Embedding Sustainable procurement in Skanska. Dale Turner Director of Procurement and Supply Chain Skanska UK

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1 Embedding Sustainable procurement in Skanska Dale Turner Director of Procurement and Supply Chain Skanska UK

2 Skanska global supply chain 12% 25% (building) 13% (civils) 10% 24% 6% 7% 14.5billion group revenue 3% 3

3 The exam questions Why an inclusive approach? How do we do it? What is the impact? 4

4 Why? Stakeholder requirements Supports our values and goals Business priority 5

5 Why? 1 Stakeholder requirements Skanska is determined to be the leading ethical and green project developer and contractor. The demand is in the market place and we believe it is a great business opportunity, right for the planet and attractive for our people Johan Karlström, President and CEO Skanska AB 6

6 Why? 2 Supporting our purpose and values 7

7 Why? 3 Business priority Sustainable procurement within Skanska contributes to the successful winning and execution of profitable projects. In the UK we spend almost 80% of our revenues with our supply chain to be a leader in safety, green, diversity and ethics we need a supply chain that is safe, green, diverse and ethical Greg Craig President and CEO Skanska UK 8

8 Why? Our licence to operate To win work To manage risk To attract stakeholders 9

9 How? Set the standard Align supply chain Innovate 10

10 Skanska sustainability agenda 11

11 Set the standard Leadership 12

12 supply chain Price maker Sustainable procurement Value vs. risk Leverage scale & relationships Segmentation and CM Best value country sourcing Right, People, Policy, Practice Lean processes Diversity and ethics Safe & responsible Collaboration Supply chain choose Skanska Preferred supply chain Easy to do business with Supplier development Supplier relationship (B2B) Early involvement Fair payment High performers Work winning support BIM capability Innovation & industrialisation Value engineering and collaboration

13 Supply Chain choose Skanska Easy to do Business with Fair payment Early involvement Relationships

14 Sustainable Procurement SP tool box Skanska Code of Conduct Category Management Plans Supplier Relationship Plans Logistics Management Plans Supplier development Transaction support ipro

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16 Totally Blind Scoring and Behavioural Assessment led procurement to ensure our supply chain partners are aligned to our values

17 360 KPI Meetings Supplier Development Behavioural Based Training 360 Degree Performance Reviews with our clients and Supply Chain Partners.

18 Legacy Commitments Behavioural Change for the industry Spend Money Wisely Validation Audits Supplier Development Fighting skills shortages

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26 3 Innovate 27

27 Special Interest Groups Social value Measurement Modern Slavery Materials Fairness, inclusion and respect 28

28 The results - Skanska UK supply chain 5,750 suppliers (7,550 in 2010) 63% of spend is SMEs (45% in 2012) 78% of UK revenue 78% of supply chain are SMEs (57% in 2012) 29

29 Key messages Why 1. Stakeholder needs 2. Supports our values 3. Business priority Our licence to operate: To win work To manage risk To attract stakeholders The end in mind 1. Consistency 2. Clarity 3. Open to all Stakeholders: Skanska Supply Chain Clients How 1. Set the standard 2. Align supply chain 3. Innovation The way we work: Leadership Embed into the DNA Attract the best supply chain 30

30 Thank you Any questions? 31

31 The CARES Sustainable Constructional Steel (SCS) Scheme Delivering improved sustainability and resilience to the construction sector Business culture and the increasing importance of ethical and responsible practices APRES Conference 2017, 22 nd November, London Dave Knight Sustainability Advisor, CARES

32 UK CERTIFICATION AUTHORITY FOR REINFORCING STEELS (CARES) Independent, not-for-profit certification body, established in 1983 Offers certification schemes for constructional steels companies Management system certification Product Certification CE Marking Sustainable Constructional Steels Scheme Its aim is to provide confidence to the users, purchasers and specifiers of constructional steels through a regime of 3 rd party regulation, testing and inspection

33 How do you develop a responsible business culture?

34 1.Provide a clear vision for responsible business Redrawn by DNVGL

35 The CARES Sustainable Constructional Steel (SCS) Scheme 2. Communicate leaders commitment Clause 1.1.1, The organizations leadership shall publicly commit to sustainability principles (inclusivity, integrity, stewardship and transparency) and the organisation shall make this commitment publicly and freely available Clause and effectively communicate

36 3. Understand and share the business case e.g. Clause The organization shall complete due diligence by assessing and documenting its adverse impacts (risks) and beneficial impacts (opportunities) that it can influence.

37 4. Commit necessary resources Clause The organization shall allocate appropriate resources to achieve its sustainable development objectives. Clause The organization shall appoint a management representative

38 5. Develop skills and competence Clause The organization shall identify the learning and development needs of employees working in different levels, 3.4. Skills and Training (Development of Employees)

39 6. Enable business systems to drive improvement Reinforcing steel bar (rebar) as an extended product

40 7. Align incentives and disincentives Clause The organization shall provide appropriate training and incentives to employees so that they understand how their work may impact on sustainable development of the organization

41 8. Assure, verify and reinforce a learning culture Certification process: Application review; Stage 1 and Stage 2 detailed on-site audits each year EPD data, which is updated once every 3 years, is subject to an additional verification stage by a third party BRE Ongoing engagement between CARES auditors and the organisations Annual SCS Scheme sector report

42 9. Engage, collaborate and build trust

43 Summary Lessons Learnt 1. Provide a clear vision for responsible business 2. Communicate leaders commitment 3. Understand and share the business case 4. Commit necessary resources 5. Develop skills and competence 6. Enable business systems to drive improvement 7. Align incentives and disincentives 8. Assure, verify and reinforce a learning culture 9. Engage, collaborate and build trust Being able to demonstrate responsible sourcing of steel construction materials is increasingly a minimum requirement on the biggest contracts

44 Ayhan Tugrul General Manager, CARES Pembroke House, 21 Pembroke Road, Sevenoaks, Kent, TN13 1XR, UK Tel: Mobile: Independent, impartial and trusted ukcares.com

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46 Apres Annual Conference 2017 Risk and Responsibility: the evolution of supply chain data and business culture Sustainability and scalability: the start-up challenge REBECCA FORDHAM MD & FOUNDER

47 Tales of. - Goals and mission - Supply chain - Advocacy and customer base - Challenges and opportunities

48 Social Investment Challenging the garment industry to positively change - The sector s employment and working conditions; and - The customer s buying practises Transparent supply chain - Empower women through sustainable employment - Focus on quality and design - Provide access to an international market We work with - Female owned/managed workshops & factories - Pay above market wages - Safe working conditions Beyond financial empowerment - Do not subcontract - Provide professional training and education - Advocate and promote skills and values

49 Edwina Assan CEO Edtex Batiks, Tema, Ghana Ghana, West Africa - Minimum wage 8 cedis a day - Edtex workers receive twice that amount - 36 % participation rate in the financial services system - 25% excluded from financial services system all together (2016, PWC) Positive Social Impact - Predominantly female workforce receive transferable professional training Employee Financial & Community Empowerment - Open a bank account for monthly salary payment - Saving and pension training - Encouraged to participate in credit union - Education and children services initiatives

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52 The Maa Trust Masaai Mara, Kenya - Provide regular employment and training - Sustainable development projects include sanitation, education and environmental projects - Produce contemporary pieces using traditional methods - Only 48% of Masaai girls enroll in school - 5% of those who enroll reach secondary education - 65% of women and girls unable to afford sanitary products in Kenya

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54 Consumer Engagement

55 Consumer Engagement People are increasingly at home with digital shopping and value its convenience, speed, low prices and responsiveness to their preferences - Large or small selection - Convenience online or physical - Experience CHALLENGES AND OPPORTUNITIES Domestic manufacturing environment - Production timeline - Job creation versus AI e.g. Sephora digital makeup - Banking system versus mobile Logistics, taxes and exports - SME bureaucracy - Big = nimble - (e.g. Alibaba) - Data company as a raw material - Stockists and minimum orders PR/Consumers/Investment - Battle of the new - Digital influencer - Male tech bias partnerships and collaborations with big business while maintaining ethics

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