Travis Perkins plc – Annual report – 31 December 2022
Industry: distribution
Section 172 statement
Engaging with stakeholders
Building positive relationships through strong engagement, collaboration and dialogue with stakeholders who 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.
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.
During summer 2022, the Group undertook an independent investor perception study run by Rothschild & Co. This study included 15 major investors, representing around half of the Group’s actively managed shares, and also five sell-side analysts with a range of current views on the business. This feedback was presented back to the Board by Rothschild & Co during July 2022.
To ensure engagement, the Group also undertook around 200 investor interactions during 2022. These interactions build upon the presentation by the Group of its ambition to become the leading partner to the construction industry, which the Group set out at its Capital Markets Update in 2021. The majority of these interactions were held as in-person meetings as the management team believes that this facilitates a better quality of conversation and helps to build longer term relationships with our shareholders.
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 2022 was sent to 17,815 colleagues with a completion rate of 76%, representing the views of 13,540 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.
Pete Redfern continued as the designated workforce engagement Non-executive Director in 2022 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 2022, Pete engaged in a programme of activities where he had the opportunity to gauge the engagement levels of colleagues across our businesses with a specific focus on our Driver and New Starter populations. Key themes emerging from listening sessions in 2022 focused on safety, belonging, equal opportunity, customer focus and corporate citizenship. Pete shared key themes and feedback to the Board.
The Group also focused in 2022 on a storytelling process 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 were designed to be rolled out throughout the organisation by cascade and so have been made to be easily communicable and capable of being brought to life with personal stories from the tellers to make narratives both resonate with the audience and be capable of being passed on. The cascade started in January 2022 when the story was delivered by the GLT to the senior leadership teams of Group’s business units and functions, who in turn cascaded the story within their own teams, with further rolling down to every colleague successfully completed by the mid-point of 2022. The Board was updated regularly regarding progress of this initiative which brought the Group’s purpose, values and strategy to life.
Further information on how the Group engages with colleagues can be found under “Colleague voice and engagement” on page 48.
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 has invested 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 supplying 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 some 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.
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 2022. Online workshops were held for suppliers in April, July and September, focusing on decarbonisation, sustainable products, responsible sourcing, packaging and quality assurance. Each series of workshops was attended by in excess of 600 suppliers. 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.
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 set a new long-term target for people development during 2022; 10,000 successfully completed 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 2022 interim carbon targets were set for buildings and fleet (Scope 1 and 2) and for the supply chain (Scope 3) to ensure credible milestones on the Group’s carbon roadmaps. Further information is available in the Sustainability Report on pages 32 to 39.
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 during 2022 were around a national retrofit strategy, green skills, decarbonisation of specialist fleets and health and 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 a new industry-leading, skills target. This was to meet increasing stakeholder concerns around the skills gap in the construction industry 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.
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