Our suppliers are key to our goals Our supply chain plays a crucial role in our business. We want to make sure our suppliers can help us in our goal of making a positive impact on the communities we serve, the people who live here and the environment around us. Supply Chain Sustainability Strategy Our thinking on sustainable procurement is evolving, and we are using the principles of ISO 20400 to develop an ambitious Supply Chain Sustainability Strategy. In time, we will continue to embed sustainability throughout the procurement and contract management life cycle. Our contract and procurement managers are now trained in ethical sourcing and supplier management, and have sustainability included within their job descriptions and personal objectives. We’ve updated our supplier-selection criteria, with a tailored approach that takes into account the size and relevance of procurement activity. For example, in our chemicals tender, we introduced specific questions on carbon management and the intensity of products. Our Sustainable Supply Chain Charter We aim to work only with organisations who respect our principles and socially purposeful standards of working – and to help achieve that, our Sustainable Supply Chain Charter outlines those principles. It sets out our minimum expectations for our supply chain. We updated the Charter in 2020, making it more ambitious, in line with our new Sustainability Framework, and we are pleased that a further 649 suppliers have signed it since September 2020, now making the total over a thousand since 2016. The Charter acknowledges that organisations are at different stages on the road to sustainability. Also that we are here to help with the development of their approach on any given issue case by case. For example, for modern slavery, we identify high-risk suppliers, offering guidance and free awareness sessions. For carbon reporting and reduction, while our approach is in its infancy, we will initially focus on suppliers whose carbon impact is high, and the mechanisms we need to put into place to support them with reporting and management. Our focus over the last year has been to establish our Scope 3 baseline, which has highlighted where these high-impact areas are, and we’ll use this insight to improve the accuracy of our Scope 3 data. Importantly, it allows us to support suppliers. Valued partnerships and collaboration with our supply chain are essential parts of achieving better and more sustainable outcomes for all our stakeholders, and we want everyone to support us in taking care of our customers, communities, colleagues and the environment around us. ” “ Liv Garfield, Chief Executive Tackling modern slavery We continue to take our responsibilities for modern slavery risk seriously within our organisation, and have this year focused our communication with our supply chain on this as an extension of our zero-tolerance approach. We refreshed our approach to assessing risk and launched a new Modern Slavery Supplier Assurance Programme, where we apply a risk assessment following a self-certification questionnaire. We then discuss the issue with those that score as high risk, and develop plans together to improve their approach. We work closely with the Slave-Free Alliance, a group of over 20 organisations working together to tackle this issue by identifying a common approach to supplier due diligence, risk mapping, and training and awareness. Building on our previous face-to-face workshops, we have provided their awareness workshops to an additional 100 colleagues working in relevant roles. We’ve also established some collaboration across the industry, being one of over 20 organisations now part of the utilities sector Modern Slavery Working Group, helping us to share best practice. Real Living Wage accreditation In March 2020, we became an accredited Living Wage Foundation employer and we are working with our supply chain to ensure they all adopt the real Living Wage as a minimum for all direct employees who working on our contracts. Several suppliers increased employees’ wages immediately. Since achieving our accredited status as a real Living Wage (‘RLW’) employer, we have focused our attention on raising awareness across our supply chain and ensuring RLW applies to all new contracts and contract extensions. The Prompt Payment Code We remain a signatory of the Prompt Payment Code. To 31 March 2021 we were paying SMEs immediately, in recognition of the pandemic circumstances. Generally, we make 98% of supplier payments within 60 days and, on average, pay suppliers within 26 days of receiving their invoice. Supplier Spotlight Our Supplier Spotlight platform continues to be an important two-way channel for positive and constructive feedback on the work our supply chain undertakes. This year we made over 156 contacts through the Spotlight platform. Building a better business Working with our suppliers To make it easier for our suppliers to support our goals we’ve developed a standard set of pledges to encourage collaboration on the key principles outlined in our charter. Currently 60 suppliers (representing 56% of our spending) have pledged to act on biodiversity, carbon reduction, resource efficiency and social mobility. Supplier pledges We’re working with the Supply Chain Sustainability School. Made up of over 100 partner companies, the school represents a common approach to addressing sustainability by building knowledge, capability and collaboration opportunities across a shared supply chain. It offers free resources, tools and training, which we’ll be using with employees and suppliers. Supply Chain Sustainability School Following specific training, we were awarded the Chartered Institute of Procurement and Supply’s (‘CIPS’) Ethics Mark. We have trained all colleagues who select and manage our suppliers in ethical sourcing and supplier management. CIPS Ethics Mark