Our approach Our | A collective sustainability Managing responsibility sustAinAbility report 2010 Full RepoRt | Profitable markets Profitable Balfour Beatty is committed to making its success sustainable. The long-term success of our business depends on us fulfilling our responsibilities to all our stakeholders, which is why our business strategy | and sustainability vision are closely aligned. communities Healthy Our approach to sustainability 4 Managing sustainability 13 Profitable markets 38 | Healthy communities 50 limits Environmental Environmental limits 85 Performance data (GRI Index) 111 Independent assessments 116 | Glossary 124 data Performance | Independent assessments Independent | 1 sustAinAbility report 2010 Full RepoRt contents approach Our Introduction 3 | Managing sustainability Managing Our approach to sustainability 4 Highlights in 2010 7 About Balfour Beatty 8 Message from Ian Tyler and Mike Peasland 9 Global issues 11 Managing sustainability 13 Our sustainability vision and roadmap 14 | Measuring our progress against the roadmap 15 markets Profitable Our performance at a glance 17 Focusing on what matters 19 Ethics, values and compliance 22 Leadership, management, governance 28 Engaging with our stakeholders 31 | Our plans for 2011 37 communities Healthy Profitable markets 38 Meeting customer needs 41 Influencing for sustainability 45 Healthy communities 50 Health and safety 52 | Talent and training 58 Employee engagement 63 limits Environmental Benefits and incentives 66 Managing a diverse workforce 68 Employee well-being and absence 71 Our supply chain 72 Community engagement 77 Community investment 81 | data Performance Environmental limits 85 Energy and carbon 87 Waste 93 Materials 98 Climate change adaptation 102 Ecology 104 | Water 106 assessments Independent Environmental incidents and enforcement action 109 Performance data 111 Global Reporting Initiative Index 111 Independent assessments 116 Stakeholder panel 117 Independent audit 123 | Glossary 124 2 sustAinAbility report 2010 Full RepoRt introduction approach Our Balfour Beatty is a leading global infrastructure services business. As such, | we have a real opportunity – and responsibility – to make a significant, sustainability Managing sustainable difference. Our 2010 Sustainability Report captures our progress during the year as we move further towards achieving our 2020 sustainability vision, clearly identifying work still underway and setting out our plans for the year ahead. Sustainability reporting is an ongoing process. Through the following pages, we hope to demonstrate what we as a company and as individuals have achieved in the past 12 months in our increasingly | diverse operations, which cover multiple geographies. As we work together to embed the collective responsibility to achieve our vision at all levels of the organisation, everyone has a role to play. markets Profitable Additionally, this year, we have developed a standalone internet site (www.collectiveresponsibility.net), dedicated to sustainability issues, our position and vision, as well as providing a forum for discussion, debate and sharing best practice around key issues. As well as putting sustainability clearly in the context of our business strategy and the interests and priorities of our customers, we continue to focus on the three key areas of profitable markets, healthy | communities and environmental limits. Good progress has been made, but much remains to be done. Healthy communities Healthy Our external stakeholder panel has once again helped to scrutinise our work and efforts – and, more importantly, provided candid feedback on our sustainability reporting, which we have built into our ongoing work. We are particularly thankful for the feedback and improvements suggested by members of the panel: Kate Broome (Network Rail), Hilary Davidson (Duke Energy), Rebeca Esteves (Business in the Community), Dave Farebrother (Land Securities), Ian Gearing (National Grid), Paul Edwards (Hammerson), Tim Goodman (Hermes Equity Ownership Services), Chad Harrell (UK Green Building | Council), Will Martin (Environment Agency), Andy Spencer (CEMEX) and Lisa Shpritz (Bank of America). See Appendix for further details of members. limits Environmental We encourage and welcome dialogue around all areas of sustainability, so please read through the report and visit www.collectiveresponsibility.net to tell us what you think. | Performance data Performance | Independent assessments Independent | 3 sustAinAbility report 2010 Full RepoRt our ApproAch approach Our | to sustAinAbility sustainability Managing | Profitable markets Profitable Highlights in 2010 7 About Balfour Beatty 8 Message from Ian Tyler and Mike Peasland 9 | Global issues 11 communities Healthy | Environmental limits Environmental | Performance data Performance | Independent assessments Independent | 4 sustAinAbility report 2010 Full RepoRt our ApproAch approach Our to sustAinAbility | During 2010, a good deal of work has been undertaken to embed our sustainability Managing sustainability vision, as well as our ethics and values, across all areas of the business. We want to ensure that our people live and breathe our vision and, in turn, apply it in all areas of their work for the benefit of the business, our customers and all the communities in which we operate. Our sustainability working group completed launch meetings with each operating company’s management in June of last year. By July, action plans were developed by each operating company, | setting out how they will meet the 2012 targets and other commitments in the roadmap. The plan markets Profitable for Parsons Brinckerhoff has been delayed to incorporate the acquisition of specialist sustainable communities firm Halsall in Canada. Parsons Brinckerhoff already has its own sustainability programme (www.pbworld.com/sustainability) and more time is needed to align this business with the Balfour Beatty roadmap. In October, we started to track progress against the roadmap for the first time, with each operating company completing self-assessments of their progress against their action plans. You can read more | about the progress being made, and the challenges faced by our businesses, by looking at our progress against our roadmap. communities Healthy | Environmental limits Environmental | Performance data Performance | Independent assessments Independent | 5 sustAinAbility report 2010 Full RepoRt The strategic priorities for Balfour Beatty are highlighted below. To achieve this strategy, there is a approach Our clear connection between our business strategy, our sustainability vision and our view of the risks and opportunities we face: Business strategy Sustainability context, risks and opportunities 1 Develop our business further Demand for sustainable infrastructure is creating new | growth opportunities for us. Our approach to sustainability is a key way of differentiating ourselves in the marketplace sustainability Managing and winning new work. As we grow and enter more diverse markets, we need to ensure that all our employees make decisions that prevent us from conducting business unethically or being exposed to potential damage. Our Group values, Code of Conduct and ethics helpline will help us manage these risks. 2 Focus on markets with the Increasingly, customers are asking us to deliver more | greatest opportunities sustainable solutions. Profitable markets Profitable The multi-billion pound low-carbon economy also presents us with significant opportunities in fields ranging from new nuclear generation to energy-efficient buildings. Renewable energy, rail and waste infrastructure and the increasing demand for integrated services in the water market are all areas of business that will increase in size and value to us. | 3 Improve operational performance Adequate margins are a prerequisite for investment in communities Healthy and cost-effectiveness long-term sustainability. We aim to operate more efficiently to remain a competitive and sustainable business. 4 Continue to strengthen core skills Both developed and emerging economies are investing in increasingly complex projects requiring an ever broader range of skills. We aim to ensure that we have these skills across our organisation, and that our future leaders can manage increasing complexity and change across | a broader range of countries. Environmental limits Environmental Our ability to integrate a range of stakeholders relies on engagement with suppliers and gives us opportunities to innovate for more sustainable outcomes. We anticipate particular opportunities in the low-carbon economy. 5 Continue to show leadership As a market-leading business, we are intent on setting the in values and behaviour industry standard for ethical conduct, safety and sustainability. | Our Code of Conduct, ethics training and Zero Harm vision are essential markers of the standards we set for ourselves data Performance and, ultimately, our supply chain. We will differentiate ourselves by embedding sustainability into everything we do as a business by 2020. Over time, our leadership will result in sustainable infrastructure consistently being seen as the best option from an economic, community and environmental perspective. | Independent assessments Independent | 6 sustAinAbility report 2010 Full RepoRt highlights in 2010 approach Our Explaining what we mean by sustainability is only part of our vision. Seeing | the vision being translated into action across the businesses and across the world is what really matters.