Chairman’s Statement

Welcome to our 2003 Sustainability Report, which outlines the progress we have made over the past year towards developing a more sustainable business and our plans and targets for 2004. By adopting a sustainable approach to the way we do business, we believe we can deliver not only social and environmental benefits, but also benefits for Carillion and all its stakeholders.

In 2003 we were delighted that our commitment to responsible business practice was recognised when we received Business in the Community’s (BITC) Impact on Society Award and became BITC’s Company of the Year. We also took part in BITC’s second corporate Responsibility Index in 2003 and were the leading company in our sector and ranked 33, out of the 139 UK companies that took part.

Delivering sustainable profitable growth is one of our core values and therefore we strive to apply the principles of sustainable development to everything we do. This means we have to understand our impacts on society and the environment and how they relate to our business objectives.

We continue to categorise our impacts according to the UK Governments four headline objectives for sustainable development, namely social progress, protection of the environment, prudent use of natural resources and economic growth and prosperity. To help us understand how these impacts relate to our business objectives, we have refined and developed the strategy model we first published in 2001. This model identifies the key performance indicators on which we need to focus in order to improve our impacts on society and the environment and at the same time achieve our business objectives. It is therefore a “road map” for demonstrating the business case for sustainability.

Our performance against the sustainability targets we set in 2003 fell slightly from the level we achieved in 2002. I am confident this reflects no weakening of our commitment, but rather the increasingly demanding targets we set year on year. Over the past year we paid particular attention to our community impacts and embarked upon reviewing and developing our community policy to provide a consistent framework to inform and guide how we engage with the communities in which we operate. We expect to finalise this work in the first half of 2004.

During 2004 we will also focus on making sure that the lessons we have learnt, the innovation and best practice we have developed and the successes we have enjoyed are consolidated into everything we do.

I hope you find this report helpful. If you would like to comment on any aspect of our performance or on the report please contact us or fill in our feedback form.

- Sir Neville Simms, Chairman Carillion plc.