It is inevitable that the scale of our global operations has an impact on the environment, both directly and indirectly. As the full extent of the challenge posed by climate change becomes evident, we are taking action to address and mitigate these impacts.

Climate change is an issue that we believe requires collaborative action between companies, as well as action by individual companies. That is why we signed the Poznan Communiqué at the end of 2008, and will continue to support it in 2009. This initiative, led by the Prince of Wales and the EU Corporate Leaders Group on Climate Change, calls for a comprehensive, legally binding UN framework to tackle climate change.

As a business we have direct environmental impacts - for example, through our offices and business travel - and indirect impacts, through the investments that we make. In our revised Responsible Business Principles we have tried to reflect both types of impact.

In this section we describe some of the work we have done, and continue to do, to minimise the impact of our operations, manage the impact of our investments and engage our employees in our environmental efforts.

Minimising the impact of our operations

Over the past year we have worked to improve our understanding of our operational impacts and to reduce them where possible. The first step is to be clear about what they are. We have identified our main impacts as energy use, water consumption and waste creation.

During 2008 we started to develop a full set of measurements that will give us a baseline against which to measure performance in the future. We plan to have completed this data collection in 2009 and will use it as a basis for setting targets going forward.

As part of the measurement process in 2008 we undertook our first publicly available Group submission to the Carbon Disclosure Project. This included details of our views on the risks and opportunities climate change presents the business, our greenhouse gas emissions accounting, our strategy to reduce emissions and our corporate governance relating to climate change. In addition to the Group submission, Nedbank completed its own submission. More details about these submissions can be found at www.cdproject.net

To help us manage our direct environmental impact, many of our sites now have their own structured Environmental Management System (EMS) in place. In 2008 over 50 percent of our employees worked in offices covered by an externally recognised EMS. Although each one is site-specific, many of these systems follow the internationally recognised ISO 14001 EMS guidelines.

Managing the impact of investment decisions

As a Group we try, wherever possible, to ensure that we are aware of the environmental impact of our investment decisions. Ensuring this happens can be a complicated process. We offer a range of financial products and the structure of our products means that our teams' investment decisions are governed by a variety of restrictions. For example, many of our fund managers have strict mandates from their customers which limit the flexibility of the investments they can make, whereas for project finance there can be much more autonomy over the investment decision.

In 2008 we took the first step towards formalising the way we manage the environmental impact of our investment decisions as a Group. We developed our first Group Investment Statement to refine the overall product offering provided by Old Mutual companies. While this represents a clear step forward for the Group, we plan to refine the statement further in 2009 to reflect the structure of our business and the changes that we have undergone.

A good example of how our business units are already taking action in this area is Nedbank's involvement in the Equator Principles. These social and environmental benchmarks enable financial institutions to classify projects according to the level of risk associated with them and then to manage these risks in a structured way. We were the first African bank to sign-up to the Equator Principles in 2003. During 2008 we provided ongoing training on the Principles for key employees and awareness-raising sessions for top management. We also engaged with NGOs through the Nedbank/ WWF-SA conservation partnership and continued learning and interaction with other Equator Principles financial institutions. More information on Nedbank's implementation of the Equator Principles can be found at www.nedbankgroup.co.za

Engaging employees in our environmental efforts

We actively encourage our employees to join in our efforts to minimise the environmental impact of our operations. Our aim as a Group is to reduce our environmental impact; but it is often the individual actions taken at a business unit level that help achieve real change. Here are just a few examples of such action in 2008:

• Skandia Nordic (Sweden): As part of the building programme for our new head office we carried out a sustainability workshop to help improve our environmental practices within offices
• Skandia-BSAM: Throughout the year we ran campaigns to encourage employees to reduce their carbon footprint. These included campaigns to reduce the number of days employees drive to work, and to help employees reduce their energy, water and paper usage in the office
• Old Mutual plc: As part of the Group's support for environmental initiatives we supported World Environment Day in June 2008. Talks and information provided during the day showed employees how they could reduce their personal carbon footprint and what they could do at work
• Skandia UK: We launched an office-wide recycling programme in 2008, removing all desk bins and replacing them with central recycling facilities.