Corporate Responsibility – Delivering Value Responsibly
Our purpose is to consistently deliver value and reward our stakeholders by making a difference to our colleagues, our customers, our suppliers and our communities. Our approach is to deliver value responsibly through our strong business model and execution of strategy by considering what “Makes a Difference”. Whilst challenging, Covid-19 has prompted us to accelerate our approach and focus on what matters most.
Our business model is decentralised, and whilst each business has its own culture, there are common themes that are the foundations of the Group’s success; continuous improvement, accountability and respect.
Continuous improvement is demonstrated by our customer focus, pursuing growth through perseverance and resilience, taking agile and responsive action and advantage of opportunities that pass others by. Accountability is demonstrated by being experts in our fields, taking responsibility to deliver the highest standards of service and performance.
We show respect to our colleagues, customers and suppliers in everything that we do, fostering a safe and inclusive culture that respects and values our differences. Through collaboration we deliver our proposition of Essential Products, Essential Services and Essential Values.
Key employee statistics
|Average number of employees in year||2,068||1,896||1,765|
|Females as percentage of total||37%||35%||35%|
|Length of service (years)||7.2||6.7||6.8|
|Average staff turnover||19.3%||19.8%||19.7%|
Set out below is an analysis of the number of employees by gender at the year end:
Diversity and inclusion
Both employment policy and practice in the Group are based on non-discrimination and equal opportunities. We want to be an inclusive organisation with a diverse workforce that reflects the global communities in which our colleagues live and work. We recognise that it is important that we value difference and encourage, support and celebrate diversity. Going forward we will review how we can continue to evolve our diversity and inclusion agenda.
The Group greatly values the commitment of its employees and recognises the importance of communication in fostering good working relationships. This year shone a light on how important it was to communicate with colleagues, they needed to be reassured of their safety, supported given their physical isolation from other colleagues, and kept positive and confident in the customer service that their business would continue to provide.
We developed our approach to internal communications during the year, sharing more frequent updates not only from the Group but also sharing great stories and best practice between businesses. Methods of communication include videos, management briefings, internal announcements, the Group’s website and 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 and provide employees an understanding of the Group’s business objectives and their roles in achieving them.
Succession planning is also important as the Group grows. Our success is based on the capability of our colleagues and we must build strength to mitigate the loss of key personnel. The average tenure remains high at ca. seven years, reflecting the loyalty of our colleagues.
Training and development
Our colleagues are vital to our success. Managers are responsible for supporting colleagues’ learning and development by setting goals, giving clear and regular feedback, and offering opportunities to learn new skills. Ability and aptitude are the determining factors in the selection, training, career development and promotion of all colleagues. We provide and encourage appropriate training and development for each of their roles.
The Group provides sponsorship for high potential employees for higher education courses, where appropriate, and employees are actively encouraged to undertake Continuing Professional Development (“CPD”). Some of the Group’s operating companies have structured apprenticeship schemes of which 18 (2019: nine) were undertaken in the UK this year.
The Group encourages good physical and mental health, and we have put a lot of emphasis on colleague wellbeing this year, including making sure Employee Assistance Programmes are in place.
Prioritising colleague safety has been even more important this year. Each of our businesses has undertaken a risk assessment, in line with local government guidelines on working safely during Covid-19, to identify potential risks and measures taken to mitigate them. The risk assessments are undertaken in collaboration with colleagues and are regularly reviewed.
The Group is fully committed to ensuring clean, safe and healthy working conditions and actively promotes a strong safety culture and a collective responsibility for ensuring Health & Safety standards are continually improved.
The Chief Executive Officer, assisted by the Chief Executive Officer of each Sector, 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, cultural 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.
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 the year.
The Group uses a near miss reporting system to ensure that Health & Safety hazards are proactively identified and appropriate mitigation is put in place to ensure they do not result in Health & Safety incidents. The number of near misses has increased as the Group increases in scale and is seen as an indication of diligent reporting practices. There are still inconsistencies in near miss reporting across the Group and this continues to be an area of focus.
|Reportable lost time incidents1||6||9||1|
|Minor injuries per 1,000 employees||41.1||62.8||40.2|
|Reportable lost time incidents1 per 1,000 employees||2.9||4.7||0.6|
The Group’s activities are substantially carried out in developed countries that have strong legislation governing human rights. The Group complies with appropriate legislation in the countries in which it operates to ensure the rights of every employee are respected and all stakeholders are treated with dignity and respect. Staff are provided with a safe, secure and healthy environment in which to work. Employees have access to an independent hotline to report any issues relating to human rights violations.
Group businesses continuously monitor and carry out due diligence of suppliers through questionnaires, audits and visits which include monitoring human rights within our supply chain.
The Group adopts a zero-tolerance approach to slavery in all its forms, including human trafficking, forced labour and child labour. Annually, each business assesses the risk of slavery taking place either within the business itself or among its principal suppliers. Group businesses continuously monitor and carry out due diligence of suppliers through questionnaires, audits and visits. Based on these assessments and the initiatives implemented by the businesses to counter slavery, the Board was assured that slavery is not taking place within the Group and has published a Modern Slavery statement on the steps taken to prevent slavery, which is available on the Company’s website.
Read the full Modern Slavery Statement
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.
The Group is conscious of environmental impact and we are considering how to develop our environmental response in the coming years. In addition, to the areas set out above, we are also considering how we can develop our revenue streams into sustainable initiatives. A good example of this is the M Seals group, which provides seals for use in wind power generation.
UK listed companies are required to report their global levels of greenhouse gas (“GHG”) emissions in their annual report and accounts. This requirement is for disclosure of Scope 1 (direct) and Scope 2 (indirect) emissions and only to the extent that such emissions are the responsibility of the company; direct emissions include heating, cooling and transport fuel and examples of indirect include purchased electricity.
The Group has considered the six main GHGs and report emissions in tonnes of CO2 equivalent (“CO2e”) for both 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. Our emissions from owned transport have been reducing as we have sold vehicles and are replacing them with lease vehicles.
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. The 2020 increase in tonnes of CO2e compared to 2019 is mainly due to the full year inclusion of VSP Technologies (“VSP”), which was acquired in 2019. Excluding VSP there would have been a reduction from 7.4 tonnes to 7.2 tonnes. Tonnes CO2e per £1m revenue are expected to increase as we transition from our Hercules Aftermarket warehouse in Tampa to the new site in Louisville (there is an 18-month period where both sites will be operating).
Tonnes of CO2E
|Source of emissions||2020||2019|
|Direct emissions (Scope 1)|
|Indirect emissions (Scope 2)|
|Tonnes CO2e per £1m revenue||8.1||7.4|
Our global energy consumption in 2020 was 7,762,448kWh (27% UK, 73% non-UK). This was a reduction of ca. 5% compared to prior year (excluding the addition of VSP), which is not surprising given the reduced operations in our locations due to Covid-19. Energy efficiency is managed locally by our businesses and we plan on developing a Group-wide perspective on energy management.
As part of the Group’s annual risk management process the Group’s businesses consider climate-related risk and where significant, reports these to the Board for review and monitoring. This is consistent with the Task Force on Climate-related Financial Disclosures Standards. The broad geographic and industrial sector spread of the Group’s businesses provide a high degree of resilience to climate-related risks.
The Board has identified that in the shorter term the principal risk from climate change on the Group’s businesses arises from extreme weather events that may significantly impact our facilities. We have seen an example during the year, caused by a hurricane that hit Lake Charles in the US and impacted VSP. Additionally, locations in California and Seattle were affected by poor air quality resulting from nearby fires.
We were fortunate to recover quickly from these events without significant operational or financial impact, but it is a risk that may increase in the coming years. Hurricane impact risk is being reduced by the relocation during the year of the North American Seals Aftermarket business from Tampa, Florida, which is exposed to higher risk of hurricanes, to Louisville, Kentucky which has less exposure.
A significant increase in energy costs caused by carbon taxation, regulation or limited resource would lead to higher costs from external freight and handling costs of delivering product to or from our facilities.
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. 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.
The Group also maintains processes and policies to monitor and review compliance across the Group’s businesses in connection with anti-bribery and corruption and international sanctions.
The Group believes that good community relations are important to the long-term development and sustainability of the operating businesses. This became even more evident in light of Covid-19 and each of our businesses implemented various initiatives to support the communities close to them.
For example, AMT Surgical and Vantage Endoscopy made a real difference to the safety of frontline workers by donating a total of 10,000 much-needed N95 masks to local healthcare providers. Colleagues at sister companies FPE Seals & DMR Seals donated personal protective equipment (“PPE”) to frontline workers in their local communities. Both companies worked together to support the Covid-19 ward at a local hospital and care homes by donating safety glasses and other personal PPE to protect health workers.
The Group also contributes to local worthwhile causes and charities and in 2020 the Group made donations to charitable organisations of £53,715 (2019: £46,441). For example, a donation was made to the Australian Red Cross to support the fight against forest fires during January 2020.
No political donations were made.