At Electrocomponents sound corporate responsibility (CR) policies and practices are integral to our business. We believe that the progressive alignment of our values and strategy with responsible and ethical business policies and practices helps enhance competitiveness and is a driver for sustainable growth and success.
The Board takes regular account of CR matters in the business of the Group; the Group Chief Executive being the Director responsible for CR, health and safety and environmental matters at the Board.
Our Group Policy Manual defines our core values and the principles we apply in dealing with our customers, suppliers and other stakeholders. The Manual also covers the protection of our assets, competition law and conflicts of interest. We issue the Manual to our management population across the Group, and make the Manual available to all employees via the Group Intranet. Managers are required to confirm receipt and ensure that employees are briefed on the contents. We have a “whistle‑blowing” policy which allows employees to report matters of concern in confidence, with an independently operated “whistle‑blowing” hotline in the UK and Asia Pacific regions.
We implement our CR policies through our management systems and processes in alignment with the overall governance structure of the Group. We monitor the effectiveness of our CR policies through regular reporting of key performance indicators and other related information.
Electrocomponents is a member of the FTSE4Good index and we participate in the Carbon Disclosure Project.
Customers and suppliers
Responsible selling and marketing and the provision of safety and environmental information are key elements of our service ethic and business model.
We source products and services from suppliers that meet, or are willing to meet, the Group’s ethical standards. In particular we will not knowingly source from organisations which use child labour or forced labour, which discriminate on the grounds of gender, ethnic or national origin, religion, sexual orientation, marital status, age or disability, or do not recognise freedom of association or collective bargaining.
All suppliers are informed of our CR principles, and all direct suppliers in countries of concern undergo periodic audit by regional sourcing teams, using assessment criteria based on Ethical Trade Initiative guidelines. During the last 12 months, we audited 30% of our direct suppliers in countries of concern.
Our customer service ethic is a core element of our strategy and business proposition. Some 40 sites around the world are covered by ISO9001 certifications, representing over 96% of the Group by turnover.
Employees
We value the commitment of our employees, and maintain a working environment where employees are valued and respected, and where there is equality of opportunity and where individual talent is recognised. Our approach is set out in further detail in the Directors’ Report.
Environment
The Group Environmental Policy Statement, which is set out in the Group Policy Manual, commits us to identifying and managing the environmental impacts associated with our activities. The policy and our implementation programmes support the Group’s strategy.
Our most significant environmental impacts are the carbon emissions due to the consumption of energy in our facilities, the use of paper in our printed catalogues, the generation of waste, packaging consumption and water use. We use a set of key performance indicators (KPIs) to assess and monitor the environmental performance of our sites and businesses. The KPIs index relevant environmental impacts to sales to reflect real performance allowing for business growth. This enables us to benchmark businesses and helps identify performance improvement opportunities.
In support of the implementation of our policy objectives we encourage our businesses to gain certification to ISO14001 where appropriate. During the year certification was extended to cover all of our UK facilities. Some 53% of our workforce is employed in ISO14001 certificated businesses with a further five international sites working towards certification in 2010.
We report below on our environmental impacts for the calendar years 2007 and 2008. We aim to continually improve the quality and coverage of our environmental reporting and have restated the 2007 performance where appropriate with all KPIs on a constant currency basis. All of our facilities world‑wide report their environmental performance and this report covers the comparable data for 2007 and 2008.
Emissions
During the 2008 calendar year, CO2 emissions due to energy use per unit of sales were reduced by 5.7%. This decrease was in part due to the ending of the parallel operation of the old and new facilities at Fort Worth, Texas during the relocation of the Allied business during the 2007 calendar year.
Excluding the effect of the Fort Worth business relocation, there was an underlying reduction in CO2 emissions per unit of sales of 0.8% across the Group during 2008. This was achieved through incremental projects to improve energy efficiency in heating, lighting and air conditioning use, and the decommissioning of surplus server equipment from the regionalisation of business systems.
| Total emissions (Tonnes CO2) |
Tonnes CO2 per £m turnover |
|||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |
| CO2 due to premises energy use(1) (2) |
20,994 | 22,266 | 20.6 | 21.9 |
- (1) CO2 equivalent from all energy sources, including country specific CO2 factors for electricity
- (2) Excludes a number of smaller facilities where utilities are included in lease costs
Paper
Over the past five years we have worked closely with our pulp suppliers and printers to reduce the carbon footprint of the paper catalogue, through refinements in the grades of paper used, the bindings and the covers. This has produced distribution efficiencies, cost savings and improvements to our carbon footprint.
All the pulp for our paper catalogues are sourced from either Sustainable Forestry Initiative or PEFC accredited forests, with all the printing carried out in ISO14001 certificated facilities. Catalogues in the European and Asian markets now carry the PEFC “chain of custody” accreditation marks.
Our customer packaging is the subject of a review by a working group which aims to identify opportunities to reduce the quantity of packaging whilst ensuring customer orders are protected against damage whilst in transit. A key development during 2008 was the introduction of the production packaging process for electronics products, which reduced significantly the quantity of packaging supplied with orders whilst providing a valuable new service to customers.
Waste
Influenced by a series of one‑off factors, the levels of waste relative to turnover increased during calendar year 2008. The relocation of the Allied business together with the reorganisation of logistics in the UK and Europe resulted in the disposal of a range of equipment and materials including surplus pallets and scrap furniture which boosted the quantities recorded. In addition we are seeing the impact of improved reporting of waste and recycling performance.
The proportion of total waste which is recycled remained high, at 72%, although due to the one‑off disposals referred to above this is lower than the 74% achieved in 2007.
| Total waste (Tonnes) |
Tonnes waste per £m turnover |
|||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |
| Total waste | 2,875 | 2,083 | 2.8 | 2.1 |
| Waste reused/ recycled |
2,054 | 1,517 | 2.0 | 1.5 |
Water
As anticipated, water consumption per unit of sales fell in calendar year 2008, with a reduction of 7.3% year on year. The primary cause was completion of the move to the new warehouse and office complex in Fort Worth in 2007 with the increase in one‑off water consumption associated with landscaping, and the cleaning and testing of fire protection systems at the new facility.
Incremental water efficiency measures in a number of businesses, together with the closure of some smaller trade counter facilities contributed to the reduction in consumption.
| Total water consumption (m3) |
Water consumption m3 per employee |
|||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |
| Total water use | 42,359 | 45,799 | 41.8 | 45.1 |
Health and safety
We are committed to health and safety best practice as an integral part of our business activities and our drive for high performance. The Group Chief Executive and members of the Group Executive Committee have safety objectives set as part of their personal objectives with the Group’s safety performance subject to ongoing review by the Group Executive Committee. In addition, there is a formal Groupwide safety performance report to the Group Executive Committee each quarter, with the Group Chief Executive presenting to the Board at least annually on safety performance from across the business.
Our health and safety management processes are based on the application of risk management techniques and on the Occupational Health and Safety Management Standard OHSAS18001. We are pleased to report that a number of our international businesses are working towards achieving OHSAS18001 certification, whilst our UK business has been certified to the standard since 2003.
During financial year 2009, the number of accidents reported increased by 15%, including a large rise in the number of “lost time” accidents. The total number of employee days lost due to an injury at work totalled 878 days, or 0.064% of working time, (2008, 0.044%). The most common causes of accident continue to be manual handling activities and slips, trips and falls, which are similar to other distribution businesses. Whilst our accident performance compares well with equivalent organisations in the service and support industries, our key objective for the coming year will be to improve our accident performance over 2009.
| 2008 | 2007 | |
|---|---|---|
| All accidents per 100,000 hours worked | 3.36 | 3.04 |
| Lost time accidents(1) per 100,000 hours worked | 0.84 | 0.33 |
- (1) Lost time accidents are those where the employee is off work for at least 24 hours
Health and safety training continues to be a major element of our drive for improvement in performance, and during 2009 the numbers of employees attending health and safety training courses increased by 30%. We will continue to improve the quality of our management controls and to make targeted investments in health and safety improvements at our facilities. Key initiatives for 2010 will include, for example, a major project to improve fire safety and premises protections at our French warehouse, significant investment at our UK distribution centres to reduce risks from working at height, and a project to eliminate slip and trip risks by fitting anti‑slip flooring in our UK contact centre.
As first reported in the 2005 Annual Report, an engineer was fatally injured at our Nuneaton, UK distribution centre in January 2005. The prosecution of our UK business was concluded in November 2008 with the company being fined £100,000 plus costs. The company has worked closely with the health and safety authorities to address the issues raised by the prosecution.
We are committed to developing a proactive and dynamic health and safety culture across the Group to reduce accidents, control risk, reduce costs and improve our reputation.
Verification
Electrocomponents evaluates its CR policies and performance as part of its risk management and internal audit processes. Those locations accredited to ISO9001, ISO14001 and OHSAS18001 have regular audits by external agencies.
Our environmental reporting processes and data are reviewed by our Operational Audit Department and our Group Risk Manager works with external consultants to review and where appropriate verify our environmental key performance indicators.
We consider that these procedures provide a reasonable level of assurance that our non‑financial key performance indicators are free from material misstatement. Whilst we have considered the potential for further external verification of the Group’s CR performance we have decided that currently we will limit this to external professional advice on specific matters as required.