FM Conway ESG Ratings Report 2021

Our Approach

2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RATINGS REPORT

Contents

3

Context of ESG at FM Conway

4

Overview

5

Strategic Approach to ESG Issues

7

Key Issues

9

How we Capture and Report on Data

10

Growing ‘Green’ Revenues

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Summary

Context of ESG at FM Conway Increasingly important for the investment community, ESG ratings provide a risk and opportunity review against the current environmental and social drivers facing businesses, as well as providing a reflection on how a company measures up against the regulatory framework and best practice in reporting and governance. At FM Conway we have a track record of recognising the importance of these issues and leading from the front in addressing these challenges, which over the last 30 years have constantly grown in importance. Along with the majority of the scientific community, at FM Conway we realise that climate change is both a real and present danger, but also something that the business community can act upon to bring real positive change. Approaching 70% of the population now live in areas where climate change emergencies have been declared and at FM Conway we are committed to reducing carbon in every aspect of our operations, and to supporting our customers in their aspirations to achieve ‘net zero carbon’. Similarly, we understand our social and community responsibilities and the pandemic has only increased our determination to play an active role in the health, wellbeing, and prosperity of the communities in which we operate. Our Mission To transform the built environment using sustainable, innovative, self-delivered, quality services; working together as a family with our people, our customers and our communities. Our Values

CARE As a family business we act with care and compassion

INNOVATION Our passion is to always find a better way

INTEGRITY A business committed to doing the right thing

EXCELLENCE Great people delivering great work, always

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Overview At FM Conway look to meet our Environmental, Social and Governance responsibilities comprehensively; we seek transparency in all reporting requirements of the UK regulations, reflecting not only the legislative aspect but also the intent. For example, issues raised by Gender Pay Gap reports on the disparity in the number of females working in the industry has inspired us to pilot female only work experience, increase the percentage of female apprentices, and during COVID-19, FM Conway’s support of the Government’s Kickstart initiative has seen 60% of Kickstart recruits being female. Similarly, in environmental legislation, in addition to meeting all the reporting requirements, our new innovations and opportunities seek not just to meet regulations, but to increase the speed of our improvement and progress wherever possible. This is in part explained by our history; while many companies are having to try and implement a new culture into their operations to meet the new environmental and social landscape, at FM Conway it is simply a case of building on what already exists. Our track record on recycling, investing in greener technologies, and a spirit of innovation have been central to the company’s growth and success. Our United Kingdom Accreditation Service (UKAS) accredited Technology Centre is at the heart of FM Conway’s materials innovation, and the drive to ‘find a better way’ is also central to Conway’s ambition to be ‘net zero carbon’ 5 years ahead of the Government’s target. Our constant research into ‘greener’ product solutions has already placed the company at the forefront of ‘green’ infrastructure. Recognition as “one of the greenest road-working companies in the whole of the world” by the Prime Minister Boris Johnson, is a significant recent accolade. We have developed and championed an ‘eco’ product range of paving solutions and services to reduce carbon for customers, and internally FM Conway is taking a pro-active approach to reducing carbon, with HVO (Hydrotreated Vegetable Oils) fuel trials, green electricity, and the appointment of a Carbon Manager all supporting our proactive approach to carbon reduction. FM Conway is equally committed to the social aspects of our performance. We have introduced an industry leading approach to health and safety (named the Big Ten in 10), seeking to eliminate operational risks by engineering them out of high-risk processes, as opposed to depending on people’s behaviours and have introduced both an Equality, Diversity, and Inclusion (EDI) Strategy and a Mentally Healthy Together Programme, both of which look to further promote an inclusive and supportive working environment. Central to our community engagement is the Conway Charitable Foundation which has donated over £500,000 to the communities in which we operate, since its inception in 2013. FM Conway is championing approaches to support the ‘Build Back Better’ campaign and the ‘Green Revolution’ promised for the UK economy, pro-actively addressing the environmental and social challenges we all face. Methodology We have structured this review of our ESG activities against the London Stock Exchange Guidance (LSEG) on reporting ESG performance. Further information can be found in our Corporate Social Responsibility (CSR) report, Sustainability Strategy and on our website.

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Strategic Approach to ESG Issues

ESG considerations sit at the heart of what we do, as outlined in our Mission Statement, they have been central to much of our recent history and help shape our plans for the future.

FM Conway has a track record of championing ‘greener’ building solutions. We have a comprehensive Sustainability Strategy and are already piloting zero carbon solutions with some of our customers. Additionally, we continually seek to utilise technology to save resources and work with customers to predict future maintenance needs, and therefore deal with issues at an early intervention stage saving resources, disruption, and cost. Our Track Record Includes: Thought Leadership - FM Conway has championed Recycled Asphalt Products (RAP) for many years, we look to be innovative in our approach and operate our own UKAS accredited Technology Centre. Surfacing materials containing 50% recycled material on the M25 and 85% recycled in the Queens District of Westminster are challenging conventional wisdom and providing more sustainable outcomes for our customers, while maintaining the highest of standards for road infrastructure. Our Drainage Water Treatment Plant was also a significant large-scale investment which remains a unique facility in the UK; allowing gully water to be used in the industrial cleaning of aggregate while simultaneously reducing wastewater sent as a hazardous waste to land fill, and significantly reducing the need for ‘fresh’ water required for the process. Recycling Aggregates – FM Conway has been recycling aggregates for the past 30 years, this industry leading approach was following the principles of the circular economy well before the term was coined. Sustainability Strategy - During 2019, we put a comprehensive 4-year Sustainability Strategy in place covering over 40 strategic targets with a related action plan linking key performance indicators to the appropriate person or team within the organisation. The strategy is multi-faceted, addressing issues important to the climate change agenda, to employees and their welfare, and to customers and suppliers. The strategy looks both to generate social value and link into the worldwide framework provided by the United Nations Sustainable Development Goals (UN SDGs). Carbon Reduction Plan - As a central part of the Sustainability Strategy, our carbon reduction targets are also dealt with distinctly, recognising the importance of this agenda and drilling into every aspect of the business where carbon is produced and can therefore be reduced. At FM Conway we have publicly committed to being net zero carbon by 2045, five years ahead of the UK Government current target. Customer Solutions - In addition to the above, all of which ultimately provide solutions to customers and provide ESG value in FM Conway’s customer supply chain, Conway travel the extra mile to ‘find a better way’ examples of which include the observation and active monitoring of both road and drain conditions to pre-empt problems and provide early intervention. Keeping the road infrastructure up and running and in the case of drains and gullies, identifying potential flood risk before it happens, allowing for preventative work which lessens the likelihood of flooding and the expense of dealing with the aftermath of floods. Hydrotreated Vegetable Oil (HVO) Pilot - As part of our Carbon Reduction Plan the key area of fuel usage (accounting for 60% of the FM Conway carbon footprint) is being singled out for prioritisation and an HVO fuel trial is already underway in both plant and vehicles.

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Other Transport Initiatives (Cargo Bikes) - Although it is currently a limited opportunity within our operations, FM Conway has also trialled the use of non-fuel transport, with Cargo Bikes being used for the transportation and delivery of light materials, in particular on the award winning “Illuminated Bridges” project in central London. The electric Cargo Bikes have zero carbon output and zero Nitrous Oxide (NOx) supporting the capital’s air quality aspirations and targets. Westminster Pilot - Long-term relationships and partnerships which go well beyond the transactional have been formed with many of London Boroughs, one over a period of 40 years. Currently FM Conway is working in partnership with Westminster Council trialling a zero-carbon project, and we are also working with a number of partners on shared approaches to cutting carbon. This includes multi- disciplinary partners working collaboratively through carbon workshops, sharing best practice and joint delivery plans. Supply Chain Programme - Pre-pandemic FM Conway had established a Supply Chain Programme to engage key suppliers and cascade sustainability messaging. Speakers included Transport for London (TfL), the London Borough of Hammersmith and Fulham, as well as supply chain partners and construction related charities like the Lighthouse Club Construction Charity. The programme looks to maximise the environmental and social impacts we can deliver through partnership working.

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Key Issues ‘How do FM Conway address the key areas of environmental and social impact central to our ongoing long- term success?’ We have produced the table below against key issues outlined in the London Stock Exchange Guidance document on ESG Reporting, the activity listed is not exhaustive but gives an indication of our direction of travel.

Carbon Emissions Independently assessed carbon data is available on the website and in the CSR report, as well as through the mandatory reporting SECR (Streamlined Energy and Carbon Reporting) process. Our direction of travel is positive. Recycled Waste High levels of recycled waste via our innovative use of road arisings and drainage water (mentioned under hazardous waste). RAP with as much as 85% recycled content is now being produced.

Energy Use Mandatory SECR reporting demands both performance data and indicative future plans. We are piloting energy efficiencies well above minimum requirements. A Carbon Manager has been appointed. Social & Community Investment Significant levels of social and community investment, both through the Conway Foundation (£520,000 donated since 2013) and through our investment of time and effort into disadvantaged groups and young people. Social Value is independently evaluated at over £6 million per annum. Staff Attrition Rates Currently at 15.51%. This is an acceptable level of staff turnover in our sector. However we are actively engaging staff including via our employee survey ‘Have Your Say’ is looking to reduce staff turnover further.

Hazardous Waste We are an industry leader in diverting hazardous waste from landfill, with the significant investment in a Drainage Water Treatment Plant a key element of this reduction.

Non-Recycled Waste Our business has very low levels of waste going to landfill, and our target is zero.

Environmental Management All key areas are covered in our

Health & Safety Management Health and safety

performance is at the heart of our operations including a recently launched 10-year program to improve even further. Big Ten in 10 is our Safety Strategy looking to eliminate risk areas that have the potential to cause life changing harm. Modern slavery Our Modern Slavery policy is in place and available on the website. The approach we take to Modern Slavery is extensive with every worker on site receiving training in spotting potential signs of modern slavery.

Sustainability Strategy and key performance indicators are assigned to named individuals or teams. Our performance on the environment and reducing the environmental impact of the company reflects a robust environmental management process.

Health & Safety Training Health and safety

Environmental Fines Nil.

training is extensive as is the communication of key initiatives. Toolbox Talks on safety matters are held at all operational sites.

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Water Use Identified nationally through case studies by the Waste and Resources Action Programme (WRAP) as an exemplar company on the use and management of water.

Share of Temporary Workers Contingent workers represent a high percentage of our workforce. This is our normal operational model, providing the business with flexibility in its operations. Data Protection Data security meets all major customer requirements and is the subject of various and repeated testing. We are Cyber Essential certified and the process to achieve ISO27001 is underway.

Employee Training Hours We undertake

Independent Directors An independent Chair and 3 independent

extensive employee training. 380 training classes have been provided in last 12 months covering 69 different courses (1987 attendees). Equality, Diversity and Inclusion Our EDI strategy was recently launched. Up to 48 nationalities currently work at FM Conway. Female and BAME (Black, Asian, Minority Ethnic) representation in the workforce reflects industry averages and is increasing.

Non-Executive Directors sit on our board.

Political Contributions Nil.

Corruption Fines Our Bribery Policy is on the website. Training and on-going communication on the Bribery Act is undertaken annually.

A programme of continuous

improvement and investment are well established.

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How we Capture and Report on Data Overview

Our data in all significant areas of environmental and social impact is checked by independent 3rd parties and our systems are also subject to external audit from the likes of British Standards Institute (BSI) and the International Organisation for Standardisation (ISO). Cross referencing of Energy Saving Opportunities Scheme (ESOS) data, Carbon Footprint data and Streamlined Energy and Carbon Reporting data helps ensure accuracy and internal checks. We have also appointed a Head of Carbon and Environment to further interpret data and focus on reduction. Examples: ESOS – The Energy Saving Opportunities Scheme is a mandatory reporting requirement, which established levels of energy use and opportunities for reduction. Data is collated and submitted in line with regulatory requirements. SECR – The Streamlined Energy and Carbon Reporting requirement is similar to the above but focuses more on carbon and requires an organisation to report on potential improvement measures in their annual report and accounts. FM Conway meets all the requirements under this legislation. ISO – An excellent relationship exists between the International Organisation for Standardisation and FM Conway and our Integrated Management System (IMS) and Road Safety Manager is the head of the UK delegation to ISO / TC 241 on Road Safety. Social Value – has been calculated by external consultancies in line with The National Themes Outcomes and Measures (TOMs) calculation method used by the majority of construction companies and public sector bodies. As data capture and engagement continue to grow, our Social Value calculation is increasing annually. Research & Development Work on Products – FM Conway also has its own research and development function looking at high recycled content asphalt and is pushing the boundaries on the reduction of virgin material in road surfacing. The FM Conway laboratory is UKAS accredited. United Nations Sustainable Development Goals – FM Conway’s Sustainability Strategy and CSR reporting are both framed around the UNSDGs, with specific reference to climate change and the commitment of FM Conway to be net zero carbon by 2045. Governance - Governance is covered on the website which outlines Board composition and regulatory requirements such as Gender Pay-Gap and Modern Slavery. All mandatory reporting requirements are provided at the bottom of the FM Conway home page to ensure transparency. Training on topics such as Modern Slavery and Bribery and Corruption go well beyond minimum requirements. An example of which is covering 6 key points to be aware of in relation to Modern Slavery and ensuring all operational staff are aware of these and for the format for reporting any concerns. ‘Speak Out’ , our system which allows any employee to identify an area where they feel we are falling below our high standards in any aspect of our performance, is regularly communicated to our people and every call is investigated and documented. FM Conway is accredited to ISO Standards 9001, 14001, 39001, 45001. BSI – Our recent British Standards Institute audit (undertaken virtually over two days due to the pandemic) found all systems and reporting to be in excellent shape.

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Growing ‘Green’ Revenues

In terms of our approach to key areas of ESG performance, we also attach great relevance to the potential growth in revenue due to FM Conway’s green products and services. Overview Our track record of environmental innovation is ensuring the company remains well positioned for growth in challenging environmental times. In partnership with key customers including Highways England, we are helping to set the standards for high recycled content asphalt road surfacing options across the UK. We have been producing recycled aggregate for over 30 years. Additionally, our investment in the Drainage Water Treatment Plant with its significant water savings are already components for what we believe is a compelling and sustainable business case. The pressing climate change emergency has increased the focus on the work we are carrying out and has led to increasing collaboration with our customers on ‘green’ issues. Currently the breakdown of revenues between normal asphalt and greener asphalt contracts is not produced and this is something we may look to address at a future point. Example: Westminster Case Study We have been working with Westminster City Council to push the boundaries of materials recycling in the highways industry once again, recently laying a surface course containing a warm mix of 85% recycled materials: an industry first. Our single layer solution, SureLayer® E, was laid on Third Avenue in the Queens Park district of Westminster, delivering a recycled content of 85% which was a combination of high Polished Stone Value (PSV), RAP and ‘recovered aggregate’. This product is challenging conventions around the amount of RAP incorporated in road surfaces and is also delivering carbon savings via the use of a more sustainable warm mix content. Warm mix asphalt is mixed and laid at a reduced temperature, which cuts energy usage and reduces the associated carbon when compared to a traditional hot mix asphalt. As a result, the use of SureLayer® E in the overall scheme, including transport, produces a 40% carbon saving over traditional hot mix asphalt. In total, the 760 tonnes of material supplied by our Heathrow asphalt plant were laid in a single layer by our surfacing division, which increased productivity and reduced the number of lorry movements by 55%.

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Summary FM Conway is committed to delivering excellence across Environmental, Social and Governance issues. Our history is one of Thought Leadership, Championing of Materials Recycling, Recycled Asphalt Products, and the Circular Economy; a proactive approach to sustainability and adding social value is both our history and our future. Our recent ten-year strategy shapes the outlook of the company based on the three pillars of Self- Delivery, Carbon and Environment, and Technology. We believe that this is an excellent foundation for maintaining and improving our ESG performance as Self-Delivery gives us much greater control over every aspect of our performance, technological innovation will keep us substantially ahead of our competition, and a focus on carbon and recycling means that we will achieve our ambitions without compromising future generations. Our comprehensive Sustainability Strategy has improvement targets for every aspect of our performance, both environmental and social, and the Company is committed to achieving ‘net zero’ by 2045, five years ahead of the UK Government target. Our Sustainability Strategy has over 40 Key Performance Indicators (KPIs) helping to measure our progress in shaping our aspirations for the future. A key element of our aspirations for the future is based on driving materials innovation. Our materials portfolio is developed to deliver sustainable solutions which address the current climate emergency and meet the evolving needs of the construction industry. We have a UKAS accredited laboratory at our Technology Centre and its facilities play a vital role in our commitment to innovation in sustainable material solutions. It ensures we can design, test, and produce these solutions which allow us to continually raise the bar on material innovation. Our commitment to the environment is matched by our commitment to our communities. The Conway Charitable Foundation was established in 2013 and donates significant finance and time to our charity partners both national and local. In addition to the work of the Foundation, our work experience and apprenticeship programme, our award-winning work with veterans and the disabled, and our partnership with the London Construction Academy, (a pre-employment programme supporting the disadvantaged), supports us in our efforts to take an inclusive approach in offering insights and opportunities within our industry. Finally, and underpinning everything we do, is our commitment to Health, Safety and Wellbeing. Our people are our greatest asset and therefore ensuring the workplace is somewhere where they can thrive is very important to us. Our Big Ten in 10, Health and Safety programme is looking to remove operational risk from activities which on previous data have caused the most harm in our industry, our championing of Fairness, Inclusion and Respect (FIR) as well as our pro-active commitment to Mental Health forms the basis of a workplace where our people feel safe, valued, and respected. FM Conway also takes a comprehensive approach to combating Modern Slavery in all its forms throughout our operations. Our ESG commitments are the foundation of a future as successful as our past, a company based on safety, innovation, and sustainability. A company which works with integrity, and in collaboration with our customers and wider stakeholders to deliver commercial excellence based on respecting of the environment and the supporting of our communities.

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RATINGS REPORT 2021

EXCELLENCE Great people delivering great work, always

CARE As a family business we act with care and compassion

INNOVATION Our passion is to always find a better way

INTEGRITY A business committed to doing the right thing