Microsoft Word - Environment Report 2018 - Draft

Lockton now offsets CO2 Lockton demonstrates leadership in Environmental Management

2,351 tonnes in the last year

Leading the way for insurance brokers Lockton is offsetting all prior years CO2 emmissions

Lockton Associates join in the CO2 reduction by offsetting their own personal CO2. A new benefit programme allows our associates to have their lifestyle CO2 offset and to cost split 50/50 with Lockton. Lockton Associates offset a further 1,000 tonnes ISO14001 :2015 Lockton accreditation for our Environment Management Systems continues for the 5 th year

In a departure from other Brokers Lockton has taken the decision this year to offset all our CO2. Having verified measurement of our CO2 we are undertaking offset projects to minimise our impact. Shortly the individual schemes shall be decided and international communities stand to gain from this commitment, raising their standard of life and reducing their C02. Once these are underway Lockton will be certifying Carbon Neutral with

Internal Lockton Environment Group A mix of Partners and associates have joined together to form an new group, looking to introduce alternative and better ways of working to reduce our environmental impact. 13% Less paper used in London in the 12 months to May 2018 We bought 3¾ tonnes less paper in London in the 12 months May 2018 compared to the 12 months before.

Meeting with other associates – Meet online – contact Technology to ask how

the target being full Carbon Neutral certification within the next three months. Again, a first amongst our peers to make this commitment.

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Environmental Responsibility “An essential part of Lockton’s Corporate Social Responsibility Programme.”

This is the third Lockton Environmental Report and this years represents a change in both style and content from the earlier versions as we have adopted a CO2 based environment report. Importantly having identified our CO2 we are choosing to offset all our CO2 with approved schemes, demonstrating our commitment to doing what we do in the right way and minimising our environmental impact in providing our services to our clients. Working with an external partner, Carbon Footprint, we are now reporting all our environmental data in a manner which enables the CO2 impact to be appropriately measured and future reduction targets set. Environment awareness continues to be raised within Lockton, our first Environmental Awareness week was held in November, with presentations from Carbon Smart and from the Lloyds Insurance market giving their interpretation of the impact of climate change on insurance risk and the markets response. We now have an Environment Group, made up from Associates, LLP Partners and members of the Lockton Young Professionals Group. They will, during 2018-19 and beyond, be bringing forward new environment initiatives and helping guide Lockton on building a stronger and continuously improving Environmental position. Lockton believes it is essential we meet the environmental demands of all our stakeholders, be they clients, associates, Partners or suppliers and deliver our services in the right way. Mike Kerridge SVP – UK environmental program leader

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“Lockton as a private independent business has always taken the long term view and what could be longer than seeking to preserve our environment and making sure we minimise our impact. We are proud to be investing now to help ensure future generations are not adversely affected by what we do and target our environmental programmes to constantly improve our efficiency and reduce our impact.” Neil Nimmo Executive Chairman & CEO Lockton Companies LLP

We at Lockton have grown and developed our environment programme extensively over recent years. We aligned ourselves with good practice in 2010 and built on this by being the first London Market Broker to obtain an accredited ISO 14001 Environment Management System five years ago. Our aim of reducing CO2, alongside our continued drive to reduction consumption and maximising efficiencies, represents the way we want to work - as a both a leader in insurance services and leading in how we choose to provide those services. Simon Coleman Partner and Chief Operating Officer Lockton Companies LLP

Working with Lockton it is great to see that our business at all levels is concerned enough to take action and alter and adapt what it does to minimise our environmental impact. Not only is the business concerned about building my future but also engaging with others inside and outside of Lockton to examine better and alternative ways of doing what we do to look after the future of this planet for others etc…. Xxxxxx xxxxxx Lockton Associate & Member: Lockton Environment Group

Photo of associate who makes statement needed

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CO2 Report

For the first time we are now reporting our environmental impact as CO2e generated as a consequence of providing our services to our clients. We have also moved our reporting period to tie in with our financial year and going forward this report will always match the financial year. Our management strategy will now also be expressed in terms of CO2e reduction. Our Environmental Policy, an essential part of our ISO14001 Strategy, remains unchanged and is repeated at the end of this report. Our environment targets will include a statement of CO2e saving as well as overall volume reduction or efficiency gains in amount per associate.

CO2e Generated – 2,351 tonnes

In the 12 month period from May 2017 through to the end of April 2018 Lockton activities in the UK and Ireland generated 2,151 tonnes of CO2e.

CO2e is the international standard to measure CO2 and other emissions and allows a number of different activities to be analysed by their CO2 impact and establish a common base measurement. We calculate our carbon emissions, using GHG Protocol and Defra guidelines utilising 2017 emissions metrics (published August 2017) developed by the UK Department for Business, Energy and Industrial Strategy (BEIS).

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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 they are detailed overleaf. Scope 1: Direct emissions Occur from sources that are owned or controlled by Lockton. Examples: Lockton owned vehicles, fuel combustion, 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, extraction & production of purchased materials, transportation of purchased materials or goods, contractor owned vehicles, outsourced activities, waste disposal etc. We are reporting two measurements, considering both calendar year 2017 and our 12 months period for our financial year 2017-18. This is enable reporting against last years targets, if applicable, and the 12 months period of our new baseline period and the new improvement targets going forwards CO2e emissions for Lockton

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Scope 1 Emissions

Lockton Scope 1 Emissions are based on just one property where we directly consume Gas to provide heat and hot water, Edinburgh. During this period 17.1 tonnes of CO2e were generated.

Lockton Scope 2 Emissions for the electricity consumed per site in kW/Hr for the period May 2017 to April 2018 for all sites were a total of 2,256,266kWhr Scope 2 Emissions

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This kWh total is then matched against the provider company and their generation method/mix per site to calculate the CO2e, giving a total Scope 2 CO2e (Market Based) of 518 tonnes. This calculation is important as some of our electricity providers use 99% renewable sources to generate electricity and therefore our consumption of energy generates less CO2e per kWhr compared to the UK average.

Our scope 3 emissions for the 12 months May 2017 to April 2018 were 1,816 tonnes with a monthly profile as below. 78% of this total was flights. Scope 3 Emissions

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As can be seen, flights represent the majority of all Lockton’s CO2e emissions and our flights gave rise to 1,419 tonnes of Co2 during the period May 2017 to April 2018 out of our total CO2e of 2,351 tonnes. This represents 60.35% of all emissions. This travel reflects the international nature of our business and the location of our clients and the personal nature of our services and the need to validate information and review risks with clients and deliver our advice to them. Our business travel is client led, we are continuously introducing more technology into the business to enable alternative methods of work and meeting via video conferencing, including use of WebEx and Cisco Spark boards. By encouraging and promoting on line meetings and better electronic sharing of information we want change the way associate work to avoid unnecessary travel. Electricity use then stands out as our second largest CO2e impact, at 518.3 tonnes, representing the need for our associates to be provided with a satisfactory office environment, in locations which support the business strategy and client needs. Our offices are modern, with the majority of our associates housed in energy efficient buildings which are BREEAM rated excellent. Use of energy per associate is lower this year compared to last year when looking at kWh/associate across the whole estate. The key for us to achieve CO2e reductions on electricity is to seek to use suppliers with a high renewable generation in their fuel mix, alongside continuing to seek improved efficiencies. The third highest area of CO2e emissions is driving. The 259 tonnes represents 873,500 miles on UK roads, again with Lockton associates going to clients to visit their businesses and risks. As with air travel, we will be reviewing meeting purposes and looking to our associates to consider alternative methods for internal meetings. Our CO2e strategy is therefore based around the reduction of these three key areas of our environmental impact, and offsetting the CO2e generated by them.  Flights – Reduce internal Meeting Travel  Energy Use – Maximise Efficient Use of our Energy and use Renewables  Car Travel – Reduce internal meeting travel with a further lowering of CO2e in the remaining areas, but these having a much lower CO2e impact. CO2e Assessment and commentary.

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CO2e offsetting

Lockton has taken the decision to offset 100% of our CO2e generated total for the 2017-18 period, by using accredited schemes against all our Scope 1,2 and 3 carbon emissions, with this being achieved through buying carbon credits certified under the Gold Standard. Gold Standard is a non-profit Swiss Foundation endorsed by 80+ international NGOs and with more than 1,400 projects in 80 countries undergoing certification. The Gold Standard has become the global benchmark for the highest integrity and greatest impact in climate and development initiatives. Each tonne purchased represents one ton of CO2 (or an equivalent greenhouse gas) emission prevented, or captured from the atmosphere. Final selection of the schemes will take place after this report has been published. All the CO2 credits purchased will be validated through Gold Standard and managed in conjunction with our external advisor, Carbon Footprint Ltd. In future reports we will be providing information on the offset schemes that we undertake. In addition to offsetting all our Scope 1,2 & 3 emissions Lockton has gone one step further and introduced this year a new voluntary benefit, available to all Associates and LLP Partners, allowing the offsetting of their household CO2e to be recorded and offset. This innovative programme uses government data to calculate CO2e for the average associates household and the entire amount then offset. This opt in programme has been launched in the last month and Lockton will be meeting 50% of the offset cost and the remainder by the individual. The take up on this, within the first month, will allow nearly 1,000 tonnes of Co2 to be offset. As with the main offset programme, we will also be providing information on the offset schemes that we undertake. We go one step further

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Carbon Management and Environmental Impact Reduction

In previous years we have set targets for ourselves for reducing the quantity of used energy and tonnes of paper used and waste. Whilst we will still have absolute targets these will also be expressed in terms of CO2e targets and reductions. We recognise that the reducing travel of all types, elimination of unnecessary use of energy and improving operational efficiencies, reducing consumption and minimising waste and maximising the recycling of that waste all need to part of a “Reduction before Offset” strategy. So the following areas will all be part of our carbon management strategy.  We will set targets for reducing our absolute carbon emissions (scope 1 – where possible and scope 2 and 3)  Seek to reduce unnecessary air and land travel by introducing new technologies to allow and encourage working between associates and clients efficient and remotely  Seek to reduce our emissions by introducing alternative ways of working, which bring in efficiencies and continuing to invest in appropriate technologies to reduce our resource consumption and the waste we generate  Assist our associates in reducing their emissions they generate in their working lives  Work with our suppliers and our landlords to try and purchase renewable energy where possible  Off setting our Scope 1,2 and 3 carbon emissions by buying carbon credits certified Gold Standard accredited schemes.

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Energy - Electricity

In our previous report in 2017 we set ourselves a target of reducing our electrical energy use per associate by 5% by the end of 2018 compared to our use in 2016. This reduction being set in kWh/associate but did not take into account renewable sources of energy being less C02 intensive or state targets in terms of the overall CO2e impact. We have also added two buildings to our estate during the reporting period, in Aberdeen and in London. We have reviewed the consumption and achieved this 5% reduction by a mix of better energy management and from efficiencies from growth in headcount within the our offices, as well as the addition of more office locations within the business.

kWh  Total 

Year 

head count 

kWh/associate 

kWh 2016 

2,152,923  

920 

2,340 

kWh 2017 

2,256,266  

1014 

2,225 

‐5% 

Change 2016 to 2017 

We have calculated the electricity CO2e for the 12 months financial year 2017 – 2018 as being 592 tonnes for both Scope 2 consumption (518 tonnes) and Scope 3 transmission and distribution. (74 tonnes) This gives an electricity Co2e per associate of 584kg (Market Based) This will be the benchmark measurement number going forward and used in setting targets.

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CO2e saving Target - Electricity

We intend to reduce the electricity scope2 and scope3 CO2e per associate by 20% by the end of the 2022-2023 financial year from the 2016 base year. This by increased operational efficiencies and by increasing the amount of renewable energy purchased or a combination of both. If we were to continue unchanged we would generate approximately 758 tonnes CO2e. Our target will reduce this CO2e by over 26 tonnes

kWh Per associate

Reduce the kWh per associate by 15% by the end of the same period is also essential, we therefore have st this target and expect to achieve it by a mix of improved operational efficiencies as more associates are accommodated within the same buildings as well as improved working methods.

Achievement of this will reduce our total electrical consumption energy by an estimated 425,000kWhr in year five, vrs taking no action, and save approximately 140 tonnes of CO2e

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Energy - Gas

We have one smaller location, within a listed building, using gas, so our ability to reduce the CO2e impact of the Scope 1 Gas consumption is limited. Additional insulation of the builidng is not permitted internally or externally. We have replaced the boiler and the controls are maintained and work efficiently. These scope 1 emissions represent only 17 tonnes out our 2,342 total, or less than ¾ of 1%. Any reduction plan would have a deminimus impact. Never the less we believe that a 5% saving should be possible over the next five years and so we have set this as our target.

CO2e saving Target

Improve gas use efficiency per by 5% over the next five years to reduce quantity of gas consumed, at the end of the fifth year this will save 855kg of CO2e generation.

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Transport CO2e

Lockton’s largest environmental impact is the movement of our associates. Air, Car and Trains account for 73% of all CO2e emissions for the period May 2017 to April 2018. A total of 1,710 tonnes. Our client are from around the entire planet. The growth of Lockton, throughout the UK and around the world, has increased our transport use in absolutes terms, as we continue to meet with our clients and provide our services. Placing alimit on travel and then an overall target on reduction of our total travel to support client needs whilst we are growing business is not practical at this time. Our client service, based around our broking done differently, demonstrably gives our clients what they require. We cannot compromise on the quality of our client service. We will seek to evolve the services and will look to setting client required travel CO2e targets in the future. In the meantime we will continue the offset strategy for this CO2e. We do however undertake a number of the journeys as part of managing the operation of the Lockton business. It is these internal meetings that we will initially focus on and seek to reduce. The introduction of additional improved video conference facilities and other shared media platforms being adopted should allow some internal meetings to take place electronically and replace travel.

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We will change during this year the recording of all travel to seek identify the purposes of the travel and ensure client and internal operational travel is detailed separately. We will then calculate the CO2e per associate for internal operation travel and set reduction targets.

CO2e saving Target

For internal meeting travel we will set a CO2e reduction target of 33% less internal meeting CO2e generation within five years. Initial review suggests that this may save 8-10% of our total transport CO2e, up to some 170 tonnes. We will encourage client meetings to adopt a mix of electronic meetings but no target set at this time but will continually review this and if valid targets can be set then we will do so.

Exact detail on this transport reduction will be contained in future reports.

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Paper Use

We set ourselves a target last year of gathering information for all locations regarding paper use, as the previous data was limited to three locations. We have achieved this target. We also set two quantity reduction targets.  For London 15% less paper by weight by end of 2018 vrs a base of 2016  For all locations 10% less paper per associate at the end of 2018 vrs 2017. London Paper Use. This target has been met already. In 2017 we bought 24.65 tonnes of paper compared to 28.36 in 2016. This giving a reduction of -13% . This target is now closed. All Locations Use. The data reporting period will now move to the financial year, with 2017 as a base year with quantities and targets stating  the tonnes of paper bought,  the use per associate and  the CO2e impact. The 10% less per associate will be retained as the target but will be expressed in CO2e as well as sheets bought.

The current paper use is

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CO2e saving Target

Over the next 5 years we now set a target of reducing the paper use CO2e per associate by 30%. Whilst this will not achieve a huge tonnage of CO2e we believe it correct to have this as a target and may be met by less use of paper and by altering our paper sourcing to manufacturers and paper types that have a lower CO2e impact. This will save 8.8 tonnes of paper generated Co2e per annum by 2023

Quantity saving Target

Over the period 2014 to 2018 we assessed paper use in London, Birmingham and Leeds. Over that period we reduced paper consumption with a 46% reduction by weight. Now we have data for each location we are setting a sheets used per associate by site as a target and each site being set the same 30% reduction within five years. This years total quantity was 6.53 million sheets, an average of 6,440 per associate. A 30% reduction drops the total sheets to 4.571 million and the sheets per associate to 4,508. Paper can be supplied from a variety of different sources, Lockton will be seeking to increase the percentage of recycled paper. Currently less than 10% of our paper is from recycled sources with the remainder supplied from FSC certified mills. For every 10% shift from virgin paper to recycled paper between 2.5 and 3.5% of the total CO2e cost of the paper can be saved. We are not setting a CO2e reduction target around paper recycling use at this time, we will target 25% of our paper to come from recycled sources by 2020. Responsible Sourcing

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Waste

We set ourselves a number of targets last year. Performance against all these targets has not been achieved as we have not yet obtained volume/weight data from all sites, we are still working with our landlords, who control the dispose of the waste to achieve this. For London alone we do have data, we are currently slightly behind track to achieve the reduction target of 7.5% less waste by weight by end 2020, (2016 base Year). The slippage caused by more paper being disposed of as shredded waste as we move from hard copy archive to scanned electronic copy. This increased the volume of this area of waste substantially and growth in the overall total. This change does however set us up to work differently and should result in less paper being used and less waste in future years and we expect to be back on track by the end of this year. We have assessed where waste is disposed of and two locations have landlord disposal services where waste may end up in Local Authority controlled land fill. The waste disposal in these two locations will be reviewed and no landfill will be used by end of the current reporting year, this gives us new targets of.  All sites data by end 2018  7.5% less by gross weight in London from 2017 to 2020  10% less per associate in London from 2017 to 2020.  Set Targets for all sites for 2018-2020 at the end of 2018, expected to be 7.5% less waste within 2 years

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CO2e saving Target - Waste

Over the next 2 years we have set a target of reducing our waste total per associate in London by 10% from the base in 2016. We are expecting to set a 7.5% less for other associates around the UK. Stating this in terms of CO2e the target should achieve around only around a tone of CO2e. Responsible Use, Recycling & Disposal The low CO2 impact of waste forces the focus on waste to look at the quantities generated and disposal methods to minimise the environmental impact. We will therefore be seeking reuse and recycle to be the norm for all waste and to remove unnecessary products and material from use, preventing their need for disposal in the first place. Zero to landfill being a primary target.

Single use plastics will be identified and where possible removed from use by Lockton and from our immediate supply chain.

We recognise that as we evolve our workplace to be more efficient that surplus furniture and technology equipment will arise. We will therefore look to recycle and reuse of both these primary waste streams.

Our increasing use of partial or wholly recycled products will help sustain a market in these and hopefully enable more efficient recycling and other reuse or recycle opportunities in the future. Over the next 12 months our target will be paper and other stationery consumables where use of recycled product in the manufacture process can be assessed.

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Environmental Awareness

Suppliers

Currently over 70% of our operational suppliers have certified ISO14001 programmes. We are now working with them to explore environmental and carbon savings that may be achieved. DHL is a supplier of document and package movement services to Lockton and though our use of their “Go Green” Initiative all our use of their services is Carbon Neutral and small premium is paid on all package movements to achieve this. This offset was 8.07 tonnes CO2e for the period. During the coming year we will be working with the top 50 of our suppliers, with the focus on our landlords, to look to assess and offset their environmental impact in providing the base buildings in which we have some of the let space. We will be looking to this group to bring new ideas and evolution of working methods to Lockton in order to have an associate driven programme, involing directly our associates at all levels. Any environmental impact improvement may be considered by this group and put forward for adoption, with criteria being CO2e saving, Energy Saving, Transport reduction. Recycling improvement, waste reduction or some other measure appropriate to the area being considered. It is hoped tht where suggestions do come forward and get adopted that a specific LEG reduction achievement review will form part of the next one of this report. Lockton Environment Group

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Lockton Environmental Policy

The Environment Policy forms part of the Lockton ISO 14001 Environment Management System and is reproduced below. 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  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  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 The company will achieve these commitments through the following means:

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 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, COO, March 2018

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Certification ISO14001:2015

Carbon Offset – Carbon Footprint

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