Sustainability Strategy 2017

people planet performance solutions

Building our future

Sustainability Strategy 2020

2

Martin Riley Senior Vice President Tarmac

Oliver Mahon Senior Vice President Europe North, CRH (UK Cement & Lime, Ireland and Finland)

Welcome

to our sustainability strategy

We believe sustainability is essential for the prosperity and well-being of society, our customers, the communities in which we operate and the longterm success of our business.

The world is changing, bringing a host of challenges for society and our business, including a growing population, increasing life expectancy, a changing climate, energy security challenges, pressure on resources and urban development. It is widely recognised

by Government and the construction sector that wider environmental and social considerations will transform what we build in the future, what we build it with and how we build it.

As a leader in the UK construction sector Tarmac is set to play its part.

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That’s why sustainability must be at the heart of our business and embedded in everything we do.

To guide us on our journey, we established an External Sustainability Panel to provide expert advice and challenge. By working with the Panel and other stakeholders, we have identified the key sustainability priorities for our business. We have set ourselves challenging commitments and 2020 milestones, which take us beyond incremental improvements to business transforming solutions. We have a credible strategy to achieve these targets.

Our strategy emphasises the importance of adopting a whole life

approach and embedding sustainability into everything we do, from the goods we purchase, our operations and logistics but also the performance of our products in use and their reuse and recycling at the end of their life.

Achieving our targets will be challenging and it will need the commitment and support of all our employees, contractors, suppliers, customers, communities and investors. We are confident that we’ll continue to grow and evolve to meet the challenges ahead and we’ll certainly keep you updated on our progress towards delivery of our commitments.

Martin and Oliver

contents

Foreword

3

Contents

4

External Sustainability Panel

5

Our business

7

Our sustainability strategy

9

People Health and safety Our people Community involvement

13 15 17 19

Planet Climate change Environmental stewardship Resource efficiency

21 23 25 27

Performance Economic value Governance & ethics

29 31 33

Solutions Sustainable supply chain Sustainable construction

35 37 39

Delivering the strategy

41

Materiality

42 4

external sustainability panel Tarmac has established an External Sustainability Panel to advise and challenge the business on its sustainability strategy and performance. Panel members provide expert knowledge spanning the wide range of sustainability issues that are most important to Tarmac and its stakeholders.

Members from left to right are as follows: Peter Halsall, Shaun McCarthy OBE, Penny Shepherd MBE, Tony Burton OBE, Jiggy Lloyd, Andy Brown (not pictured).

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Message from our external stakeholder panel The Panel’s continues to focus on the business benefits of sustainability. We aim to help Tarmac identify what those benefits are and how to deliver them, taking account of global and local environmental challenges, stakeholder expectations and the economic and political climate.

Our deliberations span all areas where opportunity and challenge may arise, from the management of the natural environment through to the maintenance of a sustainable supply chain and the development of Tarmac employees.

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Leading

materials capability

8,000 employees

National

contracting and highways services

about our business Construction products have an invaluable role to play in achieving sustainable development. They are used to create homes, schools, hospitals, workplaces and infrastructure, which are essential for social and economic well-being.

Along with the many positive benefits, impacts arise from their manufacture and use.

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As a major provider of construction products, services and solutions, with over 350 sites across the UK, 8,000 employees, thousands of customers and hundreds of communities, we recognise our responsibility to grow our business in a way that’s good for people and the environment. We are proud of what we have achieved, but there is much more to be done.

Our strategy is founded on whole-life thinking and pushing the boundaries to develop innovative solutions, which help

our customers create more sustainable buildings and infrastructure. To achieve this we are focussed on continuously improving the sustainability performance of our business, products and services throughout their life-cycle, including how they are produced, how they perform in-use and how they can be reused at the end of their current life.

Our ambitious sustainability strategy sets out how we will do this by focusing on the things that really matter and those we can influence.

Providing:

offsite manufacturing building products aggregates readymix cement asphalt lime

1.827

fleet vehicles

124

quarries

30

44

44

4

up to train sets operating weekly

recycling plants

building products sites

marine dredgers

3

130

17

22

2

72

cement plants

marine wharves

lime plants

readymix plants

contracting depots

asphalt plants

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Sustainability is about securing long-term success for our business, customers and communities by continually improving environmental, social and economic performance throughout the whole lifecycle of our products, services and solutions.

our sustainability strat Our strategy considers not only the goods we purchase, our operations and logistics but also the performance of our products in use, their reuse and recycling at the end of their life.

By doing this, we can understand and take action to reduce adverse impacts, and to maximise the many positive sustainability benefits our business and products bring.

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Our business has undergone a number of changes and having already achieved many of the targets set out in our previous strategy, we aim to build on these successes to drive further progress. Using ‘whole-life’ thinking we have reviewed our progress to date, re-benchmarked based on our current business structure and engaged with our stakeholders to develop our

sustainability strategy. This strategy defines the main sustainability themes and our key priorities, those issues which are most important to our business and our stakeholders. We continue with our ambitious long-term commitments to transform our business under four main themes: People, Planet, Performance and Solutions

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people planet performance solutions We have set ambitious commitments for each of our key priorities, supported by a series of key performance indicators.

They have been set to take us beyond incremental improvement programmes to business transforming solutions.

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13

“Keeping people safe is of paramount importance to us.

We also believe that our longterm success is founded on our ability to attract and develop a talented and diverse workforce and build strong relationships with our communities�.

Graeme Boylen Human Resources Director

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health and safety Protecting the health, safety and wellbeing of our employees, contractors and those around us is a core value of our business and the impetus behind our drive to develop a zero harm culture. We work in potentially hazardous environments so it’s important that everyone understands how to go about their jobs safely.

commitment Achieve zero harm

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Our goal is zero harm to anyone working for, or with Tarmac.

Creating a consistent, proactive safety culture through engagement, training and behaviour change, will support us in achieving our goal. We believe that no task is so important that it can’t be done safely and through measurement and learning we can continuously improve our performance.

Everyone working at Tarmac is expected to work in a safe, responsible manner and to challenge unsafe behaviour.

2020 milestone Achieve Lost Time Injury Frequency Rate of 0.5 and Total Recordable Case Frequency Rate of 1.0

performance indicators 1

2

3

Continue to improve our health and safety management systems and processes, with all operational sites maintaining OHSAS 18001 certification and transitioning to the new ISO 45001 standard

All operational sites and offices to engage in the Tarmac Health & Safety assurance programme to ensure successful delivery of the Health & Safety strategy

Introduce a new wellbeing strategy as part of part of the Tarmac employee occupational health programme in 2017

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our people We aim to be an employer of choice by providing a great place to work, with a culture that promotes equal opportunities for all and encourages flexibility and innovation.

By fostering a fair culture and a supportive working environment, everyone can feel involved, respected and connected. This is reinforced through frequent, open and honest communication with employees and listening to their views.

commitment An employer of choice

17

We want to attract and retain a motivated, talented and diverse workforce and believe this is vital for the longterm success of our business and customers. We also want employees to feel positively engaged in our business, to understand, their career and development opportunities and how they contribute to achieving business goals. We aim to enable everyone to realise their full potential through learning, development and progression and our business is committed to supporting young people into the workplace through graduate and apprenticeship programmes.

2020 milestone Achieve top 10% in the industrial sector for employee engagement and wellbeing

performance indicators 1

2

3

Deliver year on year enhancement in the diversity of our workforce through progressive strategies embedded into HR processes

Join the 5% club and ensure that 5% of our UK workforce over the next five years are young people on a structured training scheme

Enhance the number of employees training to achieve a formal qualification

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community involvement Tarmac is a large employer, connected to communities in many ways. As an integral and long-standing member of our local communities our commitment is to make a positive contribution to them.

Our operations create value for our communities through employment, tax contributions and the goods and services we buy. We also contribute positively through our involvement in and support of community programmes

commitment Net positive contribution to our communities

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and local projects, especially those that build stronger community relationships, support education and employment opportunities, and improve the local environment.

Conducting our operations in a considerate and responsible way at all times is the basis of being a good neighbour. We will seek to build trust and understanding through open communication, collaboration, listening to positive and challenging feedback and hosting site visits, open days, exhibitions and liaison groups.

2020 milestone Contribute 25,000 volunteer hours per year

performance indicators 1

2

Implement our community engagement plans at all operational sites and offices

Maintain corporate engagement programmes with universities, schools and groups working with disadvantaged young people

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“Our products, services and solutions are needed to build and maintain the homes, schools, workplaces, roads and the utility services we all rely on in our daily lives. It is important we meet this demand in a responsible way, by helping to tackle climate change, using resources efficiently and making a positive contribution through the stewardship of our sites.�

Dr Martyn Kenny Sustainability Director

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climate change Climate change is a global issue but one that affects us all and one that we all have a responsibility and role in addressing. Tarmac is responding by taking action across the whole of its business and product life-cycle.

Buildings and infrastructure account for over half of the UK’s greenhouse gas emissions so the construction sector has a key role to play in helping the Government meet its climate change commitments. As well as reducing the carbon footprint of our products, we provide solutions

commitment Design out CO2

23

to help customers design and build more sustainable, low carbon buildings and infrastructure. By using whole life thinking, our solutions can also reduce the need for maintenance, replacement and support the re-use and recycling of the materials at the end of their current life.

We’ve set ourselves tough targets to deliver on our long term commitment to design out CO₂. This means raising awareness and changing behaviours, both within our company and with customers and other stakeholders. It means investing in energy efficiency, designing for durability, using renewable energy sources, like biomass, innovating low carbon products and optimising the transport of our goods.

2020 milestone 30% reduction in CO2 per tonne of product compared to 1990

performance indicators 1

2

3

100% of sites to maintain ISO 50001 certification

Increase thermal input from waste derived fuels in cement to 45%, including 18% from biomass by 2020

Reduce transport COâ‚‚ per tonne by 10% by 2020

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environmental stewardship With over 350 sites and 100,000 acres of land under our stewardship, we recognise our duty to manage these assets responsibly and to ensure positive outcomes for our business, the community and future generations. Providing a lasting legacy is enshrined within our commitment to enhance environmental stewardship and deliver a net positive contribution to biodiversity.

commitment Enhance environmental stewardship

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As part of our long-standing commitment to environmental stewardship, we shall continue to manage our impacts on air, water, land and local communities. Every quarry has a restoration plan and by working in collaboration with regulators, wildlife bodies and community groups, we are able to deliver high quality restoration, while promoting biodiversity and respecting archaeological heritage.

By working with stakeholders and local government, our sites are often returned to their original use but where circumstances allow, we create nature reserves, wetland habitats or the land might be returned to the community for amenity or recreational use. In other circumstances, our sites may be developed to support local jobs through industrial or retail use or to provide much needed housing.

2020 milestone 100% of mineral extraction sites to have biodiversity, geodiversity and restoration management plans

Guided by our Biodiversity Management Plans opportunities to support, enhance and create local biodiversity are taken during the full life cycle of a site - planning, working, restoration and aftercare.

performance indicators 1

2

3

4

5

100% of operational sites to maintain ISO 14001

Make a net positive biodiversity contribution, creating and maintaining priority habitats

Priority mineral extraction sites to maintain partnerships with local biodiversity groups

Contribute to the delivery of the national biodiversity strategies

Support cultural heritage through proactive engagement initiatives

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resource efficiency We have an important role to play in meeting society’s demand for our products, services and solutions, while ensuring that our resources are used in the most efficient and sustainable way. To do this we have adopted the concept of the circular economy which focuses on designing out waste from every stage of the product life-cycle and extending its useful life.

commitment Accelerate the transition to a circular economy

27

Our strategy to accelerate the transition to a circular economy means collaborating across our supply chain to eliminate waste from our operations, recycle materials from other industries (as raw materials and fuels) and develop sustainable opportunities to conserve water. We will also support the transition by extending the life of the things built with our products through enhanced durability, designing for reuse and facilitating recycling into new products.

2020 milestone Recycle over 10 million tonnes a year of waste and secondary materials from other sectors

performance indicators 1

2

3

4

Achieve zero waste to landfill by 2020

Increase the recycled and secondary aggregates used in asphalt to 20% by 2020

Reduce water use (abstracted and mains) per unit of production by 25% by 2020

All operational sites and offices to maintain risk based water management plans and water inventories

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“By transforming our business into a sustainable construction solutions provider and upholding the highest standards of governance and ethics, we can create the best value for our customers, employees, communities and investors�.

Katie Smart Head of Legal

30

economic value Financial success is essential for operating a sustainable business, one that can continue to invest in employees, innovative products and solutions, new technology and more efficient operations. Creating economic value enables our business to fulfill its responsibilities to customers, employees, suppliers, communities, authorities and investors.

commitment Create sustainable economic value

31

We create economic value by providing direct employment and work for contractors, by purchasing goods and services and through the taxes and other contributions we make.

The homes, workplaces and infrastructure produced using our products also create economic value for society. Our vision focuses our business on contributing further to this by innovating new construction solutions to help our customers build more sustainably, efficiently and profitably.

2020 milestone Achieve focused growth

performance indicators 1

2

Invest in future construction solutions

Continue to implement our operational, commercial and supply chain excellence programmes

32

governance and ethics A strong culture of corporate governance, compliance and business ethics is essential to operate a sustainable, successful business.

Our Code of Business Conduct ensures that we conduct our business dealings in a transparent and accountable way.

commitment Uphold the highest corporate governance and ethical standards

33

Acting with trust, integrity and honesty are integral to the way we do business and we expect everyone working with or for our business to uphold the highest ethical and professional standards at all times.

Compliance with the law is a basic principle underlying all our policies. All employees and those acting on our behalf are appropriately trained and expected to embrace our values, behaviours and policies. We have a robust reporting structure, with risk management assessments, audit and reporting to ensure compliance.

2020 milestone Continue to achieve 100% compliance with our code of conduct and competition compliance programme

performance indicators 1

2

Respect human / labour rights and take all reasonable steps to ensure that modern slavery (in any form) does not take place within our sphere of influence

Maintain compliance to the Sarbanes-Oxley Act 2002 (SOx) to ensure open, honest and transparent accounting practices

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“We adopt a whole life approach to provide innovative construction products, services and solutions that support our customers’ needs and contribute positively to the development of sustainable communities and a low carbon built environment.”

Jeremy Greenwood Managing Director National Commercial and Construction Solutions

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sustainable supply chain Tarmac procures a significant amount of goods and services each year, so it’s important to ensure they are sourced, manufactured and traded legally, ethically and with careful consideration of their environmental, social and economic impacts.

commitment Responsibly procure all goods and services

37

Our supply chain is essential in supporting the delivery of our ambitious sustainability targets. We therefore seek to form close partnerships with trusted companies that operate in a way consistent with our values, are committed to continuous improvement and will support us in delivering our goals.

Our commitment to responsibly procure all our goods and services and to monitor performance through independent audit and certification helps us to minimise supply chain risk for our customers and their clients and meet their demand for responsibly sourced products.

2020 milestone Ensure supply chain partners are selected against responsible and ethical sourcing criteria using the principles of ISO 20400

performance indicators 1

2

3

Maintain BES 6001 responsible sourcing certification at ‘excellent’ rating

Continue to adopt the principles of sustainable procurement in accordance with ISO 20400 and embed within our procurement process

100% of in scope suppliers to be accredited to a recognised supply chain scheme by 2020

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sustainable construction Our approach to construction encompasses innovative sustainable products, efficient building systems and practical solutions.

We recognise the important role we have in promoting sustainable construction by optimising our products, their use and whole life performance. We make an important contribution to a better built environment through the provision of systems, solutions and guidance for the materials we provide.

commitment Enable customers to use innovative solutions to create a sustainable built environment 39

Sustainable construction considers issues such as building design, the responsible sourcing of materials, material technology and performance benefits, processes and methods of construction, energy and resource efficiency, Building Information Modelling (BIM) and the long-term operation and maintenance of the built environment.

By providing sustainable construction materials, solutions and guidance to optimise the use and whole life performance of our products we are able to support our customers in delivering a positive contribution to a sustainable built environment.

2020 milestone Provide industry leading guidance and solutions

performance indicators 1

2

3

Promote sustainable construction solutions and measure customer uptake

Innovate new sustainable products, services and solutions based on whole life performance

Collaborate across our supply chain to promote sustainable construction and whole life performance

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E

el

xt n er pa na y t l sus i l tainabi

delivering the strategy Our sustainability strategy forms an integral part of our business vision and is central to the long-term success of our business. We have defined our strategy, priorities and targets and have processes to govern their implementation and report on progress. We believe that everyone has a role to play and a responsibility to continuously improve the sustainability performance of our business.

Our approach is to embed sustainability into everything we do and our sustainability governance hierarchy helps us to do this.

Tarmac’s Executive Committee is responsible for setting and delivering the strategy, with actions and programmes delegated to Business Units and Functions. Each member of the Executive Committee has a personal goal linked to our sustainability strategy. We will regularly measure, report and review our progress and undertake audits to ensure a robust performance. We will undertake a formal annual review of our strategy, working with our External Sustainability Panel, to ensure its continuing appropriateness and high level of ambition.

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Vision and values

EXCOM sets company vision.

Defines company values and behaviours

Sustainability strategy

EXCOM sets long term strategy.

Establishes key priorities and commitments to deliver a sustainable business

Business unit/ functions action plans

Director/head of department defines programme and actions to be taken by BU/Function to deliver the strategy

Site specific action plans/ personal objectives

Line management defines programme and actions required at a local or personal level

Monitoring and strategic review

Line management ensures regular monitoring/review and action to achieve sustainability targets

Reporting performance

Sustainability team provides annual report on performance, and supporting business improvement

al/external au dit ern t n I

Tarmac’s key priorities have been identified through a materiality analysis aligned with the Global Reporting Initiative guidelines. Gathering input from key decisionmakers in the business, external experts, customers and other stakeholders, including our External Sustainability Panel, we map each issue on a materiality matrix to highlight its significance. The key priorities identified by this process form the basis of our sustainability strategy.

Significance to Stakeholders

It’s recognised good practice to focus on the sustainability issues that are of most importance for the business and its stakeholders, that is, the issues that have current or potential impact, over which the business has control.

Reporting performance

Governance and ethics Community involvement

Environmental protection Resource efficiency

Sustainable construction Climate change

Medium

materiality

High

In our strategy we have grouped our key priorities under four themes; People, Planet, Performance and Solutions. For each key priority we have set an ambitious long-term commitment, a 2020 milestone target, supported by a series of performance targets.

Sustainable supply chain

Medium

Impact on Tarmac

Economic value Safety and health Our people Innovation and quality

High 42

We welcome your questions and feedback on all aspects of our sustainability strategy.

Please address your comments to sustainability@tarmac.com 43

‘Sustainability has a central role in our business strategy and is key to supporting our customers and their clients. Working with our stakeholders we have set ambitious commitments and targets to help us realise our vision. Through strong governance and engagement we will be working hard to ensure sustainability is deeply embedded through our business, strategy and culture’ Martin and Oliver Martin Riley Senior Vice President Tarmac

Oliver Mahon Senior Vice President Europe North, CRH (UK Cement & Lime, Ireland and Finland)

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