Corporate responsibility

It is extremely important to us that we not only achieve our strategic vision but that we do this in the right way

We seek to ensure our business is sustainable while also behaving responsibly in relation to our key stakeholders, including the communities in which we operate, our people and the environment.

The four key areas of focus are not separate and overlap in many ways.

The strategy for our people, the community and the environment has been well-established and communicated across our Group for a number of years. Our supply chain strategy has previously operated at a brand level resulting in different levels of focus. As we move towards our One Group business model, we are linking together the different elements of our supply chain strategy to produce a more coherent and consistent strategy across the Group.

All four elements of our CR strategy are taken into consideration when key business decisions are made and the Board receives regular reports during the year on the key areas. Responsibility for the overall CR strategy sits with our Chief Executive.

The governance around the four key areas is to ensure that we have a consistent approach to risk management, strategy development and measuring progress against each key area.

The overall aims of our CR strategy are to:

  • use our knowledge and expertise to create a positive impact on all our stakeholders and the communities in which we operate;
  • develop and promote a culture driven by our Group values, which in turn is reflected in how we conduct our business; and
  • engage, enable and empower our people so that they can make a positive contribution to our CR strategy and the causes that matter to them.

 

Signed on behalf of the Board

Kathy Smith

Company Secretary
18 June 2014

Why is this part of our CR strategy?

We have a responsibility to the communities in which we operate; in particular our KC brand has a significant impact on the local community in Hull and East Yorkshire. Our community strategy is key to ensuring that we take our responsibility seriously in all of our local communities.

How does this link to the Group strategy?

This links directly to our customers strategic pillar as our community strategy, particularly in the Hull and East Yorkshire area, impacts directly on the brand experience of our customers.

In detail

We have no material social issues, however we are very aware of our potential impact in the local communities in which we operate, particularly in the Hull and East Yorkshire region where we employ over 1,000 people, support a further 400 full-time local jobs and contribute over £150 million each year1 to the local economy.

We are proud to be part of local life and the potential impact on the local community is considered in all decisions made by the Group.

As businesses and consumers increasingly rely on online services to communicate and do business, we have invested significantly in rolling out superfast fibre-based broadband services in the Hull and East Yorkshire area to help boost the region’s economy and to transform the online lives of our customers, with download speeds including 100Mbps and 350Mbps. We announced the start of the fibre roll-out in 2012 and as at 31 March 2014 we have passed 29,700 premises, with a commitment to pass 45,000 premises by 31 March 2015.

Unemployment rates in Hull are high in comparison to England as a whole2, we therefore believe that we have a responsibility to support the local economy whenever we can. We proactively adopt a ‘buy local’ approach when purchasing goods and services, which means that two-thirds of these come from over 240 local suppliers.

In 2011 we launched an investment fund, called KC Invest, to provide start-up and growth financing for local businesses in the digital and technology sectors. The aim of this fund is to stimulate business growth in the local economy and help create new, sustainable jobs. Since it was introduced, KC Invest has provided loan financing to 20 start-ups and small businesses, which in turn have supported 72 local jobs.

Community engagement prior to the launch of KC Invest highlighted that a key area in which small businesses need support is with sales and marketing skills. We therefore launched a series of Boost Your Business events featuring expert speakers, which are free for small businesses to attend. The first series of events was so successful that a second series was launched in May 2013, with events now taking place quarterly.

We have also supported 17 young people with grants through the Hull Youth Enterprise Bank to help them set up and develop their businesses. We firmly believe that the enterprising young people of today are the employers of tomorrow and therefore it is vital that we provide practical and financial support where we can to help these businesses get started.

We are active supporters of the Hull Employability Charter and in the past year have taken on six apprentices to demonstrate our support.

In addition to our activities in the Hull region, we also encourage all of our people to become involved in local community projects wherever they are based.

We have formal partnerships in place with schools, charities and projects in areas where we operate across the UK. During the year, our people donated 3,843 hours to community volunteering through our various community programmes.

Our commitment to the local community was recognised in November 2013 when the KC brand was awarded the Community Involvement Award at the annual Hull Daily Mail Business Awards.

We continued also this year our patronage of the Prince’s Trust, the UK’s leading youth charity. The Trust aims to change lives by offering training, personal development, business start-up support, mentoring and advice to young people. As part of our support we entered two teams into the Million Makers corporate challenge, in which each team aims to raise money for the Trust by setting up their own mini enterprise. Our two teams raised over £17,000 for the Trust, with our Eclipse team winning first place in the South West region for their fundraising.

In addition, we have sponsored and hosted a number of events to recognise the achievement of young people on Prince’s Trust programmes and to encourage wider membership from business contacts.

We work with a charity partner, chosen by our people who vote on a shortlist of UK-registered national charities. In April 2012 we began a partnership with Sparks, a charity dedicated to funding pioneering research into conditions affecting babies, children and mums-to-be. The focus of Sparks is on improving the quality of life for children and families affected by serious illness or disability, while seeking ways to better diagnose, treat and prevent these conditions in the future through medical research.

Since the partnership began in 2012 we have raised almost £150,000 for Sparks through the dedication of our people participating in sporting challenges, dress down days, auctions, cake bakes and many other activities. We have extended our partnership to 31 March 2015 after consulting with our charity champions and key fundraisers.

1. DTZ Consulting, 2011.
2. For the 12 months to 30 September 2013 unemployment in the Hull City Council area was 14.61% compared to 7.91% for England as a whole. Data taken from the Humber Data Observatory.

Why is this part of our CR strategy?

People are key to our business and to our ongoing sustainability. We listen to our people as key stakeholders in our business and ensure also that we meet our legal and moral obligations in relation to the health, safety and wellbeing of our people and anyone else who comes into contact with our business.

How does this link to the Group strategy?

This links directly to our people strategic pillar, which seeks to attract, develop, sustain and enable all of our people to achieve their full potential. It also links to our partners strategic pillar as our partners working alongside us are directly affected by our people strategies.

 

In detail

Our people are essential to our success as a Group and are one of our key differentiators when we are seeking to win business. It is therefore crucial to us that we can continue to attract the right skills, behaviour and talent for the Group, whilst continuing to motivate and develop the talented individuals already within our organisation. We launched our current People Strategy in 2010 with these aims in mind.

Our values are to be open and considerate, team-minded, flexible, inspiring and innovative and we have invested in activities to communicate and embed these values across our Group since 2010. Part of this has been through a series of workshops entitled ‘It Starts with Me’, which have been attended by over 1,000 of our employees.

Since the launch of our People Strategy we have provided comprehensive leadership training to all of our people managers, covering all areas of people management and providing 360 degree feedback to all participants, plus access to one-on-one coaching for all employees and managers.

We are working also on the production of a competency-based framework across our organisation to enable greater career management and personal development opportunities for those within our organisation.

We respect fundamental human rights consistent with the United Nations Universal Declaration of Human Rights and we ensure that all of our internal policies are consistent with this. We do not have any current human rights issues.

The health, safety and wellbeing of our people is of paramount importance to us, along with the health, safety and wellbeing of our contractors, partners, customers and any members of the public who may be affected by our work.

We have rigorous training and clear Safe Systems of Work for all of our people engaged in manual work; we also have training for our office-based workers and we undertake risk assessments with those who drive on company business, providing additional driver training for individuals deemed to be at a higher risk.

We work with a number of partners when performing manual work and we have clear processes in place to ensure that our partners are competent and are operating in a healthy and safe manner. We require all of our suppliers of physical services to hold safe contractor status and seek to work with any smaller suppliers without this to help them achieve this status.

We have held our annual health and wellbeing screening sessions, for the fifth consecutive year. These are open to all of our people and provide a free and confidential health assessment measuring such things as blood pressure, blood sugar levels, Body Mass Index and lung capacity. 592 of our colleagues attended these sessions in the year. In addition we provide employees with the option to purchase other medical and dental services through our flexible benefits scheme.

We continue to maintain our accreditation to the BS OHSAS 18001 Health and Safety management standard and there were no fatalities or health and safety enforcement notices in the year. We experienced two Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) incidents (2013: one). There were 13 working days lost in the year as a result of health and safety incidents (2013: 17.5).

It is important to us that we achieve gender diversity at all levels of the organisation. The gender diversity of the Group as at 31 March 2014 is set out below:

Male Female Female %
Board Directors 6 0 0%
Senior management team 11 6 35%
Other employees 1,198 702 37%

We are supportive of flexible working whenever possible and 15 per cent of our workforce works flexible hours, including 34 per cent of our female employees.

Why is this part of our CR strategy?

We are not a significant polluter from an environmental perspective; however, we need to ensure that we meet our obligations in relation to environmental reporting requirements and environmental legislation. It is important that we measure and monitor our environmental impact so that we can make informed decisions in relation to environmental matters. We must also consider wider environmental impacts on the Group as part of our ongoing strategy to protect the sustainability of the business.

How does this link to the Group strategy?

This links to all of our strategic pillars:

  • the manner in which we manage our environmental impacts and the impacts of the environment on our business directly affects our customers and therefore our customers strategic pillar;
  • having a clear environmental strategy and enabling our people to identify how they can contribute to this is a motivational factor for our people;
  • environmental impacts, such as flooding, can have a direct impact on our processes and systems if we do not adequately plan to mitigate these risks; and
  • environmental impacts on our suppliers and partners can also directly impact our business if we do not adequately plan for these; therefore linking directly also to our partners strategic pillar.

     

In detail

As a Group we take our impact on the environment seriously and over the years have sought to reduce our emissions wherever possible. We have recycling facilities at all of our main offices and we have a network of Green Champions across the Group, who help to raise awareness of environmental matters in their local area.

Our main environmental impact arises from the use of electricity, which accounts for over 85 per cent of our CO2e emissions. This includes electricity used at our offices, as well as at our data centres and network sites. During the year our electricity usage has reduced by eight per cent from the prior year. This is a result of energy efficiencies achieved through various IT initiatives and more detailed reporting of usage by site enabling opportunities for energy savings to be more easily identified and implemented.

The table below sets out our annual emissions in tonnes of CO2e.

Area Year ended
31 March 2014
CO2e
Year ended
31 March 2013
CO2e
Combustion of fuel and operation of facilities 3,147 3,968
Purchase of electricity 18,344 20,014
Total 21,491 23,9821
Tonnes of CO2e per £’000 of revenue 0.058 0.064

1. Last year we reported total emissions of 26,600 tonnes of CO2e. We have now restated the comparatives to reflect changes in the assumptions set out by the Department for Environment, Food and Rural Affairs (Defra) to ensure consistency with the emissions reported this year.

We have calculated our emissions data using the GHG Reporting Protocol.

There has been a significant amount of flooding across Great Britain during the year under review. Despite a tidal surge affecting the centre of Hull, we are pleased to report that our business continuity process provided adequate protection and none of our buildings or equipment were affected. However, we take the risk of flooding seriously and over the last few years have installed powerful water pumps and flood alarms at the sites we have identified as having a potential flood risk, as well as installing flood barriers to doors leading to basements and replacing air bricks at selected sites.

Last year we also reported on CO2e arising from business travel, the proportion of waste recycled and the amount of printer and photocopier paper used. We set ourselves targets to maintain all of these at 2012/13 levels. During the year we achieved all of these targets.

We will continue to monitor these figures going forward, however we do not believe that these are material to understanding our business performance and therefore will not report these in our Corporate Responsibility report in future years. If you would like any further information on our environmental performance or further detail on any of our emissions then please contact our Company Secretary, Kathy Smith.

Area Target 2013/14 Target met Actual Target 2014/15
Total CO2e emissions Not to exceed 2012/13 levels of 23,982 CO2e 21,491 tonnes Not to exceed 2013/14 levels
Landfill Not to exceed 2012/13 levels of 16 tonnes 12 tonnes Not to exceed 2013/14 levels
Why is this part of our CR strategy?

Our supply chain is crucial to the success of the business and it is essential that this is managed effectively in order to manage the risk relating to continuity of supply. We believe also that we have an obligation to ensure that we source goods and services from suppliers with the right ethical priorities and from sustainable sources wherever possible.

How does this link to the Group strategy?

This links directly to our partners strategic pillar, which focuses on closely collaborating with our partners and suppliers which in turn directly leads to supply chain strategy.

Our supply chain choices also impact on our customers and therefore also link to our customers strategic pillar across the Group.

 

In detail

We believe that we have responsibilities in relation to our supply chain, not only to try to ensure continuity of supply but also to do as much as we can to ensure that our suppliers operate with the same ethics and standards as us. In devising our supply chain strategy we have considered the key risks in relation to the current supply chain.

The vast majority of products that we purchase come from suppliers within the UK. During the year we imported only one per cent of the goods we bought, all of which came from Europe, North America, Australia and New Zealand. In our KC brand we have a specific policy of ‘buying local’ so two-thirds of our spend to support our KC brand was with over 240 local suppliers.

We have a supplier code of conduct which all of our suppliers are required to adhere to. This includes our requirements in relation to laws and ethical standards, labour practices, risk management and business continuity. We are also in the process of meeting with our top 10 suppliers to see first-hand how they approach ethical issues and how they ensure compliance with our code of conduct.

We review continually our supply chain to ensure that we are able to have continuity of supply, or a viable alternative, should one of our key suppliers unexpectedly fail. Electricity is clearly key to much of our business and therefore the threat of a significant power outage has been identified as a potential risk to the Group. To mitigate this risk, each of our key sites has an on-site dedicated power supply back-up, with either permanent or mobile generator support in the event of long-term power outages. These are all tested at regular intervals.

One of the key areas in which we need to manage risk in our supply chain is in our contracts with suppliers and subcontractors. We have an in-house Legal team that is responsible for overseeing all of our bespoke contracts and they work hard to ensure that the Group does not take on an exposure which is outside of our control and that we contract fairly while mitigating risk where possible.