Sustainability report 2009

Waste is a significant issue for us. Constructing, refurbishing and demolishing buildings, roads, railways, bridges, tunnels and other structures generates huge quantities of waste. The US Environmental Protection Agency estimates 330 million tonnes of waste was produced by the sector in 2005. In the UK, the construction industry produces over 100 million tonnes of waste a year, of which around 40% goes to landfill. The UK’s strategy for sustainable construction aims to half the amount of construction and demolition waste going to landfill by 2012.

The cost of disposing waste to landfill continues to rise in the UK through the landfill tax at £8 per tonne per year until 2013. As landfill rates have risen, waste companies and technology providers are building systems to deliver renewable energy and supply alternative disposal routes to landfill. There is a growing market for us in financing, constructing and operating this infrastructure.

Avoiding waste going to landfill brings us operational cost savings as well as environmental benefits. It can differentiate us in the marketplace, help us deliver lower cost projects, meet customers’ desire for lower environmental impacts, and enable us to achieve our 2020 goal of zero waste to landfill.

We believe that opportunities to finance, build and operate new infrastructure to sort, recover, reprocess and extract energy from waste will increase significantly over the coming decade.

The UK Government’s Waste Strategy for 2007 identified recycling and energy recovery as the key to reducing municipal waste to landfill. 35-40 municipal waste/energy from waste plants at £200m+ each are required in the UK by 2015. This represents an £8bn+ market by 2015 in the UK alone and one being actively pursued by our investments, construction and civil engineering businesses.

We measure our waste sent to, and diverted from landfill through a recycling or recovery operation, in the following categories:

• Construction
• Demolition
• Excavation
• Office
• Manufacturing and depots

Our businesses seek opportunities to reduce, re-use, recycle and recover waste and to use recycled materials where possible. Increasingly, we are replicating best practice developed in one operating company or site to others in the Group. We are developing new ways of managing our wastes and finding uses for wastes from other sectors. We also play our role in creating valuable markets and opportunities to re-use waste materials in our projects. Viewing waste as a resource rather than something for disposal reduces our material costs.

Waste management has been identified as one of the priority categories for our supply chain management programme in the UK. Work will commence in 2010 on this category. Such an approach will not only yield cost savings but will help us develop more robust data for our 2010 baseline and encourage our supply chain partners to work with us to implement innovative waste solutions.

The global coverage of our data continues to improve, with waste being reported by our construction businesses in the US and Middle East for the first time in 2009. Our global operations disposed of 878,300 tonnes of waste to landfill in 2009 (833,400 tonnes in 2008).

Chart data

When normalised against revenue, our global operations disposed of 80 tonnes of waste to landfill/£m revenue in 2009 (84 in 2008), a reduction of 5% over the year and a 48% reduction since 2006.

Chart data

Our global operations recycled and recovered 5,139,000 tonnes of waste in 2009 (2,821,000 tonnes in 2008). 85% of the waste we generated in 2009 was diverted from landfill through recycling, recovery or re-use (77% in 2008). The improved recovery/recycling rate in 2009 reflects the impact of the large-scale excavation works that took place on the ‘Business Bay’ project in Dubai. These excavation works were necessary to facilitate the extension of an existing canal route and generated 2,056,000 Tonnes of spoil for re-use; this represents 46% of the Group’s total amount of waste for recycling/recovery. This material is sent to a ‘public fill’ where it is re-used for other projects, rather than being discarded as waste. This figure is based on conversion factors applied to waste volumes rather then weight, reflecting the less well developed waste infrastructure market in the UAE.

Chart data

External benchmarks of our performance are difficult to come by. Limited benchmarking is available through the data we submit as part of the UK construction sector’s halving waste to landfill reporting protocol (www.wrap.org.uk/reportingportal). Our performance for 2009 is comparable to the sector average of 175 companies, with 76% of our waste diverted from landfill (75% sector average ) and 11 tonnes of waste to landfill per £100,000 project spend (10 tonnes/£100k project spend sector average).

Supporting industry commitments

Accurate data is essential if we, and the sector as a whole, are to measure our progress to halving waste to landfill over this timescale. We are committed to establishing our global baseline on waste to landfill by the end of 2010.

Our ultimate goal is zero waste to landfill by 2020 and embedding zero waste thinking into all that we do. We have established an interim global target to reduce our waste to landfill by 50% per £m revenue by 2012 to support the UK construction industry goal.

In order to drive re-use of waste we have also set a target of at least 25% of our major materials coming from recycled sources by 2012, where we specify the material. Major materials include concrete, aggregates, steel, aluminium and copper used in our construction, civil engineering and rail projects.

2012 targets

Reduce our disposal of waste to landfill by 50% per £m revenue against a 2010 baseline. Achieve a minimum of 25% recycled content of major materials (by value).