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Corporate Responsibility Spotlight: AT&T

Telecom giant AT&T (NYS: T) may not be the first company that comes to mind for a socially responsible investor, although it has made great strides in corporate responsibility. Having recently released its 2011 Sustainability Report, AT&T makes a great candidate for scrutiny.

The positives and negatives in Environmental:
The Good Stuff:
Since releasing its first Social Responsibility Report in 2006, AT&T has committed itself to environmental efficiency and initiatives, and made these projects well known to the public. Similarly, the 2011 report details many new environmental projects.  The company reached $42 million in annualized energy savings through more than 4,500 energy-efficiency projects, far more than we can discuss here. Notably, all AT&T branded packaging will soon transition to a plastic composed of up to 30% plant-based materials. In transportation, it increased the number of deployed alternative-fuel vehicles to 3,469, avoiding the purchase of 2.5 million gallons of gasoline in future years. While improving transportation efficiency is good, reducing overall transportation is even better. And AT&T did just that, using TelePresence minutes rather than physical transportation to avert 8,261 metric tons of CO2.

Many environmentalists hope for a future corporate America that takes responsibility for products in all life cycle stages rather than just selling a product and letting the consumer dispose of it. AT&T is taking steps to account for its products post-sale by improving recycling rates on cell phones and other electronic devices. In 2011, the business collected approximately 3 million cell phones -- triple Verizon's (NYS: VZ) collection total of 1 million recycled phones -- and 1.7 million pounds of batteries for reuse or recycling, a significant contribution.

While AT&T clearly has many positive environmental initiatives, their scale is small compared to the company's larger operations. Still, many of their projects that increase efficiency also save money, which will help the company's profitability going forward.

The Bad:
Recently, consumers have been putting pressure on AT&T to stop the use of "conflict minerals" in its electronics. These minerals are obtained from war-torn areas of the Democratic Republic of the Congo and surrounding countries, where armed militias force children and adults to work in the mines. As consumer pressure mounted over the last few years, the government included a clause in the 2010 Dodd-Frank Act that requires companies to disclose whether their products contain any conflict minerals by tracking their supply chains for tin, tantalum, tungsten, or gold -- the four most common conflict minerals. While the email campaign protested almost every tech company, including competitors Verizon, Sprint Nextel (NYS: S) , and T-Mobile, AT&T's failure to eliminate its own exposure to conflict minerals presents a definite risk going forward if further regulation or trade restrictions are put in place.

By Charlie Kannel, The Motley Fool




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