Bringing our suppliers along on the journey

Globally, Carillion buys a wide variety of products and services, and has an annual procurement spend of more than £3 billion.

We therefore have a significant opportunity to extend our influence and Values beyond our immediate business. This begins by applying our risk management processes when selecting our suppliers, and then at every stage of a contract from prequalification to completion. See Supply chain management.

As a minimum, we expect all suppliers to adopt the principles of the Sustainable Supplier Charter. In some instances, we also require them to develop inclusive Community Engagement Strategies that involve their employees working on our contracts and projects.

Sourcing from local and small businesses

We are committed to ensuring that 60% of our external expenditure is directed to local suppliers by 2015. Our intention is that this will help to develop local economies, with further community and employment benefits, as well as helping us to provide a flexible and responsive supply chain. Progress to date has been good, with 24% of our UK spend in 2012 going local.

Buying from local businesses also minimises unnecessary transportation, helping us to reduce our carbon footprint and the footprint of the services and products we provide to our customers.

In the UK, as a strategic supplier to the Government, we are also required to report against its stated aim of ensuring that 25% of Government contracts’ expenditure is directed towards small and medium enterprises (SMEs). To date, we are reporting at around 35% on those areas of the business.

In 2013, we will be promoting the use of and measuring SME spend on all our UK contracts, not just those with the Government.

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Giving small businesses a chance

Before the Carillion Telent (CT) Joint Venture in the UK took over as network delivery partner for BT Openreach superfast broadband, delivery was through six large contractors. Following procurement activity by CT, 97.5% of spend on the contract is now through Small and Medium Enterprises (SMEs), that is, £234 million of the £240 million annual spend.

The strategy has some key benefits for SMEs, especially to support the growth of their businesses. For CT, partnering with SMEs has helped the Joint Venture to reach the required price points, and provides the flexibility to handle peaks and troughs of the contract.

Responsible timber procurement

As a major consumer of timber, and a member of the Forest Trade Network since 1997, we are committed to the responsible procurement of these products. We aim to source all forest products (including those sourced by subcontractors on our behalf) from well-managed forests, which have been certified to Forestry Stewardship Council (FSC) or equivalent standards. During 2011, we sourced 97% of timber from such sources1.

Carillion’s joinery workshop in Oman, part of our Middle East and North Africa (MENA) business, is the only operator in the country to have FSC chain of custody certification, providing assurance on the responsible sourcing of our timber products. In 2012, this initiative won the Construction Week Sustainability Oman Award.

In 2012, we refreshed our Responsible Timber Procurement Policy in the UK and implemented the new policy in our overseas businesses as well. For example, it is rigorously applied to our product sourcing business in China, Carillion Direct Sourcing, which is FSC registered and able to maintain an unbroken chain of custody on numerous timber-related products.

From 2013, we will also measure FSC in our overseas businesses, with a stated objective of 100% of directly procured timber being FSC or equivalent. We will also be working to produce a more extensive list of approved suppliers for direct use by subcontractors.

12011 data as 2012 data was unavailable at the time of publication.

Committed to...

...focusing on our supply chain and improving standards

...maximising local spend and employment

See our progress against targets

24%

local UK spend including SMEs

WinnerWinner

Construction Week Sustainability Oman Award for our FSC certified joinery workshop in Oman

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Apprentices in the supply chain

Apprentices

Many of our key suppliers now take our apprentices on temporary or permanent placements. One such supplier is Knauf, our primary supplier of insulation and drylining materials in the UK. We are partnering with Knauf to champion our apprenticeship scheme. This is a 16-week pilot scheme that provides 10 apprenticeships. After advertising in August 2012, 15 candidates were selected for interview, and the scheme will begin in early 2013.

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