Morgan Sindall : 2023 Responsible business data sheet

Morgan Sindall Group plc

Responsible Business Data Sheet 2023

At a glance

We are a leading UK construction and regeneration group

Our purpose is harnessing the energy of our people to achieve the improbable.

Through six divisions, we deliver construction and regeneration for the public, commercial and regulated sectors.

Our talented teams, empowered by our philosophy of decentralisation, work hard to exceed the expectations of all our stakeholders.

Construction Regeneration

Construction

Construction Infrastructure

£966.6m	£886.7m
Revenue	Revenue

Education, healthcare,	Highways, rail, energy,
commercial,	water and nuclear
industrial, leisure	markets.
and retail markets.	morgansindallinfrastructure.com
morgansindallconstruction.com
	Infrastructure
	includes the
	BakerHicks design
	activities based out
	of the UK and
	Switzerland.
	bakerhicks.com

				Regeneration
Fit Out	Property	Partnership	Urban
	Services	Housing	Regeneration
£1,105.2m	£185.2m	£837.5m	£185.3m
Revenue	Revenue	Revenue	Revenue

Fit out and	Response and planned	Partnerships with	Transforming the
refurbishment in	maintenance services	local authorities and	urban landscape
commercial, central	for social housing and	housing associations.	through partnership
and local government	the wider public	Mixed-tenure	working and the
offices, as well as	sector.	developments,	development of
further education.	morgansindallpropertyservices.com	building/developing	multi-phase sites
	homes for open	and mixed-use
overbury.com
	market sale and for	regeneration.
		social/affordable rent,	museplaces.com
		design and build
		house contracting
Office interior design		and planned
and build services		maintenance and
direct to occupiers.		refurbishment.
morganlovell.co.uk		corporate.lovell.co.uk

This data sheet provides detail on our responsible business strategy and the metrics we use to monitor our performance on an annual basis.

It highlights the positive social and environmental impacts our initiatives are having on local communities and the internal governance processes we have in place to meet our stakeholders' expectations.

Contents

1. What it means to be a responsible business
2. Our responsible business strategy
3. Listening to our stakeholders
4. Our 2023 performance07 Protecting people
   08 Developing people
   09 Improving the environment
   11 Working together with our supply chain
   12 Enhancing communities

1. External accreditations

The data sheet forms part of our annual report suite and should be read in conjunction with our 2023 annual report, 2023 gender pay gap report, 2023 modern slavery statement and 2023 GRI (Global Reporting Initiative) report. Finally, for transparency and comparability, this data sheet includes non-financial figures for the last three years to allow for long-term trend analysis together with forward-looking targets that we aim to achieve in the years to come.

03

Social and environmental value

966

Apprentices and sponsorships for graduates and national vocational and professional qualifications (2022: 882)

270,000

Trees planted at Blenheim Estate for climate mitigation, enhanced biodiversity and community wellness

AAA

MSCI environmental, social and governance (ESG) rating (2022: AAA)

73p

Monetary value of social activities per £1 of project spend on 80 projects measured

(2022: 67p on 112 projects measured)

406

Members of the Morgan Sindall

Supply Chain Family

A

CDP score for our climate change disclosures and performance for the fourth consecutive year

04	Morgan Sindall Group plc
	Responsible Business Data Sheet 2023

What it means to be a responsible business

Generating positive outcomes for our workforce, clients, suppliers, local communities and the natural environment

Our responsible business strategy addresses the Group's most material ESG topics and reflects our Core Values. It is centred around five distinct, but interrelated Total Commitments: protecting people, developing people, improving the environment, working together with our supply chain and enhancing communities.

The Commitments were first established in 2008 and are now embedded into daily operations across the Group, delivered locally at an individual project level, and are a key component of our wider business strategy. As such we report our performance against our Total Commitments every year and set clear and ambitious targets that drive continuous improvement. In 2023 we reaffirmed our commitment to net zero by realigning our science-based targets with a 1.5oC scenario and successfully achieving revalidation by the Science Based Target initiative in March. We remain on track to meet our target of reducing our Scope 1 and 2 and operational Scope 3 emissions by 60% by 2030 and by 90% by 2045 from a 2019 baseline. We have further added to our targets and committed to reduce our wider Scope 3 emissions (emissions derived from the embodied carbon in materials, those emitted during construction and those estimated to be emitted from operating the buildings for 60 years after handover to the client) by 42% by 2030 and by 60% by 2045 from a 2020 baseline. Meeting these targets will require extensive collaboration with our supply chain and clients, and over the years we have fostered resilient, long-term relationships with them through effective engagement practices. We want to achieve our carbon reduction targets while looking after our own people and ensuring that their health and safety remains a top priority across the businesses. We are disappointed to see a worsening in our health and safety performance this year and recognise that we need to remain vigilant in seeking to reduce accidents. We continue to explore ways to enhance existing training and are considering how new technologies and leading indicators can support our teams to create safer working environments1.

This past year, I am very pleased that our strategy has garnered external recognition across the environmental, social and governance spectrum. We achieved a AAA rating from MSCI for the third consecutive year and an A score for leadership on climate change mitigation from CDP for the fourth consecutive year. We also won the award for Net Zero Innovation of the Year at the edie awards for climate leadership for our 'Growing Natural Capital' project in the Dorn Valley Woodlands in partnership with the Blenheim Estate. This achievement reflects over three years of ongoing partnership that culminated in the planting of 270,000 trees across nine woodlands that, in addition to storing carbon, has increased local biodiversity by over 75% and created

15 kilometres of new walking pathways for local communities. Projects like these illustrate the holistic approach we take to sustainability, i.e. integrating biodiversity, circular economy and decarbonisation considerations while simultaneously addressing local needs and opportunities to foster a more equitable and just transition. As well as being the right thing for us to do as an organisation, delivering social value is a business imperative with clients seeking our support on projects to address local community needs. Increasingly important to the Group is not only the immediate and direct economic benefits we generate via local procurement and job placements, but also implementing social value initiatives that will have a lasting impact beyond the completion of a project. As such we continuously focus on university and school engagements, providing apprenticeship training and work experiences for local people, partnering with charities and social organisations, and providing affordable and energy- efficient homes. The hard work of our teams is reflected in the 73p of social value per £1 spent on 80 projects, as measured by our Social Value Bank and £33.3 million as measured by the Social Value Portal.

Inclusion and diversity, in its broadest sense, is vital to our long-term strategy as different perspectives help us both challenge the status quo and drive innovation. Striving for greater inclusivity by breaking down barriers and increasing resources and skills development takes time; and while we know our diversity numbers continue to need improvement, we are witnessing incremental progress, and we are confident that the initiatives in place are the right ones to create an inclusive environment that will set up the business for long-term success.

In the following pages, you will find more details on our responsible business strategy, how we implement our initiatives, and our long-term ambitions and commitments, all in our determination to becoming a better organisation.

John Morgan

Chief Executive

• MSCI is a provider of decision support services for the global investment community; its ESG ratings are used by the majority of our major shareholders.

05

Our responsible business strategy

Our Total Commitments to our stakeholders

Protecting

people

Developing

people

Enhancing	Our Total
communities	Commitments

Improving the

environment

Working together with our supply chain

We have been using our five Total Commitments as a framework for our responsible business strategy since 2008.

For each Commitment, we have one or more formal key performance indicators (KPIs) in place against which we measure our progress towards 2025 and 2030 quantitative targets. In addition to the KPIs, we monitor our performance against a wide range of metrics. Since mid-2022, the Group's governance team has been undergoing a review of the data collection processes and methodologies used to report our non-financial data across the Total Commitments. The project includes the development of a central PowerBi platform where all metrics will be monitored and verified monthly. This will add an additional level of robustness and accountability to our ESG governance.

Our Total Commitments metrics and targets continue to be reviewed by our divisional forums (i.e. our climate action group, social value panel, protecting people forum and human resources forum), divisional boards, our Group management team (GMT) and the our responsible business committee. The committee's activities throughout the year assist the Board in its oversight of responsible business performance and governance to ensure we are prepared for ever-evolving regulatory requirements. More information on our ESG governance can be found on page 132 of our responsible business committee report in our 2023 annual report.

Our Total Commitments align with the UN Sustainable Development Goals to 'end poverty, protect the planet and ensure prosperity for all'. We have identified the following six goals as those where the Group can make the most impact:

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	Responsible Business Data Sheet 2023

Listening to our stakeholders

Ensuring our responsible business strategy remains relevant

Every two years, we conduct a new materiality assessment to ensure that our strategy continues to address our most relevant ESG topics and adds value to our stakeholders over the short to medium term. We conducted our latest assessment in 2023, starting with a comprehensive online survey which enabled us to measure both the relevance and significance of a wide range of social, environmental and governance topics. The survey also included text boxes for respondents to include commentary, explanations and examples, thus providing us with greater context to explore the materiality of the ESG topics.

A total of 2,680 people completed the survey: 2,125 employees and 555 external stakeholders including customers and suppliers. This represents a similar response rate to our previous assessment (2020: 2,937) and a higher participation of external stakeholders (21% compared to 15% previously). The initial findings revealed significant overlap and commonalities between material topics, suggesting that the Group's responsible business strategy is appropriate. We used the initial findings to guide 11 in-depth interviews with industry thought leaders and stakeholder representatives. Interview questions were geared towards exploring potential industry disruptions or long term-transformative trends that could impact the business and its operations. The assessment concluded that while various topics were material or borderline material, the most relevant issues continue to centre on climate change, responsible employment practices and workforce welfare (see page 21 of the 2023 annual report for the full outcomes of the assessment).

The materiality assessment reaffirmed that our Total Commitments framework continues to provide the right approach to our responsible business strategy. All material topics align with one or more of our Total Commitment and their objectives. The topics to the right were considered the most material by both internal and external stakeholders.

Protecting

people

Developing

people

Enhancing	Our Total
communities	Commitments

Improving the

environment

Working together with our supply chain

Our material issues

• Physical and mental health, safety and wellbeing
• Fair employment and no modern slavery
• Diversity and inclusion
• Employee capabilities strengthened and expanded
• Youth training and employment
• Net zero progress
• Protecting ecosystems
• Zero avoidable waste
• Resilient, responsible and engaged supply chain
• Diverse and local supply chain, including small- and medium-sized enterprises (SMEs)
• Positive environmental and social outcomes
• Ethical business and governance

Our 2023 performance

Protecting people

We aim to protect the health, safety and wellbeing of all employees and contractors connected to our business. We provide effective resources and the necessary training to minimise the occurrence of accidents on our sites and foster the physical and mental wellbeing and financial health of our workforce through initiatives, programmes and collaborative efforts.

Unfortunately, in 2023 our lost time incidents increased to 119 (2022: 104), our RIDDOR accidents increased to 37 (2022: 29) and our accident frequency rate increased to 0.08 (2022: 0.06). This decline in performance is due in part to our standards and procedures not consistently being adhered to. We recognise that we need to remain vigilant in seeking to reduce the number of incidents and ensuring that people working on our sites keep their own and their colleagues' safety at the forefront of their minds. Our divisions continue to explore ways to enhance their existing and ongoing training and supervisory resources and are considering how new technologies and leading indicators can support the teams

07

to create safer working environments. Our divisions continue to learn lessons from each accident, conduct regular and periodic audits and attempt to reduce and manage all risks through regular assessments and extensive training. They have continued to roll out new initiatives and reinforce existing ones to increase safety awareness and promote safe behaviours.

We support our colleagues' physical, financial and mental wellbeing by creating an environment where all employees feel safe and supported and where the importance of both physical and mental health is recognised equally. Throughout the year, the divisions host health-related awareness events across a wide range of issues such as menopause, stress alleviation, cancer screenings, healthy living and the de-stigmatisation of mental health struggles. The aim of these initiatives is to highlight the abundant resources provided by the divisions and available to employees.

Our human rights and modern slavery policies set out the ways in which we manage the potential risk of abuse in our operations and supply chains and in 2023 we introduced a Supplier Code of Conduct specifically for our supply chain partners that outlines both our commitment to treating all suppliers with dignity and fairness and the requirements, expectations, and standards we expect all suppliers to uphold while conducting business with us. More information on our activities to prevent modern slavery can be found in our annual report and our 2023 modern slavery statement on our website.

2023 2022 2021

Lost time incidents	119	104	136
Lost time incident rate2	0.24	0.22	0.29
Total number of RIDDOR3 incidents	37	28	44
Accident frequency rate (AFR4)	0.08	0.06	0.09
Accident incident rate (AIR5)	165	134	211
Percentage of employees working under a certified health and safety management system	100	99	99
Fatalities	0	0	0
Absenteeism due to sickness (average number of days per employee)	5.0	4.7	4.1
Monetary value of fines for non-compliance with health and safety laws and regulations	£0	£0	£0
HSE inspector site visit and investigation fees	£0	£0	£0

1. Number of lost time incidents x 100,000 divided by the number of hours worked. Lost time incidents are those resulting in absence from work for a minimum of one working day, excluding the day the incident occurred.
2. The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013.
3. The number of RIDDOR reportable accidents multiplied by 100,000 and divided by the number of hours worked.

• The number of accidents multiplied by 100,000 and divided by the average number of people on site.

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	Responsible Business Data Sheet 2023

Our 2023 performance continued

Developing people

We create an inclusive culture where everyone feels valued and respected for who they are and provided the resources necessary to excel.

A diverse and talented workforce is fundamental to our business, and we continuously strive to improve the ways in which we attract, develop and retain the best possible people. To communicate the benefits of a potential career in construction, we maintain national partnerships with Women into Construction, Working Families/Working Mums, BPIC (Black Professionals in Construction) and Build Force UK.

We also engage directly with educational providers across the UK and the 5% Club, a national campaign to generate opportunities for graduates and apprentices, to provide young people with work experiences and training and show them the various pathways available into the industry.

This year we became a Silver member of the Armed Forces Covenant, signalling our commitment to supporting the career development of former and current military members.

These and other initiatives illustrate how we consider diversity in the broadest sense, including age, gender, ethnicity, culture, socio-economic background, disability and sexuality.

For those who join our teams, we focus on providing clear career pathways and the resources they need to help them achieve their full potential. This includes flexible working arrangements, comprehensive benefits packages, leadership training and skills development opportunities and mentorship. Our divisions strive to foster an inclusive and collaborative work environment through cultural events and activities and hold regular engagement surveys to actively encourage dialogue and ensure we are delivering a rewarding and satisfying workplace for everyone. We have been recognised externally, with four of our businesses maintaining their accreditation from Investors in People (Construction holds Platinum status and Infrastructure, Partnership Housing and Urban Regeneration each hold Gold status), demonstrating

a fulfilment of commitment to our employees.

2023 2022 2021

Number of UK employees at 31 December6	7,498	7,058	6,509
Average number of training days per employee	3.2	3.2	3.5
Average number of training hours per employee7	25.7	25.7	21.0
Employees who have been with the Group six years or more (%)	37	37	37
Men employed (%)	74	75	75
Women employed (%)	26	25	25
Women on the Board (%)	37.5	37.5	37.5
Women in senior management (GMT) (%)	10	18	9
Women who are direct reports of the GMT (%)8	36	32	21
Median gender pay gap (%)	29.1	30.6	29.6
Employees from ethnic minority backgrounds (%)	10	8.6	8.74
People employed aged 24 or under (%)	8	8	8
Average age of employees	42	42	42
Voluntary employee turnover (%)	12.4	15.0	13.0
Number of employees promoted internally	674	883	535
Number of employees who completed the leadership development programme	67	65	20
Number of cohorts who completed the leadership development programme	5	4	2
Employee participation in satisfaction surveys (% responded)9	66	87	62
Number of raising concerns reports	58	36	39
Average number of raising concerns reports per 1,000 employees	7.7	5.1	5.1
Employees covered by collective bargaining agreements (%)	3	5	8
Total number of new employees	1,943	2,002	1,538
New hires (%)	26	28	24
Number of new graduates recruited	82	78	61
Number of sponsored students	42	67	44
Total employees on structured training programmes	483	425	336
Percentage of total employees on structured training programmes	6.0	6.0	5.0
Number of people supported through NVQs and professional qualifications	565	535	532

• The number of employees is comprised entirely of our direct UK-based employees for the 12-month period. We do not include any temporary workers and subcontractors who deliver our projects

1. A training day is a minimum of six hours' training.
2. The GMT is our Group management team, which includes the executive directors, company secretary, Group commercial director and divisional managing directors.

• Property Services, Fit Out, Infrastructure and Urban Regeneration completed surveys in 2023.

Our 2023 performance continued

Improving the environment

We are working towards net zero by creating sustainable living spaces, developing a circular economy to minimise waste, and enhancing biodiversity.

As part of our net zero ambition in 2023, we had our emission targets revalidated by the Science Based Targets initiative (SBTi) to align with a 1.5°C scenario and extended our commitment to further reduce our Scope 1 and 2 and operational Scope 3 emissions by 90% by 2045 and our wider Scope 3 emissions by 60% by 2045. These targets now encompass the lifecycle of carbon associated with our projects, including both the embodied carbon in our building materials and the operational emissions expected to be generated over 60 years after handover of a building. We are on track to meeting these targets and in 2023, we achieved a reduction of 45% in our Scope 1 and 2 emissions and operational Scope 3 from our 2019 baseline. While we experienced a slight 1.6% increase carbon emissions in 2023 compared to our 2022 performance, our carbon intensity figure has continued to decrease, illustrating how we have managed to curb emissions while simultaneously growing the business and expanding our project portfolio. We are working to improve the quantification of our wider Scope 3 emissions and in 2024 we will be recalculating our 2023 and historical figures to reflect more accurate data generated through our carbon reduction tool, CarboniCa. This will require us to engage with clients and suppliers. We will report our wider Scope 3 emissions from 2024 onwards and our revised 2023 figures will be included in our upcoming CDP submission. Our supplier engagement on climate change continues to be recognised by CDP, as we have been named a Supplier Engagement Leader for the fourth consecutive year. In 2023 we completed 191 sustainability-accredited projects and used CarboniCa on 280 projects. Our divisions also retrofitted 715 homes to make them more energy efficient.

09

While our decarbonisation plans are robust, we recognise that our route to net zero will require offsetting residual emissions by investing in high-quality UK based projects that. in addition to storing carbon, foster community benefits and enhance biodiversity. We have completed the planting of 270,000 trees across nine woodlands on the Blenheim Estate in Oxfordshire, with the final two woodlands completed in 2023. At Lakenheath, planning permission has been granted and we have begun restoring the wetlands, thereby expanding the habitat for local wildlife and endangered birds. Meanwhile rewetting has begun in the Great North Bog, a peatland restoration initiative in northern England that, in addition

to storing up to 400 million tonnes of carbon, has the potential of generating valuable nature credits for the Group. Our divisions are also proactively integrating biodiversity into design decisions and measuring the biodiversity net gain of their projects where required or requested by clients. When regenerating towns and city centres, we strive to develop mainly brownfield areas to avoid additional environmental disturbances. Our sustainable timber policy also ensures we only use material from responsibly managed forests and are FSC and PEFC certified.

We continue to appropriately manage the waste that we generate by participating in manufacturers' take-back schemes and working with our supply chain and other stakeholders to reuse waste responsibly. We send waste to landfill as a last resort and ensure waste is minimised throughout the life of any project we construct, design or maintain. In 2023 we successfully rolled out a new waste system that enables our teams to quantify the monetary value lost through waste generation and provides them with additional data insight to reduce project costs and increase efficiencies. We avoid the use of hazardous substances whenever possible and, if needed, will reduce negative impacts through appropriate management and disposal.

In addition, our divisions continue to work with suppliers to minimise/remove plastic packaging on deliveries and seek to remove single-use plastics from projects and offices.

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	Responsible Business Data Sheet 2023
	Our 2023 performance continued
	Improving the environment
			2023	2022	2021
		Reduction of Scope 1 and Scope 2 carbon emissions10 from 2019 baseline of 20,903 tonnes CO e (%)	45	45	35
	2
		Reduction in operational Scope 311 carbon emissions from 2019 baseline of 6,339 tonnes CO e (%)	17	24	45
	2
		Scope 1 carbon emissions UK and offshore (tonnes CO2e)	8,733	9,528	11,243
		Scope 2 carbon emissions UK and offshore (location-based method) (tonnes CO2e)	2,691	2,069	2,352
		Total Scope 1 and Scope 2 carbon emissions (tonnes CO2e)	11,424	11,597	13,595
		Operational Scope 3 carbon emissions UK and offshore (tonnes CO2e)	5,250	4,814	3,502
		Total Scope 1, 2 and operational Scope 3 emissions (tonnes CO2e)	16,674	16,411	17,097
		Carbon emissions from vehicle fleet12 (tonnes CO e)	8,871	8,750	7,320
	2
		Reduction in carbon emissions from our vehicle fleet from 2019 baseline of 12,078 tonnes CO2e	27	28	39
		Carbon intensity Scope 1 and 2 emissions (tonnes CO2e produced/£m revenue)	2.8	3.2	4.2
		Carbon intensity - total emissions	4.0	4.5	5.3
		Number of projects using CarboniCa13	280	142	41
		Total number of vehicles in company fleet	2,891	2,454	2,181
		Number of hybrid vehicles in company fleet	928	735	609
		Percentage hybrid vehicles in company fleet	32	42	28
		Number of electric vehicles in company fleet	936	580	275
		Percentage electric vehicles in company fleet	32	24	13
		Electricity purchased from renewable sources (%)	70	65	72
		Electricity as percentage of total energy consumption	15	13	15
		Gas purchased from renewable sources (%)	0	0	0
		Gas as percentage of total energy consumption	2	2	2
		Total waste produced (tonnes)	485,722	373,071	859,081
		Total waste diverted from landfill (tonnes)	454,722	358,794	851,081
		Total waste diverted from landfill (%)	94%	96%	99%
		Waste intensity (total waste produced/£m revenue)	118	103	267
		Construction waste produced (tonnes)	96,141	91,195	40,662
		Construction waste diverted from landfill (%)	98	96	97
		Number of projects achieving BREEAM, CEEQUAL, LEED, SKA or other industry-relevant	161	109	99
		sustainability ratings
		Major environmental incidents	0	0	0
		Monetary value of significant fines for non-compliance with environmental laws and regulations	0	0	0
		Subcontractors (by spend) requested to report their own carbon emissions5	£224m14	£649m	£589m
		Subcontractors (by spend) with accredited science-based targets	0	0	0

1. Scope 1: direct emissions from owned or controlled sources; Scope 2: Indirect emissions generated from purchased energy.
2. All indirect emissions not included in Scope 2 that occur in limited categories of our value chain as measured by the Toitū 'carbonreduce' scheme.
3. Vehicle carbon emissions are included in the calculation of Scope 1 emissions but are reported separately as they are a significant source of the Group's emissions.
4. CarboniCa is a tool developed by the Group that calculates the total carbon emissions of a project and building at an early stage of the design, including carbon embodied in the materials (incurred in production, transport and waste) and projected emissions from the building throughout its lifecycle.
5. For 2023 we are reporting the data from the Supply Chain Sustainability School only. This has resulted in the figure reducing from £649m in 2022 to

£224m in 2023.