Alcatel communicates with stakeholders on sustainable development and implementation of the Global Compact principles in its 2003 annual Sustainable Development report.

In the message from the President and CEO, Serge Tchuruk declares that "2003 was important because we signed the United Nations Global Compact. In doing this, we confirmed our long-term commitment to responsible business practices. We have set ambitious but realistic goals to meet and to improve our products and services. Our business is in itself able to reduce the digital divide, therefore offering great opportunities for sustainable development." Alcatel''s commitment to the Global Compact is further described on page 2 of the report.

Under "Ethics," the report provides thorough information on Alcatel''s Statement of Business Practice throughout the company (see pages 8 to 11). The report also describes how telecommunication is at the heart of economic and social development (pages 12 to 15). Alcatel?s management of human resources and staff reduction is addressed on pages 16 to 21 of the report. Environmental issues, including process in eco-design and environmental site management, are addressed on pages 22 to 25 of the report.

Pages 30 of the report presents indicators of Alcatel''s social performance in 2003, as compared with previous years, covering issues such as research and development, training, percentage of headcount (including women), number of disabled employees, mobility and health and safety. Page 31 presents indicators of Alcatel''s environmental performance in terms of energy consumption, CO2 emissions, consumption of drinking water, production of toxic waste, etc.

The report also describes Alcatel''s Social Charter, which was conceived to formalize the company''s commitment to social responsibility and was approved by the Ethics Committee in December 2003. The charter''s content conforms to International Labor Organization (ILO) initiatives, the Universal Declaration of Human Rights and the UN Global Compact.

Finally, the report describes organizational changes that Alcatel implemented to fulfil its commitment to sustainable development (see page 32). The Sustainable Development Department, which is part of the Communication Department, is in charge of defining sustainable development policies and actions plans and coordinating their dissemination and implementation by a network of correspondents deployed world-wide.

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On page 33 of the report, Ernst & Young provides an Independent Verification Statement based on its review of the sustainable development organization described in the report and the procedures related to social and environmental reporting. The verification statement describes the nature and scope of the audit, and the findings and recommendations of the auditors.