Corporate Responsibility Report 2012–13 This is our eleventh Royal Mail Group Ltd Corporate Responsibility Report. This Report sits alongside the Royal Mail Group Ltd Annual Report and Financial Statements 2012–13 and is our primary source for non-financial reporting for 2012-13. Our last report was published in January 2013 and covered the financial year 2011–12. On 15 Contents October 2013, upon flotation on the London Stock Exchange, Royal Mail plc became the ultimate parent company of Royal Mail Group Ltd. The new Group structure is presented on page 7.
Special purpose financial statements Foreword 02 As previously announced, Post Office Ltd was transferred from under the ownership At a glance 04 of Royal Mail Group Ltd to become a fellow subsidiary undertaking of Royal Mail plc on 1 April 2012, one week into the 2012–13 reporting year. Accordingly, to enable comparative analysis, special purpose, consolidated financial statements for Royal Mail Group Ltd, excluding Post Office Ltd, have been prepared for 2012–13 and 2011–12.
Adjusted 52-week basis The 2012–13 financial year was a 53-week year. To provide meaningful comparisons, revenue and operating costs it has also been presented on an adjusted 52-week basis. 1 About Royal Mail Group The adjustment removes the 53rd week’s revenue and incremental costs associated with that revenue.
Scope of non-financial reporting This Report covers the Group’s UK and international parcels and letters delivery 1.1 About Royal Mail Group 07 businesses operating under the Royal Mail and Parcelforce Worldwide brands. The UK represents 92 per cent of our operations by full-time-equivalent employees and 83 1.2 Our strategy 10 per cent of our revenue in 2012–13. Our primary focus is therefore on the UK. We will, 1.3 Our progress and future priorities 16 however, be increasing the coverage of GLS from 2013-14. This Report includes performance data for the financial year 2012–13. Because of 1.4 Key performance indicators 18 the privatisation of Royal Mail Group, it also covers important developments that have 1.5 Moving to the private sector 22 occurred beyond the end of the financial year. Where that is the case, we make it explicit. 1.6 Our stakeholders 26 Where stated, data contained in this Report has been restated from previous years to exclude Post Office Ltd. This includes environmental (greenhouse gases, waste and water), safety and community investment data. Post Office Ltd represented 4.4 per cent of the employee population of Royal Mail Group Ltd in 2011–12. 2 Our responsibility
2.1 Our customers 35 2.2 Our people 42 2.3 Our communities 54 2.4 Our environment 64 2.5 Transparency 72
3 GRI Index
3.1 Employee data 75 3.2 Global Reporting Initiative Index 77
4 About this report
4.1 Economic and social impact study by Cebr 85 4.2 Independent assurance 90 4.2 About this report 92 Foreword
We are honoured to provide the Foreword by Moya Greene, our CEO Universal Service to more than I am pleased to report that 2012-13 saw us continue to 29 million addresses across the UK make good progress on many fronts.
Just over three years ago our core UK business Our customers In mid-December 2013, we agreed in principle a Moving to the private sector had significant cash outflows. Last year, our ground-breaking new agreement on an agenda reported Group operating profit[1] grew from We are focused on getting things right for our for growth with our main union, the CWU. It is On 15 October 2013, Royal Mail floated on the £152 million to £440 million. The core UK customers and being their first choice. Royal Mail about improving industrial relations, creating London Stock Exchange. We are now a listed business delivered solid parcel volume and letter Group Ltd is the market leader by revenue in the a can-do culture and a joint commitment to company, majority-owned by investors, including revenue growth. With this strong commercial UK parcels and letters market. Being customer delivering business success. The agreement employees (who currently hold the single biggest performance we are able to make a major focused is one of our strategic priorities. includes legally-binding terms covering employee stake other than the Government), institutions and members of the public. Being a listed contribution to the UK economy through the jobs To be their first choice, we must get the basics pay, protections and industrial stability. The company means we now have access to capital we create and the taxes we pay. We remain a right and be easy to do business with. We industrial stability framework sets out a new when we need it to support our strategy. We core part of the UK’s social fabric. gather customer feedback extensively across approach to resolving workplace issues at a believe we will combine the best of the public our business and use this insight to increase much faster pace and without disruption. We will This report primarily focuses on the 2012–13 and private sectors. Our strong commitment to customer satisfaction, reduce complaints and provide updates to the agreement on our website. reporting year. However, because of the our corporate responsibility agenda and to our improve the whole customer experience. privatisation of our company, there are some Our communities stakeholders remains unchanged. important developments that we report on that We have made good progress in addressing occurred following the end of the financial year. issues on redirection, redelivery and misdelivery, We connect millions of customers, companies In summary where complaints have reduced since 2009. and communities, including those in the most Corporate responsibility is a core part of our Our strategic approach We are giving recipients of parcels more choice, remote rural areas. We make commerce happen focus on being a sustainable and stakeholder- for example through our Delivery to Neighbour in the process. Our contribution to the UK at Our vision is to be recognised as the best focused business. It is integral to our success. scheme and our recently announced ‘click and this difficult time for the economy is significant. delivery company in the UK and across Europe. We have a long heritage of contributing to our collect’ service. I am pleased to be able to report That is because we are one of the largest A key part of our business strategy and our communities. Our people go the extra mile, both that our research shows that our mean business employers in the UK and most of our operations corporate responsibility strategy is to ensure a serving our customers and supporting good customer satisfaction score is 74, an increase are based in this country. For the 2012–13 sound and sustainable Universal Service for financial year, Cebr estimated that we made the causes in their local communities. the benefit of everyone in the UK. of four points on last year. We are putting the customer at the heart of everything we do. seventh largest contribution to the UK economy We summarise our key achievements in 2012- As a company that touches all communities out of all UK corporations. We had a total 13 on pages 16 and 17 of this report. Here we across the UK, our corporate responsibility Our people economic impact of more than £9.6 billion, made also set out areas we will seek to strengthen strategy is best viewed through our impact on up of direct and indirect contributions to the and a clear work programme for the coming Our people are key to our transformation and our multiple stakeholders. To further strengthen wider economy, which was slightly higher than year. Future priorities are also summarised at the delivery of our business success. We provide our reporting and strategy, we introduced a the previous year’s £9.4 billion. the end of the Customer, Colleague, Community good-quality jobs. Research we commissioned by stakeholder panel this year. Representatives of and Environment chapters. While we have the Centre for Economics and Business Research We have also had great success in our new business, supplier and community interests, and significantly moved on our agenda in 2012-13, (Cebr) showed that we make a significant Charity of the Year partnership with Prostate external experts from Corporate Citizenship, Cancer UK. With the backing of our colleagues there is more to do. came together to discuss the key issues contribution to social inclusion through the vital employment and earnings we bring to many we raised £800,000 by year end, including We know that it is the dedication of our people facing Royal Mail and their expectations of the matched giving, and by June 2013, we had business. We have used this data to help shape of the country’s more deprived areas. that has enabled our success to date and raised over £1 million. forms the basis of our strong brand. Looking our report and direct our activities. I know that most of us – our employees, our forward, we will continue to ask a lot of them unions, the whole company – share a common We assess the effectiveness of our programmes Our environment to ensure continued progress. I am grateful goal: to help secure Royal Mail’s future so it through external benchmarks. I am pleased to for their ongoing support. I know that we will can grow as a business and remain successful. We are working hard to reduce our report that this year we maintained a Platinum work through the current challenges and that Ten per cent of the company was set aside for environmental impact. We have strengthened ranking in Business in the Community’s together, we will drive our business forward eligible employees – the overwhelming majority our approach to environmental management Corporate Responsibility Index, with a score of and realise our collective objectives. of Royal Mail Group Ltd employees in the UK. during the year. We have established a new 96 per cent. We also completed RobecoSAM’s Environment Governance Board (EGB) to help Corporate Sustainability Assessment for the Just over 100 million shares were offered for free (Free Shares) to eligible employees. As drive our performance. The EGB undertook second time in 2013. Based on the methodology a detailed materiality assessment to review used to calculate the Dow Jones Sustainability shareholders, colleagues have a meaningful stake in the company and the potential to our most significant impact areas, including Index (DJSI), our score ranks Royal Mail Group our targets. We have reconfirmed our main among the DJSI World and DJSI Europe member benefit from its future success. For more detail, please see page 24. environmental focus areas and developed a scores for the Transportation industry. new Environment Policy. Managing and reducing our impact in a responsible manner Moya Greene will help us save costs, compete more effectively Chief Executive Officer and deliver a good service to our customers.
[1] After transformation costs. 02–03 At a glance
£2.5 BILLION At a glance 150,000 SPEND ON SUPPLIERS EMPLOYEES
Royal Mail Group is one of the UK’s largest companies and one of its best known brands. We are proud to be the sole provider of the Universal Service UK PARCELS, INTERNATIONAL in the UK. We make commerce happen by connecting companies, customers AND LETTERS COMPRISES OF and communities across the country. OUR ROYAL MAIL CORE NETWORK Our vision is to be recognised as the best delivery company in the UK and across Europe. On 15 AND OUR EXPRESS PARCELFORCE October 2013, we became a private company, listed on the London Stock Exchange. Our purpose WORLDWIDE BRAND remains the same – delivering, six days a week, to more than 29 million addresses.
This report covers the Group’s UK and international parcels and letters delivery businesses, operating under the Royal Mail and Parcelforce Worldwide brands. The UK represents over [1] 90 per cent of our full-time-equivalent employees and our primary focus is therefore on £4 BILLION this country. We will, however, be increasing the coverage of GLS from 2013–14. EMPLOYEE WAGES AND SALARIES IN TAXES
6 DAYS A WEEK TO Delivering: 1 BILLION 17 BILLION 29 MILLION WE DELIVER 99% PARCELS LETTERS ADDRESSES OF LETTERS IN THE UK
Collecting from: 115,000 11,500 79,000 POST BOXES POST OFFICES BUSINESSES
8 REGIONAL 1,400 Processing through: MAIL DISTRIBUTION DELIVERY 45 CENTRES CENTRES OFFICES 60p £7 IN EVERY £1,000 Contributing: [2] UK ECONOMIC OUTPUT CAN TAKE A LETTER FROM A POST BOX IN LAND’S END TO A MAILBOX IN JOHN O’GROATS OVERNIGHT
Numbers quoted on this page are approximate.
[1] UK-based wages and salaries, not including pensions or social security benefits.
[2] The Centre for Economics and Business Research found that Royal Mail Group contributes 0.4 per cent to the UK’s total Gross Domestic Product, rising to 0.7 per cent when including our wider economic impacts. 04–05 1 About Royal Mail Group | 1.1 About Royal Mail Group
1.1 About Royal Mail Group
Proud to be the sole provider of the Universal Service in the UK, Royal Mail reaches everyone.
Who we are In 2012–13, a study by the Centre for Economics and Business Research found that Royal Mail Group Ltd is one of the UK’s largest Royal Mail contributes 0.4 per cent to the UK’s companies and one of its best known brands. total gross domestic product (GDP). Including We are proud to be the sole provider of the our wider economic impacts, that figure rises Universal Service in the UK. We deliver the to 0.7 per cent of GDP, amounting to an annual six-day-a-week, one-price-goes-anywhere economic contribution of £9.6 billion. Universal Service to more than 29 million addresses across the UK. Our businesses Our UK Parcels, International and Letters (UKPIL) business is comprised of two strong and trusted 1 About Royal Mail Group Royal Mail was found to be one of the brands: our core Royal Mail network, responsible for delivering letters and parcels in line with its 10 most influential brands in the UK Universal Service Obligation, and Parcelforce in 2012, alongside organisations such as Worldwide, a leading provider of collection and delivery services for express parcels. Amazon, BBC and Marks & Spencer[1] General Logistics Systems is one of the largest ground-based deferred parcel delivery networks in Europe. It is a pan-European business, 1.1 About Royal Mail Group 07 providing reliable parcel and express services as Royal Mail Group Ltd represents a key well as logistics solutions. 1.2 Our strategy 10 component of the UK’s economic and social 1.3 Our progress and future priorities 16 infrastructure. We provide services to private With the move to the private sector, the 1.4 Key performance indicators 18 individuals, companies and communities. Our organisational structure of the Group has altered postmen and women are an important part of in 2013. On 15 October, upon flotation on the 1.5 Moving to the private sector 22 their local communities. As a business, we help London Stock Exchange, Royal Mail plc became 1.6 Our stakeholders 26 generate considerable economic activity. the ultimate parent company of Royal Mail Group Ltd. The Group primarily operates within the United Kingdom, including a number of subsidiaries, associates and joint ventures.
Royal Mail plc
Royal Mail Group Ltd
Royal Mail Royal Mail Romec Investments Ltd Estates Ltd
General Logistics Systems B.V.
[1] Ipsos MORI Influential Brands 2013. 06–07 1 About Royal Mail Group | 1.1 About Royal Mail Group
Where we are Our future
We are proud to deliver the Universal Service, We believe that Royal Mail will combine the best but it does require a high fixed-cost network. of the public and private sectors. Our vision is to The transformation of Royal Mail Group Ltd be recognised as the best delivery company in is helping to ensure the sustainability of the the UK and across Europe. Universal Service by putting our Company on a sound financial footing. We are continuing As discussed in Our Strategy (page 10), our vision to improve our customer focus and are is underpinned by three strategic priorities: modernising our business to ensure our UK Being a successful parcels business: network can accommodate increasing parcel Leveraging our network reach and our strong volumes and meet customer needs. brand to ensure we can capture increasing Our brand is one of the UK’s most trusted. parcel volumes as a result of the growing That puts Royal Mail in a strong position. Our popularity of online retailing in the UK. Using our transformation programme is well on track and new regulatory freedom for parcels to develop is ensuring that we will be a strong competitor new offerings and compete more effectively in in the UK’s changing postal services market. the marketplace. Ensuring our combined UK network can accommodate increasing parcel The last two years have seen some of the volumes and meet customer needs through the most important legislative and regulatory completion of our modernisation programme. changes with respect to postal services in the Group’s history. Our new regulatory Managing the decline in letters: Managing framework, introduced in April 2012, provides the structural decline in the letters market by the foundation for a sustainable Universal becoming more productive and effective, and Service, allowing us to compete more effectively. ensuring we remain the carrier of choice for the However, we need ready access to investment delivery of letters in the UK. Harnessing the new to allow us to quickly seize and respond to regulatory freedoms we have won to ensure opportunities that arise. we make a reasonable, commercial return for the letters we deliver. Making marketing and The privatisation of Royal Mail provides us with business mail more valuable to our customers by [1] access to the capital we need. Private ownership increasing the data and insight they can gather. will better enable Royal Mail to invest in its business for growth. Being customer-focused: Putting the customer at the heart of everything we do Our financial performance to ensure that we continue to be the delivery partner of choice. Being easy to do business We continue to make good progress. Powered with, and building new propositions that truly by our strategy, Royal Mail is delivering strong meet customer needs. financial performance. This report Key highlights in the year ended 31 March 2013 This report covers the Group’s UK and international • Group revenue increased by 5 per cent parcels and letters delivery businesses, operating on a like-for-like basis. under the Royal Mail and Parcelforce Worldwide brands. The UK represents over 90 per cent of our • Letter revenue was up 3 per cent full-time-equivalent employees and our primary and UKPIL parcel revenue increased by focus is therefore on this country. We will, however, 13 per cent on a like-for-like basis. be increasing the coverage of GLS from 2013-14.
• Operating profit after transformation costs before other exceptional items of £403 million is £251 million higher than last year, on an adjusted basis, mainly due to revenue growth. Reported 52 Adjusted 52 Reported 53 weeks 2012 £m weeks 2013 £m weeks 2013 £m We believe that Royal Mail will • We saw a 5 per cent growth in parcel volumes on a like-for-like basis. Reported parcel Group external combine the best of the public volumes were 1,081 million items, compared revenue 8,764 9,146 9,279 with 1,016 million items in 2012. and private sectors • Operating costs have increased by 3 Operating per cent on a like-for-like basis, benefiting profit after 152 403 440 from productivity improvements and tight transformation costs cost management.
Free cash inflow/outflow 154 334 334
Group figures include General Logistics Systems. Financial year runs from April 2012 to March 2013.
[1] After transformation costs. 08–09 1 About Royal Mail Group | 1.2 Our strategy
This table shows the links between our core strategic priorities and our corporate responsibility 1.2 Our strategy aims and demonstrates how our corporate responsibility strategy supports the delivery of our corporate strategy. It also summarises some achievements against each corporate responsibility objective for the year 2012-13. Our vision is to be recognised as the best delivery company in the UK and across Europe. Corporate strategy priority Supporting CR objective Achievements in 2012–13 Deliver economic and We commissioned the Centre for Economic and Business social benefit to the Research (Cebr) to quantify our contribution to the UK economy. Our vision is underpinned by three priorities: 3. Thirdly, we need to continue to be a communities we serve The study found that we rank seventh of all UK companies. We capitalising on growth in online retailing to customer-focused company. In this add £9.6 billion a year to the UK economy, including indirect grow our parcels businesses; continuing to competitive market, our customers have a Communities impacts, making an overall contribution of 0.7 per cent to Gross mitigate structural decline in the letters market choice. We are developing the services we page 54 Domestic Product. This means that for every £1,000 of UK economic output, Royal Mail contributes £7. Cebr also measured by maximising the value of mail; and by being offer to ensure they meet our customers’ our impact on social inclusion in the UK. Through our provision customer-focused. By doing this, we believe needs. We are investing in technology to of high-quality jobs we bring vital employment and earnings we can drive sustainable, profitable growth provide the tracking services our customers to some of the UK’s poorer regions – Royal Mail employment is and secure a sustainable future for look for. We are working with our customers disproportionately weighted towards areas with high levels of our Company. to anticipate times of peak demand and deprivation and where job opportunities are fewer. In addition, ensure we can deliver the high-quality since 2006, our apprenticeship schemes, training postmen and Our corporate strategy service they expect. postwomen, engineers and mechanics, are worth £21.2 million based on a conservative estimate. Our corporate strategy has three priorities: Integrated responsibility Drive colleague advocacy of We are a people business. Our colleagues are fundamental 1. Firstly, being a successful parcels business. Our corporate responsibility strategy is an the Group and its strategy to our ability to succeed. Throughout 2012–13, we continued The UK parcels market has shown continued integral part of realising our core strategic to deliver a wide-reaching communications campaign to keep growth, thanks to the growth of online priorities. Indeed, the objective at the heart People people informed of our transformation programme and its page 42 retailing. We are investing in our parcels of our business strategy and our corporate objectives. 170 senior managers delivered around 600 face-to- face sessions to answer questions and get feedback between networks and our tracking technology to responsibility strategy is the same – to ensure July 2012 and March 2013. In spite of significant change meet customer needs. A long-term a sound and sustainable Universal Service for investment programme in our core, UK within the business, our annual Employee Engagement score the benefit of everyone in the UK. It is essential increased in 2013, and over seven out of ten say they still network will ensure we have the capability to our business success that we behave want to work for us in two years’ time. we need to accommodate the changing traffic responsibly and sustainably in relation to our mix from letters to parcels. people, customers, suppliers, communities Reduce the environmental In 2012–13, we worked on updating our environment strategy. 2. Our second strategic priority focuses on and environment. impact of our business We also established a new Environment Governance Board operations to help drive our performance. managing the decline in letters. We have Our corporate responsibility strategy already transformed how we sort letters, supports our strategic priorities, ensuring Environment During the year we reduced carbon emissions per £1 million automating the handling process in our long-term performance by: page 64 revenue by 4.2 per cent. We also achieved recertification of the Mail Centres. 79 per cent of letters are now Carbon Trust Standard; reduced water use by 12.6 per cent; sequenced to delivery point. We are pressing • Delivering economic and social benefit to reduced the amount of waste we send to landfill by 23 per cent on with our programme of delivery revisions, the communities we serve and increased the amount we reuse, recycle and recover changing the way we deliver to more than (i.e. energy from waste) to 66 per cent. 29 million addresses across the UK. This also • Driving colleague advocacy of the Group allows us to effectively manage growth in and its community role Manage our modernisation Through our modernisation programme, we are becoming parcel volumes and at the same time improve • Reducing the environmental impact of programme responsibly more productive and effective. For example, 79 per cent of our productivity. Changes in the regulatory letters are now sequenced to delivery point. We are continuing our business and operations Customers framework last year have given us greater to improve our processes to handle the increasing number of page 35 parcels in our network, while maintaining our Quality of Service commercial freedoms. These enable us to • Managing our modernisation standards, improving the safety of our people and managing programme responsibly respond better to market changes. We have People change responsibly. In consultation with our unions, we have already taken steps to simplify and improve page 42 • Communicating our management of corporate made significant commitments to job security, including many of our propositions. We are also helping an overarching objective to complete our modernisation responsibilities openly and transparently our customers derive more value from the programme without compulsory redundancies, and a mail they send through our direct marketing commitment to remain a predominantly full-time workforce. offering, MarketReach. Communicate management We have again strengthened our Corporate Responsibility of corporate responsibility Report this year. Data and assertions have, for the first time, openly and transparently been assured under the dual standards of AA1000AS and ISAE 3000. Using AA1000AS ensures content is material Independent Assurance and relevant to stakeholders, while using ISAE 3000 provides page 92 additional comfort in the robustness of data. We appointed the accounting firm Ernst & Young to carry out this assurance.
We have also reported against an additional eight Global Reporting Initiative (GRI) indicators, compared with last year’s report, to provide further transparency around our corporate responsibility performance.
10–11 1 About Royal Mail Group | 1.2 Our strategy
Delivering our strategy Corporate Balanced Scorecard
Our corporate responsibility strategy is At the highest level, our Strategic Framework The four quadrants below (People, Customer, Performance and Financial) and their respective KPIs reflect reviewed and supported by senior leaders within sets the overarching key performance indicators our Corporate Balanced Scorecard for the year 2012–13. As the business changes, we may adapt our KPIs the business (see Corporate Responsibility (KPIs), reviewed by the Chief Executive’s in future years to reflect changing priorities. The Scorecard KPIs are reviewed and agreed by the CEC, Governance on page 13). Supporting this, we Committee (CEC). On the ground, our policies, Remuneration Committee and, during the reporting period, the Shareholder Executive. have a comprehensive structure of delivery tools procedures and training engage and inform our that promotes clear responsibilities and targeted people. Using our three strategic priorities as measurement to achieve our aims. In this way, focal points, each cascaded level works towards Employee engagement – First Class retail responsibility is integrated throughout achieving our vision: to be recognised as the best customer focus Quality of Service the business. delivery company in the UK and across Europe. Second Class retail Employee engagement – Quality of Service increase index Integration of corporate responsibility throughout the business Mean customer Corporate Responsibility Delivery is driven by a set of delivery frameworks and tools. satisfaction
Lost time accident Strategic Framework • The Framework monitors the successful delivery of our business strategy. frequency rate Total complaints • During the reporting period, the framework has been revised to mirror our new strategic priorities and is now made up of 16 key objectives supporting our business success, each supported by measurable KPIs. Total expenditure – • Corporate responsibility is a key element of seven of these main objectives, Delivery Offices operating cost of which include improve safety, engage our people, deliver what we promise fully modernised UK businesses and maintain our trusted brand. Operating profit • Performance and progress are reviewed on a regular basis by the CEC. before exceptionals
Transformation delivery Corporate Balanced Scorecard • Supports the implementation and execution of our strategy by linking (% gross hours year-on- (see schematic on page 13) managers’ remuneration to both business and individual KPIs. year reduction) Free cash flow • Managers’ bonuses are linked to the scorecard.
• 50 per cent of KPIs are corporate responsibility-related, specifically Total revenue targeting people and customer issues. Corporate responsibility governance • Managers’ agreed targets and appraisals are aligned with the four areas of People, Customer, Performance and Financial. The corporate responsibility strategy is Design of the strategy is shaped by the approved by the CEO and monitored by the Chief Communications Action Group (CAG), which is World Class Mail • D r i v i n g continuous improvement at the frontline, engaging and involving Executive’s Committee (CEC). CEC members chaired by the CEO. The CAG is responsible for (page 14) our people in transformation. report directly to the CEO, who is the chair. The identifying good opportunities and also risks to CEC includes: Managing Director Operations the Group’s reputation, as well as defining the • Improving performance in safety and productivity through & Modernisation, Chief Finance Officer, Chief strategy and considering all the issues, including a comprehensive seven-step system. Customer Officer, Managing Director Consumer those related to modernisation. & Network Access, CEO General Logistics Systems, Director Group Human Resources, Environment strategy is driven by the General Counsel, Company Secretary, Managing Environment Governance Board, which proposes Director Strategy & Communications, Chief of targets for approval by the CEC, and ensures Policies, procedures • Corporate Responsibility Policy: Developed during the reporting period, Staff, Director CIO & Technology and the Director delivery of performance improvements. and training this sets out our strategy, governance and commitment to corporate Regulation & Government Affairs. The CEC It meets quarterly and is chaired by the Director responsibility including our support of the United Nations Global Compact undertakes an executive review of the strategy of Health and Safety. It consists of senior (UNGC) and Universal Declaration of Human Rights. on a regular basis. managers accountable for functional areas concerned with material environmental issues. • Responsible Procurement Code of Conduct: Requires all suppliers to The Managing Director of Strategy and adhere to the United Nations Universal Declaration of Human Rights and Communications is accountable to the CEO for Royal Mail Group Ltd Board receives regular act in accordance with the Ten Principles of the UNGC. These include carrying out implementation of the corporate updates on corporate responsibility activities, provisions against labour abuses, such as forced labour and child labour, as including, for example, monthly health and well as prohibitions against corruption and bribery. responsibility strategy, supported by the corporate responsibility team, who carry out safety briefings. It is also kept abreast of progress against the Strategic Framework • Environment Policy: Developed during the reporting period, this sets out delivery and reporting of associated activities. our commitment to environmental management. This is due to be published Other members of the CEC take responsibility blocks and reviews and approves the Corporate in 2013–14. for the corporate responsibility aspects of the Responsibility Report every year. people, customer and environment strands • Other relevant support includes the Royal Mail Code of Business Conduct within the overall business strategy. and the Equality & Fairness, Bullying & Harassment and Anti-Bribery policies and associated employee training.
12–13 1 About Royal Mail Group | 1.2 Our strategy
Measuring our progress Key facts
We aim to be independently rated as one of In the DJSI-based assessment we achieved • All of our Mail Centres[1] and approximately • 11 Mail Centres and five Delivery Offices have the most responsible companies in the UK. or matched best-in-industry scores for five 40 per cent of our Delivery Offices have been awarded Bronze status by the World Business in the Community’s (BITC) Corporate criteria: codes of conduct/compliance/corruption started the WCM journey. We are aiming Class Manufacturing Association. Responsibility Index is one good way of & bribery, supply chain management, corporate to implement WCM in all of our Delivery measuring the strength of our sustainability citizenship and philanthropy, labour practice Offices by the end of 2013–14. • We trained an additional 36 WCM auditors programme. Platinum is the highest ranking. indicators & human rights and human capital to meet growing demand. At year-end In 2012, we achieved a Platinum ranking in the development. We also performed well in we had 64 auditors in place to assess the CR Index, scoring 96 per cent, up from a Silver stakeholder engagement and risk and crisis achievements of our sites. (87 per cent) ranking in 2010. We have management. However, both the DJSI and BITC retained this ranking for 2013. assessments highlighted a need to strengthen our approach to environmental management. We also completed RobecoSAM’s Corporate As a result, during the reporting period we Sustainability Assessment for the second time have worked to review our strategy and have in 2013. Based on the methodology used introduced a new Environment Governance to calculate the Dow Jones Sustainability Board, to strengthen our governance. We also Index (DJSI), this benchmarks companies’ developed a new group-wide Environment sustainability performance in economic, social Policy. For more information see our and environmental criteria compared with peers Environment Strategy on page 65. from around the world. The assessment found that Royal Mail Group Ltd is positioned among the leading companies globally in sustainability. Our overall score of 80 ranks Royal Mail among the DJSI World and DJSI Europe member scores for the Transportation industry.
World Class Mail
World Class Mail (WCM) is key in driving our has seven steps, based on the Japanese modernisation programme. Introduced in late philosophy of Kaizen, meaning continuous 2008, WCM is a comprehensive system for the improvement, which must be completed continuous improvement of efficiency, safety to reach World Class status. and quality in the workplace through root cause analysis, use of counter measures, and At the heart of WCM is the embedding of certain employee involvement and engagement. common values across Royal Mail’s operations, including the treatment of high performance as WCM is structured into ten technical areas, or standard, opportunities for enhancing employees’ pillars. These cover our operational activity, such training and skills, and the generation of a sense as people development, the environment and of pride and opportunity in the workplace. cost deployment. The pillars are supported by We rigorously audit the implementation of ten management criteria, including attributes WCM programmes across the business, to help such as management commitment and celebrate the success of all those involved. organisational competence. Each pillar
[1] Percentage of end state Mail Centres starting WCM journey. 14–15 1 About Royal Mail Group | 1.3 Our progress and future priorities
1.3 Our progress and future priorities
This provides an overview of our key achievements in 2012-13, areas that we look to strengthen and our priorities for 2013-14.
Our customers (see page 35) Our people (see page 42) Our communities (see page 54) Our environment (see page 64) Key achievements 2012–13 Key achievements 2012–13 Key achievements 2012–13 Key achievements 2012–13 • 74: our business customer satisfaction score, up • 20 per cent reduction in our lost time accident • £800,000 raised for Prostate Cancer UK, our • We established a new Environment Governance from 70 in 2011–12. frequency rate Charity of the Year, by March 2013. By the first Board during the year to help drive our anniversary of the partnership in June 2013, performance. We also undertook a materiality • 82 per cent of customers are satisfied with the • Over three fifths (62 per cent) of our employees we had raised over £1 million. assessment to ensure we are addressing our attitude of Royal Mail’s delivery staff.[1] say they are proud to work for us OUR COMMUNITIES most significant impact areas. • As a single company network, we had the • Improving customer options through our • Over 50,000 days formal training were greatest number of employees in the world • We reduced the amount of carbon emissions Delivery to Neighbour scheme and the recently delivered for approximately 31,000 people OUR CUSTOMERS register to take part in Movember, and we we produce per £1 million of revenue by 4.2 announced (May 2013) ‘click and collect’ service. • 11 new facilitators trained for our Springboard raised the most amount of money, including per cent during the year. Electricity emissions • Introduced our MarketReach service in July programme to support the development of our matched giving, at over £525,500. reduced by 2.1 per cent. 2012 to help companies and their agencies frontline female employees. • 11 per cent increase in colleague fundraising • We also reduced the amount of water we use by derive more value from mail. Areas to strengthen and 185 per cent increase in matched funding 12.6 per cent and the amount of waste we send Areas to strengthen by the business at a time when donations to to landfill by 23 per cent. • Seven people lost their lives in connection charities are reducing. • The number of complaints we received with our activities in the past year. We work Areas to strengthen increased in 2012–13. We work to identify and to establish root causes of accidents and • Awarded Gold Class status from the Chartered OUR ENVIRONMENT • Continue to drive down carbon emissions to address the root causes of complaints. identify lessons we can learn. We communicate Institute for Purchasing and Supply for our reach our 2020–21 reduction target. We are findings across the Group and discuss at Board supply chain management, including its • We will also continue to ensure that our people committed to implementing effective emissions meetings. Our aspiration is zero fatalities. integration with corporate responsibility. have the right skills and knowledge to deliver a reductions options across our building, fleet more customer focused business. • Ensure that more of our people feel valued OUR PEOPLE Areas to strengthen and transport use. and recognised. Priorities for 2013–14 • Supporting and encouraging our people to • Rubber band littering continues to be a • Increase gender diversity across the workforce, participate in volunteering activities within focus. We plan to review and re-launch our • Meet our Quality of Service targets, as set and particularly in operational functions, where our communities. awareness raising campaign to help continue by Ofcom. our workforce is 14 per cent female. to reduce rubber band littering and the • Refresh our educational programmes to ensure • Make improvements to delivery offices associated impacts. Priorities for 2013–14 they continue to be relevant and engaging for with specific performance issues, including: young people. • Improve environmental governance and investment in facilities and training of • Strengthen manager-team relationships, management systems under the direction colleagues and improving behind-the-scenes communicating changes, ensuring job Priorities for 2013–14 of our newly established Environment retrieval processes for parcels. expectations are clear and that performance • Further support colleagues’ volunteering Governance Board. is evaluated and rewarded. • Launch barcoding of machinable, addressed efforts, assisting local communities and driving • Increase coverage in our sites of the letters, enabling tracking through network from • Develop a new way of working with our unions colleague engagement. environmental management system, ISO14001. sender to receiver. to resolve disputes without unilateral action. • Raise over £2 million, including matched giving, Priorities for 2013–14 • Update parcel shipping and parcel IT systems, • Build on the success of the Walk Risk for Prostate Cancer UK. investing in a range of solutions to ensure Assessment Programme, using the self- • Launch our new Environment Policy. • Re-launch the Young Letter Writers Competition customers can easily integrate their systems assessment methodology and risk management to increase its reach and impact. • Achieve certification to ISO14001 in an with ours. process to address other areas of risk. additional 10 of our core network sites, and • Maximise our support for communities, • Continued focus on the largest areas of • Extend our employee wellbeing offerings with identify how this could be applied more widely encouraging take up amongst employees of our customer complaints – working to understand healthy eating initiatives, an extension of gym- throughout the business. range of community grants. root causes, deploying sustainable solutions and related offerings, and improvements to the • Show improved performance in our driving down complaints. Feeling First Class Programme. • Further categorise key suppliers into ‘critical’ management of waste, energy and water use. and ‘important’ suppliers and expand • Improve customer information and service • Equip colleagues with necessary skills and performance management reporting to an channels, making it quicker and easier to access capabilities by expanding our Workplace Coach additional 33 suppliers to further mitigate risk. help and making it easier to do business with programme and introducing additional WCM Royal Mail. Champions and Champion Supports. • Create a hub of communications and events for the contract management community to enable • Increase the number of women applying collaboration and knowledge sharing. for roles, especially in the frontline, through targeted recruitment and more flexible working.
[1] Ipsos MORI Consumer CSI and Brand Tracker Survey 2012-13. 16–17 1 About Royal Mail Group | 1.4 Key performance indicators
2011–12 2012–13 People Target Status 1.4 Key performance indicators Performance Performance Lost time accident Reduce the LTAFR 1.47 1.17 Achieved in 2012–13 frequency rate (previously RIDDORs) See page 46 This table shows our progress against our corporate responsibility (LTAFR)[1] key performance indicators in the last financial year. Total accidents Reduce the number 15,859 13,878 Achieved in 2012–13 of work-related See page 46 accidents
2011–12 2012–13 Customers Target Status Performance Performance Days lost due Reduce the number 69,930 44,405 Achieved in 2012–13 to accidents of days lost due See page 46 to accidents First Class Quality 93% Quality of 92.7% 92.5% Not met in 2012–13 of Service[1] Service for First See page 40 Class retail[2] Fatalities Towards zero work- 6[5] 7 Ongoing products, adjusted related fatalities See page 46 for force majeure[3] Sickness absence Reduce the sickness 4.0% 4.2% Not met in 2012–13 absence among See page 47 Second Class Quality 98.5% Quality of 98.7% 98.7% Achieved in 2012–13 our workforce of Service[1] Service for Second See page 40 Class retail[2] products, adjusted Engagement[1] Increase our employee 49 50 Achieved in 2012–13 for force majeure[3] engagement score, See page 44 as measured in the Annual Employee Opinion Survey
Customer Improve our average 70 74 Achieved in 2012–13 Customer focus[1] Increase our 63[6] 65 Achieved in 2012–13 satisfaction[1] (mean) customer See page 36 Customer Focus See page 36 satisfaction score, score, as measured in as measured in our our Annual Employee monthly business Opinion Survey customer survey Learning and Ensure employees NA Trained over 2,100 Ongoing development are appropriately Workplace Coaches See page 48 Customer Reduce the number 457,600 [4] 486,400 Not met in 2012–13 equipped with skills and introduced 163 complaints[1] of complaints received See page 39 and knowledge new World Class by our Customer Mail Champions and Service team Champion Supports
Diversity and Introduce 12 trained NA Trained 11 facilitators. Ongoing inclusion facilitators for Six new programmes See page 49 the Springboard planned by end March development 2013, with 458 programme in order applicants to put 1,000 female employees through in 2013–14
[1] This is a key performance indicator in our Corporate Balanced Scorecard.
[2] Retail includes stamped and metered mail, plus account mail. It excludes access mail and special delivery.
[3] This accounts for the impact of factors that are beyond Royal Mail’s control, such as weather and the logistical impact of the London 2012 Olympic and Paralympic Games.
[4] A new complaint type was introduced for 2012–13. P739 complaints now include a new category for items not located at the Delivery Office, which were previously reported as claims. The 2011–12 number has been restated from 439,600 complaints to provide a like-for-like comparison.
[5] This was reported as seven in 2011–12. Since then, it was found in court that we were not involved in one incident.
[6] The 2011–12 score for customer focus was incorrectly reported in the 2011–12 Corporate Responsibility Report as 70. 18–19 1 About Royal Mail Group | 1.4 Key performance indicators
2011–12 2012–13 2011–12 2012–13 Communities Target Status Performance Target Status Performance Performance Performance Performance
Charity of the Year Raise £2 million, NA Raised £800,000 On track Group revenue[1] Increase Group £8,764 million, £9,279 million, Achieved in 2012–13 including matched including matched giving See page 57 revenue reported, reported, See page 8 and 2012- giving for Prostate 52-week basis 53-week basis 13 Annual Report and Cancer UK over a Accounts (ARA) two-year period Delivery hours Percentage year-on- 2.2% 1.9% Achieved in 2012–13 Colleague Increase support for £3 million raised £3.2 million raised, Achieved in 2012–13 reduction[1] year reduction in the See 2012–13 ARA engagement charities through by colleagues with a four per cent See pages 54, 58 gross hours spent on payroll giving, increase in payroll delivery activities matched giving giving and a 11 per and fundraising cent increase in Delivery Offices fully Increase number 408 860 Achieved in 2012–13 employee fundraising modernised[1] of Delivery Offices See page 43 that have been Volunteering Roll out a NA Introduced a 12-month Achieved in 2012–13 modernised volunteering DofE volunteering See pages 51, 58 programme for programme focused on apprentices on our Charity of the Year 2011–12 2012–13 the Duke of and apprentices’ chosen Financial Target Status Edinburgh’s Award good causes Performance Performance (DofE) Scheme Operating costs[1] Manage costs - total £6,950 million, £7,247 million, Ongoing Suppliers Phase in our new NA 55 suppliers engaged; Ongoing expenditure for UK reported, reported, See page 8 and Supplier Relationship on-the-job training for See page 61 businesses, excluding 52-week basis 53-week basis 2012-13 ARA Manager System contract management all exceptional items across RMG through employees with 90 per training and cent of contract owners Group operating Increase Group £381 million, £635 million, Achieved in 2012–13 supplier engagement now in place profit[1] operating profit before reported, reported, See page 8 and programmes exceptional items 52-week basis 53-week basis 2012-13 ARA
Free cash flow[1] Increase free £154 million £334 million Achieved in 2012–13 cash flow See page 8 and 2011–12 2012–13 Environment Target Status 2012-13 ARA Performance Performance
Carbon emissions Ensure that our CO2e 721.6k tonnes CO2e 746.5k tonnes On track emissions at the CO2e, 16 per cent See pages 67–68 end of 2020–21 are below emissions in our reduced by 20 per cent baseline year 2004–05 against our baseline year (2004–05)
Waste Divert 70 per cent of 58 per cent of waste 66 per cent of waste Achieved in 2012–13 waste from landfill diverted from landfill; diverted from landfill; See page 69 by 2014-15. Interim 13.9k tonnes of waste 23 per cent reduction target of 60 per cent to landfill; 19.2k in waste to landfill; diversion by 2012-13 tonnes recycled 10.7k tonnes of waste to landfill; 20.3k tonnes diverted from landfill.
Water Manage and reduce 1,726k m3 of 1,508k m3 water Achieved in 2012–13 our use of water water consumed consumed, a reduction See page 70 of 12.6 per cent
[1] This is a key performance indicator in our Corporate Balanced Scorecard. 20–21 1 About Royal Mail Group | 1.5 Moving to the private sector
“ The key objective of our reforms to the postal market 1.5 Moving to the private sector is to protect the one-price-goes-anywhere, six-days- a-week service that businesses and communities throughout the country rely upon” We can combine the best of the public and private Vince Cable MP, Secretary of State for Business, Innovation and Skills sectors. Our strategy supports a sound and sustainable Universal Service for the benefit of everyone in the UK.
On 15 October 2013[1], after the reporting Customers • Our customers will continue to enjoy a Colleagues period, Royal Mail Group Ltd was floated on high-quality Universal Service, protected the London Stock Exchange. We are now a We operate in a very competitive sector. We by law. The Universal Service – six-days-a- Our people are naturally concerned about what listed company, majority-owned by investors, know we need to get it right first time as our week collection and delivery at a uniform price privatisation means for them. We know that including employees, institutions and members customers have many choices and can take – is enshrined in the Postal Services Act 2011. there are three specific issues they want of the public. As a private organisation, we will their business elsewhere. Changes could only be implemented with the to know about, namely: no longer have to rely on the Government for consent of both the Houses of Parliament and money to invest and innovate. Our great customer service will be a big Secretary of State. • What it means for jobs and pay advantage for us in the private sector. It is In the competitive market we operate in, underpinned by the legal commitments • We will continue to deliver to a very high • How Free Shares work we need to be more nimble to seize the around the six-days-a-week, one-price- standard. Quality of Service is one of the key • What it means for customers opportunities available to us. As a private goes-anywhere Universal Service. drivers of our success and the regime that company, we will be able to move faster and applied to Royal Mail under public ownership We have communicated extensively with take advantage of those opportunities. Like Our customers include many small and continues to apply under private ownership. our colleagues – both on the frontline and many major companies, we need access to medium-sized enterprises (SMEs) such as small managers – to improve understanding and capital from time to time. Being a listed businesses and PowerSellers on eBay. They • Privatised postal operators deliver a provide reassurance during this time of change. company on the London Stock Exchange represent an important part of our customer high-quality standard. Privatisation of This includes briefing packs sent to means we will have the opportunity to access base. They will also reap the benefits as we postal services elsewhere in Europe has seen employee homes: capital when we need it. Since Deutsche work to develop stronger relationships, provide private postal operators maintain high quality • What privatisation means for you Post was floated in 2000, it has invested greater on-demand services and easy-to-use of service levels. Deutsche Post and Austrian [2] systems, and improve accessibility to a wider Post both deliver more than 95 per cent of over £20 billion in its business . • What privatisation means for managers range of customers. Easy access to our services letters the day after posting. In the lead up to privatisation we looked to attract will continue through Post Offices – the largest • Managers brief high-quality investors including pension funds, retail network in the UK – as discussed • Our services will remain good value for insurance companies, mutual funds and private on page 25. money. That will not change. Royal Mail’s • A Courier Special on privatisation individuals. In addition, 10 per cent of shares in average inland stamp price (for letters up to Our communications programme is outlined Royal Mail (just over 100 million shares in total) 100g) is 55p, which compares favourably with in the Our People section of this report (pages were set aside for the overwhelming majority equivalent prices in Germany (57p) and Italy 42–45). Jobs, Free Shares and customers of Royal Mail Group Ltd employees at the time (87p). The comparable price in France is 54p. are discussed here. of flotation – for free. This means that, besides • We will continue to deliver to rural areas. the Government, our employees currently have Under private ownership, the rural areas we the single biggest stake in our company. As serve will continue to receive a full, six-days- shareholders in the company, there will be a-week collection and delivery service at a greater alignment between the interests of uniform tariff. our employees and the business.
[1] This report covers our reporting period from April 2012 to March 2013. However, because of privatisation, we have also included important developments that have occurred beyond the financial year.
[2] www.dp-dhl.com/reports/2010/annualreport/about-us/mehrjahresuebersicht.html 22–23 1 About Royal Mail Group | 1.5 Moving to the private sector
Jobs and pay Communities management greater freedom to focus on its customers and growing its revenue base. The privatisation of Royal Mail does not change We have confirmed that each eligible full-time Supporting communities employee terms and conditions. Employees employee is entitled to 725 Free Shares in Royal We believe capital investment and continue to be employed by the same company, Mail. Based on the closing mid-price on 15 We are proud to provide the Universal Service transformation of Royal Mail will result in Royal Mail Group Ltd. Employee pay, pension October 2013, this means the initial market value and of the role we play in the economy. We make more business going through Post Offices – and other benefits continue to be as set out in of their allocation was £3,545.25. Under HMRC commerce happen by connecting companies, particularly from the growing parcels market - our agreements. rules, the maximum amount of Free Shares that customers and communities across the UK. and a stronger post office network. At the same can be allocated to an individual employee in Research by the Centre of Economic and time, the Post Office Network Transformation In mid-December 2013, we agreed in principle any tax year is £3,000. Eligible employees will Business Research indicated that in the last year programme will result in longer opening a ground-breaking new agreement on an therefore receive their Free Shares in our success has moved us up one place, from hours at Post Offices, and greater flexibility for agenda for growth with our main union, two allocations. eighth largest in the UK in terms of economic postal-service users. This will allow Royal Mail’s the CWU. It is about improving industrial footprint in 2011–12, to seventh largest in customers greater access to parcel facilities relations, creating a can-do culture and a joint The final value of an individual employee’s Free 2012–13. Our considerable contribution to the and benefit both companies. commitment to delivering business success. Shares will be determined by Royal Mail’s share economy will remain. Indeed, we believe that Royal Mail, working with Post Office Ltd, The agreement includes legally-binding terms price, if and when an employee decides to sell Royal Mail will be able to be more successful announced in 2012-13 the launch of the UK’s covering employee pay, protections and their stake. The Free Shares are being held in a in the private sector. industrial stability. The industrial stability tax-advantaged Share Incentive Plan (SIP). Under largest ‘click and collect’ network. This is to framework sets out a new approach to HMRC rules, the shares need to be held in the SIP Following privatisation, Royal Mail continues to support online shopping growth by providing resolving workplace issues at a much faster for at least three years. Eligible employees can sell deliver the Universal Service to every community greater choice of convenient parcel delivery pace and without disruption. We will provide or transfer their Free Shares out of the SIP after in the UK. We continue to provide a full, six- options for online retailers and their customers. updates to the agreement on our website. three years and will be able to sell or transfer days-a-week collection and delivery service at Around 10,500 Post Offices will be taking part in them completely tax free after five years. In the a uniform tariff, including to rural and remote the initiative, which will enable online retailers to Free Shares meantime they will receive any dividends the communities. Only Parliament could decide to offer shoppers the opportunity to order items for collection at their local branch. At the time of flotation 10 per cent of the Company may pay, and will be able to instruct the reduce this service provision. SIP Trustee to vote on their behalf at shareholder company (just over 100 million shares in total) Working with Post Office Ltd Maintaining our character was set aside for eligible employees. These shares meetings. As shareholders, colleagues have a meaningful stake in the company and the were offered for free (Free Shares) to eligible Post Offices are at the heart of many Royal Mail is proud of its heritage. It is one of potential to benefit from its future success. employees. More than 99 per cent of eligible communities across the UK. The presence of a the best-known brands in the country. This is a employees - the overwhelming majority of Royal Employees who were eligible for Free Shares also Post Office counter in an independent business strong and valuable asset for investors. There Mail Group Ltd employees in the UK - chose to had the option to apply to buy additional shares often supports the financial viability of the ‘last would be no incentive to rebrand or change its receive Free Shares. through the Employee Priority Offer. Eligible shop in the village.’ Post Offices provide a range iconic visual symbols such as post boxes. of postal, Government and financial services to This is the largest free stake of any major UK employees could purchase shares at the same The Sovereign will continue to approve all stamp isolated communities, and 99 per cent of the privatisation. More employees were able to take price as any other investor. However, they were issues. The Secretary of State has the power to population lives within three miles of a Post part in the Free Shares Offer than in any other UK given priority over members of the public when ensure her image appears on stamps, and the Office branch. privatisation for almost 30 years. It means that, shares were allocated, receiving the amount they image of any future sovereign. This process is had applied for up to £10,000 when other retail besides the Government, our employees currently Formerly sister companies, Royal Mail and Post safeguarded in the Postal Services Act 2011 investors received up to a maximum of £750 of have the single biggest stake in the business. Office Ltd are now separate companies, working (Section 62 – UK postage stamps bearing an Royal Mail shares. closely together in their mutual interest. The two image of Her Majesty). businesses have signed a long-term agreement, A key part of our heritage is held within the which provides the framework around which British Postal Museum & Archive (BPMA), they work since they were legally separated established by Royal Mail in 2004 to manage in April 2012. The long-term commercial the public records of The Royal Mail Archive. agreement ensures that Royal Mail services are This represents our history and we continue to available through all Post Offices in the future. protect and promote this from the private It is in both Royal Mail and Post Office Ltd’s sector. Stamps form part of the public record interest to ensure a strong, comprehensive post and could only be sold with the agreement of office network. Combined with Government The National Archives and other Government funding of the Post Office, and allowing Royal bodies. The long-term funding agreements Mail to access external capital, separation signed between Royal Mail and the BPMA will safeguard the future of both companies continues beyond privatisation. and the commercial relationship between them. Separation has also given Post Office Ltd
“ It cannot be right for Royal Mail to come cap in hand to ministers each time it wants to invest and innovate. The public will always want Government to invest in schools and hospitals ahead of Royal Mail” Vince Cable MP, Secretary of State for Business, Innovation and Skills, July 2013
[1] The proposed agreement will apply to employees in CWU represented grades in Core Operations, Logistics, Engineers, Fleet Maintenance Services, RMSS and Royal Mail International until March 2016. Parcelforce Worldwide pay discussions continue to run separately with the CWU. 24–25 1 About Royal Mail Group | 1.6 Our stakeholders
1.6 Our stakeholders An issues list was collated from existing stakeholder feedback and We engage our stakeholders as a part of our every day an industry media review for business, from customers, suppliers and colleagues through to communities, the Government and discussion at the panel and used regulators. As Royal Mail transforms, we are gathering to identify key responsibility essential feedback on our progress and performance. We are ensuring we understand stakeholder views and issues facing Royal Mail expectations, and helping them understand our need for change. This also helps us identify where our operations have the greatest impact and where corporate responsibility can deliver the greatest benefits.
Determining materiality
To align our Corporate Responsibility Report Issues raised for inclusion were: more closely with our stakeholder interests and needs, in 2013 we introduced a stakeholder • What privatisation means to the business approach to our materiality assessment. Our and its stakeholders specific aims were to identify current and future • How employees are engaged and invested opportunities and challenges that shape our in throughout change corporate responsibility strategies and actions. • How we manage our environmental impacts We held a roundtable discussion involving of the property estate and fleet Royal Mail Group Ltd employees, stakeholder representatives (acting for supplier, community • How we support local communities and business interests) and external corporate • How Royal Mail is addressing diversity responsibility experts from Corporate in its workforce Citizenship. An issues list was collated from existing stakeholder feedback. Also, an industry Our Corporate Responsibility Report is the media review was devised for discussion at the primary medium by which we communicate our panel and used to identify key responsibility responsibilities. The stakeholder feedback has issues facing Royal Mail. been used not only to inform the contents of this report, but also how we present information, for example through the use of additional infographics to convey important information. In response to feedback, we have also reflected on the journey of Royal Mail: where we have come from, where we are now and our vision for the future.
26–27 1 About Royal Mail Group | 1.6 Our stakeholders This table provides an overview of key Royal Mail Group Ltd stakeholders and how we engage.
Stakeholder Who they are What they expect from us How we engage Progress during 2012–13 Looking ahead to 2013–14
Customers
• Business and consumer customers • Provision of the six-day-a-week, • Around 15 million customer • Reduced redirection complaints • Continue focus on activities to drive one-price-goes anywhere Universal conversations a year through phone, as a result of our targeted work to down the largest areas of customer • Senders and receivers of mail Service at competitive prices email, letter and twitter address this complaints
• High-quality and consistent service • Our frontline postmen and women • Introduced simple, flexible options to • Improve first-time delivery engage with our customers at point meet customer needs e.g. tracked • Value for money of collections and on deliveries returns and Delivery to Neighbour • Add value to bulk mail by barcoding six days a week • Updated www.royalmail.com to make • Develop our parcel services • Our sales team of account managers: it easier to use such as our ‘click and collect’ service in field, desk, new business and specialists partnership with the Post Office Ltd • Introduced consumer customer surveys • Our www.royalmail.com website to better understand their needs • Invest in local enquiry offices to provide a better experience for customers • Business and consumer customer collecting their parcels surveys and focus groups
Colleagues
• 150,000 RMG employees • Engagement on issues of importance • Weekly Work Time Listening • Significant fall in workplace • Continue to drive down accident to the company and Learning sessions accidents as a result of our focus numbers and lost time accidents • 16 per cent female on safety and minimising risk • Unrivalled standards of health • JustSayIt (a direct email link • Actively pursue legal action - • 10 per cent minority ethnic and safety to the CEO) • Widespread employee engagement or support our people in taking programme to keep colleagues legal action - against the owners informed of the changes across the of dangerous dogs • 6 per cent identify themselves • Equality and fairness • Royal Mail TV business and the reasons for it as having a disability throughout workplaces • Intranet and myroyalmail.com • Improve gender diversity, proactively • Learning and development support • Improved employee engagement score encouraging female applicants and in our annual Employee Opinion Survey supporting development through our • Our monthly magazine, Courier, Courier Springboard programme Specials and Newsflashes sent direct to employee homes
• Postcards, posters and daily and weekly emails sent to business units or individuals' homes
• A programme of 'town halls', forums, conferences and on-site engagement with senior managers and leaders across the business
Suppliers
• Over 7,000 suppliers • Fair and transparent contracting and • Group procurement monitors • Achieved the Chartered Institute of • Attain CIPS Platinum Certification ordering processes, and payment in compliance with our Responsible Purchasing and Supply (CIPS) Gold • Our annual procurement spend is accordance with agreed terms Procurement Code of Conduct Certification - at year end, only 15 • Expand our SRMS, approximately £2.5 billion other organisations worldwide had including training and supplier • Clear, relevant information on Royal • Participation in the Public Sector achieved this engagement programmes to Mail’s requirements and standards Ethical Sourcing Working Group improve understanding • Delivered our Supplier Relationship Management System (SRMS), measuring performance and minimising risks in the supply chain
28–29 1 About Royal Mail Group | 1.6 Our stakeholders This table provides an overview of key Royal Mail Group Ltd stakeholders and how we engage.
Stakeholder Who they are What they expect from us How we engage Progress during 2012–13 Looking ahead to 2013–14
Unions
• Communication Workers Union • Fair and respectful treatment • Weekly meetings held between • Agreed commitments to job security, • Pay settlement (CWU) - an estimated 80 per cent of of members CWU representatives and frontline including maintaining a predominantly operational and administrative grade operational managers to discuss full time workforce and aiming to • Agree a new model for how we work employees are members • Consultation and engagement resource to workload, reviewing core complete the modernisation programme together, with closer alignment between on issues of importance to costs, upcoming work and additional without compulsory redundancies CWU and Royal Mail, developing • Unite Communication and the company resource requirements industrial stability mechanisms as part Managers’ Association (Unite CMA) • Collaborated to develop our of this agreement - an estimated 40 per cent of our • Negotiating improvements • Daily/ad-hoc meetings as required to approach to safety managers are members of Unite CMA to terms and conditions review resourcing and in support of • Pensions reform individual members • Agreed new approaches to attendance and absence management and on • Complete modernisation revisions and • Dedicated specialist industrial relations bullying and harassment set out future for operational change team regularly consulting with unions to address business-wide issues such as jobs, pay, privatisation and transformation
Local communities
• Communities across the UK • Operating in a socially responsible way • Supporting our people in making a • Made a total economic contribution • Reach our £2 million fundraising difference to local communities of more than £9.6 billion target, including matched giving, for • Charities and non-government • Require appropriate access Prostate Cancer UK organisations to services • Collaborative working with • Raised £800,000, including matched charity partners giving, for our Charity of the Year • Further support colleagues’ Prostate Cancer UK volunteering efforts, encouraging and assisting our people to give • Our colleagues have donated around back to communities. £48 million through payroll giving since 1989
• Delivered around 6.2 million items of mail for free under Articles for the Blind
UK Government
• During the reporting period, Royal • Continue to modernise and • During the reporting year, the UK • Implemented Royal Mail Group Ltd's • Government became a Mail Group Ltd was 100 per cent strengthen Royal Mail Group Ltd Government was kept up to date business strategy minority shareholder in Royal Mail owned by the UK Government through regular performance reviews Group Ltd when it was privatised and is asked to approve Royal Mail • The Government announced plans on 15 October 2013 • The Shareholder Executive within the Group Ltd’s business strategies to extend legal protection over dog Department for Business, Innovation attacks to cover those that take place • Relationship interface redesigned for & Skills manages the Government’s • Regular day-to-day engagement on private property. This followed the government as a shareholder and from relationship with Royal Mail Group Ltd through our Government Affairs publication of an independent report a policy perspective & Regulation and Group into dangerous dogs, commissioned by Communications departments Royal Mail Group Ltd Chairman, Donald Brydon CBE
30–31 1 About Royal Mail Group | 1.6 Our stakeholders This table provides an overview of key Royal Mail Group Ltd stakeholders and how we engage.
Stakeholder Who they are What they expect from us How we engage Progress during 2012–13 Looking ahead to 2013–14
Ofcom
• Independent regulator for the UK • Regular updates on compliance with • Regular engagement through • Significant deregulation took place, • Carry out ongoing monitoring of Royal communications market the Universal Service, including reporting, face-to-face meetings allowing Royal Mail Group commercial Mail Group’s compliance with the new providing data to enable monitoring and consultation responses and operational freedoms to adapt to a regulatory framework • Responsible for, among other things, against this considerably challenging market safeguarding the UK’s Universal • Relationship managed by the Regulation • Monitor the mail market Service Obligation • Responses to public consultations and Compliance departments • Review of Postal User Needs was and the sustainability of the regarding the regulatory framework published in March 2013 Universal Service
• Ofcom published their statement on direct delivery competition in March 2013
Universal Postal Union (UPU)
• United Nations (UN) body, which has • Engagement on issues of importance • RMG takes a leading role at the UPU • At the four-yearly Congress, the Doha • Implement decisions taken at Congress 193 member states, dedicated to the to develop the organisation, the UN Postal Strategy was adopted development of the global postal service and the Universal Service • Providing leadership and expertise in • Continue and deliver the inter- the UPU on topics of importance to • Great Britain was re-elected to the Congress issues via the Postal • Supports and maintains the global • Commitment to and participation in Royal Mail Group Postal Operations Council, one of the Operations Council postal network, setting the rules for the various bodies two governing bodies of the UPU international mail exchanges among • RMG attends the bi-yearly governing • Deliver the structures and work its member countries body meetings, participates in key • Took on positions of leadership in programmes mandated by Congress forums and attends ad-hoc meetings several Committees and working • Coordinates efforts to modernise groups, in areas of importance to • Observe the annual UPU Council of products and services, stimulate Royal Mail Group Ltd Administration session, on behalf of mail volume growth and improve the Great Britain customer quality of service
• www.upu.int
International Post Corporation (IPC)
• Dedicated to improving service • Leadership (at CEO level) as a • Participation in meetings, forums • Developed Quality of Service • Continue development of quality, promoting cooperation member of the IPC Board and conferences measurement, operational and e-commerce platforms and interoperability, and providing IT enhancements informed intelligence about the • Participation in working groups • Continue Quality of Service postal markets • Increased focus on service measurement and operational services • Provision of expert resources enhancements to better serve to support international mail exchange • www.ipc.be e-commerce customers
PostEurop
• Regional union of the UPU in Europe • To take a leading role at the • Royal Mail Group is an elected member • Prepared for the 2012 UPU Congress • Attend 2013 Plenary Assembly with 52 postal operators. Its aim Management Board and working of the Management Board on implementation with focus on is to promote further cooperation group level • New strategy, structure and e-commerce among the European posts and • Participation in working forums, resource model agreed at 2012 improve services • Engagement on key European meetings and focus groups Plenary Assembly and global issues • www.posteurop.org • Royal Mail Group contributed responses to the European Commission on e-commerce, VAT and data protection
32–33 2 Our responsibility | 2.1 Our customers
2.1 Our customers
We are focused on getting things right for our customers and being their first choice. Royal Mail is the market leader by revenue in the UK parcels and letters market. Being customer focused is one of our strategic priorities. As a responsible brand of long standing, our customers trust us to deliver.
Key facts Our customer strategy
• We collect from around 205,000 post boxes, Royal Mail Group Ltd is the sole provider of the post offices and businesses Universal Service in the UK. We reach everyone. Whether our customers live in the centre of a 2 Our responsibility • We deliver to more than 29 million addresses, large city or operate a business from a remote six days a week corner of the countryside, we deliver to their • We delivered over one billion parcels door, six days a week. in 2012-13 Our customer strategy is focused on continually • Approximately 99 per cent of letter volumes improving the customer experience. We are: in the UK are delivered by Royal Mail • Becoming a more customer-focused • We handle around 58 million addressed business: investing in training for our items each day postmen and women; rolling out handheld 2.1 Our customers 35 scanners to all frontline employees to better track and trace deliveries; aligning managers’ 2.2 Our people 42 remuneration with customer focus. 2.3 Our communities 54 75 per cent of consumers agree that • Ensuring products are continually [1] 2.4 Our environment 64 “My postie provides a good service” relevant and valuable: updating customer 2.5 Transparency 72 insight to identify future needs; developing deeper and more commercial customer relationships via sales training; and enhancing, extending and improving our products. Key achievements • Making more customers more satisfied: • 74: our mean business customer satisfaction identifying the root causes of customer score, up from 70 in 2011-12. complaints; making it easier to find out information online; and making it easier for • 70: our mean consumer customer satisfaction customers to send and receive mail. score in March 2013, having steadily increased from 66 in April 2012, when the survey was Private ownership allows us to continue to first introduced. invest in customer service improvements. Customers will continue to enjoy a high quality • 82 per cent of customers are satisfied with the Universal Service. We will continue to deliver to [1] attitude of Royal Mail’s delivery staff. a very high standard. Our services will remain • Improving customer options through our good value for money and we will continue to Delivery to Neighbour scheme and the recently deliver to rural areas. announced (May 2013) ‘click and collect’ service, utilising the Post Office network for secure parcel collection across the UK.
• Introduced our MarketReach service in July 2012 to help companies and their agencies derive more value from mail.
[1] Ipsos MORI Consumer CSI and Brand Tracker Survey 2012-13. 34–35 2 Our responsibility | 2.1 Our customers
We have received recognition for our efforts to Business customer priorities Delivery to Neighbour Being easy to do business with continuously improve our performance; • Being easy to do business with After a successful trial in early 2012 and the Our customers will only choose us first if they • We jumped 34 places to rank 17th out of go-ahead from Ofcom on 1 October 2012, we • Providing value for money find it easy to do business with us. We need to 500 UK companies in this year’s Business deployed the Delivery to Neighbour scheme provide simple and flexible options that suit our Superbrands survey – believed to be our • Delivering on the basics: collecting across the UK. Our postmen and women customers’ needs, at the right price. highest position for some time. This is based and delivering successfully and in line can now leave parcels with a neighbour if on the opinions of marketing experts, with expectations. the recipient is not at home. Feedback from Our transformation is helping us manage the business professionals and thousands people in the areas where we trialled Delivery changing balance between parcels and letters, of UK consumers. We also introduced a survey of consumer to Neighbour revealed that 92 per cent[3] allowing us to effectively deliver both through a customers who contact us, asking them their of customers whose items were left with common network. Strategically, we are focused • We won the prestigious Sales Support Team opinion about Royal Mail and their experience a neighbour were satisfied with the overall on capturing the growth in online retailing to of the Year at The British Excellence in Sales of our services. We survey around 3,000 people experience. People can, however, choose to opt ensure a sustainable and profitable Universal & Marketing Awards. per month and satisfaction scores have steadily out of the scheme. By March 2013 only 0.53 Service, as the number of letters we handle • Royal Mail and Parcelforce Worldwide came improved from 66 (out of 100) in April 2012 per cent had chosen to do this. We were continues to decline. to 70 in March 2013. previously the only major parcel carrier in the first and third in a Money Saving Expert For parcels, we’re focused on: Survey of the best parcel carriers in UK who was not allowed to leave items with January 2013. a neighbour, when no-one was at home. • Getting the basics right. Streamlining 76 per cent of consumers are more likely our parcels offering to make it easier for • We achieved first place for email responses customers to choose the right service for (up from seventh in 2011) in the International Case study to reuse a particular online retailer if they them. We have simplified our terms and Customer Management Institute Top 50 Call [1] conditions, too, and provided our colleagues Centres for Customer Service 2012 award for use Royal Mail for deliveries with more of the tools they need to deliver our Door-to-Door service. We ranked sixth for Christmas deliveries increasing numbers of parcels. calls (up from 22nd). The Christmas period is an important time • Getting the technology right. Investing in Understanding customer needs Consumer customer priorities for us. It’s a peak period and we need to IT to offer our customers the services they show that we can continue to meet our • Items arriving in good condition expect from a parcels operator, including We want to be first choice for customers, customer promises. Our comprehensive SMS messaging and tracking services. whether they are individuals or businesses. • On time deliveries. planning for Christmas 2012 paired with our That means getting the basics right and more efficient operations meant that we had • Expanding and automating our networks. providing them with what they want. We talk In addition to surveys we conduct targeted great success. We recruited approximately Investing to adapt the Royal Mail network to our customers to find out what is working research with specific groups. The resulting 20,000 temporary staff to handle increased to handle more parcels and expanding the for them, what they think of Royal Mail and insights helped us re-shape the parcels portfolio Christmas traffic, with eight temporary parcel capacity of Parcelforce Worldwide’s what needs to improve. this year (see page 37). This research also sorting centres opening at the beginning of express network. pushed us to take a fresh look at the speed of November. We also extended local Delivery We redesigned our parcels portfolio, responding We gather customer feedback and insights to delivery and tracking capabilities – two areas Office opening hours to make it as convenient to customer feedback to keep it simple; make help us shape our products and services and to that customers flagged as being of particular as possible for people to pick up parcels after the speed of delivery clear; and provide more address any areas of concern. importance to them in our parcel business. receiving a ‘Something for You’ card. The core features. We have streamlined our First Class UK network handled 125 million parcels in Our business customer satisfaction survey After our customers, our own people are best offering with fewer weight bands (from 15 to the UK over the four weeks to 23 December provides a useful measure of how we are doing. positioned to tell us how customer focused seven) and two parcel categories (small and 2012, while Parcelforce Worldwide handled We survey about 700 business customers our products and services really are. We use medium). We also introduced a 1–20kg eight million express parcels. During the every month, from the very large to the our annual employee survey to gauge what Second Class Signed For option. We continue peak period over Christmas, the Royal Mail very small, investigating general satisfaction they think. Their viewpoint on customer focus, to respond to changing customer needs and network, on average, delivered more than levels, and inquiring about their experience which comprises one of our Corporate Balanced support the growth of the UK parcels market. 2.2 times the average daily delivered parcels. with us. This year, we moved from reporting Scorecard measures, has increased by two Our Delivery to Neighbour scheme and an net customer satisfaction scores to mean points over the last 12 months meeting our We also announced, in May 2013, the upcoming extra redelivery day on Sunday 23 December customer satisfaction scores. The net customer stretch target of 65.[2] launch of our new ‘click and collect’ service satisfaction score does not account for some meant that we delivered more first class – partnering with the Post Office network to responses (e.g. ‘fairly satisfied’ and ‘neutral’ retail parcels first time, and our redelivery provide secure parcel collection facilities through responses) while the mean customer satisfaction complaints reduced by 4 per cent compared around 10,500 Post Office branches. score takes all answers into account. We believe with the same period in 2011. There is an ongoing decline in letters, partly all responses are equally important and the due to e-substitution. However, this is still an mean score therefore provides us with a better important element of our mail. Letters (including view of our performance. This year, we achieved marketing mail) accounted for over 50 per a score of 74, an improvement of four points cent of our revenues in 2012-13, including on 2011–12. statements, magazines, greeting cards and social letters.
[1] Delivery Matters by Hall & Partners, published April 2013.
[2] The 2011–12 score for customer focus was incorrectly reported in last year’s Corporate Responsibility Report as 70. The actual score was 63.
[3] lluminas research: 720 telephone interviews with trial participants. 36–37 2 Our responsibility | 2.1 Our customers
Our focus on improving the experience of Our letters strategy targets: Tracked using our handheld scanners, Case study customers using the redirections service the system also means greater efficiency has resulted in a 10.4 per cent reduction in • Using our new regulatory freedom to with automated logging of returned items redirection complaints year on year. Success receive a commercial return for the letters we for each customer. Excellence in Customer Service was driven by senior leader support at the deliver. Price increases in April 2012 are a key national level and local activity plan development driver of UK Parcels, International and Letters Communicating with our customers Business customers look to deliver advertising by Delivery Office teams. We are applying this improved profitability. campaigns through unaddressed leaflet focused approach to other complaint categories Clear communication with customers is one of distribution. Our Door-to-Door service offers • Investing in our operations to improve in 2013–14. This is starting to deliver results: the foundations of good customer experience. advice on campaigns to make sure their efficiency and in tracking business mail. there was a 10 per cent reduction in the total messages reach the right households. We We have put in place initiatives to make We use a variety of communication channels to number of complaints in the first quarter of have on average around 20,000 customer traditional mail more attractive to customers. inform and support our customers by telephone, 2013–14, compared with the same period conversations per month and work hard to email, letter and twitter. We communicate in 2012–13. deliver excellent customer service. Since • Leveraging our position in marketing mail to updates to services, potential disruptions (e.g. 2010, our Door-to-Door team has been reach customers in new and innovative ways. due to severe weather) and address customer We remain committed to driving down the recognised in the Top 50 Call Centres complaints and queries. Our website displays number of complaints and fixing things promptly In July 2012, we launched our new MarketReach for Customer Service - an initiative that up-to-date information about our network when they go wrong. service. This enables customers to maximise measures the customer service offered by and services. the impact of marketing mail to support their some of the nation’s best-known brands such business growth. Direct Mail is the fourth as Nationwide, British Gas and Virgin Atlantic. Case study largest advertising channel in the UK. In 2012, Royal Mail achieved first place for emails (up from seventh in 2011) and sixth We also redesigned our website to make it easier 73 per cent of eBay sellers using Royal place for calls (up from 22nd in 2011). Fixing problems for to deal with us online and we continue to expand Mail or Parcelforce Worldwide are very or Mazuma Mobile our tracking services. Our postmen and women Fixing problems are now equipped with almost 50,000 handheld extremely satisfied (compares with 58 During our operational transformation [1] scanners, helping customers better track and per cent for the next best competitor) Regrettably, the number of complaints we programme, we moved our work for phone trace their parcels. We have a target for a total received increased last year from approximately recycling firm Mazuma Mobile to our new Mail of approximately 73,000 scanners to be in use 457,600 [2] to 486,400. We are working hard to Centre in Hemel Hempstead. Mazuma Mobile by Christmas 2013. reduce the number of complaints we receive. told us it was unhappy with the move because In 2013–14, we are launching a major initiative A rapid response time is key for customers, Four issues cause over 60 per cent of Royal Mail it was no longer receiving the same level of that will see barcodes added to letters, so that and Royal Mail has embraced social media as complaints: misdelivery, redelivery, redirection service as before. a means of engagement. By April 2013, our and P739 or ‘Something for you’ cards. We have large companies can track their mail through The customer experience team worked with Twitter account @RoyalMail had attracted introduced a number of measures to improve the postal network. Businesses will be able to the local operational team to review the around 32,000 followers, providing a direct the service our customers receive, such as the improve their efficiency and customer service by pipeline to the customer. As a result, we connection for customer queries and feedback Delivery to Neighbour programme (see page 37). staffing operations, such as call centres, based made changes to the dispatch times and to as well as a platform for us to share information, on the exact date customers receive statements To understand and address the root drivers’ start times. This restored the level of for example on organising redeliveries and or business mail. This will also enable them to causes we: service that Mazuma Mobile was used to and managing mail while away. improve the effectiveness of marketing mail resolved their concerns. campaigns and more accurately link associated • Track complaints by type and geography Customer communications: communications activities, for example, a text In order that Mazuma Mobile understood • Establish targets for each Royal Mail area message, with delivery of their mail. • 6.8 million customers received letters what changes were being made and the about operational transformation • Communicate with colleagues on what the reasons for them, we invited the company’s Tracked Returns issues are and how they can be resolved representatives to the Mail Centre in order • 6.62 million conversations with to see how our new operations at Home With the increase in online shopping, returns consumer customers • Encourage the sharing of locally designed Counties worked. are also increasing, as people try items at home best practice and return them if they are not wanted. Being • 1.48 million calls with business customers “ The enthusiasm that came across from able to easily and confidently return items is We are also introducing more convenient the whole team – including the various • 74,000 messages sent via Twitter. important to both online businesses and their delivery options and easier collections processes, employees we met and spoke to on the floor customers. At the start of April 2013, we added We continue to make our communication including improvements in our Delivery Office. – was both very informative and inspiring. a tracking facility to our returns product. This channels and processes more accessible and It was very nice to catch up again and gain provides online businesses with a choice of customer friendly in our drive to be easy to more of an understanding with some of the delivery speeds, inclusive compensation and free do business with. “knock-on” effects that late deliveries into proof of posting. Returns are easily accessible Hemel Hempstead can and will have on our through the Post Office – 99 per cent of the UK deliveries. There is no comparison with the population lives within three miles of a post new facility to the old plant we visited a office. Efficient returns means our business couple of years back in Watford, and it gives customers can more easily manage sales and us some understanding of the modernisation improve customer service, while their customers that Royal Mail has been going through. You can easily and confidently return items. now have superb premises to which I know the Watford team are rightly proud of.” Mike Cahill, Financial Director, Mazuma Mobile [1] eBay usage through Post Office Ltd.
[2] A new complaint type was introduced for 2012–13. P739 complaints now include a new category for items not located at the Delivery Office, which were previously reported as claims. The 2011–12 number has been restated from 439,600 complaints to provide a like-for-like comparison. 38–39 2 Our responsibility | 2.1 Our customers
Quality of Service standards We revised our parcels portfolio in April Priorities for 2013–14 Case study 2013. We simplified the range for ease of Delivering when we say we will is a key understanding, providing clear choices, simpler During 2013, we are concentrating our component of our service standards. Royal Mail pricing and fewer weight bands, making it attention on the following areas: has demanding Quality of Service targets set Delivering tickets for easier for people to select the right service. by Ofcom as part of our obligation to deliver London 2012 We continue to respond to changing customer • Meet our Quality of Service targets, as the Universal Service. needs and support the growth of the UK set by Ofcom. Royal Mail was proud to play its part in the parcels market (see page 37). [1] • Make improvements to Delivery Office This year, including force majeure adjustments , Olympics. We were the chosen provider to [2] with specific performance issues, including we delivered 92.5 per cent of First Class retail deliver tickets for the London 2012 Olympic Royal Mail’s average inland stamp price (for investment in facilities and training of items on time, just missing our target of 93 per and Paralympic Games. Eighteen months letters up to 100g) is 55p, which compares colleagues, and improving behind-the-scenes cent. We are disappointed not to have achieved of operational planning and a dedicated favourably with equivalent prices in Germany retrieval processes for parcels. our goal. However, our performance still means customer service team ensured that collection (57p) and Italy (87p). The comparable price in that over 1.2 billion First Class stamped and and delivery services for customers remained France is 54p. • Launch barcoding of machinable, addressed metered items were delivered on time, first time, excellent throughout the Games period. letters, enabling tracking through network against a backdrop of significant operational Tickets were tracked through our system, from sender to receiver. Aim to convert all change. We exceeded our target for Second with customers receiving SMS notifications business customers over three years. Class retail[2] items, delivering 98.7 per cent both letting them know when the tickets The proportion of businesses who felt of items on time, against a target of 98.5 per would arrive, and upon successful delivery. Royal Mail rates were competitive • Update parcel shipping and parcel IT cent. Our Special Delivery service achieved We delivered 1.6 million envelopes enclosing systems, investing in a range of solutions a performance of 98.2 per cent, against our approximately 7.5 million tickets to customers, increased during 2012–13, despite to ensure customers can easily integrate stretching target of 99 per cent. with over 98 per cent of them arriving significant price rises[3] their systems with ours. first time, on time. The modernisation of Royal Mail provides the • Continue focus on the largest areas of basis for us to achieve our service standards, customer complaints, working to understand improving efficiency across our common Pricing root causes, deploying sustainable solutions and driving down complaints. letter and parcel network. We are driving Last year, Ofcom’s decision on a new regulatory A report by Ofcom in March 2013 concluded improvements in the pipeline to be more that the Universal Postal Service prices framework for UK postal services gave Royal • Improve customer information and service productive and effective. For example, 79 per remain affordable for both residential and Mail greater freedom in the way we set channels, making it quicker and easier to cent of letters are now sequenced to delivery business customers. our prices. access help and making it easier to do point (see page 43). business with Royal Mail. Ofcom put a cap on Second Class stamps for “The evidence we have collected indicates that Carlisle was the top performing delivery post letters of 55p, indexed in line with CPI (consumer universal postal services are affordable for both code in 2012–13, with 94.9 per cent of First price index) for seven years. There was no cap residential consumers (including low income and Class Mail delivered on the next working day. for First Class stamp prices. We raised prices in other vulnerable consumers) and businesses April 2012 to help us safeguard the one price (including small and medium businesses) at goes anywhere Universal Service. current prices. We have reviewed the price changes that are due to take effect from 2 April We know that no one likes price increases 2013 (as announced by Royal Mail in March when the economy is as tough as it is right now. 2013), and consider that universal postal In 2012, we ran a Christmas stamp scheme services will continue to be affordable to support around 5 million customers from following these changes.”[4] low-income households. Customers in receipt of Pension Credit, Employment and Support Allowance, Unemployability Supplement or incapacity benefit were able to buy stamps at 2011 prices for Christmas 2012. We also introduced a new payment option for postage that offers an alternative for organisations – mostly charities – that cannot reclaim VAT.
In March 2013, we confirmed that stamp prices would remain at 2012 prices.
[1] This accounts for the impact of factors which are beyond Royal Mail’s control, such as weather and the logistical impact of the London 2012 Olympic and Paralympic Games.
[2] Retail includes stamp and meter mail, plus account mail. It excludes access mail and special delivery.
[3] Ipsos MORI Business Customer Satisfaction Index 2012–13
[4] ‘The affordability of universal postal services’, Ofcom, published 19 March 2013 40–41 2 Our responsibility | 2.2 Our people
2.2 Our people Over 90 per cent of our UK parcels are handled through the core Royal Royal Mail has long been part of the fabric of the UK. Mail network. Our people interact with customers on a daily basis. Our colleagues are trusted and respected.
We are going through a significant period of Key achievements 2012–13 Privatisation and our people Transforming Royal Mail change. Our transformation programme is one of the largest undertaken in the UK in recent • 20 per cent reduction in our lost time accident This is a difficult time for our people. We know Since 2007–08, Royal Mail has been undergoing history. We have recently moved from the frequency rate that our colleagues are concerned that their a major transformation programme which has public sector to the private sector. Through this terms and conditions might change following covered every aspect of its operations, namely: change, we are committed to creating a safer, • Over three fifths (62 per cent) of our employees privatisation. We are working hard to provide collection, processing, logistics, sorting and more secure organisation for our employees and say they are proud to work for us reassurance to our colleagues. delivery. We are becoming better equipped to one that is better able to offer the service our handle the increasing numbers of parcels in • Over 50,000 days formal training were We have communicated extensively with our customers expect. delivered for approximately 31,000 people the network, whilst maintaining Royal Mail’s colleagues - both on the frontline and managers quality of service standards and improving Our workforce profile: • Developed a Joint Statement on Bullying and – about what privatisation means for them and employees’ safety. (refer to pages 49-51 and 75-76 for Harassment in cooperation with our unions the company. This includes through briefing additional statistics) packs sent to employee homes: Our people have shown flexibility and • 11 new facilitators trained for our Springboard commitment in making the large-scale changes • 124,000 postmen and women programme to support the development of our • What privatisation means for you required to compete effectively in a competitive • 64 per cent of employees have been with frontline female employees. • What privatisation means for managers market. During 2012–13, we more than doubled Royal Mail for over 10 years; 31 per cent have the number of Delivery Offices undergoing been with the business for over 20 years Our people strategy • Managers brief modernisation: up from 408 in 2011–12 to 860. This represents over 60 per cent of our • A Courier Special on privatisation • 10 per cent of our employees are from We are a people business. Our colleagues are Delivery Offices. The remainder are due to be fundamental to our ability to succeed as we ethnic minorities The privatisation of Royal Mail does not change modernised by March 2014. Since the start handle more parcels, manage the decline in employee terms and conditions. Employees of the journey, we have introduced: • 84 per cent of our people are male; letters and enter the private sector. continue to be employed by the same company, 16 per cent are female We are focused on ensuring: • 995 new, refurbished or upgraded machines Royal Mail Group Ltd. All terms and conditions for efficient and accurate sorting of mail. Eight • 73 per cent of our workforce is employed remain in place, on the same basis, as set out in • We have the right mix of people in out of ten letters are now automatically sorted on a full time basis. our agreements. our workforce in the order they will be delivered. In the lead up to privatisation we looked to • Our people have the right knowledge • 11,490 shared delivery vans, and greater attract high-quality investors including pension and skills for the job use of light weight and high capacity trolleys funds, insurance companies, mutual funds and servicing the increased numbers of parcels • We create a customer-focused culture private individuals. This included our employees we deliver. with safe and engaged people through the Government’s Free Shares Offer. Further information is provided in the Moving to • Colleagues are fairly rewarded within • 50,000 handheld scanners to better track the Private Sector section (pages 22–25). a stable industrial relations climate. and trace items. • World Class Mail in all of our Mail Centres[1] and around 40 per cent of Delivery Offices.
[1] End-state Mail Centres starting WCM journey 42–43 2 Our responsibility | 2.2 Our people
We know that change can be difficult for our Employee engagement Internal communications Our unions people. Rationalisation and consolidation of our estate is a necessary part of our transformation. Employee engagement is one of the key Throughout 2012–13, we continued to deliver We recognise two unions, the Communication Whether we are in the public or private sector, drivers in our business success. It is one of the a wide-reaching communications campaign Workers Union (CWU) and Unite/CMA. We estimate we need to be smaller and more efficient. The three people KPIs on the Corporate Balanced to keep people abreast of our transformation that approximately 80 per cent of our operational Company has extended until April 2014 its Scorecard, alongside safety and employee programme and its objectives. and administrative grade employees are members existing voluntary redundancy terms for those customer focus. of the CWU and approximately 40 per cent of our More recently, we have shifted our focus to the impacted by modernisation and renewed its managers are members of the CMA. Government’s privatisation agenda. We have commitment to maintaining a predominantly We have focused on building employees’ increased communications in an effort to help We share a common goal: to help secure Royal full-time workforce. We offer practical advice, understanding of our business future and people understand what privatisation means Mail’s future so it can grow as a business and information and guidance to affected colleagues reasons for change. We have aimed to build for them, our customers and communities. remain successful. through our Clear Choice and Next Steps manager and team relationships and have Our communications have included: programmes and through bespoke, tailored shared customer issues, enabling our people In mid-December 2013, we agreed in principle a to understand what customers complain services. Initiatives include: • On-site engagement: 170 senior managers ground-breaking new agreement on an agenda about and to develop solutions. have delivered around 600 face to face briefing for growth with our main union, the CWU. It is • Advice centres where colleagues can talk to sessions in the field to answer questions and about improving industrial relations, creating experienced HR Managers about site changes. Our second annual Employee Opinion Survey was carried out in March 2013, tracking and get feedback (July 2012–March 2013). a can-do culture and a joint commitment to • Awareness events providing information on benchmarking employee satisfaction and delivering business success. The agreement • Town halls: seven events in early 2013, voluntary redundancy from external suppliers engagement. We achieved a seven per cent rise includes legally-binding terms covering employee hosted by members of the Executive and providers. in respondents compared with our first survey– pay, protections and industrial stability. The Leadership team, including Moya Greene, up from 68 per cent in 2011–12 to 75 per cent industrial stability framework sets out a new CEO and addressing up to 1,000 colleagues • Enrichment days enabling employees to trial in 2012–13. We also increased our engagement approach to resolving workplace issues at a at a time. Around 60 events are planned working in a new Mail Centre or Delivery Office. score by one point, to 50, meeting our target. much faster pace and without disruption. We will for 2013–14. provide updates to the agreement on our website. • One-to-ones with external career coaches to help make informed choices on next steps. • Conferences: our annual Operations and Last year the number of days lost due to strike Modernisation conference attended by around action increased from 592[1] to 1366 (balloted • Outplacement workshops and one-to-ones 67 per cent of employees would 2,600 managers and union representatives strikes: 497, unballoted strikes: 869). with external providers, supporting colleagues recommend Royal Mail services to and two senior management forums with an who choose voluntary redundancy as they average of 800 people attending each one. At the local level, CWU representatives and site move into job searches, self-employment a friend or family member, 7 per cent managers meet weekly. They discuss resources or retirement. higher than the Ipsos MORI norm • Work Time Listening and Learning: weekly and workload, review core costs and discuss any updates by managers to all employees. issues that arise. for large organisations. Case study • Employee newspaper: 12 Couriers and 13 In 2012–13 we also worked closely together to Courier Specials delivered to colleagues’ homes develop our approach to safety (see page 46) (to March 2013). and bullying and harassment (see page 48). On the Move Other encouraging outcomes include: • RMTV: weekly programmes broadcast on Rewarding performance Gavin Conway was a part-time reserve • Over three-fifths (62 per cent) of our people internal TV and online. postman at Teeside Mail Centre for eight feel proud to work for us (61 per cent in 2012), We continue to develop a robust and consistent • Postcards, posters, Courier newsflashes years. He is now working in the revenue with a similar proportion (61 per cent) saying approach to performance management. and email updates team at Tyneside. “I was devastated when they are satisfied with their current job. In addition to senior management, middle I heard Teeside was going to close,” says Just Say It managers’ bonuses are now linked to both Gavin. “It was only three miles from home • 72 per cent of colleagues say they still want to corporate and individual performance against and the hours suited me. But I ran my own work for Royal Mail in two years’ time (71 per Employees can send Moya feedback directly the Corporate Balanced Scorecard (see page business for more than 20 years, so I know cent in 2012). through our Just Say It email channel. She 13) where previously they were only linked to corporate performance. Managers must also that change has to happen sometimes for a • Three per cent increase in how optimistic receives and responds to hundreds of messages show that objectives are achieved in the right business to progress. I had three options – people feel about their own future in from colleagues asking questions about Royal way, demonstrating good leadership behaviours switch to deliveries, which I didn’t fancy doing, Royal Mail Group Ltd. Mail’s future and suggesting ideas for business move to Tyneside and travel 41 miles each improvements. As a result of feedback, we have such as working collaboratively with colleagues way, or take redundancy. I think the Clear However, there are areas where we need to do introduced clearer information for customers and leading by example. The move ensures Choice programme handled it really well. better. We need to ensure more of our people on our Parcelforce Worldwide “while you that all managerial objectives are aligned to our Moving to Tyneside was my first choice and feel valued and recognised (34 per cent, up were out” cards; improved accessibility to our business strategy, and that high performance is I’m really happy here. I got comprehensive from 33 per cent in 2011–12) and increase the customer contacts on the Royal Mail website; encouraged and rewarded. training for the role and it’s a fantastic team.” number of people who feel involved in decisions and made general improvements in mail that affect them and their work (35 per cent, handling processes and procedures within up from 33 per cent in 2011–12). operational units.
[1] In 2011–12, 592 days were lost to strike action, not 532 as previously reported. 44–45 2 Our responsibility | 2.2 Our people
Safeguarding our workforce Wellbeing Case study
Employee safety is an enduring priority for us: it is measured as one of the We aim to provide good wellbeing support for our people. This helps us attract the best KPIs on our Corporate Balanced Scorecard. A safer workplace means less Vehicle safety on our premises people, boost workplace morale and enables us to provide a good service to our customers. harm to our people and more efficient operations. Car parks on our sites are generally home to A healthy workforce also reduces cost through many Royal Mail vehicles and are sometimes absences and time off work. used by customers. This presents a safety KPIs 2010–11 2011–12 2012–13 risk to the people using the yard. To address Our sickness absence rate this year increased the issue of accidents and incidents involving from 4.0 per cent in 2011–12 to 4.2 per cent vehicles on our premises, we have worked for 2012–13. This stands against our target of Total accidents 19,043 15,859 13,878 with our employees and unions to develop a 3.9 per cent. The increase is largely due to a Yard Risk Assessment process. This involves spike in January and February 2013 of absences completing a checklist of potential hazards Lost time accident frequency rate attributed to flu and flu-like illnesses. We are (LTAFR) 1.79 1.47 1.17 to identify and address potential safety risks. committed to helping our people maintain their Improvements have included allocated parking health and to driving down both the number and bays, separation of business and customer duration of sickness absences. Days lost due to accidents 87,478 69,930 42,393 car parks and designated walkways. The feedback from frontline staff and managers In 2012–13 we focused on addressing long- has been very positive. Kilmarnock Delivery term absences (greater than 30 days’ duration). Total number of fatalities 5 6[1] 7 Office manager James Jarvie says: “We’ve We have developed a new Attendance Policy completely changed the yard. A new one-way and management guide for deployment in system is in place. We’ve fitted speed bumps 2013 with the agreement of our unions. This Sickness absence 4.1% 4.0% 4.2% and introduced yard rules for everyone to introduces specific action points for managers follow. We haven’t had a single incident since.” and employees, with the goal of supporting colleagues back into work. Dangerous dogs This year we changed our Balanced Scorecard Safety initiatives have focused on managing Our wellness offerings include: safety KPI from RIDDORS (Reporting of Injuries, risk, including: Dog attacks pose a serious risk to our postmen • Online wellbeing portal: providing access Diseases and Dangerous Occurrences Regulations) and women every day. During 2012–13, there • Self-Assessment Audits, helping local to wellness check-ups, and health and fitness to lost time accident frequency rate (LTAFR). This were 2,411 dog attacks. This is a 24 per cent managers identify and focus on safety issues advice and support. provides a more accurate and representative reduction compared to last year, however any most relevant to their sites. measure of safety because it takes into account attack is one too many. • Health fairs, offering free heath checks and hours worked and therefore reflects hazard • Walk Risk Assessment Platform enabling advice for employees. We have made progress on tackling the threat exposure time. It also provides a better view of frontline staff to identify delivery round dangerous dogs pose to our people. In 2012 • On-site gyms and external gym performance trends. Many other organisations hazards and define follow up actions to our Chairman, Donald Brydon, announced the memberships: we upgraded all our 39 on- use this measure for reporting, enabling us to minimise risk. benchmark our performance. This includes launch of an independent, judge-led inquiry site gym facilities and offer an off-peak gym PostNL, British Gas (Centrica) and BT. • Yard Risk Assessments, improving vehicle to gather evidence on this issue and make membership scheme for those without access safety on our premises (see Vehicle safety recommendations for action. In November to an onsite gym. Our safety initiatives case study). 2012, Sir Gordon Langley published his report, making clear the necessity for Government • Employee Assist Service, HELP: offering We have continued to take great strides in We strive to improve our safety performance action and proposed measures to protect counselling, manager coaching and financial driving down accident rates. We achieved a 20 in everything that we do. It is with great regret postmen and women. and legal advice. per cent reduction in LTAFR during the year. that we report seven people lost their lives in In February 2013, the Government announced • Occupational health support system: The total number of accidents decreased by 12.5 connection with our activities in the past year. improvements to our system to enable per cent while the days lost due to accidents All the fatalities were associated with road traffic that it is planning to extend legal protection over dog attacks to cover those that take place managers to book physiotherapy and decreased by almost 40 per cent. We estimate accidents with our vehicles. We liaise closely counselling treatment for employees directly. this has saved the business around £3.6 million. with the relevant authorities and undertake on private property. Since the year end, this our own detailed investigations to establish the legislation has been put firmly on the agenda Our colleagues can also access to grants in times root cause of each accident and, where possible, through the announcement of the Anti-social of need through the Rowland Hill Benevolent determine what lessons we can learn. The Behaviour, Crime and Policing Bill in the Queen’s Fund (see page 48). findings are communicated across the Group and Speech in May 2013. Following the Langley Our efforts to develop a strong wellbeing discussed at the monthly meeting of the Board. report’s recommendations, we are establishing programme saw Royal Mail win the prestigious We are improving our processes to ensure a process where attacks on our people are more Personnel Today ‘Health at Work’ award that recommendations from the independent likely to be the subject of legal action. In addition, in 2012. investigations team are dealt with in a timely we will take a more robust approach to the manner. Our investigations have alerted us to suspension of deliveries where dogs pose a potential dangers arising when we reverse our danger to our postmen and women. vehicles. We are tackling this hazard by installing Our Group Safety, Health and Wellbeing and reversing sensors on our vans. Security and Criminal Law teams are working to establish a process to more actively pursue dog owners whose dogs attack our postmen and women. We also ran a joint dog awareness campaign with the CWU in July 2012. There was a 21 per cent reduction in dog attacks over July and August 2012 compared to the [1] This was reported as seven in 2011–12. Since then, it was found in court same period for 2011. that we were not involved in one incident. 46–47 2 Our responsibility | 2.2 Our people
We are currently working with the Portsmouth Diversity Case study Business School to examine ways that we can Case study empower our people to challenge verbal bullying. Royal Mail employs a diverse mix of people who This will form the basis of a new campaign reflect the communities in which we work, and Rowland Hill Benevolent Fund in 2013–14. Graduate Programme the customers we serve. We are committed to being an equal opportunities employer. As part A healthy workforce is imperative to Training and career development Royal Mail has a range of graduate of this endeavour, we work with Business in our business success. The Rowland Hill programmes linked to different functions, the Community’s ‘Opportunity Now’ and ‘Race Benevolent Fund provides grants to Royal As Royal Mail is modernising, so are the skills of such as Human Resources and Finance. for Opportunity’ programmes, which promote Mail colleagues, pensioners and their families our people. We are achieving this through our In 2012, we recruited 75 graduates. Each best practice in equal opportunities. In addition, in times of need. The Fund was founded extensive internal development programmes. spends between 18 months and two years in 2012–13 we signed up to the Government’s as a permanent memorial to the postal We invested around £22.2 million in training last in their appointed area of the business. Think, Act, Report initiative, which encourages reformer Sir Rowland Hill, who retired as year, to ensure our people have the skills they The programme is structured to provide companies to share progress in promoting Secretary to The Post Office in 1864. Its need to do their jobs well. these high potential recruits with the gender equality. principle objective is to relieve beneficiaries necessary skills, knowledge and attributes of financial distress. It offers grants and Approximately 31,000 people undertook to build their careers and become future short-term loans to address all aspects of formal training during the year, equating to leaders in Royal Mail. financial need, from assistance with chronic around 50,000 days of training. This is in health problems, to managing debt to funding addition to extensive World Class Mail and “ My role is to create change and embed home modifications for mobility aids. Royal on-the-job training that occurs regionally. better ways of working. I’ve had lots of Mail contributes around £50,000 a year, in We continually monitor and track the success challenges and opportunities; I’ve made five addition to around £60,000 in in-kind support of our programmes to ensure they remain presentations to Professor Yamashina, Head costs, e.g. for facilities, services and HR relevant and effective. of the Global World Class Manufacturing support. The Fund also receives contributions Association. I’m really proud of that”. Activities during the year included: from Royal Mail employees and pensioners Sheetal Kashyap, 2009 Royal Mail Graduate through payroll giving. In 2012–13, the Fund • Re-launched the Operational Workplace Coach helped 393 people, an increase of almost programme: over 2,100 Coaches now support 100 cases compared with 2011–12 and gave performance improvement and colleague out £337,693 in grant aid compared with development in their units. Gender distribution Female Male £261,850 during 2011–12. • Trained an additional 163 World Class Mail Dignity and respect Champions and Champion Supports. Board 36.4% 63.6%
Royal Mail is committed to creating and • Developed the Certificate of Professional maintaining a working environment that is free Competence for our drivers - well received Senior Managerial 27.4% 72.6% from bullying and harassment, and where we and rated by independent auditors. treat each other with dignity and respect. • Launched the Delivery Simulator programme, Managerial 19.0% 81.0% We encourage employees to inform their ensuring delivery managers have the skills they line manager if they become aware of any need for the modernisation of the business. By end March 2013 over 400 people had discriminatory behaviour. Employees who are Administration 58.4% 41.6% found to have committed an act of discrimination completed this. or harassment are subject to disciplinary We have also introduced an Executive action, including possible dismissal. Leadership Development Programme for our Operational 14.3% 85.7% We take all reported instances of bullying and senior leaders. Eighty-three leaders attended harassment seriously. We continue to raise the the programme during the year, which is run profile of discriminatory behaviour. In the last in conjunction with Oxford University’s Saïd year, we have: Business School. It comprises three modules, which focus on strategy development and Age distribution <30 30–49 50+ • Agreed a new Joint Statement on Bullying and delivery, value creation and leading change. Harassment with our unions. We aim to train an additional 150 leaders over the next year. Board 0.0% 18.2% 81.8% • Reviewed our Code of Business Standards, summarising our core values, policies In addition, we run the Springboard and expectations. development programme, designed to support Senior Managerial 2.9% 66.2% 30.9% • Launched our “Enough” campaign, highlighting frontline female employees in progressing the damaging impact of inappropriate banter their careers (See page 50). and the responsibility of every colleague to Managerial 6.3% 60.2% 33.5% challenge inappropriate behaviour or language. • Delivered Work Time Listening and Administration Learning sessions with a focus on bullying 9.0% 54.0% 37.0% and harassment. Operational 9.9% 54.6% 35.5%
48–49 2 Our responsibility | 2.2 Our people
Gender
At our Board and senior management grades we • Developing frontline employees: our Ethnicity distribution Asian Black Chinese Mixed Other White have a relatively high gender diversity. At Board Springboard personal development level, 36 per cent of members are female. On programme, aimed at developing frontline Board average, FTSE–100 companies have only 17.3 female employees, has attracted almost 800 - - - - - 100.0% per cent[1] female representation on their boards. participants since 2005. We intend to expand At senior management level, 27 per cent of the programme to an additional 1,000 women Senior Managerial employees are female, one per cent higher than in non-managerial roles during 2013–14. 2.2% 0.9% 0.0% 0.5% 21.1% 75.3% last year. However, this drops to 14 per cent in In 2012–13 we trained 11 new programme operational functions. Royal Mail is committed to facilitators to help deliver this goal. By March, improving the gender balance across all areas of we already had 458 applicants and six new Managerial 4.6% 2.0% 0.1% 0.7% 19.5% 73.2% the business, programmes planned. Our Gender Diversity Steering Group, Chaired • Developing middle management: our Administration 3.6% 1.3% 0.2% 0.6% 17.1% 77.2% by Sue Whalley, Group Director of Regulation Women’s Network hosts events and a mentor and Government Affairs, drives our strategy. programme to help women in middle and Comprising representatives from across senior management support each other in Operational 6.1% 2.8% 0.2% 0.6% 19.7% 70.6% the business, the Group looks to help progression. Two events are run every year for attract women into the business, as well almost 200 members covering subjects linked as supporting their career progression: to professional and personal development. In addition, 92 one-to-one mentor partnerships Royal Mail is a gold member of the Business programme. Targeted at 18 to 24 year-olds, this • Encouraging female applicants: we see are currently in place between senior and Disability Forum. Our Group HR Director, John programme focuses on developing the careers of few female applicants for frontline roles. middle managers. Duncan, is a member of its Board of Trustees. future first and second-line operation managers. We are targeting female recruitment, This year, we worked with the Department Delivered over two years, it comprises 18 work Ethnicity advertising roles on women’s online of Work and Pensions to reinstate our ‘two placements, alongside a structured training recruitment networks and speaking at tick’ recruitment accreditation to encourage programme. At the end of the course, successful industry events - such as at the Women in Overall, Royal Mail’s ethnic profile is representative of the UK workforce[2]. Around applications from people with disabilities. participants receive a Level 3 Certificate in Technology conference. We are also rolling out Principles of Leadership & Management and a programme to speak in schools, colleges, 10 per cent of our employees are from ethnic We have also: minorities. However, we recognise that ethnic NVQ Level 3 Certificate in Management awarded universities and business groups to attract by the Institute of Leadership and Management. more female applicants. minorities are not adequately represented • Undertaken workshops to educate managers among our management population. We are on discrimination and disability. Apprentice Dominic Chapman says: “It’s great, • Flexible working: women make up a much seeking to address this. In the coming year • Streamlined the process for making the training I was given in the first six weeks greater proportion of the UK’s part-time we will focus on improving our recruitment has been invaluable and I feel very confident in workforce than men. Provision of flexible processes and advertising campaigns to attract adjustments to the working environment, such as purchasing assistive equipment. taking the lead on most issues I come up working patterns is often of greater benefit to more people from diverse ethnic backgrounds. against. Thank you.” women and key in attracting female applicants. We are also investigating options for a career • Developed new fact sheets on disabilities In 2012, we reviewed our flexible working development programme. We continue to work to educate and support managers. Our Advanced Apprentice Engineer policy and communicated it to managers with Race for Opportunity to strengthen our programme was revived in 2011–12. In to raise its profile. In our operational units, progress in this area. Through our partnership with the disability September 2012, we launched a new Duke flexible working arrangements include part- charity, Remploy, we have successfully placed of Edinburgh Gold Award Scheme for its time roles, flexible start times, job shares and Disability over 1,500 disabled people into work at Royal participants. The Award is open to those under Mail over the last six years. During 2012–2013, term-time only working. In 2013–14 we are We aim to be a disability confident employer. 25 and takes 18 months to complete. It involves we offered 45 work placements and employed continuing to strengthen our approach. We are committed to employing people with fundraising for charity and increasing personal 140 individuals over Christmas. In 2013–14, disabilities and supporting disabled employees fitness. There is also an outward-bound element, We are increasing consideration of flexible with the closure of Remploy factories, we are during employment. Around 6 per cent of which requires training and practice leading up working for all roles and trialling job shares creating additional work experience placements our employees identify themselves as to a five-day expedition in the Lake District. The for key operational roles (Delivery Office to support people into work. having a disability. aim of the expedition is to teach teamwork and Managers) in one of our regions. This to help individuals achieve their own personal represents a major cultural change and Inclusive recruitment goals. We will seek to make this Award available step forward for the business and will be to all new apprentices in future. reviewed in 2013–14. Assisting people with disabilities into work is just one strand of our inclusive recruitment A study by the Centre for Economics and Business practices. We also support young people into Research found that our apprenticeship schemes work through our apprenticeship schemes, and are worth £21.2 million to UK productivity based support the long-term unemployed through on a conservative estimate. See the Community our BITC Ready for Work partnership. section for more details (page 56).
In 2012–13, Royal Mail ran three apprenticeship Since 2005, we have offered over 430 schemes to attract and develop young talent in placements on the Ready for Work programme. the workplace. We had an intake of 46 young This work experience supports long-term people during the year. Our Vehicle Technician unemployed back into work. To date, 288 Ready Apprentice scheme has been running for for Work Graduates have gained employment over ten years and has trained over 200 with Royal Mail and other employers after apprentices. In October 2012, we introduced a completing the programme. new Operational Management Apprentice
[1] The Female FTSE Board Report 2013, Cranfield University School of Management.
[2] Labour market status by ethnic group, ONS, 2012-13. 50–51 2 Our responsibility | 2.2 Our people
Priorities for 2013–14 • Engagement: Strengthen manager-team • Learning and development: Equip colleagues Since 2005, we have offered over relationships, communicating changes, with necessary skills and capabilities by ensuring job expectations are clear and that expanding our Workplace Coach programme 430 placements on the Ready performance is evaluated and rewarded. – aiming to have 4,750 Coaches in place by March 2014 – and introducing an additional • Working with unions: Develop a new 150 WCM Champions and Champion Supports. for Work programme. This work model for how we work together, with closer alignment between CWU and Royal Mail, • Equality and diversity: Improve our systems experience supports long-term developing industrial stability mechanisms for measuring and monitoring diversity across as part of this agreement. the business. We will support an additional 1000 frontline female employees through our unemployed back into work • Safety: Build on the success of the Walk Springboard development programme. We also Risk Assessment Programme, using the aim to increase the number of women applying self-assessment methodology and risk for roles, especially in the frontline, through management process to address other targeted recruitment and more flexible working. areas of risk. • Dignity and respect: Communicate the • Wellbeing: Extend our employee wellbeing amended Bullying and Harassment Policy and offerings with healthy eating initiatives, an Statement which we jointly developed with the extension of the gym-related offerings, unions. We will also deliver a new Bullying and and improvements to the Feeling First Harassment campaign aimed at empowering Class Programme. staff to challenge verbal bullying so that early intervention can help avoid escalation.
52–53 2 Our responsibility | 2.3 Our communities
Our Community Investment[1] 2011–12[2] 2012–13 2.3 Our communities Amount contributed £9.10 million £9.49 million by Royal Mail
Amount contributed through employee £3.00 million £3.18 million We seek to be an integral, valued and trusted part of the fundraising
communities that we serve. Total contributions supported £11.62 million £12.85 million by Royal Mail
Quite unlike most other businesses, Royal Mail • Achieved a Guinness World Record for Total voluntary £5.53 million £6.54 million is in every UK community. We deliver to over the most amount of money raised at a contributions 29 million addresses and work with over 7,000 company quiz. suppliers. We are passionate about using our national reach to support the communities • We were shortlisted for two Third Sector Cash – Royal Mail £1.72 million £2.36 million where we live and work. Business Charity Awards. Cash – employee fundraising £3.00 million £3.18 million • Awarded Gold Class status from the Chartered Key facts Institute for Purchasing and Supply for our In-kind £0.34 million £0.24 million supply chain management, including its • £4 billion – our annual salary and wage bill. integration with corporate responsibility. • In 2012–13, Royal Mail contributed £9.5 Time £0.35 million £0.41 million This year, we focused on contributing more to million directly to charities, good causes and the community and getting more colleagues schemes for disadvantaged groups. involved. On a like for like basis, our total • In addition, our colleagues raised almost £3.2 community investments increased by over four Administration £0.12 million £0.35 million million for many good causes across the UK. per cent. Our reported voluntary investments increased by 33 per cent. We achieved this • Around £48 million has been donated by mainly through our commitment to our Charity Total mandated £6.58 million £6.13 million colleagues through payroll giving since 1989. of the Year programme. We also strengthened contributions[3] our reporting of administration costs. • £5.6 million – the 2012–13 cost of our free delivery service for blind and We successfully encouraged more colleague Cash £0.38 million £0.48 million visually impaired people. involvement. We saw a four per cent increase in payroll giving and an 11 per cent increase Key achievements 2012–13 in colleague fundraising. Our matched funding In-kind £6.2 million £5.65 million contributions rose 185 per cent, from £184,000 • £800,000 raised for Prostate Cancer UK, our to £525,000. That’s more cash and more time Charity of the Year, by March 2013. By the first spent supporting our local communities. anniversary of the partnership in June 2013, Our community strategy is focused on the we had raised over £1 million. In 2012–13 our Articles for the Blind service Our community strategy following core elements: costs reduced from £6.2 million to £5.6 million. • As a single company network, we had the Royal Mail is proud of the role we play in This value naturally fluctuates year on year greatest number of employees in the world UK society. We make commerce happen • Making a positive economic contribution depending upon the number of items sent. register to take part in Movember, and we by connecting companies, customers and to the UK through our core business We are proud to be able to support blind and raised the most amount of money, at communities across the UK. Under privatisation, operations. We do this by providing good- partially sighted people with this service. over £525,500. Royal Mail will continue to deliver the Universal quality jobs and being an inclusive, equal Service to every community in the UK, including opportunities employer. • 11 per cent increase in colleague fundraising to rural and remote communities. We will and 185 per cent increase in matched funding • Providing our large UK workforce with continue to support the blind and visually meaningful opportunities to get involved in by the business at a time when donations to impaired through our Articles for the Blind charities are reducing. their communities and deliver real benefit service. Our long-term commercial agreement to good causes. with the Post Office Ltd ensures that Royal Mail services are available through all post offices • Promoting education and literacy in the in the future. communities we serve to support their future social and economic wellbeing. Our community strategy is focused on enhancing our contribution to the UK economy. We do this In the last 18 months we have worked hard to through our everyday business and through streamline the investments that we make in the targeted community investment. We align our community, focusing on targeted contributions activities with the central goals of our business that deliver measurable results. Under the strategy and the interests of our people. RobecoSAM Corporate Sustainability Assessment, the foundation of the Dow Jones Sustainability Indices, we achieved the highest score in our industry, globally, for Corporate Citizenship and [1] Community investment contributions are calculated in accordance with LBG guidelines. Philanthropy (98 per cent) in 2013.
[2] 2011–12 figures have been restated to exclude Post Office Ltd contributions: contributions made to the British Postal Museum and Archive are split between Royal Mail and Post Office Ltd.
[3] Includes commitments to articles for the blind and the British Postal Museum and Archive. 54–55 2 Our responsibility | 2.3 Our communities
Connecting through our business On average across the UK, one in every 200 Connecting through people works for Royal Mail. However this can be Case study our employees Impact on UK economy as high as 40 per cent – or two out of every five workers – in certain areas of the country. In the Our people take great pride in the work they Royal Mail makes one of the single biggest Politicians on Delivery Rounds 17 locations in England where we employ more do in communities. Through them, we are able economic contributions of any UK company. than 1,000 people, we employ on average 22.4 to target both national and local communities. per cent of the workforce. Throughout the year we invite politicians Research by the Centre for Economic and to visit our Mail Centres, Delivery Offices We harness our collective size to deliver against Business Research (Cebr) found that: We also make a considerable contribution and other Royal Mail facilities. In 2012, national issues; and encourage colleagues in through our investment in employee training. almost 100 politicians from Westminster using individual strengths and interests to • Royal Mail contributes £7 in every £1,000 Cebr found that our apprenticeship schemes and the devolved administrations: Scottish address local community needs. UK economic output. We had a total alone are worth £21.2 million[1] to UK Parliament, Welsh Assembly and Northern economic impact of more than £9.6 billion, or Charity of the Year productivity based on a conservative estimate. Ireland Assembly, visited a Delivery Office in 0.7 per cent of UK Gross Domestic Product The schemes also result in a wage premium: their constituency and joined a postman or in 2012–13, made up of direct and indirect In 2012 we launched a new two-year those who have completed vehicle maintenance woman on their delivery round. This enables contributions (£9.4 million in 2011–12). Charity of the Year programme. and engineer apprenticeships typically earn decision makers to see at first-hand how • On average across the UK, one in every between 14.3 and 15.1 per cent more than Royal Mail is transforming and to understand We worked closely with our main union, the 200 employees work for Royal Mail. people of the same age[2]. This compares the complexities of delivering the Universal CWU, to shortlist three very deserving charities. We employ almost 150,000 people in the UK. favourably with the 19.1 per cent average Service. Among the participating politicians Sixty-eight per cent of our colleagues voted salary premium typically yielded by a university in 2012 were Vince Cable MP (Secretary of through a UK-wide survey, with over 36,000 • We contribute around £1.6 billion in degree for new graduates. This also helps the State for Business, Innovation and Skills), people selecting Prostate Cancer UK, from taxes to the UK Exchequer. This comprised general economy, as higher wages support Chuka Umunna MP (Shadow Secretary of the shortlist including Whizz Kidz and employer and employee National Insurance spending on consumer goods and services. State for Business, Innovation and Skills), Alzheimer’s Society. contributions, income taxes and business rates Further information on our apprentice Michael Fallon MP (Postal Affairs Minister), Prostate Cancer UK fights to help more men in addition to a range of indirect taxes paid schemes can be seen on page 51. John Swinney MSP (Cabinet Secretary for survive prostate cancer and enjoy a better directly through suppliers. Finance, Employment and Sustainable Growth) quality of life. They support men and their Articles for the Blind and Adrian Bailey MP (Chairman – Business, The Cebr research shows that our economic families by providing vital information and Innovation and Skills Select Committee). impact is growing: we were ranked seventh Royal Mail also supports its communities support. We aim to raise at least £2 million largest in the UK in terms of economic footprint through the Articles for the Blind service. Over 350 politicians paid a festive visit to their over the two year partnership. This will fund in 2012–13, up one place compared to 2011–12. The service provides free postage for blind or local Delivery Office to say a personal “thank the recruitment and training of additional partially sighted people. We are proud to provide you” to our people for the important role they specialist prostate cancer nurses to improve A key part of our economic activity is generated the scheme, which we have delivered for nearly play at Christmas and throughout the year. care for people affected by prostate cancer through our supply chain. We spend £2.5 billion a century. We are fully committed to delivering Visitors included Theresa May MP (Home across the UK. For the first time, Royal Mail is across a network of over 7,000 suppliers (see page this scheme against the highest quality of service Secretary), David Laws MP (Education Minister) matching funds raised by colleagues for the 61) including inter-business intermediate spend. standard specification of any major European and Peter Hain MP (Former Welsh Secretary). Charity of the Year, penny for penny, up to Further information on Cebr’s research can be country. In 2012–13 we delivered around 6.2 £1 million in each year of the programme. By found in the Economic and Social Impact Study million items free of charge. We work with the end of 2012–13, we had raised £800,000 section of this report, on page 85. the Royal National Institute of Blind People Case study including matched giving, through campaigns and other charities for the blind to ensure the including Movember, Give a Quid and the Impact of our employment scheme meets their needs. Under privatisation £100 challenge. we will continue to proudly deliver this service. Celebrating gold medals In 2013, Cebr research found that we make This service is protected by law - a change to Through our partnership, we are not only Royal Mail is proud of its British heritage. a significant contribution to social inclusion the scheme could only happen if directed by enabling the implementation of additional Throughout our long history we have used through the vital employment and earnings the Secretary of State and voted for by both resources, we are also raising awareness around our stamps to recognise great national we bring to some of the UK’s poorer regions. Houses of Parliament. this little spoken-of disease. We have placed We offer jobs where there are generally fewer figures. We saw the London 2012 Olympic specially designed postmarks on millions of items job opportunities. Our employment also matches and Paralympic Games in 2012 as the perfect of mail; held charity auctions on eBay; partnered the population profile: where there are more opportunity to continue this tradition. For that with Prostate Cancer UK to shake collection tins people, we offer more jobs. reason, we produced a new stamp for every at a number of football matches; and ran one of gold medal won by a British Olympian and the most successful Movember campaigns in the The study indicated that jobs provided by Paralympian athlete. It was the first time any world, raising the profile of the cancer through Royal Mail may help people avoid long- host country used action shots for gold medal our heavily moustachioed men (see page 59). term unemployment in deprived areas. The stamps. We also painted one of our traditional unemployment rate in locations where we employ red postboxes gold in the home town of every As part of our ‘everyone’s a winner’ approach, people is 13.8 per cent higher than average in Team GB and Paralympics GB gold medal we also donated £50,000 to Whizz Kidz and England and 17.7 per cent higher in Wales. In winner. 111 postboxes were painted gold Alzheimer’s Society. Once we achieve our £2 Wales, 59 per cent of our employment locations across the UK in total. These will remain gold million target for Prostate Cancer UK any money are within the bottom 30 per cent most deprived permanently. Each postbox also has a plaque raised for any of the three shortlisted charities wards or localities. The same applies to England naming the athlete and marking their gold will also be matched, penny for penny, up to a and Scotland, where 40 per cent and 37 per cent medal achievement, or marking the location’s further £1 million. respectively of employment locations are within connection with London 2012. the 30 per cent most deprived wards.
[1] For apprentices employed between 2006 and 2013. Net productivity gain over the five years post-completion.
[2] Based on people aged 22–29 years, compared with average UK wage by age. 56–57 2 Our responsibility | 2.3 Our communities
In 2012–13, our contributions and • Payroll Giving. Payroll giving provides a tax- fundraising efforts have delivered efficient way for colleagues to support their chosen Case study Case study funding for: charities. Our payroll giving scheme is one of the largest in the UK, with over 40,000 employees and • 20 new specialist prostate cancer nurses pensioners taking part. Almost £2.5 million was Movember Our first Prostate Cancer nurse through Prostate Cancer UK. donated this year, a four per cent rise on last year. More than 975 charities have benefited from our Royal Mail Group Ltd supported the Movember Stuart Little was the first prostate cancer • 29 wheel chairs for young people through campaign in 2012, a global moustache-growing nurse to be funded by our Charity of the Whizz Kidz. payroll giving donations since the scheme began in 1989 and it has generated around £48 million charity event to raise funds and awareness for Year programme. He began work in the • 2,265 hours of dementia support through in donations. This is testament to our employees’ prostate and testicular cancers. Our charity north east of Glasgow in January 2013. As Alzheimer’s Society. great generosity. In 2012, we were awarded a partner, Prostate Cancer UK, benefits from part of his role, Stuart has been able to run Guinness World Record and a Platinum Payroll funds raised by Movember in the UK. awareness sessions on prostate cancer and Business Connectors has developed links with local NHS and health Giving Quality Mark Excellence Award. The biggest Our 2012 campaign was a great success, beneficiaries include County Air Ambulance Trust, organisations to help improve care for men In 2012, we joined Business in the Community’s with our colleagues raising over £525,500, Barnardos, Help the Hospices and our own charity, with prostate cancer. Business Connectors programme. As part of this including matched giving from the company. the Rowland Hill Benevolent Fund. we are placing our people in community-based The Movember charity confirmed that we “I’m really pleased to have started work in organisations so they can use their knowledge raised more than any other single company Glasgow to help men and their families who and skills to create connections between network in the world. are affected by prostate cancer. By having an local businesses and local good causes. The active and visible role in the community, I’m Derek Dawson, Sales Account Manager Over 2,500 Royal Mail employees signed up programme also builds stronger ties between hoping we can tackle prostate cancer head-on in Motherwell, says: to take part, meaning we also had the largest Royal Mail and its communities and provides a and make a real difference to people living in number of registered fundraisers of any single growth and development opportunity for our “ I have been involved with my local the city.” Stuart Little company network worldwide. And, of our top seconded colleagues. children’s football club for the past ten fundraisers, three were women. We also Four other nurses are now working in Four colleagues were involved in 2012–13. 4 years, currently as head coach for the engaged 23 MPs, MSPs and researchers post in Birmingham, Newcastle, Stockport They facilitated mentoring, coaching and job in fundraising. and London. and work placement opportunities; supported Moorlands Red 2001. I have been very Altogether, the funds will pay for 13 new young people’s education; and enabled fortunate in that every year I have applied prostate cancer nurses in areas of need development of a charity’s sustainability plan. Case study for Sports Foundation support, I across the UK. Supporting our people have been successful. We have played Our campaign received a Highly Commended Graduate and Apprenticeship in the Third Sector Business Charity Award We have a very large workforce and our numerous teams across central Scotland, Fundraising Challenge colleagues have a wide range of community Challenge Event category in May 2013. interests. We encourage and support them in some with kit sponsorship, but none with Owen Sharp, CEO, Prostate Cancer UK said, This year we held our inaugural Graduate and contributing to a range of worthy causes: the prestige or UK wide presence as “Reaching men and women from a wide range Apprenticeship Fundraising Challenge. This encourages our young recruits to raise money • Community matched giving and grant of backgrounds who are not office based is Royal Mail and I know that the team for Prostate Cancer UK while developing schemes. We encourage our people to get very tough to do. But Royal Mail has done their skills and promoting team working. involved in community activities through exactly that. Thousands of its employees took wear the kit with pride.” The challenge invites small teams to compete fundraising and community support grants. part in Movember and for every participant against one another to design and deploy a We match funds raised by colleagues for there will have been hundreds of other people fundraising activity. Over 60 graduates and charities and good causes, up to £200 a year. who will have seen the moustache when the • Sports Foundation. Established in 2002, our apprentices from across Royal Mail took part. Colleagues can also obtain a grant of up to post was being delivered.” Sports Foundation provides grants for our Events ranged from a fashion show, to an £200 a year to cover the cost of fundraising people to provide equipment, trophies and open day at a Mail Centre to Zumba classes. activities. In 2012–13 we supported around training to local clubs. Through our people we Their motivation and enthusiasm meant 350 charities through these grants, and are able to support community sports and local that together, they raised £44,000, including match funded almost £525,000 (including sports clubs. During 2012–2013, 664 sports matched giving, which is enough to fund a Charity of the Year matched giving, below). clubs benefitted from the Foundation’s grants specialist prostate cancer nurse. • Charity of the Year matched giving. For our with an estimated 17,000 people benefiting. Charity partner, Prostate Cancer UK, we match • Volunteering. Volunteering outside of the work funds raised by colleagues up to £2,500 a year. environment plays an important role in helping build an engaged and committed workforce. It also allows our employees to forge important relationships in the communities where they work. We offer paid time off for colleagues supporting communities and grants of up to £400 to cover volunteering costs. Last year we provided over 2,200 days’ paid leave for volunteering activities and almost 9,000 days of unpaid volunteering leave. We have also introduced a 12-month volunteering programme as part of our Duke of Edinburgh Gold Award Scheme (see page 51). Over 2013–14, we look to further support colleagues’ volunteering efforts.
58–59 2 Our responsibility | 2.3 Our communities
Connecting with tomorrow Schools outreach programme; development Partnering with suppliers Supporting a responsible supply chain and distribution of BPMA Learning Packs; and Our future as a business, just like every other a series of evening talks. In 2012–13 Royal Royal Mail Group Ltd is committed to ensuring We encourage suppliers to be transparent about business in the UK, depends on having well Mail contributed £1.6 million in cash and that our suppliers maintain high standards of their practices and performance on social, educated and enterprising young people to in-kind donations. social, ethical and environmental conduct. environmental and ethical issues. As a member recruit. These leaders of tomorrow bring with of Sedex – a non-profit organisation specialising them fresh ideas and inspiration. As a letter In 2013–14 we will work with BPMA to improve Key facts in ethical auditing – we ask relevant suppliers business, Royal Mail has a particular interest in the records of and access to our war memorials. to complete self-assessment questionnaires, literacy levels among young people, encouraging The centenary of the start of World War I is in • Our annual procurement spend is £2.5 billion. and use this to evaluate and mitigate risks confidence in reading, writing and creativity. 2014. Royal Mail is thought to be the second in our supply chain. This was particularly • We have a network of over 7,000 suppliers. We also promote knowledge about the postal largest custodian of war memorials in Britain, important for our work with LOCOG (London after the Church of England. We are committed system’s rich heritage and how it has shaped Our suppliers play an important role in Organising Committee of the Olympic Games) to preserving, valuing and celebrating these the modern world. supporting communities and delivering business for the London 2012 games, who required all heritage assets. responsibly. We continue to communicate suppliers to be members of Sedex. As well as Supporting schools enabling Royal Mail to work with LOCOG, we also Speaker’s Parliamentary with suppliers about the responsible business practices we expect. promoted it within our supply chain, identifying Royal Mail acknowledges the vital job that UK Placement Scheme suppliers of Games-based philatelic items and school teachers perform, providing a range We require all suppliers to adhere to the UN Since 2012 Royal Mail has been a sponsor of the providing them with information to support of resources to engage students. Resources Universal Declaration of Human Rights and act Speaker’s Parliamentary Placement Scheme. their Sedex listing. are aligned with the National Curriculum and in accordance with the Ten Principles of the are available directly to teachers, as well as The scheme gives participants the opportunity UN Global Compact. This promotes responsible We are also a member of the Public Sector through site and school visits. We also ensure of nine months paid employment with a Member business across the areas of human rights, Ethical Sourcing Working Group. The Group that children with disabilities do not miss out, of Parliament. This is administered by the Social labour, environment and anti-corruption. Since is coordinated by the Ethical Trading Initiative designing video resources with subtitles as well Mobility Foundation, a charity which organises 2012, we also require our suppliers to comply and is a forum for discussion and progression as signed content. Last year, in addition to school the recruitment of participants and makes sure with our mail security procedures and our of social and ethical issues in the supply chain. visits undertaken by employees, Royal Mail that it reaches people who would not normally approach to anti-bribery and corruption. This is part of a European-wide network of hosted 374 school visits to our facilities consider applying for jobs in Parliament. organisations seeking to promote ethical trade around the country. We have developed a wide reaching engagement principles across European public procurement. In June 2012 we hosted a Corporate Day approach as part of our Supplier Relationship Young Letter Writer Competition for the 2012–13 participants. They toured Management (SRM) programme, which we Supporting SMEs Mount Pleasant Mail Centre, got an introduction reported on last year. The aim of this is to The Young Letter Writer competition has Small and medium size enterprises (SMEs) to corporate life and took part in real-time cement our relationships with suppliers and to engaged thousands of pupils since its launch play an important role in the UK economy. As a group exercises. For more information on the ensure we understand each other’s objectives. 35 years ago. In an increasingly digital age, provider of services, Royal Mail aims to ensure scheme, see the Social Mobility Foundation’s the competition aims to raise awareness of the Measuring performance that it effectively supports SMEs through our website: www.socialmobility.org.uk pleasures of writing, encouraging creativity and product and service offerings. SMEs are also an confidence in the written word. Teachers select Royal Mail has worked to identify, prioritise important part of our supply chain. In the last the best examples and send them in for judging Priorities for 2013–14 and mitigate risks within the supply chain. year, we have altered the structure of some of These cover three main areas: health and - in 2012, 600 letters were entered into the We aim to increase colleague engagement and our contracts, where commercially appropriate, safety, continuity of supply and commercial competition from 76 different schools. In 2013– participation, to deliver lasting benefits to good in a way that makes them more accessible to performance of our main suppliers. We are 14 we will focus on refreshing the competition causes through increased support of our key SMEs, e.g. by breaking down a single large continuing to expand our SRM System. This to ensure it continues to be relevant and charities, and to continue to be recognised contract into a set of smaller contracts. This involves tracking suppliers’ contract performance engaging for young people. as a trusted brand. Our priorities are to: provides more opportunity for niche suppliers and relationship management activity, as well and SMEs to bid for work, rather than allocating British Postal Museum and Archive • Further support colleagues’ volunteering as creating performance dashboards for senior a single large contract to one large supplier. efforts, assisting local communities and driving supplier relationship owners. Our top 55 most Through the British Postal Museum and Archive colleague engagement. critical and important suppliers and contracts Garment recycling and waste reduction (BPMA), Royal Mail supports the heritage of are now monitored via regular performance the British postal system and its role in shaping • Raise over £2 million, including matched management reports. Royal Mail procures a large number of uniforms the modern world. The Royal Mail Archive, giving, for Prostate Cancer UK. for our postmen and women. Together with Asda, cared for by the BPMA, is officially designated Identified risks, including environmental, social Oxfam and others, we participated in a project as being of Outstanding National Importance. • Re-launch the Young Letter Writers and governance risks, are reported to the Chief run by the University of Leeds to trial ways to The collection includes some of Britain’s most Competition to increase its reach and impact. Executive’s Committee (CEC). We are continuing decrease clothing waste. In the past, used clothing iconic objects, spanning over 400 years of postal • Maximise our support for communities, to strengthen the process to ensure that risk has been seen as waste. This project considered history, innovation and service. We are currently encouraging take up amongst employees reporting is forward looking, enabling the CEC how uniforms could be reused: removing items supporting the BPMA to create a new, more of our range of community grants. to foresee and mitigate supplier and supply such as logos, trims and buttons to increase the accessible museum to display the archives and chain risks. garment’s commercial value. It also considered have provided a 999-year lease for the new the recyclability of different yarns and how these site. Our funding also helps support the day- To ensure effective contract management we could be more easily separated from each other. to-day running of the BPMA and its educational have provided on-the-job training to employees Designing uniforms with easily removable trim programmes. Examples of BPMA’s activities as well as delivering SRM workshops and and logos and more easily separated materials in 2012 include: support for the Stamps in skills assessment. will enable them to be re-worn or readily re- In the 2013 RobecoSAM Corporate spun into new garments. This provides a more Sustainability Assessment, we achieved the sustainable supply chain. highest score globally (79) in our industry for Further information on our environmental work supply chain management. with suppliers is provided on page 71.
60–61 2 Our responsibility | 2.3 Our communities
Priorities for 2013–14 Case study In November 2012, Royal Mail was • Further categorise key suppliers into critical and important suppliers and expand performance management CIPS Gold Accreditation awarded The Chartered Institute reporting to an additional 33 suppliers to further mitigate risk. In November 2012, Royal Mail was awarded The Chartered Institute of Purchasing and of Purchasing and Supply (CIPS) • Develop a risk dashboard that allows Supply (CIPS) prized Gold Certification; clear reporting on risks to people, a status shared with only 15 other prized Gold Certification; a status process, market and supplier situation organisations worldwide. CIPS Certification and strategic implications for critical is the recognised global accreditation for and important suppliers. excellence in procurement. CIPS evaluated shared with only 15 other Royal Mail’s performance across 16 modules, • Create a hub of communications and including corporate responsibility. CIPS organisations worldwide. events for the contract management Gold requires that we link our overarching community to enable collaboration corporate responsibility strategy to our and knowledge sharing. purchasing activities and practices. We do this by:
• Adhering to the UN Global Compact in a global supply chain.
• Assessing our supply chain performance using the Dow Jones Corporate Sustainability Assessment, which also feeds into the business reporting process.
• Influencing stakeholders inside and outside Royal Mail to assist in meeting corporate responsibility aims.
• Using corporate responsibility risk and performance data via the Sedex portal.
62–63 2 Our responsibility | 2.4 Our environment
HIGH Environmental materiality matrix 2.4 Our environment Energy Prices This assessment prioritised environment-related issues that have the potential to influence decisions of our key stakeholders and influence Transparency, Accountability and Reporting We are working hard to reduce our environmental our business success. impact. The increasing cost of natural resources makes efficiency an important commercial imperative, as much as a social one. World Class Mail
KPIs[1] 2010–11 2011–12 2012–13 Water Usage Reduction Fuel Prices Waste[2] (1,000 tonnes 15.4 13.9 10.7 to landfill) Waste Diversion
Waste[3] (1,000 tonnes 14.2 19.3 20.3 [6] Extreme Weather Conditions diverted from landfill) Heritage Protection EMS
Water consumed[4] 1,513.3 1,726.4 1,508.3 Environmental Technology Supply Chain Opportunities (1,000 m3)
Sustainable® Advertising Mail Carbon emissions[5] 754.2 721.6 746.5 (1,000 tonnes CO2e) Customer Efficiency
Tonnes of CO2e 109.9 100.4 96.1 per £1m revenue IMPORTANCE TO STAKEHOLDERS Supply Chain Risks
We aim to ensure that our business operations Key achievements 2012–13 Carbon Neutral Products have a positive impact on our future and a minimal impact on the environment. Managing • We established a new Environment Governance Customer Information Engagement and reducing our impact in a responsible manner Board (EGB) during the year to help drive our will help us save costs, compete more effectively performance. The EGB undertook a detailed and deliver a good service to our customers. materiality assessment to review our most Biodiversity Value significant impact areas, including our targets. Key facts • We reduced the amount of carbon emissions • We were the first UK postal services operator we produce per £1 million of revenue by 4.2 to achieve Carbon Trust Standard Certification per cent during the year. Electricity emissions in 2008 and in September 2012, we were reduced by 2.1 per cent. LOW INFLUENCE ON BUSINESS SUCCESS HIGH recertified for this. • We also reduced the amount of water we use • We are introducing more double deck trailers by 12.6 per cent and the amount of waste we into our fleet, carrying up to twice as many send to landfill by 23 per cent. Our Environment Strategy letters and parcels in every journey. As a In 2012–13 we focused on strengthening our Following a subsequent review by the Chief result, we have reduced the number of miles approach to environmental management. We Executive’s Committee, the fundamentals we travel by 10.7 per cent since 2008–09. established a new Environment Governance of our approach remain unchanged. We • We are deploying the World Class Mail Board (EGB) to help manage and drive our reconfirmed our targets for our primary impact operating discipline across our property environmental performance. During the year, areas of carbon emissions and waste. We also portfolio, which includes an environment the EGB undertook a detailed materiality reconfirmed our main environmental focus management pillar. assessment (see chart above) to review our most areas, namely climate, waste, water, biodiversity significant impact areas including our targets. and customers and suppliers. These are [1] On 1 April 2012, Royal Mail and Post Office Limited (POL) became separate companies. Our further detailed on page 66. environment data has therefore been restated to exclude POL data. To provide a useful comparison over three years, we have also excluded POL data from 2010–11 data. [2] Waste generated while sites were operational [3] Data for 2010–11 has been restated to include figures for pallets which were not previously included. Pallet data has been included for all years disclosed here. Waste diverted from landfill includes reuse, recycling and recovery (energy from waste). [4] Water for 2011–12 represents use over the period March 2011 – February 2012. All other years are for April to March. [5] Carbon emissions have been calculated using Defra’s 2012 emission factors. In line with best practice, we have applied these latest factors to previous years’ data. [6] Environmental Management System 64–65 2 Our responsibility | 2.4 Our environment
Our environmental focus areas Energy and climate Given our Universal Service obligation, the We have also managed the impact of the growth scale of our operations means that we have a in our fleet by purchasing fuel efficient vehicles Energy and climate: reducing our use of energy and the significant energy demand. We deliver to more and driving efficiency in our existing fleet. associated greenhouse gas emissions than 29 million addresses, six days a week. Our buildings contribute around 38 per cent On an absolute basis, we have reduced our of our carbon footprint, while fleet and transport footprint by 16 per cent since 2004–05, with make up around 60 per cent. POL emissions excluded from the baseline. However, for 2012–13 carbon emissions We are working hard to reduce our carbon increased by 3.5 per cent compared with the Water: reducing our demand for water and driving emissions and have achieved some good results. previous year. This is primarily due to two down waste We reduced the amount of carbon we produce factors: the weather and an increase in our use per £million of revenue by 4.2 per cent last of air transport. This impacted our Scope 2 (gas year, compared with 2011–12. Since 2010–11, and heating oil) and Scope 3 (from vehicles not we have reduced emissions per £1 million of owned by Royal Mail Group Ltd) emissions. revenue by 12.5 per cent. We also achieved Weather influences how much gas and heating Waste: minimising the amount of waste we create and re-certification of the Carbon Trust Standard in 2012, which recognises leading companies oil we use to keep our buildings warm. Our CO e emissions for 2011–12 were relatively increasing the amount diverted from landfill in managing and reducing their emissions. 2 low as a result of the mild winter. Mean We have a target to achieve a 20 per cent monthly temperatures were consistently above reduction in emissions by 2020–21, compared to average for December 2011–February 2012[1]. a 2004–05 baseline. This is a long term target. Conversely, 2012–13 saw the coldest winter Biodiversity: preserving and enhancing the natural Previously, our baseline included Post Office for 50 years. The difference in temperature Ltd emissions. We undertook a major piece of between the two years accounts for more than environment surrounding our property estate work during the reporting period to restate our half of the increase in emissions for 2012–13. emissions to exclude POL from the baseline, and subsequent years’ emissions data. Secondly, we made more use of air transport during the year, to deliver for customers’ We have successfully reduced, or managed the next-day and same-day delivery expectations. Customers and suppliers: working in partnership with growth of, some of our Scope 1 and 2 emissions. Air transport contributed 10.7 per cent of Electricity use has been reduced through our our carbon footprint, up from 9.6 per cent customers and suppliers to address our environmental investment in energy efficiency projects across in 2011–12. our estate. impacts and leverage any opportunities With the planned reduction activities detailed here, we believe we are on track to achieve our 20 per cent reduction target by 2020–21. Working towards ISO14001
We are continuing our journey towards ISO14001 accreditation. Seven of our core network Mail Centres are certified to ISO14001. We are working with a further 10 of our largest CO2e Emissions by Scope CO2e emissions sites to achieve ISO14001 certification in [2] 2012–13 2012–13 late 2013. Our Parcelforce division has all its (‘000 tonnes) by source (%) operational sites and headquarters certified to ISO14001. Scope 1 468.4 Building 38 Our World Class Mail programme (see page 14) Scope 2 Fleet & transport is also helping us manage our environmental 150.8 60 impacts and drive continuous improvement. All of our Mail Centres have now started their Scope 3 127.3 Business travel 2 WCM environment pillar journey. TOTAL 746.5
The above tables show our carbon emissions by Scope, according to the Greenhouse Gas Protocol, and by source of our business activity. Previous years’ emissions are reported for comparison on page 64.
[1] http://www.metoffice.gov.uk/climate/uk/2012/winter.html
[2] We use Defra emissions factors to calculate carbon dioxide equivalent emissions. Scope 1 includes business-owned road transport and natural gas, heating oil and refrigerants. Scope 2 includes purchased electricity, including business-owned rail. Scope 3 includes transport emissions (road, air, rail and ferry) from vehicles not owned by Royal Mail Group and electricity distribution and transmission losses. 66–67 2 Our responsibility | 2.4 Our environment
• Cardboard recycling: we collect cardboard Annual projected reductions of site energy consumption projects Amount saved packaging received from customers and Electricity (MWh) Case study National Distribution Centre: suppliers. We bale and recycle this through 38 20 CO e (tonnes) LED lighting in the open plan office 2 Biffa, and we receive a rebate in return. Expanding our renewable During 2012–13 this generated £42,000 Warrington Hub - Induction lighting 167 87 energy portfolio in revenue. Mount Pleasant Mail Centre: Our online environmental reporting system, - LED lighting 206 108 This year we have continued to expand our eCO2HUB, provides site level data for resource Manchester Mail Centre: renewable energy technology portfolio. Project commenced but not completed in 2012–13 use. It is the primary tool for environmental LED lighting in the sorting hall We installed our first solar panel array at [2] Chelmsford Mail Centre. The system is a management used by our World Class Mail Carlisle Mail Centre: 100kWp photo voltaic array, which equates Environment Pillar Leads. The system gathers LED lighting in the sorting hall 11 6 to 700m2 of panels. We have calculated that and provides detailed data on waste, including whether it is sent to landfill or not, down to Total projected reductions 422 221 the system will provide us with 83,000kwh of zero carbon electricity per year, which will business unit level. This helps colleagues deliver an associated emissions reduction of benchmark their site’s performance against around 45 tonnes CO e annually. others. They are encouraged to display the Transporting mail 2 results within their sites and to share best Case study Waste practice – as Environment Leads are able to The mail that we carry is changing. We are identify those locations having the greatest now delivering a greater number of parcels Our approach to waste management follows the success. By year end, almost 700 Environment than ever before, due to the growth in online Practical energy reductions waste hierarchy to avoid landfill: reduce, re-use, Champions had registered with eCO2HUB. retailing. We use air transport to meet both our recycle, recover (through energy from waste). Lighting in the sorting halls of our distribution We also consider how we can reuse and recycle Universal Service obligations and the high level We track where we generate most waste and centres has been identified as the single the products we use. For example, we have of service our customers expect. We also ensure tackle our most significant areas first. that our fleet is equipped to deliver the larger, biggest consumer of electricity in our partnered with the University of Leeds to bulkier parcels. The use of bicycles for local buildings. During a survey at Warrington We exceeded our target for 2012-2013 to divert investigate how our uniforms can be designed deliveries is no longer practical in the Hub, we found that it had highly inefficient at least 60 per cent of our waste from landfill, so that they are easier to recycle (refer to Our vast majority of cases. lighting – in the form of old metal halide achieving 66 per cent. Overall, our target by Communities section on page 61). high bay lights. We have now replaced these 2014–15 is to divert 70 per cent of waste from We are managing the efficiency of our fleet to with induction lighting. This was the most landfill. We achieved this by raising awareness minimise the impact of needing more vehicles. financially viable and practical option as it Case study amongst our employees of the importance of Our vehicle numbers rose by 9 per cent year-on- enabled a like for like replacement, without separating waste and by making recycling easy year, however our associated emissions only rose the need for major building works. At the (see Case Study). Some of our more advanced by 0.1 per cent. We manage fleet fuel efficiency same time, it will deliver significant efficiency sites, such as Gatwick Mail Centre, Medway Making recycling easy closely and it is a key part of our criteria when improvements. The induction lights are and our National Distribution Centre, achieved We have deployed over 2,600 new bins at procuring new vehicles. We also reduce mileage projected to reduce Warrington’s carbon impressive recycling rates of over 90 per cent. 30 of our sites to encourage employees to (and fuel costs) by using higher-capacity vehicles footprint by around 90 tonnes CO e a year. 2 With the roll out of our new recycling system recycle. We worked with Environment Pillar and by optimising our delivery routes. (see case study), we aim to add many more During the year, we also delivered a number leads at our National Distribution Centre and sites to these ranks in 2013–14. Our fleet is already using aerodynamic vehicle of lighting efficiency projects in other mail and Leeds Mail Centre to help design the bespoke design, eco-start technology and load efficient distribution centres. The table above sets out Waste management is important both from an recycling bin system. The bins display double deck trailers to make efficiency gains. We some examples and the projected reductions environmental and cost perspective. Reducing clear guidance on what can be recycled. also deliver driver training to teach fuel-efficient in electricity usage and carbon footprint. the amount of waste sent to landfill reduces Manufactured by our facilities management driving. We test alternative technologies such as Energy savings are equivalent to the energy costs, while some waste streams present partner, Romec, the bins were rolled out to hybrids and electric vehicles on a regular basis use of around 103 homes.[1] opportunities for revenue generation. sites early in 2013. We supported the roll – our fleet currently includes 10 diesel-electric out with an awareness raising campaign, hybrids and two electric vehicles. However, the Examples of this include: using posters and film to inform colleagues large-scale application of low and zero emission about recycling. Trials at three of our sites • Rubber band re-use: rubber bands are technology is currently not commercially viable demonstrated significant improvements as a collected from incoming mail at Mail Centres due to initial adoption costs. We expect this result of the scheme: Peterborough achieved and distributed to nearby Delivery Offices to change in future and we continue to keep a 73 per cent recycling rate, up from 59 per for re-use. Medway Mail Centre collects an up to date with developments, evaluating the cent in 2011–12; National Distribution Centre estimated 100kg of bands per week, supplying suitability of emerging technologies through increased its rate from 86 per cent to 95 up to 16 Delivery Offices depending on their the Government’s Low Carbon Vehicle per cent; while Gatwick Mail Centre jumped demand. Across the business, orders for Procurement Programme. Further details on from 67 per cent to 94 per cent. Around rubber bands reduced by 4 per cent how we work with our suppliers on this are 4,000 additional bins have been ordered over the year. provided on page 71. for 2013–14.
[1] Average (mean) annual domestic electricity consumption per meter in Great Britain was 4,078 kWh. ‘Sub-national electricity consumption statistics 2011’, Department of Energy and Climate Change.
[2] Data for 2010–11 has been restated to include figures for pallets which were not previously included. Pallet data has been included for all years disclosed here. Waste diverted from landfill includes reuse, recycling and recovery (energy from waste). 68–69 2 Our responsibility | 2.4 Our environment
Water Customers and Suppliers We remain committed to working with the Case study Direct Marketing Association to help meet Water is a precious natural resource. We are Our business has a key role to play in working the Government’s environmental targets for committed to managing our water use effectively with customers and suppliers to minimise our direct marketing and incentivise environmental and efficiently. This year we have focused on Rainwater harvesting collective environmental impacts. We have the responsibility among suppliers. This also gaining a better understanding of our water potential to reach over 7,000 suppliers, and helps our customers meet their own footprint and developing a more representative Our new Medway Mail Centre in Kent was engage with over 1.4 million businesses sustainability goals. dataset of our water use. We still have some opened in September 2012. Incorporating across the UK. way to go however. We look to continue to solar walls, rainwater harvesting, bio-mass • Our Mailing House scheme incentivises mailing strengthen the monitoring and management boilers and solar hot water heating, the Our procurement of vehicles is one example houses to be environmentally responsible, of water across our estate. site achieved a ‘very good’ BREEAM rating of our ongoing work with suppliers to manage providing financial incentives if production (BRE Environmental Assessment Method) our environmental impacts. We have regular facilities are environmentally accredited. In Our Delivery Offices and Mail Centres account for – the leading assessment standard for meetings with our panel of vehicle suppliers to 2012-13, 104 mailing houses had achieved around 76 per cent of our water consumption.[1] sustainable buildings. understand the currently available technology, the standard. Water used is primarily ‘domestic’ in nature: in identify trends and share our business employee washrooms and catering areas. Other The rainwater harvesting system is fed by the requirements. We are currently discussing the • Our Sustainable Advertising Mail and 2 uses include cleaning, building maintenance and building’s 15,400m roof. Water is distributed impact of the new European legislation on Heavy Sustainable Door to Door services follow the vehicle washing. to all facilities that do not require drinking Goods Vehicles (Euro 6) that aims to reduce BSI Publicly Available Specification (PAS) 2020 water, for example for toilet and urinal vehicle emissions; the benefit of aerodynamic standards. This voluntary specification of best During 2012–13 we recorded a reduction in flushing. The system became fully operational kit on our fleet; and the benefit of expanding practice seeks to minimise the environmental 3 water consumption of approximately 218,000m . in June 2012. In the 12 months to June start/stop engine technology into our core UK impacts of direct mail. The criteria cover best This equates to a 12.6 per cent reduction 2013 almost 740,000 litres of rainwater light fleet, currently being used at Parcelforce. practice in data management to reduce waste, compared with 2011–12. Part of this can be was collected and used throughout the Mail Further information on our management of on-product messaging that the mailing can be attributed to a reduction in the size of Centre. This represents 19 per cent of the suppliers can be seen on page 61. recycled and minimum environmental criteria our workforce. total water used throughout the site, resulting for raw materials. in both water and costs savings for the site. We are working with WRAP’s (Waste Resource We are currently working with the Direct Action Programme) Rippleffect programme, Biodiversity Marketing Association to improve our and our facilities partner, Romec, to identify Sustainable Advertising Mail and Door to Door areas for water savings. We are running trials of We have a large estate across the UK and a products, ensuring the specification matches water saving technologies, such as water saving responsibility to protect and enhance the natural customer requirements and provides an urinals, to assess where and how we can reduce environment around it. Our new sites, such as improved customer experience. We aim to our water usage, wastage, and at the same time Medway Mail Centre, have been constructed to a introduce these changes at the start of 2014–15. reduce our water costs. The outcomes of the BRE Environmental Assessment Method rating, trials will help inform our next steps. incorporating sustainable design and safeguards Priorities for 2013–14 for local biodiversity. Over time, we aim to gain Refurbishing our sites presents an ideal a better understanding of our portfolio and the • Launch our new Environment policy. opportunity to reduce water consumption, by existing green spaces on our sites. installing water saving devices at the same time. • Achieve certification to ISO14001 in an We hope to introduce formal requirements for An important issue for us in terms of biodiversity additional 10 of our core network sites, and water saving improvements in our refurbishment is our use of rubber bands. Rubber bands that identify how this could be applied more widely guidelines in 2013–14. litter the ground present a threat to wildlife as throughout the business. well as representing a needless expense. Our • Show improved performance in our efforts to raise awareness around littering and management of waste, energy and water use. ways to save rubber bands are having some success (see page 69). We plan to review and re-launch our awareness raising campaign to help continue to reduce littering and the associated impacts.
[1] Based on a 2011 study we undertook into our water consumption. 70–71 2 Our responsibility | 2.5 Transparency
Delivery exceptions Mail security[1] 2010–11 2011–12 2012–13 2.5 Transparency Royal Mail aims to collect and deliver every Number of internal prosecutions 312 315 248 item of mail that passes through our network. There are, however, cases where this might not be possible. We publish annual reports that Underpinning everything we do is a commitment to Number of external prosecutions 88 66 116 detail the Universal Service exceptions on which transparency in our business, and the security of the we are required to report. The annual 2012 Full criminal investigations 993 757 658 Exceptions Report, published in October 2012, UK’s mail service. into internal crime raised showed there were 3,000 addresses where it was not possible to deliver mail. Considering Full criminal investigations into external crime raised 193 160 218 that Royal Mail delivers to over 29 million UK addresses, this represents 0.01 per cent We feel it is important to ensure information on our We raise awareness of the issue amongst our of this total. performance is comprehensible and comprehensive, people and encourage them to report ‘scam mail’ where possible. This section provides an update on complaints to our Security team. We also have a Returned mail 2010–11 2011–12 2012–13 During 2012–13, there were 2,001 long-term some of our other responsibilities, including against helpline for customers who believe that they, or Universal Service collection exceptions across statutory requirements. their family, are receiving ‘scam mail’. In addition, National Returns centre employees 160 140 134 the UK (compared with 2,100 in 2011–12). This we encourage people to send us any potentially represents one per cent of around 205,000 Mail security[1] fraudulent mail so that we can work with the collection points across the UK. These exceptions relevant authorities to investigate it and take Items processed (m) 25.6 21.2 19.15 can be caused by difficulties in accessing post We take the security of mail we deliver very any appropriate action. We also mail, on request, boxes, including business post boxes that are seriously. Our security team works around the a free Action Fraud leaflet to communities only open Monday to Friday. There were also Revenue generated at auction (£m) clock to identify threats to our products and and provide guidance on our website. 0.9 1.2 1.32 118 temporary collection exceptions of more services and we have robust measures in place than four months (117 in the prior year). These Cost of running National to deal with any breaches. We now publish data For more information please go to: were due to such things as road or building Returns Centre (£m) 3.9 3.4 3.25 on the team’s investigation into internal and www.royalmail.com/scam-mail works that limited access to post boxes. We external crime. During 2012–13, we raised 658 report all such exceptions to Ofcom on a full criminal investigations into internal crime Returned mail Exceptions to our delivery regular basis. (757 in 2011–12). 248 former employees of 2010–11 2011–12 2012–13 and collections service Royal Mail Group were prosecuted in the UK The overwhelming majority of mail items we handle are delivered safely to the correct Freedom of information (315 in 2011–12). These individuals form a small Long term delivery exceptions 2,571 2,571 2553 proportion of an overall UK employee population address. A small proportion of items are, As a public company we received hundreds of of approximately 150,000. We raised 218 full however, undeliverable for reasons beyond our Freedom of Information (FOI) requests about our criminal investigations into external crime against control. These include incomplete addresses, lack Temporary delivery exceptions 414 442 447 business each year. Our dedicated team worked Royal Mail (160 in 2011–12), with 116 external of forwarding addresses for recipients who have on requests, ensuring that we responded as fully moved house and lack of return addresses. prosecutions (66 in 2011–12). Long term collection exceptions 2,180 2,100 2,001 as possible. There were, of course, times when Our National Returns centre in Belfast we were not be able to make certain information ‘Scam mail’ handles undeliverable mail. We aim to return available. For example, as a commercial undeliverable mail to the sender or, if this is Temporary collection exceptions 155 117 118 operation, we would decline requests for We understand the upset and disquiet that not possible, securely dispose of it. In 2012–13, information that would damage commercial ‘scam mail’ can cause households across the the Centre processed 19.15 million items. That interests. In other cases, we did not hold the country, including vulnerable people. In 2012 should be set against the total of some 15 billion data requested. we became an active member of the National [2] addressed mail items we handled in 2012–13. Freedom of Information requests 2011–12 2012–13 Scams Hub, a new organisation aimed at Last year, 536 requests were referred to our central Information Rights team. Of those, identifying and addressing fraud and supporting Number of requests 494 536 victims. The Hub is sponsored by the National 188 were answered in full. A further 118 were Trading Standards Board and hosted by East answered in part. There were 151 requests Sussex Trading Standards. Representatives on Answered in full 175 188 where the information requested was not the steering group include the National Fraud provided e.g. for commercial and data protection Intelligence Bureau, Action Fraud, the National reasons. In 79 cases we did not hold the Answered in part Crime Agency and the Metropolitan Police. 95 118 information requested. As a private company we We are committed to working closely with will no longer be subject to FOI requests. the Hub to identify and stop ‘scam mail’ Not Provided 145 151 wherever and whenever we can. Data protection and privacy Not Held 79 79 We know that privacy is very important to the public, our customers and our people. Compliance with the Data Protection Act underlies all our business policies and procedures governing the use of personal information. We handle personal information fairly, securely and in line with the rights of individuals. Our privacy policy explains how we collect, use, share and protect personal information.
[1] Numbers have been restated to include Parcelforce Worldwide. Numbers www.royalmail.com/privacy-policy for full criminal investigations were incorrectly reported last year.
[2] Numbers have been restated to exclude Post Office Ltd 72–73 3 GRI Index | 3.1 Employee data
3.1 Employee data
We report in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Framework, G3.1. This sets out the Principles and Standard Disclosures organisations can use to report their economic, environmental, and social performance and impacts. Our Global Reporting Initiative index has been checked by Corporate Citizenship. Corporate Citizenship confirms that in their view the Index meets the requirement of B+, as set out in the GRI G3.1 Guidelines. The GRI Content Index starts on page 77.
LA1 Total workforce by employment type, contract and region, 2012–13 The total headcount for UK Parcels, International & Letters at the end of 2012-13 was 149,940. This comprises the Group’s UK and international parcels and letters delivery businesses operating under the “Royal Mail” and “Parcelforce Worldwide” brands.
3 GRI Index By region Profile East region 19.0%
North region 18.0%
South East region 19.0%
South West region 15.3%
3.1 Employee data 75 West region 16.0% 3.2 Global Reporting Initiative Index 77 Logistics 4.4%
Non-region specific 8.3%
By contract Profile
Permanent 94.1%
Temporary 5.9%
By type Profile
Full-Time 73.5%
Part-Time 26.5%
74–75 3 GRI Index | 3.1 Employee data
LA2 Number and rate of employee turnover by age, gender and region, 2012–13 3.2 Global Reporting Initiative Index
Leavers by region Headcount Rate Joiners by region Headcount Rate 2012–13 G3 Content Index East region 1,712 6.0% East region 1,343 4.7%
North region 1,900 7.0% North region 1,371 5.1% 1. Strategy and Analysis
South East region 2,016 7.1% South East region 2,068 7.3% G3.1 Indicator Description 2012–13 response (page references)
1.1 Statement from the most senior decision-maker 02–03 South West region South West region 1,575 6.9% 1,224 5.4% of the organisation. 1.2 Description of key impacts, risks, 10-14, 16-17, Annual Report and Accounts West region 1,412 5.9% West region 905 3.8% and opportunities. 2012–13 (ARA) 24–27
Logistics 303 4.6% Logistics 261 3.9% 2. Organisational Profile
Non-region specific 705 5.7% Non-region specific 1,253 10.0% G3.1 Indicator Description 2012–13 response
2.1 Name of the organisation. 07 Total 9,623 6.4% Total 8,425 5.6% 2.2 Primary brands, products, and/or services. 07 2.3 Operational structure of the organisation, 07 including main divisions, operating companies, Leavers by age Headcount Rate Joiners by age Headcount Rate subsidiaries, and joint ventures. 2.4 Location of organisation's headquarters. 92 <30 1,924 1.3% <30 3,640 2.4% 2.5 Number of countries where the organisation 07 operates, and names of countries with either 30–49 30–49 major operations or that are specifically relevant 3,681 2.5% 3,642 2.4% to the sustainability issues covered in the report. 2.6 Nature of ownership and legal form. Inside front cover, 08 50+ 4,018 2.7% 50+ 1,143 0.8% 2.7 Markets served (including geographic Inside front cover, 04–05, 07–08, ARA 23–24 breakdown, sectors served, and types of Total 9,623 6.4% Total 8,425 5.6% customers/beneficiaries). 2.8 Scale of the reporting organisation. 02, 08, ARA 4, 14–15 2.9 Significant changes during the reporting period 08 Leavers by gender Headcount Rate Joiners by gender Headcount Rate regarding size, structure, or ownership. 2.10 Awards received in the reporting period. 14–15, 36, 47, 58, 62 Female 1,612 1.1% Female 1,514 1.0% 3. Report Parameters Male 8,011 5.3% Male 6,911 4.6% G3.1 Indicator Description 2012–13 response Total Total 9,623 6.4% 8,425 5.6% 3.1 Reporting period (e.g., fiscal/calendar year) for Inside front cover, 03, 92 information provided. 3.2 Date of most recent previous report (if any). 92 3.3 Reporting cycle (annual, biennial, etc.). 92 3.4 Contact point for questions regarding the report 92 or its contents. 3.5 Process for defining report content. 26 3.6 Boundary of the report (e.g., countries, divisions, 92 subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary Protocol for further guidance.
76–77 3 GRI Index | 3.2 Global Reporting Initiative Index
3.7 State any specific limitations on the scope or 92 4.6 Processes in place for the highest governance Board members are required to declare any boundary of the report (see completeness body to ensure conflicts of interest are avoided. conflicts of interest at the start of each Board principle for explanation of scope). meeting. Directors sign an annual declaration identifying external roles which might lead to 3.8 Basis for reporting on joint ventures, 92 conflicts. For any conflicts identified the Company subsidiaries, leased facilities, outsourced Secretary will take steps to ensure a conflict at operations, and other entities that can the Board is avoided e.g. exclusion from relevant significantly affect comparability from period Board discussions. Two Board members – the to period and/or between organisations. Senior Independent Director and the Chair of the 3.9 Data measurement techniques and the bases 36, 39, 42–46, 49–51, 54–56, 64–70, 72–73 Audit & Risk Committee – seek to ensure that of calculations, including assumptions and this is carried out appropriately. techniques underlying estimations applied to 4.7 Process for determining the qualifications Our annual Board effectiveness review identifies the compilation of the Indicators and other and expertise of the members of the highest gaps in skills and knowledge. A review is also information in the report. Explain any decisions governance body for guiding the organisation's undertaken when a new Chair is appointed. not to apply, or to substantially diverge from, strategy on economic, environmental, and Where appropriate we engage a search partner the GRI Indicator Protocols. social topics. to identify candidates with particular skills. 3.10 Explanation of the effect of any re-statements Inside front cover, 39, 46, 64, 72 4.8 Internally developed statements of mission or 10–15. ARA page 45 Our Code of Business of information provided in earlier reports, and values, codes of conduct, and principles relevant to Standards identifies our standards and values. the reasons for such re-statement (e.g.,mergers/ economic, environmental, and social performance A revised version of the Code was released acquisitions, change of base years/periods, nature and the status of their implementation. in late 2012. of business, measurement methods). 4.9 Procedures of the highest governance body for ARA 45–50 3.11 Significant changes from previous reporting 92 overseeing the organisation's identification and periods in the scope, boundary, or measurement management of economic, environmental, and methods applied in the report. social performance, including relevant risks and 3.12 Table identifying the location of the Standard 77–82 opportunities, and adherence or compliance Disclosures in the report. with internationally agreed standards, codes of conduct, and principles. 3.13 Policy and current practice with regard to seeking 92 external assurance for the report. 4.10 Processes for evaluating the highest governance ARA 39 body's own performance, particularly with respect to economic, environmental, and social performance. 4. Governance, Commitments, and Engagement 4.11 Explanation of whether and how the ARA 44 G3.1 Indicator Description 2012–13 response precautionary approach or principle is addressed by the organisation. 4.1 Governance structure of the organisation, ARA 40 –45 4.12 Externally developed economic, environmental, 12, 61–62, 66–67 including committees under the highest and social charters, principles, or other initiatives governance body responsible for specific to which the organisation subscribes or endorses. tasks, such as setting strategy or organisational oversight. 4.13 Memberships in associations (such as industry 32–33, 49, 51, 58, 60–61, 72 associations) and/or national/international 4.2 Indicate whether the Chair of the highest ARA 35 advocacy organisations in which the organisation: governance body is also an executive officer. • Has positions in governance bodies; 4.3 For organisations that have a unitary board ARA 35 • Participates in projects or committees; structure, state the number of members of the • Provides substantive funding beyond routine highest governance body that are independent membership dues; or and/or non-executive members. • Views membership as strategic. 4.4 Mechanisms for shareholders and employees 24, 26–33, 44–45 4.14 List of stakeholder groups engaged 26–33 to provide recommendations or direction to the by the organisation. highest governance body. 4.15 Basis for identification and selection of 26 4.5 Linkage between compensation for members of ARA 45–50 stakeholders with whom to engage. the highest governance body, senior managers, and 4.16 Approaches to stakeholder engagement, 26–33 executives (including departure arrangements), and including frequency of engagement by type the organisation's performance (including social and and by stakeholder group. environmental performance). 4.17 Key topics and concerns that have been raised 26–33, 36, 39–40, 43–47 through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting.
78–79 3 GRI Index | 3.2 Global Reporting Initiative Index
Economic Social: Labour Practices and Decent Work
G3.1 Indicator Description 2012–13 response G3.1 Indicator Description 2012–13 response
DMA Objectives and results ARA 10–12 DMA Objectives and results 10–12, 13, 23, 40–51 DMA Responsibilities ARA 34–37 DMA Responsibilities 13 DMA Policy ARA 38–45 DMA Policy 10–12, 47–51 DMA Monitoring ARA 38–45 DMA Monitoring 42–51, 75–76 EC1 Direct economic value generated and distributed, ARA 07–08, 11 LA1 Total workforce by employment type, 75–76 including revenues, operating costs, employee employment contract, and region. compensation, donations and other community LA2 Total number and rate of employee turnover 76 investments, retained earnings, and payments by age group, gender, and region. to capital providers and governments. LA4 Percentage of employees covered by collective 45 EC3 Coverage of the organisation's defined benefit ARA 75–81 bargaining agreements. plan obligations. LA6 Percentage of total workforce represented in 45 EC9 Understanding and describing significant indirect 56, 85–89 formal joint management-worker health and economic impacts, including the extent of impacts. safety committees that help monitor and advise on occupational health and safety programs.
Environmental LA7 Rates of Injury. Occupational diseases, lost 46 days,absenteeism and fatalities.
G3.1 Indicator Description 2012–13 response LA9 Health and safety topics covered in formal Approximately 98 per cent as trade unions are the agreements with trade unions. recognised employee safety representatives for DMA Objectives and results 11–12, 64–71 engagement purposes. There is a corporate level safety and health committee which deals with DMA Responsibilities 12–13, 65 strategic issues and is part of the group policy DMA Policy 12 and arrangement facilities. In addition there are regular meetings at Group and Business Unit level DMA Monitoring 64–71 by the safety and health leads with senior trade EN3 Direct energy consumption by primary Purchased core gas = 2,082,876 GJ; union safety representatives. energy source. oil (kerosene) = 1,083 GJ; LA11 Programmes for skills management and lifelong 48–51 diesel = 5,046,163 GJ; learning to support continued employability. gas oil = 41,627 GJ; LPG = 9,129 GJ LA13 Composition of governance bodies and breakdown 49–51, 75–76, ARA 34, 39 of employees per category according to gender, EN4 Indirect energy consumption by primary source. Core electricity = 1,089,497 GJ; age group, minority group membership, and other rail electricity = 36,232 GJ; indicators of diversity. photo voltaics = 295 GJ[1]; wood chip = 642 GJ EN7 Initiatives to reduce indirect energy consumption 67–68 Social: Human Rights and reductions achieved. EN16 Total direct and indirect greenhouse gas 67 G3.1 Indicator Description 2012–13 response emissions by weight. DMA Objectives and results 11–12, 61 EN18 Initiatives to reduce greenhouse gas 67–68 emissions and reductions achieved. DMA Responsibilities For employees, responsibility is held with our Director of Group Human Resources. EN22 Total weight of waste by type and 64, 69. Waste sent to landfill, non-hazardous: For Suppliers, it is held with our disposal method. 10,678t; hazardous: 7.5t. Waste diverted Procurement Director. from landfill, non-hazardous: 19,766t; hazardous: 576.7t DMA Policy 11–12, 61 EN28 Monetary value of significant fines and None DMA Monitoring 43–50, 61, 72–73 total number of non-monetary sanctions for HR6 Operations identified as having significant risk for In line with our specific security requirements non-compliance with environmental laws incidents of child labour, and measures taken to all employees are required to demonstrate their and regulations. contribute to the elimination of child labour. identity and age. We also seek to manage child labour risks in our supply chain through our procurement process. All suppliers are expected to adhere to the UN Declaration of Human Rights. We undertake audits of high risk (by location or industry) sites to verify performance. HR7 Operations identified as having significant risk We operate in the UK and have no issues of forced for incidents of forced or compulsory labour, and or compulsory labour. We work with our unions in measures to contribute to the elimination developing collective bargaining agreements. of forced or compulsory labour.
[1] Chelmsford Mail Centre only 80–81 3 GRI Index | 3.2 Global Reporting Initiative Index
Social: Society
G3.1 Indicator Description 2012–13 response
DMA Objectives and results 10–12, 14, 54–62, 72–73 DMA Responsibilities 13. We maintain a Home Office-recognised professional criminal investigation team that complies with all tenets of the Police and Criminal Evidence Act, and a team of criminal lawyers that operates under the auspices of the Code of Public Prosecutors. DMA Policy 12–13, 55 DMA Monitoring 14, 54–62, 72–73 SO2 Percentage and total number of business units All units have been risk assessed. analysed for risks related to corruption. SO3 Percentage of employees trained in organisation's Launched e-learning in May 2012 for Royal Mail anti-corruption policies and procedures. Group Ltd centre managers. For Operational managers this is being deployed in three phases depending on risk. By mid-April 2013, 93 per cent central functions; 74 per cent Operations Phase 1 and 2; and 31 per cent Operations Phase 3 managers had completed this. Also 40 per cent of central functions contractors. SO4 Actions taken in response to incidents 72 of corruption. SO6 Total value of financial and in-kind contributions ARA 33 to political parties, politicians, and related institutions by country. SO7 Total number of legal actions for anti-competitive None behaviour, anti-trust, and monopoly practices and their outcomes. SO8 Monetary value of significant fines and total None number of non-monetary sanctions for non- compliance with laws and regulations.
Social: Product Responsibility
G3.1 Indicator Description 2012–13 response
DMA Objectives and results 10–12 DMA Responsibilities 13 DMA Policy 12 DMA Monitoring 14, 18, 37–40, 72–73 PR2 Total number of incidents of non-compliance There were no prosecutions under Health with regulations and voluntary codes concerning and Safety regulation non-compliance for health and safety impacts of products and services 2012–13. No Improvement or Prohibition during their life cycle, by type of outcomes. notices were issued. PR5 Practices related to customer satisfaction, 35–39 including results of surveys measuring customer satisfaction. PR6 Programmes for adherence to laws, standards etc 40, 71 marketing communications.
82–83 4 About this report | 4.1 Economic and social impact study by Cebr
4.1 Economic and social impact study by Cebr
The Contribution of Royal Mail to the UK Economy Part 1: A study on the economic contribution of Royal Mail’s UK Parcels, International and Letters (UKPIL) business unit to the UK (May, 2013)
Headline findings • From a position of 19th in the 2009 Department for Business, Innovation and The Centre for Economics and Business Skills (BIS) GVA Scoreboard (which is based Research Ltd (Cebr), commissioned by Royal Mail, on the global operations of the top 50 UK- has carried out a complete economic impact based companies), Royal Mail UKPIL jumps assessment of its UK Parcels, International and to a position of 7th in Cebr’s adapted GVA 4 About this report Letters (UKPIL) business unit and discovered its Scoreboard (based on the UK operations of the significant contribution to national employment, top 10 UK-based companies) – this is a jump of value added and taxation. one place in Cebr’s adapted GVA Scoreboard. We find: In an economic context, the benefits deriving • A direct £5.25 billion contribution to total from Royal Mail’s UKPIL business unit are UK GVA by Royal Mail’s UKPIL business unit, demonstrable, as our report shows. equating to a 0.4 per cent contribution to UK GDP. Methodology and assumptions • 151,191 full-time-equivalent (FTE) jobs For the study, we used a combination of national 4.1 Economic and social impact study by Cebr 85 supported directly by UKPIL, which equates statistics sources and data supplied by Royal Mail relating specifically to the UKPIL business unit. 4.2 Independent assurance 90 to a 0.6 per cent share of aggregate UK employment. This is in excess of one in eight Royal Mail provided the following information 4.2 About this report 92 jobs in the entire transportation and storage for the financial year 2012-13 for input into sector (of which Royal Mail UKPIL forms part). the study: • A £1.65 billion exchequer contribution through 1. Taxes less subsidies on products employer and employee NICs, income taxes, business rates and a range of indirect taxes 2. Taxes less subsidies on production: this paid directly and through UKPIL’s suppliers. consists of business rates and employers’ national insurance contributions (NICs) at a • A £2.2 billion spend on goods and services minimum provided through UKPIL’s external supply chain, a figure that rises to £2.5 billion once inter- 3. Compensation of employees business intermediate spend is counted. 4. Gross operating surplus and mixed income • A further £4.4 billion of GVA generated 5. Intermediate consumption (supply chain) in the wider economy through indirect and induced impacts, bringing the aggregate GVA 6. Employment: number of full-time contribution to £9.6 billion, or 0.7 per cent equivalent employees of UK GDP. To establish the size and economic impacts of • A further 83,949 FTE jobs indirectly Royal Mail’s UKPIL business unit, we adopted the supported by Royal Mail UKPIL in the wider framework provided by the ONS’ supply-and-use economy, taking the total jobs impact of UKPIL tables, the most detailed official record of how to 235,100 FTE posts. the industries of the economy interact with other industries, with consumers and with international • For every £1 of income from employment markets in producing the nation’s GDP and paid by UKPIL, an additional £0.60 of income national income. from employment is generated in the wider economy through indirect and induced impacts. In other words, for every average gross salary of £29,172 paid by Royal Mail UKPIL, a further £17,576 of gross salary is earned elsewhere in the economy.
84–85 4 About this report | 4.1 Economic and social impact study by Cebr
Making use of the supply-and-use framework The original UK Scoreboard included the global Part 2: A study to demonstrate Royal Mail’s impact to analyse a company like Royal Mail – which operations of UK-owned/listed companies and is only a subset of an industry at the level of foreign-owned companies which report in the on the UK economy through improved social cohesion disaggregation provided by this framework – is UK. Royal Mail requested that Cebr establish an one of the best means of ensuring consistency adapted version of this Scoreboard which takes (September, 2013) with the national accounting framework. The account of UK operations only. Because Royal Mail process of embedding a specific company, such UKPIL’s operations are UK-based, the adapted as Royal Mail, within this framework involves scoreboard would provide a more appropriate Introduction assigning that company a role within the supply- basis for ranking its economic contribution to the Social cohesion is an important concept Furthermore, Royal Mail employs staff in direct and-use tables. UK relative to other major companies. concerned with the goal of promoting equal proportion to the population of the areas they Having assigned a role for Royal Mail UKPIL The process of isolating the share of the value opportunities and reducing disparities and serve and this is consistent across all regions. within the supply-and-use framework, we had added generated from the global operations of divisions within a society, thereby strengthening Again, this means Royal Mail employment follows the foundation for establishing: these major companies that could be attributed social relations, interactions and ties. The closely the contours of the population so that where to UK operations involved an individual related concept of social inclusion, which is itself there are more people, Royal Mail offers • The economic size (or direct impact) of Royal review of each of their annual reports and a key requirement for achieving social cohesion more jobs. Mail’s UKPIL business unit, using standard consolidated accounts. This produced reasonable and a key focus of this report, is concerned with [1] The very nature of Royal Mail’s postal distribution measures of GVA – and, from this, the bridging these disparities in society in terms of approximations of the shares of their globally network means it has a presence right across percentage contribution to GDP – exchequer access to and opportunities for services, jobs generated value added that could be attributed to the country. This shows Royal Mail employment contributions and employment; and and infrastructure. their UK operations. is distributed far more widely than most other • The wider economic impact of Royal Mail’s Cebr has produced an adapted GVA scoreboard, In this report we examine two aspects of Royal similar-sized companies, thus providing jobs in UKPIL business unit on the UK economy, using showing the top 10 companies by value added Mail’s UK business that increase social inclusion areas where they are needed. In addition, Royal Leontief input-output modelling to estimate a from UK operations. In this, Royal Mail UKPIL and help effect social cohesion. These are: Mail roles require a wide range of skills, making full set of (matrix) multipliers capturing direct, the company’s jobs accessible to people of varying ranks 7th in the UK. 1. Royal Mail’s widespread presence across the indirect and induced impacts of UKPIL on education levels. output, GVA and employment. Disclaimer UK meaning that it provides jobs in locations where employment opportunities are most This can indicate that for those people at We use the multipliers in association with the Whilst every effort has been made to ensure the scarce. the bottom end of the employability scale, direct impacts data to produce estimates of the accuracy of the material in this document, neither jobs provided by Royal Mail may well help 2. The apprenticeship and training programmes total impacts of the industry through the supply Centre for Economics and Business Research them to avoid joining the ranks of the long- that Royal Mail provides for employees, which chain response (indirect impacts) and the boost to Ltd nor the report’s authors will be liable for term unemployed in deprived areas. The not only bridge educational disparities but can household incomes and expenditure in the wider any loss or damages incurred through the use unemployment rate in areas where Royal Mail be identified with real productivity gains. economy (induced impacts). of the report. employs staff is 13.8 per cent higher in England Royal Mail’s contribution to social compared to the average and 17.7 per cent Royal Mail UKPIL’s rank on Cebr’s Authorship and acknowledgements higher in Wales. GVA scoreboard for UK operations inclusion through widespread This report has been produced by Cebr, an The stability of Royal Mail’s business also benefits employment in the UK For eight years running up until 2009, the independent economics and business research these communities by providing a reliable source Department for Business, Innovation & Skills consultancy established in 1992. The study was Headline findings of employment. Royal Mail employs between 0.4 (BIS) produced a scoreboard of the top 800 UK led by Oliver Hogan, Cebr Head of Mircoeconomics and 0.5 per cent of the working population in and 750 European companies by value added. with research and analytical support from Cebr Royal Mail contributes to social inclusion mainly England, Wales, Scotland and Northern Ireland. Economists Daniel Solomon and Chitraj Channa. via the vital employment and earnings it brings This is no different to the concept of gross value On average across the UK, one in every 200 The views expressed herein are those of the to some of the UK’s poorer regions. Royal Mail added or GVA introduced earlier in this Executive people works for Royal Mail. But that figure authors only and are based upon independent provided 151,191 full-time equivalent jobs across Summary, and is the difference between a can be as high as 40 per cent – or two out of research by them. the UK during its last financial year. company’s sales (turnover or output) and the every five workers – in certain areas of the cost of bought-in goods and services This study has been commissioned by Royal Royal Mail employment is disproportionately country. For the 17 locations in England where (intermediate consumption). Mail Group Ltd and has utilised a combination weighted towards areas with high levels of Royal Mail employs more than 1,000 staff, the of data provided by Royal Mail Group Ltd and deprivation and where job opportunities are company employs on average 22.4 per cent of the those available in the public domain through fewer. This means Royal Mail jobs tend to ‘cluster’ workforce in those locations. ONS, Nomis etc. where they are most needed, directly answering The report does not necessarily reflect the views the need in areas of job scarcity. Specifically, 40 of Royal Mail Group Ltd. per cent of Royal Mail employees in England work in areas in the bottom 30 per cent of English wards in terms of deprivation. In Scotland 37 per cent of employment locations are within the 30 per cent most deprived wards. This number is even higher in Wales with 59 per cent of staff working in wards in the bottom 30 per cent of [1] GVA or gross value added is a measure of the net value of goods and services which, in the national Welsh wards. accounts, is the value of industrial output less intermediate consumption. That is, the value of what is produced less the value of the intermediate goods and services used as inputs to produce it. GVA is also commonly known as income from production and is distributed in three directions – to employees, to shareholders and to government. GVA is linked as a measurement to GDP – both being a measure of economic output. That relationship is (GVA + Taxes on products – Subsidies on products = GDP). Because taxes and subsidies on individual product categories are only available at the whole economy level, GVA tends to be used for measuring things like gross regional domestic product and other measures of economic output of entities that are smaller than the whole economy, such as Royal Mail’s UKPIL business unit.
[2] The employee database provided by Royal Mail includes a postcode location for each employee. This allowed us to apportion these data to the same disaggregated geographies used in the census and indices of deprivation datasets. 86–87 4 About this report | 4.1 Economic and social impact study by Cebr
Methodology and assumptions Methodology and assumptions
To analyse the contribution of Royal Mail to The combination of on-the-job training of To estimate the productivity impacts of Royal Once the gross productivity gains and total costs social inclusion in the UK through employment, hundreds of apprentices provides a boost in Mail’s apprenticeship schemes, we follow the have been computed for each apprenticeship we relate Royal Mail’s employee data to census wages, particularly for young workers. The established methodology from Hasluck et al scheme, we proceed to calculating the net and deprivation data for the area in which the corresponding lift in productivity helps the (2008)[2} in their paper “The Net Benefit to productivity benefits per apprentice. Emulating employee is located.[2] The postcode location of general economy, whether they stay with Royal Employer Investment in Apprenticeship Training”. the procedure of Hasluck et al (2008), we apply each Royal Mail employee was matched to its Mail or depart and carry their enhanced skills into This was also utilised in the City and Guilds 2012 the gross productivity gains to total costs over a lower super output area (census zone), electoral the broader workforce. Higher wages also support report “The Economic Value of Apprenticeships” five-year timeframe. This allows for a sufficiently ward and district. spending on consumer goods and services in the and by Cebr during a recent study for the National long time for the costs to be recouped while wider economy. Both of these effects provide a Apprenticeship Service. avoiding the need to develop assumptions about We then calculated the average deprivation rank, welcome boost to GDP. the potential for employees to be promoted and the unemployment rate and the employment The Hasluck et al approach is to compare the thus move to a higher salary. Because we use rate for each ward where Royal Mail staff are Royal Mail has two active apprenticeship wages and salaries of completed apprentices to 2012 ASHE data and, due to the fact that some employed. The ward deprivation rank was schemes: Engineering and Fleet Maintenance. unskilled experienced workers in order to identify schemes do not complete in every year, we deflate converted into percentiles by dividing the rank An additional two schemes, Core and Advanced, the marginal productivity gain to the employer all productivity gains to 2012 prices. This is by the total number of wards in each country. operated for the period 2009 to 2011 and are from funding the apprenticeship scheme. achieved using Cebr’s forecasts for real earnings Combining this data facilitated the estimation no longer active. Engineering apprentices train To make use of Hasluck et al’s estimated growth over the relevant time period. of an overall deprivation and employment for three years to achieve a BTEC qualification productivity gains, we identify an experienced deprivation percentile for each ward where Royal in engineering or a NVQ Level 3 engineering person’s wage for the postal and courier services Disclaimer Mail employees work. qualification. Fleet maintenance apprentices sector (Standard Industry Classification 2007, train for four years to achieve the IMI NVQ Level Whilst every effort has been made to ensure the industry 53). For this purpose, we use the Royal Mail’s contribution through 3 qualification in motor vehicle technology. The accuracy of the material in this document, neither Annual Survey of Hours and Earnings (ASHE), Core and Advanced schemes were designed for Centre for Economics and Business Research investment in human capital which provides a rich source of data on average new postmen and postwomen starters. The Core Ltd nor the report’s authors will be liable for earnings in sectors and subsectors of the scheme provided the Mail Services qualification any loss or damages incurred through the use Headline findings UK economy. and lasted for 12 months. The Advanced scheme of the report. Royal Mail’s commitment to staff training brings lasted for 18 months and provided participants Combining median wages by age group at the Authorship and acknowledgements millions of pounds in gains to UK productivity. with an NVQ Level 3 in management and an ILM UK level and median wages within the postal and Since 2006, the company’s apprenticeship Technical Certificate in First Line Management. courier services sector, we construct the median This report has been produced by Cebr, an schemes alone, training postmen and postwomen, wage of postal sector workers with approximately Engineering and Fleet Maintenance apprentices independent economics and business research engineers and mechanics, is worth £21.2 million 20 years’ experience. Median wages of full-time can expect a 78 per cent wage premium over consultancy established in 1992. The study to UK productivity based on a conservative workers in the UK generally peak approximately the average full-time employee of the same age was led by Oliver Hogan, Cebr Head of estimate.[1] They also result in a wage premium 20 to 30 years after entry into the workforce. (18 to 21), due to the longer duration and more Microeconomics, with analytical and research typically between 14.3 and 15.1 per cent for This suggests that the productivity of the median technical nature of these programmes. Similarly, support from Cebr Senior Economist Colm vehicle maintenance and engineer apprentices. worker also peaks at this point in their career and Royal Mail apprentices who completed the Core or Sheehy. The views expressed herein are those of that their corresponding salary is appropriate for This hike compares favourably with the 19.1 per Advanced schemes can expect a wage premium the authors only and are based upon independent use as the representative wage of an experienced cent average salary premium typically yielded of 38 per cent. research by them. worker. Implicit also is an assumption that by a university degree for new graduates. The This study has been commissioned by Royal schemes boost the productivity of ‘core’ workers These productivity gains are a direct contribution productivity gains for workers in the postal and to the UK economy and help reduce the courier services sector follow the same trajectory Mail Group Ltd and has utilised a combination of such as postmen and postwomen by 20 per cent proprietary data supplied by Royal Mail as well as and engineers and fleet maintenance workers productivity gap between the UK and other as the average for the UK as a whole, and that developed countries. The benefits also remain this applies to all four apprentice scheme data available in the public domain through ONS by 50 per cent. Contrary to the situation facing and related sources. graduates, however, where they enter the with trainees throughout their careers, enhancing career paths. their earning power and performance. workforce laden with student debts, Royal Mail The gross productivity gains, resulting from The report does not necessarily reflect the views apprentices are paid while training and, therefore, apprenticeship completion, are stated in terms of of Royal Mail Group Ltd. emerge better off on completion. experienced workers’ wages. We then apply the productivity gain (as a percentage of experienced worker wages) to the estimated experienced postal services sector median wage. Finally, we analyse data provided by Royal Mail on the direct cost of each apprenticeship and estimate the indirect salary cost of productive time lost due to training.
[1] For apprentices employed between 2006 and 2013. Net productivity gain over the five years post-completion.
[2] Hasluck et al, 2008, ‘The Net Benefit to Employer Investment in Apprenticeship Training’, Institute for Employment Research, University of Warwick 88–89 4 About this report | 4.2 Independent assurance
We did not visit any logistics sites as part of our Observations and areas for site visit programme. Our data testing at sites improvement 4.2 Independent assurance was limited to the environmental data. Our observations and areas for improvement Our conclusions will be raised in a report to RMG management. Selected observations are provided below. These 6. Interviewed staff responsible for data Based on the scope of our review our conclusions To the management of Royal Mail observations do not affect our conclusions on the reporting and carried out the following are outlined below: Group Limited Report set out above. activities to review selected Customer, Inclusivity Royal Mail Group Limited’s Corporate People, Community, Environment and • RMG has come under increased scrutiny and Responsibility Report 2012-13 (the Report) has Transparency data (listed below): Has RMG been engaging with stakeholders across various stakeholders have raised concerns over been prepared by the management of Royal Mail the business to develop its response to corporate the impacts of privatisation. The Report includes i. Reviewed the guidance on data reporting, key Group Limited (RMG), who are responsible for responsibility issues? a new section on privatisation that describes processes and quality assurance performed. RMG’s ongoing regulatory commitments to the collection and presentation of information • We are not aware of any key stakeholder groups Universal Service in the private sector and within it. Our responsibility, in accordance with ii. Selected a sample of data points from across that have been excluded from dialogue. RMG management’s instructions, is to carry out the business and seek documentary evidence how it is managing any likely impacts on a limited assurance engagement on the Report. to support the data. • We are not aware of any matters that would customers, employees and communities. Future We do not accept or assume any responsibility lead us to conclude that RMG has not applied reports should continue to address the issue of iii. Conducted a walk-through of data reported for any other purpose or to any other person or the inclusivity principle in developing its privatisation and how RMG is engaging with key from a sample of sites to test consolidation. organisation. Any reliance any such third party response to corporate responsibility issues. stakeholders to address their concerns. iv. Reviewed any explanations provided for may place on the Report is entirely at its own risk. Materiality • RMG maintains a wide programme of significant variances. stakeholder engagement. This takes place both What we did to form our conclusions Has RMG provided a balanced representation of v. Reviewed the Report for the appropriate during the course of running the business and key topics concerning the corporate responsibility Our assurance engagement has been planned and presentation of the data including limitations specifically in relation to corporate responsibility performance of RMG? performed in accordance with ISAE3000[1] and and assumptions. reporting. Compared to last year the Report has to meet the requirements of a Type 2 assurance • We are not aware of any key topics concerning more clearly identified RMG’s key stakeholders 7. Reviewed information or explanation engagement as defined by AA1000AS (2008).[2] the corporate responsibility performance and its means of engaging with them. about selected data, statements and The AA1000AS (2008) assurance principles of of RMG which have been excluded from assertions regarding the corporate • RMG engage third party contractors to collate Inclusivity, Materiality and Responsiveness have the Report. utility invoice data, analyse consumption and been used as criteria against which to evaluate responsibility performance of RMG. • Nothing has come to our attention that causes produce environmental footprint reports. During the Report. Level of assurance us to believe that RMG management has not the course of our data testing procedures, we In order to form our conclusions we undertook applied its processes for determining material identified errors in the calculation of certain Our evidence gathering procedures were designed the steps outlined below: issues to be included in the Report. footprint reports, which were subsequently to obtain a limited level of assurance, as defined addressed prior to publication of the Report. In 1. Interviewed a selection of RMG in ISAE3000. The extent of evidence gathering Responsiveness future years RMG should engage and challenge management and reviewed group level procedures performed is less than that of a Has RMG responded to stakeholder concerns? the third party contractors regarding the documents to understand the progress made reasonable assurance engagement (such as a accuracy and completeness of the carbon and in the area of corporate responsibility during financial audit) and therefore a lower level of • We are not aware of any matters that would water data. the reporting period and test the coverage of assurance is provided. lead us to conclude that RMG has not applied topics within the Report. the responsiveness principle in considering the Our independence The limitations of our review matters to be reported. 2. Conducted two site visits to a mail centre As auditors to RMG, Ernst & Young are required Our review of data processes only included the and a delivery office to understand how Completeness and accuracy of to comply with the requirements set out in the following selected data sets: corporate responsibility is being managed at performance information Auditing Practices Board’s Ethical Standards for site level. • Customer – mean customer satisfaction score, • We are not aware of any material reporting Auditors. Ernst & Young’s independence policies 3. Reviewed the RMG approach to stakeholder number of customer complaints. units that have been excluded from the apply to the firm, partners and professional staff. These policies prohibit any financial interests in engagement through interviews with • People – total number of fatalities, lost time group wide data relating to corporate our clients that would or might be seen to impair employees with responsibility for managing accident frequency rate, employee engagement responsibility data. independence. Each year, partners and staff are engagement activities at group and site score, customer focus score. levels, and reviewed selected associated • Nothing has come to our attention that causes required to confirm their compliance with the documentation. • Community investment – total amount us to believe that the data relating to the above firm’s policies. contributed by Royal Mail (£), total amount topics has not been collated properly from We confirm annually to RMG whether there 4. Reviewed the RMG process for determining raised by employees (£). group-wide systems. material issues to be included within have been any events including the provision the Report. • Environment – scope 1 and 2 carbon emissions • We are not aware of any errors that would of prohibited services that could impair our (tonnes of carbon dioxide equivalent), direct materially affect the data as presented in independence or objectivity. There were no such 5. Reviewed the coverage of key issues within energy consumption by primary energy source the Report. events or services in 2013. the Report against the key issues raised by (GJ), total waste to landfill (tonnes), total waste How plausible are the statements and claims the RMG stakeholder engagement activities, recycled (tonnes), total water consumption (m3). Our assurance team external media reports and the corporate within the Report? responsibility reports of RMG’s peers, as well • Transparency/mail security – number • We have reviewed information or explanation Our assurance team has been drawn from our as the topics discussed by the RMG Board and of prosecutions, number of full criminal on selected statements regarding RMG’s global Cleantech and Sustainability Services Communications Action Group. investigations into internal crime raised, corporate responsibility activities presented Practice, which undertakes engagements similar number of full criminal investigations into in the Report and we are not aware of any to this with a number of significant UK and external crime raised. misstatements in the assertions made. international businesses. Ernst & Young LLP, London [1] International Federation of the Accountants’ International Standard for Assurance 14 November 2013 Engagements Other Than Audits or Reviews of Historical Financial Information (ISAE3000).
[2] The 2008 edition of AccountAbility’s AA1000 assurance standard. 90–91 4 About this report | 4.3 About this report
4.3 About this report
Scope
This is our eleventh annual Royal Mail Group Ltd We continue to use the principles of the Global Corporate Responsibility Report. This Report Reporting Initiative (GRI) to guide our reporting. sits alongside the Royal Mail Group Ltd Annual Our GRI Index has been checked by Corporate Report and Financial Statements 2012-13 and Citizenship. Corporate Citizenship confirms that is our primary source for non-financial reporting. in their view the Index meets the requirement It covers our UK operations and includes of B+ as set out in the GRI G3.1 Guidelines. performance data for the financial year 2012–13. We have printed only a limited number of hard copies of this Report, in order to minimise waste. On 15 October 2013, upon flotation on the London Stock Exchange, Royal Mail plc became External ratings and standards the ultimate parent company of Royal Mail Group Ltd. Because of privatisation, this report We assess our relative corporate responsibility also covers important developments that have performance via external ratings and standards occurred beyond the financial year. Where that in order to benchmark our performance and is the case, we make it explicit. Our last report challenge ourselves to improve. Last year, we was published in January 2013 and covered the achieved Business in the Community’s Platinum financial year 2011–12. rating in the BITC Index for the first time. This year we retained this level with an Royal Mail Group Ltd’s corporate responsibility improved score. strategy encompasses all Royal Mail Group Ltd business units, including Parcelforce Worldwide. We also completed RobecoSAM’s Corporate Sustainability Assessment for the second time As in our previous report, this report includes in 2013. Based on the methodology used to data from all UK operations and associate calculate the Dow Jones Sustainability Index companies where we have a controlling interest. (DJSI), our overall score of 80 per cent ranks On 1 April 2012, Royal Mail Group and Post Royal Mail among the DJSI World and DJSI Office Ltd became separate companies. All data Europe member scores for the Transportation excludes Post Office Ltd and relates to the Royal and Transportation Infrastructure industry. Mail UK operations. Our UK operation accounted for 92 per cent of our full time equivalent For more on Royal Mail: employees in 2012–13 and 83 per cent of Royal Mail Group revenue. Our primary focus is therefore on the 100 Victoria Embankment UK. We will, however, be increasing the coverage London of GLS from 2013-14. EC4V 0HQ Independent assurance [email protected]
This report has been formally assured, as have all previous reports. This report has been assured by Ernst & Young. We appreciate this independent verification of and opinion on our reported activity. Please refer to the ‘Independent assurance statement’ on page 90 for more information.
We are a signatory to the United Nations Global Compact and are working to meet its principles. This Report meets our United Nations Global Compact Communication on Progress requirements. Royal Mail, the Cruciform and the Parcelforce Worldwide logo are registered trademarks, of Royal Mail Group Limited. Corporate Responsibility Report 2012-13 © Royal Mail Group Limited 2013. All rights reserved.