Sustainability reporting process and methods
This chapter provides specific information on the reporting process and reporting methods BAM used to arrive at the sustainability figures and topics included in this report.
BAM reports its sustainability policy and the associated results to all stakeholders. BAM’s stakeholders include clients, the company’s employees, suppliers and subcontractors, shareholders, other organisations in the construction industry, NGOs and public authorities.
Reporting criteria – GRI G4 ‘In accordance’ – Comprehensive
This report has been compiled ‘in accordance’ with the Comprehensive Option of the G4 Guidelines of the Global Reporting Initiative (GRI). Chapter 7.2 includes an overview of the GRI G4 and CRESS economic, environmental and social performance indicators covered by this report. Certain indicators are reported qualitatively rather than quantitatively. Chapter 7.2 discloses the nature of reporting per G4 – Comprehensive Indicators e.g. quantitatively or qualitatively.
Reporting period and reporting frequency
This report presents both quantitative and qualitative data for the calendar year 2015. An exception is made for all CO2 and waste data reported by BAM International which applies a reporting period of 1 December 2014 to 30 November 2015. BAM allows for this different reporting period as BAM International has a complex operating and reporting structure and more time is required to ensure that the reported data is reliable and adequate. BAM believes that the effects of a different reporting period by BAM International is not material to the Group’s annual report. All other data is reported annually.
This report contains data of all operating companies and thus BAM’s own activities. Sustainability performance and data are accounted for according to BAM’s share of equity. As an exception to this rule, BAM International reports all sustainability data for joint arrangement projects in which it is the leading party. In general BAM views disclosure regarding acquisitions and divestments on a case-by-case basis. BAM is considering to make a better policy on how these are incorporated in reporting.
The Integrated Report, including all material aspects, is approved by the Supervisory Board and the Executive Board. Data collection takes into account BAM’s organisational structure. Both qualitative and quantitative information is reported by operating companies to the Group. The data is consolidated and validated first at company level and then consolidated and further validated at group level. Every reporting entity has a CSR manager, CSR controller and director responsible for CSR who are involved with ensuring reliable reporting. In 2009, a reporting system for CO2 emissions and waste was launched as an extension of the financial reporting system.
The reporting process and definitions used are formalised in BAM’s CSR reporting manual. The sustainability reporting manual provides guidance on how to measure, calculate and estimate data.
For BAM’s main indicators this chapter provides further insight below. For other quantitative indicators disclosures on the reporting scope and methods used are given in the annual report itself. Where relevant, figures are presented in a relative way (using percentages and ratios) to make it possible for readers to monitor and measure progress year-on-year, unless the reporting criteria require absolute figures to be disclosed.
For safety BAM defined its incident frequency (IF) as the number of BAM employees and all persons working under supervision of BAM International involved in reportable incidents per million manhours worked on BAM’s construction sites. Reportable incidents are based on actual occurrences and are never extrapolated or estimated. Reported hours are measured, calculated or estimated. For all companies, except for BAM International, BAM includes only BAM employee related accidents and hours. BAM International takes into account all persons working under their direct supervision although they may not have a labour contract with Royal BAM Group directly. As a result, the accidents and hours worked by all persons working under the supervision of BAM International and irrespective of their labour contract are included in the reported incident frequency. This is inherent to BAM International’s business model. In its disclosures concerning the incident frequency BAM distinguishes between the incident frequency for all operating companies including BAM International and the incident frequency for all operating companies working in the five home countries which thus excludes data from BAM International.
Human Resources (HR)
HR data is obtained twice a year using a standardised questionnaire. HR data is derived from the HR accounts held by BAM’s operating companies. Due to different definitions used, breakdowns in chapter ‘Employee recruitment, development and retention’ are based on figures that do not match the total number of FTE in ‘Key figures’. This does not cause different insights. FTE and absenteeism definitions may vary per territory.
Energy consumption and CO2 emissions
Our energy consumption and greenhouse gas inventory is based on the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, Revised Edition (2004: ‘Corporate Standard’) as issued by the World Business Council for Sustainable Development and the World Resource Institute. For greenhouse gas emissions BAM has chosen to report only on CO2. Other greenhouse gases, such as CH4 (methane), N2O (nitrous oxide) are excluded from BAM’s emissions inventory as they are considered not material. BAM uses country specific emission factors for the calculation of the greenhouse gas emissions, or more accurate factors if available. BAM uses standardised conversion factors to calculate energy consumption. The Group’s reporting scope includes its direct CO2 emissions (scope 1 emissions, from BAM’s own sources), indirect CO2 emissions from the generation of purchased electricity consumed by BAM (scope 2 emissions) and three indirect categories of CO2 emissions that are a consequence of BAM’s business activities from sources not owned and controlled by BAM: employee air travel, employee car travel with privately owned cars and business travel (scope 3 emissions). Emissions from the use of private cars at BAM’s German operating companies are excluded from scope 3 emissions, due to fiscal technicalities. The impact on the total scope 3 emissions is considered to be limited.
The GHG Corporate value chain (scope 3) accounting and reporting standard for full scope 3 reporting has not been implemented. Contrary to the Greenhouse Gas Protocol BAM reports fuel consumption by leased vehicles under scope 1 emissions. Energy consumption from district heating and use of public transport are considered negligible and therefore not included in BAM’s overall energy consumption and related CO2 emissions.
The basis for consolidated energy consumption and CO2 emissions is activity data which in turn is based mostly on metre readings, invoices and data provided by suppliers. Where reliable data is not available, BAM uses calculations or estimations using reliable methods and input data. BAM is satisfied that the estimates are reliable in all material respects.
Where clients provide BAM with electricity and BAM is able to receive reliable information on its client supplied electricity consumption, the company includes this consumption in its carbon footprint. Also, as BAM only receives information on CO2 emissions associated with air travel, which BAM includes in its scope 3 emissions.
Using conversion factors from reputable and authoritative sources, BAM determines the energy consumption in TJs and CO2 emissions associated with BAM’s energy consumption. BAM has updated its set of emission factors in 2013 compared to its previous reports. The factors follow the Kyoto protocol and UNFCCC charter as closely as possible. Each factor originates from a reputable source, which is updated annually.
It occurs on its projects that BAM supplies fuel and/or electricity to subcontractors. BAM’s CSR reporting instructions state that fuel and electricity supplied to subcontractors should be measured and excluded from reported figures, unless fuel and electricity is supplied under the supervision of BAM, including for rented or leased machinery and possibly operating personnel. In practice, however, it is not always possible to unambiguously determine how much fuel is supplied to subcontractors. In that case BAM accounts for all CO2 emissions. BAM continues to encourage measuring fuel and electricity supplied to third parties. This will result in more accurate figures of its own CO2 emissions and further insight in reduction potential to all involved.
BAM’s reporting scope includes all waste leaving its sites and offices, mainly based on waste tickets and data provided by suppliers. Excavation waste and demolition waste are especially difficult to measure. Reported waste is either measured, calculated or estimated using reliable methods and input data which can be based on BAM’s experience in comparable works e.g. the relation of asphalt and aggregates.
Since 2011 BAM made a shift from reporting cubic metres to tonnes and recalculated the waste figures of 2009 and 2010. The percentage on waste separation relates to BAM’s Dutch companies and is based on information from BAM’s waste management suppliers. BAM is satisfied that the converted waste figures provide a reliable basis for comparison over time of its performance on this field.
In 2011 BAM started reporting on the amount of materials used and the recycled content of various materials used by Dutch operating companies. BAM has selected the raw materials which it consumes in large quantities and which have a significant impact on natural resources. The Group reports on concrete, timber, asphalt, bricks, steel and limestone.
The raw material consumption in the Netherlands was determined using solid statistical methods (weighted least square methodology) by random sampling of invoices from BAM’s financial database. BAM has determined the average procurement volume per material based on evaluated invoices. From the sample, BAM also derived an average price per unit of material. The average procurement volume, divided by the average price, resulted in a volume or weight per material. BAM has sampled sufficient invoices to derive statistically reliable averages. The results of BAM’s statistical analysis are within a 95 per cent confidence interval. The results are considered to be statistically reliable and are verified against suppliers’ data, internal and external experts and with BAM’s procurement database. The recycled content is determined based on information provided by suppliers.
True Price of asphalt
The True Price calculations of LEAB and STAB in chapter Materials are made by a third party and contain inherent estimates and specialised supplier data. The methodology has been checked for logic and consistency, yet it is known that different visions on the cost of CO2 are available and that the cost of CO2 is subjective. A comparison by True Price has been performed to evaluate the bandwidth of CO2 cost, in which a conservative estimate is used by True Price. LEAB is a product with new data and is compared to STAB, of which the most accurate data is five years old.
Potable water consumption volume is based on final settlements paid in 2014. BAM’s entity regarding drainage activities was divested in 2015. The corresponding information on the extracted water volume is thereby excluded from the reporting scope and comparable figures have been removed.
For the Dutch companies BAM has investigated the extent to which its purchases are sourced locally. BAM has defined local sourcing as a purchase done with a supplier who is located in the same country as the construction site. Based on the country of residence of its suppliers, BAM determined the percentage of local sourcing. BAM was able to examine 99.97 per cent of the purchasing volume in the Netherlands.
BAM has reported the NOX emissions from asphalt plants, some of which participated in the Dutch NOX-trading system.
In 2014 the emission trade system for NOX was terminated. Asphalt plants were obliged to report their NOX emissions to the Dutch Emission Authority (NEa). An independent auditor determined the NOX emissions per consumed unit of fuel. BAM continues to calculate the NOX emission factors which were required in previous years. For joint arrangement asphalt plants BAM reports the NOX emissions based on its share of equity in these asphalt plants.
Business conduct includes information regarding the Group’s Business Principles and Code of Conduct, on which BAM reports qualitatively. In addition, this report contains quantitative information on a mandatory e-learning course to increase awareness and understanding of the Code of Conduct and expected ethical behavior. The performance indicators concerned are: the number of employees who received an invitation to participate, which applies to all BAM Infra NL, BAM Bouw en Vastgoed and BAM PPP staff with a BAM email account; and the percentage of these employees that successfully completed the course between introduction in 2014 and 31 December 2015.
Verification of this report
In order to provide BAM’s stakeholders comfort over BAM’s sustainability information, for the sixth consecutive year the Executive Board has appointed PricewaterhouseCoopers Accountants (PwC) to provide independent assurance of the Report. As in previous years, BAM obtained reasonable assurance for all information with regard to the Safety section as included in chapter 3.2, IF and SAA. Additionally PwC provided reasonable assurance over the ‘Material themes’ section in chapter 3.1 and the ‘Business conduct and transparency’ section in chapters 2 and 3.2. For all other information reported in chapters 2, 3 and 7 (with the exception of paragraph 3.1 and 3.4) BAM obtained limited assurance.
As BAM applies the ‘best standard’ principle with regard to external assurance, the Group asked PwC to apply NV COS 3810N, a standard explicitly developed to verify sustainability reports. This standard includes strict requirements for the quality of accounts, the indicators used and the wording of the Report. Readers can therefore be confident that the report provides a fair and true representation of sustainability within BAM. The Group aims to achieve the highest level of assurance (reasonable assurance) through a staged approach, focusing on the most material themes. Increasing the maturity of internal processes in the coming years will help in also increasing the level of assurance of the report.
Other sources of information
Royal BAM Group welcomes your comments on CSR. If you have any questions or remarks, please contact BAM’s CSR department via e-mail (firstname.lastname@example.org).