Lockton Environment Report 2023

Lockton Companies LLP Environment Report

2022-23

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Environmental Responsibility Report

Our environment report continues to evolve year on year and this 2022-23 report is no different. The key data regarding measurement and review of our performance since 2017 continues. However the Lockton business now has an ESG group and policy and this environment report represents just part of an overall programme within the larger area of ESG. Our business, during the period of May 1 st 2022 through to April 30 th 2023, saw a considerable change in the environmental performance compared to the immediately preceding two years. Three of these key changes, detailed in the report are: Firstly the return to work after the previous two years of pandemic and travelling and working restrictions. We have been able to follow through with client requests to meet face to face and this has led to a marked increase in air travel this year. This air travel being essential to how we and our clients work together to understand, manage, advise and build insurance programmes and benefits advice that is suited to their unique needs and those of their stakeholders. Secondly, we have seen an increase in our headcount. This growth being strategic and directly related to planned successful expansion of the business, and each new associate has a CO2 impact. By planned actions we have minimised that impact; Thirdly the increase in renewable and low carbon electricity means we have continued to follow our strategic path of looking towards 100% renewable energy supply throughout the mainland UK. It is also pleasing to note that since we introduced our voluntary employee benefit package for offsetting personal household CO2, that some 8,954 tonnes of CO2 have been offset.

Certified Carbon Neutral to PAS 2060 Standard

We have taken steps to offset the CO2 generated by our operations through verified measurement and offset programs that have been assessed under PAS 2060. We have achieved 90% renewable electricity at our sites, moving closer to our target of 100% renewables by 2032. We are proud to retain this certification for our offsetting efforts. For those who work with Lockton, you can be assured that we will not add to your business’s carbon profile.

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Ej Hentennar CEO Lockton Europe

“I am delighted to share this year’s Environment Report, highlighting our strategy in action as we collectively progress our journey towards a low carbon future. As a people-focused business, we are committed to providing an exceptional level of client service. Post-pandemic, we are travelling more regularly to serve our clients. Our footprint is expanding, increasing our need for office space as we continue to invest in our people and our offering to clients. With these opportunities comes the responsibility to operate in a sustainable way. We continue to be mindful of our impact on the communities we operate in, and this includes our planning and delivery of our Environmental programme. We are on a journey, and now have a dedicated ESG group of talented Associates who inform our strategy and approach as we navigate these challenges. I am excited to see the positive impacts we as a business make on our communities.”

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CO2 Report Emission data and review 2022-23

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CO2 Emission and Review Summary

This year we are reporting an increase in the overall CO2 generated by Lockton Companies LLP compared to previous years. This is as a direct consequence of an increased quantity of air travel as we and our clients return to the more normal way of face to face working as the pandemic restrictions were removed. If we briefly look to one side of air travel, we can see from analysis of our CO2e measurement, that, despite this overall increase, our CO2e per associate is marginally lower than 2017-18. It has to be said that an absolute measurement comparison for the period 2017-18 to 2022-23 is difficult, as our method of measure has changed and improved, and the business has also changed, with Lockton Re LLP statistics now being assessed separately, following their separation out from Lockton Companies LLP in May 2021. The current CO2 measurement for this and the prior year does represent Lockton companies in isolation and next year we expect to be able to make direct year on year comparison on a like for like basis (no pandemic distortions) and review any targets set for absolute amounts. 7% reduction in CO2e per associate over five years and an unwelcome, but not unexpected, increase over our prior year overall.

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Analysis Methodology For this year there has been no change from the previously adopted methodology. We are measuring and reporting our emissions based on a period that aligns with our financial year and using an external third party, Carbon Footprint, to assist. We are taking our raw data and using GHG protocol and Defra guidelines, and using the latest metrics from BEIS, to calculate our CO2e. All results then validated to ISO14064-3. Emissions totals are calculated by multiplying activity data (i.e. electricity consumption) with the appropriate emissions factor (i.e. UK electricity). Three emission scopes are set down in the GHG protocol and are detailed below: Scope 1: Direct emissions Occur from sources that are owned or controlled by Lockton. Examples: Fuel combustion, Gas burnt. Scope 2: Electricity indirect emissions GHG emissions from the generation of purchased electricity consumed by Lockton (using both location and market based approach) Scope 3: Other indirect emissions An optional reporting category for all other indirect emissions that are a consequence of our activities. These occur from sources not owned or controlled by the company. Examples: electricity transmission & distribution losses, employee business travel, waste etc.

Emissions Analysis by Scope Scope 1 Emissions 7.08 tCO2e (2.75% decrease)

The combined scope 1 emissions for the 2022-23 reporting year are 7.08 CO2e. This 2.75% reduction from 2021-22 is the final removal of directly purchased and burnt gas from our energy profile and in increase in the company owned car use. As per prior year our M&E service company (CBRE GWS) advise no significant refrigerant gas loss during the year.

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Scope 2 Emissions Electricity Consumed 48.44 tCO2e (27.78% lower than 2022, 90% lower than base year 2017)

Over the 12 month period from May 2022 through to the end of April 2023 our overall electrical consumption, from the various suppliers either direct or through our landlords resulted in 48.44 tCO2e being generated, this was 27.78 % lower than previous years, our analysis revealed. During the same period our absolute total kWhr electrical consumption was approximately 13.5% higher as we increased our floor space in Newcastle due to a relocation and we took an additional 40,000 sq.ft of space in London. Whilst these two figures may initially appear contradictory, our review revealed that existing landlords had retained low carbon electrical supply, and our new landlords were on renewable supply which increased the overall percentage of low CO2 electrical supply.

13.5% increase in electricity consumed over the annual period, but a marginal – 1.4% reduction in electricity consumed per head.

The energy use per head, calculated in kWhr, has come down from the previous 1,232 kWhr per associate to 1,215kWhrs, a 1.4% reduction. This has come in partly from an adoption of agile working, where the amount of space per associates has dropped in absolute terms and also from the newer space being more energy efficient than our existing portfolio.

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Scope 3 Emissions 3,089 tCO2e (100% increase on prior year) As with previous reports, we continue to set down our scope 3 emissions annual data table with further monthly information where appropriate expanded later in the report. This section of our 2023 report is making a direct comparison to our Lockton Companies 2022 report and no numbers are included here for Lockton Re LLP. The very obvious and immediate comment is that travel related CO2 has increased substantially, contributing to all the 100% increase in these scope 3 emissions year in year.

Lockton Companies LLP Scope 3 tCO2e Emissions data

2022-23

2021-22

Flights

2,825.79

1,365.04

15.51 42.51

15.27 21.55

Rail Travel Taxi Travel Car Travel

196.61

138.82

0 0

0.44

Waste Water Paper

0

4.22 4.87

5.68 6.34

Site Electricity (T&D) (market based)

3,089.51

1,553.14

Overall Totals

Monthly Scope 3 CO2e

The uneven spread of the CO2 over the year reflects the evolving travel pattern changes, with a substantial amount of travel in the last month of the financial year.

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CO2e Assessment and Commentary One word really sums up our CO2e impact, travel. Whilst air travel represents the majority, car travel is a substantial element and use of taxis also contributes a reasonable amount to our CO2

Travel, including air, rail, car and associate Grey fleet mileage accounts for 98.2% of all our measured emissions and air travel alone virtually 90% of our emissions. We had recognised this in prior years and were expecting the substantial uplift this year as business returned to normal, for us and our clients. Current and Future Focus Our focus on decarbonisation of our environmental impact will continue to be the two areas of air travel and electricity supply source. The air travel focus being to support meetings taking place electronically where appropriate and the electrical supply source being the continued drive to renewable generation sources.

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Carbon Offsetting Our continuing step further We Are Carbon Neutral With Verified Measurement And Verified Offset

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Lockton Companies LLP is a Carbon Offsetting Company Lockton is focusing on removing CO2 from what we do and this programme will gradually improve our CO2e profile. Until it succeeds, and particularly as technology advances to allow lower or zero carbon options for travel, we will continue with our chosen partner, Carbon Footprint, to select and use accredited offset schemes. To do this we need accurate verified measurement, which is covered earlier in this report, and then purchase carbon credits to offset all our emissions. The offset method remains unchanged from the prior year and have again undergone PAS 2060 assessment of our programme to recognise, accredit and reinforce our Carbon Neutral credentials. We continue to be proud to say we are a carbon neutral organisation. In future as other targets impact on our generated CO2 the carbon neutral position will be maintained with carbon offsetting reducing as our business processes are gradually decarbonised. Our offsetting is undertaken to internationally recognised standards and for this we use PAS2060.

Certified Carbon Neutral to PAS 2060

This year we have used one VCS Gold Standard Project. 400 MW Solar Power Project at Bhadla, Rajasthan, India

The project activity generates electricity using renewable solar energy. The generated electricity is exported to the regional grid system, which is under the purview of the INDIAN electricity grid of India. The project activity reduces anthropogenic emissions of greenhouse gases estimated to be approximately 694,471 tCO2e per year, thereon replacing 732,874 MWh/year amount

of electricity with renewable energy. The project diversifies the mix of power plants connected to the INDIAN GRID, which is mainly dominated by thermal/fossil-fuel based power plants.

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Supporting UN Sustainable Development Goals This verified offset project supports the three of the UN sustainable development goals

Ensure access to affordable, reliable, sustainable and modern energy for all

Promote sustained, inclusive and productive employent and decent work for all

sustainable economic growth, full and

Take urgent action to combat climate change and its impacts

Certification: The project is VCS certified and the Retirement Certification is recorded here: https://registry.goldstandard.org/batch-retirements/details/147623

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Continued provision of an employee benefit to our associates in assisting their personal household CO2 offset.

This past year has been the fourth year of our voluntary employee benefit for our associates, this enables associates to join a scheme that let them offset their personal household CO2. We have continued this benefit programme and retaining our link with Carbon Footprint we have maintained our scheme whereby Lockton contributes 50% of the cost of the Carbon Offset and the associate contributes the remainder on a monthly basis. The amount of carbon to be offset is calculated by Carbon Footprint using nationally published data sources for household CO2 generated and the cost to the associate is a simple £2.50 per month. This scheme is now embedded in our employee benefits programme. Associates are then supplied with an annual certificate confirming their participation and that the CO 2 has been offset, an example is below. Over the five years that the scheme has been running 8,954 tonnes of CO2 have been offset under VCS projects.

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Our Reduction Targets

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CO2 Reduction and targets Absolute reductions and performance reductions The reworking of our environmental programme within our ESG framework has impacted our target setting and performance measurement. As such we have continued to monitor and review our CO2 using our previously stated targets and extending those targets on for a further three years from a 2022/23 end date to a 2025-6 end date. Electricity Our previous target was: o To reduce our scope 2 (consumption) and scope 3 (Transmission and distribution) emissions by 20% by the end of the 2023 financial year, when measured against a base year of 2017-18. o To reduce the kWh consumed per associate by 15% over the same period, 2018 -2023. These targets have now been revised and extended o To reduce our scope 2 (consumption) and scope 3 (Transmission and distribution) emissions by 99.8% by the end of the 2026 financial year, when measured against a base year of 2017 18. o To reduce the kWh consumed per associate by 25% over the revised period, 2018 -2023. Performance against Revised Targets Revised Taarget is Scope 2 Reduction in CO2 - 99.8% reduction in Co2 from electrical consumption (generation and transmission and distribution) per associate by end of Fin Year 2026 versus 2017-18 base year. Currently at 34.5kg/head – Target is 27.75 kg/head by 2026 – we are on target. This will save a further 21.36 tCo2e by 2026 if we achieve the target.

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Reduce kWhr per Associate – the target now being to reduce our kWhr per associate by 40% over the revised period 2017-18 to 2025-2026.

Performance against target We are on target to achieve this, we are above the overall end target at present, steps being taken during the coming year should result in further energy saving, particularly related to lighting changes to LED and we remain on course to meet the target. Transport and Travel The return of international travel after the pandemic has immediately lead to a surge in travel as the Lockton associates catch up with their clients after the enforced hiatus. This travel being an increase in all areas, trains, taxis, associate’s car travel and most obviously in air travel. Our stated target was to reduce our travel co2e per associate by 10% from the amount in 2017 18 by the end of 2022-23 financial year. The leap in air travel and catching up on the prior two years of lost client and business meetings shows very clearly in this years statistics. Where we were ahead of our target and on course to retain that that tracking through to the end of 2022 23 that direction has been knocked sideways by the return to business.

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This year has seen the leap in travel brings the annual kgCO2e per associate up to the highest amount it has been since we started measurement at a total of back up to 1,998kg. We believe that this year is a slightly distorted figure and that has led to the decision to extend the target date for the reduction in CO2 per associate for Travel out to 2025-26, with the same target of 10% reduction per associate from the 2017-18 base year. Performance against Target Travel CO2 is therefore behind on target to meet the revised 2025-26 target of 10% Reduction vrs 2017-18 base year. We expect a lesser pattern of travel to emerge over the coming year as the excess “catch up post pandemic” works out of the system.

Secondary Target Lockton has made a substantial investment in video meeting facilities. We are still looking at a target of 1/3 of current internal face to face meetings to be moved to Video meetings by 2028, this will contribute towards the reduction in travel CO2. The investment has changed the profile of our VC capabilities and at this time an effective measurement assessment method is being developed to allow us to report on this transition in future years environment reports.

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Paper Use We previously advised for paper we set one reduction target and one technical target, albeit that paper in and of itself is a low tCO2e total impact item. o An overall 30% reduction in paper use within 5 years, based on 2017-18 purchased sheets. o Alongside this we set a 25% of the paper we use to come from recycled sources by 2020. We had met those targets. However we continued to record and review the paper purchase data and the return to the office has seen the quantity of paper purchased in the UK climb in the past year. Whilst not unsurprising this increase has lead to the review of paper and the setting of a continuing target for paper use at a reduction of 10% per annum for the next three years. Performance against target Quantity of paper used The methodology takes all sizes of paper purchased and converts to a standard A4 sheet and then uses this as the baseline to calculate overall quantity. We continue to record this as a point of review. We are on track to meet this target.

Recycled paper. There is no change on this from previous years, working with our supplier, Banner, we have mandated all supplied paper to us should be recycled. The focus remains reduction of the absolute quantity of paper used.

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Waste We remain very conscious of the need to encourage our landlords and ourselves regarding effective waste management. The social and potential pollution impact can be reduced if the quantity of waste can be lowered and the reuse and recycling of the waste can be improved. We have set ourselves targets with these being:, 1 Getting accurate waste quantity totals from each location; 2. Reducing London Waste Quantity per associate by 10% by 2023. Performance against target Waste reduction continues to meet the target. Data Target not yet met, will continue as an operational target rather than a CO2e reduction target. Key issue for us is still getting our landlords to gather data on waste disposal on the sites we occupy. As our waste is mixed with other tenants (if we were to have a separate contract then even more CO2 would be generated by separate vehicles coming to site) we need the landlords to make effective steps to measure the waste. They are not. We will be working hard on this in the coming 12 months. London Waste and Disposal. As our landlord has started to produce statistical information on our waste management here, we have changed this year from our own measurement analysis to using theirs, as below. The 48.598 tonnes of waste represent 40.03kg per associate. This is a reduction of 43% on 2017-18

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Additional Environmental Programmes Two prime programmes have continued over the past twelve months as these make up a fair amount of the business waste as we invest in the business and adapt our technology and furniture to meet the neds of supporting agile working and increased headcounts. Recycle IT equipment We have continued to work with a number of specialist companies for surplus IT equipment disposal and WEEE waste disposal. We ensure accredited data wiping has taken place and allowed reuse (upcycling) by others of redundant equipment. The remainder has been broken down into spares for reuse by others. Furniture Our prime furniture supplier is Senator and we have continued to work with them to ensure replaced surplus furniture is taken by them, where we have worked with them to upcycle where possible to schools and other organisations, with the remainder going through to their UK based dismantling facility. Over the course of the year we have also been re-working our City of London office space to support agile working and have recycled as scrap metal our surplus desk pedestals and filing cabinets. Package Movement. Our supplier partner for package movement is DHL, in conjunction with their Go Green Climate Neutral service we seek to minimise the impact of our movement of packages and equipment between offices and with clients, whether within the UK or internationally. We are therefore part of their go green programme and pay an additional amount to them for package movement to offset the carbon cost of that movement. It is also appropriate to note that DHL have their own carbon reduction programme. Pollution and Plastics. Key Targets 2023 We continue to look to remove plastics, particularly all single use plastic from the business and identify and remove all unnecessary plastic use from the business. Our catering and cleaning contractors in London are supporting this removal of single use plastics. With other suppliers where our relationship with them is transactional rather than through a framework as we don’t have sufficient volumes, it is proving more difficult to get them to use plastic free protection around delivered items. With our furniture supplier they have removed plastics from their delivery as part of their own strategic move, a welcome bous of working with an appropriate organisation. Fit Out Projects 98.5% of all out waste from our recent fit out project in London was recycled or reused, the waste being split into streams by the contractor before removal from site (Data insert here awaited)

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Secondary Targets We have reviewed these previously and they continue to be a focus for us. Now we have returned to normal working we are able to revert to looking at achieving these aims alongside other targets. • Adopt bulk delivery and dispense via refill for all cleaning and bathroom products, stopping waste bottles. Continuing, ozone system remains in use, some limited chemicals has been needed to address very small specific cleaning issues. We are looking with our supplier at further alternatives, where ozone does not achieve a satisfactory outcome. • Removal of plastic single use bags from the waste collection and cleaning process Continuing • Remove plastic based corporate and marketing products. Continued, albeit very limited ov er the past 12 months • Adopt non plastic milk delivery and dispense within the offices. Continuing • Maximise use of all electronic email and social media to distribute messages and information to associates. Continuing • Maximise the use of plastic free products in all office stationery, including bamboo, wood and other products. Although alternatives investigated the low consumption from existing stock over the year has meant progressing this to completion will now be over the next 12 months. Very limited use of these products has meant existing supplies have yet to be used. The change in working practices has impacted on this. As the need arises options are bing reviewed with our key supplier Banner. • Client Presentations and bound folders, redesign the Lockton presentation folder and house style to remove plastics from the process whilst retaining the professional Lockton production values. Underway, purpose made folders that are plastic free and recyclable are in use, a continuing drive and support to associates.

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PAS 2060 Environmental Targets.

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Pas 2060

PAS2060 Requires that we also look at the longer term as well as measuring the current.

PAS 2060 Carbon Reduction Plan Under the PAS certification process we need to continue to demonstrate a continuing carbon reduction programme. The effect of COVID-19 restrictions during 2021 on our travelling necessitated re-baselining our emissions this year. We remain committed to our previous set targets in our carbon management plan. We are also undertaking a Climate Change Gap Analysis with our external assessors this year to identify any areas of scope expansion needed for Net Zero targets, especially since operations have change post-pandemic, e.g., increasing likely significance of home/hybrid working and computing hardware to accommodate for this. PAS 2060 – Lockton Companies LLP A 33% reduction in air travel emissions related to internal company meetings by 2028, measuring from a baseline of 2023, set around a metric of tCO2e/£turnover. To have all electrical supplies to Lockton Companies from 100% zero carbon or renewable generation sources by 2032. Progress on PAS 2060 Carbon Reduction Air Travel Now we have the first full normal year of data we will be making measurement and looking to track progress and report in 2024. Renewable Electricity. We are able to report substantial progress towards the 100% renewable target, our assessment for the period reveals we have increased the amount of our electricity coming from renewable and low carbon sources from 85% to 90%.

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Environmental Policy and our accreditation

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We have held this accreditation since 2013, having made the decision that it was appropriate for Lockton to lead on this and be the first London Market Broker to obtain this internationally recognised environment accreditation. Extensive work is undertaken during the year to maintain and update the management systems and records and essential external verification takes place in March each year. We work with Equas as our external partner to provide the control software and advice on operation and maintenance of our systems and with BAB Assessment as our external UKAS Audit. The Environment Policy forms part of the Lockton ISO 14001:2015 Environment Management System and is reproduced below. Lockton Environmental Policy Lockton Companies LLP recognises that its business activities interact with the environment in a variety ways. These activities have an impact in the key areas of: • Raw material use • Energy use • Generation of waste materials The company recognises that it has a responsibility to help protect the environment wherever it has an opportunity to do so, be a responsible neighbour and to provide a comfortable environment for its associates to work in. As such, the company is committed to: • Continual improvement in the environmental impact of its business activities • Preventing pollution wherever possible • Complying with all relevant legal, customer, and other environmental requirements • Occupying and using its offices in a manner which minimises the consumption of energy • Improving the efficiency with which it uses office materials • Minimising the generation of waste materials and their environmental impact Lockton continues to hold UKAS externally accredited ISO14001:2015 Environment Management System

The company will achieve these commitments through the following means:

• The implementation and maintenance of an Environmental Management System that is independently certified as compliant with ISO 14001:2015 • Employing processes that identify the aspects of the Company’s business that have an environmental impact and quantifying the significance of each aspect.

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• Setting objectives for reducing its environmental impact and maintaining an environmental performance improvement programme to enable them to be achieved. • Ensuring that its associates, suppliers and customers are aware of any support required by them to support the Company’s commitments and environmental objectives. • Ensuring that all electrical and electronic devices purchased must have the highest energy rating available unless there is a justifiable business case for doing otherwise. • Ensuring that all paper purchased must contains at least 90% recycled content or is from a certified sustainable source. • Facilitating the re-use and recycling of all waste materials and redundant equipment generated by the company wherever it is economically viable to do so. • Training its associates in good environmental protection practices and encouraging associate involvement in environmental improvement initiatives. • Continually monitoring the environmental impact of its business activities • This Environmental Policy is an integral part of the company’s business and must be supported by all associates as an integral part of their daily work.

Simon Coleman, Lockton Companies LLP COO, May 2021

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ISO14001:2015 Certification – Lockton Companies LLP

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CO2 Measurement Validation to ISO14064-3 Lockton Companies LLP

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Certification of Carbon Neutral Operation Lockton Companies LLP

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