Corporate responsibility report

Corporate Responsibility Review

In 2010 we improved many aspects of our core responsible business practices. We introduced a new group-wide code of conduct; continued embedding our values worldwide; undertook the second global “Your Voice Counts” colleague survey; continued focusing on energy and water saving; developed health and safety programmes; piloted innovative new ways of working; and enhanced product stewardship for customers.

We participated in Business in the Community’s Corporate Responsibility Index, the Dow Jones Sustainability Index and the Carbon Disclosure Project. We are highly ranked within our sector across these benchmarks.

Governance

The chief executive has responsibility for corporate responsibility. The board reviews progress at least once a year, and specific items, e.g. health and safety, more regularly. The senior safety, health and environment professionals across the group now meet regularly to develop and embed more standard processes across the group.

Divisions are responsible for setting operational corporate responsibility priorities, whilst complying with group policies in areas such as on health and safety, the environment and business conduct.

2010 saw the launch of a new code of conduct, accompanied by a governance guide for all managers. Front line colleagues received a pocket guide to promote responsible business practices across the group. Produced in 22 different languages, this was distributed either directly to homes or as part of team meetings. The internal control self assessment system and the “Speak Up” system contribute to effective governance. The audit committee reviews outputs.

Our training in competition and antitrust law continued and is part of induction training for new colleagues in relevant areas of activity. In 2011, refresher assessments will be introduced, together with training about anticorruption issues.

The Board reviews the following indicators:

The Environment

In 2010 we improved each of our environmental KPIs. Key activities included the consolidation of a number of our textiles processing plants into better located more efficient plants; the development of our first textiles plant which uses no boilers and a major energy efficiency programme in Germany. We increased focus on waste reduction and recycling to support our customers’ requirements.

These were some of our key activities:

• Rentokil’s Authorised Product List (APL) enhances control of active ingredients and their dosage. The APL has been introduced across Rentokil’s worldwide operations, to ensure that unacceptable toxic products are avoided, chemical usage compliance is maintained and excessive dosage avoided.
• Ambius adopted a plan to reduce its carbon footprint. In 2010 it established a target to reduce vehicle fuel consumption by 10-15% and property energy by a similar amount.
• Improving IT systems results in cost and service improvements as well as energy reduction. Introducing four data centres across the world led to significant energy reductions. Developments in “cloud” computing and Google Apps result in reduced branch technology use and efficiency improvements for mobile colleagues.
• Similarly, our UK operations’ change to fuel cards using consumption reporting focuses on efficient driving and fuel consumption. The UK’s introduction of Drive Smart combines the benefits of improved safety, reduced damage costs and improved fuel consumption.
• Proactive waste management is a focus for many businesses. City Link reviews its waste streams including waste in wooden pallets and recycling plastic packaging, often generating revenue as a bi-product.

Greenhouse gas emissions

In 2010 CO₂ emissions were 269,415 tonnes compared with 301,509 tonnes in 2009. Emissions per £m turnover decreased by 9.4% year-on-year. Improvement in business unit reporting has led to greater consistency in reporting this year.

As service delivery tends to be on customers’ premises our property environmental impact is limited and we focus on carbon emissions and water consumption. Our main environmental impacts are from our processing plants; our vehicle fleet; and process chemicals.

Our emissions indicator is normalised CO₂ emissions (tonnes per £million turnover). Emissions conversion is based on DEFRA guidance using scope 1 and 2 emissions factors. Reporting includes all property energy and all vehicle fuel. Further details including on air travel emission can be found in the company’s Corporate Responsibility Report 2010.

CO₂ emissions data has been collated by the group since 2000 for its major European textiles operations, with the data for all European processing plants being reported since 2006. They are currently responsible for 66% of the group’s CO₂ property and process emissions (2009 – 65%) – and just over 32% for all sources of scope 1 and 2 emissions (2009 – 40%).

The chart below shows the trend since 2006 for continental European processing plants (the larger plants in Belgium, France, Germany and the Netherlands and the smaller plants in Austria, Czech Republic and Spain), showing 5% reduction in emissions in 2010 (2009 – 3% reduction).

Water Consumption

In 2010, the water consumption, based on kilogrammes of laundry washed in all the company’s European processing plants, fell by 8% to 12.42 litres (2009: 13.40 litres). The chart below shows the trend in water consumption for both our continental plants and the plants in the UK.

The Workplace

The company continued its HR strategy to deliver capability-led change and drive engagement and enablement of colleagues.

Engagement and enablement

Rentokil Initial measures and acts to improve both colleague engagement and enablement. Your Voice Counts (YVC) is the company’s annual, confidential colleague survey. In 2010 this was completed worldwide for the second consecutive year.

33,364 colleagues took part, an increase of 8% on 2009, representing a 69% response rate. Both engagement and enablement levels remained constant at a group level. Ambius and Initial Facilities Services showed positive improvements, while scores in City Link were generally down year on year. 1,497 reports and presentations were produced to enable communication and action planning locally.

This table shows responses to relevant corporate responsibility questions.

Skills and talent development

In 2010, 451 employees undertook accredited learning, mainly within the Initial Facilities Services division, in subjects such as business administration, cleaning and support services, and team leading. While this is lower than previous years due to the change in the UK Government framework, the success rate increased by 22%. In line with the new framework, the company has appointed two skills training providers and begun to develop its own core values training programme with three modules to reflect the company’s three core values of – Service, Relationships and Teamwork – which will underpin future numeracy and literacy training. This is planned to be piloted in 2011 and the company will seek official accreditation for this new initiative.

The Rentokil pest control business further developed its learning and development approach – the Rentokil Academy – with global reach and alignment to the strategic agenda. Its business benefits are considered considerable with the sales community showing positive engagement score improvements post Academy participation.

At a management level, the talent development process was reviewed with a focus on the senior 450 managers, and middle managers with high potential, across the group. Key programmes included “Coaching for Senior Teams” and “Living Leadership.

The Marketplace

Customer service levels reached 97% (state of service) during 2010 ahead of the company’s 95% target. Levels of customer satisfaction, measured using the process which we call Customer Voice Counts (CVC), also showed improvements across the group, particularly City Link. The group CVC score was 19% in 2010. We measure customer retention levels at a business unit and divisional level, while the group score improved to 83.9% in 2010, compared with 80.8% in 2009.

These were some of our key activities:

• Customers rightly expect proactive approaches, anticipating future developments. Following success last year achieving product registration under the EU Biocidal Products Directive for its RADAR unit, Rentokil has now achieved USA regulatory approval for RADAR.
• To better understand customers’ specific issues, divisions use various survey techniques in addition to the CVC process. Ambius undertook customer preference research, especially concerning “green” services and Rentokil undertook mystery shopper research, focusing on branches’ response to customers.
• Eden, one of the UK’s largest school catering services providers, worked with Croydon Council to achieve Silver accreditation for the Food for Life catering mark. Eden is the first to have achieved this recognition for a group contract.
• Rentokil introduced Entotherm, a chemical-free process utilising dry heat to tackle bed bugs and cockroaches, which was awarded a Best Innovation in the Private Sector award as part of the Best Business Awards 2010.
• Initial Hygiene introduced Eco Soaps, a range of environmentally friendly, low allergy soaps, to meet the strict ecological requirements of the Nordic Swann Council and EU Eco-Label.
• City Link developed a range of initiatives to offer the industry’s highest level of parcel security. This includes VanCam and the recent introduction of Eteligencia, analysing products sold on auction sites such as eBay, helping locate missing or stolen products.
• Initial Hygiene developed service propositions linked to customer segments, which are currently under trial. Ambius’s customer research led to specific service propositions for customers seeking more environmentally friendly service. Rentokil offers larger commercial customers improved service information using online information – PestNet Online – which enables improved reporting and monitoring.

Supply chain management

The company combines a central procurement team with divisional specialists in areas such as textiles and Asia sourcing.

The central procurement department seeks out the most acceptable purchasing decisions, taking into account corporate responsibility issues, using techniques like whole life costing. To ensure consistent procurement approaches, the group utilises a supply chain academy, to deliver training on sustainability including courses on “Sustainability in Suppliers” and “Best Practices”. In 2010 the procurement team signed an agreement to introduce in 2011 Ariba® Procure-to-Pay™ to drive a best-practice procurement process.

In many businesses, where product supply categories represent high risks, we adopt higher supplier involvement levels. In the Textiles & Hygiene division a focus is on materials, much of which is sourced from a few countries known to be “countries to watch”. Textiles contracts require suppliers to meet ethical, environmental and labour standards and uses ACTE, together with OEKO-TEX certification, to ensure compliance.

Procurement activities In Rentokil and Ambius often link with regulatory management. Technical colleagues specify products and ingredients, based on regulatory and technical knowledge and our procurement teams. Internal specifiers advise procurement in procuring environmentally safe products.

Health and Safety

Health and safety is routinely reviewed at all management levels and is on the main board‘s agenda at every meeting. The focus is on colleagues, customers and those individuals affected by the company‘s operational activities.

These were some of our key activities:

• The company rolled out the “Success Is No Accident” incident and accident management programme into operations in Australia, New Zealand and North America, following its success in the UK. The programme provides an early reporting and management action process related to work-related accidents and near misses.
• Driving on company business is a major area of risk. Drive Smart was introduced for all UK drivers to achieve a “crash free culture”, by proactively identifying “at risk” drivers and providing a range of targeted and effective interventions. UK results showed third party claims per vehicle reducing by 4% and more minor accidental damage incidents down by 20%, with resulting cost benefits.
• The group has continued its drive to install more common processes for managing health and safety risks such as working at height and risk assessments.
• Businesses introduced a variety of health and safety initiatives and training schemes during 2010. City Link introduced the “Don‘t Look Away” campaign to raise awareness of potential hazards, ensuring they are “sorted and reported”. It also launched “Safety Zone”, an online health and safety induction course. Rentokil Academy introduced a health and safety module in technician‘s performance assessment training materials and an “ATEX Awareness” training package for colleagues working in explosive atmospheres.

Health and safety management

The company‘s approach to health and safety compliance is backed by internal health and safety management requirements to which businesses must conform. These are based around OHSAS 18001.

In this year‘s Your Voice Counts survey a question was asked about colleagues‘ perceptions about the group‘s priority towards health and safety. The response to “The company places high priority on health and safety” increased by 2 percentage points to 76% which is above General Industry norm rates.

Our businesses report on their lost time accident rate (LTA) – a frequency measure. Currently, there is one formal health and safety KPI – Lost Time Accident Rate (LTA). To improve focus on absence management, the Working Days Lost Rate (WDL) – a severity measure – will be formally reported as a KPI from 2011.

In 2010 the group identified 21 priority businesses targeted for improvements and Lost Time Accidents (LTA) performance improved significantly in 10 of the 21 priority businesses. For 2011, the company will focus on five key business units for targeted interventions. The five units include City Link and Textiles & Hygiene Benelux which are undergoing performance improvement plans. These units accounted for 52% of the total LTAs and WDL in 2010. The group LTA and WDL rate increased by 12.5% and 13% respectively in 2010. Part of this increase is accounted for by improved processes of reporting in 2010 compared to 2009.

The Community

Rentokil Initial‘s community approach consists of three activities: charitable cash donations; community support; and community investment. The latter two tend to be at a country or divisional level, and are likely to combine financial support, operational or marketing support and employee volunteering.

Significant community investment programmes occurred in South Africa (supporting individuals impacted by Aids/HIV), in Australia (supporting Rainforest Rescue), and in Europe (supporting organisations in the developing world, as well as local charities).

In 2010, Rentokil Initial‘s charitable donations amounted to £130,000 (£150,000 in 2009) split between UK donations £47,000 (2009: £61,000) and overseas £83,000 (2009: £89,000). This excludes value in kind donations or provision of management time or colleagues‘ own fundraising.

More details of the community initiatives and projects, and other aspects of Corporate Responsibility, can be found in the Corporate Responsibility Report 2010.