Beyond bricks and mortar

Corporate Responsibility Report 09

2008/09 performance

To assess our ongoing progress towards achieving our long-term objectives, which run from 2007 until 2010, we set ourselves annual targets. Our performance against our milestones for 2008/09 is detailed below. Each has been directly informed by our ongoing dialogue with stakeholders.

Each target is recorded below under one of the seven stakeholder workstreams, though in practice, most span more than one.

Fully completed
100%
Mostly completed
75-99%
Partially completed
26-74%
Target started
1-25%
Target not started
0%
Target not applicable

Customers
Health and Safety
Employees
Suppliers
Community
Investors
Environment

Customers

We believe our approach to customer service differentiates us from others in the market and makes us the kind of business others want to work with. We fully completed four out of our seven customer targets for 2008/09.

Target	2008 PERFORMANCE	STATUS
Achieve 90% overall customer satisfaction rating on the DWP contract	93.2%
Notes: Trillium's annual customer satisfaction survey for its DWP Estate contract asked questions on a range of property management-related issues, including cleaning, security, catering, maintenance and equipment, and health and safety. 93.2% of respondents to the 2008 survey stated they were either 'satisfied' or 'very satisfied' with the service received. In total, 639 surveys were returned.
As part of our partnership with DWP, ensure the joint Invest to Save initiative in 2008/9 achieves a 6% reduction in energy consumption against the baseline agreed with DWP	14.8%
Notes: Based on nine months of available data (January–August 2008), Invest to Save (RISE) had delivered like-for-like energy savings of 14.8% compared to the previous year. Through the RISE initiative, targets were set, and customer and Service Partner energy performance was managed by prioritising action in 340 buildings, (accounting for nearly 75% of total energy consumption).
Develop a customer service improvement plan for each Public Private Partnership (PPP) project managed by Land Securities Trillium	–
Notes: The target was deemed 'not applicable' due to the sale of Trillium's PFI business.
Achieve an overall customer satisfaction rating of 3.8 in the annual London Office Portfolio survey1	3.83
Increase the customer satisfaction ratings across the five key performance areas identified by London to 3.8	–
Notes: Land Securities' London business commissions an annual customer satisfaction survey, carried out by an independent third party (Real Service). In the 2008 survey of 23 properties, the 3.8 target (maximum score of 5) was exceeded in two of the five indicators (communication and willingness to recommend) and improved on 2007 scores in three (communication, willingness to recommend and responsiveness). The overall average customer satisfaction rating was 3.83.
Achieve an overall customer satisfaction rating of 3.85 in annual shopping surveys undertaken by Retail	4.18
Notes: Land Securities similarly commissions external customer satisfaction surveys across its Retail business. In 2008, the results – also on a scale of 1 to 5 – achieved an overall satisfaction of 4.18, significantly higher than the target and 0.2 points higher than 2007.
In response to customer requests, develop and pilot a sustainability guide for retailers	–
Notes: In October 2008, Land Securities appointed an external consultant to produce the 'Guide for Modern Retail', aimed at senior retail executives. It outlines key sustainability challenges, legislative requirements and guidance covering environmental, social and economic dimensions of sustainability, focusing particularly on technical solutions and benefits. Publication is expected in July 2009, with wider circulation in October. A low-carbon fit-out guide for retailers is also being developed for a simultaneous launch.

Please note that this target is not included in the overall assessment as it was not a commitment stated in the 2008 CR report. It has been included in this report for transparency purposes.

Health and Safety

We take every reasonable step to secure the health and safety of our employees and anyone else affected by our business activities, including contractors, customers and the general public. We produce an annual health and safety plan and our performance is reviewed quarterly by our Board. We completed three of our four health and safety targets for 2008/09.

Target	2008 PERFORMANCE	STATUS
Certify one further workstream or business activity to the international standard OHSAS 18001 for health and safety management systems	–
Notes: We appointed LRQA to conduct an OHSAS 18001 audit in February 2009 for selected assets managed by Land Securities Trillium. At the time of publication, the final certificate confirming accreditation has yet to be awarded (due to an unrelated delay) but assurance that the audit was successful has been provided.
Achieve and maintain a position within the top 10% of the Health and Safety Executive's Corporate Health and Safety Performance Index (CHaSPI)	–
Notes: Land Securities Trillium achieved a top three ranking in CHaSPI, a framework for benchmarking occupational health and safety performance among organisations with at least 250 employees. Land Securities (subsequently amended to Trillium) achieved an overall score of 9.2 out of 10. One area where we were initially unable to submit information was subsequently addressed, with the introduction of new sickness reporting procedures in December 2008.
Report monthly on contractor performance across all construction projects, collating information on fatalities, RIDDOR and non-RIDDOR reportable injuries, near misses and lost days	–
Notes: Land Securities actively monitors the health and safety performance of contractors, including RIDDOR and non-RIDDOR incidents. While a common reporting framework was not developed for each business until Q4 2008, all Retail and London projects were measuring relevant metrics by the end of the period, as were Trillium projects over £5 million (as many others are minor refurbishment and maintenance projects).
Create an environment in which 50% of employees believe their health and wellbeing is supported	94%
Notes: In the annual Employee Engagement Survey, 94% of respondents felt their health and wellbeing was taken seriously. The overall proportion of employees answering this question positively remained consistent with 2007, but the proportion of employees 'strongly agreeing' with the statement rose by 7%.

Employees

We employ approximately 700 people across the UK, and each one plays a vital part in our company life – they are the key to our success to date and the foundation on which we are building our future. We will continue to attract, recruit and retain the calibre of employees who add value to our business and our customers, as we strive to be the employer of choice in the sector. We achieved four of our five employee targets for 2008/09 in full.

Target	2008 PERFORMANCE	STATUS
Ensure out-performance of the Expert Training Systems (ETS) benchmark on employee engagement across the Group	–
Notes: The result of our annual Employee Engagement Survey is benchmarked against more than 60 similar surveys conducted by Expert Training System (ETS). In 2008, 1,385 Land Securities employees responded to the survey (2007: 1,341) and their responses were either on par or above the benchmark for 11 of the 12 questions that aligned with ETS' questions. 88% of respondents were 'satisfied' or 'very satisfied' working for Land Securities, just above the ETS mean.
Contribute actively to local communities by encouraging 30% of the Group's staff to volunteer time and expertise through the Foundation	30.4%
Notes: During the year, 30.4% of employees volunteered to support charitable initiatives and local community groups during company time; a significant amount of this time was volunteered via the Land Securities Foundation. This figure includes 43 people who took advantage of the matched time volunteering scheme.
Encourage 8% of staff to participate in charitable payroll giving	7.4%
Notes: Our Give As You Earn payroll giving scheme enables employees to donate money to charities directly through their salaries. At the point of sale, 8.7% of Trillium's employees were contributing through the scheme, and by year end, the equivalent figure for Land Securities was 5.7%. This represents an overall rate of 7.4% for the year. In 2008/09, the total value of contributions exceeded £100,000 for the first time, and increased by 43% on the previous year.
Ensure at least 60% of staff believe that the Group's learning and development platform meets their individual needs and enables them to develop their careers	83%
Notes: According to the Employee Engagement Survey, 83% of employees have a learning and development Plan, helping to focus their individual training and developmental needs in a structured manner. 65% also reported they felt the company offered them good career development opportunities.
In support of our commitment to diversity, through the Employee Engagement Survey, measure staff perception of the statement "our employee profile reflects the communities in which we work"	81%
Notes: The Employee Engagement Survey revealed that 81% of employees believe the make-up of the company's workforce accurately reflects the communities in which it works. This is a positive result, in light of our recently implemented equal opportunities and diversity policies and procedures.

Suppliers

We work with almost 4,300 suppliers, whose values, philosophy and culture are complementary to our own. By forming long-term partnerships with our business partners, we bring benefits, innovation and best practice to our activities, and throughout our extensive supply chain. We fully met all three of our supplier targets for 2008/09.

Target	2008 PERFORMANCE	STATUS
Recruit 10% of all new catering and cleaning staff into the LST supply chain through agencies which support disabled and disadvantaged people	54%
Notes: Following discussions with cleaning and catering Service Partners, Trillium agreed that all posts would be advertised via Job Centre Plus, Remploy and the Shaw Trust, three agencies that promote employment opportunities to disabled and disadvantaged people. In 2008/09, 133 disabled and disadvantaged people were recruited in this way, 44% more than required to meet the target. ISS and MITIE recruited the largest numbers.
Engage in regular meetings with the Top 10 Service Partners (measured by contract value) to agree a joint programme of community investment and volunteering	–
Notes: A revised approach saw 155 employees from 10 Service Partners involved in existing Land Securities volunteering events and fundraising initiatives, including 85 who participated in a sponsored cycle ride.
Benchmark the Top 20 Category Two suppliers (by contract value) to determine the extent of their compliance with the CR criteria in the Group supplier evaluation questionnaire	–
Notes: During 2008, the questionnaire for assessing Category Two suppliers was revised to include requests for information on policies, procedures and management of issues such as employee/subcontractor awareness, labour rights, bribery and diversity. This information is used to assess whether or not suppliers are selected for future contracts. An internal system, which identifies suppliers posing a risk to our core CR values and targets, is available to all employees with procurement responsibilities.

Community

Strong relationships are the lifeblood of any community and we believe it is important to put the building blocks in place early – well before the planning process begins, let alone a brick being laid. Such engagement helps to ensure our office developments and shopping centres underpin the spirit of the local communities in which they are located. We successfully delivered against four of our six community targets for 2008/09.

Target	2008 PERFORMANCE	STATUS
Exceed the value of community investment achieved in 2007/08 as measured by the Community Investment Reporting system, and ensure the system is used across the Group to record the full range of community-based activities	-4%
Notes: Using the London Benchmarking Group (LBG) model to measure and value community-based investment, our charitable giving increased in 2008/09, but overall corporate community investment fell by 4% – still a significant achievement in the current economic climate. This decrease accounts for an adjusted baseline following a significant one-off sponsorship of the Tate Modern Global Cities exhibition. During 2008/09, beneficiaries included the Arts and Kids retail programme (£140,000), and charities and organisations using free space in 23 shopping centres (£670,000).
Supplement the Capital Commitment Fund of £150,000 by securing additional sources of external funding	–
Notes: We secured £150,000 matched funding from the Government's Grassroots Grants programme which specialises in helping small community groups strengthen communities from within. Land Securities is the Founding Donor of the Westminster Fund. The total amount raised via Grassroots and Land Securities' own contribution stands at £300,000. The Fund contract stipulates that monies (ranging from £1,000 to £5,000 per grant) must be allocated for the benefit of the community of Westminster, supporting small, local voluntary community groups and charities that fit within Land Securities funding priorities. In addition to the Westminster Fund, we continue to allocate money to local groups in Tower Hamlets, Islington, Southwark and Camden via the Capital Commitment Fund.
Pilot a web-based learning system to deliver community-based safety awareness training to schools in communities in which the Group operates	–
Notes: As part of our engagement with schools in buildings we own and manage, a suite of e-learning training packages was planned. Internal stakeholders raised the capital required to start the pilot stage, but due to the significant financial investment needed over three years, the project was halted.
Develop a structured work experience programme in LST which can be made available to schools in the LST portfolio	–
Notes: Following consultation with 39 schools owned or managed by Trillium, a work experience programme was set up. There is also a detailed feedback structure to ensure pupils can share what they learn and what they think could be improved.
Introduce a safe child awareness scheme giving assurance to the safety and welfare of children in retail centres to a minimum of 10 shopping centres	21
Notes: 21 shopping centres introduced the Childsafe Awareness Scheme during the target period, far exceeding the target.
Establish formal Community Link programmes at three retail development sites to support a range of training and skills development initiatives aimed at promoting local employment	–
Notes: Through Community Link programmes focusing on training and skills development, Skillsmart Skills Shops are opening at three shopping centres: Cabot Circus in Bristol (autumn 2008), Park Lane College/Leeds Trinity Skillsmart (April 2009), and St David's in Cardiff (July 2009). Backed by major retailers and developers, Skills Shops will offer retailers, employees and jobseekers services such as pre-employment training, qualifications, courses, advice, placements, work experience and store management programmes. Two further Skills Shops are planned for The Bridges (Sunderland) and St John's (Liverpool).

Investors

Our goal is to be regarded by investors as the most transparent and responsive company in the sector, so maintaining an active communication programme with the investment community is extremely important to us. We met one of our three investor-related targets for 2008/09.

Target	2008 PERFORMANCE	STATUS
Conduct separate surveys of investors and analysts to benchmark the quality of the Group's investor relations and establish comparative data for future surveys	–
Notes: An external consultant conducted two engagement exercises with key sell-side analysts in 2008/09 (one before the preliminary results in May 2008, and one in December 2008). An executive decision was taken not to survey investors in light of the sale of Trillium and an imminent rights issue.
Hold five one-to-one tailored meetings with SRI analysts focusing on aspects of the Group's CR programme of particular interest	1
Notes: Our engagement with SRI analysts in 2008/09 was hampered by the economic downturn, and as a consequence, there was only one successful engagement during the year, specifically with investment manager Schroders. The Environment Director and the Investor Relations Manager covered issues including tenant engagement, energy management, the Carbon Reduction Commitment, environmental investment and Land Securities' environmental performance and commitment relative to peers.
Increase from 10% to 15% the percentage of investors subscribing to e-communications	11.5%
Notes: By year end (31 March 2009), 11.5% of investors had signed up to e-communications, which was short of the 15% target.

Environment

We seek to reduce the environmental impacts of our business activities, particularly with regard to the design and construction of new developments, and the management of existing buildings on behalf of our clients. We fully completed seven out of 15 environmental targets in 2008/09.

Target	2008 PERFORMANCE	STATUS
Climate change
All new Group developments to be 20% below the prevailing Building Regulation requirements for CO2 emissions	–
Notes: In light of the economic downturn, all schemes due to commence on site during the year were postponed, while those with recent planning permission but not yet at the stage of specifying materials and those still being built were all designed before the target came into effect. On this basis, the target cannot be assessed.
Achieve a 5% reduction in CO2 emissions associated with energy use in managed office and retail premises	-4.4%
Notes: Overall, our portfolio reduced its CO2 emissions by 4.4% over the course of the year. This total comprises London (3.9%); shopping centres (5.3%); and retail parks (7.4%). We purchased offsets for our 5 and 11 Strand offices to the value of £13,000, equivalent to offsetting 1,463 tonnes of CO2. Emissions from shopping centres were not offset, but the equivalent offset cost was calculated and reinvested as energy efficiency improvements.
Produce a case study analysis of energy and CO2 performance for the six properties audited in 2007/08	–
Notes: Energy efficiency initiatives at our highest energy consuming buildings, including 40 Strand, Portman House, Arundel Great Court and several buildings at Harbour Exchange, resulted in reduced energy consumption and cost savings, largely through operational adjustments to plant and machinery. Case studies have been made available on our intranet to share good practice.
Biodiversity
Evaluate existing biodiversity conditions before commencing development and demonstrate completed scheme improves habitat quality and the number of species present	–
Notes: Our Sustainable Development Brochure includes a requirement ensuring that biodiversity factors are taken into account as a matter of standard procedure. In 2008/09, six schemes were submitted for planning consent, all of which committed to ecological enhancements through design measures such as green and brown roofs, bird and bat boxes, and landscaping. However, progress against this target cannot be measured due to insufficient evidence, as no one scheme was at an advanced enough stage to be able to measure biodiversity enhancements.
Resource use and waste management
Achieve a minimum of 20% recycled content by weight or value in every new development	–
Notes: All design teams and contractors are aware of this target and use WRAP's RC-Toolkit to achieve it. However, no figures are available, given that no one project is at the stage of design where materials are specified, and those being built were already designed before the target came into effect.
Monitor the performance at all occupied premises of grey-water recycling and rainwater harvesting	–
Notes: One occupied building – DVLA Swansea – had a fully functioning rainwater harvesting system operating during the year. Based on data for April 2008–March 2009, nearly 99% of the rainwater collected was used within the building, and just 1% of water used came from the mains supply.
Benchmark water usage across the London business and survey 50% of these sites for opportunities to reduce water consumption	–
Notes: Water consumption was benchmarked for 44 metered properties in London, and reduction targets were set for each. Water surveys were then carried out at 24 sites to audit the incorporation of water-efficient devices and fittings. Zero cost solutions were implemented within the 2008/09 service charge budget year. We intend to use any budget surplus to address solutions where limited capital expenditure will be required.
Undertake a trial of the Forest Stewardship Council project-specific registration scheme	–
Notes: Our Falkirk development achieved partial FSC certification, granted to projects that use FSC-certified wood in one or more specific applications, such as flooring or decking.
Reuse or recycle 85% of demolition and construction waste for projects covered by Site Waste Management Plans	80%
Notes: Eight development schemes were on-site during the year, and therefore eligible for assessment. As all were underway before April 2008, none had the target incorporated into contractual requirements. However, the total proportion of waste diverted from landfill was 80%. Four projects exceeded the 85% target, two of which exceeded 90%.
Reuse or recycle 85% of office waste generated at Head Office	81.6%
Notes: From April 2008 to March 2009, 81.6% of waste produced at our Head Office in 5 and 11 Strand was recovered or recycled, representing 96% progress against the target. Initiatives included the introduction of food waste incineration for energy in January 2009. Due to challenges in securing data from Trillium's waste contractor, waste recycling at 140 London Wall is excluded from this assessment.
Increase recycling rate by an average of 5% across all managed shopping centres, with no centre falling below its 2007/08 rate	18.1%
Notes: Using data from the last two years, the average recycling rate across 21 shopping centres increased by 18.1%. Fifteen centres exceeded the 5% target, four of which achieved a 20% or higher improvement in their recycling rates (Westwood Cross, Broadstairs; Fremlin Walk, Maidstone; Gunwharf Quays, Portsmouth; Victoria Centre, Harrogate) but six had a lower rate.
Management
Submit all new major developments for BREEAM assessment with a minimum target of "Very Good"	–
Notes: Four projects were eligible for assessment during the target period, and all were awarded design-stage certification. The projects were 30 Eastbourne Terrace, Almondvale The Elements and Cabot Circus (all rated as "Excellent") and Thomas More Square, building 2 (rated "Very Good").
Ensure that every shopping centre develops and implements a site-specific environmental management programme	–
Notes: Environmental management plans were devised and implemented at all shopping centres during the year. Each site-specific plan aims to formalise environmental initiatives that centre managers may wish to implement on site. We also developed a generic 'Shopping Centre Environmental Management Toolkit' to assist shopping centre managers in their management of waste streams and energy. A third-party consultancy ran tailored workshops to ensure the toolkit was understood and implemented correctly.
Ensure that LST's managed PPP projects are certified to ISO 14001 within the scope of its environmental management system	–
Notes: Due to the sale of Trillium's public private partnership business, evidence for this target is not available.
Refine the environmental benchmarking process for managed offices and shopping centres to facilitate meaningful comparisons	–
Notes: We launched a revised tool for environmental benchmarking of managed properties in January 2009, based on the Investment Property Databank's Environment Code, which covered the majority of offices and shopping centres. We intend to update the report regularly to reflect changes on site.