Daniel Turner Project Officer Carbon Disclosure Project 57 a farringdon Road

Daniel Turner

Project Officer

Carbon Disclosure Project

57 A Farringdon Road

London EC1M 3JB

31 May 2007

Dear Daniel

BSkyB Carbon Disclosure Project Response

Please find enclosed the BSkyB Carbon Disclosure Project Response for 2007. All questions have been answered and the additional documents have been enclosed to support our return.

Should you have any questions relating to our return, please contact in the first instance Sky’s Head of Environment, Fiona Ball (email: [e-mail] or tel: [phone]).

Kind regards

Ben Stimson

Director of Corporate Responsibility

Enclosures:

• 
  Sky Environment Policy;
  
• 
  Sky Environmental Objectives;
  
• 
  Sky Environmental Targets;
  
• 
  Environmental Performance data table for 2005/2006 financial year.
  

Section A

For all Companies to Complete

1. Climate Change Risks, Opportunities and Strategy

a: Risks: What commercial risks does climate change present to your company including, but not limited to, those listed below?

It is widely accepted that the growth of carbon dioxide in the atmosphere is contributing to climate change and, if continues unchecked, has the potential to have a catastrophic effect on the planet through global warming.

The principal commercial risk is associated with the uncertainty regarding government guidance with respect to addressing climate change issues and the future potential for over-regulation to counter climate change. Our progress in reducing carbon emissions throughout our supply chain and the investment in our 5-year commitment to be a carbon neutral company means we believe that we would be able to comply with the proposed cap and trade system of carbon allowances under the Carbon Reduction Commitment.

Sky would, however, argue that the mechanisms put in place by the Carbon Reduction Commitment need to be carefully designed and appraised in order to maintain a ‘light-touch’ regulatory approach, guided ultimately by market. The market is good at delivering both change and innovation.

These commercial risks can be minimised through sound consultation from the government and the production of guidance that can be implemented over realistic business cycle timeframes, without undue cost.

1. 
   Regulatory risks associated with current and / or expected government policy on climate change e.g. emissions limits or energy efficiency standards .
   

Sky is not currently legally required under the EU Emissions Trading Scheme to reduce their greenhouse gas emissions. However, Sky has made a voluntary commitment to become CarbonNeutral. Sky is therefore offsetting its “unavoidable” CO₂ emissions with Verified Emission Reduction (VER) projects which meet the Climate Group’s Voluntary Carbon Standard and / or the Gold Standard. The projects invested in by Sky generate carbon offsets to reduce Green House Gas emissions which would not occur without the investment provided by the sale of the credits, all the emission reductions are new and additional to what would have happened otherwise. The projects Sky has invested in are a Gold Standard wind power project in New Zealand and a micro-hydro scheme in Bulgaria. These projects will be supported to offset Sky’s CO₂ emissions from the first year of its CarbonNeutral status.

2. 
   Physical risks to your business operations from scenarios identified by the Intergovernmental Panel on Climate Change or other expert bodies, such as sea level rise, extreme weather events and resource shortages.
   

The majority of our operations are in the UK and Europe (with the addition of Easynet since 2006). The results of climate change including changing weather patterns, rising temperatures and sea level rises will effect Sky, in the same way as any business) in the long term through a number of ways including:

Risk to pension assets linked to companies or regions affected by climate change.

Regulatory changes made to try to control the rate of global warming.

Changes in insurance availability and increases in premiums due to higher exposures to climate-induced risks.

iii) Other risks including shifts in consumer attitude and demand.

According to a recent YouGov survey commissioned by Sky, 63% of individuals in the UK feel that business should be responsible for taking action against climate change and for providing consumers with information on how they can reduce their impact. Consumers are increasingly demanding more of companies to reduce the energy use of the products and services they purchase and this will only increase in a lower carbon future. Sky is actively responding to this demand and engaging with its customers on climate change and is supporting its customers with finding simple and affordable ways to cut emissions on their homes.

Sky has used a number of strategies to increase the energy efficiency of its products. This has led to halving the power consumption of set top boxes since launch. Innovations include features that decrease power consumption and creating a research and development roadmap aimed at energy efficiency.

Sky is also helping customers reduce their household energy bills with the introduction of an innovative new feature that will automatically switch inactive Sky HD and Sky+ boxes into Standby mode overnight. This UK-pioneered technology, the first of its kind in the UK, is the latest step in Sky’s on-going commitment to reduce its own impact on the environment and in helping millions of customers to take small steps to reduce theirs.

The ‘Auto Standby’ feature has been introduced to more than two million customers’ boxes.

b. Opportunities: What commercial Opportunities does climate change present to your company for both existing and new products and services? :

A commercial opportunity is associated with the potential long-term cost savings associated with a fundamental review of energy, including the reduction of carbon emissions through energy conservation and efficiency measures.

In addition, climate change is an increasingly mainstream consumer issue, and Sky is committed to playing a unique role in bringing a concept as large as climate change down to a human level. As part of its CarbonNeutral plans, Sky is committing itself to engage with its growing base of more than 8.5 million customers, with practical and inspiring ways to become better informed and more progressive about energy use.

Sky achieves emissions reductions through the use of building systems and design such as free cooling, chilled beams, efficient chillers, efficient lighting, presence detection and modular boilers. Appropriate systems are introduced during building refits or when replacing end of life systems.

Sky is the only broadcasting media company to have signed up to the voluntary European Commission Code of Conduct on Energy Efficiency in Digital TV Service Systems, and all our products are below the emissions levels recommended by the code of conduct. Since launch we have halved the energy used by our set top boxes and continue to develop technologies that reduce the emissions produced by our products and services. Sky recently launched in March 2007 an automatic standby facility for set top boxes which is estimated to reduce customers carbon dioxide emissions by 32,000 tonnes of CO₂ annually which is similar to Sky’s own carbon footprint. Sky’s programme of action moving forward includes a number of employee and customer facing initiatives to reduce further CO₂ emissions and to encourage staff to be more energy efficient in the workplace and at home. Staff incentives will encourage individuals to reduce business related travel and support the purchase of hybrid vehicles.

c. Strategy: Please detail the objectives and targets of the strategies you have undertaken or are planning to take to manage the risks and opportunities. Please include adaptation to physical risks.

Sky’s climate change strategies are the responsibility of the Chair of our Corporate Responsibility Steering Group, Gail Rebuck, and our Chief Executive, James Murdoch. Our policy on climate change has the backing of our Executive Board and the personal commitment of our Chief Executive. In addition Sky’s Corporate Responsibility Steering Group (CRSG) consists of senior board members including the Chief Executive and is chaired by a Non-Executive Director, Gail Rebuck. The remainder of the membership consists of a further non-executive director and the full Sky Executive team. The CRSG monitors and reviews environmental risk and opportunities to the business including climate change. The CRSG meets on a bi-annual basis.

d) Reduction Targets: What are your emissions reduction targets and time frames to achieve them? What renewable energy and energy efficiency activities are you undertaking to manage your emissions?

The majority of BSkyB’s workforce is split between Scotland and Isleworth. Sky has set environmental targets with respect to carbon emissions and energy use and has a public target to reduce carbon dioxide emissions by 10% below 2002/2003 levels by 2010. On the 18^th May 2006 Sky also became CarbonNeutral through the measurement, reduction and offsetting of its CO₂ footprint. Our site emissions account for 12,899 tonnes of CO₂ emissions (44% of total CO₂ emissions). This makes the range of initiatives we are taking to reduce emissions from our operations important. Various energy efficiency measures have been trialled at each location including:

• 
  Fitted chill beams in air conditioning units – water is heated to a higher temperature than conventional air conditioning systems, this minimises the force required to move air through the system therefore making the system more energy efficient. A 10-20% energy saving compared to conventional air conditioning has been measured.
  
• 
  Oil-less chillers have been fitted at 4 buildings including two call centres – by using magnetic bearings instead of traditional style bearings they operate at a higher RPM and therefore energy consumption is reduced by 40-50%. The move to these chillers has also meant that the need for ozone depleting gases has been removed.
  
• 
  Free cooling coils – have been installed at a number of buildings including our main site at Isleworth and in Chilworth, Southampton. Using ambient air from outside the building to cool the interior of the building has resulted in significant energy savings
  
• 
  Presence detection systems – in five buildings presence detectors have been installed to cut out lighting/air conditioning if no-one is present. This has resulted in a reduction of 40% energy use in common areas.
  
• 
  Time controlled lighting has been introduced in car parks – resulting in 30-40% savings.
  
• 
  Implemented solar lighting controls in three key office buildings. Solar lighting control involves adjusting the level of light emitted by light fittings based on the level of light outside.
  
• 
  Water features – the main water feature at the entrance to the main corporate HQ is now powered by solar panels and wind turbines. Resulting in savings of energy use of 10 average households in a year. The remaining fountains have been turned off and been left as architectural features saving water and energy.
  
• 
  We have installed single breaker switch off functionality in all of our editing suites to ensure that when the suites are not in use all monitors and equipment are turned off.
  
• 
  Significant staff awareness raising programmes – each floor has an environmental ambassador; energy efficient signage has been introduced on every floor encouraging staff to turn off PC’s at the end of the working day, information on energy savings are also regularly posted to the staff.
  

Sky’s other main source of CO₂ emissions and energy uses are those associated with travel. This year 16,157 tonnes (56%) of CO₂ came from travel. We’ve set up a number of schemes to reduce emissions-producing travel, including:

• 
  The introduction and promotion of video conferencing facilities for meetings
  
• 
  The use of a locally based taxi service that uses hybrid cars for business travel at our Isleworth sites.
  
• 
  Reviewing our fleet of 1,600 vans used by our field engineers and as part of the re-tender process have investigated the fuel types available to us in order to reduce CO₂ emissions associated with our fleet operations.
  

The benefits of Sky’s energy efficiency projects are threefold with reductions seen in energy use and carbon dioxide emissions, a cost saving achieved and employee awareness significantly improved on how they use energy within the office and at home.

Sky purchase 100% of its electricity for its main owned sites from renewable source. This has significantly reduced our CO₂ emissions. This year our total CO₂ emissions were 29,056 tonnes, against our target of 34,079 tonnes by 2010. This represents a reduction of 5% since last year.

Measurement and monitoring of our environmental performance in order to obtain reliable data is crucial for guiding our improvement activities and tracking how we’re doing. We’re continuing to improve our environmental data collection systems, and this year we commissioned an independent verification of our environmental data by ERM. As part of the monitoring process energy data is collected from each building on a monthly basis. In order to ensure that the data is real time each building is separately metered and monitored and the results collated and displayed on the intranet site so that the impact and success of any new measure implemented can be monitored.

The data collected and analysed includes electricity, gas, oil for our on site operations and fuel use (diesel / petrol) and miles travelled (cars and flights) for our direct and indirect energy use through transportation.

Our environmental strategy is one that focuses on operational action, engagement with our people and customer communications. As an entertainment business in nearly one in three homes in the UK, we know we’ve got a platform to help people understand environmental issues and bring what can seem like an enormous problem down to a human level. We want to inspire people to get involved, and give help and advice about smart, practical things they can do to make a difference. For example, when our customers move home, they let us know because they need to take their Sky equipment with them and get it re-installed. So we’re going to use this opportunity to send our customers a home-movers pack full of helpful environment tips. Our field engineers will also be encouraging customers to think smarter about how they use energy, including explaining the importance of switching their set top box to standby when it’s not in use. This can save between 30-50% of the amount of energy used by the set top box. Sky is the only media company to have signed up to the Voluntary EU Code of Conduct on Energy Efficiency in Digital TV Service Systems. All our products are below the emission levels it recommends. In March 2007 Sky launched auto-standby which is being made available to 2.1 million set top boxes and will enable the set top box to be switched to standby when not in use. It has been calculated that this feature will save approximately 32,000 tonnes of CO₂ per annum, nearly the same amount of energy as Sky own carbon footprint.

We have also developed sustainability guidelines for the specification of the energy requirements and efficiency measures in new building projects. These guidelines include measures such as:

• 
  Minimising the need for and use of mechanical ventilation, heating and cooling systems.
  
• 
  Aiming for at least 10% of energy requirements being sourced from renewable energy generated from on-site sources.
  
• 
  Maximising energy efficiency through consideration to the following ranking method for heating, and where necessary, cooling systems;
  

• 
  passive design;
  
• 
  solar water heating; then
  
• 
  combined heat and power for heating and cooling (i.e. tri-generation), preferably fuelled by renewables; then
  
• 
  heat pumps; then
  
• 
  gas condensing boilers.
  

• 
  Ensuring that site outdoor lighting is energy efficient and minimises light lost to the sky.
  
• 
  Including facilities for bicycles and electric vehicles in design in order to reduce associated transport emissions.
  
• 
  Implementing measures to reduce required power, such as: 
  

- Micro window turbines located on roof and surrounding car parks;

- Photovoltaic walls and grids;

- Energy efficient light fittings;

- Lighting controls in all areas to have solar and presence detection;

- Inverter drives (pumps run by demand rather than fixed).

- All heated domestic water sourced from solar panels;

- High degree of insulation (ensuring the building is as air tight as possible).

2. Greenhouse Gas Emissions Accounting

a Methodology: Please provide the following information on your company’s emissions measurements:

i) The accounting year used to report GHG Emissions - July 1^st 2005 to June 30^th 2006. Please not that our GHG emissions for the reporting year 2006/2007 will be published in our CR Review in September 2007.

ii) The methodology by which emissions are calculated. Emissions are calculated using DEFRA guidelines and conversion factors.

iii) Whether the information provided has been externally verified or audited. Our environmental data including our CO₂ emissions is audited by ERM and a verification statement published in our CR Review.

iv) An explanation for any significant variations in emissions from year to year, e.g. due to major acquisitions, divestments, introduction of new technologies, etc. Our emissions for our financial year 2006/2007 to be published in September will include data resulting from the acquisition of Easynet. This is not expected to significantly impact on Sky’s CO₂ absolute reduction targets.

b. Scope 1 and 2 of GHG Protocol: Direct and Indirect GHG emissions and electricity consumption.

	Globally	Annex B Countries
Scope 1 activity tonnes CO2e emitted	16,641	n/a
Scope 2 activity tonnes CO2e emitted	7,407	n/a
MWh of purchased electricity	48,545	n/a
Percentage of Purchased MWh from renewables	100% (since October 2006)	n/a
Total emissions globally in tonnes CO2e	29,056	n/a

c. Scope 3 of GHG Protocol: Other Indirect GHG emissions.

Business Travel in-non company owned commercial planes: 4,830 tonnes CO2e

Business Travel in non- company owned helicopter for Sky News: 178 tonnes CO2e

NB: In 2006/2007 we hope to be able to report on CO₂ emissions from key contractors. We have estimated the carbon dioxide emissions associated with the use of our set top box products. As signatories to the European Commission voluntary Code of Conduct on Energy Efficiency of Digital TV Service Systems, we work with our suppliers to reduce power consumption of the product. We’ve reduced the power consumption of our set top boxes by around half since launch and have launched automatic standby on 2.1 million Sky + and HD set top boxes which is expected to save approximately 32,000 tonnes of CO₂ per annum.

British Sky Broadcasting Ltd, Grant Way, Isleworth, Middlesex TW7 5QD
Call 0870 240 3000 Fax [phone] Visit Sky.com

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