Corporate responsibility

The five key themes of Wolseley’s CR Strategy are:

• Health and safety;
• Environment;
• People;
• Responsible business; and
• Community engagement.

These themes were selected to support Wolseley’s business strategy and represent the areas that have the greatest impact for our operations. Ensuring the health and safety of our people and maintaining our physical assets helps us to preserve the integrity of our operations and strengthens customer service.

Measuring our environmental performance will enable us to set targets to improve our impact on climate change as well as reduce costs in our business. Offering competitive rewards and development opportunities will help to improve morale in our workforce, attract and retain high quality employees and ensure that our people can maximise their potential. Conducting business responsibly and with integrity minimises risk and strengthens our reputation. Building closer relationships with the communities in which we operate helps us to promote our business and its objectives and gain a greater understanding of our customers, neighbours and employees. Further information on each of our five key themes can be found later in this report.

The strategy identifies minimum standards with which each of our operating companies should comply and Group goals which we aim to achieve over time. In pursuit of the Group goals, each operating company has the freedom to implement its own initiatives and targets in respect of each of the key themes. This approach recognises that the drivers for progression may vary from business to business, that different objectives may require different resources and time to achieve, and that they will therefore require different solutions. This approach also recognises that some of our businesses might achieve their goals within an earlier time frame than the overall five-year plan.

	Group minimum standard	Group goal
Health and safety	Compliance with legal requirements, monitoring Group and operating company Key Performance Indicators (“KPIs”).	Proactive safety culture, recognised industry leader.
Environment	Compliance with legal requirements, establish KPIs, develop improvement programmes.	Carbon neutral operations, informing industry best practice.
People	All employees are competitively rewarded and provided with development opportunities.	Industry-leading staff retention and productivity rates.
Responsible business	Endorsement of the Group Code of Ethics, identify forest source of timber.	Group Code of Ethics and compliance programmes evidence best practice, eliminate risk-timber.
Community engagement	Participating in, or donating to, a number of community projects.	Public recognition of Wolseley’s contribution and value.

To help achieve our objectives we have identified a number of priority actions, which are summarised in the tables that follow, together with the progress made to date.

Year 1: 2008 – 2009

Target and priorities	Progress
Governance Focus on building on existing CR governance and consolidating implementation processes.	Group CR strategy communicated to businesses. Engagement with key managers. Development of internal CR network to deliver local CR plans.
Health and safety	Group health and safety policy introduced in December 2008 with supporting Group-wide common management processes and KPIs.	See details
Environment and Responsible business Ethical sourcing.	Timber: development and coverage of the Group’s risk assessment process has continued and improved.	See details
	Other products: a pilot project is underway in Wolseley UK to begin the process of verifying our suppliers’ practices against our ethical sourcing standards.	See details
Responsible business Prevention of fraud and corruption.	Group anti-fraud and anti-corruption policies and training are currently in development, for introduction later in the financial year.	See details

We are pleased to report that our objectives for the first year of the CR strategy have broadly been met. The focus of resources on other Group priorities has resulted in a delay to some activities but not to a significant extent.

Year 2: 2009 – 2010

Target and priorities
Delivery of anti-fraud and anticorruption policies and training.
Continued development of local CR plans.
Refresh and re-launch Group Code of Ethics and supporting policies.
Develop Group environment and sustainability objectives.

Year 3: 2010 – 2011

Target and priorities
CR governance and implementation processes are consistent and aligned across the Group. Implement enhancements.
Further focus on Group-wide approach to improvements to priority CR activities.
More detailed and consistent data gathering and reporting.

Year 5: 2012 – 2013

Target and priorities
Higher standards achieved by all businesses.
Continuous improvement principles integrated into business processes.

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The Group Company Secretary and General Counsel is responsible for the overall delivery of the Group’s CR programme. Within our operating companies, local management have responsibility for developing and implementing CR plans that are integral to their operations and that support the Group CR strategy. Maintaining responsibility for operating company plans in this way helps to promote accountability for our CR goals at the local level and helps to ensure that individual plans are aligned with local objectives, markets and resources.

Progress against the CR programme is monitored at a Group level by regular updates from operating companies to the Group Company Secretary and General Counsel, who then updates the Board annually ensuring objectives and priorities are discussed and agreed.

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An explanation of the Group’s risk management programme. Those risks which might have an impact on the key elements of our CR programme, and consequently on our business, are discussed in more detail in this section.

Prompted by the threat posed by the H1N1 virus (swine flu), the Group reviewed its business continuity plans and tested its preparedness to respond to the potential impact of the virus on our employees, their families and our customers. All employees have been provided with extensive information and advice to help prevent infection, recognise symptoms and plan responses where infection occurs.

Risks associated with climate change, for example flooding, present a threat to some of the Group’s physical assets but, overall, the impact is expected to be manageable or limited. These risks are reviewed annually as part of the renewal of the Group’s insurance programme.

In the UK, the Carbon Reduction Commitment (“CRC”), to be introduced in 2011, will require Wolseley’s UK operations to participate in a government auction process for carbon emissions allowances. Wolseley UK has established a working group to assess the impact of the CRC on its operations and to identify ways to reduce its carbon emissions. These initiatives may include changes to physical infrastructure, for example the types of insulation and heating used in buildings, as well as cultural and behavioural changes to everyday practices and procedures. Carbon reduction initiatives identified by the CRC working group will be shared across the Group to ensure that the maximum benefits can be gained.

It is possible that European legislation will be introduced within the next five years which will stipulate that all timber imported into the European Union must be from a legal source. We are engaging with national governments and the European parliament, as well as national timber trade federations, to provide our input to the development of legislation and government procurement policies. We are actively working with our suppliers to ensure the legal status of the timber we supply and thereby reduce the risk of purchasing products from illegal or unsustainable forest sources. See timber sourcing for more detail.

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