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Corporate
Responsibility

The need for developed countries to significantly reduce their carbon emissions is now widely acknowledged. This will require companies - and individuals - to adopt more sustainable approaches to their activities as we move to low-carbon economies.

National Express is a relatively simple business that already provides low-carbon transport solutions. There are huge net benefits which arise when customers choose our services instead of the car or plane, and we work hard to make public transport an ever more attractive option. The greater the number of people who use public transport - rather than less efficient modes - the greater the benefits to the environment. Sustainability is thus an integral part of our core business strategy of organic growth.

But the environment is not the only beneficiary.

Any organisation could test their sustainability by asking themselves the simple question: "If we stopped operating tomorrow, would it make a difference?".

As a public transport provider, the answer for National Express is that there would be serious negative impacts on the many millions of people who do not have access to cars, damaging the fabric of our society and our economy. To an extent we are a social service with environmental benefits.

The key corporate responsibility issues for our businesses are:

1. safety;
2. the environment;
3. social inclusion;
4. affordability; and
5. our people.

Safety

First and foremost we are responsible for the safety of the people who use and deliver our services. Safety is absolutely key and is at the forefront of all our operations. We measure several safety indicators across our operations.

Preventable vehicle accident rates improved considerably in the UK (18% better) and in Spain (11% better) during 2009. In addition to local initiatives, a new driver competency management system and a warning system for low bridges, were among the factors leading the improvement. A small deterioration in performance was recorded in North America - though accident rates are at a very low level.

While lost time injuries to employees in the UK remained stable, there were increases in Spain and in North America, and specific injury reduction plans have been prepared to address the current trend.

In UK Rail, the incidence of Signals Passed at Danger fell by 7%. Compared with travelling by car, you are at least ten times safer on public transport.

Environment

Governments around the world now recognise that we need to make dramatic reductions in the emissions of greenhouse gases. Emissions from transport are growing, and in the UK currently account for 21% of the country’s carbon emissions. So addressing this is essential.

In our view, the transition to a low-carbon economy must see an increase in public transport. Coaches, for example, are the most environmentally friendly form of mass transit, with CO2 emissions per passenger around 80% less than those of an average car - and even lower than the train.

Emission figures for buses are higher than for coaches as they operate in slow city traffic. However they are still better than the average car and many more people could be accommodated on our buses with only a minimal CO2 increase.

The irony for a company such as National Express, is that the more successful we are at growing our business and encouraging people to change their mode of transport, the greater our own emissions will become. Yet this is entirely consistent with the transition to a low carbon economy, as we explain in our vision for the future of transport 'More is Less' - which is available on the Group website.

Social inclusion

Public transport cannot only play a major part in tackling climate change, it can also improve the quality of people’s lives, delivering huge benefits in terms of social inclusion. In the UK, for example, 24% of households do not have access to a car.

Our services are at the very heart of the communities they serve often providing a lifeline for people who have no other means of getting around. We give people access to shopping and medical facilities, to education and to one another.

We also enable local economies to function by ensuring that millions of people can get to and from work.

Affordability

Public transport is only good public transport if people want to use it. It must be affordable and it must provide value for money. Last year, for example, 1.43 million National Express coach passengers travelled for £5 or less; and in the West Midlands, a monthly travelcard for buses will enable you to commute to work for less than £1 each way.

We are constantly working and investing to increase the appeal and use of public transport by making travel more convenient and more comfortable.

A balance must be struck, however, between making improvements to the provision and putting that provision beyond the reach of those that need it.

But value for money demands high levels of punctuality and safety as well as low prices. These are core corporate responsibility issues for National Express, but are moving targets, as customers’ needs and expectations change. Providing real-time information is now an important priority. Ten years ago it wasn’t.

People

Although 2009 was a difficult year for the Group, we continued to recognise the importance of investing in our people in order to build capability across the business.

In the UK, our operational training team and training centre have been recognised for the quality of the training they deliver by a range of safety and training organisations - some for the first time within our industry.

Almost 6,000 of our qualified drivers attended courses on customer care or defensive driving during 2009, and we also invested almost £100,000 in our vocational qualifications programme.

We seek to develop management talent from within the business, and in Birmingham alone more than 70 people began or completed the Diploma in Team Leading or the Diploma in First Line Management.

In North America, we have been providing customer service courses to our drivers, with training focused on how to handle difficult situations and how to interact effectively with students, customers and the public.

Our new centralised driver recruitment process, established in North America, has processed 16,225 applications and filled 2,633 driver and monitor positions during the year. Centralisation has improved the effectiveness of our recruitment, and also benefits our local managers.

In July, our Spanish business, ALSA, was recognised in the Merco Personas Ranking as one of the top 100 best companies to work for in Spain.

Policy issues

Having a workable, integrated, intelligent public transport system is essential, if people are to be enabled to reduce their personal carbon footprints, and for countries to achieve their emission targets.

Partnerships between national and local government, transport operators and town planners are key to removing the barriers to public transport use and positively encouraging uptake.

If we want consumers to use public transport more, it needs higher priority in public planning. That means dedicated priority measures: from extra bus lanes to intelligent traffic lights that recognise high-occupancy vehicles. It means better demand management, through schemes such as congestion charge zones. It also means working with city councils to create partnership schemes which recognise the needs of local populations and put these at the top of the agenda.

There are many possibilities. But to make all of this practical, we need a shared vision and policy agreement. Engagement in the national debate on such issues is an integral part of our corporate responsibility strategy: because we can’t act alone.

Goals and progress

National Express sets specific goals and targets for its corporate responsibility performance - our non-financial KPIs are displayed on page 13 and are reported online at:

www.nationalexpressgroup.com