Corporate responsibility

We seek to ensure our business is sustainable and acts responsibly

We have a number of key stakeholders that are influenced by the way that we choose to do business. Our Corporate Responsibility (CR) strategy seeks to ensure that we behave consciously in a way that has a positive effect on the communities in which we operate, on the people we employ and on our customers and suppliers, while minimising our impact on the environment. We also acknowledge that CR is of importance to our shareholders and that our ethical behaviour as a listed company has an influence on the market on which our shares are traded.

As one of the largest employers in the Hull and East Yorkshire region, we believe that we have a particular responsibility to make a positive difference in the region and much of the community work we do is aimed at benefiting the Hull and East Yorkshire community.

There are three key objectives which underpin our CR strategy:

  • to use our expertise in communications technology to create a positive impact on all our stakeholders and the communities in which we operate;
  • to promote our values, both internally and in the way in which we do business with external stakeholders; and
  • to engage and empower our people so that they can make a positive contribution to our CR strategy and the causes that matter to them.

Our CR strategy covers four key areas

All four areas are taken into consideration in key business decisions and the Board receives reports on each of these areas as and when appropriate. Responsibility for the overall CR strategy sits with our Chief Executive, Bill Halbert.

The governance around the four areas is to ensure that we have a consistent approach to risk management, strategy development and measuring progress.

 

Signed on behalf of the Board

Kathy Smith

Company Secretary
17 June 2015

Why have we chosen these four key areas?

Our people are fundamental to all we do and the way that we operate as a business clearly has an impact on how valued our people feel and whether or not we are the type of organisation that they want to work for.

How does the CR strategy link to business strategy?

The key areas of our CR strategy are fully inter-linked with the main pillars of our strategy, as shown below. We seek to ensure that CR initiatives are fully aligned with our overall strategy and that CR considerations are built into all strategic decisions across the business.

 

Development

Our people are one of our key differentiators. We place great importance on seeking talented individuals to join our business and motivating and developing those who are already part of our team.

Our aim is for our people to embody our values of being open and considerate, team-minded, flexible, inspiring and innovative. Many of our training programmes and activities focus on these values and the behaviours arising from them. We believe demonstrating the right behaviours is as important as having the right skills to perform a role.

During the year under review we have started to implement a competency framework, which sets out the required competencies for every role, covering both behaviour and technical expertise. The framework will enable us not only to carry out more effective and meaningful performance management but will also open up more development opportunities for our people by showing more clearly the competencies required to move to another part of the business or to progress.

Human rights

We respect fundamental human rights consistent with the United Nations Universal Declaration of Human Rights and we ensure that all of our internal policies are consistent with this. We do not have any current human rights issues.

Health, safety and wellbeing

We continue to place the utmost importance on the health, safety and wellbeing of our people, as well as the health, safety and wellbeing of our contractors, partners, customers and any members of the public who may be affected by our work.

Some of our people are engaged in manual work and we have thorough training in place for all of these people, as well as clear Safe Systems of Work that must be followed at all times. We launched a mandatory health, safety and environment e-learning module towards the end of the year for all of our employees. This covered fire safety, workplace hazards, health and wellbeing, environmental sustainability, driving safely, and responsibilities and reporting.

A number of our people have to drive on company business and we perform risk assessments and provide additional driver training for individuals deemed to be at a higher risk.

We work also with a number of partners when performing manual work and we follow clear processes to ensure that our partners are competent and operate in a healthy and safe manner. We require all of our suppliers of physical services to hold accreditation to a member scheme of Safety Schemes in Procurement (SSIP) and we will work with those without this to assist them in reaching the required level of competence.

We have been accredited to the BS OHSAS 18001 Health and Safety Management standard since 2011 and there were no fatalities or Health and Safety Enforcement Notices in the year. We experienced two Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) incidents (2014: two). There were 35 working days lost in the year as a result of just three health and safety incidents (2014: 13 working days). Health and safety incidents are closely monitored by the Health and Safety team to ensure that any appropriate actions arising as a result are identified and then fully implemented.

Education is a key part of our approach to wellbeing. Each year we hold health and wellbeing screening sessions which are open to all employees and contractors. These are provided by an independent third party and provide a free and confidential health assessment measuring such things as blood pressure, blood sugar levels, Body Mass Index and cholesterol. 585 of our colleagues attended these sessions in the year, representing approximately 32 per cent of the workforce. We provide also employees with the option to purchase other medical and dental services through our flexible benefits scheme.

During the year we launched a new programme called ‘Live Well, Work Well’ which provides self-help tools and ideas to our people to encourage them to think about their mental and physical wellbeing and to seek support and help when they need it to achieve a healthy work-life balance. Many of our employees have embraced the programme and have shared their ideas and tips through our internal social media platform.

Gender diversity

Gender diversity is the subject of much focus at the current time and we believe unreservedly in equal opportunities for all regardless of gender. We have clear policies in place which mean that men and women are given equal opportunities, both when we are recruiting and then in developing and progressing once with us. Since the year end we have welcomed a female Director to the Board. As at the year end the gender diversity of the Group was as set out in the table below:

Male Female Female %
Board Directors 6 0 0%
Senior management team1 11 5 31%
Other employees 1,165 635 35%

1. The senior management team is defined as those reporting directly to the Board of Directors and other leaders of key areas of the business.

We are supportive of flexible working wherever possible and 14 per cent of our workforce works flexible hours, including 34 per cent of our female employees.

During the year we launched a new programme called 'Live Well, Work Well' whici provides self-help tools and ideas to our people
Why have we chosen these four key areas?

We believe the environment is a key concern for all businesses and that we all have a responsibility to minimise our negative environmental impact and make decisions with environmental sustainability in mind.

How does the CR strategy link to business strategy?

The key areas of our CR strategy are fully inter-linked with the main pillars of our strategy, as shown below. We seek to ensure that CR initiatives are fully aligned with our overall strategy and that CR considerations are built into all strategic decisions across the business.

     

Breakdown of our emissions %

Breakdown of our emissions %

The main environmental impact of the business arises from our use of electricity, which makes up 85.9 per cent of our CO2e emissions. This includes all our premises, such as offices, data centres and our various network sites both nationally and in the Hull and East Yorkshire region.

As a business, we continue to work on reducing our emissions wherever possible. We have recycling facilities at all of our main offices and have introduced recycling bins for dry mixed materials during the year to make it easier for more items to be recycled. This has led to 94.1 per cent of our waste being recycled in 2014/15 compared to 92.5 per cent in the prior year. We report our environmental performance internally through a ‘Green Dashboard’ on our intranet and we have a network of volunteer Green Champions across the business, that helps to raise awareness of environmental matters.

Emissions in the year

The table below sets out our annual emissions in tonnes of CO2e.

Area Year ended
31 March 2015
CO2e
Year ended
31 March 2014
CO2e
Restated1
Combustion of fuel and operation of facilities 3,110 2,962
Purchase of electricity 18,953 18,344
Total 22,063 21,306
Tonnes of CO2e per £’000 of revenue 0.063 0.057

1. The reported figures for 2013/14 have been restated to use the UK Government conversion factors for 2014 and methods of calculation which are consistent with those used in 2014/15.

During the year the CO2e created from the combustion of fuel and operation of facilities has increased by 5.0 per cent. This reflects a slightly higher use of refrigerant gases in the year as a result of the replacement of the, now obsolete, R22 gas in a number of our air conditioning systems, plus an increase of 3.7 per cent in our business travel, the majority of which is due to an increase in domestic and short haul air travel. Whilst we always encourage our employees to travel only when necessary, we acknowledge also that some travel is necessary in order to do business.

We will continue to monitor our emissions in these areas and will continue to enforce the message to minimise our emissions wherever possible.

The CO2e from electricity purchased has increased by 3.3 per cent in the year which reflects an increase in the conversion factor applied to electricity in the year. The actual amount of kilowatt-hours of electricity used has reduced in the year by 6.9 per cent.

Information for our carbon emissions reporting comes from our own internal systems, third party travel companies, suppliers of fuel and waste collection and recycling services and from our electricity supplier. The method of calculation has been audited in previous years by our Internal Audit team and uses the UK Government conversion factors for company reporting.

Environmental measures

Area Actual Target 2014/15 Target met Target 2015/16
Total CO2e emissions 22,063 tonnes Not to exceed 2013/14 levels of 21,306 tonnes1 To return to 2013/14 levels of 21,306 tonnes
Waste sent to landfill 20.2 tonnes Not to exceed 2013/14 levels of 27.8 tonnes2 Not to exceed 2014/15 levels of 20.2 tonnes

1. The target for 2014/15 has been adjusted to reflect the restated comparatives for 2013/14. The restatement is to show the 2013/14 emissions as calculated using the same methodology and assumptions as in 2014/15, which are fully compliant with the UK Government conversion factors for company reporting for the relevant years.

2. This number reflects actual tonnes of waste sent to landfill rather than CO2e tonnes, which can be subject to changes in assumptions or methods of calculation year on year. The target for 2014/15 was previously shown in CO2e tonnes.

The impact of climate change

There has been a significant amount of flooding across the country over recent years and we take the risk of flooding seriously. Over the last few years we have installed powerful water pumps and flood alarms at the sites we have identified as having a potential flood risk, as well as installing flood barriers to basement doors and replacing air bricks at selected sites. During the year none of our buildings or equipment have been affected by flooding but we continue to monitor the risk and regularly practice our business continuity procedures to ensure we are prepared should an incident occur.

We report our environmental performance internally and a network of volunteer Green Champions raises awareness of environmental matters
Why have we chosen these four key areas?

We operate in a number of different communities across the country, particularly in Hull and East Yorkshire where we have a significant presence. We take seriously our responsibility to operate in a manner that benefits the local community as well as our strategic aims as a business.

How does the CR strategy link to business strategy?

The key areas of our CR strategy are fully inter-linked with the main pillars of our strategy, as shown below. We seek to ensure that CR initiatives are fully aligned with our overall strategy and that CR considerations are built into all strategic decisions across the business.

 

Supporting the local economy in Hull and East Yorkshire

The Hull and East Yorkshire region is the birthplace of our business and we are proud to play our part in local life in the area. We employ 957 people in Hull, representing 53 per cent of our Group, and we contribute over £150 million to the local economy each year1. We make our business decisions with the potential impact on the local community very much in mind, both in Hull and East Yorkshire and in the other communities in which our people are located. We have no material social issues.

Unemployment rates in Hull have fallen over the last year but continue to be high in comparison to England as a whole2; this has strengthened our resolve to support the local economy wherever we can. Our KC brand’s ‘buy local’ approach when purchasing goods and services has resulted in us directly supporting over 175 local suppliers over the last year.

Our KC Invest fund, which was launched in 2011 to provide start-up and growth financing for local businesses in the digital and technology sectors, continues to operate. During the year we also became a key partner of a community interest company called For Entrepreneurs Only, which is based in Hull and seeks to help boost the local economy by creating more private sector jobs for the future. We have provided financial support and our people have acted as guest speakers at events to help entrepreneurs learn more about the reality of running a business.

We continue to support the Hull’s John Cracknell Youth Enterprise Bank, which has provided grants to 14 young people to help them set up and develop their businesses over the last year. We believe that supporting young people at the outset of their careers helps to develop the employers of the future, thereby supporting the long-term local economy. As part of this we support the Hull Employability Charter and have taken on 12 apprentices over the past year to demonstrate our commitment. During the year we have also engaged with 23 primary schools, eight secondary schools and three colleges to support the development of employability skills, provide one to one reading support, take part in careers events and inspire interest in science, technology, engineering and maths.

1. DTZ Consulting, 2015.

2. For the 12 months to 30 September 2014 unemployment in the Hull City Council area was 12.75 per cent compared to 6.61 per cent for England as a whole. Data taken from the Humber Data Observatory.

Increasing broadband penetration in Hull and East Yorkshire

The government has highlighted ‘digital exclusion’ as a key risk facing the UK at the current time. People may be digitally excluded due a lack of internet access or a lack of digital skills. Digital inclusion results in people feeling more connected with their families and communities, increases the job opportunities available and even enables people to save money through shopping online, and to access government services that are increasingly moving online.

We are looking to help tackle digital inclusion in a number of ways:

  • we are making a significant investment in the provision of superfast broadband, to enable people to communicate and do business online at download speeds including 250Mbps. Our fibre deployment began in 2012 and has continued throughout the year, with more than 45,000 premises passed as at 31 March 2015 and a commitment to have passed 100,000 premises by 31 March 2017;
  • we have introduced new products and packages that provide low-cost PCs, tablets or laptops to new customers. We have also launched our cheapest ever broadband package to encourage more people to get online; and
  • we are working with local councils and other organisations to provide equipment and volunteers to run courses and drop-in sessions to teach digital skills, including in local community centres.

Improving wellbeing in Hull and East Yorkshire

During the year we announced a partnership with Hull 2020 to introduce a number of ‘Safe at Home’ services to be used across the region. Hull 2020 is a group of nine public service organisations committed to enabling the people of Hull to improve their own health and wellbeing.

In October 2014 we began trialling a ‘cold alarm’, which is a wireless device that monitors the temperature in a home and sends an alert via the internet to an alert centre or family member if the temperature falls below an agreed threshold. The devices can be used in the homes of people at risk from the cold, including older people and those with long-term health problems.

By launching technology-enabled care services such as the cold alarm, we aim to help give vulnerable people and their relatives peace of mind and give people an opportunity to live independently in their own homes for longer.

Volunteering

Our people are keen to volunteer to help with local community activities. We continue to operate formal partnerships with schools, charities and projects in the areas local to our offices across the country. In total our people donated 1,570 hours to community volunteering during the year to 31 March 2015.

We have continued this year in our patronage of The Prince’s Trust, the UK’s leading youth charity. The Trust aims to change lives by offering training, personal development, business start-up support, mentoring and advice to young people. This year we have hosted and supported events to help The Trust expand its work in Hull and East Yorkshire.

Group charity partner

For the last nine years we have focused employee fundraising around a charity partnership. Every three years, we work with a charity partner chosen by our people from a shortlist of UK-registered national charities. In April 2012 we began a partnership with Sparks, a charity dedicated to funding pioneering research into conditions affecting babies, children and mothers-to-be. In the three years to 31 March 2015 our people raised over £235,000 for Sparks through a variety of sporting challenges, dress down days, auctions, cake bakes and many other activities.

From 1 April 2015 our new charity partner is Teenage Cancer Trust, selected again by our people. Teenage Cancer Trust is dedicated to ensuring that young people diagnosed with cancer receive the very best care and support from the moment they are diagnosed.

Why have we chosen these four key areas?

Our customers and suppliers are also key stakeholders in the business and we believe that we have a responsibility to behave ethically with both suppliers and customers. We know also that there are issues that are important to our customers that go beyond the products or services that they buy from us, and we also seek to address these as part of our CR strategy.

How does the CR strategy link to business strategy?

The key areas of our CR strategy are fully inter-linked with the main pillars of our strategy, as shown below. We seek to ensure that CR initiatives are fully aligned with our overall strategy and that CR considerations are built into all strategic decisions across the business.

 

Ethical sourcing

We believe that we have responsibilities in relation to our customers and suppliers, to treat them fairly and to do business with them in the right way.

We also have a responsibility to make sure that our suppliers operate with the same ethics and standards as us. All of our suppliers are expected to sign up to our Supplier Code of Conduct; this sets out our expectations in relation to laws and ethical standards, labour practices, risk management and business continuity. We have regular meetings with our key suppliers and work closely with them to ensure that we understand the way in which their business operates and their approach to sustainability and their own corporate responsibility.

We also know that we have a responsibility to our customers to ensure we tackle the issues that are important to them, beyond the products and services that they buy from us.

Online safety

One area in which we believe we have a corporate responsibility to our customers is in relation to online safety. In October 2014 we launched free parental controls on our broadband service which any consumer customer may sign up for. We are applying these controls automatically for all new customers, with customers able to opt out if they wish to.

We have also provided funding to a local theatre group to develop and perform plays addressing cyber bullying and online grooming. These plays have been performed in primary schools across the region to teach children about the importance of online safety.

Continuity of supply

We believe that continuity of supply is essential for many of our customers who rely on us for their business communications or for access to online services. We therefore continually review our partners and suppliers to ensure that we are able to have continuity of supply, or a viable alternative, should one of our key suppliers unexpectedly fail.

We are reliant on electricity across much of our business and therefore the threat of a significant power outage has been identified as a potential risk to the business. To mitigate this risk, each of our key sites has an on-site dedicated power supply back-up, with either permanent or mobile generator support in the event of long-term power outages. These are all tested at regular intervals. We have also invested significantly in recent years to ensure that our internal systems have resilience and back-up support should any of our key systems fail.

We have a responsibility to our customers to ensure we tackle the issues that are important to them