economies

Carillion is... enabling

We see the potential in a cleaner future

We are working collaboratively with our customers and our suppliers to cut carbon emissions and deliver wider environmental benefits. Economies built around low-carbon services present a significant opportunity to Carillion. So, as well as cutting carbon we are getting more creative in sustainable design.

“ With the costs of electricity rising and more demands for companies to be sustainable, the installation and the possibilities have been well received by Heathrow, and we are hoping to see more units installed

Travelling light at Heathrow

Green House

OMAN TEAM WINS NATIONAL DESIGN COMPETITION WITH THE HIGHER COLLEGE OF TECHNOLOGY

Climate Performance A List

OUR HIGHEST EVER SCORE (99A) IN THE CARBON DISCLOSURE PROJECT GLOBAL RANKING

Reviving water power

ANCIENT TECHNOLOGY PROVIDES POWER AND PROTECTS FISH

Sustainability in action

ENABLING LOW-CARBON ECONOMIES

Climate change and our impacts

Sustainable design

Our carbon footprint

Performance data

OUR BUSINESS CUSTOMERS & SUPPLIERS

PEOPLE COMMUNITIES LOW-CARBON ECONOMIES

ENVIRONMENT

Making tomorrow a better place

SUSTAINABILITY REPORT 2014

through the airport in the future!”

PAUL WHITELY, Operations Manager, Heathrow Terminal 3

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17% reduction of our carbon footprint since 2011 (normalised)2013: 10%

5m+ litres of fuel saved by Carillion Canada Highway Services since 2011

2014: 24% 2015: 20%

25% reduction in electricity consumption from Carillion officesTargets

2014: 19% 2015: 20%

11% reduction in gas consumption from Carillion officesTargets

Target achieved Behind schedule

Our key figures2014 performance highlights

Progress against targets

VIEW OUR FULL PERFORMANCE AGAINST TARGETS

CLIMATE PERFORMANCE A LIST

We achieved a carbon leadership position in the top echelon of the global Climate Performance Leadership Index, recognising our commitment to reduce carbon emissions and mitigate the business risks of climate change, as well as being open and transparent in our reporting.

We were one of only 187 companies that were awarded a climate performance A-grade in this global ranking of 2,000 publicly listed companies independently assessed against CDP’s widely respected scoring methodology. The Index provides a tool for nearly 800 institutional investors and stakeholders to evaluate and track corporate efforts to mitigate climate change.

CEMARSCarillion UK is accredited to the Certified Emissions Measurement and Reduction Scheme for measured, managed and

CLIMATE CHANGE AND OUR IMPACTS

CLIMATE PERFORMANCE A LIST

RETHINKING CARBON NEUTRALITY

CARBON INNOVATION

CARBON REDUCTION IN OUR CONTRACTS

TRAVELLING LIGHT AT HEATHROW, TORONTO AND BRIGHTON

Our goal is to bring low-carbon solutions to our clients and suppliers and to be as lean and carbon-efficient as possible in our own operations.

Cutting carbon is essential to achieving long-term global economic, social, and environmental sustainability for our business and society. We have an opportunity to innovate in the services and products we offer to achieve a competitive edge, reduce costs, reduce the demand on energy and deliver greater operational efficiency.

Alongside other industry leaders, we committed to cut 24 million tonnes of carbon from infrastructure contracts by 2050 as a result of the UK Infrastructure Carbon Review. We made good progress against this target in 2014.

In British Columbia, Canada, our Energy Conservation Assistance Programme (ECAP) has helped 8,000 low-income families through free energy advice, saving them $400,000 (£219,000). We have also won another ECAP contract to deliver energy conservation to three First Nations communities near Penticton, BC.

ENABLING LOW-CARBON ECONOMIES

Climate change and our impacts

Sustainable design

Our carbon footprint

Performance data

OUR BUSINESS CUSTOMERS & SUPPLIERS

PEOPLE COMMUNITIES LOW-CARBON ECONOMIES

ENVIRONMENT

Making tomorrow a better place

SUSTAINABILITY REPORT 2014

“ Global greenhouse gas emissions continue to rise and we face steep financial risk if we do not mitigate them. The need for data on corporate climate change impacts and strategies to reduce them has never been greater. For this reason we congratulate those businesses that have achieved a position on CDP’s Climate Disclosure Leadership Index and the A List. These companies are responding to the ever-growing demand for environmental accountability and should inspire others to follow suit.”

PAUL SIMPSON, Chief Executive Officer of CDP

“ Carillion’s inclusion for the second year running in the top echelons of both the UK and the global Climate Performance and Disclosure Leadership Indices demonstrates the vital importance that we place on reducing and managing our carbon emissions. This backs up our Sustainability Strategy to enable low-carbon economies through work with clients, supplier partners and our own people.”

DAVID PICTON, Carillion’s Chief Sustainability Officer

Carillion featured in 2013 as one of the leading UK companies for climate change transparency in the FTSE 350 Climate Disclosure Leadership Index – scoring 92A – and improved that further in 2014 to achieve a near-perfect 99A at the head of the Industrials sector for performance and disclosure of climate-related information.

RETHINKING CARBON NEUTRALITY

We are focused on reducing our carbon emissions to their lowest possible levels, and have so far achieved a 17% reduction normalised by revenue since 2011. In 2014, we received further recognition for our carbon management strategy by topping three of the Carbon Disclosure Project’s leadership indices for performance, disclosure and supply chain.

Our materiality review in 2014 showed that stakeholders remain positive about our original commitment to work towards carbon neutrality, so we need to be clear now about how best to achieve this for a balanced benefit. We need to take advice, and work that through our sustainability governance to understand how this investment aligns to our ambition to lead the way in sustainability, and how best to include a clear link to our international operations and to the six positive outcomes of our 2020 strategy.

We remain committed to working towards carbon neutrality as a long-term goal, and if we are to invest in offsets once we have minimised our own carbon footprint, these must resonate with our stakeholders. In 2015, we will develop and implement our plan for carbon reduction and neutrality across

verified carbon emissions.

Carbon reduction commitmentFor our UK Carbon Reduction Commitment (CRC) reporting, in compliance year 2013/14, our emissions increased by 4% on the previous year. This is the result of the expansion in UK operations, including acquisitions in 2013/14. In the absence of this expansion, Carillion’s net CRC emissions for 2013/14 would have been reduced by more than 5%.

Reviving water powerA Carillion development in Durham has been awarded a BREEAM ‘excellent’ rating largely due to using 2,000-year-old technology to generate renewable electricity. An Archimedes’ screw water turbine will supply 75% of the electricity needs to a new riverside office.

The screw design incorporates a ‘fish pass’ allowing fish and elvers to travel upstream. It also counts numbers and species of fish as they pass through. The £26 million Freeman’s Reach development will be home to the National Savings & Investments bank and a new branch of the Passport Office.

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Total Carillion Group-17%

UK-34%

MENA-40%

Canada+112%

the remainder of our Sustainability 2020 journey, such as green energy production and consumption; addressing the embodied carbon of our projects; and helping customers reduce their carbon (see our EcoPods).

CARBON FOOTPRINT (NORMALISED BY £M TURNOVER)% change from 2011

1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes.

CARBON INNOVATION

We are committed to drive innovation in carbon management, including:

working with other organisations, like the Department for Transport, to establish the effectiveness of various systems for improving vehicle fuel efficiency;

looking into the fuel profile of our operations to direct fuel reduction activities;

assessing renewable energy use on major projects;

membership of the Highways Term Maintenance Association Environment Group and a member of the Rail Industry Environment Forum; and

energy Champions in our Middle East operation for each project.

In 2014, we have maintained our focus on reducing fuel consumption. Over 70% of our carbon footprint is made up of fuel, mainly from commercial vehicles, company cars and plant equipment.

We continue to measure and track fuel internally in order to reduce our overall footprint and have achieved 28% reduction in fuel across the Group (2013: 3%) against a 2011 baseline normalised by turnover.

“ Finding innovative ways to meet the 2050 targets set by the UK Infrastructure Carbon Review will need us to think and act differently, working closely with clients and suppliers to develop new materials, techniques and better long-term resilience.”

ADAM GREEN, Managing Director of Carillion Construction UK

STUDIES

Off-site construction saves COCaledonian Building Systems in Nottinghamshire won a contract from Carillion worth £42 million to construct eight new accommodation blocks for The Royal School of Military Engineering, Minley.

A large number of vehicles commute to the site but thanks to off-site construction, deliveries were reduced by 82% during the monitoring period, contributing to a

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Our performance dataCARBON FOOTPRINT (NORMALISED BY £M TURNOVER)

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“ With the costs of electricity rising and more demands for companies to be sustainable, the installation and the possibilities around it have been well received by Heathrow, and we are hoping to see more units installed through the airport in the future!”

PAUL WHITELY, Operations Manager at Heathrow Terminal 3

We launched an internal campaign, ‘Fuelling Profit’, to understand how we can reduce fuel use through changes to our equipment, behaviour, contract design and operations, and through regular communications campaigns. In 2015, we will continue to implement initiatives across these key areas.

In Canada, 98% of our carbon footprint is produced by our road business in Ontario and Alberta, delivering vital services such as clearing heavy snow to keep communities mobile. Here, the focus is on driver training for safe, fuel-efficient operations.

CARBON REDUCTION IN OUR CONTRACTS

In 2013, we implemented bespoke Carbon Reduction Plans (CRP) for contracts, linked to the operating segment’s overall sustainability plan. Currently, 96% of our contracts are using the CRP and in 2015 we aim to achieve 100%. The CRP helps projects identify carbon-intense activities and provides action plans for reduction initiatives.

Carillion Construction UK has identified a number of projects to start trialling an embodied carbon tool produced by the Environment Agency to measure the complete impact of our contracts from design through to construction and operation.

Travelling light at Heathrow, Toronto and Brighton

Cheap, sustainable electricity is the goal for many client buildings, but at Heathrow’s Terminal 3, a new feature is leading the way. Carillion installed 51 foot-pressure pads, with each pad generating enough charge to light a one-metre-long strip of LED lights for just over two seconds. As an interactive feature in the airport, this has been popular both for the potential energy savings and the fun it can generate, especially over the summer holidays.

In Canada, the Toronto subway terminus has replaced original incandescent lighting bulbs with long-life fluorescent lamps, which are more robust and use significantly less power. Approximately 1,800 are saving seven tonnes of CO e per month, the equivalent of CA$4,500 (£2,300).

reduction of CO and saving approximately 11 tonnes of CO from reduced transportation.

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BUILDING INFORMATION MODELLING (BIM)

BIM uses computer-aided modelling techniques and information management practices to create safer, more efficient ways of designing, constructing and maintaining assets. UK public sector procurement will require our industry to prepare for BIM by 2016. We are determined to be at the forefront and prepare for the global rollout of this process. BIM has already been deployed across 40 active projects. With those contracts across the health, defence, residential, education and rail sectors, we are investing significantly in:

1. process: investment in adapting our processes to support a BIM Level 2 process adaptation and adoption;

2. technology: new software and hardware to enable our people to engage with the process; and

3. people: 300 technical training days in 2014 and increased awareness across senior management teams and operational leads.

Visual planning winners Carillion was the winner of the 2014 Visual Planning Awards, for our work on the A465 Head of the Valleys contract. The awards promote innovation in construction project delivery and recognise Carillion’s visual planning capability to provide more efficient and safer highway schemes.

£140,000 saved and 12,500 tonnes CO savings at the Four Seasons Hotel Project in

SUSTAINABLE DESIGN

BUILDING INFORMATION MODELLING

GREEN HOUSE

MODULAR BUILDINGS ARE BETTER

Great engineering must also be sustainable. We encourage design intelligence through the project lifecycle, including design, construction, occupancy and demolition.

Across our work, we aim for independent certifications where we can, such as the Building Research Establishment Environmental Assessment Method (BREEAM), the Civil Engineering Environmental Quality Assessment and Award Scheme (CEEQUAL), and Leadership in Energy and Environmental Design (LEED) standards. In 2014, we had 53 projects targeting a BREEAM, or similar rating such as DREAM, 20 to Excellent and 32 CEEQUAL, 10 to Excellent.

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ENABLING LOW-CARBON ECONOMIES

Climate change and our impacts

Sustainable design

Our carbon footprint

Performance data

OUR BUSINESS CUSTOMERS & SUPPLIERS

PEOPLE COMMUNITIES LOW-CARBON ECONOMIES

ENVIRONMENT

Making tomorrow a better place

SUSTAINABILITY REPORT 2014

In 2015, we will further raise awareness around the business; offer technical and project team training; and share our experiences with suppliers and customers. In the Middle East, where BIM is subject to customer demand, we plan to roll out whole-life contracts in these locations.

Green House

An eco home constructed by Carillion Alawi for the Higher College of Technology swept the boards at a national competition. The GreenNest house won the Eco House Design Contest for its grid-connected solar photovoltaic system, greywater recycling and heat-barrier plants that provide organic produce.

The first ever Oman Eco House Design Competition is part of a long-term plan of the Sultanate of Oman in energy conservation, development of renewable energy and environment sustainability.

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Modular buildings are better

Modular buildings used to construct accommodation blocks in one of our construction contracts in Wales are saving time, money, waste and carbon. During a building’s construction, a high level of CO is normally emitted through transport and use of materials. However, modular buildings can be part-constructed off-site.

Modular buildings save around 30% of CO e compared to traditional building methods. This equates to 425,000 miles of travel in today’s average family car. During the full project, we estimate carbon emissions will be reduced by around 31,000 tonnes.

Abu Dhabi thanks to our engineers replacing ordinary cement with a concrete with smaller manufacturing carbon embodiment.

625t of CO /£37,000 will be saved by using LED lights at the Network Rail and Thameslink project over a 25-year lifetime

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Total Carillion Group-34%

UK-45%

This is largely due to efforts across the business to reduce energy consumption and emissions arising from the operation of our facilities, fleet and business travel. Our Carbon Policy (PDF 108 KB) outlines how we will reduce our energy and consumption arising from the operation of our facilities, vehicle fleet, business travel and from our customers and supply chain. Our aim is to:

avoid unnecessary carbon emissions;

reduce unavoidable carbon emissions by introducing technology and better planning;

provide efficiencies on client projects;

source low-carbon products and services, including renewable energy; and

assess the embedded carbon of the products we use.

In 2014, we began giving quarterly presentations to the business around our carbon performance against targets in order to drive awareness to our businesses on their footprint and encourage discussion around reductions.

CARBON FOOTPRINT (ACTUAL)% change from 2011

17% reduction in normalised carbon footprint since 2011

A ‘pioneering institution in the Arab World’ Al Futtaim Carillion recognised for its solar energy installation, after being nominated by the Dubai Chamber. The award was presented by The Board of Trustees of Tatweej – Excellence

OUR CARBON FOOTPRINT

A-GRADES FOR CARBON

POWERING CARILLION

SMARTER WORKING

Carillion’s carbon footprint includes direct and indirect emissions from our operations, across all our regions. We have reduced our carbon footprint by 17% in 2014 against a 2011 baseline (normalised).

ENABLING LOW-CARBON ECONOMIES

Climate change and our impacts

Sustainable design

Our carbon footprint

Performance data

OUR BUSINESS CUSTOMERS & SUPPLIERS

PEOPLE COMMUNITIES LOW-CARBON ECONOMIES

ENVIRONMENT

Making tomorrow a better place

SUSTAINABILITY REPORT 2014

MENA-39%

Canada+26%

1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes.

We report on scope 1–3 emissions from the following sources:

Gas – emissions calculated using kWh data from suppliers

Commercial vehicles, company cars, plant fuel and business mileage – emissions calculated from fuel card returns

Electricity from our offices and sites – emissions using kWh data from suppliers

Rail travel – emissions calculated using data showing total distance travelled

Air travel – emissions calculated using data for three categories (domestic, short haul and long haul)

Hotel stays – emissions calculated based upon a standard hotel stay of 48kg CO e per person per night

Paper – emissions calculated from total kg paper purchased and multiplied by CO e factors provided by our paper suppliers

Water – emissions calculated based on data showing total volume of water used (including some effluent data in the Middle East and North America region)

“ The achievement of Al Futtaim Carillion in being named a pioneering institution reflects the hard work of all our people to try new ideas and find creative solutions to complex problems.”

SIMON WEBB, Managing Director, Al Futtaim Carillion

Awards Academy and the Arab Organisation for Social Responsibility.

Smarter PCs, smarter thinkingCarillion Canada is investigating the opportunity to source green power, and this process is ongoing. Initial meetings have been held to understand the scope and viability.

Thin Client PCs have been set up for 117 workstations at Carillion Canada. The units are 46% cheaper and use around 10% of the energy required by standard PCs. The initiative will save 5,373kg of CO a year and a total of CA$60,000 (£31,400). Smart thinking has also

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Our performance dataCARBON FOOTPRINT (ACTUAL)

Scope 1

Scope 2

Scope 3

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A-grades for carbon

Carillion is one of only 187 companies awarded a climate performance A-grade in the Carbon Disclosure Project (CDP) global ranking. 2,000 publicly listed companies are independently assessed against the CDP scoring methodology.

Carillion is also one of the leading UK companies for climate change transparency in the FTSE 350 Climate Disclosure Leadership Index, achieving 99A in the 2014 index for 2013 performance and leading the Industrials sector for performance and disclosure of climate-related information.

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POWERING CARILLION

In the UK, we procure Climate Change Levy-exempt energy across our businesses where possible. Where it is not, we buy energy from combined heat and power plants. For our Middle East business, solar energy is gaining traction. Installing photovoltaic panels on our Dubai head office has showcased solar power and promoted our new energy services business.

SMARTER WORKING

Our Smarter Working Campaign in 2014 encouraged people to adopt ways of working that saved time and natural resources, lowered our impact on the environment and promoted a better work–life balance. We also ran our 11th Sustainability Week, which encompassed World Environment Day.

Wolverhampton head office: This is moving to a more efficient building and our pilot campaign, Carillion Unplugged, has reduced energy consumption by 10%, with 5% of the savings going to a local charity. Following the success of this pilot, we will be rolling similar schemes out across all UK offices at the

contributed to a CA$1.1 million (£577,000) saving by working with our travel partner to reduce company travel and accommodation with initiatives such as Travel Blackout Weeks.

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beginning of 2015.

Building energy: Display Energy Certificates are placed in all principal properties showing how they perform in terms of energy efficiency. Trained Energy Champions are available at many sites to drive energy-efficient behaviour and promote best practice.

Plant fuel: We use a plant fuel calculator across all our civil engineering sites. This simple tool gives us a much greater understanding of where and when plant fuel is being consumed. We also have telematics technology in our plant machinery, giving site managers full visibility of when and why machinery is using fuel, and with operators taking appropriate steps to optimise performance.

Vehicle efficiency: Out on the roads, we encourage our commercial drivers to drive with fuel efficiency in mind, helped by a sophisticated telematics system which monitors speeds, acceleration and braking, and relays data back to drivers and managers. There are monthly competitions to reward the best-performing drivers.

PERFORMANCE DATA

CARBON FOOTPRINT (ACTUAL)

CARBON FOOTPRINT (NORMALISED)

CARBON FOOTPRINT BY SCOPE

Note: MENA stands for Middle East and North Africa.

Carbon footprint (actual)tonnes

tonnes2011 2012 2013 2014 % CHANGE

FROM 2011

Total Carillion Group 265,743 211,796 201,206 175,709 -34

UK 126,465 86,827 63,680 69,260 -45

MENA 106,858 98,918 92,317 65,661 -39

Canada 32,420 26,051 45,209 40,788 +26

1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes.

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ENABLING LOW-CARBON ECONOMIES

Climate change and our impacts

Sustainable design

Our carbon footprint

Performance data

OUR BUSINESS CUSTOMERS & SUPPLIERS

PEOPLE COMMUNITIES LOW-CARBON ECONOMIES

ENVIRONMENT

Making tomorrow a better place

SUSTAINABILITY REPORT 2014

Carbon footprint (normalised by £m turnover)tonnes CO e per £m

tonnes CO e per £m 2011 2012 2013 2014 % CHANGE

FROM 2011

Total Carillion Group 52 48 49 43 -17

UK 35 27 21 23 -34

MENA 190 203 173 114 -40

Canada 41 40 67 87 +112

1. The sharp increase in carbon emissions between 2012 and 2013 was due to improved data capturing and reporting processes.

Carbon footprint by scopetonnes CO

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1

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tonnes CO 2012 2013 2014

Scope 1Combustion of fuel and operation of facilities

170,342 157,459 134,656

Scope 2Electricity, heat, steam and cooling purchased for own use

26,804 27,059 25,116

Scope 3Travel, paper and others

14,648 16,668 15,936

Total 211,794 201,206 175,709

The 2013 CO e numbers shown on this page are actuals and have been restated from the estimates published in the 2013 report. The 2014 CO e numbers are subject to an adjustment as some of the actuals for the last quarter of 2014 were not available at the time of publication and have been estimated based on 2013 data. The non-financial figures reported in these tables have been reviewed by independent external assurance provider Bureau Veritas. For details of the scope of work and opinion on the accuracy of our stated performance, please see the full assurance statement.

What we include when we report

We report our greenhouse gas emissions (GHG) in tonnes of carbon dioxide equivalent (CO e) from the sources required under the Companies Act 2006 (Strategic Report and Director’s Report Regulations 2013). We have used the GHG reporting protocol to calculate our GHG emissions for 2014, based on data gathered to fulfil our requirements under the CRC Energy Efficiency scheme and on emission factors from the UK Government’s GHG Conversion Factors for Company Reporting 2014.

We report on Scope 3 emissions from the following sources:Business travel data is provided by Portman (our travel partner) which is responsible for booking and tracking all rail, air and hotel base travel. Travel data from Canada is obtained from our travel booking partners.

Rail travel – emissions calculated using total distance travelled.

Air travel – emissions calculated using data for three separate categories (domestic, short-haul and long-haul flights) showing distance travelled.

Hotel stays – emissions calculated based upon a standard hotel stay of 48kgCO per person per night.

Paper use – emissions calculated from total kg paper purchased and multiplied by CO factors provided by paper supplier.

Water – emissions calculated based on data showing total volume of water used.

Hire cars – emissions calculated based on miles travelled and litres of fuel consumed.

Electricity and gas WTT – emissions calculated based on kWh.

Electricity line losses – emissions calculated based on kWh.

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