WH Smith PLC CORPORATE RESPONSIBILITY REPORT 2007

Transcription

1 WH Smith PLC CORPORATE RESPONSIBILITY REPORT 2007

2 CONTENTS CONTENTS 3 Introduction 4 Governnce nd ccountbility 5 Mrketplce 10 Environment 14 Workplce 19 Community 25 Verifiction

3 INTRODUCTION Welcome to WH Smith PLC s 2007 Corporte Responsibility Report. Over the lst yer, we hve seen environmentl nd socil issues rise higher on the gend for our customers, s well s for politicins nd the medi. At WHSmith, we hve continued our long-estblished work to embed our Corporte Responsibility (CR) principles within the wy tht we mnge every spect of our business. We believe tht mnging CR in this wy enbles us to understnd nd effectively mnge the key impcts of our business, s well s the relted risks nd opportunities. This report outlines the progress we hve mde during 2006/07 towrds the objectives we set lst yer. As ever, we divide our CR progrmme into four res: mrketplce, workplce, environment nd community. I m plesed to report progress in ll res of our progrmme. Notble chievements include further increses in the mount of pper we source from sustinbly-mnged sources nd the delivery of trining nd development progrmmes which hve chieved cler results to help our stff further their creers with us. We hve lso continued to mke progress to reduce our environmentl footprint nd to support our stff s they tke n ctive role in the communities we operte in. More detil on these nd mny other inititives cn be found in the Report. We re lwys keen to benchmrk our CR performnce ginst other leding UK compnies s this cn help us identify wys to further improve our progrmmes. The nnul Business in the Community Corporte Responsibility Index provides just such n opportunity nd, this yer, we were delighted to improve our performnce for the fourth successive yer, chieving Gold rnking. In the yer hed, we will continue our work to mnge our impct on society nd the environment, whilst lso exploring opportunities to use corporte responsibility to enhnce our business performnce. Kte Swnn, Group Chief Executive, WH Smith PLC

4 GOVERNANCE AND ACCOUNTABILITY At WHSmith, we believe tht good corporte responsibility is essentil to the long-term success of our business. We hve therefore integrted the governnce of CR into our core mngement systems to ensure tht CR risks nd opportunities re given the correct level of ttention nd fctored into business plnning decisions. Mngement nd ccountbility Accountbility for corporte responsibility sits t the highest level within our business, with nmed Bord Director responsible for ech of the four key CR res (Mrketplce, Environment, Workplce nd Community). Detils of these Directors re in the relevnt sections of this report, together with detils of the senior executives tsked with ensuring tht we deliver on our CR objectives on dy-to-dy bsis. Identifying risks nd developing key performnce indictors Ech yer we crry out full review of our CR strtegy. As prt of this process, we mp the risks nd opportunities relted to CR, process which is informed by legisltive nd consumer trends, s well s key environmentl nd socil issues. This review nd risk nlysis shpes our CR strtegy nd the key performnce indictors nd improvement trgets we set for the next 12 months nd further into the future. The Executive tem is fully involved in this process nd the Bord grees the finl strtegy nd trgets ech yer. The Risk Committee reviews progress qurterly. Stkeholder enggement Our pproch to corporte responsibility is shped by the views nd expecttions of our stkeholders. We engge with key stkeholders on regulr bsis. Investors we meet with investors to discuss our CR strtegy nd to nswer their questions on specific elements of our CR progrmme. Non-Governmentl Orgnistions we re members of the WWF-UK Forest Trde Network nd the Ethicl Trde Inititive. We submit nnul performnce reports to both groups nd use their feedbck to inform our mngement of forestry nd ethicl trding issues. Suppliers we engge with our suppliers in number of forums, including workshops, conferences nd meetings. This yer, such enggement included conference providing forum for our key Chinese suppliers to understnd nd give their feedbck on our pproch to ethicl trding. Customers customers often contct us to let us know their views on spects of our corporte responsibility progrmme. We ensure tht we respond to customers individully nd tke their comments into ccount s we develop our pproch going forwrd. We lso directly seek out customer views on how we re performing on CR issues. This yer, we crried out survey, sking customer views on our CR pproch nd how this influences the rnge of products in our stores. Employees we communicte regulrly on CR issues in our weekly newsletter nd we provide detiled informtion on CR on dedicted intrnet site. Stff re encourged to give their feedbck on our CR progrmme. Benchmrking our performnce We regulrly benchmrk our performnce in ll the key CR res ginst other compnies nd retilers to ensure tht we re keeping pce. The nnul Business in the Community Corporte Responsibility Index provides n opportunity for us to benchmrk our CR performnce ginst other leding UK compnies. We were delighted to improve our performnce for the fourth successive yer, chieving Gold rnking. Business in the Community mde prticulr note of WHSmith s outstnding performnce in the mngement of our socil impct nd of mrketplce issues, such s responsible forest sourcing nd ethicl trding. We remin committed to mnging our impct on society nd the environment, whilst exploring the wys in which corporte responsibility cn enhnce our business performnce. WHSmith continues to meet the socil, ethicl nd environmentl criteri set out by the FTSE4Good Index so we hve retined our plce in the Index for nother yer. FTSE4Good mesures the finncil performnce of compnies tht meet globlly recognised stndrds on corporte responsibility.

5 MARKETPLACE Bord ccountbility Kte Swnn, Group Chief Executive Executive ccountbility Stephen Clrke, Commercil & Mrketing Director Relevnt policies Ethicl Trding Code of Conduct Forest Sourcing Policy Mrketing Code of Prctice Customers re incresingly concerned bout the socil nd environmentl impct of the products in their shopping bskets. They wnt to be ressured tht products they buy hve not been mde t the expense of the environment or of the workers who mde the product, nd we hve n ctive progrmme to work with our suppliers to ddress ny issues. Amid n incresingly competitive retil environment, we re lso working to improve the shopping experience t WHSmith, with focus on delivering high-qulity products nd excellent service to our customers. Customer focus Customer Service continues to be one of our core business vlues underpinning everything tht we do. Delivering excellent customer interction is key focus within the overll WHSmith customer experience. Throughout this yer we hve performed over 2,800 mystery shopper checks on our stores to test the customer experience. We hve delivered consistently high scores ginst our key criteri for customer experience t the till point. These include indictors such s polite greeting nd close to trnsction with eye contct mde nd ccurte nd efficient processing of the trnsction. Most recent results show performnce of over 97% in this re nd this hs been consistent throughout the yer. Another focus for us is on delivering high levels of vilbility nd consistent stndrds for our customers in every store. In sttionery, for exmple, our Sttionery Excellence progrmme works to ensure mximum on-shelf vilbility of our key lines in ll stores. Similrly, in books, our Books Excellence progrmme focuses the ttention of our store tems on ensuring tht ll the key titles re on disply for our customers nd tht the ltest pricing nd promotions re lwys on offer. Responsible mrketing At WHSmith, we tke our responsibility for the products we sell very seriously. Our customers re diverse group nd they often hve strongly differing views bout the products we sell. We re committed to offering our customers choice but lso recognise tht we hve responsibility to ensure tht we sell our products in responsible mnner. Reching n pproprite blnce involves listening to our customers nd thinking bout the products tht we sell nd the wy in which we sell them. For exmple, we sell wide-rnge of mgzines, some of which might be unsuitble for our younger customers. We therefore hve strict guidelines bout how nd where we disply our mgzines, tking cre to mintin distnce between mgzines imed t younger people nd those imed t older udiences. We lso tke cre to plce mgzines with more mture content so tht they remin out of sight nd out of rech of younger hnds. We tke similr pproch to other products, such s entertinment products or some sttionery items such s glue or crft knives, mking sure tht they re either out of rech of children or re kept in n re of the shop where our stff cn keep n eye on them. Our till points lso operte strict system of product prompts to constntly remind stff to check tht customers re of n ge tht is pproprite to the product they re buying. Our Mrketing Code of Prctice sets out the stndrds we follow in ll spects of promotionl ctivity, mrketing nd dvertising. These stndrds lso pply to the design nd development of our products. We operte ccording to strict internl guidelines regrding the responsible retiling nd mrketing of our products nd, during the yer, we hve trined our buyers on the Code of Prctice nd explined how the Code should influence their dyto-dy work. Following the trining, we hve seen n increse in the number of buyers tht re ctively referring to the guidelines during the design nd development of product rnges. Forest sourcing As leding retiler of books nd sttionery products, one of the significnt environmentl impcts of our business is the pper nd wood sources used in mny of our own-brnd products. It is our long-term im tht ll virgin (i.e. non-recycled) mteril used in our products should come from known, legl, wellmnged nd credibly certified forests. The issues round forest sourcing re complex nd it will tke us time to rech this position. As minimum, therefore, we expect our suppliers to know where the forest mteril used in their production cme from nd to be ble to provide evidence tht it hs been leglly hrvested. Trining key stkeholders Forest sourcing is key risk re for our business nd the risks re prticulrly high when sourcing from countries where forestry stndrds cn be poor; mny of these countries re in the Fr Est. With more of our products coming from this region, it is vitl tht our Hong Kong buying office fully understnd the issues. This yer we provided trining to our Hong Kong tem to enble them to better understnd the risks nd requirements of forest source mngement, so tht they cn, in turn, explin this to suppliers with the im of ensuring tht the pper nd wood products we buy in the region re from well-mnged sources. To help both our UK nd Fr Est suppliers, we hve developed series of guidnce documents tht explin the risks round forest sourcing nd wht WHSmith is looking for in terms of responsible forest sourcing policies. We lso provide countryspecific risk reports, which detil ny issues in supplier s source country or region.

6 MARKETPLACE Ech yer, following our nnul forest source survey, we give feedbck to ech supplier on their performnce, suggesting res for improvement, typiclly s prt of n ongoing dilogue to help them develop products with better environmentl credentils. Monitoring forest sources All prospective nd ongoing suppliers re required to complete pre-order questionnire, which sks for detiled informtion on the forest sources intended for WHSmith products. Our complince tem ssess the informtion nd decide whether or not the order should be plced. The dvntge of this pproch is tht it reduces the risk of unwnted mteril entering our supply chin. WHSmith continues to be member of the WWF UK Forest Trde Network (FTN). Members re committed to trcing timber nd pper products bck to the forest source nd providing n nnul report to the FTN detiling those sources. The nnul reporting llows the FTN to monitor trends in forest sourcing whilst lso providing members with feedbck nd prcticl dvice on further improving their forest sourcing. As prt of our membership commitments, we contct our mjor suppliers of own-brnd pper nd wood-bsed products requesting informtion on every forest-bsed product tht they supplied to us over the previous 12 months. Suppliers complete the survey using the WHSmith Forest Source Clcultor, which helps suppliers fill in the very detiled informtion tht we require. The resulting report llows us to identify ny risks in our supply chin, such s timber tht might be from environmentlly contentious res, nd complements our pre-order questionnire process. The report lso llows us to identify those suppliers tht re mking good progress in their own forest source mngement nd whom we cn work with to introduce new, sustinble product lines. OWN-BRAND MATERIAL FROM RECYCLED SOURCES AND CERTIFIED FORESTS 30% 32% 41% This yer s survey covered 90% of ll WHSmith s own-brnd products, up from 78% lst yer. This is importnt becuse it gives us greter visibility of the risks in our supply chin. Of note is the fct tht ll of our key Fr Est own-brnd suppliers returned dt. As this is high risk region in terms of forest sourcing stndrds, we were prticulrly plesed t this chievement. In the yer hed, we im to mintin or further increse this level of coverge. The volume of mteril from recycled sources nd certified forests * rose from 32% to 41%, significnt yer-on-yer increse. But we know there is more work to be done nd we will be working hrd to mke further increses in the yer hed. * Certified forests re mnged in ccordnce with the requirements of specific certifiction bodies setting out the steps tht must be tken to ensure the longterm sustinbility of the forest. The certifiction schemes our suppliers use include the Forest Stewrdship Council (FSC) scheme, Progrmme for the Endorsement of Forest Certifiction (PEFC) scheme nd Sustinble Forestry Inititive (SFI). The pproch tken by ech certifiction scheme vries. We encourge suppliers to move towrds certifiction under the FSC scheme, which is recognised by WWF s n indictor of well-mnged forest. Product stewrdship Mnging the environmentl nd socil impct of our products Much of our work to improve lbour stndrds or forestry stndrds in our supply chin is behind the scenes. However, we re working hrd to mke more of this work visible to our customers, so tht it is esier for them to see which products hve environmentl or socil benefits. This yer, we hve continued to increse the number of sttionery products mde from recycled mterils, notbly through the introduction of new Core Sttionery line for Bck to School. Other products rnge from correspondence pper to photocopier pper nd mgzine files. Our Corporte Responsibility tem work closely with our buyers to look t opportunities to further expnd our recycled product rnge nd we re lredy working on new product lines to be introduced next yer, some mde from recycled mterils, others helping to rise wreness of environmentl issues such s climte chnge. Our products cn lso help to support chrities nd we hve continued to expnd our successful Adopt Box rnge which rises money for prtner chrities working on conservtion issues. More detil cn be found in the Community section of this report. 2004/5 2005/6 2006/7

7 MARKETPLACE Developing products to meet the needs of diverse customer bse With stores on lmost every high street cross the UK, our customer bse reflects the diversity of the UK popultion. During My nd June, WHSmith took prt in Books for All, pilot promotion with the Arts Council Englnd s diversity inititive specificlly trgeting Africn, Asin nd Cribben customers. Reserch crried out by The Bookseller in 2006 found tht there ws fer fctor within the book industry when it cme to mrketing books to Britin s blck nd minority ethnic popultion. Books for All ws n ttempt to ddress this lck of confidence nd to help mke our stores n ppeling option for reders from every bckground. The promotion rn in our London nd Birminghm stores nd involved devoting spce to llow for the promotion of books by blck nd Asin writers. Responsible disposl of wste electricl products Ech yer in the UK, people throw wy over 1.2m tonnes of electricl nd electronic wste the equivlent of 150,000 double-decker buses! Electricl equipment contins chemicls tht cn be hrmful to the environment nd to humn helth. It is therefore importnt tht these products re disposed of sfely. This yer, the UK implemented the Wste Electricl nd Electronic Equipment Regultions (WEEE), which im to increse the mount of electricl wste tht is sent for recycling. It plces requirements on UK retilers to help give members of the public the opportunity to deposit their old electricl items for recycling. WHSmith is working with other retilers to help upgrde locl Civic Amenity sites cross the UK where customers cn tke their old electricl items for sfe, free-of-chrge disposl. All electricl products from WHSmith now crry symbol of crossed-out wheelie bin to remind customers tht the product should be disposed of crefully nd not thrown out with generl household wste. Our stores lso offer guidnce to help customers find out how nd where to recycle electricl nd electronic products when they rech the end of their lives. Promoting ethicl trding In ddition to the environmentl impct of our products, we lso hve responsibility for the wy in which our products re mde. WHSmith is committed to ensuring tht stndrds re mintined cross our supply chin, regrdless of where in the world our products re mde. Our im is tht suppliers should, t minimum, meet the stndrds set out in our Supplier Code of Conduct. To rech tht gol, we re working with our suppliers to bring bout incrementl chnge, through trining, dvice nd by showing suppliers tht they too cn benefit from improved lbour stndrds nd better supply chin mngement. WHSmith hs been member of the Ethicl Trde Inititive (ETI) for number of yers. The ETI is n llince of compnies, NGOs nd trde unions tht ll work together to promote nd improve the implementtion of corporte codes of prctice covering supply chins. Our own Code of Conduct is bsed on the ETI Bse Code. We lso prticipte in the ETI Chin Working Group, which provides forum for members to lern nd shre experiences from one of our key supplier countries. Before n order is plced with new supplier, our specilist Hong Kong socil complince tem visit the supplier fctory to ssess the lbour stndrds ginst the stndrds set out in our Code of Conduct. On-site, the tem exmine everything from fctory production records to fire exits nd worker dormitories. The worklod is considerble nd often involves forensic ccounting when monitoring wges nd working hours. This yer, the tem crried out 157 udits cross Chin, Indi nd the Fr Est. At the end of the tem s visit, the WHSmith tem meet with the fctory mngement to discuss their findings nd recommend ny necessry improvements. An ction pln is greed with specific timetble for ech improvement to be completed. We will then follow up with the fctory s necessry to ensure tht ll ctions hve been completed. Another full udit is crried out no more thn 24 months lter. It is this improvement process which is core to our pproch, lthough it cn often be time-consuming process s our tem work with suppliers to convince them tht improvements in lbour stndrds cn benefit the business s whole, s well s the workers. This yer, we hve incresed the size of our Socil Complince tem which hs in turn incresed our cpcity to work with suppliers on improvements. We hve lso been ble to crry out in-depth enggement with one key supplier, focusing on improvements to helth nd sfety, nd we hosted supplier conference to provide suppliers with prcticl dvice on how to mke improvements (see cse studies). Enggement with UK suppliers Our UK-bsed complince tem hve responsibility for mintining stndrds in our UK own-brnd suppliers. Mny of our UK suppliers lso source components from round the world nd it is importnt tht they too hve systems in plce to monitor stndrds. This yer, our UK complince tem hve been working with key UK own-brnd suppliers to ensure tht they hve robust systems in plce to udit lbour stndrds nd forest sourcing prctices in their supply bse. We contcted our Top 20 UK own-brnd suppliers sking for detiled informtion on the pproch to mnging these issues nd ensuring complince with WHSmith s policies. We held meetings with the Top 5 suppliers to discuss their policies nd procedures in depth. This helped us to understnd the chllenges our suppliers fce when implementing ethicl trding policies, for exmple, nd we took the opportunity to give dvice on how to implement robust systems. At ech meeting, we greed timebound ction pln for the supplier to complete ny improvements necessry. The UK Complince Tem hve then followed up with ech supplier t regulr intervls nd will continue to do so in the yer hed. We know from our own

8 MARKETPLACE experience tht improving lbour nd forestry stndrds in the supply chin cn be chllenging nd tht commitment is required over the long-term to chieve rel improvements. We will continue to support our suppliers s they follow this pth. Cse study Listening to supplier views In June 2007, WHSmith held conference in Gungzhou, Chin, for 40 of our key Chinese suppliers. The conference ws run in prtnership with the ETI Chin office nd CSR Asi, non-profit orgnistion working in Hong Kong nd Chin to promote CSR issues. The conference ws intended to provide our suppliers with cler understnding of our expecttions round lbour stndrds nd to underline the benefit to suppliers nd to WHSmith of working together to tckle these issues. The conference ws lso intended to support more open nd trnsprent dilogue-bsed reltionship with suppliers. CSR Asi stff conducted closed group sessions where suppliers were encourged to tlk openly bout the chllenges they fce. After the closed sessions, series of workshops covered industry best prctice in Humn Resource Mngement, Helth nd Sfety, Communiction nd Socil Accountbility, setting out the benefits of improved prctices, both in terms of worker well-being nd overll business productivity. Cse study Working to improve occuptionl helth nd sfety In July 2006, we begn to work with one of our key Chinese suppliers, mnufcturer of photogrph lbums, to look t wys to work together to improve the mngement of helth nd sfety (H&S). The project ws bsed on the Ethicl Trding Inititive (ETI) H&S Project which we hd been prt of developing through our membership of the ETI Chin Working Group. Our objective ws to build close reltionship with this key supplier to look in detil t one spect of lbour stndrds. In return, we hoped the project would ssist them to build their understnding of best prctice in the mngement of H&S issues. Post-conference feedbck ws positive with mny suppliers ppreciting WHSmith s efforts to engge. Mny found the workshops useful nd insightful, while others felt they better understood why WHSmith ws interested in improving lbour stndrds. One comment which cme from number of suppliers ws tht they would like more guidnce on how to improve the working conditions within their fctories. As result of this feedbck, we pln to increse the mount of trining nd guidnce we provide. The WHSmith tem worked longside fctory mngement to gree the best pproch nd fctory personnel were closely involved t ech stge. The first step ws full risk ssessment involving ir nd noise tests nd the identifiction of potentil hzrds. We then worked with the fctory mngement to review their H&S policy, trin key personnel nd dvise on the estblishment nd election of worker H&S committee. The project provided useful lernings for ll involved. For our supplier prtner, there ws the opportunity to develop their H&S mngement skills nd build confidence in involving workers in dilogue on such issues. For WHSmith, the project helped us to better understnd the best wys to encourge improvement in lbour stndrds nd persude suppliers of the mutul benefits of such improvement.

9 MARKETPLACE 2006/07 Trgets Progress 2007/08 Trgets Ethicl trding Increse enggement work with Fr Est own-brnd suppliers by 10% to give greter visibility of potentil risks nd to encourge improvement from the highest risk suppliers. Continue our work with two Fr Est suppliers on helth, sfety nd welfre issues. g Totl number of udits nd post-udit follow-ups ws 157 visits, up by 10% from lst yer nd resulting in significnt increse in the number of completed corrective ctions. H&S Project completed with one supplier. See cse study for detils. Continue focused enggement work with key suppliers to help them understnd the business benefits of improved lbour stndrds, trgeting 5% increse in enggement. Continue to work with key Fr Est suppliers. Deliver trining for key suppliers giving prcticl dvice on how to improve lbour stndrds. Enggement Ensure tht key UK sttionery suppliers who provide us with own-brnd product from the Fr Est hve robust systems in plce to udit lbour stndrds nd forest sourcing prctices in their supply chin. g Dilogue initited with 5 key suppliers to emphsise the importnce of robust systems to mn ge lbour stndrds in the supply chin nd to communicte WHSmith s requirements. Action plns greed s prt of ech meeting. Continue to work with key UK FOB sttionery suppliers, following up points from mutully-greed ctions pln to ensure continued development of systems to udit lbour stndrds nd forest sourcing prctices in their supply bse. Forestry Mintin t 32% or increse further the mount of own-brnd pper nd timber product sourced from recycled sources nd certified forests. 41% of own-brnd timber nd pper is now from recycled sources or forests certified s being sustinbly mnged. Mintin t 41% or increse further the mount of own-brnd pper nd timber product sourced from recycled sources nd certified forests. Products & mrketing Continue to identify new product opportunities through our CR pproch. Aim to introduce t lest 3 further recycled or FSCcertified product lines. Develop internl guidelines tht specify the ctions buying nd mrketing tems should tke to ensure tht Mrketing Code of Prctice is effectively implemented. New recycled nd chrity product lines introduced e.g. extended Adopt n Animl rnge, wider rnge of recycled core sttionery lines. Internl guidelines developed nd trining provided to key buyers to ensure they understnd how to implement the guidelines in their dy-to-dy work. Continue to identify new products through our CR pproch (i.e. products with improved environmentl credentils or which support chrity). Aim to introduce t lest 15 new product lines. g x Achieved Ongoing Not chieved

10 environment Bord ccountbility Aln Stewrt, Group Finnce Director Executive ccountbility Robert Moorhed, Retil Finnce Director Relevnt policies Environmentl Policy WHSmith is committed to reducing the impct our business hs on the environment. Environmentl issues re lso n incresing concern for our customers nd stff nd we wnt to help them do their bit to help the environment. Responsibly mnging our environmentl impct lso mkes good business sense. Electricity, fuel, wter nd rw mterils ll represent cost to our business, so the less we use, the lower our costs will be. power or renewble energy. This yer, we were successful in sourcing most of the electricity for our High Street stores from hydro-electric sources, contributing to reduction in crbon emissions. It cn be difficult to secure supply of these lower emission forms of energy, but we will endevour to purchse our energy from low emission sources gin next yer. Next yer, we will focus on crbon emissions in our Trvel irport stores, working with Pure, the Clen Plnet Trust, to offset the emissions from the electricity used in these stores by supporting clen energy developments cross the world. ENERGY CONSUMPTION* KWh per squre foot Our min environmentl impcts include: The energy used in our stores, offices nd distribution centres. The fuel consumed by our vehicle fleet in getting product to stores. 2002/3 2003/4 2004/5 2005/6 2006/7 The wste, minly crdbord nd plstic, generted in stores nd t our distribution centres. We lso hve responsibility for the environmentl impct of the products we sell, lthough these re often hrder to mnge. We discuss some of these issues in our Mrketplce chpter. Environmentl mngement Our pproch to mnging our environmentl impcts is governed by our environmentl mngement system (EMS). This is bsed on the principles of the interntionlly-recognised ISO14001 scheme. During the yer, we hve crried out full review of the EMS, looking t our key environmentl impcts, the personnel responsible for mnging ech spect of the system nd the wy we set objectives nd trgets nd monitor performnce. The review provided n opportunity to ensure tht key stff round the business hve full understnding of their responsibilities with regrd to environmentl mngement nd re focused on the ctions they need to complete to meet our environmentl trgets. Our objective is to repet this process nnully to ensure tht our EMS continues to support further improvement in our environmentl performnce. Energy nd emissions We hve continued to reduce energy consumption cross the Group in line with our trgets. In September 2004, we set trget to reduce energy consumption by 5% per squre foot by August We hve exceeded this trget, delivering 9% reduction in energy consumption during the period. Overll Group crbon dioxide emissions (from both trnsport nd energy) reduced by over 55% yer on yer, from 41,493 tonnes lst yer to 18,528 tonnes this yer. A significnt fctor in our emissions is the mount of energy we re ble to source from genertion sources with lower crbon emissions, such s hydro-electric *Dt from previous yers re-stted bsed on more ccurte squre footge dt. Improving energy wreness Energy conservtion is often bout lots of people mking very smll chnges. Encourging people to mke these smll chnges involves rising wreness of the simple steps tht people cn tke. With over 16,000 members of stff spred cross over 700 sites round the UK, there is n opportunity to mke significnt energy improvements through greter wreness of environmentl issues. During September nd October, we lunched SWITCH IT OFF! cmpign in our High Street nd Trvel businesses, imed t promoting wreness of environmentl best prctice nd delivering reductions in energy consumption nd wste. All stores received set of eye-ctching posters nd stickers tht remind stff of the simple steps they cn tke. As prt of the cmpign, we held n Energy Awreness Week with dily tips on sving energy. Stff were lso encourged to use the Energy nd Environment section on our intrnet, which provides stff with informtion on how they cn help reduce energy consumption. Coupled with the fct tht store mngers re ccountble for energy costs within their profit nd loss ccounts, this heightened wreness is mking n importnt contribution to delivering overll reductions in energy consumption. Spotting energy wstge quickly Accurtely mesuring nd reporting on our environmentl impct is criticl prt of energy mngement. However, monitoring consumption cross 700 sites sites tht include irport stores, rilwy sttions nd older high street buildings is difficult nd time-consuming exercise. This yer, we completed the rollout of Automted Meter Reders (AMRs) cross our High Street stores. AMRs llow us to monitor, loclly or centrlly, the energy consumption of n individul store 10

11 environment throughout the dy. The consumption pttern tht AMRs produce cn identify where lights or PC monitors hve been left on overnight or where thermostts hve been wrongly set. The grphs below show the ctul electricity consumption of the sme store tken on different dys. Under idel energy mngement, the grph should tke the form of top ht, with miniml consumption during non-trding hours. Mon 26/05/07 Mon 30/07/ Time The chrt dted 26 Mrch shows bnorml non-trde consumption, with electricity use remining high throughout the dy. The chrt led us to identify tht n override function on the store ir-conditioning system hd been left permnently on. Correcting the settings led to considerble improvement, resulting in the idel top ht pttern of consumption shown in the chrt dted 30 July nd nighttime energy sving of round 75%. With the AMRs lredy hving identified significnt svings in individul stores, used cross our portfolio of stores should help us chieve substntil svings in energy consumption. Trnsport CARBON DIOXIDE EMISSIONS PER PACKAGE MOVED Crbon dioxide emissions (kg per pckge) 30 full vehicle is before mking delivery, rther thn simply bsing it on dily schedule. As well s reducing fuel consumption, these refinements improve the service levels provided to our stores. We hve lso continued to introduce double deck trilers on our trunk routes. In order to further reduce emissions from our fleet, we re upgrding our delivery fleet with clener nd more fuel-efficient vehicles. We re lso trilling bio-diesel in some vehicles, nd we will be closely monitoring the efficiency nd environmentl impct of the lterntive fuel. In ddition to the impct of our distribution fleet, we re lso looking t other spects of our trnsport impcts. Following the introduction of new compny cr policy this yer, next yer, we will begin the renewl of our compny cr fleet to reduce crbon dioxide emissions by 7% of typicl vehicle. Reducing wste The mjority of the wste generted by our business comes from our stores nd distribution centres nd is mostly mde up of crdbord, plstic shrink wrp nd dmged stock. The focus for our wste reduction progrmme is to increse recycling in our stores. However, our lrge estte mde up of mny smll sites, often with limited vehiculr ccess, mens tht this is chllenging tsk. During the yer, we hve incresed the number of stores recycling their wste to 216 of our sites. While this represents n improvement, we hve fllen frction short of mking the improvement we trgeted in terms of percentge of wste recycled cross the Group. Group recycling rtes re 19.5%, ginst trget of 20%, nd next yer we will work hrd to improve on this figure, trgeting 25%. TOTAL WASTE ARISINGS Thousnd tonnes of wste /3 2003/4 2004/5 2005/6 2006/ /3 2003/4 2004/5 2005/6 2006/7 Lndfilled Recycled With store network running the length nd bredth of the UK, the trnsport of product to store is mjor environmentl impct for WHSmith. This yer, we hve introduced new wy of mesuring nd reporting the impct of our trnsport network, looking t the volume of crbon dioxide for ech pckge moved from our distribution centres to our stores. We hve continued to work with our logistics contrctors to further improve the fuel efficiency of our distribution fleet. A key driver of further efficiencies is the ongoing progrmme of refinements to our idel delivery frequency schedule, which tkes ccount of how Reducing pckging In recent yers, pckging hs become mjor focl point for consumers concerned bout wste nd the environment. Excessive nd unnecessry pckging is lso source of cost to our business. It dds to trnsporttion costs, tkes up room in our stores nd it dds to our wste disposl costs. Ech yer, we re required to report to the Environment Agency figures for the mount of pckging we hndle nd ensure tht set percentge of this mteril hs been recycled. This percentge is known s our pckging obligtion. 11

12 environment PACKAGING OBLIGATION Tonnes The new bg designs we introduced in 2006 hve lredy delivered 28% reduction in the mount of plstic used. We know tht our customers re concerned bout the impct crrier bgs hve on the environment. In the spring, we lunched scheme to work with our customers to reduce crrier bg use. In prtnership with the Woodlnd Trust, the UK s leding woodlnd conservtion chrity, every time customer chooses not to tke crrier bg, we will mke dontion to support the Woodlnd Trust s work. Our trget is to fund the plnting of 10,000 trees by the end of 2008 to crete new woodlnd cross the UK. Much of the wste generted t WHSmith is from the pckging used to protect our products in their journey from fctory floor to shopping bsket. From next yer, we will require ll our suppliers to provide detiled informtion for ll the pckging used in WHSmith products. This will llow our commercil tems to see t glnce the different mterils nd quntities of pckging used in our products. Another focus on pckging hs been in reducing the mount tht is sent out to stores. Collecting our trnsit pckging t our distribution sites llows it to be more esily recycled. We hve lso begun tril with some of our book publishers which involves distributing books to stores using totes, which cn be reused, thereby eliminting the crdbord nd shrink wrp tht is currently used to protect books on their journey to stores. Crrier bgs We hve been working hrd in recent yers to reduce the environmentl impct of our crrier bgs. We joined with other leding retilers lso wnting to tckle this issue, signing up to the British Retil Consortium s commitment to reduce the environmentl impct of our crrier bgs by 25% by 2008, lso trgeting further reductions to be chieved by Helping our customers to protect the environment Environmentl conservtion is often bout individuls tking smll steps to reduce their own environmentl impct. With millions of customers pssing through WHSmith stores every dy, we hve rel opportunity to engge with our customers nd to help mke them wre of their role in environmentl conservtion. Woodlnd Trust Christms Crd Recycling Scheme For number of yers, WHSmith hs been working in prtnership with the Woodlnd Trust to rise the profile of recycling mong our customers. During the month of Jnury, customers cross Scotlnd, Englnd nd Wles could tke their old Christms crds into their locl WHSmith store for recycling. As well s rising the profile of recycling in the UK, the scheme lso rises funds tht llow the Woodlnd Trust to continue its vluble work in restoring nd conserving the UK s nturl woodlnd. This yer, our customers helped to recycle lmost 93m crds tht would otherwise hve ended up in lndfill. The proceeds from the recycled crds lso rised enough money for the plnting of 22,000 trees cross the UK. Supporting Tommy s through inkjet crtridge recycling Our inkjet crtridge recycling scheme continues to provide customers with n opportunity to recycle their old crtridge when they come into WHSmith to buy replcement one. Recycling rtes incresed significntly this yer, with 31% of the own-brnd inkjet crtridges sold being recycled t the end of their lives. This is up from 18% lst yer. As well s helping to reduce wste, for every crtridge recycled, dontion is mde to Tommy s the bby chrity. WHSmith s prtnership with the Woodlnd Trust The Woodlnd Trust is the UK s leding chrity dedicted solely to the protection of the UK s ntive woodlnd heritge. The Trust cquires woodlnd sites, which it then mnges in mnner sympthetic to both wildlife nd public enjoyment. The Trust lso uses its considerble experience to promote forestry conservtion cuses mong government nd public. Sue Holden, Chief Executive of the Woodlnd Trust, sid: WHSmith s support of the Woodlnd Trust over the lst six yers hs been fntstic. Together we ve plnted thousnds of trees nd reched millions of customers with environmentl messges such s recycling. 12

13 environment 2006/07 Trgets Progress 2007/08 Trgets Energy Crry out environmentl wreness cmpign cross ll stores, offices nd distribution centres. Continue to reduce energy consumption, trgeting further 3% reduction by August SWITCH IT OFF! cmpign held covering ll loctions to promote wreness of environmentl best prctice nd encourge reductions in energy consumption nd wste. Group energy consumption reduced by 9% YoY. Continue to reduce energy consumption, trgeting 15% reduction by August Offset the emissions from the electricity used in our Trvel Airport stores by supporting clen energy developments cross the world. Roll out Automted Meter Reding systems cross High Street stores to provide ccurte meter redings which will enble fst identifiction of high energy users. Automted Meter Reding system rolled out to ll High Street stores. Trnsport Continue to trget logistics contrctors to improve fuel efficiency of distribution fleet by mintining fuel consumption t 9.9mpg. Fuel efficiency incresed to 10.5mpg. Reduce crbon dioxide emissions per skip delivered to store to 0.67kg. Begin renewl of compny cr fleet to reduce crbon dioxide emissions by 7% of typicl vehicle. Wste nd Mngement Ensure tht t lest 20% of group wste is recycled. x 19.5% of group wste recycled. Ensure tht t lest 25% of Group wste is recycled during 2007/8. g x Achieved Ongoing Not chieved 13

14 workplce Bord ccountbility Aln Stewrt, Group Finnce Director Executive ccountbility Tnith Dodge, Group Humn Resources Director Relevnt policies Code of Business Conduct Suite of employee policies Helth nd Sfety Policy Attrcting nd retining the best employees is crucil to the success of our business. With employees seeking greter levels of fulfilment in their own lives, nd mid highly competitive employment mrket, remining n employer-of-choice requires continuous investment in our workforce. Vlue Our People is one of our core business vlues nd we im to provide ll our stff with suitble trining nd the opportunity to develop their creer t WHSmith. We lso im to be cler bout wht we expect of stff nd tht everybody shres nd understnds our business cross ll our loctions. Living our vlues In 2004 we dopted four key business vlues: Customer Focus, Drive for Results, Vlue Our People nd Accountbility. Over the pst few yers we hve focused on engging with our stff to ensure they understnd the vlues nd on celebrting the success of stff who demonstrte the vlues on dy-to-dy bsis. WHSMITH VALUES Customer focus Vlue our people Drive for results Accountbility The vlues form key prt of every employee s lifecycle, from recruitment, personl objectives nd pprisls, to trining nd development progrmmes. Our Hed Office Vlues In Prctice or VIP scheme ws lunched in 2004 nd is n opportunity for ny member of stff to recognise collegues who hve set leding exmple of demonstrting the vlues. This yer we dded Mking Life Esier for Stores to the VIP scheme to encourge stff to focus on removing or simplifying tsk or ctivity for our store tems. Ech month one VIP nominee is selected s VIP of the Month by the Executive tem s n exceptionl exmple of how to live our vlues, nd they receive three extr dys holidy. Thus yer, we reviewed the scheme through short feedbck questionnire to stff. The findings confirmed the positive impct of this scheme, with comments such s the scheme is gret wy of recognising collegues who mke the extr effort nd wht mkes this relly specil for me is finding out I ws nominted by members of my tem. Exmples of VIP nomintion: Jn demonstrted Customer Focus nd ws nominted following n emil from customer to thnk Jn for the help she gve him. He wrote: I spoke to Jn Cookson in the Customer Service Centre nd wht breth of fresh ir she is. She ws ttentive nd I felt tht someone ws ctully tking me seriously. Jn delt with this superbly nd kept in contct until resolution. I cnnot commend her highly enough. Wht gret mbssdor for WHSmith. Wht n bsolute str! Michelle hs demonstrted gret Accountbility s she worked with suppliers to help improve sles performnce following rnge review nd promotion. She worked tirelessly to chse orders, instigted weekly meetings nd implement improved working prctice. This resulted in improved vilbility nd improved sles. Clire hs demonstrted Vlue Our People, recently supporting High Street store mnger when they were deling with n extremely difficult customer complint. The store mnger ws relly grteful to Clire for her clming influence, plus the dvice nd ressurnce she gve. She lso contcted the store mnger fter the complint hd been delt with to ensure he ws OK. The store mnger sid, Clire s support ws outstnding nd it ment lot to me tht Clire took the time to check my welfre, thnk you gin nd keep up the good work. The Hed Office VIP scheme continues to be populr with stff, with over 100 Hed Office stff being recognised lst yer for living our vlues. Ech yer we lso celebrte the successes nd chievements of our store stff, with wrds being presented to recognise the commitment stff hve to the business, the contribution they mke nd how they overcome chllenges. These wrds include Most Improved Store, Store of the Yer, Store Mnger of the Yer nd Mnger s Mnger of the Yer. Communicting with nd engging our stff We understnd the importnce of communicting with our stff on regulr bsis tht s weekly, monthly nd nnully, to keep them updted nd informed on current business ctivity, performnce nd progress. Every week we circulte newsletter to stff in hed offices nd distribution centres contining rticles on business ctivity, stff recognition nd new people joining, policy updtes, nd store promotions nd events. The lst survey reveled tht this newsletter ws red by 95% of stff. The Executive Directors crry out briefings every month to the senior mngement tem, providing n updte on business performnce. Deprtment briefings then follow so ll hed office stff re updted nd hve n opportunity to sk questions. Another monthly session is more informl group clled Director s Brekfst, where smll group of stff, chosen t rndom, hve n opportunity to tlk to one of the Executive Directors nd rise ny subjects they wish. The suggestions mde t these events re tken wy by the Directors to follow up. 14

15 workplce Twice yer the Executive tem hold strtegy briefing to updte stff on key priorities for the forthcoming months. The lst briefing ws held in April nd we contcted smple of stff for their feedbck. Comments included I thought the session s whole ws very interesting nd relly informtive session. All stff questioned sid they understood the business priorities very well s result of the briefing. Once yer ll Store Mngers ttend conference for their re. This event provides review of performnce during the previous yer nd looks t priorities nd focus for the current finncil yer, especilly the Christms trding period. This is lso n opportunity for stff recognition. In order to understnd how successful we re in keeping our stff engged, this yer we crried out n employee survey. We will use the results to further improve our employee enggement going forwrd. Trining nd developing our stff We hve continued to strengthen our trining nd development support to ensure ll employees, whether in hed office, stores or distribution centres, cn ccess the pproprite development tools. This yer sw the lunch of new trining nd development intrnet site, with one version imed t hed office stff nd nother designed specificlly for store stff. Both sites support stff with creer development, highlighting ll the different trining nd development solutions vilble, s well s helping our stff drive their own self-development by lerning new skills. Cse study Lerning t Work week We took prt in the nnul wreness cmpign Lerning t Work week, when thousnds of orgnistions orgnise business-relted lerning ctivities to help stff lern new skills they cn put into ction t work. During the week, mster clsses were held, with over 250 stff ttending. Following the clsses we sked stff for their comments: I went to two mster clsses, Assertiveness nd Negotition, which were both excellent nd provided some gret top tips tht I cn put into immedite prctice in rnge of business situtions. The bite size courses were fntstic nd hve helped me look t where I need to develop. I took wy lots from ech course nd m surprised how much ws covered in just one hour. Our trining nd development progrmmes re focused on delivering mesurble results, both for the individul members of stff tking prt nd for the business. At hed office, in ddition to our Fst Trck Acdemy which prepres smll group of high potentil cndidtes for future senior mngement roles, we hve introduced progrmmes focused on specific function. For exmple, the Buying nd Merchndising Foundtion Course ws introduced this yer to support individuls in the keys res of Buying nd Merchndising nd ims to develop the technicl nd behviourl bilities of the delegtes. Within the store environment, our Supervisor nd Mnger Development Progrmmes continue to deliver excellent results, creting pipeline of tlent to fulfil these key roles nd giving stff the opportunity to progress up through the business. Both of these progrmmes provide potentil Supervisors nd Mngers with the commercil, opertionl nd behviourl skills nd knowledge they would need to be promoted into the more senior role. This yer, we hve incresed the rech of both of these progrmmes by over 20%. We mesure the success of the trining by looking t how mny cndidtes re promoted into supervisor or store mnger role once they hve completed the course. In 2006/07, 60% of prticipnts on the Supervisor Development Progrmme were promoted t the end of their trining period nd for the Mnger Development Progrmme, the promotion rte ws 73%. The store development progrmme does not stop t store mngers, but gives stff the opportunity to continue right up the creer ldder. Our Senior Store Mnger Development Pool, for exmple, comprised 15 individuls identified to hve the potentil to become District or Are Mngers in two moves. This yer 50% of cndidtes chieved promotions. Supporting work/life blnce Hving n pproprite work/life blnce is very importnt to our stff, nd we wnt to do more to help them chieve this. We lso recognise tht people s lifestyle ptterns re chnging nd they incresingly wnt to hve flexibility in their working conditions. In the lst 12 months, we hve lunched number of new employee benefits, including: School Strter Scheme grnting working prents hlf dy pid leve to ccompny their child on their first dy of school Phsed Retirement llowing employees to voluntrily reduce their working hours s their retirement dte pproches V-Time Working llowing employees to voluntrily reduce their working hours for defined period of time in order to blnce their work nd personl commitments without hving to leve the orgnistion or permnently reduce their working pttern Rewrding Attendnce Scheme giving stff with 100% ttendnce record during six-month period, n dditionl dy holidy. 15

16 workplce Vluing diversity Diversity is n integrl prt of our corporte responsibility. We wnt inclusion to be the norm t WHSmith, where diversity nd equlity re vlued by everybody. Following the estblishment of diversity working group lst yer, this group hs continued to meet during the yer to review progress ginst our diversity ction pln. We re mking progress with the implementtion of this pln. Actions crried out during the yer include the integrtion of our diversity principles into the store recruitment strtegy nd lso the provision of trining progrmmes on diversity, disbility nd discrimintion issues for ll mngers within the business, both within stores nd hed office. In ddition, we hve trilled sign lnguge courses for store stff to help them to communicte better with customers with hering difficulties. These courses hve been well received nd we will look t offering them to more stff next yer. We continue to work to improve the qulity of dt we hve on the diversity of our own stff nd this will be focus in the yer hed. DIVERSITY PROFILE All employees Mle Femle Senior mngement Mle Femle Mintining sfe nd helthy working environment The Bord is committed to mintining high stndrds of helth nd sfety in the business. The Mngement tem, supported by professionl sfety dvisers, monitors key sfety performnce indictors nd n nnul report detiling trends, performnce nd recommendtions is presented to the Bord. The business lso hs properly constituted Helth nd Sfety Committee tht comprises employee representtives, mngement, trde union representtives nd professionl Sfety dvisers. Accidents nd Injuries Mjor injuries Injuries resulting in over 3 dys bsence from work All RIDDORs* * Accidents reportble under the Reporting of Injuries, Diseses nd Dngerous Occurrence Regultions. This yer, the totl number of reportble ccidents reduced by 1%, while the number of mjor ccidents reduced by 27%. This will be continue to be n re for focus in the coming yer. As shown in the pie chrt below, over 60% of ccidents re due to slips nd trips nd mnul hndling. During the yer over 1,000 mngers hve been trined so they cn cscde sfety trining to their stff, with prticulr emphsis on these two res. Specific Helth nd Sfety trining hs lso been incorported into our Mngement Development Progrmme for new Store Mngers. ACCIDENTS BY TYPE 1 SEPTEMBER AUGUST % 17% 12% 9% 2% 19% Mnul hndling Striking fixed object Struck by moving/flling object Slip/trip/fll Fll from height Hnd tools/other We monitor ll incidents t ll our sites, irrespective of how minor they my be, so tht we cn understnd the cuse nd identify ny trends. This yer, our trget ws to reduce these minor ccidents by 5% nd we exceeded this with reduction of 11% during 2006/07. We will trget further 5% reduction next yer. In ddition, we trck the contcts mde by locl Environmentl Helth Officers nd the issues rised. Our trget is to hve no fines or penlties imposed nd this ws chieved for 2006/7, s it hd been in the previous yer. We lso monitor the number of forml notices received from Environmentl Helth or Fire Officers. This yer, we trgeted 2% reduction in the number of notices received nd we were plesed to exceed this trget, chieving 4% reduction. Over the next three yers, we im to reduce the number of forml notices by 6%. We continue to benchmrk our Helth nd Sfety performnce ginst our peers to ensure tht we improve our pproch in line with best prctice. Helthy Living cmpign Our work on employee helth nd sfety extends beyond the mngement of ccidents s we seek to help employees improve their helth both inside nd outside the workplce. During the erly months of 2007, we lunched the WHSmith Helthy Living Cmpign designed to give hed office stff the opportunity to strt helthier wy of life, perhps especilly relevnt in the new yer fter the excesses of Christms. The cmpign included the following ctivities: Personl Helth Screening (tken up by over 25% of hed office nd distribution centre stff) Clinics to help give up smoking; Helthy Eting weeks in the stff resturnt; Hed, foot, bck nd shoulder mssge clinics; nd Fitness nd running clsses. 16

17 workplce The cmpign proved populr with our stff nd we will look t further similr inititives in the future. Mking our stores ccessible for ll The business is continuing to work towrds improving the services tht it provides to disbled customers, in complince with Disbility nd Discrimintion Act legisltion. In prticulr, this includes; A rolling progrmme of cpitl improvements tht we hve continued to undertke cross our estte during the yer. This hs included number of instlltions of customer service lifts, utomtic doors nd hering loops. We hve lso invested in new evcution chirs for disbled customers, s prt of our fire protection progrmme. We hve continued to undertke ongoing trining of our store stff; nd We continue to subscribe to the website service operted by Direct Enquiries, tht provides informtion to disbled customers on the specific fcilities t ech of our stores nd enbles us to review feedbck on the qulity of service. We re lso members of the Employers Forum for Disbility. Cse study WHSmith Post Offices: providing service for the whole community In April, WHSmith nnounced n greement with Post Office Limited to open Post Offices in 77 High Street stores. This greement sfegurds the future of Post Office services in these 77 communities. As well s ensuring the service levels re mintined or improved, we hve n ctive progrmme to ensure tht the new Post Offices will be ccessible to ll the members of the community wishing to use the services. Long before the Post Office opens, detiled survey of the store is crried out, looking specificlly t the entrnce wy, doors, fire sfety nd evcution procedures nd, in split level stores, the suitbility of existing lifts, stirs or escltors. Following this ssessment, we begin progrmme of upgrding fcilities s required. For exmple, the existing lift my be upgrded to include mirrors nd hndril, or, if it is deemed necessry, new lift my be instlled. As prt of the Post Office rollout progrmme, we re instlling new lifts t nine stores. Rigorous mintennce schedules re designed to ensure tht lifts remin in service t ll times. However, in the unlikely event tht it lift unvilble, lterntive rrngements for serving customers unble to ccess usul serving positions will be put into ction on the ground floor in the form of freestnding Post Office counter tht offers essentil products nd services, respecting customer confidentility, fully conforming to FSA regultions. 17

18 workplce 2006/07 Trgets Progress 2007/08 Trgets Enggement Use our trining & development progrmmes to strengthen the skills mngers hve to consult with their tems nd increse employee enggement. Employee Lifecycle tools updted to improve visibility of trining mterils to support stff performnce nd enggement through objective setting. Continue to improve employee enggement levels using tools such s Directors Brekfsts. Delivered Coching workshops to Ledership Group in stores nd hed office. Trining & development 70% of ttendees on store mnger development progrmme to be in store mnger role within one yer. 73% of ttendees were promoted to store mnger role. Crry out full review of existing suite of progrmmes for stores to ensure effective development of internl tlent. Mintin current levels of internl success with t lest 60% High Street store mnger vcncies to be filled by internl cndidtes. Over 60% of High Street store mnger vcncies filled by internl cndidtes. Rise wreness of trining nd development cross the whole business nd work with line mngers to increse their ccountbility for performnce. Diversity Provide trining for ll store mngers on diversity, disbility nd discrimintion issues. Trining ws provided to ll mngers within the business, both in stores nd lso in our offices nd distribution centres. Implement diversity monitoring for current, new nd prospective employees. Integrte diversity into store recruitment strtegy. All policies updted nd fed through into our store recruitment strtegy. Continue to review the ccessibility of our stores for disbled customers. Helth & sfety By 2010, overll reportble ccidents to be 10% of 2004 levels. g RIDDOR rte reduced by 38% from 2004 levels nd we remin focused on mintining this performnce to meet our 2010 trget. By 2010, overll reportble ccidents to be 10% of 2004 levels. g x Achieved Ongoing Not chieved 18

19 community Bord ccountbility Kte Swnn, Group Chief Executive WHSmith Chritble Trust Executive ccountbility Tnith Dodge, Group Humn Resources Director Relevnt policies Community Enggement Policy As n employer of over 16,000 people, nd with retil stores, distributions centres nd offices in over 700 loctions, WHSmith plys n importnt role in mny communities throughout the UK. We encourge our employees to be involved with locl communities, with our community investment focusing on eduction nd life-long lerning. As leding bookseller nd sttioner, this is n re where we cn use our knowledge nd resources to mke rel difference. As members of the Per Cent Club, we set n nnul trget to invest t lest 1 per cent of our pre-tx profits in support of chrities nd community projects. We use the London Benchmrking Group s reporting model to clculte our community contributions which provides stndrdised wy of mnging nd mesuring corporte community enggement. The chrt below gives brekdown of our community contributions, using the London Benchmrking Group reporting model to clculte our investment. We mesure the direct contributions we mke to the community, in the form of csh dontions, gifts in kind nd stff time nd mngement costs. WHSmith community investment 2006/07 126, , ,335 Csh Gifts in kind Stff time/mngement costs The WHSmith Chritble Trust is n independent registered chrity (registered chrity no ) tht ctively supports employees tht re involved with chritble orgnistions in their locl community. The Trust hs two principl objectives: To support the locl communities in which WHSmith stff nd customers live nd work; nd To support eduction nd lifelong lerning, helping people of ny ge to chieve their eductionl potentil. Our stff re gret mbssdors for WHSmith cross the communities in which we operte nd mny of our stff re involved in their community on personl bsis. To support nd encourge stff involvement, the Trust will mtch employee fundrising up to 500 nd tem fundrising up to the vlue of 1,000. In 2006/07, the Trust mde more thn 30 grnts worth over 17,000 to orgnistions tht rnged from ntionl chrities such s Cncer Reserch nd the Big Issue to locl chrities such s Essex Air Ambulnce nd the Erl Mountbtten Hospice. Ech yer, the Trust lso runs Christms Givewy where stff cn pply on behlf of ny chrities they re involved with. This Christms, over 20,000 ws distributed to wide rnge of chrities nd locl orgnistions. Twice yer, grnts re lso mde to smll chrities locl to our hed office in Swindon. The chrities re chosen by stff t our hed office nd receive grnt of 5,000 to support their work in the locl community. The Trust lso works with WH Smith PLC to promote eduction nd lifelong lerning. This yer, support ws given to two mjor projects with the Ntionl Litercy Trust nd Ty Newydd, both of which re profiled elsewhere in the Community section of this report. Getting involved in locl communities round the UK The WHSmith Community Awrds were lunched in 2006 nd re our wy of recognising the contributions tht WHSmith tems throughout the business hve mde to locl chrities nd good cuses cross the UK. 19

20 community As prt of the 2007 Community Awrds, 20 tems from round the business received wrds recognising the leding exmple they hd set by building strong links with community orgnistions in their locl res. Ech tem received 500 dontion for their prtner chrity or school with Gold, Silver nd Bronze prizes for the three tems who hd mde prticulrly specil contribution to locl orgnistion. These tems lso received dontion towrds their stff socil fund. We were delighted to see the number of Community Awrds entries up by 50% this yer, indicting tht this inititive is helping to rise the profile of community involvement within the Group. Our Glsgow Centrl Trvel store ws wrded the Gold wrd for their work with the Erskine Hospitl. The Erkskine Hospitl provides nursing nd medicl cre for veterns of the British Armed Forces. The Glsgow tem hd helped out by reding to ptients nd providing entertinment t Burns Suppers nd t Christms time. The hospitl posted huge photo of the store tem t the entrnce to sy thnk you to WHSmith. Newbury High Street store won Silver for providing work experience for specil needs children. The store tem lso won locl employer wrd for their efforts. The Bronze wrd went to Chelmsford High Street store where the store tem hve been busy fundrising for the locl Shopmobility which provides electric powered scooters to help those with mobility difficulties. Their entry red: It provides n opportunity for the tem to unite on something outside of work. Supporting Shopmobility enbles more people to shop in Chelmsford. Cse study Working loclly to promote reding: Cheshire Oks store nd RedWrite Over the lst yer, our Cheshire Oks store hs been working with RedWrite. RedWrite is chrity tht collects unwnted nd unused books nd redistributes them free of chrge to chrities nd voluntry orgnistions working with people who re disdvntged or socilly mrginlised; people who in mny cses simply cnnot fford or even borrow books through the usul chnnels like public librries. RedWrite mde presenttion to our store tem in recognition of the tremendous help the store hs given to the chrity. Store mnger Jenni Ripley nd her store collegues re gret exmples of the importnt work done by WHSmith tems in the community. They hve helped RedWrite in number of wys, from donting their own unwnted books to rrnging for the compny to mke dontion of shop fittings for RedWrite s new wrehouse nd trining fcility. The Cheshire Oks tem lso successfully nominted RedWrite for WHSmith s 2006 Community Awrds, winning grnt of 500 for the chrity. RedWrite spent the grnt in the Cheshire Oks store on books which were donted to locl chrities. Cse study WHSmith stff rising money for chrity: 3 mountins + 6 tems = 34,000 One Sturdy fternoon lst September, six tems ssembled t the bottom of Ben Nevis to strt the WHSmith Three Peks Chllenge. The objective ws to rise funds for the WHSmith Trust nd the Mitchemp Trust. The Mitchemp Trust (registered chrity no: ) works with vulnerble young children enbling them to experience the outdoors, build their self-esteem nd improve their self-relince nd mke rel difference to their lives After this point, there ws no rest until Sundy evening when the lst wery tems completed their descent of Snowdon, hving trvelled nd wlked through the night to climb the three highest mountins in Scotlnd, Englnd nd Wles. Executive in the shpe of two Directors leding two of the tems up the mountins. The chllenge required rel endurnce to keep going despite sore feet nd ching legs nd only hving slept few hours in bumpy minibus. But perhps the most importnt thing ws temwork s everyone worked together to help ech other through the highs nd lows. Most importntly, the chllenge rised over 34,000 for the WHSmith Trust nd the Mitchemp Trust. Shortly fter the event, we were delighted to her from the Mitchemp Trust tht the funds rised were lredy being put to good use through their outdoor progrmme for disdvntged young people. Four tems from WHSmith took prt, joined by tems from two Smiths News houses with ctive support from the WHSmith 20

21 community Promoting Litercy in prtnership with the WHSmith Chritble Trust The Ntionl Litercy Trust is n independent chrity tht chnges lives through litercy. The NLT ims to build society in which everyone hs the reding, writing, speking nd listening skills tht they need to fulfil their own, nd ultimtely, the ntion s potentil. Third yer of the WHSmith Summer Red 2007 sw the third yer of our prtnership with the Ntionl Litercy Trust. WH Smith PLC nd the WHSmith Trust worked with the Ntionl Litercy Trust s Reding is Fundmentl progrmme to promote the love of reding. The Summer Red ws developed to encourge children to keep reding during the long summer holidys, time when litercy levels often drop. In the UK s most deprived communities up to 60% of 11-yer-olds fil to rech bsic stndrds in reding nd writing, with mny never hving owned books of their own. Reserch lso shows tht children who red for plesure hve substntilly better life opportunities thn those who don t. In 2007, we were delighted to be ble to expnd the scope of the progrmme, reching 3,500 children in 17 loctions round the UK. We lso improved the wy we communicte the progrmme to our customers through leflets in prticipting stores, which told them bout the Summer Red nd lso gve them the opportunity to donte to the Ntionl Litercy Trust s work. The events were well supported by stff from cross the business, with members of our Executive mngement tem lso ttending severl events, including Chief Executive Kte Swnn, Commercil Director Stephen Clrke, nd Humn Resources Director Tnith Dodge. The tems from locl WHSmith stores ttended mny events, giving store stff vluble opportunity to get involved in the locl community. INSERT PICTURES This yer s Summer Red events encourged children, typiclly from deprived communities where book ownership is not feture, to tke prt in fun, book-relted ctivities such s story-telling or mking bookmrks or msks of chrcters from their fvourite books. Ech child then chose two books to tke home nd keep long with WHSmith goody bg. The im of the event ws to promote the fun of reding, the importnce of book ownership nd the benefits to fmilies of shring books t home. Mesuring the impct of the Summer Red Hold events in t lest 15 loctions Events in 17 loctions Events in 15 loctions Events in 15 loctions to benefit t lest 2,500 children Over 3,500 children took prt Over 2,700 children took prt Over 2,600 children took prt Over 70% of project coordintors 93% rted WHSmith Summer 75% rted WHSmith Summer 86% rted WHSmith Summer ssess project s very importnt Red s very importnt Red s very importnt Red s very importnt Locl projects delivered: Improvement in children s 89% improvement 90% improvement 76% improvement ttitude to reding Incresed project coordintors 86% incresed project 59% incresed project 69% incresed project knowledge of children s books coordintors knowledge coordintors knowledge coordintors knowledge of children s books of children s books of children s books Additionl fun element to 93% dditionl fun element 97% dditionl fun element 83% dditionl fun element children s experiences of reding to children s experiences to children s experiences to children s experiences of reding of reding of reding 21

22 community Nurturing the cretive writers of the future This yer, WH Smith PLC nd the WHSmith Trust hve lso been working with Ty Newydd, the Ntionl Writers Centre for Wles, s prt of our work to support eduction nd litercy. Ty Newydd provides young people with unique nd often life-chnging experience by giving them the time, spce nd confidence to develop confidence in cretive writing. The children work in smll groups with published writers nd poets to explore their potentil, with n im of nurturing the young writers nd reders of the future. A substntil grnt enbled Ty Newydd to double the number of writing courses it runs for school children, bringing its writing courses to pupils from schools in disdvntged res nd lso finncing writer visits into schools. In ll, round 1,000 pupils were given the opportunity to work longside some of Wles best-known writers. Slly Bker, Executive Director of Ty Newydd, sid: At Ty Newydd we believe we cn give young people unique nd often life-chnging experience by giving them the time, spce nd confidence to explore their potentil s writers. The grnt from the WHSmith Trust hs enbled us to offer this experience to schools throughout Wles. Cse study Visit to Ty Newydd inspires Bngor primry school children On riny dy in July group of pupils from yer 6, Ce Top Primry School in Bngor cme to Ty Newydd to write poetry in both Welsh nd English. Ce Top Primry School is in poor re of Bngor nd these pupils hd never worked with writers before nd would never hve hd the opportunity to do so without the grnt from WHSmith. They worked longside two of Wles most prctised cretive writing tutors to write their own poetry. The pupils love the experience. Some hd limited lnguge skills but ll produced something tht they were proud to perform, mny creting work wy beyond their expected cpbilities. By tking the children out of the school environment nd giving them the help nd guidnce to explore their cretivity, it ws cler tht they hd grown in confidence nd hd become individuls who believed they hd something worthwhile to sy. The pupils lter visited WHSmith s Bngor store to red some of their poetry. INSERT PHOTOGRAPH Ty Newydd logo At the beginning of the project with Ty Newydd, we greed trgets for the impct we wnted to chieve. These trgets nd our progress ginst them, re set out below. The project runs until erly summer 2008, by which time both we nd Ty Newydd re confident tht ll trgets will hve been chieved. Trget with Numbers Originl WHSmith chieved numbers grnt to dte Residentil schools courses Schools from deprived res Individul pupils supported Writer visits into schools Supporting World Book Dy Mrch 2007 sw the 10th nniversry of World Book Dy. World Book Dy ims to give every child the opportunity to choose book of their own nd to promote the enjoyment of reding. Mny WHSmith High Street stores helped locl children celebrte by orgnising their events. Activities focused on promoting the fun of reding nd included dressing up in costume, holding storytelling sessions, fce-pinting, competitions nd ctivity sheets for children. Products to promote nd support chrity nd eduction For mny yers, WHSmith hs been supporting good cuses through its chrity Christms crd rnge, hving rised hundreds of thousnds of pounds for ntionl nd interntionl chritble orgnistions. This yer, our chrity Christms crds rised over 140,000 for five chrities which were chosen by our stff: British Hert Foundtion, Children in Need, Guide Dogs for the Blind, Childline nd Mcmilln Nurses. Christine Renouf, Director of Listening Services, for one of our chrity prtners, Childline, told us, we re extremely grteful to WHSmith for their support of the ChildLine service in The money rised through sles of WHSmith chrity Christms crds helped us to nswer hundreds of clls from children in desperte need. ChildLine is service provided by the NSPCC NSPCC registered chrity numbers nd SC Christms is time when mny of our customers like to give present to loved one which lso benefits chrity. Lst yer we introduced our Adopt Box rnge which gives customers the opportunity to support the work of specific chrity, for exmple helping to fund the cre nd protection of n endngered niml or contributing to the funds required to build school in Afric. Lst yer, this rnge rised over 130,000 for our prtner chrities Born Free, Cre for the Wild, Send Cow, Blue Cross nd the Woodlnd Trust. In ddition to the finncil contribution, these products lso rise consumer wreness of the work these orgnistions do nd help them gin new supporters. In the yer 22

23 community hed, we will be expnding the rnge further nd hope to rise even more for chrity. Chrity isn t just for Christms either we lso support chrities ll yer round, for exmple through products such s Brest Cncer Pink notebooks nd filofxes. Another wy in which we give our customers the opportunity to support chrity is through the chrity pin bdges we sell t our tillpoints. Every yer, we sell Pink Ribbons in support of the Brest Cncer cmpign nd Vriety Club Gold Herts. This yer, WHSmith ws lso the exclusive retil prtner for the Prostte Cncer Reserch s Give-- Few-Bob cmpign to rise wreness nd funds for vitl reserch into prostte cncer. Lottery sles t WHSmith rise over 200m for good cuses This yer lso sw remrkble milestone in WHSmith s support of the Ntionl Lottery. Sles of tickets in WHSmith during the yer rised over 17m for Ntionl Lottery good cuses, tking the totl mount rised by WHSmith customers since the strt of the Ntionl Lottery to stggering 200m. The Ntionl Lottery returns higher proportion of lottery money to society thn ny other mjor lottery in the world. It is currently rising money for the 2012 Olympic Gmes nd Prlympic Gmes in London in ddition to benefiting good cuses in the rts, heritge, helth, eduction, sport, environment, voluntry nd chrity sectors. 23