Annually we spend approximately £1billion on goods and services provided by approximately 9,800 suppliers and subcontractors. The procurement of these products and services inevitably provides us with an opportunity to positively impact on sustainable development issues throughout the supply chain from extraction of raw materials to transportation and disposal issues.

The Co-op Bank’s Ethical Purchasing Index (EPI) calculates that ethical purchasing grew by 10% in 2000. This demonstrates a rise of 6 times more that the total market growth (Green Futures), which will hopefully help to improve the accessibility of ethical products.

In addition, the value of Socially Responsible Investment (SRI) has grown by 1,000% in the last 4 years (Green Futures). This demonstrates that investors are also interested in the corporate responsibility of organisations.

Our commitment to managing our supply chain issues is borne through our overarching objective of ‘engaging Carillion’s supply chain in the sustainability programme to improve supplier sustainable development performance and assist us in achieving our targets’. Two targets were specifically developed to support this objective;

We have further defined the role of our Category Managers and the formation and implementation of our Supplier Accreditation Process.

Each Category Manager is responsible for managing the key suppliers within a specific area of spend, e.g. concrete and steel frame. The role of the Category Manager represents a significant opportunity for the consideration of sustainable development issues as they manage 20% of suppliers, which represents 80% of spend.

To enable Category Managers to maximise their supplier impact, over 70% attended a 1-day Supply Chain Sustainability Awareness Course. The course explored the drivers for sustainability, the sustainable development issues surrounding the products and services procured by Category Managers and provided an overview of the measures that can be implemented to ensure that sustainability is considered during procurement decisions.

Our Supplier Accreditation Process provides an opportunity to raise awareness amongst key suppliers of sustainable development issues. This is achieved through:

Our other suppliers are assessed through:

We recognise that to truly implement change in the supply chain individual suppliers must identify and evaluate their significant sustainability impacts. Only then will they be able to minimise and control such issues. To achieve this a collaborative approach is required and therefore, we have developed a suite of 5 Sustainability Scorecard’s, which we are using as part of our supplier assessment to measure their progress towards sustainability. See our environmental and safety scorecards.

The Scorecard allows companies to identify their progress towards becoming sustainable, from ‘Pre-Sustainable’ through to ‘Implementing Best Practice’. It requires that we work with the supplier to identify sustainability issues and of those, which are most important.

The Scorecard is a simple matrix that allows suppliers to identify how well sustainable development is embedded in their business culture. The supplier measures itself against six categories, namely:

The six categories of measurement allow the supplier and Carillion to determine the degree of focus required by the supplier towards managing areas of sustainability risk.

The Scorecard is an integral part of the Carillion Supplier Sustainability Day. This is the second year that the Supplier Sustainability Day has been run and 10 key suppliers attended. As well as asking suppliers to assess their sustainability performance, suppliers and their relevant Category Managers heard presentations from suppliers that attended the 2001 Supplier Sustainability Day. These presentations focused on the progress the suppliers had made towards achieving the pledges they made in 2001.

We do not view the implementation of the scorecard as an effort to blacklist companies, rather, it seeks to provide a platform where Carillion and its suppliers can work together to improve the sustainable development performance of the suppliers, products and services. We aim to work with, rather than penalise, suppliers that identify activities, which fall below the standards, but will consider ending business relationships with a supplier if serious shortfalls persist.

The transportation of the resources that we use is an issue that we consider within individual project plans. We try where possible to use local suppliers and subcontractors. If local subcontractors are not available then where practicable we encourage our subcontractors to use public transport. For example, at the Dell contract in Bracknell we provided a free shuttle bus from Bracknell Station to Site and all the project bricklayers were brought to site by minibuses.

Carillion Rail have gained better control over the delivery of materials used in infrastructure management by awarding a contract to logistics specialists Exel. Exel undertake the planning and procurement of materials, inventory management and logistics operations. This effective management of an area of our supply chain has brought the following environmental benefits;