Corporate responsibility review

Managing our business impact

Our society is resolved to reduce levels of carbon in the atmosphere and to secure energy supplies for the future. Centrica can help achieve these goals and is keenly aware of its responsibilities.

Mary Francis CBE,
Senior Independent Director and Chair of the Corporate Responsibility Committee

At Centrica, we believe that a business must be alert to the impact it has on the society and the physical environment in which it works and that it should do what it can to contribute to the health and sustainability of both. That is what we mean by corporate responsibility.

We believe that being a responsible business is fundamental to our long-term success and contributes to a healthy business environment. It is essential to maintaining our reputation with customers, investors, regulators and other external stakeholders – because it reflects the principles which they value. For the same reason, it enables us to recruit and retain the most talented and capable people. Consequently, we set ourselves high standards in all areas of responsible behaviour, including business integrity, environmental stewardship, fairness to customers, employment and community support.

Even in a year in which all businesses were preoccupied with short-term financial and economic concerns, we held true to these principles. In particular we continued to develop and expand our workforce to install the low carbon technologies of the future, including solar panels and microCHP units, and to advise our customers on using energy more efficiently. Leadership in these services will position Centrica both to contribute to and benefit from, the progressive transition to a low carbon economy which our society has set as its goal.

We also took further steps to reduce the carbon intensity of our energy generation and to improve the security of the UK’s energy supplies. We expanded Centrica’s investment in wind power and consolidated our upstream base through our acquisitions of Venture and a 20% stake in British Energy.

Below is a summary of Centrica’s corporate responsibility (CR) performance in 2009. Further details can be found at www.centrica.com/responsibility.

Case study: Green Streets

The UK carbon reduction target is 80% on 1990 levels by 2050. To find out what could be achieved at a local level we ran a year-long project called ‘Green Streets’, a competition between eight communities that promoted awareness of low carbon solutions for householders and showed how different energy efficiency solutions, allied to changes in behaviour, can deliver benefits to customers.

The results published in March 2009 demonstrate how much can be achieved using current commercially available technologies.

Building on these findings, we launched the ‘Green Streets 2010’ community initiative in January 2010, in which 14 communities will compete to reduce their energy use and carbon emissions.

Picture of the residents of Green Lane

25%

The project showed demonstrable benefits for consumers through lower energy bills and, most importantly, an average reduction in carbon footprint of almost 25%.

35mt CO2

If the Green Streets savings were replicated across UK households, we estimate that 35 million tonnes of CO2 would be cut from the national carbon footprint.

£6 billion

At 2009 prices this would save £6 billion per annum.

Picture of the residents of Green Lane

CR priority: to keep our employees safe and healthy at work

We do not compromise on the safety of our employees. Health and safety is one of our highest priorities, and from 2010 annual bonus targets for the Group’s Chief Executive and each Executive Director will each include a health and safety performance target (see annual performance measures for 2009 for further details).

In 2009, we took steps to embed a more proactive approach to managing health and safety across the Group, with a particular focus on individual leadership. Historically the performance of our upstream businesses has been strong, despite the inherent risks of their operations. Our priority in 2009 was to address the injury record in the service and repair part of British Gas, where our engineers are exposed to a wide range of different hazards when visiting domestic properties.

We ran a hard-hitting ‘What if’ safety campaign that made a personal emotional connection with our engineers. This was backed by high profile consistent attention of management to safety. The results have been encouraging with a reduction in lost time injury (LTI) rate in this part of the business from 2.07 in 2008 to 0.74 in 2009. We believe this is still too high and are targeting continued reductions through a new Group safety, health and wellbeing policy and strategy.

KPIs

Group lost time injuries (LTI)/100,000 hours worked

  • 0.49 Our 2009 Performance
  • 1.00 Our 2008 Performance

Our 2009 commitments: 20% LTI reduction on 2008 performance to 0.8

What’s next: 12.5% LTI reduction on 2009 performance to 0.43

Fatalities

  • 0 Our 2009 Performance
  • 1 Our 2008 Performance

Overall the Group’s LTI rate per 100,000 hours worked improved from 1.00 in 2008 to 0.49 in 2009.

Our entry into the UK’s nuclear industry brings specific challenges as the radioactivity associated with nuclear power generation introduces different safety risks relative to conventional sources of power generation. Radiation emissions and radioactive waste must be contained and handled safely.

As a minority shareowner in EDF’s nuclear operations in the UK, we are not the operator of any nuclear facilities. EDF is the world’s largest nuclear operator and its UK nuclear subsidiary, British Energy, has an excellent safety record, vast experience and a record for being open and transparent. We are represented on the organisation’s board and have established a nuclear team to manage our role within the UK’s nuclear industry

 

Mary Francis CBE
Senior Independent Director and Chair of the Corporate Responsibility Committee
25 February 2010