People - Drax

People

Our people – employees and contractors – are a key asset of the business and we are focused on creating a diverse and inclusive working environment that is both safe and supportive. Our One Drax people strategy focuses on developing skills and talent, valuing our people and driving business performance.

Health, safety and wellbeing

SUMMARY PERFORMANCE

 2018 Actual2018 Target20172016
Drax Group Health and Safety
LTIR(1)0.090.130.130.02
TRIR(2)0.22*0.220.270.22
RIDDOR9774

1 LTIR is the total fatalities and lost time injuries per 100,000 hours worked
2 TRIR is the total fatalities, lost time injuries and medical treatment injuries per 100,000 hours worked
* Limited external assurance using the assurance standard ISAE 3000 for 2018 data as indicated. For assurance statement and basis of reporting see www.drax.com/sustainability/assurance-statement/

We have Safety Management Systems (SMS) in place to ensure safe workplaces for all our people. At Drax Power Station, the SMS is certified to OHSAS 18001 and subject to regular compliance reviews, the last of which took place in 2016. In Pellet Production, the SMS meets the requirements of OHSAS 18001 and the US certification ANSI Z10. The Group health and safety policy outlines our approach.

Safety performance is reported and reviewed regularly by local management teams, the Executive Committee and the Board. Each incident is comprehensively analysed and reviewed, lessons learned are shared with employees and actions are taken to mitigate the risk of future occurrences. At Drax Power Station, a weekly safety update is uploaded to our intranet and at Pellet Production, information is made available to employees through a health and safety online portal.

The Board receives monthly reports which include Total Recordable Injury Rates (TRIR), Lost Time Injury Rates (LTIR) and numbers of Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDORs) (or US equivalent) for the Group.

Our Group TRIR for 2018 was 0.22 per 100,000 hours worked. Following the fire at our Drax Power Station biomass pellet unloading facility in 2017, we carried out a full Safety and Engineering review. In 2018, initiatives were implemented to reduce the risk of future incidents and improve operator and plant safety. These initiatives continue into 2019.

2018 also saw the launch of the One Safe Drax toolkit for safety leaders, managers and supervisors at Drax Power Station. These tools provide a standard approach for safety management and support us in creating Safe People, Safe Systems and Process, and Safety Assurance to ensure we all go home safe and well every day.

Unfortunately, in December 2018 we had a major safety incident at our Drax Biomass LaSalle site which resulted in a colleague being injured. Operations at LaSalle were suspended until all employees were retrained on safety protocols and procedures.

A full safety audit was carried out by an independent third party at all three pellet plants. The audits identified a major difference in safety culture between LaSalle and our other facilities. We currently have 42 action items we are working on that consist of the recruitment of new management staff, development of new safety programmes and procedures, safety audits, safety committees and structured training.

Our businesses have local health and wellbeing programmes and during 2019 we will work on aligning these and sharing best practice across the Group.

People and culture

The Group works to maintain consistently high standards in its employment practices and all our employees benefit from a range of policies to support them in the workplace. These include policies designed to enable different work and lifestyle preferences, processes for employees to raise grievances or concerns about safety, along with supporting a diverse and inclusive workplace. Our Group-wide people strategy focuses on valuing our people, driving business performance and developing talent to deliver our strategic and operational objectives.

Developing skills and talent

Our career development framework supports our people strategy and provides a consistent structure to compare every job at every level in Drax Group. The aim is to support employees with better understanding what is required at each point in their career, to identify career development opportunities across the business and to understand how every job contributes to the overall success of the business.

The career development framework helps employees and their managers navigate their career progression and identify skills they need in order to progress. Enabling our employees to take greater ownership of their own career is a key aspect of our people strategy.

Rewarding our people

We know that performance management and rewarding and remunerating our people fairly are key to our business success. Performance and development reviews are held annually for every employee, and managers provide support and guidance throughout the year. We encourage our UK employees to take ownership of the business in which they work through a range of shared plans.

In 2018, we implemented a single Group bonus plan to drive Drax Group performance, ensuring we value the contribution each employee makes in a fair and equitable way.

During the year we introduced our One Drax Awards, which recognise high-potential employees and reward those employees who act in ways that support and underpin our culture and values.

Diversity and inclusion

Drax Group is fully committed to the elimination of unlawful and unfair discrimination and we value the differences that a diverse workforce brings to the organisation. Our goal is to create and maintain a working environment that is both safe and supportive of all our people and where every employee has the opportunity to realise their potential. We believe that a commitment to diversity is critical to achieving our strategic goals. We are determined to be a place where employees, customers and suppliers alike feel respected, comfortable and supported in their diversity.

In line with the gender pay gap reporting requirements, we published our first gender pay gap data in March 2018.

Gender Pay Reporting

Further information on gender diversity is available in the Corporate Governance Report, p.50, Drax Group plc annual report and accounts 2018.

Employee representation and engagement

Across the Group, 19% of the workforce is covered by collective bargaining. We have representative employee consultation and information arrangements in place for those employees who have individual employment contracts.

We communicate with employees through channels including our internal intranet, quarterly newsletter and Open Forum meetings. Employees can ask our Group CEO questions through a weekly online question and answer portal.

We track employee engagement through our annual survey and in 2018 this was completed by 79% of employees. Key themes included creating greater clarity for our colleagues about our key priorities and ensuring we continue to make improvements to the learning and development opportunities we have available. In 2019, we will develop Group and business action plans to address each theme, which the Executive Committee will review regularly.

Ethics and integrity

At Drax Group we are committed to conducting business ethically, with honesty and integrity, and in compliance with all relevant laws and regulations. We do not tolerate any form of bribery, corruption or other unethical business conduct.

Our compliance framework consists of principles, policies and procedures. The principles underpin the wider framework and are set out in our Group ethics handbook, Doing the right thing. The handbook identifies the behaviours expected from our employees and contractors on topics including human rights, ethical business conduct and integrity. Our policies and procedures provide further guidance and instruction, in line with best industry practice. These include our Group Corporate Crime policy and Gifts and Hospitality, Conflicts of Interest and Due Diligence procedures.

The ethical principles contained in the handbook form part of our terms of employment. In 2018 the handbook was converted into a series of short videos. These are used as part of our new starter induction programme and for annual ethics refresher training. Teams that are exposed to increased risk receive tailored e-learning or classroom-based training.

Responsibility for ethics

Governance of our framework is overseen by the Group Ethics and Business Conduct Committee (EBCC). The Committee meets quarterly and is chaired by the Group CFO. Managers and senior managers across the Group are responsible for demonstrating leadership on ethical matters and supporting teams to apply our ethical principles.

Our Group Corporate Compliance team carries out an annual review of the Group’s gift and hospitality records and our Internal Audit team provides assurance on the robustness of our policies and processes. Results of the annual review, details of investigations conducted and audit outcomes are reported annually to both the EBCC and the Audit Committee.

The Group Corporate Compliance team also conducts annual risk assessments of each of its compliance programmes, which relate to areas including anti-bribery and corruption and modern slavery in supply chains. This is to ensure procedures remain fit for purpose and to recommend any further mitigation measures. The results are presented to the EBCC.

Working with others

We joined the UN Global Compact (UNGC) in January 2018 and have established representation on both their UK Advisory Group and Modern Slavery Working Group. This will enable us to play an active role in the UK UNGC network, to benchmark our compliance programmes, to share and exchange experience and promote peer collaboration.

We seek to work with suppliers, partners, agents, intermediaries, contractors, consultants and counterparties whose standards are consistent with our own. Third parties are subject to our pre-contract due diligence checks and continual monitoring through the lifecycle of the contract, via our third party due diligence system. In cases where a red flag is raised, we follow an EBCC-approved escalation protocol. Depending on the nature of the flagged issue, we may decide not to engage with a third party, to engage on a conditional basis, to collaborate on remedial action or to end an existing business relationship.

Anti-bribery and anti-corruption

Our internal processes ensure consistency with our zero tolerance approach to bribery and corruption.

Geographic risk is factored into our country due diligence and third party due diligence systems. Conducting business in higher risk countries must receive prior approval from the Group Operational Risk Management Committee.

Following country approval, third parties are then put forward for our due diligence process. Suppliers in higher risk countries receive a higher level of initial due diligence and ongoing monitoring. We also screen the affiliates (directors, shareholders) of these suppliers and refresh their information on a more frequent basis, compared to our lower risk suppliers. Third parties with operations in, or linked to, higher risk countries are escalated to the EBCC for review prior to engagement. Ongoing monitoring is performed with new information provided to the relevant committee, as appropriate. In May 2018, we implemented a new due diligence system across the Group to facilitate this process.

Drax Group was not involved in any legal cases related to corruption and bribery in 2018.

Labour and human rights

Our commitment to the protection of human rights includes not tolerating the use of underage workers or forced labour. This is captured in our Corporate Crime policy and our Corporate Responsibility (CR) statement.

Our CR statement outlines the standard of ethical business conduct we expect from suppliers. Businesses in our supply chain should offer a safe workplace for their employees that is free from harm, intimidation, harassment and fear. We have incorporated further provisions into our statement template to manage these risks within our procurement contracts and will further advance this effort in 2019 with the development of a Code of Conduct.

Within the Code of Conduct, we will emphasise our requirement for our suppliers and contractors working on our behalf to challenge unethical behaviour and promote a “speak up” culture.

Modern slavery

In 2018, we published our second modern slavery statement in accordance with the UK Modern Slavery Act. This describes the steps we are taking to reduce the risk of modern slavery in our supply chain.

We have a cross-functional Modern Slavery Working Group that identifies and advances actions. The group meets on a regular basis and seeks to collaborate with expert groups, with interests across a range of industries, to inform our practices.

Our due diligence system references a number of human rights indices, including the Global Slavery Index. This enables us to begin monitoring modern slavery risk in third party supply chains from the outset of our on-boarding process. Should the potential for modern slavery risk be flagged, a supplementary questionnaire is issued to the third party, to gather additional information to inform the assessment.

Where fuel suppliers are based in higher risk geographies, we engage with them on modern slavery. Woody biomass suppliers are engaged directly during site visits and coal suppliers are engaged indirectly through Bettercoal. To improve the transparency of our modern slavery reporting, we have engaged with the Modern Slavery Registry and TISC report, as recommended by the Home Office. We will be publishing our statements on these platforms, as well as continuing to do so on our own websites.

No instances of modern slavery were identified in 2018. One media monitoring alert was investigated and closed following direct engagement with the third party and receipt of satisfactory assurances.

Data privacy and security

We take the privacy and security of the personal data we control seriously. We are committed to maintaining effective privacy and security programmes to ensure our people, customers and the third parties with which we engage have confidence in our data handling practices.

As part of our continual improvement programme, our Privacy, IT and Security teams were re-organised and expanded in 2018. Following an internal audit, which identified weaknesses in operational IT controls that support our cyber security at Drax Power Station, we initiated a comprehensive remediation programme to address the findings and introduce more robust control measures. We also continue to update our Privacy Compliance Programme to take account of the requirements of the General Data Protection Regulation (GDPR), the new UK Data Protection Act 2018 and other associated legislation.

To support our privacy compliance processes and policies, we maintain industry-leading control measures to protect our employee and customer data, by detecting and preventing threats and security breaches. In addition to traditional security measures, we undertake advanced threat monitoring and analytics measurement as a layered toolset designed to detect, identify, respond to and resolve cyber threats and attacks before they can happen. We are conscious that such threats continue to change. Accordingly, we run a continual security programme to improve and evolve our controls and response to cyber threats.

Whistleblowing

As set out in our Whistleblowing policy, at Drax we encourage employees to speak out and report concerns either internally or through our whistleblowing hotline.

Employees can raise issues internally through managers, a member of the Group Corporate Compliance team, directly with the EBCC or through our anonymous hotline, which is independently operated by a third party.

The Corporate Human Resources team records all hotline reports received and will raise any ethical-related matters with the Group Corporate Compliance team, which maintains an investigations log. Where required, the EBCC and Group General Counsel are consulted, and a course of action agreed. Should genuine concerns be raised, we have a strict non-retaliation policy.

During 2018, no reports were made through our third party whistleblowing hotline.

Positive social impact

We provide jobs, support economic growth, pay tax responsibly and deliver charitable and volunteering initiatives in the communities where we operate.


£1.6bn

Drax Group’s total GDP contribution in 2017

£1.2bn

Drax Group’s spending with UK suppliers during 2017

17,500

Supported jobs in 2017


Job creation

Drax Group creates employment opportunities in all the areas where we operate. We directly employed a total of 2,716 people in 2018. Researchers at Oxford Economics estimate that, based on Drax’s operations in the energy sector and its use of British businesses across its supply chain, Drax contributed £1.6 billion to the economy in 2017.

In the United States, our business activities have helped to revitalise communities which have lost jobs in traditional industries, such as pulp and paper. Our Pellet Production business supports local landowners through steady and dependable demand for their low-grade wood. Without such a market, much of this low-grade timber might be under-utilised. As well as the silvicultural benefits that our market brings, it also helps to sustain loggers, hauliers, tree-planters, tree nurseries and other local businesses that either directly or indirectly provide services to us.

Drax’s economic footprint by UK region

Paying tax responsibly

Our tax strategy reflects our understanding of the fact that public policy on taxation and the entire tax environment is changing. This is also reflected in our in our Group ethics handbook, Doing the right thing.

We take a responsible approach to managing our tax affairs and we will always comply with applicable tax laws and regulations in the countries in which we operate.

Further information on taxation is available on p.130, Drax Group plc annual report and accounts 2018.

Volunteering and charitable giving

In 2018, we provided £129,016 in charitable donations through employee match funding, payroll giving, our community fund and national fundraising days. We also established strategic national partnerships and consistent Group charity and community principles. We will roll-out our Group-wide social impact strategy in 2019.

Our Haven Power employees continued to support the Eden Rose Coppice Trust’s Brickmakers’ Wood project. They volunteered 882 hours and raised £6,052. Recognising its work with the charity, Haven Power was awarded the Utility Week 2018 ‘Community Initiative of the Year’ title.