Corporate social responsibility

The Company takes the area of social responsibility seriously and has for many years had policies with respect to business standards, health, safety and the environment. The Board believes that positive actions with respect to social responsibility are not only desirable in their own right but are also of potential economic and commercial benefit to the Company and considers environmental, social and governance matters for identifying, evaluating and managing risks to the Group. Bunzl is a member of the FTSE4Good index.

Bunzl’s corporate social responsibility policy provides a reference point to guide stakeholders, including all employees, on the elements that drive the conduct of the business and relationships with the world in which the Company operates. The overall policy is made up of the following underlying elements: Standards of business conduct (Code of ethics), Environment (including climate change)/Health and Safety, Employees, Customers, Suppliers and Community. Further details are available on the Company’s website, www.bunzl.com.

Standards of business conduct (Code of ethics)

The Group has standards of business conduct which were updated most recently in 2007. The standards set out the behaviour expected of each Bunzl employee and cover the areas of conflicts of interest, compliance with laws, rules and regulations, dealing in Bunzl shares, protection of confidential information and company assets and relationships with stakeholders. The Code sets out requirements for reporting unethical behaviour, including any issues relating to accounting, internal controls and auditing matters. To raise employee awareness further, notices have been posted across the Company encouraging employees to ‘Speak Out’ regarding any business related concerns. The notices include details of confidential contacts should they feel unable to discuss such issues with their line managers. Business area heads are responsible for implementation of the standards and compliance is monitored annually. During 2007 no incidents of non-compliance have been recorded.

Environment (including climate change) and Health & Safety (‘EHS’)

The Group has a long standing commitment to achieving continual improvement in environment, health and safety performance. The Group Environment, Health and Safety Committee comprises representatives from each business area and is responsible to the Board for reviewing the Group’s policy and agreeing standards and objectives for the Group worldwide as well as auditing performance against those objectives. An integrated web-based tool, the Bunzl Group System (‘BGS’), has been developed which is universally applicable and adds value to the environmental and the health and safety management programmes both at subsidiary and Group level. The following objectives were set for 2007 to improve further the Group’s performance:

The Company continuously seeks to improve the quality and the reliability of data collection to support the key metrics used to measure the Group’s EHS performance. As a result of other improvements in the source data collected, some of the prior year’s measures have been restated to align them with the bases used for 2007.

Group health and safety performance is assessed by two indices: incidence rate, reflecting the total number of accidents/incidents which involve lost time, and severity rate, reflecting the number of days lost as the result of accidents or work-related ill-health. Trends against these two measures are tracked using monthly averages.

Data covering Denmark and France has been included from 2005 onwards. The central European businesses have not yet been integrated into the Group’s health and safety reporting framework.

The accident severity rate has improved compared to 2006 due in the main to better performance in the US and Continental Europe. Regretfully during the year there has been one fatality (a member of the general public) involved in a road accident in the US.A variety of actions have been taken to raise awareness of health and safety issues and provide managers with information to enable them to identify areas of poor performance and to improve accident rates including publication of business area statistics on a quarterly basis and, within some business areas, the publication of accident statistic league tables.

Manual handling and slipping and tripping remain the highest cause of incidents but the level of severity is variable. The Company remains focused on reducing these risks as far as reasonably practicable by ensuring good housekeeping, reviewing weights of products supplied, providing appropriate equipment and raising personal awareness of safe working practices. A variety of further initiatives were undertaken during the year to improve the safety performance including extending existing employee training programmes to include areas such as defensive driving and handling hazardous materials, implementing a series of visits by senior managers and insurers to review those sites with a high accident level and a number of promotions on themes such as fire safety and general safety awareness. In addition, there have been a number of programmes aimed at encouraging employees to take greater ownership of their own health and well-being including smoking cessation, prevention of skin cancer, fitness, including cycling to work, and distribution of information on nutrition.

The major environmental impacts of Bunzl are associated with management of waste, which is predominantly the packaging that suppliers use for delivering their products to Bunzl, and the consumption of fuel to transport products to Bunzl’s customers. During the year the Group has continued to focus on quantifying its environmental performance in these areas.

The UK & Ireland businesses maintained good performance relating to waste to landfill and waste to recycling. The average tonnes of waste per month being taken to landfill in the UK & Ireland has fallen each year from 2005, while the average tonnes of waste being recycled in the UK & Ireland has increased over the same period.

The Group maintained its improvement in fuel efficiency of the commercial fleet compared to 2005, measured as the consumption of diesel against revenue, for the US and the UK & Ireland businesses and, for 2007 only, the businesses in France. However, there continues to be a focus on the efficient use of fuel by better transport management. In the US a vehicle tracking system has been implemented which has helped to reduce fuel consumption by reducing ‘engine idling time’. In the UK, Bunzl Catering Supplies has introduced a computerised routing system which has substantially improved route planning and thereby increased fuel efficiency. In addition, the viability of purchasing electrically powered commercial vehicles for use in central London is being investigated.

A number of initiatives in each of the business areas are continuing which have a positive environmental benefit. Balers, used to compress waste paper, cardboard and plastic shrink wrap for disposal, and waste segregation programmes have been introduced at more sites. Discussions have been held with suppliers to eliminate unnecessary transit packaging and wherever possible reusable packaging is utilised. In the UK the Group is a member of Valpak who discharge the relevant obligations under the Producer Responsibility (Packaging Waste) Regulations and is a member of the Save-a-Cup scheme whereby plastic cups used on Bunzl premises are recycled. In Germany the Group is a member of Duales System Deutschland who operate the ‘Green Dot’ recycling system. Bunzl Netherlands launched ‘Bunzl Bewust’ to promote environmental education and practice within Bunzl and its customer base. UK & Ireland have set up a ‘Green Team’ to develop further ideas on green products and operations as well as staff and customer education.

Central to Bunzl’s environmental programme has been a drive across the business to gain ISO 14001 accreditation. During 2007, ISO 14001 accreditation has been attained by Bunzl Outsourcing Australia, Sanicare and Lesnies. To date, all principal UK & Ireland businesses have gained accreditation, with the exception of the newest acquisitions, Southern Syringe, Keenpac and Coffee Point (Coffee Point’s Dagenham site is accredited). Within Continental Europe Bunzl Netherlands, Denmark and Germany are accredited. Le Goff has started to take part in the Bunzl environmental reporting processes. In Australasia it is expected that Allcare and CHS will start working towards accreditation in 2008. North America has started a pilot programme for recycling plastic and installing energy efficient lighting systems as well as continuing to provide information on truck fleet fuel usage.

During 2007 measuring Bunzl’s CO2 emissions to develop a carbon footprint has been reviewed. This highlighted the emerging nature of the science behind the calculation of CO2 emissions and the fact that there are no agreed international protocols on the methodology or conversion factors to be used in determining a carbon footprint. In the absence of international protocols it was agreed that we would adopt the greenhouse gas conversion factors developed by the UK Department for Food and Rural Affairs. These factors will be used unless local conversion factors are more appropriate. Calculation of Bunzl’s carbon footprint will be phased. Phase one, which started during 2007, will be to measure the Group’s direct carbon footprint i.e. the emissions caused directly by the activities of Bunzl to include energy/ electricity used for operation of premises and fuel used for transportation of goods from our premises for delivery to the customer and for business travel (not including commuting). In addition to fuel used for the distribution of goods, as such data is currently collected, we will also be endeavouring to measure CO2 emissions of third party carriers used in connection with the transportation of Bunzl’s goods. Business travel will include the fuel used by the car fleet as well as public transport such as rail, air and taxis. Indirect emissions have not been factored in at this stage.

Employees

Bunzl remains committed to the recruitment of high quality staff and developing them within the businesses to maximise personal performance and progression. This is achieved by a combination of structured Group development programmes, specific skills training within respective businesses, performance management processes and the provision of challenging and responsible roles. During 2007 the Bunzl VIP (value, integrity and performance) sales training and development initiative developed in North America was successfully implemented in Australasia. In addition a new development programme, ‘Managing Business Integration’, has been introduced which is aimed at senior managers involved in the integration of acquired businesses into the Group. In the UK & Ireland a customer care programme WoW! was launched to change attitudes to customer care across the business. The Group aims to provide development opportunities to employees and strives to promote from within whenever appropriate. Graduates continue to be recruited into the businesses in the US and UK and have a successful structured training programme to enhance their development.

Appropriate and well-timed communication to and from employees is essential to ensure the continued effectiveness of the business. The European Information and Consultation Forum continues to meet to provide information to, and to consult with, elected employee representatives on Group and business area policies, strategy and performance. Some UK businesses have formalised information and consultation arrangements to ensure better employee involvement and feedback locally. During 2007 businesses worked on action plans drawn up to address issues which were identified through an employee attitude survey run at the end of 2006. A magazine, ‘The Source’, continues to be produced and distributed around the Group, notifying employees of major business successes, acquisitions and appointments. In addition, during the year a booklet entitled ‘Green Bunzl’ was published to educate employees and inform customers on environmental issues and the actions that Bunzl is taking to reduce its environmental impact both by changing its way of operating and sourcing environmentally friendly products. A variety of locally produced newsletters, briefings and intranet communication give more specific information related to the business or site where employees are based.

Customers

The Group’s business and livelihood depends upon its customers. Every employee is responsible for ensuring that any contact with customers and the public at large reflects professionalism, efficiency and honesty. During 2007, as has been the practice for some years, a number of businesses undertook formal customer surveys to measure their customer service performance and rectify any issues identified. In addition, senior management meet key customers on an ad hoc basis to ensure an understanding of their service requirements and gain their perceptions on how these requirements are being met. The quality of the operations and service is key and many sites have attained ISO 9001:2000 accreditation. A number of customers have recognised the quality of service provided by Bunzl businesses during 2007 and a variety of awards have been received. These include in the US, where the Processor division was awarded the Spirit of Excellence Award by Hormel Foods Corporation for attaining excellent service standards, and in the UK, where Shermond was named Supplier of the Year 2007 by The Consortium, a national procurement and fulfilment business, due to its excellent level of service relating to both the supply of products and the proactive resolution of queries, Bunzl Cleaning and Hygiene Supplies was voted the favourite supplier of the London Division of ISS and a Lockhart Accounts Manager was named Sales Professional of the Year by the Catering Equipment Suppliers Association due to the successful provision of colour-coded cutlery to accompany halal meals in the prison service. In Australia, an Account Manager won the National TESA Star Performer Award recognising the amount of new business he had generated and his knowledge of their products.

Bunzl regards suppliers as partners and works with them to help achieve policy aspirations in the delivery of products and services. Specifically the Group is committed to working with its suppliers of products and services to ensure that the welfare of workers and labour conditions within the supply chain meet or exceed recognised standards. Management regularly meet with suppliers to ensure mutual understanding and to give and receive feedback on services and goods received.

Community

Bunzl is a member of Business in the Community in the UK and at Group level has continued to support a cross section of projects with registered charities in the fields of healthcare, education, disability and environment. In 2007 Bunzl and its employees across the world made significant donations to various cancer research and cancer care charities including sponsorship of projects relating to leukaemia research undertaken by the Leukaemia Research Fund and donations and local fund raising for Macmillan Cancer Support and Marie Curie Cancer Care. Bunzl continued to support Queen Elizabeth’s Training College in the UK to assist in funding a new Customer Service training course. Support was once again given to Leonard Cheshire, this year to support a new training programme on TV production to assist people in applying for media jobs. Funding was provided to the British Occupational Health Research Forum to support research on ‘The Wellbeing of Mobile Personnel’.

For the first time, Bunzl provided support to a number of environmental projects which included funding the London Remade Local Authority Network Meetings which discuss recycling activities as well as providing funding for a school and two educational centres to purchase wind turbines to provide them with renewable energy.

Donations were also made to two UK benevolent associations, Hospitality Action and The Lighthouse Club who support workers from two of the key industry sectors that Bunzl serves.In addition, Group companies and individual employees worldwide continue to support local charitable initiatives. Australasia raised funds for Young Care, Children’s Medical Research Institute and the Cancer Council of Queensland. In the UK, fund raising activities took place for the Evelina Children’s Hospital, the Red Cross and Jeans for Genes Day. North America has sponsored a variety of charitable events during the year for such organisations as the Care for Kids Foundation and b.r.a.i.n.child, a brain tumour research and assistance and information network in Canada.