Corporate Responsibility

Workplace

The safety and wellbeing of our staff is our top priority.

Safety
In 2009/10 we continued to work towards our three-year target (set in 2007) to reduce our Accident Incident Rate (AIR) to below the food and drink industry average and reduce the number of days lost from accidents by 10%. We came close to the AIR target of less than 1775 achieving 2015, which still represents a 36% reduction over the last 12 months and we reduced the number of days we lost through accidents by 54%. Our success was based on introducing a comprehensive ‘think safe, act safe, be safe’ campaign.

Next year we will be introducing a new online health and safety learning induction programme and we will begin the next phase of our behavioural safety programme.

With hundreds of commercial vehicles and professional drivers we have introduced a number of initiatives aimed at reducing the number of vehicle accidents, for example we have established an NVQ Carrying and Delivering Goods programme in our Household division. We are also pleased to have achieved the status of being a recognised driver-training provider, which means we are able to train staff who drive for our company on a professional basis.

Finally, to ensure that safety doesn’t just stop with our staff we have signed up to the ‘safer contractor scheme’ – which is a leading UK contractor safety accreditation scheme.

Wellbeing
As the wellbeing of our staff is important we have launched a three-year occupational health strategy that includes:

• Running regular health and well-being promotions across the business
• Giving all staff over the age of 40 the opportunity to have a free health check
• Completing health surveillance checks appropriate to job roles
• Creating a wellbeing section on our intranet
• Helping our employees get back into work sooner following illness or injury

Communications
To help improve communication across our business we have introduced a new intranet called ‘the gardens’ that all staff can access at work and from home. This innovative development complements the other traditional communication methods we use including, face-to-face meetings, our staff magazine and monthly ‘Mark Lunches’ where staff can ask Mark Allen any questions they like. Staff can also email Mark directly with ideas or queries via ‘Let Mark Know’.

We will be carrying out our third employee survey in October 2010 to get the views of our staff and we will be responding to what they tell us.

Our people
We employ approximately 7,000 people across the business. We aim to attract and retain the best people, treat everyone with respect and help all our people develop their potential. We discuss our people and developments further in pages 8 to 9.

Community

As we grow we are committed to looking after our people and the communities where we work.

Our staff charity – Macmillan
Thanks to the superb fundraising efforts of our staff since April 2009, we have so far raised over £450,000 for Macmillan Cancer Support, greatly exceeding our 2009 target of £300,000. Through joint marketing and helping with their awareness campaigns the charity valued our partnership in the first twelve months at over £500,000.

Our community plan
So that we make a real and positive impact in the local communities where we operate we have introduced a new local community plan that focuses on improving health and education and supports farming-related good causes through paid work-time volunteering and donations.

The plan is run by 24 local community committees representing each of our places of work and we have given each of them responsibility for their own budget and for the decisions they make.

Environment

We recognise that all of the decisions we take have an impact on the wider environment we all share. As an organisation it is essential that we act responsibly and to the highest standards possible.

Reducing CO₂ Over the past year we have continued to work with the Carbon Trust on a Carbon Management plan which takes our carbon reduction targets out to 2020.

Since 2002/03 we have reduced our CO₂ emissions per tonne of raw milk processed by 34% with an 8% reduction in the last year.

Over the course of this year we will be installing two biomass boilers at our creamery in Davidstow which, once up and running, will deliver a 12% reduction in our carbon emissions by 2012.

Reducing water usage
Following last year’s 8% saving in water used per tonne of milk processed this year we achieved a further 1% reduction – keeping us on track to reduce the amount of water we use by 10% by the end of 2012. Since 2007 we have made an annual saving of more that 300,000 cubic metres of water.

We continue to aim at achieving a 20% reduction from our 2007 usage levels by 2020 as laid out in the Federation House Commitment.

Reducing waste to landfill
Our overall aim is to have zero waste going to landfill by 2015 where this is proven to be environmentally advantageous.

We continue to focus on reducing the solid wastes that result from our operations and where waste is unavoidable we will look for ways of diverting it from landfill by reusing and recycling it. Within our household depot operations we now recycle plastic and cardboard at all depots.

At our manufacturing sites we have appointed a new waste management company to remove our wastes and are working closely with them to ensure that landfill is minimised. In 2009/10 we recycled in excess of 3,500 tonnes of waste material. We achieved an overall average recycle rate of 48%. In the last quarter of 2009/10 three production sites achieved a recycling rate of over 90%.

We are a signatory of the Courtauld agreement and we also signed up to Courtauld 2. Our Courtauld targets and our work with WRAP’s ‘Love Food Hate Waste’ campaign are outlined in our online CR report (published in summer 2010).

Finally we now include 10% recycled material in all of our plastic milk bottles and JUGIT uses 75% less packaging than a standard 2 pint bottle.

Minimising milk losses during processing
Chemical Oxygen Demand (COD) is a measure of concentration of waste organic materials in effluent. We measure COD as an indicator of milk loss during our processing activities. Some loss during cleaning is unavoidable but we aim at minimising this. Improvements of over 40% have been seen since 2002/03 although the last year has been slightly adverse due, in part, to improved sampling of high fat effluents. We aim to focus on reversing this trend in 2010/11 with a year-on-year improvement target of 3%.

Marketplace

Making our products healthier
Our vision includes a commitment to providing consumers with healthy, enjoyable, convenient products. To meet this commitment we have developed Country Life Spreadable Lighter, Cathedral City Lighter, Clover Lighter and 1% milk. We are pleased to report significant sales growth in all of them.

Clover Lighter now accounts for 14% of the brands volume, Country Life Spreadable Lighter 13% and Cathedral City Lighter 11%. Over the course of the year our 1% fat milk has made a big impact in Sainsbury’s, Morrisons, and Waitrose – with the combined volume exceeding 18 million litres. This year we have started to roll out 1% milk across our Household business.

As we are committed to seeking out and implementing the best and most hygenic manufacturing practices possible we have given ourselves the target of having all of our sites accredited to the Quality Management System ISO 9001 by 2011.

We continue to have dialogue with the Food Standards Agency regarding their targets for nutritional dietary improvement and we were happy to play a leading role in their recent healthy eating campaign. In particular, we have agreed to reduce salt in our cheese where this can be achieved without adverse impact on product quality. During the course of the year we have also completed the removal of trans fatty acids from our range of branded spreads.

We have supported both the IGD and Dairy UK proposals for declaring Guideline Daily Amounts on packs as the most sensible means of providing consumers with meaningful information on nutritional status.

Ethical sourcing
Over the course of 2009/10 we introduced a bespoke ethical supply policy and gave ourselves the initial target of signing up 10 of our key suppliers. Although we are slightly behind schedule with achieving this over the course of next year we will be looking at extending our policy to a further 50 suppliers.

We are aiming to source our palm oil from environmentally sustainable sources. To help us achieve this we have joined the Roundtable on Sustainable Palm Oil.

Improving relationships with our dairy farmers
We have around 1,350 direct suppliers providing us with 70% of our total milk requirements. A strong relationship with our farmers is fundamental to our business as we work to capture new market opportunities and improve efficiencies. Our aim is to continue to develop and enhance this relationship with our suppliers and to find new ways of working together. The progress we have made against this objective is set out in the Milk Procurement report on pages 29 and 30.