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We continue to build a sustainable and
successful business by delivering on our six
positive outcomes, which support profitable,
responsible growth and underpin our values
as a responsible business.
Our positive outcomes
Building a successful business
Leading the way with our customers andsuppliers
Providing better prospects for our people
Supporting sustainable communities
Enabling low-carbon economies
Protecting the environment
We are making tomorrow a better place
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
Sustainability is...
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Sustainability is so important to Carillion because
it makes a fundamental difference to our
business success. We estimate that itcontributed 27.2m to our profit in 2014. Given
our local commitments across contracts and
projects, this also created many wider benefits
for our communities, for our own people and for
our suppliers and partners.
RICHARD HOWSON, Chief Executive
READ MORE
It makes business sense
2014 Sustainability Review with Richard Howson
Sustainability in action
Linking sustainability to the bottomline
27.2M SUSTAINABILITY CONTRIBUTION TO PROFIT IN2014
Engaging and collaborating with theindustry supply chain
FUNDING PARTNER OF THE SUPPLY CHAINSUSTAINABILITY SCHOOL
An inclusive workplace
FAIR OPPORTUNITIES FOR EX-OFFENDERS WHENAPPLYING FOR JOBS
Investing in future skills5,000 APPRENTICESHIPS TO BE OFFERED DURING THENEXT FIVE YEARS
Climate performance A-list
99A SCORE IN CARBON DISCLOSURE PROJECT
Waste no more
WASTE-REDUCING INITIATIVES IN CANADA
27.2mnet profit contribution through
sustainability efficiencies
51%local spend including SMEs
49%reduction in our All AccidentFrequency Rate since 2011
87%of apprentices foundemployment or pursued further
education
17%reduction of our carbon
footprint since 2011
(normalised)
95%waste diverted from landfill
VIEW OUR KEY FIGURES AT A GLANCE VIEW OUR FULL PERFORMANCE AGAINST TARGETS
Our key impacts
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Carillion is...building a successful
Sustainability makes us
more profitable: fact
It helps us to win and deliver profitable work responsibly
and encourages collaboration around innovation, safety,the efficient use of resources and the creation of social
value. Increasingly, this is what our customers and society
expect from leading sustainable businesses, which is why
we choose to operate to standards that go well beyond
minimum requirements.
Chairing the Board Sustainability
Committee is an important
opportunity to make sure that
Carillions award-winning
Our Board SustainabilityCommittee
Materiality review
WHAT MATTERS MOST TO OURSTAKEHOLDERS?
Investing in integrity
INSTITUTE OF BUSINESS ETHICSAWARDS CARILLION THE INVESTING ININTEGRITY CHARTER MARK
Broker research note
IMPRESSING ANALYSTS WITH OURWORK AT BATTERSEA POWERSTATION
Sustainability in action
BUILDING A
SUCCESSFULBUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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sustainability progress to date
remains ambitious and relevant.
Resilience and balance will become
ever more fundamental to
responsible and forward-thinking
businesses.
DR CERI POWELL, Carillion Non-
Executive Director
READ MORE
5.1bnof new and probableorders2013: 4.9bn
216.9munderlying profit fromoperations2013: 214.3m
2014: 25m
2020: 40m
27.2mcontribution to net
profit through
sustainability strategyTargets
Target achieved
Our key figures
2014 performance highlights
Progress against targets
VIEW OUR FULL PERFORMANCE AGAINST TARGETS
Integrity andethics
About this report
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ABOUT US
TRIED/TESTED/TRUSTED
OUR VISION AND VALUES
OPERATING SEGMENTS
HOW DO WE CREATE ECONOMIC VALUE?
Carillion is one of the UKs leading integrated support services companies,
with a substantial portfolio of Public Private Partnership projects,
extensive construction capabilities and a sector-leading ability to deliver
sustainable solutions.
TRIED/TESTED/TRUSTED
We have a track record of delivering sustainable, cost-effective
solutions for our customers safely and of creating positive
legacies for the communities where we work and live. Whether
it is providing facilities management services for over 100,000
buildings, the management and maintenance of transport and
utility networks or delivering award-winning cultural,
residential, commercial or community developments we
strive to deliver high-quality services that make a positive
difference to people and communities.
We have continued to respond decisively to challenging market
conditions to create a leaner, stronger business, capable of
delivering growth over the medium term. As well as rescaling
some of our existing businesses to ensure they are aligned in
size to their markets, we have strengthened our positions in
markets that offer opportunities for growth. Strong corporate
governance, together with rigorous risk management
processes and our efficient central operating platform, help us
to deliver the most complex projects successfully.
We are a trusted partner when trust matters most. We providemission-critical facilities management services to public and
private sector customers, notably in the health, defence,
secure accommodation, financial services and energy sectors.
We keep transport and utility networks operating 24/7 and
4.1bnGroups annual revenue
42,000employees
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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deliver new hospitals, schools, roads, railways and other
landmark buildings and structures. We build long-term
partnerships based on delivering value for money services that
our customers know they can rely on.
OUR VISION AND VALUES
Our Vision: To be the trusted partner for providing services,
delivering infrastructure and creating places that bring lasting
benefits to our customers and the communities in which we
live and work.
Our Valueshelp us build trust and set the standard for
sustainability in our sector:
We care: we respect each other and we do things safely
and sustainably. It is good for our people, our business
and our local communities.
We achieve together: we value the contribution of eachindividual and we work together to build strong, open
and trusting partnerships.
We improve: we listen, we learn and we adapt our ideas
and experience into better solutions and service for our
customers.
We deliver: we set ourselves stretching goals and we
take pride in doing a great job and helping our
customers and partners to succeed.
OPERATING SEGMENTS
Business units
At Group level, we report our financial results in four business segments.
Support services
Including our facilities management, facilities services, energy services, railservices, utility services, road maintenance and consultancy businesses in the UK,Canada and the Middle East.
Order book plus probable orders
14.1bn
Underlying operating profit
135.9m
Working andachieving together,caring and improving these values helpus to deliveroutstanding supportservices for ourclients, and to buildreal trust andstrength in ourteams.
NIGEL TAYLOR,Managing Director,Services UK
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Public Private Partnership (PPP) projects
Including financial returns generated by the investments we make in Public PrivatePartnership (PPP) projects in the UK and Canada, including those from the sale ofequity investments.
Order book plus probable orders
1.2bn
Underlying operating profit
34.5m
Middle East construction services
Including our building and civil engineering activities in the Middle East and NorthAfrica.
Order book plus probable orders
0.9bn
Underlying operating profit
25.1m
Construction services (excluding the Middle East)
Including our UK building, civil engineering and developments businesses and ourconstruction activities in Canada.
Order book plus probable orders
2.4bn
Underlying operating profit
41.5m
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How do we create economic value?
m 2012 2013 2014
Total revenue (excluding Joint Ventures) 3,666.2 3,332.6 3,493.9
Operating costs 2,689.7 2,414.7 2,507.8
Employee wages and benefits 761.0 751.0 777.7
Payments to providers of capital 94.7 100.7 103.5
Payments to Government (taxes) 5.7 7.8 7.7
Charitable and community giving through a combination of employees time, cash,and in-kind donations
2.2 1.9 1.8
Economic value retained 115.1 58.4 97.2
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4.1bnGroup revenue 27.2mprofit contribution
through
sustainability
strategy
49%reduction in All
Accident Frequency
Rate (AAFR)
+37Net Promoter Score
measuring customer
satisfaction
99Anear-perfect score for
carbon disclosure
through the Carbon
Disclosure Project
Building Public Trust
Award (PWC)
retained for a 2nd
year for FTSE 250
Sustainability
Reporting
2014 AT A GLANCE
We are proud to be making progress on our sustainability journey that
began when Carillion was formed in 1999. From our first Sustainability
Policy in 2001; BITC Company of the Year in 2003, ISO 9001 and 14001
accreditations in 2004; and Platinum status in the BITC Corporate
Responsibility Index, we have shown we are serious about making
tomorrow a better place. These are some of the highlights from the
reporting period:
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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Investing in Integrity
Charter Mark
17%reduction of our
carbon footprintsince 2011
(normalised)
95%of waste divertedfrom landfill
28%reduction in water
use since 2012
51%local supplier spend
1%pre-tax profit
donated to
community
activities
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PHILIP GREEN, CHAIRMAN
Our markets remained challenging in 2014 although we beganto see signs of improvement that we expect to continue this
year, subject to there being a sustained economic recovery.
We continued to be very selective in terms of choosing the
contracts for which we bid, as we have done throughout the
economic downturn, and this was reflected in our underlying
operating margin, which remains unchanged at 5.6%.
The Groups total revenue was also unchanged at 4.1 billion,
with underlying profit before tax marginally lower at 172.9
million (2013: 174.7 million) and underlying earnings per share
at 33.7 pence (2013: 34.7 pence). Basic earnings per shareincreased by 20% to 28.0 pence (2013: 23.3 pence) and the
Board is recommending a 1% increase in the full-year dividend
to 17.75 pence.
Overall, we delivered another solid performance, but recent
history tells us that we need to remain totally focused on
strong corporate governance, high standards of ethical
behaviour and rigorous risk management. Our balanced and
ambitious commitments to economic, social and
environmental responsibility underpin our drive to become
and remain a leader in sustainability.
Our balanced andambitiouscommitments toeconomic, social andenvironmental
responsibilityunderpin our drive tobecome and remain aleader insustainability.
PHILIP GREEN,Chairman
WELCOME FROM OUR CHIEF EXECUTIVE ANDCHAIRMAN
PHILIP GREEN, CHAIRMAN
RICHARD HOWSON, CHIEF EXECUTIVE OFFICER
Business-critical sustainability, local responsibilities and long-term trust:
our Chairman and Chief Executive reflect on performance over the last 12
months.
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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RICHARD HOWSON, CHIEF EXECUTIVEOFFICER
2014 Sustainability Review with Richard Howson
Sustainability is so important to Carillion because it makes a
fundamental difference to our business success. It is not all
about the bottom line as the health, safety and welfare of our
people and those touched by our operations always comes
first. However, economic responsibility is a key element of a
balanced sustainability strategy, and we estimate that it
contributed 27.2 million to our profit in 2014. Given our local
commitments across contracts and projects, this also created
many wider benefits for the communities in which we operate,
for our own people and for our suppliers and partners.
We are helping to regenerate deprived neighbourhoods,
offering employment where its most needed and training
people to have the right skills to enter and stay in the job
market. We are also tackling carbon emissions from our sites,
offices, vehicle fleets and supply chains and I am pleased to
report a further 17% reduction in carbon emissions since 2011,
when normalised by turnover.
All these achievements are down to the skills and commitment
of our diverse workforce, which drives the creativity andinnovation we need to compete across all our markets and
geographies. Investing in safety, training and diversity is not
optional, but business critical, and we remain focused on our
target of zero accidents.
It is easy to say that ethics and integrity are of paramount
importance, but at Carillion we really mean it. In particular, we
were proud to win the PWC Building Public Trust award for the
second year in succession the first time that a FTSE 250
company has done so and gain the Investing in Integrity
Charter Mark from the Institute of Business Ethics.
I believe the breadth, depth and success of our sustainability
programme confirms that Carillion is a recognised leader in
sustainability. In this report we have set out the evidence to
It is easy to say thatethics and integrityare of paramountimportance, but atCarillion we reallymean it. In particular,we were proud towin the PWC BuildingPublic Trust awardfor the second year in
succession the firsttime that a FTSE 250company has doneso.
RICHARD HOWSON,Chief ExecutiveOfficer
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support our claim. At the same time, we know we still have a
great deal to do to deliver our sustainability strategy and its
positive outcomes, but I am confident we will do so.
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DAVID PICTON, CHIEF SUSTAINABILITYOFFICER
Now, more than ever, sustainability is not a nice-to-have, it is
critical for long-term business success. That critical nature
extends to making sustainability a strong, balanced approach
and delivering on the Three CBs integrated approach to drive
impact: changing behaviours, commercial benefit and
challenging balance.
Changing behaviours: in order for sustainability initiatives to
take root and make a longterm impact on both business and
the community, they have to change behaviours. In the
business sense, this begins internally by encouraging best
practice, responsibility and personal commitments among our
people. It means achieving positive change by acting early and
through regular commitment.
Commercial benefit: profit can have negative connotations but
profitable businesses are in the best position to share their
value not only with shareholders but with communities, the
environment, employees and supply chains. Evidence
emerged in 2014 specifically linking sustainability with
profitability and building positive customer relationships. We
took the step a few years ago to include sustainability metrics
in our financial reporting, demonstrating that a streamlined,
responsible, ethical business can (and should) also be a
profitable one for the long term. This year weve made
steady progress in measuring the value of sustainability againstour Sustainability 2020 targets.
Challenging balance: to achieve lasting change for itself, for
organisations and for communities a truly sustainable
Now, more than ever,sustainability is not anice-to-have, it iscritical for long-termbusiness success.Sustainability needs astrong, integratedapproach whichdelivers on the ThreeCBs: changing
behaviours,commercial benefitand challengingbalance.
DAVID PICTON, ChiefSustainability Officer,Carillion
VIEWS FROM OUR CHIEF SUSTAINABILITY OFFICERAND INDEPENDENT ADVISORS
DAVID PICTON, CHIEF SUSTAINABILITY OFFICER
A VIEW FROM DAME JULIA CLEVERDON
A VIEW FROM JONATHON PORRITT
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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business must be ambitious, challenging preconceptions and
entrenched beliefs. In sustainability terms, that also needs to
be balanced across economic, social and environmental
responsibilities. Traditionally green or environmental
considerations remain high on the sustainability agenda, but
social responsibility creates longterm legacies in the
communities where we work and live.
This year weve made steady progress in measuring the value
of sustainability and aiming for our Sustainability 2020 targets.
In sectors like construction and services, which rely
fundamentally on working with partners, its important to
recognise that collaboration is key to success. Managing
resources wisely, developing new and competitive
innovations, engaging credibly with local communities and
building long-term economic success all require learning and
skills development. This fundamentally is at the heart of our
Sustainability 2020 strategy, and we know that there is a lot still
to tackle as we work to make tomorrow a better place.
Looking ahead, were still ambitious with what we want to
achieve through our sustainability expectations and targets.
The achievements to date have set a firm platform of evidence
and benchmarks in place so much so, that we often overlook
things that we now take for granted as our daily business and
values. Its the way that we do business, but were not
complacent.
Our new Sustainability Committee will bring even greater focus
to our strategic leadership, and we will continue to test and
develop what we believe it means to be leading the way insustainability. Our target to achieve a 40 million contribution
to profit from sustainability by 2020 is stretching, but this is
how we will build a successful business and continue to make
sustainability business critical. Well need to make it as easy as
possible for our people to volunteer and capture that
evidence if were to get 50% of them involved by 2020, so
well develop a mobile application and continue to link them to
practical, relevant opportunities with our strategic community
partners.
For carbon, we need to continue reducing our footprint to aminimum, and to understand how we can address and
minimise embodied carbon together with clients and suppliers.
As we look ahead to 2020 and beyond, we need to implement
a carbon strategy that delivers clear business relevance and
appropriate impact, as our business continues to evolve and
develop in a dynamic marketplace. As we close in on an
effective zero waste to landfill, we also need to remain focused
on reducing our absolute waste production, and particularly in
the Middle East where recycling infrastructure is less
advanced.
Collaboration can often be a clich, but our support for the
Supply Chain Sustainability School is anything but that it is a
clear commitment to raising sustainability skills and working
with our suppliers across the built environment. Building on
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that, we will continue to develop regional stakeholder
engagement to understand what matters most in sustainability
to the people who buy, deliver, advise on and supply to our
business. Of fundamental importance will be the need for
responsible resource management, including FSC timber,
water and materials, capturing and working with suppliers
innovations and implementing regionally appropriate ethical
sourcing plans.
Turning finally to people, we need to be sure that wereengaging both our own people and those who are outside our
immediate business. Much effort is focused on implementing
the recommendations from the Great Debate, and to further
develop the knowledge we gained from our Materiality
Review. Sustainability comes to life through our people, their
actions, commitments, behaviours and impacts, so well
continue to make sustainability as inspiring as possible for and
through them.
WHAT NEXT?Here is a snapshot of just some of the areas we will be working
on during 2015.
Reduce costs and increase efficiency to improve
margins and deliver 32.5 million to profitability
Deliver cash-backed profit
Embed the new Board Sustainability Committee
Undertake focused stakeholder engagement to
further understand the most important issues
across our regions, including a specific materiality
review in Canada
Understand better what matters to our clients in
sustainability, and how that can help improve
customer satisfaction
Increase expenditure with local UK suppliers to 60%
Install a further 16 EcoPods to serve 644 homes and
save 50,000 tonnes of carbon
Prepare for the introduction of Business Information
Modelling (BIM) across UK Public Service
Procurement including technical and project team
training; share experiences with suppliers andcustomers; and roll out whole-life contracts in the
Middle East
Engage supply chain partners in skills development
Building a successfulbusiness
Leading the way
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and innovative, sustainable solutions
Enhance our understanding of ethical sourcing and
implement region-specific ethical sourcing plans
Be a recognised leader in health, safety and
sustainability
Develop and attract excellent people to create a
vibrant, diverse and flexible workforce
Develop a Stress and Mental Health Charter,
accompanied by tools and a training module to
reduce work-related stress and promote positive
mental wellbeing
Make ePOD learning available in the Middle East;
extend it to suppliers, partners and clientsAddress challenges to releasing our people to
participate in volunteering
Measure and monitor actions that will have the best
positive impact for the communities where we work
and liveEnsure every site has a community needs plan,
bringing our total to 100%
Continue rolling out our plan to create 5,000 new
apprentice places across the 5 years to 2020
Develop and implement our plan for carbon
reduction towards 2020, such as green energy
production and consumption; addressing the
embodied carbon of our projects; and helping
customers reduce their carbon
Continue our focus on transparency and climate
change adaptation under CDP aiming to maintain
our lead of the Industrials sector
Tackle our target of sending effectively zero non-
Providing better prospectsfor our people
Supporting sustainablecommunities
Enabling low-carboneconomies
Protecting the environment
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hazardous waste to landfill by the end of 2015
Strengthen relationships with waste removal
providers
Maintain our focus on sourcing FSC timber, and
wider ethical sourcing initiatives
A VIEW FROM DAME JULIA CLEVERDON
In this tough year for business competitive advantage, Carillion
have made some important gains in the long-term
sustainability of the business not just in the UK but in the
Middle East and Canada as well. Visiting the Carillion team in
Canada I was impressed to see, at first hand, both the progress
on sustainability auditing through their supply chain and the
potential for leadership in ensuring quality aboriginal
employment and training opportunities. The acquisition of a
49% interest in the Bouchier Group will give an incredible
opportunity to develop more high-quality employment
practices for the First Nation people.
In the UK, Carillion are increasingly able to illustrate, measure
and monetise the benefits of employee engagement and
community impact, and investors are taking note. Richard
Howsons strategic leadership on the Board of Business in the
Community is driving forward the Business Connector
programme showing the social value of high-powered
business secondees building private, public and community
partnerships in some of the UKs most deprived communities.The social value for Carillion in pioneering the Community
Needs plans for all major contracts is clear Liverpool,
Battersea and Kings Cross are flagships already delivering
replicable results. Construction and rail businesses are
increasingly able to share the evidence of work winning
through collaborative partnerships with clients impacting on
communities. The target of employing 1% of all army reservists,
announced this year, in partnership with the MOD is both
strategic in attracting talent and builds our reputation as a
values-driven business.
Last year, I applauded our progress towards achieving the
target that the Board should be 25% female by 2015. However
important non-executive directors are as role models, what
has been termed pink parachute silk is not going necessarily
to build the executive pipeline. We need to achieve 29% female
executives by 2020 to achieve our goal so it is encouraging
that as a result of focused internal leadership we have made it
for the first time into the Times Top 50 employers for women.
A critical part of Carillions long-term sustainability will come
from winning the war for talent and skills and progress has
really been made this year!
A critical part of
Carillions long-termsustainability willcome from winningthe war for talent andskills and progresshas really been madethis year!
DAME JULIACLEVERDON DCVO,CBE, Vice Presidentof Business in theCommunity andSpecial Advisor toThe Princes Charities
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A VIEW FROM JONATHON PORRITT
Sustainability is a many-splendoured thing! And todays
sustainability reporting reflects that, getting both more
comprehensive (in overall scope) and more forensic (in its
detail) all the time. Carillions report is a model of its kind,
embracing the full gamut of environmental, social andgovernance issues, with constant connectivity back to a core
economic rationale.
As the report says: Sustainability makes us more profitable:
fact. And a 27.2 million contribution to net profit in 2014
makes for a good starting-point for the companys new Board
Committee for Sustainability itself an important and
innovative affirmation of the centrality of sustainability to
Carillions future success.
But theres a lot more than profit that has to be taken intoaccount when thinking about long-term value creation. Many
companies in the UK are now working hard on the metric of
social value, systematising the diverse ways in which big
companies can support the communities in which theyre
working (Carillion has very nearly reached its target of 100% of
big projects having a Community Needs Plan), their suppliers
(for whom the simple story behind prompt payment matters
enormously), and the local economies they can enrich by
guaranteeing high levels of local spend in Carillions case,
an average of 51% across all projects, and an outstanding 60%
at the Royal Liverpool Hospital.
All of which, and all its core project delivery in the UK and
internationally, has to be done in ways that keep driving down
Carillions overall carbon footprint. The results show how
stretching this can be, especially with its operations in Canada.
Overall, a reduction of 17% in carbon intensity (the amount of
greenhouse gas emitted per million dollars of turnover) is
impressive. But theres a long way to go before these relative
reductions are turned into absolute reductions, as part and
parcel of Carillions ambitious and still crucially important
target of becoming carbon neutral by 2020.
Ambitions of this kind can only be delivered through consistent,
top-down leadership from the Board and the CEO, combined
with opportunities for all Carillions staff,in whatever role, to
play their part in blazing this particular low-carbon trail.
Sustainability is amany-splendouredthing! And todayssustainabilityreporting reflectsthat, getting bothmore comprehensive(in overall scope) andmore forensic (in its
detail) all the time.Carillions report is amodel of its kind,embracing the fullgamut ofenvironmental, socialand governanceissues, with constantconnectivity back to acore economicrationale.
JONATHON PORRITT,
Founder Director ofForum for the Future
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We will increase shareholder value through our sector
leadership and focus on profit contribution through
sustainable efficiencies, value creation and waste
elimination.
We will be recognised as the benchmark in sustainability
and innovation, in turn driving demand as the service
provider of choice for our customers.
We will maximise the prospects of our people by offering
opportunities for continual learning and development, and
create safe, healthy places to work.
27.2mprofit contributionthrough sustainabilitystrategy
Carillion is a member ofthe FTSE4Good Index,which measures theperformance ofcompanies that meetglobally recognisedcorporate responsibilitystandards.
OUR 2020 STRATEGY
SUSTAINABILITY IS DRIVING PROFIT
ENGAGING WITH OUR STAKEHOLDERS
BROKER RESEARCH NOTE
STAKEHOLDER PRIORITIES
A structured plan and stretching targets: these are what our stakeholders
expect of us and what drive tangible benefits to our bottom line. Thats
why we launched our vision and strategy in 2011 and our six positive
outcomes to guide our work.
Building a successfulbusiness
Leading the way with ourcustomers and suppliers
Providing better prospectsfor our people
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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Our leadership in creating employment and skills
opportunities, coupled with our understanding of
communities needs, will have a significant and net
positive contribution everywhere we work.
Our services will help Carillions customers work towards
minimising carbon, so together we become the lowest
carbon producers in our respective sectors.
We will work with our customers and suppliers to be best
in class in reducing waste, managing use of water and raw
materials, and protecting biodiversity wherever we
operate.
The strategy is owned by our Board of Directors and delivered
at all operational levels through tight governance controls. We
set clear targets for each of the outcomes, which we reviewannually. Read more in Targets and performance.
Sustainability is driving profit
The sustainability initiatives and practices followed across
our businesses made a net contribution to profit of 27.2
million in 2014. Our target is to achieve 40 million by
2020. The target is a personal performance measure,
linked to remuneration, for our Chief Executive and for theBoard. This Key Performance Indicator is reported through
monthly trackers, approved by each Business Unit Finance
Director. It is built through cost efficiencies which include
fuel and travel cost reduction, waste management, lean
operational excellence, contract efficiencies and material
reuse.
Our first MaterialityReview gave us somevaluable insights intothe views of key
stakeholders wellbuild on that todevelop ourunderstanding andfocus our efforts as asustainable, forward-looking business.
JOHN PLATT,Strategic GrowthDirector
The profit
contribution from ourSustainability 2020strategy is significantand growing all thetime, proving that far from simply being
We are a member ofBusiness in theCommunity (BITC) andparticipate in the BITCCorporate ResponsibilityIndex, which ranked us aFour Star company.
Supporting sustainablecommunities
Enabling low-carboneconomies
Protecting the environment
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Impressive site visit to Battersea Phase 1
Construction project. Potentially more to come.
Sustainability clearly helped Carillion win the bid.
We also believe that Carillion has had a strong
period of contract news and is gradually moving
up the value chain.
The site visit coincided with the launch of Carillionssustainability report. It is easy to be cynical about
this. However, having spoken to the customer,
sustainability was very important to the customer,
as it was at the Royal Liverpool.
VIEW ALL CASE STUDIES
ENGAGING WITH OUR STAKEHOLDERS
At Carillion, our stakeholders include our people, clients,
shareholders and investors, supplier partners, charities,
industry organisations and people living in the communities
where we operate. We use a stakeholder framework to:
understand why engagement is required;
identify relevant stakeholders and impacts; and
decide on forms of engagement and record the
outcomes.
We involve stakeholders in developing and reviewing our
2020 sustainability strategy; in deciding which issues to focus
on; and in sustainability initiatives through the year (see case
studies).
Broker research note
The following summary is taken from a research note
published by Liberum after one of its analysts attended the
launch of last years sustainability report at Battersea
Power Station, where Carillion is building the first phase of
this major redevelopment.
nice to have building a sustainablebusiness is critical forshareholder valueand long-termcommercial success.
RICHARD ADAM,Group FinanceDirector
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The new Royal Liverpool Hospital is a Public Private
Partnership Project being delivered by Carillion.
VIEW ALL CASE STUDIES
STAKEHOLDER PRIORITIES
In 2014, we conducted our first materiality review to
understand our stakeholders most significant priorities and
report on what matters to them. The independent review
included workshops, interviews and an international online
survey for employees, clients, governments, investors,
suppliers, community groups and sustainability organisations.
We received 360 responses to our online survey. The majority(80%) of responses were from employees, and most of these
were based in the UK. We will be looking to diversify this going
forward. Some of the most material issues identified were:
people engagement: people want to hear more about
what were doing, and see even more progress around
diversity, retention and recruitment. Additionally, safety,
health and wellbeing were particularly significant
factors;
building a successful business: our financial
performance clearly matters, and we need to help
people see both the role that they can play and the clear
link to our strategy and reputation;
supply chain: continued progress on our early payment
facility, supplier relationship management and
sustainability upskilling through the Supply Chain
Sustainability School;
waste: making progress on the overall reduction of
waste produced to build on our achievements to date
with diversion from landfill;
skills and local engagement: people want to see the clear
delivery of local solutions for and with local companies
and their communities with a focus on providing
apprenticeships, education, employment and skills;
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human rights: we need to remain committed to and
investing in appropriate management processes to
deliver responsible labour, welfare and employment
practices; and
governance and management of sustainability: people
want to understand how our sustainability strategy is
managed throughout the various levels of the business.
The materiality review also included eight in-depth interviews
with key clients across both commercial and public sector
contracts. They told us that:
competence and delivery are critical to building trust,
creating long-term relationships and when selecting
suppliers;
sustainability is important in tenders but price remains
the dominant factor;
Carillions senior team are good at conveying
sustainability, its relevance to clients and sustainabilityas business as usual;
we need to challenge our contract partners and clients
to drive sustainability consistently from tender through
to design, delivery and service management.
The Materiality Review was reviewed in depth by our Integrated
Management Strategy (IMS) teams across the business units,
and by Carillions Group Sustainability Committee which then
helped to inform and determine the content of this report, as
well as re-focusing sustainability priorities, targets andchallenges.
Further to the Group process, in 2015 we will be undertaking
focused stakeholder engagement to further understand the
most important issues across our regions, starting with a
materiality review in Canada.
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EVOLVING PRIORITIES
Halfway through our 2020 strategy, our strategy continues to
evolve. This year, we have modified our targets and results
table to encompass new targets and set others aside where
they have now been achieved. Some original targets have also
evolved to reflect the dynamic nature of conducting our
business (for example, absolute fuel consumption, as detailed
in Enabling lowcarbon economies). Other targets have run
their natural course and are fully embedded and implementedas policy.
Target achieved
Behind schedule
Verified by Bureau
Veritas
Verified by other
external party
KEY
TARGETS AND PERFORMANCE
EVOLVING PRIORITIES
BENCHMARKING
Communicating performance is key to transparency and we update onprogress in areas that matter to our stakeholders. By celebrating
achievements and understanding where we can do better, we continually
shape our strategy to be even more ambitious.
Our key performance indicators (KPIs) are developed in collaboration with stakeholders as part of
our 2020 sustainability strategy, and data and other information for measurement against our
business unit KPIs is gathered and stored by our Capture system to enable accurate international
tracking and performance analysis.
VERIFIED 2014 TARGET2014PERFORMANCE
2015TARGET
LONG-TERMTARGET
Carillion will contribute 25 million toprofitability through sustainabilityactions
READ MORE
27.2million
32.5million
40millionby2020
Building a successful business
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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VERIFIED 2014 TARGET2014PERFORMANCE
2015TARGET
LONG-TERMTARGET
Maintain Level 4 of Sustainable
Procurement Task Force FlexibleFramework and work towards Level 5
READ MORE
Achieved Level 5 Level 5
by 2015
10% of suppliers to respond positivelyto sourcing materials and productsfrom responsible and ethical sources
READ MORE
35% 40% 100%by2020
VERIFIED 2014 TARGET2014PERFORMANCE
2015TARGET
LONG-TERMTARGET
39% reduction in All AccidentFrequency Rate (AAFR) against a 2011baseline
READ MORE
49% 56% 70% by2020
75% of employees feel proud to be
part of Carillion (Great Debate survey)READ MORE
65% 75% 80% by
2020
15% of employees utilise the Carillionspecial leave policy for volunteering inareas where we work
READ MORE
14% 22% 50% by2020
VERIFIED 2014 TARGET2014PERFORMANCE
2015TARGET
LONG-TERMTARGET
45% local spend including small andmedium enterprises (SMEs) in the UK
READ MORE
51% 60% Maintainat 60%
88% of Carillion apprentices whocomplete their framework will have anemployment outcome
READ MORE
87% 90% 95% by2020
100% contracts to have a communityneeds plan
READ MORE
96% 100% Maintainat 100%
Leading the way with our customers andsuppliers
Providing better prospects for our people
Supporting sustainable communities
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1% pre-tax profits donated tocommunity activities either in cash orkind
READ MORE
1% 1% 1%
4% of schools, unemployed and hardto reach groups to develop skills toenter employment
READ MORE
4% 10% Maintainat 10%
VERIFIED 2014 TARGET2014PERFORMANCE
2015TARGET
LONG-TERMTARGET
11% reduction on our carbonfootprint (against a 2011 normalisedbaseline)
READ MORE
17% 20% 24% by2020
19% reduction in gas consumptionfrom Carillion offices (against a 2011degree days normalised baseline)
READ MORE
11% 20% 20%reductionby 2015
15% reduction in electricityconsumption from Carillion offices(against a 2011 baseline)
READ MORE
24% 20% 20%reductionby 2015
100% contracts to have a CarbonReduction Plan
READ MORE
96% 100% Maintainat 100%
VERIFIED 2014 TARGET2014PERFORMANCE
2015TARGET
LONG-TERMTARGET
96% waste diverted from landfill
READ MORE
95% 98%(zerowaste)
Zerowaste tolandfill
15% reduction in water consumption(against a 2012 normalised baseline)
READ MORE
28% 25% 25%reductionby 2015
100% sourced timber will meetForest Stewardship Council orequivalent standards
READ MORE
99% 100% Maintainat 100%
1. Hard to reach covers a wide range of groups and are those with real or perceived barriers toengagement/employment.
1
Enabling low-carbon economies
Protecting the environment
2
3
4
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BENCHMARKING
We also participate in benchmarking exercises, to understand
our performance against best practice and be the leader in our
industry sector. We are proud to be listed in leading indices,
including the FTSE4Good Index Series and Business in the
Communitys (BITC) Corporate Responsibility Index.
2. 2% of our waste is hazardous or non-recyclable therefore a 98% diversion rate is equivalent tozero waste to landfill.
3. Operational water reduction (using 2012 baseline and normalised by turnover) was 28%. TheCarillion Estate water consumption increased by 12% (using 2012 baseline and normalised bysquare footage).
4. Timber performance data from 2013 report as 2014 data not available at time of publication.
BITC CR Index
% 2013 2014 2015
Carillion score 96 96 97
All index participants 90 85 91
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GOVERNANCE AND RISK
MANAGING SUSTAINABILITY
OUR BOARD SUSTAINABILITY COMMITTEE
REMUNERATION
SHAREHOLDER RELATIONSRISK MANAGEMENT
Effective corporate governance is the basis of how we do business. It
provides confidence in what we are trying to achieve for the shareholders,
customers, partners, suppliers and the communities within which we
work.
Carillion has put in place comprehensive policies, management structures and processes that are
applied rigorously to ensure that the company complies with the requirements of the UKCorporate Governance Code (September 2012). Furthermore, our Chairman and Company
Secretary conduct a formal and rigorous annual evaluation of the Board, its committees, their
procedures and performance. Read more about corporate governance in our 2014 Annual
Report and Accounts(PDF 5.7 MB).
MANAGING SUSTAINABILITY
Our sustainability governance ensures our operations, targets
and plans are managed and delivered in a consistent,responsible and transparent way. Richard Howson, Carillions
Chief Executive, is responsible to the Board for sustainability,
while Chief Sustainability Officer, David Picton, is accountable
for sustainability across the Group. A Board Sustainability
Committee has been introduced, chaired by Dr Ceri Powell, a
Carillion Non-Executive Director, and is now in operation. This
will provide oversight on behalf of the Board for priorities,
targets and challenges material to the Sustainability 2020
Strategy and its management across the Group.
Our Board and Executive leadership teams are also advised bya Sustainability Advisory Committee, which includes directors
from our business units as well as two independent external
advisors Dame Julia Cleverdon DCVO, CBE (Vice President of
Business in the Community and Special Advisor to The Princes
Connectingindustry andParliamentCarillions ChiefSustainability Officer
David Picton wasappointed Commissionerto the Industry andParliament TrustSustainabilityCommission in
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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Charities) and Jonathon Porritt (Founder Director of Forum for
the Future).
Philip Green was appointed to the Carillion Board in June 2011
and was elected Chairman in May 2014. Philip is also Chairman
of both the Nominations and Business Integrity Committees.
Philip was awarded a CBE in the 2014 Queens Birthday
Honours List. He received the award for services to business
and to charity in the UK and South Africa. Philip is the
corporate responsibility advisor to the UK Prime Minister,David Cameron.
The operational delivery of the Sustainability 2020 strategy is
overseen by the Group Sustainability Committee which
includes our operational Managing Directors, as well as key
functional heads from our corporate teams. The work of these
committees is underpinned by a rigorous set of policies,
procedures and operational tracking processes to deliver
business unit plans, each of which also has a steering group to
track progress against Sustainability Leadership Plan targets.
Our sustainability management systems are fully integrated
across the business. They govern our 2020 strategy, help
provide assurance for clients and suppliers, and support risk
management processes. All our operations in the UK, Middle
East and North Africa are certified to the ISO 14001
international environmental standard, as is Carillion Canadas
Roads Maintenance division in Ontario.
BOARD OF DIRECTORSThe Board reviews progress monthly. Richard Howson,
Chief Executive, has Board-level responsibility for
sustainability while Chief Sustainability Officer, David
Picton, has overall accountability for sustainability across
the Group.
SUSTAINABILITY ADVISORY COMMITTEEThe Sustainability Advisory Committee makes
recommendations to the Board. It is made up of
representatives from our business units as well as two
Chairing the BoardSustainabilityCommittee is animportant
opportunity to makesure that Carillionsaward-winningsustainabilityprogress to dateremains ambitiousand relevant.Resilience andbalance will becomeever morefundamental toresponsible andforward-thinkingbusinesses.
DR CERI POWELL,Carillion Non-Executive Director
September 2014. TheCommission exploreshow business andgovernments can worktogether to promotemore sustainablebusiness practices.
CSR LabelAl Futtaim Carillion has
recently been accreditedwith the Dubai ChamberCSR Label awardrecognising ourcommitment to operatingresponsibly.
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independent external advisors. See Independent Advisor
statements.
BUSINESS LEADERS SUSTAINABILITYCOMMITTEEThe Board also engages with the Business Leaders
Sustainability Committee, which is chaired by the Chief
Sustainability Officer and oversees the delivery of our
2020 sustainability strategy. The Chief SustainabilityOfficer implements the strategy via workstreams covering
the six outcomes, interfacing with working groups in each
of the business units.
BUSINESS STEERING GROUPEach of our businesses also has a steering group to track
progress against Sustainability Leadership Plan targets.
POLICY, PROCEDURES AND MANAGEMENTSYSTEMSSustainability is embedded across the Carillion Group via a
number of policies, procedures and use of our
management systems, which are certified to OHSAS 18001
and ISO 14001. In 2012, we launched Capture, a web-based
data collection system for each contract to report safety
and sustainability progress. See Health and Wellbeingand
Environmental Management.
However, the Board recognises that on their own policies
and procedures are not enough and, in order to achieve
consistently high standards of governance and service
excellence, we have to ensure that our values are at theheart of everything we do. Our values are helping to shape
the culture, character and beliefs of our business. For
more information on our values visit About us.
Our Board Sustainability Committee
Dr Ceri Powell was appointed to the Carillion Board as a
Non-Executive Director in April 2014. Ceri is a member ofthe Audit, Remuneration, Nomination and Business
Integrity Committees and Chair of the Sustainability
Committee. Ceri is also a member of the Advisory Board of
the United Nations Sustainable Energy for All initiative,
chaired by the Secretary General of the UN, Ban Ki-moon.
From 2015, Dr Powell will chair a new Board Committee for
Sustainability, set up to assess strategic issues, the delivery
and future development of Carillions sustainability
outcomes and advising on:
sustainability strategy, values and policies;
annual sustainability report;
annual management report from our sustainability
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auditors;
sustainability legislation and regulations; and
engagement with internal and external stakeholders
on sustainability.
VIEW ALL CASE STUDIES
REMUNERATION
In 2014, the Chief Executives objectives included, to lead the
Groups health and safety and sustainability strategies and aim
to deliver continuous improvement in performance.
Our target is to achieve by 2020 a 40 million contribution to
profit as a result of our sustainability programme. It is also one
of our Chief Executives annual bonus targets, sitting alongside
other social, environmental and governance measures to
create a balanced sustainability programme.
Our policy is to ensure that remuneration and other benefits
attract, motivate and retain Executive Directors and senior
managers of the calibre required to achieve the Boards
objectives, including economic responsibility and growth in
shareholder value. Our remuneration policy is derived from
our strategic objectives, which specifically include achieving
leading standards of sustainability, health and safety,
environmental and social performance.
We aim to ensure that pay is fair, consistent and appropriate to
our culture and community. For our full statement and more
details on remuneration, see our 2014 Annual Report and
Accounts(PDF 5.7 MB).
SHAREHOLDER RELATIONS
We welcome and encourage engagement with shareholders.Our contact details are available on our website.The Board
and senior management team communicate regularly with our
shareholders through:
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our Annual Report and Accounts;
our half-year report;
regulatory announcements;
presentations and site visits;
meetings with current and prospective shareholders;
and
our Annual General Meeting.
RISK MANAGEMENT
The Board is ultimately responsible for ensuring that the
Groups risk management systems are suitable for identifying
and evaluating significant sustainability risks. Alongside our
legal obligations and anti-corruption measures, we invest in
integrity with our rigorous business integrity policies and
procedures. Managing social, environmental and ethical risks
is also an integral part of delivering contracts successfully.
We evaluate risk at every stage, from initial thought processes
to assessing how suppliers and subcontractorsare likely to
perform through our supply chain managementsafeguards.
For our people, risk management is practical and structured
but also a reflection of their attitudes. We use the following
processes to manage risk correctly:
independent, external auditors review financial controls
and other business systems to ensure they are
operating effectively;
peer reviews are carried out within each business unit
by teams of impartial representatives from other parts
of the business empowered to ensure compliance with
comprehensive guidelines;
all our people are encouraged to raise genuine concerns
about malpractice at the earliest possible stage,
including a confidential whistleblowing hotline; and
robust anti-bribery and corruption policies. (PDF 95 KB)
See below for our table of sustainability-specific risks.
SUSTAINABILITY RISK MITIGATION
Reduction in public spending on
construction contracts
Potential growth in our services business as
governments look to subcontract work to help
deliver cost savings
New business opportunities in sustainable
products and services with new and existing
clients
Building a successful business
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Difficulties operating in existing or new
overseas regions and markets where
there is potential for political unrest or
change
Employing people with appropriate experience
when tackling new markets and regions
Deploying high-quality project directors in new
regions
Ensuring that key joint venture partner
relationships are managed at the highest level in
Carillion
Carillion employees involved in
allegations of bribery or corruption,
leading to potential prosecution and
damage to reputation
Bribery and governance policies for all senior
management and operational teams, backed up
by specific, targeted training
Volatility affecting price predictions for
the duration of a contract
Hedging against price increases, assessing scope
for risk mitigation or sharing and continuing to
focus on optimising cost efficiencies
SUSTAINABILITY RISK MITIGATION
Losing or failing to win contracts as a
result of poor customer service
Winning and retaining contracts through our
proactive service and sustainable products
Reputational damage by association
with a supplier with poor sustainability
performance
Working with suppliers to enhance their
sustainability performance and continuing as a
funding partner to Supply Chain Sustainability
School
The financial stability of our customers,
partners and suppliers
Applying rigorous selectivity criteria in relation to
financial stability, security of project funding and
contractual terms and conditions; provision of
Early Payment Facility
Failure to support local and SME
businesses, resulting in loss of work
with public sector organisations and
lack of diversity in supplier base
Targets set for local and SME spend; SME charter
and support through initiatives such as Supply
Chain Sustainability School
SUSTAINABILITY RISK MITIGATION
Moral, legal and financial risks through
accidents or incidents to our people or
subcontractors
Continue to embed, develop and enforce our best
in class health and safety standards and practices
across our business
Employee dissatisfaction, leading to a
reduction in retention and our ability to
deliver on contracts
Great Debate survey and follow-up actions to
deliver upon feedback given
Leading the way with our customers andsuppliers
Providing better prospects for our people
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Risks to health and wellbeing among
our people, affecting their welfare and
ability to perform their roles
Providing opportunities for a better work-life
balance through flexible working and Health Like
Safety campaign
Lack of diversity among employees not
reflecting customer base
Investment in diversity programmes, action plan,
targets and advisory programmes such as
Business in the Communitys Opportunity Now
Lack of compliance with local labour
laws, appropriate welfare and humanrights standards, evolving anti-slavery
legislation and employment practices
Ensure that our HR and procurement policies,
guidance and practices adhere to theInternational Labour Organisations core
conventions, align with international ISO
standards and regional laws, and can align with
Carillions values
Recruiting and retaining key people
throughout our businesses
Address key issues arising from employee
engagement; using the Carillion Leadership
Programme as a pipeline for future leadership
talent
SUSTAINABILITY RISK MITIGATION
Reputational damage in the
communities where we work, leading
to a reduction in repeat business
Enhancing our reputation in the community with a
strategic programme of investment in
sustainability and community engagement
Youth unemployment and skills
shortages
Ensuring a future pipeline of skilled individuals
through our education and training programmes,
plus our commitment to national initiatives such
as YourLife in the UK
Safeguarding when working with young
and vulnerable people
Increasing awareness on safeguarding through
training available to employees
Failure to understand our clients and
local community requirements and to
respond to them
Tailoring our community needs plans and
programme delivery to suit the local needs and
appropriate expectations
SUSTAINABILITY RISK MITIGATION
Trailing behind the market for low-
carbon products and services
Innovate and launch services that deliver financial
and carbon savings to clients
Climate change impacts affecting our
business
Continued commitment to climate change
mitigation and business continuity plans to
mitigate localised regional risks
Supporting sustainable communities
Enabling low-carbon economies
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National carbon targets being set Continued commitment to carbon reduction and
minimising our footprint
Increase in costs as energy costs
increase
Investigate and invest in appropriate renewable
energy opportunities and other means to
optimise energy security
SUSTAINABILITY RISK MITIGATION
Biodiversity:
Failure to comply with local legislation
or contract biodiversity requirements
Biodiversity:
Building mutually beneficial partnerships with
organisations such as The Wildlife Trust to
develop environmental management policies,
backed up by specific, targeted training andsystems for managers and operational teams
Waste to landfill:
Financial implications as costs rise
Reputational risk of not taking enough
action to tackle waste
Waste to landfill:
Reduce costs by diverting waste and assess
scope to realise value from waste
Increase engagement with key stakeholders and
advisory groups to target an effective zero waste
to landfill and minimise waste overall
Resource management:
Loss or decline of resources needed for
our business, specifically timber and
water, and consequent price rises
Resource management:
Building mutually beneficial partnerships with
organisations such as the Forest Stewardship
Council (FSC-UK)
Investigate and invest in appropriate alternative
resource use
Pollution prevention:
Prosecution for failure to comply with
local legislation
Pollution prevention:
Environmental management policies, backed up
by specific, targeted training and systems for
managers and operational teams
Ethical sourcing:
Purchasing products and materials that
havent been responsibly and ethically
sourced
Lack of waste recycling facilities in
some of our Middle East operations
and geographical dispersal of our
operations in Canada
Ethical sourcing:
Timber strategy and policy through WWF Global
Forest & Trade Network, targets and evidence
for local spend with small and medium
enterprises, alignment to UK Flexible Framework
principles
Investigating opportunities to create the
infrastructure to support our operations in these
areas, or to partner with appropriate specialist
organisations
Protecting the environment
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Investing in Integrity
Our international operations were awarded the Investing in
Integrity (IiI) Charter Mark following a rigorous
accreditation process involving 3,000 of our people. The
Charter Mark enables us to reassure stakeholders that we
commit to acting with integrity at all times: we are the only
business in our sector to achieve it.
The independent accreditation included site visits,
interviews and surveys carried out by an independent
1,500hourstraining delivered to 330senior employees incompetition, ethics and
business integritypolicies in 2014
INTEGRITY AND ETHICS
INVESTING IN INTEGRITY
ZERO TOLERANCE APPROACH TO CORRUPTION
WHISTLEBLOWING
FALSE CLAIMS ABOUT BLACKLISTING
A range of policies and procedures mandate that everyone who works at
Carillion does so with high ethical and moral standards.
Our Board also expects suppliers and customers to share this commitment, as outlined in our
Ethics and Business Integrity Policy. An independent committee of the Board, the Business
Integrity Committee, reviews and oversees the implementation of the Groups Ethics and
Business Integrity Policy. It also monitors Carillions compliance with relevant legislation, such as
the Bribery Act 2010 and the Competition Act 2006.
The Business Integrity Policy applies to all Carillions businesses through a series of detailed
procedures. They allow us to maintain our reputation for conducting business to the highest
ethical standards, which are essential to its relationships with customers, business partners, our
people, shareholders and the public.
Our Ethics and Compliance Office provides dedicated support for this work, and our Directors
and senior managers complete annual compliance returns to ensure our approach remains
appropriate.
Carillions Ethics and Business Integrity Response Plan outlines the actions that should be taken in
the event of a suspected policy breach. It ensures investigations are conducted fairly anddecisions are taken by suitable individuals.
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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assessor (the Good Corporation), alongside analysis of
ethical policies, procedures and practices.
VIEW ALL CASE STUDIES
ZERO TOLERANCE APPROACH TOCORRUPTION
We absolutely prohibit bribery or corruption of any kind,
including both the offering and accepting of bribes, through our
Disciplinary Policy. We mandate our people and others to
come forward if they witness or suspect unethical behaviour
that is in potential breach of our policy. Gifts and hospitality and
conflicts of interest must be declared and documented.
We continue to provide our people with face-to-face and online
training on our competition, ethics and business integrity
policies. In 2014 we delivered face-to-face training to over 330
senior employees, as part of a company-wide training rollout.
Carillion has a zero tolerance approach to fraud and
corruption. Internal Audit works alongside independent
managers to investigate allegations and prevent and detect
improper behaviour. Carillions Audit Committee receives
regular updates on all allegations reported, and investigation
outcomes.
RESPECT FOR HUMAN RIGHTS
We believe that human rights are universal and we support the
United Nations Declaration on Human Rights, as laid down in
our Ethics and Business Integrity Policy(PDF 98 KB). Employees
are trained on this policy and we report performance through
the Competition Act training statistics. All suppliers have to sign
up to the policy and monitoring compliance is the
responsibility of our Group Compliance Office.
We work hard to ensure that in all areas of interaction with
employees, clients, suppliers, third parties, interviewees and
joint venture parties, that everyone is protected and treated
By signing up toInvesting in Integrity,Carillion has begun ajourney which will bechallenging andrewarding. They haveworked hard acrossthe UK, Middle Eastand Canada to gain
accreditation. Byachieving IiI, Carillionhas demonstratedthey are seriousabout behavingethically.
PHILIPPA FOSTERBACK CBE, Director,Institute of BusinessEthics
Now more than ever,the public rightly
expects businessesto behaveresponsibly andopenly. For Carillionpeople, this is exactlyhow we operate across ourinternationaloperations and thiswas key to usachieving theInvesting in IntegrityCharter Mark.
RICHARD TAPP,Company Secretaryand Legal
PwC BuildingPublic TrustAwardfirst FTSE company toretain the FTSE 250Sustainability ReportingAward for a secondconsecutive year
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absolutely fairly. See the Promoting diversitysection for more
information.
WHISTLEBLOWING
We actively encourage our people to raise concerns about
fraud, corruption, or any other malpractice at the earliest
possible stage. They can do this by talking to their managers or
through monthly Team Talks and feedback sessions. We also
have a confidential whistleblowing hotline provided by an
independent third party. Details of our approach are in our
Whistleblowing Policy.
In 2014, 210 whistleblowing cases were reported across
Carillion. Of these cases, 122 related to fraud, 59 related to HR
and 29 cases were categorised as other.
As at 31 December 2014, 164 cases have been investigated and
closed, and among these closed cases, 51 resulted in either
disciplinary action taken against our people, thereimbursement of losses or the implementation of control or
process improvements to prevent or reduce the likelihood of
the impropriety occurring again. The remaining 113 cases were
either unfounded or required no action. As at 31 December
2014, 46 whistleblowing investigations were in progress.
FALSE CLAIMS ABOUT BLACKLISTING
Along with other companies in the construction industry, over
the past few years Carillion has been accused of beinginvolved in the illegal blacklisting of workers. This is not true.
Blacklisting relates to the use of the Consulting Association
database many years ago by companies in the industry. At
Carillion, we pride ourselves on our strong Values and high
standards of corporate governance and we do not condone or
engage in blacklisting. A former Carillion subsidiary did access
this database but this practice was stopped, voluntarily, over a
decade ago and before it became unlawful. Since then we have
apologised for our use of the database and any damage it may
have caused. To provide an accurate picture we have set up asection of our website with regards to false claims about
blacklisting.
We apply the sameglobally recognisedstandards of excellenceto all our operations,whatever thejurisdictions. See how wehave done this in Qatar.
http://www.carillionplc.com/response-to-blacklisting-accusations/blacklisting-what-actually-happened.aspx#.VHSmuYusW1Uhttp://www.carillionplc.com/response-to-blacklisting-accusations/blacklisting-what-actually-happened.aspx#.VHSmuYusW1Uhttp://www.carillionplc.com/response-to-blacklisting-accusations/blacklisting-what-actually-happened.aspx#.VHSmuYusW1Uhttp://www.carillionplc.com/response-to-blacklisting-accusations/blacklisting-what-actually-happened.aspx#.VHSmuYusW1U7/24/2019 Carillion Sr2014 Full
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SCOPE
The report covers Carillions international operations during
the 2014 calendar year, encompassing the UK, Canada, the
Middle East and North Africa (MENA).
We have reported on activities and projects undertaken as part
of our various joint ventures, depending on our influence on
their operations and the size of our shareholdings in them.
Where Carillion people are seconded to a joint venture, we
include them in the data but exclude the Joint Ventures
operations.
GLOBAL REPORTING INITIATIVE
This report has been prepared in accordance with the GRIs G4
guidelines at core level, reporting against self-selected
indicators based on material aspects.
See our GRI Index. (PDF 224 KB)
ASSURANCE
Bureau Veritas, an independent professional services and
compliance specialist, has assured our performance against
specific sustainability targets, factual statements and
Carillions 2013sustainability reportdemonstrated thatsustainability is anintegral part of its
core business andthe company wantsto communicate theissues in an open andaccessible way. Thereport demonstratesa clear understandingof the sustainabilityimpacts of thebusiness and howthis links to futureviability of the Group,especially aroundresource usage. Inaddition, Carilliondemonstrated someinteresting andinnovative ways ofpresenting
We welcome yourfeedback on this report
and our approach tosustainability. If you haveany comments orquestions please contactus
ABOUT THIS REPORT
SCOPE
GLOBAL REPORTING INITIATIVE
ASSURANCE
This is our 15th sustainability report. It is structured around the six positive
outcomes of our 2020 strategy and aligned to our material issues, as
guided by our stakeholders. This report, alongside our sustainability
strategy and policies, is available on our corporate website.
BUILDING ASUCCESSFUL
BUSINESS
About us
2014 at a glance
Welcome fromour ChiefExecutive andChairman
Views from ourChiefSustainabilityOfficer andindependentadvisors
Our 2020 strategy
Targets andperformance
Governance andrisk
Integrity andethics
About this report
OUR BUSINESS CUSTOMERS &SUPPLIERS
PEOPLE COMMUNITIES LOW-CARBONECONOMIES
ENVIRONMENT
Making tomorrow a better place
SUSTAINABILITY REPORT 2014
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performance data related to the targets within the content of
this report. See the assurance statement below.
BUREAU VERITAS INDEPENDENTVERIFICATION STATEMENTTo the stakeholders of Carillion plc.
INTRODUCTION AND OBJECTIVES
Bureau Veritas has provided independent verification over thestated achievement of a selection of Carillion plcs (Carillion)
2014 sustainability targets against a 2011 baseline, as reported
in its 2014 Sustainability Report (the Report), the methodology
and approach for gathering carbon footprint data. The
objective of our work is to assurance to Carillions
stakeholders over the level of achievement of the selected
targets and of the reliability and accuracy of the supporting
performance data.
SCOPE AND METHODOLOGY
The information and data reviewed for this verification processcover the reporting period: 01 January 2014 31 December
2014, and all the Carillion businesses across the UK, Middle
East and Canada.
In order to form its conclusions, Bureau Veritas conducted the
activities outlined below:
Phone interviews with key Carillion personnel (Head
Office and Regional Staff);
Review of data management and data accuracy through
interrogation of spreadsheets and sampling of selectdatasets;
Review of supporting documentation (including: policies,
procedures, minutes of meetings, email
correspondence, presentations, invoices);
Review of consolidated site and business unit
sustainability data sets.
Carillions sustainability targets and their stated level of
achievement, as subject to the verification, are presented in the
table below.
WHAT CARILLION SAID 2014
Maintain Level 4 of Sustainable ProcurementTask Force Flexible Framework and worktowards Level 5
Achieved
information andengagingstakeholders, such astheir 2020Sustainability Visionbrochure and theSustainability Talk &News initiative.
ALAN MCGILL,
Partner, Sustainabilityand Climate Change,PwC
Leading the way with ourcustomers and suppliers
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WHAT CARILLION SAID 2014
39% reduction in All Accident Frequency
Rate (AAFR) against a 2011 baseline
49%
WHAT CARILLION SAID 2014
45% local spend including SMEs in the UK 51%
100% of contracts to have a communityneeds plan
96%
1% of pre-tax profits donated to communityactivities either in cash or kind
1%
WHAT CARILLION SAID 2014
11% reduction in carbon footprint (against a2011 normalised baseline)
17%
19% reduction in gas consumption fromCarillion offices (against a 2011 degree daysnormalised baseline)
11%
15% reduction in electricity consumptionfrom Carillion offices (against a 2011baseline)
25%
WHAT CARILLION SAID 2014
96% of waste diverted from landfill 95%
15% reduction in water consumption (against
a 2012 normalised baseline)
28%
BUREAU VERITAS OPINION
Providing better prospectsfor our people
Supporting sustainablecommunities
Enabling low-carboneconomies
Protecting the environment
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It is Bureau Veritas opinion, based on the verification activities
as per the scope and methodology above, that the stated level
of achievement reported by Carillion against the selected
targets is a fair reflection of its performance.
Nothing came to Bureau Veritas attention that would indicate
any material error or omission in the information reported, that
would affect stakeholders ability to make informed judgments
on Carillions performance in 2014.
LIMITATION AND EXCLUSIONS
The preparation of the Report is the sole responsibility of
Carillion. The verifier has an obligation to stakeholders and
users of the report and is exclusively responsible for the
content of this verification statement. Carillion has provided
access to the documentation and data required to undertake
the verification process and Bureau Veritas is confident that no
material information has been withheld.
Excluded from the scope of our work is:
Any information not directly linked to the selected
targets;
Activities outside the defined reporting period;
Company strategy and position statements (including
any expression of opinion, belief, aspiration,
expectation or aim);
Financial data which is taken from Carillions Annual
Report and Accounts.
A limited sample of site specific source data and records were
reviewed as part of this assessment.
This independent statement should not be relied upon to detect
errors, omissions or misstatements that may exist within
Carillions reported information. The scope of our work was
defined and agreed in consultation with Carillion. Our work
covers global operations and relies upon the accurate collation
of information at Carillions worldwide locations and its UK
offices.
STATEMENT OF INDEPENDENCEBureau Veritas is an independent professional services
company that specialises in quality, health, safety, social and
environmental management advice and compliance with over
180 years history in providing independent verification and
assurance services. Bureau Veritas has implemented a code of
ethics across its business which ensures that all our staff
members maintain high standards of integrity and
independence. We believe our verification assignment did not
raise any conflicts of interest. Our team completing the work
has extensive knowledge and experience of conducting
verification over sustainability information and systems.
London, 18th of March 2015
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Carillion is
the way with our customers and suppliers
Effective and innovative
collaboration
We work together with customers and suppliers to findmutually beneficial and dynamic solutions, which will help
us to win repeat business and gain new clients based on
our proven delivery credentials.
Launching our SmallBusiness Charter
We are currently exceeding the UK
Governments goal of 25% SME spend for
government contracts with 27% of our
spend going to SMEs. In 2014, we
launched a charter to engage 3,700 small
Prompt payment
977.6M IN EARLY SUPPLIER PAYMENTSIN 2014
Engaging and collaborat
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