Sustainable Procurement Policy

1. Policy statement

We are committed to minimising our environmental impact and operating ethically through the selection of the suppliers or sub-contractors we use and the products and services we procure. We will proactively work to ensure that all Goods, Works and Services it procures are sourced ethically.

2. Overview

This policy sets out how Hydrock will operate as a business to ensure that procurement decisions of every sort are made with due to consideration to the wide range of sustainable and ethical challenges we face today. It identifies how our procurement decisions can have impacts economically, socially and environmentally and aim to ensure any employee making purchasing decisions does so in the full knowledge of all areas for consideration.

It targets both in the way Hydrock procures and the standards that Hydrock expects our suppliers, service providers and contractors to meet.

3. Basis for our procurement policy

We have based our procurement policy on a number of nationally and internationally recognised standards and national legislation:

» Ethical procurement

» Ethical Trading Initiative (ETI) base Code

» Modern Slavery Act 2015

» The Equal Opportunities Act 2010

» The National Minimum Wage Act 1998

» Bribery Act 2010

» Universal Declaration of Human Rights (UDHR)

» Sustainable procurement

» UN Sustainable Development Goals

» The Public Services (Social Value) Act 2012

4. Guiding principles

The guiding principles of our procurement are:

» Improve labour conditions in the supply chain - Promote sustainable and ethical employment practice in our supply chain through the standards we set. Including, but not limited to:

» Ensuring all organisations have equivalent and robust policies and practices to address Modern Slavery

» Requiring our suppliers to pay the living wage.

» Enhancing opportunities for emerging talent.

» Limited to no use of zero-hour contracts.

» Embedding equal opportunities in our supply chain by:

» Ensuring all organisations have robust policies and practices in place to ensure recruitment and employment opportunities are available to all regardless of race, gender or ethnicity.

» Ensuring procurement is fair and open by:

» Ensuring our own staff are fully aware of their responsibilities and in the risks of unfair competition and how it can be avoided.

» Having robust training, whistleblowing and escalation processes supporting this.

» Requiring our supply chain to have similar arrangements.

» Embedding social value in our procurement by:

» Actively engaging the SME/VCSE sectors to support them in addressing our procurement requirements.

» Actively considering local sourcing in our buying decisions.

» Ensure we pay our suppliers and those suppliers pay their supply chain on time and in accordance with the principles of the Prompt Payment Code.

» Engaging our supply chain to identify opportunities to enhance the delivery of social value.

» Making firm social value commitments as part of our contracts in line with Procurement Policy Note (PPN) 06/20 and the Public Services (Social Value) Act 2012, and asking our suppliers to do the same.

» Delivering sustainable solutions by

» Ensuring that due consideration is given to minimising the environmental impact of that transaction by; minimising the impacts of the supply chain; minimising the impacts of the product/service and through buying resource efficient products.

» Actively considering the manufacturing, materials, transport and recycling aspects of goods being purchased.

» Regularly reviewing internal operational guidance to align with the above objectives.

4.1 Human rights

Hydrock will not provide support or work with businesses or organisations which fail to uphold basic human rights as set out in the Universal Declaration of Human Rights (UDHR) or with businesses or organisations with links to an oppressive regime ‐ regimes where basic human rights are denied in a systematic manner over time.

We commit to completing our due diligence with regard to modern slavery risk, and ask all our suppliers to do the same.

4.2 Arms trade

Hydrock will not provide support or work with businesses or organisations involved in the manufacture or transfer of armaments to oppressive regimes, including:

» Companies which manufacture for or sell to oppressive regimes systems (or products) that kill, maim or destroy.

» Companies who issue licences for the production of armaments for oppressive regimes.

» Individuals or organisations involved in the brokerage of armaments to oppressive regimes.

» Companies which export products to oppressive regimes that, while not designed to kill, maim or destroy, are parts for equipment which have a battlefield application or are essential to the operation of a weapon, such as radar and electronic warfare, military communications and armour.

Hydrock will not provide support or work with businesses or organisations involved in the manufacture of equipment that is used in the violation of human rights.

4.3 Global trade

Hydrock will not support businesses or organisations whose activities include:

» Irresponsible marketing practices in developing countries, including inappropriate marketing to children.

» Inappropriate financial trading methods.

» Tobacco product manufacture or distribution.

4.4 Environment

Hydrock has submitted targets to the Science Based Target initiative (SBTi) to achieve net zero carbon emissions for Scope 1, 2 and 3 by 2045 from a 2023 base year. In order to achieve this ambitious target, Hydrock will work collaboratively with its supply chain to share knowledge, disclose data and drive carbon reduction. Suppliers will be grouped into strategic suppliers, SME's/VCSE's and transactional suppliers; requirements will be phased from voluntary to mandatory on appropriate timescales for each group. For strategic suppliers, the following requirements will be phased in within the next 3 years:

» Measure Scope 1, 2 and 3 emissions in line with Greenhouse gas (GHG) Protocol Corporate Standard and disclose publicly on an annual basis within 1-3 years, the exact timeframe for this will be communicated to different supplier groups in an engagement program and will be based on their relative contribution to Hydrock's Scope 3 emissions

» Commit to setting a science-based net zero goal for reducing GHG emissions in line with Science-Based Targets initiative (SBTi) within specified timeframe

» Submit targets for validation to the SBTi within specified timeframe and communicate these on company website

» Commit to RE100 campaign by 2030 and transition all electricity procurement to renewable sources

» Commit to efforts in line with achieving the targets

A full supplier review will be conducted annually based on data collected directly from suppliers via a questionnaire and also through a supplier engagement program. Environmental credentials will be monitored and suppliers will be provided a scorecard to reflect their position and alignment to a net zero journey.

5. Our approach

We will regularly review our supplier/subcontractor assessment process (as specified in our ISO9001 Integrated Management System and our ISO45001 Occupational Health and Safety System) to ensure alignment across all aspects of procurement.

Undertake annual reviews of all suppliers to ensure they maintain their high standards. This will be achieved through an annual supplier questionnaire which is then marked against a scoring matrix to provide a scorecard for each supplier.

Engage with our supply chain to overcome challenges. An ongoing supplier engagement program will create a forum to share knowledge, expectations and best practice across the supplier network.

We have developed an in-house mechanism to measure and monitor social value in the business and will develop our Social Value Strategy.

Actively monitor:

» Delivery and take-up of bribery and corruption training

» Delivery and take-up of DEI training

» Our supply chain payment - creditor days (Targeting <60)

» £ and % of our spend through MSME's and VCSE's

» Location of our supply chain spend and locality to our offices (for central spending) or projects

» Volunteering time donated by our staff, separated into expert and non-expert volunteering.

» Scope 1, 2 and 3 carbon emissions

» Commitments and submission of targets to the SBTi

Mark Seberry, Executive Director

April 2024