Associated British Foods plc - HSE Report 2012 · Associated British Foods Health, Safety and...

Associated British Foods Health, Safety and Environment Report 2012

Acting responsiblyheAlth, sAfety And environment report 2012

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IntroductIon

AssociAted British Foods is A diversiFied internAtionAl Food, ingredients And retAil group with sAles oF £12.3Bn, employing 106,000 people in 47 countries.

our people And the environment Are At the heArt oF our Business. we strive to provide A sAFe plAce oF work For All oF our people And to ensure thAt our environmentAl impAct And the use oF scArce resources Are cAreFully mAnAged. these Are Business priorities And Are emBedded in the Four core principles upon which our ApproAch to sustAinABility is Founded:

•ManagingourenvironMentaliMpact;

•takingcareofourpeople;

•fosteringethicalbusinessrelationships;and

•beingagoodneighbour.

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message from george weston

calculation methodology was standardised in 2011 and throughout 2012 we have worked to implement a consistent approach to reporting water usage. We have also improved the reliability of our measurement of waste by adding new reporting requirements for recycled waste in order to recognise the beneficial impact of extensive and long-standing recycling operations. We will continue to focus on improving the accuracy and consistency of all our HSE data.

Sharing good practiceWe continue to assess the HSE risks of our operations and put in place improvement programmes to address significant risks. To support this we share good practice between the businesses and make regular use of tele-conferencing to bring together our global community of specialists under the leadership of the Group HSE Manager.

Over the last yearOur safety performance has continued to improve, but the safety of our workforce is, and will always remain, a high priority for the board and for all directors and managers in group businesses.

Many of our businesses are closely linked to agriculture and are therefore sensitive to changes in weather, particularly temperature and precipitation extremes. Following a year of unusual weather patterns in 2011, the weather in 2012 in most countries in which we operate has been more stable. This resulted in some of our businesses, particularly our sugar operations, increasing output. Despite an increase in group production of 9%, our total energy use decreased by 4% due to better sugar growing conditions and the positive impact of our focus on energy usage improvement measures. We continue to find innovative ways to reduce or make use of our production waste so that we minimise what is actually thrown away.

We are pleased to present our Health, Safety and Environment Report 2012, showing our progress, and welcome your feedback.

George Weston Chief Executive

The number of reporTable injuries fell for The fourTh year running

Our teams of health, safety and environment (‘HSE’) specialists have been working together, and with their colleagues on sites throughout the group, to drive continuous improvement in our HSE standards and performance. In 2012 we invested in the training of these specialists to ensure that a safe working culture and good environmental risk management practices were thoroughly embedded in the business. In parallel we also implemented a programme to improve the reporting accuracy of our HSE data. This is the source of information that we publish in this report which is shared with a wide range of stakeholders, and it is also used by the businesses to improve resource utilisation. Overall, we invested £32m in health and safety improvements during the year and are encouraged that the number of reportable injuries fell for the fourth year running, by 13% from 2011.

Improving measurementDue to the size and diversity of our operations we inevitably have sites with differing levels of sophistication in performance measurement. In 2010, we identified some inconsistencies in the measurement of water usage in different parts of the group, especially in Africa. The

George WestonChief Executive

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doIng good BusIness By doIng good thIngs: 2011/12 Performance summary

heAlth And sAFety• Weinvested£32mtoimprovetheworkingconditionsandthesafetyofequipment

• reportableinjuriesfellforthefourthyearrunning,down13%from2011

• lost-timeinjuriesdown47%since2008and11%since2011

• reductionof16%from2011inemployeedayslostduetolost-timeinjuries

• 331ofoursitesachievedayear’soperationwithoutanyreportableinjuries. thisincludesourfactories,depots,laboratoriesandprimarkstores

• 200employeesresponsibleforhsereceivedenhancedtrainingindatacapture sowecanmoreaccuratelyandconsistentlymanageourimpactandassessperformanceimprovement

environment• Weinvested£19minenvironmentalimprovements

• productiontonnageupby9%acrossallofassociatedbritishfoodsbutenergyusagedecreasedby4%

• 47%ofourenergywasderivedfromrenewableresources

• electricityexportedfromoursitesincreasedby9%to837gWh.thisequates tosupplying150,000ukhomesforayear

• oursugaroperationsreducedtheenergyneededtoproduceeachtonneof sugarby6%

• productpackagingusageremainedlargelyflat,decreasing2%from252,000tonnes to246,000tonnes

• 36sitesnowcertifiedtoiso14001,withothersworkingtowardsthisinternationalstandardin2013

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hse governance and rePortIng In assocIated BrItIsh foods

About this report Each year we report separately on our health, safety and environmental management performance in recognition of the material impact and contribution our businesses make in these areas.

In 2010 we published our first comprehensive corporate responsibility report, which will be updated every three years. This included our HSE performance as well as other material risks in the areas of business ethics and governance, social responsibility and our response to global trends.

We report here our global HSE performance for the year ended 31 August 2012 referred to as our 2012 Annual HSE report. This is issued in parallel with the group’s Annual Report and Accounts 2012.

Scope of report•We report data for 283 operational

sites and 240 Primark stores but do not include data for sites currently under construction or being relocated and therefore not contributing to production or management of production.

•A small number of sites reported results for periods that do not exactly align with the year ended 31 August, but all sites report consistent 12 month periods.

•We report on the performance of those businesses we own, as well as those subsidiaries in which we have a majority shareholding.

• The environmental impact reported relates to our factory and retail operations but does not include the related agricultural aspects.

The issues reported are those that are most important to ABF and our stakeholders. Further information on our policies and performance in health, safety, environment and other non-financial management is available on our website at www.abf.co.uk/responsibility.

The key performance indicators discussed in this report are:

•Number of employee fatalities

•Number of contractor fatalities

•Number of reportable injuries

•Number of health and safety fines

•Cost of health and safety fines (£)

•Number of environmental fines

•Cost of environmental fines (£)

•Energy used (GWh)

•Volume of water entering premises (cu metres)

•Quantity of packaging used in products (tonnes)

•Carbon dioxide emissions (tonnes)

•Sulphur dioxide emissions (tonnes)

Selected HSE performance data for the year ended 31 August 2012 marked with the ∆ symbol have been subject to independent limited assurance to ISAE 3000 by KPMG. Their report can be found on pages 26 to 28.

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governance of aBf’s hse aPProach

These principles include environmental and safety risk management whereby, as a minimum, they must comply with current applicable legislation of the countries in which they operate. Health and safety is considered equal in importance to any other core function of the group.

The Group HR Director, who reports to the Chief Executive, has overall responsibility for the group’s safety and environmental policies and performance management. He is supported directly by the Group Safety and Environment Manager. In turn, each business has at least one senior technical specialist who manages compliance, development, monitoring and reporting of HSE performance. During 2012 a number of businesses recruited additional skilled specialists to manage HSE matters. In total we employ over 160 HSE specialists at different levels within the businesses.

Our performance is regularly reported to, and reviewed by, the board. Responsibility for ensuring compliance with group policies is devolved to the chief executive of each business who nominates a director with specific responsibility for HSE matters. At the start of 2012 we shared the 2011 HSE performance of the group and the individual business with all the chief executives to demonstrate the collective effort needed to improve the quality of data collection and reporting, and to improve the HSE standards across the group. In addition, throughout the year the senior management of each business received updates from their HSE managers on their HSE performance and any capital expenditure directed at improving HSE practices.

We have now reported our HSE performance for seven years and most recently have focused on implementing robust internal procedures for data collection accuracy and assurance.

In 2012, we developed and ran an extensive training and support programme for our HSE specialists. This was delivered through face-to-face group training days, online training sessions and one-to-one advice.

Over recent years, we have also increased our level of assurance to make sure we receive independent verification of our data and processes. We employ ERM, a global HSE consultancy, to provide us with a rolling programme of independent compliance and risk management audits. The sites and businesses audited address promptly those issues that can be remedied easily and draw up improvement programmes for those requiring a more considered response. Last year we appointed a senior manager specifically to manage this audit programme and support the businesses in resolving the issues in a timely manner.

Following KPMG’s assurance programme last year, we have increased the number of key performance indicators to be independently assured in recognition of the value this external verification has on our approach to data management.

while the group operAtes A decentrAlised ApproAch thAt enABles the Businesses to develop in response to their mArkets And operAtions, they Are reQuired to applYthegroup’score Business principles. »

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Our business priority is to safeguard the wellbeing, development and safety of our people and those who work with us.

With 106,000 employees, we put significant effort into ensuring that our businesses are safe places in which to work and we aim to offer our people the support most suitable for their needs.

Our approach to human resource management is decentralised with flexibility given to each of our businesses. To find out more about our approach to developing and safeguarding our employees, see www.abf.co.uk/ responsibility.people.

Health and safety We have a clear requirement to continue to reduce the number of injuries sustained in our businesses. During the year we received 404 mainly routine visits from safety regulatory authorities and ensured that any findings were acted upon immediately.

54 of our manufacturing sites are certified to an industry-standard health and safety management system, such as OHSAS 18001. This number is increasing year-on-year and now equates to nearly one fifth of all our manufacturing operations.

In 2012 we invested £32m to improve the working conditions and the safety of equipment and sites. This included training programmes for employees and on-site personnel, personal protection equipment, fire prevention and smoke detection equipment, emergency response systems, pedestrian and roadway improvements, clean air systems and machine guarding. Although we do not report here our HSE impact during construction operations, we do place special focus on safety during any construction or relocation of sites or equipment.

in 2012 We inVesTeD £32m To improVe WorKing ConDiTions anD The safeTy of eQuipmenT anD siTes

During the construction of a new sugar factor in Zhangbei, northern China, we have been committed to high standards of safety and to demonstrating a duty of care to our contractors and suppliers. Heavy-duty construction in this part of China presents many operational challenges. Effective communication, clear expectations and continuous rigorous enforcement of standards have been an essential part of the project, as well as maximising the skills and innovations of those we have worked with to build the new site.

All major construction projects bring with them major risks. With 15 local contracting companies working in close proximity, the danger of workers being struck by materials or falling from height were of particular concern. Day-to-day work was made even more challenging when we had over 1,000 workers on site at peak periods.

case study: contrIButIng to safer constructIon In chIna

Safety started with the selection of experienced, competent contractors who showed a good understanding of our safe working practices. Contracts included commitments to safe working and imposed 15 site standards. Each contractor received an induction and registration, with continuous training and audits used to reinforce our expectations. Safety performance data, including contractor benchmarking, was regularly shared across the site. Daily co-ordination meetings and weekly safety meetings were held and findings recorded and shared.

Our robust approach to risk management for this project, resulting in no serious injuries, set a new standard for further major construction projects.

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ComplianceAcross ABF we monitor carefully the relevant guidance published by the national regulatory authorities as a benchmark and upgrade our safeguards where necessary to meet the latest standards. Our businesses have continued to develop the robustness of their risk management systems, which include clear objectives and safety improvement targets, effective physical controls, effective management procedures and routine performance monitoring. In addition, through our programme of independent audits we have processes in place to verify legal compliance and compliance with ABF standards throughout the year.

Fatal injuries Despite the health and safety of our workforce being an absolute priority, we deeply regret that there were five fatalities ∆ to contractors on our sites during 2012. Four of these deaths occurred in Africa and one in China. Three of the deaths in Africa involved vehicles and one involved a security guard dealing with trespassers. The death of the contractor in China was as a result of faulty lifting equipment.

Loss of life in our operations is entirely unacceptable. We recognise that many of our businesses operate in high-hazard environments, such as with heavy machinery, large transport and freight vehicles, confined spaces and working at height. Whenever there is a death on our sites or linked to our operations, we alert all our businesses and re-emphasise the requirement for safe working practices.

These accidents were investigated fully by our internal safety specialists, our directors and senior managers and the external regulatory authorities. All work-related deaths are reported to the ABF board and local management are held to account for the cause at their site. We have created a series of safety task groups to focus on providing practical guidance to all sites on contractor management.

Our approach to risk management is designed to ensure that risks are assessed, relevant precautions and work procedures are implemented and that there is strong supervision. It is a key principle that all managers are responsible for the safety of their workforce and for ensuring a safe working environment. Each factory and business has safety managers to advise and facilitate. These principles are embedded throughout our businesses.

Health and safety governance The group’s health and safety performance is reviewed quarterly by the Chief Executive and annually by the board.

The Group HR Director works with the Group HSE Manager to manage the day-to-day performance and long-term approach to health and safety. The Group HSE Manager is responsible for monitoring and reporting the performance of health and safety at group level and providing support to the operating companies.

The Group HR Director and Group Safety and Environment Manager review activity and performance monthly, hold formal half-yearly reviews of safety plans with the main businesses and visit a selection of the major operating sites throughout the year.

Each business is responsible for cascading communications from the centre and for managing their own communication of policies, expectations and improvements.

We are CommiTTeD To CreaTing an aCCiDenT-free business

These include clear working instructions in the relevant languages, provision of safety induction training for new employees and contractors, continuous training programmes as appropriate, increasing the safety training for managers, conducting safety audits and implementing safety improvement plans.

Beyond managing systems and processes for safety, there is also a strong culture across the group of embedding and respecting an approach to safe and healthy working which is reinforced by increasingly visible leadership at the business and group levels.

In recent years there has also been an increased engagement with employees on the importance of their personal responsibility for safety and the processes in place to reduce risk for themselves and their colleagues.

In 2012 a number of our businesses invested in a range of employee and contractor training programmes, including specialist training focused on forklift use, manual handling, dangerous goods, fire wardens and emergency crews. In parallel, some businesses implemented employee awareness and behavioural change training using online and face to face methods.

There are annual meetings of the senior global safety managers and two meetings a year of our Chinese safety specialists. These meetings provide an opportunity for the safety specialists to discuss the latest developments and share good practice. The Group HR Director and Group Safety and Environment Manager will continue to review the annual safety improvement action plans of the businesses to ensure they address the principal risks and will agree with local management their safety priorities for the coming year.

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Since the first day of production in 2005, the Twinings tea blending and packing factory in Shanghai has been focused on ensuring the safety of all 250 employees and encouraging a culture of safety awareness. Safety and quality are core to the business and employees are very familiar with the phrase ‘Zero Harm –Zero Defect’.

Our biggest challenge came in 2010 with investment that saw the site double in size. At the outset we clearly stated our safety requirements and worked closely with the contractor to complete the development without any injuries. As a result of this focus on safety, the contractor’s reputation has been enhanced and it has been awarded a number of new contracts. We are very proud of being able to help other companies understand the benefits of a good safety policy.

case study: twInIngs, shanghaI – develoPIng a strong safety culture

In August 2012 the site reached four years without a lost-time injury – an achievement to which every employee has contributed.

The factory is constantly making improvements in safety. For example, last year a potential safety risk was identified for forklift trucks loading into freight containers. To eliminate the hazard, teams from warehousing, engineering and HSE carried out a joint investigation and installed a loading dock safety system.

We value our people and understand that the factory’s achievements would not be possible without their excellent work. However we are not complacent and have introduced challenging targets for noise and dust reduction during the coming year. “We are determined to keep the factory at the forefront of safety development and ensure that we achieve a world-class environment,” says Sophy Xu, Site Safety Manager.

Twinings CEO, Bob Tavener, talking with Site Safety Manager, Sophy Xu

Injuries to ABF employees2012 has been the fourth consecutive year of reduced reportable injuries to our employees, with a drop of a further 13% following a 6% reduction last year.

With a growing workforce, this also reduces the proportion of employees having a reportable injury from 0.62% of our total workforce in 2011 to 0.51% in 2012.

Since 2008, we have been able to report a downwards trend in the total lost-time injuries (LTIs) to our employees each year. In 2012, these totalled 514 which was 11% lower than last year and 47% lower than 2008. For our reporting purposes, an LTI arises out of, or in connection with, ABF work activities and results in the employee being absent from work for at least one day or shift within 12 months of the accident.

These facts demonstrate the continued importance of investing in a strong safety culture.

We communicate our safety messages in a variety of ways according to the local situation. A simple but highly effective way is for our senior managers to ask about our safety performance and plans during visits to sites and to carry out safety tours. We know that the more interest taken by directors and managers, the more the workforce care for each other and stay safer. In businesses employing people from different cultures and with different languages, the use of pictorial messages has a positive impact. In some of our African operations, such as at the Dwangwa sugar factory in Malawi, the management teams use storytelling and drama to convey the safety message in a way which is engaging and effective.

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We are CommiTTeD To CreaTing an aCCiDenT-free business enVironmenT

Reportable injuries Reportable according to the laws of each country

Lost-time injuriesNumber of lost-time injuries to employees

Reportable injury rates Percentage of employees having a reportable injury

Days lost

0

150

300

450

600

750

575

644

544517

445∆

2008 2009 2010 2011 2012

0

250

500

750

1,000

1,250

2008 2009 2010 2011 2012

974

864

681

575514

0

0.25%

0.50%

0.75%

1.00%

1.25%

0.770.81

0.700.62

0.51∆

2008 2009 2010 2011 2012

0

5,000

10,000

15,000

25,000

20,000

14,979

16,818

10,9369,792

8,193

2008 2009 2010 2011 2012

Achievements: •A reduction of 16% from 2011 in the

number of employee days lost due to LTIs (See graph: Days lost).

•We are pleased that 331 of our sites achieved a year’s operation without any reportable injuries. This included our factories, depots, laboratories and Primark stores.

• 281 sites did not have a lost-time injury.

Westmill Foods, UK – Recognised for no lost-time injuriesWestmill Foods passed a health and safety milestone at the end of their 2012 financial year by completing 772 days since a lost-time injury to a Westmill employee. This is more than two years free from an injury which resulted in an employee being absent from work.

The achievement was the result of a long-term focus over the past four years which has seen lost-time injuries fall from nine in 2007 to zero in 2011 and continuing into 2012.

Safety drama taking place at Dwangwa sugar factory, Malawi

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This has been accomplished by:

• clear leadership in safety in the workplace and a very high level of management focus;

• a strong emphasis on tracking safety routines and preventative measures;

• a high level of reporting and addressing issues arising from incidents and near misses;

• the introduction of Westmill accident prevention programmes which actively identify and deal with potentially unsafe conditions and practices;

• appropriate levels of resource and attention on major projects at Westmill sites;

• an employee incentive scheme which recognises excellent health and safety performance and positive behaviours; and

• a continuous improvement culture and drive towards a comprehensive risk management system.

Westmill’s achievement has been recognised by the Royal Society for the Prevention of Accidents which, in 2012, awarded Westmill sites Gold and Silver Health and Safety Achievement awards.

Health and safety finesNumber of fines

0

2

4

6

10

8

7

4

2

6 6∆

2008 2009 2010 2011 2012

Safety fines During 2012 we received six safety fines, three in the US, two in Spain and one in Australia, totalling £40,000 ∆ for breaches of safety regulations. The businesses involved were required to report to the Group HSE Manager when and how remedial actions would be implemented.

One site received a fine for problems with its water-cooling tower associated with poor maintenance, use of poor materials and an insufficient control and monitoring system. The business has invested in the site to prevent this happening again. There are now procedures in place to ensure a periodical overhaul of all critical points. The installation will be cleaned and sanitised appropriately and water quality will be better managed. A plan to upgrade the installation has been approved and the monitoring of risks to health, such as legionella, is now undertaken monthly, which exceeds the legal requirement.

Workers in the Westmill Foods factory

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promoTing a safe anD healThy plaCe To WorK

A healthy workplace A core requirement is for our people to go home from work as healthy as when they arrived, unaffected by their tasks or working environment.

Internal occupational health specialists monitor the working practices at our factories to ensure they are healthy places in which to work. However, some of the substances we handle and manufacture may, if incorrectly managed, pose a risk to health. The main use of chemicals in our manufacturing facilities is for the cleaning of food processing equipment. Chemicals are also used by engineers for boiler water treatment and the maintenance of food processing equipment, although some of the oils and greases are of food grade and not hazardous.

Many chemicals are used by our laboratories for routine quality control analysis. Our sites employ competent technical staff to control the storage, handling and use of hazardous substances and their final disposal.

The operators are provided with the necessary hazard information, training, handling equipment and protective clothing and we require sites to have effective emergency procedures in place. The European Union (‘EU’) has issued very detailed legislation regarding the registration, assessment and authorisation of chemicals. We have reviewed their applicability and, where appropriate, set up technical working parties to ensure compliance with the relevant milestones by 2018.

Employee transportation – safety is the keyIllovo Sugar’s safety programme has almost halved the number of injuries over the last year. The overall aim is to ensure all agricultural workers can get to and from work safely. This is not easy given the remoteness of some cane estates and the lack of public transport. Workers are transported from a series of central pick-up points in vehicles that are fit for purpose and operated by trained and licensed drivers. However, bad weather, poor road conditions, wandering animals and other road users all pose a risk.

Therefore Illovo has introduced a groupwide safety standard for transport. This includes: rollover protection for all vehicles; fitting of seatbelts; tool and equipment compartments; training of drivers with live vehicle tracking to monitor driver behaviour; and a mandatory reduced travelling speed. This initiative has resulted in just one (injury-free) accident since March 2010.

Safe storage of chemicals

Improved transport for sugar cane workers in Africa

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our core gloBAl policy on, And ApproAch to, sustAinABility is to mAnAge our environmentAl impActs, increAse our energy eFFiciency And Be A good neighBour.

Our greatest direct environmental impacts are in:

• the use of energy and the resultant emission of carbon dioxide;

• the abstraction of water; and

• the generation and disposal of liquid and solid wastes.

During the year we invested £19m in environmental improvements including upgrades to effluent treatment, waste reduction and improving segregation of our different wastes, reducing energy use and improving the storage of oils and chemicals.

In 2012 our sites received 714 visits from the environmental regulators, down 9% from last year. Of these visits, 465 were in Asia and of these, 412 were in China. Six sites received awards from external organisations for their environmental achievements. Thirty-six of our sites are certified to ISO 14001 with others planning to work towards this international standard in 2013.

We build environmental considerations into all aspects of our business. For example, when considering the acquisition of new businesses we carry out strict due diligence to ensure that we understand the environmental impact of the operations before we purchase them. The outcome of these investigations forms part of the decision on how to proceed and allows us to plan any necessary investment.

We ConTinue To WorK harD To use energy effiCienTly

Our environment policyWe recognise the impact that our businesses have on the environment. Therefore, as a minimum, we comply with the current applicable legislation of the countries in which we operate and our operations are conducted with a view to ensuring that:

• emissions to air, releases to water and landfilling of solid wastes do not have an unacceptable environmental impact and do not offend the surrounding community;

• significant plant and process changes are assessed and positively authorised in advance to prevent adverse environmental effects;

• energy is used efficiently and consumption is monitored; natural resources are used efficiently;

• raw material waste is minimised; solid waste is reduced, reused or recycled where practicable;

• the amount of packaging used for our products is minimised, consistent with requirements for food safety and product protection;

• products are transported efficiently to minimise fuel usage, consistent with customers’ demands, production arrangements and vehicle fleet operations; accidents are prevented so far as is reasonably practicable; and

• effective emergency response procedures are in place to minimise the impact of any incidents that do arise.

The environmental performance of our businesses is reported regularly to, and reviewed by, the board.

The responsibility for achieving compliance with this policy is devolved to the chief executive or managing director of each of our businesses. Each business has nominated a director with specific responsibility for environmental matters.

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Energy As energy use is one of our main environmental impacts, a commitment to reducing usage and to increasing the proportion of renewable fuels used remains central to our focus and high on the agenda of all our businesses.

Improving our energy efficiency not only reduces the use of natural resources and emissions of carbon dioxide and other pollutants, but it also usually reduces operating costs. Manufacturing in so many different countries means we are exposed to a wide range of energy supply constraints and commercial pressures as well as making use of a wide variety of fuels.

In 2012, our absolute use of energy was 22,727 GWh compared to 23,765 GWh in 2011, a 4% reduction. We are very encouraged by our total energy consumption this year which is due to better sugar processing conditions and the environmental benefit from the investments we are making in energy efficiency across our businesses.

Despite unavoidable use of carbon-intensive fuels, a substantial proportion of our energy – 47% – is derived from renewable sources. The majority of our renewable energy comes from the use, as a fuel, of sugar cane fibre once the sugar has been extracted. This makes our on-site energy production, and use of by-products, a very efficient closed system.

This year we also increased the amount of electricity we exported from our sites by 9% to a total of 837 GWh. Some of our sites are able to generate electricity surplus to their needs and export to others, typically to the national electricity distribution networks. This quantity of exported electricity – sufficient to power around 150,000 UK houses for a year – is not credited in the energy consumption data described above.

Energy consumption – absoluteAbsolute energy use GWh

Energy consumption in sugar manufacturingExpressed as percentage steam on feedstock

Types of energy used in 2012 ∆

0

10,000

20,000

30,000

25,403 25,920

22,27023,765

22,727∆

2008 2009 2010 2011 2012

35%

40%

45%

55%

50%

46.4

44.943.7 44.0

41.0

2008 2009 2010 2011 2012

2.1 1.0 0.6 0.3

Renewable 47.5%Gas 27.3%Coal & coke 14.5%Electricity 6.7%

Imported steam 2.1%Fuel oil 1.0%Gas oil 0.6%LPG 0.3%

47.5

27.3

14.5

6.7

Energy use in our sugar companies Our sugar operations continue to dominate our global energy use and, as in the previous year, accounted for 87% of the total energy use in 2012. Sugar factories require energy to separate the sugar from the beet and cane, to concentrate and then evaporate the sugar solution and to crystallise the sugar.

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To minimise energy demand we use the steam generated by the first evaporator as the heat source for the second evaporator and so on through the series of evaporators. We measure year-on-year how much steam it takes to make sugar1. In 2012 we used 41% steam on our feedstock, which compares favourably to 2011 at 44% and to our target of 43%. This represents a 6% reduction year-on-year in energy consumption per tonne of sugar.

This reduction was further helped by favourable crop production in the UK and Spain and better weather conditions in the UK.

AB Sugar’s long-term aim is to use less than 40% steam on feedstock even with fluctuations in climate. Improving efficiency in our sugar factories allows us to use the surplus steam to generate substantial amounts of renewable electricity – more than is required for factory operations. The surplus electricity is sold to local electricity networks, effectively replacing energy currently produced by fossil fuels.

AB Sugar made good progress in energy management in China and Spain and Illovo’s expanded factory in Swaziland began a successful start:

• In southern China we successfully installed three large evaporators at the Boxuan factory. Careful planning, before, during and after installation, ensured that the evaporators were fully integrated with factory processes and delivered levels of efficiency significantly higher than is normally expected in cane mills. This allowed the factory to both reduce the volume of bagasse used in its boilers, freeing up sales of this renewable cane fibre to the local paper industry, and generate more of its own electricity.

case study: examPles of energy effIcIency Projects In sugar comPanIes

•Refining raw sugar in Azucarera’s factories in northern Spain has been a success and has provided an opportunity to improve energy efficiency. During 2011/12 the three sugar factories produced 70,000 tonnes of sugar from raw cane. The resulting reduction in CO2 emissions of 15% has been a good step towards Azucarera decreasing its carbon footprint.

•At Big Bend in Swaziland, Ubombo Sugar’s factory expansion and power co-generation project was successfully commissioned. This major project will enable the company to increase its annual sugar production from 220,000 tonnes to more than 300,000 tonnes and will significantly raise its power generation capacity by using biomass from cane as a supplementary fuel for the factory boilers. The factory will not only be self-sufficient in energy but will be able to export surplus electricity into Swaziland’s national grid.

Bales of bagasse being loaded for transport to a paper mill

Sugar cane being harvested

1 One tonne of steam evaporates as much as five tonnes of water from the sugar solution. A key performance indicator for this energy usage – percentage steam on feedstock – is calculated by dividing the amount of steam (tonnes) required to process the sugar beet or cane by the weight of the beet or cane processed (tonnes) and expressing the result as a percentage. The lower the figure the lower the amount of energy needed to process the sugar and therefore the greater the efficiency of the process.

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effiCienT use of energy is a sTraTegiC issue for abf

Energy regulation Energy efficiency programmes become all the more important as the global business environment becomes increasingly carbon constrained. The regulation of carbon, issues of energy security and spikes in energy costs impact all our operations. Energy usage is therefore a strategic issue for ABF and we accord it a high degree of operational and commercial focus. Our businesses aim to be proactive in their energy management so that they are ahead of any new or developing national energy or carbon regulations.

Irrespective of the amount of energy used and its source, it is a core principle of the group that all energy must be used efficiently. Of our larger European sites, 22 are subject to the EU Pollution Prevention and Control regime and are under a statutory duty to minimise energy consumption by the use of the best available techniques. Our UK manufacturing operations participate in the UK government’s Climate Change Agreement. This year we also joined the government’s CRC Energy Efficiency scheme, which is mandatory for large but non energy-intensive organisations and aimed at helping them to help cut emissions and increase energy efficiency. Our sugar sites in the UK and Spain participate in the EU Emissions Trading Scheme which provides financial incentives for reduced energy consumption and cost-effective emission reduction.

Carbon When we use energy in our factories, we either buy electricity and steam from external power stations or we burn fuels directly on site, within our own power stations. The carbon dioxide emissions we report below reflect that internal and external power generation. We calculate the quantity of carbon dioxide emitted through the use of electricity using the latest internationally recognised factors published by DEFRA or local governments where applicable. We calculate the carbon dioxide emitted from other fuels using the UK government’s latest conversion factors. In 2012 we emitted, or caused to be emitted, 3.36 million tonnes of carbon dioxide.

Carbon dioxide emissionsMillion tonnes

0

2

1

3

4

5

2008 2009 2010 2011 2012

3.593.85

3.01

3.613.36∆

Carbon Disclosure Project The group participates in the annual survey by the Carbon Disclosure Project, an independent not-for-profit organisation working to reduce greenhouse gas emissions and sustainable water use by businesses and cities. It provides a voluntary system for thousands of companies globally to measure, disclose, manage and share environmental information. ABF is continuously looking to improve the measurement and reporting of its environmental data to drive innovation and progress in our energy efficiency activities.

Sustainable building – AB Agri’s new head office AB Agri moved its headquarters to a new purpose-built office designed specifically to be environmentally friendly. All materials used in the construction of the new building are 100% recyclable including the underlying structure and the cladding.

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Features include:

• double-glazed, green tinted windows to increase thermal performance and reduce solar gain;

• external solar shading incorporated as part of the building’s exterior: reducing solar gain, the internal cooling loads and energy bills;

• opaque low-level glass that increases light into the building, reducing the need for artificial lighting during the day;

• energy efficient lighting designed to meet the latest building energy efficiency requirements installed throughout;

• dedicated floor-by-floor heating and cooling system using fresh air ventilation for occupants; and local system comfort controls, using air-to-air heat recovery to reduce energy bills and the environmental impact of the building;

• installation of extraction fans into each area operating on occupancy/timer delay control;

• localised instantaneous electric hot water heaters have been installed near to the point of use to reduce draw off time, system losses and heat wastage; and

• a rainwater harvesting system that collects run-off water into a tank on the roof of the building to provide grey water for the toilets throughout the building, reducing the use of potable water.

Primark UK – carbon reduction trialsPrimark’s UK stores use over 200 GWh of energy for heating and lighting – equivalent to the power needed by over 60,000 UK households. However, these stores use electricity sourced from green power sold into the national network by fellow subsidiary British Sugar. As part of its drive to be highly energy efficient and to reduce the energy tax under the UK’s CRC Energy Efficiency Scheme, the company has conducted carbon reduction trials at 36 UK stores.

The trials focused on two main aspects:

• behaviourmeasuresincludingrefreshertraining on the effective use of the heating and lighting control systems; and

• technicalmeasuresincludinguseof the most up-to-date energy-saving technology such as Building Energy Management Systems, LED lighting, efficient cooling, photovoltaic energy sources, variable speed drives, better insulation, improved lighting control and reducing the night-time base load.

The trials have shown that there are significant energy and financial savings to be achieved among Primark’s older stores. The inherently more energy efficient design of the newer stores (less than three years old) offer more limited scope. The trials have recently been extended to 14 stores in the Republic of Ireland.

Sulphur dioxide and other emissions to atmosphereWe are very conscious of our responsibilities towards our neighbours and, as stated in our environment policy, we work hard to prevent any nuisance or offence. Most of our manufacturing sites have only small steam boilers and few process emissions: their emissions to air are not significant. Our sugar operations are considerably larger but they are subject to more stringent controls. Our non-carbon atmospheric emissions include dust particles, acid gases (oxides of sulphur and nitrogen) and odours, all of which have to comply with local environmental standards.

Two years ago, we started to collect data on our emissions of sulphur dioxide as the principal acid gas emission from our combustion processes and we published our global emissions for the first time last year. This year we emitted 5,513 tonnes ∆, a 13% increase in emissions over those declared for 2011, but this reflects the 54% increase in the number of sites reporting their emissions this year rather than an absolute increase in SO2.

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managing resourCes responsibly is Key

Water and waste water In addition to efficient energy use, another significant focus area is effective management of our water usage and waste water. Since 2010 when it became apparent that our reporting of water data needed to improve, particularly by our sugar operations, we have invested extensively in developing our management and reporting of water use. Nevertheless this year, as in 2011, water use reporting is affected by the lack of accurate metering at some sites.

We carried out a large-scale programme to improve our water measurement methodology, and to provide training to all the environment specialists in the businesses and support them as they implement changes and raise awareness in their operations. This year we have further refined our calculation for water use to exclude once-through cooling water1. This was included in last year’s reporting so the reduction in total water use we report here is largely due to this new measurement methodology.

In 2012 the amount of water brought on to our premises for use in operations was in the range of 54 to 64 million m3∆, excluding any water used for crop irrigation. The accuracy of our water use data has improved again this year due to additional training and guidance and investment by individual businesses in their water management equipment. However, the change in methodology makes it difficult to provide a year-on-year water usage comparison. It is important to note, as well, that although we continue to make water savings in our processes, the total amount of water used is also directly influenced by the size of the sugar crops and availability of other agricultural raw materials which in turn depend on weather conditions.

British Sugar’s factory at Cantley has put in place a water efficiency programme, resulting in a significant reduction in water use of 17% between 2011 and 2012. Modifications were put in place to maximise recycled condensation for cooling purposes rather than primarily relying on water from other sources such as rivers.

Situated in Norfolk, Cantley sugar factory has a special place in the history of Britain’s sugar industry. Built in 1912 as the first British beet sugar factory, Cantley marks the birth of the home-grown sugar industry.

Water plays a significant role at Cantley and in all British Sugar factories, where it is used for cleaning, heating, cooling and transportation (sugar beet float in water). The manufacturing sites operate under ISO 14001, where independent audits are undertaken to review performance against continuous improvement targets. Within this, each site identifies opportunities for reusing and recycling water.

Over the past five years, the factory at Cantley has made steady progress in reducing the volume of water it uses to

case study: reducIng water aBstractIon at cantley

manufacture sugar, electricity and other co-products. Improvements were achieved by small-scale measures, but when a more significant step change was called for, radical thinking was required.

Cantley factory abstracts water under licence from three sources: potable water; borehole water; and river water.

In 2011, the factory used 38,000m3 of river water, abstracted from the River Yare into a small reservoir, from where it was pumped to the factory for cooling purposes. A pond nearby was filled with process condensate awaiting permitted discharge to the river. This condensate had already been cooled to below 25°C to meet discharge temperature regulations. A small project team examined the feasibility of using this cooled condensate to replace river water. The result? We installed 200 metres of pipeline, and a condensate pump now feeds the cooled condensate via the original system in the factory. River water is no longer used for cooling.

Another feasibility study is now planned to investigate similar reduction opportunities for borehole water.

Use of water at Cantley sugar factory (m3)

1 Once-through cooling water was excluded as it is only used to cool parts of the process, is cooled down and then flows back to the river. This therefore does not affect river water flows.

0

50,000

100,000

150,000

200,000

250,000

47,207

132,461

51,336 34,786

44,650

59,853

62,585 72,519

37,936

48,065

16,9112009 2010 2011 2012

(6 months)

Borehole

River abstraction

Potable water

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We reQuire our businesses To use naTural resourCes, inCluDing WaTer, effiCienTly anD To aVoiD WasTe

Illovo Sugar facts • Illovo Sugar’s water use accounts for a

quarter of ABF’s total production water use. It is also the group’s largest user of river and lake water, predominantly for irrigation of sugar cane crops.

•Our operations in Malawi, Mozambique, Swaziland and Zambia are fully irrigated, Tanzania’s operations are partly irrigated and those in South Africa are rain-fed.

• Irrigated agricultural operations have licences from national water authorities for water abstraction points and are in line with the South African Sugarcane Research Institute’s guidelines to ensure that we do not adversely affect water flows in rivers.

•As part of our commitment to use water responsibly we invested over £3m in 2012 and £2m in 2011 to improve environmental management in Illovo, with a focus on water and waste management.

Sugar and yeast production is water intensiveSugar beet fields are irrigated using water abstracted from local sources under strict legal controls. The quantity of water is limited by national environmental regulators to ensure that the abstraction is not prejudicial to the water capacity of the local rivers and aquifers. The sugar cane fields owned and operated by Illovo in Africa are either rain-fed or are situated adjacent to major rivers from which the irrigation water is abstracted. Cane is grown in these locations specifically because water is plentiful and we are very careful to ensure that people and ecosystems downstream are not affected.

Sugar beet comprises more than 75% water. The processing of sugar beet within our factories results in the water within the beet being released, treated and discharged to the river. Similarly, the processing of sugar cane releases the water stored within the cane.

Waste water The majority of the waste water from our factories is treated before being discharged into the local rivers, with the level of treatment being based on local river quality standards. This year saw significant new expansions in waste water treatment at our yeast businesses in China, Europe and South America, at our sugar businesses in Europe and Africa and at our bakery businesses in the UK, with approximately £5m invested either in new, expanded or improved effluent treatment plants in order to meet increasingly stringent local requirements.

AB Mauri’s yeast operations generated 42% of all of ABF’s waste water in 2012. The level of treatment depends on local river standards and so varies according to location. The overall treatment in any year is dependent on the proportion of use of cane molasses, beet molasses or sugar as the substrate; on factory expansions; on the transfer of production between sites; and on the creation of new or expanded treatment facilities. However, AB Mauri is very focused on its water usage and treatment of effluent which the following examples demonstrate:

Turning waste water into energyAB Mauri Hull, UK During 2012, the AB Mauri factory in Hull, UK, upgraded its waste water treatment facility including installation of a second anaerobic digester to increase the overall efficiency of the system. Once treated on site, the liquid waste is sent to the local water company, Yorkshire Water, for final treatment before discharge.

As a result of this upgrade and the new digester, the amount of organic matter discharged to rivers has been cut by around 11% and the amount of biological residue sent to land as fertiliser reduced by 17%. Anaerobic biological systems destroy residual organic materials resulting in cleaner water for discharge. In addition,

the amount of energy required to run the treatment facility fell by some 20% while the amount of renewable energy produced on site in the form of biogas has doubled.

The biogas generated by anaerobic treatment of the liquid waste is blended with natural gas and used to generate heat and power for the factory’s operations. We estimate that this system will save up to 1 million m3 of natural gas a year, enough to provide a year’s heating for 650 UK houses.

AB Mauri Tucumán, ArgentinaOur yeast and malt extract factory in Tucumán, Argentina, has a production capacity of 33,600 tonnes of yeast a year. When we bought the plant it did not have a formal system for liquid effluent treatment so we invested to solve this problem and generate an opportunity.

The construction of the first phase of the effluent treatment system, started in 2009, involved installing an anaerobic digester which generates biogas as a replacement for fossil fuels. As well as substantially reducing pollutants, the plant’s biogas displaced the equivalent of 18,700 MWh which had been provided previously via natural gas, representing a saving of 0.3% of ABF’s global gas usage.

In addition, the treatment system has been registered as a Clean Development Mechanism (‘CDM’) project contributing to the objectives of the United Nations Framework Convention on Climate Change. The aim of the CDM is to promote clean sustainable development and reduce emissions leading to climate change. This has been an industry first in Argentina and for AB Mauri.

As illustrated above, the anaerobic process generates biogas which is valuable in replacing the use of fossil fuels. However, we recognise that even after full treatment with biological systems, further treatment is required in some instances.

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AB Mauri Harbin and Hebei, ChinaAB Mauri is also adopting alternative treatment systems in its Harbin and Hebei factories in China. We have commissioned two effluent evaporation plants which, by separating the higher strength liquid waste streams and subjecting them to concentration and evaporation, further improve the quality of liquid discharges. At the same time the evaporated vinasse is a saleable commodity, used as a fertiliser or incorporated into animal feeds.

Waste Minimising the quantity of waste makes good environmental sense and has commercial benefits. This applies not only to inert and non-hazardous wastes such as production residues, spoilt finished products, paper, cardboard and plastic packaging materials, but also to small quantities of hazardous substances such as unwanted laboratory chemicals and used lubrication oils. Wherever possible we handle, transport and finally dispose of waste at appropriately engineered and licensed facilities under a strict duty of care. Where such facilities do not exist we use our best endeavours to handle and dispose of waste safely.

The types of waste vary considerably according to the manufacturing process. Waste legislation differs significantly between countries so that a substance not classified as waste in one country may be classified as waste in another. The quantity of materials classified as waste generated by our businesses therefore varies according to the mix of manufacturing operations and countries in which we operate. Irrespective of these variations we have a key requirement to minimise waste.

In 2011 we made the decision not to report our data on hazardous and non-hazardous waste production due to inconsistencies in reporting methodologies across the group. As a result, throughout 2012 we carried out a more detailed analysis of the data, working as appropriate with our suppliers of waste services, to improve our data collection and estimation methods for non-hazardous and hazardous waste production. We have made improvements over the last year and have provided training to our HSE people globally on how to manage waste data and have distributed improved guidance to further aid consistent measurement and estimation of waste. Despite clear progress more work is needed before we can report an accurate waste figure. Many waste streams are

being diverted from landfill by a number of beneficial usages such environmental restoration and landscaping, soil pH treatment and fertiliser, animal feed and the production of paper. We recycle a number of by-products including plastic, paper and cardboard, metal, glass, mud and ash.

Azucarera’s Miranda factory, Spain – using lime waste to support the mushroom industryOur Spanish sugar business, Azucarera, aims to turn all its non-hazardous waste into beneficial materials, resulting in zero landfill. For the last three years, they have been collaborating with the Technical Institute for Mushrooms to develop the role of their sugar factory lime, Carbocal, into mushroom casing. The casing works as a calcium carbonate substitute in the mushroom growing compost and can increase growth.

After trials to determine the right growth conditions, Carbocal is now produced during the beet season in Azucarera’s Miranda sugar factory and in small quantities at its Toro factory. It is stored for a year before final processing into an enhanced product which is sold to the mushroom industry in different regions of Spain. As a result, Azucarera sells almost 75% of its lime by-product as Carbocal.

Azucarera’s Miranda factory – Carbocal waiting to be delivered Azucarera’s Miranda factory – mushrooms growing with the benefit of Carbocal

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Packaging The quantity of packaging used in our products since 2011 remained largely flat, decreasing 2% from 252,000 tonnes to 246,000 tonnes, whilst the volume of production increased by 9%. We include in these figures both packaging used to protect, deliver and handle our products and final product packaging.

Packaging handled000 of tonnes

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100

200

300

400

500

315290

233252 246

∆

2008 2009 2010 2011 2012

In May 2011 the Allied Bakeries’ sites in the northwest of England set themselves a challenge of finding uses for all of their waste and not sending any for disposal at landfills. They identified all types of waste and researched recycling opportunities. In collaboration with an external company – Nutrafeed – they introduced clearly labelled recycling points throughout the site and trained their staff in how to segregate the eight different waste streams. By September 2011 the sites had found uses for all of their waste and had eliminated landfilling.

case study: allIed BakerIes zero to landfIllABF is committed to reporting an accurate waste figure and reporting the breakdown for hazardous, non-hazardous and waste sent for recycling better to understand and manage our waste impact. Over the forthcoming year we will:

• further reinforce the process and methodology for reporting hazardous and non-hazardous waste;

• provide additional support for data management and accuracy for those businesses within the group that produce the most waste;

• provide refresher training; and

• perform a half-year review of waste data collection processes and accuracy with those businesses that contribute the most to the group total.

Although packaging increased in 2011 the trend in the amount of packaging since 2008 is downward over the long term, mainly reflecting changes in the packaging materials used in some of our product ranges from glass and metal to plastics.

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George Weston Foods, Australia – supporting schools through recycled packagingAs a signatory to the Australian Packaging Covenant, George Weston Foods (‘GWF’) has been working in partnership to increase recycling of its plastic packaging. Soft plastic packaging is used for bread bags and other food products.

The Australian Packaging Covenant aims to achieve a 70% recycling rate for packaging by 2015 and a more holistic approach to packaging sustainability. GWF takes seriously its commitment as a signatory and recognises that its role in the lifecycle of its products’ packaging goes beyond the consumer’s waste bin.

Working in collaboration with RED (Recycling + Education = Difference) Group, the Australian Food & Grocery Council, other brand owners, retailers and transport companies, GWF has become a key contributor to the REDcycle Programme.

The REDcycle Programme was developed to recover and recycle post-consumer soft plastic packaging through a network of retail drop-off points around Australia. This packaging stream is not currently recycled through existing household or curb-side schemes in Australia and is a significant contributor to landfill.

The initiative was successfully trialled through 115 Coles supermarkets in Melbourne. Over 5.8 million units of plastic bags and packaging, dropped off by customers, were then recovered and processed by RED Group.

Based on the success of the trial, the objectives of the programme are now:

• to roll out at a national level with a minimum of 700 retail collection points by end of 2013;

• to create a working, tangible recovery model that enables consumers to recycle their soft plastic packaging; and

• to establish a product stewardship model where all participants in the lifecycle of packaging can play a role in a sustainable outcome.

Through the programme, Australian consumers will continue to be provided with simple messages and an engaging way to divert GWF bread bags and other soft packaging from landfill by returning it to supermarkets for recycling.

Material will be recovered, processed and converted into products such as benches, bollards, decking, fencing and tree guards for Australian schools and communities.

Eco Cap – using fewer materials without compromising on qualityAB World Foods has reduced the amount of steel in some of its product packaging, creating significant savings and a better environmental solution.

For a number of months the business has been carrying out extensive tests on how to make the switch to the lighter Eco Cap caps to some of its products, to reduce overall packaging weight. Having gradually phased out old style caps on branded products, the business is now working with own-label customers to do the same. AB World Foods is also reducing the weight of steel used in its cans without reducing the protection the can provides to the product. To achieve thinner cans without detrimental impact on product protection required significant technical expertise from the manufacturer. This is a very good example of how a supply chain can work together to bring to the market a lower-cost product with less environmental impact.

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Recycling – Primark, UK – closing the loop on waste packagingAs reported last year, Primark has built a centralised recycling plant at its distribution centre in Thrapston, UK. This allows the business to collect its cardboard waste, recycle it and return it in the form of paper shopping bags to be used in its stores. Over 16,000 tonnes of waste cardboard was collected in 2011, some 61% of Primark’s total packaging, which reappeared as 179 million paper shopping bags.

case study: recyclIng – twInIngs ovaltIne, thaIlandThere has been a concerted effort to reduce waste going to landfill from the Twinings Ovaltine site in Thailand. This has had great results with over 1,132 tonnes being diverted from landfill to more useful purposes. In fact this is now called ‘valued waste’ by the site.

The programme activities include:

• reclassifyingwastesuchaswoodenpallets to being ‘valued waste’;

• workinginpartnershipwitharecycling business to pass on these resources;

• communicatingthenewactivity and waste classifications to the entire site so they can support the initiative; and

• updatingthewastemanagementprocedure and registering the new process and waste classification with the local government.

This has contributed to non-hazardous waste from the site decreasing by 25% and hazardous waste decreasing by 50%. The programme will continue to be reviewed by the internal ISO 14001 committee.

This was enough bags to supply every Primark store in the UK and two in Spain.

We estimate that this process is saving over 160,000 road freight miles a year.

Primark is now looking to develop a system for recycling plastic coat hangers, of which 5,200 tonnes are collected and recycled annually in the UK, to use in its stores as bins and then to expand this system across its European operations.

Baling waste cardboard to send for recycling into shopping bags

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Environmental complaints During 2012 we received 82 environmental complaints, 18% fewer than the previous year.

There were various causes of complaint during the year but the majority related to noise and odours, most of which were site-specific issues and addressed locally. The absolute number of complaints should be considered in the context of a large and growing business. We are always seeking to eradicate the causes of such events but meanwhile the sites involved have expressed their regret for the inconvenience caused to our communities and neighbours.

Environmental finesIn 2012 we received 16 environmental fines totalling £137,000 ∆ covering noise, odour and waste water errors. Each site has addressed the issue swiftly to remedy the situation and ensure that, henceforth, standards are met.

For example, one of our sites was fined £960 in 2012 for two instances relating to the discharge of waste water at a low pH. The site had both a manual chart recording system for pH measurement and a manual pH adjustment system. To resolve the issue, the site installed a new buffer tank with fully automatic pH dosing (adjustment) as well as advanced instrumentation with alarms.

Environmental complaintsNumber of complaints

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100

150

250

200

161

128 126

101

82

2008 2009 2010 2011 2012

Environmental finesNumber of fines

0

5

10

15

25

20

7

9

6

9

16∆

2008 2009 2010 2011 2012

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Health and safety performance has improved in 2012We are pleased to report another year with significant improvements in our overall health and safety performance, although any work-related death will never be acceptable.

Continuing to strive for a safe workplaceWe have also seen a continuous reduction in the number of work-related injuries but we recognise the need to strive for further improvements. Across the group there is a strong culture of responsibility for providing a safe workplace and we will continue to build on providing effective training and appropriate systems, processes and skills to operate healthily and safely.

We are making a real difference in managing our environmental impactThis year we have increased production across our businesses, but despite this increased output, we have maintained our focus on reducing the use of resources including energy and water and in the generation of waste.

We are always trying to improve our performance year-on-yearWe have spent time this year in refining the definitions against which we collect and report our HSE data. Every business has taken part in updated training to ensure consistency in our reporting across the group. We have introduced new key performance indicators to address emerging, or increasingly important, issues including the amount of waste sent for recycling or other beneficial use.

We have also refined our water usage definition and although this resulted in a significant reduction this year, we are confident that this is, in part, a result of the focus we have placed on the effective management of water across our business.

We welcome your feedback on this report or comments about our HSE performance. Please get in touch with us at www.abf.co.uk/contact.

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Associated British Foods plc, Health, Safety and Environment Report 2012 definitions

Employee A person working directly for the Company and paid directly by the Company.

Contractor A person doing work for the Company but paid by a different company.

Fatal injury The death of a person (either an employee or a contractor) as a result of work activities. This includes the traditional activities within our operations and also travelling for work purposes, for example engineers visiting other factory sites or people travelling to attend a training course. Deaths from natural causes, e.g. a heart attack, and deaths from non-work activities are not included.

Reportable injury

An employee injury which resulted from an accident arising out of or in connection with work activities and which was required to be reported to the external safety regulatory authorities under the requirements of the legislation of that country. This excludes injuries reported only to the country’s social welfare or workers’ compensation schemes or where a reported injury is subsequently not attributed to the Company by the authorities in official statistics.

Safety or environmental fines

The fines resulting from the regulator bringing legal action against the Company for breaches of the relevant legislation. The cost of the fines has been converted to sterling.

Energy used The amount of energy used on site from electricity, natural gas, gas oil, coal, coke and anthracite, heavy fuel oil, LPG, renewable fuels and imported steam. The total is displayed as gigawatt hours (thousands of megawatt hours).

Carbon dioxide The tonnes of carbon dioxide gas calculated to have been emitted by the combustion of fuel on our sites and caused to have been emitted by the power stations generating the electricity which we purchase. The calculations use internationally agreed factors to convert the relevant amount of energy per fuel and by country, where available and applicable. The figure does not include any other greenhouse gas emissions.

Sulphur dioxide The quantity of sulphur dioxide emitted to air. For sites that have abatement equipment the calculation of sulphur dioxide has taken account of the effect of desulphurisation, where accurate data on this can be obtained.

Water The quantity of water entering the manufacturing, other processing operations and retail premises from all sources for use on the premises. The figure excludes once-through cooling water which does not enter the site water system. Once-through cooling water was included in the 2011 report. After refinement of the calculation, it has been removed for 2012.

Waste The quantity of waste sent for disposal or beneficial use. Across the group the following waste categories are measured:

•hazardouswaste;

•non-hazardouswaste;and

•wastesentforrecyclingoranotherbeneficialuse.

Additional guidance for reporting waste was provided to all businesses in 2012, including acceptable estimation techniques.

Packaging All materials used for the containment, protection, handling, delivery and presentation of our products. Waste packaging, packaging on materials purchased by sites and packaging used for internal transfers are excluded.

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IndePendent assurance rePort to assocIated BrItIsh foods Plc

KPMG LLP (UK) (‘KPMG’) was engaged by Associated British Foods plc (‘ABF’) to provide limited assurance over selected health, safety and environmental (‘HSE’) performance data contained within the Associated British Foods plc Health, Safety and Environment Report (‘the Report’) for the reporting year ended 31 August 2012.

What was included in the scope of our assurance engagement?Assurance scope Assurance criteria

Reliability of the ABF totals for the selected HSE performance data for the year ended 31 August 2012 marked with the symbol ∆ in the Report.

Relevant reporting parameters for the selected HSE performance data as set out on page 25.

Limited assurance is to be provided for this scope. The nature, timing and extent of evidence gathering procedures for limited assurance are less than for reasonable assurance as set out in ISAE 30001, and therefore a lower level of assurance is provided for the data and objectives under the limited assurance scope.

We were engaged to provide limited assurance over the quantities of non-hazardous and hazardous waste for the period ended 31 August 2012. However, as noted on page 19, the company has not disclosed these quantities in the Report since a reliable estimate could not be reached. Consequently the scope of our assurance conclusion below does not include the quantities of non-hazardous and hazardous waste for the period ended 31 August 2012.

Which assurance standards did we use?We conducted our work in accordance with International Standard on Assurance Engagements 3000: Assurance Engagements other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board. That Standard requires that we comply with applicable ethical requirements, including independence requirements, and that we obtain sufficient, appropriate evidence on which to base our conclusion.

ResponsibilitiesThe directors of ABF are responsible for the preparation of the Report; for determining the content and statements contained therein; and for establishing HSE reporting guidelines and maintaining appropriate records from which the reported health, safety and environmental information is derived.

Our responsibility is to express our conclusions in relation to the above scope. We conducted our engagement with a multidisciplinary team including specialists in HSE assurance with experience in similar engagements.

This report is made solely to ABF in accordance with the terms of our engagement. Our work has been undertaken so that we might state to ABF those matters we have been engaged to state in 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 ABF for our work, for this report, or for the conclusions we have reached.

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 included the following procedures using a range of evidence-gathering activities which are further explained below.

Assurance standards1 International Standard on Assurance Engagements 3000: Assurance engagements other than Audits or reviews of Historical information, issued by the International Auditing and Accounting Standards Board.

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We conducted three phases of work:

A. Site level:Visits to nine ABF facilities were completed in China, Spain, UK, Australia, Africa and Thailand. Additionally desk-top reviews of 11 ABF facilities were completed in Africa, UK, India, Brazil, USA and China.

• These 20 sites were selected on a risk basis to provide:

– Coverage of the HSE performance data (selected KPIs at specific sites);

– Coverage across the differing operating divisions; and

– Coverage across a variety of geographic regions.

During site visits we:

•Conducted interviews with local ABF management and staff to obtain an understanding of the HSE performance data collection, aggregation and reporting processes and controls for selected KPIs;

•Examined the systems and processes in place to collect, aggregate and report the HSE performance data for selected KPIs;

•Reviewed a selection of the documentation which supports the HSE performance data for selected KPIs for the year ending 31 August 2012;

• Tested a selection of the underlying data and controls which support the HSE performance data for selected KPIs for the year ending 31 August 2012; and

•Performed analytical review procedures over the HSE performance data, including a comparison to the prior year amounts having due regard to changes in production volumes and changes in the business portfolio.

During site desk-top reviews we:


•Reviewed the systems and processes in place to collect, aggregate and report the HSE performance data for selected KPIs through discussions with site management;


B. Company head office level:Seven company level head office reviews were completed, five on site and two via desk-top reviews. The seven head offices were selected based on:

•Number of sites under the control of a division (where appropriate);

•Contribution to the HSE performance data by the division/company; and

•Non-coverage of the division/company in site level visits.

During company head office visits we:

•Conducted interviews with ABF management and staff to obtain an understanding of the HSE performance data collection, aggregation and reporting processes and controls;

•Examined the systems and processes in place to collect, aggregate and report the HSE performance data;

•Reviewed a selection of the supporting documentation which supports the HSE performance data for the year ending 31 August 2012;

• Tested a selection of the relevant controls over the HSE performance data; and


During company head office desk-top reviews we:


•Reviewed the systems and processes in place to collect, aggregate and report the HSE performance data for selected KPIs through discussions with site management; and


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C. Group data aggregation:To review group level data aggregation we:

•Conducted interviews with ABF management and staff to obtain an understanding of the HSE performance data collection, aggregation and reporting processes and controls;

•Examined the systems and processes in place to collect, aggregate and report the HSE performance data;

• Tested a selection of the relevant controls over the HSE performance data;

•Reviewed a selection of the documentation which supports the HSE performance data for the year ending 31 August 2012;

•Performed analytical review procedures over the aggregated HSE performance data, including a comparison to the prior year amounts having due regard to changes in production volumes and changes in the business portfolio; and

•Reviewed the presentation of the HSE performance data in the Report to ensure consistency with our findings.

What are our conclusions?Based on the work performed and scope of our assurance engagement described above:

•Nothing has come to our attention to suggest that the selected HSE performance data marked with the symbol ∆, in this report are not fairly stated, in all material respects, in accordance with the criteria provided by ABF at www.abf.co.uk/responsibility.

KPMG LLP (UK)Chartered AccountantsLondon 6 November 2012

Associated British Foods plc - HSE Report 2012 · Associated British Foods Health, Safety and...

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