Business conduct/code of ethics

The Group's business conduct/code of ethics policy is disseminated to every employee as a guide to how employees are expected to conduct themselves both from a corporate and individual perspective. The policy clearly states that employees should avoid conflicts of interest, provides guidance on the giving and receiving of gifts and entertainment, prohibits illegal payments as well as political donations and reinforces the need to comply with laws, rules and regulations, protect confidential information and company assets and maintain high standards in relationships with our customers and suppliers.

No material breaches of our business conduct/code of ethics policy were recorded in 2015. However, some minor incidents relating to employee conduct, such as theft or misuse of the Group's property, did occur and were dealt with during the normal course of business using Group human resource (‘HR') policies and procedures. 17 (2014: nine) calls/letters were received through our confidential whistle blowing process, ‘Speak Up', none of which raised any issues of material concern.

Performance against 2015 objectives

  •  All directors, managers, sales representatives and purchasing staff once again undertook all of the CR e-learning modules which had been developed and enhanced since their original launch. There are now a total of 11 modules which provide an overview of the business conduct/code of ethics policy and anti-bribery issues such as facilitation payments and gifts and entertainment, and include two new modules on competition law and cybersecurity. In addition we refreshed the posters which are displayed in all our locations to advertise our whistle blowing process – ‘Speak Up’

Employees

Bunzl currently operates in 29 countries worldwide. We are a service provider, not a manufacturer and, as such, our business relies heavily on the skills and experience of our employees. We pride ourselves on the fact that we run our businesses locally with local managers. We do not unfairly discriminate and we respect human rights. We seek to recruit the right people who are passionate about our business and to provide opportunities for people to progress within the organisation on the basis of their skills, experience and aptitude. We believe that to get the best from people we need to respect each other and encourage honest, straightforward communication. Our acquisition pipeline continues to be a valuable source of management talent for the Group and the completion of a number of acquisitions during the year has brought further highly skilled people into Bunzl. Details of the Group’s workforce diversity at 31 December 2015 are set out here

Bunzl adheres to the Universal Declaration of Human Rights ('UDHR') and upholds the Fundamental Principles and Rights at Work policies, defined by the International Labour Organization, as well as local laws. The majority of countries in which Bunzl operates have their own laws banning child labour and promoting human rights. We monitor the age of our workforce across the world to ensure compliance and identify any potential succession issues. In the US some of our operations, particularly in the north east, are represented by trade unions with which we have negotiated pay contracts. Bunzl does not restrict any of its employees in any of the countries in which it operates from joining a trade union if they wish to do so. We also work closely with our suppliers to ensure that they at least meet internationally recognised minimum requirements for workers' welfare and conditions of employment, as defined by the International Labour Organization or the Ethical Trading Initiative.

Performance against 2015 objectives

  • Turnover levels have remained relatively flat in UK & Ireland, Australasia and Continental Europe, increased somewhat in Latin America but reduced slightly in North America. In our view the movement in voluntary turnover tends to reflect changing economic conditions in the countries in which we operate rather than any intrinsic reasons related to the Group.
  • The number of women at senior management level has once again increased slightly to 11% (2014: 10%). In February 2015 another female non-executive director was appointed to the Board. We continued to promote a women’s development and training network across the Group which is proving to be popular.
  • The results of the employee survey have been absorbed and, as appropriate, working parties have been set up to address issues raised.

Health & Safety

Health and safety remains a priority for Bunzl and it is our aim that no employee or other person should be injured as a result of our operations. Incidents relating to manual handling, slipping and tripping and impact with equipment/objects remain the highest causes of accidents and days lost. Together these three hazards represent 90% of incidents and 82% of days lost. Regretfully in the 2015 reporting period there were two fatalities (2014: two) both resulting from impact with Bunzl vehicles. One incident involved the death of a delivery driver who was struck by a reversing vehicle on Bunzl premises and the other was the death of a third party whose vehicle was in collision with an overturned Bunzl trailer. We continue to invest in premises and equipment to improve the safety of our employees and others. The majority of the vehicles in our commercial fleet already have on-board telematics that enable us to improve safety. We are currently piloting the use of telematics in France Hygiene’s commercial fleet which is the largest fleet in Continental Europe. Following a successful pilot study, UK & Ireland is fitting its commercial fleet with cameras and audible turn left and reversing warnings with audible/visual side sensors. It is expected that the fitting of such devices will significantly improve safety and reduce vehicle damage. Many of the incidents we experience result from human error and/or failure to implement identified safe working practices. We recognise that world-class safety depends on leadership that promotes safe working practices and we have introduced a number of activities to demonstrate this. Bunzl has developed a Safety Guide for Managers based on Bunzl’s accident history, an app which can be accessed via tablets or mobile phones to assist senior managers in raising safety issues while visiting sites. Further, substantial investment was approved for the web-based accident reporting system in order to provide improved analysis and management reports. The Safety Observations Programme, mentioned in last year’s report, has been implemented in North America and UK & Ireland and is also being adopted in Continental Europe. Investment in additional Environment, Health & Safety management resource has occurred in Continental Europe which has resulted in safety improvement programmes being implemented in each company based on self-assessment. North America has launched Safety Call to Action, a communication programme led by Division Presidents to enhance safety behaviours of all staff. In addition, UK & Ireland has developed a series of bespoke safety posters with supporting Tool-box Talks. In Australasia the Safety Walk programme is aimed at promoting a safe working culture by demonstrating the engagement of business leaders. The programme involves senior managers visiting sites and talking with individual employees about safety related matters that affect their particular site. The Bunzl Risk Management Committee, which reviews Group safety performance on a quarterly basis, will focus on this issue going forward. Details of our performance from 2012 to 2015 are provided in the bar charts below. The accident data provided is for the whole Group including acquisitions made during the relevant reporting period.

Performance against 2015 objectives

  • The 2015 target was to reduce the Group accident incidence rate by 3% and the Group accident severity rate by 5% from the 2014 accident rates:
  • for the year ended 30 September 2015 our accident incidence rate reduced by 7%; and
  • for the same period our accident severity rate reduced by 16%.

The accident incidence rate reduced by 7% and the accident severity rate reduced by 16%. The accident incidence rate improved substantially in excess of target in North America and Continental Europe. In UK & Ireland, Australasia and Latin America there was an increase in both incidence and severity rates. In UK & Ireland three significant incidents due to unsafe conditions on customer premises accounted for 42% of days lost in that business area. The inclusion for the first time of recently acquired companies in Latin America has increased the incidence and severity rates. The increase in Australasia’s incidence and severity rates show no specific causal trends.

Environment & climate change

We seek to minimise the contribution of Bunzl operations to climate change and to prevent other harmful effects of Bunzl’s operations on the environment. Our facilities operate worldwide to Group standards and we promote environmental awareness throughout the business. Our branch network serves to minimise the effectsof extreme local climate conditions. Bunzl had no significant environmental incidents in 2015. Direct water usage is not a significant environmental impact for our business as it is principally confined to staff hygiene and workplace cleaning purposes. We continue to measure water across a sample of our sites worldwide and our usage per employee is largely unchanged. As we do not manufacture any of the goods we sell, water discharges, apart from internal sanitation, are limited to rainwater run-off from the yards of Group locations where the water is treated by interceptors in accordance with local legislation.

Our reported environmental data includes all businesses that are subsidiaries of the Group for financial reporting purposes, with the exception of those recent acquisitions where there has been insufficient opportunity for the businesses to adopt our reporting guidelines, in which case the revenue from the businesses is not included when calculating the indexed emissions.

A number of locations in UK & Ireland, Australasia and Continental Europe renewed their ISO 14001 accreditation. Currently, measured by revenue, approximately 27% of the Group’s operations are ISO 14001 accredited.

Performance against 2015 objectives

  • Our target for 2015 was to reduce our Scope 1 and Scope 2 carbon emissions relative to revenue by 25% from 2010, our base year. This data covers around 98% of the Group by revenue. All acquisitions made prior to the 2015 reporting year are now providing environmental data. Revenue relating to more recent acquisitions which are not yet reporting emissions is excluded. The reported data covers around 98% of the Group by revenue.
  • Scope 1: emission rates per £m of revenue have decreased between 2014 and 2015 by 6% (see the KPI bar chart under CR Metrics) representing a decrease from 2010, our base year, of 27%. Fuel for transportation remains our highest source of CO2e emissions contributing c. 84% of Scope 1 and 61% of combined Scope 1 and 2 emissions. Of those emissions relating to transportation, more than 75% are generated by our fleet of commercial vehicles. We continually review the performance of the fleet as part of our operational efficiency strategy. This includes regular replacement and maintenance of vehicles, mapping of customers against the branch network and optimising routing, the use of vehicle telematics and driver training programmes. At Group level diesel consumed by our commercial fleet decreased by c. 1%. Reductions in UK & Ireland and Australasia were partially offset by slight increases in North America and Continental Europe where fleet sizes have increased due to a combination of acquisition and organic growth. We have considered the use of bio fuels in UK & Ireland but it is not currently viable due to the requirement to install on-site fuel tanks and concerns about compatibility with Euro 6 engines. France Hygiene, which operates the largest commercial fleet in Continental Europe, is piloting the use of vehicle telematics which can encourage more fuel efficient driving. Fuel consumption in Latin America has increased by 18% as a result of acquisitions. Consumption of gas during the year fell by 5% as slight increases in UK & Ireland and Continental Europe, due primarily to acquisitions, were more than offset by reductions in North America because of the less harsh winter weather compared with 2014
  • Scope 2: emission rates per £m of revenue decreased between 2014 and 2015 by 4% (see the KPI bar chart under CR Metrics) and from 2010, our base year, have decreased by 11%. As a result of our ongoing acquisition programme and extensions to existing sites and operating hours to service growth within the business, units of electricity consumed across the Group have increased. North America has seen a 9% increase in electricity consumption resulting from a combination of extensions to a number of sites, longer operating hours and the purchase of new materials handling equipment to reduce manual handling risks. In Australasia, Bunzl Industrial Services (‘BIS’) has reported for the first time. BIS is made up of a number of smaller sites which is less energy efficient, and accounted for 34% of electricity consumed in Australasia during the year. Despite some lighting renewal projects in Continental Europe, both Continental Europe and Latin America have increased consumption due to the effect of acquisitions, together with some increases in the number or size of sites to provide extra capacity. In UK & Ireland there was a reduction in consumption as a result of site consolidations and some lighting improvement programmes in office areas. Lighting is our highest area of electricity consumption and we continue to review the return on investment on low energy lighting at all our sites worldwide as the technology progresses and continues to improve the efficiency of such lighting.
  • Scope 3: We have for the first time provided information on our Scope 3 emissions comprising emissions from third party carriers, business flights, waste and electricity transmission losses. We are aware that there is still work to be done to refine the data which is provided for transparency of our emissions, particularly in relation to the distribution of products. The majority of the businesses which have been acquired since 2010 do not have their own fleet. In addition all our businesses, irrespective of whether they have their own fleet, will distribute a proportion of goods by third party carriers where it is more efficient and cost-effective to do so. The bar graph below shows that third party carriers produce the largest part of our Scope 3 emissions. Bunzl is an international company with an active global acquisition programme and business flights are essential for the effective management and growth of our business. We increasingly use alternative means of communication such as video and telephone conferencing and flights are justified by business needs and subject to authorisation by senior management.
  • Waste data: Reduction and segregation of waste continues to be an area of focus and the data provided covers approximately 96% of the Group by revenue. Although we have included this in our Scope 3 calculation, we have for transparency continued to provide waste data separately as well. UK & Ireland has successfully launched initiatives in the hospitality and catering sector to improve recovery and recycling of waste generated by our customers, including disposable products that we have supplied, by partnering with our customers and waste management contractors who specialise in recycling.
  • The EU Energy Efficiency Directive came into effect during 2015. UK & Ireland appointed

    Lead Assessors in May 2015 and the Company’s submission was completed ahead of the deadline. Recommendations for energy reductions are currently under review and the findings will be shared across the Group through the Bunzl Risk Management Committee. We have completed a review of the businesses in Continental Europe within the scope of the Directive and plans are in place to comply with the requirements of the transposed legislation in each country.

  • We integrate our environmental reporting with our financial reporting through the annual budget review. Businesses provide commentary on their environmental performance and set targets for the following year. Environmental data is reviewed and agreed by the relevant Finance Directors.

Suppliers

Price is only one factor in our purchasing decisions and matters such as quality, availability, our customers' preferences and our policies are also taken into account. The vast majority of our products are sourced locally by our businesses but many products are sourced elsewhere if it is appropriate to do so. In 2015 less than 20% of our products were sourced from lower cost countries. Each business area is responsible for implementing appropriate processes to assess key suppliers' compliance with the relevant CR standards and to monitor performance and improvements against such standards. Bunzl focuses on its key suppliers to ensure that they meet the same CR standards we have set for ourselves. We periodically write to those suppliers that provide us with 50% of our products by value to update them on our CR aspirations and to encourage them to adopt a similar approach.

To assist the business areas, we have our own quality assurance/quality control team based in Shanghai whose main aim is to perform regular audits of our suppliers in Asia to ensure that they meet international standards, as well as testing the factories' production capabilities and their quality assurance and quality control systems. Employees' terms and conditions of work, customer service, hygiene management systems and their policies and practices on environmental issues are also checked. Our policy is that all our suppliers meet internationally recognised minimum requirements for workers' welfare and conditions of employment, as defined by the International Labour Organization or the Ethical Trading Initiative. During 2015 the team has continued to grow and has further refined its CR audit programme to categorise suppliers appropriately in relation to their standards and practices.

Suppliers who are unable to meet all the requirements after an initial assessment/audit are given the opportunity to comply fully within a period which is deemed appropriate for the circumstances. If a serious breach is identified following assessment, an action plan is documented and the supplier is expected to commit to addressing all the areas where discrepancies have been identified. The process of improvement via this method is principally reliant on the commitment of the supplier's management team/owner/agent to ensure that all areas are addressed. If we have reason to believe that the supplier is not making sufficient or committed progress, this could lead to a suspension in the relationship until such time that we are confident that all areas are being satisfactorily addressed. Bunzl companies reserve the right to cease a relationship with a supplier if it is found that unacceptable practices are being employed at any sites used for producing or sourcing Bunzl products. Such practices include use of child labour, forced or bonded labour as well as physical abuse or discipline and intimidation, illegal discrimination, wages not meeting local minimum requirements and not providing adequate days of rest. Since 2015, in order to enhance the process further, any suppliers that are being monitored and assessed due to identification of a serious breach are now reported to and reviewed by the Board.

During 2014 we continued to liaise with suppliers and refined and introduced a process to ensure that any paper or wood based products are from sustainable sources in compliance with the relevant timber regulations.

For more information on all of Bunzl's CR policies and activities please visit the Responsibility section.

Community

Although Bunzl’s operations are international, our strength is I the local nature of our businesses. In keeping with this ethos, we particularly support the fund raising activities championed by our employees locally. This is supplemented by donations made at Group level to charities predominately in the fields of healthcare and the environment to support projects in communities where our operations are based.

In 2015 companies across the Group continued to support local charity initiatives, often devising creative ways to raise funds for good causes. For example in North America, SAS Safety in Long Beach, California participated in a five kilometre beach walk to raise funds for The Children’s Clinic, a charity which provides access to healthcare for disadvantaged children and young people, while an employee in St Louis dived into the icy waters of Creve Coeur Lake to raise money for the Special Olympics. In Ireland an employee completed the Mizen Head to Malin Head four day cycle challenge to raise funds for The Northern Ireland Hospice. 13 women from Bunzl Spain took part in the biggest women’s sporting event in Europe in 2015 to raise money for breast cancer.

The Group continued to support projects with an environment impact, for example a field trip by Kew Garden’s Millennium Seed Bank to the Atacama Desert to collect seeds from plants that were flowering due to unusual rainfall and an initiative of Blackburn Youth Zone to encourage young people to grow food sustainably. A number of projects connected with the health and wellbeing of our employees and their communities were supported. Examples of such projects were providing funding to Macmillan Cancer Support for a Skin Clinical Nurse Specialist in Surrey, to the Alzheimer’s Society to run a dementia cate in the north east of the UK and to buy a mobile first aid unit for St John Ambulance. Where possible and appropriate Bunzl also looks to donate stock free of charge (‘in-kind’).

Group wide,Bunzl donated a total of £631,000 to charities in 2015. This does not include in-kind donations or employee fund raising.

Customers

As a service business, our ability both to anticipate and meet our customers’ needs is key to our success. We strive to ensure that we provide high levels of service, which we achieve by building solid relationships at a local level and by regularly meeting with and seeking feedback from our customers. We continue to provide innovative service and product solutions to meet our customers’ needs, including requirements to meet sustainability goals. The Group provides customers with the ability to benefit from a consolidated delivery of their consumable products. This reduces carbon emissions by eliminating the need for multiple deliveries from many different suppliers and streamlining the related administration for our customers. Bunzl is not a manufacturer and therefore there is complete flexibility to offer products that meet customers’ requirements from a variety of different sources.

A full range of environmentally friendly products are available throughout the Group.  Examples include the provision of sustainable packaging for takeaway food products such as salad bowls and napkins made from bagasse fibre, the waste product remaining after the extraction of sugar-bearing juices from sugarcane.  In addition, we have been working with some customers in the UK to provide them with accurate data to help them achieve recycling and sustainability targets, as well as, assisting them in designing a plan for waste segregation and collection.

In 2015 Bunzl continued to receive awards from its customers for high levels of service.  In North America, FoodHandler has received a 2015 US Cornerstone Partner Award from Gordon Food Service for the fourth consecutive year whilst the Chicago branch was awarded Vendor of the Year by Sendik’s grocery chain