Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety
• Health
• Environment
• People
• Community

Environmental Achievements

• 27% reduction in relative UK contribution to global warming over the last four years
• 78% of UK timber spend procured from certified sources in 2006
• 12% less water used than in 2005
• 76% less hazardous waste generated than in 2005

Social Achievements

• 11% reduction in voluntary employee turnover in 2006
• 12% reduction in absenteeism in 2006
• £220,000 raised for Marie Curie Cancer Care over two years
• £15 million invested in training in 2006
• Over 25,000 schoolchildren competed in the Balfour Beatty sponsored London Youth Games

Governance Achievements

• Policies, internal controls and reporting processes and management systems were reviewed and confirmed. Codes of practice added to existing corporate principles and individual employee behaviour guidelines.
• 96% of UK business units certified to OHSAS 18001
• 96% of UK operating companies undertook occupational health screening during 2006

Climate Goals & Targets

Environmental Challenges

• Occupational ill-health cases often result from prolonged exposure or repeated activities.
• Subcontractor safety performance data not consistently available across all regions (e.g., US).

Mitigation Strategies

• Increased focus on managing occupational health systematically and effectively in operating companies.
• Contracted professional occupational health service providers to review specific arrangements in several operating companies.
• Group-wide risk management framework for reporting and escalating risks.

Supply Chain Management

Responsible Procurement

• Long-term relationships with suppliers based on compatibility of values and behaviour

Climate-Related Risks & Opportunities

Awards & Recognition

• Most admired construction sector company in Management Today’s 2006 annual survey
• Sixth in the overall publicly quoted company league table in Management Today’s 2006 annual survey
• Quality in Construction Award for the best corporate responsibility programme in the industry

Environmental Metrics

ESG Focus Areas

• Safety
• Health
• Environment
• Business Ethics
• Risk Management
• Human Rights
• Social Issues
• Community Engagement
• Sustainable Construction

Environmental Achievements

• 30% reduction in UK relative contribution to global warming over five years
• 24% reduction in total waste per £m NSV in the UK since 2006
• 65% increase in materials recycled in the UK compared to 2006
• 70% of timber purchased from certified sources

Social Achievements

• 16% reduction in accident frequency rate in 2007
• Assumption of name sponsorship of the London Youth Games
• Over £100,000 funding and management support for Stoke Football Action programme
• First Group-wide employee opinion survey undertaken in 2007
• 14.4% voluntary employee turnover, reduced from 16% in 2006

Governance Achievements

• Continued critical evaluation of governance and management systems
• Renewal and restatement of policies
• Updating terms of reference of the Business Practices Committee
• Initiation of ethical standards training for all employees

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions (implied by discussion of sustainable sourcing)
• Data collection inconsistencies across operating companies
• Managing subcontractor safety performance (particularly in the US)
• Reporting environmental performance consistently across global operations

Mitigation Strategies

• Development of supply chain environmental risk and impact grading tool
• Increased central support and clarification of methodologies for environmental data collection
• Development of formal safety management systems in US operations
• Progressive extension of environmental reporting standards to non-UK businesses

Supply Chain Management

Responsible Procurement

• Sustainable sourcing of timber
• Use of recycled materials
• Engagement with suppliers on environmental issues

Climate-Related Risks & Opportunities

Awards & Recognition

• Numerous safety awards (RoSPA, British Safety Council, Considerate Contractors Scheme)
• Environmental awards (BITE Index, Considerate Constructors Scheme, etc.)

Environmental Metrics

ESG Focus Areas

• Governance and Management
• Safety
• Environment
• People
• Community

Environmental Achievements

• 30% reduction in CO2 emissions per £m sales for UK operating companies since 2004
• 37% reduction in waste disposed in UK per £m sales since 2005
• 2.8 million tonnes of waste generated across operations diverted from landfill (77% recycling/recovery rate)
• 74% of UK timber purchases from sustainable certified sources

Social Achievements

• Launched Zero Harm safety vision aiming for zero deaths, injuries to the public, and ruined lives by 2012
• Significant progress in reducing Accident Frequency Rates (AFR) across Group companies
• £20m spent on training
• 5,000 employees in Sharesave Scheme
• Development of a range of KPIs for people management
• E-learning programme for ethical behaviour rolled out across the UK
• Established a charitable trust, Building Better Futures, to support disadvantaged young people

Governance Achievements

• Reached full and final settlement with the Serious Fraud Office regarding the Bibliotheca Alexandrina project
• Appointed the Global Infrastructure Anti-Corruption Centre (GIACC) to monitor anti-corruption practices
• Implemented certain compliance measures following SFO settlement

Climate Goals & Targets

Environmental Challenges

• Eight worker fatalities across sites in 2008
• Five environmental incidents resulting in fines
• Ongoing investigation by the Office of Fair Trading into tender activities
• Data limitations in reporting environmental performance from US operations and some joint ventures
• Supply problems guaranteeing chain of custody for sustainably sourced timber

Mitigation Strategies

• Launched Zero Harm vision and six-pillar strategy to improve safety
• Implemented improved procedures and controls following environmental incidents
• Full cooperation with the Office of Fair Trading investigation
• Strengthened central SHE team to improve data quality and completeness
• Developing sustainable timber procurement policies and plans

Supply Chain Management

Responsible Procurement

• Stringent health and safety pre-qualification criteria for subcontractors
• Sustainability requirements included in subcontractor conditions
• Monthly key performance indicators used to track supplier performance

Climate-Related Risks & Opportunities

Physical Risks

• Increased temperatures affecting material durability
• Higher rainfall and more intense storm events leading to increased flooding

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Increased demand for sustainable buildings and infrastructure

Reporting Standards

Frameworks Used: GRI (Level C+)

Certifications: OHSAS 18001 (safety), ISO 14001 (environment)

Third-party Assurance: URS Corporation Ltd (URS), aligned with AA1000 assurance standard; Stakeholder panel review

Sustainable Products & Innovation

• Proflo backfill material
• Bioremediation technique for ballast waste

Awards & Recognition

• Numerous safety and environmental awards listed in report

Environmental Metrics

ESG Focus Areas

• Profitable markets
• Healthy communities
• Environmental limits

Environmental Achievements

• 85% of waste generated was recycled, recovered or re-used
• Increased the proportion of timber from certified managed sources from 69% to 89%
• Reduced CO2 emissions from vehicles, plant and buildings to 383,400 tonnes (2008 restated: 324,000 tonnes). Relative to revenue, CO2 emissions were 34.8 tonnes/£m, an 8% reduction from the 2005 figure of 38 tonnes/£m.
• Reduced global waste disposed to landfill (tonnes/£m revenue) from 84 to 80, a 5% reduction over the year and a 48% reduction since 2006.

Social Achievements

• Embedded Zero Harm safety vision across the Group
• Invested £30m in employee training
• Launched values-based Code of Conduct Group-wide
• Set up a charitable trust to support social initiatives
• Achieved over 300 days without an accident at Travis Air Force Base
• Graduate retention rates were 90% after one year and 67% after three years (2008: 84% and 60%)
• Recruited 454 graduates (2008: 311)

Governance Achievements

• Launched a sustainability vision, roadmap and Group-wide targets
• Introduced a confidential third-party ethics helpline; 42 whistleblowing cases reported (2008: 28)
• Improved Dow Jones Sustainability Index score to 67% (2008: 65%)

Climate Goals & Targets

Environmental Challenges

• Economic uncertainty
• Breaches of competition law resulting in a £5.2m fine
• Managing non-financial risk
• Quantifying Scope 3 emissions
• Addressing indirect (Scope 3) greenhouse gas emissions
• Managing migrant workers
• Ensuring responsible sourcing of materials beyond timber

Mitigation Strategies

• Robust business strategy
• Thorough audit of businesses and rigorous training program to ensure compliance with competition law
• Sustainability vision and roadmap
• Work on quantifying Scope 3 emissions
• Developing understanding of Scope 3 emissions and working with suppliers
• Providing debit card and ATM facilities, dedicated training facility, and mobile safety training unit for migrant workers in Dubai
• Extending data collection systems to track sourcing of other major construction materials and developing understanding of their environmental impacts

Supply Chain Management

Responsible Procurement

• Working with suppliers on industry-leading procurement and supply chain management
• Embedding Zero Harm and sustainability in the supply chain
• Focus on responsible sourcing of materials

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Opportunities

• Low-carbon economy
• Adaptation measures
• Renewable energy
• Waste management
• Low-energy buildings

Awards & Recognition

• Private Sector Partner of the Year (Travis AFB)
• Award for contribution to diversity and inclusion on the Olympic Park
• Network Rail’s environmental sustainability project of the year (Stoke Gifford)

Environmental Metrics

ESG Focus Areas

• Profitable markets
• Healthy communities
• Environmental limits

Environmental Achievements

• Provided street lighting for Coventry City Council, resulting in a 38% reduction in carbon emissions.
• Designed and project-managed a wastewater recycling plant in Queensland, Australia, producing water for industrial use.

Social Achievements

• Balfour Beatty Construction US ranked 40th in Fortune’s 100 Best Places to Work® in the US.
• BK Gulf achieved 21.4 million man-hours without a reportable incident.

Governance Achievements

• 70% of businesses started to give the core values presentation to employees.
• Nearly 28,000 employees (56%) completed Code of Conduct training.

Climate Goals & Targets

Environmental Challenges

• Five fatalities due to workplace accidents.
• Fined GBP 38,840 for health and safety offences.
• Increased carbon emissions, water use, and waste to landfill.
• Decline in responsibly-sourced timber procurement.
• Exclusion from the Dow Jones Sustainability Index.

Mitigation Strategies

• Redouble efforts to eliminate risks and achieve Zero Harm.
• Implement sustainability action plans to meet 2012 targets.
• Develop a standalone internet site dedicated to sustainability issues.
• Review feedback from the Dow Jones Sustainability Index to identify improvements.

Supply Chain Management

Responsible Procurement

• Project GrACE initiative
• Supplier assessment tools (Exor and Achilles)
• Sustainable procurement toolkit

Climate-Related Risks & Opportunities

Physical Risks

• Increased temperatures affecting material durability
• Higher rainfall and storms leading to flooding

Transition Risks

• Carbon legislation and policy frameworks

Opportunities

• Growth opportunities in clean energy infrastructure
• Demand for adaptation services

Reporting Standards

Frameworks Used: GRI

Certifications: OHSAS 18001, ISO 9001, ISO 14001

Third-party Assurance: URS Corporation Limited, KPMG

Sustainable Products & Innovation

• XiSpan bridge strengthening technology
• Recycled plastic railway bridges
• Ecolite lighting towers
• Green Apple Award-winning eco-lootion site accommodation unit

Awards & Recognition

• Middle East Health and Safety Achievement Award
• Communitas Award
• Green Apple Award
• Singapore Environmental Achievement Awards
• Queensland Signatory of the Year Award
• Sunday Times Best Green Companies

Environmental Metrics

ESG Focus Areas

• Profitable Markets
• Healthy Communities
• Environmental Limits

Environmental Achievements

• Reduced waste to landfill by 45% (vs 2010 baseline)
• Reduced water use by 17% (vs 2010 baseline)
• Avoided 77,000 tonnes CO2e emissions on A421 project
• Diverted nearly 8 million tonnes of waste from landfill from four major highways schemes in the UK
• 34% of UK major construction materials sourced from responsible sources

Social Achievements

• Over 17,000 employees completed sustainability e-learning course
• Launched 2020 vision film
• Donated £1.5m to young people’s charities
• Supported thousands of young people through The Prince’s Trust

Governance Achievements

• Launched a new Code of Conduct for supply chain
• 284 cases reported to ethics helpline
• GIACC completed review of anti-corruption compliance programme

Climate Goals & Targets

Environmental Challenges

• Reducing carbon emissions has been challenging due to growth of energy-intensive projects in Hong Kong
• Securing adequate evidence that all timber purchases are from recognised responsible sourcing schemes
• Exclusion from the Dow Jones Sustainability Index
• Tragic loss of five employee lives due to workplace accidents

Mitigation Strategies

• Renewed focus on carbon emission reduction in 2012
• Developed a climate change adaptation framework
• Developed a suite of water footprinting tools
• Implemented Zero Harm health and safety campaign
• Thorough investigation of workplace accidents and implementation of corrective actions

Supply Chain Management

Supplier Audits: 29% of 3,500 key suppliers assessed for compliance with sustainability requirements

Responsible Procurement

• Supplier code of conduct
• Sustainable Procurement Group training
• DEFRA Flexible Framework for responsible procurement

Climate-Related Risks & Opportunities

Opportunities

• Growth in renewable energy infrastructure
• Green retrofit of buildings
• Carbon capture and storage consultancy

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: DNV, KPMG, URS

Sustainable Products & Innovation

• Eco-lootion site accommodation cabin
• Solar powered traffic lights
• Closed loop system for waste plastic
• More durable concrete sea defences

Awards & Recognition

• DuPont Safety Award
• Sir George Eagle Trophy
• Green Gown Award
• Best Environmental Performance award (Blackfriars station)
• Sustainability award (Highways Agency)

Environmental Metrics

ESG Focus Areas

• Environment
• Materials
• Communities

Environmental Achievements

• 51% reduction in carbon emissions since 2010
• Over 97% of waste across the UK and Hong Kong avoided landfill in 2019
• 83% reduction in carbon emissions on East Leeds Orbital Route project in first six months of EcoNet use
• 73% embodied carbon reduction on materials in Hither Green, London signalling renewals project
• 89% material saving in Hither Green, London signalling renewals project
• 68% reduction in waste sent to landfill compared to traditional construction methods on Penny’s Bay COVID-19 Quarantine Facilities project

Social Achievements

• Increased proportion of UK workforce in ‘earn and learn’ positions to 5.7%
• £174 million of social value delivered across 128 SCAPE projects since 2015
• 26% of total project hours on The King County Children & Family Justice Center project undertaken by apprentices (23% minority, 7% women)
• Gammon awarded Gold level WELL Pre-certification for its new head office in Hong Kong

Governance Achievements

• Inclusion of 'Sustainable' as a new value in Group Cultural Framework
• Establishment of a Group Safety and Sustainability Committee to review Sustainability Strategy and monitor progress

Climate Goals & Targets

Environmental Challenges

• Significant environmental and waste footprint of the construction and infrastructure industry
• Climate change

Mitigation Strategies

• Commitment to go Beyond Net Zero Carbon by 2040
• Implementation of IEMA’s Greenhouse Gas Management Hierarchy
• Collaboration with supply chain partners to reduce embodied carbon
• Development of new solutions and technologies to drive net zero outcomes
• Switch to renewable electricity across all operations
• Decarbonisation of plant and fleet
• EcoNet technology to reduce on-site energy consumption
• Circular economy initiatives such as take back schemes for packaging and unused materials
• Modern methods of construction such as off-site manufacturing and modularisation

Supply Chain Management

Responsible Procurement

• Working with supply chain partners to report and reduce embodied carbon in materials

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Sustainable Development Goals

Certifications: LEED Platinum Certification

Third-party Assurance: External auditor provides limited assurance of Scope 1 and 2 greenhouse gas emissions

UN Sustainable Development Goals

• SDG 9

Focus on parts of SDG 9 – Industry, Innovation and Infrastructure that are most relevant to Balfour Beatty

Sustainable Products & Innovation

• EcoNet technology
• Enertainer lithium-ion battery storage system

Environmental Metrics

ESG Focus Areas

• Environment
• Materials
• Communities

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Materials
• Communities

Environmental Achievements

• 2% reduction in absolute carbon emissions
• 7% reduction in carbon emissions intensity (market-based)
• 40% reduction in UK waste intensity

Social Achievements

• £936 million of social value delivered in the UK
• 81% employee engagement score (7 percentage points above industry average)
• Right to Respect programme rolled out across the UK

Governance Achievements

• Group Ethics and Compliance Programme Charter formally adopted
• New ethics helpline implemented
• Increased Speak Up reports (59% increase from 2022)

Climate Goals & Targets

Environmental Challenges

• Two fatalities on Balfour Beatty UK sites in 2023
• Global competition for infrastructure talent
• Managing inflationary pressures and high interest rates

Mitigation Strategies

• Forensic review of health and safety protocols
• New stored energy fatal risk working group established
• Increased emphasis on supervision and vigilance
• Investment in strengthening its position as an excellent employer
• Diversification into new markets (energy, defence)
• Selective bidding for contracts to reduce risk

Supply Chain Management

Supplier Audits: 121 modern slavery audits in the UK

Responsible Procurement

• Code of Ethics
• Supplier Sustainability Conditions
• Modern Slavery Statement requirement
• Sustainability tender question sets

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD, GRI, SASB

Certifications: ISO 14001:2014, ISO 20400:2017

Third-party Assurance: PwC LLP

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• EcoSense cabins
• EcoNet energy management tool
• Hydrogen fuel cell technology
• GTwin Smart Site Management System

Awards & Recognition

• Mates in Mind Best Overall Workplace Mental Health Programme award
• Engage Awards Best Use of Voice of the Employee award
• FTSE4Good ESG score of 3.3
• CDP rating of B