a Best Buy Fiscal 2010 Sustainability Report gy and Power in the Conne o l o n h cted , Tec e l Wor p ld. Peo Annual rt ility Repo b a in a t s u S 0 Fiscal 201 Best Buy Co. Inc. table of contents 1 2 6 8 11 12 12 15 27 33 41 47 60 61 63 CEO Letter Company Overview and Approach Scope of Operations Our Approach Corporate Governance, Compliance and Ethics Corporate Responsibility and Value Creation Engaging Stakeholders Connecting with Employees Connecting with Customers Connecting with Communities Connecting with our Exclusive Brands Suppliers Environmental Sustainability and the Consumer Electronics Value Chain Awards and Recognition For more information about Best Buy’s social and environmental programs, policies, performance and past reports, go to the sustainability section on www.bby.com. Please check back frequently as this site will be updated throughout the year. To contact Best Buy with questions, concerns or feedback on this report or any of the programs contained within, please email newscenter@bestbuy.com Metric Profile and GRI Index Appendix 1 from the ceo Here’s what we know: 1 We learn from challenge and change. Brian Dunn Chief Executive Officer At Best Buy, we hold a set of values very close to our hearts. They are not a bunch of “ inspirational” ideas written on a poster because they sound good. Instead they are the result of taking a hard look at ourselves and trying our best to articulate what it is about us that really defines what we ARE and what is TRUE about us on our best days. energy and the environment, two topics that represent huge challenges — and also huge opportunities for human beings. We’re not just learning; we’re taking action, too. We’re investing 2 We show respect, humility and integrity. even more aggressively in our recycling efforts, in making our 3 We have fun while being the best. protect our planet. 4 We unleash the power of our people. At Best Buy, we believe technology makes the world smaller, buildings energy-efficient, and a host of other initiatives that help collapsing distance, shortening learning curves and dissolving Every one of these values captures an essential element in the Best Buy makeup, but the last one is especially significant. For me, unleashing the power of our people captures the core idea that has always driven Best Buy, and, in my opinion, every great human organization: that a group of ordinary people can accomplish extraordinary things when they work together. In fact, it’s the only way anything extraordinary ever happens. We at Best Buy also believe that technology holds the power to make the world more connected and, in a word, better. But only if it is created to serve people and the things they care about. That’s why People and Power are the two dominant themes of this, our fifth Sustainability report. how we treat our own people, and we work hard to provide real opportunities for them. And, as the preeminent retailer of technology — aware that everything we sell quite literally requires power — we’re also learning as much and as vigorously as we can about Connected World, made possible by technology. I believe we’ve only scratched the surface of the positive, transformational power of technology to serve human beings — not only to connect us, entertain us and make us more productive, but also to help us solve the daunting sustainability challenges we face. I am extremely optimistic about the future. It’s my nature. But this optimism isn’t just my genetic set-point; it comes from my objective observation that once people understand a set of challenges, they are capable of creating solutions that eventually surpass anything we can imagine. I can’t wait to see what the future holds, and I am proud that Best Buy has an opportunity to help shape it in the most positive way. This report is evidence of our sincere desire to focus the power of Best Buy’s people to do just that. Best Best Buy Buy F’2010 Fiscal Annual 2010 Sustainability Report We are a company of, by and for people. We take very seriously barriers to access and understanding. In short, we believe in a 2 Best Buy Fiscal 2010 Sustainability Report Company Overview and Approach Sustainability for Best Buy means placing a focus on people, technology and the power needed in the connected world. Our Belief Our employees are core to our customer-centric business model and we feel a responsibility to empower them. Our Impact Best Buy has received awards and recognition as a result of its employee engagement, training and employee-driven community relations programs. People The relationships we build with our customers allow us to deliver sustainable, innovative solutions. Sustainable innovation — both our own and those of our vendors — has led to more products that help consumers stay connected. Our store employees and customers are part of communities that we support through donations and local volunteer efforts. Store teams have volunteered over 124,000 hours in their communities. This year, Best Buy will give nearly $7.5 million through Community Grants, Tag Team Awards and store donations. No one is more connected in this world than our teens. We can help them make a difference. We fund programs to give teens a voice. For example, the @15 Exchange lets teens choose how to invest $1 million in their communities. Technology & Power We care about human rights across our value chain. Our vendors and manufacturing partners share our values and work together with us to make a difference. Our Belief Our Impact As a leader in our industry we engage in discussions with stakeholders across the landscape of sustainability. Improving energy efficiency in our operations and in our customers’ use of the products we sell is vital to success in the connected world. E-waste is a problem for our customers and for the planet. We can be a leader in new, innovative, sustainable solutions. We continue to converse with stakeholders including the U.S. Environmental Protection Agency (EPA), Alliance to Save Energy, Ceres, Business for Social Responsibility, and the Sustainability Consortium, among others. We set goals for our own operational carbon footprint and we work with customers every day to help them make more sustainable choices. We operate the most comprehensive recycling program in retail. In fiscal 2010, we helped to prevent more than 140 million pounds of appliances and electronics from ending up in landfills around the world. We have set a goal to collect 1 billion pounds. We are experimenting with resource-saving technologies including smart grid, electric transportation and renewable energy sources that help address global challenges such as climate change. 3 Employees Customers Investors Best Buy employees care deeply about working for a sustainable company and want to know how Best Buy is helping to protect the planet and support communities. Best Buy’s customers want to feel good about purchasing products from a company that values the environment, is socially responsible, participates in their community and works to protect their privacy. Investors are interested in how Best Buy’s social and environmental strategies manage risk, fuel enterprise growth and improve financial performance. company values Non-Government Organizations Other Stakeholders NGOs seek specific, transparent information regarding Best Buy programs, policies and performance, and how they may affect social and environmental interests. In addition to these primary audiences we hope the information captured in this report will be of interest to many other stakeholders including government organizations, academics, vendor partners and those who live in the communities where we operate. Have fun while being the best Show respect, humility and integrity Learn from challenge and change Unleash the power of our people To view Best Buy’s Code of Business Ethics for employees please go to bby.com/cmn/files/BBY_Code_of_Business_Ethics_080121.pdf Best Buy Fiscal 2010 Sustainability Report The primary audiences for this report include: 4 Best Buy Fiscal 2010 Sustainability Report Fiscal 2010 Social / Environmental Highlights Corporate and Best Buy Children’s Foundation Philanthropic Donations $25.2 million in fiscal 2010 and over $145 million since fiscal 2006. Please see page 32–39 for more information about our philanthropic program. $25.2M Overall customer satisfaction score (scale of 0–100) 82.8 points — a 2.3 percentage point increase over fiscal 2009. Please see page 26–31 for more about how we listen to customers. 82.8 points CO2e emissions in our U.S. store operations 51.6 pounds per square foot — a 14.8 percent reduction over our 2005 baseline. Please see pages 46–59 to learn about our energy and carbon reduction goals. 51.6 pounds per square foot 5 Best Buy Fiscal 2010 Sustainability Report Average Factory Audit Balanced Scorecard results 82% — a 5 percentage point improvement over fiscal 2009. To learn more about our supplier standards and factory audit program, please see pages 40–45. 82% Retention rate: Percent of employees who maintain employment with Best Buy for at least one year 75% — a 6% percentage point improvement over fiscal 2009. Please see pages 14–25 for more information on employee engagement. 75% 6 Best Buy Fiscal 2010 Sustainability Report 1 Scope of Operations Best Buy (NYSE: BBY) is a publicly traded global retailer of technology and entertainment products and services. With operations in the United States, Canada, Europe, China, Mexico and Turkey, the Best Buy family of brands and partnerships collectively generates more than $49 billion in annual revenue and includes brands such as Best Buy, Best Buy Mobile, Audio Visions, The Carphone Warehouse, Future Shop, Geek Squad, Five Star, Magnolia Audio Video, Napster, Pacific Sales and The Phone House. The Carphone Warehouse and The Phone House businesses are a collaborative venture between Best Buy Co., Inc. and the Carphone Warehouse Group, PLC. Approximately 180,000 employees apply their talents to bring the benefits of our brands to life for customers through retail locations, multiple call centers, web sites, in-home solutions, product delivery and community activities. financial results Revenue (in millions) $45,015 $50,000 40,000 $49,694 $40,023 $35,934 $30,848 30,000 20,000 10,000 0 06 07 08 09 FY’10 Operating Income Rate 6% 5.6% 5.4% 5.3% 5% 4.5% 4.2% 4% Community partnership is central to the way we do business at Best Buy. In fiscal 2010, we donated $25.2 million to improve the communities where our employees and customers live and work. 06 07 08 09 FY’10 Diluted Earnings Per Share (in dollars) $3.50 $3.12 3.00 2.50 $3.10 $2.79 $2.27 $2.39 2.00 06 Best Buy’s fiscal 2010 Annual Report is available at phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDQ3NTB8Q 2hpbGRJRD0tMXxUeXBlPTM=&t=1 07 08 09 Best Buy’s 2010 fiscal year ran from March 1st, 2009 to February 27, 2010. 1 FY’10 7 Best Buy Fiscal 2010 Sustainability Report Stores locations stores 4,027 employees 176,596 USA ...... 1,069 Canada ........ 64 Total number of stores and employees at close of fiscal 2010 Mexico .............. 5 USA ................ 74 Canada .............4 USA ................ 35 USA ................... 6 USA ....................8 Stores2 Spain.................. 447 France ................ 318 Germany...........265 Portugal............. 153 Sweden ................ 115 Belgium.................82 Stores China ................ 6 3,054 415 32 83 122 68 445 9 114 Stores doing business as “The Carphone Warehouse” and “The Phone House” are part of our Best Buy Europe business, which is jointly owned with The Carphone Warehouse. Turkey ............... 1 China .......... 158 9,498 China Turkey full-time part-time 9,015 255 165 63 employees 2 5,304 1,838 1,224 882 676 629 219 490 340 part-time 72,052 11,334 297 locations UK Spain France Germany Sweden Portugal Netherlands Belgium Ireland full-time 58,674 8,166 631 employees full-time part-time 151,154 USA Canada Mexico Netherlands.... 186 15,944 Canada ..... 144 employees Ireland.....................75 locations United Kingdom ........... 812 8 Best Buy Fiscal 2010 Sustainability Report Our Approach Goals and Aspirations Best Buy has defined three aspirations for Corporate Responsi- Since our last report… bility/Sustainability: Best Buy welcomed our new CEO, Brian J. Dunn on June 24, 2009. Like his predecessor Brad Anderson, Brian is a long time veteran To be a global champion for human ingenuity and opportunity of Best Buy, having started on the sales floor more than 25 years To be an advocate for consumers in the world of technology ago. Brian is passionate about Best Buy’s role in preserving our To be fiscally, environmentally and socially accountable for our planet and connecting with the people that make Best Buy a success. He has made it clear that corporate responsibility will continue to be a major priority for the company under his leadership. brands and business operations worldwide These aspirations have guided us during one of the most challenging business years of our 40-year history. To bring these Best Buy continued to expand globally in fiscal 2010. Near the aspirations to life, we have researched our efforts relative to end of fiscal 2009, we opened our first store in Mexico, and in other companies in our industries, both consumer electronics and late fiscal 2010, we opened our first store in Turkey. Since then, retail, as well as companies known for best practices in sustainability. we have also opened an additional four stores in Mexico and continued our European expansion with the opening of our first Best Buy branded store in the United Kingdom on April 30, 2010. Strategy: Making Connections As we look at the world today, we are optimistic. More and more, we are observing how technology impacts the way people are connecting. In many areas of the world, there is a TV in every room, a personal computer in every home, and a smart phone in every pocket. The home has become the office, and offices are connected worldwide. People are connecting to each other and to knowledge and opportunity. They receive health, weather and financial information that helps them take care of themselves, their families and their businesses. Information about almost Fiscal 2009 : Mexico everything is becoming more and more accessible. Fiscal 2010 : Turkey Fiscal 2011 : United Kingdom Best B uy: Turke y 9 We support the communities where we do business through: tions that are no longer considered discretionary — some are a Local community grants, store donations and sponsoring part of people’s daily lives. It also means that with more technology use comes greater energy consumption, and this has an impact on our planet. Sustainability for Best Buy is about placing a priority on people, technology and the power to drive it in this connected world. As a technology retailer, we play a key leadership role in the connected world. It is clear to us that our people and their unique events that serve a variety of causes identified by our local employees, globally Volunteerism, with more than 21,000 employees participating and nearly $2.5 million distributed to non-profit organizations in communities across the world Our United Way program and disaster relief through our global partnerships with the Red Cross and Mercy Corps connection with customers and their communities are critical to our success. And, because everything we sell requires power to We have an extensive and collaborative process to ensure good deliver value, we need to focus on energy — what we consume in labor practices for workers in our supply chain through our our operations, in our supply chain and what our customers will vendor/supplier agreements, third party manufacturing audit consume while using our solutions. process and our training and remediation efforts. In 2009, we joined the Global Social Compliance Programme (GSCP), a coalition of industry partners and NGOs aimed at increasing the effectiveness and efficiency of the audit process and remediation across the industry. People Our employees are core to our customer-centric business model. We engage our employees by offering great benefits and opportunities and encouraging a diverse working experience. We also involve our employees in our sustainability efforts — we want to know their ideas for creating positive change. For example, based on feedback and ideas from our employees we now have recycling solutions in nearly every break room in our U.S. retail stores. The relationship we build with our customers allows us to deliver sustainable, innovative solutions that meet their needs. Part of this is providing our customers with information and education — in our Best Bu y: China stores and online — that will enable them to make more sustainable choices. Our partnership with the EPA through the ENERGY STAR® program is a good example of this. In fiscal 2010, over the lifetime of the ENERGY STAR® products, we will help our customers: Realize utility bill savings of $91 million Save 796 kWh of electricity Reduce carbon emissions by 1.6 billion pounds co Mexi Buy: Best Best Buy Fiscal 2010 Sustainability Report What this means for Best Buy is that we sell products and solu- 10 Best Buy Fiscal 2010 Sustainability Report Technology & Power Sharpening Our Strategy We are working to reduce our carbon foot- We believe the most effective sustainability strategies are those print across our operations. We reached tied to a company’s overall business strategies. We determined our original goal — an 8 percent reduction this past year that we need a clearer view of the areas where Best per U.S. retail square foot — three years Buy can make the most meaningful impact and a plan for driving in advance of the 2012 target date. results. To guide us in developing this plan, we are working with Of course, we don’t plan to stop there. We are currently in the process of developing a new goal. To do this, we are evaluating our measurement capability across all brands and regions. We believe we can have an even greater impact through improved store design, fuel reductions, implementation of an improved Environmental Management System, and employee awareness and training. We intend to explore and leverage renewable energy and carbon offsets/renewable energy credits as well. We plan to expand our recycling and technology trade-in programs an industry-leading company, Business for Social Responsibility (BSR). In collaboration with BSR, we are in the process of analyzing our business practices. Starting with an internal assessment, we are talking with many of our company’s leaders about how their business units intersect with sustainability opportunities. We are also looking at external trends through research and interviews with key stakeholders. Once we have a clear view of the current state, we can then prioritize the sustainability efforts that align best with our business strategies and the needs of our external stakeholders. in the U.S. and around the globe. We are excited about this work. We believe it will help us drive In our first year, we recycled greater economic, social and environmental benefit. The sus- or refurbished over 1.4 million tainability strategies we develop through this assessment are customer units in the U.S. While we see this as a great achievement, intended to influence our corporate responsibility work for the we know there are many more products still ending up in landfills. next 3–5 years. Land filled electronics cannot be harvested for precious metals, component parts and commodities that can be reused in the supply Other Important Areas chain. This ends up requiring more energy to mine and manufacture We continue to develop policies, such as our climate change those components, as well as using more resources across the and paper procurement policies, to ensure our business practices value chain. We are currently evaluating how we ”close the loop” in align with our corporate responsibility aspirations. Industry our value chain, using recycled content in our own products and/or initiatives are also an area where we can learn and provide across the industry. leadership. Our current relationships include Ceres, Business for Social Responsibility, Boston College Center for Corporate We were the first to hold an Citizenship, the Sustainability Consortium, the Alliance to Save ENERGY STAR® 3.0 rating for Energy, Business for Innovative Climate & Energy Policy (BICEP), our entire line of Insignia LCD TVs. and the GSCP. We will continue to seek out and endorse new and emerging technologies that help our customers live more sustainable lives, Looking forward, we intend to use what we learn from our including electric vehicles and home automation controls that partnerships to focus our efforts, build on what we know is work- help customers better understand and improve their ing and ensure we are making an impact. In this report, you will consumption habits. see the culmination of our efforts to date and how we use the reporting process to evaluate progress, set new goals and hold ourselves accountable. We believe that through our efforts we can help foster Best Buy’s ambitions to be a sustainable company. 11 Compliance & Ethical Standards Board of Directors our relationships with employees, consumers, vendors and com- The Best Buy Board of Directors is committed to a highly effec- munities are not merely a series of transactions, but instead an tive corporate governance structure that reflects the interests of ongoing partnership. Our Chief Compliance Officer monitors and our shareholders, customers and employees. To ensure a diversity addresses enterprise risks in the areas of law and public policy, in- of perspectives, the Board seeks a balance of internal experience cluding corporate governance, anti-corruption, customer privacy, and independent expertise. This combination of perspectives is environmental regulation and product safety, among others. Our also in line with our corporate culture, which is a cornerstone of Chief Ethics Officer guides and develops business standards and our legacy and a key competitive advantage. practices that comply with the law. To help us deliver on our promise of business integrity, Best Buy goes beyond what is required, or even expected, to assure that The Board has established standards consistent with the Both our Chief Ethics Officer and our Chief Compliance Officer requirements of the Securities and Exchange Commission (SEC) are key members of our corporate responsibility governance and New York Stock Exchange (NYSE) corporate governance structure. They are connected with business leaders across rules. The Board is primarily made up of independent directors, the enterprise. Both regularly meet with Board Committees to and the roles of Chief Executive Officer (CEO) and Chairman of discuss areas of concern to our corporate compliance and culture. the Board are separate. Our CEO focuses on the development They are active in shaping ethical, compliant business practices in and execution of company strategies and is responsible for the every country in which we operate. ongoing leadership and performance of our company, and the Chairman of the Board is focused on Board oversight, strategic planning and mentoring company officers. In addition, our Board has appointed a Lead Independent Director. This director is responsible for leading executive sessions of the independent directors, serving as a liaison on their behalf. The Board has established that three of its committees — the Audit Committee, Compensation and Human Resources Committee, and Nominating, Corporate Governance and Public Policy Committee — be comprised entirely of independent directors. These actions all support our belief that sound corporate governance is a critical component of a successful corporate responsibility program. Best Buy’s corporate responsibility governance structure includes the Board’s Nominating, Corporate Governance and Public Policy Committee, who receive quarterly updates. It is further supported by a cross-functional committee of leaders who oversee our programs and initiatives including Environmental Affairs, Community Relations, Human Resources, Legal, Ethics, and Transportation, among others. This group serves to drive integration, set goals and measure results. In recent years we have also made several investments in our organizational structure to support our corporate responsibility goals, including two dedicated personnel Senior Director, Corporate Responsibility and Senior Manager, Corporate Responsibility. These individuals work across the enterprise on stakeholder engagement, sustainability strategy, communication, reporting and measurement. Join the Conversation: Ethics At Best Buy In fiscal 2010, we launched a website to help our employees learn about ethics and what “showing respect, humility and integrity” looks like in our day-to-day activities. In addition to serving as a reporting hotline for ethical concerns, the new bestbuyethics.com/ website includes: A connection to our Chief Ethics Officer’s award-winning blog, kathleenedmond.com/ A “Tell Us About The Good Stuff” feature that celebrates employees living Best Buy’s values The site is designed to engage Best Buy employees in an ongoing conversation around business ethics. However, in the spirit of complete transparency, it is freely accessible on the Internet for our customers, competitors and vendor partners and will soon be translated into eight languages. To see how we are using social media to redefine the world of business ethics, join the conversation at bestbuyethics.com/. Best Buy Fiscal 2010 Sustainability Report Corporate Governance, Compliance & Ethics 12 Best Buy Fiscal 2010 Sustainability Report Corporate Responsibility & Value Creation Corporate responsibility efforts are part of a smart business strategy to grow revenue and reduce costs. The table below outlines how some of the sustainability programs we have in place directly benefit the organization according to the criteria often used to evaluate a company: growth, return on investment and risk management. growth return on investment risk management How our Corporate Responsibility initiatives help grow revenue How our Corporate Responsibility initiatives help grow our operating and cash flow margins How our Corporate Responsibility initiatives help reduce our risk for potential costs Our Women’s Leadership Forum (WOLF @ Our energy efficient buildings reduce store We proactively lead legislation surrounding Best Buy) identifies ways to attract and retain female shoppers, potentially increasing sales. Many people who use our recycling and trade-in programs are new to Best Buy, which we believe may result in long-term incremental traffic and sales. Items brought in for trade-in are refurbished and resold through alternate channels. We have increased our focus on ENERGY operating expenses. We use less packaging for select Exclusive Brands, resulting in lower costs for materials and more efficient shipping and transportation. By improving transportation routing and scheduling, we have decreased logistics expenses and carbon emissions. Reducing our operational waste and expanding our recycling program has resulted in less trash hauling expenses. STAR® qualified products which often have higher price points and margins. environmental standards such as e-waste recycling and LEED certification. Addressing risks in the areas of customer privacy, product safety and sustainability have directly contributed to reductions in legal and regulatory costs and improved brand management. Our Social and Environmental Responsibility team in China is addressing risks in our Exclusive Brands supply chain. By joining the Global Social Compliance Programme, we seek to gain efficiencies in our supply chain and factory audit program while also lowering our supply chain risks. Engaging Stakeholders This past year, we formed a formal Stakeholder Advisory Board Our approach to stakeholder engagement is both formal and of social responsibility investment companies, environmentalists informal. Informally, we interact with our employees and custom- and human rights representatives from leading NGOs. Through a ers every day in our stores, online and over the telephone. You will dialogue that includes leaders from across Best Buy, we ask for see in this report’s employee, customer and community sections, insight and ideas and share challenges, opportunities and success- how we bring this communication to life. es. This effort has just begun, but we expect to gain a great deal of through our relationship with Ceres. The Advisory Board consists value through these conversations as we continue to mature in our sustainability practices. 13 Sustainability Strategy & Development Organizations World Economic Forum U.S. Green Building Council: Leadership in Energy and Environmental Design (LEED) An independent, international not-for-profit organization committed to improving Developed by the U.S. Green Building the state of the world by engaging leaders Council (USGBC), LEED provides building A membership-based research organizain partnerships to shape global, regional owners and operators a concise frametion committed to helping business leverand industry agendas. weforum.org work for identifying and implementing age its social, economic, and human assets practical and measurable green building to ensure its success and create a just and Environmental Organizations: design, construction, operations and maintesustainable world. bcccc.net Climate Leaders nance solutions. LEED is an internationally An EPA industry-government partnership recognized green building certification Business Civic Leadership Center (U.S. Chamber of Commerce) that works with companies to develop system, providing third-party verificacomprehensive climate change strategies. tion that a building or community was The world’s largest business federation Partner companies commit to reducing designed and built using strategies aimed serving as a resource and voice for busitheir impact on the global environment by at improving performance across all the nesses and their social and philanthropic completing a corporate-wide inventory metrics that matter most: energy savings, interests. uschamber.com/bclc of their greenhouse gas emissions based water efficiency, CO2 emissions reduction, Business for Social Responsibility on a quality management system, setting improved indoor environmental quality, aggressive reduction goals, and annually and stewardship of resources and sensitivA leader in corporate responsibility. reporting their progress to EPA. Through ity to their impacts. usgbc.org/leed Leverages their network of over 250 member companies to develop sustainable program participation, companies create a credible record of their accomplishments business strategies and solutions. bsr.org Social Change Organizations and receive EPA recognition as corporate Magic Johnson Enterprises Ceres environmental leaders. epa.gov/stateply Magic Johnson Enterprises, formed in A national network of investors, environ® 1987, serves as a catalyst for community ENERGY STAR mental organizations and other public and economic empowerment by making Through the ENERGY STAR® program, interest groups. Works with companies available high-quality entertainment, the EPA and DOE have partnered with and investors to address sustainability products and services that answer the thousands of organizations across the challenges impacting the planet and its demands of ethnically diverse urban comresidential, commercial and industrial secpeople. ceres.org munities. Through investment, partnership tors to increase the sales of energy effiand consultation, Magic Johnson Global Social Compliance cient products bearing the ENERGY STAR® Programme (GSCP) Enterprises has a portfolio of companies label, raise energy efficiency standards for A business-driven program for companies new home construction and existing home that strategically work together to reinforce the organization’s focus on serving wanting to harmonize existing efforts in renovations, and improve the efficiency emerging, multicultural communities. order to deliver a shared, consistent, global of commercial and industrial facilities magicjohnson.com approach for continuous improvement of through strategic energy management working conditions in global supply chains. practices. epa.gov or energy.gov Youth Venture Boston College Center for Corporate Citizenship gscpnet.com Smart Way Sustainability Consortium An independent organization of diverse global participants working together to build a scientific foundation to drive innovation and improve consumer product sustainability through all stages of the product life cycle. sustainabilityconsortium.org An EPA program to improve the environmental performance and fuel efficiency of the U.S. freight sector (truck & rail) through the use of a voluntary market incentive system, that encourages retailers/end users to choose trucking and/or rail companies that are environmental leaders in their respective industry segments. epa.gov/smartway Youth Venture is a global movement of young change makers. Youth Venture inspires and invests in teams of young people to start their own sustainable social ventures and connects them to a powerful global network. Collectively, these young change makers are redefining the youth years as a time of initiative and positive change. genv.net Best Buy Fiscal 2010 Sustainability Report Best Buy is a member of or collaborates with the following organizations (partial list): Retail Leadership Forum (RLF) Learns from the Geek Squad In January 2010, the RLF met with leaders and employees at Geek Squad City, one of our computer repair facilities in Louisville, Kentucky. The goal was to gain insights through observation and dialogue with Geek Squad employees. The sessions ended up enabling RLF leaders to decrease computer repair time and overall turn time at stores in their own markets, which positively impacted customer experience at those stores. The RLF also helped launch a cross-functional training program between top-performing Geek Squad agents at Geek Squad City to further identify efficiencies that could be scaled across the enterprise. Congratulations WaterCooler Users! In 2009, the McMurry Center for Professional Excellence awarded Best Buy’s virtual Watercooler top honors in the Social Media — Internal Social Networks category. The site won for its ability to change the way Best Buy does business. Congratulations to all of the 10,000 Best Buy employees every week that have contributed to more than 1.3 million posts in less than two years. Asia Employee Engagement Best Buy is actively pursuing a set of global employee engagement best practices. Best Buy China received the Best Model of Human Resources and Most Popular Employer awards from 51job, Inc., a leading provider of human resource services in China. 15 performance at a glance U.S. Employee Retention Rate Global Employee Engagement Survey Score (out of 5) 75% 3.97 a 6% percentage point increase over FY 2009 a .05 point reduction compared to FY 2009 Number of Training Certifications Earned on our Online Employee Training Site 272,000 people Connecting With Employees Employee engagement is not just a corporate cliché at Best Buy. Our employees are the main connection between our company and our customers. Their creative and innovative minds have sparked many of the programs we have in place to carry out our corporate responsibility mission — including programs in the areas of community involvement, environmental sustainability and social change. They truly are our most valuable asset. To support and encourage them to be their best, we are focused on connecting all 180,000 Best Buy employees worldwide — to each other, to management and to knowledge and opportunity that helps them excel at their jobs and in their lives. In this section, you will discover the many ways we are helping employees get connected. Employee Engagement Challenges response results looking forward Maintaining high employee engagement scores during challenging economic times and the implementation of a new store labor model. Initiated leadership involvement in setting an action plan which included CEO check-in. Created a task force to explore opportunities to increase employee engagement at U.S. retail locations. Continue to engage leaders to “own” the employee survey results and create meaningful actions. Providing competitive benefits to full and part-time employees. Placed rewards in employees’ hands sooner in the year. Paid bonuses to eligible U.S. employees mid-year. Spent $12M on Blue Crew Bucks, a bonus program for store-level employees including part-time. Look for new opportunities to enhance benefits and compensation programs across the enterprise. Encouraging eligible employees to save for retirement. Founding member of “Financially Fit Minnesota,” a group of employers committed to educating employees about personal finance. Starting in January 2010, all new Best Buy U.S. employees are auto-enrolled in the 401(k) Retirement Savings Plan after one year of service. Explore opportunities to create additional wealth-building incentives for part-time employees. Best Buy Fiscal 2010 Sustainability Report challenge 16 Best BestBuy BuyFiscal Fiscal2010 2010Sustainability SustainabilityReport Report Connecting Employees to Each Other The benefits of connecting employees to each other go beyond just the sharing of information. Employees can, and often do, provide support for each other, spread positive messages, and collaborate to develop innovative ideas. The following are some of the programs we have recently implemented to help employees connect with each other: Diversity and Inclusion A diverse workforce strengthens our company’s pool of knowledge and talent and allows us to provide our customers with top-notch customer experiences. In developing a diverse workforce, it is important to us that all of our employees feel welcome and valued. That’s why we are working to further develop and maintain an inclusive environment where employees can feel free to be themselves, develop their talents and grow with the company. In fact, we ask “Can you be you?” and encourage conversations about how the individual can really be themselves and feel like they belong to a great company that values them. Employee Business Networks (EBNs) are one way we encourage an inclusive environment. EBN groups are based on an interest in and support for a common dimension of diversity such as age, race, gender or sexual orientation. We believe our EBNs help reduce turnover, aid in the development of leadership skills and bring insights to the business from a diverse perspective. In the U.S., we have 11 EBNs and over 100 EBN chapters in our corporate offices and in our retail field organization — thousands of employees are involved in these networks. “ EBNs have played a significant role in launching “ The EBN and FIN programs are the necessary catalyst for turning conversation and good intentions into tactical action.” - Adrian Dallara, District HR Manager business relationship and partnerships with such organizations as The Gay and Lesbian Center for Pride, the African American Research Library, and Women in Distress. These long lasting relationships have a positive impact on our market, our community, as well as our employee experience. ” Kirk Harris, Operations Supervisor 17 TEFA Military Employee Business Network LatIN Latino Employee Network PRIDE “ When I started at Best Buy, I heard FIN Gay, Lesbian, Bisexual and Transgender (GLBT) Employee Network Focused Involvement Network WOLF SaGE Women’s Leadership Forum The Wisdom of Experience BLU AEN Best Buy Leadership United Asian Employee Network INCLUDE BEN Focus on Abilities, Not Disabilities Black Employee Network the phrase ‘…bring your whole self to work.’ Until I joined the Corporate Pride EBN and began immersing myself in diversity work, I never really knew what that phrase meant. Now that phrase has come to life for me. My boss and work team know that I have a partner and they support the fact that I co-chair the Corporate Pride group. They understand how important the work is to me. Overall, I feel lucky to be at Best Buy and able to be my true self every day. ” Corey Smith, Sr. Manager, Human Resources “ The Asian Employee Network is an extension of who I am as an employee and as an individual. It’s another tool that allows me to be a part of the change I want to see. InterFaith ” Jackie Le, Space Management Analyst Female & Minority Group membership employees Female Hispanic African-American Best Buy U.S., Magnolia & Pacific Sales Percent of female & minority group employees Asian-American In fiscal 2010, Best Buy added another opportunity for employees to come together around a common interest, called Focused Involvement Networks (FINs). Two FINs launched in 2009: the Families at Work Network and Facing Autism in a Caring Environ- 26% 14% 27% 28% 29% 30% ment. With the addition of these groups, even more employees have a forum to share ideas and learn through the exchange of common experiences. 14% 13% 13% 14% Other important ways we encourage diversity and inclusion include: 13% 14% 14% 13% 13% 6% 5% 5% 5% Running our Affirmative Action Program, which affects our retention, development, outreach and recruitment efforts. 6% Working with employees to develop local immersion experiences, such as visiting multicultural landmarks 06 07 08 09 FY’10 Educating employees on diversity issues through a catalog of ready-to-use online courses Enterprise Percent of female employees For more information about diversity and inclusion at Best Buy, go to diversityatbestbuy.com. 31% 09 32% FY’10 Best Buy Fiscal 2010 Sustainability Report Teenage Employees Focused on Advancing 18 Best Buy Fiscal 2010 Sustainability Report WOLF @ Best Buy and Innovation: Reward Zone for Schools The Women’s Leadership Forum team in Wisconsin (code name Stella!) set a goal to engage more female customers, by developing a twist on a successful store program. The idea was to allow customers to donate their Reward Zone Program points to the school of their choice. Schools could use those donated points to buy products that meet their technology needs. The donation program was expanded to all stores in the Midwest. By fall 2009, Best Buy customers had provided $40,870 in Reward Zone certificates to schools. One school even cashed in their certificates and spent more, leading to a $415,000 sale. From Anywhere To help employees stay connected, we launched an “The Reward Zone for Schools program has had a huge impact with our customers and in our community,” explained Kristin Houle, product process manager, Store #1052 (Stevens Point, Wisconsin). “Once customers learn they can support their schools with Reward Zone points, we are immediately set apart from the competition and become top of mind. And once we’ve built that relationship with the schools, Best Buy and Best Buy for Business can be the source for all their technology needs, from appliances to family and consumer education - even smart boards for every classroom.” internet-accessible version of our eGO Human Resources Support Center site. Now employees can get information about their pay and This innovative new program has been adopted by many stores across the U.S. We continue to work with WOLF @ Best Buy to integrate the Reward Zone program with business customers. benefits, policies and more whenever and wherever they want it. To learn more about Reward Zone for Schools, please see the following video on YouTube: youtube.com/watch?v=yxLKceT8gzM mybbyrewards.com Why is there a Best Buy’s virtual Watercooler is another way we help connect our geographically diverse workforce. Watercooler is an online forum for Best Buy employees to engage in discussions pertinent to their business and of interest to their community. “As an installer (car electronics), I’ve gained a majority of the knowledge I know about vehicles from other installers who reply to my posts. It’s a great way to establish a relationship with other installers in the company.” – TECH, AUTO MECP BASIC, Location 673 “I check out the forums for department specific topics. They can actually be quite helpful. There is usually someone in your position that can answer a business related question you have quickly.” – SPEC, SWAT, Location 549 “There is a great amount of helpful information on Watercooler. Topics like “get it off your chest” also help us deal with the stress that we all have, helping us keep that smile on our face as we help customers.” – SALES OPERATOR, Location 678 19 The Women’s Leadership Forum (WOLF @ Best Buy) is an employee and consumer network that focuses on driving female market share and advancing women’s leadership within the company. WOLF @ Best Buy recently launched a Talent Readiness Program that will enable over 170 women from the U.S. retail field and corporate offices to participate in a one-year leadership development experience. Beyond the U.S., we are in the process of expanding our Women’s Leadership Forum to involve employees in Canada and Mexico. Visit WolfatBestBuy.com for more information and inspiring stories or connect with us via Facebook or Twitter. Employee Councils and Forums Engaging our employees in their own development and helping them write Best Buy’s growth story is an important part of our culture. Our Retail Leadership Forum (RLF) is designed to positively impact local growth and innovation in the short-term, while building successful leaders in the long-term. The forum includes all eight of our U.S. territories. As of December 2009, 80 percent of RLF members and qualifying alumni experienced a positive role change (from single to multi-unit role or promotion) or achieved mastery in their current role. esler d Liz Ha ddart an ary Sto aders M st Buy le e Wolf @ B WOLF @ Best Buy’s goals include: recent results Create opportunities and structure for our people, especially our female employees, to maximize their leadership development. 49 networks exist in the U.S. and Puerto Rico. Combined teams of women from retail stores and our corporate office meet weekly to review business metrics and work on projects focused on strengthening the business. The annual conference provides opportunities to learn more about our business, our customers and develop personal and professional skills. Over 100 WOLF @ Best Buy members across the U.S. participated in the White House Project: “Go Run Training” and “Day at the Capital” workshops. Engage our female customers by delivering experiences and services that appeal to them. We collaborated with our female customers to improve our Appliances business in the southeastern U.S. by making changes such as adding a consultation desk and a kid’s corner. We saw positive business results as negative comp sales were reversed. Best Buy Fiscal 2010 Sustainability Report Women’s Leadership Forum 20 Best Buy Fiscal 2010 Sustainability Report HEROes Support Program Leveraging Web 2.0 and Social Networking To encourage the exchange of knowledge Best Buy encourages employees to participate and share insights between employees in the U.S., China, through numerous internal social media platforms, including our Mexico and Turkey, we implemented the company discussion forums, virtual town halls, online polls, Brian’s HEROes Support Program (HERO stands Whiteboard (our CEO’s blog) and interactive news site. Employees for Half-year Enterprise Retail Operations). also discuss and network externally on sites such as Facebook, The program was designed to help employees Twitter and LinkedIn. We have a social media policy for employees share knowledge that helps to further who participate in these sites, based on three simple principles: integrate our global operations. Be smart, be human, be respectful. In 2009, eight Best Buy U.S.-based employees We gather employee insights through these channels to create providing Geek Squad services traveled to a comprehensive “employee landscape” for the company: a China, Mexico and Turkey. Future versions snapshot of what our employees think, feel and understand. This of HEROes may take on different work in employee landscape is then used as critical input to strategies different countries or could involve and projects, measurement for tactics and tools, and an ongoing non-U.S. employees. pulse-check for company leaders. Green Council In June 2009, we founded Green Council. The Council is made up of 16 U.S. employees who have committed to learning more about Best Buy’s sustainability programs and to sharing information with their peers. It’s a voluntary role and all employees are eligible to apply for the Council. This fiscal year, the Council focused on recycling, energy management in our stores, and Earth Day 2010. They also shared best practices to improve efficiency and customer experience. Connecting Employees to Management Corporate communications is no longer a highly controlled, one-way process. And dialogue is no longer just a two-way exercise; it is an all-way network, as employees can also get information from each other. At its heart, the concept of dialogue is simple: talk, listen, and respond. But within a company especially a large company like Best Buy with a global, distributed workforce it can be incredibly complicated and difficult. When w we open up a conversation, we have to follow through by listening aand responding to the input, even if it challenges our current way o of thinking. T The value of dialogue, however, is worth the effort. When we invite e employees to take part in communication and give them a voice in tthe company, we believe we are creating a highly engaged w workforce that understands, shares, gets involved and cares. H Here are some of the programs we’ve implemented to help e employees and management connect. embers ouncil m Green C 21 Best Buy Fiscal 2010 Sustainability Report U.S. Employee Rates of Retention & Turnover 75% 69% 68% 69% Total Retention1 44% Total Turnover2 64% 67% 67% 60% 37% 36% 06 07 08 09 Total Enterprise Turnover2 FY’10 1 Retention represents the percent of employees who remained with Best Buy for the entire fiscal year 2 Turnover represents the total number of people who ended employment with Best Buy within the fiscal year divided by the total number of employees Surveys Annually, Best Buy measures employee engagement across the Enterprise using the Viewpoint survey. The survey results are shared with managers to help them understand what we are doing well and if any areas need improvement. Action plans created based on survey results are focused on enhancing the employee experience. We also use an Employee Satisfaction Index (ESI) survey, administered bi-annually to our U.S retail stores. Modeled after the Customer Satisfaction Index (CSI), the ESI measures employee satisfaction and commitment. It provides significant insights into 17 different dimensions of the workplace environment. These insights give us direction on how to improve the workplace experience, and subsequently increase employee satisfaction and loyalty. Additionally, we can use the results to identify important links between the employee and customer experience. We are able to achieve a more robust view of the overall employee experience using both surveys. Each brings a different, yet complementary set of key insights. Recognition at Five Star Imagine you are a general manager at one of our 158 Five Star Appliance stores in China, and you are feeling good about your store’s recent financial performance: revenue was up substantially and gross margin was well ahead of budget. You wonder if the hard work and commitment of you and your employees will be recognized. Then the phone rings. On the other end is Joseph Cheng, President of Operations, Nicolas Wang, President of Retail, and Moe Amirie, Vice President of Business Operations! They are calling to personally congratulate and thank you for your outstanding work. Talk about recognition. Each Monday, Joseph, Nicolas and Moe gather in a room at the Five Star headquarters that has several touch-screen TVs that display the previous week’s financial performance. They are able to tap on lines to drill down to store specific information, open a map of the city where the stores are located and even click on an icon to see a photo of the actual store. Through this technology, company leaders feel more closely linked to the brick & mortar locations and to the top performing employees that power the company’s success, and they have the opportunity to recognize and encourage their efforts. 22 Best Buy Fiscal 2010 Sustainability Report Civic participation We believe our employees can further develop their leadership skills by engaging in civic-minded activities. Our new BLUEgrassroots Captains program involved 67 general managers, district managers and other field leaders who volunteered to inform and engage their peers on public policy issues impacting the company. Our BLUEgrassroots Captains connect their local stores with elected officials, participating in more than 120 meetings with members of Congress in July 2009 alone. Nearly 1,000 employees connected with more than 400 local, state and federal elected officials at various events, store grand openings, press conferences or town hall meetings in fiscal 2010. For more, visit bluegrassrootsnetwork.com Fiscal 2010 Cool facts We awarded over $304,000 in prizes to employees for completing training courses on the Learning Lounge Employees completed 1.2 million hours worth of training on the Learning Lounge Employees completed 2,700,000 courses on the Learning Lounge Learning Lounge AWARD In 2009, the Learning Lounge won the Stevie Award for “Best Training Website” from the American Business ss Association. 23 Innovations in Rewards: It is important that we help connect employees to the resources requesting that those options be used to fund a reward for they need to serve customers well. But we also want them to learn extraordinary performance from employees who were not eligible and grow for their own sake — to foster creativity, innovative to receive stock options as part of the Company’s Long-Term thinking and leadership skills. Here are some of the programs we Incentive Plan. Because of his generosity, nearly 2,000 employees have implemented to help employees connect to knowledge received grants totaling approximately $7 million in restricted and opportunities for growth. shares in fiscal 2010. When Brad retired in June 2009, the Brad Career and Life Planning Anderson Legacy Stock Award Program was created as a way to Employees that dream big are an asset to our company. Dreaming big means they haven’t lost their sense of creativity and imagination — two characteristics central to innovation. To encourage our employees to think beyond their day-to-day lives, Best Buy launched a website called idreambestbuy.com. The site has tools for self-reflection, planning, commitment, inspiration and support for developing a career and life plan that makes them happy. Legacy Program Honors Former CEO’s Giving While he was CEO, Brad Anderson declined to receive stock options, honor his contributions, his values-based leadership and his commitment to Best Buy and its employees. The program awards options to purchase stock each year to deserving employees worldwide. Two thousand employees across our company were honored with the first-annual Brad Anderson Legacy Stock Award in 2009. To listen to the stories of some of the recipients, visit: ourstories.iambestbuy.com/Brad_Anderson_Legacy_Stock_Awards.html Gift of Time Policy Developed though the passion and commitment of our U.S. employees, the Gift of Time policy provides the opportunity to help employees who are unable to work due to a personal Our employees provide extraordinary service to our customers and we reward them for their contribution in return. Because every individual is motivated in a different way, we offer a wide variety of programs and opportunities. At Best Buy, rewards are designed to: Attract, motivate and retain the right talent to achieve our strategic objectives and long-term growth plans. Offer a competitive, flexible mix of rewards that reflect employee preferences. Pay for performance by providing a strong relationship between the rewards received and the performance of the company, team and individual employee. Globally, we focus on four reward components for employees: compensation, benefits, learning and development, and work environment. While our rewards philosophy and strategic compensation programs are managed centrally, many of our health, paid-time-off and retirement programs are tailored to meet the needs and preferences of employees based on their particular location. Overall, we maintained our company match to the 401(k) plan and offered salary increases (totaling more than $20 million) in a year when many organizations did not. issue, serious illness, injury or caring for an immediate family member who has a serious illness or injury. Employees can donate a combined maximum of four weeks of their own accrued vacation time to an employee who has exhausted his or her paid time-off benefits. Achievers Program We offer our employees the chance to be recognized as the “best of the best” for their job performance through our Achievers program. This program helps reinforce that meeting customers’ needs and teamwork are key aspects of company success. Top performers enjoy a trip, prizes and also get early information about the latest and greatest products and services from our vendor partners. Employees in the U.S. and Canada currently participate in the program. We hope to develop it into an enterprise-wide recognition platform. Best Buy Fiscal 2010 Sustainability Report Connecting Employees to Knowledge and Opportunity 24 Best Buy Fiscal 2010 Sustainability Report Our certification programs require employees to complete training and testing on topics related to their job on a regular basis. We have found that certification positively impacts our Customer Satisfaction scores. Over 272,000 certifications have been completed since the program launched in May 2009. In addition to certifying employees, we also require extensive training on our customer service process and how to engage customers in creating solutions that work for them. Day-to-day Training and Skill Development Chairman’s C ’ A Award Employees can be recognized for their unique contributions to the growth of the company each year through the Chairman’s Award, named in honor of Best Buy founder, Richard Schulze. The Chairman’s Award honors employees who are dedicated to fueling Best Buy’s growth through innovation or through efficiency and effectiveness. Each year up to $1 million is awarded to multiple projects. In fiscal 2010, 135 employees received recognition and cash awards for their contributions. Because people learn in many different ways, we deliver in-person training to our employees, in addition to the online options we offer. Examples of face-to-face training include new employee training and orientation, monthly weekend training sessions in our stores, and all-store meetings several times a year. Each day, our store managers are expected to hold a “chalk talk” with the team working that day to review customer feedback, store performance and recognize employees for outstanding work. As our business has expanded into other countries, our training materials on information protection, diversity and other values-based topics are translated into multiple languages and presented in a way that is respectful of the culture. Learning Lounge Beyond our own training program, Best Buy U.S. supports its We deliver training to our diverse and geographically-dispersed full-time employees who are interested in pursuing educational employees using a platform called the Learning Lounge opportunities outside the company. From helping employees earn (bestbuylearninglounge.com). The Learning Lounge includes a high school diploma to pursuing a PhD, our Tuition Assistance multiple training tools, including documents, videos, elearnings program is designed to build on our goal of becoming a world- or audio files that employees can download to an MP3 player. class organization. The Learning Lounge is accessible anywhere there’s an internet connection, so our people can learn where they like, when they like — and they are paid for their time. Approximately 70 percent of the content is provided by our vendor partners, making the site very cost-effective and the best source of up-to-date information about the technology products and services we offer. 25 Before the Boycott: 56 54 50 Average hours of training per year/per employee Riding the Bus Number of employees in the Tuition Assistance program To celebrate Black History month, Best Buy partnered with the National Civil Rights Museum to develop an eLearning program for middle school students. The program, called Before the Boycott — Riding the Bus, teaches students about legalized segregation and the events that led to the modern Civil Rights Movement. The program covers Rosa Parks’ heroic stand on December 1, 1955, when she refused to give her seat up to a white man, among other significant events. After completing seven stops in a simulated bus trip, the students will have assembled a “story” to submit to their school newspaper. A teacher’s guide is also available. To experience the Before the Boycott — Riding the Bus eLearning, go to beforetheboycott.com/. 4,880 $9.8M 2,846 $7.8M Tuition Assistance $7.8M 08 09 FY’10 As our company grows, we plan to expand our employee engagement strategies and programs. The goal: to keep employees connected, not only in the U.S., but also where we operate internationally. Employee surveys, diversity and inclusion programs, training and leadership development are all examples of programs that can be expanded. Ultimately, we believe that connecting employees to each other, to management and to knowledge and opportunity will drive growth and innovation here at Best Buy. eLearning 6,255 Best Buy Fiscal 2010 Sustainability Report Training & Education 26 Martin Luther King Center gets active with Military forum Wii of improving the average shipping time of 30 days to a military address. From Since 2008, the Martin Luther King Multi-Service Center and Best Buy store #231 in Indianapolis, Indiana, have partnered to provide youth with a diverse set of opportunities. This past year, the partnership established the Wii Fitness Center, featuring 10 Nintendo Wii consoles and 10 Insignia 37-inch televisions. The program has already earned an endorsement from the Indiana Department of Health and is targeted to expand its appeal beyond youth to the senior community, further delivering digitally-connected health benefits. that partnership, and working with the U.S. Post Office, Best Buy implemented “ The youth that use this facility live a new process in June of 2009 that provided faster shipping — 7 to 14 days — in areas where technology like this is not available,” said John May, General Manager, Store 231. “ We feel good about being able to support the Center and helping them improve the lives of others with technology that’s fun and easy to use.” shipping time Over the last couple of years, Best Buy has expanded the assortment of products we have available to ship to military personnel. While we were pleased with our increased ability to meet these particular customers’ needs, we found there were issues with the amount of time it took to ship the items overseas. Shipping can be difficult in war zones where there are added security processes. Our .com team partnered with our Military Employee Business Network and the Transportation team to research best practices, with a goal and better tracking. Customer feedback the first month was extremely positive, and our .com Customer Satisfaction scores spiked 14 points. Our plan for future enhancements includes implementing a process to provide pre-paid labels, free shipping and appropriate customs documents for any items that may need to be returned due to damage, defects, or in the event that an incorrect item was shipped. Connecting with communities in El Paso Best Buy store #1470 in El Paso, Texas, created a program in partnership with the Texas Department of Transportation and the local University Medical Center to combat the high child fatality rate in the area due to inadequate car seat restraints. The store’s Geek Squad agents became certified to do the inspections and to date, they have helped inspect over 200 car seats. Not only are these employees helping to solve a serious community safety issue, they also helped build customer trust and loyalty by showing that Best Buy employees genuinely care about their community. 27 performance Overall Customer Satisfaction Score (maximum of 100) Number of Substantiated Privacy Breaches Number of Customer Questions Answered viaTwelpforce zero over 23,800 82.8 (a 2.3 percentage point increase over last year) Best Buy Fiscal 2010 Sustainability Report at a glance people Connecting with Customers In the connected world, customers are communicating with us in ways we could have never imagined before. And we are listening. We are measuring their satisfaction across every channel — in our stores, on our web sites, through call centers and in-home services, and social media spaces like Facebook and Twitter. We are open to connecting with our customers in whatever way they choose to interact with us. Even more importantly, we must be able to help them with the questions, concerns and issues they tell us are important to them. Our customer care goal is to keep connections strong between Best Buy and our customers by investing in programs that increase our ability to listen and to respond creatively and effectively. In this section, you will learn how we are connecting our customers to solutions that address their individual needs. Customer Care Challenges challenges response results looking forward Consumers expect to have instant access to accurate, reliable information about our products and services. They also want to have their questions answered and their opinions heard. We used both our .com site and innovative web 2.0 tools, to share information and interact with customers at their convenience. Innovative venues like Twelpforce and IdeaX allowed us to connect with thousands of customers 24/7. We will continually seek timely and convenient ways to engage customers to share information and gather their opinions. A vast number of international, national, and state security and privacy laws and regulations exist, presenting Best Buy with widely divergent, and in some cases conflicting, obligations. We developed an Enterprise Privacy Group (EPG) to adopt a set of policies, programs, and training to govern privacy decisions and interactions with customers. We did not experience any substantiated privacy breaches. We maintained E.U. Safe Harbor certification. And we continue to place a focus on responsible use of new technologies. We will continue to evolve a global approach and generate additional opportunities for employee education. 28 Best Buy Fiscal 2010 Sustainability Report Customer Satisfaction Surveys In the U.S., we rely on a customer satisfaction survey to help us assess areas where we excel and areas where we can do better. We revise the survey each year based on input from consumer focus groups and employees. Each of our Best Buy stores and our .com team can also customize their surveys to better understand what local Best Buy U.S. Retail Customer Satisfaction Survey Results customers want. Survey results are posted on our Intranet for employees to consider as they develop and refine their strategic overall customer satisfaction plans and address opportunities to improve performance. 77.4 In fiscal 2010, one of the more dramatic shifts in our survey scores 79.2 80.7 82.8 was in the Problem Resolutions category. While we believe the lower score is due, in part, to a shift in our survey methodology, we are happy to report that the total number of people stating that store atmosphere there was a problem with their shopping experience decreased 85.7 sharply this past fiscal year. 86.9 85.7 84.0 merchandise 83.6 82.9 Best Buy.com Purchaser 80.9 81.6 Customer Satisfaction Survey Results overall satisfaction 85.0 product descriptions 85.1 84.3 merchandise associates 77.2 84.1 search 85.5 navigation 86.8 83.9 ordering process 85.3 88.1 48.3 85.5 site performance 85.5 82.9 problem resolution 48.9 86.4 79.9 50.9 46.2 83.7 84.1 customer service desk 79.0 86.2 82.1 checkout transaction costs 85.7 85.1 88.1 09 87.1 81.5 FY’10 09 81.3 FY’10 87.6 82.9 07 08 09 FY’10 29 TwelpForce and IdeaX Best Buy further embraced the social networking Our customer care call centers are focused on meeting customers’ space with two new tools to support customers needs, using the full talent of the Enterprise Customer Care and provide another format for them to voice team. They continually monitor the overall health of the customer their opinions and share ideas with us. experience, showing strong performance in meeting those needs Twelpforce is the name of Best Buy’s customer in fiscal 2010: 佡 Customer satisfaction improved by 4.16 percentage points over fiscal 2009 to a score of 70.1. 佡 Customers reported that we resolved 74.6 percent of all questions or issues, an improvement of 3.4 percentage points from the previous year. 佡 Customers also gave our customer care employees high marks, especially in the areas of understanding their needs and level of knowledge. service forum via Twitter. Customers can send us “tweets” with questions about the products they are interested in. Best Buy employees from our Enterprise Customer Care team, Blue Shirts and Geek Squad are able to provide expertise and support whenever customers might be seeking assistance. They respond to Twelpforce posts as soon as possible — usually within 30 minutes. Twelpforce users have directed over 45,000 online clicks to BestBuy.com. As of January 2010, Twelpforce membership is just shy of 2,400 employees, and 16,000 people have bookmarked and follow Twelpforce on Twitter. In 2009, we launched IdeaX (bestbuyideax.com), an online forum for Best Buy customers to share and discuss ideas. Customers are encouraged to share new ways to solve problems and improve their experience with women participated our website, products, services and store policies. There is also a feature where site users can comment on others’ ideas and vote on which ideas they think are best. IdeaX has become a great opportunity for our company to find out what is important to our Women’s Leadership Forum: Consumer Innovation Program customers. We fully expect ideas that have strong support from this online community will impact our business going forward. Through our Women’s Leadership Forum (WOLF @ Best Buy), Best Buy has the opportunity to engage our female customers by Protecting Privacy inviting them to help us deliver better technology and shopping Privacy is one of the most important issues to customers today. experiences. WOLF invites female employees and consumers to Emerging technology and communication tools such as social participate in innovation teams that work together to enhance media, online behavioral advertising and mobile marketing give overall store design and product assortment. In addition to sharing us new ways of serving our customers and communicating with their unique perspectives, this experience provides an opportu- our employees. These same tools also create complex privacy nity for these young girls and women to broaden their personal issues that require transparent and creative solutions to meet and professional networks and sharpen their leadership skills. evolving privacy concerns. At Best Buy, we address these needs Through a 90-day innovation process, these groups have helped improve several specific areas of our stores, including Appliances, by balancing policy with transparency and our customers’ and employees’ desire for information with their privacy needs. Services, Home Theater, Gaming and Mobile Phones. As a result As a leading retailer, we continuously update our policies, monitor of their recommendations, adjustments have been made to store our processes and systems, and incorporate up-to-date security spaces and more accessories have been added, making these measures to ensure we address employee and customer concerns areas more appealing and easier to shop. More than 1,500 female and emerging issues related to protecting data. consumers in 10 cities across the U.S. and the U.K. have helped Best Buy become a more female-friendly experience. Best Buy Fiscal 2010 Sustainability Report Best Buy U.S. Customer Care Call Centers — Customer Satisfaction Survey Highlights 30 Best Buy Fiscal 2010 Sustainability Report Hint Helper and Customer Privacy During the fiscal 2009 Holiday season, Best Buy promoted the Hint Helper. Customers selected gifts they wanted and then sent a link to their friends. By signing up, during their visits to Web sites across the Internet, they would receive online banner ads containing the gifts selected by their friends. The friend had to agree to have their online behavior tracked in order to serve up the ads which would be customized with their name and their friend’s gift ideas. Best Buy took a proactive, transparent stance to ensure users understood what information would be collected and ir privacy. used and how they were able to control their Our Enterprise Privacy Group operates with the following values to build and maintain positive, constructive relationships with customers and employees and to help us make informed decisions: 佡 Proactively identify opportunities to create customer value through robust privacy practices 佡 Understand, respect and respond to the privacy concerns and expectations of our customers and employees 佡 Understand, respect and ensure compliance with the laws of the communities in which we do business 佡 Partner with internal business teams to enable their goals while ensuring privacy is an integral part of the solution 佡 Empower employees to take responsibility for protecting the personal information of each other and our customers 佡 Monthly audits by a third party to determine the efficacy of our M-rated carding program. In fiscal 2010, Best Buy’s compliance in preventing underage gamers from purchasing M-rated games was 83.3 percent When it comes to video games, there are often two main criticisms: 1) the violence depicted in some games is seen as inappropriate, and 2) the sedentary nature of playing video games in general In fiscal 2010, Best Buy continued to perform as an industry may contribute to rising rates of obesity. These concerns can be leader in establishing and deploying best practices for protecting elevated when we consider the potential impact these issues customer privacy. Working with the Retail Industry Leaders could have on our youth. Best Buy is taking steps to address both Association, Best Buy formed the Privacy Leaders Council to issues through education in our stores and at bestbuy.com/family understand and advocate for improved retail industry practices gaming. We also provide opportunities for families to experience for addressing privacy concerns. Best Buy also continued its long games before purchasing them. Our policies have helped us relationship with the Center for Information Policy Leadership continue to build credibility, trust, loyalty and a deeper relation- to further thought leadership in understanding and addressing ship with a critical customer segment — families with youth. global privacy concerns. In fiscal 2010, we updated our approach regarding the advertising Family Gaming at Best Buy of M-rated video games. Historically we have not advertised In fiscal 2010, we continued our commitment to support the M-rated video games, either on TV or in our stores, but several Entertainment Software Rating Board (ESRB), an independent factors caused us to reconsider this line of thinking. We ultimately nonprofit group that provides standardized ratings for video chose to advertise a single M-rated video game in fiscal 2010. This games. We have numerous practices in place to help parents and is why: First, mature games are among the top selling video games youth make informed decisions about the games in our stores. and we want to be sure our adult customers are aware that Best Buy Our practices include: offers some of these games. We also note that there is a difference 佡 Producing a holiday buyer’s guide which was heavily focused between mature video games with mature themes and M-rated on family games 佡 Age verification (also called “carding”) for M-rated (Mature) games — including an online age-verification process at checkout games that contain graphic and gratuitous violence. Finally, when choosing to advertise a mature video game, we have and will continue to approach it with heightened sensitivity, not showing scenes of violence nor positioning the game for the teen market. 31 Best Buy was able to help hundreds of thousands of consumers embrace the conversion from analog to digital television broadcasting last year. We partnered with government agencies Every day, Best Buy hopes to listen to and learn from our custom- and nonprofit organizations and leveraged the knowledge of ers. This is an integral activity within our business that is aligned our U.S. store employees to help consumers make the transition with our company values and mission. When our employees and our to digital service. Our dedicated phone line, DTV website and customers work together, the resulting insights and innovation in-store workshops were just some of the resources we provided. allow us to have a positive impact on many connected lives. The value of these efforts was broadly recognized: To further this work, we are developing a globally-focused “ The National Telecommunications and Information Administration’s (NTIA) consumer insights team that will enable Best Buy to do even more with deeper information about customers’ needs and preferences. At the same time our Enterprise Privacy Group is partnership with Best Buy helped millions of focused on their goal to ensure that customer and employee Americans convert to digital broadcast televi- privacy is protected across the enterprise and is actively sion reception. Your involvement was essential and control with respect to their customer information. to the program’s success — including helping In the U.S., we support the U.S. Federal Communications to prevent the most vulnerable over-the-air Commission (FCC) national broadband plan and will leverage our television viewers from losing a key connection developing new ways to give customers greater transparency knowledge and resources to help provide underserved and small business customers with better connections that enhance their to the world. Our work together enabled our lives. We also plan to continue our process of learning from our nation to make a smooth and effective conver- customers and communities — to find out what they want and sion to digital broadcast television. ” need to lead connected, sustainable and responsible lives. — Lawrence E. Strickling, Assistant Secretary for Communications and Information, U.S. Department of Commerce Enhancing customer experience through language In 2009, we offered employees the opportunity to learn another language to better serve our customers. Employees around the world have embraced the opportunity saying: “ Offering this to employees is a great benefit for us, but more importantly, the customer. ” “ Many of my stores have a significant percentage of Spanish-speaking customers and employees, so to be able (even just a little) to have dialogue in their native language allows me to show respect. ” “ I help two to three customers a day that I would not have been able to help before starting the program. ” Best Buy U.S. employees can also communicate with customers through on-the-spot, over-the-phone translations in our stores. Stores across the country have reported that this service has helped customers feel more welcomed. Best Buy Fiscal 2010 Sustainability Report Digital TV Conversion 32 Letter excerpt from Bridging On behalf of Bridging staff, volunteers, board members and especially our clients, we extend a sincere thank you for your generous donation of 235 hours by 80 Best Buy volunteers in 2009. Your gifts of time and talent allow Bridging to continue providing families in need with quality furniture and household items. More than 5,000 families benefit from Bridging each year. That’s 17,000 people — half of them children — whose lives were improved by the commitment and dedication of your team members. Your teams worked hard loading and unloading trucks, inspecting and folding sheets, assembling donated furniture and working directly with families. In 22 years, Bridging has helped change the lives of more than 52,000 families. The objective of Bridging’s Volunteer Program is to continue to serve families from our community by leveraging community resources, including volunteer time and talents. Thanks again! Best wishes, Diana Dalsin Volunteer Manager Joe McKinley Volunteer Coordinator Fran Heitzmann Bridging Founder hours 235donated 33 performance Fiscal 2010 Philanthropic Donations Number of Employee Volunteers Number of Volunteer Hours $25.2 million 21,379 125,600 Best Buy Fiscal 2010 Sustainability Report at a glance people Connecting with Communities There are many ways to support a community — through donations, volunteering our time, and providing other resources. Our strategy is based on our company’s value of “unleashing the power of our people.” We have chosen to utilize the strengths of two well-informed groups — our employees and young people — to help make decisions about where our resources can make the most difference. We are focused on connecting these two groups with their communities because we think they best understand their local communities’ needs. We also see this is an opportunity for growth and leadership for both our employees and for teens, who make up a large part of our customer-base and workforce, and who will drive technology consumption in the coming years. In this section, you will see how we are working to connect employees and youth to their communities. Community Challenges challenges response results looking forward Teens around the world often feel disconnected and undervalued. Our social change program, @15, recognizes the value of teens by giving them a platform to voice their opinions and by supporting their development. Over 175,000 teens have become members of at15.com where they have an opportunity to help allocate funds to organizations that improve the lives of teens. @15 will continue to invest in academic research that provides insights into ways we can best support teens. Fewer girls gravitate toward careers in technology. Geek Squad Summer Academy (GSSA), while open to either gender, tends to focus on helping girls realize their potential and the opportunities that exist for careers in the technology field. In fiscal 2010, GSSA expanded to 22 courses in which approximately 80% of the participants were female. GSSA will seek partners that can help the program expand and reach more girls and teens. One partnership currently being developed is with the Girls Scouts of America. 34 Best Buy Fiscal 2010 Sustainability Report Donations & Other Community Investments (in millions) $31.8 $28.7 $33.4 $26.3 $25.2 $14.2 $13.5 $12.3 $16.5 $11.1 Here are some highlights of @15 programs that engage, support and empower teens: $18.1 $18.2 $9.5 Total Donations $12.7 $9.4 Direct Cash Donations Best Buy Children’s Foundation Cash Donation at15.com At the core of Best Buy’s @15 program is at15.com, a free online community built with teens, for teens. The website is where teens can voice their opinion on issues, participate in polls or nominate their school. In addition, a variety of @15 nonprofit partnerships and programs are featured on the site, each designed to engage $1 $1 $1 $3.4 $3.5 Non-Cash Donations and mobilize the more than 175,000 teen members. @15 Exchange 06 07 08 09 FY’10 Best Buy has put the philanthropic power of @15 directly into the hands of teens. Teens can earn points on at15.com for responding to surveys, posting a blog entry and more. Quarterly teens can We are proud that Best Buy’s financial gifts to the communities allocate points they’ve earned to nonprofits that support teens. we serve are 1.5 percent of our pre-tax earnings. Overall earnings The percentage of points allocated determines the portion that were down during the fiscal year and that was reflected in our we donate to the featured charities each quarter. In fiscal 2010 reduced budget of $25.2 million in fiscal year 2010. members directed $1 million of Best Buy’s philanthropic budget to Connecting Teens and their Communities 16 nonprofit organizations. Nonprofits featured in the @15 Exchange in fiscal 2010 included Teens have always been a focus at Best Buy. They influence our organizations such as Do Something, PACER Center’s Teens company as consumers, as current and future employees and Against Bullying, Ashoka’s Youth Venture, Global Citizens Corps as contributors to the communities where we do business. They and Genesys Works. are early adopters, highly informed and heavy users of today’s connected-world technologies. Their expertise and input is vital Teach@15 Awards to ensure that our organization continues to grow and thrive. Starting in fiscal 2010 students could nominate their schools to win gift cards for technology upgrades. Teens vote to select three Fiscal 2010 marked the second year of @15, Best Buy’s community winning schools every 15 days. First place winners receive a giving program directed by and toward teens. Teen voices and $1,500 gift card, second place winners receive a $1,000 gift card perspectives are at the heart of @15’s mission — to recognize, and third place winners receive a $500 gift card. In the first year understand and fuel their power to contribute and connect to our of the program 40 schools received awards totaling $43,500. world. Best Buy has received an abundance of positive feedback on @15 and requests for partnership from other corporations, nonprofits, government agencies and academics. This high level of interest reaffirms the @15 mission and indicates the core message of @15 is resonating with the community. U.S. Teach @15 Awards Number of Awards Total Dollar Amount of Awards 40 =$43,500 35 U.S. @15 Scholarships 1,551 $2.7M $2.8M 1,000 1,000 $1.5M $1.0M 07 08 09 Number of Scholarships Awarded Dollar Amount of Scholarships Awarded FY’10 @ 15 Scholarship Students in grades 9–12 may apply for a $1,000 scholarship for post-secondary study based on their grades, community involvement and/or work history. In fiscal 2010, 1,000 scholarships were awarded totaling $1 million. Since its inception in 1999, more than $17.5 million in scholarship dollars have been awarded to more than 13,000 eligible students. @15 Community Impact Challenge This program seeks teens that are ready to change their community through their own sustainable social ventures. Each team is provided with coaching in grassroots marketing as they compete for five $5,000 grants and five $1,500 grants. Their peers, @15 members, vote for the ones they believe are most deserving of grants. A total of 15 finalists are selected based on the potential for community impact and long-term sustainability. Teen Voice Report To deepen our knowledge of teens, including how to support and benefit from teen strengths, @15 worked with Search Institute, a national leader in adolescent research, to create a groundbreaking report, Teen Voice 2009: The Untapped Strengths of 15-Year-Olds. The report, based on a national study of more than 1,750 U.S. 15-year-olds, explores the motivations, opportunities and relationships needed to set and keep these teens on a positive course at a critical time in life. The report informs and supports Best Buy’s efforts to engage teens through @15. A follow-up study is currently underway. The complete Teen Voice 2009 report may be viewed and downloaded at at15.com/about_at_15/insights. Best Buy Fiscal 2010 Sustainability Report 1,742 36 Best Buy Fiscal 2010 Sustainability Report Geek Squad Summer Academy (GSSA) Best Buy’s Women’s Leadership Forum (WOLF @ Best Buy) developed a program that inspires a younger generation to get involved firsthand with technology and science-based career paths. Through interactive classes and activities, the Geek Squad Summer Academy (GSSA) was formed to demystify the ins and outs of PCs, Apple Macs, routers, digital music and more for young people ages 9 to 18. The class curriculum is developed and taught by volunteer Geek Squad agents. In addition to benefitting kids, the GSSA has created a new career path opportunity for our own employees and GSSA has successfully driven brand awareness and increased market share in communities where academies are conducted. The program’s popularity has driven us to expand it. Thirty academies are planned for fiscal 2011, including new classes in London, England. Geek Squad agents plan to train 2.7 million Fiscal 2010 GSSA performance: 22 academies held across the U.S. Approximately 2,000 teens participated Courses in English, Spanish & American Sign Language Unleashes the power of our people: 600 employee volunteers from Geek Squad & Best Buy stores 84 percent of employees agree or strongly agree that they are more engaged in their own job after volunteering for GSSA 76 percent of employees agree or strongly agree that participation in GSSA positively affected their ability to better serve customers members of Girl Scouts of America and their troop leaders in fiscal 2011. In the spirit of making training available to participants everywhere, we plan to offer GSSA online for teens, parents and the general public soon. Best Buy Canada’s Teen Focus In fiscal 2010, Best Buy Canada and Future Shop gave nearly $2.1 million (CAD) in monetary donations to nonprofit organizations. This was in addition to contributions to the United Way and other local in-store donations from employees. 37 Best Buy Canada made great strides with its community program through the Best Buy for Kids giving program. As the umbrella at the store level this year. Each store received $2,000 (CAD) program for all of Best Buy Canada’s community involvement, to support their community involvement efforts; they gave to Best Buy for Kids includes Best Buy’s two signature programs — schools, youth sport teams and other nonprofit organizations. the Best in Class Fund and Tech-it Away. Many stores enthusiastically shared their stories and photos The Best in Class Fund is a community investment program whose goal is to support schools across Canada and to inspire and advance learning through the integration of technology in the classroom. This year, 15 schools received a $20,000 (CAD) across the organization through internal employee websites. And in the true spirit of partnership, many stores enhanced their community involvement program by volunteering for the organizations that received donations. technology grant. Tech-it Away is a unique program designed to make it Future Generations — Creating Infinite Possibilities F easy for schools to Canada’s Future Shop continued its decade-long commitment to C recycle consumer ssupporting students and education in Canada. Since its inception, electronics. This F Future Shop has awarded 522 post-secondary scholarships year, Best Buy ((valued at over $4,000 (CAD) each), 10 Tech Labs (valued at Canada partnered $ $50,000 (CAD) each) to deliver cutting edge programs to students with schools to host iin grades 10–12, and over 600 computers to nonprofit partners. e-waste drives, helping F Future Shop believes one of the best investments it can make is students collect unneeded electronic items from the commu- providing tools to students and teachers to help reduce the nity. Each participating school received a $10,000 (CAD) digital and economic divide for disadvantaged youth. technology grant from Best Buy. The school that brought in the most electronics received an additional $2,000 (CAD) from Best Buy to fund a student-led environmental project. This year, Best Buy partnered with eight schools in Vancouver and Toronto over two Tech-it Away event days, donating over $85,000 (CAD) and collecting nearly 165,000 pounds of e-waste from the community for safe recycling. Best Buy Canada is a strong supporter of Big Brothers and Big Sisters of Canada (BBBS), a national partner since 2002. Donations were made to BBBS’ In-School Mentoring program (at the national level) and individual partner agencies located in communities near Best Buy stores were each given a laptop,, software and Geek Squad services to further support their In-School Mentoring programs. Another program, the Future Generation Tech Lab program provides funds for technology products to under-resourced schools. Five schools were awarded grants for labs valued at $50,000 (CAD) each. Additionally, Future Shop entered into its tenth year of partnering with the Boys and Girls Clubs of Canada, which opens doors for thousands of young Canadians so they can create their own infinite possibilities. Best Buy Fiscal 2010 Sustainability Report Best Buy Canada continued to help kids reach their full potential 38 Best Buy Fiscal 2010 Sustainability Report Volunteering = Tag Team Awards U.S. employees who choose to volunteer are asked to track their hours, and, after 40 hours of volunteerism, are eligible to receive Carphone Warehouse Gets Connected with Teens a Tag Team Award which provides a cash donation to the The Carphone Warehouse (CPW) supports teens through nonprofit with which they volunteer. Best Buy employees logged Get Connected (getconnected.org.uk), a charity that offers support more than 125,000 volunteer hours in fiscal 2010, which trans- for young people in distress. Through phone, email or live web lated to 2,328 Tag Team Awards totaling more than $2.5 million. chat, young people are able to talk through next steps when faced with difficult circumstances. CPW raises funds for the organization, providing overhead costs, including training, facilities, equipment, and IT and marketing support. Additionally, employees may earn extra vacation time based on the volunteer hours they Volunteerism & Tag Team Awards dedicate to staffing the Get Connected hotline. $4.0M $3.5M Connecting Our Employees with Communities Dollar Amount of Tag Team Awards Best Buy encourages employees to be actively involved in improving the communities where they live and work. Local giving 151,046 125,600 59,724 42,421 20,423 community involvement) and the Retail Marketing Tool (branded 6,200 Number of Employee Volunteers 3,288 To assist them, we provide a number of tools, including the intranet-based Community Planning Portal (resources for Number of Volunteer Hours 41,125 $522K needs and volunteer their time with organizations they believe make the most impact. $2.5M $890K takes many forms, but the goal is to promote leadership and growth in employees by encouraging them to identify community 165,321 21,379 9,000 1,925 2,328 resources for stores). Employees can use these tools to customize the support they give based on the needs of their community. 622 06 869 07 08 09 FY’10 Number of Tag Team Awards 39 In fiscal 2010, local communities were further supported through The U.S. Community Grants program is a local grant initiative nearly $500,000 in store giving and $3.5 million in non-cash that empowers U.S. teams to decide how Best Buy Children’s donations. Foundation funds are used in their local area. U.S. retail employees at all levels are invited to participate to ensure that the organizations receiving grants are helping to meet their communities’ most pressing needs. International Communities Best Buy’s involvement in the community takes many forms. As we open stores around the world, it is common for new store teams to select community initiatives that address local needs. In Mexico, The Community Grants program objectives are to: for example, the Mundo E store chose to make a donation to a Encourage strategic partnerships with nonprofit organizations local library, whereas the Best Buy China team chose to contrib- that empower teens to excel in school, engage in their communities and develop leadership skills Support comprehensive local business growth plans with resources to fund nonprofits Inspire brand and customer loyalty by strengthening communities Engage employees in local decision making to impact skill development, retention and morale ute funding for the building of a retirement home for victims of a recent earthquake. Best Buy Turkey launched a program where employees visit high schools, repair technology lab equipment and teach effective use of technology equipment. Continuing the theme of providing educational support, employees of Best Buy Turkey also helped a children’s care center, while China’s Five Star employees established the RMB 2M Scholarship, which provides monetary support for 100 students from Sichuan earthquake stricken areas who planned to enter college in 2009 and 2010. U.S. Community Grants 197 193 Number of Grants Best Buy is invested in the communities we serve, by encouraging employees and local teens to seek connections with their communities. We see a future where Best Buy brands continue 85 19 $1.1M $1M Dollar Amount of Grants to partner with community groups to educate and create opportunities for growth. Moving into fiscal 2011, Best Buy will work to further refine the $643K @15 programs to better engage youth, demonstrate their positive impact on society and develop young people as leaders in using $196K technology to drive social change. To support these goals, we’ll look to create ways for our employee to participate and support 07 08 09 FY’10 @15 locally, collaborate with a select group of non-profits that engage teens directly and integrate @15 with other youth focused initiatives currently being developed at Best Buy. Best Buy Fiscal 2010 Sustainability Report U.S. Community Grants 40 41 performance Percent of Factories Audited Average Balanced Scorecard Results 82% * 97% * 100% of non-U.S. a 5 percentage point improvement over fiscal 2009 results Percent Change in Total Number of Supplier Code of Conduct Violations 43% decrease compared to fiscal 2009 Best Buy Fiscal 2010 Sustainability Report at a glance people Connecting with our Exclusive Brands Suppliers Best Buy’s commitment to people extends beyond our employees, customers and the communities where we operate. We also care deeply about the people in our supply chain — those who work at the factories that manufacture and assemble our Exclusive Brands products, which includes Insignia, Dynex, Init, Rocketfish and Geek Squad brands. Developing an ethical global supply chain can be challenging and to that end, our code of conduct and factory audit program aim to ensure that our expectations for worker rights are clearly articulated, communicated and actualized. Adherence to our policies is also good for business. By improving working conditions, we believe workers will be more engaged, turnover will be reduced and there will be a reduction in occurrences of walk-outs, strikes and strife that could potentially lead to a decrease in product quality and overall productivity. We are approaching these goals with a strategic focus on making connections. We are connecting directly with third-party manufacturers to communicate our policies. We are connecting internally to continually improve our audit process, and we are making connections with other global retailers to improve efficiencies. Supply Chain Challenges challenge response results looking forward Labor shortages can make current challenges with child labor and working hours more difficult. Provide training to factory management on methods to address labor shortages, such as increasing wages/benefits and improving working conditions. Increased training and collaboration are some of the factors that lead to a decrease in the percentage of audits that identified child labor and working hour issues. Encourage continuous improvement of working and living conditions and employee benefits. Fiscal 2010 was another difficult year for the global economy. Many factories around the world struggled with the decrease in orders and were forced to lay off workers, or in some cases, go out of business. Best Buy carefully selects and builds deeper relationships with suppliers to reduce our risk during challenging times. No factories manufacturing our Exclusive Brand products closed during fiscal 2010. Continue our practices in this area, by placing importance on long-term relationships with strategic suppliers. 42 Best Buy Fiscal 2010 Sustainability Report 5 phases Our audit program includes five specific phases that are focused on driving continuous improvement and ensuring a vendor base that has the management systems, capacity and willingness to partner with Best Buy to meet our Supplier Code of Conduct. The five phases include: Factory selection An initial screening is conducted before Best Buy will source from a factory. In the last three fiscal years, over 40 factories did not become Best Buy suppliers based on the initial review. Monitoring program Each year we audit every non-U.S. factory in our Exclusive Brands supply chain at least once. Those identified as higher risk are audited more frequently. Training and capacity building Best Buy believes working with factories to improve management systems and building capac- High-level Overview of Factory Audit Program ity is a more effective method of raising working conditions than punitive measures that result in production disruptions and worker layoffs. In last year’s Corporate Responsibility report, we discussed our Public reporting and accountability Exclusive Brands factory audit program in detail, including the Beginning with our first corporate responsibility social, environmental and security components, and how we set report in 2006, Best Buy has annually reported clear expectations for our manufacturing partners. We further non-compliance findings. Each year we look for ways clarify our program through factory management training and to provide additional transparency so that our stakeholders have providing a detailed overview of our implementation guidelines confidence in our ability to manage risk and improve the working prior to placing an initial order. The overall intent of the program is conditions where Exclusive Brand products are manufactured. to not only to identify areas of non-compliance, but to determine the root cause of potential violations and help factories build the capacity to eliminate future non-compliance. We dedicate time and resources to identifying opportunities and threats to continual improvement, including conducting a gap analysis between Continuous learning and improvement Our program includes building relationships, fostering capacity building and encouraging the adoption of best practices. the factories’ current practices and best practices and then For more information about our factory audit program, please see developing action plans to address any gaps. The data we collect our fiscal 2009 Corporate Responsibility report. is used to make sourcing decisions. “ Best Buy provides a lot of training for its suppliers. In 2009, several of our employees attended two training sessions on CSR by Best Buy. Best Buy also coordinated third-party training for factory management and employees. Overall, Best Buy provides more training than any of our other clients. ” — Social and Environmental Manager, Exclusive Brands Supplier 43 A lesson we have learned in ethical sourcing is that to drive compliance with our standards and systemically improve the living and working conditions at factories, our auditing program needs to go beyond simple monitoring. To that end, our program includes several aspects that help us achieve and sustain a high-performing factory base, such as: Analyzing factory capabilities and willingness to collaborate In addition to monitoring compliance with our code, we spend time examining a factory’s ability to meet our standards over the long term. We also investigate how willing factories are to Fiscal 2010 Performance Compliance with our Code of Conduct improved in fiscal 2010. Overall there was a 43 percent drop in the total number of violations discovered compared to fiscal 2009. In addition, the number of critical violations, those that directly infringe on the rights of workers or have an immediate, detrimental impact on the environment, dropped significantly from 62 cases in fiscal 2009 to just 20 in fiscal 2010. Some of the reasons we feel performance improved include: collaborate and implement recommended improvements to our approach 100% of potential new factories received their facilities. a pre-screen and pre-training to meet our Code of Conduct. By Best Buy Fiscal 2010 Sustainability Report Building a High Performance Factory Base conducting this work prior to placing orders, we believe we eliminated Management systems One of the most critical attributes of a high-performing factory is a strong management system. Ensuring that policies, procedures, training and clarity of roles and responsibilities are in place significantly improves the chances that the factory will remain compliant. In fact, inadequate management systems constitute a high percentage of the violations of our Code of Conduct, as opposed to actual labor or environmental violations. low-performing factories before they entered our vendor base. results Nine of 94 new factories failed the pre-screen. Seven of those were eliminated after being identified as high risk. The other two were trained and corrective actions were implemented so they passed the second pre-contract audit. our approach Sought to eliminate “C” and “D” performing factories (We use a balanced scorecard with grade levels of A, B, C and D to compare the performance of a factory. See our 2009 Corporate Responsibility report for more information on our results In fiscal 2010, all “C” Employee hotline balanced scorecard grading.) Providing an open channel of communication with consistent and “D” level factories were either removed from our vendor base access is critical, as a result we have instituted a hotline which or they improved their performance to “A” or “B”. encourages factory workers to report worker rights violations. Best Buy investigates every call to make sure, when necessary, corrective actions are put in place. Shadow and validation audits In addition to auditing our factories, we also audit our third-party partners who conduct the factory audits on our behalf. We do this our approach As described in our fiscal 2009 report, we placed an increased focus on 21 strategically important factories that were deemed at a higher-risk of failing to comply with our standards. results The additional trainings and collaboration these factories received has improved balanced scorecard results from 67 percent in fiscal 2009 to 83 percent in fiscal 2010. by observing their audits, and sometimes conducting a separate audit to compare our findings with those of the third party. This helps ensure that the initial audit methodology is effective and applied consistently everywhere. 43% drop in violations 44 Best Buy Fiscal 2010 Sustainability Report Escalation Process In Fiscal 2010, the Exclusive Brands and Sourcing teams developed an escalation process that allows Best Buy to more effectively address critical violations when they occur. We believe the escalation process, which includes senior factory management Best Buy joins the Global Social Compliance Programme In fiscal 2010, Best Buy joined the Global Social Compliance Programme (GSCP), a business-driven coalition of companies whose vision is to harmonize existing supply chain standards. GSCP members, with the assistance of multiple stakeholders, are transparently developing a set of reference tools and processes that provide a common interpretation of working and environmental requirements. Today, factories spend much of their time preparing for audits that are inconsistent and often conflicting, which potentially takes time and resources away from improving working conditions. This proves to be inefficient for both and influential leaders from the Exclusive Brands team, provides another opportunity to communicate our standards, guidelines and expectations. The process focuses on several key areas: Quickly identifying corrective actions Ensuring factory management is aware of the non-compliance and is committed to resolving the situation Exploring ways to improve factory management systems for the long term Increasing decision making speed to more quickly improve working conditions the manufacturer and the buying companies and does little to drive improvement. By joining the GSCP, we are seeking to align our factory audit program with a shared, global and sustainable approach. By doing so, we will ultimately be able to share factory audit data which will then allow a shift in time and resources to remediation, capacity building and trainings that will improve In fiscal 2010, our Exclusive Brands factory audit program working conditions, lower costs and improve efficiency in the results improved markedly compared to fiscal 2009. We are supply chain. taking several steps in fiscal 2011 to continue that trend, Lower complexity and costs Benefits for Best Buy beginning with the process of harmonizing with the GSCP code and audit methodology. We hope to pilot the updated program Better use of limited resources with a select number of factories next year. As we adopt the Increase focus on remediation and GSCP, we will also increase our focus on the environmental capacity building More effective risk management impact of the supply chain. We plan to explore connections with nonprofits, NGOs, academics and others to help us with our goals and augment our internal capabilities. Clarity and consistency in worker Benefits for Our Suppliers standards and environmental requirements Fewer audits with a focus on building capacity Time and resources to reinvest in improving working conditions as well as production quality and safety Clear understanding of their rights Benefits for Workers Improvement of working conditions Opportunity to monitor and challenge their employers Ability to raise questions directly with purchasing companies Finally, as more of our manufacturing occurs outside of China, we intend to incorporate a more informed and formalized global approach, one that objectively compares audit results for factories in different countries by layering in country-level risk analysis. 45 Key Performance Indicators 1 100% 100% 137 118 97% Percent of primary Exclusive Brands suppliers that have undergone human rights audits Factory Audits: Non-compliance 0% 37% 142 Number of factories inspected 0% 0% Harassment & abuse 33% 163 9% 149 Number of full factory audits Health & safety 6% 4% 2% Forced labor 123 11% 18% 9% 26 Environmental 47% 11 5 33 16 7 Number of terminated factories 36% 20% Potential new factories rejected based on initial audit 0% 1% Wage & compensation 1% Discrimination 08 09 FY’10 0% Factory Audits: Balanced Scorecard Results 0% 0% Right to freely seek association 69% 60% 62% Working hours 19% 23% 5% 80% 13% 2% % Receiving an “A” rating 8% 1% 6% 77% Child labor 2 77% % Receiving a “B” rating 08 09 FY’10 17% 0% 0% % Receiving a “C” rating 0% % Receiving a “D” rating 1 Factory audit results reflect the performance of factories that manufactured Exclusive Brands product within each fiscal year. Factory audit performance reflects comprehensive audit results only and does not include follow-up audits findings. 08 09 FY’10 2 For fiscal 2010 results, working hours or safety violations impacting legal juvenile workers (ages 16–18) have been reclassified under working hours or health and safety. Best Buy Fiscal 2010 Sustainability Report Exclusive Brands Factory Audits 46 Recycler of the Year The Best Buy U.S. corporate campus received the 2009 Recycler of the Year Award from the Recycling Association of Minnesota for our efforts creating a recycling and composting program in the restrooms and cafeteria. Best Buy U.S. — Volume of Corporate Campus Composting FY’10 FY’09 107 tons 108 tons Green IT interests in addressing climate change. Best Buy is an innovator Best Buy’s IT continued to reduce in offering our customers products and services that enable energy consumption and improve them to live more sustainably. At the same time, Best Buy is methods for quantifying energy “ Best Buy’s commitment to sustainability aligns with global savings. We added more virtual servers addressing our own carbon footprint resulting in a positive in fiscal 2010 and while our store count impact on the economic, environmental and societal well-being and business grew, our physical server growth remained nearly flat. Working with Xcel Energy, we are testing the impact of raising the temperature slightly in our data centers to further reduce our energy use. In the future, we will look for ways to consolidate our data centers within the global scope of our operations improving how we track and measure their energy use. We plan to invest in a centralized, ultrasonic humidification model to replace our current system, which not only will save energy but is estimated to pay back on the investment in one year or less. We will continue to focus on measuring the power used per square foot of equipment, to find areas where we can improve efficiency. of the planet. ” For our complete Climate Change Policy, go to: bby.com/cmn/files/Climate-Change-Policy-BBY-3.18.10.pdf. 47 performance Pounds of Electronics Collected for Reuse or Recycling (for U.S. Best Buy stores only) Pounds of Appliances Collected for Reuse or Recycling (for U.S. Best Buy stores only) Carbon Emissions Reduction over 2005 Baseline (for U.S. Best Buy stores only) 74 million 66 million 162,155 metric tonnes Percent of U.S. Best Buy Stores Built in FY’10 that are LEED Certified or Pursuing LEED Certification 69% Best Buy Fiscal 2010 Sustainability Report at a glance technology & power Environmental Sustainability and the Consumer Electronics Value Chain As we work to discover new and innovative ways to engage in the connected world and, at the same time, lessen our impact on the environment, we are faced with some challenges. Product life cycles are shortening, which generates incremental e-waste, and total energy consumed by consumer electronics is growing. All along the technology value chain, people and power play an important role. Best Buy is working diligently to understand the environmental impact along the entire value chain and to find opportunities to gain efficiency by reducing energy use, materials and waste where possible. Our strategy for making improvements is all about connections. For consumers, our goal is to be with them every step of the way. We can help them choose energy-efficient products, teach them to use products wisely, and make it easier for them to reuse or recycle responsibly. We are also making connections that help us reduce the carbon footprint throughout the lifecycle of a product, including its manufacturing, transportation, consumer use and recycling. This chapter outlines many of the ways we are addressing these environmental challenges along each step of the consumer electronics value chain. Environmental Sustainability Challenges challenge response results looking forward Potential risks and implications resulting from climate change Further refine our Energy Management System — revise processes and standards, enhance communication and training, and clearly reiterate roles and responsibilities. Help our customers choose more energy-efficient products. We believe we can continue to reduce our energy consumption and carbon emissions in ways that deliver value to our shareholders, customers, and employees. Continue to engage in the public policy dialogue and monitor new environmental legislation in order to proactively mitigate risk and identify opportunities for growth. Helping employees understand their environmental impact at work Develop and share online reports about recycling volume, energy management and energy use with employees. The total electrical energy used was flat compared to calendar 2008 despite a 5.02% increase in retail square feet. Continue education and communication about recycling processes and energy management. Expand and share our energy management strategies and tools across our enterprise. 48 Best Buy Fiscal 2010 Sustainability Report Product Design Based on these results, the Insignia design team set a goal of As new consumer electronic products are developed and ogy by the end of fiscal 2012. The change should result in reduced adopted, the percentage of household energy use devoted to energy consumption overall, but also require smaller packaging those devices is also increasing. While many products are being (due to thinner screens) resulting in more efficient shipping. LED- designed to use energy more efficiently than ever, including LCD televisions are also attractive to Exclusive Brands because our Exclusive Brands, people are using technology at an ever- fewer hazardous materials are required to manufacture televi- accelerating rate. Our challenge is to create and sell products sions lit by LED versus CCFL (cold cathode fluorescent light). shifting the design of all Insignia televisions to LED-LCD technol- that consumers demand, but also minimize the resources those products consume. In some cases technology can even be part Product Safety of the solution to address environmental challenges. We have Our product safety program is driven by two objectives: found that we can reduce the environmental impact of our proactively address safety concerns and always take care of the products through improved product and package design. customer. We have many checks and balances in place to help meet our objectives. Once an Exclusive Brands product has been Smarter Television Design selected to be a part of our assortment, Best Buy’s safety team Consumer demand for large screen televisions continued to enlists a nationally recognized testing lab to provide an assess- climb in fiscal 2010, due in part to falling prices and the growing ment of the standards the product must meet. This information is availability of High Definition (Hi-Def) programming. Large routed to the supplier, who is then obligated to complete and pass screen televisions can potentially consume more fabrication all testing before the item is placed on the shelf. Once a product is resources and energy to operate than smaller units. Our in production, a third-party contractor conducts a safety audit Exclusive Brands engineers sought technologies that would help program. Corrective action is taken if there are audit findings. diminish this potential increase in environmental impact. We continue to monitor our products’ safety performance after In 2009, Insignia was the first consumer electronics brand to they reach the market. We track call center logs, and if potential bring 19- and 22-inch LED-LCD televisions to store shelves. Both safety hazards are found, we take swift action to protect our sets featured sleek, slim screens (less than 1.5 inches thick) and customers. If we identify reliability and quality patterns, we notify were more energy efficient than the ENERGY STAR® standard. our suppliers in order to determine necessary modifications. While several other manufacturers have utilized LED technology for larger television sets, the two new models from Insignia To stay on top of regulatory issues and trends that impact our utilized an edge-lit LED-LCD variation on the technology that product safety program, we maintain membership in and engage delivered the thin factor, while lighting the screen more effi- industry coalitions such as the Retail Industry Leaders Association ciently using fewer LED bulbs. These features translated to 40 (RILA), the International Product Health and Safety Organization percent less energy consumption in the Insignia brand televisions (IPHSO) and the National Retail Federation (NRF). These as compared with standard LCD televisions 1. organizations have dedicated committees for advancing product 1 According to the new ENERGY STAR® 4.0 standard, which went into effect May 1, 2010 safety through which we have gained insight into best practices. Best Buy joined the Sustainability Consortium... to further our understanding of product sustainability. Through this organization, we are involved in developing consumer product life-cycle research and global measurement and reporting standards. The Sustainability Consortium is an independent group of scientists and engineers from leading academic research institutions around the world who engage with other leading researchers from the NGO, Government, and Industrial sectors to build a scientific foundation that drives innovation to improve consumer product sustainability. Members of the Consortium work to develop sustainability measurement and reporting standards across all sectors, to identify what data should be collected, how to collect it, and how it should be reported for different areas of environmental and social impact. sustainabilityconsortium.org 49 One area where we can reduce environmental impact is through PVC content in cables that connect products to other products and power sources. Product managers are evaluating all options for manufacturing environmentally friendly cables without sacrificing performance or quality. In addition, Exclusive Brands engineers are working on increasing the number of wireless connectivity options to reduce the need for cables, including wireless home theater products. Rock etfish Manufacturing packa ging b efore and We expect our Exclusive Brands product suppliers after to conduct business in a way that demonstrates respect for the environment and aligns with our Advances in Sustainable Packaging Practices sustainability goals. Beyond being aware of potential Best Buy seeks to establish best practices around our end- environmental issues and sharing in the commitment to-end packaging design and manufacturing process. While new, to conserve natural resources, we request that suppliers take steps energy efficient technologies, such as LED, were utilized for to minimize the negative impact on the environment. Furthermore, products themselves, Best Buy met with the designers, printers suppliers are expected to comply with local environmental laws and manufacturers of packaging for Exclusive Brands products and regulations. Other best practices we encourage our Exclusive to develop designs which required less plastic or no plastic, were Brands suppliers to practice include: smaller in size and used recycled materials, non-solvent coatings and organic inks wherever possible. Plastic Reduction Waste disposal and treatment 1 Non-hazardous waste is collected, segregated and disposed of appropriately, and hazardous waste is In 2009, Exclusive Brands began shifting away from clear plastic collected and treated in accordance with applicable laws blister pack containers and clamshell packages toward easy-to- and regulations. open, recyclable boxes for several product categories. The packaging team also made a concerted effort to reduce packaging size when possible. These transitions resulted in lower fossil Material and energy consumption 2 fuel consumption and shipping resources as more products could be packed into fewer shipping boxes for transportation. Total packaging reductions for fiscal 2010 included over 125 tons of PVC and other plastics. Many Exclusive Brand products shipped in fiscal 2010 met these new criteria. We are currently in the process of reducing our inventory of older, less environmentally friendly packaging in stores, so that consumers find only newer, environmentally conscious options on our shelves. This includes phasing out PVC packaging for all Rocketfish and Dynex home theater, audio and computer cable assortments. Best Buy Exclusive Brands Factories monitor their use of materials and energies and take steps to minimize their consumption. Environmentally friendly production 3 Factories are encouraged to adopt and implement an environmentally friendly production methodology to minimize negative impacts. Best Buy Fiscal 2010 Sustainability Report PVC Reduction 50 Best Buy Fiscal 2010 Sustainability Report Best Buy’s Green Campus In fiscal 2010, our Facilities team converted approximately 1.4 acres of manicured landscaping at our Richfield, Minnesota headquarters into native prairie grass and plants. Native plants reduce the need for water, fertilizer, and the gasoline required to operate maintenance equipment in those areas. In addition, we partnered with our onsite café and catering service to launch a variety of sustainability initiatives. They included introducing a farmer’s market to the Best Buy campus and creating a small garden plot on campus that they use to grow some of the food they serve in our campus cafeteria. “ We have already achieved our goal to reach an 8% carbon emissions reduction by 2012.” 51 We continued our partnership with the Coalition for Responsible Transportation (CRT), working with member companies to proactively minimize diesel-related emissions and improve SM sustainability practices in U.S. ports. As a member, we participate in a collaborative dialogue with policy makers at the federal, state and local levels to ensure that our industry’s perspective is part of the solution for port-related legislative and regulatory processes. Building a More Fuel Efficient Geek Squad Fleet In fiscal 2010, we experienced a slight reduction in miles traveled by our Geek Squad in-home services team, which we attribute to Transportation a more effective routing system. We are also testing the use of A major component of our business is moving products around — whether we are shipping products from our suppliers to our fully electric vehicles and replaced many of our full-size cargo vans with smaller, more fuel efficient vehicles. stores or from our stores to our customers. We also consume In fiscal 2011, we intend to invest in cargo vans that have smaller fossil fuels through services like Geek Squad, whose agents engines and to monitor technology solutions that may be able to travel to businesses and homes. We consistently look for ways to help us measure our fleet usage more effectively. improve efficiency in this area of our business to reduce energy use and costs. Retail Operations Best Buy is a SmartWay Partner ® Best Buy has partnered with SmartWay since 2007 to help us reduce the environmental impact of transportation in our operations. SmartWay is an initiative of the U.S. Environmental Protection Agency (EPA) that helps transportation carriers and shippers improve their efficiency. In fiscal 2009, we set a goal to have 100 percent of our long haul carriers in the SmartWay program and in fiscal 2010, we achieved that goal. We further leveraged SmartWay to develop partnerships with suppliers and third party shippers to reduce the number of miles traveled with an empty truck. In fiscal 2010, we were honored In our U.S. operations, Best Buy became a partner in the U.S. EPA’s Climate Leaders program. Climate Leaders is an industrygovernment partnership that works with companies to develop comprehensive climate change strategies. Partner companies complete a corporate-wide inventory of greenhouse gas (GHG) emissions based on a quality management system, set aggressive reduction goals and voluntarily submit annual reports to the EPA. We have already achieved our goal to reach an 8 percent carbon emissions reduction (per U.S. retail square foot over 2005 baseline) by 2012, and are working to establish a new goal to continue this trend. by the EPA for excellence in this area, receiving the SmartWay Excellence Award 2009 in the Shipper category. “No Idling” Policy We set an internal goal to expand the “no idling” policy that we instituted in fiscal 2009 from all U.S. retail stores to all of our U.S. distribution centers. While we were not able to meet our goal, we made progress and plan to continue working on making “ EPA is pleased to have Best Buy as a partner in EPA’s Climate Leaders program. Best Buy clearly understands that industry leaders must also lead in the fight against climate change. ” — Gina McCarthy, U.S. EPA Assistant Administrator for Air & Radiation this policy feasible in each of our locations. We achieved our goal by training U.S. employees in each store to understand energy management through communication, education and reporting. With a focus on eliminating waste, our stores have learned they can impact and control their energy use. Best Buy Fiscal 2010 Sustainability Report Coalition for Responsible Transportation 52 Best Buy Fiscal 2010 Sustainability Report We further take a leadership role through our active In July 2009, three stores in Texas (Atascocita, Waxahachie and membership with the following organizations: New Braunfels) were the first to earn official LEED certification Alliance to Save Energy under the Volume Certification program, a U.S. Green Building The Alliance to Save Energy is a non-profit coalition of business, Council initiative in which store prototypes are pre-certified. government, environmental and consumer leaders. The organiza- In fiscal 2010, 36 of our new stores in the U.S. were designed and tion supports energy efficiency as a cost-effective energy built according to LEED’s pre-certified plans and specifications. resource under existing market conditions. It advocates energy- Seven of these stores are currently under review by the U.S. efficiency policies that minimize costs to society and individual Green Building Council (USGBC), and all the rest will be submitted consumers, and that lessen greenhouse gas emissions and their for review in calendar 2010. On August 12, 2009, Best Buy was impact on the global climate. ase.org/ approved for additional LEED credits to increase its pre-certified Business for Innovative Climate & Energy Policy level to 35 points — the Gold level. Moving forward, Best Buy will (BICEP) — BICEP’s members believe that climate change will impact all sectors of the economy and that various business perspectives are needed to provide a full spectrum of viewpoints continue to monitor, evaluate and introduce improvements to our building program, striving towards even more energy efficient Best Buy stores. for solving the climate and energy challenges facing America. BICEP’s goal is to work directly with key allies in the business community and with members of Congress to pass meaningful energy and climate change legislation that is consistent with our core principles. ceres.org/bicep High Performance Buildings linois elmont, Il mball & B Kim Another way we are reducing our carbon footprint is through our High Performance Building program. This program is focused on developing our stores into positive shopping and working environments for our customers and employees. A few key elements include: Skylights and dimmable lighting Skylights introduce abundant natural light, and allow us to turn off artificial light when adequate daylight is entering the space. Low Volatile Organic Compounds (VOC) paints, varnishes, and cleaning supplies We specify finishes that meet or exceed VOC limit recommendations to help provide good indoor air quality for employees and customers. Water efficient fixtures Best Buy specifies low-flow urinal and toilet flush valves and metered faucets in all of our U.S. stores’ restrooms. Stafford Townsh ip, New JJers ey “ The Volume Certification program provides companies with the tools to integrate LEED into their standard practices. As one of the country’s most recognized retailers, Best Buy has the opportunity to educate hundreds of thousands of customers who visit their stores each year about high-performance, energy-efficient, healthy green buildings. ” — Doug Gatlin, Vice President, Market Development, U.S. Green Building Council Best Buy uses the LEED rating system to measure the success of our High Performance Building program. FY’11 projection FY’10 FY’09 FY’08 FY’07 Energy saved due to conservation & efficiency improvements over 2005 baseline (in millions) 224 kWh 176.3 kWh 109.6 kWh 48.0 kWh 33.6 kWh CO2e reduced over 2005 baseline (in metric tonnes) 203,004 162,155 110,569 42,308 27,331 Direct CO2e emissions by weight (per sq. ft.) 49.8 lbs 51.6 lbs 54.2 lbs 57.9 lbs 58.6 lbs 53 Best Buy Fiscal 2010 Sustainability Report Product Use More and more consumers are demanding products that are energy efficient. We are working to meet this demand by stocking our shelves with the latest and greatest in technology that’s good for our planet. Powering Down Technology Not in Use Best Buy researched ways to save energy by evaluating how consumers connect their electronics to power sources. For example, even when technology isn’t being used, it can consume “phantom” power, whereby trickles of energy are needlessly consumed when devices are idle or turned off. Three energy saving surge protector/power bars were introduced in 2009, including two for personal computers and one for home theaters, to help solve the problem. Each model incorporates master/ master-controlled outlet circuitry, which means that a user can plug their primary component, such as a personal computer or television, into a master outlet. When the primary component is powered off or “goes to sleep,” power is automatically shut off to all other devices plugged into the master-controlled outlets, such as printers, monitors, external hard drives, Blu-ray/DVD players, and audio-visual receivers. The feature helps consumers regulate their energy consumption seamlessly by powering off electronics that are not being used at the moment. Energy Star® and Exclusive Brands Best Buy’s Exclusive Brands offers consumers a wide variety of choices that help them reduce energy consumption during product use. One example is our focus on increasing the total number of ENERGY STAR® qualified televisions we offer. This effort was rewarded when 100 percent of Insignia LCD televisions on Best Buy shelves met the ENERGY STAR® TV standards in fiscal 2010. In addition, all digital photo frames from Insignia and Dynex were ENERGY STAR® compliant; the only brand of such frames sold in Best Buy stores whose full line met this standard in calendar year 2009. Focusing on energy efficiency at Audio Visions It’s not often that energy efficiency is associated with home theater systems costing in excess of six figures, but that’s exactly the way these systems are approached by Audio Visions, Best Buy’s high-end consumer electronics brand. In an effort to meet the evolving demands of consumers and to satisfy new regulation, our employees have created innovative ways to increase energy efficiency in residential buildings. As a result, staff members have become LEED certified and have created a full complement of environmentally friendly services now integrated into our installation process, including: 佡 Occupancy and vacancy sensors 佡 Master switches to turn off all lighting, electronics, HVAC, etc. 佡 Security systems that notify home owner when windows are open 佡 Home energy management monitors and dimming lights to 80 percent 佡 Intelligent electronics to fully power off equipment when not in use. 54 Best Buy Fiscal 2010 Sustainability Report Energy-efficient products Connecting with Utility Companies 1 Consumer electronics continue to emerge as a means for people to connect not only with family and friends but also with entertainment, music, movies, news, information and so much more. As technology products shift from discretionary items to necessities, 24,296,000 Number of ENERGY STAR qualified products sold ® the energy required to power all of these products has grown substantially. Many consumers are seeking ways they can reduce their own energy consumption, and many of them are looking to Best Buy to provide information and solutions. To meet this emerging expectation, Best Buy has connected with utility companies around the U.S. to educate consumers and provide energy-efficient products and solutions. To facilitate these relationships, Best Buy recently hosted a summit with over 100 utility companies. According to the president of D&R International, David Steiner, “D&R, through its work with the U.S. 796,496,972 Total energy savings (kWh) Department of Energy’s ENERGY STAR® program, appreciates Best Buy’s leadership in pushing ENERGY STAR® through higher qualified product performance and expectations, more active consumer engagement about energy efficiency, and closer industry collaborations. Best Buy has been an exemplary partner that has raised the stakes for other program partners.” $91,463,867 Consumer utility bill savings 2 Through our partnership with utility companies, such as Pacific Gas and Electric (PG&E) and Southern California Edison (SCE), we are working to help customers lower their energy usage, save money and reduce their impact on the environment. Like Best Buy, many utility companies are interested in helping their customers reduce their energy usage; in fact, they are even willing to incentivize those customers through rebates when they purchase 1,655,738,086 Reduced carbon emissions (pounds of CO2) 3 ENERGY STAR® qualified products. Utility companies view Best Buy as an ideal partner given our direct interaction with consumers. Ultimately, our intent is to help make energy-efficient products more affordable for consumers so together we can reduce the environmental impact of appliances and consumer electronics. According to Helen Burt, senior vice president and chief customer 137,554 officer of PG&E, “This program allows us to broaden the reach of Equivalent cars removed from the road 4 products that add value to our customers by ensuring access to the next generation of energy-efficient electronics. Last year, northern and central California residents saved more than three megawatts and 40 gigawatt-hours of electricity, equivalent to 1 2 3 4 powering over 5,500 homes for one year, by purchasing more Calculation used to determine reductions in energy requirements provided by the U.S. EPA and savings represent the difference over the life of the product between the average energy use of non-ENERGY STAR® qualified products and the average energy use of ENERGY STAR® qualified products. Energy costs based on 11.27 cents per kWh. CO2 output amount based on 1.54 pounds of CO2 per kWh. Based on emissions totals of 12,037 pounds CO2 /car/year. energy-efficient electronics. Best Buy achieved 40 percent of this total by incorporating the program’s energy efficiency specifications 55 Electric Vehicles suppliers to meet the program’s energy efficiency specifications.“ Pike Research reported in 2010 that by 2016, 466 million electric “SCE continually searches for new ways to effectively educate customers about how they can save energy, money and the environment,” says Erwin Furukawa, vice president of SCE’s vehicles will be sold worldwide. Best Buy believes in the future of these products and began implementing plans to test the sales of electric vehicles in September 2007, beginning with Segway Customer Programs and Services. “Our partnership with Best Buy allows us to tell the energy efficiency story and bring solutions directly to the consumer, right in the store where they are making purchase decisions.” Best Buy and SCE are also working together to address the needs of low-income customers through the California Alternative Rates for Energy (CARE) and Family Electric Rates Assurance (FERA) programs offered in our stores. This collaboration with SCE is an entirely new way for Best Buy associates to engage with customers, and we have successfully enrolled dozens of Southern Californians in these programs this year. CARE provides income-qualified customers a 20 percent discount on their electric bills. FERA is a “volume discount” program where families who would normally be charged one rate for their electric scooters in Oregon and Northern California stores. In June 2009, service are charged at a different, lower rate. Both programs Best Buy began selling electric bicycles, scooters and motor- contain educational elements to ensure customers understand cycles in select stores in the Los Angeles, San Francisco and the importance of conservation and energy efficiency. Portland markets. We even offer an electric car along with electric bikes, scooters, and motorcycles at our first European Home Energy Management When it comes to sustainability solutions, energy-efficient products are just the first step. As a trusted source for the latest in technology, Best Buy is well positioned to take a leadership role in the emerging markets of home energy audits and surveys, home energy management devices and alternative/renewable energy sources, such as solar and wind. These categories provide consumers with the benefit of saving money by reducing energy usage or minimizing their environmental footprint by reducing the use of carbon based energy sources and in many cases both benefits can be achieved. Through the connection that Best Buy employees have with customers, we also see an opportunity to help them understand the advantages of sustainability and energy efficiency solutions. All of this makes us excited about what the future holds for these emerging categories. Best Buy branded store located in the U.K. Best Buy Fiscal 2010 Sustainability Report into the private label televisions it manufactures and asking its 56 Best Buy Fiscal 2010 Sustainability Report Recycling - U.S. 73.9 Volume of Electronics recycled or reused (in millions of pounds) Recycling and Waste Reduction Recycling is an area where Best Buy believes we can make a large impact. Our goal is simply to connect customers and employees with easy options for recycling and reducing waste. As a result of our efforts, we have diverted 1.4 million units, or nearly 140 million pounds, from the waste stream and recovered raw materials that 65.8 29.9 Volume of Appliances recycled or reused will reduce the energy required to mine for those raw materials. (in millions of pounds) In fiscal 2010, we expanded our recycling program by adding an everyday in-store recycling option across the U.S., creating the 61.4 63.0 most convenient and comprehensive solution for customers to Volume of Cardboard/Paper recycled (in millions of pounds) dispose of their appliances and electronics. With this recycling program in place, we have set an aggressive goal of recycling 1 billion pounds of consumer products. We expect to meet this goal in five to six years. 46.1 6.2 6.3 Volume of Pallets/Wood recycled or reused 2 When we launched the first nationwide retail consumer (in millions of pounds) electronics recycling “take back” program, the response we received from consumers illustrated the huge unmet need for .9 a place to easily and responsibly recycle old electronics. Volume of Plastic recycled 3 Program highlights: (in millions of pounds) 佡 Recycled 74 million pounds of consumer electronics and 66 million pounds of appliances. Our recycling efforts significantly reduced the amount of electronic waste that ended up in landfills and also served to retire old, inefficient appliances, reducing energy demand in many communities. 1.6 Volume of Metal recycled 1 (in millions of pounds) .8 佡 Received extremely positive customer feedback. 佡 Brought new customers to our stores. In addition to the in-store “take back” program in which we accept .2 09 products such as TVs, DVD players, computers, printers, and other small electrics for recycling — most for free, with a few FY’10 restrictions, Best Buy’s U.S. stores offer more recycling and reuse options than any other retailer: Recycling - Canada .5 佡 U.S. Best Buy stores have free kiosks, just inside the door, for Volume of Electronics recycled or reused (in millions of pounds) 10.0 Volume of Cardboard/Paper recycled (in millions of pounds) people to drop off inkjet cartridges, rechargeable batteries, CDs/DVDs and gift cards. 佡 Generally, we’ll remove an old TV or appliance from a customer’s home for free when a replacement Best Buy product is delivered or installed by Geek Squad® or Best Buy® Home Delivery. 佡 Without a purchase, for a minimal fee, Best Buy will remove up to two TVs or appliances from a person’s home for recycling. 佡 Our Best Buy Trade-in program allows customers to trade their FY’10 1 Metal recycling is from project and store material only, does not include metal recycled through the appliance recycling programs. 2 Pallet recycling only includes the material that was recycled, does not include repartee/reuse units. 3 Plastic recycling is from store and distribution center recycling programs, does not include plastic recycled through CE recycling programs. used products for a Best Buy gift card worth the value of the item. 57 Best Buy Fiscal 2010 Sustainability Report Recycling Partners To ensure all products collected for recycling through Best Buy are handled responsibly, we partner directly with qualified and respected recycling companies. Our recycling partners must uphold Best Buy’s publicly stated recycling standards and align with industry best practices. See the appendix for details. Supporting E-cycling Public Policy In September 2009, Best Buy hosted U.S. Senator Amy Klobuchar (D-Minnesota) and members of Minnesota’s electronics recycling industry at a Best Buy store to support federal e-waste legislation. The Electronic Device Recycling Research and Development Act, sponsored by Senator Klobuchar, is the first step in bringing together manufacturers, retailers, recyclers and research institutes to find solutions to the challenges of e-waste. The legislation would: Create competitively-awarded grants for universities, government labs, and private industry to research and develop demonstration projects for recycling, reuse, refurbishment and life-cycle analysis Call for a study by the National Academy of Science to look at barriers and opportunities to increase electronic device recycling and reduce the use of hazardous materials in electronic products Direct the Environmental Protection Agency (EPA) to make grants available for curriculum development for engineering students and professionals in electronics manufacturing, design, refurbishing and recycling industries U.S. Senator Amy Klobuchar with Geek Squad agents “ Technology continues to advance, but our ways of disposing of electronic equipment haven’t kept up. We need a national solution to ensure that all unwanted electronics are discarded in a safe and responsible manner. I commend Best Buy for its leadership This year, we doubled the activity of our existing online trade-in option and added a new trade-in option at all U.S. stores. Customers who bring select electronics (previously bought att Best Buy) to the Geek Squad Precinct can receive a Best Buy gift card for the value of the product based on a Geek Squad agent assessment. The online trade-in program can be used 011, even if the product was not purchased at Best Buy. In fiscal 2011, most stores will be enabled to accept qualified products thatt were not purchased at Best Buy, with some exclusions. Visit bestbuytradein.com for details. in helping consumers recycle responsibly.” — Amy Klobuchar, U.S. Senator (D-Minnesota) 58 Best Buy Fiscal 2010 Sustainability Report Recycling in Employee Break Rooms We set a goal for fiscal 2010 to provide a comprehensive recycling solution for our U.S. retail stores. While many stores already recycle cardboard and paper, as of January 2010, nearly all U.S. retail stores now have a break room recycling option. Not only are we helping the environment, but we have also reduced our trash hauling expenses. In fact, we reduced the volume of trash that would typically go to a landfill by approximately 70 percent. Note: Recycled waste includes cardboard, paper, plastic, wood, metal, gift cards, etc. In the U.K., The Carphone Warehouse achieved outstanding results with their zero-waste initiative at their logistics center in Wednesbury, which includes a repair center and a warehouse. Partnering with The Green House, an environmental management company, CPW set goals to increase sustainability, reduce costs, improve efficiency and controls in order to achieve zero waste going to landfills. In the last quarter of fiscal 2010 (December 2009 – February 2010), The Carphone Warehouse recycled as Five Star Appliance recycled over 415,000 units of electronics and appliances in calendar 2009. much waste as it generated! MyMobile Recycling The Carphone Warehouse provides consumers the option to recycle their mobile phone handsets through the MyMobile recycling program. For every handset recycled, we donate £10 (approximately $15 USD) that is split equally between The Carphone Warehouse Foundation and Get Connected (getconnected.org.uk), a nonprofit organization that helps young people get free, confidential help. The Carphone Warehouse Foundation also provides small grants to charities nominated by employees. Tech-It Away Both Best Buy and Future Shop in Canada made great strides in 2009 in the environment and community. Across Canada, electronic recycling increased 40 percent over the previous fiscal year. This was largely due to successful initiatives like Tech-It Away and the introduction of electronics return to retail pilot programs in select Canadian markets. Best Buy and Future Shop brands will continue to expand their electronics recycling programs during fiscal 2011. In addition to electronics recycling, Best Buy Canada continues to increase its cardboard and paper recycling efforts and recycled over 10 million pounds of cardboard and paper last year. 59 Best Buy Fiscal 2010 Sustainability Report rt In Canada, our Best Buy store employees helped schools collect nearly 165,000 pounds of e-waste from the community during two Tech-it Away recycling drives in 2009. By partnering with high schools in the Vancouver and Toronto areas, Best Buy helped teens promote the recycling drive in their communities and Best Buy employees assisted with the collection at each high school. Each school received $10,000 (CAD) in new technology from Best Buy for their environmental efforts, and the school that collected the most e-waste received an additional $2,000 (CAD) donation Our carbon reduction work has led to the discovery of untapped to their environmental club. opportunities that have the potential to deliver benefits many years into the future. Our goal is to develop a cohesive program that spans our operations internationally. This includes expanding our High Performance Building program, improving our recycling programs, and exploring reuse/resale markets. We plan to make more connections by partnering with our customers, suppliers, government and other external organiza- We will look for ways to expand our assortment of sustainability tions to find new and innovative ways to lessen our impact on the solutions that meet customer’s needs and expectations — through environment throughout the product lifecycle. Best Buy will our own Exclusive Brands product lines and from our vendor support the development of guidelines and standards that are partners. We will seek products that consume less energy, use good for consumers, the environment and for our economic less toxic material and are constructed of recycled and recyclable sustainability by participating in partnerships and coalitions and material. And we hope to further expand our highly successful engaging in public policy discourse. recycling and reuse program — both in the U.S. and in some of our international operations — to make it even more convenient for consumers to dispose of old electronics in a responsible manner. For further information about our policies and activities, please visit bby.com/category/sustainability/. 60 Best Buy Fiscal 2010 Sustainability Report Awards and Recognition As our corporate responsibility program continues to evolve, we have been fortunate to be recognized for our efforts along the way. Over the course of fiscal 2010, we received numerous awards and appeared on several “Best of” lists, including Ethisphere’s list of the World’s Most Ethical Companies. While we greatly appreciate being recognized for our sustainability efforts, what is truly important to us is the progress we are making to drive sustainability practices into our core business functions and throughout the organization. awards & recognition source 2009 World’s Most Ethical Companies Ethisphere Most Admired Companies (37th overall/2nd among Specialty Retailers) Fortune 2009 Best Employer Five Star Appliance China Human Resources Commission Best Model of Human Resources & Most Popular Employer Best Buy China 51job, Inc. 2009 Smart Way Excellence in Shipping U.S. Environmental Protection Agency 2009 ENERGY STAR ® Excellence in Appliance and Electronics Retailing Best Buy U.S. U.S. Environmental Protection Agency Highest in Customer Satisfaction among the Largest Appliance Retailers Best Buy U.S. U.S. Environmental Protection Agency U.S. Corporate Campus recognized as an ENERGY STAR ® building (6th year in a row) J.D. Power and Associates 2009 Recycler of the Year Award Best Buy U.S. Corporate Campus Recycling Association of Minnesota 100% Corporate Equality Index Score (6th year in a row) Human Rights Campaign Detroit LatIN Group — 2009 Annual Partners Detroit Hispanic Development Center 2010 Diversity Leader Awards Diversity Journal BRAG Corporate Award Black Retail Action Group 23rd Best Training Organization in the World (out of over 10,000 companies ranked) Training Magazine Stevie Award for “Best Training Website” Learning Lounge American Business Association Social Media — Internal Social Networks Watercooler E2E Communication Awards 2009 Corporate Grassroots Innovation Award Geek Squad “Tech Tax” repeal Public Affairs Council Best Public Education Campaign: Out With the Rabbit Ears — The DTV Transition Minnesota Public Relations Society of America is Coming! And for Best Buy’s contact with the FCC “ We are glad to see recognition for Best Buy’s efforts in the sustainability spaces. This is an example of a company focusing their efforts on initiatives that are relevant to their business and where they can, in fact, make a difference.” Dr. Charles Fombrun, Founder and Chairman, Reputation Institute, Inc. 61 Best Buy is at the beginning of our journey to learn how to best measure our social and environmental performance. We currently use a suite of Global Reporting Initiative (GRI) metrics that we believe are some of the most critical for our business and industry. However, we are still working to identify the best possible key performance indicators specific to our business so that we can more accurately measure the impact of our efforts. We anticipate the assessment we are currently conducting with Business for Social Responsibility is a significant step in this direction. We have added several new GRI key performance indicators to this year’s report. The new GRI metrics for fiscal 2010 include: Economic 2 Implications for the organization’s activities due to climate change Labor 3 Benefits provided to full-time employees that are not provided to temporary or part-time employees Social 5 Public policy positions and participation in public policy development and lobbying Social 6 Total value of contributions and in-kind donations to political parties, politicians and related institutions In addition, we continue to seek opportunities to include performance data from Best Buy operations outside the U.S., including operations in Canada, China, Europe and Mexico. While we are making progress in enterprise measurement, it represents one of our greatest opportunities as we strive to meet one of our sustainability aspirations, “to be environmentally, social and financially accountable for our brands and business operations worldwide.” “to be environmentally, social and financially accountable for our brands and business operations worldwide.” Best Buy Fiscal 2010 Sustainability Report Metric Profile 62 Best Buy Fiscal 2010 Sustainability Report GRI Index Disclosure/Indicator PAG E Strategy and Analysis 1.1 1 1.2 8–10 Organizational Profile Disclosure/Indicator PAGE Management Approach and Performance Indicators Economic EC1 6 EC2 47 2.1 front cover EC4 63–64 2.2 6 EC8 34 2.3 6 2.4 back cover Environmental EN5 52 2.5 7 EN6 54 2.6 6 EN16 52 2.7 6 EN18 52 2.8 6–7 EN26 48–49 2.9 8 EN27 56 2.10 60 Report Parameters Labor Practices and Decent Work LA1 7 LA2 21 LA3 63 3.1 6 3.2 inside front cover 3.3 front cover LA10 25 3.4 inside front cover LA11 24–25 3.5 8–10 LA13 17 3.6 6–7 3.9 61 3.11 61 Human Rights HR2 45 3.12 62 HR4 45 3.13 62 HR5 45 Governance, Commitments, and Engagements HR6 45 HR7 45 4.1 11 Society 4.2 11 SO5 63–64 4.3 11 SO6 63–64 4.4 11 4.6 11 Product Responsibility 4.8 3 PR1 48 4.9 11 PR5 28 4.13 12–13 4.14 13 4.15 12 4.16 12 4.17 8–10 For more information about the GRI, go to globalreporting.org The fiscal 2010 Annual Sustainability report was reviewed by our Internal Audit team for assurance. 63 As a leading global retailer and corporate Customer Privacy Policy citizen, Best Buy believes that it is important to Best Buy’s Customer Information policy applies to the collection, work with policymakers on issues impacting our access, use, storage, transfer, disclosure, retention and destruccustomers, employees, businesses, shareholders tion of Customer Information. bestbuy.com/site/Help-Topics/ Privacy-Policypcmcat204400050062.c?id=pcmcat204400050062&D and communities. More information on Best CMP=rdr0002305 Buy’s Public Policy Priorities, Political Activity Policy, and 2009 Political Report can be found at Ethics Policies bby.com/advocacy/. To ensure a positive and values-based work environment, Best Climate & Energy Policy Buy has policies that all employees must be aware of and follow. Includes policies covering Conflict of Interest, Foreign Corrupt Best Buy’s commitment to sustainability aligns with global Practices Act and Ant-Corruption Compliance Policy, and Gifts, interests in addressing climate change. Best Buy is an innovator Business Courtesies and Vendor Relations. bestbuyethics.com in offering our customers products and services that enable them to live more sustainably. At the same time, Best Buy is addressing our own carbon footprint resulting in a positive Foreign Corrupt Practices Act impact on the economic, environmental and societal well-being It is the policy of Best Buy and all of its subsidiaries and affiliates, of the planet. wherever they may be located, to comply fully with letter and spirit of the Foreign Corrupt Practices Act (FCPA) and all other In our own operations, Best Buy became a member of Climate applicable anti-corruption and anti-bribery laws. Best Buy strictly Leaders, set a goal to reach an 8 percent carbon footprint prohibits all improper, unlawful or unethical payments to public reduction by 2012 and achieved that goal in 2009. We are in the officials anywhere in the world. No offer, promise or payment of process of determining a new goal going forward. Our plans to anything of value may be made, directly or indirectly, to or for the reach this goal will include: improved store design, tightened benefit of any foreign official that is or may appear to be related operational controls, reduced plug loads, fuel reductions, to obtaining, retaining or directing business or for any other employee awareness and involvement, and renewable energy improper advantage. carbon offsets/renewable energy credits. bestbuy.ethicspointvp.com/custom/bb_fcpa/forms/en/FCPA_ bby.com/cmn/files/Climate-Change-Policy-BBY-3.18.10.pdf Policy010810_en.pdf Conflict of Interest Full-Time and Part-Time Rewards A conflict of interest arises when we act in our individual Outlines the benefits provided to full-time and part-time personal interests instead of, or at the expense of, the interests employees. bby.com/about of the Company when engaged in the Company’s business activities. Each employee is required to observe the highest standards of business integrity. This means avoiding any activity Gift of Time Policy or interest that may be regarded as a possible conflict with the Best Buy was created by ordinary people accomplishing extraor- interests of Best Buy or engaging in activities that could create the appearance of a conflict of interest. bestbuy.ethicspointvp.com/custom/bb_coi/forms/en/Conflict_of_ Interest_Policy010610_en.pdf dinary things. In support of this culture, we have a policy that enables employees to donate their vacation time to another employee in need of time off from work. bby.com/about Best Buy Fiscal 2010 Sustainability Report Appendix 64 Best Buy Fiscal 2010 Sustainability Report M-Rated Video Games Social Media Policy At the Company level, we are actively involved in working with the Guidelines for functioning in an electronic world are the same ESRB. Best Buy is a member of the ESRB Retail Council (ERC). as the values, ethics and confidentiality policies employees Best Buy stores will not sell or rent M (Mature) rated computer are expected to live everyday, whether they are Twittering, and video games to customers under the age of 17 without talking with customers or chatting over the neighbor’s fence. permission from a parent or guardian, and will not sell or rent bby.com/about AO (Adults Only) games to customers under the age of 18. phx.corporate-ir.net/phoenix.zhtml?c=83192&p=IROL-FAQ#21 Standards for Recyclers No Idle Policy Best Buy promotes responsible environmental stewardship No trucks are allowed to idle their engines while at a Best Buy standards regarding the reuse, refurbishment or recycling of retail location. No Idling signs are posted in plain sight outside of products collected through our programs and the disposal of the dock doors at each retail location. Within Best Buy’s “No Idle” waste generated from the recycling process. bestbuy.com/site/ policy the term “idle” refers to running a truck’s engine during null/null/pcmcat174700050010.c?id=pcmcat174700050010 by requiring all recyclers retained by Best Buy to comply with the loading or unloading of a shipment. bby.com/about Paper Procurement Supplier Code of Conduct These Supplier Compliance Standards are based upon Best Buy’s This policy communicates our environmental goals throughout expectation that its Suppliers, and their subcontractors, comply the paper supply chain and states our expectations for responsible with all applicable laws and regulations, maintain just and decent forestry practices that promote sustainability and result in working conditions, share Best Buy’s respect for the environment, long-term social and financial benefits. bby.com/about and implement sound security measures. extendingthereach.com/ wps/portal/US/BBY/MI1?catalog.contentURL =/nonsecure/na/us/ bby/merch/1portlet/vendor_standards_us_bby.htm Tuition Assistance Program Best Buy’s Tuition Assistance Policy is designed to build on our goal of becoming a world-class learning organization. bby.com/about 65 Best Buy Fiscal 2010 Sustainability Report we... learn from challenge & change. show respect, humility & integrity. have fun while being the best. unleash the power of our people. 7601 Penn Avenue South Richfield, Minnesota 55423-3645 Phone: (612) 291-1000 © 2010 Best Buy Co., Inc.