Our 2020 strategy

A structured plan and stretching targets: these are what our stakeholders expect of us and what drive tangible benefits to our bottom line. That’s why we launched our vision and strategy in 2011 and our six positive outcomes to guide our work.

Building a successful business

We will increase shareholder value through our sector leadership and focus on profit contribution through sustainable efficiencies, value creation and waste elimination.

Leading the way with our customers and suppliers

We will be recognised as the benchmark in sustainability and innovation, in turn driving demand as the service provider of choice for our customers.

Providing better prospects for our people

We will maximise the prospects of our people by offering opportunities for continual learning and development, and create safe, healthy places to work.

Supporting sustainable communities

Our leadership in creating employment and skills opportunities, coupled with our understanding of communities‘ needs, will have a significant and net positive contribution everywhere we work.

Enabling low-carbon economies

Our services will help Carillion‘s customers work towards minimising carbon, so together we become the lowest carbon producers in our respective sectors.

Protecting the environment

We will work with our customers and suppliers to be best in class in reducing waste, managing use of water and raw materials, and protecting biodiversity wherever we operate.

The strategy is owned by our Board of Directors and delivered at all operational levels through tight governance controls. We set clear targets for each of the outcomes, which we review annually. Read more in Targets and performance.

Sustainability is driving profit

The sustainability initiatives and practices followed across our businesses made a net contribution to profit of £27.2 million in 2014. Our target is to achieve £40 million by 2020. The target is a personal performance measure, linked to remuneration, for our Chief Executive and for the Board. This Key Performance Indicator is reported through monthly trackers, approved by each Business Unit Finance Director. It is built through cost efficiencies which include fuel and travel cost reduction, waste management, lean operational excellence, contract efficiencies and material reuse.

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Engaging with our stakeholders

At Carillion, our stakeholders include our people, clients, shareholders and investors, supplier partners, charities, industry organisations and people living in the communities where we operate. We use a stakeholder framework to:

  • understand why engagement is required;
  • identify relevant stakeholders and impacts; and
  • decide on forms of engagement and record the outcomes.

We involve stakeholders in developing and reviewing our 2020 sustainability strategy; in deciding which issues to focus on; and in sustainability initiatives through the year (see case studies).

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Broker research note

The following summary is taken from a research note published by Liberum after one of its analysts attended the launch of last year’s sustainability report at Battersea Power Station, where Carillion is building the first phase of this major redevelopment.

Impressive site visit to Battersea Phase 1 Construction project. Potentially more to come. Sustainability clearly helped Carillion win the bid. We also believe that Carillion has had a strong period of contract news and is gradually moving up the value chain.

The site visit coincided with the launch of Carillion’s sustainability report. It is easy to be cynical about this. However, having spoken to the customer, sustainability was very important to the customer, as it was at the Royal Liverpool.”

The new Royal Liverpool Hospital is a Public Private Partnership Project being delivered by Carillion.

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Stakeholder priorities

In 2014, we conducted our first materiality review to understand our stakeholders’ most significant priorities and report on what matters to them. The independent review included workshops, interviews and an international online survey for employees, clients, governments, investors, suppliers, community groups and sustainability organisations.

We received 360 responses to our online survey. The majority (80%) of responses were from employees, and most of these were based in the UK. We will be looking to diversify this going forward. Some of the most material issues identified were:

  • people engagement: people want to hear more about what we’re doing, and see even more progress around diversity, retention and recruitment. Additionally, safety, health and wellbeing were particularly significant factors;
  • building a successful business: our financial performance clearly matters, and we need to help people see both the role that they can play and the clear link to our strategy and reputation;
  • supply chain: continued progress on our early payment facility, supplier relationship management and sustainability upskilling through the Supply Chain Sustainability School;
  • waste: making progress on the overall reduction of waste produced to build on our achievements to date with diversion from landfill;
  • skills and local engagement: people want to see the clear delivery of local solutions for and with local companies and their communities – with a focus on providing apprenticeships, education, employment and skills;
  • human rights: we need to remain committed to – and investing in – appropriate management processes to deliver responsible labour, welfare and employment practices; and
  • governance and management of sustainability: people want to understand how our sustainability strategy is managed throughout the various levels of the business.

The materiality review also included eight in-depth interviews with key clients across both commercial and public sector contracts. They told us that:

  • competence and delivery are critical to building trust, creating long-term relationships and when selecting suppliers;
  • sustainability is important in tenders but price remains the dominant factor;
  • Carillion’s senior team are good at conveying sustainability, its relevance to clients and sustainability as ‘business as usual’;
  • we need to challenge our contract partners and clients to drive sustainability consistently from tender through to design, delivery and service management.

The Materiality Review was reviewed in depth by our Integrated Management Strategy (IMS) teams across the business units, and by Carillion’s Group Sustainability Committee – which then helped to inform and determine the content of this report, as well as re-focusing sustainability priorities, targets and challenges.

Further to the Group process, in 2015 we will be undertaking focused stakeholder engagement to further understand the most important issues across our regions, starting with a materiality review in Canada.

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£27.2m profit contribution through sustainability strategy

FTSE4Good logo

Carillion is a member of the FTSE4Good Index, which measures the performance of companies that meet globally recognised corporate responsibility standards.

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We are a member of Business in the Community (BITC) and participate in the BITC Corporate Responsibility Index, which ranked us a Four Star company.

John Platt

Our first Materiality Review gave us some valuable insights into the views of key stakeholders – we’ll build on that to develop our understanding and focus our efforts as a sustainable, forward-looking business.”

John Platt, Strategic Growth Director

Richard Adam

The profit contribution from our Sustainability 2020 strategy is significant and growing all the time, proving that – far from simply being ‘nice to have’ – building a sustainable business is critical for shareholder value and long-term commercial success.”

Richard Adam, Group Finance Director

Carillion plc, Company No. 3782379. Registered Office: Carillion House, 84 Salop Street, Wolverhampton WV3 0SR. Place of Registration: England and Wales

Copyright 2015 Carillion plc

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