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					  Corporate Social Responsibility Review 2003




       Corporate Social
Responsibility
                     Review 2003
   Vision                                     Mission      Values
   The standard against which Making aspirational quality Quality, value, service,
   all others are measured    accessible to all           innovation and trust




   Contents

 1 Introduction from Luc Vandevelde
       Our philosophy and principles

 2 Our heritage
       Social responsibility in Marks & Spencer

 3 Governance
       Corporate Social Responsibility Committee

 4 Listening
       How we listen to our stakeholders

 6 Our principles in action
       Introduction

 7 Principle one – Take care and act
   responsibly in delivering high quality
   products and services
       Introduction
       Review of progress and priorities for next year
       Product safety
       Sustainable raw materials
       Animal welfare
       Reducing waste from packaging and products
       Reducing energy, water use and waste
       Responsible financial services

18 Principle two – Create great places to work
       Introduction
       Review of progress and priorities for next year
       Ethical trading
       Communication and consulting
       Rewarded for superior results
       Build on strengths and develop skills
       Health, safety and wellbeing

25 Principle three – Help make our
   communities good places in which to live
   and work
       Introduction
       Review of progress and priorities for next year
       Community involvement

   Summary
                                                                                                  www.marksandspencer.com   1




Introduction




Luc Vandevelde Chairman
Welcome to our first publication        our CSR heritage and tried to make      principle to a third aspect of our
on Corporate Social Responsibility –    it fresh, relevant and effective. And   CSR activities – our work in the
or CSR for short. It explains how       just as we listened to our customers    community. Under the philosophy
we as a company are seeking to          to get our products right, we’ve        of helping others to help
meet our social, environmental          taken our CSR priorities from the       themselves, our aim is not simply to
and ethical responsibilities and to     things that you, our stakeholders,      give money but to try and tackle the
satisfy the expectations of all those   have told us are important.             root of the problem. A case in point
involved in our business.                                                       is our decision to offer two-week
                                        This process has focused our
                                                                                work placements in our stores to
Our approach to CSR is not just         attention on three main themes
                                                                                600 homeless people over the next
to tick off boxes to say we’ve          that have always been at the heart
                                                                                two years, so helping to break the
complied. Instead, we’ve done           of our business.
                                                                                cycle of no home, no job, no home.
some hard thinking on how we
                                        The first is the products we sell. We
can genuinely contribute to the                                                 This publication addresses each
                                        know that many of our customers
societies in which we operate.                                                  of those three themes in more
                                        are concerned that their purchases
                                                                                detail. As Chairman of the
We start with the great advantage       are produced in an ethically and
                                                                                Marks & Spencer CSR Committee,
that Marks & Spencer has always         environmentally responsible
                                                                                I hope it provides the kind of
been a socially responsible             manner. We want to meet that need
                                                                                information you find most useful.
business. This ethos showed itself      – and are well placed to do so
                                                                                I’m also concerned that we measure
in the Company’s determination to       because we have total control of our
                                                                                the impact of our CSR activities.
offer quality products by dealing       products. That’s why, for example,
                                                                                While this review is mainly about
directly with manufacturers,            we now guarantee that all the eggs
                                                                                philosophy and principles, future
to provide excellent working            in our food products are free-range.
                                                                                publications will contain more by
conditions for its employees and
                                        The second theme you’ve told us         way of hard data to demonstrate
to make local communities better
                                        is important is the way we relate       our progress.
places to live and work.
                                        to our employees. A key feature
                                                                                CSR is a matter of continuous
Despite the tough conditions we’ve      of our recovery was creating an
                                                                                evolution. As in all aspects of our
faced in recent years, these values     environment that allows people
                                                                                business, we’re keen to listen and
have persisted and are deeply           to be at their best. This adult-to-
                                                                                ready to improve. We welcome your
ingrained in the way we run our         adult relationship between the
                                                                                comments and will do our best to
business. Everything we do is           Company and its employees makes
                                                                                keep meeting your expectations.
influenced by the notion of good        Marks & Spencer a better place
corporate behaviour.                    to work while also producing
                                        superior results.
We initiated our commercial
recovery by going back to the           Having seen that this approach
fundamentals of the business. In the    can make a real difference to our       Luc Vandevelde
same way, we’ve looked again at         business, we’re applying the same       Chairman
2   Marks and Spencer Group p.l.c.




    Our heritage

    ‘We realise the main prop of our         1933                                      1996
    organisation is the goodwill of our      Chairman Simon Marks commissioned         Fleet of liquefied and compressed
                                             Flora Solomon to set up a staff welfare   natural gas food delivery vehicles
    public. This goodwill can only be
                                             programme providing pensions,             launched.
    maintained and extended by giving
                                             subsidised canteens, health advice,
    our customers the satisfaction of                                                  Marks & Spencer becomes a founding
                                             hairdressing, rest rooms and camping
                                                                                       member of the Business in the
    knowing that to shop in our stores is    holidays.
                                                                                       Environment Index, and is the highest
    to purchase goods of outstanding         1934                                      ranked retailer.
    value and merit, and to gain the         Marks & Spencer established a
                                                                                       1999
    benefits of our long experience in       scientific laboratory to improve
                                                                                       Marks & Spencer published its Global
    retailing. We are never satisfied with   products.
                                                                                       Sourcing Principles.
    our achievements. We believe we          1941
                                                                                       2000
    can still, by helping to bring about     Staff raised funds for the war effort.
                                                                                       Marks & Spencer joined the Ethical
    more scientific production and by        1959                                      Trading Initiative.
    further economies in our costs of        Marks & Spencer became the
                                                                                       ‘Count On Us’ healthy option foods
    distribution, improve the standards,     first British retailer to introduce
                                                                                       launched and pilot ranges of organic
    values, and prices of our goods,         No Smoking rules.
                                                                                       cotton clothing introduced.
    and so increase the number of our        1970s
                                                                                       Children’s Promise Millennium
    customers and our turnover.’             Donations of unsold foods to local
                                                                                       campaign raised £21m for
                                             charities started, and reusable plastic
                                                                                       disadvantaged children.
    This could easily be a comment           trays for food deliveries to stores are
    from this year’s Annual Report, yet      introduced.                               2001
    it was actually made by a former                                                   Company-wide employee
                                             1975
                                                                                       representation forums known
    Chairman of Marks & Spencer over         Scheme for recycling unwanted coat
                                                                                       as Business Involvement
    70 years ago. It represents what         hangers is introduced at all stores.
                                                                                       Groups launched.
    we might call the enlightened self       1980s
                                                                                       Marks & Spencer announced
    interest that has always been a          Marks & Spencer became a founding
                                                                                       targets to work towards fruit,
    keystone of the Marks & Spencer          member of Business in the Community
                                                                                       salad and vegetables free from
    philosophy. Since our beginnings         following urban riots, based on
                                                                                       pesticide residues.
                                             philosophy of ‘healthy high streets
    in 1884 we have always believed
                                             need healthy back streets’.               Included in first and subsequent
    that employing business practices                                                  revisions of FTSE4Good ethical
                                             1985
    which benefit society as a whole                                                   company index.
                                             Marks & Spencer Chargecard
    will contribute to the Company’s
                                             launched.                                 2002
    long-term performance.                                                             First major UK retailer to sell and use
                                             1991
    1884                                                                               free-range eggs in all food products.
                                             First ranges of organic foods
    Michael Marks, a Russian-born Polish     introduced.                               Launch of fuel efficient ‘Urban Delivery
    refugee opened his first stall in                                                  Vehicle of the Year’.
    Kirkgate market.                         1992
                                             Marks & Spencer published its first       ‘Rainbow of Hope’ Queen’s Golden
    1894                                     brochure detailing environmental          Jubilee campaign in support of
    Tom Spencer became Michael Marks’        activities.                               national I-CAN charity.
    retail partner.
                                             1994                                      Ranked as retail sector leader in
    1920s                                    Reusable packaging systems for            worldwide Dow Jones Sustainability
    Company started buying directly          delivering clothing to stores             Index.
    from manufacturers to ensure quality     introduced.
    and value.                                                                         Opening of first new format Simply
                                             1995                                      Food stores.
    1930s                                    First Environmental Code of Practice
    First food department opened.                                                      2003
                                             covering the chemicals used in
    Café Bars are introduced to                                                        Ranked in top 24 companies in
                                             clothing production introduced.
    provide nutritious mass catering for                                               Business in the Community’s first
    customers and subsidised canteens                                                  Corporate Responsibility Index.
    for employees.                                                                     First Corporate Social Responsibility
                                                                                       publication.
                                                                                                www.marksandspencer.com   3




Governance

One of four Board-level Corporate                 Marks & Spencer personnel who
Governance committees provides                    gather information relating to our
leadership on Corporate Social                    Corporate Social Responsibility
Responsibility, meeting at least                  performance, work with external
three times a year.                               specialists, where required, on
                                                  issues such as energy consumption
Supporting this committee is a
                                                  and pesticide residue testing.
network of key managers, known
collectively as the Corporate Social              Risk assessments are carried out
Responsibility Forum.                             three times a year in all areas of
                                                  the Company, with an additional
All directors receive induction
                                                  assessment of non-financial
training on Corporate Social
                                                  performance risks every six months.
Responsibility and are kept
informed of progress by monthly
newsletters and regular
operational reviews.



Corporate Social Responsibility Committee




                                                                                                 Yasmin Yusuf
                       Luc Vandevelde                                Jack Keenan                 Creative Director for
                       Chairman                                      Non-Executive Director      Clothing




                                                                                                 Flic Howard-Allen
                       Alison Reed                                   Paul Myners                 Director of
                       Finance Director                              Non-Executive Director      Communications




                                                                     Graham Oakley
                       Justin King                                   Group Secretary and Head    Ed Williams
                       Executive Director, Food                      of Corporate Governance     Head of CSR



 Key Facts:
 ●   335 stores in UK & Ireland
 ●
     Franchise operations in
     26 countries
 ●   5 million Chargecard holders
 ●
     30,000 product lines
 ●
     1,500 suppliers in over
     70 countries
 ●
     67,000 employees
 ●   330,000 shareholders
4   Marks and Spencer Group p.l.c.




    Listening

    In many ways, Corporate Social        affect. As well as shareholders,     Understanding exactly what our
    Responsibility describes the          customers, employees and suppliers   stakeholders expect is central to
    standard of behaviour expected        this also includes a wide range of   developing informed and confident
    of companies by their stakeholders.   research and campaign groups         policies. Listening and learning
                                          who represent issues such as         will continue to be our highest
    Stakeholders are all the people and
                                          the environment, human rights        Corporate Social Responsibility
    interests an organisation might
                                          and animal welfare.                  priority, now and in the future.




    This table summarises our stakeholders:




                                                                                         Environment
                   Communities                       Employees
                                                                                           groups




                     Customers                 MARKS & SPENCER                             Suppliers




                   Government/                                                          Animal welfare
                                                    Shareholders
                    regulators                                                             groups
                                                                                                  www.marksandspencer.com   5




Our stakeholders                        How we listen

Employees                               • Business Involvement Groups – representing employees locally,
                                          regionally and nationally throughout the Company.
                                        • Confidential helpline.
                                        • ‘How are We Doing?’, a regular employee survey.
                                        • Internal communications including an employee magazine, regular
                                          business updates and team briefings.
                                        • Listening Groups that senior management hold during regular
                                          store visits.
                                        • Three month CSR consultation programme during 2002.


Customers                               • Sales information.
                                        • Weekly and monthly monitoring of views.
                                        • Surveying customers at new and refurbished stores.
                                        • Customer panels.
                                        • 350,000 communications to Head Office.
                                        • Two million communications to Financial Services business.
                                        • Annual independent Corporate Social Responsibility survey.


Shareholders                            • Annual General Meeting.
                                        • Regular meetings and presentations with institutional investors.
                                        • Regular surveys of institutional investor satisfaction.
                                        • Participation in Corporate Social Responsibility surveys and
                                          benchmarking such as FTSE4Good.


Suppliers including franchisees         • Regular visits and meetings.
                                        • Regular surveys of supplier and franchisee satisfaction.
                                        • Attending major UK agricultural shows and running farmers’
                                          listening groups.
                                        • Direct relationships with important raw material suppliers.
                                        • Taking part in the Ethical Trading Initiative.


Communities                             • Working on a wide range of urban initiatives like quality freight and
                                          crime prevention.
                                        • Regular meetings with key charity partners.
                                        • Partnerships initiatives to address issues of health, community safety,
                                          education and employability.
                                        • ‘One Community’ pilot, working through our employees, customers
                                          and neighbours.


Environment and animal welfare groups   • Regular meetings to discuss key issues.
                                        • Active participation in benchmarking and surveys.
                                        • Partnership initiatives across a wide range of issues such as wild fish,
                                          fish farming, free-range eggs, food pesticides, safer chemicals and
                                          food miles.


Government/regulators                   • Regular meetings with bodies such as the Food Standards Agency,
                                          Department for Environment, Foods and Rural Affairs, Health & Safety
                                          Executive, environmental regulators, Financial Services Authority and
                                          key government departments.
                                        • Local authority partnerships on environmental health & safety, fire and
                                          trading standards.
6   Marks and Spencer Group p.l.c.




    Our principles in action

    This review examines our progress     as a more detailed explanation          Community’s Impact on Society
    on Corporate Social Responsibility    of certain issues for our UK and        website and the London
    within our three fundamental          Ireland operations. We have set out     Benchmarking Group. Our website
    principles:                           the Corporate Social Responsibility     currently contains performance
                                          issues we cover by referring to the     reports on many issues, based on
    • Take care and act responsibly in
                                          United Nations Global Reporting         Business in the Community’s
      delivering high quality products
                                          Initiative, an international template   ‘Impact’ model.
      and services.
                                          for best practice.
                                                                                  For more information please visit:
    • Create great places to work.
                                          Over the next few years we aim to       http://www2.marksandspencer.com/
    • Help make our communities good      report our progress across all these    thecompany/ourcommitmenttosociety/
      places in which to live and work.   issues. On some aspects of CSR we       index.shtml
                                          already report performance, such
    Each section contains an overview
                                          as our involvement in the Ethical
    of our progress and plans as well
                                          Trading Initiative, Business in the




        Business in the Community’s
         ‘Impact’ based reporting
              model includes:


                Marketplace

                 Community

                  Workplace

                Environment

                Supply chain
                                                                                               www.marksandspencer.com   7




Principle one – Take care and act responsibly in delivering
                high quality products and services
What we mean by this                  Marks & Spencer purchases have         We exercise direct control over the
• Recognising that when we            been produced in an ethically and      middle two sections of the life of
  make a profit we also accept        environmentally responsible manner.    our products, during distribution
  a responsibility.                                                          and selling. However, as a 100%
                                      The ways our products and services
                                                                             own brand retailer we also
• Striving to achieve the best        affect people, the environment and
                                                                             influence most other aspects of the
  balance of quality, value for       animal welfare, present many of
                                                                             production and use of our products.
  money, social wellbeing,            our toughest Corporate Social
  environmental protection            Responsibility challenges, and we’re   We believe our role is to help
  and animal welfare.                 constantly having to ask ourselves     everyone get the best out of
                                      what responsible behaviour means,      Marks & Spencer products as
• Listening and responding to the
                                      as the range of concerns continues     responsibly as possible. We can
  needs of our stakeholders openly
                                      to grow. The greatest challenge for    only achieve this by working with
  and honestly.
                                      us is the sheer diversity of raw       a wide range of stakeholders to
Anticipating customer needs and       materials, production processes,       agree what is, or isn’t, acceptable
acting in their interests is how we   chemicals and countries of             and how we can help to make
aim to meet their expectations.       operation involved in producing        improvements.
We want to be able to reassure        Marks & Spencer goods.
our customers that all their




Product lifecycle



Raw materials          Production      Distribution           Selling              Use                Disposal
8   Marks and Spencer Group p.l.c. / Principle one – Take care and act responsibly in delivering high quality products and services




    Principle one – Review of progress and priorities for next year


      Issue                               Progress                                                            Priorities for next year

      Product safety                      • Comprehensive systems for ensuring quality                        • Website Chemicals Strategy to be updated
                                            and safety developed over many years.                               annually in line with latest scientific research
                                                                                                                and stakeholder views.
                                          • Independent safety specialists for clothing,
                                            footwear, home and beauty products                                • Conduct pilots to audit on-site management
                                            regularly consulted.                                                of dyeing, printing and finishing chemicals.
                                          • Use of standards to avoid skin contact with                       • Publish progress updates on our website on
                                            materials that can cause allergic reactions                         moving towards fruit, salad and vegetables
                                            when clothing is worn.                                              free from pesticide residues.
                                          • Policy of using non-GM food ingredients                           • Monitor developments on Genetically
                                            and derivatives in 100% of Marks & Spencer                          Modified materials.
                                            foods.*
                                                                                                              • Consult with suppliers, trade associations
                                          • A non-GM policy for key animal feeds.*                              and environmental groups on ways of
                                                                                                                improving safety.
                                          • Chemicals Strategy made publicly available
                                            on our website, identifying chemicals of
                                            concern and actions.
                                          • Environmental code of practice covering
                                            chemicals used in dyeing, finishing and
                                            printing of textiles implemented.
                                          • Implementation of programme to phase-out
                                            the use of 79 potentially harmful pesticides
                                            in the production of fruit, salad and
                                            vegetables.
                                          • Setting of long-term goal to sell fruit, salads
                                            and vegetables free from pesticide residues.


      Sustainable raw                     • Introduced all available and suitable Marine                      • Develop sustainability standards for cotton,
      materials                             Stewardship Council approved types of fish                          wool, agricultural produce, renewable
                                            and participating in WWF’s Invest in Fish                           plastics and horticultural growing media.
                                            initiative.
                                                                                                              • Continue to improve existing sustainability
                                          • We do not sell 19 of the 20 species on the                          standards on wood, farmed fish and sea fish.
                                            Marine Conservation Society’s blacklist.*
                                                                                                              • Launch range of o/organic beauty products
                                          • Implemented schemes to improve                                      made from at least 70% organic ingredients.
                                            environmental standards of salmon farms
                                                                                                              • Continue to promote and develop ranges of
                                            and restocking of natural species.
                                                                                                                organic foods.
                                          • Major sources of wood used in the
                                                                                                              • Participate in further research projects to
                                            production of fabrics and furniture identified
                                                                                                                identify future best practices.
                                            along with supporting forestry certification.
                                                                                                              • Improve the quality of information available
                                          • Organic foods relaunched in 2002 and
                                                                                                                on our website.
                                            intention to further extend ranges whilst
                                            maintaining level of sourcing from the UK
                                            at 60%.
                                          • Lifecycle assessment studies carried out on
                                            clothing, packaging and some aspects of
                                            food sourcing to identify future
                                            improvements.
                                          • Funding postgraduate research project into
                                            sustainable food sourcing.
                                          • Website publication of performance on
                                            sustainable raw materials.


    *Updated since publication
                                                                                                     www.marksandspencer.com   9




Issue                 Progress                                          Priorities for next year

Animal welfare        • Exclusive sale and use of 100% free-range       • Continue to identify ways we can help to
                        eggs in all food products introduced from         improve standards of animal welfare.
                        September 2002.
                                                                        • Consult with stakeholders about the effects
                      • System for ensuring use of free-range eggs        of new European chemicals safety
                        reviewed by independent specialists.              legislation.
                      • Application of comprehensive animal             • Continue to develop Key Production
                        welfare standards for all Marks & Spencer         Indicator/Key Welfare Indicator
                        foods covering housing, feed, care and            measurements.
                        transport.
                                                                        • Improve the quality of information available
                      • Operation of Marks & Spencer Select Farm          on our website.
                        schemes for all fresh meat, poultry, eggs
                        and farmed fish.
                      • Piloting of Key Production Indicator/Key
                        Welfare Indicator monitoring of chicken.
                      • Policy of not conducting or commissioning
                        animal testing since 1988.
                      • Start of programme to work with other
                        companies, Government and animal welfare
                        and environmental groups on the best way
                        to implement proposed legislation on
                        ensuring the safety of chemicals.
                      • Policy and performance information
                        available on our website.


Easy to understand    • All clothing labelled with country of origin.   • Continue to ensure that labelling and
labels and                                                                information meets customer needs.
                      • Revised food labelling policy launched in
information             autumn 2002 including origins of all main
                        meat, poultry and fish ingredients.


Reducing waste from   • Annual packaging usage calculated and           • Conduct pilots to find sustainable uses for
packaging and           recycling levy payments made since 1998.          recycled clothing.
products
                      • Operation of recycling scheme for unwanted      • Test renewable and biodegradable plastics
                        coat hangers in all stores.                       for packaging and products.
                      • Search facility on website to help find local   • Launch project to improve the
                        recycling banks.                                  environmental performance of packaging.
                      • Introduced use of recycled cardboard in
                        many types of food packaging.
                      • Conducted extensive packaging stakeholder
                        consultation event with the Environment
                        Council.
                      • Sponsorship of Community Recycling
                        Network annual conference and RECOUP
                        who recycle plastic packaging.
                      • Comprehensive performance information
                        available on our website.
10   Marks and Spencer Group p.l.c. / Principle one – Take care and act responsibly in delivering high quality products and services




       Issue                               Progress                                                            Priorities for next year

       Reducing energy,                    • Operation of energy and water usage                               • Recycle obsolete plastic food delivery trays
       water use and waste                   management programmes at all locations                              into new more efficient metric versions.
                                             including half hourly monitoring of electricity
                                                                                                               • Continue with second year of programme
                                             consumption and monthly performance
                                                                                                                 to replace older HCFC store refrigeration
                                             audits.
                                                                                                                 systems with new more efficient units.
                                           • Participated in the first UK emissions trading
                                                                                                               • Participate in development of Building
                                             scheme.
                                                                                                                 Research Establishment Environmental
                                           • System for energy and water management                              Assessment Methodology for stores.
                                             reviewed by independent specialists.
                                                                                                               • Target to purchase 10% of electricity from
                                           • Implementation of programme to replace all                          renewable sources from April 2004.
                                             remaining HCFC refrigeration systems and
                                                                                                               • Food distribution centres working towards
                                             develop alternatives to HFCs.
                                                                                                                 international environmental management
                                           • Operation of reusable packaging systems                             system standards.
                                             for delivering products to stores, and
                                             internal recycling systems for cardboard,
                                             polythene, paper, uniforms and computer
                                             equipment.
                                           • Scheme to donate maximum feasible
                                             amounts of unsold foods to local charities
                                             operating in all stores since the early 1970s.
                                           • Participation in Government sponsored
                                             ACORN project encouraging suppliers to
                                             improve their environmental performance.
                                           • Comprehensive performance information
                                             available on our website.


       Responsible financial               • Use of rigorous system of credit scoring to                       • Consult with stakeholders about Corporate
       services                              ensure a responsible approach to money                              Social Responsibility in financial services.
                                             lending.
                                                                                                               • Build our portfolio of products that remain
                                           • All information designed to be easy to                              socially responsible in today’s credit driven
                                             understand.                                                         society.
                                           • Policy of no hidden charges implemented.
                                           • Programme of sensitive debt management
                                             operated.
                                           • Co-sponsoring of Money Advice Trust call
                                             centre.


       Choice of nutritious                • Using the expertise of nutritional specialists                    • Continue to develop and promote a wide
       and healthy foods                     when developing recipes and labelling.                              range of healthy foods like ‘Count On Us’,
                                                                                                                 ‘5-a-day’ and ‘healthy options’.
                                           • Providing a wide range of healthy option
                                             foods.


       Respect of privacy                  • Comprehensive data protection policy,                             • Continue to review systems.
                                             systems and training in place.
                                           • System to allow employee access to
                                             personal data introduced.
                                                                                                  www.marksandspencer.com   11




Product safety                          of legislation, and have worked on
                                        implementing this with the help of
                                                                               systems of traceability for food
                                                                               ingredients.
Our customers expect the best           suppliers and environmental groups.
                                                                               This approach means we can
from Marks & Spencer products.          An overall Chemicals Strategy is
                                                                               respond to current customer
We employ around 150 specialist         publicly available on our website
                                                                               concerns over genetically modified
technologists to set and develop        as are the environmental standards
                                                                               foods by ensuring that none of our
quality standards, and work with        used in the dyeing, printing and
                                                                               foods use GM ingredients, including
our suppliers to make sure we meet      finishing processes of our clothing.
                                                                               feeds for our fresh poultry, lamb,
them. Alongside traditional types of    Our greatest chemicals challenge
                                                                               beef, farmed salmon and
product quality, such as the taste of   for foods is the use of pesticides.
                                                                               milk-producing dairy herds.
food or the fit of clothing, we also    We have set a long term goal to
take a serious approach to safety       eliminate all pesticide residues       Our clothing, footwear, home
issues that affect the wider world.     from fruit, vegetables and salads      and beauty ranges are assessed
                                        as well as phasing out the use of      by specialists to ensure the safety
Chemicals are the building blocks       79 potentially harmful pesticide       and suitability of products for their
of life, and therefore an ingredient    chemicals. Since the start of 2002     intended customers. For example,
used in the production of every         we have been publishing our            our range of ‘angel’ underwear for
product we sell. For this reason we     progress on our website. At the end    girls under 16 years of age has been
take an approach to chemicals that      of 2002 Friends of the Earth rated     endorsed by the National Society for
responds to both known science          our actions on pesticides ahead of     the Prevention of Cruelty to Children
and stakeholder concerns. We            all other UK food retailers.           (NSPCC) and Kidscape. We also
were one of the first companies                                                avoid the use of materials that can
to commit to Friends of the Earth’s     For food products, we believe
                                                                               cause allergic reactions, such as
Pledge on Chemicals, to replace         that safety is dependent on high
                                                                               nickel or latex, next to the skin.
potentially harmful chemicals ahead     standards of raw materials. For this
                                        reason we operate comprehensive




safer
Eleven consecutive Government surveys have
given Marks & Spencer a clean bill of health in
meeting the guidance levels set for pesticide
residues. No other major food retailer has achieved
this, but that is no reason to be complacent and
with help from suppliers and environmental
groups we are still working hard to
meet our long term goal of selling
fruit, salads and vegetables free
from pesticide residues.
Main Heading


                                                                           fresher
                                                                           All fresh salmon on sale
                                                                           in our stores comes from
                                                                           Marine Stewardship Council
                                                                           approved sources or
                                                                           Marks & Spencer Select
                                                                           Farms. This means
                                                                           customers can be sure
                                                                           the salmon they buy
                                                                           meets the highest
                                                                           environmental standards.




Sustainable raw                          Support the best: We sell as many
                                         as we can of the suitable and
                                                                               We intend to apply this approach
                                                                               to cotton, wool, renewable plastics,
materials                                available types of fish approved by   agricultural produce and
                                         the Marine Stewardship Council        replacements for peat over the
Marks & Spencer products rely on         (MSC);                                next two years.
the plentiful supply of high quality
                                         Avoid the worst: We do not sell 19    Our sourcing of wood is also critical
raw materials. This means that we
                                         of the 20 species on the MCS’s        in ensuring that we support good
have a commercial need to secure
                                         blacklist.* For the 20th, Scottish    standards of forestry management
long term supplies of these materials
                                         Haddock, we are working on a          around the world. Most of the wood
and a social responsibility to protect
                                         research project to identify more     we use goes into fabrics, such as
the natural environment.
                                         sustainable fishing methods.          viscose for clothing, and we have
The current crisis in world fish                                               identified all the main sources of
                                         Improve the rest: By supporting
stocks, threatening an estimated                                               this timber and their respective
                                         WWF’s Invest in Fish project, we’re
65% of commercial fisheries, is one                                            forestry programmes. We support
                                         helping to fund research into the
of many challenges that will affect                                            the best schemes like the Forestry
                                         best ways of restoring fish stocks
us all. Marks & Spencer is not going                                           Stewardship Council (FSC), avoid
                                         around the UK. Farming fish can
to be able to solve these problems                                             badly managed forestry regions and
                                         provide both solutions and a new
on its own but we are prepared to                                              are working to improve our use of
                                         set of environmental challenges, so
take a lead, which we’re doing in                                              other forestry schemes. Wood for
                                         we launched a scheme requiring all
three ways:                                                                    our furniture comes entirely from
                                         our salmon growers to reduce the
                                                                               known regions with good standards
                                         environmental impacts of their
                                                                               of forestry management.
                                         operations. We’re also supporting
                                         a project at Inverness College to
                                         restock the population of wild
                                         salmon.                               *Updated since publication
                                                                                                   www.marksandspencer.com   13




For organic food and beauty            Another aspect of sustainable raw        In the 7th annual Business in the
products we’ve had to adopt            materials is the relatively new term     Environment Index published in
a slightly different approach          of ‘food miles’. Although it’s usually   March 2003, Marks & Spencer
recognising the need to meet both      taken to mean the distance and           was rated as the best performing
our own standards of quality as        expense of transporting food from        general retailer, finishing 32nd out
well as those of organic production.   source to store, food miles decisions    of more than 200 companies.
However, one of the reasons we’re      also include elements of locality,
very keen to extend our choice         freshness, use of preservatives,
of organic foods is because            packaging, choice, support for UK
organic techniques help promote        farmers and quality. We’re currently
more environmentally sustainable       funding a four-year, post graduate
methods of farming.                    research project into Food Miles
                                       with the University of Surrey in
                                       order to improve our understanding
                                       of best practices and performance.




sustainable
Wood is an enormously
versatile material – used
in products ranging from
furniture to clothing.
Managed effectively, timber
is a renewable resource –
contributing to the
development of natural
habitats and absorbing
damaging greenhouse
gases. Marks & Spencer
products are always made
with wood sourced from
known locations using good
standards of forestry.
14   Marks and Spencer Group p.l.c. / Principle one – Take care and act responsibly in delivering high quality products and services




     Animal welfare                                             • Developing alternatives to veal
                                                                  crates and stall and tether housing
                                                                                                                            In 2002 we received Compassion in
                                                                                                                            World Farming’s Compassionate
     There is a wide spectrum of views                            for pigs.                                                 Supermarket of the Year award.
     on animal welfare, from those who                          We base our standards of animal
     believe it is ethically wrong to use                                                                                        Farm Animal Welfare Council
                                                                welfare on the ‘Five Freedoms’ of                                Five Freedoms:
     animals as a source of produce at                          the Farm Animal Welfare Council.                              • Freedom from hunger and thirst
     all, to a broader consensus about                          All our fresh meat, poultry, eggs and                         • Freedom from discomfort
     promoting higher welfare standards.                        farmed fish comes from suppliers in                           • Freedom from pain, injury
     Food products                                              the Marks & Spencer Select farm                                 and disease
     Over the years we’ve worked                                scheme, working to our own unique                             • Freedom to express normal
                                                                standards covering housing, feed,                               behaviour
     closely with our suppliers, the vast
                                                                care and transport. As well as                                • Freedom from fear and distress
     majority of whom are UK based, on
     a variety of initiatives including:                        visiting farms and suppliers, we
                                                                are piloting a welfare monitoring
     • Moving to free-range eggs for all                        scheme for chickens by regularly
       food products.                                           assessing certain important
     • Improving standards of animal                            measurements, known as
       husbandry.                                               Key Production Indicators/
                                                                Key Welfare Indicators.
     • Promoting free-range poultry.

     • Only using antibiotics for
       veterinary purposes.




                                                                                                       free-range
                                                                                                        In 1997 Marks & Spencer
                                                                                                        became the first major UK
                                                                                                        retailer to sell exclusively free-
                                                                                                        range eggs. In September 2002
                                                                                                        this policy was extended to the
                                                                                                        250 million eggs we use as
                                                                                                        ingredients in products like
                                                                                                        quiches, cakes, pasta and
                                                                                                        biscuits. As a result, 700,000
                                                                                                        birds are now living in free-
                                                                                                        range conditions.
                                                                                            www.marksandspencer.com   15




Beauty products                       Marks & Spencer has for many years   Clothing, footwear and home
All chemicals for human use have      supported the search for new types   products
to pass safety tests traditionally    of testing which don’t use animals   We have introduced policies
conducted on animals.                 and we were one of the founder       designed to protect the welfare of
Marks & Spencer has never             corporate members of the Fund For    animals. For example, we specify
commissioned any animal testing or    Replacement of Animals in Medical    that down used in duvets, pillows
asked our suppliers to carry it out   Experiments (FRAME). Over the next   and cushions is not obtained by
for us, a policy we formalised        few years we will work with other    ‘live plucking’. However, we are
in 1988.                              companies, Government, and           keen to help further improve animal
                                      animal welfare and environmental     welfare standards in our leather
Concerns over the legal standards
                                      groups to agree the best approach    sourcing.
used to assess safety have resulted
                                      for ensuring human safety whilst
in European Commission proposals
                                      avoiding the needless suffering
to re-test many chemicals to
                                      of animals.
new standards.




organic
Developed over three years, O/ORGANIC EXTRACTS
is made from at least 70% organic ingredients
and is free of genetically modified materials and
artificial colours or fragrances. In keeping with
all Marks & Spencer Beauty products, the range
contains no animal derivatives and is not
tested on animals.
16   Marks and Spencer Group p.l.c. / Principle one – Take care and act responsibly in delivering high quality products and services




     Reducing waste from                                        Over the next year we will be                               Reducing energy, water
     packaging and products                                     working with a wide range of                                use and waste
                                                                stakeholders to agree the best
     The disposal of used packaging and                         overall solutions. In common with                           Suppliers producing our products,
     clothing contributes relatively small                      all retailers, Marks & Spencer has                          and customers using them, consume
     but still significant amounts of the                       paid a levy on packaging since                              12 times more energy than the
     materials sent to landfill in the UK.                      1998 to help fund national levels                           running of our stores. For this reason
                                                                of recycling. In addition we support                        we’ve concentrated our efforts on
     Packaging plays an important role
                                                                groups such as the Community                                improving the environmental
     in reducing waste by protecting
                                                                Recycling Network, and RECOUP                               performance of our products.
     products from damage, and we try
                                                                who recycle plastic packaging.                              However, we still operate a wide
     to choose the type of packaging
                                                                                                                            range of internal efficiency
     that will result in the best overall                       As the UK’s largest retailer of
                                                                                                                            programmes.
     performance. These decisions are                           clothing we are investigating and
     not as straightforward as they might                       piloting projects to find uses for                          We measure energy consumption
     appear. For example, apples sold in                        recycled clothing.                                          every half hour, in all locations,
     packaging generate no more waste                                                                                       with monthly audits and incentives
                                                                Our new reusable packaging system
     in total than loose apples which                                                                                       to promote reductions in use. From
                                                                for delivering cut flowers won the
     suffer higher levels of damage                                                                                         April 2004, we will obtain 10% of
                                                                Business Initiative category at the
     during transportation and handling.
                                                                2003 Grower of the Year Awards
                                                                for saving over 2,000 tonnes of
                                                                cardboard per year.




                                                                                                     reuse
                                                                                                      For nearly thirty years, we
                                                                                                      have reused or recycled some
                                                                                                      50 million coat hangers a year,
                                                                                                      saving around 2,000 tonnes
                                                                                                      of waste. The use of reusable
                                                                                                      plastic trays to deliver food
                                                                                                      products saves a further 30,000
                                                                                                      tonnes of packaging a year.
                                                                                                      These trays are now fitted with
                                                                                                      Radio Frequency Identification
                                                                                                      tagging for more efficient
                                                                                                      delivery to stores.
                                                                                                   www.marksandspencer.com   17




our electricity from renewable           Responsible financial                  take on our loans and credit
supplies. We’ve also taken part in       services                               facilities. All our financial services
the UK’s first emissions trading                                                products are designed to offer
scheme by making commitments to          Trust is an important factor in        competitive pricing with no hidden
reduce energy consumption in our         choosing a provider of financial       charges. Supporting literature is
head office. Our programme to            services. Our aim is to provide the    written in plain English and avoids
replace older store refrigeration        same levels of assurance and           using small print. We maintain our
containing ozone depleting HCFC          integrity that customers would         growing savings and investments
gases, with modern, efficient ozone-     expect from other Marks & Spencer      portfolio with a wide range of UK
friendly units, is well ahead of         purchases.                             and international investments,
legislation. We also operate a wide                                             managed by a team of specialists.
range of reuse and recycling             We want positive relationships         These experts build relationships
schemes for cardboard, polythene,        with our customers, and have strict    with the companies in which they
paper, coat hangers, uniforms and        lending practices to ensure we do      invest, in order to achieve best
computer equipment. And all our          all we can to assist them to manage    value and optimum returns for our
stores have donated unsold foods to      their money effectively. We use        customers, within a socially and
local charities since the early 1970s.   thorough and reliable credit scoring   environmentally responsible
                                         processes and use external credit      framework.
                                         reference agencies to ensure we sell
                                         only to people who can afford to




responsible
All our financial services
products are designed
to offer competitive
pricing with no hidden
charges. Supporting
literature is written in
plain English and avoids
using small print.
18   Marks and Spencer Group p.l.c.




     Principle two – Create great places to work

     What we mean by this                  Marks & Spencer, in the eyes            We were placed 13th in the Irish
     • Employees and suppliers feel        of those who know best – our            Independent’s ‘Best Company
       engaged in helping to grow a        employees. They reported that           to Work for in Ireland’ survey.
       good and responsible business.      working as a valued member of a
                                                                                   In 2002 we won the Personnel
                                           close-knit team, who get results and
     • Valuing the quality of our                                                  Today ‘Age positive at work’ award.
                                           enjoy each other’s company was the
       relationships with each other and                                           This recognises our commitment to
                                           most important part of working for
       our stakeholders.                                                           attracting employees of all ages
                                           us. It’s an aspiration we aim to back
                                                                                   through policies designed to reflect
     • Encouraging the growth of           up with our policies.
                                                                                   the varied lifestyles of today’s
       diversity and responding to
                                           As well as our responsibilities on      working population. As well as
       better work/life balances.
                                           issues like Health & Safety and         removing the official retirement
     • Working with business partners      freedom from discrimination, our        ages for both men and women, we
       who share our aspirations beyond    employees have also told us they        have increased the use of flexible
       our Global Sourcing Principles.     believe a ‘great place to work’         working and introduced flexible
                                           needs to offer:                         retirement options.
     Creating great places to work
     is a principle we apply across        • Communication and consulting –        In May 2002 we received the
     Marks & Spencer but it’s also an        to understand, from clear and         Opportunity Now award for gender
     aspiration we have for others,          concise communication, what the       equality in management.
     whether suppliers, franchisees or       Company is striving to achieve,
     business partners. It’s an approach     and to be actively involved.
     we believe creates shared benefits
                                           • Reward for superior results – to
     for the Company, employees and
                                             feel rewarded and recognised for
     society as a whole.
                                             achieving results.
     During 2002/03 we carried out a
                                           • Development of skills – the
     wide range of consultation projects
                                             importance of feeling equipped to
     to define what it means to work for
                                             perform current and future roles.




                                                        participation
                                                        The Sunday Times rated us as one
                                                        of the ‘100 Best Companies to Work
                                                        For’ in the UK in 2003. In the first
                                                        year of our participation in this survey,
                                                        where 80% of the marks are based
                                                        on confidential employee feedback,
                                                        we finished 76th out of over
                                                        200 companies who chose to enter.
                                                                                                   www.marksandspencer.com   19




Principle two – Review of progress and priorities for next year


Issue                Progress                                         Priorities for next year

Communication and    • Priorities for the coming year linked to the   • Launch national Business Involvement Group
consulting             Company’s vision, mission and values             forum chaired by Chief Executive.
                       communicated through annual ‘cascade’
                                                                      • Continue to monitor and improve internal
                       programme.
                                                                        communications.
                     • Teamwork, listening and learning promoted
                                                                      • Continue to develop action plans in
                       as the bedrock of all our relationships.
                                                                        response to ‘How are We Doing?’ survey
                     • Developed new policy to ensure that              results.
                       employees hear important business
                       decisions direct from their employer.
                     • Introduced Company-wide local, regional
                       and national employee representation
                       forums known as Business Involvement
                       Groups.
                     • Operation of confidential employee Welfare
                       Helpline offering advice on a wide range of
                       employment, legal and personal concerns.
                     • Regular ‘How are We Doing?’ surveys
                       conducted with results communicated to
                       all employees.
                     • Improved range of internal communications
                       including an employee magazine, daily store
                       team briefings, roadshows, videos and team
                       events.


Rewarded for         • Reward and recognition systems                 • Continue to improve policies that provide
superior results       redesigned to support business goals.            more opportunity to reward superior
                                                                        individual as well as team performance.
                     • Benchmarking of reward packages against
                       comparable jobs in other companies.            • Continue to consult with employees on
                                                                        reward policies and systems.
                     • Reward packages comprise of fixed pay,
                       variable performance related pay and
                       benefits.
                     • Revised contributory pension scheme
                       launched for new employees in 2002.


Build on strengths   • New approach to training and development       • Launch Retail Academy to improve key
and develop skills     launched.                                        selling skills.
                     • Integration of new system to train and         • Develop partnerships with external
                       develop employees across the Company.            organisations to ensure high quality,
                                                                        consistent training programmes.


Diversity and        • Developed clear policies covering all          • Continue to review policies and processes.
opportunity            aspects of equality.
                     • System for ensuring diversity and
                       opportunity reviewed by independent
                       specialists.
                     • Active membership of Opportunity Now,
                       The Employers Forum on Age and Disability.
20   Marks and Spencer Group p.l.c. / Principle two – Create great places to work




       Issue                              Progress                                          Priorities for next year

       Respecting the                     • Introduced flexible approach to retirement,     • Continue to ensure that policies meet the
       balance between life                 allowing employees, if they wish, to work         needs of individuals and the Company.
       and work                             past 65.
                                          • Founding members of the Employers for
                                            Work Life Balance Alliance.
                                          • Provision of a wide range of work life
                                            balance options offered including: child
                                            breaks, enhanced maternity/paternity,
                                            adoption, fostering, IVF treatment and
                                            dependency leave benefits.
                                          • Basic diversity information available on our
                                            website.


       Health, safety                     • Provide a wide range of employee                • Develop ‘WorkWell’, a targeted stress
       and wellbeing                        occupational health support including access      management intervention programme.
                                            to Occupational Health Adviser and physician,
                                                                                            • Continue to improve Health & Safety
                                            breast screening, private medical and dental
                                                                                              performance linked to annual audits.
                                            insurance and cash back health plan.
                                          • Independently audited Health & Safety
                                            system.
                                          • Participate in Local Authority Partnerships
                                            Programme – working with five different
                                            authorities to develop best practice systems
                                            and nationally recognised standards.
                                          • During 2002 all employees received a
                                            personal security alarm key ring, and a
                                            booklet advising on personal safety.
                                          • Founding members of Mindout for Mental
                                            Health, a charity aiming to help those with
                                            mental health problems in the workplace
                                            and Tommy’s Pregnancy risk assessment
                                            accreditation service.
                                          • Health & Safety performance information
                                            available on our website.


       Ethical trading                    • Active membership of Ethical Trading            • Continue to gather proof of compliance with
                                            Initiative (ETI) including annual submission      our Global Sourcing Principles by all
                                            of performance report.                            suppliers.
                                          • System for ensuring ethical trading reviewed    • Continue to improve performance within the
                                            by independent specialists.                       Ethical Trading Initiative.
                                          • Participation in nine ETI pilot programmes      • Provide further assistance for suppliers
                                            including projects focusing on China, Sri         working towards the Ethical Trading Initiative
                                            Lanka and banana plantations in Costa Rica.       code.
                                          • Use of non-Marks & Spencer specialists to       • Participate in SEDEX project to reduce food
                                            advise on improvements.                           suppliers’ workload and costs in providing
                                                                                              ethical trading information to retailers.
                                          • Comprehensive training provided for
                                            suppliers.
                                                                                                  www.marksandspencer.com   21




Issue             Progress                                           Priorities for next year

Ethical trading   • Self Help Guides produced in nine                • Develop franchisee audits in line with
continued           languages for suppliers.                           approach to Ethical Trading Initiative.
                  • Detailed briefing notes developed for            • Improve quality of information available
                    60 countries.                                      on our website.
                  • Suppliers helped to set up local best
                    practice programmes.
                  • Supporting adult literacy classes in Morocco,
                    family open days in Sri Lanka and health
                    care training in Indonesia in partnership with
                    suppliers.
                  • Audit programme covering franchise
                    operations.


Business ethics   • Introduced policy of not making financial        • Review Business Ethics policy.
                    political donations in 1997, however, we
                    will continue to support our employees who
                    wish to play an active role in democratic
                    political life.
                  • Long-standing Government Affairs
                    programme.
                  • Operation of business ethics policy on gifts
                    and insider trading.
22   Marks and Spencer Group p.l.c. / Principle two – Create great places to work




     Ethical trading                                           70% from the UK and Ireland, with     by strict sanctions when standards
                                                               20 suppliers accounting for 70% of    are not met. Most of our suppliers
     Providing the best quality and value                      all the foods we sell.                have suppliers of their own, who
     products to our customers involves                                                              in turn may themselves be supplied
                                                               For many years Marks & Spencer
     working with nearly 1,500 suppliers                                                             by others. Ensuring the working
                                                               has sought to ensure that our goods
     in 70 countries around the world.                                                               conditions of the vast number of
                                                               are produced in good working
     We believe that global trading can                                                              people who contribute in some
                                                               conditions. This supports our core
     benefit everyone when conducted                                                                 way to what eventually becomes
                                                               principles of providing our own
     within a set of principles to ensure                                                            a Marks & Spencer product is very
                                                               workforce with meaningful jobs
     ethical trading.                                                                                challenging. In 1999, we therefore
                                                               and providing customers with
                                                                                                     published our company-wide
     In the late 1990s the competitive                         high quality products. We and
                                                                                                     Global Sourcing Principles. These
     clothing market required us to work                       our suppliers have found from
                                                                                                     principles require all our direct
     with our suppliers to establish                           experience that when people are
                                                                                                     suppliers i.e. those whom we
     overseas manufacturing facilities.                        treated with respect, in decent
                                                                                                     directly contract for both goods
     Today, over 80% of our clothing is                        working conditions and with fair
                                                                                                     and services to ensure they
     manufactured overseas but the                             rates of pay, then both they and
                                                                                                     meet with what we believe to be
     importance of supplier relationships                      their companies benefit from
                                                                                                     acceptable standards, and to be
     remains. Our top 15 clothing                              increased commitment and
                                                                                                     continually improving. We enforce
     suppliers account for over 80% of                         productivity. Customers benefit too
                                                                                                     these principles firmly using a
     our clothing business, and many of                        from goods offering better quality
                                                                                                     combination of independent and
     these are UK companies sourcing                           and value. We aim to achieve this
                                                                                                     Marks & Spencer audits, and
     from overseas.                                            objective through the use of agreed
                                                                                                     supplier self-audits. We also
                                                               standards developed between
     For our foods we search for the best                                                            encourage our suppliers to adopt
                                                               ourselves and suppliers, a regular
     quality available in the world, but                                                             this approach with their own
                                                               pattern of visits and a policy of
     always choose UK produce first if                                                               suppliers.
                                                               continual improvement – backed up
     the quality is right – we get around




                                                                      ethical
                                                                      Ensuring good working conditions for
                                                                      all the people involved in producing
                                                                      Marks & Spencer products is an important
                                                                      challenge for us. In 1999 we published our
                                                                      company-wide Global Sourcing Principles
                                                                      as a way of communicating the minimum
                                                                      standards we require. We use a combination
                                                                      of independent, Marks & Spencer and
                                                                      supplier self-audits to ensure that our Global
                                                                      Sourcing Principles are complied with and
                                                                      that progress is being made towards the
                                                                      international standards promoted by the
                                                                      UK Government’s Ethical Trading Initiative.
sharing
We believe that listening, learning
and working as a team are the
bedrock of Marks & Spencer. In
stores, we hold daily briefings
and weekly updates, whilst e-mail
updates and our staff magazine
On Your Marks keep all staff in the
picture. In addition, we run regular
‘How are We Doing?’ surveys to
gauge morale and pinpoint areas
for improvement.


We take great care in choosing the        We encourage the open sharing of        Communication and
companies who supply us directly          best practices amongst suppliers in
                                                                                  consulting
with goods and services and with          countries as diverse as Morocco,
whom we aim to build long term            Indonesia, Sri Lanka, India, Turkey,
                                                                                  Over the last two years we’ve
partnerships. From the start we           Egypt and Vietnam. In Morocco,
                                                                                  developed a set of ‘ways of working’
require each supplier to implement        where only 45% of women over the
                                                                                  to define and promote practices
our Global Sourcing Principles,           age of 25 are literate, all factories
                                                                                  such as teamwork, listening and
requiring compliance with all             producing our goods now work with
                                                                                  learning. We believe these form the
relevant local and national laws,         the Government to provide literacy
                                                                                  bedrock of all the relationships that
particularly with regard to: working      training for both men and women.
                                                                                  make Marks & Spencer work –
hours, health & safety, conditions,       So far 300 workers have completed
                                                                                  between the Company and
rates of pay, terms of employment         the literacy course and gained a
                                                                                  employees, among employees
and minimum age of employment.            diploma. In Sri Lanka, where
                                                                                  working together, and between
But as our business relationship          families are often concerned about
                                                                                  employees, customers and suppliers.
develops, we expect the supplier          the safety of sons and daughters
steadily to raise standards and           who leave home to find work, we’ve      We have taken steps, as far as
improve working conditions, taking        encouraged our suppliers to hold        possible, to make sure our
account of the internationally            open days. Whilst in Indonesia,         colleagues hear important business
recognised standards promoted by          one supplier works alongside local      information direct from their
the Ethical Trading Initiative (ETI), a   health groups to offer a health         employer. As most of our employees
group set up by the UK Government,        education programme, which              are also shareholders and customers
of which we are a member.                 benefits not only their employees       we also take care to keep them up
                                          and their families, but also the        to date on business performance.
To help suppliers achieve this, we
                                          business.                               In stores, we hold daily briefings
fund training programmes alongside
                                                                                  and provide weekly updates on
Self Help Guides in nine languages.
                                                                                  operational news. We use printed
By the end of 2002 we had assessed
                                                                                  and electronic updates, including
over 70% of our finished product
                                                                                  On Your Marks – a regular magazine
suppliers worldwide against both
                                                                                  for and about employees, as well
our Global Sourcing Principles and
                                                                                  as offering team events, telephone
the ETI’s standards.
                                                                                  conferences, roadshows and videos.
24   Marks and Spencer Group p.l.c. / Principle two – Create great places to work




     We regularly ask employees what                           performance which may increase           Health, safety and
     they think about different types of                       on an annual basis.                      wellbeing
     communication to make sure we
                                                               Benefits A comprehensive
     meet their needs.                                                                                  We aim to actively protect the
                                                               range of benefits including a
     Our regular ‘How are We Doing?’                           20% Marks & Spencer discount,            health and safety of our employees,
     surveys gauge Company morale and                          interest-free loans for public           with safety officers in each store and
     pinpoint areas for improvement.                           transport season tickets, preferential   annual audits by an independent
     These surveys have very high                              loan rates from Marks & Spencer          specialist. Over the last year we
     response rates, and we share results                      Financial Services, save-as-you-earn     have focused training on managers
     with employees and action plans                           share options, access to preferential    and store safety officers. We’ve
     for improvements developed. The                           car leasing, profit sharing and          also used our programme of store
     Company also communicates                                 generous pension scheme.                 renewal to look at ways of making
     directly with employees through                                                                    our sale floors safer.
                                                               Variable Pay A sliding scale of pay
     Business Involvement Groups,                                                                       Our major causes of workplace
                                                               based entirely on business and
     which grew out of existing                                                                         accidents are slips, trips, falls and
                                                               personal performance.
     employee consultation forums in                                                                    being struck by moving objects
     2001/02. Employees developed                              Marks & Spencer reward                   on sales floors and we have
     these groups themselves, building                         packages are designed to provide         concentrated this year on reducing
     on a recognised need for stronger                         remuneration which compares to           these sorts of injuries.
     consultation. Representatives,                            that of similar companies, but allows
     elected by their peers, have two                          employees to aim for earnings in the     We also provide a full range of
     hours a week allowance for this                           top 25% of comparable jobs.              occupational health services
     activity, and attend a training                                                                    including access to occupational
                                                               The challenge for us is to get the       health advisers, breast screening,
     programme created with the
                                                               balance right between promoting          private medical insurance and a
     Institute of Management. We have
                                                               teamwork and rewarding individual        cash back health plan. Over recent
     Business Involvement Groups in
                                                               achievement.                             years we’ve changed our approach
     every store and office area, with
     head office and regional forums, to                                                                from supporting primary health
     review shared issues. After running                                                                initiatives to occupational support.
     these for over a year we’re also                          Build on strengths and                   Last year we started to record and
     launching a national forum, which                         develop skills                           collect information about employees
     our Chief Executive will chair. These                                                              who became unwell at work. We
     forums aim to encourage employees                         In today’s marketplace everyone          discovered that 60% of workplace
     to share knowledge and promote                            needs a flexible and diverse range of    illness relates to muscular stresses
     debate about the business.                                skills. This is true whether someone     and strains, emphasising a need to
                                                               joins us for a short period of time or   improve the way we train people
                                                               as a long term career.                   to handle goods and equipment.
                                                                                                        The second highest cause was
     Rewarded for superior                                     To help people fulfil their
                                                                                                        anxiety and depression. During
     results                                                   career ambitions, we have a
                                                                                                        2002/03 we’ve provided extra
                                                               comprehensive system to train
                                                                                                        training to our occupational health
     The success of our business depends                       and develop employees – what we
                                                                                                        advisers on this issue, supported
     on the contributions of talented                          call ‘performance management’.
                                                                                                        by a stress awareness programme.
     and capable people. In 2001, in                           Specialists across the Company help
     consultation with employees, we                           team leaders develop career plans        During 2002, we gave all our
     designed a three-part reward                              for all employees. Every year our        employees a booklet advising them
     structure to offer greater incentives                     employees can review progress with       on personal safety together with a
     for personally achieving superior                         their line manager, using agreed         personal security alarm.
     results. It includes:                                     objectives as a basis for
                                                               performance pay awards.
     Fixed Pay A basic salary plus
     an extra amount for personal
                                                                                                     www.marksandspencer.com   25




Principle three – Help make our communities good places
                  in which to live and work
What we mean by this                     We’ve always been committed to           Our Children’s Promise millennium
• Being at the centre of all the         meeting the needs of our customers       campaign was highly commended by
  communities in which we trade          by providing a balanced approach         Business in the Community’s 2000
  and making a positive contribution     to high street, suburban or edge-of-     Awards for Excellence.
                                         town shopping. Over 80% of our
• Supporting the involvement of our                                               In 2000, the introduction of car
                                         stores are in traditional town and
  employees in their communities                                                  sharing as part of a Green Transport
                                         city centres, which we’re adding to
                                                                                  Plan reduced the number of cars
• Acting as good neighbours              in our growing chain of Simply
                                                                                  commuting to Marks & Spencer
                                         Food stores. These locations are
As a major retailing presence in the                                              Financial Services, on the outskirts
                                         convenient for people living and
UK and Ireland, Marks & Spencer                                                   of Chester, by 30%. Special software
                                         working in town and city centres
stores provide employment, a wide                                                 helped match potential partners,
                                         and offer customers and employees
range of products and services and                                                and participants received incentives
                                         ready access via public transport.
often act as an important part of the                                             such as car tax vouchers.
                                         Operating in these partly residential
fabric of many high streets. Retailing
                                         locations inspired many of our           In 2002 we received Motor
depends on economically healthy
                                         innovations, developed in                Transport Magazine’s Urban Delivery
and sustainable communities.
                                         partnership with suppliers, like         vehicle of the year award for our
Helping others to helps themselves
                                         ‘quiet’ nitrogen chilled food delivery   development of delivery vehicles
is an expression of enlightened self-
                                         trailers and gas-powered tractors.       that halve fuel use and emissions.
interest, providing assistance to
those who need it, and who in turn       Following the Brixton, Moss Side,        In 2002 we received the Deafblind
will pass on the benefits to society     St Pauls’ and Toxteth riots of the       High Street award for accessibility.
as a whole.                              early 1980s, Marks & Spencer,
                                         together with a number of other
Over the years we’ve participated in
                                         businesses, took responsibility for
projects up and down the country
                                         finding ways to contribute towards
designed to help improve the
                                         a better society. This led to us
quality of town and city centres,
                                         becoming a founding member of
addressing issues as diverse as
                                         Business in the Community and
public transport access, parking,
                                         later helped to set up the PerCent
traffic management, lighting,
                                         Club – a group of companies
security, disability access, provision
                                         committed to putting at least
of recycling facilities and assisting
                                         1% of pre-tax profits back into
sections of the community who feel
                                         the community. Since then our
excluded.
                                         approach to community investment
                                         has continued to evolve, matching
                                         projects with business needs to
                                         deliver more widespread benefits.
26   Marks and Spencer Group p.l.c.




     Principle three – Review of progress and priorities for next year


      Issue                           Progress                                           Priorities for next year

      Community                       • Founding and continuing members of               • Launch of major ‘flagship’ initiative to raise
      involvement                       Business in the Community’s PerCent Club –         stakeholder awareness and engagement in
                                        companies committed to investing at least          our community activities.
                                        1% of pre-tax profits in community projects.
                                                                                         • Increase scale of priority community
                                      • Annual participation in London                     projects.
                                        Benchmarking Group to measure
                                                                                         • Develop improved ways of measuring
                                        community benefits of initiatives.
                                                                                           benefits to the community.
                                      • Operation of a wide range of community
                                                                                         • Implement a community involvement
                                        involvement activities designed to ‘Help
                                                                                           programme around the relocation of our
                                        others to help themselves’ focused around
                                                                                           head office.
                                        health, community safety, education and
                                        employability.                                   • Improve quality of information available
                                                                                           from our website.
                                      • Annual sponsorship of Sieff Award to
                                        recognise the achievements of individuals
                                        or organisations in the community.
                                      • Provision of support for employee
                                        volunteering in the form of awards,
                                        matching funds, part-time secondments,
                                        payroll giving and ‘Cares’ one-day team
                                        building challenges.
                                      • Provision of ‘Seeing is Believing’ tours for
                                        senior management to visit key community
                                        initiatives.
                                      • Policies and examples of initiatives available
                                        on our website.


      Acting as a good                • Introduced a wide range of distribution          • Continue with second of five year
      neighbour                         transport initiatives including use of gas-        programme to upgrade distribution fleets to
                                        powered food delivery vehicles, ultra-low          Euro III emission standards.
                                        sulphur diesel, continuous recycling traps
                                                                                         • Develop further distribution transport
                                        and rail freight.
                                                                                           innovations.
                                      • Collection and transporting of recyclable
                                                                                         • Continue to participate in local authority
                                        materials back to Distribution Centres.
                                                                                           best practice initiatives.
                                      • Provision of interest free loans to employees
                                                                                         • Extend use of rail freight.
                                        for public transport season tickets.
                                      • Participation in local authority Freight
                                        Quality Partnerships.
                                      • Contributing to a wide range of town centre
                                        management and improvement initiatives.
                                      • Performance information available on our
                                        website.


      Accessibility                   • Supported Disabled Go partnership to             • Continue to support the development of
                                        promote high standards of accessibility in         Disabled Go internet guides.
                                        public buildings.
                                                                                         • Increase the number of smaller local food
                                      • Operation of programme to ensure that              stores.
                                        stores are accessible to disabled people.
                                      • Development of programme to open local
                                        Simply Food stores.
                                                                                                 www.marksandspencer.com   27




Community                               Breakthrough Breast Cancer             Rainbow of Hope – Our charity
involvement                             Challenge – Raising awareness and      for the Queen’s Golden Jubilee
                                        funds for breast cancer by selling     was I-CAN, the national charity for
Over the last few years our             special ribbons and providing          children with speech and language
community involvement activities        information in our lingerie            difficulties. From 8 May to 8 June
have moved away from providing          departments during October 2002.       2002 all Marks & Spencer stores
many small scale, philanthropic                                                featured a striking Rainbow of Hope
                                        Marks & Spencer British Community
donations. Today, we prefer to work                                            display inviting children to pin up
                                        Safety Awards 2002 – In partnership
in partnerships providing larger                                               their hopes for the next 50 years.
                                        with Crime Concern, we ran a
scale support for fewer projects. Our   national awards scheme to              Ready for Work – Following a
community involvement programme         recognise the best crime prevention    successful pilot scheme, a two-year
has two main thrusts – working at       and community safety projects.         project in partnership with Business
Company level on key initiatives,                                              in the Community to provide two-
and supporting employees in             Are You What You Eat? – A free
                                                                               week work placements with
individual local activities.            resource pack for secondary school
                                                                               Marks & Spencer for 600 homeless
                                        teachers called ‘Are You What You
1. Company initiatives                                                         people across the UK and Ireland.
                                        Eat?’ to promote better child
We aim to create community              nutrition across the UK, voluntarily   Disabled Go – A partnership to
benefits on key social issues that      taken up by 38% of schools.            develop internet guides to venues
relate directly to our business by                                             and services which are accessible
helping others to help themselves.      A fresh look at foods and packaging
                                                                               to people with disabilities aiming to
We’ve concentrated these activities     – A free resource to support the
                                                                               cover 75 UK towns and cities by the
on three main areas: Health,            teaching of science, design,
                                                                               end of 2005 (www.disabledgo.info).
Community Safety, Education             technology and health education
and Employability:                      for children aged 5-11 years.          Charity Christmas Cards – Half of
                                                                               our Christmas card sales help
                                                                               support charities including Mencap,




               community
               Following a successful pilot
               scheme, Marks & Spencer
               has now launched Ready for
               Work – a two-year project in
               partnership with Business in the
               Community to provide two-
               week work placements in our
               stores and head office for
               homeless people across the
               UK and Ireland.
28   Marks and Spencer Group p.l.c. / Principle three – Help make our communities good places in which to live and work




     National Autistic Society, Rethink                       actively involved in their                                  opportunity to take part in one-off
     Severe Mental Illness, Samaritans                        communities in this way. We                                 volunteer action days. As well
     and Shelter.                                             promote this in our employee                                as involving employees in the
                                                              magazine and at national events.                            community, it develops skills such
     Share restructuring – In 2002,
                                                              Here’s what we do to support those                          as teamwork and communication,
     we also gave our shareholders
                                                              who want to get involved:                                   and boosts motivation and morale.
     the chance to take part in our
     community activities during the                          Matching Funds – We match any                               Payroll Giving – We enable
     Company’s financial restructuring                        funds our employees raise, pound                            employees to donate to their
     which returned approximately                             for pound, up to a maximum of                               favourite charities through their
     £2 billion to shareholders. We                           £10,000 each financial year                                 salary, the most effective method for
     replaced existing shares with new                        per store.                                                  the charities.
     ordinary shares and fixed value
                                                              Helping Hands and Individual                                Employee Volunteer Awards – We
     B shares. Under our specially
                                                              Fundraising Awards – We provide                             held our third awards ceremony in
     arranged share dealing facility,
                                                              our fundraising or volunteering                             September 2002, recognising and
     shareholders could choose for the
                                                              employees with £250 each                                    celebrating the achievements of our
     proceeds of their sale of B shares
                                                              financial year, to help the charities                       employees who volunteer in their
     to go to charity.
                                                              they support.                                               community.
     In 2002 we received a 20th
                                                              Part-time Secondments – We
     anniversary award from the Terence
                                                              encourage our employees to
     Higgins Trust, an HIV/AIDS charity,
                                                              develop skills such as team building
     for our continued support.
                                                              and communication through
                                                              valuable community work. It’s
     2. Employees
                                                              something that benefits them, as
     Many of our employees willingly
                                                              well as our community partners.
     give up their spare time to raise
     money and volunteer for a wide                           Marks & Spencer ‘Cares’ – The
     range of charities and local                             ‘Cares’ programme arranged by
     organisations. We are keen to help                       Business in the Community
     employees who wish to become                             gives teams of employees an
Summary                                                                                                                              Feedback

                                                                                                                                     (Please tick all boxes that apply)
Leadership                                                  Additional copies & audio tape
A Board level Corporate Social Responsibility               Additional copies, or an audio tape giving highlights,
                                                                                                                                     I am a:
Committee led by the Chairman provides leadership           can be obtained by calling freephone 0800 591 697.                           Marks & Spencer shareholder
supported by a Forum of key managers from across                                                                                         Marks & Spencer employee
the Company.                                                                                                                             Marks & Spencer customer
                                                                                                                                         Marks & Spencer supplier
Listening to Stakeholders
                                                                                                                                         NGO staff member
We have carried out stakeholder ‘mapping’ to identify
                                                                                                                                         CSR/environmental consultant
all stakeholders and how we listen to their expectations.                                                                                Financial analyst
Listening and learning will continue to be our highest                                                                                   Investor
Corporate Social Responsibility priority, now and in                                                                                     Journalist
the future.                                                                                                                              Student or schoolchild
                                                                                                                                         Other (please specify):
Important Issues
We have used our understanding of stakeholder
expectations to identify the most important issues,
known as ‘materiality’. We have identified a full range                                                                               Your information needs
of CSR issues with reference to the United Nations                                                                                   I am interested in:
                                                                                                                                         General background information on Marks & Spencer and CSR
Global Reporting Initiative, and grouped them under
                                                                                                                                         Information on particular topics (please specify):
20 headings.

Integration
Every area of the Company is currently developing its
                                                                                                                                     Did you find the information you were looking for?
own Corporate Social Responsibility action plan to
meet our overall responsibilities. Existing management                                                                                   Yes        No
systems include requirements for Corporate Social
Responsibility action.                                                                                                               Overall impression

Indicators
                                                                                                                                     I think the CSR Review is:
Our aim is to provide comprehensive and useful                                                                                           Excellent
measurements of our progress on Corporate Social                                                                                         Good
Responsibility, and we already use a wide range of                                                                                       Average
indicators for this.                                                                                                                     Poor

Assurance
                                                                                                                                     Internet version
Information relating to our Corporate Social
                                                                                                                                     Do you have internet access at home or work?
Responsibility performance is currently collated by
Marks & Spencer personnel with the assistance of                                                                                         Yes        No
external specialists where required. In 2002, an external
assurance provider conducted a review of key systems                                                                                 Would you be happy, in principle, to access an internet version
and performance. We are currently developing plans to                                                                                of our forthcoming CSR Report instead of a printed copy?
provide suitable levels of assurance in the future.
                                                                                                                                         Yes        No
Reporting
Marks & Spencer already reports progress on a wide                                                                                   Any comments?
range of Corporate Social Responsibility issues through                                                                              We welcome your thoughts about the CSR Review.
Business in the Community’s Impact on Society website,
the Ethical Trading Initiative, London Benchmarking                                 Design and production
Group and our own website. In June 2004 we plan to                                  Designed and typeset by Pauffley, London
produce our first CSR Report.
                                                                                    Printed by The Beacon Press using their
                                                                                    environmental print technology. The paper is
Feedback                                                                            Mega Matt, 50% totally chlorine-free pulp from
We welcome your views on this publication, its content                              sustainable forests and 50% recycled fibre.
and our plans for the future, and have attached a                                   Beacon Press is a Carbon Neutral® company.
feedback form over the page.                                                                is a Millennium Product.
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                                                                                      2
                                         Corporate Social Responsibility Department
                                         Room D147
                                         Marks and Spencer Group p.l.c.
                                         Michael House
                                         47 Baker Street
                                         LONDON
                                         W1E 1BR




         2000
ENTERPRISE INNOVATION
THE QUEEN’S AWARD FOR

         2003
ENTERPRISE INNOVATION
THE QUEEN’S AWARD FOR

				
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