Corporate Social Responsibility Maatschappelijk Verantwoord Ondernemen Alan Smith 3 October 2006 3714/09/06
Strategy for Sustainable Development in the UK Social progress Protection of the environment CSR Prudent use of natural resources Economic growth and employment
Climate change
Global Damage
Climate change A tour of the greenhouse Laid-Back America China USA Eu-15 Former Sov. Union India Brazil 0 0.5 1 1.5 2 2.5 3 2000 2025 (projected) Japan France Spain India Britain Germany China USA 0 20 40 60 80 100 Greenhouse-gas emissions, bn tonnes of carbon equivalent % of People concerned about global warming
Society's solution Sustainable Development Agenda 21, the Rio Declaration on Environment & Development Rio de Janeiro, June 1992 World Summit on Sustainable Development Johannesburg, September 2002 The FIEC Principles for Sustainability / CSR Launched in Brussels, June 2005
CSR / Sustainability: Construction s impact in Europe Economic responsibility: - Construction accounts for 9.9% of Europe s GDP - Construction provides 50.8% of Europe s gross fixed capital Social responsibility: - Construction is Europe s largest industrial employer - 14 million operatives account for 7.2% employment in Europe Environmental responsibility: - 50% of Earth s raw materials are used in construction - The Built Environment produces 1/3 of all greenhouse gas emissions - Waste from construction is one of Europe s largest waste streams
BAM Worldwide operations
BAM and its Supply Chain a global impact! Wood Steel Equipment Products West Africa, Malaysia, Philippines, Brazil, Finland, Panama Ukraine, Turkey, Latvia, India, Poland China, Japan, Taiwan, Spain, Eastern Europe, USA Multi-national / Global Corporations (ie CEMEX plant in Mexico, Europe, Central America, North Africa, Middle East, Asia, etc) BAM operations employ c 27,000 people but impacts on millions
Climate change The UK The Times, 18 September 2006
Lobby Group pressures:
Legislative pressures:
Political pressures: Local Agenda 21 (LA21) - Environmental Protection - Community Well-being - Community Involvement - Local Economic Prosperity Statement of Community Involvement (SCI) - All Council Planning Developments need SCI s - SCI s Scrutinized by Secretary of State Operating and Financial Review (OFR) - UK Law, 22 March 2005 - Extends Directors Company Reports - Includes Environment, Employee and Social and Community Issues
Industry Pressures: July 2006
Client pressures: Building, 21 July 2006 Contract Journal, 9 August 2006
Client Pressures: How important is using an environmentally responsible contractor to you? Very Important 64% Quite Important 34% How important are a contractor s credentials in sustainability? Very Important 24% Vital 27% Not really important 2% Wouldn t make any difference 0% Important 27% Contract Journal 9 August 2006 Building 21 July 2006 Irrelevant 8% Not Very Important 14%
Competitor Pressures: The big issue of the moment that appears to be of high priority, especially among the larger firms, is that of Sustainability and Corporate Social Responsibility. What is also clear is that it is the hottest issue for the larger quoted companies. Eight out of 10 said that Sustainability and Corporate Social Responsibility were rising up the boardroom agenda and a third said the rise was fast. Construction News Top 100, September 2006 The Top 100 Contractors Board Agenda Issues 2006 Index 2005 Index Management talent 50.0 48.4 Sustainability/CSR 46.2 (2nd) 36.6 (7th) Customer satisfaction 44.8 42.5 Labour shortages 41.7 42.6 Supply chain management 38.0 34.6 Skills and training 34.9 37.2 IT 33.6 23.1 Health and Safety 31.8 43.1 Tender prices 27.7 14.9
CSR Delivery - Management Health, Safety & Welfare Working Conditions Employment & Training Environmental Impact & Pollution CO2 emissions Depletion of Resources - Quarrying - Deforestation Waste Reduce, Recycle, Re-use CSR
Measuring Success MCG Accident Statistics Injury Rate Injury Rate 1st July 2005-30th June 2006 1st July 2005-30th June 2006 All Reportable Injuries: Rate per 100,000 Employees All Reportable Injuries: Rate per 100,000 Employees HBG 1400 1400 1200 1200 1000 1000 800 800 600 600 400 400 200 200 0 0 52 53 54 56 57 58 59 60 61 62 64 65 66 68 52 53 54 56 57 58 59 60 Companies 61 62 64 65 66 68 Companies 1st July 2005-30th June 2006 1st July 2005-30th June 2006 All Reportable Injuries: Rate per 100,000 Subcontract All Reportable Injuries: Rate per 100,000 Subcontract Employees Employees Injury Rate Injury Rate 1600 1600 1400 1400 1200 1200 1000 1000 800 800 600 600 400 400 200 200 0 0 HBG 52 53 54 56 57 58 59 60 61 62 64 65 66 68 52 53 54 56 57 58 59 60 Companies 61 62 64 65 66 68 Companies 1st July 2005-30th June 2006 All Reportable 1st July Injuries: 2005 Rate - 30th per June 100,000 2006 Workers All Reportable Injuries: Rate per 100,000 Workers Injury Rate Injury Rate 1600 1600 1400 1400 1200 1200 1000 1000 800 800 600 HBG 600 400 400 200 200 0 0 52 53 54 56 57 58 59 60 61 62 64 65 66 68 52 53 54 56 57 58 59 60 Companies 61 62 64 65 66 68 Companies Current Period Rates MCG Average Current Period Rates MCG Average
Measuring Success MCG Competence Percentage Compliance Percentage Compliance MCG Fully Qualified Workforce - Direct Employees April MCG Fully Qualified Workforce - Direct Employees April 2006 2006 HBG 100 91.7 92.4 89.1 90.6 92.2 89.2 100 91.7 92.4 89.1 90.6 92.2 89.2 80 86.7 79.1 83.3 84.1 83.4 82.3 84.7 80 86.7 79.1 83.3 84.1 83.4 82.3 84.7 79.6 79.6 60 60 40 40 20 20 0 0 52 53 54 56 57 58 59 60 61 62 64 65 66 68 52 53 54 56 57 58 59 60 61 62 64 65 66 68 MCG Member % MCG Average % MCG Member % MCG Average % 87.63 87.63 MCG Fully Qualified Workforce - Indirect Employees April 2006 MCG Fully Qualified Workforce - Indirect Employees April 2006 Percentage Compliance Percentage Compliance HBG 100 89.6 84.4 100 75.6 89.6 78.0 78.9 79.3 84.4 75.09 80 75.6 78.0 78.9 79.3 80 73.3 74.3 74.6 72.4 60 73.3 65.5 69.4 62.8 74.3 74.6 72.4 60 62.8 65.5 69.4 62.9 62.9 40 40 20 20 0 0 52 53 54 56 57 58 59 60 61 62 64 65 66 68 52 53 54 56 57 58 59 60 61 62 64 65 66 68 MCG Member % MCG Average % MCG Member % MCG Average % Percentage Compliance Percentage Compliance 75.09 MCG Fully Qualified Workforce - Overall Result April 2006 MCG Fully Qualified Workforce - Overall Result April 2006 HBG 100 90.3 88.1 100 80.5 90.3 80.8 79.9 81.7 88.1 80 80.5 80.8 79.9 81.7 79.03 74.3 70.8 74.4 73.8 77.9 73.9 60 74.3 70.8 74.4 73.8 68.8 77.9 73.9 60 68.8 80 78.4 78.4 40 40 20 20 0 0 52 53 54 56 57 58 59 60 61 62 64 65 66 68 52 53 54 56 57 58 59 60 61 62 64 65 66 68 MCG Member % MCG Average % MCG Member % MCG Average % 79.03
BS EN ISO 14001: 2004 International Standard for Environmental Management Promotes continual improvement Objectives and Targets Measurement of environmental impact Positive Health and Safety Evaluations (PHASE Audits) Project Environmental Audits
CSR Delivery - Operational Health & Safety Parking Lorry / Plant Traffic Dust & Mud Noise & Vibration Obstruction & Closures Litter Behaviour Verbal & Other Materials Waste Community Relations CSR
Considerate Constructors Scheme Safe Considerate Environment Cleanliness Good neighbours Respectful Responsible Accountable
CCS Site Reports CSR
Project Specific Community Relations / CSR Plans Guidance & Support
Public Consultation
HBG and its Supply Chain a global impact! Wood Steel Equipment Products West Africa, Malaysia, Philippines, Brazil, Finland, Panama Ukraine, Turkey, Latvia, India, Poland China, Japan, Taiwan, Spain, Eastern Europe, USA Multi-national / Global Corporations (ie CEMEX plant in Mexico, Europe, Central America, North Africa, Middle East, Asia, etc) HBG operations employ c 2,000 people but impacts on millions
CSR and Procurement Guidelines Social impact areas 1 Health and Safety 2 Child and Forced Labour 3 Labour Conditions 4 Basic Pay (Decent Wages) 5 Bribery and Corruption (Ethics) 6 Equal Opportunities 7 Community Relations Environmental impact areas 1 Environmental management 2 Timber 3 Aggregates 4 Cement 5 Glass 6 Steel 7 Products Specific supplier characteristics Location of Supplier Operations Global Local
Guidelines for Specific Impact Areas A. Specific Impact Areas Social Issue Draft guideline Objective Implementation HBG policy document(s) Child and Forced Labour Seek to exclude suppliers that are knowingly using child and / or forced labour Ensure suppliers are not employing child labour and / or forced labour Association with child labour may be a significant reputation risk for many companies, and suppliers knowingly using child or forced labour should be excluded. Companies should require suppliers to meet best practice on this issue in the countries in which they operate in order to minimise risk. HBG Health & Safety Guidelines for Subcontractors HBG Project health and Safety Management Plan Operating Procedures 4.10 Employment of young persons
Guidelines for Specific Impact Areas A. Specific Impact Areas Social Issue Draft guideline Objective Implementation HBG policy document(s) Bribery and corruption Work with suppliers to prevent bribery and corruption within the supply chain, temporarily excluding suppliers known to be engaging in bribery and corruption until they can demonstrate that they have taken appropriate measures to eradicate it. Reduce the possibility of being exposed to risk through suppliers that are engaging in bribery and corruption. Allegations of involvement in bribery can be very damaging. The guideline should make it clear that passive acceptance of bribery because that s the way it works round here is not acceptable business practice. In the UK a common tool for dealing with bribery and corruption is to establish whistle-blowing procedures. HBG Code of Conduct Integrity see Appendix 4 *
Guidelines for Specific Impact Areas B. Specific Impact Areas Environmental Issue Draft guideline Objective Implementation HBG policy document(s) Environmental management As a prerequisite to winning / retaining a contract, require all suppliers to sign up to the company s environment al policy and demonstrate how they will seek to comply with it. Ensure that suppliers can implement the same standards of environmental management as their clients. Environmental management has long been seen as a major issue in the construction industry, and HBG has a formal environmental management system (EMS) in place. It may not be realistic to expect smaller contractors to have an independently certified EMS. However, they can still have procedures in place to minimise their environmental impacts, and as a minimum requirement should sign up to the company s environmental policy. HBG Environmental Operating Procedures Construction 5.1 Introduction to Construction Procedures and 5.2 Precommencement & Checklist see Appendix 7. HBG Website www.hbgc.co.uk, Environmental Policy Statement Go to HBG website / News / Issues/ Environmental / Environmental Policy. HBG Environmental Management System Best practice guidance on the HBG Intranet.
CSR & Procurement Policy Work with suppliers to define minimum levels of performance on fundamental issues (e.g. environmental policy; basic pay etc). Prioritise engagement with suppliers according to their most significant social / environmental aspects and impacts, and work with them to encourage continuous improvement of their social and environmental performance.
Pressure on HBG Corporate Governance Global Warming Industry Ethics Increased Legislation Sustainable Development Increased Energy Costs Investor Concerns HBG Image & Reputation Customer Concerns Equal Opportunities Diversity Community Pressure Regulations Waste & Recycling
Benefits for HBG Improved Risk Management Improved Margins Accountability Employee Satisfaction Improve Stakeholders Value First Choice Employer HBG Staff Development & Retention Integrity & Transparency Benefits of Diversity Safety Leader Improved Reputation Meet Customer Expectations Access to capital
Corporate Social Responsibility Policy Statement The directors and staff of HBG UK Limited are committed to improving the environmental, social and economic sustainability of all its business operations and processes. This applies for all employees, supply chain partners, customers and the communities and environments actually or potentially impacted by the activities of the company.
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