Lockton Environment Report 2018-19

Lockton Environment Report 2018-19

LOCKTON ENVIRONMENT REPORT  2018‐19 

Lockton  Environment  Report  2018‐19

LOCKTON ENVIRONMENT REPORT  2018‐19 

Environmental Responsibility

This report is our fourth Environmental Review and represents the first  opportunity to set down a full year on year assessment of our progress  towards on our CO2 targets and environmental impact targets.   We have worked with our associates, through support at Executive  Management Board Level and with an associates lead Environment Group, to  develop further our measurement and assessment of all that we do and alter  our behaviour to improve our environment position.  CO2 measurement and reduction represents the core emphasis of our  environment programme. Additional C02 impacts are included in our  calculations for this year and all data is subjected to third party external  verification.  We also recognise that waste reduction and improving our recycling, with  stated targets on particular areas, including plastics and paper, are also  important as these pollution reductions go hand in hand with our climate  change reductions to make up our overall balanced environmental  programme. 

Michael Kerridge SVP – UK Environment Programme Leader.

LOCKTON ENVIRONMENT REPORT  2018‐19 

We are proud to be doing what all businesses, should be doing and taking care to have a balanced programme to reduce as far as we can our environmental impact. We know that by doing so we can help preserve the planet for all the generations to come. Reducing CO2, cutting waste and pollution is second nature to us and investing in achieving further reduction targets demonstrates our willingness to support words with actions. Neil Nimmo Managing Partner LLP, Chief Executive Officer - Lockton International

Environment is not just a simple word for us, but a programme of gathering detailed information which is analysed and quantified to enable us to understand all the impacts of providing our services and skills to our clients. ISO14001 certification has underpinned us since being put in place six years ago and statutory measures like ESOS, SECR will always be met, but we will always push ourselves that little bit further, improving our environment impact alongside delivering great client service. Simon Coleman

With good leadership and with operational support the Lockton Environment Group has has the chance to bring associate concerns and suggestions into the environment programme. By being part of this team and helping bring forward ideas I hope that all associates can see that Lockton really does have a commitment to the future. Climate change and recycling and alternatives to plastics have all been reviewed within the group and action put forward and taken up. Ian Blackadder Partner Real Estate And Construction & Chairman of the Lockton Environmental Group

LOCKTON ENVIRONMENT REPORT  2018‐19 

 CO2 Report  Emission data and review

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LOCKTON ENVIRONMENT REPORT  2018‐19  CO2 Emission and Review Summary  In the twelve month perio May 2018 to End of April 2019 Lockton activities in UK and Ireland  generated 1,845 tonnes CO2e, this represents an overall reduction of over 21%. The majority of the  reduction comes from now having our electrical energy in our London HQ building at St Botolph now  coming from confirmed 100% renewable generation, with zero carbon dioxide. We have also seen a  small reduction in flights flown and reductions in paper use and waste generated.   All of these changes, when combined with an increased headcount and an increase in turnover  means that as well as an absolute reduction in Co2 emissions we also have reduced the Co2 impact  per associate by over 22% and the Co2 impact per £M of turnover reduced by over 25%. 1

21% Reduction in our total CO2e in the last 12 months

Analysis Methodology  We have continued to use the methodology that we adopted for the first time last year, and that is  reporting our emissions based on a period that aligns with our financial year and using an external  third party, Carbon Footprint, to take our raw data and using GHG protocol and Defra guidelines,  using the latest metrics from BEIS. All results then validated to ISO14064‐3.   Emissions totals are calculated by multiplying activity data (i.e. electricity consumption) with the  appropriate emissions factor (i.e. UK electricity). 

Three emission scopes are set down in the GHG protocol and are detailed below: 

1  2017‐18 Figures are restated to use common CO2/£m comparison to this year. 

LOCKTON ENVIRONMENT REPORT  2018‐19 

Scope 1: Direct emissions  Occur from sources that are owned or controlled by Lockton.  Examples: Fuel combustion,  Scope 2: Electricity indirect emissions  GHG emissions from the generation of purchased electricity consumed by Lockton (using both  location and market based approach)  Scope 3: Other indirect emissions  An optional reporting category for all other indirect emissions that are a consequence of our  activities.  These occur from sources not owned or controlled by the company.  Examples: electricity transmission & distribution losses, employee business travel, extraction &  production of purchased materials, transportation of purchased materials or goods, contractor  owned vehicles, outsourced activities, waste disposal etc.  Scope 1 Emissions 23.05t 

Our total Scope 1 Emissions for the period 2018‐19 are 23.05t, which is an absolute increase on  2017‐18 as we are now measuring both emissions from gas used for office energy in Edinburgh and  emissions from petrol consumed for to company owned car, where we buy the fuel.  In absolute terms for just the gas consumption in Edinburgh we have lowered the consumed gas and  emissions from the prior year by 17% from 17.1t to 14.2t.  The car emissions total 8.87t.

LOCKTON ENVIRONMENT REPORT  2018‐19 

Scope 2 Emissions 139.34t 

Our total kWh all sites electrical consumption for the period was 2,236,006kWh. This represents a  very slight reduction of 20,260kwh in our overall electrical consumption year on year, a downwards  change of ‐0.9%. The changes being mainly a 3% reduction of electricity used in the HQ building at St  Botolph Building, offset by a slight increase in occupied floor area due to an office relocation in  Manchester. 

73% reduction in emissions from electricity consumption saving 379t CO2e

The use of  renewable energy  represents the biggest change for us over the past 12 months. We are  now able to confirm that the London HQ is supplied electricity via a 100% renewable generation  contract and that as a consequence our scope 2 emissions have reduced by 73.1%. Some of our  other locations have also reduced the CO2e impact by a mix of lowering their kWh consumed and by  a positive change in the renewable generation percentage of their supplied electricity.  Overall this represents a reduction of 379 tCO2e from the prior year total of 518.30 to the current  reporting year total of 139.34t. 

LOCKTON ENVIRONMENT REPORT  2018‐19 

Scope 3 Emissions 1,683t 

Waste Numbers  approx.0.1tCO2 e per month,  too small to  show on graph

The data for the scope 3 emissions is reported in the table below, illustrated in the graph above. We  have included taxi information for the first time and now have paper consumption figures for the  whole of the UK. Whilst we had hoped to be able to report on waste information CO2e for each  location, we have not yet achieved this and consolidated data is limited to the HQ building at St  Botolph. 

Overall our measured scope3 tCO2e for 2018‐19 was 1,683t, a reduction of 7.3% the majority of this  coming from a slight reduction in aircraft miles flown, there were small increases in car and rail CO2e 

2017/18 

2018/19 

% Change 

Scope 

‐8.4%  2.8% 

Flights 

1,418.89 

1,299.64 

Rail Travel  Taxi Travel  Car Travel 

31.67 

32.55 

‐ 

0.00 

6.95 

1.1% 

259.14 

261.92 

Waste  Paper 

‐17.4%  ‐12.8%  ‐26.6% 

1.53 

1.27 

30.60  74.16 

26.68  54.46 

Site Electricity (T&D) 

LOCKTON ENVIRONMENT REPORT  2018‐19  CO2e Assessment and Commentary This year’s data reveals a welcome drop in our overall CO2e emissions, with the majority of the  reduction coming from a renewable electricity supply service at the London HQ contributing to the  lower total of 1,845t CO2e.  We have a slight reduction of the flight CO2e which has dropped by 119t, however the percentage of  our overall CO2e generated from flights has increased, as savings in other areas have reduced the  overall total.  This year flights represent 70.41% of our total CO2e, up from 60.35% in 2017‐18. 

The switch to renewable electricity means that associate car travel on business in the UK now  represents our second largest source of C02e emissions and these slightly increased year on year to  a total of 1.92t.   Associate travel, including Air, Train, Taxi, and personal car use represents 87.22% of all our measure  emissions.  All of these amounts in this section are in tonnes CO2e and are absolute quantities. These The  second part of this report is our carbon offsetting. in the second part of this report the third section  analyses performance against targets which are generally taken as CO2e per associate for the area  being targeted.

LOCKTON ENVIRONMENT REPORT  2018‐19 

 Carbon Offsetting  Our step further

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Whilst being committed to reducing our carbon emissions we took the decision last year to offset all  of our generated CO2e. Working with our external partner, Carbon Footprint, and by selecting Gold  Standard accredited schemes, we purchased carbon credits to offset all our emissions.  The Gold Standard is a non‐profit Swiss Foundation, endorsed by 80+ international non‐government  organisations and has more than 1,400 projects in 80 countries undergoing certification. The Gold  Standard has become the global benchmark for the highest integrity and greatest impact in climate  and development initiatives. 2

We offset all our Carbon emissions

In their words, “Carbon markets enable carbon offsetting, the process by which businesses and  individuals purchase carbon credits ‐‐ or certified GHG emission reductions ‐‐ to take accountability  for their unavoidable emissions and help finance the global transition to a low carbon economy.  Gold Standard certification ensures that these emission reductions are real, 'additional,' and  permanent, coming from projects that also contribute to a minimum of three Sustainable  Development Goals.” All 2,351 tonnes were offset in our previous year and the scheme selected was  the Uganda Clean Water Borehole Project.

The project is located primarily in the North Region of Uganda, within the Districts of Alebtong, Kole  and Dokolo and approximately 60% of the people in the Districts do not have access to clean water  and rely exclusively on open wells, lakes and other unprotected sources.   The struggle to find clean safe drinking water can take a major part of a family's resource. More  often than not the burden falls to women and children to collect water often walking a great  distance from home. Even then water drawn from pools or rivers is often contaminated with  pollutants and potentially lethal bacteria that cause illness and infections, and so to make the water  palatable and safe to drink it needs to be boiled.   The project works with local communities to identify and repair the many broken boreholes in  Uganda. As well as the natural health benefits it means that families no longer have to boil the  water, saving firewood and thereby preventing carbon emissions from being released.  We will again  be offsetting all our 2018‐19 CO2e. 

2 https://www.goldstandard.org/impact‐quantification/carbon‐markets

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LOCKTON ENVIRONMENT REPORT  2018‐19 

We help our associates offset their personal household CO2

We recognise that our associates want to do as much as possible to help reduce their own personal  carbon Footprint. In response to this expressed desire we therefore introduced a voluntary  employee benefit last year to help associates offset their Carbon Footprint.  Again we worked with Carbon Footprint to set the programme in motion and after careful  consideration set up a scheme whereby Lockton contributes 50% of the cost of the Carbon Offset  and the associate contributes the remainder on a monthly basis.  The amount of carbon to be offset was calculated by Carbon Footprint using nationally published  data sources for household CO2 generated and the cost to the associate was a simple £2.50 per  month.  The associates selected the scheme they wanted to support from a short list drawn up by Carbon  footprint and they decided to support the same project as for the Lockton Business offset and for  the first six months of the scheme a total of 590 tonnes of CO2 was offset by those associates who  joined the scheme.  All associates received a personalised certificate for taking part. 

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LOCKTON ENVIRONMENT REPORT  2018‐19 

 Our Reduction Targets  Performance towards our existing goals and new goals for the future.

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LOCKTON ENVIRONMENT REPORT  2018‐19  How did we do in our CO2 Reduction and our other Targets Absolute reductions and performance reductions  We stated earlier that we have educed our overall t tal CO2e by over 21%.  However when a  business is successful and is growing, in both turnover and headcount, it can be slightly misleading to  use an absolute measure, as there comes a point where delivery of growth will lead to an absolute  increase in CO2. Last year we therefore adopted a series of performance metrics based around our  headcount and set targets for improvements, some short term, others longer term.  Electricity  We set ourselves two targets last year.   o To reduce our scope 2 and scope 3 (Transmission and distribution) electricity use emissions by  20% by the end of the 2023 financial year, when measured against a base year of 2016‐17.   o To reduce the kWh consumed per associate by 15% over the same period, 2017 ‐2023.  Overall, if we were to meet these targets then an estimated 166 tonnes of CO2 would be eliminated  from our 2023 total.  Performance against target  CO2/Associate 

Following to the adoption of renewable  generation for the electric supply at the  London HQ, the overall CO2 per associate  for the UK has already dropped to 170.6kg  per associate, exceeding the  444kg/associate target set for 2023.  However, we are susceptible to changes in  the supply source by our landlords and so  we are retaining the 2023 target at present  and will monitor against this.  kWh/Associate  Increased energy efficiency measures in  London, mainly through reduced hours of  plant operation, have contributed to a  reduction in overall kWh for the year. An  increase in headcount over the same period  means that we had a net reduction per  associate for electricity consumed of  146kwh per associate, representing ‐6.9%.   Analysis shows us ahead of target for the  2023 15% reduction.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Gas  We set a single CO2 five year target last year, a 5% reduction in gas consumed and co2 generated, at  the single location using it. 

Performance against target 

CO2  The CO2e/kWh consumed has not  changed in calorific value between years  so the CO2e calculation method remains  unchanged. The CO2e saving is already  ahead of target. 

KWH  Due to improved efficiency of a  replacement boiler the overall gas  consumption has dropped. We are still  retaining the five year target at present. 

The single location using gas means that scope for changing the reduction target is limited, with the  major action of replacement of the boiler being the change that could most impact that building.  The building is listed and is in a conservation area and there are internal alteration restrictions that  mean improving the thermal efficiency is not possible.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Transport and Travel  Transport remains the biggest source of our CO2e emissions, with flights making up the bulk of the  split. Due to the nature of our business and the requirement to deliver our services face to face with  our clients, wherever they may be based, we recognised that limiting our travel to our clients would  compromise the very heart and soul of our business, which is class leading client service – our  “broking done differently” offering.   So last year we set out to limit travel related to internal meetings, with an estimate that by reducing  these by 33% within five years then we would save approximately 8‐10% of the overall travel CO2  emissions. 

Performance against target  CO2 

Acquisition of our transport data has been historically difficult due to the varied methods of  associates themselves acquiring the travel, either through travel management companies or direct  with the transport company and the accuracy of the information returned from associates via  expense claims. Therefore a review of the methodology has formed part of an operational project  over the past three months and the outcome is now that we will be seeking to place our travel  through a travel management company, for all short and long haul travel, enabling accurate data for  future years.  However, analysis of lasts years data against this years does allow an assessment of progress  towards the 10% reduction in travel or 33 % reduction for internal meeting travel.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Performance against target  By taking all travel CO2 and measuring it against headcount it is possible to calculate the travel  CO2e/associate/Per annum. In the prior year this calculated to 1.6t CO2e/associate. 

This year we have added the travel taxi expenses claimed through the various taxi accounts held by  the business and also added the company vehicle. The overall CO2e this year then calculates to 1.61t  CO2e/associate. This is a year on year reduction due to slight drop in air travel.  We will continue to monitor this reduction as recording methods improve and we are retaining the  33% reduction in travel for internal meetings with an estimated 10% overall reduction, as the only  stated target. Improvements in the installed audio visual technology have already contributed to a  reduction in UK travel on internal meetings.   The current split by transport type reveals the graph on the right. 81% of all travel Co2 is flights and  16% is associates driving their own vehicles on company business.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Paper Use  Paper use does not have a huge CO2e impact and we recognised this last year when setting targets.  We set one reduction target and one technical target.  o An overall CO2e 30% reduction in paper use per associate within 5 years.  o Alongside this we set a 25% of the paper we use to come from recycled sources by 2020  Performance against target  The methodology takes all sizes of paper and converts to a standard A4 sheet and then uses this as  the baseline to calculate overall quantity, our prior year overall total was 6,530,180. This years is  5,679,010. 

This puts us ahead of target to meet the five year reduction target.  Recycled paper was our second target, we have now identified a suitable stock 80g recycled paper  for general use and this has been in use since February 2019 in London and is replacing the standard  stock for all locations. When a full year of use of this paper is reviewed we expect our recycled paper  use to be far in excess of the stated 25% target next year.  Waste  As observed previously waste in and of itself does not have a large CO2e impact. However we  recognise that it does have a social and pollution impact that can be reduced if the quantity of waste  can be lowered and the reuse and recycling of the waste can be improved.  We did set targets last year 

o Getting accurate waste quantity totals from each location  o Reducing London Waste Quantity per associate by 10% by 2020  And three responsible sourcing targets  o Removal of plastics from use in our supply chain  o Recycle and Reuse surplus IT equipment and Furniture  o Use of recycled materials in products that we by for Stationery.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Performance against target  We have not been successful in getting accurate data from all locations, the involvement of multiple  different parties, on our side for cleaning, and on the landlord side for waste removal and estate  management has frustrated this effort this year. As such we will be focusing on this going forward  this year.  London Waste Disposal.  We have continued to maintain good accurate data for the waste performance in London. 2018‐19  saw a reduction in the overall waste reduction of 11.28tonnes, or 16% in absolute terms. This  reduction in waste quantity is partly due to the increased amount generated in the preceding year  due to extensive work undertaken to rationalise and remove on site files retained, as the record  technology moved more to electronic filing.  This reduction already exceed the overall target set for 2020 and so we are not setting an immediate  target new target for next year, and will monitor performance against the stated target to ensure  waste does not increase, or the CO2 generated from it.   Recycle IT equipment and Furniture  Through working with EOL on surplus IT equipment we have ensured accredited data wiping has  taken place and allowed reuse (upcycling) by others of equipment. The remainder has been broken  down into spares for reuse by others. We will continue to work with EOL on electrical and  technology recycling.   Our prime furniture supplier is Senator and we have worked with them to ensure surplus furniture is  taken by them to their UK based dismantling facility. We have recycled through them all surplus  furniture that we have been unable to place with alternative users. 

Waste Target 2019‐20  The primary objective of getting sound data for all  sites will be the focus of activity in this area for  2019‐20, the aim then being to set targets for  future years.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

Pollution and Plastics.  New Key Target 2021 

As a direct consequence of input from associates via the Lockton Environment Group and with  support from the LLP executive we have now adopted a primary target related to plastics and to  remove all single use plastic from the business and identify and remove all unnecessary plastic use  from the business by the end of the 2021 financial year.  Secondary Targets  Alongside this prime target we have a series of secondary plastics removal targets and the following  are planned to be implemented in the next 12 month period.   Adopt bulk delivery and dispense via refill for all cleaning and bathroom products, stopping  waste bottles.   Adopt house style meeting badging and information using plastic free presentation   Removal of plastic single use bags from the waste collection and cleaning process   Remove plastic based corporate and marketing products.   Adopt non plastic milk delivery and dispense within the offices   Maximise use of all electronic email and social media to distribute messages and information  to associates.   Maximise the use of plastic free products in all office stationery, including bamboo, wood  and other products.   Client Presentations and bound folders, redesign the Lockton presentation folder and house  style to remove plastics from the process whilst retaining the professional Lockton  production values.   Request all Lockton suppliers and their subcontractors and suppliers to remove single use  and unnecessary plastics from their service provision to Lockton.

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LOCKTON ENVIRONMENT REPORT  2018‐19 

 Environmental   accreditation 

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LOCKTON ENVIRONMENT REPORT  2018‐19 

We have held this accreditation since 2013, having made the decision that it was appropriate for  Lockton to lead on this and be the first London Market Broker to obtain this internationally  recognised environment accreditation. Extensive work is undertaken during the year to maintain and   update the management systems and records and essential external verification takes place in  March each year. We work with Equas as our external partner to provide the control software and  advice on operation and maintenance of our systems and with ACS Registrars as our external Audit.  The Environment Policy forms part of the Lockton ISO 14001 Environment Management System and  is reproduced below.  Lockton Environmental Policy  Lockton continues to hold UKAS externally accredited ISO14001:2015 Environment Management System

Lockton Companies LLP recognises that its business activities interact with the environment in a  variety ways. These activities have an impact in the key areas of: 

 Raw material use   Energy use   Generation of waste materials 

The company recognises that it has a responsibility to help protect the environment wherever it has  an opportunity to do so, be a responsible neighbour and to provide a comfortable environment for its  associates to work in. As such, the company is committed to:   Continual improvement in the environmental impact of its business activities   Preventing pollution wherever possible   Complying with all relevant legal, customer, and other environmental requirements   Occupying and using its offices in a manner which minimises the consumption of energy   Improving the efficiency with which it uses office materials   Minimising the generation of waste materials and their environmental impact 

The company will achieve these commitments through the following means: 

 The implementation and maintenance of an Environmental Management System that is  independently certified as compliant with ISO 14001:2015   Employing processes that identify the aspects of the Company’s business that have an  environmental impact and quantifying the significance of each aspect   Setting objectives for reducing its environmental impact and maintaining an environmental  performance improvement programme to enable them to be achieved   Ensuring that its associates, suppliers and customers are aware of any support required by  them to support the Company’s commitments and environmental objectives   Ensuring that all electrical and electronic devices purchased must have the highest energy  rating available unless there is a justifiable business case for doing otherwise 

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LOCKTON ENVIRONMENT REPORT  2018‐19 

 Ensuring that all paper purchased must contains at least   90% recycled content or is from a certified sustainable source 

 Facilitating the re‐use and recycling of all waste materials and redundant equipment  generated by the company wherever it is economically viable to do so   Training its associates in good environmental protection practices and encouraging associate  involvement in environmental improvement initiatives   Continually monitoring the environmental impact of its business activities   This Environmental Policy is an integral part of the company’s business and must be  supported by all associates as an integral part of their daily work. 

Simon Coleman, COO, March 2019

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LOCKTON ENVIRONMENT REPORT  2018‐19 

CO2 Measurement Validation to ISO14064‐3

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