2016 CR Index Insights Report
Converting megatrends assessment
into action/Targets for action
Foreword
The role of Business in the Community is to paint the
societal landscape in which business operates and to
help to shape that landscape for mutual benefit. We
support and challenge companies to devise and deliver
business strategies and operations with responsibility
at their heart. The Corporate Responsibility Index
has been a pivotal tool in helping us to achieve that
objective. We are delighted to present the CR Index
2016 Insights Report which as something of a gem
to our participants, member companies and the wider
business community today.
This report identifies and describes many of the
key emerging trends in corporate responsibility
measurement and reporting and it reflects the progress
that companies are making towards a more refined,
comprehensive and therefore more valuable approach
to behaving responsibly.
It reinforces the importance of ongoing measurement
and management, not just for the purpose of identifying
risks, but for seeking opportunities in a rapidly changing
world. It makes the case for doing so in the long term,
especially on climate change where many companies
have yet to take the longer term view that is necessary.
In today’s slow growth world this report also makes
the case for smart growth that is innovation-driven, not
just any growth at any cost, but the kind of growth that
benefits all in a sustainable way. At the heart of this
drive are business leaders so it is crucial that the right
knowledge is made available to those leaders on the
societal issues that matter most to their businesses,
which is why page 37 of this report offers synopsis of
the biggest issues that companies tell us that they
must confront.
Ultimately responsible business is about taking action
and we hope that the short but insightful case studies
in this report inspire many more business about what
is possible and the practical ways that businesses are
integrated responsible practice into their operations.
We are grateful to our participant companies, to our
CR Index Advisory Group chaired by Gavin Bounds,
Chief Operating Officer, Europe Middle East India and
Africa, Fujitsu and to our staff for compiling this report.
Patrick O’Meara,
Director,
Business in the Community.
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Business in the Community - 2016 CR Index Insights Report
Converting megatrends assessment
into action/Targets for action
Introduction
Over the last 14 years Business in the Community
has used the Corporate Responsibility Index (CR
Index) to identify trends in responsible business. This
report provides companies with the most up to date
information around leading practices and is intended to
guide businesses forward on their journey.
This report comprises of three main sections:
- Responsible business examples from participants
- The 2016 CR Index listing including score breakdowns
- Sector specific issues and challenges
The report focuses on the core themes which we
believe to be integral to any company that wishes to
fully integrate responsible business practises into their
strategy and operations.
We found that company’s vision and values are key to
drive change internally, particularly for businesses that
have strong cultures and leadership values. Recruitment
practices and leadership development also play a vital
role in driving change.
Supply chain impacts represent the majority of the
end-to-end impact of a business which is why we have
introduced a more robust question set around Supply
chains in the 2016 CR Index. The report highlights some
of the businesses that have risen to this challenge in a
collaborative way.
We also detected that even after the Paris COP 21
agreement, looking at climate change targets there is
still a short term approach to companies are tackling
this global challenge. In response we have made
recommendations on how companies can work towards
longer timescales when managing global mega trends
such as climate change.
Finally the report takes an in depth analysis into key
sectors: Construction & Materials, Industrial Goods
& Services, Retailers and Utilities and the business
challenges faced by businesses in these sectors.
We hope this report is both interesting and valuable for
businesses across any sector.
For more information, please contact us or visit our
website: http://www.bitc.org.uk/services/benchmarking/
cr-index
Maël Lagadec,
Benchmarking Manager,
Business in the Community
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Business in the Community - 2016 CR Index Insights Report
Contents
01
Megatrends: converting
assessment into action
05
Listing
34
02
Building a culture based on vision
and values
10
Sector-specific Insights
37
03
Trusting our leaders
15
Benefits of participation
53
04
Strengthening the supply chain
20
References
54
05
Sustainability – cost or
investment?
25
06
Measuring the value of
responsible business
30
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01
Megatrends: converting assessment into action
Pressure from global trends is rapidly changing
the factors that determine a company’s long-term
success.
By understanding global pressures or
‘megatrends’ – such as population growth,
demographic changes, growing social divisions,
climate change and technological innovation
– companies can prepare for a future beyond
the next financial cycle and shape their longterm business strategies and models. Leading
businesses assess megatrend risks; they
develop strategies and set targets that enable
them to take the necessary action to mitigate
these risks and seize relevant opportunities.
Good practice
It is good practice to consider global
megatrends as part of a corporate risk
management process, to reflect this
assessment in the company vision and
strategy, and to underpin action with
objectives and targets. Objectives and
targets should be SMART (Specific,
Measurable, Achievable, Relevant
and Time-bound) in order to convert
company aspirations into the concrete
actions needed for a company to
manage its risks successfully.
This chapter explores how CR Index participants
approach these types of long-term risks.
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Key findings
More and more companies take
global megatrends into account
when undertaking risk assessments
100
80
60
40
20
67% 81% 86%
0
2014
2015
2016
86 per cent of CR Index participants assess the risk of
global megatrends to their business – up from 67 per
cent in 2014.
However, not all companies are setting the long-term
objectives and targets that would enable them to address
these risks more effectively. Qualitative analysis of shared
targets shows that most companies would benefit from
fine-tuning their targets by, for example, looking further
ahead or making them more measurable or specific.
Climate change is the long-term sustainability risk
most comprehensively integrated into participants’ risk
management systems. However only 74 per cent of
participants have set climate change targets beyond the
next financial year, only 33 per cent up to 2020, and just
5 per cent beyond that date.
Converting megatrends assessment into action/targets for action
2010
2015
85% of companies
have targets for carbon
emissions covering all
operations
2010
2011
2012
2013
98% of companies now say they have long-term
(five-year) environmental objectives, but only
74% have climate change related targets that
extend beyond the next financial year
2014
7% of companies are carbon neutral
and 12% have targets for achieving
carbon neutral status
2015
2016
2017
2018
2019
2020
2021
33% of companies have CO2 emissions targets
for 2020, and a further 5% have targets beyond
that date
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Business in the Community - 2016 CR Index Insights Report
01
Of those CR Index
participants who
use self-generated
renewables or
alternative sources
67%
produce only enough to
cover up to a quarter of
their energy needs
20
36 10
%
CR Index
participants
generating
renewable
energy
• Companies would benefit from developing longer-term SMART objectives and
targets to address climate change and other risks to future business stability. This
would enable them to address such risks more effectively and be better prepared
for the future.
• Collaboration with different types of stakeholder is key to finding solutions to
environmental or social challenges. Collaboration not only offers substantial
opportunities for improving the management of these issues, it is also a way of
engaging stakeholders and enhancing a company’s reputation, as the following
examples demonstrate.
20
50 15
%
19%
of CR Index participants
use a green tariff to
cover over 75% of their
energy needs
Key recommendations
*
*Companies with Carbon Trust certification
not included
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01
Case Studies
Gentoo have a comprehensive internal sustainability
programme whereby each department within Gentoo
has pledges and targets to reduce the environmental
impact of their activities. These pledges are varied,
with some focused around operational activities that
have helped to drive an 18.73 per cent reduction in
Gentoo’s carbon footprint since the launch of the
programme in 2012. This has been achieved through
promoting sustainable transport activities, reducing
energy consumption and embedding sustainable
waste management practices. Additionally, Gentoo
have a series of projects to embed sustainability
within new build developments, asset management
and customer facing activities. Furthermore, Gentoo
are currently investigating the feasibility of balancing
remaining carbon emissions through a local
sequestration project that includes local environmental,
social and economic benefits among the strategic
objectives for the programme.
In 2015, Carillion achieved its 2020 carbon reduction
target five years early – delivering a 31 per cent
reduction against a 24 per cent target – and was one of
only two UK Industrial firms awarded an A grade in the
2015 Carbon Disclosure Project Climate Change Index.
Working with customers, suppliers and across its own
operations, it has brought hybrid cards into its vehicle
fleet, reduced generator usage in the Middle East by
connecting project sites early to mains power and
introduced vehicle telematics in Canada to encourage
more efficient driving styles. Turning its attention now
to measuring and cutting embodied carbon, Carillion
is supporting the design of the Green Construction
Board’s new carbon standard (PAS2080), and working
with the UK Green Building Council to identify practical
ways to reduce embodied carbon across the built
environment.
M.A.G has formed partnership working groups with
business customers at all its airports in order to make
operations more sustainable. These groups have
promoted the adoption of a different landing technique,
known as continuous descent approach, which
reduces carbon emissions per flight by up to 150kg.
In total this technique is now saving more than 3,000t
of fuel each year, resulting in an annual carbon saving
of more than 9,000t. This year these groups have
also overseen trials of new ways of flying, including
the first UK deployment of satellite guided precision
flying. This has dramatically increased the accuracy
and consistency with which aircraft fly noise preferred
routings, reducing local impacts. The working groups
have also reduced noise by examining numerous
operational procedures and reduced fuel burn further
by allowing aircraft to taxi with one engine switched off.
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01
Case Studies
In the past year National Grid has announced two
significant investments: an electricity interconnector
from the UK to Norway and one from the UK to
Belgium, which will contribute to the decarbonisation of
the UK’s electricity supply.
National Grid and Statnett, the Norwegian transmission
system operator, signed an agreement to build a
transmission link between the two countries. The
730km HVDC interconnector will cross the breadth
of the North Sea into the connection point in the
Norwegian fjords and will be the world’s longest
Interconnector. The agreement with Norway will
save UK households up to £3.5bn over 25 years by
importing cheaper electricity, according to Ofgem.
Most of the electricity flowing into the UK from Norway
will be zero-carbon having been generated from
hydropower in Norway.
Energy consumption is the most significant impact
given that it results in carbon dioxide emissions
contributing to climate change. Nationwide have
reduced energy consumption by 15 per cent by
making buildings and working practices more energy
efficient and investing in appropriate new technologies,
including:
•Installation of new multi-functional printers, saving an
estimated 30,000 kWh of electricity a year.
Midcounties has been awarded the Queen’s Award
for Enterprise for Sustainable Development 2015.
This was achieved as a result of the Society placing
sustainability at the heart of its operations. The Society
created significant environmental improvements
whilst delivering tangible social and economic
benefits. This is recognised as one of the UK’s most
prestigious business awards, given only to companies
or individuals outstanding in their field, with only 12
businesses awarded the Sustainable Development
award in 2015. The award was achieved as a result of
a range of sustained responsible practices, including
the following achievements over the last 10 years:
•Installation of high efficiency lighting and automatic
controls in key locations.
•Increasing recycling levels from 21 per cent to 85 per
cent
•Installation of a 50 kW solar photovoltaic panel on the
roof of the Head Office in Swindon.
•Reducing energy usage by over 10 per cent
•Improved metering and monitoring to identify
energy waste and subsequently fine-tuning building
management systems.
Nationwide have also developed a woodland creation
programme, pledging to plant 60,000 trees. This will
help reduce impact on the environment and provide
long lasting community benefit for generations to
come.
•Annual eco efficiency savings of £1.5 million
benefiting the business.
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02
Building a culture based on vision and values
“Culture eats strategy for breakfast”,
Peter Drucker, management consultant,
educator and author
The CR Index focuses on the structures and
policies put in place by companies to support
their responsible business ambitions. Vision
and mission statements set out the longterm direction of an organisation as far as its
business, markets, customers and financial
objectives are concerned. Company values
establish the ethical boundaries within which
a company operates. The latter have assumed
even great importance in the light of recent
corporate scandals such as that engulfing
Volkswagen.
Good practice
CR Index top performers ensure
that their values are well understood
internally as well as externally. They
promote them using a variety of
channels and make sure these values
remain relevant to the business, its
people and its stakeholders. They also
ensure that their values are consistently
applied across the entire organisation
by integrating them into performance
assessment and rewarding those who
act accordingly.
This chapter explores how companies embed
values across their operations and engage their
people in applying them.
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Key findings
Employee engagement practices used by CR
Index Participants
INVOLVE
INFORM
• Surveys
• Conferences and roadshows
• Online feedback mechanisms
eg mobile applications
• Intranet/in-house magazines
• Updates from the CEO
• Leaflets and posters
ENGAGE
• Employee forums and representatives
• Ambassadors
When evaluating a company’s values and the extent to
which they are integrated across its business, BITC asks
CR Index participants the following questions:
1. How do you promote your values to your
stakeholders and engage your staff?
When promoting values, the main objective is to
make sure that the values are well understood. CR
Index participants employ a range of channels for
communicating their values, including:
- recruitment processes
- induction and other training
- posters, screensavers, walls of meeting rooms and
similar
- appraisal, promotion and reward mechanisms
- exit interviews
- stakeholder interviews and other engagement
- other internal engagement initiatives.
Another way of encouraging staff to embody company
values is to involve them in volunteering activities.
The percentage of companies using volunteering to
engage and motivate employees is increasing, while a
significantly smaller – though increasing – percentage
use it as a learning and development tool.
72 per cent of businesses involved in education
partnerships report greater staff engagement, increased
opportunities for skills development and improved internal
networks.i
CR Index participants using
volunteering:
2014
2016
to engage and motivate staff
73%
84%
as a learning and development
opportunity
39%
56%
As technology advances, companies are starting to
replace traditional methods of engaging their employees
with more personalised and interactive ways of promoting
constructive dialogue and collaboration.
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2. How do you ensure compliance with your values?
Businesses should verify on a regular basis whether
their values are consistently applied across the entire
organisation. Only 28 per cent of CR Index participants
include their values in performance reviews and only 12
per cent reward those who act in line with these values.
Integrating values into performance management is
necessary to ensure that they are translated into preferred
behaviours and to address misconduct. Because
bonuses are a strong driver for employees to achieve
their individual targets, it is important to use appraisal to
ascertain how these targets have been achieved.
It also needs to be highlighted that 7 per cent of
participants do not monitor compliance with their Code
of Conduct. We recommend to those businesses which
have yet to put the necessary procedures in place to
address this in the coming year.
Building a culture
based on vision and
values
98%
of CR Index participants
confirmed that their
board takes account of
employee issues that
affect the delivery of
business strategy
84%
of CR Index participants
confirmed that senior
directors’ remuneration
is influenced by their
responsiveness to
employee issues
Key recommendations
•
Companies benefit from integrating values into performance appraisals,
promotion and reward systems in order to encourage preferred behaviours.
•
Companies could explore further the opportunities provided by volunteering
to engage and develop staff and make the most of their currently unengaged
talent, for example, the quarter of employees who consider that their companies
do not allow them to show initiative. ii
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Case Studies
Kelda’s values are an integral part of the culture
within the company and fully underpin its vision. They
are used in recruiting new employees through preassessment and interview questions to ensure that
candidates have the right values and behaviours to fit
in with the company.
They also form part of an ongoing performance
management process, with managers having
discussions with employees about their values and
behaviours, as well as how well they are doing their
job. An important part of the performance bonus
that all employees can receive is based on how they
have lived the relevant and appropriate values and
behaviours over each quarterly period.
Royal Mail Group reports publicly on breaches to its
Code of Conduct and resultant disciplinary actions
in the CR Report. Breaches include incidents such
as a failure to follow workplace practices, through to
bullying and harassment and theft of mail. Information
is reviewed centrally in order to inform policies and
procedures and to provide coaching for managers.
The Code of Business Standards sets out the
standards of behaviour that Royal Mail Group expects
from employees. It is about doing the right thing:
following the law, acting honourably and treating
others with respect. It sets out values, policies and
behaviours that are necessary to make Royal Mail
Group a trusted, positive and successful place to work.
Where standards are not maintained, appropriate
action is taken under the Code of Conduct. Priorities
for 2015–16 are outlined in the CR Report.
Risk assessments have been carried out in the
financial year 2013/14 for every role in the company
for potential exposure to competition (antitrust) and
bribery breaches. The risk score an individual role
receives informs the level of training required to
mitigate the risk effectively. Similar risk assessments
have also been carried out for data protection
(information security) and the required training has
been delivered to employees. This risk assessments
and training communication programme is regularly
refreshed and repeated.
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Case Studies
In the 2012/13 and 2013/14 employee surveys, Reward
and Recognition attracted a relatively low score. As
a result, in September 2014 M.A.G. introduced a new
recognition scheme called Values in Practice (VIP).
In this scheme all people managers in the company
are empowered to make awards to colleagues who
have performed exceptionally and demonstrated the
company’s values. Award winners are also considered
by a panel of senior leaders and potentially shortlisted
for annual awards at an annual awards dinner.
More recently, M.A.G. has extended this scheme to
include a specific recognition for those who contribute
to volunteering. Volunteering is a specific value and by
participating colleagues can achieve bronze, silver,
gold or platinum achievement recognition. In its first
month of operation, this scheme recognised the efforts
of 60 people for being brilliant at what they do or going
the extra mile and really bringing the company’s values
to life.
The Regional Leadership Team (RLT) values the
importance of employee issues and acknowledges
that ultimately it is employees who run the organisation.
‘People’ is one of Fujitsu’s four interconnected,
equally valued business priorities, along with ‘results’,
‘customers’ and ‘responsible business’.
It is essential that business issues appropriate to
employees are identified and considered when
shaping strategy. Fujitsu Voice is a group of 23 elected
employee representatives and six company appointed
representatives with whom the RTL can engage to
discuss strategic matters and subjects that impact the
future of the business and its employees. A member
of Fujitsu Voice is invited to join all the Responsible
Business Board meetings to partake in discussions
and feedback where necessary.
In addition, appropriate decisions will be run past
Fujitsu Voice for its input. Voice members regularly
feed back to the employee group(s) they represent
with key information and updates.
The Interserve Employee Foundation (IEF) was launched
in February 2012 as a result of an employee-led
leadership development programme identifying the need
to bring charitable activity and employee volunteering
together with a clear strategy to support communities
where employees work and live. The IEF is a separate,
not-for-profit legal entity with its own Board of Directors;
these directors are company employees who are
nominated and elected on a biennial basis. The IEF has
established a strong network of IEF Ambassadors who
contribute to the development of programmes and are
responsible for involving other employees in activity.
The role of an ambassador is to provide support for and
encouragement to the wider business to take part in
community activity and provide a link between the wider
group of employees and the IEF.
Interserve’s leadership development programmes, the
Trusted Partner Programme (TPP) and Ingenuity at Work
Programme (IWP) both include community activity as part
of their structure.
Employee volunteering is used to motivate and engage
employees across the business. The Interserve Reward
& Recognition Programme ‘Unlock the future’ contains
two awards: ‘Bring better to life’ and ‘Social Capital’ that
recognise employee volunteering, with finalists receiving
a cash award.
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Trusting our leaders
Developing responsible business leaders is
critical to the future of responsible business.
The Edelman Trust Barometer 2016 shows that,
globally, trust in business has increased for the
first time since the recession.
However, the same report finds that only 57 per
cent of people in the UK trust the companies
they work for iii. Considering that already over
half of employers are facing difficulties filling
vacancies iv, a new approach is needed.
This chapter explores the steps CR Index
participants take to identify, recruit and develop
leaders as part of ensuring that their staff
are trustworthy, inclusive and have sufficient
knowledge of responsible business to ensure
long-term success.
Good practice
Companies that include sustainability
experience and inclusive attitudes in
capability matrices at all levels are better
positioned to manage successfully the
environmental and social issues they face.
It is good practice to adopt a structured
approach towards recruitment and talent
management. This should involve a formal
assessment of the skills and expertise
needed, followed by the development of
structures and programmes to ensure that
these skills are available in the business
at all times. At the same time, companies
should be transparent in their approach,
communicating their successes and
failures publicly so as to forge trust and
attract currently disengaged talent. Public
reporting of the gender pay gap – which
is now mandatory – enables companies
to better manage this issue by first
acknowledging it and then developing
more transparent pay systems.
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Key findings
Over the last two years, companies have developed
a more structured approach towards including
sustainability expertise at board level. The number of
participants who have undertaken a formal board-level
skills assessment has increased from 10 per cent in 2014
to 53 per cent this year, with 40 per cent of participants
able to demonstrate that they have at least two board
members with a CR mindset that can inform other
members of the Board. Significantly, those companies
with a capability matrix at board level outperformed those
that do not by 7 per cent in the 2016 CR Index.
In the current economy, successful leaders have to
meet growing expectations. 9 out of 10 participants
provide training to enable leaders to envision how their
organisation can contribute to a sustainable economy and
to equip them with the skills and knowledge to translate
this into a successful business strategy. Company
leaders are often encouraged to continue their education
by pursuing an MBA or similar degree or working towards
becoming chartered members of relevant professional
organisations.
CR Index participants use a variety of competency maps
and leadership and behavioural frameworks to develop
learning and development opportunities for employees
who hope to be future leaders.
Inclusivity is one of the key qualities companies should
nurture in leaders in order to attract the talent they need.
Many UK employees do not feel valued (38 per cent)
or inspired (24 per cent). They don’t have access to
career role models, or do not feel supported and valued
by their managers. Individuals from an ethnic minority
background are most likely to feel this way. v
In order to manage diversity effectively, companies
must first appraise the existing situation, then develop
programmes based on the feedback they receive. 71 per
cent of CR Index participants regularly survey their staff
about their experience of working in their organisation.
Some of them analyse the data by ethnicity (42 per
cent), gender (65 per cent) and age (61 per cent) of
respondents. 1 in 2 analyse their data even further by
comparing gender alongside age or ethnicity. 87 per cent
of participants also use surveys to ascertain how inclusive
line managers are and to ask specific questions related to
diversity and inclusion.
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Key recommendations
9 in 10 managers understand organisational
diversity and inclusion objectives
6 in 10 of current line managers have diversity
and inclusion competences assessed during
appraisal and are tested on their ability to be
inclusive eg through 360° feedback mechanisms
7 in 10 of managers are accountable for the
progression of diverse groups within their teams
As far as public reporting is concerned,
participants* report the gender (100 per
cent) and BAME (67 per cent) composition
of the workforce but only a minority report
promotion rates by ethnicity (21 per cent)
and gender (25 per cent). The uptake of
flexible working (17 per cent) and return
rates from maternity/shared parental
leave (21 per cent) are also infrequently
reported.
4 in 10 people who are promoted or recruited
into people management roles are tested for
their ability to be inclusive
7 in 10 companies integrate inclusion
competences into leadership development
programmes
8 in 10 companies include the ability to be
inclusive as part of a leadership framework
Only 67 per cent of CR Index participants
have a transparent pay system in which
everyone knows and understands how
pay is determined. The same percentage
of companies monitor employee pay by
gender to ensure equal pay. There is still
much work to be done, therefore, to get
ready for mandatory public reporting of
the gender pay gap.
•
Organisations benefit from identifying the skills and experience – including
responsible business knowledge – needed at all levels for implementing their
long- and short-term strategies for recruitment and succession planning.
•
Companies should consider communicating their position on organisational
diversity and inclusion to all managers, and including assessments of diversity
and inclusion competences in their recruitment, promotion and appraisals
processes. Bringing managerial behaviour into line with corporate diversity and
inclusion strategies is an important step towards getting the best from currently
disengaged diverse groups.
•
Businesses would benefit from being more transparent about their promotion
and pay practices. Based on our data, the majority of businesses have a
significant gender pay gap. Measuring and reporting this information puts
businesses in a better position to address the issues, to develop appropriate
programmes and to demonstrate their commitment to equality and diversity –
which will in turn enable them attract the best talent.
*of those who completed the diversity section
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Case Studies
All Managers at Gentoo are expected to be
behavioural role models. Managers are therefore
appraised against a set of behaviours that include
Diversity and Inclusion. As part of recruitment
to management positions, candidates will have
successfully completed an assessment that looks at
how effectively they display required behaviours.
All leaders and managers also take part in a range
of development activities including events called
Vision in Action. Last year Gentoo held an event for
over 120 managers focusing on delivering inclusive
staff development discussions, identifying any signs
or signals of mental health issues and dealing with
domestic violence.
Kelda provides detailed overviews of employee profiles
as well as the results of further analysis of employee
data. In an easily accessible way anybody can find
out, for example, how many women come back from
maternity leave or the uptake of flexible working. For
most of those looking at this data it may not matter
what the actual percentages are. But by sharing
this information, the company makes a stand and
demonstrates that is a responsible employer.
Kelda also discloses information about its journey to
equal pay.
As a measure of success, last year’s appraisal results
showed less than 2 per cent of employees were rated
as not meeting behavioural expectations.
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Case Studies
In 2014 Ricoh launched a four-tier Leadership Development framework, an internal
programme for all levels of Ricoh leaders from junior supervisors to future board
members. All four tiers incorporate an element of voluntary work, whether this be
fund-raising or skills-based volunteering. Since launching this programme, the
following benefits have been realised:
•>100 per cent increase in uptake of employee volunteering
•Leadership delegates becoming advocates for employee volunteering
•Measuring the impact that volunteering has upon Employee Engagement (24 per
cent positive differential in Employee Engagement between ‘Volunteers’ and ‘Nonvolunteers’)
•Leadership delegates learning or reinforcing workplace skills
•£ 66k raised for charity directly by Ricoh’s Leadership delegates
•>140 young NEETs (Not in Employment, Education or Training) coached in
Employability skills such as interview practice, CV writing, applications for work
placements, etc.
Tata Consultancy Services (TCS) works alongside
specialist charities and social enterprises as part of IT
Futures, Tata’s multi award winning programme aiming
to once again personalise the creation of technology,
showing young students that they can help to create
the digital worlds they inhabit.
Since the programme’s inception in 2013 we have
reached in excess of 51,000 young people across
numerous secondary schools and universities in the
United Kingdom and Ireland.
IT Futures aims to engage students at critical stages
of education whilst raising awareness of IT professions
among parents as well as strengthening the ability
of educators to deliver effective training and relevant
skills through multiple channels and programmes.
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Strengthening the supply chain
A sustainable and resilient supply chain is key to a company’s
ability to deliver its business strategy successfully.
It is also a huge area of risk and opportunity. Risk
because the impacts of the supply chain can constitute
the majority – and sometimes as much as 90 per cent– of
a business’s end-to-end sustainability impact. vi When
supply chains are not carefully managed companies
are exposed to a range of risks including reputational,
legislative and environmental risks. However, the supply
chain also represents an area of huge opportunity in
which collaboration can drive innovation and efficiencies
in the business, resulting in decreasing costs and
increasing profits. Collaboration can also identify and
produce solutions in situations where there are negative
impacts – from human right abuses to environmental
failures.
Good practice
To build and maintain a robust, flexible,
resilient and collaborative supply chain
companies must be able not only to
identify and understand their supply
chain risks and opportunities but also
to develop a strategy that supports
knowledge and resource sharing.
Collaboration beyond traditional clientsupplier relationships and hierarchies
should be at the heart of the strategy if
a substantial shift is to be achieved.
This chapter explores how companies are driving responsible
business practice in the supply chain and provides top level
guidance on making the most of an under-explored opportunity. vii
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Business in the Community - 2016 CR Index Insights Report
04
Allocating responsibility for managing the supply chain
Key findings
Sustainable supply chain management with the focus on collaboration
When selecting suppliers, two in three CR Index participants integrate sustainability
factors into the pre-qualification stage of the tendering process, including pre-qualification
questionnaires, invitation to tender, supplier site visits and supplier presentations, with 30
per cent of companies assigning over 40 per cent weighting to sustainability factors.
Once suppliers have been selected, the majority of CR Index participants encourage
innovation and collaboration. They integrate sustainability requirements into their supplier
management by setting targets, developing action plans to achieve them or offering
practical support. One in two reward their suppliers for good performance through awards
or other types of promotion or by prioritising them for new contracts.
Almost all CR Index participants (93 per cent) state that they collaborate with suppliers to
solve sustainability challenges through strategic partnerships or by fostering innovation.
Supply chain – power of collaboration
1 in 2 3 in 4 4 in 5
CR Index participants
reward suppliers for
good performance
CR Index participants
provide practical
support for suppliers
CR Index participants set
improvement targets for
suppliers and require them
to adopt processes to drive
sustainability in their own
supply chain
9 in 10 CR Index participants have identified employees responsible for managing
the sustainability aspects of the procurement process and have given them relevant
training. However only one in two consider social and environmental supply chain
performance when appraising and remunerating these purchasing and supply chain
employees.
Significantly, companies that do not have dedicated staff to engage their supply chain
are less likely to integrate sustainability factors into their tender processes. Only a third
of those companies, as opposed to 89 per cent of those with a dedicated resource,
include sustainability requirements in all bid evaluation criteria.
Similarly, companies without a dedicated resource are less likely to integrate
sustainability criteria into their assessment of suppliers’ management and performance.
For example, they do not monitor suppliers to ensure they meet minimum standards or
collaborate with them to solve sustainability challenges.
Without dedicated resources only:
1 in 2 1 in 3 1 in 5
CR Index participants
• Have a risk assessment
process based on
social, environmental
and economic criteria
• Set targets and
develops action plans
with suppliers
CR Index participants
CR Index participants
• Conduct regular audits to
ensure compliance
• Require suppliers to
adopt processes to
drive sustainability
• Provide practical support
for suppliers
• Reward suppliers for
good performance
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Business in the Community - 2016 CR Index Insights Report
04
Supply chain - power of collaboration
Building relationships with SMEs
This year BITC introduced supporting SMEs or social
enterprises as one of the social impact options in the
survey. 14 per cent of participants completed this section.
Pre-tender barriers
Unduly restrictive due
diligence processes
Access to tenders
eg complexity of
procedures and lack of
access to information
Long payment terms
The business case for supporting SMEs
is clear as one CR Index participant,
Interserve, outlined:
1) Customers in a range of sectors are keen that their
large tier 1 suppliers engage with SMEs and Social
Enterprises. Evidencing this can enhance the
relationship with existing customers and increase
competitiveness when bidding for new work.
2) Long-term relationships with suppliers enable a
better understanding of each other’s businesses,
leading to increased reliability and continuity of
supply.
3) Improving the capacity of the supply chain over the
longer term helps to deliver more effective services.
CR Index participants like Fujitsu acknowledge that there
are barriers for SMEs and make an effort to address them.
To better understand the SME landscape, Fujitsu
commissioned independent research entitled
Collaboration Nation (report available online).
Amongst other findings, it highlighted the key
barriers to collaboration between SMEs and large
organisations. These issues included establishing the
correct point of contact within the organisation, long
payment terms and bureaucratic processes.
Late payment is a persistent problem for small
businesses. According to Phil Orford MBE of the Forum
of Private Business: “Upwards of £30 billion remains tied
up in late payments, costing a typical small business in
the UK 130 hours a year to chase and meaning that a
third are forced to seek external finance to cover the gaps
in cash.” viii Only half of CR Index participants pay their
suppliers on time, in line with their own policy. However,
we have observed an improvement with a majority of
participants now paying within 60 days rather than 90.
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Business in the Community - 2016 CR Index Insights Report
04
Supply chain – power of
collaboration
1 in 2
CR Index participants
pay suppliers on time
1 in 3
CR Index participants
pay within 30 days
2 in 3
CR Index participants
let suppliers wait up to
60 days for payment
The pace of change is too slow and poses a reputational
risk to large businesses. From April 2016 they will be
required to publish their payment practices twice a year to
make sure that small companies do not get caught out. ix
To help remove the barriers faced by SMEs, CR Index
participants:
• organise or participate in access-to-buyer events or
specialised pre-tender briefings for SMEs or social
enterprises;
• work with SMEs/social enterprises to develop
engagement programmes and augment procurement
practices; and
• engage with other organisations, networks and
directories to access pools of SME or social enterprise
suppliers.
Ways of supporting SMEs according to CR Index participants*
Financial
Assistance
57%
86%
Training
Networking
100%
Mentoring
100%
Innovation
support
71%
0
20
40
60
80
100
*CR Index
participants
who selected
the “SME/
Social
Enterprise”
social impact
option in the
survey
CR Index participants identified the following as concerns that arise once a contract is
granted: safety culture, skilled resources, quality of work undertaken and ability to operate
on a national level, where appropriate.
The best performers in this area identify the development needs of their SME suppliers
and help them increase their capacity either directly or through partner organisations. The
most common types of support offered are networking, mentoring, training and innovation
support.
Key recommendations
•
In order to improve the level of engagement and collaboration with suppliers,
companies should develop a detailed sustainable procurement strategy, define
the scope of each engagement and allocate the resources needed to execute it.
•
Companies can collaborate with suppliers to achieve shared targets and solve
major challenges. They should ensure that those responsible for delivery –
whether they work for the company or its suppliers – have the knowledge and
skills needed for successful project execution.
•
In order to create a level playing field for businesses of all sizes, companies
supporting SMEs must first address the barriers that SMEs face at different
stages of the procurement process.
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Business in the Community - 2016 CR Index Insights Report
04
Case Studies
The H50 Alliance works on a collaborative basis
to deliver South West Water’s engineering capital
programme, with incentivised targets aligned
with South West Water’s business plan, delivery
programme, financial and sustainability targets. H50
Alliance members provide briefings to regional SMEs
and local schools on health, safety and environmental
best practice.
Members organised Sight Specific training in
partnership with WESC Foundation for staff, partners
and contractors to help them to better understand the
challenges that street works can pose to blind and
visually impaired people. Over 100 staff took part from
14 companies, with one attendee commenting: “This
type of training really brings home how challenging
negotiating street works can be for blind and visually
impaired people and how we can minimise that
impact.”
To “create and deliver innovative sustainable solutions”
Costain is very focused on providing access for
new SME suppliers and where applicable social
enterprises to form partnerships to help develop
solutions. Costain’s annual Blue Engineering Futures
event is aimed at attracting innovators, entrepreneurs,
businesses and members of the general public to
come and present new and exciting ideas at a series
of nationwide events. The initiative has been set up to
support Costain’s Engineering Tomorrow strategy, the
Group’s commitment to identifying, developing and
implementing innovative solutions to major national
needs.
From the submitted innovative ideas, Costain selects
the most viable ones to be employed in the company’s
operations. In 2013 from 52 ideas, the top five received
investment, the largest of which was £500,000 to
develop a concept into a service in Costain’s market
around affordable energy management.
During its SME UK Tour in 2013/14, Fujitsu made direct
contact with over 300 SME suppliers. Now comes
Generation through Innovation, the next step in SME
engagement evolution.
Generation through Innovation aims to align
appropriate SMEs with current business opportunities.
It brings the technical community and procurement
together in the search for innovative SMEs. It is Fujitsu’s
very own Dragons’ Den. It provides SME businesses
with a forum to pitch ideas to meet challenges, which
are brought to the attention of Procurement and Fujitsu
Technical Specialists by specific Business Units within
the organisation.
Fujitsu awarded 30 per cent more contracts to SMEs
last year compared to FY2012/13, which reflects
Fujitsu’s commitment to making it supply chain more
accessible to small businesses.
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Business in the Community - 2016 CR Index Insights Report
05
Sustainability – cost or investment?
Innovation lies at the heart of the transition to
sustainability. CR Index participants see innovation
as an opportunity to differentiate themselves from
their competitors, and view the initial expenditure
involved as a long- term investment rather than a
cost. All CR Index participants invest in making their
existing products and services more sustainable
or introducing new, more sustainable options –
with 93 per cent taking steps to scale up these
initiatives. Often innovation involves collaboration
with stakeholders, which is used to generate and
implement innovative ideas.
In addition to completing the 2016 CR Index,
20 per cent of participants took part in a survey
dedicated to their innovation practices and drivers.
This chapter represents a combined analysis of
the responses from both surveys and showcases
examples of good practice.
Good practice
Companies can innovate by upgrading
existing offers, through new products/
services or by introducing new business
models. Successful innovation depends
on a number of factors, including:
• understanding the business case for
innovation (eg risks and opportunities
related to megatrends);
• a shared vision of the future (eg longterm thinking);
• stakeholder engagement and
collaboration (internal and external);
• overcoming barriers (eg bureaucratic
decision making processes,
investment criteria).
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Business in the Community - 2016 CR Index Insights Report
05
Sustainability – cost or investment?
Suppliers
Other
stakeholders
100% of CR Index
participants innovate
by offering new business
products/services
Customers/
consumers
inn
Competitors
Collaboration
Partners
n
tio
ova
Employees
Community
Government
30% of CR Index participants
offer an end-of-use return or
repair service for their products
but only 14% use it to innovate
through new business models
(circular or functional economy)
93% of CR Index
participants innovate
by upgrading existing offers
Key findings
Improved processes and products
CR Index participants represent a variety of industries and business models. Their
practices and motivation therefore vary significantly.
All CR Index participants innovate by making existing products and services more
sustainable, with 93 per cent of them undertaking innovation initiatives with a longerthan-normal return on the investment period.
Companies’ innovation focuses on improving internal processes and structures as well
as current products and services – but not on changing their business model.
A move towards a truly sustainable economy would involve businesses in considering
the impact not only of their own operations and the products and services they use
but also the way in which customers use and dispose of the products they make. The
Ellen MacArthur Foundation describes the circular economy as “an economy that’s
restorative and regenerative by design”, whose ultimate aim is to eliminate the concept
of waste entirely.x Only a third of CR Index participants offer or enable an end-of-use
return or repair service for their products. These companies gain financial, as well as
social and environmental, benefits from closing the loop. Furthermore, only 14 per
cent of participants have identified and explored new business model opportunities for
bringing additional revenue streams to the business and/or its partners (eg local social
enterprises).
Overall a combination of ‘closing the loop’ on resource use and moving to a servicerather than product-based business model has been estimated to have the potential to
add 0.18 per cent – equivalent to £2.9bn per annum – to the UK’s annual GDP. xi
26
Business in the Community - 2016 CR Index Insights Report
05
Innovation – drivers and barriers
Participants identified a number of crucial factors affecting innovation.
• Innovation is driven by business culture and long-term opportunities. Corporate vision
and values, people and culture as well opportunities presented by sustainability are
cited most often as the main drivers of innovation.
• Companies are observing customer trends, rather than looking at competitors or their
own industry, in order to generate innovative ideas. Long-term risks, and pressure from
stakeholders such as clients and government can play an important role in fostering
innovation. Stakeholders are often involved in the ideas generation processes, with
most companies engaging primarily with staff, customers and suppliers.
• Lack of resources and regulation are listed as key barriers. Operations and R&D
teams are more involved in innovation than Marketing and Corporate Responsibility
teams. Internal collaboration is cited by all participants as key to overcoming the
challenges they are facing, with some companies focusing on increasing internal
engagement and creating more collaborative channels of communication between
different parts of the business. Others engage external stakeholders – suppliers,
customers, other industries, government and universities – in finding a solution.
Key recommendations
• Businesses should undertake whole life cycle assessment or similar
methodologies to identify areas for sustainable innovation. Looking beyond the
boundaries of their own respective areas of expertise and engaging other partners
in this process can enable them to discover and implement innovative solutions.
• Businesses are encouraged to forget about disposability and to focus on
restoration. Raising awareness is fundamental to a new way of thinking about
waste: moving away from viewing waste reduction as a means of saving money
towards treating waste as a resource and an opportunity to innovate and develop
new business models.
• Organisations should emphasise collaboration with internal and external
stakeholders as a means of finding solutions to their key challenges.
• Effective internal communication to secure staff buy-in and support the work of
specialists in different departments will help businesses overcome the challenges
posed by resource scarcity.
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Business in the Community - 2016 CR Index Insights Report
05
Case Studies
Reducing waste through packaging design changes
and realigned product ranges:
HEINEKEN’s SmartDispense system cuts UK pubs water,
energy, waste and costs
In 2013 Central England Co-operative was part of a
FRTS (Federal Retail Trading Services) led initiative
to reduce the weight of bottles across 20 own-brand
wines, resulting in savings of 648 tonnes of glass from
the supply chain annually. Other significant product
packaging redesign saved 80 tonnes of glass from
whisky bottles and 37 tonnes of plastic by removing
trays from cake packaging.
HEINEKEN has revolutonised the way draught beer
is stored and served with its first-of-a-kind draught
dispense technology, SmartDispense (SD). Following
£5m of investment and six years of engineering it created
a system that reduces the need to store and cool beer in
kegs, and the frequency of cleaning, which:
By analysing product sales across food retail stores,
a number of product lines that were underselling and
generating significant waste in certain stores were
identified. This resulted in the removal of over 100,000
of these underperforming store/product combinations
from the ordering system, saving 1,093 tonnes of food
waste, worth £12.8m in cost savings.
•reduces water use by around 75 per cent – saving
around 4,500L a year per pub
•reduces energy use by at least 20 per cent* – worth
around £2,000 a year
•cuts beer waste by 680L per year – worth more than
£4,000 when sold at retail price
•reduces greenhouse gas emissions – cooler units have
a GWP of 3 compared to the industry standard of 1300
•reduces chemical use in cleaning by 33L a year.
The Revolution VLR Consortium – of which Unipart
Rail is a key partner – is committed to developing and
building an affordable low-carbon, lightweight rail
vehicle to facilitate low cost connectivity of suburban
and rural areas. The objective is to reduce the cost and
weight of a railcar by half.
The project will demonstrate the next generation of
very light-weight railcar (VLR) using hybrid propulsion
technology, coupled with a unique self-powered
bogie and modular, composite bodyshell design. A
key element of the project is to utilise off-the-shelf
componentry where practical to reduce overall
manufacturing cost and improve reliability and
maintainability.
The Consortium believes that such an approach
is fundamental to the provision of integrated and
sustainable short-range public transport systems both
now and in the future.
By the end of 2015, around 3,100 restaurants, hotels and
pubs had introduced SmartDispense into their outlets.
*This is significantly higher for pubs where the need for cellar cooling is eliminated.
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Business in the Community - 2016 CR Index Insights Report
05
Case Studies
2013 saw the start of vigorous campaigns for
remarketing services for client devices, which voids
product disposal, and promotes the implementation
of the 3 R’s (Reduce, Reuse, Recycle) for client IT
infrastructure.
Fujitsu’s Recycle Services, based at the secure
Warrington facility, specialises in the recovery of
legacy IT equipment through managing the recovery,
reuse, recycling, resale and safe disposal of redundant
IT equipment. It continues to maintain 0 per cent
waste to landfill for end-of life assets. It is becoming
recognised as a Recycling Centre of Excellence and
is licensed by the UK’s Environment Agency as an
Authorised Approved Treatment Facility under the UK
transposition of the WEEE Directive. This provides
sustainability benefits to customers of a fully managed
lifecycle service from purchase to disposal.
With a view to reducing the amount of raw materials
used in the production process, and extending the life
of products, Ricoh introduced a range of GreenLine
machines remanufactured in the UK.
Ricoh GreenLine devices are remanufactured to a
stringent As New standard and come with full factory
warranty. By reusing the majority of the original
parts and components, the whole-life impact can
be reduced by up to 25 per cent through avoidance
of new raw materials. GreenLine products are also
lower-priced compared to equivalent brand new ‘first
life’ products. Ricoh have employed approximately
20 additional people in their Telford factory and have
reduced the company’s impact on the environment.
The Centre of Excellence continues to support
charitable donations of IT Equipment and ensures that
regulatory standards are met and end-of-life hardware
returned by charities is safely recycled.
29
Business in the Community - 2016 CR Index Insights Report
06
Measuring the value of responsible business
The CR Index is based on the principle that what
cannot be measured cannot be managed.
Over the 15 years of the Index, Business in the
Community has been observing what and how
businesses are measuring and how they use the
information they glean. Relatively simple return
on investment (ROI) calculations used internally
as part of the decision-making process are now
being replaced with more complex models that
measure more than just the financial value of
initiatives. CR Index participants are moving
from minimising risks and costs to exploring the
opportunities CR offers to business, society and
the environment.
Good practice
It is good practice to assess the value
of CR initiatives, both in order to check
that they address the relevant business
issues and to ensure the long-term
commitment of the organisation.
The information derived from this
assessment process should be used to
review CR programmes, with successes
communicated to stakeholders as a
means of inspiring further change.
The most committed businesses use
their information to explore opportunities
for developing new responsible
business models, such as the circular
economy.
This chapter explores how businesses measure
the value of CR and how these practices have
evolved over time.
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Business in the Community - 2016 CR Index Insights Report
06
Key findings
The percentage of companies measuring the value that CR
brings to the business has increased by almost 30 per cent
over the last two years – rising from 60 per cent in 2014 to
88 per cent in 2016.
The measurement focus has shifted as well, with more
companies focusing on capturing opportunities for income
or value generation and not just on avoiding costs. Whilst
almost all participants calculate return on investment (ROI)
and energy savings from the installation of new equipment
and other operational efficiency improvements, only half
of them calculate both savings and profits derived from
sustainable solutions and new contracts gained as a result
of adopting a responsible business approach.
Key recommendations
is to be encouraged as a driver for further investment
in local communities and for engaging employees and
stakeholders at a deeper level. Stories are often the first
step in demonstrating the value that CR brings to the
business and beyond and can inspire other companies to
find out more about what responsible business means and
what can be achieved.
• Businesses would benefit from measuring the
value that CR brings to them as well as to other
stakeholders. Focusing on both will ensure that their
programmes are well targeted and can be adapted
as needed, and that they secure the long-term
support within the business that is needed in order
for programmes to succeed.
What do companies measure?
• It is important to measure the impacts of engaging
with the supply chain, and especially the social and
environmental impacts of procuring from SMEs.
Measuring progress achieved with suppliers can
have a significant impact on a company’s own
performance and drive further improvements.
Savings from operational
effectiveness
New contracts
(bids)
Social
11%
value
CR Index participants actively use the data they gather
not only to inform future investment decisions but also
to engage their key stakeholders, including employees,
clients, suppliers and local communities.
Economic
contribution
Funding
opportunities
Though not sufficient as a measurement in its own right,
anecdotal evidence of the impact of responsible business
Other
Media
coverage
5%
43%
16%
13%
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Business in the Community - 2016 CR Index Insights Report
06
Case Studies
Since 2004 Calor has implemented digital technologies
across its operations to significantly reduce its
carbon footprint. The installation of over 68,000
telemetry units on customer bulk tanks enables Calor
to accurately forecast consumption, with orders
generated automatically to enable capacity planning
for fleets each week. In addition, an intelligent GPS
mapping package ensures that Calor vehicles are
directed to customers via the most efficient route,
reducing distances driven by 1.6million kilometres per
year. Calor’s Integrated Distribution Strategy has also
seen investment in longer trailers and larger capacity
vehicles, increasing payload and maximising delivery
sizes. This has enabled Calor to reduce its overall fleet
size by 40 per cent between 2004 and 2014.
In 2015, Carillion’s sustainable behaviours and
initiatives made a net cost-efficiency contribution of
£33.8 million towards the Group’s overall profit. The
company’s people delivered this through innovation,
waste reduction, improved process efficiency and
working in partnership with their suppliers. Relatively
unique amongst businesses across multiple sectors,
this figure is audited and published in both the Annual
Accounts and the Sustainability Report. Carillion’s
overall target aims to contribute £40 million to profit
by 2020 – directly from responsible business – and
this makes a fundamental link to the business case
for sustainability. In essence, this makes it clear that
sustainability is not something that companies have
to find a way to afford, but something they cannot
afford not to do.
Costain uses a tool called LM3 that measures the local
multiplier effect of money spent on a project. The data
output is especially useful in community engagement
and for customer reporting. The output is for every £1
spent, £X value is created in the local economy. Many
projects have local employment targets which are
measured monthly. This is again further developed to
target NEETs and apprentices. A typical ratio is that
for every £3m of contract value a NEET or apprentice
needs to be recruited. The Costain supply chain offers
support at all stages of the NEET and apprentice
recruitment and development lifecycle to ensure
sustainable employment is achieved.
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Business in the Community - 2016 CR Index Insights Report
06
Case Studies
In 2015 Interserve built a social mapping tool to help
the company understand how it can foster greater
economic and social wellbeing in communities where it
works. The tool enables Interserve to combine people
and procurement data from Interserve’s business
systems with publicly available datasets, eg levels of
deprivation, to create a contextual picture or ‘map’, of
the impacts the company has. Interserve is bringing
anonymous spatial data on payroll and supplier
spend, employee skills, skills progression, education
standards, together with public socio-economic data
sets on multiple indices of deprivation, reported crime,
education standards, house price values etc. The
project helps the company to understand operations
in the context of the communities it works in, identify
community connections, and make decisions based on
the information it gathers.
Wates have traded £6.6m with social enterprises (SEs)
since 2010. Wates’ 2020 ambition is to achieve £20m
investment, providing a sustainable revenue stream
to the sector enabling them to scale and fulfil their
social purpose. Wates measure impact through SROI
assessments conducted by their social enterprise
supply chain.
Wates work in a national partnership with SEUK (Social
Enterprise UK) to deliver SEB (Wates Social Enterprise
Brokerage) – an online directory of approved SE
suppliers to Wates. SEUK provide annual impact
reports for SEB, the first one featuring Spotless
Recruitment – a labour agency in Wales. For every
£1 spent by Spotless, £5.55 of social value is created
for society. Wates have traded over £400k with them
directly and they have preferred supplier status.
33
Business in the Community - 2016 CR Index Insights Report
Listings
CR Index 2016 Company listing
The CR Index challenges companies to devise and deliver
business strategies that have responsibility at their heart. It does
it by conducting a gap analysis, benchmarking against industry
peers recognising and communicating achievement of public
participants.
Performance is categorised in a 5 star system which demonstrates
how integrated corporate responsibility is into a company’s
business strategy and operations.
The boundaries are as
follows:
2016
Company Name
Sector
Britvic Soft Drinks
Food & Beverage
UK only
Calor Gas Ltd
Utilities
UK only
Carillion Plc
Industrial Goods & Services
National
Retail
National
Costain Group Plc
Construction & Materials
National
Electricity North West
Utilities
National
Fujitsu Services Ltd
Technology
UK only
Gentoo Group Ltd
Construction & Materials
National
Central England Cooperative Ltd
Gi Group Recruitment Ltd
Professional, Scientific, and
Technical Services
Star banding
Coverage
National
Greggs Plc
Retail
National
Heathrow Airport Group
Travel & Leisure
National
Heineken UK Ltd
Food & Beverage
UK only
Interserve Plc
Industrial Goods & Services
Global
ISS UK
Industrial Goods & Services
UK only
34
Business in the Community - 2016 CR Index Insights Report
Listings
Company Name
Sector
John Lewis Partnership
Star banding
Coverage
Company Name
Sector
Retail
National
Royal Mail Group
Industrial Goods & Services
National
Kelda Group Ltd
Utilities
National
Siemens Plc
Industrial Goods & Services
UK only
Kier Group Plc
Construction & Materials
National
South West Water
Utilities
National
L&Q Group
Construction & Materials
National
Speedy Hire Plc
Industrial Goods & Services
UK only
Manchester Airports Group
Travel & Leisure
National
Tata Consultancy Services
Professional, Scientific, and
Ltd
Technical Services
Marks & Spencer
Retail
Global
The Clancy Group Plc
Construction & Materials
National
Moy Park
Food & Beverage
National
The Go Ahead Group Plc
Travel & Leisure
National
National Grid Plc
Utilities
UK only
Retail
National
The Midcounties Cooperative
Star banding
Coverage
Global
Nationwide Building Society Banks
National
The Southern Co-operative
Retail
National
NG Bailey
Construction & Materials
National
Unipart Group
Industrial Goods & Services
Global
Northern Rail
Travel & Leisure
National
United Utilities Plc
Utilities
National
Global
Viridor Waste Management
Industrial Goods & Services
National
National
Wates Group
Construction & Materials
UK only
National
WHSmith Plc
Retail
Global
Pearson
Portakabin Group
PwC
Ricoh UK Ltd
Professional, Scientific, and
Technical Services
Construction & Materials
Professional, Scientific, and
Technical Services
Technology
Business in the Community - 2016 CR Index Insights Report
UK only
35
Listings
CR Index 2016 overall average score: 90%
95%
Corporate Strategy
92%
Integration
89%
Management
92%
Community
93%
Environment
84%
Marketplace
85%
Workplace
86%
Impact Areas
82%
Impact Areas - Social
91%
Impact Areas - Environmental
83%
Disclosure
2016
36
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Top issues affecting CR Index Participants
Employee engagement
Carbon emissions
safety and wellbeing
Employee health
Waste
Sustainable products and services
Low level of social inclusion
Affordability
Health and safety
Pollution
Lack of skills
Recruitment and retention
Resource use
Talent management
Quality of local environment
Employee learning and development
Youth unemployment
Customer satisfaction
Ethical sourcing
Sustainable Supply Chain management
Impact on communities
Employee Diversity and inclusion
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Top
5 issues
• Youth unemployment
• Waste and carbon
emissions
• Lack of skills
• Health, safety and
wellbeing of employees
• Responsible sourcing
Companies included in
this section:
• Costain Group Plc
• Gentoo Group Ltd
• Kier Group Plc
• L&Q Group
• NG Bailey
• Portakabin Group
• The Clancy Group Plc
• Wates Group
Construction and Materials
Challenge
Employers are struggling with the
recruitment of skilled workers
Examples of business risks related to the declining
number of young people with STEM (science,
technology, engineering and maths) qualifications
and an ageing workforce.
• Inability to meet business needs/strategic
objectives
•P
rogramme delays due to lack of employees and/or
suppliers with a qualified workforce
•S
mall pool of potential candidates available to work
• Increased recruitment costs
•C
ost of long journeys and accommodation for
workforce
•L
ack of employee diversity
Skills shortages
An ageing population, increasing migration to cities, and unhealthy lifestyles (eg
growing obesity) are just a few examples of the persistent challenges facing the
construction and materials sector.
CR Index participants are concerned about an ageing workforce and the widening of
the skills gap as more specialists retire. With a significant part of the workforce retiring
in the near future and a lack of new skilled people in the local community able to fill
the gap, companies are facing with being unable to fulfil strategic objectives, win and
deliver contracts.
The problems caused by a lack of skilled staff have also been identified as a supply
chain issue, with suppliers having problems with the availability of skilled resources.
Youth Unemployment
Examples of business risks related to high youth unemployment.
• Project delays due to negative community relationships.
• Negative PR /reputation problems.
• Site safety.
• Lost contracts caused by failure to fulfil client/contract requirements eg when
employing local residents is a contract requirement.
•P
oor quality of work
•R
educed business development as some
customers request local labour
•A
geing population means a lower tax take and
therefore lower spend by public bodies.
The construction and materials sector is concerned about the lack of available labour.
Ironically they also see high levels of youth unemployment in the communities in which
they operate. The question of how to end this frustrating situation remains unresolved.
Identifying and addressing the root causes of this problem through community
programmes remains a priority.
38
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Construction and Materials
Opportunity
Top tips for a new approach
Make more of an ageing workforce
Attract more young people to work in the construction
sector
•P
rioritise the development of excellent managers at
every level of your organisation.
Learn from the BITC Generation Talent campaign and
improve recruitment processes:
•A
ddress barriers to the recruitment of older people.
• Assess your recruitment channels and criteria for entry
level jobs.
•E
nable flexible and agile working.
•H
elp your employees plan for the future through
financial planning support.
•E
nable people with disabilities to remain in work.
•A
ccommodate age in a changing economy.
•P
rovide opportunities for encore careers.
•A
dapt training and development to the needs of an
age-diverse workforce.
•H
elp employees to find a good work-life balance.
•H
arness the benefits of age diversity. xii
• Provide a transparent recruitment process so that
young candidates are clear about timescales and what
is expected of them at each stage.
• Offer feedback to interviewed candidates so that they
can improve their interview technique.xiii
• Be open to skilled professionals, regardless of their
past.
Ensure objective and transparent recruitment practices
that give people with criminal convictions, who are skilled
and able to work, the opportunity to compete fairly for
roles and move on from their past mistakes. xiv
39
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Construction and Materials
Case Studies
NG Bailey’s school engagement programme, Inspire,
aims to enhance awareness of STEM subjects
(science, technology, engineering and maths) within
schools.
The programme started in 2013, with 170 pupils
from a school in Leeds taking part in a 10-week
environmentally themed project, which was mentored
by a number of NG Bailey employees. Since then the
programme has developed long-term relationships
with five schools, reaching 940 pupils in years 8–11.
71 per cent of them said they would consider studying
STEM subjects in the future.
Inspire also supports one of the 18 targets set out in
NG Bailey’s One Approach sustainability strategy – for
every one person the company employs, it will have
helped two young people become more successful in
their career.
Carillion champions and creates employment
opportunities for disadvantaged groups. In 8 years of
supporting BITC’s Ready for Work, Carillion has now
offered its 1000th work placement and helped its 400th
person gain a job. In 2015, 7 per cent of its people
used their six-day volunteering allowance to help build
employment skills for young people in schools, for the
unemployed and for other hard to reach groups.
Carillion is a key Ban the Box supporter, and its Royal
Liverpool University Hospital team worked with HM
Prison Kennet to tackle the potential barrier of the
Construction Skills Certification Scheme (CSCS) card.
This is essential to work on a construction site, so the
company provided a mobile CSCS card-testing bus,
helping 26 people to pass the test and four to secure a
job on the hospital project itself.
40
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Top
5 issues
•C
arbon emissions
•T
alent management
•Y
outh unemployment
•H
ealth, safety and
wellbeing of employees
•R
esource use (timber)
Companies included in this
section:
• Carillion Plc
• Interserve Plc
• ISS UK
•R
oyal Mail Group
•S
iemens Plc
•S
peedy Hire Plc
•U
nipart Group
•V
iridor Waste
Management
Industrial goods and services
Challenge
Security of supply of sustainable
materials
Examples of business risks related to responsible
sourcing.
•N
ot meeting customer specification.
•L
egislative/compliance risk (eg illegal timber linked
to deforestation).
• Increasing regulatory controls, legal and insurance
costs.
•R
eputation risk (eg association with conflict
minerals or missing public targets related to
sourcing).
Ethical sourcing – timber
Population growth and its consequences – such as the development of cities and
growing demand for food – are examples of factors causing deforestation. The
decreasing surface of forests has serious consequences: higher greenhouse gas
emissions and decreased availability of natural resources available for use eg timber.
In the global ecosystem, where everything is connected, one change is followed by a
chain of other changes such as increasing prices and resource scarcity.
This puts the industrial goods and services sector under a great deal of pressure.
According to the report Smart growth in the Circular Economy: “Leading companies
are looking at how they can secure long term, sustainable sources of the raw materials
they need. Even more fundamentally, they are re-examining their approach to delivering
products and services in a way that will reduce the impact of resource competition
and scarcity on their business. This approach means they can tap into €250–500 billion
opportunity that’s expected to be available by 2025.” xv
Timber is an important material for many companies. The value and vulnerability of
places where timber comes from have been highlighted by tropical forest fires in South
East Asia last year, with the World Resources Institute calculating that Indonesia’s fire
outbreaks were producing more daily emissions than the entire US econom xvi and that
by late 2015 Indonesia had surpassed Russia as world’s fourth-largest emitter. xvii
CR Index participants have identified the risks related to sourcing the materials they
need on daily basis. With targets of sourcing 100 per cent of timber from Forest
Stewardship Council (FSC) or similar certified sources, UK-based industrial goods and
services companies demonstrate good practice for other sectors too.
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Industrial goods and services
Case Study
Efficiency and responsible use of materials
Examples of business risks related to responsible
use of materials.
• Increasing cost of materials and their use (eg water
and effluent charges).
• Increasing costs caused by wastage of finite
resources.
Through its joint venture Landmarc, Interserve has
piloted a Natural Capital Decision Support tool that
uses data-based assessments of Natural Capital to
better manage rural estates. The tool was developed
in collaboration with Jacobs SKM, Smiths Gore and
Exeter University. It identifies, maps and evaluates the
complex elements that constitute natural capital stocks,
drawing upon a mix of natural capital, ecosystem
services and constraint datasets. The tool is used to
support operational decision making on issues such
as sites for renewable energy generation, biodiversity
offsetting and carbon sequestration.
Interserve’s work in protecting natural ecosystems also
extends to product sourcing and ensuring materials
don’t contribute to deforestation. Monitoring covers the
proportion of timber which has FSC, PEFC (Programme
for Endorsement of Forest Certification) or other
recognised certifications. To ensure compliance with
EU Timber Regulations, the company has written to all
suppliers of timber and timber products and gained
confirmation of compliance.
• Increasing cost of landfill (eg landfill tax increasing
from £58/tonne to £80/tonne in 2015).
• Failure to deliver projects on time caused by
resource scarcity or uncertainty of supply (eg water).
• Reputational risk of not being seen to be offering
forward thinking solutions.
• Operational risk of service delivery falling behind
that offered by competitors.
UK businesses could save £25 billion each year through
no- or low-cost resource efficiency measures alone, and
particularly from smarter usage of raw materials and
minimising waste (£20 billion a year). £4 billion a year in
savings is possible from energy efficiency and £1 billion
from water efficiency. Extending payback thresholds
beyond one year could realise a further £36 billion in
annual savings. xviii
A significant element of operational effectiveness is fuel
use. In some cases emissions from transport contribute
to over 70 per cent of a company’s carbon footprint.
The main drivers for change in this situation are fleet
management costs and customers who measure delivery
miles as part of their own carbon footprint. Limiting travel
and transport is a consistent feature of the many initiatives
undertaken by businesses. Use of ecodriving and low
carbon vehicles is not enough, however. For example,
employee travel can be reduced by promoting remote
working, and transport efficiency can be increased by
improving logistics.
Balancing business growth with the effect on the
environment of consuming natural resources can
drive cost savings and – through more rapid adoption
of resource efficiency and deployment of emerging
clean technologies – mitigate environmental concerns.
Many companies are now turning to innovative clean
technologies to reduce their impacts still further and to
build resource independence.
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Industrial goods and services
Case Studies
During 2013, Royal Mail launched a vehicle
maintenance programme to reuse parts extracted
from accident-damaged vans, thereby extending their
life. Using parts from Royal Mail vehicles removes
the need for paint spraying, as they are already in the
right colours, and reuses reliable components that
would otherwise have been melted down. This initiative
resulted in an average saving of £21,000 per month,
equating to approximately £250,000 in a year
Interserve is reducing waste by improving specifications and building relationships
with suppliers to take back surplus products. There has been good engagement
with suppliers and customers to design out waste, for example, through the use of
off-site manufacture and assembly of construction modules.
Interserve is also investing in improved production facilities to minimise waste at
source. The Spacemaker production facility in Qatar, producing lightweight steel
structures, has upgraded machinery to minimise wastage of sheet steel, and joinery
facilities use CNC technology to maximise material efficiency and minimise offcuts.
Other initiatives to increase resource efficiency include enabling the commercial
reuse of items that may have entered the waste stream (eg careful removal of old
slate roof tiles and sale via e-auction so that second hand materials can be reused
rather than disposed of – 9,500 roof tiles have been sold for use on other roofing
projects) and the donation of items to charity for their reuse (eg redundant furniture
was donated to the charity Rehabilitation Response for reuse by rural communities
in Pakistan).
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Industrial goods and services
Opportunity
Case Study
Top tips for a new approach
Embed these principles from BITC’s Smart growth in
the Circular Economy report:
• Develop a baseline of waste across your business.
• Explore opportunities to reduce the use of materials,
components and products. xix
• Assess the environmental impact of inputs,
components and products.
Improve management of water use based on BITC
Water Taskforce xx recommendations:
• Understand your business’s relationship with water.
• Create a plan of action.
• Manage direct water use.
• Manage indirect water use.
• Build resilience to flooding and water shortages.
• Collaborate on sustainable water quality
management. xxi
• A similar approach can be helpful for thinking about
dependence on other resources.
Collaborate with peers, suppliers, internal and external
experts:
• to grow your knowledge and learning best practice;
• to drive improvement in resource use; and
• to come up with innovative products and services or
new business models.
Water footprint assessments conducted in 2013–14
identified around £300,000 per year of potential water
savings. Each site received recommendations for
reducing water consumption and is responsible for
implementing these at a local level. Royal Mail has now
included water saving technologies in refurbishment
standards where possible. In 2014–15, total water
consumption was around 1,397 megalitres, a one
per cent reduction compared to the previous year.
Employees from Gatwick Mail Centre suggested a
simple but effective solution for water management.
Introducing a water flow restrictor reduced levels from
15–25 litres per minute to just eight litres per minute,
saving around £3,500 and 1,700 cubic meters of water
per year. In addition, Save a Flush bags, which expand
to reduce the cistern capacity, decreased water
consumption in toilets by one litre for every flush. This
delivered annual savings of over 760 cubic meters of
water and over £1,500 per year.
44
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Top
5 issues
•C
arbon emissions and
waste
•D
iversity and inclusion
•E
mployee learning and
development
•L
ack of healthy lifestyles
• Poverty
Companies included in this
section:
•C
entral England
Co-operative Ltd
•G
reggs Plc
• J ohn Lewis Partnership
•M
arks & Spencer
•T
he Midcounties
Co-operative
•T
he Southern
Co-operative
•W
H Smith Plc
Retailers
Challenge
Poverty within and outside the retail sector
Examples of business risks related to poverty.
•C
onsumers have lower disposable incomes and so
will spend less in shops.
•N
egative impact on brand reputation of association
with poor diet and lifestyle (eg causing obesity and
diabetes).
•T
hreats to the strength and stability of supply
chains.
•S
ocial problems undermining the stability of the
community or communities in which a company
operates and where its employees and customers
live.
•C
rime and anti-social behaviour affecting stores,
customers and the wider local community.
Rapidly growing levels of poverty and inequality, as well as the polarised health
challenges of both growing levels of obesity and malnutrition, are already visible in the
UK – not just in emerging economies on the other side of the globe. These long-term
trends are already affecting business operations.
CR Index participants from the retail sector operate in a variety of locations. Some
of their stores are located in areas of deprivation and high unemployment especially
among NEETS (young people aged from 16–24 who are Not in Education, Employment
or Training). Participants also operate in a number of communities with limited access to
education, skills gaps and unemployment. These are also communities that experience
poverty (especially food poverty).
Poverty in the supply chain
All these social problems threaten the wellbeing of the communities where retailers
operate and where their employees and customers live, and the strength and stability of
their supply chains.
Retailers can play an important role in supporting deprived communities by supporting
small enterprises and sourcing products locally, where possible.
45
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Retailers
Case Studies
The Southern Co-operative’s Local Flavours initiative
supports local food and drink producers from across
the South Coast through its in-store range of local
products, helping local economies to continue to grow
and evolve, building on existing partnerships and
forging new ones.
As part of the programme, the company has
sponsored Fit2Cook’s Create and Cook Competition
since 2009, a competition which nurtures young talent,
promotes local food and healthy eating and provides
accessible industry role models, leading to work
experience and job opportunities.
The Southern Co-operative is currently developing a
Local Flavours Enterprise Project with a BITC Business
Class partner school. The project aims to identify how
key curriculum subjects, such as English and Maths
can be practically applied in a business context.
The John Lewis and Waitrose Foundations exist to
invest in and empower communities in key sourcing
regions. Over ten years, The Waitrose Foundation
has launched over 450 programmes in South
Africa, Ghana and Kenya, focusing on sustainable
livelihoods, improved education and health, community
development and environmental sustainability. For
example, responding to safety concerns by workers at
Ravine Roses in Kenya and its community, solar street
lighting was installed. This is used daily by around
1,500 people and improved safety has prompted
longer opening hours for local businesses. Through
John Lewis Foundation’s partnership with Cotton
Connect, more than 1,500 farmers in Gujurat, India
have been trained to adopt better crop management.
To date yields are up on average 8 per cent and costs
down 12 per cent.
46
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Retailers
Avoiding in-work poverty
Poverty is a complex issue affecting not only customers’
ability to afford products but also employees as retail is
one of the sectors with low-income employment.
In the last 15 years, in-work poverty as a proportion of
all poverty in Britain has increased from one third to over
a half of the population. Official figures show two thirds
of children living below the poverty line live in working
households. xxii
There is another side to the problem, as Faye Goldman
from BITC explains: “It is important for employers
to recognise two things: firstly, work is no longer a
guaranteed route out of poverty so there may well be
people within your workforce who fall below the current
poverty line; and secondly, you would not definitely
know who they are. The only consistent indicator every
business can use is their payroll – identifying those on the
lowest total weekly income.” xxiii
Many businesses are trying to help local communities
by equipping young people with the skills they need to
secure employment, training or further education. They
do this by offering support such as employability skills
training in schools, work placements or apprenticeships –
which are commercially sound investments.
Avoiding future problems and helping underprivileged
children to escape poverty and neglect are both equally
important.
Case Studies
WH Smith PLC is supporting the National Literacy
Trust’s Young Readers Programme. Between 2005 and
2015 more than 20,000 children could choose around
42,000 free books to keep. The current three-year
project should see over 20 schools and around 7,500
children aged six to nine taking part in the Programme,
which gives children the opportunity to discover the
pleasure of reading and choose their own books to
keep. Key achievements include:
•73 per cent of all participating children reading more
frequently as a result of peer reading scheme.
•91 per cent of teachers observing better overall
reading attainment against expected reading levels
for participating children.
By 2020 WH Smith has a target to help over 20,000
children discover the joy of reading in partnership with
the WH Smith Trust.
Supporting young and vulnerable people to be work ready:
Central England Co-operative has a target of 20 per cent of
NEETs attending Journey to a Job programmes to secure
permanent employment within six months by 2017. It delivers
a series of two-day workshops as part of the grocery
industry’s Feeding Britain’s Future initiative which aims to
give young people the skills to find, get and keep a job.
The basic model has been adapted for younger audiences,
ex-offenders and other vulnerable groups, including older
teens receiving SEN education, of which 7 per cent would
normally be expected to find paid employment. Central
England Co-operative is committed to improving prospects
through its award winning SENse to Aspire scheme. A
classroom/ work experience format offered annually in years
10–13 gives the students multiple opportunities to engage
with the world of work.
It is currently rolling out an extended period of work
experience to selected students and is hoping to take
the first supported interns in the new academic year. It is
currently working with five schools and are looking to recruit
another four by the end of 2015/2016.
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Retailers
Healthy and affordable choices for all
As customers become more aware of the importance
of healthy lifestyles, there is a growing demand for
healthy and affordable choices. Healthy food should be
promoted, with prices that encourage wise choices.
Case Study
The consequences of not taking action are already
visible.
Tackling obesity and encouraging healthier lifestyle
habits:
Central England Co-operative acknowledges that 30 per
cent of UK children – our future workforce and customers
– are overweight or obese and more than 25 per cent of
UK adults are clinically obese. By 2050 this is expected
to increase to over 50 per cent.
Support to achieve a healthy diet and lifestyle will be
essential to reversing this trend and, as a responsible
retailer, Central England Co-operative endeavours to
contribute though its product range and by encouraging
behavioural change. Working to reduce salt, saturated fat
and sugar in key products, improved labelling, balanced
options and marketing to encourage healthier lifestyle
habits are all part of the strategy.
It is currently trialling a new till queuing system which
will offer loose fruit, nuts and seeds alongside traditional
treats, and on 1 March it launched Bloom – A recipe for
healthy living, which is a fun and informal forum to share,
discuss, inform and inspire our colleagues, customers
and members.
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Retailers
Opportunity
Top tips for a new approach
•D
evelop a strategic
approach towards
reducing low-income
employment by
identifying both
immediate and longterm goals to address
the increased poverty,
low productivity rates
and growing skills
shortages now seen in
the UK. xxiv
• Get involved in
revitalising local
communities. Following
the lead of Marks &
Spencer and Greggs,
join Healthy High
Street. Focus on high
streets that serve an
area of high multiple
deprivation, have
potential for growth and
have established or
emerging partnerships
to represent them. xxv
• Integrate further into
your local community
by seconding
employees as
Business Connectors.
It is an opportunity to
embed into a local
area – developing
skills, behaviours
and knowledge that
can change the way
businesses and
communities interact
and benefit each
other. xxvi
• Support your local
community by
working with local
social enterprises.
Social enterprises
are transforming
local communities,
creating high social
impact by helping
and often employing
disadvantaged local
residents. Support
their capacity building,
access to finance
and supply chain
opportunities by getting
involved in the arc
programme.
49
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Top
5 issues
•L
ack of skills
•F
uel poverty
•C
limate change –
mitigation and adaptation
•D
iversity and inclusion
•E
mployee engagement
Companies included in this
section:
•C
alor Gas Ltd
•E
lectricity North West
•K
elda Group Ltd
•N
ational Grid Plc
•S
outh West Water
•U
nited Utilities Plc
Utilities
Challenge
Climate change adaptation
Extreme weather events
Examples of business risks related to extreme
weather events.
• Intense rainfall causing increased storm flows into
some wastewater treatment works and ensuing
discharges.
•C
hanging weather patterns posing a risk to
equipment.
•D
ifficulties abstracting raw water during periods of
drought.
•B
reaks in transmission caused by strong winds and
storms.
•R
eputational risk related to flooding defence
systems.
The importance of adapting to climate change is definitely not a new topic. Yet
despite being one of the megatrends most commonly cited by CR Index participants,
many businesses remain vulnerable to climate change, ignoring the need to protect
infrastructure and secure supplies even though extreme weather events are predicted to
happen more frequently in the future.
Economic losses from climate-related disasters are already substantial. Extreme
weather events such as floods or droughts are becoming more commonplace and
some areas are experiencing permanently increased temperatures. Climate change will
continue to increase the risk to capital investments. xxvii
Extreme weather events, such as flooding in the north west of England at the end
of 2015, raised public awareness and concern about the consequences of years of
inadequate care for the environment. According to a recent poll, 9 in 10 people believe
in climate change and 8 in 10 attribute it to human activity. xxviii
The cost of the UK’s winter floods will exceed £5bn, with thousands of families and
businesses facing financial ruin because they have inadequate or non-existent
insurance. xxix This suggests that businesses are still not adequately protected.
50
Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Utilities
Besides floods other, maybe less visible,
weather patterns such as wetter winters and
drier summers and shorter and more intense
rainfall, are affecting the continuous supply of
energy and water. The resilience of networks is
a priority for both water and energy providers.
Utilities companies are among those who
understand the risks and opportunities
presented by climate change. They are
concerned not only about reducing CO2
emissions but, looking ahead, they also want
to be prepared for the unavoidable impacts of
climate change. Adaptation to extreme weather
events is very present on their agenda.
Some of this may be down to the Climate
Change Act 2008 and its creation of a policy
framework for climate change mitigation and
adaptation, which includes the UK Climate
Change Risk Assessment, the National
Adaptation Programme and the UK Adaptation
Reporting Power. The Act gives government
the power to require certain bodies to produce
reports on the current and future predicted
impacts of climate change on their organisation
and their proposals for adapting to climate
change. xxx
The Energy UK report Climate change risks
& adaptation responses for UK electricity
generation: A sector overview 2015 states:
Electricity generation demonstrated a high
level of resilience to potential disruption from
the weather events that occurred [in Winter
2013/14]. All of the reporting companies have
corporate risk management processes which
are covered by company policies and have
procedures that are subject to regular internal
review and audit. The decision of whether, and
when, investments should be made to mitigate
climate change risks is therefore an integral
part of those companies’ risk management
processes, ensuring that essential investments
are made in a timely manner but also enabling
close management of investment appraisals in
areas of greater uncertainty. xxxi
The Open Water programme, which will affect
the non-household retail market for water in
England and Wales, and is set to start from 1
April 2017, means there is an even stronger
desire to demonstrate leadership in tackling this
issue. Internal competition within the sector is a
driver for business to differentiate themselves
from their peers by being responsive and
resilient to changes that are already taking
place. Water companies acknowledge that only
this approach can secure long-term survival,
profitability and growth.
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Business in the Community - 2016 CR Index Insights Report
Sectorspecific
Insights
Utilities
Case Study
Opportunity
To tips for a new approach (not just for utilities)
Upstream Thinking is South West Water’s multi-awardwinning catchment management scheme which has
been applying natural landscape-scale solutions to
water quality issues since 2008. Upstream Thinking
is a sustainable approach to improving raw water
quality at the source. This keeps down costs for water
company customers and reduces the impact of water
treatment on the environment.
South West Water has also been able to prove that
changing land management can significantly increase
the amount of water stored in the landscape. Whether
it is alleviating soil compaction, restoring wetlands
or encouraging water-storing sphagnum mosses,
Upstream Thinking approaches can significantly
increase water storage and reduce run-off, helping to
reduce the impact of flooding downstream.
• Gain a better
understanding of the
risks by conducting a
Business Resilience
Health Check (available
online). Discover further
guidance and tools at
the Water knowledge
hub (available online).
• Secure supply
chain operations by
encouraging suppliers
to take actions against
climate change.
Share the Business
Emergency Resilience
Group 10 Minute Plan
(available online) to help
them prepare.
• Collaborate with
stakeholders to identify
solutions for various
weather scenarios. Only
long- term, joined-up
thinking will produce the
innovative solutions that
will enable businesses
to thrive – in even
the most challenging
conditions.
52
Business in the Community - 2016 CR Index Insights Report
Benefits of participation
Unipart Group
Manchester Airports Group
The philosophy advocated by the CR Index
has, over time, encouraged us to integrate
CSR thinking and decision making more
closely within our business.
It continues to provide an invaluable tool
to comprehensively benchmark our current
policies and programmes against best
practice.
Neil Robinson
Group CSR Director
The Southern Co-operative
We continue to use the CR Index
as an internal management tool
to improve our management and
performance in relation to CR/
sustainability. Performance in the
CR Index forms part of our Leadership
team objectives.
Gemma Lacey
Director Sustainability &
Communications
Portakabin Group
The CR Index helps drive a
number of the right behaviours and
is a great way of benchmarking
ourselves against those
organisations who are perceived to
be best in class.
Sandra Falcus
Head of HR, L&D and CSR
Participation in the CR Index
provides a constant challenge
to our thinking and areas of
focus with regard to responsible
business and enables us to
integrate best practice thinking into
what we are doing. In addition to
this, recognition for our on-going
efforts from such a highly regarded
source is inspiring for all our
employees.
John Neil
Chairman and Group
Chief Executive
Unipart Group
Being a Responsible
Business is important
to our customers and
potential customers and
our performance in the
index lends credibility to
our own statements about
our values and how we
conduct ourselves.
John Neil
Chairman and Group
Chief Executive
ISS UK
The CR Index provides an opportunity and a
framework to gather data and best practice
from across the business. This in turn also
informs our CR Report and critically, helps
us to identify gaps in our performance and
address strategic solutions to move forwards.
Tim Proctor
Director of Health, Safety, Environment,
Quality & Corporate Responsibility
53
Business in the Community - 2016 CR Index Insights Report
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Business in the Community - 2016 CR Index Insights Report
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