Royal Mail Group Corporate Responsibility Report 2011-12

Our responsibility

to our ccollolleaeagues,gues, custcustomeromerss aannd cd commuommunnitiesities Contents Contents

Fororeewowordrd 44

AAboutbout R Rooyyaal Mail Maill 6

Our business strstraategyegy 1010

Our CRCR strstraateegygy 12

CR governa governance 18

TTrraansparnsparencencyy 20

OurOur custcustomomerers 22

Our peoplpeoplee 28

OurOur ccoommummunnitiesities 38

OurOur eennvirvironmenonmentt 46

GRI Index 56

IndependentIndependent assurannccee statstatemenementt 64

This is our tenth Royal Mail Group Corporate Responsibility Report. It covers our UK operations and includes performance data for the financial year 2011-12. Given the significant improvements that we have made to our corporate responsibility strategy, the Report also contains reference to events that have taken place outside of the reporting period. Where that is the case, we make it explicit. Our last report was published in January 2012 and covered the financial year 2010-11.

On 1 April 2012, Royal Mail Group and Post Office Limited became sister companies. We have sought to separate out as much Post Office Limited data as possible in this Report. However, as Post Office Limited was part of Royal Mail Group up until the end of the financial year 2011-12, financial data includes Post Office Limited. In addition, the environmental data we have disclosed includes our Post Office Limited footprint. Our UK operations, including Post Office Limited, accounted for over 90 per cent of our employee base and 84 per cent of our revenues in 2011-12. All other data excludes Post Office Limited.

Royal Mail Group Royal Mail Group Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 Foreword Foreword Foreword by Moya Greene, our CEO

Sound footinootingg The BITC Index is one good way of assessing the strength of our Our direct economic impact is supported by our active community sustainability programme. I’m pleased to say that we achieved investment programme. During 2011-12, Royal Mail contributed I amam pleased to say thatthat Royal MaMailil has made good progrprogress in Platinum, the highest ranking, for the first time in 2012, scoring 96 £10.4 million to charities, good causes and schemes for our journey towards sustainedsustained profitabilitofitabilityy. Our new busbusinesiness per cent; up from a Silver ranking (87 per cent) in 2010. disadvantaged groups. In addition, our colleagues raised £3 million strateegygy is delivering. Our Group operaoperating profitofit1 marmargginin for many good causes across the country. In fact, the payroll has improved to 2.2 per cent from 0.4 per cent last yearyear. The Our new Corporate Balanced Scorecard, launched in 2011, is generosity of my colleagues has earned us a Guinness World Record. businessbusiness is cash positive for the first time in four yearyears. fundamental to our achieving sustained profitability and safeguarding Since 1989 we have donated more than £45 million to 975 charities the Universal Service. The Scorecard supports the implementation and good causes across the UK. The past eighteen months have marked an important turnaround and execution of our business and CR strategies as it is linked to for the Group. One of the key developments has been the successful managers’ remuneration right across the business. It consists of Among the highlights of the past year was the creation of a new passage through Parliament of the Postal Services Act 2011, which four quadrants which each have equal weighting: People, Customer, Charity of the Year programme. This follows a four-year association received Royal Assent in June 2011. The Act sets a framework within Performance and Financial. These four areas are integral to achieving with children’s charity Barnardo’s, during which time we raised which the Group could secure external capital. our business and CR strategies. £2.6 million. For the first time, Royal Mail has committed to matching funds raised by colleagues, penny for penny, up to £1 million a year Another development was the Pension Solution. On 1 April 2012, Just as we are improving the quality of our financial reporting, we for each of the two years of the Charity of the Year partnership. just after the year end, almost all of the pension liabilities and are seeking to strengthen our sustainability reporting in our annual Our people voted for Prostate Cancer UK, from a shortlist of three, pension assets of the Royal Mail Pension Plan were transferred to As the sole provider of Corporate Responsibility Report. This year, we are reporting against as our first charity partner under the revamped programme. As HM Government. We are grateful to the Secretary of State and his the Global Reporting Initiative (GRI) Index for the first time. Under the part of our ‘everyone’s a winner’ approach, however, we are also colleagues at the Department for Business, Innovation and Skills for the Universal Service GRI, we have achieved a B+ rating. We will now seek to build on this supporting Alzheimer’s Society and Whizz-Kidz as part of this their commitment to delivering this milestone. in the UK, Royal Mail performance in future years. programme, which runs until autumn 2014. Finally, on 27 March 2012, again just after the year end, we were is proud to connect pleased with the introduction of a new regulatory framework. Our contributionontribution to the communitommunity OutlOutlookook Our new regulator, Ofcom, recognised that the prior framework Royal Mail has a long heritage of contributing to the communities We are in a stronger financial position, but much remains to be done. customers, companies was not appropriate and that there was a very real risk to the that we serve. We do this primarily through the Universal Service – Our margin is improving, albeit from a very low base. Our strategies sustainability of the Universal Service. The new regulatory approach connecting millions of customers, businesses, organisations and and initiatives are geared towards delivering, in time, a more and communities. We provides us with increased commercial freedom, to better position communities, including those in the most remote rural areas. commercial margin as compared to other successful postal operators. us to earn a reasonable return on the services we deliver. This new deliver six days a week approach underpins the regulator’s primary duty and commitment to Our economic contribution to the UK is significant. In 2012, Royal Very few companies face the prospect of continued change on the safeguarding the Universal Service in the UK. Mail commissioned the Centre for Economics and Business Research scale that we do. I am very grateful for the continued help and to over 29 million (CEBR) to quantify our impact on the economy. The study found that support we have received from HM Government. I also thank our Our strattegicegic apapprproachoach we make a major contribution. Our core business ranks as the eighth union colleagues for their ongoing engagement and constructive addresses. We make largest in the UK in terms of our economic footprint. We contribute challenge to ensure our success. And, most of all, I would like to The objective at the heart of our business strategy and our 0.4 per cent to the UK’s total Gross Domestic Product (GDP). Including thank all our colleagues across the Group. I know what we are asking commerce happen. corporate responsibility strategy is the same – to ensure a sound and our wider economic impacts, that figure rises to 0.7 per cent of GDP, of them is difficult. I am grateful for their continued dedication, hard sustainable Universal Service for the benefit of everyone in the UK. amounting to an annual economic contribution of £9.4 billion. work and commitment. They continue to be the main driver of our To monitor the successful delivery of our business strategy, we have Moya Greene success as we look towards a secure and profitable future. launched a new Strategic Framework. The Framework consists of 24 Chief Executive Officer We directly support around 153,000 full-time equivalent (FTE) jobs in blocks geared towards strengthening our commercial future and, as the UK. In addition, a further 83,000 FTE jobs are supported through Royal Mail is not just any company. It occupies a privileged position in a result, the positive contribution we make to the UK’s economy and our core business in the wider economy, taking the total jobs impact UK society. And with privilege comes responsibility – to our colleagues, society. to around 237,000 full-time posts – or 1 per cent of UK employment. customers and communities.. The study also found that for every £1 paid by Royal Mail in wages, Corporate responsibility (CR) is one of our strategic imperatives. an additional 57p is generated elsewhere in the economy. Our objective is to be independently rated as one of the most responsible companies in the UK, as measured by the preeminent We are building on our contribution as an employer by supporting Business in the Community (BITC) Corporate Responsibility Index. the Government’s campaign for vocational apprenticeships. We have In addition, many of the other Strategic Framework blocks contain several new apprentice schemes that aim to get marginalised young corporate responsibility objectives, including Customer Interaction, people into the workplace and to launch their careers. We have also People Engagement, Reputation Management etc. MoyaMoya Greene introduced, for the first time, the Duke of Edinburgh Gold Award scheme for apprentices on our Engineering scheme.

1 Financial data included in this Report includes Post Office Limited.

Royal Mail Group Royal Mail Group 04 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 05 About Royal Mail About Royal Mail About Royal Mail

As the sole provider of the Universal Service in the UK, Royal Mail reaches everyone.

Who we are GLS delivers high-quality parcel and express Transforming Royal Mail Our future Group structure services as well as value-added logistics As the sole provider of the Universal We are in the midst of one of the largest The Postal Services Act 2011 set out solutions throughout Europe. GLS is one Service in the UK, Royal Mail Group transformation programmes in the UK, as the steps Royal Mail must take to secure Royal Mail Holdings plc of the biggest ground-based parcel service reaches everyone. We deliver six days a we adapt a network traditionally focused external investment. We have made good providers in Europe today. week, to over 29 million addresses across on letters, to one which handles more and progress restoring the Group to financial the UK, at affordable and competitive more parcels. Our strategy is to create a stability, obtained significant deregulation and Royal Mail Group Ltd and Post Office Limited prices. more customer-focused company, run secured European Commission approval for became sister companies just after the on commercial lines, where we convert the transfer of almost all of the Royal Mail Royal Mail Group Ltd2 Post Office Limited reporting date, on 1 April 2012. In January Royal Mail is a key component of the UK’s increases in parcel volumes into profitable Pension Plan’s pension liabilities and pension 2012, both companies signed a major economic and social infrastructure, providing growth and manage structural decline in the assets to HM Government. commercial agreement, which provides services to private individuals, companies and letters business. During this transformation, continuity and a close working relationship communities. Our postmen and women are we are committed to delivering to high Preparations are now under way for the 2 over the long term. Royal Mail Investments Limited Royal Mail Estates Limited an important part of their local communities. Quality of Service standards for our sale of Royal Mail Group. Obtaining external As a business, we make a major contribution customers across the UK. capital is a key part of the transformation Where we want to be process as we become a more parcels- to the economy, adding 0.7 per cent to the General Logistics Systems B.V. UK’s total GDP.† Where we are today. We are one of the Transformation means: focused business and make the investment UK’s most trusted brands. We connect • becoming a more customer-focused in technology to do so. The structure and the Our businesses customers and communities and make company. timing of the transaction is a matter for the Government. All options are being considered Royal Mail has a diversified business model commerce happen. A new regulatory framework Building a commercial future • changing our business to become more of and there can be no certainty about the – letters, parcels and data. The Group is a parcels business as online retailing keeps On 27 March 2012, Ofcom introduced a new After years of regulation that kept Royal Mail Why we are changing. The UK postal outcome. organised into two main businesses: UK growing. regulatory framework. Ofcom recognised that tariffs artificially low, we took the difficult but Parcels, International and Letters (UKPIL) services market has changed dramatically. the previous framework was not appropriate, necessary steps to increase our prices. The • successfully managing the decline in letters. and General Logistics Systems (GLS). We are transforming our business to succeed Recent milestones that price controls had failed and that there increase is helping us to earn a reasonable in one of the most liberalised and competitive • taking every opportunity to become a was a very real risk to the sustainability of rate of return for the work that we do. It is 1. Our pension solution UKPIL processes and delivers letters and markets in the EU. successful and profitable business. the Universal Service. also enabling us to accelerate modernisation, parcels in line with its Universal Service 2. A new regulatory framework ensure our commercial future and drive We are proud to deliver the Universal After the reporting date, in October 2012, We are now able to compete more effectively. growth through investment in IT and Obligation. It is also the leading provider of 3. Building a commercial future collection and delivery services for express Service. But, it does require a high fixed-cost we confirmed a £75 million, four-year The new regulatory approach provides us development of the products and services parcels through Parcelforce Worldwide. network. The UK postal services market has expansion programme in Royal Mail’s with increased commercial freedoms, to customers most want. However, we recognise changed dramatically in recent years. Our UK express parcels business, Parcelforce Our pension solution better position us to earn a reasonable how hard any increase is for households strategy aims to tackle the key challenges Worldwide. The expansion is expected to Our historic pension deficit was a significant rate of return on the services we deliver. and businesses at a time when economic facing Royal Mail to build a sustainable, create approximately 1,000 new UK jobs. It financial burden. After the reporting date, on However, there are still some challenges conditions are so difficult. For Christmas diversified business, secure the future of the will enable UKPIL to increase the number of 1 April 2012, following EU State Aid approval, to be addressed. We continue to work with 2012, we offered stamps to people in low- Universal Service and attract external capital. express parcels it is able to handle by around we transferred almost all of the historic Ofcom to ensure Royal Mail can compete on income households at 2011-12 prices (see 25 per cent each year, in a market estimated pension liabilities and pension assets of the a level playing field. page 25 for more information). to be worth £5.8 billion annually. Pension Plan to HM Government. This will 2 improve our future cash generation as we The UK Parcels, International and Letters (UKPIL) † business unit is not a separate legal entity and is According to research undertaken by the complete our modernisation programme. Centre for Economics and Business Research. included within Royal Mail Group Ltd and Royal Mail Estates Limited.

Royal Mail Group Royal Mail Group 06 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 07 About Royal Mail About Royal Mail

Our financialncial performaormanncce3 Full year The GrouGroupp’s ffinainancncialial perfperformance continues toto streengthen.ngthen. All our main To 27 March 2011 To 25 March 2012 businesbusinessesses are prprofitablofitable.e. Business unit performance £m £m

KKeeyy financialncial highlightshighlights in the yearyear Group external revenue 9,156 9,532 ended 25 March 2012 Operating profit after modernisation costs 39 211 • GrG rooupup operaoperatintingg pprrofitofit afaftteer modernisamodernisationtion costs increased from ££3939 millionmillion to £211 Free cash inflow/(outflow) (213) 234 millionion.. • UKPIL returned to ooperperaatintingg prprofitofit aftteerr modernisation costs of £2£233 millionmillion • Ext ernal revenues in UKPIL, our core UK OutlOutloookok followinollowingg a lossloss of £120 million in 2011. business, increased from ££6.96.9 billionbillion to WhilWhile our financial health has imprimproved £7.2 bill billiion.on. substasubstantiantially over the last 1188 months, there • The Grououpp’’s overall ooperperaatintingg profitprofit margginin is still more toto do. AAccccommodating increasing after modernisation costs (befo(beforree other • UKPIL ’s domestic parcel volumes were up parparccel traafficffic is one ooff the kekeyy elementselements ofof ooperperating exceptionaeptional items) increased fromfrom 6 per cent during the yearyear. TrTraditionaaditionall leletter ourour progprogrraamme. It includes becominomingg a 0.4 per cent in the previous yyearear to 2.2 per vvololuumes declined 6 per cent. much more customer-focused company and cent. The margingin remains low cocomparmpareded to • UKPIL parcels revenue increased 10 per genergeneraattinging prprofitable grgrowowthth across a rarangenge mamanny otherother major postal operaoperators. ccentent to £2.6 billion, driven by strong ofof new anandd existinexistingg pprroducts.oducts. It is abouaboutt growowthth in online reretailtailining.g. ReRevenues atat RRooyyaall Mail being run along commercial lines, ExtExternal revenue and volvoluummeses GLS, our continental Euroopeapeann parcparcels aandnd investing in new, vital technologyechnology as we business, increased by 5 per cent to • GrG rooupup externaexternal revenue incrincreasedeased 4 per become a more parparccels-driven business. £1£1.6.6 billionbillion.. cent to £9.5 billion after two successivesive Hence our need for external cappitaital,l, which yyearears of declinedecline.. is central to our transformation pprroogrgraammemme.. So too is the succceessful complompletionetion of our modernisation pprroogrgramme as we become a more efficient and effective orgaganisation in evereverytythinghing we do.

3 FFinancialinancial data includes Post Office Limited.

Royal Mail Group Royal Mail Group 08 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 09 Our business strategy Our business strategy Our business strategy

Case Our overarching goal is simple – to become the bestbest study: Growing our parcel delivery anandd markmarketing mail business in the UK. business

Royal Mail Group is more than just a UK-focused, letter delivery business. We are leveraging our capacity, reach and expertise to grow OverOvervviewiew BBeeinging brilliabrillianntt at the basbasicsics BBuuildingilding a commercialcial future Driving prproofitfitable grgroowwthth ThrThree popointint plan profitable revenue streams in parcel delivery, among other services. We are implementing a fundamental change Alongside modernising our operations comes The third and final part of our business RRooyyalal Mail has a clearearcl tr traansfnsformaormationtion TherTheree are three main partsparts to our pplalan.n. The Growing our parcels business is a in the way we work across our operations. the need to build a commercial future. strategy is to create profitable revenue strstraateegygy in placplace. It is deliverideliveringng results.results. firfirst two need to happppenen atat the same time key part of our strategy as we seek Our modernisation programme is one of Ofcom’s new regulatory approach, announced growth in marketing mail and parcels to WWee araree addressing the structucturural to achieve the thirdthird one – drive pprrofitablofitablee to attract external capital. decline in the traditraditionaltional leletters markmarket the largest of its kind in the UK. The aim of just after the end of the financial year, is counter the decline in the traditional letters grgroowwtth.h. the process is to make our operations more a key step. The new regulatory approach market. Royal Mail Group currently has a by improving efficiency acroacrossss our Our parcels business has three efficient: increasing productivity, improving provides us with increased commercial £4.2 billion revenue-generating parcels operations and adapting our network (1) BBee brillia brilliantnt a att the basics basics networks in the UK: Royal Mail’s the service our customers receive and freedoms. However, there are still some business that includes UKPIL’s Royal Mail ttoo acccommodaommodatteeac the ever-increver-increasingeasing UK parcels operation, Parcelforce reducing the cost of the Universal Service. challenges to be addressed. We will work UK network, Parcelforce Worldwide and SStatay saf safee atta alla ll times. This is ouThis ourr nunumbermber of par parccels beingbeinels g sent. Worldwide and Royal Mail Specialist Modernising means improving every aspect with the Government and Ofcom to ensure GLS. Parcels made up 48 per cent of Group ttop prioritop priority. Services. Internationally, it has Royal of our operation: collections, processing, Royal Mail can operate on a level playing revenue across the year. Our UKPIL parcels Our businesbusiness strstraateegygy has three parts:parts: Hit our qquuaalilitty tartarggets. Mail International (which uses Royal sorting and delivery. It also means reducing field. We are also focused on the significant business grew its revenue by 10 per cent, FFiirrsstlytly, toto be brilliant at the basics. Mail’s UK parcels network) and our the hours it takes to process and deliver the benefits that the new regulatory framework while GLS’s underlying revenue grew by We need to become more efficient and Modernise our oper operaations.tions. European parcels operator, General mail. has provided. 4 per cent.. customer focused. This means completing OffOfferer the right pr products aoducts att the right pric price in aae Logistics Systems (GLS). the automation of our core letters network, Managing the changing mail is a key The Postal Services Act, passed in June Growing our parcels business is a key chachanging anging and cnd coompetitivempetitive markket.et.mar reducing the hours taken to complete These businesses handled 1.2 part of the modernisation programme. 2011, paved the way for the Post Office strategic priority for us. By 2016, online delivery and getting it right first time, every Work ttooggetherether usinusingg the World ClClass Mail billion parcels over the last 12 Parcels require more space to process and and the Royal Mail Group to become sister retailing is expected to account for 12 per time. programme to make improvements andnd months. This represented a 6 per transport, and demand more customer companies in April 2012. The two companies cent of the UK’s overall retail spend. In drivedrive up sasaffetety, customer service, quality andand cent increase in UKPIL domestic interaction on delivery. We are issuing our have signed a major commercial agreement, addition, UK consumers will buy products Secondly., bubuildingilding a commercial future prproductivitoductivityy.. volumes and a 3 per cent increase postmen and women with handheld Postal which provides continuity and a close online from overseas providers, benefiting puts the onus on us to use the new in GLS volumes. Total parcel Digital Assistants to provide track and trace working relationship over the long term. both our parcels and international regulatory framework to earn a reasonable (2) Build a commercommercial future revenues for the year stood at facilities as part of our service offering. As The mutual commercial success of both businesses. Royal Mail Group is well placed return for the products and services we offer. approximately £4.2 billion, with GLS at September 2012, more than 47,000 of companies is best served by Royal Mail and to benefit from these growth trends. FFix ourix our fina financnces aes and and atttrtractact priv privaattee Last year, 80 per cent of our mail revenues generating £1.6 billion. these devices have been deployed during the the Post Office working closely together for Our parcels businesses are best-in-class cappitaital. were subject to direct revenue control. Today, modernisation programme so far. We are the benefit of customers. For our revised operators in their respective markets. this figure has fallen to less than 10 per cent. Build struild strong rong reelalationshipstionships with our unionsu nions so Looking forward, we need to expecting operational front-line productivity Group structure, see the diagram on page 7. togetogetherher we work to acachievehieve our pplalann. continue to improve customer improvements of around 2 to 3 per cent We are also developing our marketing mail Thirdly, we are continuing to respond to experience and increase cost this year as we continue our modernisation business, which contributed £1.1 billion in Build on ouruild our strongstr brong braand and reputaeputation.tion.rnd changing customer needs, building the efficiency across all our parcel programme. revenues in 2011-12. The new business, business outside our traditional revenue businesses. Our strategy is to MarketReach, was launched in July 2012. (3) Drive profitable growthth streams to drdriveive profitable growth. We areare maximise profitable revenue growth Utilising our own assets, and with the developing our parcels, marketing mail and by utilising our multi-network support of several partners, it offers a Grow our parcparcels businesses and data propositions to contribute to the future parcels platform in the most full service solution for businesses, large prprovide premieremierprovide leettttererl ser servicvicees.s. success of a financially stable, diversified competitive markets. We are also and small, covering creative development, Royal Mail. GrGrooww our revenues by selling new and continuing to focus on our presence production, distribution and customer data imprimproveovedd markmarketing maimaill servicserviceses.. in the business-to-business market, management for advertising mail. LauLaunchnch new serservicvices fes foorr busines businesses ases andnd which is closely linked to GDP cconsuonsumermerss.. growth.

Royal Mail Group Royal Mail Group 10 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 11 Our CR strategy Our CR strategy Our CR strategy

The objective at the heart of our business strategy and our corporate responsibility strategy is the same – to ensure a sound and sustainable Universal Service for the benefit of everyone in the UK.

Our foundations Our Strategic Framework • Safety – to provide a safe working Our Chief Executive’s Committee reviewed and Our Corporate Balanced Scorecard environment for all employees by approved our revised corporate responsibility Royal Mail has a long heritage of The objective at the heart of our business continuing to promote a zero accident strategy in November 2011. Progress against contributing to the communities that we strategy and our corporate responsibility culture. our corporate responsibility targets is reported Safety First Class retail serve. We do this primarily through the strategy is the same – to ensure a sound and Quality of Service to senior management on a monthly basis. Universal Service – connecting millions of sustainable Universal Service for the benefit of • People engagement – to improve our customers, businesses, organisations and everyone in the UK. To monitor the successful employee engagement index year on year communities, including those in the most delivery of our business strategy, we have and drive increased employee satisfaction. Our Corporate Balanced Scorecard remote rural areas. launched a new Strategic Framework. The The new Strategic Framework helps us Framework consists of 24 blocks geared Our corporate responsibility objective monitor the successful delivery of our Engagement Net customer satisfaction Our economic contribution to the UK is towards strengthening our commercial future The BITC Index is one good way of assessing business strategy. Our Corporate Balanced significant. In 2012, Royal Mail commissioned and, as a result, the positive contribution the strength of our sustainability programme. Scorecard supports the implementation and the Centre for Economics and Business we make to the UK’s economy and society. Platinum is the highest Index ranking. Our execution of our strategy as it is linked to Research (CEBR) to quantify our impact on Each block is underpinned by a measurable aim is to maintain our Platinum ranking in managers’ remuneration. It consists of four key performance indicator (KPI). The Chief quadrants which are integral to achieving our Customer Customer the economy. The study found that our core the Index. We achieved this for the first time focus complaints business ranks as the eighth largest in the Executive’s Committee reviews progress in 2012, scoring 96 per cent; up from a Silver business and CR strategies. The quadrants, UK in terms of our economic footprint. We against all KPIs on a monthly basis. ranking (87 per cent) in 2010. which each have equal weighting, are: contribute 0.4 per cent to the UK’s total GDP. People – what our people think of our Corporate responsibility is one of our Process Operating Including our wider economic impacts, that During the reporting period, we concluded a company. sequencing costs figure rises to 0.7 per cent of GDP, amounting strategic imperatives. Our objective is major review of our corporate responsibility to an annual economic contribution of £9.4 to be independently rated as one of the and community investment strategies. The Customer – what our customers think of us billion. most responsible companies in the UK, as new strategies are aligned to our overall and how we deliver for them. measured by the preeminent Business in the business strategy: to ensure a sound and Community (BITC) Corporate Responsibility Performance – how well we are Delivery hours Free cash flow We directly support around 153,000 full-time sustainable Universal Service for the benefit of reduction Index. In addition, many of the other modernising our operations, including health equivalent (FTE) jobs in the UK. In addition, everyone in the UK. and safety factors. a further 83,000 FTE jobs are supported Strategic Framework blocks include corporate through our core business in the wider responsibility objectives. Examples of these Our revised corporate responsibility strategy Financial – the financial health of the economy, taking the total jobs impact to include: focuses on: business. Group revenue Group operating profit around 237,000 full-time posts – or 1 per • Reputation Management – to ensure • delivering economic and social benefit to the cent of UK employment. The study also found Royal Mail is seen as a customer, community communities we serve. The Chief Executive’s Committee receives that for every £1 paid by Royal Mail in wages, and colleague-orientated company. monthly updates against Scorecard criteria. an additional 57p is generated elsewhere in • managing our modernisation programme The four quadrants above (People, Customer, Performance and Financial) and their respective KPIs reflect • Deliver what we promise – to increase responsibly. This is helping to drive responsiveness, the economy. customer satisfaction and advocacy of Royal our Corporate Balanced Scorecard for the year 2011-12. As the business changes, we may adapt our accountability and alignment for our KPIs in future years to reflect changing priorities. Mail. • driving colleague advocacy of the Group and managers throughout the UK. Our direct economic impact is supported by its community role. • World Class Mail – to reduce our our active community investment programme. • reducing the environmental impact of our During 2011-12, Royal Mail contributed environmental impact, our property-related CO emissions and the amount of waste we business operations. £10.4 million to charities, good causes 2 and schemes for disadvantaged groups. In send to landfill. • communicating our management of addition, our colleagues raised £3 million for • Optimise logistics – to optimise our corporate responsibilities openly and many good causes across the country. fleet and deliver fuel and energy carbon transparently. reduction initiatives.

Royal Mail Group Royal Mail Group 12 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 13 Our CR strategy Our CR strategy

World Class Mail WCM is structured into ten technical World Class Mail audits areas, called pillars. These pillars cover all World Class Mail is a key vehicle We rigorously audit the implementation our operational activity, such as people for driving our modernisation of WCM programmes across the business. development, the environment and cost process through the engagement Audits can also celebrate the success of all deployment. Running in parallel to these ten and involvement of all our people in those involved and help colleagues feel proud pillars are ten management criteria. These continuous improvement. It is delivering of the new standards for safety, quality and include attributes such as management improvements in safety, quality and productivity achieved. commitment and organisational competence. productivity. Each of the pillars has seven steps which must Key facts be completed in order to reach World Class status. • 42 mail centres have implemented World Class Mail. These centres process over Remuneration Communicating our performance • We matched the best-in-sector scores 90 per cent of our mail, meaning a very The 10 pillars of our World Class Mail programme Remuneration is linked to the achievement Just as we are improving the quality of our for stakeholder engagement, corporate high percentage of our processing units of Corporate Balanced Scorecard objectives financial reporting, in addition we are seeking citizenship, corporate governance and fuel have high environmental and safety World Class Mail for all Royal Mail managers, including the to strengthen our sustainability reporting in efficiency. standards. senior leadership team. Senior leaders our annual Corporate Responsibility Report. • We also performed strongly in human • The World Class Mail Manufacturing with specific responsibilities for strands This year, we are reporting against the Global capital development and operational Association has recognised the progress of our sustainability agenda are assessed Reporting Initiative (GRI) Index for the first

eco-efficiency. CQualit SaomerustC/olontry actiontisf encena and achievements of our people at eleven encena against their performance in those areas. time. Under the GRI, we have achieved a

mail centres – Gatwick, Cardiff, Belfast, OrackplorW tionnisagae This informs their bonus and remuneration B+ rating. We will now seek to build on this Our progress Bristol, Glasgow, Leeds, Norwich, Greenford, package. If the measures contained within performance in future years. The GRI table is opmentvelee DeoplP opmentvelee ovement

Maintaining our Platinum ranking in BITC’s yetSaf

Heathrow Worldwide Distribution Centre opment our Corporate Balanced Scorecard are not on page 56.

CR Index requires us to execute our CR (HWDC), Edinburgh and North West onmentvirEn met, the size of the potential bonus available evel

strategy very well. We will undertake the Logistics Midlands – by giving them Bronze awards. DstoC to all managers is reduced. This system helps Benchmarking our performance following steps: ensure that Royal Mail rewards performances Maint essional ofrP In 2012, after the reporting period, Royal • Improve our disclosure of independently WCM: safety, quality and productivity Impr Focused and behaviours that will advance our key Mail voluntarily completed a Company Maint Autonomous verified social, ethical and environmental World Class Mail is a comprehensive system strategies. Sustainability Assessment based on the performance data in our external reports for step-by-step improvement to safety, Dow Jones Sustainability Index (DJSI) and communications. customer service, quality and productivity. It is Transparency methodology. The DJSI benchmarks Commitment Involvement Communication Understanding Management • Proactively address any gaps in the CR and one of our Strategic Framework blocks. We publish our Scorecard KPIs both in the companies’ sustainability performance in Development Implementation Evaluation Standardisation Documentation sustainability benchmarks where we need with Visibility Annual Report and Accounts and in our economic, social, and environmental criteria to improve performance and help drive Corporate Responsibility Report. In addition, compared with peers from around the world. change in the business. we publish our performance internally on a The assessment found that Royal Mail Group monthly basis on our Groupwide intranet. is positioned amongst the leading companies • Engage with external stakeholders, such All employees can access this information to globally in sustainability. as non-profit organisations and investors, to improve their understanding of our see how managers are performing against • As one of the top-scoring companies in our approach and performance. their targets. Our approach was shortlisted sector, Royal Mail qualified for inclusion in by the Chartered Institute of Personnel the 2013 ranking and is among the winners and Development in 2012 as an example of RobecoSAM’s sustainability distinctions. Case study: of excellence in human resources. The full We achieved a bronze medal. WWorld CllasassCorld Mail Cs Chahampionsmpions Corporate Balanced Scorecard KPIs are set out on page 17. • Our overall score of 83 per cent ranks Royal Mail among the DJSI World member The WCMWCM Championmpion role offofferers staff the oopporpporttuninittyy toto scores for our Industrial Transportation taktakee on a mananageriageriall rorollee anndd becomebecome exexperpertt in usinusingg sector. WCM. The Chahampionsmpions helhelpp us ensure we put safety atat the centre of everything we do, aandnd find the best ways ttoo cut downdown on loslossesses anndd wwaaststee.. We received nearly 900 applications from our people toto become WCM Chahampions,mpions, forfor just 60 rolesoles early in 2012. All successful applpplicants received a ten-weeken-week rreegionagionall trtraininainingg prproogrgraamme.

Royal Mail Group Royal Mail Group 14 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 15 Our CR strategy Our CR strategy Key performance indicators

Stakeholder engagement Royal Mail is also a participating member of The four quadrants below (People, Customer, Performance and Financial) have equal weighting. Together they are integral to achieving our At Royal Mail, our relationships and business Our values the Public Sector Ethical Trade Working Group, business and CR strategies. We have disclosed progress against these quadrants throughout the Report. activities touch millions of people across which promotes the observance of human • We work safely the UK. These individuals interact with us in rights in European public procurement (see KPI Measured by Key activities in the year different ways depending on who they are and • We have a passion to deliver for our page 45 for more information). what they do. We rely on these individuals to customers People help us grow as a company and succeed in Anti-bribery and corruption Safety Number of RIDDORsi per 1,000 people Our Zero Accidents Programme, focusing on road safety risks, and our the future. Listening and responding to their • We have pride and care about what Following the introduction of the Bribery we do in the UK businesses. basic programmes on slips, trips and falls, continue to drive down the rate interests and concerns is therefore essential to Act on 1 July 2011, Royal Mail Group has of accidents across our businesses. our long-term success. • We work together and treat each strengthened its anti-corruption processes. other fairly Our anti-bribery policy adopts a strict Engagement An annual survey measuring what our In common with many businesses, we have zero tolerance policy towards bribery and people think about Royal Mail, including identified and prioritised issues of importance • We are trusted to succeed corruption. Any breach of this policy, or any leadership and strategic direction. Our inaugural Employee Opinion Survey took place in spring 2012, with a to individuals and organisations that • We act commercially procedure implementing it, will be treated Customer focus An annual survey measuring how 69 per cent response rate. influence our success, using a stakeholder- as a very serious matter and may result focused our people are on delivering for based approach. From this process we have in disciplinary action, up to and including our customers. defined our key stakeholders as Government, Responsible Procurement Policy termination of employment and reporting to regulators, employees, unions, customers, the appropriate authorities. Customer We work to ensure that we engage suppliers business partners, suppliers, and the that act with respect for human rights. Under First Class Quality of Quality of Service for First Class retail As part of one of the most comprehensive change programmes ever communities where we operate. How we ii our new Responsible Procurement Policy, we Service products, including force majeure undertaken in the UK, delivery revisions have taken place in 331 delivery address individual stakeholder groups and adjustment. offices across the UK. This is about a more efficient and effective Royal Mail. require all suppliers to meet the ten principles include their viewpoints within our business of the United Nations Global Compact. These processes is covered at relevant points Net customer Customer satisfaction scores on a A customer satisfaction questionnaire is completed by approximately 700 include provisions against labour abuses, such satisfaction number of issues, including price, business customers per month, helping us to identify key areas for action. throughout this Report. as forced labour and child labour, as well as service quality and customer experience. prohibitions against corruption and bribery. Human Rights and Code of Business Customer Number of complaints captured by our We continue to take action to focus on redelivery, misdelivery, “Something With respect to human rights specifically, iii Standards complaints Customer Service team. for You” cards and redirections, with considerable progress in redirections our procurement policy makes mandatory and redeliveries. Human Rights refers to “the basic rights and Principles 1 and 2 of the Global Compact for freedoms to which all humans are entitled”. all suppliers. Businesses should: Performance After the reporting period, we launched an updated Code of Business Standards, in Principle 1: support and respect the Group revenue Group revenues. Price increases were implemented across the business, including an 8 per October 2012, which provides guidance on protection of internationally proclaimed cent increase for letters in April and May 2011. Traditional letter volumes a variety of core human rights. In addition, human rights within their sphere of declined by 6 per cent during the year, while UKPIL domestic parcel volumes increased by 6 per cent in the same period. human rights are integrated into all other influence; and relevant Groupwide policies. Principle 2: make sure that they are not Delivery hours Percentage year-on-year reduction Delivery revisions were completed in 331 delivery offices during the year, complicit in human rights abuses. reduction in the gross hours spent on delivery reducing the gross hours spent delivering mail. Our new Code of Business Standards (the activities. Code) is a comprehensive set of standards of Process sequencing Percentage of our mail sequenced into 235 new, refurbished or upgraded processing machines were behaviour that we expect from our people. It delivery order for our postmen and installed during the year. is based on our six core values. These reflect women. the principles, beliefs and aspirations that guide our behaviour and shape our culture. Financial The Code aims to help employees understand Operating costs Expenditure before modernisation We continued our modernisation programme in our front-line operations both what is expected of them and what they and other exceptional costs for our UK and completed the reorganisation of Group central functions. can expect from Royal Mail. All employees businesses. have a duty to uphold the standards set out within the Code. To help employees recognise Group operating Group operating profit before An increase in Group operating profit was generated by necessary price how the standards apply to day-to-day work profit exceptional items. rises and cost reductions. situations, the Code also includes tools and checklists to support them in doing the right Free cash flow Free cash flow excluding Royal Mail We focused on delivering the RMPP transfer, the sale of non-core thing. Pension Plan (RMPP) deficit payments activities and properties, and working capital management. and finance leases.

i Reporting of Injuries, Diseases and Dangerous Occurrences Regulations. ii This accounts for the impact of factors beyond Royal Mail’s control, such as floods or the Icelandic volcanic eruptions. iii We also provide detailed annual disclosure on customer complaints to our regulator, which is publicly available.

Royal Mail Group Royal Mail Group 16 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 17 CR governance CR governance CR governance

We aim ttoo ensure that corporate responsibility is integral to the way we do businessbusiness..

In 2011-12, we ttookook some significannttsignifica • Matthew Lester, Chief Finance Officer, CCommunommunicaicattionsions ActionAction GroupGroup ststepepss toto intintegregraatte corporrporaate is responsible for all financial reportinng The Communications Action Group (CAG) responsibility intointo the waway we do and core sustainability issues, including considers all issues and events that present a businesbusiness.s. Corporate responsibility is now procurement. Matthew sits on the Royal good opportunity for the Group or that might embedded in our governancncegoverna structucturures,stre es, Mail Group Board. present a reputational risk. Included within businesbusinesss strattegyegy,, the KPIs we eemplmplooy toto this remit is responsibility for shaping Royal drive ourdrive our busines business perfformaormancncepers andae nd the RRooyyaall Mail Group Booarardd Mail Group’s corporate responsibility strategy wwaay in which we rreewwaarrdd all managernagersma s The Royal Mail Group Board reviewed our and consideration of all issues related to acracrososs Rs Rooyyal Mail.Mail. new Group Communications strategy in corporate responsibility, including those that September 2011. Corporate responsibility are related to Royal Mail’s modernisation ExExecutiveecutive responsibilitesponsibilityy and community investment are integral to programme. Recent papers tabled to the • Moya Greene, our CEO, is ultimately the Group Communications strategy and both CAG include a review of our performance responsible for corporate responsibility. were covered in the September presentation in Business in the Community’s CR Index, • Mark Higson, Managing Director, to the Board. The Royal Mail Group Board and approval to participate in a Company Operations and Modernisation, is is also presented with monthly health and Sustainability Assessment based on the Dow responsible for all Environment strands of safety briefings. Additionally, the Board is Jones Sustainability Index. The CAG meets our corporate responsibility strategy. Mark regularly informed of progress against the monthly and is chaired by our CEO. sits on the Royal Mail Group Board. Strategic Framework blocks, which includes corporate responsibility. EnEnvivirroonmentnment GGoovevernarnannccee BBoaoarrdd • Shane O’Riordain, Managing Director, The Environment Governance Board is Strategy and Communications, is CChhief ExecutiveecutivExief e’’ss CCoommitmmitteteee responsible for driving our environmental responsible for shaping and implementing The Chief Executive’s Committee (CEC) strategy, defining targets and ensuring we our corporate responsibility strategy, approved our enhanced corporate deliver performance improvements. The including our community investment responsibility and community investment Board meets quarterly and is chaired by the programme. Group Communications strategies (in October 2011 and November Director of Logistics, Euan McMurdo, who provides the secretariat for the 2011 respectively). reports to Mark Higson, Managing Director, Communications Action Group. Operations and Modernisation. It consists of • John Duncan, Director of Human All major corporate responsibility and senior managers accountable for functional Resources, is responsible for all People community investment initiatives are areas that underpin, or are responsible for, strands of our corporate responsibility reviewed and approved by the CEC on a environmental performance in relation to strategy. regular basis. material environmental issues. • Mike Newnham, Chief Customer Officer, is responsible for all Customer strands of our corporate responsibility strategy.

Royal Mail Group Royal Mail Group 18 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 19 Transparency Transparency Transparency

We believe it is important to ensure information on our performance is comprehensible, and comprehensive, when possible.

Our agenda The majority of items handled by the Centre Our security team proactively uses any Dangerous dog attacks the attack takes place on private property. are business mail. We store undeliverable, available information to safeguard the This means that for postmen and women – Royal Mail is committed to being open Unfortunately, dog attacks are a hazard faced high-value items of mail for up to four integrity of the postal service. For the first who each have to visit hundreds of private and transparent with our stakeholders. by our postmen and women every working months. The majority of items handled at the time, we are releasing data on the team’s addresses on their delivery rounds every As a public institution we are legally day. During 2011-12, there were 3,186 Centre have no sale value and, if undelivered, investigation into internal and external day – the legal protection against attacks by obliged to be open about our operations. dog attacks on Royal Mail people. These are securely disposed of and recycled. crime. The number of investigations into dogs is limited. The Langley Report calls on We also feel it is important to ensure attacks cause great distress and, in too many 57% However, if an item is not claimed, and we external crime remained fairly constant from Parliament to repeal current legislation and information on our performance is cases, serious injuries. After the reporting can find no address to which to return it, 2010-11, while there was a slight decrease provide a new statute which removes this comprehensible, and comprehensive, period, the Group Chairman, Donald Brydon, and the item has some value, we put it out in the number of new internal crime loophole, enabling criminal sanctions to be when possible. launched an independent inquiry into the to auction. All the proceeds, minus a market investigations. prevalence and consequences of dog attacks taken against owners of dogs which attack rate commission for the auction house, are people, wherever the attack takes place. Freedom of information requests in the UK. The findings of the inquiry, led by used to partially offset the considerable cost former High Court Judge Sir Gordon Langley, It also makes two key recommendations Every day, Royal Mail receives questions We answered 57 per cent of FOI involved in seeking to reunite customers with Mail security 2011 2012 were published in November 2012. The related to Royal Mail, which we are now about diverse aspects of our business. requests either in full or in part last year items of undeliverable mail. report highlights that the legal sanctions acting on. These are: While we make every effort to respond to Number of prosecutions 312 301 currently available in England and Wales all requests fully, this is not always possible. • taking a more robust approach to Mail security when dogs attack people on private property As a commercial operation, we must decline Returned letters Full criminal investigations 993 771 suspension of delivery for any addresses are largely limited. Tougher measures are some requests for information since answers The overwhelming majority of all mail items We are serious about the security of every into internal crime raised where dog attacks occur; and available under existing law against owners could compromise competitiveness. Nor are we handle are delivered safely to the correct item of mail we collect and deliver. Our • actively pursuing legal action – or Full criminal investigations 193 194 whose dogs attack people in public places. we permitted to release any information that address. A very modest proportion prove security team works round the clock to supporting our people in taking legal action into external crime raised But, these sanctions cannot be applied where would be in breach of the Data Protection to be undeliverable for a variety of reasons identify any threats to the network and we – against the owners of dangerous dogs. Act. In other cases, we do not hold the data outside our control. These reasons include have robust measures in place to deal with requested. incomplete addresses, recipients who have any breaches. moved without leaving a forwarding address, Last year, 604 requests were referred to our and the lack of return addresses. For these Royal Mail Group will prosecute anyone central Information Rights team. Of those, types of mail, we hold information on the found to be stealing or interfering with mail 236 requests were answered in full and amount of mail processed at the National in England and Wales. The Procurator Fiscal a further 111 requests were answered in Returns Centre in Belfast. deals with cases in Scotland. In Northern part. There were 170 requests where the Ireland, this is the responsibility of the Public information requested was not provided Our National Returns Centre employs Prosecution Service. During 2011-12, 301 because, for example, it would have damaged 140 people dedicated to either returning former employees of Royal Mail Group commercial interests or breached principles undeliverable items of mail to the sender or, were prosecuted in the UK. There are over of the Data Protection Act. In another if this is not possible, securely disposing of 150,000 UK employees and the number of 87 cases, the information requested was undeliverable mail. In 2011-12, the Centre prosecutions needs to be understood in this not held by us. These figures are broadly processed 21.1 million items. That should context. comparable to those from 2010-11. be set against the total of some 15 billion inland addressed items of mail we handled in 2011-12.

Royal Mail Group Royal Mail Group 20 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 21 Our customers Our customers Our customers

We connect customers and communities and make commerce happen. Royal Mail is one of Britain’s most trusted brands.

Connecting customers Our overall strategy To help us achieve our aims, around half Delivery to Neighbour Customer satisfaction We are focusing on identifying the root of our key performance indicators in our causes of complaints. We know that over 70 Royal Mail has always played a crucial Royal Mail is an essential part of the UK’s In 2011-12, we trialled a successful initiative Our net customer satisfaction score has Corporate Balanced Scorecard are customer per cent of the complaints we receive relate role in helping people engage with others economic and social infrastructure. We make to make it easier for people who are not at improved, standing at 36 per cent for related. These include first class quality to one of the following issues: in the community. commerce happen by connecting companies, home during the day to receive deliveries. 2011-12, compared with 31 per cent for customers and communities. of service, net customer satisfaction and The trial, which enabled us to leave packages the second half of the previous year. We aim • not redirecting mail correctly or customer complaints. The Scorecard is set with neighbours, was rolled out in around to increase customer satisfaction further in continuing to redirect when the redirection We deliver to almost Businesses change as economies change. out on page 13. 748,000 homes in Edinburgh, Gatwick North, 2012-13. has finished. Royal Mail is doing the same thing. While Hull, Norwich, Swansea East, Wigan and Understanding customer needs • delivery of mail to the wrong address letter volumes are declining, the number of Bolton. We found that customers welcomed In addition, our new ‘customer focus’ (misdeliveries). 29 million parcels we handle is rising. We want customers to continue to choose the convenience of items being delivered to a Corporate Balanced Scorecard measure • posting “Something for You” cards when UK addresses Royal Mail. That depends on us becoming neighbouring address if no one was at home tracks the way our people think about someone is in to receive their mail, or not We are focusing our energies and resources more commercially responsive, and providing to receive them. Research by Consumer customers, putting them at the centre of filling them out correctly. We collect mail from over on meeting customers’ needs. market leading services. One way to improve Focus revealed that 92 per cent of customers business and operational decisions. We customer service is by finding out what whose item was left with a neighbour were achieved a score of 70 per cent in our first • not carrying out redeliveries properly; and We are modernising our business to become customers really think about Royal Mail; satisfied with the overall experience. 90 per year of measurement. • not obtaining signatures for deliveries that 115,000 more efficient and customer responsive. what they like and what they want to see cent of neighbours who accepted an item require them. postboxes, often more than once a day This means improving all aspects of our improved. expressed overall satisfaction. Fixing problems operations – collections, processing, sorting Last year we received 439,600 complaints. and delivery. Our modernisation is one of the We know that customers want their parcels Following the success of the trial, after the This is up from 423,700 the previous largest change programmes in the UK. to be delivered at the first attempt – whether reporting period, Royal Mail’s regulator, Key facts year. However, this must be viewed in the they are at home or not. Customers want Ofcom, approved the regulatory changes context of 1.53 billion First Class retail As the sole provider of the Universal Reaching our goals to know where their items are in the mail that enabled us to roll out the Delivery to items delivered on a next day basis in Service in the UK, Royal Mail Group reaches Our strategy is focused on meeting the needs pipeline at any given time. They also want Neighbour programme across the UK from 2011-12. We are working hard to improve everyone. Whether our customers live in the of our customers. This means delivering to more flexibility to pick up their items at a 1 October 2012. Previously, Royal Mail was performance in relation to customer centre of a large city or in a remote corner of the high standards our customers expect. It time that suits them. the only major delivery company not allowed complaints. the countryside, we will deliver to their door. also means developing new services to better to deliver to a neighbour as part of standard And we will do so six days a week, one day meet changing customer needs. Over the last year or so, we have introduced practice. Our new Delivery to Neighbour more than most of our peers in Europe. a number of new measures to better meet programme is part of a process of bringing Our customer strategy is based around the these needs. Royal Mail’s terms and conditions more in • Royal Mail handles over 58 million UK following four pillars: line with other delivery companies. inland addressed items daily. • understanding customer needs. • We deliver over 1.2 billion parcels a year, in • fixing problems and getting to the root the UK and overseas. cause. • We operate six days a week, one day more • being easy to do business with. than the EU requirement. • driving up quality. • We delivered 92.7 per cent of First Class retail products overnight in 2011-12 as we pressed on with one of the largest change programmes ever undertaken in the UK. This figure is up from 92.6 per cent in 2010-11.

Royal Mail Group Royal Mail Group 22 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 23 Our customers Our customers

We are addressing these problems in a Transparency Communicating with customers: facts • We have upgraded and extended 225 Stamp prices Two companies working together variety of ways. These include: As part of our commitment to being Integrated Mail Processing machines to Royal Mail operates across phone, web, Stamp price rises came into effect on We will continue to work closely with Post • introducing dedicated redirections sorting more transparent with our customers, date. email, online chat, SMS, face to face and 30 April 2012. We know that no one Office Limited following its separation from frames to ensure they are carried out we have also, for the first time, published • We have achieved sequencing of 75 per Twitter. During 2011-12, we registered: likes price increases when the economy the Royal Mail Group on 1 April 2012. daily and we do not miss any. As a result, investigations into internal and external cent of the mail. is as tough as it is right now. The rises redirections complaints have reduced crime in 2011-12 (see ‘Transparency’ on • 5 million telephone conversations with were necessary, however, to put the In June 2011, the Government voted in favour page 20 for more information). by 4 per cent. personal customers. * These statistics are as at the end of the Universal Service on a sound, sustainable of the Postal Services Act. This paved the way • ensuring that the correct procedures are • 4 million messages and answers provided. 2011-12 financial year. and secure basis. Our stamps are still for the Post Office and Royal Mail Group to carried out when using “Something for Being easy to do business with good value compared with other EU become sister companies from 1 April 2012. You” cards. It is important that our customers have • 1.5 million telephone conversations with But, we have not let any of this activity countries. We do not believe there is an A major commercial agreement between business customers. • providing our postmen and women with confidence in our ability to deliver on our distract us from our ongoing obligations, affordability issue with stamps, which the two companies will guarantee that we make up a tiny proportion of people’s more Postal Digital Assistants to capture promises. That means being brilliant at the • 7 million customers who received letters while remaining easy to do business with. continue to enjoy a long-term relationship. household spend. signatures. We now have more than basics. We must continue to collect and about operational transformation. By the end of the year, we had succeeded in Post Office Limited will continue to be the 47,000 of these devices (as at September deliver on time. We must be easy to do creating an infrastructure of fully modernised Royal Mail’s retail arm, providing us with 2012). These handheld electronic devices, business with. letter processing and exceeded our In March 2012, we announced a Christmas access to customers through the Post Office’s issued to postmen and women during Quality of service regulator’s fourth-quarter First Class retail Stamp scheme to support around 5 million network of nearly 12,000 branches. We at collection and delivery rounds, enable us Our duties to our customers include our Our far-reaching modernisation programme delivery target – having narrowly missed the customers from low-income households. For Royal Mail, meanwhile, will remain the Post to track mail at key points throughout the aim to deliver items within a set period, and is one of the largest industrial transformation target for the full year during a period of Christmas 2012, customers who are in receipt Office’s biggest customer. pipeline. without loss or damage. In the case of our projects in the UK. Every process that we are substantial change. of Pension Credit, Employment and Support tracked products, we provide provision for involved in – collecting, transporting, sorting Allowance, Unemployability Supplement or Further information Work is under way to finalise a standard compensation should any loss or damage and delivering mail – is changing as a result. We delivered 92.7 per cent of First Class Incapacity Benefit were able to buy stamps occur due to our own fault. We also provide retail mail on time, against a target of 93 at 2011 prices - 46p for First Class and 36p Royal Mail’s products and services covering all undeliverable parcels and The overall aim is to make our network http://www.royalmail.com/ signed-for items. Our aim is to ensure that secure services for customers wishing to more efficient, increasing productivity and per cent. Against the backdrop of the UK’s for Second Class. We sent a leaflet out to we treat all our customers consistently. send valuable items, such as cash and ultimately improving the quality of service to largest ever business transformation, we every household in the UK to remind them Royal Mail customer service The changes will include a business-wide jewellery. our customers. still delivered 1.53 billion First Class retail of the details of the scheme and ensure that http://www.royalmail.com/ standard for the time elapsed that is entered items on a next-day basis. We are proud that we support all those facing tight budgets this customer-service on the “Something for You” card to ensure There are a number of items that we cannot Here are just some of the recent efficiencies we exceeded our target of 98.5 per cent to Christmas. Parcelforce’s products and services the customer can collect. We are also looking deliver to protect the safety of our people, that are helping to create a more customer- deliver Second Class retail mail on time in http://www.parcelforce.com/ into the number of attempts at redelivery our customers and members of the public. focused Royal Mail*: 2011-12. Meanwhile, businesses that use meters These include poisonous, hazardous or benefit from discounts of up to 38 per cent that should be made before issuing a • Our mail centres are now equipped with Direct Marketing Association infectious substances, flammable liquids and on stamp prices. We also introduced a new “Something for You” card. walk sequencing machines, which means Customer satisfaction survey http://www.dma.org.uk/ disposable waste. payment option that offers an alternative for three in every four letters are now What our business customers think: organisations – mostly charities – that cannot route-ready for our postmen and women. • Customer satisfaction: 70 points. reclaim VAT. • We have installed 64 intelligent letter sorting machines, easing the load • Easy to do business with: 67 points. considerably on our delivery centres. • Trustworthiness: 70 points. • New delivery methods are now in place in 448 delivery offices, with another 908 to follow this year. NB: These scores represent mean average scores.

Royal Mail Group Royal Mail Group 24 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 25 Our customers Our customers

Case study: BBusinesusinessesses thrive thankstha tnks too R Rooyal Mail Trackackeded

Parcel delivery is an increasingly important part of Royal Mail’s business. Growth in online retailing gives us an opportunity to build our capability in this area if we get fulfilment right.

Serving businesses of every size, we connect them with their customers. We help enterprises thrive and grow. From their shops and warehouses to their customers’ front doors, Royal Mail Tracked gives businesses peace of mind and confidence in our ability to deliver their goods safely and in good time.

Royal Mail is a key service provider for TalkTalk, a leading broadband supplier. TalkTalk sends out hundreds of parcels every week and needs to know where the goods are at any stage in the mail pipeline. Royal Mail Tracked enables them to do just that.

“We use Royal Mail Tracked because we believe it is the best value for money,” says Mike Wakley, TalkTalk’s Head of Supply Chain Logistics. “We value the fact that the equipment that goes to our customers is fully traceable."

Case study: SStterlingerling prapraiseise

One of Britain’s most northerly businesses, Orkney-based Sheila Fleet Jewellery, regards Royal Mail as “a lifeline”. We link one of Scotland’s leading creators of naturally inspired silver, gold and platinum pieces with many customers throughout the UK and around the world.

Having started out in a converted shed, the company now employs 55 skilled craftspeople in a dedicated workshop and showroom. As one of the Orkney Islands’ biggest and best-known exporters, Sheila Fleet counts on the expertise and dedication of the Kirkwall delivery office.

“We have used Royal Mail since the start of our business twenty years ago and know that the local team will always provide a service that truly does go the extra mile. Royal Mail’s networks cover the whole country and the air service to and from Orkney is invaluable,” says Martin Fleet, director of the business.

“Royal Mail enables us to send packages to customers throughout the United Kingdom with confidence that every parcel will reach its destination safely and on time. This is particularly important with internet shopping. We know that no other courier service can match Royal Mail in terms of price and speed of delivery. And Special Delivery comes into its own during the Christmas period. Royal Mail is an integral part of our business and we cannot praise the work they do throughout the country highly enough.”

Royal Mail Group Royal Mail Group 26 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 27 Our people Our people Our people

Royal Mail’s postmen and women meet our customers every day on the doorsteps of their homes and businesses. They are our ambassadors: a credit to the company.

Health and safety Safety Our safety programmes It is with great sadness, however, that we KPIs 2010-11 2011-12 report that during the past year, seven We are committed to doing everything One way we can improve awareness of The following activities are some of the ways people lost their lives due to road traffic Total accidents 19,389 15,859 we can to reduce the number of health and safety issues across all our in which we are working towards a zero accidents involving our vehicles. Four of accidents to zero over time. operations is to have more visible leadership accident environment: these were third-party fatalities. After each RIDDORs per 1000 staff in post 18.3 14.3 from the top. Health and safety performance • World Class Mail continuous fatality we liaise closely with the authorities Key facts is now a standard agenda item at monthly improvement – local teams in mail and also undertake our own independent Days lost due to accidents 89,048 69,930 Royal Mail Group Board meetings. All Board centres, delivery offices and logistics use a • RIDDORs (Injuries, Diseases and expert safety investigation to establish the members and other senior executives also Safety Matrix to identify health and safety Total number of fatalities 5 7 Dangerous Occurrences Regulations) root cause of the accident. Our investigations undertake rigorous safety training. Safety issues in the workplace and, using root per 1,000 people in the UK businesses take a ‘no blame’ approach so that we can is one of the Corporate Balanced Scorecard cause analysis tools, work to reduce the Sickness absence (%) 4.1 4.04 reduced by 22 per cent compared with last effectively establish what can be learnt from measures. It is one of our Strategic risk of accidents occurring. year, outperforming our target. This is a the tragedy, and develop and implement Total number of bullying and harassment 390 349 Framework blocks, and it is one of ten work Corporate Balanced Scorecard measure. • Walk Risk Assessment Programme – action plans to avoid recurrences. Our cases received areas of our World Class Mail programme. • In addition, the total number of accidents this requires local units to identify risks on findings are communicated across the Group delivery rounds, ensure they are properly and at the monthly meeting of our Board, reduced by 19 per cent last year, and ‘lost We have found that when people are given Employee strategic priorities documented and take mitigating actions to where close attention is paid to the lessons Key facts time’ accidents reduced by 20 per cent the right time and tools to do their jobs, they compared with the previous year. reduce risks. we can learn. • We employ over 150,000 people in the UK. We are a people business. Our people are work more safely. Through our WCM tracking • Zero Accidents Programme – this daily ambassadors for Royal Mail. Almost • Following development of the Feeling First system, we monitor work-related incidents, • 38 per cent of our employees have been focuses on specific road safety risks. Dog attacks continue to present a hazard no other company has daily contact with Class online health assessment, we had an as well as near misses and identification of with us for more than 11 years; and Training includes pre-use vehicle checks, faced by our postmen and women. During customers in the way that we do. We are uptake of 2,547 employees by the end of leading indicators. This helps us continue to 16 per cent more than 25. followed by three hours of in-cab tuition 2011-12, there were 3,186 dog attacks proud to employ a rich and diverse mix of 2011-12. achieve fewer work-related injuries. • The turnover rate of our full-time people who reflect the communities in which with a qualified instructor, targeting the on Royal Mail people. Our Group Chairman, front-line workforce is about half the UK they live and work. main causes of collisions experienced by Donald Brydon, launched an independent average. our drivers. Collisions among our younger inquiry into the prevalence and consequences • 16 per cent of our workforce is female, and Investing in our people is a key part of our drivers have reduced by 52 per cent during of dog attacks in the UK. The findings of the one in five (20 per cent) of management business strategy. We have identified the 22% the year as a result. inquiry, led by former High Court Judge Sir positions is held by a woman. following priorities: Gordon Langley, were published in November 2012. The report calls for new, tougher • health and safety Performance (2011-12) • Over 10 per cent of our workforce is from RIDDORs (Injuries, Diseases legislation, enabling criminal sanctions to be a black or minority ethnic background. • modernisation and Dangerous Occurrences Last year, reported accidents and injuries taken against owners of dogs which attack • engagement Regulations) per 1,000 at work reduced by 22 per cent. Annual people (see page 21 for more information). Performance people reduced by 22 per reporting of RIDDORs (Injuries, Diseases • diversity, inclusion, dignity and respect • In our 2011-12 Employee Engagement cent compared with last year, and Dangerous Occurrences Regulations) Index, we scored 49% in terms of employee • learning and development. outperforming our target now averages 14.3 accidents per 1,000 engagement. employees. This exceeds our target of 15.6 accidents per 1,000 employees, as well as • In 2011-12, we invested a total of marking an improvement on last year’s figure £14.2 million in training and skills of 18.3 accidents per 1,000 people. development. • Reported accidents across the business fell by 26 per cent in the last year.

Royal Mail Group Royal Mail Group 28 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 29 Our people Our people

Case study: Case study: WWellbeing ZoneonZellbeing e MPs on delivery rounds

In April 2012, we launched The Royal Mail recently launched a campaign to get politicians out on delivery rounds with Wellbeing Zone, a new online our postmen and women. So far 70 have taken part. The purpose of this is to give resource to provide all staff with them a real insight into the lengths to which our people go to meet our Universal personally tailored programmes, Service obligation. It is also an excellent opportunity for the MPs, MSPs, AMs, MLAs and information and support for councillors to say a personal ‘thank you’ for the part our postmen and postwomen play in healthy lifestyles, personal training their constituencies. programmes, weight management plans, stress solutions, 10-minute The day starts at their local delivery office, where the MPs see the final stages of the mail Yet we understand that change is not wellness checks and an ‘ask the sorting process before joining one of the many thousands of postmen and women on Employee engagement TTakakinging the pulsepulse always easy to accept, particularly when expert’ service. their delivery round. They hear at first hand how Royal Mail is modernising and adapting Employee engagement is one of ourour In March 2012, we carried out our inaugural it means working in different ways and to meet the challenges of structural decline in the postal sector whilst safeguarding the CCororporporaate Balanced Scorecard measures. annual employee engagement survey, keeping different hours. We are working Universal Service on which we all depend. ItIt is one of the kkeey drivery drivers in ours our independently run by Ipsos MORI. In our hard to ensure these necessary adaptations businesbusiness sucs succceessss.. 2011-12 Employee Engagement Index, we are implemented as smoothly as possible. scored 49 per cent in terms of employee Involving our employees in our change We realise that changing times, like those engagement. Our new approach enables us programme and keeping them well informed we are going through today, can be difficult to benchmark our engagement levels with is critical in this. For more on how we are for employees. We are working hard to other companies and track our performance doing this, see the ‘Employee Engagement’ communicate the changes ahead and year on year. section. Wellbeing Managing stress • Delivery spans increasing to reflect the listen to our people’s views. We want our We aim to provide good wellbeing support This year, we introduced a Stress reduction in indoor work and a desire to employees to feel more engaged in how our There were plenty of encouraging outcomes As we become a smaller workforce, better for our employees. We believe this helps Management Pilot Programme to identify protect full-time employment. business is run. in this year’s survey. Three-fifths of our suited to changing market conditions, us to attract the best people and boost the drivers of stress in our workplaces. This • The balance between use of indoor and people feel proud to work for us. A similar voluntary redundancies will mean the workplace morale. It makes good business is helping us to adopt better management outdoor equipment is changing. Our strategy for engaging our people is proportion (62 per cent) say they are departure of many colleagues. In the last sense, too, as a happy, healthy workforce will methods for dealing with employee stress. detailed in our Corporate Engagement Action satisfied with their current job. • Preparation task reducing with increased year, we reduced our workforce by 4,000 enable us to provide a good quality of service One step we have already taken as a result Plan. This sets out a range of action points mechanisation. people. To help those leaving as a result to our customers. of this programme is to publish a Stress linked to our three priority areas: However, there are areas where we need to • Extra packets and attendance calls. of this process, we have a comprehensive improve. Only around one in three (36 per Guide. The Guide provides information about • Recognising our people, and strengthening • Increasing use of shared vehicles/working programme in place. This involves help in cent) of our people expressed support for Some of the ways we provide a healthy identifying and managing workplace stress. the relationships between managers and in pairs. finding new work through job searching skills Royal Mail’s current strategy. We will focus working environment include: It also includes a line manager guide and their teams. and career advice, as well as the provision on improving employee engagement in our • An employee assistance programme, details of our risk assessment approach. A modern workplace of financial advice. In total, we spent • Communicating about our business future business strategy in the year ahead. available 24 hours a day, every day of the £1.9 million on outplacement programmes and our customers. Priorities for 2012-13 Royal Mail’s modernisation programme is one year, for health-related advice and services for employees taking redundancy. of the UK’s biggest industrial transformation • Ensuring job expectations are clear and for our colleagues and their families. • Revise our Zero Accidents driver safety Throughout the modernisation process, we projects. It is aimed at creating a more performance is evaluated. Employee Engagement Index % • We run occupational health clinics across programme to improve colleagues’ are committed to treating Royal Mail people efficient operation which is vital to secure the many of our Royal Mail Group sites. awareness of driving hazards. with the dignity they deserve. 2011-12 49 six-days-a-week, one-price-goes-anywhere Performance (2011-12) • Continue work to reduce accident rates and • We also offer health assessments, either Universal Service. sickness absence rates. Employee opinion • Our target was met for both employee Target for 2012-13 50 by phone or face to face, to any of our UK engagement and employee customer focus. locations. • Investigate long-term absence data and Our modernisation programme is having • 35 per cent of people think modernisation cases to ascertain if there are common is happening too fast. • Over six out of ten colleagues agree that • We have 39 fitness centres run by trained a positive impact on safety and customer safety is given a high priority in Royal Mail. instructors at our larger sites. trends. service. Take our mail sequencing technology, • 21 per cent think modernisation is too • Over seven out of ten colleagues say they • We have a national physiotherapy and for example. Beforehand, most mail was slow. Changing working lives hand-sorted before being delivered. Many still want to work for Royal Mail in two functional rehabilitation service for • 44 per cent think modernisation is years’ time. colleagues suffering from musculoskeletal Our modernisation programme is affecting postmen and women carried the full mail happening at the right pace. conditions. the working lives of more than 127,000 weight on their shoulders. The introduction • Over six out of ten colleagues feel proud to postmen and women. of sequencing machines and equipment such work for Royal Mail. This year our sickness absence figure as lightweight trolleys and shared vans is averaged at around 4.04 per cent, which Many aspects of our work are changing: reducing the physical strain of these tasks. compares well with our industry peers but is • Delivery attendance times, with Saturday slightly above CBI average absence target. becoming a normal working day.

Royal Mail Group Royal Mail Group 30 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 31 Our people Our people

IntInternalernal communommunicaicattionsions Our ununionsions DiverDiversitsityy Promoting dialogue is also a key part of our We work closely with the unions who WWe are pre proud toud to emplo emplooy a richrich anda dnd diveriversese engagement strategy. During the reporting represent our people, the Communication mixmix of peoplpeople who refleflectectre the communommunitiesc ities period, 120 managers visited sites across the Workers Union (CWU) and Unite/CMA. This in which we work. business to brief around 14,000 front-line cooperative approach is based on a shared colleagues about our business strategy and vision to overcome business challenges. Both There are clear commercial benefits to performance. During the financial year parties are committed to creating a culture be gained by employers who recruit from 2012-13, so far a further 170 managers have where we identify common objectives, align the widest possible talent pool. It is widely met with around 30,000 front-line colleagues interests and always seek mutually acceptable recognised that businesses with a diverse as part of our Engagement Programme. solutions to the challenges we face. workforce are likely to attract a wider customer base, and have the ability to Our Chief Executive receives all feedback This relationship has helped us navigate the recognise new potential markets and to from the engagement sessions to ensure human resource issues that inevitably occur provide a better, more tailored service. action is taken at the highest level. during a process of modernisation, such as voluntary redundancies and different working Gender ddiveriverssitityy Case study: Among the changes we made over the last hours. In this regard, we reached agreement Royal Mail is committed to being an equal WWomenomen networnetworks andaks wornd workshopskshops year as a result of employee feedback are: with the CWU in February 2012 on a package opportunities employer. Women represent of measures that will enable us to continue • introducing a simplified process for around 16 per cent of our total workforce. The Senior Women’s Network is co-led by Chief Executive Moya Greene and Sue moving forward with the modernisation reporting safety incidents. We are continually looking for ways to Whalley, Group Director of Regulation and Government Affairs. It provides a forum programme. These include a 3.5 per cent pay in which women have the opportunity to connect and network. • improved sharing of World Class Mail increase this proportion. As part of that increase, which came into force in April 2012. initiatives. endeavour, we support Business in the Community’s (BITC) ‘Opportunity Now' The Senior Women’s Network recently established a 1:1 mentor scheme designed • informal i mentoring for front-line staff to We are also talking with the unions about the programme, which promotes best practice in to build relationships that aim to unlock the potential of our upcoming female Case study: help their career progression. impact of changes arising from the Postal equal opportunities. employees and help them progress in their careers. Services Act 2011. This includes the provision HealthHealth roroadshowadshow We have also taken significant steps to for an element of employee share ownership Springboard is one of our initiatives to Ambrin Shah, a late shift manager at the North West Regional Distribution overhaul our internal communications over following any sale of the company. These are InIn 2011, we initiated a national roadshow promote gender equality. It is focused on Centre, was matched with Margaret Ollerenshaw, Head of Talent and Succession. the last year. In 2011-12 we: complex matters and they will take time to underunder our Feeling First ClassClass wellbeing helping women to advance their careers Ambrin says: “I have worked for Royal Mail since 2005, during which time I • published more than 17 regular and special resolve. have undertaken a number of different roles in Operations. In 2011, having just programme. The roadshow offers our within the business. The case study people freefree health-checks to assess editions of Courier, our employee newspaper. ‘Women networks and workshops’ on page returned from maternity leave, I approached Margaret to be my mentor at a Last year the number of days lost due to weight,weight, height, bodbodyy mass index and • held three conferences for some 6,000 33 provides more information about this Senior Women’s Network meeting. The relationship I had with Margaret was very strike action increased from 1494 to 532. much two way and I never felt as though I was taking too much of her time. We other aspects of personal fitness. In managers to keep them informed about our programme. addition, Boots susuppliedpplied machines and progress against our strategy. There have not been any nationwide strikes. discussed my career progression and how this would fit with my family life, having two young children. I believe that I couldn’t have secured my current role if it representatives to proviprovidede initiainitiall eeyeye • broadcast weekly programmes on RMTV via Gender ddistributionistribution by position iinn screening.screening. ColleaColleaguesgues who need a full 44 wasn’t for the advice and support that I received from her. Mentoring is something myroyalmail.com to keep our front-line staff In 2010-11, 149 toottaal daysys were lost due ttoo ccompaompannyy that I am very passionate about – hopefully in the near future I can be a mentor eyeeye test at an optician receive monemoney-offy-off up to date in the workplace. sstriktrikee action, not 89 dayyss as previouslpreviously reporreported. for other women in the business.” vouchers for the test and glasses if theythey • held weekly Work Time Listening and FemaleFemale MaleMale requirerequire tthem.hem. Learning (WTLL) sessions. Women’s workshops: Board levelBoard level 30%30% 70%70% Our Springboard Development programme also offers non-management-grade female employees a series of confidence-boosting The initiative is provingproving so successfulsuccessful thatthat we are set to ddoubleouble tthehe numnumberber Minority group Senior managerial 26% 74% workshops. These comprise four voluntary one-day sessions over three months where participants assess their current career situation and start to take of health-check kits pprovidedrovided durinduringg the roadshow.roadshow. AsianAsian BlackBlack ChineseChinese MixedMixed OtherOther WhiteWhite ManagerialManagerial 19% 81% responsibility for their own development. People transition manager, Sharon Feasey, is one of four facilitators. “It’s not just about work,” she says. “We ask AdministrationAdministration 3.7% 1.3% 0.2% 0.5% 17.2% 77.2% Administration 58%58% 42%42% participants to also look at their life as a whole – that includes their personal goals as well. A happier home life leads to a more fulfilled work life.” ManagerialManagerial 4.6% 2.0% 0.1% 0.6% 19.5% 73.2% OperationalOperational 14%14% 86%86% OperationalOperational 5.8%5.8% 2.8%2.8% 0.2%0.2% 0.6%0.6% 20.2%20.2% 70.4%70.4% So far we have run over 50 courses across the company and have seen more than 700 female non-managers participate. In 2012-13, we hope to introduce 12 more Further breakdowns of our gender diversity trained facilitators, with the aim of putting 1,000 women through the programme. Senior Managerial 1.8%1.8% 1.0%1.0% 0.0%0.0% 0.6%0.6% 19.6%19.6% 77.0%77.0% are given in our GRI Index on page 56.

Royal Mail Group Royal Mail Group 32 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 33 Our people Our people

EthnicEthnic ddiveriversitsity • Ready for Work – we have employed over • Senior Women’s Networkk – as part of an We dealt with 349 formal bullying and Our employee population is representative 250 Ready for Work graduates over the expansion of the Network in 2012-13, we harassment complaints out of our workforce of the external labour population. Over 10% past six years. This accounts for 11 per plan to invite senior female managers to of over 150,000 during 2011-12. This of our employees are from ethnic minorities. cent of the total employments secured by give guest talks around Royal Mail’s UK sites represents a decrease of 10 per cent However, we recognise that ethnic minorities clients after completing the Ready for Work about how they have overcome obstacles to compared with last year. We have been are not adequately represented amongst our programme. succeed. working hard to reduce the time it takes to Case study: management population. Our priority going • Ethnic diversityy – we are looking to set up a investigate these complaints. Of course, we Enactus forward is to increase the representation of ApprApprenticenticeshipseships network and development programme aimed are working towards creating a workplace ethnic minorities at all management levels in In January 2012, we launched a new at junior managers from minority ethnic that is completely free of harassment, and Enactus is an international non-profit organisation that works with leaders in Royal Mail. We will seek to set up a network partnership with Job Centre Plus. The backgrounds. we have set milestones for ourselves as business and higher education to mobilise university students to make a difference part of that journey. In 2011-12, we ran an and development programme aimed at junior programme offers up to 80 young jobseekers • Access to Workk – we are currently reviewing in their communities while developing skills to become responsible business leaders. awareness campaign, entitled ‘Enough’, to managers from minority ethnic backgrounds in voluntary placements for up to eight weeks. our pilot of the Department of Work and Participating students form teams and apply business concepts to develop outreach raise awareness of the damaging impact of the coming year. Pensions (DWP) Access to Work programme projects for people in need. Our role as Enactus corporate sponsors covers: In 2011-12, we revived our Engineering inappropriate behaviour. with a view to rolling it out to the rest of • matching our Business Advisory Board Members to Enactus teams. DisabilitDisabilityy eqequualitalityy Apprentice Scheme, which is now running in the country. We also aim to develop a more Performance (2011-12) • judging at regional and national competitions. Royal Mail aims to be a disability confident parallel with a similar programme for vehicle robust and efficient reasonable adjustment employer. Our overarching strategy is to change technicians. Both lead to a Level 3 National process for our disabled employees. • 349 formal complaints were raised, a • providing interviewing and CV advice at Enactus training events. people’s perceptions of disability. We seek to Vocational Qualification (NVQ) within three decrease of 10 per cent on last year. • partnering a number of top ten university Enactus teams. years. achieve this through five key pillars: DignitDignity ay and rnd respectespect • We received 1,204 calls to the Bullying and • Leadership – Disability Equality is led from the Harassment helpline. Our close relationship with Enactus creates positive business benefits through We also introduced our new Operational We aimaim to create an envirvironment that is topt of our organisation. • We completed 40 per cent of investigations employee engagement and developing relationships with quality students and Management Apprentice Scheme in October frfreeee fromfrom discrimination or harasassment.sment. business peers. Moreover, the community projects that the Enactus teams become • Strategic priorities – Royal Mail has an equality within 28 days, up from 29 per cent 2012, after the reporting period. It is targeted at involved with support our own corporate responsibility agenda. framework which sets out the main strategic 18 to 24-year-old jobseekers on benefits. The We define harassment as “unwanted conduct last year. The average timescale for an priority areas. scheme comprises 18 work placements, each that has the purpose or effect of violating investigation was 54 days. • Creating awareness – ensuring colleagues of which will last two years. The apprentices someone’s dignity, or creating an intimidating, and customers have the right knowledge and will receive structured training leading to a hostile, degrading, humiliating or offensive Priorities for 2012-13 attitudes. Management Level 3 Certificate. This consists environment for them.” We treat the issue with • To clarify our expectations for employee • Widening influence – we want to talk about of a Level 3 Technical Certificate in First Line the utmost importance. In accordance with behaviour in a range of policy statements. equality for everyone: employees, agents, Management and the Institute of Leadership our Equality and Fairness policy, we encourage This year we have summarised our core customers and suppliers. and Management (ILM) NVQ Level 3 Certificate employees to inform their line manager if they values, policies and expectations in one in Management. become aware of any discriminatory behaviour. place. The resultant Code of Business • Changing processes – taking ownership of Any employee who is found to have committed Standards covers a full range of personal equality and fairness at a local level. PPriorities friorities foror 2012-13 an act of discrimination or harassment will be and business behaviours. subject to disciplinary action, including possible InclInclusive rusive recrecruitmentuitment Going forward, we intend to introduce a more • In the year ahead, we plan to work with the female-friendly approach to resourcing. This dismissal. Communication Workers Union to ensure Our commitment to inclusivity stands us apart. could include measures such as targeted our Bullying and Harassment Policy is fit We actively look to provide work opportunities campaigns to attract female recruits, reviewing OOurur commitmentommitmentss for purpose. We aim to issue a new Joint for people from marginalised groups. Examples job designs to make them more family friendly • Stopping bullying, harassment and Statement, which will include a definition of our programmes include: and providing female mentors where possible. discrimination. of “acceptable behaviours” and informal • Remploy y – over the last seven years, we • Treating employees with courtesy, dignity, resolution. have successfully placed over 1,000 people • Women’sWomen’s workshops – as part of our fairness and respect at all times. into work through our partnership with Springboard Development Programme, • Dealing with complaints of bullying or Remploy. Remploy is the UK’s leading provider we plan to put 1,000 women through the Case study: of employment services to disabled people. harassment seriously, fairly and sensitively. programme in the next 12 months (see page Duke of Edinburgh Gold Award for Apprentices During 2011-12, we offered over 50 work 32 for more information). • Handling complaints in a timely manner and trials for individuals linked to Remploy, with following the appropriate process. In September 2012, we launched a new Duke of Edinburgh Gold Award scheme for an almost 100 per cent conversion ratio from participants on our Advanced Apprentice Engineer programme. The Award will take placement to job outcome. 18 months to complete. Open to those aged under 25, it will involve fundraising for charity, including our Charity of the Year, as well as personal fitness. In addition, there is an exciting outward-bound element, which will require training and practice leading up to a five-day expedition in the Lake District. The aim of the expedition is to teach teamwork and to help individuals to achieve their own personal goals.

Royal Mail Group Royal Mail Group 34 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 35 Our people Our people

Coaches Improving career management • Continued initiatives to improve the health, We have 70 accredited coaches who With such a large workforce, it is critical that wellbeing and safety of our people. offer support for our employees in their Royal Mail has the right people management • Continued improvements to our diversity development. We operate a formal coach system. Our new end-to-end integrated and inclusion agenda. allocation process to ensure we effectively People System Management Programme • Increased focus on learning and match the need to the best coach we (PSP) went live during the reporting development. have available. We also have a number of year. Now, we are better able to manage managers with coaching skills who have employees’ careers from recruitment to Further information recently attended development programmes. departure and so significantly enhance They coach their teams and peers on an working life at Royal Mail. PSP won the Communication Workers Union: informal basis. Gold Award in SAP’s 2011 UKI Quality http://www.cwu.org/ Awards in the New Business Application Unite: Implementation category. Learning and development World Class training Targeted learning Outplacement support http://www.unitetheunion.org/ We invest significantly in outplacement As Royal Mail is modernising, so are the People development forms a pillar of our The objective of our learning and support for those leaving the business. This Priorities for 2012-13 Equality and Human Rights Commission: skills of our people. We are achieving World Class Mail (WCM) programme. The development programmes is ultimately to support includes ‘Career Transition’, a flexible, http://www.equalityhumanrights.com/ this through extensive development development approach is to train people raise levels of customer service throughout • We aim to increase the employee individual service which enables those programmes internally. on the job. Last year, 14,000 people were the Group. For instance, in 2011-12 we engagement scores highlighted by our Direct Enquiries: actively involved in WCM learning activity. identified a need to equip staff in our potentially leaving the business to identify annual employee survey. http://www.directenquiries.com/ Key facts This averages out at half a day a week, or 20 enquiry offices with the right skills for what their career and lifestyle options. • We will further roll out our employee days a year per person, at an investment of is a key customer-facing role. As a result, • We invested £14.2 million in training and engagement programme, with more site £25.2 million. we introduced a new NVQ-based training dialogues across the UK. development through external providers. scheme specifically targeted towards • 32,000 Royal Mail Group employees There are various methods for sharing improving our performance in this area. experienced formal training last year. learning within World Class Mail. These • Over 61,000 training days were delivered include: All managers, from executive leaders to in 2011-12. • WCM Academies – these are education first line managers, undergo a general • Last year, 14,000 people were actively and training events run in the workplace. management development course. We have launched an online ‘Learning Hub’ which involved in World Class Mail learning • Pillar Network conference calls – the provides managers with direct access to activity. WCM National Pillar Leads run monthly Case study: a range of external learning aids such as conference calls that cover aspects such videos, podcasts, books and articles. The Hub Learning Centres Performance as feedback from WCM audits, new can supplement formal learning or be used approaches and tools, and good practice We continue to dedicate time and resources as a stand-alone solution for a development At Royal Mail, learning is supported by the updates. to ensuring that our employees have the need. Programmes cover subjects such activities of our Learning Centres. There training they need. Our front-line employees • National Good Practice Lessons – these as our Code of Business Standards, are 100 of these throughout the UK. At our participate in 30-minute Work Time Listening are examples of how a particular task, environmental issues, anti-bribery and Glasgow Mail Centre, for example, all 1,100 and Learning sessions once every week. approach or WCM tool has been mastered, corruption, and safer working practices. employees have access to lifelong learning which are available through a national opportunities in the workplace. Since 2009, Last year, we delivered training to 32,000 portal site. A comprehensive portfolio of operational 482 postmen and women have taken part colleagues. This represents around 61,634 in over 50 courses covering a wide range of • World Class Mail Portal – this online training is also provided for our postmen and days of formal training, equating to about topics. resource for WCM Pillar Leads and postwomen. £5.8 million in release costs. In addition to Champions contains all WCM teaching formal courses, all employees have around materials, as well as audit presentations one day’s training on compliance, health and feedback. and safety and fire safety. Our new starters receive a four-day induction. Collectively, this • LUTI documents – these documents additional training occupies 186,800 days explain how WCM’s Learn, Use, Teach and per year, with a total release cost of around Inspect (LUTI) approach is applied. £16.8 million.

Royal Mail Group Royal Mail Group 36 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 37 Our communities Our communities Our communities

Royal Mail seeks to be an integral, valued and trusted part of the communities that we serve.

• Promoting education and literacy in the Key facts Performance (2011-12) † Strategic community priorities Priorities for 2012-13 Our community investment in 2011-12 communities we serve to support their • £5.3 billion – our annual salary and During 2011-12, Royal Mail contributed Royal Mail has a major presence in every UK For the coming year, our focus is on future social and economic wellbeing. wage bill. £10.4 million to charities, good causes Total amount region, employing local people, connecting increasing our support of charity partners, contributed by • £2.4 billion – our annual procurement and schemes for disadvantaged groups. In customers, companies and communities. engaging our employees in supporting our Royal Mail £10.4 million Awards spend, spread across our network of addition, our colleagues raised £3 million for This is supported by our active investment communities and to gain recognition for the around 7,500 UK-based suppliers. many good causes across the country. in communities and our charitable giving The strength of our community investment contributions that we make. Cash £3.39 million programme. • In 2011-12, Royal Mail contributed £10.4 programme has been recognised in a Other highlights: Specific aims include: million to charities, good causes and In-kind £6.54 million number of ways. • 81 per cent – the percentage of our Our community investment strategy is • raising a substantial amount of money for schemes for disadvantaged groups across • In 2012, Royal Mail was awarded a customers who think we are an important focused on enhancing our contribution to the our Charity of the Year, Prostate Cancer the UK. In addition, our colleagues raised Time £0.35 million ‘Platinum’ ranking in Business in the part of the local communities we serve. UK economy and making a positive difference UK. Money raised by employees will be £3 million for many good causes. Community’s Corporate Responsibility • £2.6 million – the amount our employees Management costs £0.12 million to the communities in which we operate. It is matched by Royal Mail. • £45 million – the total donated by Index, marking us out as one of the UK’s raised for our outgoing Charity of the focused on the following core elements: colleagues through payroll giving since Amount contributed most responsible companies. • increasing the numbers of colleagues Year, Barnardo’s, during the four-year • Making a positive economic contribution 1989, helping a record-breaking 975 by employees £3 million supporting charities through payroll giving, partnership. to the UK through our core business • Our Payroll Giving scheme has generated charities. matched giving and fundraising; and, operations. We do this by providing more than £45 million in donations since • £2.4 million – the amount donated by In line with Group policy, no donations were • rolling out a volunteering programme for • £5.9 million – the annual cost of our free good-quality jobs and being an inclusive, 1989, winning Royal Mail a place in the employees through our Payroll Giving made in 2011-12 for political purposes. apprentices on the Duke of Edinburgh delivery service for blind and visually equal opportunities employer. Guinness World Records. programme last year. Scheme. impaired people. † • £2.7 million – our support for the British Our contribution includes our Articles for the • Providing our large UK workforce with • Royal Mail is one of very few organisations • 1 million-plus – the number of pupils Blind service, which is a free-of-charge service Postal Museum and Archives last year.5 meaningful opportunities to get involved in in the UK to have achieved a Platinum across the UK who benefit from our for people sending items specifically designed for their communities and deliver real benefit Payroll Giving Quality Mark Award. educational support materials. blind and visually impaired people within the UK and overseas. to good causes. 5 This includes a charitable donation that comprises a three-year funding agreement, In 2012, our Payroll Giving programme was running through to April 2013. It represents singled out for a Guinness World Record. the cost, covering mainly the staffing, to provide Royal Mail’s archive and records management The Payroll Giving Centre also granted us services for the Postal Museum and Archive. a Platinum Payroll Giving Quality Mark Excellence Award. Case study: GGiivingving our best

OurOur emploemployyees have donadonatteedd over £45 million through papayryrolloll giving sincsincee 1989.1989. The moneymoney has helhelpedped 975 charities, a figure that has earned Royal Mail a GuGuinnesinnesss World Record. Royal MMailail employees account for 6 per cent of aof all pall payryrolloll giving donordonorss in the UK. On tUK. top of theirop their pa payyrrolloll genergenerositosity, our people allsoso helpedhelped raise over £607,500 for charities acharities and othernd other good causes in 2011-12.

Royal Mail Group Royal Mail Group 38 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 39 Our communities Our communities

Impact on UK economonomyy Another main area where Royal Mail Connecting with charities generates significant economic activity is Our support for communitiesommunities starstarttss wwithith Our community programmes rest on the through our supply chain. We purchase goods Case study: the servicservices we provprovideide andand our ddirireectct partnerships that we form with other and services from around 7,500 UK-based Celebrating gold medals economic impact as an employyerer anndd organisations. These are making a big suppliers, paying them around £2.1 billion purpurchaserchaser of goods and services. difference at a local level. a year. This figure rises to £2.4 billion once Royal Mail is proud of its British heritage. Throughout our long history we inter-business intermediate spend is counted. have used our stamps to recognise great national figures. We saw the London Our contribution ttoo the UK economonomyy The bedrock of our partnership approach is 2012 Olympic and Paralympic Games in 2012 as the perfect opportunity to our revamped Charity of the Year programme. We make one of the single biggest economic We also support the future economic continue this tradition. For that reason, we produced a new stamp for every Our employees selected Prostate Cancer UK contributions of any UK company. A study wellbeing of our communities through our gold medal won by a British Olympian and Paralympian athlete. It was the as our new charity partner from 2012 to undertaken by the Centre for Economics and inclusive recruitment practices and our first time any host country used action shots for gold medal stamps. 2014. Our aim is to raise a significant amount Business Research, and commissioned community investment programmes (see page of money for the charity. by Royal Mail, found that Royal Mail adds 34 for more information). We also painted one of our traditional red postboxes gold in the home town of £9.4 billion a year to the UK economy, every Team GB and Paralympics GB gold medal winner. 110 postboxes were During the last four years we raised £2.6 making an overall contribution of 0.7 Communitommunity ininvvestmentestment painted gold across the UK in total. In November, we announced that all of per cent to the UK’s total Gross Domestic million for our outgoing charity partner, the our gold postboxes celebrating Olympic and Paralympic successes will remain We seek to make a positive differdifference to Product. We rank eighth among companies children’s charity, Barnardo’s. gold permanently. The boxes have become cherished local landmarks. Each the communitiescommunities in which we ooperperaate, in the UK in terms of our economic postbox will also have a plaque naming the athlete and marking their gold frfromom the UK’sUK’s largest cities to its mostmost contribution. In addition, the Rowland Hill Benevolent Fund medal achievement, or marking the location’s connection with London 2012. rural villages. is dedicated to supporting past and present We employ over 150,000 people in the UK. Royal Mail employees, pensioners and their Royal Mail is the first ever postal service to recognise the Olympics in this way, That equates to around one in eight workers Connecting with our busbusinesinesss families in times of need. Royal Mail Group cementing our position as one of Britain’s best-loved institutions. in the entire UK transportation and storage Times are tough at the moment. We recognise makes an annual donation to support the sector. Royal Mail also indirectly supports that. We also recognise that our business Fund (see www.rowlandhillfund.org). 83,000 full-time equivalent jobs. For every £1 will only thrive if the communities that we of income from employment that we pay, an serve are thriving too. Helping build healthy, Royal Mail’s financial support extends to many additional 57p of income from employment is prosperous communities therefore makes other charities too. Last year, for example, we generated in the wider economy. sense. donated 3,000 PCs and laptops to Computer Case study: Aid International for use in developing-world Sending aid to Bulgaria In 2011-12, we contributed around As a business, helping people connect with schools and colleges. Since 1997, we have £1.4 billion to the exchequer through one another is what we do. It is therefore also provided more than 12,000 bicycles to In 2011, a CWU team from across the UK and Ireland employer and employee National Insurance natural – and effective – that we should look cycling charities Re-Cycle and The Krizevac travelled to Bulgaria in ten vehicles loaned from Royal contributions, income taxes, business rates to align our community support with our Project, which provide bicycles to various parts Mail, BT, AnPost and Eircom. They delivered a huge range and a range of indirect and direct taxes. business expertise and company goals. That of Africa. of goods, including wheelchairs, beds, clothing, nappies, way, our social investments go further and toiletries, medical equipment and toys to homes for children have greater impact. with disabilities and a children’s hospital.

In 2012, after the reporting period, Royal Mail completed a Company Sustainability Assessment based on the Dow Jones Sustainability Index methodology. The assessment found that our Corporate Citizenship and Philanthropy programme is sector leading globally. It achieved a score of 81% 96 per cent. (Dow Jones places Royal Mail in the Industrial Transportation sector.)

Percentage of our customers who say we are important to the UK economy

Royal Mail Group Royal Mail Group 40 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 41 Our communities Our communities

Connecting our employees The money we raise for Prostate Cancer UK • Sports Foundation grants: our Sports • Volunteering: our employees volunteer Prostate cancer: the facts Our Young Letter Writers Competition is being used to fund new prostate cancer Foundation provides grants for sports for a range of charities across the UK. enthuses and engages thousands of pupils Our people take great pride in the work they nurses. Prostate cancer is the most common equipment, trophies and training for teams For example, many donate their time • One man dies every hour from prostate every year while helping improve their do in communities. We support colleagues’ cancer in men in the UK – yet there are not and clubs both within and outside of Royal to The Communication Workers Union cancer. literacy. The competition is open to Children fundraising and volunteering efforts for all enough nurses to support them. For every Mail. It has an annual budget of £400,000 Humanitarian Aid (CWUHA), a charity aged 7-11 with a ‘Special Achievement’ charities. • Prostate cancer is the most common £40,000 raised by Royal Mail, Prostate to disburse in grants. Our aim is to support run by our main union. Set up in 1995, cancer in men. It affects millions of their category for children who have overcome Cancer UK is recruiting and training another our employees in taking part in regular, CWUHA funds transport convoys that exceptional difficulties to enter. Charity of the Year partners, friends and families. specialist prostate cancer nurse. competitive community sport to promote deliver thousands of tonnes of clothing, In 2012 we launched a new Charity of the their health and wellbeing. During 2011-12, medical equipment and other items of • 40,000 men are diagnosed with prostate Royal Mail is also providing significant Year programme. We worked closely with our Royal Mail’s new Charity of the Year 3,165 employees benefited from a Royal international aid. For the last five years, cancer each year. financial support for a new centre for The main union, the CWU, to shortlist three very programme is the primary way we Mail Sports Foundation grant who then in CWUHA has also been providing funds British Postal Museum and Archive (BPMA). deserving charities: the Alzheimer’s Society, engage employees in charitable activity. turn involved 22,478 people in their local for a school in Tanzania to build three Connecting with tomorrow The BPMA is the leading resource for all Prostate Cancer UK and Whizz-Kidz. The programme carries forward many of communities in active and competitive sport. classrooms and install electricity on the site aspects of the history of the British postal We invest in the future by supporting the features of our long-standing charity • Payroll giving: payroll giving provides a (see www.cwuha.org). To encourage our system. The new Postal Museum will provide Our colleagues voted for Prostate Cancer partnership with children’s charity Barnardo’s employees, we provide grants to help them education in the communities we serve every access to the BPMA’s unique collections of UK through a Group-wide survey in April tax-efficient way for colleagues to make a day. Last year, more than a million pupils (see case study on page 44). For example, contribution to causes that are close to their with the costs of their volunteering projects 400 years of postal, social and design history. 2012. Our aim is to raise at least £2 million we will continue to work with the Charity of (see ‘Community matched giving and grant benefited from our support. A major avenue Under a plan endorsed by the Government, for Prostate Cancer UK (formerly known as hearts. Around 40,000 of our employees for our support is free educational resources, the Year to develop exciting fundraising ideas. donate through our Payroll Giving scheme, schemes’). the new centre will be established at The Prostate Cancer Charity). For the first We are also keeping our fundraising grants, which we offer to teachers in primary and Calthorpe House on London’s Mount time, Royal Mail is matching funds raised by making it one of the largest of its kind in the • Charity of the Year Hotline: with the secondary schools across the UK. Our free which give up to £200 to employees to help UK. In 2011-12, Royal Mail colleagues and introduction of Prostate Cancer UK as Pleasant site, where the country’s oldest mail colleagues for the Charity of the Year, penny cover costs for fundraising ideas. educational magazine, Teachers Post, is centre is located. The new centre will include for penny, up to £1 million a year. Once we pensioners donated £2.4 million of much- our new Charity of the Year, Royal Mail available online to all teachers and others needed funds. This pushes our total payroll established a dedicated fundraising team. educational facilities for visiting schools. have raised £2 million for Prostate Cancer UK We encourage and support our employees and is published eight times each academic – £1 million from employees and £1 million giving contribution to over £45 million since The team helps employees with fundraising year. For more information, visit the Teachers in contributing to a range of other worthy 1989, helping a total of 975 charities – an ideas and information. Last year, over 250,000 people from across from Royal Mail – any money raised for either causes too: Post website: www.teacherspost.co.uk the country visited a BPMA exhibition or Alzheimer’s Society, Prostate Cancer UK or achievement that has earned Royal Mail • Community matched giving and grant a place in the Guinness Book of Records. display. In addition, nearly 2,000 teachers Whizz-Kidz will also be matched by Royal and students took part in school workshops, Mail, penny for penny, up to a further £1 schemes: we match funds raised by For the first time, Royal Mail is also match colleagues for all other charities and funding payroll contributions to our Charity including the BPMA-sponsored Stamps in million. As part of our ‘everyone’s a winner’ Schools programme. approach, we have also made a donation of good causes, up to £200 a year, to help of the Year up to £100,000 in total in each £50,000 each to Alzheimer’s Society and them maximise their contributions. We of the two years of the programme. Whizz-Kidz. also provide grants to cover the costs for fundraising events and voluntary projects. Colleagues can obtain a grant of up to £200 a year for fundraising activities and up to £400 a year each for volunteering. Case study: MovemberMovember

MovemberMovember,, held during NNovemberovember,, is a global moustache-grmoustache-groowingwing camcampaignpaign toto raise fufunds and awareness for prostate and testicular cancers. Our new Charity of the Year, Prostate Cancer UK, benefits from funds raised by Movember in Case study: the UK. Charity of the Year Royal Mail supported the campaign in 2012 We are promoting our Charity of the Year on dedicated postmarks over the course of the and encouraged ‘Mo Bros’ and ‘Mo Sistas’ to partnership. Around 1 billion items of mail will feature a postmark raising awareness of enter the spirit of Movember to raise awareness prostate cancer and our fundraising campaigns to tackle it. For two weeks during November, and funds. Mo Bros committed to growing a for example, we applied a dedicated Movember postmark to all postmarked letters. These moustache for the 30 days of November whilst awareness postmarks were featured on around 6 million items of mail every day. Mo Sistas supported and fundraised Mo Bros, as well as getting involved in a range of other fundraising activities.

Royal Mail Group Royal Mail Group 42 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 43 Our communities Our communities

Suppliers Ensuring compliance The performance of our suppliers is measured on a monthly basis, with quarterly Royal Mail Group is committed to In 2011, we carried out an extensive Case study: reporting to the Chief Executive Committee. ensuring that our suppliers maintain programme to ensure supplier compliance SpeakSpeakerer’s Parliamentary PlacPlacement SchemSchemee The system enables the business to see how high standards of social, ethical and with the Bribery Act (2010) and promote our supply chain management is progressing environmental conduct. high standards of probity in our dealings with Royal Mail has thrown its support behind a new initiative that is opening up suppliers. This involved communicating with in general, as well as creating specific the parliamentary process to young people who are passionate about politics. Key facts all suppliers, a risk review of all contracted strategies for managing relationships with Launched in June 2011, the Speaker’s Parliamentary Placement Scheme offers suppliers and training for procurement individual suppliers. a dozen paid internships with MPs. The successful applicants to the cross-party • Our annual procurement spend is £2.4 staff. We have also implemented a process scheme come from disadvantaged and diverse backgrounds. billion. The majority of this is spent within to revise our contracts with suppliers We encourage suppliers to set targets to the UK. where appropriate and ensure that all new improve their practice and performance on The Scheme aims to break down barriers and open doors for people who would • At any one time, Royal Mail Group is relationships have appropriate anti-bribery social, environmental and ethical issues. One normally be frozen out of politics. liaising with at least 700 different suppliers. compliance built in. way we do this is through our membership of the non-profit supply chain organisation, For more information, see the Social Mobility Foundation’s website: Strategic priorities We also participate in the Public Sector Sedex. Sedex membership requires that www.socialmobility.org.uk Our focus this year has been communicating Ethical Trade Working Group, a forum for we ask relevant suppliers to fill in a self- with our suppliers on the responsible discussion and progression of social and assessment questionnaire on labour-related business practices we expect. To help make ethical issues in the supply chain. The Group risks at production sites. Evidence from the this clearer and more consistent we are is coordinated by the Ethical Trading Initiative. questionnaires is then used to evaluate and developing a new Supplier Code of Conduct. It forms part of a European-wide network remediate the risks in our supply chain. For In 2011-12, we also continued to deploy our of organisations seeking to promote ethical more information on Sedex see Case study: audit process to check supplier compliance trade principles across European public www.sedexglobal.com with our Responsible Procurement Policy and procurement. BarnarBarnardodo’’s: a fruituitffulfrs: parul partnership the UN Global Compact. In 2011-12, we identified potential risks that Measuring performance could affect the performance of 46 different Royal Mail’s employees supported children’s charity Barnardo’s as our Treating suppliers fairly Royal Mail Group continually evaluates the suppliers, and actions that we could take major charity partner from 2008 to March 2012. During that time Our 7,500 UK-based suppliers are performance of our supply chain. We do to mitigate these risks. Most of these relate they helped raise over £2.6 million through a range of sponsored important to us. Enforcing strict criteria this through a new Supplier Relationship to mainstream commercial operations. The events, from walks and hikes to marathons and fun runs. In addition, regarding suppliers’ social, ethical and Management system that is designed to majority of these risks were rated as ‘unlikely’ over 1,000 employees volunteered for local Barnardo’s projects. environmental performance is a standard track a supplier’s contract performance and or ‘very unlikely’ to occur. A dozen were These efforts have collectively helped to support 10,000 children and part of our procurement practices. When relationship management activity. The system judged to be ‘amber’, which indicates a higher young people who are living in poverty, coping with disabilities and new suppliers are added to our supplier relies on a comprehensive database, which is level of likelihood and are being managed battling youth unemployment. Royal Mail Group has also offered work database we ask for confirmation that they based around a collaborative website. Group appropriately. placements and permanent employment to over 100 young people adhere to our Responsible Procurement Procurement was responsible for rolling out from Barnardo’s projects. Policy. This policy is based on the UN Global the system across the business during 2012 Priorities for 2012-13 Compact’s ten principles. The Chartered and for managing the reporting process. We implemented the Supplier Relationship Institute of Purchasing and Supply (CIPS) Management System in April 2012, at the recently recognised our efforts in this area The system works by creating a Dashboard end of our reporting year. Over the next by awarding Royal Mail a certificate of for each supplier. This combines contractual twelve months, we will be working hard Case study: excellence for our purchasing policies and commitments alongside more relationship- to phase it in across Royal Mail Group. To International Purchasing award procedures. based activity judged by methods such as achieve this, we will run training and supplier perception surveys and risk assessments. engagement programmes throughout the In September 2012 Royal Mail Group received the Chartered Institute for To measure how well suppliers are year. We have already enrolled our largest 50 Purchasing and Supply’s (CIPS) International Purchasing Project of the Year award meeting their commitments, we have suppliers in the system. for our ‘Chinese Import Fulfilment’ project. Central to the project was working with introduced Service Level Agreements or Key a Chinese organisation to boost our share of the China-Europe parcels business. Performance Indicators. Our procurement team drew on best practice established internationally, such as extensive due diligence on the supplier ZJS Express. As a result of the project we opened up a competitively priced service in a market which is growing by 17 per cent a year.

Royal Mail Group Royal Mail Group 44 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 45 Our environment Our environment Our environment

We are working hard to reduce our environmental impact and helping our customers do the same.

Heritage: acknowledging that we need to We use our internal communications As part of our strategy, by 2020 we aim KPIs 2010-11 2011-12 protect the historic buildings, collections channels to make our people aware of the CO2 e emissions by source 2011-12 to deliver a 30 per cent reduction in and archives that form a part of our large key environmental challenges facing our buildings-related emissions, and a 10 per Carbon emissions (tonnes of CO e) 789,862 745,605 Fleet and transport9 60% 2 property portfolio across the UK. business and the initiatives we have in place cent reduction in transport emissions. Waste (tonnes to landfill) 16,287 14,607 to help manage our impacts. We also use Buildings energy10 38% Particular focus will be given to improving Responsibility for revising and overseeing these channels to celebrate some of our energy performance at our largest energy- Waste (tonnes recycled) 14,087 19,760 our environment strategy lies with our newly successes. Business travel11 2% consuming sites. Our modernisation constituted Environment Governance Board programme will also assist the reduction Water consumed (m3) 1,589,507 1,793,954 (see page 18 for more information). Reducing our carbon footprint of our carbon footprint as it will result in a 2020 CO2e target Given our Universal Service obligation, the consolidation of our property portfolio. Grams of C0 e per mail item6 38.08 37.62 We seek to ensure that our CO e emissions 2 World Class Mail scale of our operations means that we have a 2 at the end of 2020-21 do not exceed current 8 Our baseline year emissions are for CO rather Our World Class Mail (WCM) programme, significant energy demand. We are, however, 2 We are currently developing our formalised levels, maintaining a 20 per cent reduction than CO e. 2011-12 carbon emissions have been Key facts based on the principle of continuous working hard to reduce our emissions and 2 Environmental Responsibility Strategy for against our baseline year (2004-05). calculated based on Defra emission factors. • We were the first UK postal services improvement, covers ten areas of operational have already achieved some good results. performance improvement between now 9 operator to achieve Carbon Trust Standard focus, one of which is environmental Our total Scope 1 CO e emissions for This includes business fleet and other road, air and 2020. The development of our strategy 2 Our new 20 per cent target is below the 34 certification. management. 2011-12, excluding commuting, amounted and rail emissions generated in the delivery of is guided by the principles of environmental per cent CO e reduction goal for 2022 that we mail. to 462,876 tonnes, which represents a 5.6 2 • We have reduced our C02e emissions by protection, stewardship and, where practical, set previously. A variety of factors have caused The environment pillar of WCM has now per cent reduction on 2010-11. Our total 10 This includes emissions from electricity, natural over 20 per cent since 2004-05. enhancement. We seek to address our us to recalibrate our carbon targets. One been deployed at the majority of our regional emissions have dropped by one fifth (20.1 aspect is the projected growth in our delivery gas, heating oil and refrigeration. • In 2011-12, we recycled 57.5 per cent of environmental impacts and performance in distribution centres and mail centres: over 90 per cent) since the baseline year of fleet. As we continue to deliver an increasing 11 This includes road, air, rail and ferry emissions. our waste. each of the following six areas: 8 per cent of our mail volumes pass through 2004-05. number of parcels, rather than letters, we Climate: working to help mitigate climate mail centres that have started their WCM must adapt our delivery methods (see case Strategic priorities change through a programme to reduce environment pillar journey. Carbon Trust Standard study: ‘Modernising transport’ on page 49). We aim to ensure that our business our greenhouse gas emissions, while, at Royal Mail was the first UK postal services We had also planned to use alternative fuelled operations have a positive impact on the same time, minimising our vulnerability Working towards ISO 14001 operator to achieve the prestigious Carbon vehicles to radically reduce our emissions. our future and a minimal impact on the to a changing climate through adaptation Royal Mail is continuing its journey towards Trust Standard. This award recognises our However, these have not yet emerged as a environment. Royal Mail covers the whole of measures. ISO 14001 and now has seven of its 51 mail success in reducing our carbon emissions commercially and operationally viable option. the UK. The scale of our operations means Waste: minimising the amount of waste we centres (14 per cent) accredited. Parcelforce after we cut emissions by 47,670 tonnes in we inevitably have a significant carbon produce, increasing the amount of waste Worldwide has 100 per cent of its operations two years. footprint, but it also accounts for a significant we recycle, and disposing of any items that accredited. WCM is supporting our ambition to degree of our cost base. We are therefore cannot be recycled responsibly. increase the proportion of the business that is working hard to reduce both. certified to ISO 14001. Water: reducing our demand for water as CO e emissions by scope7 2008-09 2009-10 2010-11 2011-12 well as targeting loss reduction across our 2 Managing and reducing our impact in a estate. Employee environmental engagement Scope 1 486,436 471,150 479,080 462,876 responsible manner will help us to save Ecosystems: preserving and enhancing Our success depends on our people getting costs, compete more effectively and continue Scope 2 203,329 197,983 189,106 178,946 the biodiversity potential of our estate and involved. Small behavioural changes can make to deliver a good service to our customers. big differences to our energy consumption and minimising the impact of our operations on Scope 3 126,110 126,407 121,675 103,782 ecosystem services. recycling levels. Customers and services: innovating and 6 7 Emissions data includes Post Office Ltd (POL). In future years, POL emissions will be excluded from working in partnership with our suppliers Grams of CO2e per mail item are calculated based our data. Our Scope 3 emissions do not currently include commuting emissions. to minimise our collective environmental on our total Scopes 1, 2 and 3 emissions. impacts.

Royal Mail Group Royal Mail Group 46 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 47 Our environment Our environment

Case study: Testing next generation technologies

In 2012, we began trials of an electric vehicle that was custom built for Royal Mail. The zero-emissions French Mia van joined our West London fleet. This is the second electric vehicle to be trialled by the West London Distribution Centre, which already operates ten hybrid diesel vans.

The test programme builds on previous tests by Royal Mail into hydrogen-powered vehicles. The results of the six-week pilot programme, which was carried out in the Outer Hebrides, were published by Centre of Excellence for Low Carbon and Fuel • eCeCOO HUB: ourour bespoke eeCCOO HUB enerenerggyy Transport efficiencies BBuuildings-rildings-relelated effefficienciesiciencies 2 2 Cell Technologies (Cenex) in October last year. For more information see: mamannagementagement database provides detailed site Around 60 perper cent of our carbon emissions DuringDuring 2011-12, our buildinbuildingg emissionsemissions www.cenex.co.uk/resources. We have also installed technology that tells us how our level analyysissis ooff energenergyy consuconsumption and arare attributable to the transpornsportation ooff reduced by 11 per cent compared to the vehicles are being used and will help us improve driver behaviour. the associated C0 e emissions. eCeCOO HUBHUB mail. The large-scale applpplication of low andand prpreviousevious yyearear.. RoRoyal Mail has a properproperty 2 2 supporsupportsts the roll-out of the World Class zero emission technologechnologyy does not currently portfolio of approximately 2,500 buildings Mail envirenvironment pillarpillar. In 2011-12, we rreprepresent a commercially sustainablsustainablee anandd coveringvering around 3.6 million sqsquare metres ofof expaexpandednded the system to include waste and operationally viable option ffoor our fleet. floor sspacpace.e. Around 40 perper cent of our totatall water monitoring. HHoweverowever,, we are positive thatthat such ooptionsptions emisemissionssions derive from the energgyy used in Case study: will develop over the coming yyeearars. We these buildings, which range from delivery • Refr Refrigerationigeration gas replacement: will continue to play a significant role in offices aandnd mail ccentrentres to Parcelforce depotsdepots we have developed an ££8.78.7 millionmillion Double decker trailers collaborating with government and industry aandnd data centreses.. investment programme to reeplacplacee oorr to drive foforward the agendaagenda andand stimulate remove ozone-done-deplepletietingng rereffrigerrigeraant ggasesases As a result of introducing over 500 double decker trailers, we can the markmarket (see case studyy:: ‘T‘Testing next We are takintakingg a tieredtiered apppprroachoach to reeducingducing usedused in refrigerfrigeraation andand air-conditioning now carry 50 per cent more mail in one vehicle. This has already genergeneraation technoloechnologiesgies’’ on page 49). property-ry-related emissions. Our primary ssyystems across our UK sites. This investmentment reduced our annual mileage by more than 7.6 million miles, saving 7,000 tonnes of CO e. We also use route planning technology to help objective is to reduce the need for energgyy,, is projected to remove 2,12,14545 tonnestonnes of CO2e 2 In the meameantime,ntime, our Fleet and Maintenannccee then use more energy-efficientgy-efficient equipment emissions perper year by 2015. us increase the efficiency of our network. Services team will appraise industry best and finally implement renewable energygy • SmSmart art metersmeters:: we are continuing with a prpracticactice in search ooff carboncarbon eefficiencies.fficiencies. ttechnologies.echnologies. We have a number of strands for nanationtionwidewide pr proogrgramme to install eellectricitectricityy ThisThis will build on our existing, fleet-related deldeliveringivering energygy reduction over the next few and gas metermeters across our estate. SoSo far we fuel and energy carbon reduction initiatives, yearyears, includingincluding:: hahave installinstalled over 1,629 electricity metermeters which include: • EnergyEnerg y audaudits:its: we are carryiyingng out a roollllinging and 1,563 ggasas smartsmart meters. • Eco start technology: the majoritmajorityy of progrprogramme of detaildetaileded energgyy audits atat up • BoBoiler iler temperatures: we havehave instainstalllleedd thethe Paarrcelfelfororce Worldwide coollllectionection to 100 of our lalarrggestest sites, to identifidentifyy eneenerrggyy SabienSabien M2G boiler controls at a number of Case study: and deliverdelivery fleet is fitted with ‘st‘stopop reduction opporopportunities and cost efficiencies. sitsites.es. TThesehese act to monitor the teempermperaature starstart’t’ technologechnologyy,, which reeducduceses fuel TheseThese sitessites accaccount for approximately 50 ooff the heating water at ten-second intervals. Modernising transport consumption in urbabann enenvirvironments bbyy as per cent of our total energgyy consuconsumption,mption, WWhenhen heating demand increases, the The type of mail we deliver is changing from small letters to large, bulkier parcels. much as 10 per cent. soso chachanges hhereree wiwillll hahave a larlarggee impact on controntrolol system uses thethe lalatteest dadatata anandd This requires us to rethink our approach to deliveries. To increase safety for our total energenergyy use and CO e output.output. autautomaomatically ddecidesecides wwhetherhether more bburnerurnerss • Driver training:training: our Zeerroo Accidents 2 people and improve efficiency, we need to use more vans and trolleys, and fewer araree actuactuaalllly needed. TThehe reresultsult is a potential Progrogramme (ZAP) encouragesages safesafe and • V oltage reregulgulaationtion:: voltagevoltage optimisationoptimisation bicycles. efficientefficient driving, therebtherebyy rreducingeducing accidents has been installinstalled at two siteses,, with a thirdthird sasavinvingg in ggasas consuconsummptionption of 5-10 perper cent. andand carbbonon emissionsemissions simultasimultaneouslneouslyy. plaplanned beforbefore the end of 2012-13. At the same time, modernising our delivery methods is helping to drive • Double deck trailers: we havehave rapipidldlyy By installing these systems we are able to environmental efficiences. Every cycle delivery and foot walk needs vehicles to expaexpanded our fleet of double deck trailers better manage the electricitelectricity rereqquuirireded fofor support it – to provide postmen and women with replenishment pouches of mail, to overover 500. Each of our double deck ourour eqequipment.uipment. The pilotspilots are showinshowingg gogoodod and to deliver their bulkier items. We are now phasing out these support vehicles, trtrailailers transpornsportsts 50 per cent more mail elelectricity savings in the rarange of 7-10 per which tend to be larger, older and therefore produce more carbon emissions. thathann coconventional trtraiaillerers, enablenabliningg us ttoo cceent.nt. OncOncee a f ullull rreeviewview hashas beenbeen cacarrrriedied reducreduce lorlorrry journeys. outout we will look for further sites as partpart of a Our new Royal Mail fleet of energy-efficient vehicles will also stop the use of widerwider roll-out.roll-out. thousands of private cars on deliveries. Previously, it was common for postmen and women to use cars, and these emit sizable carbon emissions.

Royal Mail Group Royal Mail Group 48 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 49 Our environment Our environment

• an electronic building management Medway awarded BREEAM rating Recycling performance system that controls the mail centre’s Target waste recycling flight path 3 Returning cardboard: since 2008, we have Case study: energy use and temperature. Royal Mail’s new 15,400m Medway Mail Centre in Kent achieved a ‘very good’ rating 2010-11 2011-12 2012-13 2013-14 2014-15 baled unused flat-packed cardboard from our Northampton – ‘Green’ • sensors in the building that adjust from BREEAM, the leading environmental delivery offices for return to its suppliers. By Mail Centre the lights according to the available assessment standard. The facility, which was % recycling target 35% 55% 60% 65% 70% doing this we earn rebates on our cardboard daylight and automatically switch purchases and further cost savings as we Opened two years ago, our South opened in September 2012, incorporates them off when a room is not being no longer need to dispose of the cardboard Midlands Mail Centre at Northampton solar walls, rainwater harvesting, bio-mass Waste reduction We have seen an increase in recycling rates used. since the launch of the scheme. We recycled ourselves. These savings equate to around is beginning to prove the value of boilers and solar hot water heating. Our overall waste strategy is contained within • parking places for those who give a 57.5 per cent of our waste in 2011-12, £70,000 per year. its cutting-edge sustainable building the environmental pillar of our World Class design. So far, the building is 30 per lift to work to one or more colleagues. compared with just 6 per cent four years ago. Business travel Mail programme. It is structured according to Uniform recycling: every year, Royal cent more energy efficient than similar • bike shelters to encourage staff to the 5 Rs: refuse, reduce, reuse, recycle and We have begun a major push to reduce This year, we have included new waste Mail replaces approximately 40 tonnes of units. cycle to work. reform. the number of business-related journeys streams in our data, such as confidential employee clothing and footwear. The old taken by our people. We are continuing to waste and pallets. However, there are still uniforms are sent back to our clothing The total annual CO2e saving at our • The total annual CO e saving at South Royal Mail has a target to recycle 70 per 2 encourage our people to use conferencing several types of waste that we cannot supplier, Dimensions. They sort the good South Midlands Mail Centre is 415 Midlands Mail Centre is 415 tonnes cent of recyclable waste by 2014-15. This facilities, including audio conferencing and confidently track. These include tyres and returns from those that need to be disposed tonnes compared to a similar facility. compared to a similar facility. is ambitious in scope when compared to office communicator. Royal Mail has clocked green waste. In the year ahead, we will aim of. These disposals are then collected and up over one million participant minutes in the municipal recycling targets of around 70 per shredded by UK Shred, a specialist recycling Among the features helping to achieve • Energy reduction and energy to address this. The strengthening of our last 12 months. Audio conferencing usage has cent by 2025. firm. Usable garments are ‘de-branded’ and improved environmental performance efficiency measures alone contribute data through an improved collection process 240 tonnes of CO e saved. increased by 30 per cent over the last two and an increased number of waste types then resold and reused. The shredded items are: 2 We continue to work together with our waste years. measured have resulted in an increase in our are reused in the motor industry, primarily as contractor on a national mixed recycling • a biomass energy boiler fuelled by • Renewable energy technologies reported waste volumes. seat mouldings. scheme across our operations. This has woodchips, which saves a total of 120 account for 175 tonnes of CO2e which tonnes of CO e and £3,000 in running would have otherwise been emitted involved the replacement of 30,000 bins 2 Our attention going forward will focus on the with recycling bins and the deployment of costs a year. if conventional fossil fuel sources had top 200 sites that produce 59 per cent of our a further 15,000 recycling boxes. Biffa now • a rainwater harvesting system, which been used. total waste footprint. collects water from the roof and then collects waste from around 99.5 per cent of • Over the building’s expected lifespan our UK sites, where previously many sites pumps on demand to be used for of 20 years this will mean a projected toilets and vehicle washing. had local arrangements. Recycling performance CO2e saving of 8,292 tonnes. • smart water metering. Waste (tonnes) 2009-10 2010-11 2011-12 • solar panels capture the sun’s heat to produce hot water, and a 700m² Total waste 21,757 30,374 34,267 ‘solar wall’ at the back of the mail centre heats the building in winter. Landfill waste 15,415 16,287 14,607 Recycled waste 6,342 14,087 19,760

% recycled 29% 46.3% 57.5%

Royal Mail Group Royal Mail Group 50 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 51 Our environment Our environment

Wateterr sstrtraategy Sustainable Advertising Mail: Royal MMailail Water use m3 Royal Mail recognises that water is a precious created Sustainable Advertising Mail so that Case study: our customers can meet their environmental natural resource. We are committed to 2009-102009-10 1,679,2131,679,213 Installing LED ttechnolechnologyogy managing and reducing our use of it. commitments whilst continuing to market 2010-112010-11 1,589,5071,589,507 in the way that works for them. As part of Our national delivery depot at Daventry stretches over a 30-acre site and We do this by implementing technical this service, we provide customers with operates for 24 hours each day. In September 2011, we introduced an Case study: solutions that reduce the amount of water 2011-122011-12 1,793,9541,793,954 a Sustainable Advertising Mail calculator. innovative LED lighting technology as a way of reducing the environmental This enables them to work out the CO e Red buckets we use and by encouraging behavioural 2 impact of artificial lighting. comparison, cradle to grave, of Sustainable change amongst our employees. We have OurOur pr products aoducts and sernd servviciceses A group of employees at our West Yorkshire fitted over 1,000 water saving devices to Advertising Mail and non-Sustainable Mail The initiative involved replacing around 480 linear fluorescent lights with 140 site noticed thousands of rubber bands toilet cisterns to conserve water. We are also WWe re rececognise thaognise thatt bus businesinesses ases andnd mailings. Those that choose Sustainable LED lights. This actually enhanced the light quality for our staff. It also required were being thrown away during standard proactive in encouraging our employees to consumers want to improve the Advertising Mail receive a price incentive. In fewer lighting points, and therefore reduced energy consumption and costs. In operations. So they put out red buckets on identify and report leaks, as this can help to enenvvirironmental perfperformance of thetheirir addition, they are able to demonstrate their fact, peak energy demand in the sorting hall is projected to fall by 27 per cent, the processing floor and collection pouches prevent significant water wastage. mailings andand we want to provideovide them commitment to recycling, sustainability and saving the equivalent of 61,712kg of CO e per year, while the depot’s total withwith the products and servicviceses to do so. 2 next to sorting machines. These were then reducing waste. To ensure the specification is electricity consumption dropped by 11 per cent. The point of payback for the taken to three red dustbins. In five weeks, In our new buildings, such as the up to date with current sustainable thinking, £205,000 initiative is projected for late 2016. the bins were brimming. The measure is Northampton Mail Centre and Medway Mail Direct marketing: we are committed to we have aligned it to PAS 2020 – the helping save up to £7,000 per year. Centre, we incorporate many water saving helping the mail industry meet the UK environmental standard for direct marketing. features, such as rainwater harvesting and Government’s environmental targets for Royal Mail Wholesale also offers Responsible smart water meters (see page 50 for more direct marketing. We continue to work Mail, which provides the same environmental information). with the Direct Marketing Association to specification as Sustainable Advertising Mail. ensure we are consistent with PAS 2020, Over the past year we have significantly the industry standard for reducing the Mailing house scheme: Royal Mail operates improved the quality of our water data. As a environmental impact of direct marketing. a mailing house scheme that promotes result, we have seen an increase of 13 per a high standard of mail presentation Rubber bands During 2011-12, Royal Mail introduced a As a result, the number of rubber bands cent in reportable water consumption. While and addressing accuracy. The Scheme Royal Mail uses millions of rubber bands number of new processes for collecting and that we used during the last 12 months has water billing continues to be a challenge, also incentivises mailing houses to be every year, at a cost of around £1.4 million. reusing rubber bands. We also launched a dropped by 10 per cent. We recognise that we are seeing improved levels of accuracy environmentally responsible. To be eligible, the mailing house production facilities must These are made from natural material, major communication programme targeting there is more to do, however, and we are since we included water use in our eCO2HUB are non-toxic and degrade in a year or so, littering. Our postmen and women are committed to building on this progress. environmental management system (see be environmentally accredited and provide depending on weather conditions. instructed not to drop bands while on their page 48 for more information). a valid certificate to Royal Mail as evidence rounds, but to take them back to the office for of this. 101 mailing houses have achieved reuse – something for which the bands are the standard and are rewarded by us with a specifically designed. We encourage customers financial incentive, giving mailing houses that to return unused rubber bands too. invest in a certified standard the opportunity to recoup their investment.

Royal Mail Group Royal Mail Group 52 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 53 Our environment Our environment

Forest Stewardship Council: RRooyyaall Mail PPrriorities fioritiesfoorr 2012-13 FFuurrtherther inf informationtion was one of the first postal operators in • Buildings: we will investvestinwe over £10 millionmill ion the world to have its stamps and philatelic Department for Energy and Climate Change: over the next four years in improving the products certified by the Forest Stewardship http://www.decc.gov.uk/ energy efficiency of our buildings. We will Council (FSC) – meaning they have been focus on tackling the sites that currently EnEnvirvironment Agencyy:: made with fibre sourced from responsibly use the most energy. http://www.environment-agency.gov.uk/ managed forests. FSC is a system of forest certification and product labelling that • WaWater:ter: we will focus on baselining our Carbon Trust: promotes the use of materials from water usage this year to help inform any http://www.carbontrust.co.uk/ future reduction strategies. well-managed forests and recycled sources. Cararbonbon DisclosurDisclosure Prroject:Pe oject: • Waste: ourour new suppl supplierier wi will bebe tartll argegetteedd https://www.cdproject.net/ The Woodland Trruustst to divert 80 per cent of our waste away Parcelforce Worldwide was the first UK from landfill by 2015-16. BiffBiffa:a: carrier to offer a Woodland Carbon service. • RecRecycling:ycling: we areare pplalanninnningg a major http://www.biffa.co.uk/ Customers can choose to donate 5p for internal communications campaign to raise WWooodlaodland Trruust:st: a UK delivery or 10p for an international employee awareness of the importance of http://www.woodlandtrust.org.uk/ delivery to offset the carbon that would be recycling. produced by conveying their parcel. Investing CCentrentree of ExccellellencenceEx fe foorr L Looww CCararbonbon in Woodland Carbon supports the protection aandnd Fuuelel CellCell Technoloechnologies:gies: and expansion of forests and woodland that www.cenex.co.uk/resources absorb greenhouse gases and neutralise residual emissions.

Royal Mail Group Royal Mail Group 54 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 55 GRI Index GRI Index GRI Index

Employee data Global Reporting Initiative (GRI) Index LA1 – Total workforce by employment type, Our GRI Index has been checked by Corporate Citizenship. Corporate Citizenship confirms that in their view the Index meets the requirement of contract and region. LA2 – No. and rate of employee turnover by age, gender and region. B+ as set out in the GRI G3.1 Guidelines.

By region Headcount Rate Leavers by region Headcount Rate Joiners by region Headcount Rate G3 Indicator Description 2011-12 response Anglia 17,621 11.7% Anglia 1,449 0.96% Anglia 1,105 0.73% Strategy and analysis London 10,569 7.0% London 1,298 0.86% London 588 0.39% 1.1 Statement from the most senior decision-maker of the pages 4-5. Midlands 21,285 14.1% Midlands 1,819 1.20% Midlands 1,190 0.79% organisation. North East 19,902 13.2% North East 1,378 0.91% North East 958 0.63% 1.2 Description of key impacts, risks and opportunities. CRR 2011-12 pages 6-11, ARFS 2011-12 Our Strategy pages 12-18, Business Risk pages 50-53. North West 17,691 11.7% North West 1,334 0.88% North West 901 0.60% Strategy and analysis Northern Ireland 3,606 2.4% Northern Ireland 275 0.18% Northern Ireland 96 0.06% Scotland 12,824 8.5% Scotland 1,328 0.88% Scotland 937 0.62% 2.1 Name of the organisation. Royal Mail Group. South East 20,846 13.8% South East 1,609 1.06% South East 1,244 0.82% 2.2 Primary brands, products and/or services. ARFS 2011-12 pages 31-36. South West 26,002 17.2% South West 2,143 1.42% South West 1,737 1.15% 2.3 Operational structure of the organisation, including main ARFS 2011-12 Group Legal Structure page 5, CRR divisions, operating companies, subsidiaries and joint ventures. 2011-12 page 7. Non region-specific 810 0.6% Non region-specific 68 0.04% Non region-specific 25 0.02% 2.4 Location of organisation’s headquarters. 100 Victoria Embankment London EC4Y 0HQ. Total 151,156 Total 12,701 8.4% Total 8,781 5.8% 2.5 Number of countries where the organisation operates, and names Royal Mail Group operates in over 42 countries. The of countries with either major operations or that are specifically vast majority of operations are in the UK, with over 90 Leavers by age - Headcount Rate Joiners by age - Headcount Rate By contract Headcount Rate relevant to the sustainability issues covered in the Report. per cent of employees based there. simplified simplified Permanent 141,923 93.9% 2.6 Nature of ownership and legal form. See ARFS 2011-12 Group Legal Structure page 5. Temporary 9,233 6.1% <30 2,438 1.6% <30 3,823 2.5% Royal Mail Holdings PLC is directly owned by HM Government and is ultimate parent company of the Total 151,156 30 - 49 4,988 3.3% 30 - 49 3,754 2.5% Group. 50+ 5,275 3.5% 50+ 1,204 0.8% 2.7 Markets served (including geographic breakdown, sectors served, ARFS 2011-12 Our Businesses pages 31-38. By type Headcount Rate Total 12,701 8.4% Total 8,781 5.8% and types of customers/beneficiaries). Full time 125,106 82.8% 2.8 Scale of the reporting organisation. ARFS 2011-12 pages 31-37. Part time 26,050 17.2% Leavers by gender Headcount Rate Joiners by gender Headcount Rate 2.9 Significant changes during the reporting period regarding size, Post Office Limited and Royal Mail Group have become Total 151,156 Female 2,177 1.44% Female 1,411 0.93% structure or ownership. sister companies. Refer to page 6, 25 for further details. Male 10,524 6.96% Male 7,370 4.87% 2.10 Awards received in the reporting period. Royal Mail Group won a Gold Managing Occupational Total 12,701 8.4% Total 8,781 5.8% Road Risk medal in the 2011 RoSPA Occupational Health and Safety Awards, and a Silver in the 2011 ‘Opportunity Now’ Awards. Sustainable Mail received LA13 – Distribution per category of gender, age, minority group, other diversity indicators. Also see page 32. a Big Tick award for Sustainable Marketing and Innovation from Business in the Community (BITC). Summary age distribution Strategy and analysis <30 30-49 50+ 3.1 Reporting period (e.g. fiscal/calendar year) for information Fiscal year 2011-12. Governance body 0.0% 20.0% 80.0% provided. Senior Managerial 2.7% 67.9% 29.4% 3.2 Date of most recent previous report (if any). 2010-11. Managerial 5.6% 63.1% 31.4% 3.3 Reporting cycle (annual, biennial, etc). Annual. Administration 10.0% 55.0% 35.0% 3.4 Contact point for questions regarding the Report or its contents. [email protected] Operational 10.4% 56.1% 33.5% 3.5 Process for defining Report content. page 66.

Royal Mail Group Royal Mail Group 56 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 57 GRI Index GRI Index

3.6 Boundary of the Report (e.g. countries, divisions, subsidiaries, This Report covers all UK operations and associate 4.6 Processes in place for the highest governance body to ensure Board members are required to declare any conflicts of leased facilities, joint ventures, suppliers). See GRI Boundary companies where we have a controlling interest. conflicts of interest are avoided. interest at the start of each Board meeting. Directors Protocol for further guidance. sign a contract annually identifying external roles that might lead to conflicts. For any conflicts identified, the 3.7 State any specific limitations on the scope or boundary of the Operations outside the UK, e.g. GLS, are not covered in Company Secretary puts processes in place to remove Report (see completeness principle for explanation of scope). this Report. Our UK operation accounted for over the risk of conflict, e.g. exclusion from relevant Board 90 per cent of our employees in 2011-12. discussions. Two members – the Senior Independent 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, As above. Director and Chair of Audit – are appointed to ensure outsourced operations, and other entities that can significantly that this is carried out appropriately. affect comparability from period to period and/or between 4.7 Process for determining the qualifications and expertise of Our annual Board efficiency review identifies gaps in organisations. the members of the highest governance body for guiding the skills and knowledge. A review is also undertaken when 3.9 Data measurement techniques and the bases of calculations, Explanations for data points are provided in organisation’s strategy on economic, environmental and social a new Chair is appointed. We engage a search partner including assumptions and techniques underlying estimations relevant sections of the Report, e.g. Our Environment, topics. to identify candidates with particular skills, with final applied to the compilation of the Indicators and other information page 46; Health and Wellbeing, page 29; Employee approval by the Secretary of State. in the Report. Explain any decisions not to apply, or to Engagement, page 31. Carbon emissions data for 4.8 Internally developed statements of mission or values, codes of Our Code of Business Standards identifies our missions substantially diverge from, the GRI Indicator Protocols. 2011-12 in the Our Environment section is calculated conduct, and principles relevant to economic, environmental and and values and our expectations of our employees. A using 2011 Defra emission factors. social performance and the status of their implementation. revised version of the Code was released in late 2012. 3.10 Explanation of the effect of any re-statements of information None. 4.9 Procedures of the highest governance body for overseeing the CRR 2011-12 page 18, ARFS pages 64-71. provided in earlier reports, and the reasons for such re-statement organisation’s identification and management of economic, (e.g. mergers/acquisitions, change of base years/periods, nature of environmental and social performance, including relevant business, measurement methods). risks and opportunities, and adherence or compliance with 3.11 Significant changes from previous reporting periods in the scope, None. internationally agreed standards, codes of conduct and principles. boundary, or measurement methods applied in the Report. 4.10 Processes for evaluating the highest governance body’s See material on performance evaluation of the Board 3.12 Table identifying the location of the Standard Disclosures in the pages 57-63. own performance, particularly with respect to economic, at ARFS 2011-12 Corporate Governance page 65. Report. environmental and social performance. Performance evaluation of the Board, its Committees and individual Directors takes place on an annual 3.13 Policy and current practice with regard to seeking external pages 64-66. basis with the support of the Company Secretary. assurance for the Report. Individual member performance review is carried out as follows: the Chairman reviews the CEO and the Strategy and analysis non-executives; the CEO reviews the Chief Financial 4.1 Governance structure of the organisation, including committees ARFS 2011-12 Corporate Governance page 41. Officer and Managing Director; non-executives review under the highest governance body responsible for specific tasks, the Chairman. The Chief Executive’s Committee decides such as setting strategy or organisational oversight. the Balanced Scorecard aspects; the Remuneration Committee reviews these annually and sets objectives 4.2 Indicate whether the Chair of the highest governance body is also Separate Chairman and CEO roles. for the CEO, CFO and Managing Director of Operations; an executive officer. this is approved by the Secretary of State and Treasury. 4.3 For organisations that have a unitary board structure, state the Seven, see ARFS 2011-12 Corporate Governance 4.11 Explanation of whether and how the precautionary approach or Governance in ARFS pages 69-70. number of members of the highest governance body that are page 41. principle is addressed by the organisation. independent and/or non-executive members. 4.12 Externally developed economic, environmental, and social United Nations Global Compact, see page 66. 4.4 Mechanisms for shareholders and employees to provide Shareholders are not applicable as UK government charters, principles or other initiatives to which the organisation recommendations or direction to the highest governance body. sole shareholder. Justsayit and other internal channels subscribes or endorses. allow employees to communicate with senior management including the Board. 4.13 Memberships in associations (such as industry associations) and/ Public Sector Ethical Trade Working Group, Sedex. or national/international advocacy organisations in which the 4.5 Linkage between compensation for members of the highest ARFS 2011-12 Directors’ Remuneration Report organisation: has positions in governance bodies; participates governance body, senior managers, and executives (including pages 72-83. in projects or committees; provides substantive funding beyond departure arrangements), and the organisation’s performance routine membership dues; or views membership as strategic. (including social and environmental performance). 4.14 List of stakeholder groups engaged by the organisation. page 16.

Royal Mail Group Royal Mail Group 58 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 59 GRI Index GRI Index

4.15 Basis for identification and selection of stakeholders with whom page 7, 16. EN4 Indirect energy consumption by primary source. Core electricity = 1,021,390 GJ; CHP = 138,427 GJ; to engage. photo voltaics = 161 GJ; wood chip = 60 GJ. 4.16 Approaches to stakeholder engagement, including frequency of page 16, 23-25, 31-32. EN16 Total direct and indirect greenhouse gas emissions by weight. page 47. engagement by type and by stakeholder group. EN22 Total weight of waste by type and disposal method. Total waste: 34,367 tonnes. Waste sent to landfill, 4.17 Key topics and concerns that have been raised through pages 22-25, 31-32. non-hazardous: 14,604 tonnes; hazardous: 2 tonnes. stakeholder engagement, and how the organisation has Waste recycled, non-hazardous: 19,305 tonnes; responded to those key topics and concerns, including through its hazardous: 454 tonnes. reporting. Labour practices and decent work Economic DMA Objectives and results. Diversity, pages 32-34; Health and Wellbeing, pages DMA Objectives and results. ARFS pages 16-17, 38-39. CRR 2011-12 28-30; Learning and Development, pages 36-37; page 40 Impact on UK Economy. ARFS pages 31-36 Labour Relations, page 32. Our Businesses. DMA Responsibilities. Responsibility lies with our HR team, led by Group DMA Responsibilities. ARFS pages 64-71. Director of HR, John Duncan. DMA Policy. ARFS pages 64-71. DMA Policy. We have a range of internal policies supporting fair labour practices and decent work, including our Code DMA Monitoring. ARFS pages 64-71. of Business Standards, Equality and Fairness Policy EC1 Direct economic value generated and distributed, including ARFS pages 83-95. Charitable Contributions CRR and Working with Unions Policy. revenues, operating costs, employee compensation, donations 2011-12 page 38, 40. DMA Monitoring. We conduct regular reviews of our internal policies. and other community investments, retained earnings, and Important feedback is also received through our payments to capital providers and governments. Employee Opinion Survey. Regular monitoring is EC3 Coverage of the organisation’s defined benefit plan obligations. ARFS 2011-12 Note 9 Employee Benefits - Pensions undertaken and forms a key element of our Corporate pages 97-101. Scorecard, page 13. EC9 Understanding and describing significant indirect economic We commissioned an economic impact assessment LA1 Total workforce by employment type, employment contract and Total UK workforce for 2012 (calculated on a impacts, including the extent of impacts. through the Centre for Economics and Business region. headcount basis) was 151,156. See page 56 for Research. Reference page 40 for key findings. further breakdown. Environment LA2 No. and rate of employee turnover by age, gender and region. page 56. DMA Objectives and results. Environment Strategy page 46. Our Environment LA4 Percentage of employees covered by collective bargaining The vast majority of our colleagues (approximately section pages 46-54. agreements. 98 per cent) are covered by collective bargaining agreements. Only senior managers, of which there DMA Responsibilities. Our recently appointed Environmental Governance are just over 2,000, are not formally covered under Board oversees our environmental approach. collective agreements. DMA Policy. We have always worked to manage our environmental LA6 Percentage of total workforce represented in formal joint Around 98 per cent are represented in formal health impacts. To continue to improve our performance, management-worker health and safety committees that help and safety arrangements with our unions. There is we are in the process of developing an overarching monitor and advise on occupational health and safety programs. a corporate level safety and health committee which Environmental Strategy and Policy, see page 46, deals with strategic issues and is part of the Group Environmental Strategy. policy and arrangements facilities. In addition there are regular meetings at Group and Business Unit level DMA Monitoring. Our Environment section pages 46, 47, 51, 53. Site between the safety and health leads with the senior monitoring and implementation is under our World trade union safety representatives. Class Mail programme page 15. LA9 Health and safety topics covered in formal agreements with trade Our formal agreements with trade unions cover health DMA Environmental Performance Indicators. page 46. unions. and safety. All topics identified in GRI are covered by EN3 Direct energy consumption by primary energy source. Purchased core gas = 1,855,667 GJ; oil (kerosene) = agreements or policies. Our UK standards emulate ILO 2,949 GJ; diesel = 11,383 GJ; gas oil = 56,681 GJ; standards. LPG = 1,334 GJ. LA13 Distribution per category of gender, age, minority group, other pages 32, 56. diversity indicators.

Royal Mail Group Royal Mail Group 60 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 61 GRI Index GRI Index

Human rights Product responsibility DMA Objectives and results. Diversity, pages 32-34. Dignity and Respect, page 34. DMA Objectives and results. ARFS pages 57-59. Working with unions, page 32. See our Transparency agenda in the ARFS, pages 57-59. DMA Responsibilities. CR practices are embedded within Royal Mail, including in our marketing activities. We maintain a Home DMA Responsibilities. Responsibility lies with our HR team, led by Group Office-recognised professional criminal investigation Director of HR, John Duncan. team that complies with all tenets of the Police and Criminal Evidence Act, and a team of criminal lawyers DMA Policy. Our Code of Business Standards identifies our that operates under the auspices of the Code of Public expectations of our employees. In line with UK Prosecutors. legislation and our specific security requirements, all employees are required to demonstrate their identity DMA Policy. Our Code of Business Standards sets out our and age. We operate in the UK and have no issues of expectations of employees. forced or compulsory labour and we work with our unions in developing collective bargaining agreements, DMA Monitoring. ARFS pages 57-59. see page 32. PR2 Total number of incidents of non-compliance with regulations and There were no prosecutions under Health and Safety DMA Monitoring. ARFS pages 57-59. voluntary codes concerning health and safety impacts of products regulation non-compliance for 2011-12. and services during their life cycle, by type of outcomes. No improvement or prohibition notices were issued. HR6 Operations identified as having significant risk for incidents of In line with UK legislation and our specific security child labour, and measures taken to contribute to the elimination requirements all employees are required to PR5 Practices related to customer satisfaction, including results of pages 22-25. of child labour. demonstrate their identity and age. We also seek to surveys measuring customer satisfaction. manage child labour risks in our supply chain through PR7 Total number of incidents of non-compliance with regulations and There were no incidents of non-compliance with our procurement process. All suppliers are expected voluntary codes concerning marketing communications, including regulations and voluntary codes concerning marketing to adhere to the UN Declaration of Human Rights. We advertising, promotion, and sponsorship by type of outcomes. communications, including advertising, promotion, and undertake audits of high risk (by location or industry) sponsorship in 2011-12. sites to verify performance. Society DMA Objectives and results. pages 39-45. DMA Responsibilities. 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. Our Code of Business Standards sets out our expectations of employees. Our revised Code was released in late 2012. DMA Monitoring. ARFS pages 57-59. SO2 Percentage and total number of business units analysed for risks All 23 units have been risk assessed. related to corruption. SO3 Percentage of employees trained in organisation’s anti-corruption Bribery Act and its implication have been communicated policies and procedures. to all managers and employees via e-mail, internal newspaper or WTLL (Worktime Listening and Learning) and all higher risk populations/units have been through workshops. In terms of the more general population, to date 62 per cent of all central function managers have completed our e-learning modules and been tested. SO4 Actions taken in response to incidents of corruption. ARFS page 58. SO6 Total value of financial and in-kind contributions to political ARFS page 56. parties, politicians, and related institutions by country.

Royal Mail Group Royal Mail Group 62 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 63 Independent assurance Independent assurance statement statement Independent assurance statement

Scope and objectives Basis of our opinion Observations and recommendations Two Tomorrows (Europe) Limited London, 30 November 2012 Two Tomorrows (Europe) Limited has undertaken independent We reviewed consolidated Group data, underlying data collection Without affecting our assurance opinion we also provide the assurance of the Royal Mail Group (RMG) Corporate Responsibility systems and processes, as well as supporting evidence for sample following observations and recommendations: Report 2011-12, for the first time reported against the Global checks on specific data. Checks for data, when generated at individual Reporting Initiative (GRI) Reporting Guidelines. offices or mail centres, were not undertaken. Sample data was 1. Overall, we were confident that Royal Mail Group has robust selected using the GRI materiality principle. We interviewed data processes and systems in place to collect information for the The scope of the assurance includes: owners to assess understanding of the systems, processes and data. in-scope KPIs included in the Report. • data indicators as shown in the GRI Reporting Index covering 2. The Corporate Balanced Scorecard and Strategic Framework Environment, Labour Practices and Decent Work, Human Rights, We reviewed drafts of the report and selected a sample of claims clearly articulate how KPIs are measured, the incentive structure Society and Product Responsibility as identified by the prefixes ‘EN’, informed by the GRI materiality principle. We reviewed the accuracy and the resulting performance against SMART targets. of these claims by requesting and checking supporting evidence. ‘LA’, ‘HR’, ‘SO’ and ‘PR’. 3. Business restructuring, such as the transition to separating from Dave Knight – Sustainability Services Director • material claims made in the report. Our opinion the Post Office Limited, has required changes to data collection practices, which are being implemented. We recommend that We used the Global Reporting Initiative (GRI) Quality of Information On the basis of the work undertaken, nothing has come to our different reporting boundaries continue to be stated to aid Principles of Balance, Clarity, Accuracy, Timeliness, Comparability, attention to suggest that these data have not been properly interpretation of the data. Evidence and data collection processes Reliability as suitable criteria for providing limited assurance over this collated from information reported at operational level, nor that the for carbon footprint and emissions data are more complete and performance information. assumptions utilised were inappropriate. We are not aware of any have improved since last year. errors that would materially affect the reported data in the CR report. a. Royal Mail Group currently collects commuting CO2 data Responsibilities and statement of independence and we recommend that this is included in future Scope 3 The Corporate Responsibility Report 2011-12 and the data it reporting. contains are the responsibility of Royal Mail Group. 4. Automation of all data sets has reduced the risk of errors and improved data reliability. Two Tomorrows (Europe) Ltd was not involved in the preparation of a. Royal Mail Group is continuing efforts to increase automation any part of the Report or data. We have no other contract with Royal of energy and water data, and we would encourage these Mail Group. We have provided CSR and CR report assurance to Royal efforts in order to reduce estimation of electricity, gas and Mail Group for the periods 2003-05, 2009-11 and prior to 2001 we water data and increase accuracy and transparency of data conducted various consulting assignments. flows. In particular, water data continues to be based on a significant number of estimates. We recommend reducing the Our statement represents our independent opinion and is intended to volume of estimated data over time. inform all of Royal Mail Group’s stakeholders, including management. b. Further automation of people management information using Our team comprised Dave Knight, Anne Euler and Priti Nigam. the PSP system has resulted in data error risk reduction and Further information, including individual competencies relating to the improved auditability. team, can be found at: www.twotomorrows.com 5. Waste metrics are now more complete, with additional streams being reported this year. This has resulted in the overall waste volume rising. 6. There is currently an assumption that data obtained from waste contractors is robust. We would recommend that in accordance with best practice Royal Mail performs periodic audits on waste data obtained from waste contractors in order to increase oversight and ensure robustness of data.

Royal Mail Group Royal Mail Group 64 Corporate Responsibility Report 2011-12 Corporate Responsibility Report 2011-12 65 About this Report About this Report

Scope Differences from last year’s Report This is our tenth Royal Mail Group Corporate Responsibility Report. Just as we are improving the quality of our financial reporting, in It covers our UK operations and includes performance data for the addition we are seeking to strengthen our sustainability reporting financial year 2011-12. Given the significant improvements that we in our annual Corporate Responsibility Report. This year, we are have made to our corporate responsibility strategy, the Report also reporting against the Global Reporting Initiative (GRI) Index for the contains reference to events that have taken place outside of the first time. Under the GRI, we have achieved a B+ rating. reporting period. Where that is the case, we make it explicit. Our last report was published in January 2012 and covered the financial year Independent assurance 2010-11. This is the fourth Royal Mail Group Corporate Responsibility Report which has been formally assured by Two Tomorrows (Europe) Royal Mail Group’s corporate responsibility strategy encompasses all Limited. We appreciate this independent verification of and opinion Royal Mail Group business units, including Parcelforce Worldwide. on our reported activity. Please refer to the ‘Independent assurance On 1 April 2012, Royal Mail Group and Post Office Limited became statement’ on page 64 for more information. sister companies. We have sought to separate out as much Post Office Limited data as possible in this Report. However, as Post Office We are a signatory to the United Nations Global Compact and are Limited was part of Royal Mail Group up until the end of the financial working to meet its principles. This Report meets our United Nations year 2011-12, financial data includes Post Office Limited. In addition, Global Compact Communication on Progress requirements. We the environmental data we have disclosed includes our Post Office continue to use the principles of the Global Reporting Initiative (GRI) Limited footprint. Our UK operations, including Post Office Limited, to guide our reporting. Our GRI Index has been checked by Corporate accounted for over 90 per cent of our employee base and 84 per Citizenship. Corporate Citizenship confirms that in their view the Index cent of our revenues in 2011-12. All other data excludes Post Office meets the requirement of B+ as set out in the GRI G3.1 Guidelines. Limited and relates to Royal Mail’s UK operations. We have printed only a limited number of hard copies of this Report, Our materiality process in order to minimise waste. In 2011, we completed a major review of our corporate responsibility and community investment strategies. This exercise, as well as the ongoing work of our Communications Action Group (CAG), has informed all corporate responsibility activity, including the preparation of this Report.

The CAG considers all issues and events that present a good opportunity for the Group or that might present a reputational risk. Included within this remit is responsibility for shaping Royal Mail Group’s corporate responsibility strategy and consideration of all issues related to corporate responsibility, including those that are related to Royal Mail’s modernisation programme. The CAG meets monthly and is chaired by our CEO.

Royal Mail Group 66 Corporate Responsibility Report 2011-12 Royal Mail is ranked Platinum in Business in the Royal Mail is a winner of RobecoSAM’s Community’s Corporate Responsibility Index. sustainability distinctions for 2013.

Royal Mail, the Cruciform, the colour red and Parcelforce Worldwide logo are registered trademarks of Royal Mail Group Limited. Corporate Responsibility Report © Royal Mail Group Limited 2012. All rights reserved.