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Annual Environmental Report ÒEggedÓ

Environmental Commitment

Corporate Social Responsibility

Sustainable Development

Adaptive Management

Mit igat ion

Eco-Efficiency

Integrated Public Transport

Accessibil ity

Ecology

Mobi l i ty

Letter from the Chairman of the Board

The Principles of EggedÕs Environmental Policies

Achievements and Challenges

Achievements in 2002

Challenges for the Years Ahead

Egged - General Information

Environmental Managment at Egged

Ecology and Transportation in the Global Village - Future Challenges

Reporting by Topic

Method of Reporting

Air Quality

Water and Sewage

Materials and Waste

Hazardous Materials

Nature Conservation

Noise

Complying with Legislation

Social and Environmental Responsibility - Focusing on the Community

Independent Observers

Table of Contents

Ò E G G E D Ó E N V I R O N M E N T A L R E P O R T F O R 2 0 0 2

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Authors: Dr. Noam Gressel, Head of Environmental Responsibility at Egged

and Arbel Harari, Assif-Strategies Ltd.

Editor: Rutti Tamir, Assif-Strategies Ltd.

Graphic Design: Avivit Graff G.

English Translation: Evan Fallenberg

Proofing: Shlomi Schwarzwald, Assif-Strategies Ltd.

Printer: ÒHodfus Quality Ltd.Ó (1968), Tel Aviv. A firm specializing in use

of environmentally-friendly printing materials.

Paper: Printed on ecological paper produced by Cartiera Favini, Italy. The paper

is pH neutral, acid free and chlorine free. The paper is produced from seaweed

removed from Venice Bay. Cartiera Favini received a special mention,

ÒEco-DesignÓ from the European Union for this series of papers.

Production: Marketing Division, Egged

Our thanks to all the professional staff at Egged for their help in gathering

information and providing input:

Motti Elran, Ram Asher, Shmuel Borovsky, Igal Biton, Shmuel Ben-Ari,

Avner Ben-Zvi, Moshe Berger, Moti Telzi, Amnon Cohen, Yossi Cohen, Irit Levental,

Amir Moshe, Yakov Nachum, SaÕadia Salim, David Fayans, Ron Ratner,

Reuven Shabi, Emanuel Shemesh.

We are also grateful for the assistance in information provided by:

Dr. Leonid Tartakovsky, The Technion Institute

Mr. Avi Moshel, The Israel Ministry of the Environment

A Letter from the ChairmanThis report, which summarizes activities of the Egged Bus Cooperative

for 2002 in the fields of the environment and contribution to the

community, provides concrete proof that policy changes in the

Egged Secretariat have led to practical responsibility in every realm

of activity in which the cooperative is engaged.

We are proud to be among the first Israeli companies not only to

publish an environmental report at all, but one that is based on the principles of international

standards. This report presents our activities regarding environmental management and

the community before the various stakeholders in the area of environmental quality.

The report is a portrait of a large concern that set as its goal to be a pioneer in the reduction

of air pollution by purchasing low-bodied buses with Euro III-standard engines long before

such were required by the government. Further, Egged introduced the use of ultra low-

sulfur gasoline in all inter-city and suburban buses prior to any such requirement (as of the

printing of this report, no such requirement has been issued), and has activated, among

other changes, a recycling process for water, oils and waste at company service stations.

Concurrently, Egged has become active in the community and has taken part in unique

projects that include the clean-up of beaches, the preservation of parks and forests, assisting

the disabled by providing specially-equipped vehicles, and sponsoring a comprehensive

conference on environmental issues and public transportation.

Egged continues to strengthen its commitment to the environment in 2003, converting the

learning process into reality through collaboration with such organizations as the Israel

Nature and Parks Authority, green organizations, and the Ministry of the Environment.

While disagreements do arise, we are careful to take their needs and opinions into

consideration as we define our ongoing commitment. We believe that improving the quality

of life and the environment is a supreme social value, the very foundation of public

transportation. We shall, therefore, continue our dedication to the issue and contribute

to the best of our abilities.

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Arik Feldman, Chairman

E g g e d S e c r e t a r i a t

Environmental CommitmentCorporate Social Responsibility


Adaptive Management Mit igat ion

¥ To continue ongoing, long-termimprovement in performance withregards to transportation services,technologies and commitment tothe environment while using naturalresources with care, in accordancewith the needs and financialcapabilities of the Israeli economy;

¥ To minimize the environmentalrepercussions of our activities whileat the same time rendering oursystems more effective andmaintaining the lead in publictransportation in Israel;

¥ To create a comfortable, efficientand high-quality travel and service experience with aneye to social and environmental responsibility, inaccordance with our passengersÕ expectations;

¥ To develop and establish public transportation inIsrael as an important social and national resourceconcerned with environmental responsibility, whilecreating an economic-social-environmental balance;

¥ To preserve national environmental assets for futuregenerations;

¥ To maintain a commitment to public health;

¥ To shorten distances between outlying areas andthe center of the country;

¥ To make buses more accessible to the elderly,disabled, and young passengers;

¥ To assimilate environmental values into our businesspolicies and to commit to a gradual, steady improvementin environmental performance in coming years;

¥ To continue creating opportunities for cooperativeventures with the public, with environmentalorganizations and with policy- and decision-makers inorder to encourage increased reliance on publictransportation and to contribute to social andenvironmental improvements;

¥ To provide clear information enabling serious andfruitful dialogue with passengers, social andenvironmental organizations and the public at large.

The Principles of EggedÕs Environmental Policies

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Achievements in 2002¥ The opening of the new Jerusalem Central Bus Stationto passengers in 2002, built with an air purificationsystem that guarantees both indoor air quality in thepassenger halls as well as controlled emissions to theenvironment;¥ The purchase of 158 low-bodied city buses and 30inter-city buses equipped with a new model of engine(Euro III), bringing the total number of buses with EuroII and Euro III engines to 43% of the cooperativeÕsfleet;¥ The completion of the transition to low-sulfur dieselfuel (Õcity dieselÕ) in all cities in which Egged operatesmunicipal or suburban service;¥ The implementation of an oil-filter recycling systemin all 30 Egged service stations;¥ The installation of valves enabling the recycling ofmotor oil requiring no human intervention, in theentire Egged fleet;¥ The purchase of low-bodied buses to facilitate useof public transportation by the disabled, parents withbaby carriages, small children and the elderly.

Challenges for the Years AheadOperational Improvements¥ Continued improvements in the workenvironment and level of safety;¥ Reduced sewage affluence through waterconservation and improved treatment;¥ Minimized amounts of waste, by reductionat the source and by recycling and/or reuse;¥ Achieving the goal of a 50% decrease in airpollutants by the end of 2004.

Establishing Policies and DevelopingProcedures¥ Ongoing improvement in ecologicalperformance, in spite of the harsh economicconditions;¥ Development of environmental proceduresin service stations and parking areas;¥ Development and application of proceduresfor dealing with complaints of noise pollution;¥ Improvement of environmental reportingto include quantitative information regardingall of the organizationÕs activities;¥ Development of a general organizationalpolicy that will firmly establish recycling onbuses, in service stations, in offices and atbus stations as part of the ongoing activity;¥ Implementation of sustainable consumptionpractices through reduction of inventories

and working with suppliers to minimize packagingand waste.

Long-Term Development¥ Retirement of older vehicles from service and ensuringtheir replacement with cleaner, advance-modelsthrough adequate governmental support;¥ Continued improved efficiency of system routes inadditional cities, with the cooperation of local residentsand authorities;¥ Continued development of service according tointernational principles of sustainability;¥ Development of a long-term environmental policywith regards to infrastructure, Egged facilities, andthe acquiring of new vehicles.

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Ecology Mobi l i tyEco-Efficiency


Ò E G G E D Ó E N V I R O N M E N T A L R E P O R T F O R 2 0 0 2Accessibil ity

Achievements and Challenges

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Environmental Management at EggedContact persons:Mr. SaÕadia Salim, Engineer - Nationallyappointed environmental health and safetymanager;Dr. Noam Gressel - Head of environmentalquality, directly responsible to the chairman.

The chairman convenes regular meetings onenvironmental matters for ongoing updates anddecision-making.

The head of environmental quality is in constantcontact with environmental organizations, theMinistry of the Environment, and localcommunity representatives.

The environmental health and safety manageris responsible for developing and applyingenvironmental procedures in the variousdepartments, service stations and parking areas.

These professionals are responsible forconvening cross-organizational meetings todiscuss and determine standing issues regardingenvironmental policy.

Egged is the largest transportation organization in Israel, operating in three

districts - North, South and Jerusalem - with 39 local branches, four intersection

terminals, 25 central bus stations and 30 service stations.

[The following statistics are updated to March 2003]:

¥ Number of buses on service routes: 3,246

¥ Number of routes: 1,304 (3,984 alternative routes)

¥ Number of passengers per day: 1,050,000

¥ Number of trips per day on service routes: 26,466

¥ Number of permanent special trips per day: 3,549

¥ Number of kilometers traveled per day: 635,407 (394,588 miles)

¥ Number of drivers and transport crew: 4,454

¥ Number of administrative employees: 1,140

* Number of service employees: 991

Egged - General Information

EcologyEco-Efficiency



Mobi l i tyAccessibil ity

Nations and businesses around the world areadopting environmental policies calledÔsustainable developmentÕ the essence of whichis to ensure that the use of natural resources willnot harm future generations or other populations. Incorporating the principles of sustainabledevelopment on the strategic level allows Israel,as well as leading organizations like Egged, tominimize negative effects on the environmentwhile ensuring quality service to the public,economic prosperity, and a contribution to Israelisociety.The leading concept in environmental upkeep isÔsustainabilityÕâ namely, maintaining a balancebetween the needs of different populations, theneeds of this generation and those to come, thepreservation of nature and the health ofecosystems, and ongoing social and economicdevelopment, welfare and prosperity. Israel hasyet to assimilate this emerging global approachin any systematic manner.ÔSustainable TransportationÕâ is a new field in theworld, and few are the large transportationorganizations that have assumed a leadership rolein promoting this kind of progressive approach toecology. A recent example includes the autocompanies Ford, Honda, Volkswagen, GeneralMotors and Renault, the tire manufacturerMichelin, and the British Petroleum oil concern. These companies have established, with theassistance of non-governmental organizations, agroup called Mobility 2001, which identified

challenges similar to those faced by Egged andtransportation in Israel:¥ To ensure that the means of transportation atour disposal are fulfilling their social and economicpurpose while contributing to the environment;¥ To improve performance in private automobileswhile reducing the negative environmental andsocial ramifications;¥ To redefine public transportation as an efficientand user-friendly replacement for the privateautomobile, particularly for those populations -the disabled, the elderly, children and theeconomically disadvantaged - for whom privatecars are not an option;¥ To invent clean, efficient, inexpensiveapproaches to planning and managingtransportation systems and infrastructures;¥ To reduce the negative effects of fuels likegasoline and diesel oil on the planetÕs climate;¥ To solve the lack of transportation infrastructurefor hauling cargo and passengers, especially incity centers;¥ To identify points of traffic congestion andto employ various means for saving time andimproving quality of life within cities andbetween them.

Ecology and Transportation in the Global Village -Future Challenges

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Integrated Public Transport: The need to promoteintegrated public transport as a common objective ofthe public transportation sector, various governmentministries and environmental organizations has growndramatically in recent years. The goal is to improvequality of life in cities and to address the problems oftraffic congestion and air pollution. This report is a first-of-its-kind source of information, designed to serve asthe basis for discussion between Egged and interestedparties, decision-makers in academia, environmentalorganizations, and government ministries. It is part ofthe dialogue Egged is holding with the public for thepurpose of making known the cooperativeÕs efforts atimproving the environment as well as the inherentchallenges involved for the entire public transportationsector.As a leading organization in the transportation field,Egged feels obliged to develop solutions to problems oftransport and pollution. The first step was preparing along-term comprehensive plan for environmental qualitydeveloped over the past few years, which includesreducing emissions of air pollutants, preventing waterand soil pollution at Egged service stations and parkingareas, reducing waste, becoming more skilled at recyclingand improving service by purchasing buses suited to avariety of populations, including the physically challenged.

Emissions: At EggedÕs request, a plan for reducingpollutant emissions was drawn up by environmentalspecialists at the Technion Institute. Within three yearsthe level of pollutants emitted will have been reducedby 50%, well beyond the level required by the Ministryof the Environment, especially within cramped, congestedcity centers.

Purchasing New High-Standard Buses: Egged haspurchased, on its own initiative, buses with engines thatcomply to strict European standards, bringing into servicelow-bodied buses with Euro III- standard engines andclean low-sulfur diesel fuel (Õcity dieselÕ) on allmetropolitan routes.

Transition to low-sulfur fuel: Egged recommendsrequiring use of Ôgreen fuelÕ (low-sulfur fuel) in allvehicles that run on diesel fuel (i.e., trucks and jeeps),to bring about true and significant change in this area. In order to put an end to congestion, reduce air pollutionand improve quality of life in Israel, it is essential toadvance the construction of pedestrian walkways, bicyclepaths, convenient, accessible stations, special bus lanesand urban landscaping that makes the time residentsspend traveling from one place to the next more pleasant.

As a leader in Israeli transportation, Egged has committeditself to addressing the public plea for improved publictransportation and quality of life in the city.

Method of ReportingThis report is a first attempt by Egged at gathering allrelevant information in order to present a publicenvironmental accounting to interested parties, includingemployees, government ministries, local authorities,environmental organizations and passengers.The information within pertains to 2002. An attempt hasbeen made to include information from previous years,along with reliable projections for upcoming years inorder to best represent trends occurring in every subjectarea. Experience from other countries shows thatdisseminating information and adapting it to public needsis liable to take several years of mutual discussionbetween the public, Egged and the general businesscommunity.The data on which the report is based pertain to theEgged Israel Transport Cooperative Society, Ltd. andcomprise activities nationwide, including branches,parking areas, service stations and the fleet of vehicles. Egged subsidiaries and holdings are not included in thispreliminary report.The Global Reporting Initiative - an internationalenterprise sponsored by the United Nations with theparticipation of social-environmental organizations andbusiness concerns - is taking shape and growing.Participating social-environmental organizations includeAmnesty International, Greenpeace International andthe World Wildlife Fund; international business concernsinclude Nike, Inc., Ford Motor Corporation, GeneralMotors, Heineken, and Philips Electronics. An attempthas been made in this report to apply the principles ofthe Global Reporting Initiative and to maintain a reportingmethod similar to that of companies who are partnersto this process.The data reported are the results of direct surveys ofeach topic studied, unless otherwise noted. Informationwas gathered internally by Egged through the variousrelevant departments, including Purchasing, Maintenanceand Logistics, as well as through the various branches.Information and estimates pertaining to emissions wereprepared according to databases and existing Israelimodels carried out by the Ministry of the Environment,the Central Statistics Bureau and the Internal CombustionEngines Laboratory of the Technion Institute.

Reporting by Topic

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Integrated Public TransportAccessibil ity


IntroductionClean air is perceived as a freecommodity, unlimited and takenfor granted, supplied free ofcharge. Until now, people haveenjoyed this resource withoutbeing aware that every activitywe perform every daycontributes to air pollution andaffects our health andenvironment.In recent years, air quality has deteriorated,particularly in the larger cities. In Tel Aviv,Jerusalem and Haifa, air pollution indexes havemeasured higher than permissible levels on manydays. The main cause of air pollution is the burningof fuel for transportation, electricity, industrialactivity, etc.

Reducing Emissions of Health-RelatedPollutants:Egged is engaged in reducing the emission of airpollutants by taking the following measures:¥ Renewal of the bus fleet through purchase ofnew, more efficient models - every year 30 newinter-city buses and 158 low-bodied city buses withEuro III engines are being entered into serviceinstead of older models. (By the end of 2003 Eggedwill have acquired a total of 513 buses with EuroIII engines). One older vehicle is taken out of servicefor every new bus acquired so that the number ofactive buses does not increase while the level ofemissions decreases significantly;¥ Using low-sulfur diesel fuel in cities;¥ Making bus routes more efficient;¥ Inspecting air polluting levels of all Egged vehiclesbiannually;¥ Maintaining stringent and ongoing upkeep of theentire fleet.

In 2001 the Ministry of the Environment imposedon Egged to bring about a significant reduction inthe level of emissions. For that purpose a plan wasdrawn up comprising three elements: vehicles, low-sulfur diesel fuel and maintenance. Egged plans toreach that goal - and in many cities even surpassit - by making route service more efficient.

Air Quality

Trends in Air Quality in IsraelIsraeli cities are among the most polluted in the

Western world; recent reports place Tel Aviv as

the third most polluted city in Europe. A major

portion of this air pollution stems from the extensive

use of private cars.

While the number of buses operating in the public

transportation system does not change significantly

over the years, Ministry of Transportation data

show that the number of vehicles in Israel rises

annually by 6%. For the most part, this rise is due

to the purchase of diesel-powered vehicles in the

private and business sectors. Most of these vehicles

were not required until recently to use the low-

sulfur fuel that Egged uses. Further, polluting

emissions from a poorly maintained vehicle may

be hundreds and even thousands of percent higher

than a vehicle maintained properly on an ongoing

basis. Due to the economic situation, fleets grow

older, new-car purchases take longer, and periodic

maintenance is performed less and less regularly.

Thus, significant improvements in air pollution

reduction have yet to be realized in Israel

(Figures 1-4).



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Figures 1-4:Emission of CO, NOx, suspended particles and CO2 for Egged vehiclesbetween the years 2000-2005. The data is presented as the percentageof year 2000's emissions (i.e., the emission in the year 2000 = 100%).Trends of vehicle emissions in Israel are given for the purpose ofcomparison with the trends for Egged.

Sources: National data Ð Israel Central Bureau of Statistics and theIsrael Ministry of Environment.National projections - The Ministry of the Environment. Data andprojections for Egged Ð were produces internally based on reports fromthe Internal Combustion Engines Laboratory at the Technion Institute.

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Figure 2:Vehicle NOx emissions in Israel (1990-2005)and for Egged (2000-2005), as percent of year 2000 emissions.

Figure 1:Vehicle CO emissions in Israel (1990-2005) andfor Egged (2000-2005), as percent of year 2000 emissions.

Figure 3:Vehicle particulate matter emissions in Israel (1990-2005)and for Egged (2000-2005), as percent of year 2000 emissions.

Figure 4:Greenhouse gas emissions in Israel (1996-2004)and for Egged (2000-2002), as Gg CO2 equivalents.

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ns.

In recent years Egged has initiated changes in serviceroutes within Jerusalem and Haifa for the purpose ofimproving passenger service while lowering the volumeof bus traffic in city centers. This improvementdecreases pollution and contributes to improved airquality in city centers, without harming servicefrequency.Jerusalem: In the city center (the area of the MahaneYehuda market) the amount of daily bus traffic hasdecreased by 630 buses, from 4,593 to 3,964 buses,as a result of the new plan. This has brought abouta decrease in air pollution of at least 14% as well asreduced congestion. As far as passengers areconcerned, service has improved, travel times haveshortened and there has been no recorded decreasein the number of passengers.

Haifa: In the city center (the area of HaneviÕim andHerzl Streets) the amount of daily bus traffic hasdecreased by 425 buses, from 1,200 to 775 buses, asa result of the new plan. Here, too, the plan wasdesigned to maintain the number of passengers whilereducing air pollution by 35% and improving service.In other areas of Haifa, the reduction in pollutionlevels was more modest - approximately 20%.

Egged has pledged to reduce polluting emissions incity buses by 50% over the next three years by makingbus routes more efficient, and as part of the processof replacing older vehicles with newer ones fittedwith Euro III- standard engines. These measures complywith the goal of the Egged Secretariat to reducepolluting emissions by even more than 50%.

Rendering city-center service routes more efficient - direct effect on air quality

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Figure 6:Bus volumes travelling through the city center,before (2001) and after (2002) changes to busroutes in Haifa.

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Figure 5:Bus volumes travelling through the city center,before (2000) and after (2002) changes to busroutes in Jerusalem.

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The number for report ing smoke emiss ions i s 04-854-9597

Air Quality - Egged has completed thetransition to the use of clean diesel fuelin city busesIn 2002 Egged began, on its own initiative and withoutbeing required to do so, to fuel buses with clean dieselfuel in large cities, including Haifa and the Krayot,Rishon Lezion, Bat Yam, Holon, Netanya, Herzliya,and Kfar Saba. In November 2002 the transition toclean diesel fuel was completed in Jerusalem as well. Until that time the transition was impossible inJerusalem because suppliers did not transport cleandiesel fuel to the city. Because of its commitment toconserving the environment, Egged took the initiativeto absorb the costs involved in bringing clean dieselfuel to Jerusalem. In bringing low-sulfur diesel fuelto Jerusalem, Egged has completed the transition toclean diesel fuel in all large Israeli cities.

Clean diesel fuel, also known as Ôcity dieselÕ, is a low-sulfur fuel that reduces air pollution by tens ofpercentage points over the old diesel fuel, as long asengines are properly maintained. The combinationof a properly functioning engine with clean diesel fuelreduces the level of air pollution in cities, where largenumbers of people are exposed to air pollutants andto the resulting health problems.

MaintenanceThe most significant improvement in reducing emissionsin large fleets is attained by stringent maintenance. A well-tuned engine emits far less pollutants, comparedwith a poorly maintained engine, frequently - ordersof magnitude less. Defective maintenance, a resultof the economic crisis in Israel, is in abundant evidenceon Israeli roads in the form of smoke emitted frommany fleets. At Egged, which maintains its own fleetand takes care both to ensure the long life of its

engines and to act in accordance with upholdingenvironmental standards, the trend is the opposite:ongoing improvement in maintenance procedures andapplications.

Follow-up and immediate treatment ofsmoke emissionsBeginning in 2001 Egged has pursued a policy ofsystematic follow-up on complaints of smoke emissionsmade to the company. An appeal to the public atlarge was made in October 2001, through newspaperads and posters affixed to the buses, advertising thetelephone number to call to report smoke emissionsfrom Egged vehicles. In 2002 the following procedurefor dealing with these complaints was adopted:Any person who calls this number is connected directlyto the nationally appointed environmental health andsafety manager. The complaint is registered andpassed on immediately to the chief engineer for vehiclecompliance, who arranges for the vehicle to be removedfrom the work schedule and sent the same day or thenext for testing at the nearest Egged dynamometerstation. The bus is tested and repaired accordingly. The result of the test is sent to the person who phonedin the complaint and to the environmental health andsafety manager by the chief engineer for vehiclecompliance.

Table: The number of complaints by the public regarding smoke emissions

Source: Dept. of EH&S, Egged

Year Northen District Southern District Jerusalem District

2001 3 2

2002 5 3 4

Eco-EfficiencyIntegrated Public Transport


Mobi l i tyAccessibil ity

A National Production PlantEgged sets unique standards in Israel in all matters regardingmaintenance, use of quality components and the establishmentof more efficient processes in operating large fleets. Clearly,an essential condition in reducing negative effects to theenvironment is the meticulous high-level upkeep of the vehicles.In 1999 Egged established a National Production Plant, combiningthe maintenance and reconditioning plants that previously hadbeen scattered at various locations around the country. Thefactory overhauls a variety of components - engines, gear boxes,electrical systems and electronics - and maintains a factory forvulcanizing rubber tires, as well as a printing press for Eggedmaterials. The plant is committed to the highest standards ofenvironmental demands and to providing an environmentally-friendly, healthy and pleasant atmosphere for its employees.The plant plays a major role in reducing negative environmentaleffects of the Egged fleet due to the high level of maintenanceand the ability to overhaul and test the performance of enginesleaving the factory.Computerized tests: The process of reconditioning in the nationalproduction plant includes the use of original parts and performinga computerized check on the renovated partsÕ systems at theconclusion of the process. At the final stage, before an engineis returned to the road, it is given a three-hour run, monitoredby a dynamometer and checked thoroughly for the level of smokeemissions; only after the testers conclude that it is fit for usecan it be returned to the service station for installation. Themanufacturing plant authorizes the engine for use only whenthe level of its emissions is significantly lower than the requiredlevel (50 Hartridge smoke units); the standards used by testerson reconditioned engines are more stringent than those establishedby law. Egged standards dictate that an engine emitting 20Hartridge smoke units is still not considered acceptable. Anengine that meets the lawful standards but fails to meet Eggedstandards is returned to the factory for another round of tuningand/or renovations.Handling of hazardous material: The facility has a filtrationsystem alongside regular activity to insure adequate and lawfulremoval of wastes such as detergents and cleaning materials.There is continuous search for environmentally-friendly cleaningmaterials available on the market. The outcome of this searchhas been the introduction of efficient replacements, especiallythose handled on a daily basis by employees. Environmentally-friendly materials have replaced hazardous solvents. For example,kerosene that was used to de-grease motors and gasoline thatwas used to clean printing equipment at the in-house print shopwere recently taken out of use.Ongoing waste recycling: Concurrently, efforts are being madeto recycle waste from the various reconditioning processes onan ongoing basis. For example, small pieces of rubber thatsplinter in the vulcanization process are sucked up and collectedimmediately in a container that is then delivered to a rubberfactory; damaged metal and metal splinters are sent for meltingand recycling, as is used oil. The tires themselves undergo thevulcanization process, enabling continued use, provided theypass a stringent quality test by the Standards Institute.

Environmentally-friendly coolants usedfor air-conditioning - an initiative forpreserving the ozone layerThe coolant R12 was used for a long time in the air-conditioning systems of buses and cars until, severalyears ago, it was discovered that the group of materialsto which R12 belonged (CFC) was harmful to theatmospheric ozone layer, which is essential for lifeon this planet. Accordingly, Egged began changingthe coolant in 4,000 air conditioners in buses (42tons). Even though Israel is a signatory to the MontrealProtocol, which established a large number of goalsfor reducing damage to the ozone layer, there is asyet no law banning use of the coolant R12 in thiscountry.

On its own initiative, Egged began retooling all theair-conditioners to enable the switch from R12 toR134a, which does not harm the ozone layer inaccordance with the American SAE standards. In orderto prevent gas emissions during retooling it wasnecessary to make use of special pumping machines.The coolant R134a may be cleaned, recycled andreused. Egged acquired pumping machines andrecycling machines in order to handle the coolantwith the necessary caution and to return it to use inbus air-conditioners. Since the cleaning solution forthe air-conditioning system, R11, was harmful to theozone layer too, it was decided to replace it withR141b (HCFC), which poses a smaller danger to theozone layer.

The transition began as early as 1993. Egged retooledsome 1,500 air-conditioners at a cost of thousands ofshekels for each unit and over the years has purchasedan additional 2,000 new units which use the moreenvironmentally-friendly coolant. This process wascompleted approximately eighteen months ago sothat the air-conditioners in all Egged buses now makeuse of the environmentally-friendly coolant.

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Research and experiments for improvingair quality in cooperation with theTechnion Institute and the Ministry ofthe Environment

As the leading force in public transportation in Israel,Egged invests in research for improving air quality. Inrecent years Egged has been an active partner with theTechnion Institute and has even financed several studieson reducing polluting emissions in buses, some of whichwere carried out in cooperation with and partially financedby the Ministry of the Environment. Responsiblemanagement of the fleet and gradual improvements tothe environment require the construction of a scientificknowledge base, a long-term outlook, and the testingof technological solutions for the short-term and long-term future.

For example, the establishment of an Israeli standard forlow-sulfur diesel fuel came about with the assistance ofEgged's early experimentation with low-sulfur diesel fuelin its fleet. This data containing three years of experience,including impact on motors, was the only Israeli knowledgebase available to the Israel Standards Institute prior toestablishing the standard, now required throughout thecountry.

The following is a short summary of research carried outover the past decade:Air Quality at the Tel Aviv Central Bus Station - Eggedtook part in a project dealing with the station site itself,1994-1996.Assessing Factors in Israel buses - Egged participated inan experiment whose results are used today in calculatingemission factors for the purpose of forecasting, monitoringand calculating loads throughout the country.Assessing air pollutants in actual travel patterns inIsrael - an international project financed by the EuropeanUnion for the purpose of assessing the level of air pollutioncaused by all exiting vehicles. Egged was a participantin this experiment, through which realistic travel patternswere measured - the emissions from buses during real-life travel, not the amounts emitted during ideal laboratoryconditions.Experiment for installing catalytic converters forreducing particulate emissions - For more than a yearan experiment has been conducted on several Egged busesusing catalytic converters designed to reduce particulateemissions. Egged intends to attach particulate traps totwo buses as part of ongoing research into reducingparticulate emissions.

Laboratory experiments in Egged engines - Egged enabledTechnion Institute researchers to undertake laboratoryexperiments on its engines for the purpose of reducingpolluting emissions from buses.

Urban planning and public transportationin view of a systematic approach to theenvironment

Egged's systematic approach is expressed as early as theplanning stage of bus routes and bus stops. One studydone in collaboration with the Technion Instituteinvestigated the effects of road inclines and road conditionson emissions from buses. The recommendation was toreduce acceleration and deceleration, since these causehigher levels of emissions than straight, steady driving.Often, the need to accelerate or decelerate is caused bytraffic arrangements, road accessories (stop lights, trafficcircles), and poorly-located bus stops.

This is not a difficult problem to solve, however it demandsplanning, awareness of professionals in the localmunicipalities and coordination between the various stakeholders. For example, on an incline it is important toplan carefully the placement of a bus stop in order toreduce emissions as much as possible. Restraining devicessuch as road bumps cause acceleration and deceleration,which augment the level of air pollution. It is thereforeinadvisable to plan road bumps on bus routes, and inlocations where options are limited it is better to placeroad bumps close to bus stops in order to minimizeacceleration and deceleration, thereby reducing airpollution. Such a reduction in pollution can beaccomplished at no special cost when giving the subjectproper thought in the planning stages.


Integrated Public Transport Mobi l i ty

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Israel has a vast shortage of water. While the demandfor water continues to grow, the accelerated buildingprocess taking place countrywide, and especially in thecoastal plains, has brought about a reduction in the abilityof rainwater to permeate the ground and reachunderground water reservoirs. Further, there is a constantexpansion of industrial areas, which raises the threat tothe quality of water sources due to urban and industrialsewage, as well as fuels, oils, and industrial raw materialsthat are not properly stored. Clearly, the severe watershortage obliges us to take drastic measures in orderto avoid polluting the meager water resources availableto us.

Water preservation and recycling inbus-washing devices

Since EggedÕs major use of water is for washing the buses,most conservation efforts have focused on this aspect.Approximately 90% of the service stations have a recyclingsystem for bus-washing. The recycling system uses theexisting infrastructures for dealing with used water andreturning it to use. The water is pumped into an overheadcontainer in which filtration and treatment take place,after which it is returned to the brushing machine bypressure. Technically, this enables 95% reuse, though itis necessary to take evaporation and other elements intoconsideration, bringing the actual use of recycled waterto about 85%, with 15% added from the tap.

In addition to saving water and treating it during thewashing process, Egged is making the transition to oilseparators and floor-washing. Alternative methods forwashing service station surfaces have been foundpreferable, such as steam, which saves water and enablesmore efficient removal of pollutants by the oil separator.

Cleaning Work Surfaces in EggedService stations

In 2002 a survey was conducted in Egged service stationsto determine the best methods for cleaning. For smoothfloors, a scraping machine was found most efficient; forrough surfaces, steam proved better than using a waterhose or harsh chemicals. Using only the minimum amountof water enables a reduction in maximum flow rates, andthus, improved functioning of the oil separators, leadingto increased water conservation. Plans for 2003 includepreparing the groundwork for consolidating theseprocedures and finding technologies and environmentally-friendly cleaning solutions.

Maintenance of oil separators in thesewage system

The oil separators insure that oil is not flushed into thesewage system. In 2002 Egged engaged in evaluatingvarious contractors to deal with the oil separators andperiodically remove the oil (actual activities began in2003). Egged is improving the procedures and arrangementsfor removal and the cleaning of the separators whilemonitoring their functioning; when necessary, oil isremoved more often and separators are upgraded in orderto meet standards set by law.

Water and Sewage

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The State of Israel is a limited geographical entity facinga rising problem of increased consumption and waste,some of which can be dangerous to ecosystems and humanhealth. The quantity of waste has been increasingannually, and nearly 90% is disposed in landfills; only asmall portion is recycled. Every day 2.4 kilograms (5.3pounds) of waste are created per capita, or, in annualterms, five million tons. Many solid waste disposal sitesare situated in sensitive places, close to important watersources and without the proper means for preventingpollution. This creates severe ecological damage, mostnotably in the form of water and soil source pollution,air pollution, stench, and the spread of disease.

Egged engages in a variety of recycling activities, whichinclude the recycling of cardboard, metals (in the servicestations), ink cartridges, drink containers and others. Inorder to maximize waste reduction potential, Egged isengaging in a number of activities in 2003 for mappingout product consumption, locating alternatives that createless waste, and expanding recycling.

MetalsMetals are recycled in a few of the largest service stations,where chassis work is carried out, and at the NationalProduction Plant. In other service stations little metalwork is done, so materials are not removed for recycling. Presently, alternatives to other materials such ascardboard, office paper, glass and fluorescent light bulbsare being investigated.

Efficient recycling and drainage of motor oilOne of the most problematic water pollutants is the oilused in industry and vehicles. For that reason, the oilin Egged service stations is collected and sent for recycling.

Further, special valves have been installed in bus enginesover the past few years. These valves enable the drainingof oil from the engine without human intervention orleakage, so there is no opportunity for polluting theenvironment, maintenance time is shortened, and risksto employees are reduced as well. Installation of thesevalves in all Egged vehicles will be completed by 2004.

Empty oil and grease containersreturned for reuseIn order to prevent water and soil pollution from barrelscontaining residual oil and grease, Egged has reached anagreement with suppliers according to which the supplierswill reclaim and reuse the barrels; thus Egged does notpossess or assume responsibility for this hazardous waste.In 2003, 100% of the barrels will be returned for reuse.

Removing used filters for recyclingIn 2002 a contract was signed with a contractor, certifiedby the Ministry of the Environment, for the removal ofoil filters to a recycling plant in which they aredisassembled so that the metal and oil residue can berecycled and the rest of the waste can be removed tospecial sites for the treatment of hazardous waste. Thegoal for 2003 is to recycle 24,108 filters, or 100% of theused filters.

Materials and Waste

Figure 7: Consumption and recycling of oil.

Figure 9: Recycling of used oil filters.

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fil

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Figure 8:Consumption and removal for reuse of oil and grease barrels.


Integrated Public Transport EcologyEco-Efficiency

Integrated Public Transport Mobi l i ty

Accessibil ity


17

Hazardous MaterialsDealing with hazardous materials is very complicated,since they are a health hazard to people and theenvironment. In Israel as in other industrialized nations,there is extensive use of hazardous materials in all spheresof the economy. Inappropriate handling of these materialsand the waste created by their use can endanger humanlives and cause very severe water, soil and air pollution. By law, the toxins available in Egged service stations arediesel fuel, ethylene glycol, battery lead, oxygen,acetylene, paints, gluescontaining organic solvents,and used oils. Most of thesesubstances exist inquantities that do notrequire toxin permits. Thesubstance in which Eggeddeviates from thepermissible quantity isbattery lead. A specialrequest in this matter hasbeen forwarded to theMinistry of the Environment.

NatureConservationLand is a natural resource that must be used efficientlyand carefully especially in our densely populated country. All Egged service stations and parking facilities aresituated in populated centers and industrial areas, exceptfor the Ahisamakh facility. Therefore, damage to natureand landscaping caused by Egged is minimal.

Operating bus lines to nature reservesand national parksEgged is committed to landscape conservation both byoperating bus lines to nature reserves - whether theselines are profitable or not - and by cooperating with theIsrael Nature and Parks Authority to encourage the publicto engage in excursions, especially via publictransportation.Plans for rehabilitating sitesAt the Ir Ganim site, at which Egged operates a majorservice stationÕs facility, it was suspected that a certainparcel of land was polluted. It was removed and hasbeen used as ground cover for a solid waste disposal site,in cooperation with the Ministry of the Environment.After site rehabilitation an industrial structure will bebuilt.

Noise - DevelopingOperational Procedures withthe PublicÕs ParticipationApproximately 40% of Israelis are exposed to high levelsof noise that significantly impair their quality of life.According to the Ministry of the Environment, the majorityof environmental complaints received by local councils,the Israel Police and the Ministry of the Environment haveto do with noise. The main sources of noise in Israel arecity and inter-city roads (traffic), and army and civilianairports. In addition, a large number of residents areexposed to neighborhood noises such as alarms, stereosystems and air conditioners.

The effect of noise is comprised of several phenomena:it is oppressive on the nerves, it raises bodily energyintake, and it exhausts and harms concentration. A loudand sudden noise can cause fear, muscle tension, a rushof adrenaline to the blood, accelerated heart rate, a risein blood pressure and excessive perspiration. Most peoplesimply regard noise as a nuisance and are unaware of theaccumulated damage.

Every year a number of complaints about noise arereceived by Egged. Most are centered around activitiesat the parking areas, the service stations and bus termini. Complaints are individually investigated; each incidentrequires special treatment according to the source of thenoise and its character. During 2003 methods of developingoperational procedures to avoid noise are being examinedwith the help of citizen representatives and the managersof service stations and parking areas.

Complying with LegislationIn light of concerted efforts in 2002 to improve EggedÕsenvironmental performance and investment in mattersthat make a positive contribution to the environment,regulators expressed a more positive attitude towardEgged. Legal proceedings initiated by the Ministry of theEnvironment and several environmental organizationswith regards to emissions ended in agreements betweenthe sides, as did a hearing on the topic of oil filterrecycling.

There were only six incidents in which drivers were finedfor littering from buses. Drivers assume full responsibilityand pay the fines themselves.



The challenge - strengtheningcommunity relations and encouraginguse of public transportationAs part of its efforts to encourage the use of publictransportation and make it the transport-of-choiceover the private car, Egged has taken care to developnew services and improve existing services in orderto provide an answer to the transportation needsof its passengers. Egged listens to all interestedparties, including passengers and residents, keepingin mind both the business and social aspects.Concurrently, Egged engages in a variety of marketingactivities the goal of which is to provide added valueto users of public transportation.

Route planning: The process of planning new busroutes is carried out in close cooperation with citizenrepresentatives through committees at the local,municipal and regional levels, as well as othercommunity institutions. The process includesidentifying needs and demand and accommodatingthe route and frequency to the needs of residents.

Innovative Route Planning: Over the past twoyears Egged has labored to plan and implement aprogram for altering the public transportationnetwork in Jerusalem and Haifa. The goal was tomake service more efficient, cut overall travel timeand reduce the number of buses on main trafficarteries, a move that led to lower levels of airpollution. The new public transportation networksare based on a modern approach to transportationadopted by the worldÕs largest cities, defined asBus Rapid Transit (BRT), the division of routes bydesignation: major arterial route or local route (seeFigure 10).

Information Services: Egged runs national andmunicipal telephone information services as well asan Internet site (www.egged.co.il), which providesadvanced, user-friendly information services twenty-four hours a day, seven days a week. Informationis provided for more than 10,000 trips daily, busroutes, frequency, fares and general travel-planninginformation. Approximately 270,000 users visit thesite each month. Improvements to the site aremade on an ongoing basis and will eventually includeticket-purchasing facilities by credit card and moresophisticated information retrieval opportunities.Egged also provides route maps and timetables topassengers at information bureaus located at centraland branch bus stations.

Customer service: Egged operates CustomerService offices at three central locations - Jerusalem,Tel Aviv and Haifa - which may be contacted byphone, fax or e-mail, via the companyÕs website,and Lost and Found departments at central busstations throughout the country, which succeed inreuniting thousands of personal items with theirowners annually.

Reduced fares and benefits: Egged providesspecial-fare ticketing to youth (50% of the regularfare); an across-the-board reduction of 50% for allsenior citizens by all methods of payment (as requiredby the Senior Citizen Law); monthly passes at a costequal to 40 trips, good for unlimited travel duringone calendar month; and day passes at a cost equalto two trips, as well as other special-fare tickets.Further, Egged offers added value through specialbenefits, whereby the ticket entitles the passengerto reduced admission entry to the Israel Nature andParks Authority and a variety of leisure activitiesthrough agreements with theaters (Habima), cinemas(Rav-Chen Network), Circus Europa, book stores(Tzomet, Mila), sporting goods stores (Ricochet)and others.

Social and Environmental Responsibility -Focusing on the Community

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Figure 10: Jerusalem Bus Routes according to the newroute map for major arterial lines, made available to thepublic in early 2003.

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Integrated Public Transportation -Coordination and Integration with IsraelRailwaysWithin the framework of efforts to improve and enhancepublic transportation in Israel, a number of integratedservices have been created by public transportationproviders. Egged, other transportation companies, andIsrael Railways have begun cooperating on a number ofprojects, laying the groundwork for an integrated publictransport system. Cooperation with other bus companiesis mainly limited to shared bus stations, though somelocations, such as the Greater Tel Aviv area, offerintegrated ticketing. Cooperation with Israel Railwaysis broader and more varied. The new terminals at HaifaBay, which opened in 2002, and the Carmel BeachTerminal that opened in late 2003, integrate bus andrail services and allow coordination of timetables inorder to optimize passenger arrival and dispersal fromEgged buses to the trains. Egged information appearson timetables provided by Israel Railways, while theEgged website provides links to Israel Railways andother companies. Integrating transportation servicesrequires professional and planning cooperation in orderto make integrated public transport efficient forpassengers of both buses and trains. This year a seminarwas held for railway planners on the topic of planningrailway stations that integrate bus and taxi service.

Dialogue: Environmental Responsibility inPublic TransportationIn November 2002 Egged initiated a first-of-its-kinddialogue in Israel on the topic of increasingenvironmental responsibility and encouraging the useof public transportation. The conference was attendedby various operators of public transportation, interestedparties, decision-makers in academia, environmentalorganizations, representatives of local councils and thepublic at large. A number of government ministers andsenior officials appeared as well.Topics relevant to environmental responsibility andpublic transportation were discussed, including theenvironment and public transportation in the city,environmentally-friendly transportation policy, newapproaches and future technologies. Improving qualityof life in cities and finding solutions to road congestionand air pollution strengthen the need to promoteintegrated public transportation as a central, mutualgoal for the public transportation sector, national and

local governments, and community-based organizationsdealing with quality of life and the environment.Leaders in the field of public transportation in Israelended the conference with a panel discussion.

A Pilot Project: Accessibility for the DisabledIn 1999 legislation was passed to ensure equalopportunities for people with disabilities. Egged isparticipating in a pilot project for applying the law incooperation with the Center for Local Authorities, theMinistry of Transportation, the Accessibility Regulator,and transportation operators, including Egged. Theproject is designed to improve accessibility for disabledpopulations on public transportation. And advancedplanning of bus stations for the disabled is being carriedout with the help of traffic engineers from the localcouncils. To encourage these populations to use publictransportation the stations will feature route numberswritten in Braille, and recorded announcements of busdestinations. Improved stations built for accessibility,enable more widespread use of public transportationby disabled populations.




The Jerusalem Central Bus Station is aunique, innovative structure into whichconsiderable planning and money havebeen invested. On busy days more than60,000 people pass through it. At first thebuilding was planned similar to the TelAviv Central Bus Station in which the busesstand in open-air areas while passengersremain indoors. Later in the planningstages, however, the concept was changedso that the entire complex is enclosed andair-conditioned, emitting only clean air.The structure was fitted with one of thelargest and most sophisticated ventilationsystems in Israel. Indoor air quality iscontinuously maintained and monitoredby sensors dispersed throughout the building.In addition, the station has an air pollutioncontrol system to ensure that emissions to theoutdoor environment comply with standards setby the Ministry of the Environment. When busesare parked at the platforms where passengersboard, their exhaust systems emit fumes directly

over suction holes that draw the emissions intothe ventilation system; from here they passthrough a number of filters before being expelledand measured by the Ministry of the Environmentmonitoring sensors.

Clean Up the World

Jerusalem Central Bus Station - An Innovative Project UsingAdvanced Technology for Monitoring Pollution

In October 2002, Clean Up the World, an organization founded forthe purpose of cleaning the environment, staged a worldwide clean-up day. Many people in Israel participated in the cleaning projects

that took place all around the country but whichfocused mainly on IsraelÕs beaches. Eggedparticipated in the project by contributing 12buses that ferried more than 400 students andvolunteers from gathering points to the beachesand back, thus ensuring that the goals of theproject as envisioned by representatives of theorganization in Israel would be achieved.

The success of the event has committed Eggedto make more buses available for such clean-up days in the future. Thus, more volunteerswill be able to take part in keeping theenvironment clean.

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Eco-EfficiencyIntegrated Public Transport


Mobi l i ty

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Cooperation with the Society for the Protection ofNature in Israel and the Jewish National Fund in theJerusalem ForestPrior to Tu BÕShvat (Jewish Arbor Day) all the environmentalorganizations in Israel united tostage a rally at a huge ÔnaturehappeningÕ in support ofpreserving the Jerusalem Forestand saving open spaces in Israel.Egged committed itself to anevent called ÔEmbracing theJerusalem ForestÕ and operatedbuses to ferry participants fromall around the country, inconjunction with the Society forthe Protection of Nature in Israeland the Jewish National Fund,as well as a special shuttle fromthe Jerusalem Central Bus Stationto the forest. During the eventthe Jerusalem Forest was closedto all traffic but publictransportation. Four thousandpeople participated.

Egged sees great importance in activities supporting the JerusalemForest and urban greenery while concurrently cultivating publictransportation in the large cities. The rise in the number of privatecars on the road, traffic congestion, and air pollution have madeit necessary to develop and cultivate urban greenery in large citiesand to promote their sustainable use. Preserving the JerusalemForest and saving open spaces is of critical importance in maintainingquality of life in the capital.

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Independent Reviews:The Commissioner for Future Generations ÒThe KnessetÓ (The Israeli Parliament)

As the first Commissioner for Future Generations at ÒThe KnessetÓ,I gladly took it upon myself to review the first report of its kindthat symbolizes the beginning of a new era in the State of IsraelÐ global reporting, in the field of sustainability, prepared by Eggedfor the year 2002.

Although the report caries the title of Òenvironmental reportÓ,its contents are relevant to the three elements of ÒsustainabledevelopmentÓ or ÒsustainabilityÓ Ð environment, economics andsociety. These principles have been set forth at the World Summit on Sustainable Development thattook place in Johannesburg, August 2002. The leaders of the world took upon themselves a commitmentto use the world's resources in a way that will not deplete them, leaving optimal choices for futuregenerations.

It is important to note, that the Israeli government adopted a commitment, last May in a decision thatwas passed on a strategic policy for sustainable development in all state offices and institutions.

This Òpioneering spiritÓ - regarding the use of natural resources, society and the economy, while takinginto account the principles of interÐgenerational justice Ð is characteristic of the initiative that Eggedtook upon itself, being the first business entity to work toward improvement and awareness in houseÐ and transparency externally Ð in the areas of environment and sustainability. The importance of thisreport, aside from its specificity and being scientifically based Ð is the willingness of Egged to measureand overhaul performance, evaluate activities and share this information with the public and representativecivil organizations.

The example that Egged could provide to the members of the business community is of the utmostimportance due to the impact that this community has on formulation of the sustainable policies inour country, its future character and resources Ð for future generations.

I found that the report encompasses many elements of sustainability, though there is no doubt thatthe aspiration is to radically change certain statistics that need improvement - a decrease in air pollutionemissions, full transition of the fleet to new model engines (Euro III) and completion of the transitionto low-sulfur fuel.

If the health and economic effects of air pollution from transportation were shown in this report, asresearch has proven Ð it would enable us to identify the critical importance of the activity of the largestpublic transportation cooperative in the country Ð for the protection of the environment and theprevention of air pollution.

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In a country where broad social gaps exist Ð Egged has a significant social and economic role. It suppliesthe link between the periphery and the center of the country and the sole mode of transportation for theunderprivileged Ð thus it is essential, that the use of the subsidies will be efficient, keeping transportationat an accessible cost for one and all, to the point of free public transportation service.

It is imperative that the interest of Egged to increase the use of public transportation as an alternativeto private vehicles Ð should be also utilized in the public domain.

Egged must, whenever possible, make its voice heard against incentives for private car use, such asexpanding infrastructure for more roads that encourage private vehicle usage.

Simultaneously, Egged must aspire and fight for its ability to give attractive services through expansionof public transportation lanes and provision of exclusive service in the center of major cities, instead ofprivate vehicles.

It is thus appropriate to get involved in public campaigns, including engagement of the legislative andexecutive branches of government both directly and through creation of a favorable public opinion towardssustainable development.

Above all - Egged must prepare itself for the future, predicting trends of public transport usage, givencurrent road congestion and air pollution data. Therefore, Egged must currently design the future visionfor the public transportation sector and the roles of its various components in the grand picture.

Shlomo Shoham, Judge (ret.)Commissioner for Future Generations, ÒThe KnessetÓ

Jerusalem - November 4, 2003


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As slogans of Òsustainable developmentÓ have become increasinglyfashionable among the public and the corridors of corporations,environmentalists around the world have coined ÒGreenwashÓ as anew and pejorative concept. The concern is that corporationssometimes paint their activities as ÒgreenÓ to garner public support,while substantively, failing to improve environmental performance. Due to the phenomenon, I admit, to experiencing some anxiety whenfirst asked to review EggedÕs first environmental report. After all,it was not long ago that the Egged Corporative was sued by AdamTeva VÕdin, (an organization that I founded) because of the airpollution its buses emit. I was delighted, therefore, to read a documentthat suggests the launching of a real corporate commitment to airpollution reduction and a new model for how economic actors inIsrael can and should begin to make peace with our troubledenvironment.

When Egged was founded, it was a unique bus company, because itwas a cooperative. Its mission was rooted in an inspiring vision ofworkersÕ rights, egalitarianism and a preference for serving the public over profit-maximization. Perhapspublishing an environmental report represents a new stage of this same spirit. The air we breathe in Israelis a ÒcommonsÓ and for far too long, IsraelÕs industries and vehicles have treated this common with aninsensitive selfishness that manifests itself in alarmingly high concentrations of pollution. Short-termrevenues and production objectives drove emissions policies. As a result, epidemiologists tell us that thousandsof Israelis have died prematurely, and many more have been sick unnecessarily.

The time has indeed come for Israeli corporations who contribute to air pollution to expand the boundariesof their corporate mission to include a common resource. So in general, this report suggests that Egged hasbegun to actively embrace its environmental responsibilities, and I would like to understand this corporatepolicy in the broader historical context. It reflects a belated, but all the same, admirable continuation ofEggedÕs traditional support for values like the human right to be mobile and the serving of IsraelÕs broadercommunity interests, rather than merely making money.

There were three specific areas of the report that I found particularly encouraging:

First of all, its specificity was refreshing. Beyond the realm of platitudes and intentions - the report documentsa string of specific activities and quantifies the environmental benefits they offer. The integration of socialwith environmental objectives is a welcome change from a perspective that considers only narrow ÒchemicalÓdata - a perspective that environmentalists sometimes slip into.Second of all, I welcome EggedÕs willingness to go on the record with a concrete (and measurable) short-term environmental objective of halving its air emissions. We now have a performance indicator againstwhich we can judge EggedÕs progress in future reports. The Egged cooperative has set itself an ambitiousgoal and the Israeli public will be healthier if Egged succeeds in realizing it.

Finally, choosing an external expert to head EggedÕs environmental efforts and to oversee this report wasan important leap of faith. His strong professional skills alongside his proven commitment to environmentalprotection and public involvement, suggest a sincere corporate openness to new ideas and external review. It also increases the perception of the reportÕs reliability among skeptical readers like myself.

Independent Reviews: Chairman of ÓLife and EnvironmentÓ

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Integrated Public TransportMobi l i ty

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E c o l o g y

Having started off so positively, I would be remiss if I didnÕt offer a bit of Òconstructive criticismÓ and ideasfor future reports. First of all, it is important that we recognize that Òhalf-of the glass is still emptyÓ. If43% of Egged buses meet Euro II and Euro III standards, that also means that some 57% are still releasingfumes into the air that are poisoning the population. Nobody is expecting Egged to transform itself fromecological obtuseness into an environmental leader in the course of a single year or two. But we wouldlike a sense of where the company is going and when it plans to get there. Thus, as you consider your nextreport, it would be well to hear about clear deadlines for phase-out of all busses that do not meet thesebasic emission standards. For its first annual report as Òan environmental companyÓ, the present formatis understandable. But from now on, Egged should adopt somewhat more robust time horizons.

This leads me to the single greatest suggestion for improving EggedÕs future environmental reports. It isdifficult for the public to judge EggedÕs performance without a better understanding of what other countriesÕbus companies are doing to protect the environment. I would like to read in next yearÕs report about thefull menu of innovations that other national bus service providers have proven are possible. There are newfuel combustion and emission systems. Europe has begun to offer sulfur-free fuels. Electric buses are tobe found on many citiesÕ streets. Which of these ideas should Egged seek to adopt? What are the economicconstraints and environmental tradeoffs? Considering these issues openly will make for a richer publicdiscourse and ultimately greater creativity and progress within Egged.

Finally, I would like to see Egged more involved in the broader policy challenges associated with air qualityin Israel. The public projects supported by Egged detailed in the report are impressive and an excellentstart. But, Egged can be much bolder. It is important to remember that IsraelÕs air quality has reached crisislevels of contamination. LetÕs not forget that the same year that Egged releases this important progressreport, IsraelÕs Ministry of the Environment and the U.S. EPA published a disturbing scientific risk analysis. It calculates that over 1,400 people die each year from fine particles in the ambient urban air, most ofwhich can be traced to emissions from diesel vehicles. That is five times the number of casualties causedby terrorism. And yet, there has not been even a fraction of the attention or resources directed to thisscourge.

Given the present air pollution crisis, Egged needs to begin to broaden its environmental agenda. The othertransport companies to whom EggedÕs old buses are sold, largely do not share EggedÕs new corporatecommitment. They need to be much more highly monitored. Low-sulfur - Òcity dieselÓ fuel is not universallyavailable to taxis or required of other commercial diesel operators. The Ministry of the EnvironmentÕs budgetfor air pollution enforcement is woefully inadequate. In short, the improvement in air quality produced byEggedÕs corporate investment will be lost in the smoke of the growing diesel fleet in Israel without a morecomprehensive regulatory program for mobile sources in Israel. Egged should look beyond its own tailpipesand actively join the growing coalition that insists that breathing air should not be a hazardous activity.

We, in IsraelÕs environmental community welcome EggedÕs participation in these critical efforts. As arepresentative of IsraelÕs environmental movement, I am encouraged to read in this report about a corporationthat has indeed chosen to change its direction and begun to invest in sustainability and environmentalperformance. This sort of openness and vision is unique on IsraelÕs corporate horizon. We in IsraelÕsenvironmental community need to embrace companies that make such policy change and openly acknowledgethat it is time to work together. The candidness and commitment reflected in EggedÕs first environmentalreport offer the opportunity for a real engagement between the environmental community in Israel andthe transportation industry, based on a new level of transparency, shared values and partnership.

D r . A l o n T a l , C h a i r m a nÒ L i f e a n d E n v i r o n m e n t ÓIsrael Union of Environmental NGOs



C o r p o r a t e S o c i a l R e s p o n s i b i l i t y


Adaptive Management

Mit igat ion

Eco-Efficiency


Accessibil ity

Ecology

Mobi l i ty

Mobi l i ty

A c c e s s i b i l i t y

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