Travis Perkins plc – Annual report – 31 December 2021
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 because the value of working together is recognised. 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.
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 held a Capital Markets Update in 2021 to set out its ambition to become the leading partner to the construction industry and to set out how the Group intends to grow total shareholder return.
It was necessary to consider the potential impact of Covid-19 restrictions when planning the 2021 AGM and with regret we had to insist that shareholders did not attend the AGM venue. The 2021 AGM was, therefore, undertaken via a webcast, through which shareholders could see and hear the Directors; and could ask questions and vote in real-time at the meeting.
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 2021 was sent to 16,559 colleagues with a completion rate of 67%, representing the views of approximately 11,000 colleagues. The engagement survey included detailed questions around people, safety and ESG.
Group diversity and inclusion networks with GLT sponsorship and diversity and inclusion forums established within the individual businesses, aiming to: retain a diverse pipeline of colleagues, enable a high performance culture, develop inclusive leaders and positively impact a generation of young people.
Pete Redfern was the designated workforce engagement Non-executive Director in 2021 and focused on holding listening sessions with colleagues to seek direct insight into what was important. Participants nominate themselves for the listening sessions, which have a strong emphasis on confidentiality. Agendas for the meetings were driven by the colleagues who participated rather than Pete. His role was to listen and facilitate the conversation. During the meetings in the first half of 2021, six key themes emerged: safety, resources, Covid-19, diversity & culture, mental health and IT. Feedback from colleagues was broadly supportive of the businesses’ direction and changes being made, however some concern was expressed at the pace of change and resources. In response, taking account of the on-going additional pressures caused by the pandemic, deliberate steps were taken to slow the pace of some change activity over the summer to allow colleagues additional time to catch up. Key themes emerging from listening sessions in the second half of 2021 focused on workload and the communication of change, rather than change itself. The themes from earlier in the year did not emerge in the same way. The change in emphasis and topics in the feedback during the second half suggested that the deliberate slowing of some activity over the summer had worked and that engagement with colleagues via the listening sessions had made a difference.
Further information on how the Group engages with colleagues can be found under “Colleague voice and engagement” on page 70.
Our ambition is to be the leading partner to the construction industry by delivering an exceptional, innovative service to customers. We build quality relationships with our customers and spend considerable time with them to understand their needs and views and listen to how we can improve our offer and elevate and deepen the relationship.
Our most significant customers and customer groups are fundamental to our success and they are monitored closely so that we can identify their needs and bring them innovative solutions that help resolve the pain-points in the most effective way. We use this knowledge to inform our decision-making as customer needs evolve over time, including tailoring our digital propositions to suit customer demands. E.g. launching the Travis Perkins app in order to offer more flexibility in accessing products and account management.
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. In particular, colleagues across the Group met with 329 suppliers at the Group Supplier Conference in October 2021. Key areas of focus included innovation, product development, health and safety and ESG. 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. We have maintained regular contact with our suppliers safely throughout the Covid-19 pandemic.
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. We partner with local charities and organisations at a site level to raise awareness and funds. The key issues and themes across local communities are reported back to the Board. The Group’s impact on the environment is a key focus for the Board. During 2021 carbon targets were set to support the Group’s leading ambitions on ESG. Further information is available in the Sustainability report on pages 52 to 71 and decision-making in practice regarding the carbon targets is set out below.
Government and regulators
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. Key areas of focus are compliance with laws and regulations, health and safety and product safety. The Board is updated on legal and regulatory developments and takes these into account when considering future actions.
Decision-making in practice
One of the major decisions made by the Group this year was to commit to and publish new industry-leading, SBTi-approved carbon targets, including Scope 3 carbon, in line with a 1.5°C pathway. This was to meet increasing stakeholder expectations around carbon and, recognising our role as market leader, to set the bar for the industry. 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.