Corporate Social Responsibility

We take Corporate Social Responsibility ("CSR") seriously and our obligations evolve as the Group grows.

CSR covers a wide range of activities and our current focus is on the measurement of the impact of our operations, including those recently acquired.

Employees

Building and developing the skills, competencies, motivation and teamwork of employees is recognised by the Board as being essential to achieving the Group’s business objectives. The stability and commitment of the employees is demonstrated by the average length of service which continues to remain high. In addition, the number of working days lost to sickness is ca.1% a year. These measures remain consistent across each of the Group’s Sectors.

Key employee statistics
  2016 2015 2014
Average number of employees in year 1,602 1,449 1,264
Females as percentage of total 36% 34% 35%
Length of service (years) 6.7 6.6 6.3
Average staff turnover 24.9% 23.0% 21.5%
Sick days lost per person 3.0 3.0 3.0

The Group encourages healthy lifestyles and the level of sick days lost per person is heavily influenced by a small number of employees who are on long term sick leave.

Set out below is an analysis of the number of employees by gender at the year end.

   2016 2015  
  Male Female Male Female  
Directors 5 1 6 2  
Senior Manager 72 21 71 19  
Employees 950 549 910 497  
Total 1027 571 987 518  

The Group values the commitment of its employees and recognises the importance of communication to good working relationships. The Group keeps employees informed on matters relating to their employment, on business developments and on the financial and economic factors affecting the Group. This is achieved through management briefings, internal announcements, the Group’s website and by the distribution of Preliminary and Interim Announcements and press releases.

Copies of the Annual Review and Annual Report & Accounts are also made available in the operating businesses. This communication programme enables employees to gain a better understanding of the Group’s business objectives and their roles in achieving them. Both employment policy and practice in the Group are based on non-discrimination and equal opportunities. Ability and aptitude are the determining factors in the selection, training, career development and promotion of all employees.

The Group remains supportive of the employment and advancement of disabled persons. Applications for employment by disabled persons are always fully considered, bearing in mind the respective aptitudes and abilities of the applicants concerned. If an employee is, or becomes disabled during their period of employment, the Group will, if necessary and to the extent possible, adapt the work environment to enable the employee to continue in their current position or retrain the employee for duties suited to their abilities following disablement. At 30 September 2016, the Group employed five disabled employees.

Employment policies throughout the Group have been established to comply with relevant local legislation and codes of practice relating to employment, Health & Safety and equal opportunities. The Group provides good quality working environments and facilities for employees and training and development appropriate to each of their roles.

Some of the Group’s operating companies have structured apprenticeship schemes for technical staff and the Group provides sponsorship for high potential employees for higher education courses where appropriate. Vocational training is also provided and some staff are enrolled on National Vocational Qualification (“NVQ”) or similar level courses. Employees are actively encouraged to undertake Continuing Professional Development (“CPD”) to maintain any relevant professional accreditations.

In accordance with the Market Abuse Regulation of the Financial Conduct Authority, employees are required to seek approval of the Group Company Secretary before dealing in its shares.

Health & Safety

The Group is fully committed to ensuring clean, safe and healthy working conditions. The Group actively promotes a strong safety culture and ensures a collective responsibility for ensuring Health & Safety standards are continually improved.

The Chief Executive Officer has overall responsibility for Health & Safety policies and procedures across the Group. However, in line with the Group’s decentralised management approach, accountability for Health & Safety is with local management to ensure compliance with local regulatory requirements, culture and specific business needs. The Group requires that each operating business conducts Health & Safety reviews against its specific operational risk profile and local regulatory requirements.

The Group has this year introduced requirements for near miss reporting to ensure that Health & Safety hazards are proactively identified and appropriate mitigation put in place to ensure that they do not result in Health & Safety incidents.

  2016 2015 2014
Minor injuries 87 54 55
Reportable lost time incidents1 11 4 5
Minor injuries per 1,000 employees 54.3 37.3 43.5
Reportable lost time incidents1 per 1,000 employees 6.9 2.8 4.0
1 Three or more days' absence from workplace.

The absolute level of minor injuries has increased this year and also increased when normalised to a rate per 1,000 employees. The vast majority of these minor injuries resulted in no lost time and were considered low level. The Group has improved its reporting of Health and Safety related issues and it is likely that the increased number of minor incidents is in part due to improved awareness and reporting. The number of reportable lost time incidents has also increased; over half of these reported incidents were less than five days’ absence from the workplace. Owing to the nature of the Group’s operations, the most common types of injury relate to minor cuts, slips/trips or manual handling injuries.

All injuries are fully investigated and corrective actions and preventative measures put in place to ensure that the incident does not reoccur and future risks are mitigated.

Health & Safety forms part of the induction process for new employees and where relevant, more specialist training is provided for specific functions. The Group has good coverage of employees who have formal Health & Safety training and/or qualifications and this has continued to increase during 2016.

Human rights

The Group’s activities are substantially carried out in developed countries that have strong legislation governing human rights. The Group complies fully with appropriate legislation in the countries in which it operates.

Environmental

The Group comprises sales and marketing focused businesses which essentially receive products from suppliers and despatch them to customers. The Group’s businesses do not operate delivery fleets; they use third-party carriers to deliver their products to customers and to provide much of their packaging requirements. The Group’s ability to control the environmental impact of its logistics partners is therefore limited. The primary impact on the environment, which is entirely in the Group’s control, is consumption of the normal business energy sources such as heating and power, which the Group aims to minimise through compliance with relevant environmental legislation.

The Group is committed to identifying and assessing environmental risks, such as packaging waste, arising from its operations. Waste management initiatives are encouraged and supported by the Group and materials are recycled where practical.

Local management are committed to good environmental management practices throughout our operations. The Managing Directors have responsibility for environmental performance of their operating businesses and each subsidiary is required to implement initiatives to meet their responsibilities.

Each facility participates in recycling paper, plastic, cardboard, and wood from pallets and continues to focus on minimising energy consumption through the efficient use of heating and lighting. In addition, a number of the businesses now use fully recycled and biodegradable filler materials for packaging.

Greenhouse gas emissions

UK listed companies are required to report their global levels of Greenhouse Gas (“GHG”) emissions in their Annual Report & Accounts. This requirement is for disclosure of Scope 1 and 2 only (direct emissions, e.g. heating, cooling, transport fuel and indirect emissions, e.g. from purchased electricity) and only to the extent that such emissions are the responsibility of the Company.

The Group has considered the six main GHGs and report emissions in tonnes of CO2 equivalent (CO2e) for Scope 1 (direct) and Scope 2 (indirect) emissions. These emissions are calculated following the GHG Protocol and UK Government Environmental Reporting Guidelines. The Group has used DEFRA UK GHG Conversion Factors, US Environmental Protection Agency Emission Factors and International Energy Agency Factors.

As a distributor with no owned logistics or freight, the Group’s primary direct energy usage and related CO2 emissions arise from the Group’s facilities. Where possible the Group has reported billed data which represents ca.80% of the Group’s global emissions. For the remaining entities the Group has used an estimation using sales data and local conversion factors.

An intensity ratio of CO2e per £1m revenue has been selected, which will allow a comparison of performance over time and with other similar types of business.

      Tonnes of CO2E
  Source of emissions 2016 2015
Direct emissions (Scope 1) Natural gas 714 824
  Owned transport 100 94
Indirect emissions (Scope 2) Electricity 2732 2226
Gross emissions   3547 3144
Tonnes CO2e per £1m revenue   9.3 9.4
Business ethics

The Group recognises its obligations towards the parties with whom the Group has business dealings including customers, shareholders, employers, suppliers and advisors.

In general, the interactions with these parties are managed at a local level by senior management and the Group expects a high standard of expertise and business principles to be maintained in such dealings.

The Group's policy towards suppliers is that each operating business is responsible for negotiating the terms and conditions under which they trade with their suppliers. The Group does not operate a formal code that it follows with regard to payments to suppliers. Group companies agree payment terms with their suppliers when they enter into binding purchasing contracts for the supply of goods or services. Suppliers are, in that way, made aware of these terms. Group companies seek to abide by these payment terms when they are satisfied that the supplier has provided the goods or services in accordance with the agreed terms and conditions.

Community

The Group believes that good community relations are important to the long term development and sustainability of the operating businesses. The Group considers the environmental and social impacts of conducting business on the community and this forms part of the business decision making process.

A selection of community and charitable activities from the year include:

In North America
  • Somagen Diagnostics supported the Canadian Blood Services in their Partners for Life programme and supports an academic award in Alberta, Canada for Biomedical Engineering Technology.
  • Various charitable events at Hercules US including support to local charities such as United Way, Clothes To Kids, The Haven and Paul B. Stephens Exceptional School for Disabled Children.
  • J Royal provided support for the National Pancreatic Cancer Foundation and the Save the Children Federation.
In Europe and Australia
  • Kubo Group sponsored an athlete to enable them to compete in the Special Olympics.
  • a1-CBISS took part in the Three Peaks Challenge and the Anglesey Half Marathon to support Claire’s House Children’s Hospice.
  • WCIS in Australia took part in a sponsored walk to raise money for Breast Cancer Research.
  • DSL in Australia built Billy Carts for the Children First Foundation which provides support and funding for children in developing countries for Healthcare services.
  • Big Green Surgical supported the Bangla Smile Project by providing sterile disposable surgical instruments to help children in Bangladesh.
  • FPE Seals supported Downs syndrome research by entering a team into the Great North Run and supported a breast cancer charity.
  • Hawco Group supported a London to Paris cycle ride for Pancreatic Cancer UK and the Little Princess Trust which provides wigs for children with cancer.

The Group also contributes to local worthwhile causes and charities and in 2016 the Group made donations to charitable organisations of £44,958 (2015: £35,504). No political donations were made.

Anti-Bribery and Corruption

Anti-Bribery and Corruption (“ABC”) Policy

Diploma PLC (the “Group”) operates a zero tolerance policy in relation to bribery and corruption to ensure that all its business is conducted in an honest and ethical manner and to comply with applicable legislation. Bribery is an inducement or reward offered, promised or provided in order to gain any commercial, contractual, regulatory or personal advantage.

The ABC policy applies worldwide to all individuals working at all levels throughout the Group’s businesses, including Directors, management and employees. All forms of bribery (including bribing foreign public officials) are forbidden, whether direct or indirect through a third party.

The scope of the policy covers gifts and hospitality and donations (the Group does not make political donations, but makes lawful charitable donations at a local level). The policy prohibits offering or receiving bribes, facilitation payments and kickbacks.

The ABC policy is implemented through a group-wide e-learning training programme developed by an external provider and supplemented locally by ad-hoc topic updates from management. Local businesses carry out due diligence of suppliers so as to ensure compliance with the ABC policy. The Group Company Secretary is responsible for ABC policy implementation and Internal Audit monitors the effectiveness of the ABC policy, reviews its implementation and reports its findings to the Audit Committee.