Sustainability Report
2018 Contents
About this report 1
About Downer 5
Sustainability snapshot 11
A word from our CEO 14
Materiality and stakeholder inclusiveness 15
People 20
Zero Harm 34
Health and Safety 38
Environment 48
Communities 62
Governance 66
KPMG Assurance Statement 68
Sustainability Performance Data and GRI 71 About this report
This Sustainability Report discloses our sustainability-related performance for the financial year ended 30 June 2018 for the activities of businesses within the Downer Group (Downer EDI Limited).
This report has been prepared in These selected sustainability Sustainability performance information accordance with the GRI Standards: Core indicators are: relating to Downer entities and joint option, which emphasise the importance ventures has been included in the of identifying and reporting on issues §§ Lost Time Injury Frequency Rates relevant sections of the report as or concerns that are material to our and Total Recordable Injury specified by the table below. Joint business and our stakeholders. Frequency Rates ventures have been included for §§ Total direct (Scope 1) and indirect environmental energy and GHG Downer has engaged KPMG to (Scope 2) GHG emissions emission performance data where provide limited assurance on Downer’s §§ Total energy consumption Downer is deemed to have operational application of the Global Reporting and production control as defined by the National Initiative Standards (GRI Standards) for Greenhouse Energy Reporting Act. The Defining Report Quality and Content §§ Any significant environmental incidents or spills Health and Safety performance data as well as on selected sustainability includes incidents related to Downer §§ The total number and value of safety indicators in accordance with the employees involved in unincorporated and environmentally related fines or GRI Standard. joint ventures/partnerships but successful prosecutions. excludes incorporated joint ventures. People performance includes only Downer employees involved within unincorporated joint ventures.
Sustainability Report 2018 1 Sustainability performance inclusions
Environment Health & Safety People INPUT NEW DATA WITH PRINt ouT Business line Downer Contractors JVs Downer Contractors JVs Downer Contractors JVs
Infrastructure 1 2 3
Rail 1 2 3
EC&M 1 2 3
Mining 1 2 3
Spotless 4 4 1
New Zealand 2
Hawkins
Further information on joint ventures is detailed in the 2018 Annual Report. Changes to the reporting boundaries or measurement methodologies applied compared to our previous Sustainability Report are addressed in the relevant report sections. For ease of reference a GRI Standards Content Index is located on page 77 and KPMG’s assurance statement is included on page 68.
1 Where Downer has operational control as defined by National Greenhouse Energy Reporting Act. 2 Excludes incorporated joint ventures. 3 Data is included for all employees who are paid by a Downer entity. 4 Excluding Spotless NZ.
Sustainability Report 2018 2 Our approach to Commitment to reporting and reporting continual improvement Downer is committed to reporting our We have prepared this Report with sustainability performance annually. To reference to the Global Reporting support our commitment, we continue Initiative’s (GRI) Standards to provide to improve our data and information investors with comparable information collection processes to ensure better relating to environmental, social and quality data and insights. We will governance (ESG) performance. continue to engage with our internal Specifically, our approach takes into and external stakeholders to ensure we consideration the GRI’s principles for understand our sustainability risks and informing report content: materiality, opportunities. We are working actively completeness, and sustainability context to continually improve our sustainability and stakeholder inclusiveness. performance and reporting and to A key focus of this report is to identify ways to address the gaps we demonstrate how we deliver sustainable have in our current reporting. returns while managing risk and being responsible in how we operate.
Sustainability Report 2018 3 What’s new? Some of the new topics discussed in the Sustainability Report this year include: §§ Alignment to the GRI Standards from G4 §§ Alignment of business to the UN Sustainable Development Goals §§ Adoption of Task Force on Climate-related Financial Disclosures (TCFD) recommendations §§ Inclusion of Spotless data (excluding health, safety and environmental data for New Zealand) §§ Inclusion of ESG Sustainability Analyst Rating Scores.
ESG Sustainability Ratings Performance
Downer proactively participates in investor surveys and uses these insights to inform our understanding and improve our sustainability performance.
Rating agency Performance
Achieved Level 1 (the highest) for Governance – Environment – Social
Highest Rating – ‘Leading’ in the Commercial & Professional Services and Supplies sector
Leader in Top 25% of companies analysed globally achieving a AA Rating
“Outperformer” Top 10% of the 90 companies analysed
DJSI (Dow Jones Sustainability Indices) Consistent performance in industry category In collaboration with RobeccoSAM
Downer’s performance for ESG ratings is based on information provided in the FY17 period.
Sustainability Report 2018 4 About Downer
At Downer, our customers are at the heart of everything we do.
Our Purpose Is to create and sustain the modern environment by building trusted relationships with our customers. Our Promise Is to work closely with our customers to help them succeed, using world leading insights and solutions. Downer designs, builds and sustains assets, infrastructure and facilities and we are the leading provider of integrated services in Australia and New Zealand. With a history dating back over 150 years, Downer is listed on the Australian Securities Exchange and New Zealand Stock Exchange as Downer EDI Limited (DOW). We are an ASX 100 company that also owns 88 per cent of Spotless Group Holdings Limited. Downer employs approximately 56,000 people across more than 300 sites, primarily in Australia and New Zealand, but also in the Asia-Pacific region, South America and Southern Africa.
Sustainability Report 2018 5 Our Pillars
Safety Delivery Relationship Thought leadership Zero Harm is embedded We build trust by We collaborate to build We remain at the forefront in Downer’s culture and delivering on our promises and sustain enduring of our industry by is fundamental to the with excellence while relationships based on employing the best people company’s future success focusing on safety, value trust and integrity and having the courage to for money and efficiency challenge the status quo
Our services FY total revenue by service line % Transport 22.3% Spotless 24.6% $2,817.0m $3,101.8m Rail 9.3% EC&M 19.0% $1,169.2m $2,404.1m
Utilities 14.1% Mining 10.8% $1,783.0m $1,358.4m
Total $ 2,620.2m
Our supply chains Downer has over 30,000 suppliers Facilities 9% Professional in Australia and New Zealand, Services 7% including Spotless. The chart Food & Equipment 3% shows the percentage Beverage 3% of spend by supplier Heavy Mobile Fleet & Fuels 3% category across the Equipment 3% Downer Group. Information Other 2% Communication Technology 3% Rail 2% Logistics 2% Travel 1% Laundry 1% Tyres 1% Sub-contractors 36% Consumables 13% Raw Materials 11%
Sustainability Report 2018 6 What we do Downer designs, builds and sustains assets, infrastructure and facilities and is the leading provider of integrated services in Australia and New Zealand.
HOSPITAL
HOTEL
GAS CO LAUNDRY CLEANO
SCHOOL
Transport Rail Utilities Spotless EC&M Mining
Reporting division Key capabilities Examples/track record
Transport §§ Transport infrastructure §§ Maintain more than 33,000 kilometres of road in Australia and more than 25,000 kilometres §§ Rail systems in New Zealand §§ Multi-modal operations, including light rail, §§ Customers include all of Australia’s State bus, ferry road authorities, the New Zealand Transport §§ Light rail construction and maintenance Agency and the majority of local government councils and authorities in both countries §§ Station upgrades §§ Through Keolis Downer JV, Australia’s largest §§ Road construction and maintenance provider of multi-modal transport solutions including Yarra Trams in Melbourne, G:link on §§ Bitumen manufacturer and supplier the Gold Coast and Newcastle’s buses, ferries and a new light rail from 2019. §§ Airport lighting and pavements §§ Port facilities upgrades and services
Rail §§ Design and manufacture of new passenger §§ Maintain Sydney’s Waratah trains fleet rolling stock (78 eight-car trains) §§ Through Life Support and §§ Delivering another 24 Waratah trains by front-line maintenance early 2019
§§ Fleet control – 24-hour one-stop-shop §§ Maintain Sydney Millennium trains providing technical support, fleet planning and asset management services §§ Building Melbourne’s fleet of 65 new High Capacity Metro Trains §§ Overhaul of rolling stock components, including: new build and rotable parts, §§ Rail sites in NSW, QLD, VIC and WA refurbishment of existing rolling stock and bogie wheel set overhaul §§ Operations
Sustainability Report 2018 7 Reporting division Key capabilities Examples/track record
Utilities §§ Planning, designing, constructing, operating, §§ Maintain over 62,000 kilometres of electricity maintaining, managing and decommissioning and gas networks power and gas network assets §§ Erected over 1,000 steel lattice §§ Complete water lifecycle solutions for transmission towers municipal and industrial water users §§ Connect 35,000 new power and gas §§ Renewable energy, including wind and solar customers each year construction, operations and maintenance §§ Sunshine Coast, Clare, Ross River and Beryl §§ Fibre and copper networks solar farms §§ Mobile and radio networks §§ Ararat and Murra Warra wind farms §§ Internet of Things solutions §§ Major supplier to both nbn in Australia and Chorus in New Zealand, providing high §§ Big data automated analytics speed broadband and visualisation
Spotless §§ Asset maintenance and management §§ Largest integrated facilities management services provider in Australia and §§ Utility support services New Zealand §§ Catering and hospitality §§ Deliver more than 100 integrated §§ Facility management facilities services §§ Air-conditioning, mechanical and §§ Proven long-term partner, with around 15 electrical services Public Private Partnership projects across the healthcare, education, defence and §§ Laundry management leisure sectors §§ Security and alarm services §§ Cleaning
Engineering, §§ Engineering §§ Deliver services for complex oil and Construction and gas, mining and industrial and critical §§ Construction Maintenance infrastructure facilities such as data centres, §§ Operations and maintenance airports, public transport systems and hospitals §§ Defence services §§ Recognised worldwide leader in mineral and coal separation and processing §§ Key FY18 contracts: EPC services at the Carrapateena copper gold mine; equipment, engineering and design services at Egyptian Black Sands; construction services for the upgrade of Orbost gas plant; long-term maintenance at Origin’s Eraring power station; managing contractor for Shoalwater Bay training area remediation project; and Major Service Provider to Defence’s CASG
Mining §§ Open cut and underground mining §§ Serve customers across more than 50 sites in Australia, Papua New Guinea, South America §§ Resource definition, exploration drilling and and Southern Africa mine feasibility studies §§ Key FY18 contracts: Blackwater coal mine §§ Drilling, explosive supply, blasting in Central Queensland; Waanyi Downer and crushing JV for New Century Resources Limited; §§ Mine rehabilitation and closure underground mining services contract at the Carrapateena copper gold project; mining §§ Asset and tyre management services at the Gruyere Gold Project
Sustainability Report 2018 8 Our approach to and the opportunity to provide a more §§ Leverage opportunities that will diverse range of services. emerge from greater urbanisation sustainability in major cities At Downer, sustainability means Sustainability is intrinsically linked to Downer’s business strategy because the §§ Orient Downer’s portfolio delivering financial growth and value to to growth markets our customers through our supply chain, sustainability of Downer’s activities is §§ Embed operational technology into looking after the health and safety of our fundamental to the Company’s core service offerings. people, having a diverse and inclusive future success. Downer’s sustainability strategy is workforce, being environmentally Downer’s business strategy focuses on shaped by our four Pillars and our sustainable and enhancing the liveability Zero Harm, driving improvement in the commitments to sustainability are of the communities in which we operate. existing business, investing in growth, outlined in our policies. Downer recognises that sustainability and creating new positions. Downer’s is vital for securing long-term strategic objectives, prospects, and the environmental, economic and social risks that could adversely affect the viability and understands our role in achievement of these objectives are contributing to a sustainable future for set out in the 2018 Annual Report. The communities to prosper. strategic objectives are to: Downer is the largest and most diverse §§ Maintain focus on Zero Harm services contractor in the Asia-Pacific §§ Improve value and service for region with over $12 billion in annual customers and their customers revenue. This scale and breadth gives §§ Improve asset management and data Downer greater resilience to withstand analytics utilisation across the Group economic headwinds when they arise, §§ Position for greater government outsourcing
Health and Safety ana in health and sa ety ris promotin employee ell ein
Safety
Business resilience Financial returns; operational e iciency and productivity; sustaina le strate i ro th innovation Governance Ris mana ement le islative and re ulatory omplian e ontinuous improvement Delivery Environment Impact mitigation; carbon emissions; resource e iciency
Customer relationships Safety; value for money; cost e iciencies; productivity gains; innovative solutions Supplier relationships ndurin , ooperative partnerships sustaina le ene its transparent tenderin arran ements supply hain impa ts Relationships Communities mployment and trainin opportunities lo al pur hasin ommunity investment environmental impa ts
People and organisational Diversity and in lusiveness attra tion and retention o s illed capabilities employees employee development involvement innovation Thought no led e mana ement leadership Leadership
Sustainability Report 2018 9 Our approach to sustainability (cont.) As an integrated services company, Downer’s contribution to sustainability is also achieved by providing our customers with industry leading solutions that drive and provide efficiency, reducing the impact of customers’ operations on the environment. Downer works closely with the local communities in which it operates to achieve better social outcomes, implementing a range of initiatives focusing on social responsibility, local and Indigenous employment, cultural heritage management and stakeholder engagement. Downer’s success is a direct result of the experience, capability and engagement of our people. Downer embraces diversity and inclusiveness in the workplace. Downer relies on and encourages our people to contribute a diverse range of skills and experiences to deliver the best outcomes for our customers. Downer continues to strengthen our focus on recruiting strategically to increase workforce participation across a range of demographics.
Sustainability Report 2018 10 Sustainability snapshot
Highlights
Financial People Health & Safety Environment $296.5m 35% Underlying NPATA (Net Profit Percentage of women After Tax before Amortisation in Downer workforce 0 0 Significant environmental of acquired intangible assets) (including Spotless) Fatalities incidents (≥ Level 4)
Financial
Metric Market guidance FY18 FY17
Underlying NPATA $295.0m $296.5m $186.6m (Net Profit After Tax before Amortisation of acquired intangible assets)
Underlying NPAT (Net Profit After Tax) $251.0m $249.7m $181.5m
Underlying EBITA n/a $479.6m $285.2m (Earnings Before Income and Tax before Amortisation of acquired intangible assets)
Underlying EBIT n/a $412.9m $277.8m (Earnings Before Income and Tax)
Total Revenue n/a $12.6b $7.8b
Work in hand n/a $42.1b $22.5b
Sustainability Report 2018 11 People As at 30 June 2018, the gender diversity metrics for Downer Group were:
Metric Target5 FY18 (incl FY17 (excl Result Spotless) Spotless)
Women in executive roles No Target 20% 10.8% n/a
Women in management roles 12% by 2020 17% 11%
Women employed 20% by 2020 35% 11%
Safety
Metric Target FY18 FY17 Result
LTIFR6 <0.9 0.78 0.55
TRIFR7 <4.0 3.27 3.50
Fatalities 0 0 0
Prosecutions 0 1 0
5 Due to the acquisition of Spotless, Downer exceeded its gender diversity targets for FY18, which were set prior to the acquisition. New targets for FY19 have been set to reflect the changing nature of the operations and workforce demographics. 6 Lost Time Injury Frequency Rate (LTIFR) Lost time injuries (LTIs) are defined as injuries that cause the injured person (employee or contractor) to be unfit to perform any work duties for one whole day or shift, or more, after the shift on which the injury occurred, and any injury that results, directly or indirectly, in the death of the person. The Lost Time Injury Frequency Rate is the number of LTIs per million hours worked. 7 Total Recordable Injury Frequency Rate (TRIFR) is the number of lost time injuries plus medically treated injuries (employees and contractors) per million hours worked. Definitions used are based on 18001:2007 and documented in Downer’s management system. All incidents are reported and recorded in a hosted database, INX, which covers all operations under Downer’s management control.
Sustainability Report 2018 12 Environment
Metric Target FY18 FY17 Result
Significant environmental incidents (≥ Level 4) 0 0 0
Prosecutions 0 0 0
Infringement Notices (Fines) <5 4 6
Infringement Notices (Fines) $AUD – AU$2,720 AU$36,175 –
Metric Target FY18 FY18 FY17 Result (incl (excl (excl Spotless Spotless Spotless AU) AU) AU)
Energy Consumption (TJ) – 5,753.6 4,653.7 3,843.5 n/a
Scope 18 and Scope 29 greenhouse – 421.2 323.4 263.6 n/a gas (GHG) emissions compared to
previous year (ktCO2-e)
Annualised GHG Emission 8,692 12,491 12,315
Reductions (tCO2-e)
8 Scope 1 emissions are those produced directly by Downer Group activities. 9 Scope 2 emissions are indirect emissions, such as electricity consumption.
Sustainability Report 2018 13 A word from our CEO
Downer is the leading provider of integrated services in Australia and New Zealand. We have a diverse portfolio of businesses which allow us to drive growth while continuing to deliver on our Promise to work closely with our customers to help them succeed.
Downer is founded on the deeply held then separated, cleaned and sorted into I would like to take this opportunity value of Zero Harm as it relates to the valuable products and materials that can to thank our employees, communities, safety of our people, the environment, be reused or sold. business partners and suppliers for your and the communities in which we continued support. operate. Our approach to sustainability is Downer has also partnered with Victoria’s critical to the long-term value we create Hume City Council, as well as resource for all our stakeholders and, as we noted recovery and recycling companies last year, customers are increasingly Close the Loop and RED Group, in an looking to us to lead with best practice Australian-first trial for the construction sustainability solutions. of a road made with plastic bags, glass and used toner cartridges. Initial Grant Fenn We strive to set new benchmarks in testing shows that this sustainable, Managing Director and sustainability and innovation and I cost competitive road has a 65 per cent Chief Executive Officer believe we are making strong headway. improvement in fatigue life. In June 2018 we opened the Detritus Processing Facility, a new state of the art We recognise our success is a direct recycling plant in Rosehill in New South result of the quality and dedication of our Wales. Unlike many other recycling people. We look to our people to bring facilities, it can recycle several different different and unique views to the table types of materials and Downer has found and therefore we continue to strengthen use for those materials. In total, more our focus on recruiting strategically to than 21,000 tonnes of waste annually increase workforce participation across can now be diverted from landfill and a range of diverse demographics.
Sustainability Report 2018 14 Materiality and stakeholder inclusiveness
The material issues addressed in this report directly reflect priorities identified for Downer and our stakeholders, in line with GRI Standards requirements.
In 2017, KPMG facilitated a materiality In 2015, the United Nations agreed on 17 assessment via a series of workshops Sustainable Development Goals (SDGs) across the business to identify as part of a 2030 Agenda for Sustainable issues material to Downer. This year Development to: end poverty, promote a consultative review process was prosperity and wellbeing for all, and undertaken to confirm and identify any protect the planet. Downer is a supporter new material priority issues through of the SDGs and we recognise that we reviews of risk registers, industry ESG are well placed within the sectors we ratings, media analysis and peer reviews service to contribute to the SDGs. In this and engagement with key stakeholders. year’s report we have aligned our material This ensures our reporting reflects issues to the SDGs and demonstrated significant economic, environmental and Downer’s contribution to deliver on social issues that may influence the SDGs. the assessments and decisions of stakeholders.
Sustainability Report 2018 15 Material issues
Material Interest Issue Sustainable development goals issue relevance to broader value chain Business Resilience §§ Financial returns Suppliers §§ Operational efficiency and Sub-contractors productivity Customers §§ Sustainable strategic growth JVs and alliances §§ Enduring, collaborative partnerships Community §§ JV and overseas risks Investors §§ Innovation See further details in the 2018 Annual Report.
People §§ Talent attraction and retention of Sub-contractors skilled employees JVs and alliances §§ Diversity and inclusiveness Community §§ Employee development and capability §§ Leadership and knowledge management
Health and Safety §§ Managing health and safety risks Suppliers with a focus on critical risks Sub-contractors §§ Maintaining a high standard Zero Harm culture through Customers accountability JVs and alliances §§ Employee health and wellbeing Regulators
Community
Environment §§ Legislative and regulatory Suppliers compliance and impact minimisation Sub-contractors §§ GHG emission reduction Customers §§ Climate change related risks JVs and alliances §§ Responding to emerging issues Regulators and industry trends Community
Sustainability Report 2018 16 Material issues (cont.)
Material Interest Issue Sustainable development goals issue relevance to broader value chain Community §§ Employment and training Suppliers opportunities Sub-contractors §§ Local purchasing Customers §§ Community investment JVs and alliances §§ Socio economic benefits Community
Governance §§ Legislative and regulatory Suppliers compliance Sub-contractors §§ Risk management Customers §§ Standards of business conduct JVs and alliances §§ Continuous improvement Investors
Regulators
Downer recognises that our business operations have a direct impact on a wide range of stakeholders. To ensure we are capturing the most relevant material issues in this report, we continually review issues raised by our stakeholders. These reviews inform the issues raised above.
Sustainability Report 2018 17 How we engage with our stakeholders
Stakeholder How we engage
Directly affected
Customers Meetings, surveys, joint sustainability initiatives, social media channels
Communities Project-specific community engagement plans, local media, social media channels, employment opportunities, local supply arrangements, community investment projects
Business partners Joint venture boards and operating committees, meetings, workshops
Shareholders and investment Annual General Meeting, Annual Report, Sustainability Report, ASX releases, community half-year and full-year results presentations and webcasts, Investor Day (annually), social media channels (ongoing)
Suppliers Inductions and training, meetings, contractor Zero Harm Days, tender and contract documents
Actively interested
Government and regulators Reporting, meetings
Industry associations Representation on boards and committees, meetings
Media Media releases, briefings and interviews, website, social media channels
Non-government organisations Participation in forums, meetings
Trade unions Meetings
Sustainability Report 2018 18 Material priorities People Downer recognises that to create a high- performance culture our employees need to be inspired, engaged and empowered. We believe that embracing difference fuels innovation and enables more informed decision making, which is why we are committed to diversity and inclusiveness in our workplace. Downer works to foster an environment that facilitates opportunity and respect for all employees. We are committed to developing a workforce comprising engaged employees from a wide pool of talent. Recruiting and retaining the right people is fundamental to being able to deliver the best service options to our customers and providing a workplace that motivates people to excel. We aim to not only recruit and retain the best talent but also to develop the capability of our people with an emphasis on leadership and the sharing of knowledge. Zero Harm Zero Harm means working in an environment that supports the health solutions for our customers is a Governance and safety of our people, allows us to priority. While focusing our attention Downer is committed to ensuring that deliver our business activities in an on managing our risks associated with the company maintains an effective environmentally sustainable manner, environmental management, we also system of corporate governance which and advances the communities in which take advantage of the commercial is an integral part of our culture and we operate. opportunities this presents for business practices. our business. Our Zero Harm culture is built on leading Downer is committed to the highest and inspiring, managing risk, rethinking Communities level of governance and is committed processes, applying lessons learnt, and Downer is committed to supporting the to building a culture that rewards high adopting and adapting practices that aim success of the communities in which we ethical standards and personal integrity. to achieve zero work-related injuries and operate, by fostering and maintaining minimise environmental harm. Our corporate governance framework enduring relationships built upon trust. provides the platform from which: Health and safety Downer recognises the significant and §§ The Downer Board is accountable The health and safety of our people and lasting socio-economic benefits our to shareholders for the operations, the communities in which we work is our presence in the community can bring. performance and growth of first priority. Our approach to safety is For this reason, we seek to engage with the company a market differentiator as it enables us local suppliers and contractors, and to work in industry sectors that may be actively participate in regional business §§ Management is accountable inherently hazardous. groups and chambers of commerce. to the Board §§ The risks of Downer’s business are Environment We implement a range of strategies identified and managed We conduct our business in a way that focusing on social responsibility, local §§ Downer communicates with its is sustainable, taking into account a and Indigenous employment, cultural heritage management and stakeholder shareholders and the broader range of factors, including climate related investment community. risks and opportunities. Developing and engagement. delivering environmentally sustainable
Sustainability Report 2018 19 People
Our approach Our continued growth is linked to employees that keep the customer at the heart of everything we do. Our high performing culture is a result of teamwork and an enduring focus on safety. We are committed to attracting people that can bring their best each day, while providing our workforce with development opportunities that support their career goals.
Our performance Workforce breakdown by region In FY18 we employed around 56,000 people. Approximately 65 per cent of our employees based in Australia and New Zealand are covered by collective Australia 73.2% agreements and industry-based New Zealand and Pacific 25.7% awards. We have a wide variety of employment arrangements across the Southern Africa 0.8% Group, including individual contracts of South America 0.2% employment and collective agreements. 0.1% This reflects the diverse sectors in which Other we operate.
Sustainability Report 2018 20 Talent attraction and Talent retention We also ensure succession planning is in retention of skilled As part of ongoing development and place to enable talent development and retention strategies we annually assess enhance delivery performance for employees performance and potential. This process our customers. Talent attraction allows us to create structured career We ensure a robust remuneration Downer understands the importance of development pathways and enables and reward strategy that entices and identifying, recruiting and developing our people to seek development attracts new talent and provides strong outstanding people. opportunities that support their career recognition of performance for existing goals. This process is described below. talent to remain with Downer. Key Our diversified business operations allow factors which are incorporated into us to provide rich career development Development pathways guide career goals as our employees progress in their our remuneration and rewards opportunities so employees can system include: experience career growth. career. Key pathways include mentoring and coaching, structured formal learning §§ Benchmarking positions utilising Our focus on development opportunities opportunities, on-the-job learning and third party market data to provide is linked to retaining and developing our secondments across the business. a comparative analysis of our skilled workforce. Downer recognises remuneration offering against industry that embracing difference fuels While external talent recruitment is innovation and enables more informed important, we continuously seek to §§ Utilising the outcomes of this decision making. This approach to develop talent from within the business. benchmarking exercise to develop diversity and inclusion reflects the We do this by building and investing in remuneration packages which attract customers and communities we serve people by supporting various and diverse and retain industry leading talent while building a sustainable business. career paths that: §§ Offering reward opportunities during employment that provide financial This year Downer placed 12th in the §§ Improve our line of sight on development needs and increase and/or team based recognition for LinkedIn Top Companies to work at employees who exhibit desired survey. This achievement is a recognition the bench strength of the leadership pipeline against internal talent behaviours and/or deliver of our success and commitment to project outcomes attracting and retaining the best people. §§ Identify talent gaps that can be filled utilising internal capability and skills §§ Offering short-term and long-term Of Downer’s total workforce at our incentives where appropriate, with a §§ Identify opportunities for targeted primary locations, Australia and New focus on key roles. development activities Zealand, 63 per cent of new hires were The turnover of employees at Downer’s men and 37 per cent women. §§ Ensure we have the best talent primary locations was less for women engaged within and across than men, with 17 per cent versus 24 per the business. cent turnover respectively over the period.
Talent retention Identify, assess and Thoroughly process rank our talent – understand performance strengths, needs, and potential mobility, transferable 1. Talent 2. Talent strengths assessment profiling
4. Succession 3. Career planning development
Validate, test and Validate and review management champion career bench strength development maps
Sustainability Report 2018 21 Talent attraction and §§ Lifestyle benefits: discounted vehicle rentals, discounted technology retention of skilled products, shopping offers. employees (cont.) Spotless employees are entitled to paid Employee benefits sick leave and annual leave, however All full time and part time employees casual employees do not receive these at Downer’s major Australian and New entitlements as they are remunerated at Zealand sites receive the same a higher rate of pay instead. benefits including: In addition, Australian and New Zealand §§ Professional development: study employees receive a standard of four assistance, training, mentoring weeks’ notice for the cessation of and secondments employment. Those covered by an Enterprise Bargaining Agreement are §§ Financial and other benefits: salary governed by the various consultation sacrifice superannuation, novated provisions of their agreement regarding leasing, leave entitlements, banking a major change. discounts and offers §§ Health and wellbeing: flexible work arrangements, discounted health insurance and gym memberships, health check-ups
Sustainability Report 2018 22 Engagement survey This year Downer achieved an Feedback suggests Downer can improve engagement score of 69 per cent, and a our employee experience by supporting Downer recognises the importance of progress score of 61 per cent. Consistent better cross-unit cooperation and creating an organisational culture that with previous results, Downer performed supporting innovation. To address this builds engagement and empowers our well on questions about teamwork, safety valuable feedback, divisional leaders will workforce. This delivers high-performing and role clarity. The following represents work with their teams to identify and individuals who are committed to the these key metrics and demonstrates our implement action plans. company and has a direct impact on commitment to our people, their safety how safely they work, the quality of the and continued success. leadership and supervision they provide, and the development of new initiatives §§ 89 per cent of employees agree that and innovations. they have good working relationships with their co-workers. Downer’s annual Employee Engagement Survey has been administered for four §§ 87 per cent of employees agree that years and this year Spotless employees they are aware of their work health also participated. This survey allows and safety responsibilities. us to understand what we do well §§ 86 per cent of employees agree as a company and where we can that they understand how their job improve. It also serves as a channel for contributes to the overall success honest feedback and a direct line of of the organisation. communication to the CEO, Executive Leadership Team, Downer Board and all employees.
Sustainability Report 2018 23 Employee development We have also continued to build the §§ Development of Environment & Industrial Relations capability of our Sustainability E-Learns on Waste and capability operational managers through structured Management (including Hazardous Leadership development training programs. This important lift Waste), Water (stormwater, effluent Leadership capability remains a key in capability positions managers and management) and Planning priority and supports our people human resources professionals to & Approvals. delivering success for Downer. Our better support and engage employees, Downer’s strategic capability is programs are underpinned by the LEaD minimise our exposure to industrial underpinned by customised frameworks (Leadership Excellence at Downer) disruption, lost time and revenue, and and programs that support current and Capability Framework and focus on better service our customers. future capability and our performance leaders at all levels of the business. We have an annual performance and requirements. Our programs align to development review process. As part of Downer’s Pillars of Safety, Delivery, Downer’s Executive Development Relationships and Thought Leadership, Framework focuses on the growth of this our employees plan development goals and activities. Based on this, we and promote behaviours that deliver senior leaders within our business. The Downer’s Purpose and Promise. program provides support to leaders to identify the formal development needs build capabilities to deliver our current that include safety, leadership and Strategic learning and development and future business goals. Senior leaders project management and other capability goals include: are engaged through annual leadership to increased business performance. §§ To increase leadership capability events, where the alumni come together The table below represents Downer’s and build skills to enhance to challenge current and emerging progress completion rate for those business relationships business requirements and to maintain employees that have been identified for §§ To develop our Zero Harm culture their formal executive network across each capability program. the business. through increased leadership Environmental awareness capability and employee knowledge Leadership development remains a training includes: and commitment key priority for Downer. We recognise §§ To embed project management that our middle leaders are the vital §§ 128 employees and a total of 1,024 excellence and build capability of link between frontline people and our hours in Accredited Advanced project management against identified executive leadership teams. Our LEaD2, Environmental Awareness training, key drivers of business performance Leadership Delivering Success program targeted at Project Managers, has been developed to meet the needs Construction Managers, Supervisors §§ To increase skills to strengthen of our middle leaders and support them and Zero Harm Advisors business and commercial acumen. to effectively and competently balance Constantly striving towards achieving their leadership, management and these goals ensures our leaders have the operational responsibilities to elevate our skills, knowledge and attitude to deliver leadership and operational results. our organisational goals.
Capability program % complete of all identified employees
Executive development 73%
Middle leader 87%
Frontline leader 85%
Emerging leader 88%
Safety leadership 82%
Critical risk 100%
Project management 87%
Security awareness 73%
Sustainability Report 2018 24 Employee development and capability (cont.) Capability development – SAFETY Downer’s key initiative and the foundation of our Zero Harm commitment is ‘Our Safety Focus’. Each year employees and contractors undertake the safety training program, which is now in its fifth year. Of participating divisions, we achieved a 95 per cent completion rate across all employees. It reinforces the importance of safety leadership and focus for our key critical risk activities. This alignment has provided a platform to drive greater focus for the safety of our people and personal accountability to make our workplaces focus on key safety behaviours and actions that are relevant to their work environment. Zero Harm and safety leadership continues to be a key strategic theme across the entire leadership suite of development initiatives. Capability development – Capability development – Capability development – DELIVERY RELATIONSHIPS THOUGHT LEADERSHIP Our teams build relationships that This pillar places Downer at the forefront The ‘Fundamentals for Successful create success and we recognise that of industry by attracting and developing Downer Projects’ training program we need people at every transaction the best people and empowering them began in 2014 and continues to equip point to ensure consistent delivery. to have the courage to challenge the project managers with the capability Successful relationships are not just status quo. they need to implement Downer’s robust customer facing. We believe our internal project management methodologies for A critical component of this is diversity relationships are equally as important. successful project delivery. and inclusion. We continue to invest Downer’s capability enables us to unlock in and attract a diverse workforce to Advanced project management skills value through leveraging the company’s produce thought leaders. One such and knowledge are further developed leading market position and strong core initiative is through our Emerging through our suite of specialist modules business. This is achieved by delivering LEaDer’s program. This structured and workshops, with an emphasis on the on our commitments to customers, development program provides our further application of critical elements ensuring our service offering aligns to high potential future leaders with a of project management methodologies our customer needs, identifying and comprehensive development pathway required for larger scale project delivery. realising cross divisional opportunities, across the business fostering long- Downer’s capability frameworks have and adapting our operating model to term career growth and success. This been developed to provide a common maintain healthy margins. provides Downer with a rich and diverse and consistent description of behaviours, pipeline of future leaders and focuses on The LEaD (Leadership Excellence at skills, knowledge and abilities required business-critical leadership skills, while Downer) suite of capability development for delivery success in any role across developing core financial, commercial programs directly upskill leaders to build the organisation. These frameworks and business acumen for these and sustain relationships that support the development of a highly rising stars. create success. skilled, capable and engaged workforce Our Thought Leadership approach for continued success. extends to all levels of the business through our other leadership capability development programs including Jawun, mentoring and executive coaching.
Sustainability Report 2018 25 Diversity and Gender diversity FY19 will work to enable employees to inclusiveness Downer continues to demonstrate progress their careers at Downer while our commitment to attracting female managing their personal and Downer is committed to a workforce participation in our workforce through professional commitments. that reflects and is informed by the practical initiatives that attract, support As at 30 June 2018, the gender diversity customers and communities we serve and retain all employees. while maintaining a sustainable business. metrics for Downer Group, including We view diversity and inclusion as a Downer is participating in a number of Spotless, were: competitive advantage and commercial Science, Technology, Engineering and imperative. We are committed to a Maths (STEM) initiatives to improve culture that leverages the skills and representation of women in the fields of insights of our people. engineering, construction and project management. We work with our industry Each year Downer’s Board reviews the peers to promote the passion and 20% Diversity and Inclusiveness Policy to opportunity available within our industry. ensure that it grows and adapts to match Activities include: career guides and contemporary market changes and attendance at high school and tertiary expectations. This policy helps shape our education career forums. One such er enta e o strategy and subsequent work programs example is the Pimlico State High School to provide measurable objectives for in Queensland case study under the Our omen in Senior achieving a diverse and communities section of this report. e utive roles inclusive workforce. Our graduate program reiterates our To develop a diverse and inclusive commitment to a diverse workforce workforce, we are currently focusing on with graduates coming from a variety the following areas: of disciplines. The rigorous recruitment §§ Gender diversity – equal opportunities process ensures we find the best talent 17% irrespective of gender across the country and places remain open until we achieve this goal. §§ Generational diversity – building a continuous pipeline of talent An analysis of our recruitment process §§ Cultural diversity – increase workforce generated strategies to overcome participation of Aboriginal and potential biases and outlined goals for er enta e o Torres Strait Islander people through minority shortlisting, interview panel omen in employment outcomes and partnering recommendations and a move to focus ana ement roles with community. on competency over sector experience. In FY18 we leveraged the insights Targeted initiatives, such as ‘Refer from our Divisional Diversity Steering a Female Friend’, which have been Committees to promote and support adopted by a number of our businesses a diverse and inclusive workplace in Australia and New Zealand, have through divisional diversity and inclusion increased the number of female referrals. 35% workplans. This allowed for a coordinated Industry partnerships encourage and collaborative approach to group-wide our employees to be their best by objectives while providing divisional participating in events and learning flexibility for specific opportunities opportunities with WIMARQ (Women and outcomes. in Mining and Resources Queensland), er enta e o omen WIMWA (Women in Mining WA), NAWIC in Do ner s entire (National Association for Women in or or e
Construction) and NAWO (National Association for Women in Operations). Due to the acquisition of Spotless, Downer exceeded its gender diversity A Group-wide review of the talent targets for FY18, which were set prior management and succession planning to the acquisition. New targets for FY19 process ensured that our identified top have been set to reflect the changing female talent have active performance nature of the operations and and development plans to support workforce demographics. talented females to realise their potential. A continued focus on flexibility in
Sustainability Report 2018 26 Diversity and Valuing experience The size and scale of the HCMT Project inclusiveness (cont.) Downer has teamed up with The is enabling the consortium to create Adventure Group (TAG) to launch meaningful opportunities for regional Diversity and our Board Operation Bellator to help veterans Australia, and sustainable high-skill, high- Three of the six Non-Executive Directors and Defence personnel who may be value jobs in key regional growth areas on the Downer Board are women. One struggling with the transition from such as Newport, Bendigo, Pakenham, executive member of the Spotless Board military to civilian life. Operation Bellator Hallam and Morwell. These jobs form is a woman. is an outdoor experiential dignity part of our Disadvantaged Worker and resilience program that takes strategy that provides opportunity participating veterans on a two-day for redundant auto workers through outdoor adventure experience run by reskilling and workers with a disability. former SAS instructors, with Downer Further detail is provided in the HCMT executives and select corporate partners case study. acting as mentors to the veterans. We have over 150 veterans working in our Cultural diversity business and are invested in providing Reconciliation Action Plan meaningful opportunities to men and In 2018, Downer developed an ‘Innovate’ Generational diversity women who have served Australia. Reconciliation Action Plan (RAP) Downer equally values all generations as We benefit from having experienced currently with Reconciliation Australia being able to deliver the required talent and Defence-trained personnel across for endorsement. The Innovate RAP will and capability for Downer. generations form part of our diverse be two years in duration; 2018 – 2020, workforce. Further detail is provided in and moves from scoping reconciliation The Emerging LEaDers program focuses the Operation Bellator case study. efforts (as detailed in our ‘Reflect’ RAP) on building a continuous pipeline of to implementing reconciliation initiatives. talent to ensure that as people move Disadvantaged workers through their career to retirement the Evolution Rail (comprising Downer, Key initiatives central to our business maintains its leadership CRRC Changchun and Plenary) has been Innovate RAP: bench strength. engaged by the Victorian Government §§ Improving employment opportunities to deliver the world-class High Capacity Downer has a comprehensive for Aboriginal and Torres Strait Metro Trains (HCMT) Fleet between apprenticeship program and currently Islander candidates November 2016 and November 2024. manages more than 250 apprentices. §§ Incorporating Aboriginal and Downer’s Rail Apprentice program Evolution Rail’s approach to the HCMT Torres Strait Islander procurement achieved an exceptional completion rate Project will transform Melbourne’s public partnerships within our organisation of 100 per cent in 2017, compared to the transport system with world-class trains §§ Upskilling employees in cultural Australian average of 49 per cent. while creating a sustainable, globally- competency training to facilitate competitive manufacturing industry Apprentice completion rate better employee relationships with with the capability to export to the Aboriginal and Torres Strait Islander world. Representing one of the largest employees, contractors, suppliers government spends in Victoria, the and customers. project will not only deliver much-needed Significant work is currently being 49 public transport infrastructure, it will also Australian undertaken to progress Spotless’ avera e drive jobs, industry development and Reconciliation Action Plan (RAP) from an prosperity for Victoria. 93% 100% Innovate RAP to a Stretch RAP. 2016 2017 Part of Spotless’ commitment to reconciliation is as a partner of the Department of Prime Minister and Cabinet’s Employment Parity Initiative which provides support to our business to engage, recruit, educate and retain Aboriginal and Torres Strait Islander people. 10,409 employees have successfully completed Spotless’ online Cultural Awareness Program – Working with Indigenous Australians.
Sustainability Report 2018 27 Diversity and opportunity to support Indigenous Knowledge management leaders and the development of inclusiveness (cont.) Indigenous communities. Downer recognises the value in Jawun effectively managing knowledge. As a Since our partnership began Downer learning organisation Downer solves Downer has partnered with not-for- has provided 37 talented employees and problems systematically, embraces profit group Jawun since 2014. Jawun 222 weeks of secondment. It has also and tests new approaches and combines the skill and expertise of been supported at the highest levels, methodologies, and learns from past corporate Australia with Indigenous with 21 of our executives visiting these experiences, failures and best practices. people to enhance the skills and communities and experiencing firsthand capabilities of Indigenous Australians the difference this program has made to Custodianship of Knowledge and create real change in these communities. Management within Downer is through Indigenous communities. the Project Management Office (PMO) Aboriginal and Torres Strait Islander via the development, maintenance and Downer supports Jawun by seconding supplier diversity delivery of process and people capability. employees with the required skills and Downer has demonstrated a experience to work with Indigenous The PMO transfers knowledge commitment to creating opportunities communities in the Cape York, Inner throughout Downer by sharing lessons for Aboriginal and Torres Strait Islander Sydney and West learned and through the learning and peoples and their communities through Kimberley communities. development capability of our people. membership of Supply Nation which We are committed to furthering the directs procurement activities to advancement of Aboriginal and Torres accredited Aboriginal and Torres Strait Strait Islander Australians in these Islander-owned businesses. communities. Our participation in the Jawun program provides us with the
Sustainability Report 2018 28 Our future focus
Focus Objective Targets Initiatives Area
Brand & To enhance the brand and Establish two §§ Consider partnering with the Diversity Council reputation reputation of the Downer partnerships of Australia and/or the Australian Human Rights Group through partnerships with reputable Commission to strengthen and illustrate Downer’s related to our diversity focus diversity agencies commitment to Diversity and Inclusion areas and to ensure the Downer Group continues to §§ Build Downer’s employee value proposition that be viewed as an organisation builds on employee engagement survey findings – including through regular internal and external that is committed to D&I messaging focused on an inclusive culture
Gender To improve opportunities 37 per cent women in §§ Launch a new Downer paid parental leave policy diversity for women to reach their the workforce potential through an inclusive by 2020 §§ Establish a mentoring program where 15 high work environment while performing women are paired with high performing positioning Downer as a 20 per cent women in leaders to support their development goals management by 2020 preferred employer for §§ Build the executive talent pool of senior females women in our industry with focused development opportunities including Downer ExeLD program (five places) and targeted external development through Chief Executive Women (three places) §§ Implement a new learning module to be completed progressively by hiring managers. The module will focus on diversity insights relevant to recruitment processes so that hiring managers are able to apply insights that are focused on achieving improved gender diversity
Cultural To build on Downer’s Three per cent §§ Launch Downer’s second Reconciliation Action Plan diversity commitment to closing the Aboriginal and to demonstrate the ongoing commitment gap by increasing Indigenous Torres Strait Islander to reconciliation workforce participation employees by 2020 and developing strategic §§ Develop two partnerships with Indigenous partnerships with Indigenous pre-employment agencies to support the organisations and commitment to closing the gap community groups §§ All supervisors and above will complete cultural awareness training, which will commence during the period
Generational To establish Downer as a Build our LinkedIn §§ Build a talent pipeline by investing in youth diversity sought-after employer for ranking (currently programs that align to our diversity focus of both all age groups and as an the 12th most sought female and Aboriginal and Torres Strait Islander organisation that builds a after business to priority areas, including: the Downer Graduate talent pipeline of thought work for) Development Program (continue to unify a one leaders and continues to Downer approach to graduate recruitment) value experience Maintain or increase the number of §§ Establish governance structure and a framework graduate employees for the Downer Apprentice and Trainee Program year-on-year that supports strategic attraction and selection until 2021 §§ Develop D&I image guidelines to ensure internal and external collateral covers the broad spectrum of diverse employees (with a focus on generational)
Sustainability Report 2018 29 Managing modern We are taking steps to strengthen our Ensuring that slavery and human supplier qualification process to evaluate trafficking is not taking place in Downer’s slavery performances such as employee working supply chain, beyond our direct suppliers, Downer supports fundamental human conditions and on modern slavery remains a challenge. However, we are rights and preventing modern slavery and human trafficking issues. Where committed to continuous improvement and human trafficking as set out in suppliers are found to be non-compliant through the above measures, including international human rights conventions. with our Standards of Business Conduct engaging with our direct suppliers to and contract terms, we have established assess and encourage continuous We have undertaken a high-level risk processes to ensure that these suppliers improvement in their own capacity to assessment of our labour practices are adequately managed and their manage modern slavery risks in their including our supply chain and believe risks mitigated. subcontractors and broader that our greatest risk exposure is within supply chain. our supply chain. In addition, our current government contracts require Downer and its As a result, Downer is currently in the subcontractors to demonstrate due process of reviewing its own labour diligence in ensuring our operations practices and supply chain through comply with internationally accepted our existing procurement framework practices as set out in the UN Global and process to take into consideration Compact and the UN Guiding Principles modern slavery, in accordance with the on Business and Human Rights. NSW Modern Slavery Bill 2018 and the Commonwealth’s Modern Slavery Act 2018 soon to be introduced to Australia’s Federal Parliament.
Sustainability Report 2018 30 Case studies
Case study – Downer Rail apprentices Downer’s Rail business commenced offering apprenticeships for both mechanical and electrical streams in 2015. Through our partnerships with some of the world’s leading technology companies, Downer provides apprentices with the opportunity to contribute to a complete range of rail solutions in rolling stock and infrastructure, technology and process-led innovation and maintenance solutions. Key outcomes: Downer has a world’s best practice approach for our apprenticeships and won the ‘best practice’ award in the 2017 Hunter manufacturing awards for excellence in people and skills development. Downer’s Rail business achieved a 93 per cent apprentice completion rate in 2016 and 100 per cent completion rate in 2017, compared to the Australian VET national average completion rate of 49 per cent. In mid-2018 Downer will be managing 78 rail apprentices nationally, including seven female and three Indigenous apprentices. This initiative demonstrates Downer’s contribution to achieve the following Sustainable Development Goals:
Sustainability Report 2018 31 Case study – Downer veteran welfare initiative The shift from military to civilian life can be difficult for many veterans and Defence personnel when they take off their uniform. In February 2018, Downer teamed up with The Adventure Group (TAG) to launch Operation Bellator, a mentoring program that supports veterans who may be struggling with the transition. opportunity for the veterans to build “Through collective networks and networks with Downer executives and associations, Downer and TAG have Operation Bellator is a dignity business leaders, providing real world the ability to bring together a range and resilience program that takes guidance and support to assist in the of people, skills and talents that can participating veterans on a two-day transition and reintegration into the provide tangible and lasting support outdoor adventure experience run by civilian world. and mentoring capacity for former SAS instructors, with Downer our veterans.” executives and select corporate “As an Army veteran, I know how partners acting as mentors to daunting that transition can be,” This initiative demonstrates Downer’s the veterans. Downer’s Executive General Manager contribution to achieve the following of Defence, Brett Sangster said. Sustainable Development Goals: The program includes bushcraft, basic survival and tracking, abseiling, “Downer is proud to support our leadership and problem-solving veterans who have served this nation exercises, which provides a strong and need a little assistance to find military theme to connect the veterans their way. back to their former lives. Importantly, “A big part of the program is building beyond the outdoor experiences, connections with Downer executives. Operation Bellator also facilitates an
Case study – Refugee and Asylum Seekers Spotless was one of the first Australian businesses to sign up to the Friendly Nation Initiative (FNI) led by the Migration Council Australia. FNI encourages business to take an active leadership role to support those displaced by the Syrian war with employment opportunities in Australia. Spotless engaged with Community Australia. The pilot program, Spotless Corporate to assist with the realisation 30, was recognised by the South of its FNI commitment. Australian Department of Human Services and Multicultural SA by Through the initial pilot program awarding Spotless the South Australian Spotless has supported 32 workers Governors Multicultural Award 2017. through training and employment in the business. Spotless has committed This initiative demonstrates Downer’s to employing 100 refugees nationally contribution to achieve the following and has extended the program across Sustainable Development Goals:
Sustainability Report 2018 32 Case study – Downer Bendigo-based manufacturer Hofmann and breaking the long-term High Capacity Metro Engineering won the contract to unemployment cycle manufacture the bogie frames for the §§ Engaging supply chain partners Trains – Melbourne, HCMT Project and is now preparing to maximise the total labour hours Victoria to extend their services internationally contributed by Indigenous persons, through the production line of long-term unemployed and persons Maximise opportunities for CRRC Changchun. small to medium enterprises with a disability, achieving 2.5 per cent above the requirement. and workforce development Partnering with industry bodies and government Disadvantaged workers The HCMT Project will to support local supplier The HCMT Project has a commitment deliver up to 1,100 new jobs capability to workers facing barriers to manufacturing, maintenance To fast-track the development of employment, with a target of seven and supply chain across Victoria. engagement with local suppliers, per cent of the workforce to comprise Evolution Rail actively engaged with Indigenous Australians, the long term Evolution Rail (comprising Downer, Victorian manufacturing groups and unemployed and people with a disability. CRRC Changchun and Plenary) government bodies including: South has been engaged by the Victorian East Melbourne Manufacturing We have engaged a support network Government to deliver the world-class Association (SEMMA); Greater Bendigo of specialist providers across the High Capacity Metro Trains (HCMT) Economic Development Unit (GBEDU); disadvantaged worker sector including fleet with the first train to enter testing Ballarat Manufacturing Productivity the National Disability Recruitment by the end of 2018. Network (BMPN); Industry Capability Coordinator and AFL SportsReady. Evolution Rail’s approach to the Network (ICN); Geelong Manufacturing We have also provided disadvantaged HCMT Project will transform Council (GMC); Invest Victoria; and workers with facilitated development Melbourne’s public transport system LaTrobe Valley Regional opportunities through our Career Start with world-class trains while creating Development Fund. program, offering the opportunity to complete accredited apprenticeships a sustainable, globally-competitive Mentoring for apprentices, manufacturing industry with the trainees and under- and traineeships. Disadvantaged capability to export to the world. The represented groups workers who maintain an existing $2.3 billion project is the largest single skill are offered the opportunity to The size and scale of the HCMT order of trains in Victoria's history and participate in a Career Restart program Project is enabling the consortium to one of the largest government spends to assess their current skills and create meaningful opportunities for in Victoria. The project will not only capabilities against a defined role. regional Australia, and sustainable deliver much-needed public transport high-skill, high-value jobs in key infrastructure, it will also drive jobs, Workers with a disability regional growth areas such as Newport, industry development and prosperity Downer has partnered with The Bendigo, Pakenham, Hallam for Victoria. WorkFocus Group, appointed by the and Morwell. Federal Government as the National Identifying, engaging and They are achieving this by: Disability Recruitment Coordinator procuring from local suppliers (NDRC). This partnership developed Evolution Rail targeted local suppliers §§ Creating an organisational design a focus on long-term sustainable with known capability. with a commitment to 15 per cent changes to employment and workforce apprentices, cadets and trainees practices which will see many More than 250 representatives from §§ Working closely with State candidates enter our workforce. interested businesses participated in Government and local industry to information roadshows. offer preferential consideration of The HCMT project is on track workers from declining industries, with an emphasis on retraining to exceed local business and reskilling targets of 60 per cent for fleet §§ Designing and launching a Diversity construction, 87 per cent for = Strength workforce employment depot construction, and program, opening the door for 82 per cent during the women in the rail industry and maintenance phase. providing opportunity for Indigenous Australians, workers with a disability
Sustainability Report 2018 33 Zero Harm
Our approach At Downer, Zero Harm means working in an environment that supports the health and safety of our people, allows us to deliver our business activities in an environmentally sustainable manner, and advances the communities in which we operate.
Our Zero Harm culture is built on leading We conduct our business in a way that is Our senior executives and managers and inspiring, managing risk, rethinking sustainable, taking into account a range actively empower our people to maintain processes, applying lessons learnt, and of factors, including climate-related safe, responsible and sustainable adopting and adapting practices that aim risks and opportunities. Developing and working environments and to perform to achieve zero work-related injuries and delivering environmentally sustainable work without harm to ourselves, the minimise environmental harm. solutions for our customers is a environment, or others. priority. While focusing our attention Zero Harm is embedded in our culture on managing our risks associated with We achieve our Zero Harm culture and and is fundamental to our future success. environmental management and climate strong performance through: Our business is founded on our deeply change, we also take advantage of the held value of Zero Harm. Achieving Zero §§ Visible, caring, informed, involved, commercial opportunities this presents Harm requires strong leadership and evidence-based management for our business. relentless commitment from everyone §§ Setting clear leadership Zero Harm at Downer. Our commitment to Zero Harm is visible expectations and accountabilities, across our business. It is expressed developing and involving our people, Our approach to Zero Harm enables through the behaviours of our leaders acting with integrity, and ensuring a us to work safely and responsibly in and workers and in our “just” culture for errors and industry sectors that may be inherently Zero Harm performance. non-compliance hazardous. We firmly believe that our §§ Active engagement and involvement work can be conducted with zero harm Downer is proud of the strong and with our workforce, with supervisors to our people, the environment and the resilient Zero Harm culture we have leading Zero Harm on site communities within which we operate. established. We continue to focus on maturing this culture to prepare for the §§ Information, instruction, training, workplace of the future. mentoring, coaching and supervision for competency
Sustainability Report 2018 34 Our approach (cont.) Risk management Initiatives are underway which aim to address the top critical risk activities §§ Identifying opportunities for We have improved our management across the Group, which are: improvement and empowering our systems to ensure critical controls are businesses to implement initiatives well defined, effective and in place. §§ Working with mobile plant that improve the safety of This has enabled us to enhance the or equipment our workforce management of risks that carry the §§ Vehicles and driving potential to cause serious harm. §§ Culturally embedded risk management §§ Working at height and planning, with consideration of Downer is continuing to improve upon §§ Working with electricity Zero Harm in design, manufacturing, our Zero Harm performance with a focus §§ Working with stored hazardous energy importing, supply, installation on critical risk management. We have § Falling or dropped objects and construction maintained our focus on understanding § §§ Encouraging our employees to expand and managing risks that have the §§ Working in a confined space commitment to safety outside of the potential to cause serious harm to §§ Working in vicinity of existing services workplace – we encourage our people our people. §§ Working with cranes and to share experiences of working safely lifting equipment at home or in the community There have been substantial reductions in the occurrence across all top 10 §§ Working with hazardous substances. §§ Widespread knowledge of our critical categories of High Potential Incidents risks – those that have the potential to over the past three years, ranging cause the most harm, and identifying, from nine to 100 per cent change in supporting, improving and monitoring occurrence. In addition, two categories the controls that manage that risk of High Potential Incidents no longer §§ Consolidating, enhancing and focusing appear amongst the top 10. This work practices around critical reduction demonstrates that the Critical risk controls Risk Programs implemented have §§ High level of reporting and resulted in a reduction in risk across the benchmarking, with a focus on lead business. Even with these positive results indicators and communication about incidents have continued to occur, lessons learnt which demonstrates that our focus must §§ Continuing to improve and simplify our remain on these critical risk activities and management systems to increase our the relevant programs aimed to address efficiency and allow our businesses to them. focus on the safety needs of the business §§ Auditing implementation and effectiveness §§ Fighting complacency and fostering “chronic unease”.
Sustainability Report 2018 35 Accountability culture operational Zero Harm Management System that meets Downer’s Zero Harm Responsibilities and accountability for Management Framework. All Downer Zero Harm are clearly defined through divisions’ Zero Harm management our governance framework and Zero systems are audited by both internal and Harm management systems. external independent third parties. All of The Board oversees the Company’s Zero Downer’s divisional systems have been Harm performance via the Board Zero certified (as a minimum) to the following Harm Committee. The Board Zero Harm standards: AS/NZS 4801 or OHSAS Committee oversees the development 18001 (for occupational health and safety and implementation of strategies, management systems), and ISO 14001 systems and policies to ensure environmental management systems. compliance with our legal and regulatory Our people have a responsibility to follow, obligations and other commitments. and be involved in developing, agreed The effectiveness of these systems is work practices, complying with our monitored through extensive internal Cardinal Rules and, when required, and third-party audit programs, with to stop, challenge and report work oversight by both the Board Zero Harm practices that are unsafe or and Board Audit and Risk Committees. environmentally irresponsible. Our Executive Team has overall accountability for our Zero Harm performance. It is incumbent on the Executive Team to ensure that robust CARDINAL systems, procedures, processes and practices are in place to enable our RULES people to deliver on our commitments. 10WORKPLACE RULES THAT WILL SAVE YOUR LIFE. ALL WORKERS The Executive Committee has adopted HAVE AN OBLIGATION TO STOP AND REPORT UNSAFE WORK. a Zero Harm Management System NEVER WALK DIRECTLY BEHIND OR IN THE PATH Framework which sets the minimum 1 OF A REVERSING VEHICLE standard for Zero Harm across all divisions. Downer uses a company-wide NEVER WORK AT A HEIGHT WITHOUT FALL PROTECTION Risk Management Framework and 2 divisional integrated management NEVER ENTER A DESIGNATED CONFINED SPACE systems to identify and manage Zero 3 WITHOUT TRAINING AND A PERMIT Harm risks. NEVER BE UNDER A SUSPENDED LOAD Our divisional and operational managers 4 are accountable and responsible for NEVER ENTER A DESIGNATED EXCLUSION ZONE implementing these and for driving WITHOUT AUTHORISATION continuous performance improvement. 5 Each division is required to have an NEVER WORK ON PLANT AND EQUIPMENT WITHOUT 6 VERIFYING ISOLATION, TAGGING AND TESTING NEVER TAMPER WITH, REMOVE OR BYPASS 7 ANY SAFETY DEVICE NEVER OPERATE PLANT OR MOBILE EQUIPMENT UNLESS 8 LICENSED/COMPETENT OR UNDER SUPERVISED TRAINING NEVER OPERATE A VEHICLE WHILE USING A HANDHELD MOBILE PHONE OR WITHOUT WEARING A SEATBELT, 9 WHERE FITTED
NEVER CONSUME OR BE UNDER THE INFLUENCE OF 10 ALCOHOL OR NON-APPROVED DRUGS IN THE WORKPLACE BREACHES OF THESE RULES WILL PUT YOUR LIFE IN IMMINENT DANGER, WILL BE INVESTIGATED AND MAY RESULT IN DISCIPLINARY ACTION OR DISMISSAL.
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Sustainability Report 2018 36 Recognising senior Engaging with our Recognition and awards leadership people Downer’s commitment to sustainability, The method for measuring our We engage with our workers, share innovation and relationships is performance is clearly set out in our information and provide Zero Harm recognised by external organisations. governance framework and we offer awareness opportunities to our people Awards achieved this year include: short-term remuneration incentives through the following pathways: VEC won the Civil Contractors for senior managers in relation to our § ‘Pre-start’, ‘toolbox’ and Health and Federation Earth Award for the performance against Zero Harm targets. § Safety Committee meetings successful replacement of the St Paul’s River Bridge near Launceston Tasmania. The Short-Term Incentive remuneration § ‘Safety moments’ at the beginning of § The Earth Awards celebrate excellence plan for senior managers includes 30 per meetings cent allocated for performance against in infrastructure project construction §§ Site visits, observations and active Zero Harm (safety and environment) and environmental management. VEC engagement by senior management related key performance indicators, received the Earth Award for projects in with a balance of leading and lagging §§ The publication of Enviro News, an the $5 million-$10 million category, and indicators, including: internal newsletter highlighting our was a finalist in three other environmental solutions, performance award categories. 1. Safety performance – fatal incidents, and commendable achievements LTIFR and TRIFR Downer was awarded the first §§ Group wide topical promotions Infrastructure Sustainability Council of 2. Environment performance – Level including activities aligned with Earth Australia’s (ISCA) ‘As Built Infrastructure 5 and 6 Incidents, GHG emissions Hour, National Recycling Week and Sustainability (IS)’ rating to be awarded reductions World Environment Day to a renewable infrastructure project §§ Working with employees to implement for work on the Ararat Wind Farm. 3. Leadership – ensuring a focus on popular ideas via Downer’s Innovation This is Australia’s only comprehensive meaningful conversations between Hub including the winning entry scheme for evaluating the sustainability senior managers and the frontline from our National Recycling Week of design, construction and operation employees on critical risk, control Innovation Challenge – hard-hat of infrastructure projects. This award verification and cross-divisional recycling – which is being rolled out recognises the long-term environmental information sharing across various sites and social benefits the wind farm brings 4. Critical Risk Management Program §§ Zero Harm noticeboards to Victoria. evolution identifying opportunities to §§ Our intranet Downer’s work with Transport for NSW harmonise the way we manage those §§ Competitions. on the Transport Access Program has critical risks that are shared across our been recognised by the awarding of service capabilities. These processes are in addition to our more formal consultation processes, a Precincts and Infrastructure (P&I) Further details of these Short-Term such as health and safety committees, Safety Award. It recognises the visible Incentives can be found in the 2018 engagement with health and safety leadership and genuine commitment to Annual Report. representatives, one-on-one meetings the safety and welfare of workers on and performance processes. the project. Downer Blasting Services has been awarded the Economx Time Saving Initiative Award for its innovative Speedloader, which has reduced the blasting cycle by one hour, increasing productivity by 23 per cent and reducing fleet wear and tear.
Sustainability Report 2018 37 Health and Safety
Our approach Safety is the first of our four Pillars. Our commitment to the health and safety of our people and our communities is expressed in strong safety leadership, engagement with our workforce and stakeholders and a continual focus throughout our organisation of managing risks and aligning our values. Our commitment, and the results we have achieved, is reflected in our success in winning work, and our increased presence as Zero Harm thought leaders. Downer’s health and safety commitments are outlined in our Health and Safety Policy. Wellness in the feel discomfort, Downer supports and §§ Injury prevention programs such as encourages them to access health care health assessments, pre-employment workplace services proactively before a debilitating screening, industry defined medical Downer understands the wellness of our injury occurs. assessments and executive medicals workers has a significant impact on their Downer also engages in the following, §§ An Employee Assistance Program safety at work and their ability to thrive (EAP) for employees and their families within our business. more traditional, ways of supporting the wellness and health of our workers providing confidential counselling and Injury prevention is a critical part of through workplace health access to a home doctor service and improving worker wellness. Many workers programs including: accredited practising dieticians at Downer engage in manual or repetitive §§ Ergonomic office spaces §§ A dedicated injury management tasks. Downer recognises that these §§ ‘Walk to work’ programs to encourage service to assist employees with both workers may be at risk of degenerative workers to meet and walk to work-related and non-work-related injuries over time and as a result pursues work together the implementation of more effective injuries and illnesses to enable their controls to safeguard against these return to work types of injury. If a worker starts to
Sustainability Report 2018 38 Wellness in the Our performance In line with our previous reporting workplace (cont.) practice we have quarantined the This year we have improved our Total safety incident data for acquisitions §§ A Manager Assistance service that Recordable Injury Frequency Rate made during the year, as we use a helps managers and team leaders to (TRIFR) to 3.27 from 3.50 last year. Over 12-month rolling average to report our manage difficult workplace situations the same period the Lost Time Injury safety performance data. This ensures §§ Access to education programs Frequency Rate (LTIFR) has remained that management is accountable specifically developed to support below target at 0.78. There were no fatal for the objectives set in the annual those with supervisory, or incidents arising from our operations this business planning process, and leadership responsibilities year, however Downer was prosecuted in recognition that an integration period during which Downer’s Zero §§ Flexible working arrangements in relation to an incident which occurred in 2011 that resulted in a fatality. The Harm framework (including systems, §§ Education programs prosecution was heard by the Courts processes, definitions and Mission §§ Early intervention programs such as during 2017 and resulted in a fine of Possible program measurement and drug and alcohol testing, and a zero $1.3 million. Downer was deeply affected reporting methods) is implemented tolerance to the presence of these by the incident and initiated a number through the acquired business and is substances in our workers of programs to promote the Zero Harm appropriate. Incorporating data from the §§ Fund raising casual clothing days leadership of supervisors and their ability acquisitions prior to this would include §§ Participation in health promotion to supervise traffic control workers. the safety strategies and performance events, such as Movember, R U OK? Our roads business also championed of the business when it was outside of Day and Stress Down Day our Mission Possible program which Downer’s operational control. Where this transition to Downer’s framework takes §§ Access to fresh fruit in the workplace expanded existing exclusion zones practices and the risk controls required place over a longer period due to the § Provision of clean and comfortable § for work sites which involve mobile plant complexity of the implementation, or the facilities to take a break, and pedestrian workers. maturity profile of the acquired business, or enjoy lunch the Board will consider an extension to a §§ Benefits such as discounts on gym The lag indicators demonstrate more appropriate period. memberships, health insurance continued sustained results for a TRIFR and holidays. below 4.0 and maintenance of LTIFR Consistent with this, Downer has below 1.0. continued to report results from Hawkins and Spotless separately in FY1810. Downer’s strategic plan for critical risk Both businesses have commenced management continues to be a key the integration of Downer’s Zero Harm focus of our Zero Harm program. The requirements, however their operations Critical Risk Program has matured within differ significantly from the businesses our business; our strategy embraces historically undertaken by Downer. Their the opportunity to further standardise Zero Harm programs and performance the way that shared critical risks are were at different levels of maturity on managed throughout our business. acquisition, and as a result are subject to This approach provides Downer with detailed transition programs. As a part of opportunities to increase the consistency this, separate targets and performance and efficacy of critical risk management monitoring processes are in place and across our business, while continuing actively monitored by the Downer our focus on evaluation and assurance Executive Team. of critical controls by multiple layers of management and frontline leaders.
We also continue our focus on increasing the capability of our frontline leaders. We recognise the important role our frontline leaders hold in maintaining a safe workplace and a culture focused on prevention of harm. Our strategy includes refinement of our internal training to incorporate advancements in adult learning methodologies.
10 Refer to Spotless 2018 Annual Report for Safety Performance results.
Sustainability Report 2018 39 Additional safety of our workforce, is considerably lower occupational diseases reported. This than that of their male counterparts is consistent with trends published metrics in both Australia and New Zealand, for Australian workplaces and is due The additional safety metrics of severity consistent with the type of work more to the type of physical work often rate (lost days) and occupational disease typically performed by these workers. undertaken in engineering, construction rate have been calculated by gender The occupational disease rate is similar and mining, such as manual handling, and region for our Australian and New for male and female employees in twisting, bending, repetitive work and Zealand employees, who comprise 99 New Zealand, whereas in Australia it is working with vibrating machinery. We are per cent of our workforce significantly lower for males than continuing to implement initiatives that (excluding Spotless). for females. are aimed at reducing the incidence and severity of these types of injuries. Both the TRIFR and severity rate is The principal cause of occupational higher for our male employees in diseases that resulted in medical New Zealand than in Australia. The treatment or lost days (total recordable TRIFR and severity rate for our female injuries) was musculoskeletal disorders, employees, who account for 13 per cent which comprised 25 per cent of all
Health and Safety (Employees and Contractors)
Safety Performance FY18 FY17
LTIFR per million hours worked 0.78 0.55
TRIFR per million hours worked 3.27 3.50
Fatalities 0 0
Fines and prosecutions 1 0
Detailed Safety Performance FY18 (Australia and New Zealand) Gender Australia New Zealand
TRIFR per million hours worked Male 3.23 4.66
Female 0.33 2.67
Occupational disease rate (number of cases per Male 0.99 0.32 million hours worked) Female 2.14 0.33
Severity rate (lost days per million hours worked) Male 13.19 26.12
Female 0.00 2.00
Fatalities Male 0 0
Female 0 0
Sustainability Report 2018 40 §§ Integrating a mental wellness program Our future focus across our business and including Significant progress was made this consideration of non-work-related year in delivering on the focus areas impacts into decision making that were disclosed in last year’s report, regarding wellness in particular the enhancement of the §§ Analysing suitable technology Zero Harm capability of our workforce, platforms to improve access embedding our Critical Risk Programs, to information concerning risk benchmarking performance against management and Zero Harm matters leading and lagging indicators and and better engage with our workers, simplifying our Zero Harm management and to support future training systems. Building on this, the future §§ Continuing to review, measure and areas of focus for health and safety will benchmark our performance across consist of: a range of leading and lagging §§ Extending our Critical Risk Program indicators to provide assurance that into recent acquisitions the business has the necessary processes in place to manage Zero §§ Analysing trend data regarding the Harm risks to minimise the number Critical Risk Program to drive risk and of incidents cultural improvements across our business §§ Improving our training programs and platforms to continue to provide §§ Embedding critical control information relevant, innovative and leading into site, work planning, training, skill-related leadership and Zero Harm communication, supervision and training to employees and contractors. incident investigation processes §§ Improving reporting processes to include lead critical risk indicators §§ Extending the Critical Risk Program into process safety applications §§ Reviewing existing safety information management system opportunities with a view to reducing duplication and enhancing consistency across the business §§ Initiation of a Zero Harm innovation portal to expand our collaboration capability and share leading initiatives in the business and technological developments §§ Improving the functionality and integration technology of our Zero Harm information management systems
Sustainability Report 2018 41 Case studies
Case study – Downer Messages can also be sent direct to using the system. Downer New Zealand the vehicle, available to drivers when makes up six per cent of users yet NZ drives road safety stopped. After each drive the driver makes up 22 per cent of the five-star Our New Zealand business gets a score out of 100 for that drive vehicle population. commenced the rollout of EROAD which contributes to their overall Ehubo2 into its heavy truck and trailer star rating. This initiative demonstrates Downer’s fleet in July 2016, closely followed by contribution to achieve the following the light vehicle fleet during 2017. Drive Buddy has resulted in a Sustainable Development Goals: significant reduction in speeding and In January 2017 the program was an increase in the number of drivers expanded to include a driver buddy. achieving a five-star rating. The Drive Buddy device provides the driver with instant feedback on There are approximately 60,000 of their driving, including speed, braking, these units in New Zealand, and star cornering and acceleration. ratings are based on the performance of all drivers, not just Downer drivers. Each driver has a secure unique login To achieve a five-star rating you must which they enter via the touch screen. be in the top 10 per cent of drivers
Sustainability Report 2018 42 Workers respond every 20 minutes to Case study – Improving Workers who were initially hesitant a monitoring welfare check alarm. If the to use the application have now lone worker safety worker fails to respond the application embraced it and provided Our Utilities business is trialling a new is supported by an escalation process positive feedback. mobile application tool to support involving calls to the worker. If the workers required to work alone. It worker fails to answer the call, physical This initiative demonstrates Downer’s uses new technology that allows us to attendance at the worker’s location contribution to achieve the following monitor our workers in real time and takes place. The application contains Sustainable Development Goals: provide them with a 24/7 ability to send GPS functionality. an alert for medical attention if required. If the person has a medical event requiring attention they can initiate a People in our Water business are medical alarm by either shaking the required to activate the application phone or pressing an alarm button. when they are the only person on site, or where they are working in an isolated work area for an hour or more.
Sustainability Report 2018 43 Case study – Zero Harm improving not only safety at Otraco, but After two years the program is well within the large tyre industry. Examples recognised and embedded within reward and recognition of these improvements include the the business and a team is currently initiative development of an inflation tool, reviewing opportunities to expand Downer’s Otraco business has redesign of two regularly used tools the program. and a reduction in risk across the large successfully trialled and implemented This initiative demonstrates Downer’s an improved and award-winning tyre industry reducing risks associated with misthreading. contribution to achieve the following employee reward and recognition Sustainable Development Goals: program. The program seeks to The program has also had success harness the innovation, practical externally, winning the skills, experience and problem- following awards: solving potential of its workforce by incentivising workers to take ownership §§ Winner 2017 NSCA Foundation/GIO of solutions. The program encourages Workers Compensation National healthy competition across the Safety Awards of Excellence business for sites to develop innovative §§ Finalist 2017 Australian Mining and solutions to existing health and safety Prospect Awards risks, either within the business, or §§ Finalist Hunter Safety Awards 2018. across the industry. The focus is: §§ Recognition of values §§ Zero Harm or productivity improvements §§ Achieving a specific quarterly challenge to remove or minimise an identified risk. Key to the program’s success has been the championing of the program and support from senior executives, transparent entry and determination criteria and prompt rewarding of successful parties. The program has resulted in several safety initiatives within the business,
Sustainability Report 2018 44 Case study – Mental health in the workplace Downer’s Mining business recognised that factors outside, as well as at work, can influence workers’ mental wellness. At times, employees may need additional support to cope with work and lifestyle challenges. To support workers during the challenging time in the Mining industry, Downer introduced a mental health first aid framework. The program was supported by research and developed in collaboration with the Workforce Health Innovation research group at Queensland University of Mental health awareness and peer §§ Gold Recognition Healthier Happier Technology (QUT). support training has also been Workplaces Initiative 2015 During development of the program, delivered with more than 60 employees QLD Government to gain a better understanding of the trained and ready to provide support §§ Safety Health & Innovation Award, current mental health status of the to colleagues. People 2015 Chamber of Minerals & workforce, employees were asked On average, the appointed mental Energy, WA to participate in a range of surveys health professionals have supported §§ Health Excellence Award 2015 NSW covering lifestyle and behaviours that over 300 employees, family members Minerals Council. may link to poor mental health. and in-house management per Downer’s Executive Team recognised Mental health champions were calendar year. Since 2016 multiple the importance of ensuring the mental provided with a framework and with employees presented with significant health and wellbeing of all employees mental health first aid training to mental health distress and were and has supported the introduction of empower them to engage with workers, connected to professional support a consistent Group-wide mental provide support and encourage an immediately preventing further health strategy. environment where those experiencing potential illness/injury. Downer is exploring the cross divisional challenges to their mental health would The EAP utilisation rate increased from application of this program. Cross feel comfortable to receive support. less than three per cent to nearly five divisional training in Mental Health Key components included several per cent in the past 12 months. This First Aid has begun. toolbox talks and a digital story which demonstrates the effectiveness of This initiative demonstrates Downer’s showcased an employee’s personal the promotion of the service and the contribution to achieve the following journey with depression and suicidal internal referral rates from both the Sustainable Development Goals: ideation. Resources for families and appointed mental health professionals employees targeting preventative and trained supervisors and strategies for health and wellbeing peer supporters. were developed and distributed. To The success of the program has meant support the program, the business that mental health first aid training appointed two registered mental health is now mandated for Superintendent professionals to provide more proactive roles and above. direct mental health support and referral for employees. Our program has had a demonstrable significant impact on culture and the Across the mining business almost 60 health and wellbeing of our employees courses have been conducted since and their families. It has also received May 2015 and over 400 employees multiple public acknowledgements trained. In addition, over 50 family nationally for its innovative and members were invited and completed inclusive approach: the training in regions where community mental health services §§ Corporate Health Award 2014 QLD are poor. Mining Industry Health & Safety Conference
Sustainability Report 2018 45 Case study – responses, or why one part of the The program is available globally business may appear more or less and allows Downer to benchmark Engagement engaged than other parts. For ease of worldwide with other organisations re-imagined review, data can also be presented in participating in the program. Downer’s technology-based Snowden a traffic light display. Responses have paved the way for Snowden to develop This initiative demonstrates Downer’s business is using technology to change contribution to achieve the following the game on worker engagement. solutions to issues identified through the survey, and to respond in a more Sustainable Development Goals: Each week a short five-question timely manner, to that available through two-minute survey is emailed to the traditional annual engagement surveys. workforce. Survey questions are based Over the two years the initiative has on key engagement metrics identified been running the culture has improved, by the business. workers are more open, willing to assist others and collaborate better. The These metrics include: approach is now being assessed for §§ Relationships with supervisors and wider application within the co-workers Downer business. §§ Satisfaction, including remuneration and quality and variety of work §§ Wellness matters §§ Workplace recognition §§ Happiness §§ Alignment with workplace values. Responses to the survey are kept anonymous, unless the worker chooses to identify themselves. Completion rates within the business have grown and remain high. The program includes the ability to send those workers who have not engaged in the past few surveys an email letting them know their opinion is important. The ability to analyse the responses by either division, groups, teams, gender or roles has allowed deeper analysis and understanding of responses. For example, why there may have been dips or changes to culture scores or
Sustainability Report 2018 46 Case study – Leading the way in haul truck tyre safety Our tyre team has worked closely with an original equipment manufacturer to reduce the risks associated with tyre deflation. Misthreading of the deflation device was common within the industry. When being threaded to the tyre to begin deflation, the internal shaft of the tool can separate and the force of the deflation can make the tool a projectile. We worked closely with the manufacturer for nine months to develop a new tool with a larger bore in the centre. This greatly improved the stability of the tool, reduced the risk of separation and improved safety within the industry.
Continuing to improve safety in the Solutions to date have been expensive This initiative demonstrates Downer’s industry, the team has developed an and required the assistance of a crane contribution to achieve the following industry-changing tool to reduce the to support the tool, introducing risks Sustainable Development Goals: risks associated with changing tyres associated with the crane to the task on mine haul dump trucks. Apart from of removing the cleats. Otraco workers the easy to identify risks associated have developed a spacer plate tool with tyre and rim, and tyre inflation, that removes the need for the crane haul truck tyre fitters are exposed to and allows the workers easier access the risks associated with handling tyre to the cleats. cleats. Each cleat can weigh between eight and 35 kilograms, depending on The tool has won industry awards the size of the truck. Often the cleats including the Best Individual Workplace are located above shoulder height Health and Safety Achievement Award and there may be 12 cleats per at the NSCA Safety Awards. tyre to remove.
Sustainability Report 2018 47 Environment
Our approach Downer believes in the pursuit of environmental sustainability excellence, enhancing liveability for all communities in which we influence.
Our purpose is to create and sustain Our environmental commitments are waste, water, air emissions, hazardous the modern environment by building outlined in Downer’s Environmental waste and substance, flora and fauna, trusted relationships with our Sustainability Policy. heritage and environmental incidents. customers. We help our customers They provide us with the necessary Each division is required to have an succeed by developing and delivering understanding and tools to ensure we Environmental Sustainability Action Plan environmentally responsible and conduct our operations and activities (ESAP) and strategies in place supported sustainable solutions so our business is in a manner that is environmentally by suitably qualified environment and fit for the future. responsible and sustainable. sustainability professionals. The ESAP Our ability to manage the impacts of allocates internal responsibilities for These principles are critical to ensuring our activities on the environment and reducing the impact of its operations and our employees and broader stakeholder communities in which we operate is business activities on the environment. groups are engaged and aware fundamental to our long-term success. of our environmentally The international environmental Downer remains focused on developing sustainable commitments. standard ISO 14001:2015, is used as a solutions to reduce our energy benchmark for assessing, improving consumption and GHG emissions, while We encourage our employees to and maintaining the environmental at the same time increasing our participate in industry networking integrity of its business management cost competitiveness. events, influencing the adoption systems. The company’s divisions also of more sustainable practices for Downer is committed to transitioning adhere to environmental management example, Sustainable Business Council, to a low carbon economy and focusing requirements established by customers, Infrastructure Sustainability Council our attention on managing the in addition to all applicable licence and of Australia, Australian Constructors risks associated with environmental regulatory requirements. Association, Sustainability Working management and in particular, climate Group, Minerals Council of Australia, Our change, we are also taking advantage 10 Environmental Principles Sustainability Working Group, Civil were created as an important central of the commercial opportunities this Construction Federation, Supply Chain awareness and engagement tool, presents for our business. Sustainability School and Responsible providing practical messages to Construction Leadership Group. assist our frontline workers to achieve environmental compliance across
Sustainability Report 2018 48 Our performance Environmental compliance As at FY18 environmental performance data contained within the report includes We record all environmental incidents our acquisition of Spotless and excludes using a six-level severity rating. Downer Hawkins. The energy and GHG emission achieved its Group-wide target 11 12 data for FY18 includes the acquisition of zero Level 5 or Level 6 of Spotless in Australia but excludes environmental incidents. Spotless NZ and Hawkins. Both Spotless There were no prosecutions or NZ and Hawkins have been quarantined significant environmental incidents13 for another 12 months consistent with (≥ Level 4) during the financial year the safety performance data. Both ended 30 June 2018. A total of four Spotless NZ and Hawkins have adopted ‘Notifiable Incidents’14 were notified Downer’s energy and GHG emission to regulators and regrettably, Downer reporting protocols which are consistent incurred four minor infringement notices with the Australian National Greenhouse (fines) totalling AUD$2,720 for erosion and Energy Reporting (NGER) scheme. and sediment control breaches involving Both these entities have had limited the discharge of sediment latent water exposure to the NGER scheme and as in its New Zealand operations in FY18. a result they are at different levels of These incidents have resulted in maturity when compared to Downer’s learnings that have been incorporated Australian operations. Transition plans in the Critical Risk Program and shared are in place to ensure that their data is across the business. at the same level of integrity for reporting in FY19.
Metric Target FY18 FY17 Result
Significant 0 0 0 environmental incidents (≥ Level 4)
Prosecutions 0 0 0
Infringement <5 4 6 notices (Fines)
Infringement – $2,720 $36,175 n/a notices (Fines) $
11 A Level 5 environmental incident is defined as any incident that causes significant impact or serious harm on the environment, where material harm has occurred and if costs in aggregate exceed $50,000. 12 A Level 6 environmental incident is defined as an incident that results in catastrophic widespread impact on the environment, resulting in irreversible damage. 13 A significant environmental incident or significant environmental spill (≥ Level 4) is any environmental incident or spill where there is significant impact on or material harm to the environment; or an incident or spill that results in a significant impact or material harm; or there is long-term community irritation leading to disruptive actions and requiring continual management attention. 14 A Notifiable Incident is where there is a duty to notify the relevant authority of a pollution incident, where ‘material harm’ defined by the law within the regulatory jurisdiction is caused or threatened.
Sustainability Report 2018 49 Climate-related risk and Details of our TCFD disclosures can Stemming from the risk and opportunity be found in our 2018 Annual Report. analysis this year, our initial focus for resilience In conducting our assessment, scenario analysis will be in the Climate change impacts present a we considered the diversity of our following areas: challenge to sustaining our modern operations and portfolio, in the context environment, enhancing liveability, the of transitional, physical and reputational §§ Outlook for metallurgic and natural environment and our business. risks as well as considering opportunities thermal coal While our business portfolio is diverse, particularly in respect of transport, new §§ Impact of extreme weather (increase we have limited exposure to the markets and technological changes. Our in rainfall and temperature) effects of climate change impacts on analysis did not identify any material §§ Energy transition, considering our business through fixed, long lived short-term risks to the Downer business both the impact on energy prices capital assets. Our diverse portfolio in respect of climate change, however and opportunities for alternative allows us to be flexible and agile to risks and opportunities across short, generation sources. redeploy our assets to high growth areas medium and long-term horizons For further information on the TCFD as markets change. This diversity of were identified. disclosure, including climate-related risks portfolio strongly positions us to mitigate We have made significant progress to and opportunities, refer to Downer’s 2018 and manage our exposure to climate Annual Report. risks and to maximise the business date in assessing climate-related risks opportunities it presents. and opportunities and in FY19 we are committed to exploring and disclosing This reporting period, we have further the material impacts of these conducted a detailed assessment against items through analysis and identification the Task Force on Climate Related of appropriate metrics and targets. Financial Disclosures (TCFD) framework.
Sustainability Report 2018 50 Managing our GHG Consumption and emissions increased increased by 122 per cent, as a result considerably for the year due to the of increase in growth and improved emissions acquisitions of Spotless and growth in data capture and reporting through the This year Downer’s GHG emission the business. Contractor data is included implementation of the Envizi platform. intensity increased by 7.5 per cent when in our energy data with the exception compared to FY17 levels, primarily due to of Spotless Australia and New Zealand. Despite the increase in carbon and the growth in our Transport and Utilities As a contract service provider operating energy intensity, we implemented 45 new businesses where revenue increased by within carbon-intensive industries, projects during FY18 with a combined 35 per cent, and the acquisition a key challenge for us is the effective capacity to deliver annualised abatement of Spotless. management of our of over 12,491 tonnes of annualised GHG emission (CO -e) reductions across carbon-related activities. 2 In FY18, Downer’s energy and emissions Scope 1 (natural gas efficiency projects, changed from FY17 as per table below: Again, the primary source (61 per cent) vehicle replacement and optimisation), of our total Scope 1 and 2 GHG emissions Scope 2 (lighting upgrades) and defined is the consumption of liquid fossil Scope 3 (energy consumption for non- derived fuels (mostly diesel oil) used in operational control projects, substitution our transport fleet and the production and reuse of materials in construction of stationary energy in our asphalt including fly ash, slag, optimising delivery and other manufacturing plants. Our routes for materials). carbon intensity and energy intensity In FY19, due to the restructure of the vary from year to year, due to changes business and acquisitions, Downer is in production, project opportunities and resetting the GHG emission baseline fluctuations in revenue streams. year levels to FY18 and each division is In FY18, carbon intensity increased developing a three-year GHG reduction by 7.5 per cent and energy intensity plans with new targets for both FY19 and increased by 0.9 per cent. During the an aspirational target for FY21. year, our Scope 1 emissions increased by 49 per cent and our Scope 2 emissions
Metric FY18 FY18 FY17 % change % change (including (excluding (excluding from FY17 from FY17 Spotless Spotless Spotless (including (excluding AU AU) AU) Spotless Spotless AU) AU)
Scope 1 334.7 ktCO2-e 281.4 ktCO2-e 224.7 ktCO2-e 49% 25%
Scope 2 86.5ktCO2-e 42.0 ktCO2-e 38.9 ktCO2-e 122% 8%
Scope 3 426.9 ktCO2-e 426.9 ktCO2-e 487.4 ktCO2-e -12% -12%
Emissions 36.2 tCO2-e/ 36.2 tCO2-e/ 33.7 tCO2-e/ 7.5% 7.5% intensity $m AUD $m AUD $m AUD
Energy 5,753.6 TJ 4,653.7 TJ 3,843.56 TJ 50% 21%
Renewable 2,141 GJ 532 GJ 0 GJ – – energy consumed
Energy 0.49 TJ/ 0.52 TJ/ 0.49 TJ/ 0.9% 6.4% intensity $m AUD $m AUD $m AUD
Revenue 15$11,637 15$8,928m $7,812m 49% 14% AUD AUD AUD
15 Revenue figures have been adjusted to exclude Hawkins and Spotless in New Zealand.
Sustainability Report 2018 51 Managing our GHG emissions (cont.)
Scope and 2 Greenhouse Gas Emissions
(ktCO2-e)