Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
Sustainability is...
We are making tomorrow a better place
We continue to build a sustainable and Our positive outcomes
successful business by delivering on our six Building a successful business positive outcomes, which support profitable, responsible growth and underpin our values Leading the way with our customers and as a responsible business. suppliers Providing better prospects for our people
Supporting sustainable communities
Enabling low-carbon economies
Protecting the environment It makes business sense Sustainability in action
Linking sustainability to the bottom line
£27.2M SUSTAINABILITY CONTRIBUTION TO PROFIT IN 2014
Engaging and collaborating with the industry supply chain
FUNDING PARTNER OF THE SUPPLY CHAIN SUSTAINABILITY SCHOOL
An inclusive workplace 2014 Sustainability Review with Richard Howson
FAIR OPPORTUNITIES FOR EX-OFFENDERS WHEN Sustainability is so important to Carillion because APPLYING FOR JOBS it makes a fundamental difference to our “ business success. We estimate that it Investing in future skills contributed £27.2m to our profit in 2014. Given our local commitments across contracts and 5,000 APPRENTICESHIPS TO BE OFFERED DURING THE projects, this also created many wider benefits NEXT FIVE YEARS for our communities, for our own people and for our suppliers and partners.” Climate performance A-list
RICHARD HOWSON, Chief Executive 99A SCORE IN CARBON DISCLOSURE PROJECT
READ MORE Waste no more
WASTE-REDUCING INITIATIVES IN CANADA
Our key impacts £27.2m 51%
net profit contribution through local spend including SMEs sustainability efficiencies 49% 87%
reduction in our All Accident of apprentices found Frequency Rate since 2011 employment or pursued further education 17% 95%
reduction of our carbon waste diverted from landfill footprint since 2011 (normalised)
VIEW OUR KEY FIGURES AT A GLANCE VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
Carillion is... building a successful
Sustainability makes us more profitable: fact
BUILDING A It helps us to win and deliver profitable work responsibly SUCCESSFUL and encourages collaboration around innovation, safety, BUSINESS the efficient use of resources and the creation of social value. Increasingly, this is what our customers and society About us expect from leading sustainable businesses, which is why we choose to operate to standards that go well beyond 2014 at a glance minimum requirements.
Welcome from our Chief Executive and Sustainability in action Chairman
Views from our Materiality review Chief Sustainability WHAT MATTERS MOST TO OUR Officer and STAKEHOLDERS? independent Investing in integrity advisors INSTITUTE OF BUSINESS ETHICS Our 2020 strategy AWARDS CARILLION THE INVESTING IN INTEGRITY CHARTER MARK Targets and Our Board Sustainability Broker research note performance Committee
Chairing the Board Sustainability IMPRESSING ANALYSTS WITH OUR Governance and WORK AT BATTERSEA POWER risk Committee is an important STATION “ opportunity to make sure that Carillion’s award-winning Integrity and ethics sustainability progress to date remains ambitious and relevant. Resilience and balance will become About this report ever more fundamental to responsible and forward-thinking businesses.”
DR CERI POWELL, Carillion Non- Executive Director
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Our key figures 2014 performance highlights £5.1bn £216.9m of new and probable underlying profit from orders operations 2013: £4.9bn 2013: £214.3m
Progress against targets £27.2m contribution to net profit through sustainability strategy Targets 2014: £25m 2020: £40m
Target achieved
VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
ABOUT US
TRIED/TESTED/TRUSTED OUR VISION AND VALUES BUILDING A SUCCESSFUL OPERATING SEGMENTS BUSINESS HOW DO WE CREATE ECONOMIC VALUE?
About us Carillion is one of the UK’s leading integrated support services companies, 2014 at a glance with a substantial portfolio of Public Private Partnership projects, Welcome from extensive construction capabilities and a sector-leading ability to deliver our Chief sustainable solutions. Executive and Chairman
Views from our TRIED/TESTED/TRUSTED Chief £4.1bn Sustainability Group’s annual revenue Officer and We have a track record of delivering sustainable, cost-effective independent solutions for our customers safely and of creating positive advisors legacies for the communities where we work and live. Whether it is providing facilities management services for over 100,000 Our 2020 strategy buildings, the management and maintenance of transport and 42,000 utility networks or delivering award-winning cultural, residential, commercial or community developments – we Targets and employees strive to deliver high-quality services that make a positive performance difference to people and communities.
Governance and We have continued to respond decisively to challenging market risk conditions to create a leaner, stronger business, capable of delivering growth over the medium term. As well as rescaling Integrity and some of our existing businesses to ensure they are aligned in ethics size to their markets, we have strengthened our positions in markets that offer opportunities for growth. Strong corporate About this report governance, together with rigorous risk management processes and our efficient central operating platform, help us to deliver the most complex projects successfully.
We are a trusted partner when trust matters most. We provide mission-critical facilities management services to public and private sector customers, notably in the health, defence, secure accommodation, financial services and energy sectors. We keep transport and utility networks operating 24/7 and deliver new hospitals, schools, roads, railways and other landmark buildings and structures. We build long-term partnerships based on delivering value for money services that our customers know they can rely on.
OUR VISION AND VALUES
Our Vision: To be the trusted partner for providing services, delivering infrastructure and creating places that bring lasting benefits to our customers and the communities in which we Working and live and work. “ achieving together, caring and improving Our Values help us build trust and set the standard for – these values help sustainability in our sector: us to deliver outstanding support We care: we respect each other and we do things safely services for our and sustainably. It is good for our people, our business clients, and to build real trust and and our local communities. strength in our We achieve together: we value the contribution of each teams.” individual and we work together to build strong, open NIGEL TAYLOR, and trusting partnerships. Managing Director, We improve: we listen, we learn and we adapt our ideas Services UK and experience into better solutions and service for our customers. We deliver: we set ourselves stretching goals and we take pride in doing a great job and helping our customers and partners to succeed.
OPERATING SEGMENTS
Business units
At Group level, we report our financial results in four business segments.
Support services
Including our facilities management, facilities services, energy services, rail services, utility services, road maintenance and consultancy businesses in the UK, Canada and the Middle East.
Order book plus probable orders £14.1bn
Underlying operating profit £135.9m Public Private Partnership (PPP) projects
Including financial returns generated by the investments we make in Public Private Partnership (PPP) projects in the UK and Canada, including those from the sale of equity investments.
Order book plus probable orders £1.2bn
Underlying operating profit £34.5m
Middle East construction services
Including our building and civil engineering activities in the Middle East and North Africa.
Order book plus probable orders £0.9bn
Underlying operating profit £25.1m
Construction services (excluding the Middle East)
Including our UK building, civil engineering and developments businesses and our construction activities in Canada.
Order book plus probable orders £2.4bn
Underlying operating profit £41.5m How do we create economic value? £m 2012 2013 2014 Total revenue (excluding Joint Ventures) 3,666.2 3,332.6 3,493.9 Operating costs 2,689.7 2,414.7 2,507.8 Employee wages and benefits 761.0 751.0 777.7 Payments to providers of capital 94.7 100.7 103.5 Payments to Government (taxes) 5.7 7.8 7.7
Charitable and community giving through a combination of employees’ time, cash, 2.2 1.9 1.8 and in-kind donations Economic value retained 115.1 58.4 97.2 Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
2014 AT A GLANCE
We are proud to be making progress on our sustainability journey that began when Carillion was formed in 1999. From our first Sustainability BUILDING A Policy in 2001; BITC Company of the Year in 2003, ISO 9001 and 14001 SUCCESSFUL BUSINESS accreditations in 2004; and Platinum status in the BITC Corporate Responsibility Index, we have shown we are serious about making About us tomorrow a better place. These are some of the highlights from the 2014 at a glance reporting period:
Welcome from our Chief Executive and Chairman
Views from our Chief £4.1bn 49% Sustainability Group revenue £27.2m reduction in All Officer and profit contribution Accident Frequency independent through advisors sustainability Rate (AAFR) strategy Our 2020 strategy
Targets and performance
Governance and risk +37 99A Integrity and Net Promoter Score near-perfect score for ethics measuring customer carbon disclosure Building Public Trust satisfaction through the Carbon Award (PWC) About this report Disclosure Project retained for a 2nd year for FTSE 250 Sustainability Reporting 17% reduction of our 95% carbon footprint of waste diverted Investing in Integrity since 2011 from landfill Charter Mark (normalised)
28% 51% 1% reduction in water local supplier spend pre-tax profit use since 2012 donated to community activities Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
WELCOME FROM OUR CHIEF EXECUTIVE AND CHAIRMAN
BUILDING A PHILIP GREEN, CHAIRMAN SUCCESSFUL RICHARD HOWSON, CHIEF EXECUTIVE OFFICER BUSINESS
About us Business-critical sustainability, local responsibilities and long-term trust: 2014 at a glance our Chairman and Chief Executive reflect on performance over the last 12 months. Welcome from our Chief Executive and Chairman PHILIP GREEN, CHAIRMAN
Views from our Our markets remained challenging in 2014 although we began Chief to see signs of improvement that we expect to continue this Sustainability year, subject to there being a sustained economic recovery. Officer and We continued to be very selective in terms of choosing the independent advisors contracts for which we bid, as we have done throughout the economic downturn, and this was reflected in our underlying operating margin, which remains unchanged at 5.6%. Our 2020 strategy Our balanced and The Group’s total revenue was also unchanged at £4.1 billion, “ ambitious commitments to Targets and with underlying profit before tax marginally lower at £172.9 performance economic, social and million (2013: £174.7 million) and underlying earnings per share environmental at 33.7 pence (2013: 34.7 pence). Basic earnings per share responsibility Governance and increased by 20% to 28.0 pence (2013: 23.3 pence) and the underpin our drive to risk Board is recommending a 1% increase in the full-year dividend become and remain a leader in to 17.75 pence. sustainability.” Integrity and ethics Overall, we delivered another solid performance, but recent PHILIP GREEN, history tells us that we need to remain totally focused on Chairman About this report strong corporate governance, high standards of ethical behaviour and rigorous risk management. Our balanced and ambitious commitments to economic, social and environmental responsibility underpin our drive to become and remain a leader in sustainability. RICHARD HOWSON, CHIEF EXECUTIVE OFFICER
It is easy to say that “ ethics and integrity are of paramount importance, but at Carillion we really mean it. In particular, we were proud to win the PWC Building Public Trust award for the second year in succession – the first 2014 Sustainability Review with Richard Howson time that a FTSE 250 company has done Sustainability is so important to Carillion because it makes a so.” fundamental difference to our business success. It is not all RICHARD HOWSON, about the bottom line as the health, safety and welfare of our Chief Executive people and those touched by our operations always comes Officer first. However, economic responsibility is a key element of a balanced sustainability strategy, and we estimate that it contributed £27.2 million to our profit in 2014. Given our local commitments across contracts and projects, this also created many wider benefits for the communities in which we operate, for our own people and for our suppliers and partners.
We are helping to regenerate deprived neighbourhoods, offering employment where it’s most needed and training people to have the right skills to enter and stay in the job market. We are also tackling carbon emissions from our sites, offices, vehicle fleets and supply chains and I am pleased to report a further 17% reduction in carbon emissions since 2011, when normalised by turnover.
All these achievements are down to the skills and commitment of our diverse workforce, which drives the creativity and innovation we need to compete across all our markets and geographies. Investing in safety, training and diversity is not optional, but business critical, and we remain focused on our target of zero accidents.
It is easy to say that ethics and integrity are of paramount importance, but at Carillion we really mean it. In particular, we were proud to win the PWC Building Public Trust award for the second year in succession – the first time that a FTSE 250 company has done so – and gain the Investing in Integrity Charter Mark from the Institute of Business Ethics.
I believe the breadth, depth and success of our sustainability programme confirms that Carillion is a recognised leader in sustainability. In this report we have set out the evidence to support our claim. At the same time, we know we still have a great deal to do to deliver our sustainability strategy and its positive outcomes, but I am confident we will do so. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
VIEWS FROM OUR CHIEF SUSTAINABILITY OFFICER AND INDEPENDENT ADVISORS
BUILDING A DAVID PICTON, CHIEF SUSTAINABILITY OFFICER SUCCESSFUL A VIEW FROM DAME JULIA CLEVERDON BUSINESS A VIEW FROM JONATHON PORRITT About us
2014 at a glance DAVID PICTON, CHIEF SUSTAINABILITY Welcome from OFFICER our Chief Executive and Chairman Now, more than ever, sustainability is not a nice-to-have, it is critical for long-term business success. That critical nature Views from our extends to making sustainability a strong, balanced approach Chief and delivering on the Three CBs’ integrated approach to drive Sustainability impact: changing behaviours, commercial benefit and Officer and challenging balance. Now, more than ever, independent “ sustainability is not a advisors Changing behaviours: in order for sustainability initiatives to nice-to-have, it is take root and make a long–term impact on both business and critical for long-term Our 2020 strategy the community, they have to change behaviours. In the business success. business sense, this begins internally by encouraging best Sustainability needs a strong, integrated practice, responsibility and personal commitments among our Targets and approach which performance people. It means achieving positive change by acting early and delivers on the Three through regular commitment. CBs: changing Governance and behaviours, commercial benefit risk Commercial benefit: ‘profit’ can have negative connotations but profitable businesses are in the best position to share their and challenging balance.” value not only with shareholders but with communities, the Integrity and environment, employees and supply chains. Evidence ethics DAVID PICTON, Chief emerged in 2014 specifically linking sustainability with Sustainability Officer, profitability and building positive customer relationships. We Carillion About this report took the step a few years ago to include sustainability metrics in our financial reporting, demonstrating that a streamlined, responsible, ethical business can (and should) also be a profitable one – for the long term. This year we’ve made steady progress in measuring the value of sustainability against our Sustainability 2020 targets.
Challenging balance: to achieve lasting change – for itself, for organisations and for communities – a truly sustainable business must be ambitious, challenging preconceptions and entrenched beliefs. In sustainability terms, that also needs to be balanced – across economic, social and environmental responsibilities. Traditionally ‘green’ or environmental considerations remain high on the sustainability agenda, but social responsibility creates long–term legacies in the communities where we work and live.
This year we’ve made steady progress in measuring the value of sustainability and aiming for our Sustainability 2020 targets.
In sectors like construction and services, which rely fundamentally on working with partners, it’s important to recognise that collaboration is key to success. Managing resources wisely, developing new and competitive innovations, engaging credibly with local communities and building long-term economic success all require learning and skills development. This – fundamentally – is at the heart of our Sustainability 2020 strategy, and we know that there is a lot still to tackle as we work to make tomorrow a better place.
Looking ahead, we’re still ambitious with what we want to achieve through our sustainability expectations and targets. The achievements to date have set a firm platform of evidence and benchmarks in place – so much so, that we often overlook things that we now take for granted as our daily business and values. It’s the way that we do business, but we’re not complacent.
Our new Sustainability Committee will bring even greater focus to our strategic leadership, and we will continue to test and develop what we believe it means to be leading the way in sustainability. Our target to achieve a £40 million contribution to profit from sustainability by 2020 is stretching, but this is how we will build a successful business and continue to make sustainability business critical. We’ll need to make it as easy as possible for our people to volunteer – and capture that evidence – if we’re to get 50% of them involved by 2020, so we’ll develop a mobile application and continue to link them to practical, relevant opportunities with our strategic community partners.
For carbon, we need to continue reducing our footprint to a minimum, and to understand how we can address and minimise embodied carbon together with clients and suppliers. As we look ahead to 2020 and beyond, we need to implement a carbon strategy that delivers clear business relevance and appropriate impact, as our business continues to evolve and develop in a dynamic marketplace. As we close in on an effective zero waste to landfill, we also need to remain focused on reducing our absolute waste production, and particularly in the Middle East where recycling infrastructure is less advanced.
Collaboration can often be a cliché, but our support for the Supply Chain Sustainability School is anything but that – it is a clear commitment to raising sustainability skills and working with our suppliers across the built environment. Building on that, we will continue to develop regional stakeholder engagement to understand what matters most in sustainability to the people who buy, deliver, advise on and supply to our business. Of fundamental importance will be the need for responsible resource management, including FSC timber, water and materials, capturing and working with suppliers’ innovations and implementing regionally appropriate ethical sourcing plans.
Turning finally to people, we need to be sure that we’re engaging both our own people and those who are outside our immediate business. Much effort is focused on implementing the recommendations from the Great Debate, and to further develop the knowledge we gained from our Materiality Review. Sustainability comes to life through our people, their actions, commitments, behaviours and impacts, so we’ll continue to make sustainability as inspiring as possible for and through them.
WHAT NEXT? Here is a snapshot of just some of the areas we will be working on during 2015.
Building a successful business
Reduce costs and increase efficiency to improve margins and deliver £32.5 million to profitability Deliver cash-backed profit Embed the new Board Sustainability Committee Undertake focused stakeholder engagement to further understand the most important issues across our regions, including a specific materiality review in Canada Understand better what matters to our clients in sustainability, and how that can help improve customer satisfaction
Leading the way
Increase expenditure with local UK suppliers to 60% Install a further 16 EcoPods to serve 644 homes and save 50,000 tonnes of carbon Prepare for the introduction of Business Information Modelling (BIM) across UK Public Service Procurement including technical and project team training; share experiences with suppliers and customers; and roll out whole-life contracts in the Middle East Engage supply chain partners in skills development and innovative, sustainable solutions Enhance our understanding of ethical sourcing and implement region-specific ethical sourcing plans
Providing better prospects for our people
Be a recognised leader in health, safety and sustainability Develop and attract excellent people to create a vibrant, diverse and flexible workforce Develop a Stress and Mental Health Charter, accompanied by tools and a training module to reduce work-related stress and promote positive mental wellbeing Make ePOD learning available in the Middle East; extend it to suppliers, partners and clients Address challenges to releasing our people to participate in volunteering
Supporting sustainable communities
Measure and monitor actions that will have the best positive impact for the communities where we work and live Ensure every site has a community needs plan, bringing our total to 100% Continue rolling out our plan to create 5,000 new apprentice places across the 5 years to 2020
Enabling low-carbon economies
Develop and implement our plan for carbon reduction towards 2020, such as green energy production and consumption; addressing the embodied carbon of our projects; and helping customers reduce their carbon Continue our focus on transparency and climate change adaptation under CDP – aiming to maintain our lead of the Industrials sector
Protecting the environment
Tackle our target of sending effectively zero non- hazardous waste to landfill by the end of 2015 Strengthen relationships with waste removal providers Maintain our focus on sourcing FSC timber, and wider ethical sourcing initiatives
A VIEW FROM DAME JULIA CLEVERDON
In this tough year for business competitive advantage, Carillion have made some important gains in the long-term sustainability of the business not just in the UK but in the Middle East and Canada as well. Visiting the Carillion team in Canada I was impressed to see, at first hand, both the progress on sustainability auditing through their supply chain and the potential for leadership in ensuring quality aboriginal employment and training opportunities. The acquisition of a A critical part of “ Carillion’s long-term 49% interest in the Bouchier Group will give an incredible sustainability will opportunity to develop more high-quality employment come from winning practices for the First Nation people. the war for talent and skills – and progress In the UK, Carillion are increasingly able to illustrate, measure has really been made and monetise the benefits of employee engagement and this year!” community impact, and investors are taking note. Richard DAME JULIA Howson’s strategic leadership on the Board of Business in the CLEVERDON DCVO, Community is driving forward the Business Connector CBE, Vice President programme showing the social value of high-powered of Business in the Community and business secondees building private, public and community Special Advisor to partnerships in some of the UK’s most deprived communities. The Prince’s Charities The social value for Carillion in pioneering the Community Needs plans for all major contracts is clear – Liverpool, Battersea and King’s Cross are flagships already delivering replicable results. Construction and rail businesses are increasingly able to share the evidence of work winning through collaborative partnerships with clients impacting on communities. The target of employing 1% of all army reservists, announced this year, in partnership with the MOD is both strategic in attracting talent and builds our reputation as a values-driven business.
Last year, I applauded our progress towards achieving the target that the Board should be 25% female by 2015. However important non-executive directors are as role models, what has been termed ‘pink parachute silk’ is not going necessarily to build the executive pipeline. We need to achieve 29% female executives by 2020 to achieve our goal so it is encouraging that as a result of focused internal leadership we have made it for the first time into the Times Top 50 employers for women. A critical part of Carillion’s long-term sustainability will come from winning the war for talent and skills – and progress has really been made this year! A VIEW FROM JONATHON PORRITT
Sustainability is a many-splendoured thing! And today’s sustainability reporting reflects that, getting both more comprehensive (in overall scope) and more forensic (in its detail) all the time. Carillion’s report is a model of its kind, embracing the full gamut of environmental, social and governance issues, with constant connectivity back to a core economic rationale.
As the report says: ‘Sustainability makes us more profitable: Sustainability is a many-splendoured fact.’ And a £27.2 million contribution to net profit in 2014 “ thing! And today’s makes for a good starting-point for the company’s new Board sustainability Committee for Sustainability – itself an important and reporting reflects innovative affirmation of the centrality of sustainability to that, getting both Carillion’s future success. more comprehensive (in overall scope) and more forensic (in its But there’s a lot more than profit that has to be taken into detail) all the time. account when thinking about long-term value creation. Many Carillion’s report is a companies in the UK are now working hard on the metric of model of its kind, social value, systematising the diverse ways in which big embracing the full companies can support the communities in which they’re gamut of environmental, social working (Carillion has very nearly reached its target of 100% of and governance big projects having a Community Needs Plan), their suppliers issues, with constant (for whom the simple story behind ‘prompt payment’ matters connectivity back to a enormously), and the local economies they can enrich by core economic guaranteeing high levels of ‘local spend’ – in Carillion’s case, rationale.” an average of 51% across all projects, and an outstanding 60% JONATHON PORRITT, at the Royal Liverpool Hospital. Founder Director of Forum for the Future All of which, and all its core project delivery in the UK and internationally, has to be done in ways that keep driving down Carillion’s overall carbon footprint. The results show how stretching this can be, especially with its operations in Canada. Overall, a reduction of 17% in carbon intensity (the amount of greenhouse gas emitted per million dollars of turnover) is impressive. But there’s a long way to go before these relative reductions are turned into absolute reductions, as part and parcel of Carillion’s ambitious and still crucially important target of becoming carbon neutral by 2020.
Ambitions of this kind can only be delivered through consistent, top-down leadership from the Board and the CEO, combined with opportunities for all Carillion’s staff, in whatever role, to play their part in blazing this particular low-carbon trail. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
OUR 2020 STRATEGY
SUSTAINABILITY IS DRIVING PROFIT ENGAGING WITH OUR STAKEHOLDERS BUILDING A SUCCESSFUL BROKER RESEARCH NOTE BUSINESS STAKEHOLDER PRIORITIES
About us A structured plan and stretching targets: these are what our stakeholders 2014 at a glance expect of us and what drive tangible benefits to our bottom line. That’s Welcome from why we launched our vision and strategy in 2011 and our six positive our Chief outcomes to guide our work. Executive and Chairman
Views from our Building a successful Chief business £27.2m Sustainability profit contribution Officer and through sustainability independent We will increase shareholder value through our sector strategy advisors leadership and focus on profit contribution through sustainable efficiencies, value creation and waste Our 2020 strategy elimination.
Targets and performance Leading the way with our customers and suppliers Governance and risk We will be recognised as the benchmark in sustainability and innovation, in turn driving demand as the service Integrity and provider of choice for our customers. ethics Carillion is a member of the FTSE4Good Index, About this report which measures the Providing better prospects performance of for our people companies that meet globally recognised corporate responsibility We will maximise the prospects of our people by offering standards. opportunities for continual learning and development, and create safe, healthy places to work. Supporting sustainable communities
Our leadership in creating employment and skills opportunities, coupled with our understanding of communities‘ needs, will have a significant and net positive contribution everywhere we work.
We are a member of Enabling low-carbon Business in the economies Community (BITC) and participate in the BITC Corporate Responsibility Our services will help Carillion‘s customers work towards Index, which ranked us a Four Star company. minimising carbon, so together we become the lowest carbon producers in our respective sectors.
Protecting the environment
We will work with our customers and suppliers to be best in class in reducing waste, managing use of water and raw materials, and protecting biodiversity wherever we operate. Our first Materiality “ Review gave us some The strategy is owned by our Board of Directors and delivered valuable insights into at all operational levels through tight governance controls. We the views of key set clear targets for each of the outcomes, which we review stakeholders – we’ll annually. Read more in Targets and performance. build on that to develop our understanding and focus our efforts as a Sustainability is driving profit sustainable, forward- looking business.”
The sustainability initiatives and practices followed across JOHN PLATT, our businesses made a net contribution to profit of £27.2 Strategic Growth Director million in 2014. Our target is to achieve £40 million by 2020. The target is a personal performance measure, linked to remuneration, for our Chief Executive and for the Board. This Key Performance Indicator is reported through monthly trackers, approved by each Business Unit Finance Director. It is built through cost efficiencies which include fuel and travel cost reduction, waste management, lean operational excellence, contract efficiencies and material reuse.
The profit “ contribution from our Sustainability 2020 strategy is significant and growing all the time, proving that – far from simply being ‘nice to have’ – building a sustainable business is critical for shareholder value and long-term commercial success.”
RICHARD ADAM, Group Finance Director
VIEW ALL CASE STUDIES
ENGAGING WITH OUR STAKEHOLDERS
At Carillion, our stakeholders include our people, clients, shareholders and investors, supplier partners, charities, industry organisations and people living in the communities where we operate. We use a stakeholder framework to:
understand why engagement is required; identify relevant stakeholders and impacts; and decide on forms of engagement and record the outcomes.
We involve stakeholders in developing and reviewing our 2020 sustainability strategy; in deciding which issues to focus on; and in sustainability initiatives through the year (see case studies).
Broker research note
The following summary is taken from a research note published by Liberum after one of its analysts attended the launch of last year’s sustainability report at Battersea Power Station, where Carillion is building the first phase of this major redevelopment.
Impressive site visit to Battersea Phase 1 Construction project. Potentially more to come. “ Sustainability clearly helped Carillion win the bid. We also believe that Carillion has had a strong period of contract news and is gradually moving up the value chain.
The site visit coincided with the launch of Carillion’s sustainability report. It is easy to be cynical about this. However, having spoken to the customer, sustainability was very important to the customer, as it was at the Royal Liverpool.” The new Royal Liverpool Hospital is a Public Private Partnership Project being delivered by Carillion.
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STAKEHOLDER PRIORITIES
In 2014, we conducted our first materiality review to understand our stakeholders’ most significant priorities and report on what matters to them. The independent review included workshops, interviews and an international online survey for employees, clients, governments, investors, suppliers, community groups and sustainability organisations.
We received 360 responses to our online survey. The majority (80%) of responses were from employees, and most of these were based in the UK. We will be looking to diversify this going forward. Some of the most material issues identified were:
people engagement: people want to hear more about what we’re doing, and see even more progress around diversity, retention and recruitment. Additionally, safety, health and wellbeing were particularly significant factors; building a successful business: our financial performance clearly matters, and we need to help people see both the role that they can play and the clear link to our strategy and reputation; supply chain: continued progress on our early payment facility, supplier relationship management and sustainability upskilling through the Supply Chain Sustainability School; waste: making progress on the overall reduction of waste produced to build on our achievements to date with diversion from landfill; skills and local engagement: people want to see the clear delivery of local solutions for and with local companies and their communities – with a focus on providing apprenticeships, education, employment and skills; human rights: we need to remain committed to – and investing in – appropriate management processes to deliver responsible labour, welfare and employment practices; and governance and management of sustainability: people want to understand how our sustainability strategy is managed throughout the various levels of the business.
The materiality review also included eight in-depth interviews with key clients across both commercial and public sector contracts. They told us that:
competence and delivery are critical to building trust, creating long-term relationships and when selecting suppliers; sustainability is important in tenders but price remains the dominant factor; Carillion’s senior team are good at conveying sustainability, its relevance to clients and sustainability as ‘business as usual’; we need to challenge our contract partners and clients to drive sustainability consistently from tender through to design, delivery and service management.
The Materiality Review was reviewed in depth by our Integrated Management Strategy (IMS) teams across the business units, and by Carillion’s Group Sustainability Committee – which then helped to inform and determine the content of this report, as well as re-focusing sustainability priorities, targets and challenges.
Further to the Group process, in 2015 we will be undertaking focused stakeholder engagement to further understand the most important issues across our regions, starting with a materiality review in Canada. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
TARGETS AND PERFORMANCE
EVOLVING PRIORITIES BENCHMARKING BUILDING A SUCCESSFUL BUSINESS Communicating performance is key to transparency and we update on About us progress in areas that matter to our stakeholders. By celebrating achievements and understanding where we can do better, we continually 2014 at a glance shape our strategy to be even more ambitious. Welcome from our Chief Our key performance indicators (KPIs) are developed in collaboration with stakeholders as part of Executive and our 2020 sustainability strategy, and data and other information for measurement against our Chairman business unit KPIs is gathered and stored by our Capture system to enable accurate international tracking and performance analysis. Views from our Chief Sustainability EVOLVING PRIORITIES KEY Officer and independent Target achieved advisors Halfway through our 2020 strategy, our strategy continues to Behind schedule evolve. This year, we have modified our targets and results Our 2020 strategy table to encompass new targets and set others aside where Verified by Bureau they have now been achieved. Some original targets have also Veritas evolved to reflect the dynamic nature of conducting our Targets and Verified by other business (for example, absolute fuel consumption, as detailed performance external party in Enabling low–carbon economies). Other targets have run Governance and their natural course and are fully embedded and implemented risk as policy.
Integrity and ethics Building a successful business
About this report LONG- 2014 2015 TERM VERIFIED 2014 TARGET PERFORMANCE TARGET TARGET
Carillion will contribute £25 million to £27.2 £32.5 £40 profitability through sustainability million million million actions by READ MORE 2020 Leading the way with our customers and suppliers
LONG- 2014 2015 TERM VERIFIED 2014 TARGET PERFORMANCE TARGET TARGET
Maintain Level 4 of Sustainable Achieved Level 5 Level 5 Procurement Task Force Flexible by 2015 Framework and work towards Level 5 READ MORE
10% of suppliers to respond positively 35% 40% 100% to sourcing materials and products by from responsible and ethical sources 2020 READ MORE
Providing better prospects for our people
LONG- 2014 2015 TERM VERIFIED 2014 TARGET PERFORMANCE TARGET TARGET
39% reduction in All Accident 49% 56% 70% by Frequency Rate (AAFR) against a 2011 2020 baseline READ MORE
75% of employees feel proud to be 65% 75% 80% by part of Carillion (Great Debate survey) 2020 READ MORE
15% of employees utilise the Carillion 14% 22% 50% by special leave policy for volunteering in 2020 areas where we work READ MORE
Supporting sustainable communities
LONG- 2014 2015 TERM VERIFIED 2014 TARGET PERFORMANCE TARGET TARGET
45% local spend including small and 51% 60% Maintain medium enterprises (SMEs) in the UK at 60% READ MORE
88% of Carillion apprentices who 87% 90% 95% by complete their framework will have an 2020 employment outcome READ MORE
100% contracts to have a community 96% 100% Maintain needs plan at 100% READ MORE 1% pre-tax profits donated to 1% 1% 1% community activities either in cash or kind READ MORE
4% of schools, unemployed and hard 4% 10% Maintain to reach1 groups to develop skills to at 10% enter employment READ MORE
Enabling low-carbon economies
LONG- 2014 2015 TERM VERIFIED 2014 TARGET PERFORMANCE TARGET TARGET
11% reduction on our carbon 17% 20% 24% by footprint (against a 2011 normalised 2020 baseline) READ MORE
19% reduction in gas consumption 11% 20% 20% from Carillion offices (against a 2011 reduction degree days normalised baseline) by 2015 READ MORE
15% reduction in electricity 24% 20% 20% consumption from Carillion offices reduction (against a 2011 baseline) by 2015 READ MORE
100% contracts to have a Carbon 96% 100% Maintain Reduction Plan at 100% READ MORE
Protecting the environment
LONG- 2014 2015 TERM VERIFIED 2014 TARGET PERFORMANCE TARGET TARGET
96% waste diverted from landfill 95% 98% Zero READ MORE (zero waste to waste)2 landfill
15% reduction in water consumption 28% 25% 25% (against a 2012 normalised baseline)3 reduction READ MORE by 2015
100% sourced timber will meet 99% 100% Maintain Forest Stewardship Council or at 100% equivalent standards4 READ MORE
1. Hard to reach covers a wide range of groups and are those with real or perceived barriers to engagement/employment. 2. 2% of our waste is hazardous or non-recyclable therefore a 98% diversion rate is equivalent to zero waste to landfill. 3. Operational water reduction (using 2012 baseline and normalised by turnover) was 28%. The Carillion Estate water consumption increased by 12% (using 2012 baseline and normalised by square footage). 4. Timber performance data from 2013 report as 2014 data not available at time of publication.
BENCHMARKING
We also participate in benchmarking exercises, to understand our performance against best practice and be the leader in our industry sector. We are proud to be listed in leading indices, including the FTSE4Good Index Series and Business in the Community’s (BITC) Corporate Responsibility Index.
BITC CR Index
% 2013 2014 2015 Carillion score 96 96 97 All index participants 90 85 91 Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
GOVERNANCE AND RISK
MANAGING SUSTAINABILITY OUR BOARD SUSTAINABILITY COMMITTEE BUILDING A SUCCESSFUL REMUNERATION BUSINESS SHAREHOLDER RELATIONS
About us RISK MANAGEMENT
2014 at a glance Effective corporate governance is the basis of how we do business. It Welcome from provides confidence in what we are trying to achieve for the shareholders, our Chief customers, partners, suppliers and the communities within which we Executive and work. Chairman
Carillion has put in place comprehensive policies, management structures and processes that are Views from our applied rigorously to ensure that the company complies with the requirements of the UK Chief Sustainability Corporate Governance Code (September 2012). Furthermore, our Chairman and Company Officer and Secretary conduct a formal and rigorous annual evaluation of the Board, its committees, their independent procedures and performance. Read more about corporate governance in our 2014 Annual advisors Report and Accounts (PDF 5.7 MB).
Our 2020 strategy MANAGING SUSTAINABILITY Targets and performance Our sustainability governance ensures our operations, targets and plans are managed and delivered in a consistent, Governance and risk responsible and transparent way. Richard Howson, Carillion’s Chief Executive, is responsible to the Board for sustainability, while Chief Sustainability Officer, David Picton, is accountable Integrity and for sustainability across the Group. A Board Sustainability ethics Committee has been introduced, chaired by Dr Ceri Powell, a Carillion Non-Executive Director, and is now in operation. This Connecting About this report will provide oversight on behalf of the Board for priorities, industry and targets and challenges material to the Sustainability 2020 Parliament Strategy and its management across the Group. Carillion’s Chief Sustainability Officer Our Board and Executive leadership teams are also advised by David Picton was a Sustainability Advisory Committee, which includes directors appointed Commissioner from our business units as well as two independent external to the Industry and Parliament Trust advisors – Dame Julia Cleverdon DCVO, CBE (Vice President of Sustainability Business in the Community and Special Advisor to The Prince’s Commission in Charities) and Jonathon Porritt (Founder Director of Forum for September 2014. The the Future). Commission explores how business and Philip Green was appointed to the Carillion Board in June 2011 governments can work together to promote and was elected Chairman in May 2014. Philip is also Chairman more sustainable of both the Nominations and Business Integrity Committees. business practices. Philip was awarded a CBE in the 2014 Queen’s Birthday Honours List. He received the award for services to business and to charity in the UK and South Africa. Philip is the corporate responsibility advisor to the UK Prime Minister, David Cameron.
The operational delivery of the Sustainability 2020 strategy is overseen by the Group Sustainability Committee – which includes our operational Managing Directors, as well as key functional heads from our corporate teams. The work of these committees is underpinned by a rigorous set of policies, procedures and operational tracking processes to deliver business unit plans, each of which also has a steering group to CSR Label track progress against Sustainability Leadership Plan targets. Al Futtaim Carillion has recently been accredited Our sustainability management systems are fully integrated with the Dubai Chamber across the business. They govern our 2020 strategy, help CSR Label award recognising our provide assurance for clients and suppliers, and support risk commitment to operating management processes. All our operations in the UK, Middle responsibly. East and North Africa are certified to the ISO 14001 international environmental standard, as is Carillion Canada’s Roads Maintenance division in Ontario. Chairing the Board “ Sustainability Committee is an important opportunity to make sure that Carillion’s award-winning sustainability progress to date remains ambitious and relevant. Resilience and balance will become ever more fundamental to responsible and forward-thinking businesses.”
DR CERI POWELL, Carillion Non- Executive Director BOARD OF DIRECTORS The Board reviews progress monthly. Richard Howson, Chief Executive, has Board-level responsibility for sustainability while Chief Sustainability Officer, David Picton, has overall accountability for sustainability across the Group.
SUSTAINABILITY ADVISORY COMMITTEE The Sustainability Advisory Committee makes recommendations to the Board. It is made up of representatives from our business units as well as two independent external advisors. See Independent Advisor statements.
BUSINESS LEADERS SUSTAINABILITY COMMITTEE The Board also engages with the Business Leaders Sustainability Committee, which is chaired by the Chief Sustainability Officer and oversees the delivery of our 2020 sustainability strategy. The Chief Sustainability Officer implements the strategy via workstreams covering the six outcomes, interfacing with working groups in each of the business units.
BUSINESS STEERING GROUP Each of our businesses also has a steering group to track progress against Sustainability Leadership Plan targets.
POLICY, PROCEDURES AND MANAGEMENT SYSTEMS Sustainability is embedded across the Carillion Group via a number of policies, procedures and use of our management systems, which are certified to OHSAS 18001 and ISO 14001. In 2012, we launched Capture, a web-based data collection system for each contract to report safety and sustainability progress. See Health and Wellbeing and Environmental Management.
However, the Board recognises that on their own policies and procedures are not enough and, in order to achieve consistently high standards of governance and service excellence, we have to ensure that our values are at the heart of everything we do. Our values are helping to shape the culture, character and beliefs of our business. For more information on our values visit About us.
Our Board Sustainability Committee
Dr Ceri Powell was appointed to the Carillion Board as a Non-Executive Director in April 2014. Ceri is a member of the Audit, Remuneration, Nomination and Business Integrity Committees and Chair of the Sustainability Committee. Ceri is also a member of the Advisory Board of the United Nations Sustainable Energy for All initiative, chaired by the Secretary General of the UN, Ban Ki-moon.
From 2015, Dr Powell will chair a new Board Committee for Sustainability, set up to assess strategic issues, the delivery and future development of Carillion’s sustainability outcomes and advising on:
sustainability strategy, values and policies; annual sustainability report; annual management report from our sustainability auditors; sustainability legislation and regulations; and engagement with internal and external stakeholders on sustainability.
VIEW ALL CASE STUDIES
REMUNERATION
In 2014, the Chief Executive’s objectives included, ‘to lead the Group’s health and safety and sustainability strategies and aim to deliver continuous improvement in performance’.
Our target is to achieve by 2020 a £40 million contribution to profit as a result of our sustainability programme. It is also one of our Chief Executive’s annual bonus targets, sitting alongside other social, environmental and governance measures to create a balanced sustainability programme.
Our policy is to ensure that remuneration and other benefits attract, motivate and retain Executive Directors and senior managers of the calibre required to achieve the Board’s objectives, including economic responsibility and growth in shareholder value. Our remuneration policy is derived from our strategic objectives, which specifically include achieving leading standards of sustainability, health and safety, environmental and social performance.
We aim to ensure that pay is fair, consistent and appropriate to our culture and community. For our full statement and more details on remuneration, see our 2014 Annual Report and Accounts (PDF 5.7 MB).
SHAREHOLDER RELATIONS
We welcome and encourage engagement with shareholders. Our contact details are available on our website. The Board and senior management team communicate regularly with our shareholders through: our Annual Report and Accounts; our half-year report; regulatory announcements; presentations and site visits; meetings with current and prospective shareholders; and our Annual General Meeting.
RISK MANAGEMENT
The Board is ultimately responsible for ensuring that the Group’s risk management systems are suitable for identifying and evaluating significant sustainability risks. Alongside our legal obligations and anti-corruption measures, we invest in integrity with our rigorous business integrity policies and procedures. Managing social, environmental and ethical risks is also an integral part of delivering contracts successfully.
We evaluate risk at every stage, from initial thought processes to assessing how suppliers and subcontractors are likely to perform through our supply chain management safeguards. For our people, risk management is practical and structured but also a reflection of their attitudes. We use the following processes to manage risk correctly:
independent, external auditors review financial controls and other business systems to ensure they are operating effectively; peer reviews are carried out within each business unit by teams of impartial representatives from other parts of the business empowered to ensure compliance with comprehensive guidelines; all our people are encouraged to raise genuine concerns about malpractice at the earliest possible stage, including a confidential ‘whistleblowing’ hotline; and robust anti-bribery and corruption policies. (PDF 95 KB)
See below for our table of sustainability-specific risks.
Building a successful business
SUSTAINABILITY RISK MITIGATION
Reduction in public spending on Potential growth in our services business as construction contracts governments look to subcontract work to help deliver cost savings New business opportunities in sustainable products and services – with new and existing clients Difficulties operating in existing or new Employing people with appropriate experience overseas regions and markets where when tackling new markets and regions there is potential for political unrest or Deploying high-quality project directors in new change regions Ensuring that key joint venture partner relationships are managed at the highest level in Carillion
Carillion employees involved in Bribery and governance policies for all senior allegations of bribery or corruption, management and operational teams, backed up leading to potential prosecution and by specific, targeted training damage to reputation
Volatility affecting price predictions for Hedging against price increases, assessing scope the duration of a contract for risk mitigation or sharing and continuing to focus on optimising cost efficiencies
Leading the way with our customers and suppliers
SUSTAINABILITY RISK MITIGATION
Losing or failing to win contracts as a Winning and retaining contracts through our result of poor customer service proactive service and sustainable products
Reputational damage by association Working with suppliers to enhance their with a supplier with poor sustainability sustainability performance and continuing as a performance funding partner to Supply Chain Sustainability School
The financial stability of our customers, Applying rigorous selectivity criteria in relation to partners and suppliers financial stability, security of project funding and contractual terms and conditions; provision of Early Payment Facility
Failure to support local and SME Targets set for local and SME spend; SME charter businesses, resulting in loss of work and support through initiatives such as Supply with public sector organisations and Chain Sustainability School lack of diversity in supplier base
Providing better prospects for our people
SUSTAINABILITY RISK MITIGATION
Moral, legal and financial risks through Continue to embed, develop and enforce our best accidents or incidents to our people or in class health and safety standards and practices subcontractors across our business
Employee dissatisfaction, leading to a Great Debate survey and follow-up actions to reduction in retention and our ability to deliver upon feedback given deliver on contracts Risks to health and wellbeing among Providing opportunities for a better work-life our people, affecting their welfare and balance through flexible working and ‘Health Like ability to perform their roles Safety’ campaign
Lack of diversity among employees not Investment in diversity programmes, action plan, reflecting customer base targets and advisory programmes such as Business in the Community’s Opportunity Now
Lack of compliance with local labour Ensure that our HR and procurement policies, laws, appropriate welfare and human guidance and practices adhere to the rights standards, evolving anti-slavery International Labour Organisation’s core legislation and employment practices conventions, align with international ISO standards and regional laws, and can align with Carillion’s values
Recruiting and retaining key people Address key issues arising from employee throughout our businesses engagement; using the Carillion Leadership Programme as a pipeline for future leadership talent
Supporting sustainable communities
SUSTAINABILITY RISK MITIGATION
Reputational damage in the Enhancing our reputation in the community with a communities where we work, leading strategic programme of investment in to a reduction in repeat business sustainability and community engagement
Youth unemployment and skills Ensuring a future pipeline of skilled individuals shortages through our education and training programmes, plus our commitment to national initiatives such as YourLife in the UK
Safeguarding when working with young Increasing awareness on safeguarding through and vulnerable people training available to employees
Failure to understand our clients and Tailoring our community needs plans and local community requirements and to programme delivery to suit the local needs and respond to them appropriate expectations
Enabling low-carbon economies
SUSTAINABILITY RISK MITIGATION
Trailing behind the market for low- Innovate and launch services that deliver financial carbon products and services and carbon savings to clients
Climate change impacts affecting our Continued commitment to climate change business mitigation and business continuity plans to mitigate localised regional risks National carbon targets being set Continued commitment to carbon reduction and minimising our footprint
Increase in costs as energy costs Investigate and invest in appropriate renewable increase energy opportunities and other means to optimise energy security
Protecting the environment
SUSTAINABILITY RISK MITIGATION
Biodiversity: Biodiversity:
Failure to comply with local legislation Building mutually beneficial partnerships with or contract biodiversity requirements organisations such as The Wildlife Trust to develop environmental management policies, backed up by specific, targeted training and systems for managers and operational teams
Waste to landfill: Waste to landfill:
Financial implications as costs rise Reduce costs by diverting waste and assess Reputational risk of not taking enough scope to realise value from waste action to tackle waste Increase engagement with key stakeholders and advisory groups to target an effective zero waste to landfill and minimise waste overall
Resource management: Resource management:
Loss or decline of resources needed for Building mutually beneficial partnerships with our business, specifically timber and organisations such as the Forest Stewardship water, and consequent price rises Council (FSC-UK) Investigate and invest in appropriate alternative resource use
Pollution prevention: Pollution prevention:
Prosecution for failure to comply with Environmental management policies, backed up local legislation by specific, targeted training and systems for managers and operational teams
Ethical sourcing: Ethical sourcing:
Purchasing products and materials that Timber strategy and policy through WWF Global haven’t been responsibly and ethically Forest & Trade Network, targets and evidence sourced for local spend with small and medium Lack of waste recycling facilities in enterprises, alignment to UK Flexible Framework some of our Middle East operations principles and geographical dispersal of our Investigating opportunities to create the operations in Canada infrastructure to support our operations in these areas, or to partner with appropriate specialist organisations Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
INTEGRITY AND ETHICS
INVESTING IN INTEGRITY ZERO TOLERANCE APPROACH TO CORRUPTION BUILDING A SUCCESSFUL WHISTLEBLOWING BUSINESS FALSE CLAIMS ABOUT BLACKLISTING
About us A range of policies and procedures mandate that everyone who works at 2014 at a glance Carillion does so with high ethical and moral standards. Welcome from our Chief Our Board also expects suppliers and customers to share this commitment, as outlined in our Executive and Ethics and Business Integrity Policy. An independent committee of the Board, the Business Chairman Integrity Committee, reviews and oversees the implementation of the Group‘s Ethics and Business Integrity Policy. It also monitors Carillion‘s compliance with relevant legislation, such as Views from our the Bribery Act 2010 and the Competition Act 2006. Chief Sustainability The Business Integrity Policy applies to all Carillion‘s businesses through a series of detailed Officer and procedures. They allow us to maintain our reputation for conducting business to the highest independent ethical standards, which are essential to its relationships with customers, business partners, our advisors people, shareholders and the public.
Our Ethics and Compliance Office provides dedicated support for this work, and our Directors Our 2020 strategy and senior managers complete annual compliance returns to ensure our approach remains appropriate. Targets and performance Carillion‘s Ethics and Business Integrity Response Plan outlines the actions that should be taken in the event of a suspected policy breach. It ensures investigations are conducted fairly and Governance and decisions are taken by suitable individuals. risk
Integrity and ethics Investing in Integrity 1,500 About this report Our international operations were awarded the Investing in hours Integrity (IiI) Charter Mark following a rigorous training delivered to 330 accreditation process involving 3,000 of our people. The senior employees in Charter Mark enables us to reassure stakeholders that we competition, ethics and commit to acting with integrity at all times: we are the only business integrity policies in 2014 business in our sector to achieve it.
The independent accreditation included site visits, interviews and surveys carried out by an independent assessor (the Good Corporation), alongside analysis of ethical policies, procedures and practices. By signing up to “ Investing in Integrity, Carillion has begun a journey which will be challenging and rewarding. They have worked hard across the UK, Middle East and Canada to gain accreditation. By achieving IiI, Carillion has demonstrated they are serious about behaving ethically.”
PHILIPPA FOSTER BACK CBE, Director, Institute of Business Ethics VIEW ALL CASE STUDIES
ZERO TOLERANCE APPROACH TO CORRUPTION
We absolutely prohibit bribery or corruption of any kind, including both the offering and accepting of bribes, through our Disciplinary Policy. We mandate our people and others to come forward if they witness or suspect unethical behaviour that is in potential breach of our policy. Gifts and hospitality and Now more than ever, conflicts of interest must be declared and documented. “ the public rightly expects businesses We continue to provide our people with face-to-face and online to behave training on our competition, ethics and business integrity responsibly and policies. In 2014 we delivered face-to-face training to over 330 openly. For Carillion people, this is exactly senior employees, as part of a company-wide training rollout. how we operate – across our Carillion has a zero tolerance approach to fraud and international corruption. Internal Audit works alongside independent operations – and this managers to investigate allegations and prevent and detect was key to us improper behaviour. Carillion’s Audit Committee receives achieving the Investing in Integrity regular updates on all allegations reported, and investigation Charter Mark.” outcomes. RICHARD TAPP, Company Secretary RESPECT FOR HUMAN RIGHTS and Legal
We believe that human rights are universal and we support the United Nations Declaration on Human Rights, as laid down in PwC Building our Ethics and Business Integrity Policy (PDF 98 KB). Employees are trained on this policy and we report performance through Public Trust the Competition Act training statistics. All suppliers have to sign up to the policy and monitoring compliance is the Award responsibility of our Group Compliance Office. first FTSE company to retain the FTSE 250 We work hard to ensure that in all areas of interaction with Sustainability Reporting Award for a second employees, clients, suppliers, third parties, interviewees and consecutive year joint venture parties, that everyone is protected and treated absolutely fairly. See the Promoting diversity section for more information. We apply the same globally recognised WHISTLEBLOWING standards of excellence to all our operations, whatever the We actively encourage our people to raise concerns about jurisdictions. See how we have done this in Qatar. fraud, corruption, or any other malpractice at the earliest possible stage. They can do this by talking to their managers or through monthly Team Talks and feedback sessions. We also have a confidential whistleblowing hotline provided by an independent third party. Details of our approach are in our Whistleblowing Policy.
In 2014, 210 whistleblowing cases were reported across Carillion. Of these cases, 122 related to fraud, 59 related to HR and 29 cases were categorised as ‘other’.
As at 31 December 2014, 164 cases have been investigated and closed, and among these closed cases, 51 resulted in either disciplinary action taken against our people, the reimbursement of losses or the implementation of control or process improvements to prevent or reduce the likelihood of the impropriety occurring again. The remaining 113 cases were either unfounded or required no action. As at 31 December 2014, 46 whistleblowing investigations were in progress.
FALSE CLAIMS ABOUT BLACKLISTING
Along with other companies in the construction industry, over the past few years Carillion has been accused of being involved in the illegal blacklisting of workers. This is not true.
Blacklisting relates to the use of the Consulting Association database many years ago by companies in the industry. At Carillion, we pride ourselves on our strong Values and high standards of corporate governance and we do not condone or engage in blacklisting. A former Carillion subsidiary did access this database but this practice was stopped, voluntarily, over a decade ago and before it became unlawful. Since then we have apologised for our use of the database and any damage it may have caused. To provide an accurate picture we have set up a section of our website with regards to false claims about blacklisting. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
ABOUT THIS REPORT
SCOPE GLOBAL REPORTING INITIATIVE BUILDING A SUCCESSFUL ASSURANCE BUSINESS
About us This is our 15th sustainability report. It is structured around the six positive outcomes of our 2020 strategy and aligned to our material issues, as 2014 at a glance guided by our stakeholders. This report, alongside our sustainability Welcome from strategy and policies, is available on our corporate website. our Chief Executive and Chairman SCOPE We welcome your feedback on this report Views from our and our approach to Chief The report covers Carillion’s international operations during sustainability. If you have Sustainability the 2014 calendar year, encompassing the UK, Canada, the any comments or Officer and Middle East and North Africa (MENA). questions please contact independent us advisors We have reported on activities and projects undertaken as part of our various joint ventures, depending on our influence on Our 2020 strategy their operations and the size of our shareholdings in them. Carillion’s 2013 Where Carillion people are seconded to a joint venture, we “ sustainability report demonstrated that Targets and include them in the data but exclude the Joint Venture’s sustainability is an performance operations. integral part of its core business and Governance and the company wants risk GLOBAL REPORTING INITIATIVE to communicate the issues in an open and accessible way. The Integrity and This report has been prepared in accordance with the GRI’s G4 report demonstrates ethics guidelines at core level, reporting against self-selected a clear understanding indicators based on material aspects. of the sustainability About this report impacts of the See our GRI Index. (PDF 224 KB) business and how this links to future viability of the Group, especially around ASSURANCE resource usage. In addition, Carillion Bureau Veritas, an independent professional services and demonstrated some interesting and compliance specialist, has assured our performance against innovative ways of specific sustainability targets, factual statements and presenting performance data related to the targets within the content of information and this report. See the assurance statement below. engaging stakeholders, such as their 2020 BUREAU VERITAS INDEPENDENT Sustainability Vision VERIFICATION STATEMENT brochure and the To the stakeholders of Carillion plc. Sustainability Talk & News initiative.”
INTRODUCTION AND OBJECTIVES ALAN MCGILL, Bureau Veritas has provided independent verification over the Partner, Sustainability stated achievement of a selection of Carillion plc’s (Carillion) and Climate Change, PwC 2014 sustainability targets against a 2011 baseline, as reported in its 2014 Sustainability Report (the Report), the methodology and approach for gathering carbon footprint data. The objective of our work is to assurance to Carillion’s stakeholders over the level of achievement of the selected targets and of the reliability and accuracy of the supporting performance data.
SCOPE AND METHODOLOGY The information and data reviewed for this verification process cover the reporting period: 01 January 2014 – 31 December 2014, and all the Carillion businesses across the UK, Middle East and Canada.
In order to form its conclusions, Bureau Veritas conducted the activities outlined below:
Phone interviews with key Carillion personnel (Head Office and Regional Staff); Review of data management and data accuracy through interrogation of spreadsheets and sampling of select datasets; Review of supporting documentation (including: policies, procedures, minutes of meetings, email correspondence, presentations, invoices); Review of consolidated site and business unit sustainability data sets.
Carillion’s sustainability targets and their stated level of achievement, as subject to the verification, are presented in the table below.
Leading the way with our customers and suppliers
WHAT CARILLION SAID 2014
Maintain Level 4 of Sustainable Procurement Achieved Task Force Flexible Framework and work towards Level 5 Providing better prospects for our people
WHAT CARILLION SAID 2014
39% reduction in All Accident Frequency 49% Rate (AAFR) against a 2011 baseline
Supporting sustainable communities
WHAT CARILLION SAID 2014
45% local spend including SMEs in the UK 51%
100% of contracts to have a community 96% needs plan
1% of pre-tax profits donated to community 1% activities either in cash or kind
Enabling low-carbon economies
WHAT CARILLION SAID 2014
11% reduction in carbon footprint (against a 17% 2011 normalised baseline)
19% reduction in gas consumption from 11% Carillion offices (against a 2011 degree days normalised baseline)
15% reduction in electricity consumption 25% from Carillion offices (against a 2011 baseline)
Protecting the environment
WHAT CARILLION SAID 2014
96% of waste diverted from landfill 95%
15% reduction in water consumption (against 28% a 2012 normalised baseline)
BUREAU VERITAS’ OPINION It is Bureau Veritas’ opinion, based on the verification activities as per the scope and methodology above, that the stated level of achievement reported by Carillion against the selected targets is a fair reflection of its performance.
Nothing came to Bureau Veritas’ attention that would indicate any material error or omission in the information reported, that would affect stakeholders’ ability to make informed judgments on Carillion’s performance in 2014.
LIMITATION AND EXCLUSIONS The preparation of the Report is the sole responsibility of Carillion. The verifier has an obligation to stakeholders and users of the report and is exclusively responsible for the content of this verification statement. Carillion has provided access to the documentation and data required to undertake the verification process and Bureau Veritas is confident that no material information has been withheld.
Excluded from the scope of our work is:
Any information not directly linked to the selected targets; Activities outside the defined reporting period; Company strategy and position statements (including any expression of opinion, belief, aspiration, expectation or aim); Financial data which is taken from Carillion’s Annual Report and Accounts.
A limited sample of site specific source data and records were reviewed as part of this assessment.
This independent statement should not be relied upon to detect errors, omissions or misstatements that may exist within Carillion’s reported information. The scope of our work was defined and agreed in consultation with Carillion. Our work covers global operations and relies upon the accurate collation of information at Carillion’s worldwide locations and its UK offices.
STATEMENT OF INDEPENDENCE Bureau Veritas is an independent professional services company that specialises in quality, health, safety, social and environmental management advice and compliance with over 180 years’ history in providing independent verification and assurance services. Bureau Veritas has implemented a code of ethics across its business which ensures that all our staff members maintain high standards of integrity and independence. We believe our verification assignment did not raise any conflicts of interest. Our team completing the work has extensive knowledge and experience of conducting verification over sustainability information and systems.
London, 18th of March 2015 Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
Carillion is…
the way with our customers and suppliers
Effective and innovative collaboration
LEADING THE WAY We work together with customers and suppliers to find WITH OUR mutually beneficial and dynamic solutions, which will help CUSTOMERS AND us to win repeat business and gain new clients based on SUPPLIERS our proven delivery credentials. Customer experience Sustainability in action Sustainable innovation Prompt payment Supply chain management £977.6M IN EARLY SUPPLIER PAYMENTS IN 2014 Collaborating with Engaging and collaborating suppliers with the industry supply chain
FUNDING PARTNER OF THE SUPPLY Launching our Small CHAIN SUSTAINABILITY SCHOOL Business Charter Our hospital is one of the We are currently exceeding the UK best for cleanliness Government‘s goal of 25% SME spend for government contracts with 27% of our CLEANLINESS AND FOOD spend going to SMEs. In 2014, we IMPROVEMENT RECOGNISED AT launched a charter to engage 3,700 small DARENT VALLEY and medium suppliers. Sustainable timber READ MORE 100% RESPONSIBLE TIMBER POLICY WITH WWF
Our key figures 2014 performance highlights +37 6,783 Net Promoter Score international suppliers measuring customer accredited to MyRegister satisfaction 2013: 6,442 2013: +33
Progress against targets 35% Level 4 of suppliers responded of the Sustainable positively to sourcing Procurement Task Force materials from ethical Flexible Framework sources maintained Targets Targets 2014: 10% 2020: 100% 2014: Achieved 2015: Level 5
Target achieved
VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
CUSTOMER EXPERIENCE
OUR HOSPITAL IS ONE OF THE BEST FOR CLEANLINESS FACILITIES MANAGEMENT SUPPLIER OF THE YEAR LEADING THE WAY WITH OUR CLIENT–CONTRACTOR AWARDS CUSTOMERS AND HIGHWAYS AGENCY UNVEILS TOP SUPPLIERS SUPPLIERS
Customer Listening to, speaking with and investing in clients is a priority. Exceeding experience customer expectations is the best way to win new and repeat business. Sustainable innovation To help drive our customer strategy, we joined the Institute of Customer Service (ICS) in 2014 – a forum that shares ideas and initiatives to improve customer service experience in the UK. We Supply chain went on to support the ICS in establishing an all-party Parliamentary group on customer service management and attended the inaugural meeting in the Houses of Parliament.
Collaborating with We measure satisfaction through the Net Promoter Score (NPS). This international standard suppliers allows us to measure customer satisfaction and benchmark performance against other organisations, based on how likely customers are to recommend Carillion’s services. NPS scores range from –100 to +100. Carillion scored +37 in 2014 (up from +33 in 2013), comparing very favourably with other companies in our market sectors and giving us first-hand feedback and information to continue improving the services we provide for our customers.
Our Sheffield-based Customer Experience Centre is a centre of excellence. It provides a wide range of contact and administration services for customers and internal teams including facilities management and support helpdesks and international safety reporting.
Our hospital is one of the best for +37 cleanliness Net Promoter Score (2013: +33) Patients have rated Darent Valley Hospital as among the best in England for cleanliness. Recent results from the annual Patient-Led Assessments of the Care Environment reflect how the environment at the hospital supports 1m patient privacy and dignity. calls, emails, SMS and social media contacts Cleanliness, food and building condition are now above the taken by our Customer national average, with scores for cleanliness in the upper Experience Centre each year quartile for England. Food provision as also commended since the Carillion team introduced fresh soup, improved the presentation and quality of sandwiches and salads and amended the ordering system so that more patients were able to receive their first-choice meal.
The improved results “ have been achieved through hard work by both the Trust and ourselves providing the facilities management services. We are extremely happy with these results and this VIEW ALL CASE STUDIES is testament to the partnership approach that we have with FACILITIES MANAGEMENT SUPPLIER OF Carillion.” THE YEAR CHRIS FORSTER, Director of Estates and Facilities, Darent In 2014, we won the Facilities Management Service Provider of Valley Hospital the Year at the British Institute of Facilities Management Awards, in recognition of the outstanding service delivery and excellence provided on our long-standing contract with Centrica and British Gas. £11.6m/
Since 2002, we have worked extremely hard to build a true 95,000t of partnership and introduced a business model specifically CO2 tailored to the client, ensuring we meet the needs of their saved for our customer people and the environment. The award acknowledged the Ministry of Defence, Carillion’s training, customer service and implementation of an over the last three years effective single Facilities Team. The team unites 600 individuals from seven supplier organisations and is driven by shared behaviours, values and commitments to benefit Bouchier Carillion has Centrica and British Gas. “ the right attitude to take risks and make it win-win. We have work that needs to be Client–contractor awards done and they have a workforce that can do it. They Carillion Alawi was named Contractor of the Year at the understand what the Construction Week Oman Awards 2014 in the Grand Hyatt client wants and they Muscat. The award recognised Carillion’s ability to deliver try to execute it to the projects within tight timescales, while maintaining a zero best of their abilities to make sure we’re tolerance approach to accidents. It has also managed to happy. It’s mutual – maintain a steady growth despite challenging markets in they do work, we pay recent years. them fair value. But it’s an open In the UK, the Library of Birmingham was named relationship and very Construction News Project of the Year (over £50 million). transparent. We only succeed with both of Judges praised client–contractor collaboration through the us.” six-year project. The library was also shortlisted by RIBA Chartered Architects for the prestigious RIBA Sterling Prize CHAD BEATON, for the best building in the UK. Manager, Facilities and Services, Canadian Natural Resources Limited
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Highways Agency unveils top suppliers
The Highways Agency announced Carillion as winners of the Customer Experience Award as part of its Supplier Recognition Scheme. The award recognised our work to involve the local community during the A23 Handcross to Warninglid scheme.
We also received the Supply Chain Management Award as part of a Collaborative Procurement Working Group by implementing effective strategies through the supply chain to avoid road-user delays.
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SUSTAINABILITY REPORT 2014
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SUSTAINABLE INNOVATION
IMPROVING LIVES AND SAVING CARBON WITH ECOPODS STRENGTHENING SOLAR ENERGY IN THE MIDDLE EAST LEADING THE WAY WITH OUR MOD PROJECT SAVES £11.6 MILLION CUSTOMERS AND SUPPLIERS Our people are continually looking for ways in which we can do things Customer differently and create even more benefits for customers, communities and experience the environment. Sustainable innovation Our Sustainability Investment Fund has helped to support this thinking across the company, providing up to £120,000 for research, innovation or implementation in a variety of projects. Supply chain Funds are awarded to support the delivery of one or more of our six positive outcomes, and we management look for proposals that could improve our work or even develop new products and services. For example, in 2014, our construction services applied for funding to reduce waste by upgrading Collaborating with machinery and purchasing materials to develop a recycling area. suppliers See Sustainable design for examples of how we are integrating innovative ideas and practices from the outset of our construction work.
Improving lives and saving carbon with EcoPods
Carillion’s EcoPod technology is already reducing energy costs and cutting carbon emissions in more than 40 high- rise buildings across the UK.
EcoPod is a Smart energy and controls system for multi- occupancy buildings that provides highly efficient, safe and We are very pleased controllable heating and hot water for building owners, “ to continue our support for NHS operators and occupiers. Sustainability Day. Sustainability has The creation of the EcoPod Technology Centre puts become an Carillion at the forefront of energy-efficiency increasingly “ innovation. We will test installations at our test important part of all centre which will also support the creation of new aspects of Carillion’s business activities. jobs in research and development, renewable We are delighted to energy systems and building automation.” have the opportunity to share our PHIL SHEPLEY, Managing Director of Corporate experiences and to and Central Government Services, Carillion learn from others Services through the NHS Sustainability Day programme of events.”
NUALA GILMARTIN, Business Development, Carillion Health
See NHS Sustainability Day in action
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Strengthening solar energy in the Middle East Manchester and Birmingham
We are installing a Concentrated Solar Power (CSP) energy savers technology power plant in Dubai and the wider Middle East A partnership between Carillion and Birmingham region for Dubai Electricity and Water Authority. This trial City Council will see 24 project will be used as a learning tool for larger-scale EcoPods installed across deployment of CSP installations in Dubai to help strengthen the city. The significant the local solar industry. This is an important step for the energy savings, together solar energy sector and to encourage environmental with Energy Company Obligation funding, will sustainability by using renewable energy. help fund the project.
We have also been testing recycled PVC plywood in place The first phase of six of traditional plywood for shuttering on one of our projects EcoPods was completed in Dubai where we have demonstrated that it saves time late in 2014, comprising and money, and can be 100% recycled. On the same 350 homes and saving a total of 17,000 tonnes of project, the team also hired a concrete crusher to produce CO2 over the lifetime of approximately 7,000m3 of aggregate for use on other the system. 2015 will see project areas, reducing additional virgin material costs. a further 16 EcoPods serving a further 644 homes and saving 50,000 tonnes of carbon.
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£140,000 and 12,500t CO2 savings at the Four Seasons Hotel project in Abu Dhabi thanks to our VIEW ALL CASE STUDIES engineers replacing ordinary cement with a concrete with smaller manufacturing carbon embodiment MoD project saves £11.6 million
Over the last three years, our work in the Regional Prime Central contract has achieved excellent, long-term sustainability results with savings of £11.6 million and 95,000 tonnes of CO2 .
The works were aimed at introducing new technology and driving down energy consumption and carbon levels on all major sites. We also focused on upgrading the infrastructure to harness, manage and optimise fuels and carbon emissions across the estate.
The CarillionAmey Joint Venture responsible for the contract was named Sustainable Business of the Year at the MOD Sanctuary Awards in 2014 and has also won a number of major industry awards for its work.
Meanwhile, in the National Housing Prime Contract, the CarillionAmey team worked with the client to secure energy company funding for energy improvements and technologies across service family accommodation. As a result, the standard of accommodation has been improved and, in many cases, reduced fuel costs for our forces personnel and their families.
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SUPPLY CHAIN MANAGEMENT
MYREGISTER SUPPLIER ACCREDITATION SYSTEM SUSTAINABLE PROCUREMENT STEERING GROUP LEADING THE WAY WITH OUR PROMPT SUPPLIER PAYMENT CUSTOMERS AND UK CONTRACTORS GROUP SUPPLIERS TRAINING OUR SUPPLY CHAIN MANAGERS Customer CARILLION IN QATAR experience
Sustainable Our supplier relationship management aims to build a two-way innovation relationship that supports and encourages supplier business, helps us to deliver our client operations and expects the same standards of Supply chain management responsibility as we set for ourselves.
Collaborating with suppliers MYREGISTER SUPPLIER ACCREDITATION SYSTEM £977.6m paid to 396 suppliers
We set best-in-class standards for health, safety and working conditions wherever we work. We also set high standards of corporate governance, and our supplier partners are assessed against commercial, health and safety, quality and sustainability 6,783 indicators. MyRegister, our supplier accreditation system, accredited suppliers captures information on capability from all our suppliers, internationally against commercial, health and assessing against health, safety, quality and sustainability safety, quality and indicators. Based on their responses to the My Register sustainability indicators questions, suppliers are graded from A to D with A being the highest. This assessment informs our purchasing decisions, ensuring that the most capable supplier is selected for a given project. We also use this information to actively engage with our supply chain, sharing knowledge and encouraging 100% of supply chain teams development of their capability as appropriate. completed the ethics module of the Chartered We have 6,783 accredited suppliers internationally, with the top Institute of Procurement 10% achieving an ‘A’ grade in 2014. Working with the Supply and Supply Chain Sustainability School we are actively encouraging our suppliers to undertake further training. This should in turn improve the quality of responses to the MyRegister question set and therefore enhance the overall sustainability capability of our supply chain. We manage our preferred supplier list through categories of Procurement supplier, which strengthens our relationships, innovation and development of supplier sustainability credentials. By sharing Pledge information about future business demand, we can also help Carillion signed the our suppliers to plan and grow in line with forecasted work. Government’s Procurement Pledge We also regularly audit and measure supplier performance using our Supplier Performance Improvement tool. This enables us to manage category-specific sustainability risk assessments, helping us to understand and mitigate risks for that category. The average supplier sustainability score from the many thousands of reviews carried out in 2014 was 69%, down from 71% in 2013.
SUSTAINABLE PROCUREMENT STEERING GROUP
This is made up of senior representatives from across our business units, who work to develop and govern best-practice approaches to supply chain sustainability. A key objective is to assess suppliers against ethical sourcing standards, with the aim of achieving 100% compliance by 2020. The steering group also oversees our Ethical Sourcing Plan, Timber Procurement Policy, SME spend ratios and Sustainability School relationships.
PROMPT SUPPLIER PAYMENT
396 Carillion suppliers (150 SMEs) are now using our Early Payment Facility (EPF) and we paid nearly £977.6 million in 2014. The EPF allows suppliers to access early payment in advance of their agreed terms at no additional cost, which improves their cash flow. We plan to further expand this facility in 2015, with a target to pay £1 billion through this mechanism, equivalent to almost 50% of our UK supplier spend.
UK CONTRACTORS GROUP
We are members of the UK Contractors Group. Membership commits around 30 companies to work with their supply chain to reduce waste and greenhouse gas emissions.
We support the Government’s construction industry strategy (Construction 2025) for greater resource efficiency and a 50% reduction in greenhouse gas emissions in the built environment by 2025. It supports a number of WRAP Built Environment Commitments to take actions through the supply chain that contribute to a lower-carbon, resource-efficient built environment. TRAINING OUR SUPPLY CHAIN MANAGERS
Our internal Supply Chain Academy has delivered its most successful training year to date with more than 3,000 hours completed by our supplier teams, the equivalent to four days per person. More than 30 courses are available, including Data Gathering and Market Analysis, Customer Service Skills, IOSH and NEBOSH qualifications and Women in Leadership.
Carillion in Qatar
Carillion sets best-in-class standards for our people’s health, safety, human rights and working conditions wherever we work. We also set high standards of corporate governance, supported by policies and procedures that are applied rigorously across our business. These are not just standards we set for the benefit of those we employ directly, but also standards from which our supply chain’s people should benefit.
In regions such as the Middle East, where we have operated for over 40 years, we make strenuous efforts to ensure that our supply chain aligns with ISO standards, as well as local laws. We make it clear to all our subcontractors that they must comply with Carillion health and safety standards on our sites – the same as those applied in the UK. In addition, we require our subcontractors to comply with the requirements set within Qatar Labour Law in respect of payment of wages, living conditions and employment rights.
We work closely with our suppliers, and where we identify inappropriate practices or subcontractors/sub-suppliers not meeting our standards we will work with them to help them improve. If they are either not prepared or unable to do this, we will engage alternative suppliers who are able to do so.
In Qatar, Carillion is contracted to deliver phase 1B of the Downtown Doha project, a mixed-use development comprising retail, commercial, residential, leisure, cultural and community facilities. Our work on this scheme has won a key industry Sustainability Project of the Year Award. While this was principally in recognition of our achievements in minimising environmental impact, it also reflects Carillion’s leading role as a responsible contractor and employer in the region.
You can find out more about our standards and practices in Qatar in this section of our corporate website.
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COLLABORATING WITH SUPPLIERS
SUPPLY CHAIN SUSTAINABILITY SCHOOL LOCAL SOURCING AND SUPPORTING SMES LEADING THE WAY WITH OUR MEETING LOCAL SME SUPPLIERS CUSTOMERS AND SUSTAINABLE TIMBER SUPPLIERS
Customer With an international supplier spend of around £3 billion, we can make a experience tangible positive impact on sustainability alongside our supply chain Sustainable partners. innovation Our Sustainable Supplier Charter ensures our commitment to sustainable procurement is Supply chain embedded in supplier management, applying the principles of the UK Chartered Institute of management Purchasing and Supply’s (CIPS) Policy on Purchasing Ethics and the Canadian Institute for Supply Management (CISM) principles. Collaborating with suppliers We put our efforts into building relationships with local businesses that share our values. For example, in the Middle East, we have trained 350 subcontractors in estidama (sustainability) workshops to factor sustainability into project planning and tenders.
SUPPLY CHAIN SUSTAINABILITY SCHOOL Ethical
We are a Funding Partner of the Supply Chain Sustainability Supplier School – the award-winning collaboration initiative designed to offer free skills, training and action plans to suppliers across Collaboration the full built environment. The School is an online virtual Award learning facility, and one of the most successful sustainability For Carillion Services’ education initiatives in the history of the built environment. contribution to David Picton, our CSO, has been a member of the Leadership Nationwide’s supply Council since 2013, and the School has made exceptional chain progress in upskilling supply chain companies and people.
Throughout 2014, we also chaired the expansion of the School beyond its original coverage of just the construction sectors, branching out to include Facilities Management (FM) and Services. More than eight months of hard work came to fruition at the end of the year – having managed to secure part- funding from the UK Commission for Employment and Skills – with the public launch of the expanded FM and Services arm of the School. In the fields of sustainability, there’s little chance of achieving progress without collaboration – and the School offers:
best-practice resources to help FM suppliers and sub- contractors develop their sustainability knowledge and competence; self-assessed action plans to demonstrate benchmarking, and routes of progress towards greater skills; e-learning modules, plus unique management systems to track progress; We are working hard “ to extend our opportunities for involvement at supplier development sustainability values days and sustainability workshops; and across our supply access and input to other groups, events and initiatives chain in the Middle East, with a particular within the wider Supply Chain Sustainability School focus on the (including groups focused on construction, standards we expect infrastructure and research). in health, safety and welfare for everybody that is We ran our first Supplier Day with the School at Liverpool in working on our April 2014, linked to our operations to build the Royal contracts. This is a real challenge but Liverpool University Hospital, with just over 110 delegates one that we are attending from 90 different companies. We covered determined to deliver perspectives from Carillion, from other partners in the School, upon.” from suppliers and from the Business in the Community regional teams who we work with to engage local communities ANDY JONES, Managing Director, and develop social value for the region. Middle East and North Africa We are also members of the School’s Horizon Group – comprising industry main contractors and partner universities specialising in the built environment. The group aims to improve the supply chain’s capability to deliver a sustainable 750 lorry built environment through collaborative research, and we are driving the first significant project to review ethical sourcing movements competence, knowledge and skills among the supplier base. and 45t of CO2 saved on the Battersea Power Watch the video. Station Phase 1 contract, by collaborating with our supplier Groundworks to LOCAL SOURCING AND SUPPORTING remove waste by barge SMES
We aimed to place 45% of our UK supplier spend with local Funding business last year, and we exceeded that to achieve 51%. Working with smaller local businesses has generated Partner employment, boosted local economies and helped us to for the Supply Chain Sustainability School engage with the communities in which we work.
We have also exceeded the UK Government’s goal of directing 25% of spend towards SMEs for government contracts, with our current SME spend at 27%. 51% of supplier spend to local Our Small Business Charter was launched in 2014, showing businesses (target: 45%) how working with our 3,700 accredited SME businesses will support the UK economy and what our suppliers can expect when working with us, including access to our Early Payment Facility.
Meeting local SME suppliers 3,700 SME suppliers Carillion held a business event for companies to discuss local opportunities and benefit from the Finningley and Rossington Regeneration Route Scheme. In partnership with Doncaster Council, a ‘meet the buyer’ day allowed businesses to scope requirements with the Carillion buying team and find out about planned developments.
This is a wonderful business development opportunity for Doncaster firms and a great chance “ for them to network with some of the biggest firms in the country. By meeting these decision makers it could open doors to new work, jobs and growth; ensuring the borough and our economy benefit at every opportunity.”
ROS JONES, Mayor of Doncaster
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Sustainable timber
Carillion has become one of the first British businesses to sign up to WWF-UK’s new forest campaign. The pledge commits companies to responsible forest trade and 100% sustainable timber and wood products by 2020, and we will continue to work with suppliers to develop our Timber Procurement Policy. In Oman, Carillion’s joinery workshop was the first in the country to have Forestry Stewardship Council (FSC) chain of custody certification, providing assurance on responsible sourcing of timber products.
Illegal and unsustainable logging contributes to deforestation and degradation across the world’s “ most important international forest regions. We will continue to direct concerted efforts at understanding and tracking the sourcing of all our forest and wood products in line with the WWF pledge.”
DAVID PICTON, Chief Sustainability Officer, Carillion VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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Carillion is… providing better prospects for our
Bringing out the best in our people
PROVIDING BETTER Our 42,000 people come to work at Carillion to apply PROSPECTS FOR OUR their talents in a safe and inclusive work environment. We PEOPLE continue to invest in developing and attracting excellent people to create a vibrant, diverse and flexible workforce. Safety performance
Health and Sustainability in action wellbeing
Recruiting, Aboriginal relations retaining and engaging FIRST NATION INITIATIVES IN CANADA excellent people ARE VITAL TO LONG-TERM DIVERSITY Your Life campaign and Promoting STEM subjects for girls diversity
SHOWCASING CAREER CHOICES TO Performance data YOUNG WOMEN IN EDUCATION Employing ex-offenders Supporting the armed forces Business has a huge opportunity and responsibility to make the CREATING OPPORTUNITIES FOR EX- “ workplace more accessible to FORCES PERSONNEL AND RESERVISTS talented ex-offenders who simply want to contribute their skills to society.”
CATHERINE SERMON, Employment Director, Business in the Community
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Our key figures 2014 performance highlights 28% 23% women on our Board of our people are female 2013: 25% 2013: 23%
Progress against targets 49% 14% reduction in All of our people use the Accident Frequency Rate Carillion special leave Targets policy for community 2014: 39% 2020: 70% engagement Targets 2014: 15% 2020: 50%
Target achieved Behind schedule
VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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SAFETY PERFORMANCE
MANAGING AND IMPROVING PERFORMANCE CARIBBEAN, ALAWI AND CANADA SAFETY PROVIDING BETTER PROSPECTS FOR OUR LOOKING AHEAD PEOPLE
Safety Our target is zero. Zero accidents, zero incidents. We do everything we performance can to remove the risk of accidents from our business.
Health and However, when an accident does occur, we investigate the root causes fully and make changes to wellbeing processes to ensure it does not happen again. We share our findings and take concrete actions to improve and we constantly measure our progress to improve performance and adopt best Recruiting, practice. retaining and engaging In 2014, we launched ONE, a health and safety campaign based around one team with one goal: excellent people zero ill health and accidents caused by work. We know that one accident is one too many, so we keep up momentum towards our target. Promoting diversity
Performance data Lost Time All Accident Incident Frequency Rate Frequency Rate 2.31 0.24 (2013: 2.81) (2013: 0.29)
Our performance data LOST TIME INCIDENT FREQUENCY RATE Safety award ALL ACCIDENT FREQUENCY RATE Our excellent safety record in Canada was recognised with a Safest Employer Silver Award at We are transparent about our health and safety performance, the Canadian both when things go right and also, crucially, when they do not. Occupational Safety Awards. The national We deeply regret that we suffered two fatal accidents in Oman awards programme and Qatar in 2014. In the first, a person fell several metres recognises Canadian when he stood on an unfixed panel he had just placed into companies that are position and it tipped. In the second, a subcontractor’s making a difference in employee was struck by a vehicle while crossing a highway as protecting the health and safety of their people, part of a maintenance activity. through initiatives such as our ‘Don’t Walk By’ In addition to these accidents, a vehicle carrying five workers programme. collided with a broken-down vehicle on the M4 in England. Two of the passengers died instantly and a third died later in VIEW ALL CASE hospital. A fourth passenger was seriously injured. STUDIES
Our thoughts remain with the relatives and friends of the people affected by these tragic incidents. 49% MANAGING AND IMPROVING PERFORMANCE reduction in All Accident Frequency Rate We are certified to the BS OHSAS 18001 standard for health and (2011 baseline) safety management systems across our operations in the UK, the Middle East and North Africa. Meanwhile, every contract is assessed for health and safety risks, from design and delivery to final use. Senior managers regularly visit contracts to review BS OHSAS health and safety. 18001 We make sure that everyone understands our health and safety standard for health and policy (PDF 816 KB). This is done through communications safety management campaigns and formal training. In the UK and Canada we have systems for the UK, Middle East and North a dedicated phone number for reporting any incident or near– Africa miss.
We have a range of risk evaluation processes from design through delivery and right up to Point of Work Risk Winner Assessments. These address risks to both the health and Royal Society for the safety of our people and those working for us through our Prevention of Accidents supply chain. Occupational Health and Safety Award, Carillion Training Services
CEO Health and Safety Best Practice Award to Qatar FM Shell
Caribbean, Alawi and Canada Safety
Carillion Caribbean has been recognised by its client Massy Wood Group for its contribution to reaching two million work hours with no Lost Time Incidents, while in Oman, Carillion Alawi received a Platinum Target Zero Award for four years without a Lost Time Incident. In Canada, the construction crew at the Toronto Union Station Revitalisation project reached one million hours of work with no Lost Time Incidents and Bouchier Group, part–owned by Carillion, received a Platinum Target Zero Award for reaching over six million hours without a Lost Time Incident.
CEO Safety Excellence Winner: The Bouchier Carillion Group
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Our ARK performance model assessment allows us to evaluate our systems and behaviours against our vision of excellence. It measures performance in three key areas:
PEOPLE, including leadership, engagement, culture, competence, supply chain, health and wellbeing; PROCESS, including governance, compliance and continuous improvement; and PERFORMANCE, including health and safety performance against key performance indicators.
We use ARK to benchmark current performance in a particular part of the business and to set targets and plans for improvement.
Mike Francis, winner of our CEO Health and Safety People Award
LOOKING AHEAD
In 2015, in addition to continuing our focus on our key risks such as work at height, electricity and moving vehicles and plant, we will be focusing on reviewing and improving safety when our people are driving or travelling on the road.
In Canada, for example, we will be working with the Ontario Ministry of Transportation to improve winter lighting on heavy maintenance equipment and testing prototypes to inform a potential new standard. Making tomorrow a better place
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HEALTH AND WELLBEING
Looking after our people and contractors is not just a moral obligation, it makes clear business sense. Our people being well and healthy is vital to PROVIDING BETTER our success. PROSPECTS FOR OUR PEOPLE In 2014, we launched our new Occupational Health strategy, Health Like Safety, which aims to Safety raise the status of health as a key component of our overall objectives and strategy. Health Like performance Safety includes a dedicated health plan and health champion at all locations in order to:
Health and ensure safety-critical workers are fit for work; wellbeing prevent work-related cancers and other chronic health conditions caused or made worse by work; Recruiting, promote wellbeing and healthy lifestyles while recognising that this remains a matter of retaining and personal choice; and engaging excellent people optimise our approach to dealing with sudden cardiac arrest in the workplace.
Promoting diversity
Performance data 38% of our people reported an increase in productivity as a result of the Global Corporate Challenge health initiative
62% weight loss reported by our people in the Global Corporate Challenge Health Like Safety at the Thameslink Programme team
In 2014, Carillion joined the Global Corporate Challenge, a corporate health and wellbeing initiative aimed at increasing physical activity and establishing sustainable habits for sedentary workers. Highlights include:
62% reported a weight loss, with an average of more than 9lbs; 65% reported a decrease in stress levels; 38% reported an increase in productivity; 85% reported their health as good, very good or excellent compared with 42% pre-event; and 57% reported that the event had encouraged their friends and family to get out walking more.
In 2015, we are launching a Stress and Mental Health Charter. This will be accompanied by tools and a training module to reduce work-related stress and promote positive mental wellbeing.
Our health and wellbeing programmes include:
Employee assistance
Employee assistance, offering services such as free education advice, childcare guidance and employee counselling, with a 24-hour telephone support service
Work–life balance policies
Work–life balance policies covering issues such as parental leave, flexible and part-time working, and special leave
Licensed medical clinics
Licensed medical clinics in Dubai, Muscat and Cairo supporting more than 20,000 employees
Health Matters
Health Matters, a monthly information service, in partnership with our occupational health provider, aimed at giving good-quality information on personal health issues. Feedback from employees has been extremely positive RoSPA Award
Carillion Training Services was a winner at the Royal Society for the Prevention of Accidents (RoSPA) Occupational Health and Safety Awards 2014. The Education & Training Services Sector Award recognises commitment to continuous improvement in accident and ill health prevention at work. Judges consider entrants’ overarching occupational health and safety management systems, including practices such as leadership and workforce involvement.
I am proud of the sheer hard work, dedication, innovation and commitment to health and safety “ by our staff and apprentices. It is they who make a significant difference and allow us to continually improve our occupational health and safety performance.”
RAY WILSON, Director and General Manager
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RECRUITING, RETAINING AND ENGAGING EXCELLENT PEOPLE
PROVIDING BETTER SUPPORTING THE ARMED FORCES PROSPECTS FOR OUR RECRUITING TALENT PEOPLE BAN THE BOX Safety LEARNING AND DEVELOPMENT performance E-LEARNING TAKES OFF
Health and THE GREAT DEBATE wellbeing COMMUNICATING SUSTAINABILITY AN EXEMPLAR EMPLOYER Recruiting, retaining and engaging We occupy a competitive sector when it comes to attracting and keeping excellent people talented people. To find the calibre of people we need, we have to think Promoting differently. diversity This means demonstrating that we mean business when we talk about inclusivity, learning, Performance data developing, engaging and rewarding.
Within our refreshed strategy, investing in our people and capabilities remains our top priority. Developing and attracting excellent people to create a vibrant, diverse and flexible workforce has the greatest impact on the success of our business.
Our new recruitment website includes a focus on flexible working practices to appeal to a wider talent pool, and we continue leading the way alongside Business in the Community to champion opportunities for young women in engineering, ex–offenders, vulnerable women and reservists.
Supportive employers Supporting the armed forces “ are essential to ensuring that reservists are able to Supporting those connected to the armed forces has been contribute effectively formally recognised by the Ministry of Defence with a to the safety and Martello Tower Award in 2014. security of the UK. Carillion is an We currently employ around 400 former service personnel excellent example of that. They and are provide resettlement opportunities for those understand the leaving the Forces. Last year, 94 personnel took advantage benefits that of Carillion’s placements, and we aim to employ 300 reservists can bring reservists by the end of 2016 – offering them two additional to their organisation, weeks’ paid leave during the year. and are prepared to go the extra mile to ensure that their We have also signed up to an Armed Forces Pathways to reservists are able to Employability programme. This enables young people on meet their training job seekers’ allowance to attend a General Army Insight commitments.” Course and secure a placement with reservist-friendly MAJOR GENERAL companies such as Carillion. Carl Smith was the first to JOHN CRACKETT, complete work experience with us. He has since secured a Assistant Chief of full-time job with Heyrod – one of our subcontractors. Defence Staff (Reserves and Cadets)
BITC Sieff VIEW ALL CASE STUDIES Award Elena Gonzalez, Carillion Corporate Responsibility Manager, received the RECRUITING TALENT Business in the Community West Midlands Sieff Future We aim to recruit from our existing staff where possible and Business Leaders Award, advertise all roles internally for a minimum of two weeks. Our which recognises the next step is to recruit people locally, supporting local next generation of economies, reducing costs and carbon through commuting sustainability leadership. and strengthening community relationships.
We strive to treat all job applicants fairly and to eliminate any bias or unlawful discrimination. All our managers receive guidance and training on how to tackle unconscious bias and 14% of our people utilise the consider each applicant on merit alone. Carillion special leave policy, which enables them to engage in community and charity Ban the box activities for up to six days a year on full pay Carillion is part of a pioneering employers’ group that has banned the criminal conviction ‘tick box’ from job application forms. Banning the box enables ex-offenders to compete fairly for jobs based on an assessment of their skills first, alongside regulated Disclosure and Barring Service checks. Participating employers are able to find people from a wider pool of talent, while also contributing to reducing the estimated £11 billion annual cost of reoffending.
It is so important to maintain a steady flow of skilled, engaged people into our workforce and “ promote opportunities within our business to a wider pool of talent. Not having a criminal record tick box is one of the ways we meet this aim.”
JANET DAWSON, Carillion‘s HR Director
Business has a huge opportunity and responsibility to make the workplace more accessible to talented “ ex-offenders who simply want to contribute their skills to society.”
CATHERINE SERMON, Employment Director, Business in the Community
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LEARNING AND DEVELOPMENT
Carillion‘s tailored learning activities are developing and inspiring our people to fulfil their potential. The Carillion Academy continues to offer e–learning and quality assurance of the apprenticeship programmes. We now have apprentice development schemes for both technical and soft skills and have launched a new graduate development programme, with 31 graduates involved in 2014.
E-learning takes off
2014 saw a 70% increase in the number of modules completed using our e-learning system ePOD, which represents over 30% of all training recorded centrally. There are now over 85 modules available, with 12 new titles added during 2014. These included training on finance, sustainability, health and safety and IT skills. Demand for new modules is growing rapidly, with 10 new modules already planned for 2015. We have expanded this to colleagues in Canada and plan to roll it out in the Middle East in 2015 following a systems upgrade in the region. The new ePOD platform we launched in 2015 will save £200,000 over the next three years and will allow us to make training available to suppliers, partners and clients in the future. It will only become more useful as flexible working increases and we strive to cut our business travel footprint.
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We also have a number of leadership development programmes to identify and develop our future leaders and have seen a strong increase in the number of specific business group leadership, management and supervisory programmes being run. Feedback from our internal engagement survey, the Great Debate, indicated a need for soft skills training for front- line managers and so we launched the Facilities Management Supervisory Development Programme. Over 2,100 people in 72 different contracts have taken part and, as the programme was delivered internally, it has saved £850,000.
THE GREAT DEBATE
Our Group-wide employee survey, the Great Debate, gives participants the opportunity to vote on big issues that will influence the future of the company, and let senior management know what really matters to them, anonymously. The overall feedback is reviewed by the Chief Executive Leadership Team, with each business unit developing action plans for improvement.
This year, we worked with research specialists ORC International, who gave us an ‘employee engagement index’ score, designed to measure employee commitment and understand why they want to stay with the company. Our engagement score was 63% compared to a private sector worldwide benchmark level of 72%. Key issues raised included the visibility of our business leaders, employee recognition and clearer communication of business direction to everyone – all of which we have already started to address. COMMUNICATING SUSTAINABILITY
We deploy a variety of methods and local languages to convey our sustainability priorities. Formally, business Unit Steering Groups and Working Groups make sure businesses have a plan to implement the 2020 strategy, while informally, a highlight was our Group-wide Sustainability Week. In Oman, Carillion Alawi supported the Environment Society of Oman on their environmental projects and the Speciality Work Division and United Engineering project teams installed 30 environmental awareness boards at Masirah Island to help protect loggerhead turtles and other endangered species found on the island.
An exemplar employer
Carillion has been commended for its commitment to the Armed Forces with a Gold Level Award under the MOD’s new Employer Recognition Scheme.
Described as ‘an exemplar employer’ we were one of the first 50 companies to sign up to the Government’s Corporate Covenant, which pledges to help, support and champion the military, as well as the communities and families of defence workers.
We are a lead employer in support of the MOD and Department for Work and Pensions’ Armed Forces Employability Pathways programme, and are pioneering the provision of work placements for job seekers who commit to joining the Reserves.
VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
PROMOTING DIVERSITY
YOUR LIFE CAMPAIGN AND STEM SUBJECTS FOR GIRLS CAN YOU PROGRAMME A ROBOT? PROVIDING BETTER PROSPECTS FOR OUR GENDER PATHWAYS PEOPLE WOMEN ON OUR LEADERSHIP DEVELOPMENT PROGRAMME
Safety ABORIGINAL RELATIONS performance
Health and A workplace that is inclusive and reflects the make-up of our communities, wellbeing is critical to providing the range of perspectives and approaches necessary for our future competitiveness. Recruiting, retaining and We know that by recruiting and nurturing a diverse workforce we are better able to meet the engaging needs of our diverse customer base and the communities in which we operate. We monitor excellent people recruitment across Carillion, including applicant diversity and new recruits, through our Group- wide recruitment system and our in-house, experienced professionals. Promoting diversity This enables us to tackle barriers to diversity that may exist within the recruitment process. SkyBlue, our recruitment arm, works closely with our customers and local employment partners Performance data to reach marginalised groups. This includes empowering minority ethnic groups and those from socially deprived backgrounds. The team, under the guidance of Inclusion Manager David Massingham, has also achieved the Equality and Clear Assured status for the second year running, following the annual European Quality Assurance audit.
In Canada, we are giving significant programme support for aboriginal communities and businesses, while in the UK we are tackling industry gender stereotypes through schools, apprenticeships and Board-led Gender Pathways programmes. We believe that inspiring more women to pursue careers at Carillion will help us grow our business through a range of programmes.
EMPLOYEE PROFILE BY GENDER, ALL EMPLOYEES Equality and Male Clear 77% Assured
Female status for the second year 23% running, following the annual European Quality Assurance audit Our performance data EMPLOYEE PROFILE BY GENDER, ALL EMPLOYEES 42,000 people of whom 17,000 are YOUR LIFE CAMPAIGN AND STEM female and 25,000 are SUBJECTS FOR GIRLS male
We are one of eight companies backing the Your Life campaign. This high-profile, three-year campaign is aimed at 14 to 16 year olds and showcases the inspiring career opportunities that can lead on from studying science, technology, engineering and maths (STEM) subjects.
Carillion is the lead corporate partner for the construction and business services sectors and has committed to:
increase female apprentices from 1% to 5% over the next five years; A diverse workplace “ is not simply about create an ‘introduction to engineering and technology ticking boxes or for girls’ module for local schools; and finding token role models; it is the improve the retention rate of female engineers in the prime route to better business by creating a women’s support network. thinking through a powerful mix of skills, attitudes and We welcome this campaign as part of a drive to capabilities in a high- ensure that young people are equipped with the performing, inclusive “ maths and science skills the country requires to culture.” remain competitive on a global level. We also see this JANET DAWSON, as an important part of our long-term strategy to help Group HR Director, develop the skills that will enable our business to Carillion succeed in 10 years’ time.”
RICHARD HOWSON, Carillion’s Chief Executive
Watch our video for more information.
Can you programme a robot?
Carillion Telent is making STEM subjects come alive in Cumbria with their support of the STEM programme in the region. We were asked to support an enterprise day for Chicks with girls from schools in the Barrow in Furness area where we Bricks are installing superfast broadband. As part of our work in 2014 we sponsored Cumbria University Campus hosted 40 year nine girls from inspiring industry events five Barrow schools who were taught how to programme such as Chicks with Lego robots. By the end of the day they had succeeded in Bricks, alongside active programming their robots to speak and dance. membership of other initiatives such as Women on Boards and Business in the Community’s Opportunity Now programme.
We also have a team of female Construction Ambassadors who work with the Construction Industry Training Board to inspire female students in the range of opportunities that the industry can offer women.
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GENDER PATHWAYS
We believe that inspiring more women to pursue senior management roles will help us to significantly grow our business. Currently, 12% of our leadership population are female (25% on the Board), and we’re aiming for 30% across our senior management teams. This will reflect the same female representation we have at operational levels. We’re trying to inspire women into senior roles by providing targeted support through groups such as the Women in Leadership Network and the 200–strong Working Mums Network.
Our Leadership Team has set detailed and grade-specific Gender Pathways targets including:
an additional 50 female leadership appointments; increasing female graduate intake to 50%; reaching our female alumni population to attract them back; and developing a female succession forum and targeting the development of 312 female middle managers.
WOMEN ON OUR LEADERSHIP DEVELOPMENT PROGRAMME
The number of women on our Leadership Development programme is monitored and there has been a steady increase over the last four years: Women on our Leadership Development programme
% 2011 2012 2013 2014
Women on our Leadership Development 22 23 25 32 programme
We also held our fifth ‘Women in Leadership’ event to unite women across the business to share their challenges, experiences and successes. We invited coaches and motivational speakers from Women on Boards, BT OpenReach and Lloyds Banking Group to share their experiences and advice on career progression.
Aboriginal relations
Carillion Canada has become a Patron Member of the Canadian Council of Aboriginal Businesses, which is dedicated to promoting Aboriginal communities within the Canadian economy, has signed up to the Progressive Aboriginal Relations programme and is a major sponsor of a First Nations employment training camp. It is part of our strategy to be the partner of choice for Aboriginal communities and businesses across Canada.
Over 300 employees received training in cross-cultural awareness in 2014 (1,000 to date) and sponsorship of Canada’s First Nations Natural Resources Youth Employment programme supports the education and employment of Aboriginal youths. In the 14 years since the programme started, 93% of participants completed it, compared to only 58% of Aboriginal youths who graduate from high school.
A focus remains on inspiring young aboriginal women into education and employment. Petrina Fudge, Executive Director at Bouchier, has been personally involved in the Applauding Aboriginal Women in Business initiative with Nicole Bourque-Bouchier, CEO at Bouchier. Together, in their leadership roles they seek to inspire and support Aboriginal women from across Alberta in entering, and working successfully in, a business environment. CEO Social Sustainability Award: The Bouchier Carillion Group
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SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
PERFORMANCE DATA
TOTAL EMPLOYEES ETHNICITY PROFILE, ALL EMPLOYEES PROVIDING BETTER PROSPECTS FOR OUR ETHNICITY PROFILE, UK EMPLOYEES PEOPLE ETHNICITY PROFILE, MENA EMPLOYEES
Safety EMPLOYEE PROFILE BY GENDER, ALL EMPLOYEES performance GENDER PROFILE OF OUR LEADERSHIP DEVELOPMENT PROGRAMME EMPLOYEE PROFILE BY AGE, ALL EMPLOYEES Health and HIRES BY GENDER BY REGION wellbeing HIRES BY AGE BY REGION Recruiting, TURNOVER BY GENDER BY REGION retaining and TURNOVER BY AGE BY REGION engaging excellent people LOST TIME INCIDENT FREQUENCY RATE (LTIFR) ALL ACCIDENT FREQUENCY RATE (AAFR PER 200,000 HOUR WORKED, EMPLOYEES AND SUB- Promoting CONTRACTORS) diversity ACCIDENTS ON CARILLION CONTRACTS INVOLVING CARILLION AND SUBCONTRACTOR EMPLOYEES Performance data HEALTH AND SAFETY ENFORCEMENT DATA (UK ONLY)
Note: MENA stands for Middle East and North Africa.
Total employees % % 2012 2013 2014 UK 50 45 50 MENA 43 48 42 Canada 7 7 8
Total employee numbers (including ethnicity and gender) and numbers from the leadership population are extracted, almost in their totality, from the HR system across Carillion. However, other similar HR systems are used for particular contracts.
Ethnicity profile, all employees %
% 2012 2013 2014 Asian 47 44 46 Black 2 3 5 White 34 41 41 Mixed race or other 1 3 1 Declined to state 16 9 7
This data excludes Canada: data is not currently captured in this region due to legislation requirements.
Ethnicity profile, UK employees % % 2012 2013 2014 Asian 4 6 7 Black 4 5 6 White 61 71 73 Mixed race or other 1 2 1 Declined to state 30 16 13
Ethnicity profile, MENA employees %
% 2012 2013 2014 Asian 96 94 92 Black 0 0 5 White 3 1 2 Mixed race or other 1 5 1 Declined to state 0 0 0
Employee profile by gender, all employees %
% 2012 2013 2014 Male 81 77 77 Female 19 23 23 Gender profile of our leadership development programme %
% 2012 2013 2014 Male 77 75 68 Female 23 25 32
Employee profile by age, all employees1 %
% 2012 2013 2014 16–25 11 11 7 26–35 32 29 30 36–45 25 24 25 46–55 20 22 23 56–65 11 13 13 66+ 1 1 2
1. Excludes employees in the UK Joint Ventures and people employed in our healthcare contracts under the Retention of Employment model. Hires by gender by region %
% UK MENA CANADA Male 35 98 84 Female 65 2 16
Hires by age by region %
% UK MENA CANADA 16–25 16 15 18 26–35 26 17 51 36–45 23 19 23 46–55 24 26 6 56–65 10 18 1 66+ 1 5 1 Turnover by gender by region %
% UK MENA CANADA Male 62 98 76 Female 38 2 24
Turnover by age by region %
% UK MENA CANADA 16–25 8 7 19 26–35 23 48 17 36–45 23 28 20 46–55 24 12 25 56–65 18 4 15 66+ 4 1 4 Lost Time Incident Frequency Rate (LTIFR per 200,000 hours worked, employees and subcontractors combined) Rate
Rate 2012 2013 2014 0.53 0.29 0.24
This key performance indicator is calculated as the total number of incidents that result in one day or more (not including the day of the accident) off work per 200,000 hours worked for both employees and subcontractors combined. As per OSHA definition, restricted work or light duties do not count as lost time for the purpose of this indicator.
All Accident Frequency Rate (AAFR per 200,000 hour worked, employees and subcontractors) Rate
Rate 2012 2013 2014 3.62 2.81 2.31
This KPI is calculated as the total number of injury incidents that are recorded, regardless of the severity of the injury that results, per 200,000 hours worked for both employees and subcontractors combined. It measures the frequency of incidents lower down the accident triangle, which are a predictor of the likelihood of more serious events.
Accidents on Carillion contracts involving Carillion and subcontractor employees
2012 2013 2014 Fatal accidents 1 1 2 Number of Lost Time Incidents (LTIs) 656 349 297 Hours worked (millions) 247 238 246 Health and safety enforcement data (UK only)
2012 2013 2014 Prohibition notices 2 1 0 Improvement notices 0 1 1 Prosecutions 1 21 0
1. One prosecution related to an accident in 2003. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
Carillion is... supporting sustainable
We thrive when our communities thrive
SUPPORTING Social value is all about creating lasting SUSTAINABLE legacies for and with the communities COMMUNITIES where we work and live. We do this by A positive legacy creating jobs and training, working closely with community groups, supporting local, Employment and training smaller companies and inspiring our people to become personally involved. Championing apprenticeships
Volunteering Sustainability in action
Performance data Investing in future skills
5,000 APPRENTICESHIPS TO BE OFFERED DURING THE NEXT FIVE YEARS Partnering with Barnardo’s
OUR STRATEGIC PARTNER OF THE YEAR
Considerate construction Supporting good causes
Considerate construction is not just OUR PEOPLE GAVE £1.8 MILLION IN a slogan but a way of operating that TIME, SKILLS AND CASH “ ensures the industry focuses on being a good neighbour and good employer. Construction sites are not simply about the building but about creating places that bring lasting benefits to the users and communities.”
JOHN CURRIE, Project Director
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Our key figures 2014 performance highlights 14% 87% of our people got of apprentices found involved in volunteering employment or pursued 2013: 12% further education 2013: 86%
Progress against targets 51% 1% local spend including pre-tax profits donated SMEs in the UK to community activities Targets either in cash or in kind 2014: 45% 2015: 60% Targets 2014: 1% 2020: 1%
Target achieved
VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
A POSITIVE LEGACY
MAKING OUR MARK WINNING CONTRACTS BY THINKING LONG TERM SUPPORTING SUSTAINABLE DELIVERING BEYOND THE CONTRACT COMMUNITIES BUSINESS CONNECTORS
A positive legacy COMMUNITY WOOD PROJECTS
Employment and training Thriving communities help to boost economic prosperity and contribute positively to society. We are at the heart of many local communities Championing where we live and work, and we are committed to improving quality of life apprenticeships and providing much-needed employment and training through our construction, infrastructure and services contracts. Volunteering
Performance data Our aim is to have a community needs plan for all our major contracts. These plans provide a systematic approach to understanding local community priorities and meeting their needs. So far, 96% of all our projects in the UK, Middle East and Canada have a community needs plan in place.
Building on from our Community Needs Plans, we work with all sectors of the community and we are helping commissioners respond to the UK Government’s Public Services (Social Value) Act, which requires them to take into account wider social, environmental and economic benefits when procuring public services. Through our Sustainable Communities Strategy, we aim to leave a long-lasting, positive legacy in the communities where we work.
Overall, we understand that the success of our business relies on the success of our supply chain, our clients, our people and the communities where we operate.
Making our mark
In Egypt, Al Futtaim Carillion supplied materials and power tools to build a classroom extension for the African Hope Learning Centre, which offers school placements for African refugees. In Dubai, we set up shelter scaffolding at a school fete for 4,000 visitors to Jebel Ali Primary School.
In Canada, the William Osler Health Centre team in Ontario has developed student placement opportunities with different organisations. Led by Patient Food Services Director Alan Acanne, the programme has supported 26 One of our key students with a 13-week volunteer placement programme “ responsibilities is to since 2012, nine of which went on to employment. invest directly in the communities where In the UK, we support Business in the Community’s (BITC) we work and live – Business Class, developing three-year partnerships with not just to ensure that schools to give careers advice, show positive role models they get a fair share of the economic and offer volunteering and mentoring activities. benefits, but also to bring about lasting At Inverclyde in Scotland, we salvaged £19,000 worth of social change where bricks, fencing and an electric bed for Reach for Autism and it is most needed.” other charities following the strip and demolition of old buildings. SIMON BUTTERY, Managing Director of Carillion Canada
Considerate Constructors VIEW ALL CASE STUDIES Scheme As a responsible operator of construction sites, we are proud to be an Associate Member of the Winning contracts by thinking long Considerate term Constructors Scheme (CCS), and are aligned to the principles of its Code. We began our contract with the Royal Liverpool Hospital in This sets out February 2014. This hospital project is a clear example of requirements such as minimising noise and creating lasting social value with and for a client (NHS) with dust, and ensuring that a clear sustainability vision: to improve lives and contribute working hours reduce to the local economy through local suppliers and inconvenience to the contractors. local community.
Carillion was selected as a preferred project partner, not During 2014, there were 127 CCS audits across the only because of its operational credentials, but also 78 projects registered because of its commitment to creating a social and with the scheme. We economic legacy for the community. achieved a high score, with a Carillion average We are employing 60% of the workforce locally through score of 39.9 against an our supply chain, with 15% of the workers coming from average score of 34.2. priority wards. A further 100 apprentice places will also be provided, and we opened a Job Shop on site to help promote local employment opportunities. As part of our The largest commitment to source 60% of our construction spend locally, we have hosted ‘meet the buyer’ events and a apprentice trainer and employer in our sector Liverpool Supply Chain Sustainability School Day, which received a 95% excellent feedback rating. The project also provides a local three-year Regeneration Fund of £100,000, which has allocated more than £31,000 to 20 local community groups in the first year of construction. 96% of our contracts have community needs plans in place
1% of our pre-tax profits were contributed to community activities in cash or through employee time
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DELIVERING BEYOND THE CONTRACT
We won two BITC Awards in 2014 for our work to improve young people’s employment prospects in Wales.
Our A465 team won the Wales Education Award for our Schools Engagement Programme in the Heads of the Valleys. The project offered 32 weeks of work experience for local students, while enhancing educational attainment through delivery of over 60 curriculum support activities. The business benefits were:
31% of Carillion‘s Welsh workforce were engaged and actively involved in supporting young people; 70 weeks of employee development opportunities through work experience placements and mentoring; and recognition for Carillion by winning the South East Wales CITB Construction Ambassador Employer of the Year.
We were also highly commended for tackling youth unemployment in Blaenau, Gwent – going beyond contractual commitments and delivering employment, training and work experience for young people.
Business Connectors
We seconded three people to Business in the Community’s flagship Connector programme. Business Connectors are trained by BITC to build partnerships that tackle community issues in deprived neighbourhoods. Charlie Topaz is a Carillion Performance Manager and is our Business Connector in Wythenshawe. Seconded to the area for 15 months, she has been building relationships to tackle local issues including business engagement, employment, education and social cohesion.
I’ve already built a database with Manchester City Council to identify the challenges faced by “ companies in the area, identified best practice between collaborating schools and businesses, linked employment hubs and developed a network of community groups so they can pool resources and grow together.”
CHARLIE TOPAZ, Carillion Performance Manager
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One of Charlie’s key projects in 2014 was a ‘Case for Investment’ event in Wythenshawe, which connected business and community leaders to discuss opportunities and challenges for skills and employment. The event was over- subscribed, full of energy and saw speakers from Manchester City Council, Business in the Community, Carillion and Manchester Airport make the case for business and community integration and more about BITC Business Connectors
Community wood projects
Our £11 million rail contract in Brighton diverted 99.7% of waste away from landfill, with an exemplary approach to the wood used and additional community benefits.
As much as 80% of all shuttering was re-used from the Thameslink Project at Selhurst and all wood was responsibly sourced. Used wood was sent to the Community Wood Recycling Project, a local not-for-profit enterprise providing employment and training to long-term unemployed and socially disadvantaged people.
We have also saved 20 tonnes of wood from landfill at King‘s Cross, again through Community Wood. The King’s Cross project has created seven Business Action on Homelessness placements, with three people now working full time.
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SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
EMPLOYMENT AND TRAINING
READY FOR WORK EMPLOYABILITY SKILLS IN SHEFFIELD SUPPORTING SUSTAINABLE HOSPITAL SITE JOB SHOP COMMUNITIES
A positive legacy Creating local jobs for local people and buying our goods and services from local communities is part of our positive contribution to thriving and Employment and training skilled communities.
Championing Amid tough economic conditions and ongoing skills shortages, we work hard to drive apprenticeships employment, training and education to build a diverse and resilient workforce. We specifically support social mobility, especially among hard-to-reach groups, and we achieved our 2014 target Volunteering of at least 4% of our people engaging with schools, the unemployed and marginalised groups. Below are some of the ways in which we met this target. Performance data
Ready for Work
Through our Ready for Work partnership with Business in the Community (BITC) we offered 118 placements and trained 25 Carillion volunteer job coaches in 2014. Ready for Work supports some of society’s most disadvantaged people to enter employment and in 2014, 82% of placements were completed while 56% of people gained work for the first time as a result of a Carillion placement or We know that over support from a Carillion job coach. “ the next five years the construction sector We continue to support those with unspent convictions: alone will grow by 2.2% annually, 44% of the total placements we offered were to people creating 182,000 new with unspent convictions, of which 80% completed their jobs across the Carillion placement and 58.5% went on to gain work. sector. We will need talented people who Daniel Easthope, MD of Modern Housing Solutions have STEM skills to (Defence Business), represents Carillion on the Ready for fill these jobs.” Work national leadership team. Barry Quatermass, IMS RICHARD HOWSON, Director (Carillion Construction), is a member of the Carillion Chief Operations Group that reports into that leadership team, Executive and our Chief Sustainability Officer David Picton chairs the Ready for Work London Steering Group. We are delighted that during the year a record number of Carillion people volunteered to support “ Ready for Work whether as job coach, placement buddy, Ready for Work club volunteer or to support programme logistics locally.”
DEBRA FEARNSHAW, BITC’s Head of Operations on the Work Inclusion programme
Mentoring women Carillion Community Services has joined BITC‘s Women‘s Mentoring programme to help vulnerable women reintegrate into mainstream sustainable employment and gain economic independence.
VIEW ALL CASE STUDIES Double winner of Business in the Employability skills in Sheffield Community’s (BITC) Big Tick Awards for our In Sheffield, the Customer Experience Centre team held an Ready for Work initiative and our apprenticeships Employability Skills Day at Parkwood E-ACT Academy, for programme 60 Year 10/11 students. The event simulated a careers fair environment as part of a series of initiatives designed to improve students’ employability and provide local company insight. 118 The event demonstrated how even within a single company Ready for Work there are opportunities to interest people with completely placements different skills, talents and aspirations. Carillion staff, including two directors, were given their own stall, to discuss topics covering construction, customer service, HR and marketing, project management and project coordination.
The event saw students writing a job application from which the best candidates were selected for interview and potential work experience placements at Carillion. VIEW ALL CASE STUDIES
Hospital site Job Shop
Carillion’s recruitment arm SkyBlue opened a new ‘Job Shop’ on the Royal Liverpool University Hospital (RLUH) construction project.
Councillor Nick Small, Cabinet member for Employment and Skills, officially launched the Job Shop in December 2014.
Construction of the new hospital will create around 750 full- time jobs during the construction period. Carillion has committed to 60% of these jobs going to local people and 15% of the workforce will come from priority council wards in the city.
The Job Shop will be operated by Carillion’s recruitment arm SkyBlue, in partnership with Liverpool in Work, and will prove an accessible ‘one-stop shop’ for both employers and those looking for employment on the project.
One of our key objectives is to maximise the employment and training opportunities for local “ people. We want to see jobs of all types and all levels created during the construction period, and filled as far as practicable by local people.”
DAVID KENNEDY, Carillion Project Director VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
CHAMPIONING APPRENTICESHIPS
CONSIDERATE CONSTRUCTION INTERNSHIPS IN QATAR AND CANADA SUPPORTING SUSTAINABLE COMMUNITIES We are the largest apprentice trainer and employer in our sector, and A positive legacy recently committed to creating more than 5,000 apprenticeships over the next five years. Employment and training Carillion delivered over 1,000 NVQs and apprenticeships in 2014, with more than 87% of apprentices going on to find employment or pursue further education. These individuals have Championing gained skills for life and work beyond their time with Carillion. apprenticeships We were awarded a prestigious Business in the Community Big Tick for Inspiring Talent – at the Volunteering heart of our apprenticeship programme, which trains around 2,000 students at any one time across 13 centres in the UK. Performance data As part of our commitment to creating 5,000 apprenticeships over the next five years, we will offer apprenticeship interviews to all young people who graduate from the National Citizen Service (NCS), the voluntary programme for 16–17 year olds. We will also encourage our other apprentices to enrol on NCS first.
Back to business As part of Carillion’s commitment to deliver services to Oxfordshire County Council, we CEO Social Sustainability Award: Oxfordshire County Council identified 92 roles to Contract Team deliver the Universal Free School Meals programme. We appointed 52% of unemployed people into those roles, with over half of these having been Considerate construction long-term unemployed.
VIEW ALL CASE The 13-storey office at One St Peter’s Square in Manchester STUDIES was named the best in the country by the Considerate Constructors Scheme (CCS). The team was praised for its ‘exceptional’ community involvement, including the creation of 61 apprenticeships and working with local charities to help long-term unemployed people into work. 1,000 NVQs and apprenticeships CCS is a national initiative to improve the image of the delivered by Carillion construction industry, meeting a robust Code of Considerate Practice and initiatives that make it considerate towards neighbours, the public, employees and the environment. 87% This is a tremendous honour which recognises the of apprentices went on to hard work and commitment of the whole team. find employment or pursue further education “ Considerate construction is not just a slogan but a way of operating that ensures the industry focuses on being a good neighbour and good employer. Construction sites are not simply about the building but about creating places that bring lasting 52% benefits to the users and communities.” of free school meals roles at Oxfordshire JOHN CURRIE, Project Director County Council delivered by previously unemployed people
These roles allow me “ to advocate vocational training VIEW ALL CASE STUDIES and to ensure that we can balance the demands for vocational and academic training Internships in Qatar and Canada while meeting the needs of employers and those young Carillion Qatar understands the importance of educating people seeking a young people. We have provided internships to two career in Mechanical and Electrical Engineering students from Qatar construction.” University, who both completed the programme. RAY WILSON, Carillion Training In Canada, Shabbir Madraswala became the first ‘Hammer Services Director Head’ graduate from the Central Ontario Building Trade team to be directly employed by Carillion Construction when he joined the Union Station project. In Canada, Hammer Heads is a 12-week skills and employment-based training programme that links young disadvantaged people to apprenticeship career opportunities in the construction industry.
To go from a struggling, confused teenager, to becoming employed by a reputable contractor “ such as Carillion has truly been a blessing. The skills and life lessons I have learned from the Hammer Heads program will stick with me throughout my career.”
SHABBIR MADRASWALA
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Ray Wilson, Carillion Training Services Director, was appointed to the Construction Industry Training Board in 2011. He is already chair of the UK Contractors Group (UKCG) Training Committee, a member of the UKCG Apprenticeship Group and a Commissioner on the recently formed Commission on Apprenticeships as part of the Government’s Industrial Strategy. Ray chairs the Common Gateway group on behalf of the Department of Business, Innovation and Skills, which is seeking to improve recruitment into the construction sector. The group seeks to develop a ‘common gateway’ through which all interested parties can find information, jobs or work experience in construction. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
VOLUNTEERING
PARTNERING WITH BARNARDO’S EMPLOYEE NOMINATION FUND SUPPORTING SUSTAINABLE GIVE AND GAIN DAY COMMUNITIES EMPLOYEE VOLUNTEERING PORTAL
A positive legacy VOLUNTEER OF THE YEAR “YOU HAVE ENRICHED OUR HOME” Employment and training Our volunteering programme benefits Carillion, our clients, our people Championing and the communities in which we work. It enhances morale and work apprenticeships performance, supports training and development and helps to build local relationships. Volunteering
Performance data We encourage our people to volunteer with six days’ paid leave a year and gave the equivalent of 1% of our pre-tax profits to worthy causes through cash, time and in-kind donations in 2014. Our people support multiple charities across our international operations and donate their time to many causes, including food, health and nutrition campaigns, biodiversity projects, education, helping underprivileged people, and supporting the UK’s Armed Forces.
TOTAL FINANCIAL GIVING TO COMMUNITY (CASH, TIME, DONATIONS), £ TOTAL 1,813,277 (2013: 1,820,047)
$1 million raised for William Osler Foundation Since the opening of the Group UK Brampton Civic Hospital 290,593 1,164,039 in July 2007, Carillion Canada has been (2013: 236,780) (2013: 1,383,031) fundraising for the hospital’s William Osler Foundation Fund and has MENA Canada raised close to $1 million (£547,000) through 144,507 214,138 different fundraising (2013: 82,660) (2013: 117,577) initiatives. This will contribute towards a Kidney Wellness Centre, a Centre for Complex Our performance data Diabetes Care and a Mental Health and TOTAL FINANCIAL GIVING TO COMMUNITY Addictions programme.
VIEW ALL CASE STUDIES Partnering with Barnardo’s
Carillion selected Barnardo’s to be its first national ‘together’ charity partner. Formed in 1867, Barnardo’s has 1% pre-tax profits equivalent projects based in local communities across the country, donated through and helped transform the lives of 200,000 vulnerable employees’ time, cash children, young people and their families across the UK in and in-kind donations 2014.
This partnership aligns with our sustainability strategy, and in particular our commitment to building sustainable communities, and throughout the year we worked together through volunteering (including Give and Gain Day) and fundraising, providing opportunities for Carillion people to play a part in their local communities and join together with colleagues, customers, suppliers, friends and family to help young people across the UK to the tune of £95,000.
Significant fundraising work was carried out across many areas of Carillion’s UK operations, including a charity bike I would like to thank all the Carillion ride across Cuba, toy donations, raffles, a ‘Go Green for “ employees who have Barnardo’s’ day and a bake-off. The Carillion Running Club raised £95,000 in completed the BUPA Great North Run and the Winter Wolf their first year Run in support of the charity. In December – for Giving partnering with Tuesday – three Carillion teams took on the Barnardo’s Barnardo’s. This is an incredible Store Wars challenge to raise money by taking over and achievement. The running a Barnardo’s shop for the day. An engineering partnership has gone team volunteered at a nursery in Hackney, where from strength to Barnardo’s looks after approximately 100 children strength and with identified as being at risk. Carillion looking to provide employment opportunities and But it was the two-day Coast to Coast (160 mile) cycle apprenticeships for challenge, led by Richard Howson, that truly united young people colleagues, customers and partners. The team endured supported by rain, punctures, steep hills and a tough course but managed Barnardo’s, they will to complete the challenge as planned and raised nearly continue to make a real difference. I look £32,000. In total, as a result of the combined efforts of forward to seeing Carillion people, the first year of the ‘together’ partnership more exciting plans contributed nearly £95,000 to the charity – with ambitions rolling out over the to contribute further fundraising, more volunteering and ‘in coming year.” kind’ resource support throughout the second year of the JAVED KHAN, partnership in 2015. Barnardo’s Chief Executive Carillion has a long-established commitment to supporting charities and community organisations, “ and I was delighted last year to launch our partnership with Barnardo’s. It was a great team effort and despite a few punctures en route and some stiff legs from some of the big hill climbs, days everyone made it successfully across the finish 6 of paid volunteering line.” leave annually for each employee RICHARD HOWSON, Chief Executive, Carillion
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EMPLOYEE NOMINATION FUND
Across the world, our people can nominate charities or community organisations to receive a donation from the Employee Nomination Fund. In two separate rounds of funding, a total of £80,000 was distributed by awarding £500 each to charities across the UK, Middle East and Canada.
Employees were invited to nominate causes they wished to support, and the final selection process was then managed by an Appeals Committee Working Group. 160 charities were chosen to benefit from the awards and employees gave uplifting feedback on behalf of the charities involved.
GIVE AND GAIN DAY
From Board members to apprentices, our support for Business in the Community’s Give and Gain day became an international focus for volunteering, with 530 Carillion staff offering over 2,700 hours and skills to local projects including schools, charities and other organisations.
Our Chief Executive Richard Howson joined 27 colleagues to carry out a ‘magical makeover’ at a Barnardo’s centre in Leyland, Lancashire, while our Chairman Philip Green became a job coach for the day, working with Ready for Work candidates in London. Colleagues in the Middle East embraced Give and Gain day by:
raising £2,000 for Operation Smile for children who are in desperate need of operations, through fundraising initiatives at Dubai, Head Office, Al Jalila Hospital project and the New York University project in Abu Dhabi; painting and maintenance at the Sheikh Mohammed Centre for Multicultural Understanding; donating blood at Ghala Clinic, Muscat; and building a garden from our waste timber for the Eco Club at the Qatar International School, Msheireb.
EMPLOYEE TIME DONATED TO CHARITY SINCE 2012 IN CARILLION CANADA Hours Equivalent value volunteering (CA$) 2,885 $391,410 (2013: 2,570) (2013: $188,124)
EMPLOYEE VOLUNTEERING PORTAL
In 2014, we launched a volunteering website as part of our long-term target to have 50% of our people taking up their six- day special leave entitlement by 2020. The site includes information on how staff can get involved, case studies and how to record volunteering.
We asked Richard Howson, Chief Executive, about his views on the benefits of volunteering and hosted our own roundtable with key stakeholders on employee volunteering.
Volunteer of the Year
For the past few years, Rajesh Kapil has been supporting an orphanage in his native hometown of Deha, Himachal Pradesh in India, where many of our people working in the Middle East come from. With support from projects in the Middle East and a donation from the Carillion Charitable Fund, Rajesh has so far been able to raise around £4,000 for the orphanage. For his efforts, Rajesh has been awarded Volunteer of the Year at the CEO Awards. Rajesh Kapil, Sustainability Volunteer of the Year
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“You have enriched our home”
Bouchier Group in Canada (part owned by Carillion) was awarded the Fort MacKay Business of the Year Award by the Fort MacKay First Nations Council. The accolade is for financial and in-kind support for various causes.
We have chosen you as a winner because you have committed to our community and excelled in “ your pursuit of enriching our home through dedication and hard work. We are all working together for a better tomorrow through unity and integrity. We thank you for being a contributor in the past year as a devoted philanthropist and role model for other businesses.”
JIM BOUCHER, Fort Mackay regional Chief
VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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PERFORMANCE DATA
Note: MENA stands for Middle East and North Africa.
SUPPORTING Total financial giving to community (cash, time, donations) SUSTAINABLE COMMUNITIES £
A positive legacy
Employment and training
Championing apprenticeships
Volunteering
Performance data
2012 2013 2014 Group 282,730 236,780 290,593 UK 1,549,096 1,383,031 1,164,039 MENA 291,324 82,660 144,507 Canada 28,630 117,577 214,138 TOTAL 2,151,780 1,820,047 1,813,277
Our total community giving exceeded our target of 1% of our pre-tax profit. The total includes cash donated to communities, financial cost of employee time and total cost of donations in kind. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
Carillion is... enabling
economies
We see the potential in a cleaner future
ENABLING LOW- We are working collaboratively with our customers and CARBON ECONOMIES our suppliers to cut carbon emissions and deliver wider environmental benefits. Economies built around low- Climate change carbon services present a significant opportunity to and our impacts Carillion. So, as well as cutting carbon we are getting more creative in sustainable design. Sustainable design
Our carbon footprint Sustainability in action
Performance data Green House
OMAN TEAM WINS NATIONAL DESIGN COMPETITION WITH THE HIGHER COLLEGE OF TECHNOLOGY Climate Performance A List
OUR HIGHEST EVER SCORE (99A) IN THE CARBON DISCLOSURE PROJECT Travelling light at Heathrow GLOBAL RANKING
With the costs of electricity rising Reviving water power and more demands for companies “ to be sustainable, the installation ANCIENT TECHNOLOGY PROVIDES POWER AND PROTECTS FISH and the possibilities have been well received by Heathrow, and we are hoping to see more units installed through the airport in the future!”
PAUL WHITELY, Operations Manager, Heathrow Terminal 3
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Our key figures 2014 performance highlights 17% 5m+ reduction of our carbon footprint since 2011 (normalised) litres of fuel saved by Carillion 2013: 10% Canada Highway Services since 2011
Progress against targets 25% 11% reduction in electricity reduction in gas consumption from consumption from Carillion offices Carillion offices Targets Targets 2014: 24% 2015: 20% 2014: 19% 2015: 20%
Target achieved Behind schedule
VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
CLIMATE CHANGE AND OUR IMPACTS
CLIMATE PERFORMANCE A LIST RETHINKING CARBON NEUTRALITY ENABLING LOW- CARBON ECONOMIES CARBON INNOVATION CARBON REDUCTION IN OUR CONTRACTS Climate change and our impacts TRAVELLING LIGHT AT HEATHROW, TORONTO AND BRIGHTON
Sustainable design Our goal is to bring low-carbon solutions to our clients and suppliers and
Our carbon to be as lean and carbon-efficient as possible in our own operations. footprint Cutting carbon is essential to achieving long-term global economic, social, and environmental Performance data sustainability for our business and society. We have an opportunity to innovate in the services and products we offer to achieve a competitive edge, reduce costs, reduce the demand on energy and deliver greater operational efficiency.
Alongside other industry leaders, we committed to cut 24 million tonnes of carbon from infrastructure contracts by 2050 as a result of the UK Infrastructure Carbon Review. We made good progress against this target in 2014.
In British Columbia, Canada, our Energy Conservation Assistance Programme (ECAP) has helped 8,000 low-income families through free energy advice, saving them $400,000 (£219,000). We have also won another ECAP contract to deliver energy conservation to three First Nations communities near Penticton, BC.
CLIMATE PERFORMANCE A LIST
We achieved a carbon leadership position in the top echelon of the global Climate Performance Leadership Index, recognising our commitment to reduce carbon emissions and mitigate the business risks of climate change, as well as being open and transparent in our reporting.
We were one of only 187 companies that were awarded a climate performance A-grade in this global ranking of 2,000 CEMARS publicly listed companies independently assessed against Carillion UK is accredited CDP’s widely respected scoring methodology. The Index to the Certified Emissions provides a tool for nearly 800 institutional investors and Measurement and stakeholders to evaluate and track corporate efforts to mitigate Reduction Scheme for measured, managed and climate change. verified carbon emissions. Carillion featured in 2013 as one of the leading UK companies for climate change transparency in the FTSE 350 Climate Disclosure Leadership Index – scoring 92A – and improved that further in 2014 to achieve a near-perfect 99A at the head of Carbon reduction the Industrials sector for performance and disclosure of commitment climate-related information. For our UK Carbon Reduction Commitment Global greenhouse gas emissions continue to rise and (CRC) reporting, in we face steep financial risk if we do not mitigate them. compliance year 2013/14, our emissions increased “ The need for data on corporate climate change by 4% on the previous impacts and strategies to reduce them has never been year. This is the result of greater. For this reason we congratulate those the expansion in UK businesses that have achieved a position on CDP’s operations, including Climate Disclosure Leadership Index and the A List. acquisitions in 2013/14. In the absence of this These companies are responding to the ever-growing expansion, Carillion’s net demand for environmental accountability and should CRC emissions for inspire others to follow suit.” 2013/14 would have been reduced by more than PAUL SIMPSON, Chief Executive Officer of CDP 5%.
Carillion’s inclusion for the second year running in the top echelons of both the UK and the global Climate “ Performance and Disclosure Leadership Indices demonstrates the vital importance that we place on reducing and managing our carbon emissions. This backs up our Sustainability Strategy to enable low- carbon economies through work with clients, supplier partners and our own people.”
DAVID PICTON, Carillion’s Chief Sustainability Officer Reviving water RETHINKING CARBON NEUTRALITY power A Carillion development We are focused on reducing our carbon emissions to their in Durham has been lowest possible levels, and have so far achieved a 17% awarded a BREEAM ‘excellent’ rating largely reduction normalised by revenue since 2011. In 2014, we due to using 2,000-year- received further recognition for our carbon management old technology to strategy by topping three of the Carbon Disclosure Project’s generate renewable leadership indices for performance, disclosure and supply electricity. An chain. Archimedes’ screw water turbine will supply 75% of the electricity needs to a Our materiality review in 2014 showed that stakeholders new riverside office. remain positive about our original commitment to work towards carbon neutrality, so we need to be clear now about The screw design how best to achieve this for a balanced benefit. We need to incorporates a ‘fish pass’ take advice, and work that through our sustainability allowing fish and elvers to travel upstream. It also governance to understand how this investment aligns to our counts numbers and ambition to lead the way in sustainability, and how best to species of fish as they include a clear link to our international operations and to the pass through. The £26 six positive outcomes of our 2020 strategy. million Freeman’s Reach development will be We remain committed to working towards carbon neutrality as home to the National Savings & Investments a long-term goal, and if we are to invest in offsets once we bank and a new branch have minimised our own carbon footprint, these must of the Passport Office. resonate with our stakeholders. In 2015, we will develop and implement our plan for carbon reduction and neutrality across VIEW ALL CASE the remainder of our Sustainability 2020 journey, such as STUDIES green energy production and consumption; addressing the embodied carbon of our projects; and helping customers reduce their carbon (see our EcoPods).
CARBON FOOTPRINT (NORMALISED BY £M TURNOVER) % change from 2011 Total Carillion UK Group -34% -17% Finding innovative “ ways to meet the 1 2050 targets set by MENA Canada the UK Infrastructure -40% +112% Carbon Review will need us to think and act differently, working closely with 1. The sharp increase in carbon emissions between 2012 and clients and suppliers 2013 was due to improved data capturing and reporting to develop new processes. materials, techniques and better long-term resilience.” Our performance data ADAM GREEN, CARBON FOOTPRINT (NORMALISED BY £M Managing Director of TURNOVER) Carillion Construction UK
CARBON INNOVATION
We are committed to drive innovation in carbon management, including:
working with other organisations, like the Department for Transport, to establish the effectiveness of various systems for improving vehicle fuel efficiency; looking into the fuel profile of our operations to direct fuel reduction activities; Off-site assessing renewable energy use on major projects; construction membership of the Highways Term Maintenance saves CO2 Association Environment Group and a member of the Caledonian Building Systems in Rail Industry Environment Forum; and Nottinghamshire won a energy Champions in our Middle East operation for each contract from Carillion project. worth £42 million to construct eight new accommodation blocks In 2014, we have maintained our focus on reducing fuel for The Royal School of consumption. Over 70% of our carbon footprint is made up of Military Engineering, Minley. fuel, mainly from commercial vehicles, company cars and plant equipment. A large number of vehicles commute to the We continue to measure and track fuel internally in order to site but thanks to off-site reduce our overall footprint and have achieved 28% reduction construction, deliveries in fuel across the Group (2013: 3%) against a 2011 baseline were reduced by 82% during the monitoring normalised by turnover. period, contributing to a reduction of CO2 and We launched an internal campaign, ‘Fuelling Profit’, to saving approximately 11 understand how we can reduce fuel use through changes to tonnes of CO2 from our equipment, behaviour, contract design and operations, and reduced transportation. through regular communications campaigns. In 2015, we will continue to implement initiatives across these key areas. VIEW ALL CASE STUDIES In Canada, 98% of our carbon footprint is produced by our road business in Ontario and Alberta, delivering vital services such as clearing heavy snow to keep communities mobile. Here, the focus is on driver training for safe, fuel-efficient operations.
CARBON REDUCTION IN OUR CONTRACTS
In 2013, we implemented bespoke Carbon Reduction Plans (CRP) for contracts, linked to the operating segment’s overall sustainability plan. Currently, 96% of our contracts are using the CRP and in 2015 we aim to achieve 100%. The CRP helps projects identify carbon-intense activities and provides action plans for reduction initiatives.
Carillion Construction UK has identified a number of projects to start trialling an embodied carbon tool produced by the Environment Agency to measure the complete impact of our contracts from design through to construction and operation.
Travelling light at Heathrow, Toronto and Brighton
Cheap, sustainable electricity is the goal for many client buildings, but at Heathrow’s Terminal 3, a new feature is leading the way. Carillion installed 51 foot-pressure pads, with each pad generating enough charge to light a one- metre-long strip of LED lights for just over two seconds. As an interactive feature in the airport, this has been popular both for the potential energy savings and the fun it can generate, especially over the summer holidays.
With the costs of electricity rising and more demands for companies to be sustainable, the “ installation and the possibilities around it have been well received by Heathrow, and we are hoping to see more units installed through the airport in the future!”
PAUL WHITELY, Operations Manager at Heathrow Terminal 3
In Canada, the Toronto subway terminus has replaced original incandescent lighting bulbs with long-life fluorescent lamps, which are more robust and use significantly less power. Approximately 1,800 are saving seven tonnes of CO2 e per month, the equivalent of CA$4,500 (£2,300). VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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SUSTAINABLE DESIGN
BUILDING INFORMATION MODELLING GREEN HOUSE ENABLING LOW- CARBON ECONOMIES MODULAR BUILDINGS ARE BETTER
Climate change and our impacts Great engineering must also be sustainable. We encourage design intelligence through the project lifecycle, including design, construction, Sustainable design occupancy and demolition.
Our carbon footprint Across our work, we aim for independent certifications where we can, such as the Building Research Establishment Environmental Assessment Method (BREEAM), the Civil Engineering Environmental Quality Assessment and Award Scheme (CEEQUAL), and Leadership in Energy Performance data and Environmental Design (LEED) standards. In 2014, we had 53 projects targeting a BREEAM, or similar rating such as DREAM, 20 to Excellent and 32 CEEQUAL, 10 to Excellent.
BUILDING INFORMATION MODELLING Visual (BIM) planning BIM uses computer-aided modelling techniques and winners information management practices to create safer, more Carillion was the winner efficient ways of designing, constructing and maintaining of the 2014 Visual assets. UK public sector procurement will require our industry Planning Awards, for our to prepare for BIM by 2016. We are determined to be at the work on the A465 Head forefront and prepare for the global rollout of this process. BIM of the Valleys contract. The awards promote has already been deployed across 40 active projects. With innovation in those contracts across the health, defence, residential, construction project education and rail sectors, we are investing significantly in: delivery and recognise Carillion’s visual planning 1. process: investment in adapting our processes capability to provide more efficient and safer to support a BIM Level 2 process adaptation and highway schemes. adoption; 2. technology: new software and hardware to enable our people to engage with the process; and £140,000 3. people: 300 technical training days in 2014 and saved increased awareness across senior and 12,500 tonnes CO2 management teams and operational leads. savings at the Four Seasons Hotel Project in Abu Dhabi thanks to our In 2015, we will further raise awareness around the business; engineers replacing offer technical and project team training; and share our ordinary cement with a experiences with suppliers and customers. In the Middle East, concrete with smaller manufacturing carbon where BIM is subject to customer demand, we plan to roll out embodiment. whole-life contracts in these locations.
Green House 625t of CO2 / £37,000 An eco home constructed by Carillion Alawi for the Higher will be saved by using College of Technology swept the boards at a national LED lights at the Network competition. The GreenNest house won the Eco House Rail and Thameslink Design Contest for its grid-connected solar photovoltaic project over a 25-year lifetime system, greywater recycling and heat-barrier plants that provide organic produce.
The first ever Oman Eco House Design Competition is part of a long-term plan of the Sultanate of Oman in energy conservation, development of renewable energy and environment sustainability.
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Modular buildings are better
Modular buildings used to construct accommodation blocks in one of our construction contracts in Wales are saving time, money, waste and carbon. During a building’s construction, a high level of CO2 is normally emitted through transport and use of materials. However, modular buildings can be part-constructed off-site.
Modular buildings save around 30% of CO2 e compared to traditional building methods. This equates to 425,000 miles of travel in today’s average family car. During the full project, we estimate carbon emissions will be reduced by around 31,000 tonnes. VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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OUR CARBON FOOTPRINT
A-GRADES FOR CARBON POWERING CARILLION ENABLING LOW- CARBON ECONOMIES SMARTER WORKING
Climate change and our impacts Carillion’s carbon footprint includes direct and indirect emissions from our operations, across all our regions. We have reduced our carbon footprint Sustainable design by 17% in 2014 against a 2011 baseline (normalised).
Our carbon footprint This is largely due to efforts across the business to reduce energy consumption and emissions arising from the operation Performance data of our facilities, fleet and business travel. Our Carbon Policy 17% (PDF 108 KB) outlines how we will reduce our energy and reduction in normalised consumption arising from the operation of our facilities, carbon footprint since 2011 vehicle fleet, business travel and from our customers and supply chain. Our aim is to:
avoid unnecessary carbon emissions; reduce unavoidable carbon emissions by introducing technology and better planning; provide efficiencies on client projects; source low-carbon products and services, including renewable energy; and assess the embedded carbon of the products we use.
In 2014, we began giving quarterly presentations to the A ‘pioneering business around our carbon performance against targets in order to drive awareness to our businesses on their footprint institution in and encourage discussion around reductions. the Arab
CARBON FOOTPRINT (ACTUAL) World’ % change from 2011 Al Futtaim Carillion recognised for its solar Total Carillion UK energy installation, after Group being nominated by the -45% Dubai Chamber. The -34% award was presented by The Board of Trustees of Tatweej – Excellence 1 Awards Academy and MENA Canada the Arab Organisation for -39% +26% Social Responsibility.
1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes.
Our performance data CARBON FOOTPRINT (ACTUAL)
We report on scope 1–3 emissions from the following sources: The achievement of “ Al Futtaim Carillion in being named a Scope 1 pioneering institution reflects the hard work of all our Gas – emissions calculated using kWh data from people to try new suppliers ideas and find creative solutions to Commercial vehicles, company cars, plant fuel and complex problems.” business mileage – emissions calculated from fuel card returns SIMON WEBB, Managing Director, Al Futtaim Carillion Scope 2
Electricity from our offices and sites – emissions using kWh data from suppliers
Scope 3
Rail travel – emissions calculated using data showing total distance travelled Air travel – emissions calculated using data for three Smarter PCs, categories (domestic, short haul and long haul) smarter thinking Hotel stays – emissions calculated based upon a Carillion Canada is investigating the standard hotel stay of 48kg CO2 e per person per opportunity to source night green power, and this Paper – emissions calculated from total kg paper process is ongoing. Initial purchased and multiplied by CO e factors provided meetings have been held 2 to understand the scope by our paper suppliers and viability. Water – emissions calculated based on data Thin Client PCs have been showing total volume of water used (including set up for 117 some effluent data in the Middle East and North workstations at Carillion America region) Canada. The units are 46% cheaper and use around 10% of the energy required by standard PCs. The initiative will save 5,373kg of CO2 a year and a total of CA$60,000 (£31,400). Smart thinking has also contributed to a CA$1.1 million (£577,000) saving by working with our A-grades for carbon travel partner to reduce company travel and accommodation with Carillion is one of only 187 companies awarded a climate initiatives such as Travel performance A-grade in the Carbon Disclosure Project Blackout Weeks. (CDP) global ranking. 2,000 publicly listed companies are independently assessed against the CDP scoring VIEW ALL CASE methodology. STUDIES
Carillion is also one of the leading UK companies for climate change transparency in the FTSE 350 Climate Disclosure Leadership Index, achieving 99A in the 2014 index for 2013 performance and leading the Industrials sector for performance and disclosure of climate-related information.
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POWERING CARILLION
In the UK, we procure Climate Change Levy-exempt energy across our businesses where possible. Where it is not, we buy energy from combined heat and power plants. For our Middle East business, solar energy is gaining traction. Installing photovoltaic panels on our Dubai head office has showcased solar power and promoted our new energy services business.
SMARTER WORKING
Our Smarter Working Campaign in 2014 encouraged people to adopt ways of working that saved time and natural resources, lowered our impact on the environment and promoted a better work–life balance. We also ran our 11th Sustainability Week, which encompassed World Environment Day.
Wolverhampton head office: This is moving to a more efficient building and our pilot campaign, Carillion Unplugged, has reduced energy consumption by 10%, with 5% of the savings going to a local charity. Following the success of this pilot, we will be rolling similar schemes out across all UK offices at the beginning of 2015.
Building energy: Display Energy Certificates are placed in all principal properties showing how they perform in terms of energy efficiency. Trained Energy Champions are available at many sites to drive energy-efficient behaviour and promote best practice.
Plant fuel: We use a plant fuel calculator across all our civil engineering sites. This simple tool gives us a much greater understanding of where and when plant fuel is being consumed. We also have telematics technology in our plant machinery, giving site managers full visibility of when and why machinery is using fuel, and with operators taking appropriate steps to optimise performance.
Vehicle efficiency: Out on the roads, we encourage our commercial drivers to drive with fuel efficiency in mind, helped by a sophisticated telematics system which monitors speeds, acceleration and braking, and relays data back to drivers and managers. There are monthly competitions to reward the best- performing drivers. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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PERFORMANCE DATA
CARBON FOOTPRINT (ACTUAL) CARBON FOOTPRINT (NORMALISED) ENABLING LOW- CARBON ECONOMIES CARBON FOOTPRINT BY SCOPE
Climate change and our impacts Note: MENA stands for Middle East and North Africa.
Sustainable design Carbon footprint (actual)
Our carbon tonnes footprint
Performance data
tonnes 2011 2012 2013 2014 % CHANGE FROM 2011 Total Carillion Group 265,743 211,796 201,206 175,709 -34 UK 126,465 86,827 63,680 69,260 -45 MENA 106,858 98,918 92,317 65,661 -39 Canada1 32,420 26,051 45,209 40,788 +26
1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes. Carbon footprint (normalised by £m turnover)
tonnes CO2 e per £m
tonnes CO2 e per £m 2011 2012 2013 2014 % CHANGE FROM 2011 Total Carillion Group 52 48 49 43 -17 UK 35 27 21 23 -34 MENA 190 203 173 114 -40 Canada1 41 40 67 87 +112
1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes.
Carbon footprint by scope
tonnes CO2 tonnes CO2 2012 2013 2014
Scope 1 170,342 157,459 134,656 Combustion of fuel and operation of facilities
Scope 2 26,804 27,059 25,116 Electricity, heat, steam and cooling purchased for own use
Scope 3 14,648 16,668 15,936 Travel, paper and others
Total 211,794 201,206 175,709
The 2013 CO2 e numbers shown on this page are actuals and have been restated from the estimates published in the 2013 report. The 2014 CO2 e numbers are subject to an adjustment as some of the actuals for the last quarter of 2014 were not available at the time of publication and have been estimated based on 2013 data. The non-financial figures reported in these tables have been reviewed by independent external assurance provider Bureau Veritas. For details of the scope of work and opinion on the accuracy of our stated performance, please see the full assurance statement.
What we include when we report
We report our greenhouse gas emissions (GHG) in tonnes of carbon dioxide equivalent (CO2 e) from the sources required under the Companies Act 2006 (Strategic Report and Director’s Report Regulations 2013). We have used the GHG reporting protocol to calculate our GHG emissions for 2014, based on data gathered to fulfil our requirements under the CRC Energy Efficiency scheme and on emission factors from the UK Government’s GHG Conversion Factors for Company Reporting 2014. We report on Scope 3 emissions from the following sources: Business travel data is provided by Portman (our travel partner) which is responsible for booking and tracking all rail, air and hotel base travel. Travel data from Canada is obtained from our travel booking partners. Rail travel – emissions calculated using total distance travelled. Air travel – emissions calculated using data for three separate categories (domestic, short-haul and long-haul flights) showing distance travelled.
Hotel stays – emissions calculated based upon a standard hotel stay of 48kgCO2 per person per night.
Paper use – emissions calculated from total kg paper purchased and multiplied by CO2 factors provided by paper supplier. Water – emissions calculated based on data showing total volume of water used. Hire cars – emissions calculated based on miles travelled and litres of fuel consumed. Electricity and gas WTT – emissions calculated based on kWh. Electricity line losses – emissions calculated based on kWh. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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Carillion is... protecting the
Thinking globally, acting locally
PROTECTING THE We make every effort to be a responsible global citizen by ENVIRONMENT driving down our use of natural resources, rethinking waste and creating thriving, diverse wildlife habitats for A changing future generations. environment
Waste Sustainability in action
Water Saving water, carbon and Biodiversity waste
Performance data SUSTAINABILITY INITIATIVES THAT SAVE WATER, CARBON AND COSTS Waste no more
WASTE-REDUCING INITIATIVES IN CANADA Protecting natural habitats Natural Habitats Fund The Carillion Natural Habitats Fund demonstrates the company’s GLOW WORMS AMONG BENEFICIARIES “ understanding of the importance of OF £435,000 SUPPORT TO THE our work and commitment to WILDLIFE TRUSTS SINCE 2001 ensuring that we can continue to benefit from having wildlife in our lives.”
STEPHANIE HILBORNE OBE, Chief Executive of The Wildlife Trusts
READ MORE Our key figures 2014 performance highlights 99%* 100% of our sourced timber of our sites have been meets Forest assessed for biodiversity Stewardship Council or risk equivalent standards 2013: 100% 2013: 97% (based on 2012 performance report)
* based on 2013 performance
Progress against targets 95% 28% of waste diverted from reduction in water landfill consumption since 2012 Targets Targets 2014: 96% 2015: 98% 2014: 15% 2015: 25%
Target achieved Behind schedule
VIEW OUR FULL PERFORMANCE AGAINST TARGETS Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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A CHANGING ENVIRONMENT
We understand the balance between economic and environmental value. Resource availability and climate change affect business decisions every PROTECTING THE day. The increasing price of materials and energy puts resource efficiency ENVIRONMENT at the top of our agenda. A changing environment Ensuring the availability of key materials over the long term is a rising concern and that is why we are looking at environmental impacts across our value chain. This includes responsible timber, Waste water management, minimising waste and preserving biodiversity.
Water ENVIRONMENTAL MANAGEMENT Biodiversity
Performance data Our robust environmental management systems (EMS) are fully integrated into our wider corporate risk management processes and help us provide assurance to our customers and suppliers. All our established operations in the UK, the Middle East and North Africa are certified to the ISO 14001 international environmental standard, as is Carillion Canada’s Roads Maintenance business in Ontario.
The Carillion EMS (ISO 14001 certified), which includes our 100% Sustainability Leadership Plan and our environmental policies, Certification to ISO 14001 helps us to identify and manage our environmental impacts. international Central to managing environmental risks is our Environmental environmental standard at established operations Policy (PDF 104 KB), which shows Carillion’s international in the UK, the Middle East commitment to environmental stewardship. It is used by each and North Africa unit to set targets based on overarching 2020 strategy targets. Progress is monitored monthly within our wider sustainability governance framework.
Since 2012, we have used a web-based data management system, Capture, to collect, manage and analyse sustainability and safety data. We are reviewing the information on a monthly basis and using it to pinpoint risks and tackle issues as they arise. We raise internal awareness through our wider employee engagement channels, as well as dedicated environmental management training. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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WASTE
WASTE NO MORE GREENER RAILWAYS PROTECTING THE ENVIRONMENT
A changing We strive to eliminate waste across our contracts and are determined to environment send zero non-hazardous waste to landfill by the end of 2015.
Waste We seek ways to reduce and reuse materials, from food waste anaerobic digestion to reused materials. Waste reporting includes all activities undertaken within the Carillion Group and all Water geographical regions in which we operate. We collect data on waste diverted from landfill (e.g. waste reused and recycled thereby extending its lifecycle) from across our business units to Biodiversity produce an international total.
Performance data WASTE PRODUCED AND DIVERTED FROM LANDFILL £1 million Waste produced Waste diverted saved using site and accommodation cabins 2,411,509 2,278,712 as opposed to new buildings at the Royal tonnes tonnes Liverpool Hospital (2013: 1,141,246) (2013: 1,043,192)
Our performance data 95% WASTE PRODUCED AND DIVERTED FROM of waste diverted from LANDFILL landfill
In Oman, Carillion Alawi won the sustainability initiative for its Carillion is ‘War On Waste’ campaign at the Construction Week Awards. “ consistently and constructively The campaign, which targeted waste from offices, bar responsive to the reinforcement, timber, polythene, rock breaking, excavation Thameslink work, clothing, pallets and packing material, was commended programme for being a “simple yet very effective initiative which achieved sustainability agenda great results” reducing waste to landfill by 55% over two years. and is an active participant in sustainability activities, initiatives and forums. They’ve developed several best practice case studies of an innovative nature, Waste no more including that of the LED lights, which has already been shared The new Police headquarters at Niagara, Canada with another part of incorporated a basement secure parking area. The waste Network Rail bringing wider benefit to the materials were turned into a resource and reused on site. business. Overall Any spare was used locally, saving more than CA$1 million they have a proactive (£590,000). can-do approach to environmental and On the Alberta Roads project, 400 tonnes of waste was sustainability matters diverted from landfill by stockpiling and reusing the that instils strong confidence in their aggregate, and lorry movements as well as carbon have all ability to deliver been reduced. against our sustainability In Viking, Alberta, a vehicle salvage initiative is saving agenda.” money and reducing waste. When one fleet vehicle is ANNAMARIE retired, the unit is kept as a donor vehicle to supplement COMPTON, the working fleet with parts and tyres. A single donor Environment vehicle can often be used to maintain four or five others, Manager, Network saving up to CA$5,000 (£3,300) in replacement parts per Rail vehicle.
Sustainability Initiative Award for Carillion Alawi’s ‘War On Waste’ which reduced waste to landfill by 55% over two years
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Greener railways
When the team at Cricklewood Railway Sidings reused 12,400 tonnes of virgin material, they saved £113,000 and diverted 99% of waste from landfill.
As part of the Thameslink programme at Cricklewood, a train-stabling facility was designed to crush on-site ballast throughout the project. The materials were reused in accordance with Carillion’s Material Use Plan to provide type 1 gravel and sand for use on the site.
This smart thinking avoided 650 return lorry journeys totalling 13,000km, reduced transport CO2 emissions by 10 tonnes and minimised the heavy-load impact on the local community. In partnership with Network Rail’s supply chain, 100% of concrete sleepers are being reused, which is expected to save the project a further £176,000 and 400 tonnes of embodied carbon.
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CEO Environmental Sustainability Award to Chipping Campden Cutting Reactive Works Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
WATER
SAVING WATER, CARBON AND WASTE SAVING WATER IN DROUGHT REGIONS PROTECTING THE ENVIRONMENT OUR WATER CONSUMPTION
A changing environment Pressure on water resources is growing. While 2014 was a tough year for flooding in the UK, drought prevailed in many of our operating regions Waste such as the Middle East and North Africa region.
Water We have active Water Audits and Reduction Plans across our business units on top of measuring our international usage. Innovation in water use reduction leads to project efficiencies and better Biodiversity returns for clients. In MENA, where water is scarce and desalinisation costly, we have conducted audits and installed waterless urinals. We also continue to use a curing compound for concrete Performance data across building projects, which significantly reduces water use and a network of trained water champions drive behaviour change.
Saving water, carbon and waste Harvesting rainwater At Harvey Hadden, we Thousands of plastic bottles and transport miles have been are constructing a saved thanks to clear thinking on the Shell project in Ras swimming pool to Laffan Industrial City (RLIC) project north of Doha. Olympic standards. Once the pool structure and Water used to be delivered to workers in the plant in 30- balancing tanks were complete, the team litre insulated containers and we were delivering in excess considered how they of 7,500 bottles per day. With our water sampling could reduce the amount expertise, we determined that the water available from of mains water that was RLIC was of drinking quality. Following blind tasting required to fill the pool sessions, tap-source water was favoured so we created a ready for testing. worker drinking station in an old building. This follows the A worker engagement earlier introduction of water dispensers against 350ml idea resulted in bottled water. harvesting rainwater into the balancing tanks, then pumping the collected water into the main pool. The team pumped 450m3 of water from balancing tanks, which in simple terms was the equivalent of ‘flushing the toilet’ 75,000 times. This simple idea really showed that through engagement we could reduce the impact on water usage by harvesting the water naturally.
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7,500 plastic
VIEW ALL CASE STUDIES bottles saved thanks to a new worker drinking station on Ras Laffan Industrial WATER CONSUMPTION (INCLUDES City project, Doha OPERATIONAL AND CARILLION OFFICES) Canada MENA UK 0% 78% 22%
We are constantly “ seeking new ways of working with materials, technology and clients, despite often very challenging Our performance data circumstances; it’s WATER CONSUMPTION critical that we do whatever we can to reuse waste material and to continue our significant progress in reducing water Saving water in drought regions use.”
SHAUN CARTER, The Madinat Jumeirah project in Dubai has implemented Group Strategy several sustainability initiatives during construction, Director, Carillion Plc resulting in water, carbon and cost savings. They include:
use of non-potable groundwater to meet the moisture content requirements during backfilling, reducing fuel consumption from water tankers and saving approximately 462,962 gallons of fresh water or AED 54,280 (£10,000); around 46,000m3 of excess excavated sand was given to Dubai Municipality to replenish Umm Suqeim beach; and connecting to the Dubai Electricity and Water Authority mains, reducing fuel consumption associated with using generators and saving approximately AED 2 million (c. £360,000).
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OUR WATER CONSUMPTION
We measure and record water use on a quarterly basis. Across our operations, we have robust water reduction plans to help each contract identify activities that use significant water and develop an action plan to reduce consumption.
In our own offices we have direct control and influence over our water use and have collected data on this across our operations since 2012. The Carillion Estate water consumption increased by 12% compared to 2012 baseline, due to the acquisition of new buildings. Our focus for 2015 will be on driving behaviour change among employees.
Our water consumption on construction sites decreased in 2014 by 28% compared to the 2012 baseline year, reflecting our focus on using water-saving technologies more widely, and continuing to recommend sustainable designs such as rainwater harvesting to our design and construction clients. Going forward, we will learn from successful water reduction techniques applied in our Middle East business. Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
BIODIVERSITY
WILDLIFE ALONG A RAILWAY NATURAL HABITATS FUND PROTECTING THE ENVIRONMENT FRESHWATER HABITATS TRUST
A changing environment Our construction sites can have an impact on wildlife habitats. We try to make our overall legacy a positive one by creating biodiverse Waste environments for a range of species to thrive.
Water Every single contract has to undertake a biodiversity risk assessment and our work with the UK Wildlife Trusts has yielded some inspiring results from saplings along the UK’s A1 to shoreland Biodiversity clean-ups in Canada.
Performance data
Wildlife along a railway
Carillion was assigned to a large landslip in Gloucester, involving excavated slip material to a gravel pit 30 miles away. Working with Network Rail and Arup, none of the 44,000m3 slip material left the site, 326,000 miles of vehicle movement were saved and 12,000 trees were re- planted to form deciduous woodland on site. This improved local biodiversity, supported a local forestry industry, Preserving improved the area for residents and helped offset the CO2 . biodiversity in Existing non-native trees were also harvested during the Canada works with the tree stumps used to create a protective Twelve of our staff structure, hibernacula, on site. The site has been awarded a cleared debris in the park Network Rail Star Award for excellence in health, safety and in Black Creek, Toronto. environment. Thirty bags of garbage were collected within a 2km radius as part of the Great Canadian Shoreline Clean-up programme.
Our Forces Base Borden project supported the Bear Creek Sanctuary through donations of building materials and will be extending their volunteering in 2015. Bear Creek provides a safe haven for unwanted, abused and injured animals.
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CEO Environmental Sustainability Award to Chipping Campden Cutting Reactive Works
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We all benefit from “ having more contact NATURAL HABITATS FUND with the natural world. Our mental th and physical health is Now in its 13 year, Carillion’s Natural Habitats Fund has greatly improved by helped 72 habitat and conservation work ventures, awarding spending time over £435,000 in grants to date. In 2014, over 20 applications outdoors and were received and after careful consideration, six grants of enjoying the sights £5,000 each were awarded to biodiversity projects run by and sounds of wildlife whether in a city park Wildlife Trusts. These projects create opportunities for or on a beach. The volunteering, as well as bringing biodiversity and community Carillion Natural benefits: Habitats Fund demonstrates the Glow worms in Staffordshire: Working with Staffordshire company’s understanding of the Wildlife Trust on Highgate Common Nature Reserve, we importance of our are helping restore areas of heathland for wildlife work and including solitary bees and wasps, as well as glow commitment to worms. The reserve is now a Site of Special Scientific ensuring that we can continue to benefit Interest and we were awarded a gold membership from having wildlife certificate for our contribution. in our lives.” Wandle Wetlands: London Wildlife Trust worked to STEPHANIE improve the wetlands at Poulter Park and Spencer Road HILBORNE OBE, Chief Wetlands Nature Reserve in Sutton, South London. Executive, The Wildlife Trusts Rainton Meadows: Our volunteers helped Durham Wildlife Trust on their Rainton Meadows Nature Reserve with a complete overhaul of a dilapidated bird hide. £435,000 Willington Gravel Pits: A former gravel pit transformed awarded to 72 habitat by Derbyshire Wildlife Trust into a 30-hectare Nature projects through the Reserve, rich in bird life benefitted from new, accessible Natural Habitats Fund viewing platforms. since 2001 Exeter Wild City: We worked with Devon Wildlife Trust to enhance green spaces in Exeter and work with schools to make their grounds more wildlife-friendly. Freshwater Habitats Trust
Freshwater plants and animals are among the planet’s most threatened group of species, so we partnered with the UK Freshwater Habitats Trust to help protect wildlife in ponds, rivers, streams and lakes.
Through this new partnership, our people support projects that benefit biodiversity and local neighbourhoods, contributing to two of our positive outcomes in ‘Protecting the environment’ and ‘Supporting sustainable communities’. Our work includes supporting pioneering eDNA analysis to detect the presence of rare species in freshwater areas, to improve both operational efficiency and species protection.
Carillion’s 2020 sustainability strategy is leading the way in demonstrating how companies can “ make a significant contribution to addressing the root causes of environmental decline, both through their company practices and through the positive engagement of their people. We are proud to announce our new partnership with Carillion, and believe that by working together we can start reversing the current trends, and restore rich and natural freshwater communities.”
DR JEREMY BIGGS, Director, Freshwater Habitats Trust
VIEW ALL CASE STUDIES Making tomorrow a better place
SUSTAINABILITY REPORT 2014
OUR BUSINESS CUSTOMERS & PEOPLE COMMUNITIES LOW-CARBON ENVIRONMENT SUPPLIERS ECONOMIES
PERFORMANCE DATA
WASTE PRODUCED AND DIVERTED FROM LANDFILL SIGNIFICANT SPILLS PROTECTING THE ENVIRONMENT WATER CONSUMPTION
A changing environment Note: MENA stands for Middle East and North Africa.
Waste Waste produced and diverted from landfill
Water
Biodiversity
Performance data
WASTE PRODUCED (tonnes) 2012 2013 2014 UK 894,714 1,056,519 2,306,665 MENA 98,344 77,507 87,878 Canada 6,652 7,220 16,966
TOTAL 999,710 1,141,246 2,411,509
WASTE DIVERTED in tonnes (% of waste diverted in brackets) 2012 2013 2014 UK 807,770 (90) 1,004,196 (95) 2,218,038 (96) MENA 50,155 (51) 36,428 (47) 47,745 (55) Canada 5,002 (75) 2,568 (36) 12,929 (76)
TOTAL 862,927 (86) 1,043,192 (91) 2,278,712 (95) All data is collated on a project basis and reported monthly.
Significant spills
2012 2013 2014 Number of spills 0 0 10 Litres spilled (major) 0 0 314 Number of minor spills1 24 53 281
1. Litres were not recorded because they were insignificant.
Water consumption (includes operational and Carillion offices) m3
m3 2012 2013 2014 UK 168,056 187,658 131,447 MENA 544,393 424,421 462,278 Canada 5,120 2,368 2,431
TOTAL 717,569 614,447 596,156
This data includes water used on our construction sites as well as on Carillion estate-owned properties where we have direct control and influence over our water use.
Our water KPI is for water used on our construction projects, normalised by contract turnover. We have achieved a 28% reduction in 2014 against a 2012 baseline. We have increased water consumption by 12% on the UK and Canadian estate-owned properties.