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SIG recognises its corporate responsibilities towards its shareholders, employees, customers and suppliers and is committed to socially responsible business practice. In 2015 SIG continued to integrate Corporate Responsibility ("CR") across the Group.

The Group implements policies that include social and environmental issues in our decision-making process, and is investing in the development and wellbeing of its people and communities. SIG believes this approach supports the Group in achieving its business goals as well as growing shareholder value. As a constituent of the FTSE4Good Index of socially responsible companies, SIG is pleased to inform stakeholders of the measures it is taking to continually develop its approach to CR, including how it monitors and improves performance reporting.

Business Principles and Code of Ethics

The Group has in place Group-wide Ethics, Anti-Bribery & Corruption and Ethical Trading & Human Rights policies. These policies, which are regularly reviewed, underpin the Group's CR programme and support its business integrity.

Ethics Policy

SIG issues to all employees a Group-wide Ethics Policy which sets out the standards and behaviours that are expected throughout the Group's operations. The policy is designed to ensure that the business conforms to the highest ethical standards. The policy can be viewed on the Company's website (www.sigplc.com).

The policy sets out the following key principles:

  • To abide by the laws applicable to each country of operation;
  • Not to tolerate any kind of discrimination or harassment;
  • To be a responsible partner within local communities;
  • To take into account the legal and moral rights of others in business transactions;
  • To maintain a safe and healthy working environment;
  • To be proactive in managing responsibilities to the environment;
  • Not to knowingly make misrepresentations;
  • Not to make political donations;
  • Not to give or receive bribes;
  • To avoid, and in all cases report conflicts of interest; and
  • Encourage employees to report any suspected wrongdoing.

A confidential and independent hotline service is available to all employees so that they can raise any concerns they have about how the Group conducts its business. SIG believes this is an important resource which supports a culture of openness throughout the Group. The service is provided by an independent third party with a full investigation being carried out on all matters raised and a report prepared for feedback to the concerned party.

Ethical Trading & Human Rights Policy

The Ethical Trading & Human Rights Policy covers the main issues that may be encountered in relation to product sourcing and sets out the standards of professionalism and integrity which should be maintained by employees in all Group operations worldwide.

The policy expresses the standards concerning: safe and fair working conditions for employees; responsible management of social and environmental issues within the Group; and the international supply chain.

SIG promotes human rights through its employment policies and practices, through its supply chain and through the responsible use of its products and services.

There is no separate policy in place which deals specifically with human rights; however, SIG will keep under review the need for a specific human rights policy over and above its existing policies.

Anti-Bribery & Corruption Policy

SIG has a number of fundamental principles and values that it believes are the foundation of sound and fair business practice, one of which is a zero tolerance position on bribery and corruption. The Group's Anti-Bribery & Corruption Policy clearly sets out the ethical values required to ensure compliance with legal requirements within countries in which SIG and its subsidiary companies operate.

Anti-bribery and corruption training is provided across the Group to all senior management through to branch managers and external salespeople. This training is provided via our online training resource, and also includes modules on competition law.

SIG values its reputation for ethical behaviour, financial probity and reliability. It recognises that over and above the commission of any crime, any involvement in bribery will also reflect adversely on its image and reputation.

Its aim therefore is to limit its exposure to bribery and corruption by:

  • Setting out a clear policy on anti-bribery and corruption;
  • Training all employees so that they can recognise and avoid the use of bribery by themselves and others;
  • Encouraging employees to be vigilant and to report any suspicion of bribery, providing them with suitable channels of communication and ensuring sensitive information is treated appropriately;
  • Rigorously investigating instances of alleged bribery and assisting the police and other appropriate authorities in any resultant prosecution; and
  • Taking firm and vigorous action against any individual(s) involved in bribery or corruption.

A copy of the Anti-Bribery & Corruption Policy is available to view on the Company's website (www.sigplc.com).

Modern Slavery Act 2015

The Modern Slavery Act came into force in 2015 and the requirement to publish an anti-slavery statement applies to companies with financial years ending on or after 31 March 2016. SIG plc is subject to these new disclosure requirements for its 2016 financial year end and will therefore publish its anti-slavery statement in respect of 2016 on its website (www.sigplc.com) within six months of the year ending 31 December 2016.

Oldbury office desk

ENVIRONMENT

Environmental management

SIG's Environmental Policy and management system is combined with the Health and Safety management system to maximise the opportunities for continual improvement that an integrated system provides. The programme optimises resources to ensure that communication and auditing programmes are focused and targeted to support the business.

The Chief Executive is the Board Director responsible for implementation of the Policy and is the signatory on the Group's Health, Safety & Environment Policy, which is displayed at each location throughout the Group in the local language.

SIG's management system is in its tenth year of accreditation with the international environment standard ISO14001 within SIG's UK operations. Registration to the standard was successfully renewed in 2015. Having an externally verified management system provides the Group with a continuous programme of review and improvement for its businesses with a roll-out programme for new business within three months of acquisition and a target of full accreditation within twelve months.

The key elements of the management system standard are at the heart of SIG's approach to its Group-wide strategy for environmental matters which demonstrates the Group's commitment to environmental management and best practice.

SIG maintains its Environmental Aspects and Impacts Register and Corporate Environmental Risk Assessment to record and assess the principal environmental hazards within the Group. These evaluations formed part of the 2015 Management Review process for each business.

The Group has continued its excellent record of legal compliance and environmentally sound operations throughout 2015 with no prosecutions or actions from the authorities.

The emphasis for the Group's environmental objectives for 2015 are derived from its Low Carbon Business Policy, which sets out its aim to reduce the amount of fuel, energy and water consumption as well as reduce the waste it produces. The progress made by the business is covered in this report.

Carbon management

The Chief Executive is responsible for the Group's environmental performance and for the Group's Low Carbon Policy.

SIG's carbon footprint accounting process has been verified since 2009 through the achievement of the Carbon Trust Standard ("CTS") and independent auditing on behalf of the Environment Agency for the CRC Energy Efficiency Scheme ("CRC"). SIG is no longer included in the CRC and made its final submission in 2014. The Group however continues to publish its carbon footprint through the Carbon Disclosure Project ("CDP").

In order to broaden the scope of its verification to all Group activities, SIG set an objective for 2015 to achieve an internationally recognised verification standard. The Group's partnership with Carbon Credentials culminated in the achievement of "limited verification" to ISO 14064-3. This accreditation has been achieved through a detailed assessment, both qualitative and quantitative, of the Group's Greenhouse Gas ("GHG") emissions assertions. SIG is committed to maintaining the ISO standard and as such the Carbon Trust Standard accreditation was allowed to lapse at the end of 2015.

Adoption of this standard has provided the Group with a renewed framework for its energy reduction programme. The achievement and the continuous strive towards improving carbon emissions has resulted in a significant improvement in the business' standing in the Carbon Disclosure Project from 73 and "C" in 2014 to 95 and "C" in 2015. SIG also discloses its Carbon Footprint and emissions annually in this report.

The continued reduction in the Group's GHG emissions has been brought about by investment in energy efficient technology installations across the property portfolio, including refurbishment of existing buildings along with the fit-out of new sites. This has been supplemented with the continued consolidation and upgrade of the Group's road vehicle fleet.

Road risk policy

SIG recognises that driving is among the most hazardous tasks performed by its employees and that its vehicles and drivers represent SIG and its values whilst they are on the road. The Group also recognises the potential impact that driving has on the local and global environment. Because of this, SIG has worked hard to drive the Occupational Road Risk Policy across the Group, with strong local focus on key elements of the Policy.

This process resulted in SIG being "Highly Commended" in the Safe Vehicles Award section at the Brake Fleet Safety Awards in 2015.

The Occupational Road Risk Policy is a key element of the accident review process across the Group, with Accident Review Panels ("ARPs") meeting regularly throughout the year in each country. In the UK this is carried out in partnership with the Group's insurers and brokers. The purpose of the ARPs is to reduce the risk of accidents and minimise the cost to the business. This is achieved by: raising awareness across the Group of the outcomes of accidents; targeting improvements in the speed of reporting; improving the quality of investigations to identify the causes of specific accidents or trends; and recommending action and further training where appropriate.

The Fleet Operator Recognition Scheme ("FORS") is an over-arching scheme that encompasses all aspects of safety, fuel efficiency, economical operations and vehicle emissions. FORS is a voluntary scheme for commercial vehicle operators, which is designed to help improve operators' performance in each of these areas. SIG has adopted the scheme across its UK businesses. In 2015, SIG was awarded Whole Fleet Accreditation status, one of the first large fleets in the UK to do so. The branch network has a combination of Gold, Silver and Bronze accreditation statuses nationwide for sites operating commercial vehicles.

Work continued in 2015 to minimise the risk to vulnerable road users such as cyclists and pedestrians. SIG are active champions of the Construction Logistics and Cyclist Safety ("CLOCS") group. SIG also initiated an "Exchanging Places" campaign in which employees exhibited a commercial vehicle at various cycling events and invited cyclists and other members of the public to sit in the vehicle to gain an understanding of the driver's field of vision. The work in this field led to SIG being part of Transport for London's finalised bid in the Partnership Award at the Motor Transport Awards in 2015.

Continuing this work on safety with vulnerable roads users in mind, SIG has designed a new Urban Delivery Vehicle with features designed to greatly enhance the driver's primary vision of critical areas of the vehicle and to reduce blind spots. The vehicle was launched at the CLOCS progress event in February 2015 and is believed to be the first of its kind in its sector. Following the success of the first vehicle, a second Urban Delivery Vehicle went into operation at one of SIG's London locations in November 2015.

The work carried out on these vehicles resulted in SIG winning the Fleet Innovation Award at the Brake Fleet Safety Awards in 2015.

Oldbury trade counter

Transport

Along with electricity, road vehicle fuel consumption makes up 89.8% of the Group's total carbon footprint emissions (2014: 90.5%). SIG has targeted an absolute reduction year-on-year in fuel consumption since the base year of 2010. Due to the growth of the business through acquisition, the number of vehicles and delivery miles has increased in 2015 compared to 2014. However, the business has maintained an overall reduction in its fuel consumption against the base year of 2010 of 16.5%.

Early gains were made largely through: greater efficiency in journey planning and the replacement of older vehicles with new vehicles; the introduction of vehicles fitted with energy reducing features; the introduction of the driver eco training programmes; and accurate efficiency measurement through the Masternaught telematics programme. These have enabled the business to maintain the downward trend during a period of expansion.

SIG continued in 2015 to measure absolute consumption and target reductions across the core business. This was achieved through further consolidation of its branches and sharing of its fleet, whilst targeting efficiencies across the broader business in terms of improved km per litre ratios to take account of the impact of SIG's plans for business growth.

The Driver Certificate of Professional Competence ("CPC") training programme continued in 2015 across the UK & Ireland and similar programmes are in place across the Mainland European businesses in compliance with EU Legislation. The Group maintains its policy to purchase commercial vehicles to the latest Euro standard, and low emissions vehicles to facilitate deliveries into "Low Emission" zones across Europe.

In order to further improve the efficiency of vehicle routing, fuel consumption and enable accurate mileage measurement, the programme to install Telematics in commercial vehicles has now been completed in all commercial vehicles under operational control across the Group.

SIG is keen to promote driver efficiency and driver safety across its fleet. In support of its EKO efficient driving programme, SIG Poland has continued to deliver its comprehensive in-vehicle driver training programme for both commercial and business drivers. SIG France delivered a "Twelve Actions in Twelve Months" information and instruction programme over 2015, including topics such as Access to Vehicle, Load Security and Tachographs.

SIG UK continued to deliver the CPC training programme to its workforce in partnership with Mercedes and bolstered its support for drivers with an auditing and advice programme through its Fleet Management Trainers. The highlight of this year's programme was the Driver of the Year competition which reached its conclusion in June 2015. Awards were issued in several categories and the overall winner was Michal Paszt from SIGD Croydon.

Energy

Emissions from electricity consumption account for 14.7% of the Group's Scope 1 and 2 emissions (2014: 14.8%). SIG is committed to taking action to improve the efficiency of its properties through the capital projects scheme for replacing inefficient lighting with energy efficient daylight and movement sensored systems. SIG has invested over £750,000 in capital projects since the base year of 2010. This has not only improved the efficiency of the building stock, but has also provided a safer working environment.

A key element of the Group's compliance with the Energy Saving Opportunities Scheme ("ESOS") scheme in 2015 was the reintroduction of the buildings energy audit, which has identified a range of opportunities to improve energy efficiency which will feed into the objectives for 2016 and beyond. These initiatives along with the earlier "Switch Off" campaigns and printer/copier/fax consolidation have enabled the Group to achieve a further absolute reduction of 4.4% in 2015.

The projects completed under the Low Carbon Policy since the base year of 2010 have generated annual savings in excess of 1.85 million kWh of electricity, and 850 tonnes of CO2 emissions, with a payback period for the capital projects of less than four years.

In 2016 the business will continue with its programme for replacing inefficient lighting with low energy systems, installing energy efficient hand dryers and providing water heaters to replace inefficient kettles.

Greenhouse Gas Emissions

SIG is committed to providing full and accurate data for its carbon footprint across all of its operational businesses. SIG reports on all emission sources as required under the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended in August 2013. The achievement and maintenance of this objective is evident by the achievement of the ISO 14064-3 standard in 2015.

SIG uses the emission factors from the UK Government's GHG Conversion Factors for Company Reporting 2014 to calculate its GHG disclosures.

In order to provide for auditing and assessment of the Group's carbon footprint accounting process, SIG has used a period non-coterminous with the Group's financial year, with current year data reflecting the year to 30 September 2015. The adoption of this process enables more accurate carbon reporting, enabling actual data to be used as opposed to estimates. In 2015, 95.2% of calculations are based on actual data. Estimates are prepared on the basis of applying equivalent emission rates to the remainder of the Group's footprint.

The comparatives prior to 2013 are also for a twelve month period, but are based on the calendar year. However, the method of collecting data on CO2 emissions has not changed; therefore the prior year numbers have been included within this report as the Group feels that they provide meaningful comparison. The method of collection for each component of CO2 emissions has been disclosed in the footnotes to each table.

The Group's carbon footprint includes Scope 1 CO2 emissions, for which businesses are directly responsible, and Scope 2 CO2 emissions from the generation of electricity by a third party resulting in indirect emissions. The Group has also disclosed Scope 3 CO2 emissions over which the business has limited control, being third party air and rail transportation.

In 2015 the processes and procedures used in the UK have been audited and assessed by Carbon Credentials who have provided a "limited verification" to ISO 14064-3. Previously the accounting process was audited by the Carbon Trust with the achievement of the Carbon Trust Standard for the UK element only. The achievement of the ISO standard is for the full Group footprint.

As a result, the Group's carbon footprint for the year ended 30 September 2015 has been externally audited by Carbon Credentials, to ISO 14064-3 at a level of limited assurance. This process has highlighted the continuous improvement in systems and procedures related to carbon management and reporting along with identifying areas where further improvements can be made.

SIG is a participant in the statutory ESOS, which is the UK Government's approach to implementing Article 8 of the EU Energy Efficiency Directive (2012/27/EU). Through its work to gain ISO 14064-3 verification and its energy audit process, SIG achieved full compliance with ESOS ahead of the December deadline. This achievement is testimony to the Group's self-auditing programme and Low Carbon Policy.

The Group achieved an absolute reduction of 3.5% in Scope 1 and 2 emissions combined year-on-year, with an overall reduction of 16.7% compared to the base year (2010).

The overall footprint of the business for Scope 1, 2 and 3 emissions improved, with a reduction of 3.6% year-on-year. The figures represent an overall reduction of 1.7% in emissions per £m of revenue in 2015 compared to 2014 as a result of the measures taken to reduce road vehicle fuel and energy consumption.

CO2 emissions – Scope 1 – Direct

Metric
tonnes
2015
Metric
tonnes
2014
Metric
tonnes
2013
Metric
tonnes
2012
Road vehicle fuel emissions163,35265,68668,56072,223
Plant vehicle fuel emissions24,5624,9934,9345,369
Natural gas32,7722,4523,3722,999
Coal/coke for heating445555270
Heating fuels (Kerosene & LPG)58018321,313943
Total71,53274,01878,23181,604

Data source and collection methods

  1. Fuel cards and direct purchase records in litres converted according to Defra guidelines.
  2. Direct purchase records in litres converted according to Defra guidelines.
  3. Consumption in kWh converted according to Defra guidelines.
  4. Purchases in tonnes converted according to Defra guidelines.
  5. Purchases in litres converted according to Defra guidelines.

CO2 emissions – Scope 2 – Indirect

Metric
tonnes
2015
Metric
tonnes
2014
Metric
tonnes
2013
Metric
tonnes
2012
Electricity112,30712,87013,14214,346

Data source and collection methods

  1. Consumption in kWh converted according to Defra guidelines.

CO2 emissions – Scope 3 – Other indirect

Metric
tonnes
2015
Metric
tonnes
2014
Metric
tonnes
2013
Metric
tonnes
2012
Third-party provided transport (air and rail)1352405308349

Data source and collection methods

  1. Distance travelled converted according to Defra guidelines.
Emission per £m of revenueMetric
tonnes
2015
Metric
tonnes
2014
Metric
tonnes
2013
Metric
tonnes
2012
Scope 127.928.028.831.2
Scope 24.84.94.85.5
Scopes 1 & 2 as required by GHG Protocol32.732.933.636.7
Scope 30.10.20.10.2
Scopes 1, 2 & 332.833.133.736.9

The data relating to CO2 emissions has been collected from all of the Group's material operations and is based on a combination of actual and estimated results where actual data is not available. The data excludes the impact of businesses divested during 2014.

Water Consumption

The Group uses an estimated 1% of its water consumption for manufacturing processes with the remainder used for welfare purposes. However, SIG does recognise that potable water is a precious resource and continues to maintain its water recycling and reuse practices for the processes in Southport (UK) and Alizay (France).

SIG continues to identify significant opportunities for water consumption efficiencies through the branch audit and bill validation process. Water efficiency is a key element of the specification for new and refurbished properties and facilities. All Group companies now report their water consumption.

Litres
('000)
2015
Litres
('000)
2014
Litres
('000)
2013
Litres
('000)
2012
Third-party provided water supply from national network for processes and welfare104,999106,546107,604108,201

The above data is based on a combination of actual and estimated data.

Waste Management

The Group continues its programme to reduce the amount of waste generated, with the introduction of paperless delivery processes, online activity reports and the consolidation of photocopying facilities. However, SIG's key measurement of performance for waste management is the percentage of waste diverted from landfill. Each business within the Group partners with a waste management provider to provide waste segregation and recycling facilities. These are monitored centrally and through the health, safety and environmental audit and inspections process. To maximise opportunities and minimise storage and welfare risks, waste bailers and compactors are provided where practicable.

SIG has partnered with its suppliers to provide for waste take-back schemes for its customers for materials including: plasterboard and plaster products, uPVC windows, fibre ceiling tiles, vinyl floor covering materials and batteries. This enables the business to comply with their Producer Responsibility Obligations under waste management legislation.

As a break bulk supplier of products, the greatest potential for waste production is packaging materials. By re-using opened packaging products, purchasing second-hand pallets and bearers, and the operation of packaging return schemes for items like pallets and bearers, branches actively minimise their backdoor waste.

Given the difficulty in measuring the amount of waste produced, SIG ensures wherever possible that the data is accurate by working with its waste management recycling provider in order to produce its best estimates.

SIG is a member of the Valpak compliance scheme and continues to comply with its commitments under the Producer Responsibility Obligations (Packaging Waste) Regulations.

Hazardous waste

Absolute
tonnes*
2015
Absolute
tonnes
2014
Absolute
tonnes
2013
Absolute
tonnes
2012
Landfill2601321
Recycled2841139279
Incinerated6572
Total30101217372
Absolute
tonnes*
2015
Absolute
tonnes
2014
Absolute
tonnes
2013
Absolute
tonnes
2012
Hazardous waste per £m of revenue0.010.040.080.14

Non-hazardous waste

Absolute
tonnes*
2015
Absolute
tonnes
2014
Absolute
tonnes
2013
Absolute
tonnes
2012
Landfill4,4695,6264,2838,743
Incinerated151212
Total4,4845,6384,2958,743

Other waste diverted from landfill

Absolute
tonnes*
2015
Absolute
tonnes
2014
Absolute
tonnes
2013
Absolute
tonnes
2012
WEEE (Waste, Electrical and Electronic Equipment)2853
Glass1333
Wood1,1459041,3242,058
Metal1,2491,0989771,234
Plasterboard+9732,5021,258390
Paper/cardboard7475881,0241,165
Plastic353383440762
Other8,2846,57310,8608,250
Total12,75412,05915,89113,865
Absolute
tonnes*
2015
Absolute
tonnes
2014
Absolute
tonnes
2013
Absolute
tonnes
2012
Non-hazardous and other waste per £m of revenue5.06.77.48.7

* Volume per annum converted to tonnes.

+ Recycling facility withdrawn in 2015.

The above data is based on a combination of actual and estimated data.

Health, Safety AND Environment

The Chief Executive is the Board member responsible for health and safety and is signatory to the Group's Health, Safety and Environmental Policy, which is displayed in the local language at each operating branch.

The Zero Harm health and safety programme, which was launched in 2014 and headed by the Chief Executive, is now fully embedded in the business' structure. The initial aim of the programme was to provide management with a renewed understanding of the programme and their responsibilities, and to provide them with the tools to enable them to achieve the objective of the programme, being "the health, safety and wellbeing of employees and others is the primary consideration for management at all levels in the development, growth and day-to-day operation of the business, products and services."

The aim was re-emphasised at the 2015 Annual Senior Leadership Conference, where the Chief Executive gave a clear instruction that the Zero Harm message must be cascaded to all employees and that managers must take personal ownership and accountability for health and safety and in creating a safe working environment.

The success of Zero Harm is endorsed by SIG's achievement for the first time of the Gold RoSPA Occupational Health & Safety award in 2015. The award recognises SIG's ongoing commitment to raising the standards for health and safety management across the Group. Despite this being a UK award scheme, the submission represents the Group's Health & Safety programme and the achievement reflects on the hard work and dedication of the Health & Safety Team across the Group as well as the leadership of management at all levels in taking ownership of health and safety and driving the key initiatives.

The "Safety Walks" programme for 2015 continued with Senior Leaders led by the Chief Executive carrying out 420 formal branch inspections and support visits with branch managers. This initiative supported the cascade and accountability element of Zero Harm. The programme will continue in 2016 with a move away from the check-list, tick-box process to an emphasis on engagement with operational personnel to support the drive for a safe culture.

In recognition of the level of risk posed by road travel and deliveries, the Safety Walk programme in 2015 was broadened to include the accompanying of commercial vehicle drivers on scheduled delivery runs.

A range of local initiatives were delivered in 2015 in support of the Zero Harm programme, including:

  • Branch Safety Days including interactive toolbox talks and "listening" programmes delivered by Regional management in the UK and "Safety Walls" which were Zero Harm branded focal points for Health & Safety information and advice.
  • Safety information, Personal Protective Equipment dispenser and restricted access stations made from stock products in SIG France along with a Twelve Actions in Twelve Months programme dedicated to improving safety on "Loading and Deliveries".
  • A Safety Week in SIG Poland in collaboration with the construction industry's "Agreement for Safety in Construction" project and a "Perfect Warehouse" safety performance competition with the award presented by the business' Managing Director.
  • SIG Germany & Austria's targeted actions to improve access onto vehicles to reduce the accident rate for drivers.

The RoSPA accredited SIG Certificate in Health, Safety and Environmental Management programme continues to be delivered across the business, with regionally based training events provided across the UK in 2015 including managers new to the business. The Zero Harm programme is managed and supported by the Group HS&E Manager and a team of directly employed Health, Safety and Environment professionals in each part of the Group. The Group's Health & Safety management system is modelled on the internationally recognised Health & Safety Standard BS-OHSAS 18001:2007, with the SIG UK businesses enjoying their tenth year of certification following a three year renewal by its partner Intertek in 2015.

The provision of dedicated HS&E professionals enables the implementation of a robust Risk Assessment and Management Review process through which the key health and safety risks have been identified. The Risk Profile of the Group is reviewed annually to inform the Group's Health & Safety Plan. For 2016 the principal risk areas in terms of numbers of incidents and potential severity of the risk remain: Occupational Road Risk, Traffic Management, Loading and Unloading and Storage Operations.

Although an area for growth, manufacturing sites make up less than 5% of the business' locations. However, SIG recognises the potential for serious harm and a suitably qualified dedicated Health & Safety Manager remains a key post to provide advice and support to the businesses and to manage the plan for continuous improvement.

SIG's offsite activities continued to expand in 2015 and were successfully supported by the existing HS&E Team. This included the achievement of industry accreditations to: Achilles, CHAS, and BOPAS and SIG's offsite business, RoofSpace receiving the Health & Safety achievement award from housebuilding contractor Barratt Homes at their Partners Awards Event.

There continues to be significant improvement in the Accident Incident Rate for SIG in both major accidents and lost time accidents (both "over three day" accidents and RIDDOR (or equivalent)). Unfortunately, there was an increase in the UK & Ireland's "over three day" accident incident rate. This increase was due to an unusually high number of incidents occurring in December 2015. Some caution is advised when comparing RIDDOR rates as the data for 2012 has not been adjusted for the revised "over seven day incapacity" definition.

The Group has a Zero Tolerance to any employee being unfit for work due to drugs or alcohol. In 2015 the UK & Ireland business revised its Alcohol & Substance Misuse Policy. Although the Company already had in place a procedure for "for cause" testing, the revised policy now provided for random testing of employees and sub-contractors engaged in safety critical roles. The purpose of the policy is to minimise the risk of injury due to alcohol and substance misuse. In order to support this, an information and education programme was cascaded to all employees in the second half of the year and the random testing programme commenced in January 2016. A number of tests have already been carried out.

Alfreton cutting

Accidents and Incidents

UK & Ireland

Rate per 1,000 employees
2015201420132012
Major injury2.32.83.62.7
Injury resulting in over three absence days from work10.812.011.211.2
All RIDDORs10.611.413.414.1
Average UK & Ireland headcount5,1744,9845,0705,261
Lost work day rate – number of work days per 100 employees26.835.823.329.6

Group

Rate per 1,000 employees
2015201420132012
Major injury2.22.22.82.2
Injury resulting in over three absence days from work12.015.016.717.1
All RIDDORs (equivalent)*12.013.316.517.9
Average Group headcount9,6419,4549,80610,228

* This includes accidents in non-UK businesses that would meet the criteria for reporting in the UK under RIDDOR.

Quality Assurance and MANAGEMENT SYSTEMS

The Group's management systems are maintained to a high standard through management review and internal auditing. A supplier audit programme is in place, conducted by way of a questionnaire, and includes questions regarding the health, safety and environmental credentials of the supplier. Where it is commercially advantageous the quality and chain of custody management systems are externally certificated to ISO 9001, with Sitaco Poland and certificated branches in the UK achieving continued certification in 2015.

COMMUNITY

As a large organisation employing thousands of people across hundreds of local communities, we recognise that we have a duty to actively support those communities.

In Poland, for example, SIG colleagues took part in the Topacz Kids City project, which helps educate children at risk of social exclusion about how to function in a community and be a good citizen. Working closely with Caparol, a leading producer of building paints, our volunteers taught the children how to be "professional" painters so they could earn virtual money to spend in the city shop.

In the UK, we facilitate our community work through our membership of Business in the Community ("BITC"). We have worked with BITC for a number of years and the partnership enables us to ensure we are adopting best practice in all our community interactions.

Through BITC, we partner with Fir Vale School in Sheffield. During the 2014/15 academic year, we delivered 310 volunteer hours that reached a total of nearly 700 pupils through a variety of activities, providing them with vital business skills for life beyond school. As a result, over 80% of the students involved said they understood more about the subjects and skills needed to follow different career paths and were better equipped to complete an application form or write a CV.

Also in 2015, one of our Roofing and Roofline businesses took part in the well-known UK TV programme DIY SOS: The Big Build. The one hour programme sees the DIY SOS team enlist the help of local tradesmen, suppliers and the wider community to support deserving families. One episode featured a family living with the consequences of a stroke, and we helped by providing roofing products for a much needed extension to the family's home.

Charitable donations

Charity France Odyssea race

SIG employees take part in a wide range of charitable activities to support both local communities and national charities. During the year, employees across the Group raised more than £45,000 through a wide range of events, from bake sales to cycle rides across Europe. Particularly notable examples include: an employee in the UK who ran 13 marathons and raised over £3,000 for a local hospice; colleagues in France who took part in the Odyssea race, raising money for leading cancer research organisation Institut Gustave Roussy; and two of our senior leaders in Germany who dyed their beards to raise almost €5,000 for a Hamburg Children's Hospice. As a Group, we operate a matched funding scheme, which matches up to £500 (or equivalent) raised by employees through charitable efforts like these. We also support our people in their activities in other ways, like hosting charity dress-down days at work or helping to publicise employee's fundraising through notice boards.

We also make charitable donations as an organisation. In Poland, as well as our people giving their time to the Topacz Kids City project, we donated 5,000 PLN to the cause (see the "Community" section for more information about this project). At a Group level, meanwhile, we continued with an initiative we started last year, donating either £1 or €1 to the British Red Cross and UNICEF for every completed response to our employee engagement survey, SIG Listens. Our 78% response rate meant that, in October, we were able to donate £6,222 to the charities. In light of the crisis in Syria, we decided to add a further £10,000 to this amount, requesting that the two charities put the total funds towards their Syrian refugee appeals.

In 2015, the Group made total charitable donations of £99,451 (2014: £111,000), including through our matched funding scheme.

It is the Group's policy not to make political donations and no such donations were made in the year (2014: £nil).

Employees in the UK can also make charitable donations through our payroll giving scheme.

Our people

One of the key strategic areas of focus across SIG is improving the performance, engagement and well-being of all our people.

Sig values

Our values are: Trust, Respect, Integrity, Commitment, Teamwork and Fun.

These values were developed by our people and are the guiding principles by which we work with our customers, our suppliers, our communities and each other. They are the bedrock of our Stronger Together vision and we bring them to life in everything we do.

Developing our people

The skill and expertise of our people is one of our key differentiators in the marketplace; developing employees is therefore a core part of our strategy.

We want our new joiners to learn as much about SIG as possible from the moment they arrive. This year, we have created a Group Induction Programme that will give new employees a consistent view of our values, our business and our strategy, regardless of where in the world they are based. It is part of embedding our Stronger Together ethos across the Group.

Throughout people's careers, the Performance Development Review ("PDR") process, launched in 2013, ensures all managers and employees know what is expected of them in their roles and that performance is measured and managed. It also provides an opportunity for employees to discuss their career aspirations with their manager, set development plans and take action on those plans during the year. In 2015, we trained almost 450 managers in how to run effective performance reviews, and 79% of our people had a PDR discussion (compared to 65% in 2014). Our goal is to make sure all employees have this opportunity.

We recognise that developing our leaders is important, too. Throughout 2015, our Senior Leadership Team ("SLT") participated in the "Raising the Bar" programme. The programme addresses key topics, and, through facilitated training sessions, enables our leaders to learn, share knowledge and shape action-planning. Topics covered to date include PDRs, Maximising Finance Performance and Leading Change.

Some development initiatives are locally focused. In the UK, for example, our partnership with Sheffield Hallam University continues to give our leaders the opportunity to develop their management skills while also gaining an academic accreditation, either at advanced Diploma or Bachelor Degree level. In Poland, courses to grow managers' coaching capability have been developed, as has training to improve knowledge-sharing. In Germany, a programme of leadership and management training is ongoing, with modules including leading self, leading others and leading change. In France, the introduction of a new Learning Management System as part of the Group-wide training and development strategy is helping employees to manage their development and grow in their career. Similarly, the Learning Management System in the UK & Ireland has been updated, giving people access to more training and introducing self-enrolment so that people have more control of their personal development.

Developing high-potential individuals for succession planning purposes is vital to our future growth. Early in 2015, we conducted a review of successors for Executive and Senior Leader levels across the business. A further review, started later in 2015, is helping to identify high-potential people at other levels. From the reviews conducted, new development programmes have been designed and new talent pipeline programmes – including Graduates and Apprentices – have been implemented.

Through these programmes, we will not only be able to create a recruitment pipeline of talented individuals entering the business, but we will also be able to accelerate the development and progression of those already with us.

Recognising outstanding performance

We remain committed to recognising excellent performance and celebrating the success of our people.

One way we do this is through the annual, Group-wide SIG Awards. These awards give our leaders the chance to nominate employees at all levels for ideas, actions and behaviours that help us live our values as well as delivering financial results. Shortlisted nominees attend an awards dinner at the Senior Leadership Conference. During the ceremony, awards are presented in several categories, and a special Chief Executive's Award for Excellence is given to one outstanding individual who embodies our values, has shown consistently excellent personal performance and has had a transformational effect on their business area or function.

Engaged employees

During September 2015, we ran our employee engagement survey, SIG Listens, for the second time (the first was in March 2014). The survey gives our people the chance to tell us what we are doing well and how we can improve to make SIG a great place to work.

78% of employees responded and our overall engagement score, at 73%, remained stable compared with the 2014 survey. It was also in line with the global benchmark for private enterprises.

This year saw a marked rise in scores across a number of areas. These increases show that our people are feeling even more positive about:

  • the importance we place on health and safety (up four percentage-points)
  • our approach to caring for their well-being (up five percentage-points)
  • receiving regular and constructive feedback on their performance (up seven percentage-points)
  • how fairly their performance is reviewed (up five percentage-points)

This improvement is testament to the actions we have taken since the last survey, particularly in relation to our Zero Harm initiatives for health and safety and the training we have given to managers about running effective Performance Development Reviews (see the section "Developing our people" for more about these reviews). We are also delighted to see a three percentage-point rise in the "management index". This a measure of the way our people view the effectiveness of their managers in areas like delivering feedback, recognising good work, encouraging innovation and handling poor performance.

Of course, there are areas for improvement. The results show that we need to do more to convince our employees that we will act on their feedback from the survey. Our aim, therefore, is to make sure that all our managers share the results of the survey with their teams and that action planning and implementation at a Group and local level continues throughout the year. The results also indicate that we need to: provide greater clarity on our vision and strategy; keep helping our people to develop and progress in their careers; maintain focus on customer service; and improve the way we recognise our people's performance and celebrate success. You can read about how we are addressing these needs in the "Internal communications", "Developing our people" and "Recognising outstanding performance" sections of this report.

INTERNAL COMMUNICATIONS

Communicating with our people is a key priority for us. We want to make sure everyone understands our vision for SIG and our strategy for realising that vision. We are also keen for our people to share their views and opinions, so two-way communication is very important.

Our communications normally start with our senior leaders. Our channels for reaching them currently include email bulletins, web broadcasts, conference calls and face-to-face briefings. Often, we then ask our leaders to cascade the messages to their teams via emails and team meetings. To support this cascade, we provide briefing packs for leaders and managers, which help them share news and also gather feedback. Where appropriate, we also use intranet articles and updates, posters and desk drops to keep employees informed.

As our organisation develops, we are continually evaluating our communications and looking for more innovative ways to reach our people. We are currently exploring new electronic channels, such as instant messenger, internal social media and other collaboration tools. We are also increasing face-to-face contact between our operational employees and our leaders through "Meet the COMEX" events and our annual programme of roadshows. In addition, we have introduced new communication guidelines that will help bring consistency to the way our communications look, read and sound. This is part of how we are helping employees to feel stronger together, wherever they are.

Finally, our employee engagement survey and our performance review process for employees both facilitate meaningful two-way communication between us and our people. There is more information about both of these elsewhere in this report (see "Developing our people" and "Engaged employees").

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Employee Benefits

We aim to attract and retain the best talent with a fair and consistent approach to both fixed and variable pay, which is regularly benchmarked, both externally and internally. Reward and benefits play a key role in supporting employee engagement and performance.

Our bonus schemes are designed to reward exceptional performance. For our Senior Leadership population, the bonus operates to an aligned framework across the Group, specifically focusing on Group-wide deliverables and outcomes. Bonus awards are also made in the local operating businesses aligned to local performance results. These are key in driving and rewarding performance at this level.

We also encourage our employees to become Shareholders in the Company. At the senior level, we operate a Long Term Incentive Plan for our leaders and across our whole business we operate a Share Incentive Plan (SIP). This gives one matching share for each share purchased by the employee up to a maximum of £20 per month. As at 31 December 2015, there were 971 employees participating in the SIP.

SIG will implement the UK Government's National Living Wage from 1 April 2016, going beyond the legal requirement and adopting the rate for all employees from age 21 to enhance our Employee Value Proposition. In SIG, we feel that it is important to properly reward our people for helping to support our customers and ensuring the success of our business. Our decision to go beyond the legal requirement on the National Living Wage reinforces our commitment to do this.

Growing Our Talent

The growth and development of talent is key to our future success. Throughout 2015, we have remained committed, across the Group, to recruiting and developing people who are starting their careers, whether they are apprentices or university graduates.

Apprenticeships

Our apprenticeship programmes are going from strength to strength. In Germany, 25 new apprentices joined us in 2015, across two of our Group companies. These high-calibre individuals were selected from around 1,500 applicants. Fourteen of them are fulfilling roles as management assistants, while the rest are working as warehouse/logistics specialists. All receive advanced training, including a new eLearning module focusing on workplace safety training.

As in previous years, we ran the annual Apprentice Forum in 2015. Attended by representatives from our industrial partner, Rockwool, the forum enabled all the apprentices in Germany to gather together for networking, knowledge sharing and technical presentations.

We have also created a new training programme in the past year, entitled Handel Trifft Handwerk ("Retail Meets Trade"). It gives our apprentices the chance to spend two to four weeks at a construction site, learning about our products and the way they are used by our industrial partners and customers.

As well as investing in our apprentices, we have spent time developing our apprenticeship supervisors in Germany. The inaugural Apprenticeship Conference for Supervisors was held in 2015, with a range of workshops, presentations and discussion sessions focusing on how SIG, the apprentices and those supervising them can derive the most benefit from the apprenticeship programme.

In the UK, our apprenticeship offering has been running for three years and 2015 saw the continuation of the Apprenticeship Development Programme, which brings the apprentices together to develop their key skills and business understanding. Twenty-five new apprentices joined through the 2015 intake. Apprentices who have completed this programme in the past are now employed in various roles across our head office, central services and branch network.

Graduates

In 2015, we launched our new International Graduate Programme. While we continue to recruit graduates into specific functional areas on a country-by-country basis, the new programme provides successful applicants with insight and exposure across our UK, Ireland and Mainland European businesses. As our first Group-wide talent initiative, the programme focuses on attracting, developing and deploying high-calibre people who are capable of developing into SIG's future leaders. During the two-year programme, graduates will undertake four rotations of six months, and attend five extensive development modules. Each module will concentrate on different leadership attributes such as understanding self, emotional intelligence, understanding the business and key financial skills.

The first cohort of nine graduates joined us in September 2015 through a re-designed recruitment and selection process. Application criteria included a requirement for a specific degree background, such as business studies or international business, and a second language. The selection process involved video interviews, psychometric assessments and an extensive assessment centre encompassing case studies, group presentations and competency-based interviews. Key stakeholders from across SIG internationally were invited to attend the assessment centres to help select the successful applicants. The programme's next cohort is due to arrive in September 2016.

Alongside our internal work with graduates, we continue to support Enactus, as a Gold Sponsor. Enactus is a community of students, academics and business leaders that develops outreach projects to improve the lives of people across the world. In 2015, we were again involved in the judging process for the Enactus UK National Competition, with more representatives from SIG than ever before taking part in the judging. Furthermore, we have established a network of business advisors throughout SIG in the UK who support individual Enactus teams. These advisors act as mentors for the teams' projects during the year. In 2016, we will continue to build our group of business advisors to support more Enactus university teams and, over time, we hope to establish relationships with the Enactus programme in other SIG countries.

We will also continue our support for the Association of Graduate Recruiters ("AGR") in 2016, having been members for the last several years. In 2015, we were involved in sharing best practice ideas across the AGR membership, and we attended AGR events and discussion groups. A number of SIG representatives from the Talent and Resourcing teams were also invited to be part of the judging panel for the AGR Awards.

Equal Opportunities

Our policy is to provide equal opportunities to all existing and prospective employees. Across the Group, we recognise that our reputation is dependent upon fair and equitable treatment of all our employees and we prohibit discrimination on the grounds of race, religion, gender, disability, sexual orientation, age, nationality or ethnic origin. Employment opportunities are equally available to all.

We value diversity of thinking and see this as critical in generating new ideas and innovative solutions for our customers. Employment opportunities are available to disabled persons in accordance with their abilities and aptitudes on equal terms with other employees. If an employee becomes disabled during employment, we at SIG make every effort to enable them to continue in employment by making reasonable adjustments in the workplace and providing retraining for alternative work where necessary.

Gender Diversity

At 31 December 2015, across the total workforce, 2,036 (21%) of all employees are female and 7,787 (79%) are male. Two Board members (25%) are female and six (75%) Board members are male. Six senior managers (9%) are female and 63 senior managers (91%) are male. SIG continues to work towards improving its workforce diversity and this will be an ongoing area of focus in 2016.

Directors

Directors

Senior Managers

Senior managers

All employees

All employees
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