Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Health and Safety
• Customer Care
• Community Engagement
• Skills Development
• Supply Chain Responsibility

Environmental Achievements

• 26% Reduction in normalised carbon emissions from sites compared with 2015
• 1% reduction in normalised site waste compared with 2013 baseline
• 7% reduction in office energy per person (vs 2015)
• 34% reduction in office water consumption per person (vs 2015)
• 13% reduction in normalised carbon emissions from site operations per 1,000 sq ft
• 7% reduction in normalised carbon emissions from office energy per person
• 34% reduction in normalised carbon emissions from office water per person

Social Achievements

• Launched ‘Making our Customers Feel Special and Valued’ training initiative
• 82.5% of apprentices successfully completed their apprenticeships (compared to 80.7% in 2015)
• Delivered 578 new affordable homes
• 9/10 customer recommendations
• 4-star customer service rating
• £1m total investment in salaries and training costs across the Group for apprenticeships
• 88% of eligible employees completed their Delivering Professional Excellence (DPE) annual appraisal meeting

Governance Achievements

• Maintained position in the FTSE4Good Index
• Came 2nd in the NextGeneration benchmark of top 25 UK housebuilders
• Independent review of Group health and safety systems
• Board commissioned an independent review of Group health and safety systems

Climate Goals & Targets

Environmental Challenges

• Skills shortage in the construction industry
• Planning complexities and delays
• Market volatility due to Brexit
• Potential constraints on labour resources due to Brexit
• Build cost inflation
• Maintaining high customer service standards
• Health and safety incidents

Mitigation Strategies

• Investment in graduate and apprentice programs
• Strong relationships with landowners and government
• Developing new funding models and housing types (PRS)
• Improved build quality and performance data capture
• Make Waste History campaign
• ‘Making our Customers Feel Special and Valued’ training
• Improved health and safety reporting and initiatives
• Working with key partners to adopt off-site manufacture (OSM)

Supply Chain Management

Responsible Procurement

• Framework agreements with consultants and subcontractors
• Group-approved suppliers for 58% of procurement budget
• Sustainable sourcing of materials
• Make Waste History campaign
• Modern Slavery Statement

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC) principles, Global Reporting Initiative G4 guidelines

Third-party Assurance: Verco Advisory Services Ltd (for GHG emissions)

Sustainable Products & Innovation

• New core house type range with flexible designs and innovative construction methods
• Off-site manufacture capability

Awards & Recognition

• Sustainable Housebuilder of the Year
• Best House Design Award
• Best Refurbishment Project

Environmental Metrics

ESG Focus Areas

• Climate Change
• Health and Safety
• Customer Service
• Diversity and Inclusion
• Sustainable Communities
• Responsible Procurement
• Modern Slavery

Environmental Achievements

• 3% Reduction in construction waste volume (yd3/1,000 sq ft) since last year
• 14% decrease in Company’s carbon footprint using the market-based methodology
• 19% decrease in emissions associated with site activities compared with 2018
• 97% of timber purchased through direct suppliers either FSC or PEFC certified

Social Achievements

• Improved HBF Customer Satisfaction Score
• Increased customer focus in performance management and remuneration schemes
• Investment in training: £1.3m
• 37% of employees are female
• Women’s Forum established
• 88% employee engagement score in staff survey
• 25 carpentry training places and 10 jobs supported through Community Wood Recycling

Governance Achievements

• Recruitment of a new Executive Leadership Team and Chairman
• Launch of an updated strategy
• Significant improvement to customer service and satisfaction ratings
• Retained its place in the FTSE4Good Index

Climate Goals & Targets

Environmental Challenges

• Challenging market backdrop
• Brexit-related uncertainty
• Build cost inflation
• Lack of skilled labour
• Increased levels of stamp duty on higher value properties
• Tragic loss of one of our subcontractors on site
• Build cost inflation and unforeseen cost increases
• Increased regulatory focus on fire risk

Mitigation Strategies

• Updated business strategy focused on reducing costs, developing schemes of differing tenure type, and repositioning average selling price
• Strengthening the safety leadership culture and alignment of safety and operational performance
• Implementing reductions in sales-related costs and overheads
• Introduction of new standardised housing range
• Creating a dedicated partnerships business unit
• Regular sales forecasts and cost reviews
• Strategic purchase of sites
• Developing skills around off-site manufacturing (OSM)

Supply Chain Management

Responsible Procurement

• Sustainable Procurement Policy
• Supply Chain Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather events

Transition Risks

• New policy and regulatory developments

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, FTSE4Good Index, CDP

Certifications: SMAS Worksafe Certificate, BREEAM

Third-party Assurance: Verco Advisory Services Ltd

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)

Initiatives contributing to these goals are described throughout the report.

Sustainable Products & Innovation

• Energy-efficient homes
• Homes with sustainable drainage systems

Awards & Recognition

• Crest Nicholson Excellence Awards
• NHBC Pride in the Job award
• Silver Employer Recognition Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance
• Social

Environmental Achievements

• Reduced Scope 1 emissions from 7,251.6 tCO2e in 2018 to 3,638.0 tCO2e in 2021
• Increased renewable electricity tariffs from 6% in 2018 to 62% in 2021
• 96% of construction waste diverted from landfill in 2021

Social Achievements

• Maintained a 5-star HBF customer satisfaction rating
• Reduced AIIR (Annual Injury Incidence Rate) from 342 in 2018 to 385 in 2021 (Note: this seems counterintuitive and may require further investigation from the report)
• Delivered 278 days of Health and Safety training in 2021

Governance Achievements

• Received a B score for CDP Climate Change disclosure in 2021
• Received an ESG Risk Rating of 15.3 (Low Risk) from Sustainalytics in March 2021
• Established various policies including Anti-Slavery and Human Trafficking, Anti-Bribery and Corruption, Equality and Diversity, Human Rights, Corporate Health and Safety, Sustainability, Climate Change, Sustainable Procurement, Sustainable Timber, and Supply Chain Code of Conduct

Climate Goals & Targets

Environmental Challenges

• Supply chain emissions (Scope 3)
• Reducing overall emissions

Mitigation Strategies

• Partnership with Supply Chain Sustainability School (SCSS)
• Participation in Future Homes Hub (FHH)
• Implementation of various sustainability policies and initiatives

Supply Chain Management

Responsible Procurement

• Sustainable Procurement Policy
• Sustainable Timber Policy
• Supply Chain Code of Conduct
• 27% of procurement spend within 20 miles of site operation

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CDP, UN Sustainable Development Goals (SDGs), FTSE4Good Index

Third-party Assurance: Verco Advisory Services Ltd (limited assurance against ISO 14064)

Environmental Metrics

ESG Focus Areas

• Climate change
• Biodiversity
• Waste reduction
• Resource efficiency
• Community investment
• Workforce diversity
• Safety
• Human rights
• Supply chain sustainability

Environmental Achievements

• Reduced scope 1 and 2 greenhouse gas emissions intensity by 21% compared to FY19 (target 25% reduction by 2025)
• 62% of electricity procured from renewable tariffs (target 100% by 2025)
• 4% reduction in waste intensity compared to FY19 (target 15% reduction by 2025)
• 96% of waste diverted from landfill (target at least 95%)
• Avoided approximately 454 tCO2e through the use of biodiesel

Social Achievements

• £25.4m agreed spend on social infrastructure (combined s106 and Community Infrastructure Levy (CIL) payments) in FY21
• 483 affordable homes delivered
• Outdoor children’s play areas incorporated on 51% of developments
• Five-star customer satisfaction rating achieved
• 88% of developments within 1km of a public transport link
• 7% of our people are in ‘earn and learn’ positions
• 38% of our Board are female

Governance Achievements

• Joined the United Nations-backed Race to Zero, committing to net zero emissions by 2050
• Joined the Supply Chain Sustainability School as a partner
• Developed an enhanced pre-qualification process for group supply tenders

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to Brexit, COVID-19, and increased global construction output
• Shortage of skilled labor
• High employee turnover
• Rising inflation and energy costs
• Increased costs for combustible materials remediation
• Climate change risks (physical and transitional)

Mitigation Strategies

• Strong relationships with subcontractors and forward planning of material purchases
• Sourcing alternative materials (e.g., concrete bricks)
• Investing in employee development programs and improving flexible working arrangements
• Disciplined capital allocation and strong balance sheet
• Making provisions for combustible materials remediation
• Developing science-based targets for net-zero emissions by 2050
• Designing developments to mitigate flood risk and overheating

Supply Chain Management

Supplier Audits: 454 suppliers are members of the Supply Chain Sustainability School

Responsible Procurement

• Sustainable Timber Procurement Policy
• Supply Chain Code of Conduct
• Enhanced pre-qualification process

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Rising mean temperatures

Transition Risks

• Emerging legislation
• Transitioning to lower emissions technology
• Emerging regulation leading to changes in energy and fuel prices
• Reputation and changing stakeholder preferences

Opportunities

• Resource efficiency
• Changing consumer preferences

Reporting Standards

Frameworks Used: TCFD, CDP, GRI, UN Sustainable Development Goals (SDGs)

Certifications: FSC, PEFC

Third-party Assurance: PwC

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)

Sustainable Products & Innovation

• New house type range with improved thermal efficiency and reduced waste

Awards & Recognition

• Financial Times’ Europe Climate Leaders
• Home Builders Federation (HBF) five-star customer satisfaction rating

Environmental Metrics

ESG Focus Areas

• Sustainability
• Emissions Reduction
• Supply Chain Sustainability
• Employee Training

Environmental Achievements

• Progress against sustainability targets remains on track

Social Achievements

• Increased number of employees in trainee positions and on training programmes

Governance Achievements

• Completion of a new Sustainability Linked Revolving Credit Facility

Climate Goals & Targets

Environmental Challenges

• Increased economic uncertainty
• Challenging macro-economic outlook

Mitigation Strategies

• Deferral of planned opening of a third new division
• Adjustment of the expected pace of growth across existing divisions
• Maintaining a robust financial position

Supply Chain Management

Responsible Procurement

• Increasing the number of our suppliers engaging with the Supply Chain Sustainability School

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Supply Chain Sustainability
• Employee Training and Development
• Resource Efficiency
• Health and Safety
• Community Engagement
• Governance

Environmental Achievements

• Achieved all four metrics in their Sustainability Linked Revolving Credit Facility (RCF), including reductions in scope 1 & 2 GHG emissions and GHG emissions associated with home use.
• 99% of home completions had an energy efficiency rating of A-C.
• 100% of dwellings have smart meters and displays.

Social Achievements

• HBF 5-star satisfaction rating.
• 22% of employees in trainee positions or in formal training (FY23).

Governance Achievements

• Sustainability Committee met four times in FY23.
• Sustainability-related targets aligned with remuneration packages.
• Received an AA rating in the MSCI ESG Ratings assessment.
• Maintained position as a constituent of the FTSE4Good Index Series.
• Received an ESG Risk Rating of 17.3 (Low Risk) from Sustainalytics.

Climate Goals & Targets

Environmental Challenges

• Reducing scope 3 GHG emissions across the value chain.
• Managing climate-related risks (e.g., flooding).

Mitigation Strategies

• Partnership with the Supply Chain Sustainability School (SCSS) and Future Homes Hub (FHH).
• Implementation of a Group-wide Risk Management Framework to address climate change risks.
• Science-based targets validated by SBTi.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supply Chain Code of Conduct
• Partnership with Supply Chain Sustainability School

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB, TCFD, CDP, UN SDGs

Certifications: Null

Third-party Assurance: Verco Advisory Services Ltd (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Updated Group house types to deliver at least a 31% reduction in GHG emissions.

Awards & Recognition

• Not disclosed