Corporate Responsibility Report 2012

Transcription

1 Corporate Responsibility Report 2012

2 About us 03 Message from the Chief Executive 04 Who we are Governance and management 05 Corporate responsibility strategy 06 Our focus 07 Highlights of the year 08 Stakeholders 09 Targets Beyond 2012 Sustainable business 11 Benefits 13 Case studies 15 Targets Stronger communities 17 Benefits 20 Case studies 24 Targets Better environments 26 Benefits 28 Case studies 30 Targets Performance 32 Next year s performance targets 35 Environmental data 37 Land Securities people 39 Marketplace and investors 41 Assurance statement 43 External commentary 45 Stakeholder panel statement Information 47 Glossary 49 Contacts 02

3 About us Message from the Chief Executive Corporate Responsibility (CR) has an increasingly high profile in the world of business. But it can be a rather woolly area. At times I m sure we ve all struggled to see the link between a company s CR activities and its core purpose value creation. At Land Securities, being responsible is first and foremost about making the company strong and successful. We do this by working in the smartest way possible to meet the needs and expectations of everyone affected by what we do. We are not interested in box-ticking exercises or competitive CR. This is about making a real difference in the real world. Four main aims drive our activity. We want to be the employer of choice in property, so we attract and retain the best people. We want to be the developer of choice for Local Authorities and communities, so they are pleased that it is Land Securities who is developing and managing property in their area. We want to be the supplier of choice for occupiers, with retail, office and residential tenants preferring to occupy our properties. These points of difference combine to help make us the investment of choice for shareholders. It is difficult to measure the value of responsible action in the share price. Yet we are convinced that our approach assists us at every point in the life of a property, from planning to construction, leasing, management and sale. We believe it creates value by making our assets more attractive. And it protects value by ensuring our portfolio meets changing requirements and regulations. In simple terms, good CR adds value to bricks and mortar. But it can also have a direct effect on people s lives. Take the apprenticeship opportunities we offer. In an uncertain economy, we re enabling individuals with little or no experience to gain skills and develop a career. That s good for them. It increases the flow of skilled people into our industry. And it gives economic support to the communities around our properties. In turn, that increases the attraction and value of our assets. Which is good news for shareholders. This gets to the heart of what responsible business is all about mutual advantage. By giving proper thought to how we do things, we can generate benefits for everyone. This report provides plenty of examples of mutual advantage, together with clear information on our priorities, targets and performance. I am sure you will find it useful. Robert Noel Chief Executive 03

4 About us Who we are Our retail parks, shopping centres, offices and residential developments make us an important part of communities up and down the country. Governance and management We have a Corporate Responsibility Committee. Their scrutiny ensures we have the sound information we need to make management decisions. How do you know us? You might encounter us in one or more of the following ways: PLC As far as investors are concerned, we re a PLC. This is also how central government, regulators, large suppliers, trade bodies, NGOs and the 600 people we employ know us. Property developers Many of our suppliers and service providers deal with us as a property developer. This is also how the communities and Local Authorities where we have construction sites know us. What you can t measure, you can t manage. The Corporate Responsibility Committee ensures we are always doing everything we can to improve our operations as a responsible business. Made up of senior managers from across the business, its remit is to define our corporate responsibility strategy, make sure our activities remain relevant to our business objectives and monitor our performance. Until 2011, the Committee met quarterly. Now, to ensure the company is making consistent progress against its targets, meetings have been increased to six a year. Chaired by the Group Tax, Treasury and Insurance Director, Martin Wood, the Committee reports to the CEO. CR Infrastructure Asset managers Finally there is Land Securities as an asset manager and supplier of retail and office space. The communities in which our assets sit come into contact with us in this way, as do organisations who lease our properties, along with their employees and customers. Managing the effect we have We employ a relatively small number of people directly. However, our business activities and the decisions we influence can affect many people s lives over many years. As a responsible company, we want the effect we have to be as positive as possible. We therefore measure the impact of our activities against a series of challenging targets. You can read more about our priorities and performance in the next section and throughout this report. Martin Wood Director, Tax, Treasury & Insurance Debbie Akehurst Head of Corporate Responsibility, London Portfolio Ian Burr Head of Property Management, London Portfolio Neil Pennell Head of Sustainability and Engineering Mike Davidson Head of Retail Operations Andrew Dudley Projects Management Director, Retail Portfolio Suzi Clay Portfolio Director, Retail Portfolio Anna Moulton Group HR Director Donal McCabe Director, Corporate Communications Clive Johnson Head of Health and Safety The CR committee is diverse. It incorporates senior people from every area of the business. This means it can do more than just drive an agenda it can make it happen. Martin Wood, CR Committee Chairman 04

5 About us Corporate Responsibility strategy On a day-to-day basis you may engage with us as a... PLC property developer asset manager As a PLC we engage with: As a Property Developer we engage with: As an Asset Manager we engage with: Employees Investors Central Government Suppliers Communities Local Authorities Customers Consumers Communities Our strategy is simple to be at the forefront of delivering quality space for our customers and providing an attractive total return for shareholders. We do this in a number of ways, and corporate responsibility plays a key role in helping us to create and protect value. The value our strategy provides Community investment Community engagement Our people Our suppliers Investors Health and safety Environment By acting responsibly and having a forward looking perspective into the future, we are able to deliver... sustainable business stronger communities better environments Our objectives: Our objectives: Our objectives: Developer of choice Supplier of choice Employer of choice Creating jobs Improving skills and training opportunities Investing in places Protecting natural resources Keeping workspace safe Reducing waste Find out more: Find out more: Find out more: p11 p17 p26 05

6 About us Our focus This review is organised differently to last year s. In 2010, we didn t think we were being as effective as we could be in areas of corporate responsibility. Also, the social, environmental and economic agenda was changing and we wanted to respond. So we completed a comprehensive review. It identified what actions were contributing most to the long-term strength of the business. This year s report reflects this new focus on effectiveness. We have divided it into three sections, each of which looks at a different aspect of what acting responsibly achieves. Sustainable business We want to build and manage developments that will serve communities for many years. As a result we earn the trust of local authorities. That trust allows us to have constructive discussions on future opportunities. We were the first company to start building again post downturn in London, Leeds and Glasgow. We have planning permission for a further 2 million sq ft of retail, which includes approvals for over 800,000 sq ft of edge-oftown developments across the country. In London, outside of the schemes already under construction we have permission for a further 1.9 million sq ft of developments. In a challenging retail environment we are also proud of the low number of empty shops in our portfolio with retail voids at 3.1% compared to 14.6% nationally, as measured by the Local Data Company. To be a strong successful business we need to attract, retain and develop the best people in our industry. How did we do this year? Well, becoming the employer of choice involves many things. But our Employee Engagement Survey results would suggest we are making good progress. This survey measures employee understanding and support for our business objectives. Our scores in key categories such as engagement and development were 88% and 68% respectively. The independently run survey also provides a benchmark to measure our performance against the highest scoring companies surveyed. We were 9% and 7% above this benchmark for each category. We want to be known for providing buildings that are efficient, function well and meet commercial needs. That way we will attract the best occupants. How did we perform? The customer satisfaction survey we commission of our retail clients revealed 98% would recommend us. In London, overall satisfaction was up from 83.6% in 2010 to 86% this year. Stronger communities Whether we are developing or managing a property, we believe we have to support the local community. We don t believe developments work unless they are built with this support they have to be part of the community. So we aim to help with whatever local people say is most important to them. Currently, big issues include the need for more jobs and training. We can contribute a lot here. Take our White Rose shopping centre in Leeds. It employs over 3,000 people. Over 40% of them live in the neighbouring four postcodes. We spend 4.5m keeping the centre looking good each year: most of that investment is spent locally. We are also building a major shopping centre development in the city called Trinity Leeds. This year we introduced new measures to monitor precisely how many people working on the scheme come from the local community. We were able to report back to Leeds City Council that 50% of the people employed on the scheme are from the Yorkshire region and 25% are from a Leeds postcode. In London there is a pressing need to provide training and jobs for people furthest from employment, such as ex-offenders and young people who ve never worked. We created five apprenticeships during the year, and 19 NVQs. We have provided training for 191 people through our development programme in partnership with our supply chain, with 72 previously unemployed going into work. Eight ex-offenders and young offenders who were given an opportunity on our sites were still in employment 12 months after starting with us. Better environments We know that the way we build and manage our buildings has an effect on the wider environment. Indeed, commercial property is responsible for about 18% of all carbon emissions in the UK. As the industry leader, we recognise that we have to play a part in reducing that impact. There is also a hard business case for acting responsibly. Investors expect us to future-proof our portfolio by anticipating changes in regulation and meeting increasing occupier demands for sustainable buildings. This year, the use of our Head Office at 5 Strand as a living laboratory to test new energy saving and sustainable technologies was recognised by the City of London when we won the Resource Conservation category at the National Sustainable Cities Awards. In the continued absence of a Government definition of a zero-carbon, non-domestic building, we defined the stretching but more realistic ultra-low carbon building. We will use this as a target when planning future developments. In 2012/13, we are voluntarily rolling out Display Energy Certificates (DECs) across our London portfolio. These will help occupiers understand how efficiently in terms of energy consumption they are using the building and hopefully lead to greater recognition of the impact changes in behaviour can have on energy efficiency. 06

7 About us Highlights of the year SUSTAINABLE BUSINESS Our objectives: Developer of choice Supplier of choice Employer of choice STRONGER COMMUNITIES Our objectives: Creating jobs Improving skills and training opportunities Investing in places BETTER ENVIRONMENTS Our objectives: Protecting natural resources Keeping workspaces safe Reducing waste Sustainable business is good business. 3.1% of empty shops in our portfolio, compared to a national rate of 14.6% (Local Data Company). 98% According to our customer satisfaction survey, 98% of our retail clients would recommend us This year we were named Property Manager of the Year by the Property Managers Association. Our aim is to earn the trust of the local community. 3.5m The value of the space, time, promotion and cash contributions our investment in community activities is equivalent to. 1,546 separate instances of community activity across our portfolio. 8,536 hours of time given to community activities. We have a part to play in reducing the impact of commercial property. This year we received a National Sustainable Cities Award for our energy reduction initiatives at our head office 5 Strand, WC2. In the buildings where we provide electricity, our tenants can now benefit from renewable energy sourced electricity at competitive and efficient prices. This year we stayed below the industry average accident frequency rate at all our shopping centres and development projects. 07

8 About us Stakeholders We work with many different groups of people. We describe them here along with some notes on how we discover and meet the specific needs of each group. Employees We encourage our people to reach their maximum potential. Our annual Employee Engagement Survey gives everyone a chance to let management know their thoughts. There is also the Exchange Forum. Here, elected representatives discuss key issues with members of the Senior Management Board. Customers (retailers and office space occupiers) Every one of our customers has their own Land Securities contact. To help us become better landlords, each year we conduct customer satisfaction surveys among our shopping centre and office customers. Four times a year we hold occupier review meetings in our shopping centres and across our London offices. Suppliers and service partners We have regular meetings with the contractors and other partners who help us construct and run our buildings. Our current focus is on their training and employment policies. We want to make sure they do what they can to support our aim of providing specialist skills training and job opportunities to the local unemployed. Investors Naturally, our investors seek competitive returns. But they also want assurance that they are investing in a sustainable, wellgoverned business. To ensure their voice is heard, we commission an independent investor survey every two years. Communities Our properties play an important role in many communities. We plan for their local needs by consulting with residents, community groups and businesses. We also encourage our staff to get involved through charitable donations and payroll giving. Putting our scale to good use, each year we support one national charity across our UK shopping centre portfolio and in London through our partnership with the Prince s Trust. We also encourage each shopping centre to support one or two local charities that are close to and active in the local population. Local authorities No two communities are the same. So we build partnerships with decision-makers, economic development teams and planning departments to identify local priorities. Central government, regulators, trade bodies and NGOs We liaise with legislators and the trade organisations which influence them. We regularly brief members of both Houses of Parliament. We also participate in a number of industry-wide bodies, including the British Property Federation (BPF), the British Council for Offices (BCO), the British Council for Shopping Centres (BCSC), Better Buildings Partnership, London First and the UK Green Building Council. By demonstrating astute judgement and innovative thinking, we continue to set industry benchmarks and remain trusted advisors to government. Consumers There are nearly 300 million customer visits to our shopping centres each year. We try to speak to as many members of the public as possible via customer service desks in our shopping centres and through the feedback facilities on our websites. Stakeholder Panel We established the Stakeholder Panel in 2010 to give us a greater understanding of our stakeholders views and priorities. It was originally comprised of service and construction partners, responsible business experts, local authority representatives and Land Securities employees. In 2012, we expanded it to include voices from customers, academia and the investment community. Together, they provide a range of valuable opinions on our targets, performance and reporting. 08

9 About us Targets 2012 Clear targets define our aspirations and inspire our actions. Below, you can see a snapshot of how we performed this year. Sustainable business We had eight targets under sustainable business. We achieved five, had one ongoing and missed two. Achieved All full and part-time head office based employees and supply chain employees at head office to receive at least London Living Wage (LLW), currently 8.30 per hour by March % of business-critical roles (identified as succession plan vacancies in Band A roles and leadership Band B+) to have an identified internal successor ready within 12 months by March Maintain overall satisfaction rates in both London and Retail customer surveys of 4.18 and 4.27 respectively. Ongoing Maintain or increase 60% employee volunteering rate (for half day or more per year) but increase the proportion of those who provide skilled or professional advice or mentoring to 25% (of the 60%) by March This target has been harder to achieve than expected due to high levels of volunteering and insufficient recording. It has been particularly difficult to differentiate between personal and professional volunteering activities. We are putting in place new procedures to address these issues. Stronger communities We had eight targets under stronger communities. We achieved seven and had one ongoing at year end. Achieved Embed charitable partnerships into both London and Retail business units by 2014 by embedding charity lets into the asset management programme. Deliver the London Portfolio Employment and Skills programme across three development sites (20 Fenchurch Street, Park House, 123 Victoria Street) by Write training clauses into all relevant tender documents for key service partners and main construction contractors by Ongoing Report annually against social, economic and environmental metrics to all regional Local Authorities and London Boroughs where we have significant shopping centre or development presence by March By year end, good relationships had been established with Local Authorities and London Boroughs, and reports were in the process of being prepared, but they had not been distributed. Missed Four to six London based 16 to 18 year-olds per year, who do not normally have access to a corporate environment, to have gained work experience at Land Securities by March Establish a summer work experience programme (in 2011). We missed our Summer 2011 deadline for delivery of a trial work experience scheme. However, by year end, the operational aspect of this target had been achieved. Fill 50% of vacancies at middle manager level (Band B) with internal candidates recruited as graduate or early career professionals by The miss reflects the changes we made to the longer term aspect of this target during the year to align it more closely with the business. Better environment We had nine targets under better environment. We achieved five and had four ongoing at year end. Achieved In anticipation of the 25% reduction in regulated emissions due in 2013, new development design to be ahead of 2010 Building Regulations requirements in terms of CO 2 emissions. Increase to 90% the amount of waste diverted from landfill for the shopping centre portfolio by March Remain below industry benchmarks for reportable incidents for health and safety purposes on development sites and within our managed property portfolio. Ongoing Reduce average CO 2 emissions from the managed portfolio by 30% by 2020 compared to 2000/01 leading to interim reduction targets by March 2013 of: offices 8.53%, shopping centres 5.80%, retail parks 8.41%. This target was reset during the year see re-based targets on p10. To achieve FSC project-specific certification for every completed development. Most schemes are collecting the evidence to meet this target. However, it is difficult to assess as no qualifying schemes were completed in the year. Ongoing Reduce the average water consumption across the London managed office estate by 10% (compared with 2010/11), measured in terms of litres per person by March The target is not due to be met until 2016 but, as we gained better data during the year, we chose to change the scope of the target. See re-based targets on p10. Achieve zero environmental incidents. During the year there were no incidents that would result in a prosecution. However, we did find an example of a contractor not following the correct procedure when disposing of fluorescent lamps, so we did not feel we had achieved this target. 09

10 About us Beyond 2012 We believe responsible business is better business, so we take a proactive approach to updating targets and making CR business as usual. Business as usual This year two targets moved into being business as usual. Maintain high levels of participation and scoring in employee engagement survey: Our employee engagement survey occurs every year. Rather than set targets for constant improvement, we want it to record what we are doing well and not so well in terms of addressing employees concerns. So we will continue to run the survey but we will not include improvement targets. Embed charitable partnerships in retail: This target has been met at centres where it is suitable to have an embedded charity partnership. We are moving it to business as usual, where it will continue to be monitored. Re-based targets Two key targets under better environment were re-based following the year end. Reduce average CO 2 emissions: The government targets use data from 1990 as the baseline against which we should measure progress on sustainability improvements. However, as we have come to understand the setting of targets better and made them more specific, we have realised that some of our past data is not reliable enough to serve as a baseline. When we originally set our sustainability targets we took our baseline as 2000/01, as we had data for this period, but not Reviewing subsequent years, we began to worry that our 2000/01 data might not be robust enough to help us make a meaningful difference. Therefore, we have changed our benchmark to the much more reliable data of 2010/11. The new target now reads: Reduce average CO 2 emissions from the like-for-like managed portfolio by 15% by 2020/21 compared to the 2010/11 benchmark. Reduce average water consumption: We have focused more attention on the measurement of water usage as we recognised the growing importance of this issue. This year we have expanded the target to cover average water consumption in the London managed office estate and Retail like-for-like portfolio. The new target now reads: To reduce water consumption across the like-for-like managed office and retail portfolio by 10% by 2015/16, measured in terms of volume used per unit floor area. new targets This year we also introduced some new targets to the business as we seek to improve the delivery of our responsible business approach. Demonstrate we are a Considerate Development Client across both London and Retail Development Projects: Tenant behaviour utilise our two buildings signed up to Memorandums of Understanding to pilot environmental behavioural change programmes to roll out across the portfolio: To ensure all buildings available for lease within the portfolio have an EPC rating of E or better by March The government has intimated that from 2018 if you do not have a rating of E or better then you cannot sell or lease a property: To apply Planet Positive Building Certification as a pilot study to the proposed Crawley development commencing on site in Autumn 2012, to ascertain the benefits when used in support of BREEAM Certification: This new target reflects our desire to achieve even higher standards of delivery when we are on site at new developments. This target reflects our belief that behaviour change offers the biggest opportunity to deliver a fast and sizeable reduction in CO 2 emissions in commercial property. This target reflects our view that we prepare in advance for proposed legislation on the sale and lease of buildings with poorly rated energy performance to protect value in our business. This target reflects our desire to look at new ways to manage our construction process to identify better environmental performance. 10

11 Sustainable business benefits Sustainable business is good business. Build a shopping centre that meets local needs and the community will support it, making it a more valuable asset. Ensure your buildings are environmentally efficient through cost-effective measures and you will increase their appeal and future-proof them against new regulations. Provide a motivating, meritocratic and vibrant working environment and you will attract and retain the brightest talent. Our objectives: Developer of choice Supplier of choice Employer of choice 11

12 Sustainable business Developer of choice Being a developer of choice opens up new opportunities and increases the likelihood of improving our existing assets. The key is trust. Local Authorities talk to each other. They hear which developments work and which don t. We have earned a good reputation with Local Authorities by focusing on local communities and local issues and by giving something back. This means going above and beyond environmental targets. It s why we re committed to providing educational opportunities in and around our assets. And it s why we never stop focusing on creating places, rather than just delivering new buildings. Our experience in Exeter (see box) illustrates this well. Employer of choice We believe that to keep the best team you need to set challenging targets and reward people when those targets are met. We re also serious about equal opportunities, equal pay and fair pay. We think that talent needs to be nurtured; that skills need to be tested and new experiences encouraged. That s why we ensure our employees meet regularly with their managers to discuss and agree their career development plans. People like to work for a responsible employer that gives something back to society. So we encourage volunteering, offering our people time off when they have spent free time helping others. We also run a co-ordinated giving scheme. Linked to payroll, we add 20% to whatever our employees contribute. People also want to be recognised for the extra effort they put in and their achievements. That s what our annual, People into Action awards do. This allows employees from anywhere within the company to nominate someone they feel is not only putting our values into action but going above and beyond their day job. Our Employee Engagement survey tells us how focused our employees are on the wider aims and values of the business. In all nine categories, which measure the key factors contributing to job satisfaction, we were above the national average benchmark. This is established by a survey which contacts over half a million employees, in 180 companies across many different sectors. The survey also compares our employee engagement performance against the highest performing companies researched. Of the 47 teams in Land Securities, only four fell below this high performance benchmark. Three teams had scores of 100%. Supplier of choice To be successful, we need our buildings to work well for occupiers and for them to choose us as their landlord. Whether it s through the location, the quality of the design & build, or the customer service we offer to our tenants, we need to be the supplier of choice. Good design and the latest technology don t just help make our buildings fit for purpose. They also allow occupiers to save money and meet their own environment and social responsibility goals. We put a lot of emphasis on customer service. To us, it s vital. This is why we foster good relationships with our occupiers and measure how well we do through our customer survey. By targeting this, we have achieved a positive result this year with an overall customer satisfaction rate of 86%. We scored very highly in specific categories, including willingness to recommend (98%) and understanding needs (93.4%). We were also named Property Manager of the Year by the Property Managers Association (PMA). Looking ahead Local Authorities are set to be given more power in the delivery of local plans. So their influence on property development will only grow even more. Being able to demonstrate you are a genuinely responsible company will therefore become increasingly important. Employees already judge potential employers on how responsibly they run their companies as well as how successful they are. This trend looks set to continue, as will the demand for increased transparency over issues such as pay. Occupiers will have more demanding environmental and social goals as their customers demand responsible sources for their products and services. So occupiers will want buildings that embrace the latest energy-efficient technology. In all our relationships, therefore, the challenge will be to keep aware of the issues important to each group. Finding partners for Exeter Becoming the developer of choice is about using the company s strengths to be a true partner of a local community. Take our experience in Exeter. Having consulted and redesigned the development to meet Exeter s needs, we opened Princesshay Shopping centre in Debenhams had occupied an 11-storey building nearby for decades. When we helped them move into Princesshay, this showpiece property was left empty. We approached John Lewis. They thought they might open a small, At Home shop. After further dialogue, they realised the potential of the site and agreed to take over all eleven floors. They now plan to open a flexible-format department store in November That will attract more retailers, which in turn means more customers and people coming into Exeter. It s also good news for our shopping centre across the road and our relationship with the council. The next step for us is to have further discussions with the Local Authority about an adjacent site. We will need to respond to these insights, staying ahead so we continue to satisfy expectations. That way we will remain the developer, employer and supplier of choice. Achieve all these things and we should also become the investment of choice, able to secure capital on the best terms to fund future growth. 12

13 Sustainable business case study Peter Frackiewicz is a Project Director in our London Portfolio and also a pensions trustee at Land Securities. His story illustrates the benefits of seeking volunteering opportunities that make the most of our employees skills. We found Peter a volunteering position with the help of the Westminster Volunteering Centre who work with over 100 charities. They knew that RADICLE a London-based charity that helps isolated and vulnerable people needed additional management expertise. Peter became a Trustee Director for the charity. Volunteering has really increased my awareness of the needs of others. It s opened my eyes to how desperate many organisations out there are for funding, especially in these tough economic times. It keeps the ego in check and can be very morally rewarding! I d recommend it to anyone. Peter has advised on property issues as well as sourced meeting rooms for the charity. He has assisted RADICLE with policy reviews, potential sources of funding and the management of its finances. Peter s expertise has been invaluable to RADICLE as have his practical experience of dealing with property and building projects. His participation in trustees meetings and his contribution to strategy have enhanced RADICLE as an organisation. Michael Ryan, Director of RADICLE 13

14 Sustainable business case study Suzi Clay, Portfolio Director, Retail is a keen volunteer. Here, she talks about some of the charities she s helped and how Land Securities supports her. I ve volunteered at weekends with a day centre for disabled children in Richmond upon Thames which was usually a day every month. Since then I ve made a trip to Sri Lanka with a charity called Ocean Stars. We taught in nurseries and visited the charity s projects. Land Securities have always been completely flexible I ve occasionally taken advantage of the days off you get for volunteering! Land Securities also helped a lot with fundraising for charity. I cycled across Ghana last November to raise money so a village there could provide clean water. I ve done other fundraising activities too, such as other long distance cycling and running events. Land Securities have been generous through the Charities Committee. I d like to apply the skills I ve learned in my job to the charities I work for. I ve had several meetings with the Multiple Sclerosis Society to discuss how they broaden their appeal to business. I m now considering whether to apply to become a trustee of the charity. Because volunteering teaches you so much both about yourself and others I encourage my team to volunteer. They ve done their own fundraising and charity projects. And we ve also volunteered as a team. Again, Land Securities has always encouraged us and helped make it possible. 14

15 Sustainable business targets We report on eight targets in this Sustainable business section. You can find all other targets in the Stronger communities and Better environments sections and targets for the year ahead on pages KEY Increased No change Reduced overall target 2011/12 TARGET STATUS COMMENT 1. Four to six London based 16 to 18 year-olds per year, who do not normally have access to a corporate environment, to have gained work experience at Land Securities by March Establish a summer work experience programme across administrative functions for London based 16 to 18 year-olds with local state secondary schools and/or London Apprenticeship Company. 2. Maintain or increase 60% employee volunteering rate (for half day or more per year) but increase the proportion of those who provide skilled or professional advice or mentoring to 25% (of the 60%) by March All full and part-time head office based employees and supply chain employees at head office to receive at least London Living Wage (LLW), currently 8.30 per hour by March % of our surveyed investor and analyst audience and 90% of our surveyed SRI specialists to believe our CR strategy is clear and perceived to be embedded in the way we do business by March Establish and trial a scheme in Summer Establish current rate of professional volunteering and introduce recording mechanism. Share any existing programmes across the Group. Introduce LLW per hour to full-time employees and supply chain employees at 5 Strand. Ensure both audiences are surveyed correctly. Embed CR messages into investor and AGM presentations. Invite SRIs to investor events. Identify top 10 SRIs and host at least two bespoke meetings. We missed our Summer 2011 deadline for delivery of a trial work experience team. However, by the year end, the operational aspect of this target had been achieved. This target has been harder to achieve than expected due to high levels of volunteering and insufficient recording. It has been particularly difficult to differentiate between personal and professional voluntary activities. We are putting in place new procedures to address these issues. The overall target is fully met and in place. This target was met. 15

16 Sustainable business overall target 2011/12 TARGET STATUS COMMENT 5. Fill 50% of vacancies at middle manager level (Band B) with internal candidates recruited as graduate or early career professionals by % of business-critical roles (identified as succession plan vacancies in Band A roles and leadership Band B+) to have an identified internal successor ready within 12 months by March Maintain and improve high levels of participation and scoring in the Employee Engagement Survey. 8. Maintain overall satisfaction rates in both London and Retail customer surveys of 4.18 and 4.27 respectively. Introduce a graduate and early career level rotation system for new starters and those in their early career to move between the business units and disciplines. Define leadership ; develop a competency model and development framework. Introduce new survey, achieve 80% participation score, 82% engagement index score and 62% overall performance index score. The miss reflects the changes we made to the longer-term aspect of this target during the year to align it more closely with the business. This target has been met. The survey was launched on 21 November 2011 and all scores were above target. These targets were met. 16

17 Stronger communities benefits We support the communities where our properties are based. Whether it s charitable giving, addressing local employment needs or providing educational opportunities, our aim is to earn the trust of the local population. That trust is hard earned, but once you have it, the community is far more likely to support existing assets and engage constructively on any proposals for new developments. Our objectives: Creating jobs Improving skills and training opportunities Investing in places 17

18 Stronger communities Our impact on communities is perhaps best illustrated with an example. Over 3,000 people work at our White Rose shopping centre in the south of Leeds and over 40% of them live in the four adjacent postcodes. The centre spends 4.5m each year on maintenance and improvements. Over the last two years it has raised 100,000 for a local children s hospice. It provided a learning centre for local schools and started a staff car share scheme to reduce its carbon footprint and free up space for customers. That is just one of our 26 shopping centres. If you looked at any of the others you would find a similar story: they all play a big role in the local community. One of the biggest challenges we have is the number of organisations out there that you could potentially be supporting, so you have to be realistic in what you can achieve. Mike Davidson, Head of Retail Operations In their different ways, the same is true of our projects in development. Again, let s take Leeds as an example. Our 350m Trinity Leeds development is currently the only major shopping centre under construction in the UK. We realised when we started work in July 2010 that, in a fragile economy, local people would be interested in what opportunities our development was creating. So we started to monitor how many of the project workers came from Leeds and the wider Yorkshire area, setting targets for the training and employment of local people. This meant working with our construction partners, Construction Leeds and Laing O Rourke. We also established a Community Initiative fund to support local causes. Charitable support getting more strategic Our old approach to charitable giving lacked structure. Now, it is better aligned with our business strategy. Locally, each of our shopping centres selects one or two charities to support which resonate with and benefit the local community. Nationally, each portfolio supports one charitable trust per year. In 2011, Retail partnered with the British Heart Foundation (BHF) and London supported the Prince s Trust (see case study). Raising funds for the British Heart Foundation As well as working with a local charity, last year our Retail Portfolio chose the British Heart Foundation as their national charity of the year. Our centres were able to help BHF collect bags of donated goods which equated to an incredible 118,410 worth of stock. In addition, through various fundraising activities, the centres helped raise 23,329 in cash. In three years working together, BHF collected 29,738 bags of stock worth 450,000, helping deliver a partnership worth 489,000 in value as well as providing many opportunities to raise awareness of both the charity and heart disease. Raising funds for the MS Society For 2012, Retail has a new national charity partner: the MS Society. All of our shopping centres will work alongside them to help raise awareness of multiple sclerosis ahead of the charity s 60th anniversary in Around 100,000 people have been diagnosed with MS in the UK and it affects 600,000 people including family, friends and carers. Our fundraising will go towards providing local support as well as vital, long-term research. There is real hope that a cure for MS will be found in our lifetime and Land Securities will be doing all it can to be part of making this a reality. Charitable donations Last year, the Group s charitable donations amounted to 650,290, with a further 76,127 contributed in sponsorships. These included the British Fashion Council, the National Gallery and English Heritage. Charities Committee The majority of our donations are managed by local assets making a contribution to local causes. However, we also have a Charities Committee. Made up of a range of employees, they consider wider charitable requests on a quarterly basis. Last year they handed out just under 100,000 to good causes across the UK. Give as you earn Last year 5% of our employees took advantage of the Give as You Earn scheme where we match their donations to charity by up to 20%. In total, the business added 10,965 to their savings to invest in causes which are important to them. Bursaries To help our people who are helping their communities, we offer a bursary scheme to support their local cause or sports club fund new equipment. Last year we gave out over 5,000 to help support these local causes. Using our developments to develop careers Our new developments offer superb opportunities to stimulate local job markets. That s why we ve always offered a variety of apprenticeships and employment programmes. Our primary focus is on those who are furthest from the job market: ex-offenders, young people who ve never worked and the long-term unemployed. Before each new development starts, we sit down with our training partners and the local authority to devise a bespoke educational and skills plan. These plans have priorities and values specific to the local area. Our London operations provide a number of training schemes designed to get the long-term unemployed back into work. Alongside the London Probation Trust, we deliver the GLA Ex-Offenders into Construction project. We also run the Prince s Trust s Getting into Construction scheme. We ve long been a patron of the Trust but 2011 was the pilot year for this scheme. With around 580 employees, our workforce is relatively small. Yet, our developments sustain thousands of jobs through our supply chain. So although there is only so much we can do on our own: we can encourage our partners to act. We therefore put commitments into contracts and encourage best practice. Our shopping centres are major local employers. We invite retailers to put all their vacancies in one highly visible place, such as a community board. 18

19 Stronger communities Community investment Our community investment activities include the space we give away at our assets to help promote charities and local community events and the management time and expertise we put in across the portfolio to support good causes, education and training. We also encourage our people to give time to help with volunteering and mentoring and to invest in the promotion of local events at a local level. All in all, 1,546 separate instances of community investment took place in 2011/12, with over 8,536 hours of time given over to ensuring we played a full part in local community life. If we add the value of all this space, promotion and cash contributions, our investment in community activities is equivalent to 3.483m. The value placed on these activities is in line with London Benchmarking Group definitions on measuring community investments. Improving legislation We try to influence government policy when it comes to employment programmes and are currently involved in discussions with the Department for Work and Pensions. We believe the construction industry requires its own, bespoke schemes because it has highly specific needs. Education Our London portfolio invites schools to use a learning pack we ve produced. It offers lesson plans that tie in with the national curriculum while introducing young people to construction. We also try to make our building sites accessible for school visits so pupils, and teachers, can get to see what a major construction project is like for themselves. As for higher education, we offer work experience to University College London (UCL) planning students. There is currently a shortage of planners, so we want to provide relevant, quality experience where we can. Looking forward The growth of internet shopping and the challenging economic climate are having a significant impact on many retail locations. Inevitably, there will be winners and losers. Some locations and retailers will thrive. Others will find it increasingly tough to compete. Our strategy is simple. Wherever we have an asset, we will invest in and work with the community that surrounds it. By supporting and securing their long-term prospects, we will likewise be supporting and securing our business. It s win win. I think it s good for us as a business that we re being asked to comment on these types of issues. It really raises the profile and the needs of the industry. Debbie Akehurst, Head of Corporate Responsibility, London 19

20 Stronger communities case study In September 2011, we launched our Employment Strategy for the London Portfolio. We wanted to see what we could do to open up opportunities for employment and training for the long and short-term unemployed as well as those furthest from the job market such as young people and ex-offenders. Over a two month period in 2010/11 we ran a pilot programme based at 62 Buckingham Gate, our development in Victoria. The Employment Strategy is a new way of working. It is a strong partnership made up of Land Securities, the Greater London Authority, JobCentre Plus, Alandale Sustainable Solutions Ltd (our training partner), London Boroughs, our main contractor, our supply chain and other partners including the London Probation Trust. Over the course of the pilot programme 23 people obtained accredited training and went into employment with 19 of those progressing onto further NVQ level 2 qualifications. Working together with Land Securities and Alandale Sustainable Solutions Ltd (ASSL), we have been able to give the young unemployed access to long-term employment in the area in which they live. We are now looking to start a second phase of training and recruitment. Edward McAlpine, Sir Robert McAlpine, Main contractor at 62 Buckingham Gate To us, our Employment Strategy is not only the right thing for a responsible business to do, it is also an effective scheme for delivering our goals. Therefore, we are rolling it out across all of our London developments. 20

21 Stronger communities case study When the construction on our 350m Trinity Leeds shopping centre development reaches its busiest phase, up to 1,000 construction workers will be on site. When the 1 million sq ft development opens in Spring 2013, there will be more than 3,000 people employed in retail roles, many of whom will be from local communities. Land Securities and our main contractor, Laing O Rourke, are working closely with the Retail Skills Academy and Construction Leeds to offer apprenticeships and training for local people throughout the construction phase. We are also using the development as an educational and training resource. Students from Leeds Metropolitan University and local schools can arrange supervised access to the site. Laing O Rourke run an Apprenticeship Plus programme. To develop it, they teamed up with the construction industry s Training Board for Construction Skills. The programme enables apprentices to learn through a mixture of practical skills training and formal industry education. And the results? Land Securities Trinity Leeds team started to measure local impacts of the project in Results for this year show that 50% of the people employed on the scheme are from the Yorkshire region and 25% are from a Leeds postcode and 38 of the 76 sub-contracts to date have been placed with businesses within 40 miles of the site. There are 44 apprentices on the scheme who live within 25 miles of the site. 21

22 Stronger communities case study It was back in September 2010 that the Prince s Trust became the charity partner for One New Change, our retail development next to St. Paul s Cathedral. In July 2011, Land Securities became a Patron of the Prince s Trust. As part of the Patronage, we made a commitment to invest 100,000 or more in the Trust s work over a minimum of four years. The Patronage is supported by our partner in our Employment Strategy, Alandale Group. They have committed 25,000 of the 100,000. The Prince s Trust provides practical and financial support to 13 to 30-year-olds who need it most those who have struggled in school, been in care, are long-term unemployed or have been in trouble with the law. Our donation goes towards The Prince s Trust Construction and Business Services Leadership Group (CBSLG) and membership of the Retail Leadership Group (RLG). The CBSLG also provide Get Into programmes, which aim to help young people get into a career. These short courses offer pre-employment training and skills development to vulnerable young adults who want to forge a career in a trade. In September, alongside Alandale Sustainable Solutions Ltd (ASSL), we ran our first pilot scheme for the Trust: Get into Construction. The results were excellent. 12 young people benefited from valuable training and half have now entered into employment and have either started or completed their Qualifications and Credits Framework (QCF). We have now run 63 courses, reaching 700 vulnerable 13 to 30-year-olds from our communities. Two of our participants have even been nominated for the Youth Builder of the Year Award and five have won Prince s Trust Regional Celebrate Success Awards. We look forward to delivering more courses across our London developments over the coming years. 22