Other Statutory Disclosures
The Companies Act 2006 (the “Act”) requires the Directors to present a fair review of the business during the 52 weeks to 27 June 2021 and of the position of the Company at the end of the financial year together with the financial statements, Auditors’ Report and a description of the principal risks and uncertainties which the Company faces.
The Strategic Report can be found on pages 1 to 89 of the Annual Report. The FCA’s Disclosure Guidance and Transparency Rules (the “DTRs”) require certain information to be included which can be found in the Corporate Governance Report on pages 90 to 169.
There were no significant events since the balance sheet date. An indication of likely future developments in the business of the Company and details of the Company’s use of financial instruments for risk management purposes are included in the Strategic Report.
The Corporate Governance Report and the Strategic Report, together with sections of the Annual Report incorporated by reference, form part of the Directors’ Report which is presented in accordance with, and with reliance upon, applicable English company law. The liabilities of the Directors in connection with this report shall be limited as provided by English law.
The table opposite sets out where key information can be found in the Annual Report.
The Directors take pleasure in presenting to the shareholders their report and audited consolidated financial statements for the 52 weeks ended 27 June 2021.
Results, Dividends and Return of Cash
The Group made a profit after tax of £254m (2020: £113m).
During the 2020 financial year, due to the uncertainty around the impact of the COVID-19 pandemic on the business, there was no interim or final dividend paid by the Company. The Group signalled its intention to resume dividends in 2021 and as announced on 10 February 2021, given the Group's cash position and order book, the Board resumed dividend payments with an interim dividend of 6p (2020: nil p) which was paid on 9 April 2021.
The Board proposes to pay on 17 November 2021, subject to shareholder approval at the 2021 Annual General Meeting, a final dividend of 18.5p (2020: nil p) net per share in respect of the 52 weeks ended 27 June 2021 to shareholders on the Register as at the close of business on 24 September 2021.
The Company has in place a dividend re-investment plan which gives shareholders the opportunity to re-invest their dividends by acquiring shares in the Company.
Annual General Meeting
Notice of the 2021 Annual General Meeting to be held on Friday, 12 November 2021 will be sent to shareholders separately. Members wishing to vote should return forms of proxy to the Company’s Registrar not less than 48 hours before the time for holding the meeting.
The formal notice convening the Annual General Meeting, together with explanatory notes, will be found in a separate circular which will be sent to shareholders separately and will be available on the Company’s website. Shareholders will also find with the Notice of Annual General Meeting a form of proxy for use in connection with the meeting.
The Directors of the Company during the year to the date of this report, along with their meeting attendance, are listed on page 96. The current Directors are listed on pages 92 to 93 together with their biographical details.
Details of Directors’ pay, service contracts and interests in the ordinary shares of the Company are included in the Directors’ Remuneration Report on pages 128 to 153.
Formal appraisals of the Executive Directors were undertaken during the financial year. All the Non-Executive Directors underwent an annual appraisal conducted by the Senior Independent Director. The Board confirms that Matthew Pratt and Barbara Richmond, who stand for reappointment as Executive Directors; Nick Hewson, Sir Michael Lyons and Nicky Dulieu who stand for reappointment as Non-Executive Directors; and Richard Akers who stands for appointment as Non-Executive Chairman, continue to be effective and demonstrate the appropriate commitment to their roles.
The Executive Directors have formal service agreements and termination of their employment may be effective by 12 months’ notice given by the Company for Barbara Richmond and 6 months’ notice given by the Company for Matthew Pratt.
In accordance with the UK Corporate Governance Code (the “Code”), all of the Directors will retire at the Annual General Meeting to be held on Friday, 12 November 2021 and, being eligible and upon the recommendation of the Board, offer themselves for reappointment, save for John Tutte who will be stepping down from the Board on 15 September 2021.
Powers of the Directors
Subject to the Company’s Articles of Association, UK legislation and any of the directions given by special resolution, the business of the Company is managed by the Board, which may exercise all the powers of the Company. Directors have been authorised to allot and issue shares by way of resolutions of the Company passed at its Annual General Meeting.
The rules in relation to the appointment and replacement of Directors are as set out in the Company’s Articles of Association and applicable English company law. The Articles of Association can only be amended, or new Articles adopted, by a resolution passed by shareholders at a general meeting by at least three quarters of the votes cast.
The Company has an issued share capital of 352,190,420 ordinary shares of 10.5 pence each. The Company has one class of ordinary shares which carry ordinary rights to dividends (subject to the Company’s Articles of Association). Each share carries the right to one vote at general meetings of the Company in respect of resolutions which are taken on a poll.
No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.
Authority was given to the Directors at last year’s Annual General Meeting to allot unissued shares up to an aggregate nominal amount of £12,326,664.70 (which is equivalent to approximately 33% of the Company’s issued share capital) and up to a further aggregate nominal amount of £12,326,664.70 in connection with an offer by way of a rights issue. The authority was not exercised during the period ended 27 June 2021 or prior to the date of this report.
Authority was also given to the Directors at last year’s Annual General Meeting to make market purchases of the Company’s ordinary shares up to an aggregate nominal value of £3,697,999.41, which is equivalent to approximately 10% of the issued share capital of the Company. Under the authority, there is a minimum and maximum price to be paid for such shares and the shares purchased by the Company pursuant to this authority may be held in treasury or may be cancelled. No such purchases were made during the period ended 27 June 2021 or prior to the date of this report.
The Company has no current intention of exercising the authorities referred to above but nevertheless as these authorities expire at the forthcoming Annual General Meeting, the Directors will be seeking new authorities as set out in the Notice of Annual General Meeting.
The Company has made no non-pre-emptive issuances of equity for cash over the past three reporting periods.
Voting and Transfer of Shares
The Company’s Articles of Association do not contain any specific restrictions on the size of a shareholder’s holding or on the transfer of shares.
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities and/or voting rights.
The Company’s Articles of Association do not contain, and the Company is not aware of, any restrictions on voting rights, including any limitations on voting rights of holders of a given percentage or number of votes, deadlines for exercising voting rights and arrangements by which, with the Company’s co-operation, financial rights carried by securities are held by a person other than the holder of the securities.
Zedra Trust Company (Guernsey) Limited, as trustee of the Employee Benefit Trust, held 7,631,940 shares (2.16%) in the Company as at 27 June 2021 on trust for the benefit of employees of the Company. The voting rights attaching to the shares held by the Employee Benefit Trust are exercisable by the Trustee and there are no restrictions on the exercise of the voting of, or acceptance of any offer relating to those shares.
Substantial Holdings in the Company
As at 27 June 2021, the Company had been advised of the following notifiable interests in its ordinary shares, in accordance with Rule 5 of the DTRs.
Number of Ordinary Shares
||% of voting rights|
|Bridgemere Securities Limited||
* The Company was notified of this interest prior to the 20 for 21 share consolidation on 8 April 2019. The figure displayed as the number of shares held has been calculated by applying the 20:21 consolidation ratio to the number of voting rights contained within their most recent notification to the Company under DTR 5.1, at which time was 18,770,138.
In line with the relevant rules, the table above does not include notifications received from investment firms where the interest has fallen below 5%, or from non-investment firms where the interest has fallen below 3%.
The Company has not been notified of any changes to the above interests, or any other notifiable interests, since 27 June 2021 to 14 September 2021, being the latest practicable date.
Change of Control
The Company’s banking facilities require repayment in the event of a change of control. In addition the Company’s employee share incentive schemes contain provisions, whereby, upon a change of control, outstanding options and awards would vest and become exercisable by the relevant employees, subject to the rules of the schemes.
There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or employment in event of a takeover bid.
Following the latest tender process which was undertaken by the Committee in 2018, KPMG LLP was appointed as the external auditor of the Company in 2019 and was reappointed at the 2020 Annual General Meeting, with 99.98% of votes cast in favour of its reappointment.
Qualifying Third Party Indemnity Provisions
During the course of the 52 weeks ended 27 June 2021, qualifying third party indemnity provisions were in place. The Company agreed to indemnify the Directors, former Directors and the Company Secretary of the Company and Associated Companies (as defined in Section 256 of the Companies Act 2006), to the extent permitted by law and the Company’s Articles of Association, against any liability arising in connection with: any negligence, default, breach of duty or breach of trust by them; and their duties, powers or office, including in connection with the activities of the Company or an Associated Company in its capacity as a trustee of an occupational pension scheme.
The above indemnity provisions remain in force at the date of this report. In addition, the Company maintains directors’ and officers’ insurance for each Director of the Company and its Associated Companies.
Environmental, Social and Governance Disclosures
Limiting the environmental impact of developments by building responsibly and creating thriving and desirable places to live are key components of the Group’s strategy, and through the use of its design principles, the Company has ensured that social, environmental and economic aspects are incorporated into the communities delivered. Valuing People is also a key component of the Group’s strategy and this is executed by valuing and developing people and partners and inspiring the next generation to build.
The Board considers ESG matters as part of its regular risk assessment and the following sections seek to provide a deeper understanding of the work undertaken by the Company in relation to ESG matters.
Greenhouse Gas Emissions
Greenhouse gas (“GHG”) emissions data for the period 29 June 2020 to 27 June 2021 are set out in the table below:
Year (29 June 2020
to 27 June 2021)
(1 July 2019
to 28 June 2020)
Scope 1 activities:
|Direct emissions from combustion of fuels and business travel|
|Scope 2 activities:||3,263||
|Indirect emissions from purchased electricity and heat|
|Total Greenhouse Gas Emissions:||14,680||
|(Scope 1 + Scope 2)|
|Total emissions per 100m² of build||2.84||
This disclosure includes all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. These sources fall within our consolidated financial statement and we do not have responsibility for any emission sources that are not included in our consolidated statement.
During the reporting period, the annual quantity of energy consumed by the Company was 64,294,472 kWh. This figure presents the underlying global energy use data that was used to calculate the GHG emissions and is calculated in kWh. Where information has been converted to kWh from other units (e.g. litres of fuel), the 2021 UK Government’s Greenhouse Gas Conversion Factors for Company Reporting have been used for the required conversions.
This figure is the aggregate of:
- the annual quantity of energy consumed from activities for which the Company is responsible involving the combustion of fuel;
- the annual quantity of energy consumed resulting from the purchase of electricity and heat by the Company for its own use; and
- the annual quantity of energy consumed from activities for which the Company is responsible, involving the consumption of fuel for the purposes of transport.
100% of the figures reported above relate to emissions and energy consumed solely in the United Kingdom.
The Company has taken several measures for the purpose of reducing GHG emissions and increasing the Company's energy efficiency:
- In February, the Company switched to a renewable electricity contract for all of its offices. During the reporting year, 3.3% of total electricity was from a renewable source. From July 2021, all plots, show homes and site compounds will be supplied by 100% Green certificated electricity.
- The Company trailed a hybrid generator system with solar PV and a smart energy management system that can result in fuel savings of between 33% and 50%, with the accompanying emission reductions, helping it to achieve its targets and reduce costs.
- The Company is exploring a Group-wide roll out of energy-efficient site cabins. These will provide improved thermal insulation, double glazed windows with low u-values, energy efficient LED lights with PIR activation, energy efficient heaters with thermal cut-out and energy efficient point-of-use hot taps.
- With the Group’s supply partners, two trials are underway to explore the efficacy of Hydrotreated Vegetable Oil (HVO), a biodegradable non-toxic fuel that is produced from vegetable fats and oils. This could provide an alternative to diesel which is currently used in generators and other construction machinery and can reduce carbon emissions by up to 90%.
- As part of its effort to reduce the energy use of Customer Experience Suites and show homes, the Company has installed a ‘one-switch’ shutdown system for all of the lighting at our Newton Garden Village development and continues to monitor the impact on consumption and cost with a view to a wider rollout.
The Company has used the WRI/WBCSD GHG Protocol – A Corporate Accounting and Reporting Standard and the emissions have been calculated using the 2021 UK Government’s Greenhouse Gas Conversion Factors for Company Reporting. Reported Scope 2 emissions are calculated using the location-based method.
This inventory of GHG emissions has been verified by SGS to a limited level of assurance, in accordance with EN ISO 14064-3:2006, as meeting the requirements of The Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard. Further details and the independent assurance report can be found at redrowplc.co.uk/about-redrow/our-values/building-responsibly/managing-our-resources-efficiently/.
Research and Development
The Company has a centralised Product Development Team charged with identifying and evaluating new construction techniques and products. They are also responsible for minimising risk and seeking opportunities associated with future regulatory changes. In addition, the Company has a centralised Sustainability team, as these issues play a prominent role in the Company’s activities. The Company recognises its responsibilities to the community as a whole and has adopted an environment strategy and framework which is a core part of the Company’s objectives.
The charge to the income statement in respect of research and development for the 52 weeks ended 27 June 2021 was £0.4m (2020: £0.4m).
Managing resources efficiently is a key principle underpinning one of the Company’s strategic themes of building responsibly. The following are key examples of the Company’s approach to managing its resources efficiently:
- Carbon - the Company continues to be an active member of the UK Green Building Council and is working to reduce the carbon emissions from its homes, its operations and its wider indirect activities. The Company is committed to extending and building on its existing approach in order to deliver Net Zero Carbon homes in the coming decade. Details of the Net Zero Carbon commitments and ambition are further explained in the Strategic Report.
- Water - the homes produced by the Group have one of the lowest water use standards in the industry at 105 litres-per-person-per-day (lpppd), compared with a building regulation standard of 125 lpppd. The Company is committed to reducing the amount of water used in its operations and during the year, the water usage was 33.06m³ per 100m² of build.
- Waste - the Company is also committed to reducing waste from its operations and in 2021, waste generated was 8.11 tonnes per 100m² of build. Where possible, we try to reuse or recycle unused materials. During the year, 97.65% of our waste was diverted from landfill.
For further details on the Company’s approach to managing its resources efficiently, please see pages 46 to 55 of the Strategic Report.
The Company is committed to sourcing sustainable materials in for use in its operations to contribute to its long-term sustainability. The following are key examples of the Company’s approach to sourcing such materials:
- Timber – the Company uses timber in the construction of its homes and is committed to sourcing timber-based products from well-managed sources. In the 2020 calendar year, 99.64% of the forest products used by the Company were from verified and credibly certified sources.
- Other materials – the Company also uses supply chain mapping for other materials and products used in constructing its homes to allow it to work with supply partners to identify and avoid products deemed to be high risk in respect of environmental and social ethics.
For further details on the Company’s approach to sourcing sustainable materials, please see page 52 of the Strategic Report.
During the year, the Company continued to implement its industry-leading biodiversity strategy in partnership with The Wildlife Trusts to ensure that our developments enhance biodiversity and contribute to nature’s recovery. Internal workshops have been running to equip our teams with the knowledge and skills to deliver our ambitions in practice.
For further details on the Company’s biodiversity strategy, and action taken during the year for nature, please see pages 37 to 39 of the Strategic Report.
Following the recommendation of the Task Force on Climate-Related Financial Disclosure (“TCFD”), specific climate-related disclosures are included within this Annual Report. Please see pages 163 to 167 for the TCFD disclosure table.
The Company has an established set of placemaking principles called the Redrow 8 that has been used for over two years. The 8 principles are a robust set of commitments and benchmarks that ensure that we provide communities that are beautiful, sustainable, well-connected and developed with nature and people in mind.
For further details on the Company’s approach to placemaking, please see pages 28 to 36 of the Strategic Report.
The Board believes that greater engagement with the workforce is essential to preserving long-term value. Valuing People is a fundamental part of the Group’s strategy and understanding the views of employees and actively encouraging their participation sits highly on the Board’s agenda.
See pages 99 to 100 of the Corporate Governance Report for details of the work undertaken during the year in respect of engagement with the workforce, including the Group's arrangements to: provide employees with information on matters of concern to them, including achieving a common awareness for employees aware of financial performance of the Company; consulting with employees to obtain their views; and encouraging employee involvement in the Company’s share plans.
The Company recognises that the wellness of its employees is vital to the success of the business. During the COVID-19 lockdown period and in the time since, there has been an increase in the frequency and quality of employee communications, including the following initiatives to focus on health and wellbeing:
- introduction of ‘agile work places’ to further enhance the wellbeing of our colleagues by capturing the flexibility, trust and efficiencies displayed during the COVID-19 lockdown period and making them work for the benefit of colleagues and the Company over the longer term;
- continued training of the Mental Health First Aiders across the Divisions and implementation of support mechanisms for them including a closed forum on the Company’s intranet, a Buddy System and continued promotion of MyLife, the employee assistance programme is available to all employees, subcontractors and their families 24/7;
- introduction of Engage Lite, a condensed version of the Company’s intranet which was available to all employees on furlough to allow colleagues access to important business updates and health and wellbeing resources for themselves and their families;
- more personal engagement with employees, with the HR team trying to help people manage their personal challenges on an individual basis;
- fortnightly Health and Wellbeing newsletter distributed to colleagues across the business; and
- arrangement of a series of financial wellbeing webinars hosted by the Company’s pension provider.
The HR department has a dedicated team focusing on health and wellbeing to ensure that health remains a key priority and that the wellness initiatives in place are fit for purpose.
EQUALITY, Diversity and Inclusion Policy
The Company recognises that its continued success depends upon its ability to recruit the right people, retain them and help them to reach their full potential. The Company believes that attracting a diverse range of skills enables it to meet the challenge of the skills gap in the sector.
The Company is firmly committed to giving every potential recruit and employee the same opportunities irrespective of their gender, race, ethnic or national origin, disability, age, sexuality, religious belief, marital status or social class.
There is a strong commitment to continuously promoting equality, diversity and inclusion (ED&I) throughout the business to build a culture that is inclusive to all, actively values difference and ensures everyone is treated fairly. There is a culture where ED&I is championed by leadership and everyone in the Company owns it, feels empowered and is confident enough to get involved.
During the year, the Group released the Equality, Diversity and Inclusion Policy (ED&I Policy) and implemented a number of initiatives to aid the delivery and embedment of the ED&I agenda, which comprised:
- formation of the ED&I Working Group. a group of representatives from across the business to assist with the drafting and implementation of the ED&I Policy and Recruitment and Selection Policy;
- launch of the new ED&I Policy across the business;
- release of the 2021 Inclusion Calendar, which clearly explains dates/months which are key to a wide range of diverse backgrounds;
- communications programme to continuously raise awareness of the ED&I Policy throughout the business, and a dedicated page of the Company’s intranet to share related information;
- provision of a facility to enable individuals to share any ED&I concerns or ideas anonymously to ensure that a whole range of topics and issues were covered;
- embedment of the ED&I Policy throughout the employee journey, from recruitment and personal management to leadership development and exit management;
- amendment of the recruitment and selection process including:
- training of all recruiting managers on ED&I and unconscious bias;
- utilising a wider range of media for advertising to ensure the targeting of diverse candidates; and
- capturing an applicant’s diversity demographics as part of the recruitment process to promote the elimination of unlawful discrimination,
- including information on the Group’s ED&I agenda at the earliest opportunity in the onboarding process;
- regular sharing of stories and case studies through communications to encourage an inclusive workplace;
- sharing the ED&I Policy with subcontractors and third party partners to work with them to actively support the Group’s agenda;
- training over 350 Directors and Managers on ED&I and unconscious bias; and
- release of a mandatory e-learning module to all colleagues to raise awareness of ED&I.
As outlined in the ED&I Policy, the Company gives full and fair consideration to applications for employment made by disabled people and is committed to offering training and career development of disabled persons. The ED&I Policy places a duty on the Company to take reasonable steps to remove any disadvantage which a disabled person may have compared with employees who are not disabled. In the event of any employee becoming disabled, the Company makes every effort to ensure that their employment continues, training needs are met and reasonable adjustments are made to the working environment.
The Company embeds its stance of diversity matters through awareness and training in the following policies:
- Equality, Diversity and Inclusion Policy
- Recruitment and Selection Policy
Learning and Development
The Company places considerable importance on training and developing its people. Historically, training has primarily been delivered face-to-face at the Company’s in-house training facilities and supported through blended e-learning. During the COVID-19 lockdown, and in the time since, the Group has placed additional emphasis on its e-learning platform, ensuring all colleagues completed vital return-to-work training, in addition to refreshing core skills. Moving forward the Company will make more use of technology to deliver training through e-learning, webinars and interactive online sessions.
The Company, in partnership with Liverpool John Moores University and Coleg Cambria, established the UK’s first dedicated Housebuilding Degree. The three-year degree provides students with a full overview of housebuilding skills including quality, project management, health and safety, business skills and law. Learning is achieved through a blend of classroom activities, virtual learning, practical site visits and tutorials, meaning that learners are able to combine their studies with working and earning. Having successfully brought our first employees through to graduation we opened up the degree programme to post A-Level school leavers for the first time during the year, bringing in 16 high calibre youngsters.
During the year, the Company recruited over 111 trainees, including 41 apprentices and 15% of our direct employees are trainees. Company apprentices receive first class training, both on site and at local colleges, and the Company partners with key suppliers to ensure that apprentices receive a comprehensive understanding of the wider aspects of their chosen field.
The Company is committed to assisting with tackling the problem of attracting young people to construction, and more specifically housebuilding, by analysing the barriers to entry-level recruitment into the sector and making recommendations to overcome these. During the year, the Company signed up to the Talent Retention Scheme set up by the Construction Leadership Council to assist where possible with helping out apprentices who had lost their jobs.
Health, Safety and Environment
The Company is committed to quality and excellence therefore it follows that minimising risk to people, plant, products and the environment is inseparable from all of its other objectives. Health and safety has naturally become embedded into the culture of the Group, as it forms part of the overall duty of being an employee or supplier of the Group.
The Group seeks to achieve the highest health, safety and environmental standards as it significantly contributes to the overall performance of the business and protects both people and environment from harm. The Company operates an environmental management system that ensures that it manages environmental impacts in a systematic way and is certified by the British Standards Institute to the international standard ISO 14001.
During the year, the Group launched RedHSE, being an online accident/incident reporting system and HS&E audit platform allowing for the automation of significant HS&E data collection and analysis to help focus and target initiatives in support of continuous improvement.
For further details on our approach to health and safety, see pages 42 to 43 of the Strategic Report.
Charitable and Political Donations
The Company recognises the difference it can create through its presence as a national housebuilder by developing thriving communities through supporting the local community and charitable projects. The Company and its employees are actively involved in fundraising activities for our selected charitable partners.
Divisions annually select a local charity to support which has a purpose that aligns with one of the Group’s key priorities. This allows each part of the business to choose a charity that is meaningful to them in the communities in which they operate. In accordance with Company policy, the charity must be verified before any donations are made to it and a record is maintained of all charitable contributions made.
The Group paid £0.1m in charitable donations during the year, being £0.1m in support of local charities.
The Company does not engage or support any form of political donations. No Group company or employee is permitted to make a political donation in the name of the Company and employees are cautioned to be extra vigilant to ensure that political contributions are not made in circumstances where gifts, hospitality or the actions of third parties are engaged in transactions on behalf of the Company. The Group made no political donations during the year.
The Board values and appreciates the contribution made by all employees at every level and is committed to protecting and respecting human rights. Each employee is treated fairly and equally and the Company has measures in place to ensure that the Group is free from discrimination. Throughout the Group there is a zero-tolerance approach to any form of harassment or bullying; forced or involuntary labour; and child labour in any form. The Board is invested in the development of employees and has put in place measures to protect both their physical and mental wellbeing.
During the year, the Company became accredited with the Living Wage Foundation by ensuring that the pay of every Redrow employee is aligned with the real living hourly wage, which takes into consideration the cost of living as outlined by the Foundation, and extending this to the supply chain as a condition to working with the Company.
The Company embeds its commitments to the protection of human rights through its Human Rights Policy.
The Company conducts its operations with respect to the interests and human rights of those employed in our supply chain. The Group works collaboratively with its supply chain to develop relationships based on honesty, openness, respect and fairness. In addition, the Group supports its supply chain by, among other things, improving their knowledge of sustainability through training and working with subcontractors to attract new entrants into the industry and supporting their training needs.
As a partner of the Supply Chain Sustainability School, the Group’s supply chain have access to thousands of online presentations, training modules, guidance documents and checklists and are regularly invited to attend workshops and briefings.
Due diligence is conducted on the Group’s supply chains to ensure that the values of the partners which we are working with are aligned with the Group’s commitments to high ethical business standards. During the year, the terms and conditions of those in our supply chain were amended to ensure that our partners were committed to aligning their pay practices to the real living hourly wage as outlined by the Living Wage Foundation.
The Company embeds these commitments and expectations through its policy, Partnering with our Supply Chain.
For further details on our how the Company partners with its supply chain for sustainability, see pages 52 to 54 of the Strategic Report.
During the year, the Company continued to create thriving communities and committed £275m to the local communities served for the development of new schools, local shops, community and health centres as well as green spaces as part of the planning process.
The Group is committed to providing high quality affordable homes for local people and during the year has designed, built and delivered over 1,314 new affordable homes across its developments in England and Wales in partnership with Registered Providers.
The Company’s purpose is to operate to create a better way for people to live and there is very much a customer focused culture across the Group.
For further details on our how the Group keeps customers at the heart of the business, see pages 43 to 46 of the Strategic Report.
A summary of how the Board have had regard to the need to foster the Company’s business relationships with suppliers, customers and others, and the effect of this on the decisions taken by the Company, can be found within the Stakeholder Engagement table on pages 84 to 89.
The Board remains committed to high standards of corporate governance. Details relating to the Company’s governance arrangements and compliance with the UK Corporate Governance Code are provided in the Corporate Governance Report on pages 90 to 153.
Code of Conduct
The Company has in place a Code of Conduct, which acts as a guide for employees to doing the right thing in business. It focuses on the values and behaviours deemed most important for the Group and seeks to guide employees in their good judgement to act in the Redrow way.
The Code of Conduct provides a number of decision-making tools to assist employees if faced with difficult decisions and sets out the Company’s policy on a number of key matters deemed integral to doing the right thing in business, including:
- health, safety and environment;
- diversity and inclusion;
- human rights;
- supply chain and modern slavery;
- integrity (comprising bribery, gifts and hospitality, tax evasion facilitation, conflicts of interest, share dealing and data and asset protection); and
- charitable and political donations.
The Code of Conduct has been made available to all employees and is publicised on the Company’s intranet, Engage and is also available to view at redrowplc.co.uk.
There is a Group commitment to ensuring that there is no modern slavery or human trafficking in any part of our business or supply chains. The Group has a policy in place reflecting its commitment to acting ethically and with integrity in all business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking are not taking place anywhere in its supply chains.
There are a number of key initiatives in place to assist with the approach to ethical and responsible sourcing, including the following:
- All suppliers and manufacturers must submit a detailed Supplier Appraisal Assessment for approval as part of the pre-tender qualification process. The appraisal forms also track the country of manufacture allowing the Company to identify materials supplied by manufacturers with a high-risk profile.
- All supply partners must warrant that they shall comply, and will use their best endeavours to ensure that any subcontractor or party within their own supply chain shall at all times comply, with the Modern Slavery Act 2015.
- The Company’s Standard Purchase Order and Subcontractor Terms of Contract require trading partners to comply fully with the Modern Slavery Act 2015, with any breach resulting in the termination of all live contracts.
With temporary labour acknowledged as an area of high risk for modern slavery, external specialists are engaged to manage all temporary labour requirements and processes. Alongside a number of system-based checks conducted by the external specialist, for example right to work and health and safety, they also carry out physical checks and audits periodically to ensure temporary agency workers are legally complaint and there are no instances of modern slavery.
As a partner of the Supply Chain School, the Group’s workforce and supply chain have access to thousands of online presentations, training modules, guidance documents and checklists and are regularly invited to attend workshops and briefings. One of the key areas covered by the school is modern slavery, with online presentations, checklists, guidance documents and training modules accessed from their website.
In its partnership with the Supply Chain School, the Company has recently worked in collaboration with the school and other partners on further developing guidance materials to identify what a good due diligence system look like.
For further details on the steps taken by the Group to ensure that modern slavery is not taking place in our business or supply chains, please see our Slavery and Human Trafficking Statement for the 2021 financial year, which is available to view at redrowplc.co.uk.
The Board regularly reviews the identity and key priorities of its stakeholders and the business strategy of the Group is shaped by the issues that matter to key stakeholders. The key stakeholders of the Group and how the Board has responded to their key priorities can be found on page 84 to 89.
Anti-Bribery and Corruption
The Company has a zero tolerance approach to bribery or corruption of any form and there is a widely publicised formal policy in place dealing with this, which is available to all employees.
The Company has a principle-based system for bribery prevention, which comprises the following six principles:
- maintenance of bribery risk assessments within our sector;
- top level commitment of the unacceptability of bribery which is engrained in our culture;
- proper due diligence with people we do business with and seeking reciprocal anti-bribery agreements;
- clear policies and procedures applicable to all employees and business partners;
- effective implementation by embedding anti-bribery within internal controls, recruitment, remuneration policies, operations, communications and training; and
- monitoring and reviewing through auditing and financial controls which are sensitive to bribery.
Further details of the company’s Anti-Bribery and Corruption policy, and work undertaken to prevent bribery taking place within the business, can be found in the Audit Committee Report on page 116.
Provision of Information to Auditors
Each Director in office at the date the Directors’ Report is approved, confirms that:
- so far as the Director is aware, there is no relevant audit information (as defined in section 418(3) of the Act) of which the Company’s external auditors are unaware; and
- they have taken all of the steps that they ought to have taken as a Director in order to make themselves aware of any such relevant audit information and to establish that the Company’s external auditors are aware of that information.
In considering whether it is appropriate to prepare these financial statements on a going concern basis, the Directors have conducted a detailed going concern review, considering the Group’s liquidity and banking covenant compliance.
Following the review, details of which can be found within the Basis of Preparation section of Accounting Policies on page 184, the Directors consider that the Group has adequate resources in place for the forecast period and have therefore adopted the going concern basis of accounting in preparing these financial statements.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
In addition to reporting and disclosing our environmental and sustainability performance throughout this report, this year we have also included specific climate-related disclosures following the TCFD’s recommendations and structured this around four key thematic areas.
|Governance||Disclose the organisation’s governance around climate-related risks and opportunities|
|Describe the Board’s oversight of climate-related risks and opportunities.||
The Group Communities Director with the support of the sustainability department, assists and advises the Placemaking and Sustainability Committee in its development and monitoring of the Company’s approach to environmental issues which includes climate change. The Committee also reviews and approves the setting of performance objectives and targets and monitors progress against these. The Group Chief Executive has ultimate responsibility for climate-related matters and the Committee reports to the Main Board. The new role of Group Communities Director has been created to provide strategic management and oversight of the Company’s sustainability framework which includes climate change matters and reports directly to the Group Chief Executive and also sits on the Executive Management Team. The Health, Safety and Environment Committee also develops and monitors the company’s approach to environmental sustainability matters and regularly reviews the objectives and effective operation of the ISO 14001 Environmental Management System (EMS). The Group Chief Executive is a member of this Committee.
The composition of the Main Board can be seen on page 96 and the members of the Placemaking and Sustainability Committee can be seen on page 124, with representatives from other disciplines within the business invited to attend the meetings as necessary.
|Describe management’s role in assessing and managing climate-related risks and opportunities.||The Group Communities Director briefs the Placemaking and Sustainability Committee on sustainability and climate change matters, supported by the in-house sustainability team who provide expertise in developing the sustainability strategy, environmental and climate-related policies and identifying areas of improvement. The Head of Sustainability chairs a quarterly Sustainability meeting with Directors / Heads of departments across the business, including the Group Design and Technical Director, Group Commercial Director, Group Customer & Marketing Director, Group HR Director, Group Masterplanning Director, Group HS&E Director and Construction Director. These cross-discipline meetings ensure that climate and sustainability-related issues are understood and implemented across the business. The Head of Sustainability is accountable for identifying and assessing climate-related risks and opportunities. Responsibilities for managing each of these risks allocated to Directors / Heads of departments appropriately and discussed within specific and relevant working groups across the company. Actions and results are fed back the Sustainability meeting and the Placemaking and Sustainability Committee as appropriate.|
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material.
|Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term.||The business has identified the following climate-related risks and opportunities:|
|• Disruption to build programme and delivery chain from flooding and storm damage|
|• Increased requirements for surface water management impacting on margins and insurance|
|• Extreme weather events affecting productivity in offices and sites|
|• Risk of overheating of homes and apartments due to increase in outside temperatures|
|• Droughts exacerbating water scarcity|
|• Failure to be proactive in identifying opportunities for energy efficient products and materials|
|• Failure to ensure sustainable procurement routes, resulting in interruption to supply-chain and /or increased costs of raw materials|
|• Risk that the supply chain fails to supply materials/technologies required to tackle climate change|
|• Failure to reduce operational environmental impacts (e.g. GHG emissions)|
|• Increased energy, fuel and water prices for the Company's operations|
|• Failure to implement current and emerging regulations adequately|
|• Not meeting customer expectations in the use of environmentally friendly materials and products|
|• Potential litigation from customers for failing to meet regulations and adequately plan for physical risks|
|• Reputational risks associated with increased stakeholder concern|
|• Inadequate response to reporting obligations|
|• Unsuccessful investment in new low/zero carbon technologies|
|• Increased awareness and demand from our customers for homes adaptable to climate change issues|
|• Development of new low and net zero carbon homes through research and innovation|
|• Use of more efficient modes of transport for our operations|
|• Participation in the carbon and/or carbon offset market|
|• Focus on identifying and implementing initiatives for climate change adaptation|
|• Focus on our supply chain resilience, the use of materials with lower embodied carbon and materials that come from recycled and ethical sources|
|• Use of low/zero emissions sources of energy and fuel on our operations|
|• Development of climate adaptation and insurance risks|
|Describe the impact of climate-related risks and opportunities on the organisation’s business, strategy, and financial planning.||The business has identified the following climate-related risks and opportunities that can impact our strategy and financial planning:|
|• Direct regulations arising from UK Government and regional government setting out policies to minimise carbon dioxide emissions and achieve zero carbon homes|
|• Climate change impacts such as increased temperatures, water shortages and flood risk may result in the need to redesign aspects of our product which may result in increased costs, sourcing and adoption of new technologies|
|• An increase in extreme weather events may impact on supply chain continuity and construction activities, limiting production|
|• Changing climate may reduce the availability of land on which the business can build and may cause disruption to our construction programme|
|• Building materials becoming unavailable or limited and hence more expensive which will impact our operations, build programme and financial planning|
|• Insufficient development of innovative products and technologies can limit our plans to delivering homes with climate resilient measures taken into account during their design|
|• Increasing regulatory standards bring customer benefits and subsequent marketing benefits - energy efficiency of new homes is becoming more important to our customers as the cost of energy continues to rise|
|• Focusing on the development of lower-emission homes and the provision of low-carbon lifestyles in the communities we build|
|• Focusing on increasing green travel options in the developments we create, providing us with marketing benefits and higher customer satisfaction|
|• Ability to respond to and pre-empt consumer demand in the area of low-carbon products and sustainable communities, placing us in a better competitive position and therefore increasing revenues|
|• An increased focus on meeting business targets relating to carbon, energy, waste and water as part of our strategy to Building Responsibly means we are realising opportunities to contribute to environmental improvements as well as reducing our operating costs|
|Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.||Our business strategy and objectives have been developed by several key means:|
|1. Stakeholder engagement and materiality assessment - whereby key stakeholders were consulted on issues such as energy efficiency and low carbon (homes), flood risks, biodiversity, water efficiency. These issues were then prioritised according to their impact/potential impact.|
|2. Risk and opportunities processes - as outlined in the section below|
|The resulting strategy has three business principles, each of which encompasses issues relating to climate change:|
• Developing Thriving Communities (including objectives such as placemaking, biodiversity, landscaping and water attenuation)
• Building Responsibly (including objectives such as responsible sourcing of materials and carbon reduction)
• Valuing People (including objectives and targets relating to climate-related and sustainability training and low-carbon travel for our employees).
|We currently evaluate the climate-related risks to the Company through our existing risk evaluation and management systems. This includes an examination of impacts and the likelihood of occurrence to give us opportunity to examine different scenarios, but is not a formal scenario analysis. Over the next few months we will be reviewing our approach to climate risk management using the TCFD Framework and setting a long-term science-based net zero carbon target along with science-based targets for scope 1,2 & 3 that are aligned to a 1.5°C scenario.|
|Risk Management||Disclose how the organisation identifies, assesses, and manages climate-related risks.|
|Describe the organisation’s processes for identifying and assessing climate-related risks.||A comprehensive risk register is maintained at Group-level covering all aspects and disciplines within the business. Climate change risks are covered in both the ‘Sustainability’ section and within sections owned by Group functional Directors. For each risk there are Prevent controls and Detect controls in place and each section is owned by a member of the Executive Board responsible for review and monitoring.|
|Newly identified risks are added when encountered and a six monthly review is held. At a divisional-level, issues with potential to impact the divisional operational performance are reported monthly on a site-by site basis at the divisional board meeting.|
|Sustainability and climate change risks are also identified and assessed within the Group's specific sustainability risk matrix, which is aligned with the main group risk register. This forms part of our Environmental Management System, which is externally certified to ISO14001:2015.|
The Company’s in-house Technical, Commercial and Sustainability teams continuously monitor developments in regulation and legislation and engage at high level within the industry to maintain currency and to provide input to policy direction. This information is fed back to the Main Board in quarterly reports. Appropriate solutions to meet sustainability requirements are identified, evaluated and where appropriate, employed in future-proofing product specifications.
|Describe the organisation’s processes for managing climate-related risks.||The development and implementation of a robust sustainability strategy in the business ensures we recognise and address key climate-related risks and opportunities. Managing impacts from changing weather patterns is done in various ways, including:|
• Monitoring frequency, location and severity of extreme weather events, insurance market response and regulatory change in response to extreme weather events
• We have appropriate insurance cover in place, especially for flood risk
• We regularly review policies and procedures for considering flood risk when procuring land or planning a development
• We obtain professional advice on risk reduction measures for our product design, in particular for the risk of overheating
• We continually review materials suppliers to secure supply from alternative sources if necessary
Appropriate action plans are fed into the business process, shaping and informing a number of Company policies which are published on our website and are available to staff and customers. Policy decisions are communicated back to divisional managing directors for immediate implementation. The impacts can be relevant in the short term, for instance in dealing with unique site specific requirements imposed through planning conditions and equally important for long term strategy development for future business.
|Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management.||
All risks and opportunities which are identified as being pertinent to the business, including climate change and sustainability issues are reported through the monthly cycle of management reporting to the Executive Board, quarterly to the Main Board and quarterly to the Placemaking and Sustainability Committee. Reports captured include those from divisional Board meetings and from specialist disciplines within the business located at the Head Office such as Sustainability, Commercial, Financial, Health and Safety, Human Resources, Sales & Marketing and Technical.
|Metric and Targets||Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.|
|Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.||In the Non-financial Performance section and throughout this report we disclose metrics that relate to the key environmental and climate themes of our Sustainability Strategy: energy, carbon, waste, water, biodiversity. These include:|
|• Scope 1 and 2 emissions|
|• Total emissions per 100m² build|
|• Total energy consumed by source|
|• Waste generated per 100m² build|
|• % of waste diverted from landfill|
|• % of forest products used in our homes from verified and credibly certified sources|
|• % of materials and subcontractors sourced locally|
|• Water usage per 100m² build|
|Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.||
GHG emissions data for Scope 1 and 2 are detailed in page 157 of this report. This disclosure includes all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and is reported in line with the Greenhouse Gas (GHG) Protocol: A Corporate Accounting and Reporting Standard.
We are currently reviewing the various methodologies available to calculate our Scope 3 emissions and we aim to disclose these for the first time next year.
|Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets.||
We are committed to reducing our environmental impact and we aim to continually reduce the energy and water consumption, carbon emissions and waste generated from our operations and ultimately to achieve net zero carbon.
At the point of publication, we have committed to signing up to the Business Ambition for 1.5°C and to reach science-based net zero emissions no later than 2050. We will set interim science-based targets across scopes 1,2 and 3, in line with the criteria and recommendations of the Science Based Targets Initiative.
Our targets are shown below (set with 2017 as the baseline year) and progress against these is publicly available on our website (https://www.redrowplc.co.uk/about-redrow/sustainability/our-commitments/):
|• Reduction of the carbon intensity of our construction operations and offices by 10% by 2022|
|• Reduction of the water intensity of our construction operations and offices by 5% by 2022|
|• 95% + of construction waste diverted from landfill|
|• Reduction of our construction waste intensity by 10% by 2022|
By order of the Board
Registered no: 2877315
14 September 2021