DCC defines Corporate Sustainability as a business strategy to create long term shareholder value by generating economic, environmental and social value. In order to sustain our business, it is critical that our activities have a positive impact on the wider community; business success and sustainable development are mutually supportive ambitions.

 

Our complex interactions with the economy, the environment and society are already governed by a combination of legislative compliance, best practice, reporting requirements, customer demand, risk management and company culture. However, we have now formally committed to implementing a more systematic internal management process to identify and focus on those aspects of sustainability which are material to DCC, using the structure provided by the GRI¹ Sustainability Reporting Guidelines.

 

This Sustainability Report sets out our evolving management approach and reports on a number of sustainability aspects of material importance to the DCC Group. We intend to develop our internal processes and reporting and, through clearly defined key performance indicators (KPIs), we will demonstrate how DCC is implementing sustainable business practices, thereby delivering value to our shareholders and to society as a whole. As we live in a time of global economic and climate crises it is even more critical to ensure that our activities visibly contribute to the goal of sustainable development.

 

Strategy
DCC will implement its sustainability strategy by:

•	raising internal awareness and understanding of what corporate sustainability means to our businesses,
•	integrating sustainability processes into existing business structures,
•	actively engaging with our stakeholders, and
•	regularly communicating our progress.

 

Structures and Processes
In 2008, DCC established a Corporate Sustainability Working Group comprising senior Group, divisional and subsidiary executives, which reports directly to the Chief Executive.

 

The key first step undertaken by the Working Group was the identification of sustainability aspects that are material, i.e. have a high business value to DCC and have a high economic, environmental or social value. Following from this, four sustainability aspects were prioritised, namely direct economic value added, climate change, health and safety and business ethics. The Working Group intends to focus on additional sustainability aspects as the process is developed.

 

Specific objectives have been established in respect of the four aspects selected and progress on those objectives will be monitored by the Working Group using appropriate KPIs.

 

The Working Group will continue to refine and develop our management approach to sustainability at all levels throughout DCC.

 

Stakeholders
At a corporate level we have identified two key stakeholder groups – investors and employees. Other stakeholder groups, such as customers, suppliers, regulators and local communities, are specific to individual businesses and so are engaged with at subsidiary level.

 

Consultations will be undertaken with members of both of the key stakeholder groups identified.

 

Material Aspects
1. Direct Economic Value Added

DCC is focused on value creation within the supply chain which is then passed on to various stakeholders including investors, employees, suppliers, governments and lenders. In economic terms these are the most significant contributions we make to society.

 

In the year ended 31 March 2009, DCC generated revenue of €6,400m in return for the goods and services it provided. Once the cost of inputs from suppliers totaling €5,913m is taken into account the remaining value added of €487m was distributed to various stakeholders.

 

During the year a total of €306m was expended on payroll costs in respect of DCC’s approximately 7,200 employees across 16 countries.

 

Governments received corporate taxes of €19m and €21m in value was distributed to banks and other lenders. As a return for the capital they provide to the business, shareholders, including many employees, will receive €51m in the form of dividends. The remaining €90m will be retained in the business to fund further growth.

 

2. Climate Change
Our energy businesses sell LPG and oil to customers who rely on these products for heating, cooking and transportation, in most cases where there are no viable alternative energy sources. While we believe that a mix of energy sources will continue to be necessary in the future, we are conscious of the need to reduce carbon emissions and consequently we promote, both internally and externally, the efficient use of energy products.

 

In August 2008 a Group wide Carbon Management Plan (CMP) was initiated. Its purpose is to increase understanding and awareness of climate change impacts and to develop a range of operational and strategic measures in response to the emergence of a low carbon economy.

 

The CMP has two operational objectives. The first is to measure carbon emissions, in accordance with the methodology provided by the Greenhouse Gas Protocol². In the year ended 31 March 2009 our transport fleet contributed over 70% (approximately 60,000 tonnes CO₂) of our carbon emissions. Electricity consumption accounted for 21% of total emissions with heating and on-site fuel use making up the remaining 9%.

 

The second operational objective is to carry out a detailed analysis of the data in order to develop a range of energy saving initiatives focusing on the major sources of emissions in the first instance. This is already being done to a significant extent, driven by financial savings. For example, Allied Foods and Flogas UK have invested in new technologies to monitor vehicle use and establish efficient routing systems and Wastecycle has trained its drivers in fuel efficient driving techniques to reduce fuel consumption, so reducing costs and carbon emissions simultaneously.

 

During the year we will improve our measurement systems and identify appropriate KPIs and targets to increase energy efficiency and reduce carbon emissions.

 

The CMP also has a strategic objective, which requires each subsidiary to formally identify and assess the regulatory, physical and commercial risks and opportunities for their businesses arising from the transition towards a low carbon economy. For example, by recycling waste streams into new products, our environmental businesses make a significant contribution to the conservation of natural resources and the reduction of carbon emissions.

 

From a regulatory perspective, DCC’s UK based subsidiaries will be included in the UK’s Carbon Reduction Commitment scheme commencing in April 2010. The implementation of the CMP has already prepared us for the measurement requirements of this scheme and additional actions are being taken to ensure that we not only fully comply with its requirements but also benefit from the process by reducing our emissions and costs.

 

3. Health & Safety
The health and safety of our employees, contractors and members of the public with whom we interact is paramount and is a responsibility we take very seriously.

 

The profile of health and safety hazards varies considerably across the Group with businesses in the Energy and Environmental divisions at the higher end due to the nature of the material they handle and the degree of interaction between equipment and individuals.

 

Health and safety is clearly established as a line management function and is a fixed agenda item at management meetings. Senior executives are expected to demonstrate personal leadership, continually improving health and safety culture by their individual actions. In May and June 2008 thirty senior managers and directors from across DCC Energy participated in a bespoke health and safety leadership workshop delivered by DNV³. As a direct result of this initiative, subsidiary directors in the energy division now complete a minimum of two site visits per annum to inspect, observe and listen to local HSE concerns or suggestions.

 

Every subsidiary compiles an annual health and safety report for divisional management, the detail of which reflects the hazard profile of that subsidiary. All reports include a review of health and safety policies and procedures, an assessment of performance against prior year objectives and the establishment of new objectives.

 

Reflecting the higher hazard profile of the LPG, oil and environmental businesses, management meet in respective fora at least three times annually to review legislation, share best practice and develop common technical, health and safety standards. Two committees of the Energy and Environmental boards, chaired by the respective divisional Managing Director, meet bi-annually to review health and safety performance.

 

All subsidiaries have in place formal health and safety management systems which are appropriate to the nature and scale of the hazards within those businesses. In the LPG businesses, safety management systems have been developed in line with guidance from the UK Health and Safety Executive and are contained within the COMAH⁴ Safety Reports. In most other businesses, health and safety management systems are based on the OHSAS18001⁵ standard with a number of sites achieving formal certification.

 

An objective has been set to have all health and safety management systems within the DCC Environmental businesses certified to the OHSAS18001 standard by end March 2011.

 

DCC’s energy and environmental businesses already report a wide range of health and safety KPIs, for example, lost time injury rates. We will extend this requirement to other divisions and report on Group wide performance next year.

 

4. Business Ethics
DCC is diversified both by sector and by geography. Freedom to manage and make decisions locally has been critical to our success. This has been possible because the business has always had at its core a culture built on openness, honesty, trust, respect and accountability. When acquisitions are made, a key part of the integration process is the extension of this culture into the newly acquired business.

 

Wherever we operate, we strive to be fully compliant with the laws and regulations that apply to our business. In addition, each subsidiary has articulated its own internal standards of business conduct, as well as policies and processes to ensure compliance with them.

 

In light of DCC’s substantial expansion in recent years, the Working Group has now decided to embark on a comprehensive Group wide review of best practices in the conduct of business. We will approach this in a practical way by examining, for instance, best practices within the Group in areas such as the business conduct modules in employee induction processes and the ethical selling modules in sales training programmes. We will also look afresh at the way we measure performance in respect of each area of business conduct. We will also carry out external benchmarking. Out of this work, we will articulate a set of guidelines for all subsidiaries and at corporate level, in a way that is relevant and practical for our business environment and the ever more complex world in which we live and work. This will then become a key governing document for all our businesses.

 

Reporting
Our intention is to publish annual, concise and relevant Sustainability Reports which address the economic, environmental and social aspects which are material to our business and important to our stakeholders. We will report openly on our management approach to sustainability, our progress against past objectives and the determination of new objectives. The report will have the same reporting cycle as the Annual Report and will be integrated where appropriate to avoid repetition of information.

 

We accept the need to adopt a consistent and credible reporting structure. The Working Group has reviewed the G3 Sustainability Report Guidelines, developed by the Global Reporting Initiative, and it is our intention to achieve a GRI application level of at least C for the Sustainability Report for the year ended 31 March 2010.

 

We recognise that this report is only a first step and we would welcome any feedback and suggestions for improvement.

 

 

 

1.	The Global Reporting Initiative is a not for profit organisation which has developed the most commonly used sustainability reporting framework.
2.	The Greenhouse Gas Protocol is a corporate reporting standard developed by the World Resources Institute and the World Business Council for Sustainable Development.
3.	Det Norske Veritas is a leading provider of safety risk management solutions.
4.	Control of Major Accident Hazards.
5.	Occupational Health and Safety Assessment Series.