Setting the pace Sustainability Report 2010 Gammon Sustainability Report 2009 2 01 Chief Executive’s Statement 02 Performance Highlights 04 The Gammon Way 05 Our Sustainability Framework 06 2010 Highlights – A Year of Sustainability in Action 08 A Case Study in Sustainable Construction 10 Economic and Business 13 Health and Safety 16 Environment 19 Social Responsibility 22 Projects of Distinction 24 Looking Ahead 25 Verification Statement At Gammon we are setting the pace of sustainability in our business, in our brands and joint ventures, and in our daily operations. This report covers the progress we made on our sustainability journey during the 2010 calendar year. This Report and other corporate information are available on our website at www.gammonconstruction.com Our Brands Front Coverphoti For Cathay Pacific’s new cargo terminal project, Gammon devised an innovative construction method Civil, foundations, building, E&M Public-Private Engineering design services (“the Beam Shutter”) for a safer and greener working and construction services covering Partnership business environment. plant and equipment, concrete technology and steel fabrication Gammon Sustainability Report 2010 1 Chief Executive’s Statement Some years ago, we at Gammon made the decision to embrace the sustainability agenda right across our business not only as a way of meeting our project requirements but also as a strong business strategy – our engine for growth. We believe that a robust sustainability strategy puts us in a leadership position within the construction industry and is a key factor in our continuing success as a business. During the past year, we saw considerable growth in Hong Kong’s construction industry, with corresponding falls in unemployment levels. These positive trends have intensified the issues of a fiercely competitive labour environment, an ageing workforce and growing skills shortages. The steps we have taken to develop our existing employees and bring new people into the industry through our training schemes are already showing good returns – but we must and will do more. Similarly, Gammon needs the best talent available to maintain our position as a sustainable business meeting the challenges of the future. We have been particularly active in our efforts to attract young engineering talent, so I was very pleased when graduates recognised us with the Hong Kong’s 100 Leading Graduate Employers Award and voted us Winner of Engineering Services Sector. The sustainability agenda is accelerating and we must work to higher environmental standards and community expectations. We aspire to play a leading role in the industry by raising the bar on our own activities and partnering with leading organisations. Developing and adopting construction methods and materials to reduce our environmental footprint will be vital to our future success. We are doing more than just complying with regulatory requirements and this, together with our green initiatives, will be a key differentiator for our brand. Our greatest objective at Gammon is to provide a safe environment for our workforce. Our Zero Harm programme launched two years ago goes beyond the traditional approach to safety and provides clear guidelines for reducing the risk of fatalities and serious injuries. 2010 saw further progress towards Zero Harm with low incident rates and no fatalities. It would be wrong, however, not to make reference to the two fatal accidents we suffered early in 2011 during the preparation of this report. Such tragedies pain us all greatly, and we will do everything we can to assist the affected families for whom we are profoundly sorry. This is a very difficult note on which to end but such tragedies only serve to strengthen our resolve to work harder in the pursuit of our Zero Harm goal. In this, there can be no compromises. Thomas Ho Chief Executive Gammon Construction Limited May 2011 2 Performance Highlights GroupGroup Tu Turnoverrnover by by Regio Regionn AccidentAccident Incident Incident Rate Rate GreenhouseGreenhouse Gas Gas Emissions Emissions EmploymentEmployment by by Region Region US$US$ millions millions perper 1,000 1,000 workers workers tonnestonnes CO CO2 equivalent2 equivalent monthlymonthly paid paid staff staff and and daily daily paid paid workers workers HongHong Kong Kong & &Maca Macau u ChinChina a SingaporeSingapore 20052005 HongHong Kong Kong & &Maca Macau u ChinaChina SingaporeSingapore 76,02076,020baselinebaseline 0.0.4 4 1010 4 4 1 1 67,16167,161 67,34967,349 465465 39394 4 21212 2 5555 8.28.2 8.38.3 2 2 22220 0 29292 2 55,29155,291 573573 9292 48,66948,669 486486 38384 4 400400 4 4 6.46.4 20102010 45,48745,487 175175 304304 5.65.6 5.45.4 TargetTarget 32327 7 42428 8 34341 1 5555 13131 1 1 1 5.55.5 44441 1 39397 7 24241 1 2929 1,0391,039 26252625 17173 3 85859 9 90905 5 81815 5 1,001,003 3 19181918 18391839 18091809 1931935 5 13931393 954991 954991 1141149 91381382 2 2002006 6 2002007 7 2002008 8 2002009 9 2012010 0 20062006 20072007 20082008 20092009 20102010 20062006 20072007 20082008 20092009 20102010 200620062002007 7 200 2008 82002009 92012010 0 2006200620072007 200 2008 82002009 92012010 0 monthlymonthly paid paid dailydaily paid paid In 2010, our order book grew 37%. During the year, 42% of our In 2010, we continued our year-on-year reduction of the incident projects were in the public sphere; 31% were quasi-public; and rate with an Accident Incident Rate (AIR) for the year of 5.4 25% in the private sector. To sustain our business, turnover is towards our goal of being below 3.0 for 2012. used to deliver our work today and invest in our capabilities tomorrow. We are investing heavily to Our Accident Incident Rate ensure greater sustainability in (AIR) improved in 2010 as we our business and enjoy growing moved into the second year of returns well into the future. our Zero Harm Roadmap. Since 2001, Gammon’s AIR has been It is also important that we are reduced by 74%. Although this aware of the many risks we face was a significant improvement in our industry and the pressures and compared very favourably of inflation on our costs. We are with the industry, we still have taking a leadership role and some way to go to reach our adopting innovative technology, Philco Wong target of below 3.0 in 2012. Sam Houston such as Building Information Executive Director Chief Operating Officer Modelling, and upgrading the & Executive Director We are well equipped to skills of our staff. achieve our goal of Zero Harm, as we have all the tools We are also making a conscious effort to leverage what we necessary to reach our target. We will also continue to learn on green projects such as the ITE College West Campus provide training to new staff and familiarise them with our in Singapore and applying them to new projects for the worksites, processes, safety regulations and standards. benefit of our clients and society at large. Good housekeeping is vitally important in fulfilling our goal We believe this makes us better able to propose solutions for as clean and tidy sites help us remove the risks associated our clients and maintain our industry leadership. with incidents. “We are taking a leadership role “We are well equipped to and adopting innovative achieve our goal of Zero technology.” Harm.” Gammon Sustainability Report 2010 3 GroupGroup Tu Turnoverrnover by by Regio Regionn AccidentAccident Incident Incident Rate Rate GreenhouseGreenhouse Gas Gas Emissions Emissions EmploymentEmployment by by Region Region US$US$ millions millions perper 1,000 1,000 workers workers tonnestonnes CO CO2 equivalent2 equivalent monthlymonthly paid paid staff staff and and daily daily paid paid workers workers HongHong Kong Kong & &Maca Macau u ChinChina a SingaporeSingapore 20052005 HongHong Kong Kong & &Maca Macau u ChinaChina SingaporeSingapore 76,02076,020baselinebaseline 0.0.4 4 1010 4 4 1 1 67,16167,161 67,34967,349 465465 39394 4 21212 2 5555 8.28.2 8.38.3 2 2 22220 0 29292 2 55,29155,291 573573 9292 48,66948,669 486486 38384 4 400400 4 4 6.46.4 20102010 45,48745,487 175175 304304 5.65.6 5.45.4 TargetTarget 32327 7 42428 8 34341 1 5555 13131 1 1 1 5.55.5 44441 1 39397 7 24241 1 2929 1,0391,039 26252625 17173 3 85859 9 90905 5 81815 5 1,001,003 3 19181918 18391839 18091809 1931935 5 13931393 954991 954991 1141149 91381382 2 2002006 6 2002007 7 2002008 8 2002009 9 2012010 0 20062006 20072007 20082008 20092009 20102010 20062006 20072007 20082008 20092009 20102010 200620062002007 7 200 2008 82002009 92012010 0 2006200620072007 200 2008 82002009 92012010 0 Scope 1 and 2 emissions monthlymonthly paid paid dailydaily paid paid Calculated based on Greenhouse Gas Protocol published by WBCSD/WRI Our emissions follow turnover and diesel usage, but one large In 2010, we increased recruitment and training in Hong Kong project such as Penny’s Bay in 2005-06 can cause emissions to and Singapore. Our training and development programmes, spike. With business growth and limited options for replacing such as our initiative to train and recruit levellers, benefited not diesel equipment, we expect our emissions to rise in the years only Gammon but the construction industry as a whole. to come. We are monitoring and pursuing We have been investing in efficiency in our Scope 1 and 2 training to ensure we have emissions, especially diesel in sufficient high quality manpower our plant and equipment which to meet our project needs. Our accounts for 69% of our long-term objective of directly emissions. Our strategy is to developing staff and workers in adopt design, planning and line with the values of the energy-efficient construction Gammon Way began paying off methods as well as electrification in 2010, as indicated by our and greater engine efficiency success with our levellers Jon Button wherever possible.