Sustainability Report

Following the introduction by the Chief Executive on page 12, details of our sustainability approach and activities are set out in this report. DCC is committed to evolving our sustainability reporting in line with best practice and communicating our performance in this area.

Report Profile, Boundary and Scope
This is DCC’s third Sustainability Report and follows the same reporting cycle and fiscal year as the Annual Report. The scope of this report includes subsidiaries which contribute in excess of 99% Group profitability1.

 

The Corporate Sustainability Working Group (CSWG), which comprises senior Group, divisional and subsidiary management, was formed in 2009 and reports to the Chief Executive. In determining report content the CSWG consulted with senior management to determine aspects that were material at a divisional level. These formed the basis for a Group level materiality matrix which identified four material aspects - direct economic value added, climate change, health & safety and business ethics - which are reported on below.

 

Governance, Structures and Processes
The role of the CSWG is to develop appropriate corporate sustainability policies, processes and performance indicators across the DCC Group and to support the integration of sustainability into our business strategies to deliver competitive advantage.

 

Presentations to the DCC plc Board and to divisional management have been completed and sustainability workshops involving all subsidiary management teams will be held in the first half of the current financial year. External experts have been invited to participate to provide industry examples of best practice.


Stakeholder Engagement
In general, feedback from investors has been limited, though positive. During 2011 we will, at a Group level, increase our engagement with investors and other stakeholders to identify any further informational requirements. At subsidiary level, management will formally identify and engage with key stakeholders including customers, suppliers, employees and the local community.

 

Employee numbers by division. Employee numbers by geography.
Our People
DCC employs 8,037 people across the Group, approximately 90% of whom are in permanent employment.

 

Graduate Recruitment Programme
As a diverse and expanding business, it is critical to DCC’s long term sustainability to develop senior executives with multi-sector, multi-functional and multi-country skill sets who can grow and develop into international business leaders in the future.

 

One action in support of this during the year was the implementation of a new graduate recruitment programme, the DCC Future Leaders Programme. This was launched in October 2010 in Britain and Ireland to recruit a select cadre of young, high quality and mobile graduates. There was a strong response to the recruitment programme with over 1,300 applicants. Offers were made to the top performers from the programme and DCC will have 10 graduates taking up an initial two year rotation programme in September 2011.

 

Material Aspects
As noted earlier, the CSWG in conjunction with senior divisional management, determined four sustainability aspects to be material to the DCC Group. These aspects are common to all subsidiaries although additional aspects, for example sourcing of raw materials, may be identified as material to a particular business and addressed accordingly.

 

1. Direct Economic Value Added
To be a sustainable company, we must create value for our shareholders and other stakeholders. In the year ended March 2011, €557 million of added value was created, taking account of the cost of inputs from suppliers of €8,124 million and revenue of €8,681 million. This value added is distributed in the form of remuneration to employees of €327 million, corporate taxes of €42 million, interest to lenders of €15 million and dividends2 to shareholders, including many Group employees, of €62 million. €111 million is retained in the business to fund further growth.

 

DCC

Following a review of our approach to corporate giving, DCC has entered into a three year partnership with Social Entrepreneurs Ireland (SEI), whereby we will contribute a total of €360,000 over the period

 

Corporate Giving
Following a review of our approach to corporate giving, DCC has entered into a three year partnership with Social Entrepreneurs Ireland (SEI), whereby we will contribute a total of €360,000 over the period. Established in 2004, SEI is a privately funded, not-for-profit organisation that supports social entrepreneurs in growing their ideas from concept to reality.

 

“In order for social entrepreneurs to turn their vision into reality and tackle some of our entrenched social and environmental problems they need high quality support and mentoring. In partnering with Social Entrepreneurs Ireland, DCC have shown real leadership in stepping up to the plate, providing both financial and mentor support to our network of social entrepreneurs and in doing so making a tangible and hugely positive difference to communities throughout Ireland.”

 

Sean Coughlan, Chief Executive, Social Entrepreneurs Ireland.

 

Social Entrepreneurs Ireland


2. Climate Change
The reality and threat of climate change is clear. The response from policy makers and consumers is growing year by year and society is re-evaluating consumption patterns and use of natural resources. This in turn requires the business community to respond positively to new commercial risks and opportunities.

 

The DCC Carbon Management Plan, established in 2008, sets out objectives for measuring, reducing and reporting carbon emissions. The plan is currently being revised to include medium and long term carbon reduction targets.


In the UK the CRC Energy Efficiency Scheme has been significantly amended following the Comprehensive Spending Review initiated by the new government in October 2010. Originally designed to allow revenue to be recycled to the participants, the Scheme is now effectively a carbon levy on fuel and electricity consumption, payable annually from July 2012 onwards. Some uncertainty still surrounds the final details of the Scheme but DCC’s UK subsidiaries have robust reporting systems in place to provide the required energy consumption data to the Environment Agency in July 2011.

 

DCC responds annually to the investor led Carbon Disclosure Project, providing detailed emissions data and explanations of our strategic approach and the management of risks and opportunities from climate change.

 

Details of our energy use and carbon emissions are presented below. The DCC Energy and Carbon Reporting Guidelines, based on the Greenhouse Gas Protocol, set out in detail the sources included in the DCC Group carbon footprint3. Briefly these are:

CO2e emissions (tonnes) by division. CO2e emissions (tonnes) by source.

• subsidiaries of DCC plc1
• the energy sources where DCC is the counter party to the contract to supply
• direct usage of electricity and fuels to heat, light and operate buildings
• fuels used to operate company owned vehicles, plant and machinery
• electricity and gas purchased and recharged to subtenants
• any new sites from the point at which they are operational
• any new acquisitions from the point at which they are acquired


Transport and heating fuels make up the direct sources of primary energy purchased within the Group. In total they represented 1,454,813 Gigajoules (GJ) of energy. Indirect energy consumption amounted to 164,570 GJ from electricity purchased. While a number of subsidiaries purchase some of their electricity from renewable sources this has not been recorded during the year. Systems to record renewable energy purchases have been introduced and will be reported in next year’s Sustainability Report.

 

Total carbon emissions increased by 16% over the prior year, primarily driven by acquisitions in the Energy division and increased processing capacity in the environmental and healthcare businesses.

 

Outside of emissions generated by our own operations, as reported above, the use of fuel products sold within the Energy division represent the most significant source of indirect emissions beyond our immediate control. The use of oil, LPG and natural gas sold by DCC Energy subsidiaries account for approximately 19 million tonnes of CO2e emissions. Opportunities to reduce these emissions over time include the development of lower carbon fuels and the provision of energy efficiency advice to customers.

 

Environmental compliance and spills
During the year 47 routine site inspections of our licenced facilities were completed by environmental regulators. Overall our level of compliance with permitting requirements was high. During one inspection, two non compliances, principally due to extreme weather conditions causing operational difficulties, were recorded and resulted in the issue of two enforcement notices.


All remedial actions identified in the notices have been completed to the satisfaction of the regulator.

 

During the year GB Oils was fined Stg£5,000 for polluting a tributary of the River Clyst in Devon in July 2009, contrary to Section 83(1) of the UK Water Resources Act 1991. The Court recognised the work undertaken by the company to remediate the environmental impact of the spill. Approximately 20,000 litres of diesel was lost when an underground pipeline failed at a recently acquired depot. Underground pipework at our oil depots is pressure tested annually and, where possible, replaced with over ground pipework. There were no other significant releases of oil or chemicals during the period.

 

In June 2010 the Scottish Government released its Zero Waste plan which establishes a goal of recycling 70% of Scotland’s waste by 2025. Supporting this agenda, the William Tracey Group has launched a food and organic waste collection service for customers. A key part of the service will be an anaerobic digestion treatment plant constructed by Scottish and Southern Energy (SEE) at Traceys former landfill site in Barkip, North Ayrshire where landfill gas is currently being used to generate renewable energy. The new SSE facility will be capable of processing around 75,000 tonnes of organic waste annually and producing 2.5 MW of electricity which will contribute towards Scotland’s renewable energy targets.

 

Health and safety is a key priority for all divisional and subsidiary managing directors

 

3. Health & Safety
Health and safety is a key priority for all divisional and subsidiary managing directors, in particular in the Energy and Environmental divisions where the potential impacts are significant given the nature of the businesses and the products handled. Health and safety resources in GB Oils have been strengthened following the acquisition of two oil terminals in Scotland during the year. A particular focus on process safety is ongoing to minimise the likelihood of a major incident and to meet increasing regulatory demands.

 

KPI  - LTIFR. KPI  - LTISR.
Individual subsidiaries use a range of indicators to measure health and safety performance. Lost time injury rates (lagging indicators) are recorded at Group level for the operations within the scope of this report and this year the frequency of accidents that resulted in lost time fell from 2.8 per 200,000 hours worked to 2.55. At the same time the lost time severity rate increased from 42 to 48 days lost per 200,000 hours worked reflecting, on average, more days lost per accident. This increase was driven by a number of accidents that resulted in over 100 days lost. No fatalities were recorded in the year ended 31 March 2011 (tragically one fatality was recorded in the prior year as reported previously). Absentee and occupational diseases rates are not compiled at Group level.


The International Safety Rating System (ISRS) audit tool, developed by DNV, a leading risk management company, is being phased in across our energy and environmental subsidiaries. The audit is demanding, requiring a high level of verification and covering fifteen health and safety management processes including leadership, learning from events and management review in addition to risk and asset management. The ISRS tool allows us to benchmark our performance, identify areas for improvement and measure progress objectively.

 

Wastecycle’s health and safety management system was certified to the international OHSAS180017 standard in February 2011 – an independent recognition of the efforts by all employees to adopt a consistent and proactive approach to safety management.

 

In addition to OHSAS18001 certifications in the Environmental subsidiaries, SerCom Solutions health and safety management systems in Ireland and Poland are also certified to the OHSAS18001 standard.

 

 

Standard Disclosures

 

4. Business Ethics
In last year’s Sustainability Report we noted our decision to provide more practical support to our employees in the area of business ethics by formally articulating a set of guidelines which would enshrine principles for the everyday conduct of business. As a diversified Group, the freedom to manage and make decisions locally in our business, which has been critical to DCC’s success, has been underpinned by a common set of values of ethical behaviour, trust and accountability. These values have now been enshrined in a set of guidelines, the DCC Business Conduct Guidelines, which set out our common commitment to the highest standards of behaviour in the everyday carrying out of our responsibilities.


Given the breadth of DCC’s operations and the different legal and regulatory environments in which all DCC’s businesses operate, the guidelines do not set out to address every situation. They are complementary to the employment practices and policies already set out for employees by each of DCC’s operating subsidiaries. As well as outlining basic legal and ethical principles, they offer guidance on behaviour, framed with useful examples in respect of the complex issues that can arise in the business environment in which we operate.

 

The guidelines have been distributed to employees in all the Group’s subsidiaries. They have been translated into the local languages as required for DCC’s European businesses and also into Chinese for the employees based there.

 

Content table for GRI Level C

 

GRI Section No. Standard Disclosure Report Page
1.1 Statement from Chief Executive 12
2.1 – 2.10 Organisational Profile Inside Front Cover
3.1 – 3.8 Profile, Boundary and Scope 46
3.10 – 3.12 Restatement 46
4.1 – 4.4 Governance 56
4.14 – 4.15 Stakeholder Engagement 46
EC1 Direct Economic Value 46
EN3 Direct Energy Consumption 48
EN4 Indirect Energy Consumption 48
EN16 Greenhouse gases 48
EN17 Other indirect sources 48
EN23 Spillage 48
EN28 Non-Compliance 48
LA1 Workforce 46
LA7 Rates of injury 49
SO6 Political Contributions 53

 

Reporting
This report meets the requirements of the Global Reporting Initiative level C+ standard, as identified in the content table below. Feedback on this Sustainability Report is welcome and should be addressed to John Barcroft, Head of Group Environment, Health & Safety or David Byrne, Senior Independent Director.

 

1 Virtus, a US healthcare subsidiary with 131 employees, in which DCC is a 51% shareholder, is not included within the scope of this report. It will be included in next year’s report.
2 Paid and proposed for the year ended 31 March 2011.
3 Carbon dioxide makes up over 98% of the Groups’ greenhouse gas emissions. Other greenhouse gas emissions include fugitive refrigerant gases from our chilled foods logistics business and methane emissions from a small capped landfill. Carbon dioxide emissions arising from our composting operations are considered to be part of the natural cycle and are not included in the reported figures.
4 Data marked with the symbol * is included in the scope of assurance provided by KPMG LLP.
5 Company employees only, contractors are not included in lost time injury rates.
6 A Lost Time Injury is defined as any injury that results in at least one day off work following the day of the accident.
7 Occupational Health and Safety Assessment Series standard.
8 International Standard on Assurance Engagements 3000: Assurance engagements other than Audits or reviews of Historical information, issued by the International Auditing and Assurance Standards Board.


Independent Assurance Report to DCC plc
KPMG LLP was engaged by DCC plc (‘DCC’) to provide limited assurance over selected aspects of the DCC’s Sustainability Report for the year ended 31 March 2011 (‘the Report’).

 

This report is solely made to DCC in accordance with the terms of our engagement. Our work has been undertaken so that we might state to DCC those matters we have been engaged to state within this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than DCC for our work, this report, or for the conclusions we have reached.

 

What was included in the scope of our assurance engagement?

Assurance scope Level of assurance Reporting and assurance criteria
Reliability of performance data for year ending 31 March 2011marked with the symbol * on pages 48 and 49 of the Report. Limited assurance Relevant internal reporting guidelines for the selected environmental and safety performance data as set out on pages 47 and 50 of this report
DCC self-declared Global Reporting Initiative (GRI) application level on page 50 of the Report. Limited assurance G3 Sustainability Reporting Guidelines and application level requirements

 

The extent of evidence-gathering procedures for a limited assurance engagement is less than for a reasonable assurance engagement, and therefore a lower level of assurance is provided.

 

Which assurance standard did we use?
We conducted our work in accordance with ISAE 30008, with a team of specialists in auditing environmental information and with experience in similar engagements. This standard requires that we comply with applicable ethical requirements, including independence requirements, and plan and perform the engagement to obtain limited assurance about whether the data is free from material misstatement.

 

Our conclusions are based on the appropriate application of the criteria outlined in the table above.

 

We conducted our engagement in compliance with the requirements of the IFAC Code of Ethics for Professional Accountants, which requires, among other requirements, that the members of the assurance team (practitioners) as well as the assurance firm (assurance provider) be independent of the assurance client, including not being involved in writing the Report. The Code also includes detailed requirements for practitioners regarding integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. KPMG LLP has systems and processes in place to monitor compliance with the Code and to prevent conflicts regarding independence.

 

What did we do to reach our conclusions?
We planned and performed our work to obtain all the evidence, information and explanations that we considered necessary in relation to the above scope. Our work was limited to the following procedures using a range of evidence-gathering activities which are further explained below:

Conducting interviews with management and other personnel at DCC, to understand the systems and methods in place during the year ended 31 March 2011;
An evaluation of the design, existence and operation of the systems and methods used to collect, process and aggregate the selected performance data as well as testing the reliability of underlying data across a risk-based selection of nine sites, including at least one site from each of the business divisions, in the UK and Republic of Ireland, covering 75% of the data for each data set;
Checking the content of the Report to ensure consistency with the GRI application level requirements of C+;

A review of drafts of the Report to ensure there are no disclosures that are misrepresented or inconsistent with our findings.

 

What are our conclusions?

The following conclusions should be read in conjunction with the work performed and scope of our assurance engagement described above.

 

Nothing has come to our attention to suggest that the performance data marked with the symbol *, on pages 48 and 49, are not fairly stated, in all material respects in accordance with the relevant internal reporting guidelines for the selected environmental and safety performance data.

 

Nothing has come to our attention to suggest that DCC’s self-declaration of GRI application level C+ on page 50 is not fairly stated, in all material respects in accordance with the G3 Sustainability Reporting Guidelines.

 

Responsibilities
The Directors of DCC plc are responsible for preparing the Report and the information and statements within it. They are responsible for identification of stakeholders and material issues, for defining objectives with respect to sustainability performance, and for establishing and maintaining appropriate performance management and internal control systems from which reported information is derived.

 

Our responsibility is to express our conclusions in relation to the above scope.

Lynton Richmond for and on behalf of KPMG LLP
Chartered Accountants
London
9 May 2011

 

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