Chairman’s Statement

Welcome to our 2004 Sustainability Report, which describes the progress we have made over the past year towards developing a more sustainable business and our plans and targets for 2005. By adopting a sustainable approach to the way we do business, we not only create positive impacts on the environment and society, but also generate benefits for Carillion and all its stakeholders.

In 2004, we continued to develop our strategy model that links our sustainability objectives to the delivery of our corporate business objectives. This report provides details of our 2004 objectives and the 11 specific and measurable targets that supported them. Our average score against these targets was 90%. More detailed information on each target and our performance against it, is also given in this report.

As Business in the Community's (BITC) "Company of the Year" for 2003, we worked in partnership with BITC to promote corporate social responsibility (CSR) and to demonstrate how this can help business succeed. We took part in a total of 37 events involving a wide variety of activities designed to share our experience with others and to learn from them. Our time as Company of the Year concluded with Carillon hosting BITC's Gala Dinner and Awards ceremony at the Royal Albert Hall in July 2004. This was attended by BITC's patron, HRH The Prince of Wales, and many of the UK's leading companies and provided a high-profile opportunity for us to promote the importance of CSR to business success.

We also took part in BITC’s third corporate Responsibility Index in 2004 and were the leading company in our sector and ranked 32 out of the 144 companies that took part.

As I announced at Carillion's AGM in May 2004, I shall be standing down as chairman and as a non-executive director of Carillion in May 2005. John McDonough, Carillion's chief exectuive, will take over the chairmanship of our Sustainability Committee, so I leave the Committee in very capable hands.

We have achieved a great deal since Carillion was launched as an independent company in 1999 and I am proud to have played a part in its success. But despite our achievements and the leadership position we attained in CSR, we still have a long way to go to become a truly sustainable business. We remain committed to this vision, because we believe it is essential for the long-term success of our business and that being sustainable will ultimately determine whether any business has the right to operate.

I should like to express my personal thanks to the external advisers who have served on our Sustainability Committee for their considerable help and support, initially from Professor Chris Bains and David Cadman, and latterly from by Jonathon Porritt and David Cowans, both of whom will continue to serve on the Committee.

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