Corporate Responsibility

Macfarlane Group has a responsibility to ensure that through its business operations it impacts positively on society. In order to achieve this we have a series of three programmes focused on environmental care, improving the customer experience and increasing employee engagement.

Corporate Responsibility (CR) leadership comes from an internal committee consisting of members from a cross section of the Group led by the Chief Executive. The key objectives of the CR Committee are:

  • To improve the awareness of CR across the Group;
  • To develop and implement CR action plans that support the CR strategy;
  • To ensure that CR becomes an integral part of daily operational activities; and
  • To monitor and report on CR performance using agreed key performance indicators (KPI’s).

Environmental care

Mandatory Greenhouse Gas Reporting 2017

Macfarlane Group is committed to reducing its greenhouse gas (“GHG”) emissions.

This report outlines Macfarlane’s GHG emissions for the year ended 31 December 2017. Using an operational approach, Macfarlane Group identified its boundaries to ensure all of the activities and facilities for which it is responsible were being recorded and reported in line with Scope 1 and 2 of the Mandatory Greenhouse Gas Reporting regulation.

Relevant data was provided to an independent consultant, Carbon Clear. The validity, accuracy and completeness of the data was audited by Carbon Clear and then used to calculate the GHG for Macfarlane Group. The calculations were completed in accordance with the main requirements of ISO-14064-1:2006 standard and deliver both absolute values and an intensity ratio for Macfarlane’s emissions. Acquisitions made during 2017 have been included in GHG reporting and an assumption has been made regarding usage based on equivalent sites within the Group.

Macfarlane Group uses total turnover (£000) in the reporting period to calculate the intensity ratio, as this allows emissions to be monitored over time taking into account changes in the size of the Group. This factor was chosen because it provides the greatest degree of accuracy and is the metric best aligned to business growth.

The results show that total gross GHG emissions in the period were 7,182 tonnes of CO2e, (2016 – 6,946 tonnes) comprised of the following;

  • Direct Emissions (Scope 1)

    5,339 tonnes of CO2e (2016 – 4,856 tonnes) 74% (2016 – 70%)

  • Indirect Emissions (Scope 2)

    1,843 tonnes of CO2e (2016 – 2,090 tonnes) 26% (2016 – 30%)

Broken down by business unit the results were as follows;

  • Distribution

    4,146 tonnes of CO2e (2016 – 4,493 tonnes) 58% (2016 – 65%)

  • Manufacturing Operations

    3,036 tonnes of CO2e (2016 – 2,453 tonnes) 42% (2016 – 35%)

2017 emissions have increased by 236 tonnes, an increase of 3.4%, partly due to the acquisition of Greenwoods in September 2017. The increase in 2017 emissions is primarily due to an increase in vehicle fuel consumption. There have been noteworthy reductions elsewhere within the business, including an 11.8% decrease in emissions from electricity.

Table 1 Type of Emissions Activity 2017 Units 2016 Units 2017 Tonnes of CO2e 2016 Tonnes of CO2e
Direct (Scope 1) Natural Gas (kWh) 2,476,943 2,276,232 456 419
Vehicle fuel (litres) 1,823,523 1,670,170 4,822 4,361
Other 31,688 48,750 61 76
Sub-total 5,339 4,856
Indirect (Scope 2) Purchased Electricity (kWh) 5,241,655 5,072,629 1,843 2,090
Sub-total 1,843 2,090
Total Gross Emissions (tCO2e) 7,182 6,946
Table 2 Intensity Ratio 2017 2016
Total gross GHG emissions (tCO2e) 7,182 6,946
Total Sales £000 195,991 179,772
Carbon iIntensity tCO2e/£000 0.037 0.039

Macfarlane Group has seen a small increase in overall emissions during 2017, with programmes being completed to ensure the effective management and reduction in emissions where possible.
The 2017 acquisitions have increased emissions in areas such as fuel usage, in line with a larger fleet. The intensity calculation for 2017, reflects the work completed with a reduction in emissions based on sales turnover from 0.039 to 0.037.

During 2018, a programme will be developed with the key objective of reviewing transport efficiency to ensure effective and efficient use of the company’s fleet including recent acquisitions. The target in 2018 will be to see a reduction in fuel consumption, year on year. This will be aided by a programme to upgrade our fleet (approx. 40% of vehicles being replaced in 2018) with new vehicles having cleaner, more fuel efficient, engine technology. These trucks will also yield a significant reduction in our NOx emissions.

Table 3 Business Segment 2017 Tonnes of CO2e 2016 Tonnes of CO2e 2017 Sales £000 2016 Sales £000 2017 tCO2e/£000 2016 tCO2e/£000
Packaging Distribution 4,146 4,493 171,771 155,900 0.024 0.029
Manufacturing Operations 3,036 2,453 24,220 23,872 0.125 0.102
TOTAL 7,182 6,946 195,991 179,772 0.037 0.039

Given the growth of the business, continued reductions in the overall Gross tC02e/Sales result will be a challenging target, however the Group is committed to see a further year on year reduction in 2018.

Waste management

The recycling and recovery (landfill diversion) rate for 2017 across all sites showed a marginal increase compared to 2016. This has been achieved with the support from Reconomy, our waste provider, through more site audits at our Distribution and Manufacturing facilities, local toolbox talks and utilising our waste recording portal which provides reports to help manage waste streams and costs.

Our goal to achieve a zero to landfill status in 2017 was very close with all businesses across the Group achieving over 99% of waste diverted from landfill. The levels of waste segregated on site also increased to 68%.

Our Labels division, through recycling 70 tonnes of paper-based backing product as part of their waste reduction programme, achieved the best result in the Group with 99.9% waste diverted from landfil.

total waste table

As the chart shows there have been significant improvements in the recycling and recovery rate figures since 2009 and the current rates are considered exceptional for the packaging industry.
Our key environmental objectives for 2018 include;

– Continuous review and appraisals of all sites every 3 months with a view to making efficiencies
– Explore potential benefits through the waste management division of our most recent acquisition, Nottingham Recycling Ltd, who provide the recovery of sorted materials
– Look at the feasibility of capex expenditure in roll packers for wood waste, the latest compactors for corrugated waste and options for sawdust waste
– Review options on plastic strapping, now classed as a general waste item
– Provide further training on portal reports to reduce invoice queries and improve site waste management
– Deliver savings through the Manufacturing Waste Reduction Programme

Macfarlane Group works in partnership with its customers and suppliers to ensure, at every opportunity, we provide an expert, independent and tailored approach, so that the products and services we provide take into consideration the impact on the environment.

One approach we take in order to achieve this is through an Environmental Product Matrix, produced in conjunction with our suppliers, which is consistent with the underlying need to ensure products are effectively protected in storage and transit. This Matrix enables our customers to choose packaging, which is fit for purpose, whilst ensuring they still embrace the Reduce, Re-use, and Recycle ethos.

To support our ongoing commitment to improve our environmental performance, we pursue the following objectives:

– To ensure compliance with all applicable environmental legislation and regulations;
– To reduce emissions’ pollution;
– To improve waste management practices;
– To reduce the consumption of natural resources;
– To minimise noise and other nuisances; and
– To continuously assess our environmental performance.

These objectives are monitored by an internal, independent audit process, which provides visibility of a site’s operational activities, and its adherence to legislative or company requirements. Environmental information is recorded, reviewed and analysed, by an identified team of individuals to ensure compliance with the Company’s legal obligations and achievement of internal objectives and targets.

The Group continues to make progress in its performance against the identified CR objectives. During 2018, the CR Committee will continue to review environmental performance, actively supporting methods or practices that contribute to the continued development of a culture driven by environmental responsibility.

Registration to ISO 14001

With the exception of certain recent acquisitions, all our UK packaging sites are registered to BSI ISO 14001 Environmental Management Standard. As an internationally recognised standard on environmental management, registration involves a process of continual assessment of our environmental standards and processes.

Health and safety

The health, safety and welfare of our people, including colleagues, customers and suppliers, forms a critical part of Macfarlane Group’s business objectives. We aim to achieve a positive health and safety culture through the creation of a safe and healthy work environment, preventing and minimising risks. Our vision and goals for Health and Safety and how we commit to achieve them are based upon the best practice guidelines, issued by the Health and Safety Executive (HSE). To ensure we adhere and abide by best health and safety practices we have dedicated Health and Safety Managers in the business, who work with local Health and Safety teams to ensure knowledge and standards are effectively applied to the business on a consistent basis throughout all the health and safety disciplines.
To ensure constant and consistent focus regarding Health and Safety throughout the Group, it is a main agenda item at all formal monthly review meetings and operating sites in the Group are internally assessed and graded on their Health and Safety performance.

The Group Board plays a pivotal role in overseeing the operation of all Health and Safety. The Group Board reviews a report on Health and Safety at each meeting. This report covers incidents, near misses, reportable and non-reportable incidents.

The Accident Frequency Rate (‘’AFR’’) representing the number of reportable incidents per 100,000 man-hours worked is shown below.

AFR 2017 2016 2015 2014
Packaging Distribution 0.53 0.42 0.34 0.24
Manufacturing Operations 0.22 1.11 0.46 0.22
Group 0.43 0.64 0.38 0.23

In 2017, we experienced a decrease in AFR vs. 2016. This represented 6 reportable incidents compared to 9 in 2016. All reportable incidents are investigated thoroughly by our Health & Safety team and changes to working practices implemented if required. We also ensure that training in a particular area where incidents have arisen is reinforced.

The customer experience

Customer feedback

To continually improve the service to our customers, we use a range of metrics to evaluate our performance on an annual basis. In Packaging Distribution, we gain regular feedback from our customers throughout the year through Net Promoter Score (NPS) Surveys, Mystery Shopper and online Trust Pilot reviews. This insight is then used to improve products, processes and systems that interact with our customers. In addition, we continue to survey our customers in all of our businesses, on an annual basis, to evaluate our performance against a range of key service metrics.

Annual Customer Satisfaction Scores

2017 2016
Packaging Distribution 89% 89%
Packagin Design and Manufacturing 82% 89%
Labels 95% 93%
Sales order management

Our online customer order management system, Customer Connect, and www.macfarlanepackaging.com is contributing to improvements in productivity as well as meeting the needs of our customers requiring more visibility of their packaging management. In the Packaging Distribution business in 2017, the value of sales transacted online has decreased from 12.3% to 12.2%. In Packaging Distribution in 2017, orders transacted online decreased to 23% vs. 24% in 2016.

Electronic documentation

In 2017, 86% (2016 – 78%) of invoices to our customers were delivered electronically, further reducing our paper usage. The Group is continuing to encourage customers to receive documentation electronically.

Macfarlane group websites

Our family of websites enables existing and potential customers to research and evaluate our products and services and is a major contributor in generating new leads for the business. We will continue to invest in our websites to improve the experience for our customers and visitors and strengthen our value proposition.

Macfarlane Group websites

Business Website domain Target market/audience
Packaging Distribution www.macfarlanepackaging.com Wide range of businesses using packaging that need to protect their products during shipping and storage.
Network Packaging www.networkpack.co.uk Wide range of businesses using packaging that need to protect their products during shipping and storage.
Nelsons for Cartons & Packaging www.nelsonsforcartons.co.uk Wide range of businesses using packaging that need to protect their products during shipping and storage.
One Packaging www.onepack.co.uk Wide range of businesses using packaging that need to protect their products during shipping and storage.
Greenwoods Stock Boxes www.boxesdirect.co.uk Wide range of businesses using packaging that need to protect their products during shipping and storage.
Packaging Distribution Ireland www.macfarlanepackaging.ie Wide range of businesses in Ireland that need to protect their products during shipping and storage.
Packaging Design and Manufacture www.macfarlanemanufacturing.com Manufacturers of high value products in the aerospace, defence, electronics, medical and general industrial sectors.
Labels www.macfarlanelabels.com FMCG manufacturers and retailers in the food, health and beauty, household products, beverages and pharmaceutical industries.

Macfarlane Group recognises the importance of recruiting, developing, rewarding and retaining the very best people to ensure our business continues to run successfully. Maintaining a working environment that promotes good employee relations, safety and employee engagement at all levels is critical to every Macfarlane operation.

The employee experience

Employee development

Macfarlane Group strives to make our workplace one in which individuals feel challenged, fulfilled and able to achieve their full potential. The Group invests in training in order to best equip individuals with the skills and knowledge required to provide an outstanding tailored service to our customers and fulfil their personal potential. On average, in 2017 each employee was engaged in 11.5 hours of formal training. This figure has shown a slight increase from recent years, due to Macfarlane Group engaging with Apprenticeship Schemes during 2017.
Macfarlane Group offers a wide range of training opportunities, ranging from external training and coaching to on-the-job training. This allows individuals to be stretched and challenged to achieve career objectives. The Company also provides Sponsored Further Education programmes, to support employee engagement in long-term education.

Employee engagement

Employee engagement is an ongoing feature of our business. Through performance appraisals, business update sessions and informal review meetings a platform is provided for employee participation and involvement. Employee Surveys are conducted throughout the business providing a constructive method of feedback. In addition, and to support consistent employee engagement we run a number of functional forums and feedback workshops, both role specific and business specific. These forums provide an opportunity for our employees, to engage in an open two-way dialogue on topics that are important to everyone, including business performance, strategic targets and the overall wellbeing of our employees.

Macfarlane Group provides interactive tools and resources to employees via mechanisms such as iPads providing employees with the ability to gain information, advise and provide feedback instantly, supporting the continued aim of enhancing the customer experience.

Macfarlane Group encourages employees to engage with their local communities, supporting charities and activities that are having a positive impact in their region. During 2017 a number of Macfarlane teams engaged in events, providing support from both a resource and financial perspective. Each year Macfarlane Group makes a one-off donation to a charity chosen by the workforce; for 2017 this was LGS Foundation UK.

Diversity

The gender breakdown of Directors, Senior Managers and other Group employees at 31 December 2017 is shown below:

2017 2016
Female Male Female Male
Directors 0 6 0 6
Senior Managers 4 12 4 12
All other Employees 308 530 277 456

Macfarlane Group will present its Gender Pay Gap information on the corporate web site from April 2018.

Human Rights

Macfarlane Group does not have a specific Human Rights policy at present but it does have other policies, which reflect established human rights’ principles. These are:

• Equality – Macfarlane Group is committed to providing equal opportunities in employment and to avoiding unlawful discrimination in recruitment, employment or to its customers and suppliers. Striving to ensure that the work environment is free of harassment and bullying and that everyone is treated with dignity and respect is an important aspect of ensuring equal opportunities in employment and there is a specific dignity at work policy, which deals with these issues. Where an employee becomes disabled every effort is made to ensure that their employment with the Group continues and that appropriate adjustments are made. Disabled employees receive equal opportunities regarding selection for training, career development and promotion.

• Engagement – Macfarlane Group recognises the importance of meaningful communication and consultation in maintaining good employee relations. This is achieved through formal and informal meetings across all business units.

• Anti-Bribery & Corruption – Macfarlane Group has an anti-bribery and corruption policy, which is supplemented by a gift register and an associated policy on accepting gifts.

• Whistleblowing policy – there is provision for employees to use an independent service if they are not comfortable speaking to anyone within Macfarlane Group with regard to any matters which give them concern. This service is promoted throughout the Group.

• Modern Slavery Act – Macfarlane Group has now made a statement under the Modern Slavery Act which is supported by internal procedures to ensure that the principles of the act are adhered to. The statement is available on the website and can be accessed here – Modern Slavery Act.