Communication on Progress for Rubix Group International Limited

UN Global Compact – Communication on Progress for Rubix Group International Limited

Period covered by Communication on Progress (COP) From: August 2017 To: August 2018

1. STATEMENT OF CONTINUED SUPPORT BY THE CHIEF EXECUTIVE OFFICER

I am pleased to confirm that Rubix Group International Limited reaffirms its support of the Ten Principles of the United Nations Global Compact. In this annual Communication on Progress, we outline the actions that we have undertaken to integrate the Global Compact and its principles into our culture, operations and business strategy. We maintain our commitment to advance in the areas of Human Rights, Labour, Environment and Anti-Corruption and recognise the importance this bears to all of our employees, customers and stakeholders.

Yours sincerely, Martin Gaarn Thomsen Chief Executive Officer Rubix Group International Limited, United Kingdom, COP for 2017-2018.

2. DESCRIPTION OF ACTIONS

Introduction to Rubix

Since our previous Communication on Progress (of August 2017), there has been major structural and operational change within the business. Most significantly, in September 2017, the Brammer group of companies merged with the French headquartered IPH group of companies to create the IPH- Brammer group, Europe’s largest supplier of industrial maintenance, repair and overhaul products and services with a turnover, in 2017, in excess of Euro 2.2bn. In addition, in June 2018, the IPH-Brammer group of companies launched its new group brand identity – ‘Rubix’. Accordingly, with effect from 28 June 2018, the entity formerly known as Brammer Limited and, most recently, IPH-Brammer Limited, changed its name to Rubix Group International Limited.

Rubix is the leading pan-European added value distributor of high quality industrial maintenance, repair and overhaul products and related inventory management, procurement and logistics in Europe. We supply Bearings, Mechanical Power Transmission components, Fluid Power, and Tools and General Maintenance products, together with engineering and associated industrial services, to the maintenance repair and overhaul market across Europe. We are committed to helping our customers improve production efficiency, lower operating costs and, in turn, reducing their energy consumption and carbon footprint.

Rubix is UK headquartered, and our European geographic footprint now covers 23 countries and serves over 220,000 customers in every manufacturing sector, leveraging our pan-European network and delivering 24/7/365 locally across Europe. Key market brands include: Brammer, BT Brammer, Buck & Hickman, Giner, Julsa, Kistenpfennig, Minetti, Montalpina, Novotech, Orexad, Robod, Syresa and Zitec.

Human Rights 1-2

Rubix is committed to acting with honesty, integrity, in accordance with the highest ethical standards and in compliance with all applicable local and international legislation.

Rubix does not condone and will not participate in any form of human exploitation, including child or forced labour, slavery and people trafficking. Rubix is aware of the provisions of the Modern Slavery

Act 2015 and, in compliance with this, in June 2018 Rubix published its updated Modern Slavery Act Transparency Statement on its website, available at https://www.rubix-group.com/slavery.

The Group also acts in compliance with all applicable national laws in relation to minimum wage, working time regulations and overtime pay, and is supportive of ensuring that employees are paid a living wage.

The Group endeavours to select suppliers who adopt high ethical standards that are consistent with Rubix’s corporate beliefs and values. Rubix expects its suppliers (and their subcontractors) to operate their businesses and conduct employee relations in an ethical manner and to meet the requirements stipulated by both international and regional laws and industry standards.

Labour Standards 3-6

The Group is committed to promoting equality of opportunity for all staff and job applicants. We aim to create a working environment in which all individuals are able to make best use of their skills, free from discrimination or harassment, and in which all decisions are based on merit. Both employment policy and practice in the Group are based on non-discrimination and equal opportunities. These principles are set out in the Group Dignity at Work policy, which is available to all employees and also the labour practices policy, which sets out the Rubix Group’s ethos that “each and every Rubix employee has a right to work in a safe and supportive environment”.

The Group remains supportive of the employment and advancement of disabled people. It is the policy of the Group to give full and fair consideration to applications for employment received from disabled persons, having regard to their particular aptitudes and abilities; and wherever possible to continue the employment of, and to arrange appropriate training for, employees who have become disabled persons during the period of their employment. The Group provides the same opportunities for training, career development and promotion for disabled persons as for other employees

Rubix has in place a code of conduct and ethics, which sets out the expectation that all employees should behave in an ethical and law-abiding manner. This policy includes guidelines for matters such as responsible marketing, prevention of corruption, handling of information, financial integrity and employees’ responsibilities to treat others with dignity and respect. In addition, the Group has a whistleblowing policy, under which Rubix commits to the highest standards of openness, probity and accountability. The effectiveness of this policy is further enhanced following the roll out of a 24hr confidential whistleblowing hotline, operated by an independent partner, which all employees are encouraged to use to report serious concerns concerning matters in the workplace.

The Group strives to provide and maintain a safe environment for all employees, customers and visitors to its premises and to comply with relevant health and safety legislation. In addition, the Group aims to minimise the risk of work based accidents by ensuring systems are in place to address health and safety matters.

The Group encourages the involvement of employees and aims for continual improvement in health and safety matters through a formal structure with a training, reporting and review process.

Compliance with health and safety policies and legislation is monitored on a country by country basis. The goal of the Group is to achieve best practice in all of its operations.

Reports on health and safety performance are made to meetings of the Board on a quarterly basis. A format of health and safety reporting is in place so that the board can monitor more carefully injury statistics and trends across the Group, especially where there are locally notifiable incidents.

Environment 7-9

Rubix recognises that it is part of a wider community of employees, shareholders, customers, suppliers and other stakeholders, and that Group companies have a responsibility to act in a way that respects the environment. This is at local, regional and national level, and covers a multitude of different areas.

It is the policy of Rubix, so far as is reasonably practical, to protect and conserve the local and wider environment from any adverse impacts caused by its operations and to take all reasonable steps to lessen its impact upon the environment; including reducing its carbon footprint through deceasing energy consumption and proactive waste management. As a distribution company, the interests of our major stakeholders and the environment are well aligned as increased efficiencies can reduce our carbon footprint, and help to both drive increased shareholder value and improve costs for customers.

Across all its operations Rubix works hard to ensure that employees are provided with relevant environmental training and awareness, to meet all relevant legislative requirements on environmental issues and ensure all contractors follow our practices while working on site and respond promptly and efficiently to adverse occurrences.

Rubix also looks favourably upon suppliers who have committed themselves to reducing their own impact upon the environment and has in place a supplier code of conduct and sustainable procurement policy, which sets forth a number of actions where Rubix can use its purchasing power to help ensure ethical and sustainable procurement. Rubix Group has recently updated this policy to drive a consistent commitment to conducting businesses responsibly across the Rubix Group.

As part of its environmental commitments, Rubix takes part in the annual EcoVadis CSR analysis system, which covers 21 criteria across four themes of environment, fair labour practices, ethics/fair business practices, and supply chain. In 2017 Rubix was awarded a CSR Silver rating by EcoVadis.

Rubix also takes part in the Carbon Disclosure Project disclosure process in order to measure its environmental risk and how effectively Rubix is addressing this risk. In 2017 Rubix achieved the “Awareness C” level.

The Group employs the services of an independent consultant, Carbon Clear, to produce a Carbon Accounting tool to measure our global carbon footprint. The carbon accounting methodology adopted follows the GHG Protocol Corporate Standard – an internationally recognised standard which provides guidelines for companies and other organisations preparing a GHG emissions inventory. Carbon Clear were involved in the measurement and reporting of our footprint ensuring that the data is credible, consistent and reliable. Implementing a structured and integrated approach to carbon accounting allows Rubix to report an accurate and credible carbon footprint, enabling the organisation to identify opportunities for improving its environmental performance across the Group.

Transport is a key area for Rubix when considering energy use and reduction. Rubix has the following Group-wide initiatives in place in relation to transport:

• Deliveries are in the main carried out overnight so that vehicles do not get held up in traffic, thus reducing their emissions. Overnight delivery routes are reviewed regularly to ensure maximum efficiency in scheduling to reduce fuel usage and thereby reduce vehicle emissions.

• Vehicles with diesel particle filters are preferred and cars with low fuel consumption (fleet scheme) are utilised.

• Employees are encouraged to optimise their use of car-pooling, use of public transport and limit the amount of air flights.

• Drivers are asked to conserve their speed as this is more energy efficient. Hybrid and electric cars are offered to employees as part of the Group car scheme.

• Where possible Rubix UK continues to minimise CO2 emissions, with improved GPS delivery routes introduced to reduce fuel costs.

Anti-corruption 10

The Group continues to update its policies and procedures in order to meet the requirements of the Bribery Act 2010. This an anti-bribery and corruption policy which is available to employees on the Group intranet and the roll out of a whistleblowing hotline.

3. MEASUREMENTS OF OUTCOMES

Labour Standards 3-6

One measure of the Group’s commitment to equality and diversity in the work place is the percentage of male and female employees within Rubix Group by employment level. See Table 1 below.

TABLE 1: Workforce Leadership team Percentage (below executive level) of male and female employees within Rubix Group by employment level Female 2092 34 Male 5950 156 % Female 26.01% 17.89%

Environment 7-9

As detailed above, in 2017 the Group has achieved CSR Silver rating from EcoVadis and “Awareness C” level from the Carbon Disclosure Project. Each year the Group strives to improve these ratings.

As the Group does not have manufacturing activities, the main impact on the environment is the Group’s logistics. The Group therefore monitors its packaging and distribution costs from both an

4 efficiency and environmental point of view. Table 2 shows the applicable key performance indicators for 2017 compared with 2016.

TABLE 2: Packaging

2017 2016

Packaging costs as % of costs of goods sold 0.29% 0.52%

Distribution costs as a % of sales (representing 0.80% 1.48% delivery costs to customer)

Measurements of the Rubix Group’s GHG emissions for the 12 months ending 31st December 2017 are set out below with emissions by scope detailed in table 3, emissions by country and company for the whole Group in table 4, emissions by country for the IPH companies in table 5 and emissions by country for the Brammer companies in table 6 (including a year on year comparison). Using an operational control approach, Rubix identified all of the activities and facilities for which it is responsible. Relevant activity data was collected and provided to independent consultant Carbon Clear Limited. The validity of the data was checked by Carbon Clear and used to calculate the annual emissions for Rubix in tonnes of carbon dioxide equivalent (CO2e).

In relation to the emissions data for 2017, whereas Brammer, and its group subsidiaries, have been reporting its GHG emissions for several years now, the process was relatively new to IPH group companies, which translates in the quality of data provided for the purpose of measuring the Group’s GHG emissions. However, the data provided by IPH group companies will be useful to serve as a base for future GHG emissions reports of the combined Rubix Group moving forward. Using best-practice as recommended by the Greenhouse Gas Protocol, IPH’s emissions were included since January 2017 rather than the date of acquisition.

The Group’s 2017 emissions were 65,743 tonnes of CO2e, a 209% increase in emissions compared to the previous year due to the inclusion of IPH group companies in the 2017 reporting, who had not reported previously. This comprised of:

Scope 1 &2 – Mandatory Greenhouse Gas Reporting

• Direct Emissions (Scope 1) amounted to 26,019 tonnes of CO2e or 40% of Rubix’s total greenhouse gas emissions

• Indirect Emissions (Scope 2) amounted to 6,771 tonnes of CO2e or 10% of Rubix’s total greenhouse gas emissions

• Owned vehicles were the most significant source of Scope 1 emissions, this is due to several IPH countries reporting owned vehicles and Brammer Germany reporting vehicles as owned rather Scope 3 Business Travel.

Scope 3 – Additional Activity Data Reported

• The sources of Other Indirect Emissions (Scope 3) comprised 50% of total emissions or 32,653

tonnes of CO2e.

• Road travel (employee owned cars) and freight transport were the most significant sources of Scope 3 emissions

TABLE 3: Emissions by scope

TABLE 4: Emissions Intensities by Country and Company

Area Gross Emissions % of Total (tCO2e) 2017 France - IPH 19,396 29.5% Netherlands - IPH 8,273 12.6% Germany - IPH 7,766 11.8% United Kingdom - Brammer 6,030 9.2% Italy - IPH 4,273 6.5% Nordics - Brammer 3,218 4.9% France - Brammer 2,673 4.1% Germany - Brammer 2,645 4.0% Poland - Brammer 2,357 3.6% Spain - Brammer 2,131 3.2% Spain - IPH 1,575 2.4% Netherlands - Brammer 1,380 2.1% Czech - Brammer 716 1.1% Poland - IPH 687 1.0% Other – Brammer 681 1.0% Belgium - Brammer 605 0.9% Italy - Brammer 480 0.7% Switzerland - IPH 305 0.5% Romania - IPH 219 0.3% Hungary - Brammer 201 0.3% Belgium - IPH 132 0.2% Total 65,743

Emissions data has been included as far as possible, through inclusion of actual data or estimation. However, due to the way data has been provided, it has not been possible to calculate a complete footprint.

Exclusions: • France – IPH, only data for OREXAD was shared; • Netherlands – IPH excludes Brammer Zeeland data; • Germany – IPH, only data for ZITEC was shared; • Romania – IPH, only data for NOVOTECH was shared; • Where countries have a combined revenue figure, it has not been possible to estimate for individual countries, e.g. Brammer Switzerland is part of Brammer France and so only Brammer France’s data has been included but Brammer Switzerland cannot be estimated for.

TABLE 5: Brammer Emissions Intensities by Country

Area Gross Gross Revenue Revenue Emissions Emissions % change Emissions Emissions (mil'£) (mil'£) intensity intensity (tCO2e) (tCO2e) 2016 2017 2016 2017 2016 2017 Czech 644 716 16.7 19.30 38.56 37.10 -4% France 1,123 2,673 96.10 97.60 11.69 27.39 134% Germany 6,061 2,645 129.20 132.90 46.91 19.90 -58% Italy 372 480 17.20 15.80 21.63 30.38 40% Netherlands 1,166 1,380 38.40 41.50 30.36 33.25 10% Poland 1,410 2,357 45.60 53.20 30.92 44.30 43% Spain 1,076 2,131 60.70 61.00 17.73 34.93 97% United Kingdom 7,952 6,030 264.80 255.50 30.03 23.60 -21% Nordics 864 3,218 44.10 48.00 19.59 67.04 242% Belgium 506 605 17.30 18.20 29.25 33.24 14% Hungary 400 201 6.50 6.90 61.54 29.13 -53% Other 502 681 17.60 21.10 28.52 32.27 14% Total 22,078 23,117 754.2 771.0 29.27 29.98 2%

TABLE 6: IPH Intensities by Country

Area Gross Emissions (tCO2e) Revenue (mil'£) 20171 Emissions intensity 2017 2017 France 19,396 583.39 33 Netherlands 8,273 148.24 56 Belgium 132 9.85 13 Spain 1,575 66.53 24 Germany 7,766 233.58 33 Italy 4,273 139.11 31 Switzerland 305 5.48 56 Romania 219 6.59 33 Poland 687 13.66 5071 Total 42,626 1,206.45 35

IPH’s emissions intensity is 16% higher than Brammer’s. This is driven by high intensities in the Netherlands, Switzerland and Poland.

Anti-corruption 10

Rubix has not been the subject of any legal cases, rulings or other events related to corruption and bribery.

Rubix Limited’s financial statements and accounts are subject to statutory annual external audit, which is used as one of the methods of identifying any suspicious activity that could be linked to bribery and corruption.