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

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1 Embedding inclusive 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% 2

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

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

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 Anders Danielson President and CEO Skanska AB 5

6 Why? 2 Supporting our purpose and values 6

7 Why? 3 Business priority Inclusive 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 7

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

9 Why? We want to be Different and Better Providing opportunity for a wider pool of supply chain More effective and consistent engagement the supply chain Creating agile and innovative supply chains to deliver future customer solutions 9

10 How? Set the standard Align supply chain Innovate Supply Chain Sustainability School 10

11 Skanska sustainability agenda 11

12 Set the standard Leadership 12

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

14 Case study A14 delivery

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

16 360 KPI Meetings Supplier Development Behavioural Based Training 360 Degree Performance Reviews with our clients and Supply Chain Partners.

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

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22 3 Innovate 22

23 New thinking required Cost supplychainschool.co.uk building sustainability Sustainability / Specification / Faster 2 3

24 But every 1 we spend 80p... So we must develop our supply chain... supplychainschool.co.uk building sustainability

25 Common Goal to improving supply chain performance supplychainschool.co.uk building sustainability

26 A common goal The Supply Chain School aims to build a best in class supply chain for the UK construction and infrastructure sector that will enable the industry to deliver its 2025 objectives How? The School provides an online learning platform, training programme and comprehensive resource library that improve the industry's ability to understand sustainability issues and innovate When joining the School supply chain members take part in a diagnostic process to understand and benchmark their current levels of knowledge and establish areas for improvement supplychainschool.co.uk

27 Sustainability learning Our 10 sustainability themes Sustainable Construction supplychainschool.co.uk

28 Collaboration 74 clients, contractors and suppliers working with 26,000 members supplychainschool.co.uk building sustainability

29 74 Partners leading our work supplychainschool.co.uk building sustainability

30 Innovation Online delivery of supply chain development supplychainschool.co.uk building sustainability

31 supplychainschool.co.uk building sustainability

32 A range of market sector groups Homes Materials Offsite Infrastructure SupplyChain School Horizon Facilities Management Wales Construction 32 supplychainschool.co.uk supplychainschool.co.uk building sustainability /uk/homes

33 Improved performance Measurable business improvement supplychainschool.co.uk building sustainability

34 Impact on Sustainability We have a basket of 9 benchmarks that examine impact and attribution We asked the questions: Since joining the School, has your company improved your (particular issue)? For those who reported positively we asked: Engaging in the School has helped us to Sustainability issue %age with improved %age agreeing School helped to achieve this Carbon emissions - reduction 37% 48% Waste - reduction 40% 56% Water consumption - reduction 18% 50% Air quality - improved 15% 54% Responsible Sourcing improved understanding 49% 81% Modern Slavery improved understanding 63% 82% Community Engagement increased engagement 45% 66% Apprentices increased numbers 32% 44% Fairness, Inclusion & Respect improved understanding 37% 85% supplychainschool.co.uk building sustainability

35 Impact on business performance This is the impact on the business beyond sustainability issues Business Impact %age agreeing the School has helped achieve this Reduce costs 45% Win new business 43% Better understanding of sustainability 73% Retain talent 25% Be more collaborative 58% Better relationships with our suppliers 56% Improve quality of bids 52% Reduce reputational risks 53% supplychainschool.co.uk building sustainability

36 Special Interest Groups Social value Measurement Modern Slavery Materials Fairness, inclusion and respect 36

37 What is FIR? This project has been delivered with support from the CITB Structured Fund, which aims to ensure that the construction industry has the right people, with the right skills, in the right place, at the right time and is equipped to meet the future skills demands of the industry.

38 Why FIR Matters This project has been delivered with support from the CITB Structured Fund, which aims to ensure that the construction industry has the right people, with the right skills, in the right place, at the right time and is equipped to meet the future skills demands of the industry.

39 How To Promote FIR This project has been delivered with support from the CITB Structured Fund, which aims to ensure that the construction industry has the right people, with the right skills, in the right place, at the right time and is equipped to meet the future skills demands of the industry.

40 Resources Access the FREE FIR Toolkit for construction 4 x E-learning modules Resource library 6 x Toolbox Talks FIR Ambassador Events #FIR4us Case studies Workshops FIR Ambassador LinkedIn Group FIR Ambassador FIRfy Friday s This project has been delivered with support from the CITB Structured Fund, which aims to ensure that the construction industry has the right people, with the right skills, in the right place, at the right time and is equipped to meet the future skills demands of the industry.

41 New E-learning content Leading People Inclusively This project has been delivered with support from the CITB Structured Fund, which aims to ensure that the construction industry has the right people, with the right skills, in the right place, at the right time and is equipped to meet the future skills demands of the industry.

42 The results - Skanska UK supply chain 5,750 suppliers (7,550 in 2010) 63% of spend is SMEs ( 850m) (45% in 2012) 78% of UK revenue 78% of supply chain are SMEs (57% in 2012) 42

43 Key messages Why an inclusive approach? The end in mind How we do it? 43

44 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 44

45 Thank you Any questions? 45