Section 172 statement

Travis Perkins plc – Annual report – 31 December 2023

Industry: distribution

Section 172 statement

Engaging with stakeholders

Building positive relationships through strong engagement, collaboration and dialogue with stakeholders that share our values is important to us. Working together towards shared goals assists us in delivering long-term sustainable success.

Our Group comprises a number of businesses and all engage with each other recognising our ‘we’re better together’ value. Each business also has extensive engagement with its own unique stakeholders. The Group’s governance framework delegates authority for local decision-making to businesses, up to defined levels of cost and impact, which allows the businesses to take account of the needs of their own stakeholders in their decision-making.

The leadership teams of each business make decisions with a long-term view and with the highest standards of conduct in line with Group policies. In order to fulfil their duties, the Directors of each business and of the Group itself take care to have regard to the likely consequences on all stakeholders of the decisions and actions which they take. Where possible, decisions are carefully discussed with affected groups and are therefore fully understood and supported when taken.

The Board is well informed about the views of stakeholders. Reports are regularly made to the Board by the businesses about strategy, performance and key decisions taken, which provides the Board with assurance that proper consideration is given to stakeholder interests in decision-making. It uses this information to assess the impact of decisions on each stakeholder group as part of its own decision-making process. Details of the Group’s key stakeholders and how we engage with them are set out below.

Shareholders

We rely on the support of shareholders and their opinions are important to us. We want to enable shareholders to have an in-depth understanding of our strategy and operational and financial performance, so they can accurately assess the value of our shares.

We have an open dialogue with our shareholders through one-to-one meetings, group meetings, and the Annual General Meeting. Discussions with shareholders cover a wide range of topics including financial performance, strategy, outlook, governance and ethical practices. Shareholder feedback along with details of movements in our shareholder base are reported to and discussed by the Board and their views are considered as part of decision-making.

The Group’s Chair and management team undertook 144 investor interactions during 2023, including attendance at 10 investment bank conferences. The management team recognises the benefits of virtual meetings with regard to efficiency and reaching a wide investor base but remains focused on in person meetings as it is their belief that this facilitates better quality conversation and helps to build long term relationships with shareholders. In 2023, two-thirds of all investor interactions were in-person, this figure rising to over 80% with UK based investors.

Key ESG interests: Carbon, Responsible Sourcing.

Customers

The success of the Group, both historically and into the future is dependent on our ability to understand and meet the needs of our customers. The Group continues to invest heavily in data capability to bring a greater level of understanding to the behaviour of our customers and when combined with the time spent discussing their needs and perceptions this produces a significant amount of insight which we use to guide our actions.

Taking a longer term view of customer needs has allowed different business units to begin to develop and deploy a range of services which are designed to go above and beyond the traditional model of the straight supply of materials. By looking forward and seeking to understand the potential range of impacts which may affect the business of our customers in the future we are able to assist in the development of solutions to bring mutual value, enabling, for example, customers to work with changing environmental planning legislation to construct houses that meet current and future standards. Many of these examples are shared under “Modernising construction” on pages 36 to 37.

Two ESG forums were hosted for national house builders and two for regional house builders during 2023 and three working groups have been formed to work together on shared ESG opportunities. Customers increasingly invite the Group to participate in events or present at conferences to advance sustainability agendas. The ESG team engaged with over 250 customers in 2023.

Key ESG interests: Carbon (product, delivery, data, solutions for Net Zero new build and Retrofit), Sustainable products, Responsible sourcing, Social value, Packaging, Safety.

Colleagues

Our people are key to our success and we want them to be successful individually and as a team. We aim to build a fully inclusive environment where treating each other with respect and encouraging everyone to be themselves is at the heart of our values.

We work hard to engage with and listen to our colleagues in a variety of ways. Our Group-wide engagement survey in 2023 was sent to just under 18,000 colleagues with a completion rate of 79%, representing the views of over 14,000 colleagues. The engagement survey included detailed questions around safety, belonging, equal opportunity, customer focus and corporate citizenship.

Group diversity and inclusion networks with GLT sponsorship and the Diversity and Inclusion Advisory Board continued to drive the Group’s agenda to retain a diverse pipeline of colleagues, enable a high performance culture, develop inclusive leaders and positively impact a generation of young people.

The Group also continued to embed its storytelling process in 2023 to deliver a carefully crafted narrative that weaves together three elements which, in combination, are designed to engage and inspire colleagues; (i) the Group’s purpose; (ii) the Group’s updated values; and (iii) the strategy. Group-level and business unit-specific narratives are easily communicable and capable of being embellished with personal stories from the tellers to make narratives both resonate with the audience and be capable of being passed on. The story has been kept alive and further embedded in 2023 through the businesses’ conferences and Group and business level communications. Further information on how the Group engages with colleagues can be found under “Colleague voice” on page 48.

ESG training sessions were delivered across a number of teams at Group and within the businesses by the Group Sustainability team and the ESG module, which is now included in all apprenticeships, was revised in 2023 to keep the content current.

Key ESG interests: Safety and Wellbeing, Skills, Diversity, Equity and Inclusion, Carbon, Responsible Sourcing.

Suppliers

Our suppliers are experts in the wide range of products we source from them. Macro factors such as the increasing relevance of ESG and sector-specific changes seen in the development of modern methods of construction are raising expectations of us and our suppliers and creating opportunities. We aim to build strong supplier relationships and develop mutually beneficial, lasting partnerships that meet these expectations and seize these opportunities.

Engagement with suppliers is primarily through a series of interactions and formal reviews. We also host regular conferences to bring suppliers and customers together to discuss shared goals and build relationships. Core suppliers joined the conferences hosted by the Group’s businesses in 2023. Online workshops were held for suppliers in July, September and October, focusing on decarbonisation, packaging and waste, and modern slavery. Between the workshops and individual supplier engagements, over 350 suppliers were supported by the Group sustainability team during 2023. The Board recognises that relationships with suppliers are important to the Group’s long-term success and is briefed on supplier feedback and issues on a regular basis.

Key ESG interests: Carbon, Responsible sourcing (including QA), Sustainable products, Packaging, Safety, Modern slavery.

Communities and the environment

Investing in sustainable growth means supporting and empowering the communities in which we operate. By ensuring we make a positive contribution, we can help build thriving communities and strengthen our business. We engage with the communities we operate in, to build trust and understand the local issues. Key areas of focus include how we can support local causes and issues; create opportunities to recruit and develop local people; and help to look after the environment. In 2023, we continued to work towards the long-term target for people development that we announced in 2022 for 10,000 people to successfully complete apprenticeships by 2030 (delivered both for the Group’s own colleagues and those in the wider industry). We partner with local charities and organisations at a site level to raise awareness and funds. The Group’s impact on the environment is a key focus for the Board. During 2023 progress was made towards the Group’s targets for buildings and fleet (Scope 1 and 2) and for the supply chain (Scope 3). Further information is available in the Sustainability report on pages 30 to 49.

Key ESG interests: Carbon, Sustainable products, Safety, Quality, Skills, Responsible sourcing.

Government and regulations

The regulatory environment significantly impacts the success of our business. We believe it is important that those who can influence policy, law and regulation understand our views. We also want to share information and perspectives on areas that impact our businesses. We engage with the government and regulators through a range of industry consultations, forums, meetings and conferences to communicate our views to policy-makers relevant to our business. In 2023, Nick Roberts, Chief Executive, joined the Construction Leadership Council (CLC) board as industry sponsor for People and Skills. Key areas of focus during 2023 were around the skills gap, a national retrofit strategy, decarbonisation of specialist fleets and health and safety. The Group became a partner to the National Retrofit Hub in 2023 and is represented on each of its working groups. The Board is updated on legal and regulatory developments and takes these into account when considering future actions.

Key ESG interests: Carbon, Retrofit, Skills, Governance.

Trade and professional bodies

The Group has committed to be the leading partner to the industry. This involves close collaboration with trade and professional bodies to raise awareness, to share best practices and to move forward together as an industry on shared opportunities, issues and challenges. For example, the Group sits on the Builders Merchant Federation Board and each of its industry working groups, in some cases chairing those groups. The Group was also a member of the Institute of Environmental Management & Assessment (“IEMA”) in 2023, benefiting from and contributing to cross sector knowledge sharing. The Group is a CO2nstructZero Business Champion, the Construction Leadership Council’s framework for net zero in the construction industry. As a partner to the Supply Chain Sustainability School, experts from across the Group participate in key industry forums to co-develop plans and solutions for key sustainability issues.

The Group also participates in working groups with the Future Homes Hub and the West Midlands Combined Authority Future Homes Taskforce. The Group is a founding member of The Construction Inclusion Coalition (“CIC”), which has been established by CEOs at leading organisations including Aliaxis, Baxi, Bradfords, Highbourne Group, Ibstock PLC, Knauf, Travis Perkins PLC, Wavin, Wolseley, the Builders Merchants Federation and the National Merchant Buying Society to raise sector standards on equity, diversity and inclusion, with an immediate focus on gender representation in its first year.

Key ESG interests: Carbon, Retrofit, Skills, Safety, Packaging, Diversity, Equity and Inclusion.

Decision-making in practice

One of the major decisions made by the Group this year was to strengthen the Group’s involvement and investment in Retrofit. This was to meet increasing social housing customer requirements and upcoming consumer requirements relating to the retrofitting of their buildings to improve energy and thermal efficiency, reduce carbon, reduce utility costs and improve health and comfort. Recognising our role as leading partner to the industry, the Group has further developed its retrofit plans and retrofit basket of goods, as well as joining the National Retrofit Hub, investing in bespoke retrofit projects with customers and recruiting new dedicated team members to drive this agenda forward. In making this decision the Board considered the interests of and the impact on all stakeholders. To provide insight into the approach taken by the Board, a summary of stakeholder views and conclusions is set out below.