cr at gus: introduction - investis digitalfiles.investis.com/gus/storage/pdf/guscr2005bg.pdf · gus...

GUS Corporate Responsibility Report 2005

CR at GUS: Introduction

I am not sure how many of our stakeholders understand the term corporate

responsibility. Our customers certainly don't come to us for 'corporate

responsibility'; they come for good quality products, at the right price, made

with proper respect for people and the environment. The people who work at

GUS want a stimulating and rewarding environment, to be treated fairly and to

be proud of what they do. And our shareholders, although they are probably

familiar with the phrase, really want to know that we have properly thought

through all the complex social and environmental issues that could affect our

business.

Despite this, the phrase corporate responsibility has stuck, perhaps because it

captures a really important concept: businesses don't exist in a vacuum. GUS is

dependent upon a huge and complicated web of relationships. What we do

affects all these people, and their response, in turn, affects our company.

In common with other companies, we closely monitor our financial performance

because it is an excellent indicator of business strength. But we also rely on

eight other indicators to show how we are doing. Make no mistake, our financial

performance is crucial to us, but we see no conflict between the management

of our corporate responsibilities and the pursuit of profitable growth. We are

tackling these eight responsibilities because we believe they will make us a

better business. In doing so we are managing our risks in both the short and

long term. We also have to think about things in a different way; looking wider

and further than we might otherwise have done, enabling us to see

opportunities that we might previously have missed. We have tried to give you

a flavour of this throughout this comprehensive document.

So while the phrase 'corporate responsibility' is a piece of jargon that is not

always very helpful, we are squarely behind what it means: doing business

properly, emphasising the importance of people, and taking the longer, lateral

view. I hope that you enjoy this report.

John Peace

Group Chief Executive


CR at GUS: What do we mean by CR?

GUS interprets the phrase corporate responsibility (CR) to imply taking due regard of society's expectations of large companies. It shares the widely held view

in the business community that these expectations are for steadily higher standards of conduct, and for the Company to take increased responsibility for the

direct and indirect effects of its operations.

The range of issues commonly embraced by the term CR is extremely wide. GUS seeks to apply a focused definition of Corporate Responsibility built on the

following elements:

■ The principal duty of the Group is to maximise return to its shareholders but it must do so in a manner consistent with legal and ethical norms in the

societies that surround it. These norms lead to a set of explicit and implicit ethical obligations for the Company.

■ Failure to recognise appropriate ethical obligations can lead to sanctions against the Company that will damage its performance or assets. This is not

judged to be in the interests of current or future shareholders.

■ Companies that are quick to respond to shifts in social attitudes are often better placed to take advantage of new markets and opportunities as they

arise. A company with a positive social reputation will also benefit from increased customer and employee loyalty, leading in turn to advocacy on its

behalf from these important groups.

■ An important element of the management of CR is therefore its identification of risks and opportunities arising from a more holistic understanding of the

social context of the Group's businesses than might otherwise have been the case.

■ A large and complex group like the GUS Group cannot satisfy every individual stakeholder on every one of their concerns. Therefore, GUS seeks to

prioritise its response based on the current and future significance of the issue to the business.

Hence, we focus on managing our significant risks today but continually look to the future, with a landscape which may be very different from today and plan

ahead accordingly, a model summarised in the diagram.

http://www.guscsr.com/2005/print/what_p.htm10/01/2006 14:16


CR at GUS: CR Principles

The GUS Group businesses are responsible for developing Corporate

Responsibility policies relevant to their businesses. The Group board has set a

number of CR Principles - broad statements of intent encapsulating our

philosophy on CR, and spanning all the material CR issues for the Group - to

underpin and provide direction for these local policies. Where certain areas are

regarded by the GUS Board as 'critical' GUS develops additional high level

frameworks within which divisions should operate. These frameworks act as a

minimum standard, but divisions are actively encouraged to go further if they

feel it would support their culture locally. The Group's principles on supply chain

management are an example of this.

The principles are:

Communication

We are determined to stay abreast of society's expectations in social

responsibility and to implement change enthusiastically. We will listen hard to

our stakeholders and report honestly on our actions and progress.

Benchmarking

We know that we can learn from other companies, as well as from the many

examples of good practice within our own organisation. We will benchmark our

performance, both externally and internally, using quantifiable performance

indicators.

Employment practices

We are committed to high standards of employment practice and wish to be

recognised as a good employer. We aim to reward people fairly and to provide

equality of opportunity, personal development and training, and a safe and

healthy workplace.

Community relations

We value our relationships with the community around us and believe that

thriving businesses depend upon thriving communities. Our community

programmes are therefore rooted in our business strategy and are an important

management responsibility.

Environment

In GUS, we do not handle toxic substances or manage industrial processes.

Nevertheless, GUS is one of the largest companies in the UK and it has a


responsibility to consider its impact upon the environment. We are committed

to continuous improvement in our environmental performance, particularly

through minimising waste, increasing energy efficiency and reducing our

consumption of materials.

Human rights

We care about human rights in our own workplace and want to be sure that our

suppliers and business partners demonstrate similar concern. We make these

organisations aware of our requirements and take all reasonable steps to

ensure they are met.

Customers

We believe we can serve the best interests of our customers by recognising

them as individuals. We are committed to responding to their needs, respecting

their privacy and making every effort to earn their trust.

Culture

We believe that good corporate citizenship ultimately resides in the hearts and

minds of our people. Our aim is to ensure that these wider social

responsibilities influence the way we manage, reward and develop our people in

order to become part of our culture.


CR at GUS: Management responsibilities

Principal issues

In 2003 we identified the principal Corporate Responsibility (CR) issues relating to GUS. We believe that they remain the

principal issues today. They are:

■ Labour, environmental and social practices in the Group's supply chain.

■ Providing a working environment that is conducive to the recruitment and retention of the widest possible range of

talented staff.

■ Protection of consumer privacy and the proper handling and use of customer information.

■ Provision of a safe and healthy place of work.

■ Providing products of the appropriate quality, including responsible product sourcing and retailing, product safety and

reliability.

■ Serving customers to their complete satisfaction.

■ Improving the Group's environmental performance, principally our use of energy, the impact of our transport fleet

and our use of bulk materials such as paper and packaging.

■ Developing strong community relationships in support of our business objectives.

The list is kept under regular review, and has been compared against the conclusions of other commentators and

stakeholders to ensure consistency with wider opinion. In addition we believe there may be new business opportunities

arising from socially-responsible products, and the provision of services to help customers manage these issues. Some

examples are included in the marketplace section of this report.

Overall and board responsibility

The Corporate Governance Committee comprises the Chairman, Chief Executive, Company Secretary and the Senior

Independent Director. Its terms of reference explicitly include CR issues and it is the working forum where CR matters are

discussed. Significant changes in policy or strategic decisions are then referred to the Board as appropriate. The Corporate

Governance Committee met twice last year, where among other things, revisions to the management of CR and the

appointment of new roles at Group level were discussed and approved. CR features regularly on the Board agenda, being

reported directly and via the Corporate Governance Committee.

David Morris, the Company Secretary retired in September 2004 after many years service to the Group and latterly as the

champion for CR inside and outside GUS. David oversaw significant progress in the Group's approach to CR. David's

replacement as Company Secretary, Gordon Bentley, continues to hold the responsibility for ensuring that CR retains the

necessary profile within the business and at Board level and for ensuring that the results of our efforts are communicated

internally and to stakeholders. Gordon works closely with the HR Director, Reg Sindall, who holds Group responsibility for

HR matters.

The role of the Group Head of Risk Assurance, who has participated in the CR Group since its inception, has been formally

extended this year to include CR matters, taking on the additional responsibility of Group Head of CR. In this role she works

closely with Gordon Bentley and our advisors to:

■ oversee day to day CR management at Group level.

■ help set strategy over 3 of the 4 key CR areas: community; environment; and market place (responsibility for

workplace strategy issues remains within the HR function) allowing the businesses individual flexibility to suit their

own culture and business model.

■ act as the principal contact for stakeholder liaison.

■ co-ordinate with other functions including Risk Assurance, the GUS Charitable Trust and Corporate Governance.

The CR Group

Gordon Bentley is supported by the CR Group which meets under his chairmanship and draws on staff with relevant

expertise from across all of the Group's businesses. The CR Group terms of reference, which were reviewed in 2004/05, are

as follows:

■ To remain abreast of external developments and emerging best practice in the CR agenda and to highlight risks and

opportunities for the attention of the Board.

■ To make recommendations to the Board for the formal approval of Group CR policies.

■ To monitor implementation of approved policies across the Group.


■ To set the key performance indicators ('KPIs') by which GUS measures its progress and to bring together the relevant

data from across the Group, as well as confirming its accuracy and reliability.

■ To act as the focal point for external communications on CR issues, including preparation of the CR report and

meetings with institutional shareholders and other interested parties.

The membership of the CR Group comprises:

■ Company Secretary (Chairman)

■ Group Head of Communications

■ Group Head of Risk Assurance

■ Group Head of Reward and Employee Relations

■ CR Manager, Argos Retail Group

■ Head of Corporate Affairs, Argos Retail Group

■ The Company Secretariat, Burberry Group plc

■ Head of Internal Audit, Experian

■ Director of Human Resources, Experian International

■ Administrator, GUS Charitable Trust

The Group is supported by a secretary and by external advisers.

CR Management in the business

There are separate CR Groups or committees in Experian International, ARG and Burberry. The overall structure is

summarised in the figure.

CR management in ARG

The CR team within ARG has been strengthened in the past twelve months, with the creation of a new function. The team is

led by the Head of Corporate Affairs and reports to the ARG Board.

Working for the Head of Corporate Affairs is the ARG CR manager (and through him the Homebase Sustainable Business

Manager), a Charities Manager and a Media Relations function.


The ARG CR Manager chairs the ARG CR Steering Group, which receives reports from the working groups as shown in the

diagram. This allows the working groups to consider, plan and conduct specific actions, coming to the CR Steering Group for

review and, where appropriate, decisions. The working groups meet quarterly in advance of the CR Steering Group and this,

in turn, is in advance of the GUS plc CR Group. This approach has proved very effective in ARG to date and provides a good

example of how CR is becoming embedded into the businesses.

The ARG CR Manager's membership of the GUS CR Group, Chairmanship of the ARG CSR Steering Group and his day to day

reporting relationship ensures information flows up and down in the business, and that the business and the CR

professionals within ARG are kept up-to-date with actions, risks and opportunities.

ARG uses a balanced scorecard system for the measurement and reporting of non-financial data, which includes employee

and customer indicators in the performance targets and reviews of many of the business' line managers.

CR management in Experian

During the past year Experian's management structure has changed, bringing the business together under a single global

board. During the same period, Craig Smith - the Experian Chairman and champion of CR in our North American business -

tragically died. Craig was replaced pro tem on the CR Group by the Head of Internal Audit, who has been representing the

US business. In the coming year we will be reviewing our management approach, ensuring that arrangements reflect the

new Experian structure, but for the year under review each business handled the topic separately:

At Experian International, the HR Director and the CR Steering Group have worked to raise awareness of CR issues during

the last year to make them directly relevant to the Experian business. Experian won Business in the Community's East

Midlands Award for Excellence 2005, and Gregg's Investing in Education award in recognition of the company's long-term

commitment to education. Experian has also been awarded BiTC's Big Tick, which is given annually to companies that are

able to demonstrate a high standard of excellence in the way they organise and integrate their responsible business

practices, and can show a positive impact both on society and on the business. It was introduced in 1998 and is used to

communicate achievements in the field of corporate responsibility.

The Group's UK principles are an integral part of the operation of Experian North America even though CR is not a well

defined concept in the US. The topic does not tend to be managed as a single entity but there are strong and dedicated

functions managing the key issues of workplace, community and marketplace.

CR management in Burberry

Overall responsibility for CR matters rests with the Company Secretary. He is responsible for ensuring that the Board is

aware of the relevant CR issues facing the Group and, together with the support of a CR Committee, ensures that systems

are in place to identify and manage risks within the CR arena.

Responsibilities for specific CR matters are assigned, where possible, to the appropriate functional staff. The CR Committee

is comprised of these individuals, with responsibility for: environment, health and safety, human resources, supply chain


and licensees, charitable and community activity, wholesale and retail customers and internal audit. It is assisted by a

specialist firm with expertise in CR.

The Committee meets with the objective of considering emerging CR issues, proposing activity, sharing information on

activity underway and co-ordinating disclosure and reporting. The Board has approved the CR Policy and a formal report is

made on an annual basis.


CR at GUS: Performance benchmarks

It can be very difficult for a company such as GUS to know how it is performing

in the area of Corporate Responsibility, primarily because there are no

universally agreed measures of success. We therefore find external ratings of

our performance to be valuable benchmarks, recognising that no single index or

rating is definitive, but believing that taken together the results can point out

strengths and weaknesses. During the last year, GUS has been included in a

number of third-party benchmarks of our CR activity. These are listed in the

table below.

Organisation Index / rating

FTSE4Good FTSE4Good is one of the FTSE family of Indices, selecting companies which meet published CR criteria. The analysis is based on data collected by the commercial rating agency EIRiS, with GUS comment and input.

Result

GUS has been included in FTSE4Good since its inception.

Score of 85% placing GUS 50th= in the top 100 companies. [Last year: score 81%, Position 77th ] (Click here for our 2004 CR Index feedback)

Score of 88% placing GUS 51st out of the 168 companies that took part and 2nd out of 9 general retailers. [Last year: Score 81%, position 92nd and 5th general retailer] (Click here for our 2004 BiE Index feedback)

GUS has been a member since 2001, with above-average scores in all three of the Index domains. (Click here for our 2004 assessment)

BITC - CR Index BITC is a UK business-led NGO, producing an annual Index of Corporate Responsibility. This is based on a comprehensive self-assessment, and is published annually in the Sunday Times newspaper.

BITC - Environment The Index of Index Environmental

Engagement is a subset of the BITC CR Index, but is rated and published separately as a specialised environmental benchmark.

Dow Jones Global Sustainability Index

This Index selects from a universe of around 3,000 companies around the world. Companies are judged against sustainability scenarios for each sector, with the top 10% included in the Index. The Index is based on a comprehensive self-assessment completed by the company.


Morley In house analysis team at a fund manager produces a profile based on published information with GUS comment and input. Companies are placed on a matrix which informs investment decisions.

Vigeo Commercial European rating agency producing a profile based on published information with GUS comment and input.

Oekom Commercial European rating agency assessing the company via questionnaire and phone interviews.

CoreRatings Commercial rating agency producing a profile based on published information with GUS comment and input.

Rating: C3 (Two axes rating A-E and 1-5)

Rated as an average performer across five of six domains and above average on one domain (environment).

C (scale from D- to A +)

B+ (scale from D to A +)


CR at GUS: Objectives and targets

How did we do?

In our last report we set out our objectives for the year ahead, along with some quantified environmental targets that we were

aiming for. The table below shows how we did:

Target Result Comment

Management frameworks

To contribute actively to the public debate on how We responded to the Government's consultation on the to define material CSR issues for a company. OFR, contributed a member to the Accounting

Standards Board working group, spoke at a UK conference and sponsored an MBA dissertation on the topic.

To develop a transparent process for determining We undertook a project in this area during Summer 04, materiality within GUS, taking account of the and are now involved in the implementation of its proposed OFR requirements. results prior to our first OFR prepared to the new

requirements.

To finalise and embed the Group-wide process for The process was completed and rolled out to the Group comparing and managing risk. businesses.

Workplace

To set for the first time quantified targets in Health and Safety in each business, which can be collated to give a Group-wide figure.

In line with our statutory duties, each of our businesses has managed health and safety carefully this year, and we have introduced a number of improvements. We undertook an internal audit of our HR statistics, which included health and safety data. The different business typically have set targets to reduce incidents, but it has not been possible to collate these into a meaningful Group target. (Further information is available by clicking here)

Supply chain

Broader: To continue and extend the existing audit programmes, setting quantified targets for the fraction of the supply base to be covered in each business.

Deeper: To conduct specific projects to look in more depth at timber, and also the effects of mainstream buying practice on suppliers.

Marketplace

We have continued and extended the third party supplier audit programmes in ARG (now including Homebase) and Burberry (including licensees). Coverage in both businesses has increased. We have not found it practical to set targets for coverage, but instead have continued to concentrate on the highest risk areas.

We have done detailed work on our timber policy and the origins of our product range (Click here for Timber and wood products policy). We took part in the original Insight Investment research into the effects of mainstream buying practice, and have been discussing how best to proceed with a group of other interested retailers (Further information is available by clicking here).

The ARG chemicals strategy to be in place and the The chemicals strategy is complete and has been first phase-out of the highest risk chemicals communicated to selected key suppliers for their input. complete. It is clear that implementing the strategy will take time

and we have not yet phased out our first set of target chemicals. We will be carrying this objective forward. (Further information is available by clicking here)

To identify new products or extra business driven This has occurred in all three businesses e.g. through CR opportunities. Burberry's successful Cause Related Marketing work in

conjunction with breast cancer charities (click here for further information), Experian's products related to identify fraud and over-indebtedness (click here for further information), and plans being developed in ARG for a major CR-related project.

Environment

Each business to set environmental targets that can be collated to give the Group target, to include energy, waste and resource use.

Across the Group, energy use per £1000 of sales has such that energy used falls by 2% when To improve energy efficiency in our buildings,

fallen from 98.5kWh/£1000 to 95.1 kWh/£1000, a drop expressed per £1,000 of turnover. of 3.5%. Underlying this were falls in Experian and

Burberry and no significant changes in ARG.

CO2 emissions per £1000 of turnover fell from 44.8 kg/ the greenhouse gas CO2 by 1% per £1000 of To reduce the Group's total direct emissions of

£1000 to 41.4 kg/£1000, a drop of over 7%. This was turnover. driven by the improvement in energy efficiency and

significant purchases of 'green' electricity.

To ensure that 20% of the Group's own waste 22% of the total waste produced by the Group is material is recycled during the year 2004/5. recycled thanks to successful recycling initiatives in

most of the Group businesses over the course of the past year.


Packaging use per £1000 has increased from 17.8kg/ use on products, and ensure that packaging used To identify opportunities for reducing packaging

£1000 to 19.0 kg/£1000, a rise of almost 7%. A per £1000 of sales does not increase again number of projects are underway to reduce packaging during the coming year. on some product lines, including a high-profile project

with WRAP.

Community

The Group to be in a position to publish an external Our reporting this year includes some qualitative report on the impact of the Charitable Trust. analysis in this area, but we have not found a good

quantitative framework to measure the impact of our community activities.

Key

= objective fully met (8/13)

= objective partially met (4/13)

= objective not met (1/13)

Objectives for next year

Supply Chain

Responsibility: Improving labour, environmental and social practices in the Group's supply chain.

2005/6 objectives: Continue and extend the existing programme of supplier audits.

Begin a process of supplier development and training through the production of guidance and

advice.

Employment practices

Responsibility: Providing a working environment that is conducive to the recruitment and retention of the widest possible range of

talented staff.

Responsibility: Provision of a safe and healthy place of work.

2005/6 objectives: Improve our analysis and reporting of health and safety

data.

Develop internal benchmarks of HR performance.

Customers

Responsibility: Protection of consumer privacy and the proper handling and use of customer information.

Responsibility: Providing products of the appropriate quality, including responsible product sourcing and retailing, product safety

and reliability.

Responsibility: Serving customers to their complete satisfaction.

2005/6 objectives: Ask our customers for their views on Corporate Responsibility, including their opinions on what actions we

should take.

Identify and launch new products or services to help our customers meet their own responsibilities.

Environment

Responsibility: Improving the Group's environmental performance, principally our use of energy, the impact of our transport fleet

and our use of bulk materials such as paper and packaging.


2005/6 objectives: Reduce our building energy use by 2% per £1000 of sales/square foot.

Renew our arrangements to purchase 10% energy from efficient (CHP) or renewable

resources.

Reduce our use of vehicle fuel by 5%/£1000 sales.

Increase the fraction of solid waste that is recycled from its current figure of 22% to 24%.

Community relations

Responsibility: Developing strong community relationships in support of our business objectives.

2005/6 objectives: Support flagship projects to leave a permanent benefit in our charitable partners that continues after the

funding has ceased.

Managing our responsibilities

2005/6 objectives: Explain our CR strategy to our employees in a way that is relevant to their everyday work.

Improve our reporting on overseas operations, increasing the proportion of the Group that we

include.


CR at GUS: Stakeholder relationships

Stakeholders are those with an interest in the activities and decisions of an

organisation, either as individuals or representatives of a group. This includes

people who influence activities and decisions, or can influence them, as well as

those affected by them.

GUS' approach to stakeholder consultation follows closely the model expressed

in the DTI's Consultation document on the Operating and Financial Review,

which encourages: " ... a proactive approach, including a willingness to

consider society's changing norms and expectations of business, and to explore

and understand the agendas of a range of stakeholder groups. ... Such groups

can often not only articulate the norms and expectations that society has of

business but can anticipate future changes in consumer behaviour and can

influence regulatory change". Our communications with our major stakeholder

groups are summarised in the table.

Description Communication

Customers Consumers who Customer purchase the Group's communication is driven products. The clients entirely through the and partners that Group businesses, make use of our through a huge range of business-to-business different measures. services and the These include customer consumers affected focus groups, dedicated by those clients. consumer help services

online, customer surveys and direct contact with customers via the telephone, internet and post. Customer surveys and the monitoring of customer feedback are universally deployed.

Employees The 74,000 people Each business has staff who work for the with responsibility for Group, part- or full- employee time, permanent or communications issues, short-term employees and uses a combination

of written media (newspapers, notices), electronic media (intranets, emails), management briefings, employee surveys, and staff consultation processes, including discussions with trades unions where recognised.

Suppliers The companies that Led by the businesses provide us with through their supplier merchandise to sell engagementto customers, goods programmes.for our own use or business services.


Investors Our shareholders and their intermediaries, as well as those who provide capital in other ways such as loans or bonds.

Local communities Those who live and work around GUS' physical locations.

Charities Organisations working for the benefit of wider society with whom we can establish common cause.

Non-Governmental Organisations

Democratic entities generally formed around a focussed set of goals, and having no affiliation with governments, usually campaigning for change either directly with companies or indirectly via public awareness campaigns.

Driven predominantly by the plc team with involvement from the businesses as required. Engagement via a series of meetings, correspondence and website and publications aimed specifically at investors .

Engagement varies depending on the focus of the businesses' community programmes:

- Local engagement around our major centres in Nottingham and Milton Keynes in the UK and Costa Mesa in the US, including involvement in local schools, community groups, hospitals and with local government.

- Engagement through our network of almost 900 stores, including support to local charities and activities centred on individual employees working in their communities.

Extensive engagement through the work of the GUS Charitable Trust. Particular relationships are developed in depth in the businesses(GUS & the Community)

Engagement at both plc and business level on key topics (for example supply chain issues and human rights). Usually takes the form of initial correspondence followed by a meeting. The process can be initiated either by GUS, the NGO, or the individual business.

Some examples of specific dialogue during the year are as follows:

Organisation Interaction

Standard Life Meetings and correspondence -corporate governance and supply chain issues.

Insight Investment Meeting and correspondence - CR risks in the retail sector and supply chain issues.

Henderson Global Investors Correspondence - stress and occupational health.


Rating agencies Correspondence with a number of agencies including Vigeo, CoreRatings, Oekom, SiRi, EIRiS.

WRAP - the Waste and ARG successfully tendered for a Resources Action Programme WRAP Innovation Fund project to

reduce product packaging which is now ongoing with WRAP support. Click here for a quote

Business in the Community As well as meetings and GUS' participation in the BITC CR Index, Experian has worked with BITC on a project looking at Underserved Markets and is championing volunteering through its "Cares" programme.

ICTI - International Argos was the first major retailer to Confederation of Toy endorse the ICTI code of practice on Manufacturing Industries supplier standards, and to accept it

as an alternative to its own audits. Click here for a quote

Greenpeace Correspondence and meetings on our sourcing of wood products and paper.

WWF Correspondence and meetings on environmental matters.

Soil Association Meetings on organics in the retail market and Homebase's FSC Chain of Custody Certificate.

UK Department of Trade and GUS responded to the DTI's Industry consultation on the proposed OFR

(as well as contributing a member to the Accounting Standards Board working group on the topic).

ICCSR - International Centre for Corporate Social Responsibility

We hosted an MBA internship from Nottingham University's International Centre for Corporate Social Responsibility working with us on processes for assessing and reporting non-financial risk, and reviewing our preparedness for compulsory OFR reporting. Click here for a quote

UK Police

Carbon Disclosure Project

Experian has contacted police forces around the country to raise awareness of identity fraud, and provide information for victims.

GUS has responded in detail to this project looking at companies' assessment of and response to the problem of climate change (Click here for further information in the CDP project).

Experian has worked closely to assist this charity providing advice and support on credit issues, including using its technical expertise to help profile the Service's clients. Click here for a quote

ARG is actively involved in a range of sector initiatives organised by the BRC, including its CSR Group, Product Stewardship Group and its group looking at risky chemicals. We are also developing Group-level contacts with the BRC.

Consumer Credit Counselling Service

BRC - The British Retail Consortium


Nottingham City Council / Local Experian is working with Strategic Partnership Nottingham's Local Strategic

Partnership to refocus its structure to enable it to better achieve the City's objectives. Click here for a quote/td>

Common Purpose Experian is working with Common Purpose at a regional level to raise awareness of corporate citizenship.

The Nottingham Trent University Experian is working with the BEST (Business Efficiency Sustainable Technology) Network at the University to develop business support services to help small businesses improve productivity and efficiency by implementing an environmental management system in line with BS8555.

Quote 1. Dr Richard Swannell, Head of Innovation, WRAP

"WRAP (the Waste & Resources Action Programme) is working with retailers to

research new packaging formats which minimise household waste. Argos is one

of five major retailers working with WRAP on innovative research ideas. Re

useable packaging, the focus of the Argos project, is a very promising approach

which could bring significant benefits to consumers, to Argos, and to the

environment. If it is successful, it will certainly help reduce household waste".

Quote 2. Phil Lovett, Business Broker, One City Partnership Nottingham

"Experian has been working with One City Partnership Nottingham, the Local

Strategic Partnership, for 18 months and has been influential in leading the

debate in the city on the contribution of the private sector to neighbourhood

renewal. Through its community involvement programme, Experian has made

an important contribution to improving the experiences of a significant number

of citizens in Nottingham's communities. One City Partnership looks forward to

maintaining its strong links with Experian and continuing to develop ever more

innovative ways of working together".

Quote 3. Steve Nicholson, Chief Financial Officer, Consumer Credit Counselling

Service

"Experian have been extremely positive in providing CCCS with their Mosaic

Software free of charge to enable us to streamline our counselling process in

order to help more clients receive free, independent debt advice".

Quote 4. Maggie Byron, ICCSR

"In the final semester of my MBA in CSR I was fortunate to be accepted as a

summer intern at GUS. The project involved working with the Group Head of

Risk Assurance on a process for assessing and reporting non-financial risk, and

reviewing the group's preparedness for compulsory OFR reporting. In parallel

with the internship, I completed a dissertation assessing the implications of the

OFR for a FTSE 100 Company. The internship provided an invaluable experience


of management and decision making processes in one of the UK's most

successful companies - and an opportunity to balance my academic education

with practical experience of CSR on the ground".

Quote 5. David Hawtin, Director General of the British Toy & Hobby Association

"We warmly welcome the initiative taken by Argos in recognising the

International Council of Toy Industries' (ICTI) Code of Business Practices. The

ICTI code has as its fundamental aim to ensure that toys are made in safe and

humane working conditions. As the UK's number one toy retailer the support

and encouragement given to the ICTI code by Argos has provided a

tremendous boost to awareness on the part of toy factories of the need to get

the facility into compliance."

GUS Corporate Responsibility Report 2005: Verification

CR at GUS: Verification statement

Acona Ltd has been asked by GUS to provide an independent review of this CR

Report to provide assurance that;

■ The data it contains is materially accurate.

■ The qualitative statements can be supported by evidence and properly

represent activity across the Group.

Scope of the Review

The review focused on the UK operations of GUS plc. Qualitative information

from the overseas operations was confirmed with its providers but not checked

independently. Quantitative data submitted from overseas businesses was

cross-checked for consistency against that from the UK, but no detailed review

of its quality was undertaken. As the Group• reporting on its overseas

businesses improves, these data form a larger part of the quoted totals, and

the limitations of this scope become more significant.

The elements of this Report relating to Burberry are abridged from the

Company• own disclosures and have not been subject to a further review.

Conducting the Review

In performing the review, staff from Acona:

■ Conducted interviews with staff and managers across the GUS

businesses.

■ Collected and reviewed a wide range of internal documents relating to

CSR management, including policies, procedures and stakeholder

comments, particularly ensuring that evidence was made available to

support significant claims in this Report.

■ Considered the reports from GUS Internal Audits related to CR matters

during the year under review.

■ Visited the major GUS locations in the UK (Experian, Nottingham; ARG,

Milton Keynes, Wallington) and contractor premises, interviewing staff

involved in compiling the Report and testing the data and processes.

■ Undertook a desk-top evaluation of the raw data used to construct the CR

Report.

Conclusions

We found that all of the material claims in this report are supported by internal

(and external) evidence. The Report document itself has been subject to a

staged process of review and approval by a range of staff in the Group

GUS Corporate Responsibility Report 2005: Verification

businesses, including the appropriate senior management. It is therefore our

opinion that the Report succeeds in presenting an accurate picture of CR

activity in the GUS group.

We also found that the data included in this Report was received from a

number of sources: existing management systems used for other purposes;

specialised CR management systems and by ad-hoc collection. Despite this

variation, we found that the data covered all of the principal locations and

operations and is supported by more detailed evidence from within the Group.

Where there was uncertainty in the data, this was challenged and either

resolved or the data we removed from the final Report. In all cases, when

tested, the reported data were found to be materially accurate.

We have reviewed the year-on-year comparisons made in the data, testing

whether they correlate with known changes in the business. In all cases we

found logical and understandable reasons for the trends.

Acona Ltd

Acona is an international consulting group focused on understanding risk and

improving performance. All our employees are partners and co-owners in the

company. We have three business areas:

■ Business Risk Management

■ Safety and Environment

■ Sustainable Business

The team involved in the review is part of the Sustainable Business team,

concentrating exclusively on the provision of strategic advice in the field of CR.

All of the team have extensive experience in the field.

In addition to the Review described above, Acona has provided consultancy

support to the GUS Group during the year under review. This support included

advice on strategy and disclosure. Acona is independent from GUS, and is

impartial from the organisation• major stakeholders.

<< previous | next >> back to top


GUS in the environment: Environmental performance

Environmental Policy

Our policy states that GUS will:

■ Comply with all relevant environmental legislation.

■ Measure and continually improve our performance with respect to our main environmental impacts.

■ Report openly on our impacts and progress towards meeting our goals.

■ Encourage our suppliers to improve their own environmental performance.

■ Ask our customers for their perceptions on environmental issues relating to the Company.

■ Compare our environmental activities with those of others in our sectors to help us improve.

Our policy also outlines four priority areas in which we believed the Group has the greatest impact and where we could make

the largest improvements. These priority areas are:

■ Improving energy management

■ Managing the impact of our transport fleets

■ Reducing the consumption of materials

■ Reducing waste.

This policy sets an overall direction for the Group. However all our businesses undertake different activities and operate in a

different ways. As a result, they have different environmental impacts and priorities. Therefore, whilst each business must

adhere to the Group policy, it is up to them to develop their own approach to manage the issues that really matter to their

particular operation.

Each business is expected to review their activities and identify their most significant impacts on a regular basis. The Group

also requests that they then set relevant Environmental objectives and targets each year. Where this can be done

meaningfully, these are consolidated to set Group wide targets (for example in energy use). Other targets are relevant only at

the level of the Group businesses.

Each business is also responsible for collecting its own environmental performance data within a framework set by the Group.

This is reported internally and forms the basis of our annual reporting. For most this covers all their business, including

overseas subsidiaries and operations, except where these are particularly small (using a cut-off of 100 employees). We

estimate the coverage of data included within this report to be 95% of the Group when measured by turnover.

Long-term trends and data consistency

The environmental data included in this section of the report has been completely revised from that presented in previous

years to remove the discontinued operations (principally Reality / Home Shopping and The Lewis Group).

These changes make long term trends in the data more visible. In most cases absolute figures rose sharply in 2004 and

continued to rise in 2005, but these reflect the addition of new elements:

■ The figures for 2004 were the first to include Homebase, which led to rises in energy use, transport impacts and waste.

■ The 2004 figures also included the first data for Experian's operations in France, and Burberry's US operations as we

developed processes for overseas reporting.

■ The 2005 data includes figures from Experian North America, which has further increased energy consumption and

waste.

All data is shown both as an absolute total and also normalised by dividing the figure by the business' turnover. This gives a

simple measure of efficiency, compensating for growth in impacts that are driven by underlying growth in the business. It also

helps to remove distortions created as new parts of the Group are included for the first time, since their turnover is included

with them.

Despite the effects of these changes a number of long-term trends emerge. The table shows the long term performance for all


like-for-like data which we can compare for three years or more.

Earliest data (year 2005 data Total combined Annual 2000 unless stated change average rate

otherwise) of change

Argos* (all per £1000 sales)

Electricity 77.2 kWh 61.6 kWh 20% fall -4.40%

Road transport 14.2 miles 15.7 miles 11% rise 2.00%

Catalogue paper 22.8 kg (2002) 18.7 kg 18% fall -6.40%

Packaging 18.2 kg 18.5 kg 2% rise -

*These figures relate purely to Argos to enable comparisons over three or four years..

Experian UK (all per £1000 sales)


Road transport 28.3 kg (2003) 29.4 miles 4% rise 1.90%

Total waste 4.0 kg (2002) 2.7 kg 33% fall -12.30%

Waste recycled 34%(2002) 50% 16% rise 5.30%

Burberry UK (all per £1000 sales)


Packaging 1.30 kg (2002) 1.00 kg 23% fall -8.40%

Transit packaging 0.88 kg (2002) 0.73 kg 17% fall -6.00%

The following sections explain these changes in more detail.

Environmental management in ARG

Environmental activities at ARG are coordinated by the CR manager. The ARG CR Steering Group meets under his

chairmanship to review quarterly environmental performance data and monitor progress. It is this group that also sets and

agrees environmental objectives and targets. For cross-business issues such as waste management or energy use, working

groups have been established involving different functions and areas of expertise to understand where efforts should best be

focused and drive through improvement initiatives.

In general ARG gives direct responsibility for managing a particular environmental impact to the staff most closely involved.

For example, the catalogue paper buyer is responsible for ensuring that the amount of paper used for catalogue production is

minimised and for dealing with issues associated with the production process. In each area, appropriate process and

procedures are established by those staff.

For ARG the priority impact areas are:

■ Energy used in our stores, warehouses and offices;

■ Transport, particularly the number of miles driven by our commercial fleet;

■ Waste generated throughout our operations;

■ Paper used in the production of catalogues.

Data provided in the following sections relate mainly to Argos and Homebase. We are in the early stages of collecting detailed

data relating to Wehkamp, our Dutch mail order business, which is excluded. We estimate the data included within this report

to represent 96% of ARG when measured by turnover.

Environmental management in Experian

The Environmental Working Group manages environmental issues at Experian in the UK. This group reports to the Experian CR

Steering Group, and is responsible for considering the environmental impacts of the business, reviewing policy, setting

appropriate environmental objectives and targets and reviewing performance data. A network of "environmental champions"

was established in 2001 to advocate and communicate environmental Best Practice throughout the business.

All sites, except the newest, in Nottingham in the UK, are formally accredited to the environmental management standard

ISO14001. These represent the largest part of its business in terms of employees and consequently, as Experian's activities

are office based, our most significant environmental impact. The standard requires robust management processes and

procedures, which are audited on a regular basis by third-party auditors to ensure compliance. Nottinghamshire Wildlife Trust

awarded Experian the 'Excellence through Environmental Accreditation Award' in recognition of the work that went into gaining


the ISO14001.

For Experian International, the priority impact areas are:

■ Energy used in its offices;

■ Waste generated throughout its operations;

■ Travel undertaken by its employees.

Data provided in the following sections relates mainly to Experian in the UK and France, which represent the largest operations

of its International business. The approach to environmental issues in the North American business is different and establishing

appropriate monitoring and management systems is still at an early stage so the information is not yet comprehensive, with

the result that a small number indicators relate only to the UK. Where US data is included, we estimate the data to represent

80% of Experian when measured by turnover.

Environmental management in Burberry

Burberry's direct environmental impacts continue to be the consumption of energy (electricity, gas, oil, and vehicle fuel) in its

buildings and in the manufacturing and distribution of products, solid waste produced on site and the consumption of raw

materials. Performance in these areas is managed by the environment committee. The committee comprises operational staff

with responsibility for operational management across the business. This committee's work has been effective in ensuring

Burberry's efficient use of resources in the UK, and in making recommendations to other parts of the Burberry Group. Data

reporting has now been extended to cover Asia and Korea in addition to Spain and the US.

Performance against targets

Our performance against last year's environmental targets and our targets for the year ahead are described in the relevant

section of the Report.


GUS in the environment: Energy

Our impact on climate change

GUS is not a manufacturer nor do we operate any industrial process resulting in emissions into the atmosphere. However, we are a

large company and as such we use a lot of energy; whether to heat and light our stores, power the computers we use in our offices or

to fuel the vehicles used to transport our products. The use of this energy leads to the production of carbon dioxide emissions, which

in turn contribute to climate change. We believe that we have a responsibility, at least in part, to minimise these where we can,

leading to both environmental and economic benefit. In 2004/5 our use of energy and transport fuel led to the emission of 303,000

tonnes of carbon dioxide. This figure is higher than the previous year (274,000 tonnes) largely as a result of including data from our

North American businesses. When normalised using the business' turnover as a measure of activity, the CO2 emissions have fallen

from 44.8 kg/£1000 to 41.4 kg/£1000.


Building energy use; Our primary source of CO2 emissions is that associated with the energy used in our buildings. GUS has made

steady improvements in its energy efficiency over the past four years, and we are working hard to continue this trend. Our benchmark

is based on the energy we use per £1000 of sales, turning the overall total into a simple measure of efficiency.

The absolute energy consumption for 2005 is higher than that for 2004, principally as a result of including data for our North American

business. Stripping out this effect reveals that energy use broadly follows business growth, with a small improvement resulting from

gains in energy efficiency.


All of our UK businesses now buy a proportion of their energy from renewable or energy-efficient sources. For example, Experian and

Argos both purchase 'green electricity' generated from renewable sources (20% and 10% of their total consumption respectively) and

10% of the Homebase supply is generated by combined heat and power plants. We estimate that using a proportion of green

electricity in our buildings, we have avoided the emissions of 7,000 C02 this year.

Transport fleets; To get a fuller picture of how we contribute to climate change, we must also take into account our commercial

fleets, which represent the second largest source of our CO2 emissions. Last year, our road vehicles used 28 million litres of fuel

equivalent to the emission of 75,000 tonnes of CO2.


We have focussed particular attention on the way that our distribution operations are designed, how our commercial fleets are run and

the types of vehicles we use to find ways of improving of operating efficiency and reducing our impact on the environment. Our

commercial fleets are discussed in more detail later in this report (Link to GUS in the environment: Transport fleet).

We do not at this stage have a comprehensive system to record and report other forms of business travel (principally employee road

and rail travel), and are considering how best to address this in the future.

The impact of climate change on us

In broad terms we anticipate that climate change might affect our business in two ways: through an increase in our externalised and

internal operating costs (such as through the climate change levy), and a possible impact on our product mix as weather patterns

potentially change, particularly in areas relating to home improvements and DIY which are closely linked to seasonal variations. These

are discussed in turn:

Internal and externalised operating costs; GUS' energy bill is significant, although it is by no means our largest operating cost.

Increases in fuel prices linked to future climate change would affect the business' cost structure but this would be relatively marginal.

To mitigate this, GUS carefully manages its energy use as part of our 'business as usual' activity, which has led to significant efficiency

gains in the recent past. We will continue this programme of cost control. In the medium to long term, we anticipate further

Government policy changes to assign costs currently externalised back to the producers of CO2 (following the pattern of the climate

change levy and emissions trading schemes in the UK). We are therefore using renewable energy as far as possible and will continue

to explore increases in this area, reducing our exposure to externalised CO2 costs.

Product change; As a retailer, anticipating customer trends is an essential element of our business and so we already have processes

and strategies in place to deal with these issues. We keep a careful watch on changes in customer requirements resulting from all

sources including weather variations and would expect these processes to enable us to adequately respond to changes in demand.

Energy use in ARG

In 2005, ARG used 549 million kWh of energy or 105 kWh per £1000 of sales. This energy is used to provide heating, lighting and to

power electrical equipment in the 820 Argos and Homebase stores and extensive network of warehouses, depots and offices.

This year has seen the absolute energy consumption increase exactly in line with business growth, as we have opened new stores and

warehouse facilities. As our estate grows, the opportunity to invest in large-scale energy saving initiatives that will work across the

whole business becomes more challenging since the type and age profile of our buildings is becoming increasing diverse. We therefore

base our approach on regular monitoring and implementing measures to address issues relevant to specific warehouses or stores,

depending on their individual circumstances. This gives rise to steady small improvements.


Energy use in Experian

Experian in the UK used 31 million kWh of energy in 2004/5 representing an increase of 25% on the previous year. The efficiency

measure, energy used per £1000, also increased, but by the lesser amount of 14%. The change is driven by growth in the business

and a reorganisation of the building portfolio. For some parts of the year, as departments were being moved from old to new buildings

both were occupied and using energy. We do not therefore expect this trend to continue in future years. In fact, many of the new

buildings have been designed with markedly better standards of energy efficiency than those they have replaced.

Our business in France used 19 million kWh of energy in 2004, compared to 21 million kWh in 2003, a 12% decrease in absolute

terms. This drop in energy use is largely owing to changes in the business structure and reduced headcount following acquisitions,

meaning that fewer building are used as some sites have closed or merged together.

For the first time this year, we are able to provide energy consumption data for Experian in North America. In 2005, the business used

50 million kWh equating to 69 kWh per £1000 of sales.

Energy use in Burberry


The increase in energy consumption experienced in the US and Spain is directly attributable to growth in the business in the US. This

is the first full year of electricity consumption for two new sites opened in 2003 in addition to which Burberry has opened a number of

new stores.

In the past year, Burberry has increased its warehouse capacity to match the growing demand from customers. This has provided the

opportunity to take a number of energy efficiency measures, such as the inclusion of motion sensing lights in the warehouse aisles.

The company has subjected its recently acquired factory in Rotherham to an energy review and will be considering some of the

recommendations for improved efficiency. The progress of the retail stores under Burberry's direct control is particularly pleasing,

achieving energy savings of 14.7% during the year.


GUS in the environment: Transport fleet

Transport is important to GUS: the movement of goods is at the heart of our retail business and we are an international company

with employees in many countries. There are therefore two main areas to consider; how we get products down the supply chain

from suppliers to customers and how our employees travel when undertaking their duties.

Our commercial fleet travelled 67 million miles by road in the UK alone, equating to 75,000 tonnes of carbon dioxide. We have

only partial data relating to the business' car fleet, but where this exists it is included in the relevant sections.

Transport in ARG

ARG has three main commercial fleets for which it is directly responsible: the Argos commercial fleet, carrying products between

ARG warehouses and Argos stores; the Homebase commercial fleet (managed by a third party on ARG's behalf) which transports

goods between warehouses and Homebase stores; and the Argos Direct fleet which supplies home deliveries (also operated by a

third party on ARG's behalf).

These three fleets together comprise 1183 vehicles, which travelled 67 million miles and consumed 28 million litres of fuel during

2004/5. This total has increased slightly from last year, although better delivery efficiency has led to the number of miles travelled

per £1000 of sales decreasing by 5%. This reflects some consolidation between the Argos and Homebase businesses, including

shared sourcing from suppliers and increased use of joint distribution facilities. Previous reports have described in detail the ways

that ARG is addressing the impacts from its commercial fleet, by introducing more efficient tractor units, using double deck, multi

deck and 'mega' trailers and continually working to optimise the distribution network.

Beyond these three directly-controlled fleets, ARG products are also moved by third parties over whom the business has little

control, for example when suppliers transport merchandise from their factories to ARG warehouses. This is a supplier's action, but

it is at ARG's request and relates to its merchandise. This situation is further complicated by the fact that merchandise for more

than one retailer is often carried in the same transporter or goods from a number of suppliers are carried together. Unpicking this

is often difficult, making us unable to report unambiguously in this area. The diagram shows a schematic of the overall transport

system.


Over the past year ARG has continued to improve its 'vehicle optimisation' - an indication of how well it uses its vehicles - from

82% to 93%. Most of this improvement has come from mnimising the distance travelled by vehicles with empty trailers. For

example, ARG has introduced a supplier collection service through which it collects merchandise, normally delivered to the

distribution centres by the supplier, using vehicles returning empty from stores. Schemes such as this reduce the overall distance

travelled, but they may lead to an increase in ARG's mileage as it makes small deviations from the most direct route in order to

collect the product. The mileage saved can often be that travelled by suppliers, which is not recorded in the figures above.

In addition to the commercial fleets, both Homebase and Argos operate a fleet of company cars, the majority of which are leased

vehicles. Changes in the way these fleets have been managed this year means we are unable to obtain consistent data relating to

the whole company car fleet, but as an indication, this total was around 32 million miles in 2003/4 equating to approximately 4

million litres of fuel. We do not feel that these figures are sufficiently robust to include in our quoted totals at this stage.

Transport in Experian

Experian has a UK company car fleet of 664 vehicles, the majority of which are leased. These vehicles travelled over 10 million

miles, a 22% increase over the previous year. This increase is directly attributable to a rise in field-based employees.

Given the global nature of the business, with operations supporting clients in over 60 countries, a minority of Experian's

employees undertake a significant amount of air travel. This is an area that has been identified as an impact, although the

business is just starting to collect accurate performance data.

Transport in Burberry

This is now the second year in which Burberry has attempted to divert distribution between from air to sea freight, a practice that

results in significant cost and environmental savings. Although this move to slower distribution methods is set against a 'just in


time' industry background the careful planning and customer education work has allowed this change to be made without

adversely affecting the performance of the business.

This year Burberry diverted a further 29 tonnes of product away from air freight making a total of 183 tonnes of product shipped

by sea. The saving of carbon dioxide remained unchanged from last year - some 650 tonnes - as many of these products were

shipped shorter distances than in the previous year. In the current financial year Burberry expects both of these indicators to

improve as it continues to extend the range of locations shipped to in this way.

Burberry has also reduced unnecessary shipping to principal UK warehouses by increasing the proportion of product sent directly

from suppliers to globally dispersed storage facilities. Over the next year it is aiming to further increase the proportion of product

shipped directly from the supplier and further encourage the use of sea freight over air freight.


GUS in the environment: Bulk materials

Bulk materials

Like any other business, GUS uses and consumes materials and produces waste. Whilst each of our sites - stores, warehouses

and offices - produces only a relatively small amount of waste, the scale of our operations makes the overall impact

significant. Whether it is the amount of packaging that we specify for products or the amount of paper we use to produce our

catalogues, we work to minimise this where we can. Moreover, we also look for ways to reuse or recycle our materials once we

or our customers have finished with them, as well as ensuring that they originate from well managed sources, particularly the

paper we use for catalogues.

Collecting information on the total amount of waste produced by the Group is difficult since it involves recording small volumes

from a very large number of locations. Over the past three years we have been working hard to obtain accurate waste data to

provide good year-on-year comparisons. In 2005, GUS generated 85,000 tonnes of waste, 11.7 kg per £1000 of sales. Putting

it another way, the business produced almost 2 tonnes of waste for every full time equivalent employee. These figures have

risen in absolute terms since last year, but fallen by 10% per £1000 of sales as initiatives we have introduced over the past

year, particularly in our distribution centres, have had an effect.

Most of the Group businesses have implemented successful recycling initiatives over the course of the past year so that now

22% of the total waste produced by the Group is recycled. This is a small increase since last year, even against a background

increase in the overall levels of waste produced.


Bulk materials in ARG - Waste and recycling

In 2005, ARG produced 82,000 tonnes of solid waste, 15.6 kg per £1000 of sales.

At ARG, there are many different types of waste (waste 'streams'), each of which needs to be monitored and managed and are

shown in the diagram. The business has recently set up a waste management working group to consider all of these. This

group will look at the areas which produce the most waste, find ways to reduce the amount and look for opportunities to

increase recycling. One of the group's first actions was to map these waste streams to provide it with a clear picture of where

to focus efforts. ARG's ultimate aim is to send no waste to landfill at all. This is ambitious, and a long way off, but given the

right approach and initiatives the company believes that in time it will be achievable.


The majority of the solid waste in ARG comes from the warehouses, the largest amount of which relates to cardboard transit

packaging used to transport goods from suppliers and to stores (cardboard waste from the stores is usually collected by the

returning delivery vehicles and returned to the warehouses for recycling). Over the past year, ARG has invested in equipment

within the warehouses aimed at increasing the amount of waste recycled. All cardboard sent to Argos stores is backhauled to

the warehouses, where along with other card waste; it is baled to reduce its volume, and sent for recycling. In 2005, ARG

recycled 16,000 tonnes of card generated through its distribution operations.

Bulk materials in ARG - paper

ARG uses a significant volume of paper in the production of catalogues and other marketing materials. This has an indirect

impact on the environment, from the initial production of paper, through the catalogue manufacturing process and their

ultimate disposal.

In 2004/5, Argos produced over 35 million catalogues, using 68,000 tonnes of paper.


The rise in paper use relates to an increase in the number and type of catalogues produced. The introduction of the 'Extra'

catalogue, containing 4,000 more products than the standard main catalogue and having 25% more pages, accounts for most

of this change.

For the first time ARG has measured the amount of paper we used to produce other marketing publications, such as leaflets

and flyers which added a further 21,000 tonnes. These figures are included separately in the charts to permit a like-for-like

comparison with previous years, but when they have been included, they have been normalised by the larger turnover figure

including Homebase.

ARG seeks to minimise this impact in a number of ways: through improvements in the production process to improve

efficiency; better marketing to ensure catalogues reach the right people to minimise wastage; better forecasting to reduce the

number of unused catalogues at the end of each season; ensuring that that paper used is from well management forest

stocks; and encouraging customers to recycle their old catalogues.

Over the past two years, ARG has been working with various groups to identify recycling routes for catalogues and to

encourage customers to recycle. In 2003, GUS undertook some work in conjunction with schools and the Woodland Trust, to

discover the fate of GUS catalogues and identify cost effective ways to improve the current rates of recycling. The project

indicated a willingness among customers to recycle catalogues and growing capacity for their recycling, using local authority

schemes. ARG has since begun to promote the recycling message via notices in the catalogues themselves and via lending its

support to the 'Let's Recycle' campaign, which featured well-known consumer logos amended to encourage customers to

recycle.

Bulk materials in ARG - Products and packaging

ARG has a legal responsibility under the 1997 Producer Responsibility (packaging Waste) Regulations to monitor and measure

the amount of packaging it generates and handles. As the business grows and sells more products, inevitably this packaging

volume also increases. ARG must also ensure that packaging is fit for purpose; tough enough to protect products during the

transport and distribution process and making the product attractive to customers. ARG has minimum packaging specifications

provided to suppliers to ensure that this balance is achieved. A team of packaging specialists continually reviews packaging

options to develop innovative and more efficient ways to package products, doing the job whilst at the same time minimising

the use of materials.

The total amount of packaging handled by ARG was 99,000 tonnes or 19 kg per £1000 of sales. As the business has changed

over the past few years, particularly with the divestment of the Home Shopping business and the integration of Homebase, the

amount and type of packaging has changed, replacing mail-order pack with in-store packaging. This has increased the total


amount. In addition, growth within Argos and increased sales of bulkier items (such as white goods and furniture), which need

more protective packaging than in-store items as they are delivered directly to customer's homes, has continued this trend.

ARG has recently embarked on an innovative new project, with support from WRAP, the Waste and Resources Action

Programme backed by the Government, to develop and trial a reusable packaging system for a leading product category. If

successful, the project could reduce household waste across the UK Retail sector for this product alone by over 11,000 tonnes

a year. This work should be complete by the end of 2005, and we will report more fully on this exciting project in next year's

report.

Bulk materials in Experian - waste

In 2005, Experian generated 973 tonnes of waste from its offices in the UK, continuing a four year fall in the waste/£1000 of

sales. Of this waste, almost 500 tonnes was recycled (50% of the total). This improvement derives from a real employee

commitment to minimising the waste produced and the change in attitudes that can be achieved through good communication.

For example, previous reports have mentioned the 'bin your bin' campaign in which employees have given up their bins at

each desk, in favour of numerous recycling points located throughout the offices.

Experian in North America generated 894 tonnes of waste, of which 35% (301 tonnes) was recycled.

Bulk materials in Burberry - packaging


Burberry - in both the UK and Spain - reports on its use of packaging under the Producer Responsibility Obligations. It is

proactively working to reduce this impact and during the year a number of new initiatives were introduced. The company now

reuses inbound cartons from suppliers for shipping orders to the retail warehouse and distribution from this warehouse to the

UK retail stores is now performed using reusable tote boxes. Two of the wholesale sites are trialling the use of cardboard

balers in order to aid the treatment and collection of this material.


GUS' supply chain: Supply chain principles

In common with many other retailers, the GUS businesses are developing ever

closer links with their supply chains. Sourcing products directly from

manufacturers - often overseas - and specifying products in greater detail help

to increase value for money and improve quality for our customers. But we

recognise that this type of close relationship brings with it obligations, in terms

of the social, labour and environmental practices in our supplier companies. We

know that our customers expect their products not only to provide value and

quality, but also to have been made with due regard for environmental and

human wellbeing. This expectation on the manufacturer's factories becomes, in

practice, an expectation on us, as customers expect us to have checked and

corrected any unacceptable conditions.

But what is unacceptable? Working conditions in many other countries are

very different from those in the developed world, with lower pay rates and

longer hours being the norm. In fact, these very conditions could be argued to

provide the competitive advantage that is enabling economies to compete and

grow, attracting investment and leading to development. But at what point do

lower wages become exploitative? And when do long working hours become

harmful? Fortunately, there is consensus on many of these norms, and GUS

reflects this in its practices, basing its approach on a combination of the OECD

Guidelines on Multinational Enterprises, the ILO Declaration on Fundamental

Principles and Rights at work, the ILO tripartite declaration of principles on

multinational enterprises and social policy and the published base code of the

Ethical Trading Initiative.

The Group has a set of Supply Chain Principles set by the Group board which

provide the minimum standard for all of its businesses. The Principles have

been reviewed and revised in the past year, and are as follows:

Principle 1: We do not employ any person below the age of 14 or 15

(depending on the country) or below the legal minimum age (where this is

higher) in the countries in which we operate.

Principle 2: We do not use forced labour in any form (prison, indentured,

bonded or otherwise) and staff are not required to lodge papers or deposits on

starting work.

Principle 3: We comply with all applicable local environmental, safety and


health regulations. We provide a safe and healthy workplace, presenting no

immediate hazards to our staff.

Principle 4: Within the customs and practices of the countries in which we

operate*, we do not discriminate against any worker on any grounds (including

race, religion, disability, or gender). We do not engage in or support the use of

corporal punishment or mental, physical, sexual or verbal abuse.

Principle 5: We provide each employee with at least the minimum wage or the

prevailing industry wage (whichever is higher) and provide each employee with

all legally mandated benefits.

Principle 6: We comply with the laws on working hours in the countries in

which we operate.

Principle 7: We comply with all relevant environmental legislation in the

regions in which we operate. We have identified all the hazardous or toxic

waste we produce and are confident that it is disposed of by competent bodies

via authorised disposal routes.

Principle 8: We support the right of workers to form and join trades unions

which are free to meet without hindrance.

* We recognise that there are some communities in the world where a mixed

workforce is not practicable. However, we expect our suppliers to justify their

practices and to treat all employees equally.


GUS & the community: Community activity at GUS

GUS takes an active role in community activities, supporting charities and working directly with local

projects:

■ Taking part in these activities is popular with our staff - they feel that they are contributing to their

communities and that the company is supporting them in this. They are also able to learn new skills

when working together.

■ Developing stronger communities, either locally or nationally, has knock-on benefits for the business:

It can make customers feel more predisposed towards GUS, it can create a better environment for

commerce and trade and it can increase awareness of the company, attracting a wider pool of high

quality recruits.

■ The resources of the Group can have a profound impact on charitable and community projects,

through both direct giving and also through the in-kind contribution of the Group businesses.

There are two interlaced elements to our community engagement programme: the work of the GUS

Charitable Trust and the activities planned and delivered through the Group businesses. Many of the

Group's most successful projects have involved both the Trust and one or more of the Group businesses,

with the cash contribution from the Trust being amplified by the in-kind support from the business,

resulting in a gearing effect that doubles or triples the impact of the project.

The overall input to the GUS community programme is calculated using the London Benchmarking Group

method (endorsed by the BITC Per Cent Club). The direct cash giving is calculated from the Group's

contribution to the Charitable Trust (augmented where appropriate by the total of other cash gifts from

within the Group). To this is added the value of staff volunteer time within the working day, the value of

gifts in kind given to charities and the total investment in planning and managing our community activities.

The total value is then compared to the Group's pre-tax profit figure as a benchmark of achievement.

Percentage = (Cash + Volunteering + In-kind + Management) / pre-tax profit

In the year ending March 2005, the total value of the Group's charitable and community programme was

£3,050,000 representing 0.43% of pre-tax profits.

This total comprised the following elements:

2005 2004 2003

Contribution to the GUS Charitable Trust £1,365,000 £1,240,000 £963,000

Employee volunteering £113,000 £65,000 £103,000

Gifts in kind and donations £179,000 £191,000* £180,000

Other costs of community programmes £1,047,000 £305,000 £313,000

Burberry's charitable contribution £346,000 £198,000 £166,000

Total £3,050,000 £1,999,000* £1,727,000

*figures re-stated to exclude The Lewis Group and give a like-for-like comparison

These figures are analysed in more detail in the table and in the reviews from each business.


Experian

Cf. 2004

Volunteering

£60,000

£65,000

Gifts in Kind

£163,000

£69,000

Other (mainly

mgt costs & cash

budget)

£669,000

£210,000

Total

£892,000

£344,000

ARG

Cf. 2004

£53,000

£-

£16,000

£122,000

£378,000

£95,000

£447,000

£217,000

Burberry

Cf. 2004

£346,000

£198,000

Total £113,000 £179,000 £1,047,000 £1,685,000

Cf. 2004 £65,000 £191,000* £305,000 £ 759,000*

*figures re-stated to exclude The Lewis Group and give a like-for-like comparison

The Group's response to the Indian Ocean Tsunami that occurred on 26th December 2004 involved

substantial cash donations directly from the plc and the Group businesses. These donations totalled

£310,000, which accounts in part for the rise in total charitable giving recorded during the year. These

figures are included under the category 'Other (mainly cash costs and budget)' which also includes other

cash donations directly from the businesses.


GUS & the community: The GUS Charitable Trust

The GUS Charitable Trust (the Trust) receives donations from GUS, the exact amount

being linked to overall profitability (see table).

The three Trustees (Sir Victor Blank - the Chairman of the Trustees and Chairman of

GUS, Lady Patten of Wincanton - GUS Non-executive director, and Gordon Bentley - GUS

Company Secretary) meet to discuss proposals for funding and agree the Trust

beneficiaries, focussing on three areas:

■ Links with universities and educational establishments in localities in which GUS

has a significant presence.

■ Charities in the field of medical research.

■ Charities that focus on the needs of children and the elderly.

The Trust is also developing its support for environmental initiatives.

They are supported in this work by a Trust Administrator responsible for the day-to-day

oversight of projects.

Contribution to Expressed as a Trust (£'000) percentage of

pre-tax profit (%)

1999 505 0.11

2000 458 0.12

2001 600 0.19

2002 828 0.22

2003 963 0.24

2004 1,240 0.18

2005 1,365 0.19

The Trust's income from GUS in respect of the year ended 31 March 2005 was

£1,365,000. In that year the Trust made awards totalling £1,117,000. Major awards

were as shown in the table.

£000

PRIME - an ME/CFS project 97

Healing Foundation 61

Prostate Cancer Charter for Action 60

Citizen's Advice Bureaux 55

Down's Syndrome Association 54

Help the Hospices 50

Kidscape 45


Contact a Family 40

Business in the Community Breakfast Club 38

For Dementia 35

Children's Safety Education Foundation 34

Investing in Volunteers 30

CRARG 30

ICAN 30

Habitat for Humanity 30

689


GUS & the community: Management in the Group businesses

Managing community activity in ARG

This year has seen the appointment of a full time charities manager in ARG to

strengthen and co-ordinate the community investment activity. The

appointment was motivated by a desire to focus on fewer initiatives, with

higher impact, and also to better measure ARG's investment in community

activities and the corresponding impact.

Accordingly this year has seen an overhaul of many of ARG's systems, and

processes, including much better control of the small scale and diverse activity

already underway in the company and a review of how donations are classified.

The 'Charity of the Year' initiative continued, with the second year of support

for Whizz-Kids bringing the total raised for that organisation to the target

£0.5M.

Managing community activity in Experian

The Community Involvement team at Experian International is supported by

the Community and Charity Committee, comprising staff representatives from

across the business. The Committee takes the funding decisions with the

Community Involvement team managing the projects. There is a strong theme

of employee involvement in projects, providing motivational and developmental

benefits for Experian's people, and leading to high-impact, high-profile projects

in the community. The Experian community involvement policy was revised

during the last year to include a much greater focus on 'legacy' projects -

projects where the impact and community benefit continue long after

Experian's funding and involvement has ended.

Experian North America's community involvement programme is coordinated by

its Community Involvement Council. Known as "The Heart of Experian", the

programme supports the company's business strategy and brings brand values

to life, focussing on working with the community to help people help

themselves through education and community assistance. There are four

categories of opportunities of involvement: education, sponsorships, donations,

and volunteering.

Managing community activity in Burberry

During the past year, Burberry has continued to develop and implement its

global charitable giving policy which focuses on four areas:


■ Education, with particular emphasis on fashion and textile design

programmes.

■ Medical research and awareness programmes.

■ Humanitarian issues.

■ The arts.

The business recognises and supports projects which nurture the future talent

of the fashion industry. It does this by contributing to organisations such as

Textprint (a charity whose aim is to link the best newly graduated textile

designers with industry) and educational establishments such as the Royal

College of Art and the Central St Martins College of Art and Design.

During the past year, Burberry has pledged its support for various medical

research and awareness programmes, including Cancer Research UK (the

world's leading cancer research charity), the National Multiple Sclerosis Society

and the American Cancer Society.

The business maintained its charitable support of breast cancer research and

awareness through sales of a special edition trench coat, scarf and handbag. In

total, over £142,000 of the sales proceeds received from customers was given

to the UK Breakthrough Breast Cancer Charity and The Breast Cancer Research

Foundation in the US, as well as Breast Cancer charities in France and Asia.

Humanitarian issues have been of great importance this year. Following the

Tsunami disaster, a cash donation of over £100,000 was made to the Tsunami

Relief Fund (DEC) which ensured that funds reached those most in need of

support. Events to raise additional funds for the Tsunami Appeal also took place

in London and Hong Kong.

In order to continue its support of Arts projects, Burberry donated funds to the

Hockney Collection, housed in the San Francisco Museum of Performance and

Design. This donation also has an educational aspect, with a portion of funds

contributing towards the museum's programme of cultural events.

Measuring the results

The motivation behind GUS' work in the community is, as explained already,

three-fold:

■ We have an impact in the business as employees enjoy and benefit from

participation in the programmes

■ We have an impact on the business as we strengthen communities

around us and

■ We make an impact on the community itself, improving people's lives.


Our community programmes represent an investment, much like any other,

and we are therefore interested to know whether the investment has led to the

planned benefits:

Measuring inputs; We measure our the inputs to our community work in

terms of cash and other donations, support in kind and staff time, giving rise to

the figures quoted in this report.

Impact in the business; We regularly review impact in the business, albeit in

an ad-hoc way. For example, we are able to comment generally on the number

of employees involved in projects and are in touch with staff who regularly

volunteer for community programmes, enabling us to track their feedback. We

have undertaken a student internship project in Experian UK to look at the

impact of the community programme there on employee perceptions. The

results showed that over 90% of Experian UK employees were not only aware

of the Community programme, but were supportive of the company's

involvement and choice of projects. The community teams in the businesses

are also able to monitor levels of external comment in the press and media

(usually local), which is a useful indirect measure of the impact that a given

project has in GUS: the higher the local or national profile, the greater the

resulting impact on employees.

Impact on the community; Understanding the likely social impact is a key

part of the project assessment made by the GUS Charitable Trust. Projects are

evaluated in terms of their reach and scope (how many people they will affect)

and their likelihood of success and wider adoption. This evaluation continues

through the project's life as interim status reports are received. Further,

individual businesses have similar processes, listing likely community benefits

as part of the project evaluation and then tracking whether these have

materialised. To these existing elements of reach and scope we are beginning

to add the idea of 'longevity'; will our impact continue after our involvement

with the project ceases? A number of the most successful Trust projects have

produced these types of enduring long-term impacts and the Group businesses

are increasingly adopting this way of thinking.

There is no agreed mechanism either within GUS, or more widely, to aggregate

and report on the benefits of multiple community projects, prohibiting us from

making any simple statement of our overall impact. Our project reporting this

year includes statements of social benefits and internal impacts for each of the

featured case studies, which we hope begins to clarify this complex area.


GUS & the community: Case Studies

■ Experian UK - Underserved markets

■ Experian - Tsunami appeal

■ Experian UK - I CAN Talking Links

■ Experian UK - Experian Robin Hood Marathon

■ Argos - Charitable Partnership with Whizz-Kidz

■ Homebase - Partnership with World Wildlife Fund (WWF) in Borneo

■ Argos - Audio Catalogue

■ Homebase - SunSmart Campaign Partnership

■ Experian North America - Susan G. Komen Breast Cancer Foundation

Support

■ Experian North America - Allen, Texas Community Outreach Program

■ Experian North America - Illinois Junior Achievement Support

Experian UK - Underserved markets

What was the need? The need was to create a body of research to support

the theory that retail investment in deprived areas would not only benefit local

communities, but also act as a spur to wider investment and regeneration of

such areas. Similar research had been conducted in Harlem, New York which

showed that the downward cycle of urban deprivation could be halted by

commercial investment. The research would need to focus on quantifying

deprived areas that were underserved in terms of retail provision and

subsequently used to encourage retailers to invest in these areas.

How did we help? Experian was invited to become the key research content

provider to the underserved markets project led by Business in the Community

and supported by the Office of the Deputy Prime Minister. The initial task was

to use a combination of data and applications to categorise the 88 most

deprived areas in England. This included analysis of shopping patterns, retail

presence, expenditure forecasts, income levels and an understanding of how

people in deprived areas travel further afield to visit more attractive shopping

areas. Each of the 88 areas was categorised into one of six distinct groups from

which a selection of 12 centres was determined for further analysis. The twelve

short listed areas were selected on the basis of geographic diversity in addition

to the gap between consumer demand and retail provision, quantifying the

candidate areas for new investment.

What is the social benefit? The research clearly showed the case for

investment finding, for example that Bolsover has strong retail potential, but

was hampered by being predominantly rural with disparate population and poor


infrastructure, or that Haringey had polarised demographics with high contrast

between top and bottom income levels and that its retail provision was

constrained by land availability. These and other conclusions were presented to

senior cabinet ministers including Gordon Brown, John Prescott and Patricia

Hewitt at a high level Government meeting attended by the CEOs of the UK's

most successful retailers, property investors and developers. The next priority

is to help persuade retailers and local authorities of the real social and business

opportunities that these markets represent and to work with local and central

Government to create a better framework for investment decisions.

What impact did the project have in the business? The project provided

the opportunity to further cement links between the business and key

customers such as major retailers, investors and developers and the UK

government. Ultimately, healthy and sustainable growth in these areas is a

commercial benefit for Experian.

back to top

Experian - Tsunami appeal

What was the need? The Boxing Day Tsunami resulted in the death of

hundreds of thousands of people in Thailand, Indonesia and Sri Lanka and

devastated the economies and livelihoods of millions. The Disasters Emergency

Committee (DEC) called for immediate donations of cash to help residents and

rebuild communities.

How did we help? Experian UK spearheaded an international collection effort

across the company based on employee donations and matching funds from the

company. The UK office held a casual dress day and accepted employee

donations of £15,335, which was matched by an equal corporate donation.

Experian's UK Community team also co-ordinated local clothing and bedding

collection for a charity in Sri Lanka. Experian worldwide collections, including

employee donations and corporate match funding, totalled over £140,000.

What is the social benefit? The DEC's large collection benefited from 80% of

Experian International's fundraising efforts. One of Experian's suppliers, Astron,

formed the Astron Appeal to help rebuild the lives of its employees. This appeal

benefited from 20% of the money Experian raised. The resources were used for

the immediate relief of suffering caused by the Tsunami.

What impact did the project have in the business? The fundraising effort


created a real sense of unity, joining Experian globally in an effort to work as

one unit to help communities devastated by the Tsunami.

back to top

Experian UK - I CAN Talking Links

What was the need? More than one million children in the UK suffer from a

form of speech and/or language difficulty, however information on treatments,

professionals and schools is not easy to locate. Currently, different

organisations including institutions, government, the NHS, and local authorities

hold pockets of information. I CAN, the UK charity for children with speech and

language difficulties identified a need for one location to contain multiple

sources of information.

How did we help? As a leader in database technology, Experian UK was a

natural partner for the Talking Links project. Experian engaged its supplier,

SiteCore, to help develop software that will collate all the available information

into one post-code searchable database. The result will be a comprehensive

source of information relating to speech and language disabilities including

schools, therapists and support groups. The GUS Charitable Trust agreed to

fund the project for £60,000. An additional £120,000 is earmarked for the

project's software to be made available and replicable for two further charities.

What is the social benefit? When completed, Talking Links will enable

parents, carers, professionals, educators, media and government to access a

comprehensive source of information relating to speech and language

disabilities including schools, therapists and support groups, and to conduct

their searches via postcode, which until now has not been available in the

charitable sector.

What impact did the project have in the business? Experian has taken a

unique approach in engaging its supplier, SiteCore, to become involved in the

project and strengthening the relations between the two companies. In

February 2005, it held a high-profile event at Experian's newest Nottingham

building, Landmark House where HRH the Countess of Wessex launched the

project which generated positive local coverage, and was well-deserved

recognition for its employees.

back to top


Experian UK - Experian Robin Hood Marathon

What was the need? The Experian Robin Hood Marathon (ERHM) was first

organised in 1981 by Nottingham City Council and has become an important

fixture in the UK running calendar. The race, which comprises a Full Marathon,

Half Marathon, Fun Run and the Don Scott Mini-marathon for schools, depends

upon continued support.

How did we help? Experian is the title sponsor of the event, and subsidises

the entry fee for each runner in the Don Scott Mini-marathon. Experian receives

reduced entry fees for its employees, their families and friends and encourages

participation in Team Experian. The event is widely advertised to employees -

for runners and for helpers. Runners receive specially printed t-shirts and

helpers receive a thank you gift. Experian has a large marquee on site and

offers free hospitality to Team Experian from 7.30am until the last Team

Experian runner crosses the finish line.

What is the social benefit? The Experian Robin Hood Marathon is the East

Midlands' largest participation-sporting event and voted second best marathon

after the Flora London Marathon by the readers of Runners World magazine.

Participation has grown each year and 2004 saw more than 10,000 runners

cross the finish line in one of the four events. In 2004, the ERHM steering

group, in partnership with the Nottingham Evening Post, Primary Care Trusts

and Nottingham City Council, launched the Get Fit Nottingham campaign, which

encouraged health checks, physical activity appropriate for fitness level and a

general awareness of healthy lifestyles (including diet and nutrition). The

campaign ran from May to September and featured heavily in the local press.

Every three years, the ERHM steering group selects four charities to become

the Official Charities, which are heavily promoted by the event. In 2004, the

Official Charities received their highest fundraising amount to date - £47,000.

Overall, since Experian's involvement in the event, more than £2m has been

raised through the Experian Robin Hood Marathon for charities across the UK;

funding which has been 'unlocked' by Experian's support.

What impact did the project have in the business? The Experian Robin

Hood Marathon is Experian's largest community event in the UK, generating

positive publicity for Experian and reinforcing the company's commitment to

the communities around it. In 2004, Team Experian consisted of more than

1,000 Experian employees, their families and friends - the highest level of

participation to date. The event is a well-organised family day for Team

Experian that is fun, friendly and engenders team and company pride and

teamwork. This year, 2005, marks the 25th anniversary of the event and 10

consecutive years of Experian sponsorship.


back to top

Argos - Charitable Partnership with Whizz-Kidz

What was the need? Whizz-Kidz provides a broad range of mobility

equipment and services to disabled children and their families that are not

available through the National Health Service. In addition, it works to raise

awareness of the importance of independent mobility and the issues that affect

disabled children and their families. Argos formed a charitable partnership with

Whizz-Kidz in 2003 with the aim of raising £500,000 to further improve the

quality of life of disabled children and young people throughout the UK.

How did we help? The Argos Olympics was a major fundraising event during

2004, taking its theme from the Olympic Games in Athens and aiming to

involve every single member of staff during a six week campaign between

August and September; approximately 23,000 people across the UK and ROI,

through 580 stores, offices, distribution centres and call centres. The company

was split into 5 regions in line with its operational structure. Each region had a

coloured ring and an Argos Olympic flag which was passed in a relay style

event. The event challenged the staff to transport the ring and flag across their

region, location to location, in the most imaginative way, raising money at each

stage. Motorbikes, boats, steam trains and planes were some of the methods

used, with even the police, army and coastguards all getting into the spirit of

things. At the end of the event all five regions came back together again to

form the Argos Olympic rings, representing the Argos five values and the

unification of the company.

What is the social benefit? The event achieved its objectives, raising both

money and awareness for Whizz-Kidz. The charity received a cheque for

£66,000 from Argos staff and benefited from strong positive PR as both local

and national press picked up on the crazy activities that Argos employees

undertook to move the rings and flags around the regions. Whizz-Kidz chief

executive, Ruth Owen, said of the event: "Argos staff have really shown their

dedication to Whizz-Kidz and we are over the moon with the amount of money

raised. This will really help us to change the lives of disabled children by giving

them the independence all children deserve."

What impact did the project have in the business? The Argos Olympics

increased awareness of the partnership with Whizz-Kidz, involving all staff

across the business in one key fundraising event. It helped create and build on


a sense of fun and teamwork in the workplace and bolstered a sense of pride in

staff seeing the commitment Argos gives to charitable work. At an employee

award ceremony for the event managing director for Argos, Sara Weller, said:

"Everyone in the company fully supported the event, and many staff really

went the extra mile in transporting the rings and flags in very unusual ways!

Movement was the key theme behind the Argos Olympics as staff knew they

were raising vital funds to give disabled children and teenagers across the

country freedom of movement. It highlights how important it is to everyone."

back to top

Homebase - Partnership with World Wildlife Fund (WWF) in Borneo

What was the need? Globally, forestry land under Forest Stewardship Council

(FSC) covers nearly 55 million hectares in 66 countries but the area in the

tropics under FSC certification is very low. In order to meet international

demand for tropical timber from legal and well managed sources it is important

that more help and assistance is provided to timber companies in order to

reduce the impact of deforestation to local communities and the loss of unique

flora and fauna habitats.

WWF Malaysia's aim is to promote business to business partnerships and work

with companies to improve their management of tropical forests and raise the

understanding of the certification process, allowing forest managers to start to

tackle issues in line with FSC principles.

How did we help? Bornion Timber is situated in the heart of Sabah, Malaysia's

second largest state on the Island of Borneo. Three years ago it was granted a

concession from the Malaysian Government's Sabah Forestry Department to

manage and harvest timber from a Forest Management Unit (FMU), 107,000ha,

an area approximately two-thirds the size of the county of Surrey.

FMUs in Sabah are special as the concessions last for up to 100 years, rather

than the more typical 2-5 year licence. Thus, in contrast to the common

scenario where a company would go in and fell as much as it was allowed to

within the short licence, the FMU is only granted to those companies that can

demonstrate good management plans for the long term stability and success of

the forest. Bornion inherited the concession and as with many forest areas in

the tropics, it had been intensely felled and poorly managed in the past due to

conventional forestry practices (such as wide roads, too many skid trails and

little to no Reduced Impact Logging practices).


Homebase has assisted Bornion to improve its forest management by helping

finance a base-line appraisal to identify what the forest has to do over the next

five years to achieve FSC certification. The appraisal, carried out by forestry

specialists from the WWF highlighted that with commitment and support, FSC

certification could be achieved. Homebase is continuing to support Bornion to

enable the necessary work required to achieve FSC certification.

What is the social benefit? The development of sustainable forestry practices

in the region promotes not only the long term economic benefits of business

stability and employment, but also protects wildlife habitat. It ensures that local

tribes have enough area to practice their way of life without damaging the

natural and protected forest or have to participate in illegal logging activities.

What impact did the project have in the business? Supporting the WWF's

work in Borneo enables Homebase to grow and maintain its supply of legal and

well managed tropical timber to satisfy product demand in the UK.

back to top

Argos - Audio Catalogue

What was the need? Sight loss is one of the most common causes of

disability in the UK with around 2 million people having some kind of a visual

impairment; some people are born with a visual impairment and others lose

their sight as a result of disease or an accident. Argos launched an audio

catalogue in 2004 to comply with its policy of making products and services

accessible for all customers and to reach an economically active sector of the


population who might be unable to shop independently.

How did we help? Since the release of the first CD last year Argos has been

working with the National Library for the Blind to further develop the service.

The discs contain verbal descriptions of Argos best value deals and the most

popular lines from the catalogue. The two discs run for 120 minutes and include

help and advice on how to order. The CD cover includes the customer service

'Order from Home' telephone number in Braille. The intention is to produce an

audio catalogue of selected lines alongside each twice-yearly catalogue launch.

Customers may browse the CDs in store or order personal copies directly from

Argos.

What is the social benefit? Customer feedback has been very positive and

Argos has raised the number of CDs from 3,000 to 5,000 per catalogue. Olof

Templeman, Sales and Development Manager for the National Library for the

Blind, said: "It's extremely encouraging that more and more businesses such as

Argos are considering accessibility when developing new services.....businesses

are often guilty of information discrimination against (visually impaired people)

- thinking that as long as their building is accessible then they have catered for

the needs of all disabled people. Argos has proven that if a little care is taken

whilst devising new products, then these potential customers can also have

access to information on goods and services available."

What impact did the project have in the business? The project has

generated a positive reaction from staff and customers. "We are always looking

for ways in which we can improve our services and accessibility," explained

corporate responsibility manager, Laurence Singer. "Argos is committed to

making its stores and services accessible to everyone, we take our

responsibilities towards visually impaired and disabled people very seriously

and we decided that this was a valuable opportunity to inform customers of our

services."

back to top

Homebase - SunSmart Campaign Partnership

What was the need? Skin cancer is one of the commonest forms of cancer in

the UK. Official figures show that in 2001 there were over 70,000 cases of skin

cancer registered in the UK and that in 2003 2,280 people in the UK died from

the disease. Most skin cancers are preventable, with around 80% of melanomas

being caused by exposure to sunlight. It is well established that UV radiation

from the sun and from artificial sources, such as sun-beds and tanning lamps,


can cause all forms of skin cancer. There is a need to raise awareness of safe

sun bathing, through promotion of a simple 5 point code.

How did we help? Cancer Research UK promotes skin cancer awareness

through its SunSmart campaign. The organisation identified a need to build a

partnership with a leading UK retailer that consumers associated with spending

time outdoors at home. Homebase provided a good platform to communicate

the SunSmart message through a poster campaign across their 287 stores in

the UK, reaching 1.5 million customers and staff in store each week, focussing

particularly on co-promotion with its outdoor and leisure product ranges.

What is the social benefit? The SunSmart code is about simple steps to care

in the sun, thereby reducing the risk of skin cancer. It is a positive message to

communicate to staff and customers, encouraging self awareness and

explaining how small changes can make a big difference. Cancer affects one in

three people in the UK - and for that reason is likely to have touched the lives

of many of Homebase's staff and customers. The Homebase SunSmart

campaign is reaching an interested audience with useful and possibly life saving

information.

What impact did the project have in the business? Partnership with

Cancer Research UK demonstrates expert advice and is linking with a charity

which many staff and customers are likely to support. The project has been a

new venture for Homebase and provides useful experience for future charitable

partnerships.


back to top

Experian North America - Susan G. Komen Breast Cancer Foundation

Support

What was the need? Twenty-three years ago in Peoria, Illinois, Susan

Goodman Komen, a mother of two, died of breast cancer at age 36. Before

Susan died, her sister Nancy Goodman Brinker made a promise to her that she

would make a difference in the fight against this deadly disease. In 1982,

Nancy Brinker fulfilled her promise and established the Susan G. Komen Breast

Cancer Foundation. Today, the Susan G. Komen Breast Cancer Foundation is

credited as the world's leading catalyst in the fight against breast cancer with

more than 75,000 volunteers working through 118 Komen Affiliates in

communities nationwide, as well as three international Affiliates in Germany,

Italy and Puerto Rico.

How did we help? The Heart of Experian's involvement with the Komen

Foundations Race for the Cure(R) began more than twelve years ago when an


Experian employee was diagnosed (and ultimately succumbed) to breast

cancer. Since then, the Experian employees in Orange County have made it

their goal to be the number one fundraising team each year; a goal they have

accomplished five times. In 2005, Experian North America again set the all-

time corporate record for an Orange County corporation raising more than

$84,000.

What is the social benefit? Breast cancer remains one of the leading causes

of death for women around the world. Experian's prominent participation in this

worthy cause helps fund much needed research.

What impact did the program have in the business? This project provides

an excellent showcase for Experian's community involvement program. It has

unified Experian employees by allowing them to join together in support of a

positive cause. Lastly, the company has received external praise in the form of

awards and press coverage.

back to top

Experian North America - Allen, Texas Community Outreach Program

What was the need? For eighteen years, Allen Community Outreach (ACO)

has been the only local agency providing emergency assistance to residents in

the Allen area. Six percent of the population of Allen, Fairview and Lucas come

to ACO for assistance each year. Among the volunteer opportunities are Meals-

On-Wheels, ACO Upscale Resale Store, Care & Share items such as bar soap,

toothpaste, laundry detergent, school supplies, etc., and the Annual Allen USA

Celebration Kid Zone.

How did we help? Throughout the years, Experian North America employees

have provided much needed support to ACO programs - serving as volunteers

for Meals-On-Wheels & More, special events, collecting for the Care & Share

closet, school supply drive, Thanksgiving food distribution, and Christmas Adopt

a Child/Teen or Senior.

What is the social benefit? Through the efforts of the Allen Community

Outreach, thousands of needy people throughout the Allen, Texas metropolitan

area have been able to receive assistance to weather life's temporary crises or

to begin rebuilding their lives.

What impact did the program have in the business? The Allen Community


Outreach volunteer opportunities provide employees with opportunities to

better the communities they live in while fostering a sense of responsibility and

pride.

back to top

Experian North America - Illinois Junior Achievement Support

What was the need? Junior Achievement is the world's largest organisation

dedicated to educating young people about business, economics, and free

enterprise. JA programs are taught by volunteers at locations throughout the

United States and in 97 countries around the world.

How did we help? Experian has partnered with Junior Achievement to teach

in-school programs to students at Enders-Salk Elementary School in

Schaumburg. Students in JA programs learn in a fun and meaningful way about

how business and the free enterprise system operate.

What is the social benefit? An educated workforce is crucial to the success of

any 21st century company. Junior Achievement has a distinguished 86 year

history of teaching students the skills needed to survive today. The key content

areas are business, citizenship, economics, entrepreneurship, ethics/character,

financial literacy and career development.

What impact did the program have in the business? This volunteer effort

gives employees the chance to put their business skills to good use by

educating the youth of the community and by providing them the skills they

need to work for businesses such as Experian.


GUS' supply chain: Supply chain principles

In common with many other retailers, the GUS businesses are developing ever

closer links with their supply chains. Sourcing products directly from

manufacturers - often overseas - and specifying products in greater detail help

to increase value for money and improve quality for our customers. But we

recognise that this type of close relationship brings with it obligations, in terms

of the social, labour and environmental practices in our supplier companies. We

know that our customers expect their products not only to provide value and

quality, but also to have been made with due regard for environmental and

human wellbeing. This expectation on the manufacturer's factories becomes, in

practice, an expectation on us, as customers expect us to have checked and

corrected any unacceptable conditions.

But what is unacceptable? Working conditions in many other countries are

very different from those in the developed world, with lower pay rates and

longer hours being the norm. In fact, these very conditions could be argued to

provide the competitive advantage that is enabling economies to compete and

grow, attracting investment and leading to development. But at what point do

lower wages become exploitative? And when do long working hours become

harmful? Fortunately, there is consensus on many of these norms, and GUS

reflects this in its practices, basing its approach on a combination of the OECD

Guidelines on Multinational Enterprises, the ILO Declaration on Fundamental

Principles and Rights at work, the ILO tripartite declaration of principles on

multinational enterprises and social policy and the published base code of the

Ethical Trading Initiative.

The Group has a set of Supply Chain Principles set by the Group board which

provide the minimum standard for all of its businesses. The Principles have

been reviewed and revised in the past year, and are as follows:

Principle 1: We do not employ any person below the age of 14 or 15

(depending on the country) or below the legal minimum age (where this is

higher) in the countries in which we operate.

Principle 2: We do not use forced labour in any form (prison, indentured,

bonded or otherwise) and staff are not required to lodge papers or deposits on

starting work.

Principle 3: We comply with all applicable local environmental, safety and


health regulations. We provide a safe and healthy workplace, presenting no

immediate hazards to our staff.

Principle 4: Within the customs and practices of the countries in which we

operate*, we do not discriminate against any worker on any grounds (including

race, religion, disability, or gender). We do not engage in or support the use of

corporal punishment or mental, physical, sexual or verbal abuse.

Principle 5: We provide each employee with at least the minimum wage or the

prevailing industry wage (whichever is higher) and provide each employee with

all legally mandated benefits.

Principle 6: We comply with the laws on working hours in the countries in

which we operate.

Principle 7: We comply with all relevant environmental legislation in the

regions in which we operate. We have identified all the hazardous or toxic

waste we produce and are confident that it is disposed of by competent bodies

via authorised disposal routes.

Principle 8: We support the right of workers to form and join trades unions

which are free to meet without hindrance.

* We recognise that there are some communities in the world where a mixed

workforce is not practicable. However, we expect our suppliers to justify their

practices and to treat all employees equally.


GUS' supply chain: Practice in the Group businesses

Each of the Group businesses has then developed its own approach to

managing these issues in its supplier companies:

ARG: Argos Retail Group has an extensive supply chain, and has therefore

prioritised it in terms of risk and influence, concentrating first on those

elements where we judge there to be a risk of non-compliance, and over which

we can exert some influence. This has led to the following segmentation:

Product Coming from Priority Activity

Exclusive / Own Direct source brand (purchased

directly from non EU factories)

Highest

Lowest

Audited directly by qualified third-part

Audited directly to an equivalent standard by third party auditors with the importing companies monitoring the results.

Principles communicated to suppliers and included in the contractual terms and conditions.

Exclusive / Own brand

Direct import (imported on our behalf by agents or third parties from non EU factories)

Proprietary / branded product

Imported (Purchased from the brand owner from non EU factories)

Exclusive / Own UK/EU Brand sourced

(made and purchased in the EU)

Proprietary / UK sourced branded product (purchased

from the brand owner in the UK/EU)

ARG uses a detailed code of practice for suppliers, based upon the GUS

Supplier Principles expanded to include background context and detailed

requirements. This code has recently been updated and is available by clicking

here. The requirements of the code are translated by our third party auditors

(CSCC) into an audit framework, which is then applied to significant new direct

import (DI) or direct source (DS) vendors. The audit results are provided to the

management of the factory, who respond by agreeing to an improvement plan,

and an overall grade is calculated to give an indication of the general conditions

in that supplier location. All of the audit reports, together with progress against


the agreed actions, photographic evidence and the findings of any follow up

audit are all available online for the ARG team to monitor and control progress.

Argos is strongly associated with the sale of toys, and is pleased to welcome

the recent development of a Code of Practice, by ICTI (the International

Confederation of Toy Industries). The company has reviewed the Code and

publicly supported its standards, with the result that suppliers - if they are able

to demonstrate a credible audit and compliance - can offer ICTI certification to

ARG as an alternative to being audited by the company's own auditors.

Burberry: The process of acquiring new suppliers includes completion of a

supplier evaluation. Following this, risk assessments are carried out, on the

basis of which audits may be performed to ensure that any emerging issues are

kept under review. Such issues may include key supply chain risks and more

general environmental and health and safety assessments. The assessments

then become the focus of assurance and audit activity.

Experian: Experian's supply chain is very different from those in ARG or

Burberry. The company has a limited number of major business-to-business

contracts (IT, office furniture and supplies, service partners etc) which tend to

be with high profile branded organisations. Additionally there are local

arrangements for catering, cleaning and other purchases. Therefore far less of

Experian's directly controlled supply chain extends into parts of the world at

risk of unacceptable labour practices, and the matter has a lower priority.

However, the GUS supply chain principles are included in Experian's standard

Terms and Conditions for suppliers (see Experian Limited: Core Terms and

Conditions of Purchase' section 19 'Ethical Standards'). In the UK the company

runs an environmental programme with suppliers as part of its own

environmental management arrangements.

Balancing the commercial and the ethical

In our merchandise supply chains we try to view basic ethical compliance much

as we view product safety and quality requirements, namely as a condition of

supply. Before we will place an order with a major new supplier we expect the

factory to meet certain minimum standards (which are similarly expected of

ongoing suppliers, where, in the case that they are shown to have major

breaches, we reserve the right to terminate our supply agreements). In this

sense we handle commercial and ethical issues separately.

In practice the situation is more complicated. A recent report has explored the

causative link between commercial pressures and ethical failings in retail supply

chains. It found that the intense competitive and commercial pressures applied


by purchasers could encourage suppliers to cut corners in meeting the ethical

standards requested by the very same purchasing organisation. The report

suggested that there were three particular areas of tension:

■ Time and speed: the pressure to shorten lead times and produce more

quickly

■ Flexibility and seasonality: the need to be able to vary production

dramatically at short notice and at peak periods

■ Cost and risk: the desire to pay less for products and to pass

commercial risk to suppliers.

Encouragingly the Report suggested that in many cases ethical and commercial

failings went hand-in-hand, and that resolving the commercial inefficiencies

could lead to better ethical performance. For example, much of the need for

shorter lead times was reported to arise from slippage in purchasers' internal

procedures, leading to orders being placed late with suppliers. Better planning

and adherence to the critical path would cut costs in the company, but also

reduce time pressures on suppliers that can often lead to abuses such as forced

overtime or inappropriate casual labour. Whilst our purchasing processes tend

to work well, these are valid issues for ARG and we are investigating how we

can look for improvements.

During the last year, we have been integrating the Homebase and Argos supply

chains. We have also been seeking improvements in our commercial terms with

our suppliers, which has led to a certain amount of negative comment in the

media. Following the negative response we reviewed what had taken place,

with the following conclusions:

■ We judged that we had made a number of mistakes in our

communications with suppliers, particularly concerning the tone.

■ We also inadvertently included sections of the supply base for whom

some of the requests were inappropriate (e.g. horticultural suppliers to

Homebase), which led to some suppliers being unable to comply.

We recognise that this change could have been handled much better, and it has

highlighted some gaps in our approach. We are intending to develop guidelines

for our trading teams on supplier relationships which will form the basis of

future dealings with suppliers


GUS' supply chain: Recent performance

Recent performance in ARG

During 2004/05, ARG audited 83 vendors using an independent third-party,

totalling 125 assurance visits to separate supplier locations. These vendors

supply both Argos and Homebase and represent 66.2% of the value of ARG's

total DS products (last year's figure was 59.3%).

ARG's policy is to work with suppliers to resolve issues of non-compliance,

which are then verified with a re-audit. The chart shows the results of these

audits, since the start of the programme. The grading refers to the overall

assessment of the supplier's factory, ranging from Grade 1 (unacceptable

breaches of the supplier principles) to Grade 5 (excellent practice). The figures

relate to all audits conducted in the year, which are a mix of initial audits and

re-audits. Improvements in performance therefore reflect improvements in

standards at individual re-audited factories and a general improvement in the

performance of new suppliers.

40% of suppliers meet our baseline standard (grade 3) up very slightly from

39% last year. In our re-audited suppliers we have seen improvement in health

and safety standards, factory and dormitory conditions and in processes on the

use of younger and migrant workers (typically better record-keeping).

Realising further improvement is a challenge: the remaining issues in supplier

factories, particularly those in China, relate to working hours, wage rates and

(following the introduction of the eighth supply chain principle this year) trade

union membership. These issues are systemic in the Chinese economy, and are

common to all retail supply chains in the country, suggesting that long-term

collaborative solutions are required.

In the year ahead we intend to discuss these issues with a number of

stakeholders, including NGOs and trade associations, looking to identify

constructive ways for ARG to support change. We are also planning to increase

our focus on supplier guidance and training, enabling local managers to identify

and address the issues.

Results of ARG Supplier Audits


As an adjunct to our merchandise supplier programme, we have also completed

a risk assessment of our major non-merchandise suppliers during 2004/5. This

review assessed major suppliers (expenditure in excess of £200,000 per year),

against the likelihood of non-compliance against the GUS Supplier Principles

and their importance to ARG. This assessment identified no high-risk suppliers.

Recent performance in Burberry

Over the last year, primary audits were carried out on 14 factories which were

selected following a risk assessment. 12 of these will be subject to a further

audit to ensure recommended actions have been taken. Burberry currently has

35 visits scheduled for the coming year. During the year, 29 factories identified

following risk assessment were the subjects of audit visits, 12 of which are to

be visited again for re-auditing evaluation. Burberry has continued to work with

all direct suppliers and licensees to increase the awareness of Social, Ethical

and Environmental issues.


GUS in the marketplace: Consumer privacy and information

Data handling and use

Experian provides consumers, businesses and the public sector with information

and analysis to help them make important decisions. It is the guardian of large

data resources: databases on consumers around the world, including financial and

other personal information. Experian therefore places the highest priority on the

proper acquisition, handling and disclosure of this information. The business must

comply with a wide range of legislation controlling its activities including the

European Data Protection Directive, the UK Data Protection Act and the US FACTA.

But Experian goes further, acting as a pioneer of information privacy, security and

fraud prevention standards. It has five core 'information values' which are built in

to all its procedures concerned with the handling of personal information:

■ Balance: Experian strives to balance the needs of consumers with the

business needs of clients to ensure both receive benefit from information

use.

■ Accuracy: Experian strives to ensure the information it collects and

maintains is as accurate and up-to-date as possible and that the information

is appropriate for its intended use.

■ Security: Experian protects the information it maintains from unauthorised

access or alteration.

■ Integrity: Experian complies with the spirit and letter of all applicable laws

and industry codes and operates its businesses in accordance with these

information values.

■ Communication: Experian communicates openly about the information it

maintains, how it is used and seeks to inform consumers of their rights

regarding the use of information.

Preventing fraud

The focus on data security has sharpened over the past year, with marked rises in

the use of so-called 'identity fraud' - criminals using illicitly obtained personal

information to commit deception and theft. CIFAS, a central database of recorded

or suspected fraud used by the finance industry, estimated that false identity and

impersonation account for over a quarter of cases, costing the British economy

£300m a year and depriving the Treasury of £100m of taxation income.

Furthermore, these two categories of fraud were the fastest rising, with annual

growth rates of 39% and 31% respectively. This is clearly a large and rapidly

growing problem, which is costing hundreds of millions of pounds globally.

But fraud also has a human cost. Every impersonation involves an innocent victim,

many of whom are first victims of a 'physical' theft, such as mugging, burglary or


'bin raiding' to obtain personal data. Identity fraud then compounds this violation,

with financial loss, worry and considerable inconvenience: Experian estimates that

it takes on average 16 months for a victim to realise they have been

impersonated. The effort involved for the victim in working with the organisations

involved to clear their name and correct the fraud is considerable: CIFAS

estimates that it can take up to 400 hours. Experian has introduced a free service

to help consumers with this process.

Experian has quite deliberately positioned itself at the forefront of measures to

combat identity fraud, seeing both the social and commercial benefits of doing so.

It has tackled the problem around the world in a number of ways:

■ Proper proof without exclusion: New obligations on banks to prevent

money laundering have led to them demanding comprehensive proof of

identity from new customers. This dependence on paper-based identification

can result in banking facilities being denied to those unable to provide

certain documents. Experian has addressed the problem with ground-

breaking online authentication products, which banks and lenders are

increasingly using as a replacement for paper proofs.

■ Awareness raising: Experian raises awareness of identity fraud in the UK

using news stories and via its free Credit Crossroads guide, Identity Fraud.

At the beginning of 2005, Experian contacted all UK police forces and

arranged to provide free copies of its Identity Fraud guide for display in

police stations and use at crime prevention events.

■ CreditExpert: Experian's CreditExpert service gives members unlimited

online access to their up-to-date credit report information with regular alerts

by e-mail or SMS text when significant changes take place, some of which

might be the result of identity fraud.

Debt and credit

As a responsible company, Experian shares the financial community's concerns

over unsupportable debt. As a rule, credit provides a useful tool to most

consumers but there are those whose lack of understanding of credit management

or wilful misuse means they are at risk of over borrowing. Experian provides its

clients with - and facilitates their sharing of - the information which allows them to

lend responsibly. It also works hard to help consumers better understand the

credit-granting process and how to manage credit and debt, particularly during

specific life events, so that they can be responsible borrowers.

■ Working with others: In the last year, Experian has continued its close

ties with consumer groups, educators, the media and money advice

organisations to educate and inform the public over credit issues. These

have included the Money Advice Trust, Citizens Advice, National Debtline,

the Trading Standards Institute and the Consumer Credit Counselling

Service. Experian specialists are also members of a number of official


government and regulatory advisory and research groups. During the last

year, Experian has used its Mosaic segmentation system to help the

Consumer Credit Counselling Service profile its clients and further improve

the service it provides. Experian has also provided grants to both the Money

Advice Association (England and Wales) and Money Advice Scotland to help

them become professional money advice institutes.

■ Informing the consumer: Experian produces a range of free 'Credit

Crossroads' advice guides, offering advice to consumers at specific times (e.

g. when moving home, on credit refusal, on becoming a student, being

made redundant, the death of a family member, suspected identity fraud

etc). These are available from consumer advice centres and on Experian's

website and are distributed from Experian's consumer education information

stand which exhibits at many major conferences and events (for example

the BBC Good Homes and the Ideal Home Shows). Experian provided free

copies of its newest guide, Students and young people, to the 10,000

students taking part in this year's Young Consumers of the Year competition,

an event which Experian sponsors and for which the consumer affairs team

helps set questions on credit and debt. Experian's Consumer Help Service

sends around 3,000 credit reports to members of the public every day and

aims to answer queries about these reports within 5-7 days (although the

law allows 28 days). Its telephone help desk also answers up to 1700 calls

each day. Credit reports are provided free of charge to people receiving

counselling from a free advice agency (such as a Citizens Advice Bureau,

CCCS or National Debtline) with around 70 free reports being provided each

month. The table provides a breakdown of requests for credit reports,

demonstrating the rapid growth in requests received online and using our

new automated call transcription service.

■ Using our expertise: Experian continues to help consumers better

understand their credit position. The National Credit Score, now available to

members of Experian's CreditExpert service, is a guide to how the

information on a credit report might affect a lending decision and is available

along with tips to help members improve their score. Experian is also

continuing its work with lenders to address the problem of over-

indebtedness through its Consumer Indebtedness Index and the Affordability

Index. These tools help lenders identify individuals who may currently be

able to fulfil their repayment obligations but whose overall level of

indebtedness means that they would struggle to keep up with payments

were they to increase their commitments further. This year an Experian

speaker addressed the All Party Parliamentary Group on Debt and Personal

Finance and will chair the national Money Advice Association conference.

■ The Financial Services Authority's Financial Capability Initiative

online tool, The Debt Test: Experian built this tool to help consumers

judge whether or not they are, or could be, on the brink of over-

indebtedness and to give useful advice whatever the user's credit situation,

signposting them to further sources of help or information as appropriate.

This was provided for free to the FSA, an estimated in-kind contribution of

more than £25,000.


■ Support to the Consumer Credit Counselling Service: Experian

analysed two sets of CCCS data (people who had phoned the service and

people who had enrolled on debt management plans) to help CCCS identify

potential operational and customer service benefits of knowing their

customers better (a service provided free, but with an approximate cost of

£10,000). The CCCS liked the report so Experian licensed the organisation

to use its Mosaic product in-house for the foreseeable future - a further

equivalent cost of £25,000 pa.

Applications for statutory credit reports

Financial literacy

Financial literacy - the ability to understand and manage one's personal finances -

is at the heart of good credit management. Modern consumers have a huge array

of financial products available to them, but the Government and other

commentators are concerned that the sophistication of the financial services

industry has run ahead of consumers' understanding. Much of Experian's consumer

education work focuses on financial literacy and financial capability - particularly

among young people.

■ Collaborating: Experian is actively involved in several national financial

capability projects and groups, including those led by the Department of

Trade and Industry and Department of Work and Pensions, the Office of Fair

Trading, the Financial Services Authority and the Personal Finance Education

Group. As part of its work with the FSA, Experian is developed (and donated

to the financial capability initiative) The Debt Test an online tool to help


consumers decide for themselves whether they can afford further credit and

how changing circumstances might affect their ability to manage their credit

commitments.

■ Providing materials: Experian provides information and free guides to a

range of organisations and to universities and colleges to help promote

financial understanding, responsibility and management among students

and other young people. Recognising that learning continues beyond

traditional schooling, Experian is also now working with the Basic Skills

Agency to produce a tutors' guide for adult numeracy and literacy classes,

using Experian's consumer education literature to develop the theme of

applying for credit.


GUS in the marketplace: Product sourcing, retailing and safety

How do we manage our products?

Our customers expect our products to deliver value for money and to do what they claim to. We

also have a responsibility to make sure that our products are safe in use, and under conditions of

foreseeable misuse. In ARG - both in Argos and Homebase - there are teams of technical and

quality experts who work closely with the product buyers to make sure that their own brand

purchases meet these criteria. They will supervise testing for safety and legal compliance, check

instructions and warnings on the products and must sign off on any product before it makes it into

stores or the catalogue.

In Argos, when a customer buys a faulty product and returns it, the return along with the reason, it

is logged into a tracking system. The quality and technical teams monitor this data, spotting any

line which seems to be causing more than its share of problems, and investigating the source of the

complaints. In this way it is often possible to identify problems and work with the supplier to

redesign the product. In the worst case, the line will be dropped or even withdrawn from sale. We

monitor the number of products recalled each quarter, which we can use to track the effectiveness

of our quality assurance mechanisms.

Products from sensitive sources

In some cases we need to look not just at the product in the store, but also at where it came from,

to ensure that its manufacture does not inadvertently exacerbate some global problem. We have

identified a number of sensitive areas, which include our use of timber and wood products and

products containing so-called 'chemicals of concern'. Our approach in both cases is explained in

detail below.

We have a number of relevant policies in the business, which are set out below:

Area Policy Key points

Click here for conflictdiamonds policy

As a first step ARG has written to all suppliers of diamonds asking them to confirm that their sources are not located in conflict

Conflict diamonds regions, and their responses Diamonds, the profit from have indicated that this is so. which is eventually used to ARG is developing a more finance armed gangs in detailed monitoring conflict regions. procedure.

Click here for abbreviated Guidelines include issues Socially acceptable products

guidelines such as ethnic/religious offence, antisocial

Products that could cause behaviours, the use of fur, offence, lead to misuse or materials sourced from the promote unacceptable wild, products appropriate for behaviour. children etc.


Peat and Growing media The policy was initially Horticultural products developed in 1996 after containing peat several years' consultation

with the RSPB and Friends of the Earth and updated in 2000. It ensures that none of the peat sold in Homebase comes from Sites of Special Scientific Interest (SSSI's), that Homebase is reducing the amount of peat in products and also offering clearly labelled peat-free alternatives. Homebase has now met the Government's target to be 40% peat free by 2005 and is developing future targets and plans during 2005/6.

Genetically modified This is only a minor issue for organisms GUS given our product range, Products that are the direct but we are sensitive to public result of transgenic disquiet over the issue, and manipulation ('genetic have adopted a precautionary engineering') policy.

Click here for Animal Only a very small proportion

Animal Testing testing policy of our product range would

be candidates for animal Products and their testing. Nevertheless, we ingredients that are tested have developed a policy for on animals. our suppliers.

Timber and wood Click here for Timber and See section below

products wood products policy

Click here for our policy on See section below

Chemicals of concern chemicals of concern

Timber and wood products

Many of the products sold in Argos and Homebase are made of wood and the source of this material

is an important issue for the Group. Poor forestry practices can cause huge environmental damage

as ecosystems are destroyed, and can disadvantage and disenfranchise local people. Conversely,

well managed forests can provide long-term stability for the people living around them and the

animals and plants that rely on them. ARG has addressed this matter by taking the following steps:

Establishing a clear policy: At the beginning of 2004 Argos and Homebase had separate policies

on timber sourcing and, whilst there were common elements, these policies differed in significant

ways. Over the past year ARG has developed a single combined policy framework, which was a

necessary step as the two businesses seek out common suppliers of products. The new policy had to

satisfy the requirements of the UK Forest and Trade Network (UK-FTN, previously known as the

WWF 95+ Group), of which Homebase is a member, and recognise the complexities of the product

range, particularly in Argos. This was achieved by including three distinct elements for tropical

hardwood, other solid wood products and composite products such as chip- and fibre-board. A copy

of the policy can be obtained by clicking here.

Tracing the source of our product; The original forest sources of all of the timber and wood

products sold in Homebase are investigated and recorded on the TimberTracker database. At the

time of Homebase's last report to the UK-GFTN (in February 2005) the database included forest

source data covering more than 90% of the volume of wood sold in Homebase. Argos has now

begun to adopt a similar approach, following the requirements set out in the common Timber and

Wood Products policy. The source of all solid wood products included in Catalogue 61 (Spring/

Summer 04) was traced and recorded, giving approximately 75% coverage. Special attention was

paid to garden furniture and hardwood products, all of which were traced back to source.

Ensuring legality; Once we have understood the source of our products - or products that we are


considering - it may be necessary to take remedial steps. On occasions the supplier cannot vouch

for the origins of the wood that they use, or the source may pose concerns in terms of its forest

management. ARG may not be able to obtain the required paperwork to give confidence that that

wood is being harvested legally: occasionally papers are forged or only tell half of the story. When

this is the case the technical experts in the business and the product buyer work with the supplier to

try and identify an alternative source for the wood which does not present the same problems. ARG

usually tries and make these changes in advance of its decision to stock products, but in some

cases finds that is has to change supply part way through a contract to satisfy policy requirements.

This can sometimes occur if suppliers are slow to provide good data on the wood source, or if the

supply chain is a particularly long or complex one that takes a long time to investigate properly.

Promoting better forestry; Avoiding the worst forests is only part of ARG's Timber and Wood

policy. The company also works with suppliers to promote high standards of forest management,

and recognises the Forest Stewardship Council (FSC) certificate as the benchmark. This is awarded

to forests that can be independently shown to meet the FSC's criteria for well-managed forests,

which include all the principal social, environmental and economic issues related to forest

management. There are a number of other certification schemes, each of which has merits, but the

FSC criteria have been subject to rigorous independent scrutiny by experts and NGOs and are

widely regarded as the most robust and rigorous forest management standard.

This year, Homebase became the first UK DIY retailer to be awarded an FSC Chain of custody

certificate by the Soil Association. During 2005, own brand ranges made from FSC timber will be

labelled with Certificate number SA-COC-8888. This independently audited chain of custody from

forest source through manufacture to store, allows Homebase to state with confidence that the

products are made from timber from legal and well managed sources

The range and volume of FSC certified products in both Argos and Homebase is extensive and

rising. It is summarised as shown.

Homebase Argos

55% of total timber and wood volumes FSC 40% by volume of garden furniture certified (figures relate to retail products sold range is FSC Certified.and paper).

42% by volume of garden furniture range FSC certified.

Indoor and outdoor furniture, doors, garden All wooden decking fencing and ornaments, garden sheds/posts All sheds arbours, shelving, timber, mouldings, sheet/ board materials, wallpaper, flooring, barbeques and charcoals, cabinets and mirrors.


Chemicals in products

There has been sustained activity by NGOs and some international environmental agencies to

highlight concerns over so-called 'risky' chemicals. These are materials that are used - usually in

very small volumes - in a variety of industrial manufacturing processes, with certain undesirable

physical and chemical properties. Most of the chemicals in this classification do have the potential to

cause harm to humans or animals, but have been permitted up to this point on the grounds that

they occur in only small quantities and in a chemically 'locked-up' form which minimises the risk of

exposure through a product.

However research shows that these chemicals may have a life beyond that of their products,

surviving once the item has been disposed of and escaping into the biosphere when the material is

burned or buried. Furthermore, they often have a tendency to bio-accumulate: once the chemical

has been consumed by some animal it is not broken down, but persists in the animal's tissues. This

in turn is then consumed by a creature higher up the food chain, and so on. The result is that

concentrations of these chemicals in biological tissue can become considerably higher than that in

background materials.

Our starting point on this matter is to ensure that there is no risk of exposure to these chemicals in

an acute form (i.e. the level of exposure that one customer will receive from one product over a

lifetime of use). All of our products are tested to the appropriate legal and safety standards and we

are confident that ARG products are safe.

The next stage is to consider our producer responsibility: to what extent can we reduce risks

to the current and future environment by proscribing or limiting the use of certain chemicals in our

supply chain. Our conclusion is that the phased withdrawal of these chemicals is a shared issue for

consumers, retailers and manufacturers.

The British Retail Consortium (BRC) has convened a group of retailers to work together on this

matter. Currently standing at 14 member companies, including all of the UK's largest retailers, the

Group has been in existence since October 2003 and has so far:

■ Researched chemicals that have been identified as posing some concern by stakeholders and

researchers all over the world. This exercise produced a long list of almost 2,500 possible

chemicals that had been alleged to present some risk.

■ Prioritised this list based on the levels of concern expressed and the degree of consensus

among researchers to identify a short list of 160 problem chemicals.

■ Developed a risk rating methodology, based on published information, allowing the group to

assess and analyse the risks presented by the 160 short list chemicals.

■ Systemised all this analysis into a 'chemicals toolkit' for member companies to use.

Ultimately each member of the BRC chemicals group must develop its own policy on this matter:

each faces different issues, is exposed to different chemicals and will have a different appetite for

action. The 'chemicals toolkit' is an extremely useful starting point for this exercise, allowing a

review of different scenarios and providing an understanding of how important each chemical is for

ARG's own product ranges.

In the last year ARG has developed a comprehensive policy on the issue, which is now publicly

available. A copy of the policy can be obtained by clicking here . The policy is based on the 160 BRC

short list chemicals, placing each into one of four groups:


■ Remove: the chemical should not be used in any future ARG products.

■ Restrict: restrict the chemical from certain products only where we believe it may pose a

greater risk.

■ Notify: keep a watching brief on certain chemicals and request suppliers to notify ARG of

their existence in own-brand products.

■ No immediate action: no further action until a policy review, unless there is some marked

change in the prevailing scientific view.

ARG has adopted a modified approach to pesticides because of they way they are regulated in the

UK. Potential exposure to pesticides is far more predictable due to their closely-monitored and

heavily regulated use under the Food and Environment Protection Act 1985 (FEPA). ARG has

therefore adopted a slightly different approach to chemicals in this category, including an intention

to provide Grower Guidance Notes to indicate to growers that ARG is concerned about the use of a

particular pesticide.

This ARG Chemicals Policy has been discussed with a number of key suppliers, giving them chance

to comment on the technical and commercial feasibility of the proposals. The company is now

engaged in a communications exercise to explain the policy to all relevant suppliers and begin to

work with them to implement it. Detailed and patient supplier engagement will be critical to the

successful implementation of this policy; it may take time to identify suitable alternative chemicals

and to adjust product manufacturing processes. For this reason it is difficult to set immediate

withdrawal dates for each chemical in the list, but ARG expects that knowledge of this area will

improve steadily, and is are committed to open reporting on our progress.

By way of illustration, the chemicals identified for immediate removal are:

Alkylphenols (used in surface treating and finishing Artificial musks (used as textiles) fragrances)

4-nonylphenol Nonylphenolethoxylate 4-tert octylphenol Octylphenol ethoxylate 4 Octylphenol Octylphenol

Tonalide (AHTN) Galoxolide (HCCB) Musk ketone Xylene Moskene Ambrette

Flame retardants (used to provide fire protection Organotins (used in industrial but, we believe, superseded by less risky manufacture, and as anti-fungal alternatives) chemicals)

Octabromodiphenylether (OctaBDE) Triphenyltin Pentabromodiphenylether (PentaBDE) Tetrabutyltin Hexabromocyclododecane (HBCD) Tributyltin compounds All other Polybrominatedbiphenols Dioctyltin compounds

Phthalates (a group of chemicals widely used to Solvents (used in a variety of soften plastics, we believe that the three below pose applications)the greatest level of concern)

Di-sec-octyl phthalate (DEHP) or (DOP Benzene Dibutyl phthalate (DBP) 1,4-Dichlorobenzene Butyl benzyl phthalate (BBP) All other Chlorinated Benzenes

Products with reduced environmental impacts

In many cases we are able to offer customers alternative products that have a lower environmental

impact. Our retail businesses pride themselves on their range and customer choice, and so it is our

preferred approach to provide a positive alternative. In this vein we now offer;

■ Paints: Homebase offers customers alternative water-based paints. In line with current EU

Directives (soon to be legislation), it is reducing the Volatile Organic Compounds (VOC) in

paint and the levels in all paints are clearly marked allowing the customers to choose for

themselves.


■ Peat: Similarly Homebase is working to steadily replace a proportion of the peat in growing

media with less environmentally-sensitive alternatives. This is a gradual process, and must be

controlled to stringent performance criteria. Homebase also offers a good range of peat-free

alternatives with excellent growing properties.

■ Energy efficiency: ARG labels most of its energy-consuming white goods clearly, allowing

customers to make an informed choice, and ensures that it supplies a range of products

including those with the best energy consumption ratings.

Producer responsibility and Waste Electrical and Electronic Equipment

As a retailer (and importer) of electrical and electronic equipment, the Group will be affected by the

forthcoming European Directive in this area. Simply put, ARG's status as a retailer will oblige it to

support the collection of waste electrical and electronic equipment (WEEE) from customers. For

those products that ARG imports it will have to contribute to recovery and recycling. Across all the

product range ARG will need to ensure that it complies with the labelling requirements in the

directive.

Collection and take back: retailers will be responsible for collecting WEEE from customers,

ensuring that it reaches designated reprocessors. ARG favours a proposed industry-wide scheme,

which will support the existing civic amenity collection infrastructure rather than 100% retailer take-

back. Most of the provisions of the directive are likely to come into force in the UK in January 2006.

In Eire, the regulations will come into force on 13 August 2005.

Collection and recycling; ARG will be classified as a 'producer' for electrical equipment which it

imports into each member State and will need to support the recycling of a proportion of these

materials.

Labelling; All electrical and electronic goods within the scope of the directive must be marked -

from August 2005 - with an agreed symbol to encourage consumers to recycle them, rather than

simply throwing them away.

ARG has been preparing for the implementation of the directive for a number of years, working

closely with the BRC and other retailers to develop our response.


GUS in the marketplace: Customer satisfaction

Customer service in ARG

ARG has legal responsibilities to consumers, but also faces a strong commercial

imperative to ensure that customers are served to their full satisfaction on each

occasion that they shop. High levels of customer retention and loyalty are vital

contributors to the business' sales and hence to its financial performance. We

therefore measure an extensive range of customer indicators, covering product

quality and customer service standards. These indicators include;

■ Levels of product returns: (where measured) allowing us to identify

poorly performing ranges or suppliers.

■ In-store waiting times: carefully monitored in all Argos stores.

■ Mystery shopping surveys: using secret market researchers to test out

the quality of service and the environment in a particular store.

■ Exit and till prompt surveys: asking departing customers for their

views.

■ Customer listening groups: convening groups of customers to gain

more in-depth information.

■ Independent customer research: market research to measure public

and customer perception.

■ Monitoring complaints: tracking and recording the number and nature

of calls to customer help lines to give an indication of our service

standards.

This combination of measures allows us to evaluate how customers think about

ARG and their shopping experience. As an illustration, 84% of people polled

through a store exit study by an independent research company were satisfied

with their experience.

In addition, we are often involved in cross industry research undertaken by

independent organisations. For example, in a recent survey by Verdict, a major

independent research company, Argos was rated 11th overall in terms of

customer satisfaction in a list of 65 high street retailers. In terms of customer

service, we were 9th compared to 20th overall in 2004 and 39th in 2003.

Customer service in Burberry

Meeting and surpassing the expectations of wholesale and retail customers

encourages brand loyalty, maintains Burberry's reputation and contributes to

increased sales. The need to ensure a high quality customer experience at

every stage of the sales process is a key objective for Burberry. This need is

embedded within the business's systems, policies and processes from its


branding policy, fabric guide manual and wearer trial policy, through to the

measurement of customer satisfaction.

All retail customer queries and complaints from around the world are managed

locally by the relevant store and in addition there is a central Retail Customer

Service Department in London which deals with queries arising from products

purchased within Europe. Wholesale customer service issues are dealt with via

Burberry's global network of wholesale showrooms and offices and through its

Head Office Sales and Administration Services Departments.

The monitoring of customer service is performed in a number of ways including

the use of mystery shoppers at retail premises and more in-depth market

research initiatives. In the United Kingdom Burberry has broadened its

processes for monitoring customer complaints which continue to be at an

acceptably low level. Over the following year the company will be extending

these monitoring processes to cover complaints made in US, Spanish and Asian

operations.

Responsible advertising

ARG is occasionally the subject of a small number of complaints to the

Advertising Standards Agency. In most cases the complaints are brought by

other retailers and relate to technical issues around trading law. Last year 6

complaints were upheld against Argos and one was upheld against Homebase.

Regulatory issues

In 2002, Argos Ltd was the subject of a ruling by the Office of Fair Trading

stating that the company had been involved in price fixing activity with Hasbro

and Littlewoods. Argos launched an immediate legal challenge to the ruling

believing that the OFT case was based on unreliable and contradictory

testimonies provided solely by Hasbro which has been found guilty in a prior

case and has negotiated full leniency in return for supporting the OFT's case

against Argos.

Argos is disappointed with the Competition Appeal Tribunal's judgment on the

penalty. Argos continues to maintain vigorously its innocence and has sought

leave to appeal against what it believes to be an unfair decision. Argos does not

believe that the OFT has proved its case.

The toy market in the UK is very price competitive and Argos, as the number

one player in the market, prides itself on the great value of its offer. Argos is

committed to providing choice, value and convenience across all its ranges and

for all customers.


A provision of about £16m to cover the fine and associated interest costs was

made in the year to 31 March 2005 and charged against the operating profit of

Argos.


Working at GUS: A good working environment

Providing a professional and stimulating working environment for our

employees is one of our principal corporate responsibilities, and there is also a

huge commercial impact: a key element of the success of the individual

businesses within GUS is having the right people, appropriately skilled and with

high levels of commitment.

We do this in a number of ways, seeking to recruit the best people for the roles

we need and then aiming to motivate them by:

■ Sharing a set of values that mean something to us all.

■ Explaining what is expected from them and what they can expect from

us.

■ Agreeing the priorities for the year ahead.

■ Assessing performance and a staff members' individual contribution to

this.

■ Providing a stimulating, challenging, safe and healthy place to work.

■ Developing staff to fulfil their potential and meet the changing needs of

the business.

■ Incentivising long term commitment and allowing all staff to share in the

Group's success.

■ Listening to their comments and responding positively.

In the past year, the Group's employment practices have been externally

recognised in a number of ways. For example, Argos won a place in The

Guardian's 2005 list of Britain's best employers and also impressed judges at

the annual Employee Benefit Awards 2005 where the business was recognised

in two categories.

Who works for GUS?

GUS employs a total of 67,000 people working either full- or part-time. The

table demonstrates the nature and diversity of our workforce.

Argos Retail Group

Experian International

Experian North

America

Burberry

Number of employees Headcount

49,941 7,998 4,598 4,366

Number of employees Full-time equivalent

29,263 7,654 4,520 4,131


Gender profile*

(last year in brackets)

Male 48% 49% (48%) 49% (49%) n/d (46%)

Female 52% 51% (52%) 51% (51%) n/d (54%)

Age breakdown*

(last year in brackets)

<25 42% 9% (10%) 5% (5%) n/d (40%)

25-39 28% 57% (60%) 44% (47%) n/d (29%)

40-55 22% 30% (27%) 41% (40%) n/d (22%)

55+ 8% (9%) 4% (3%) 10% (8%)

* Percentage profiles are calculated from headcount figures. (n/d = not disclosed)

Knowing where we stand

To provide a structure to our employment practices each of our principal

businesses has developed a number of policies, setting out our expectations of

those working for GUS and what they can expect in return. These different

approaches have been tailored to suit their particular needs, but taken together

the range of issues covered is comprehensive. The position is summarised in

the table, which illustrates how the principal issues are covered.

Experian ARG

Bribery and Covered in employee Covered in ARG Gifts, acceptance of gifts handbook on the UK Hospitality and

intranet. Entertainment policy and guides, the ARG Business Principles booklet and the employee handbooks

Misuse of company Covered in employee Covered in the property handbook on the UK employee handbooks,

intranet. employee contracts, and in Business Principles booklet. Email and internet use policies in place.

Data protection Separate policy endorsed by the board. Experian confidentiality procedures.

Covered in ARG data protection policy and ARG finance data protection policy (available on the Intranet and from HR). Also covered in employee handbooks, employee contracts, and department specific procedures.


Equal Opportunities Covered in Equal Opportunities policy on the (UK Intranet).

Covered in Business Principles booklet and Equal Opportunities policy (both available on the intranet) and employee handbooks.

Staff Grievances Experian Grievance Policy and Procedures (on UK Intranet).

Covered in ARG Bullying and Harassment policy and Argos / Homebase grievance procedures, employee handbooks and employee contracts.

Disciplinary matters Disciplinary policy (on UK Intranet).

Covered in Argos / Homebase disciplinary and appeals procedures, employee handbooks and employee contracts.

Community and charitable involvement

Covered in people and community sections on UK Intranet.

Covered on the ARG intranet.

Confidential reporting mechanisms

(PID/Whistle-blowing) Policy on UK Intranet.

Covered in the Business Principles booklet.

Security of staff and property

Physical Security Policy. Covered on the ARG intranet.

ARG Business Principles; These Principles have been introduced in the past

year by the ARG Board to clarify what is expected in terms of behaviour and

attitude within ARG companies. They support the ARG values demanding

openness, integrity and respect for people and apply to everyone working in the

Argos Retail Group. They apply not only to dealings with other employees, but

also to dealings with and attitudes to: customers, shareholders, suppliers,

communities and the environment. The Principles support the right of

employees to speak out about any issue or concern without fear of the

consequences and are intended to foster an environment where employees are

not subject to unacceptable levels of stress.

Whistle-blowing

There have been a number of activities this year in support of the Group's

Policy on whistle blowing;

Experian; Experian's whistle-blowing policies and procedures relate to any

serious incident, situation or activity (including such things as unauthorised

sharing of information outside Experian, breaching the Data Protection Act or

software piracy), or any attempt to cover up such actions. Experian's UK policy

is available on the company intranet. Experian North America's policy has also

been approved and distributed to staff. In North America staff can call a

telephone hotline directed towards internal audit.


ARG; A whistle-blowing policy was originally developed in ARG in March 2004.

Early in 2005 this was supplemented by policies on equal opportunities, stress,

bullying and harassment. The whole set of policies were launched via e-mail

and cascade briefing, which is also available on the ARG Intranet and in the

Business Principles booklet issued to all staff. The whistle-blowing policy

identifies named management contracts to whom concerns should be raised. It

also includes the provision of a confidential helpline managed by a third party

organisation, 'Public Concern at Work', which offers employees independent

advice on how to raise concerns regarding malpractice.


Working at GUS: Recruiting and retaining staff

Recruiting the right people

All businesses across GUS follow the same overarching principles when recruiting: we look to recruit the best candidate for the role, with the

best skill set and fit for our organisation regardless of race, religion, disability, sexual orientation or age. The Group is an equal opportunity

employer and all businesses have appropriate policies associated with this

A variety of procedures are employed to varying degrees across the Group including the use of application forms, assessment and formal

interviews. Some roles may require the use of psychometric testing.

The Group businesses also seek to develop staff and move them into different roles when ready, so many roles are advertised internally

first, for example in Argos, where in the year to May 2004 the business made over 800 management appointments within retail, 600 of

which had come from internal applicants.

Development and training

Training and developing existing staff provides them with enhanced skills, increasing their value to our business, but also increasing their

employability and future career prospects. Each of our businesses has a structured approach to development, and invests heavily in training.

Training and development case studies - ARG

In ARG there are a number of training schemes, working to support staff at all levels:

ARG Academy; Created in partnership with the Manchester Business School (MBS) this programme aims to develop 'home grown' senior

management from within ARG, ensuring that there is a pool of talent to fill senior positions as they become available. It concentrates on

developing strategic management thinking and critical commercial skills and includes topics like supply chain management, emerging

consumer and market trends and developing compelling competitive advantage. Each participant is mentored by a member of one of the

ARG operating company boards through the 12 month programme, resulting in a final presentation to the whole ARG Board. The course

requires a lot of commitment from participants but this is matched by the commitment of the businesses' leaders in supporting them.

Sixteen business managers have successfully graduated from the Argos Retail Group (ARG) Academy as the class of 2005

Advance; This is a programme for middle managers aspiring to become senior managers and who have been spotted as having potential to

get there. Advance comprises three modules: one a shortened version of the Academy pitched at a slightly lower level, (and run by MBS)

one around influencing and one around leadership, with these last two modules being run internally. 16 people a year go through Advance.

ASPIRE; This is a development programme for Store Managers aspiring to be Area Managers. 15 staff identified from the business'

succession plan are currently on the programme, being supported throughout by a coach-mentor. The year-long scheme which is externally

accredited by the ILM (Institute of Learning Management), builds on the success of a number of regional programmes tested last year,

which culminated in a number of internal promotions.

Stock Manager Development Programme; This is a bespoke programme created and delivered in-house by Argos' Learning &

Development function and has supported the whole of the company's existing stock manager team (approximately 580 people). The

programme consists of an "Insight Day" which outlines the RACO (Replenishment and Core Operations) concept and Argos Extra as well as

assessments to ascertain developments, needs and opportunities. This day is followed by 2 separate technical workshops covering RACO and

Argos Extra as well as key stock management skills. This programme is ongoing and will move onto behavioural aspects to strengthen

management skills. Store Managers have served as coaches and this approach again underlines Argos' approach to teams, staff

development and the company's values.

Advance into Management (AiM); Training and development is not restricted to our senior management team; the business has also

introduced the "Advance into Management" (AIM) programme. This is a development programme to help improve the capability of those

with management potential and is designed to support the large majority of Argos' internal promotions. The programme is aimed at team

leaders and exceptional customer advisors who have sufficient score on their performance review, have the potential to develop to a

management position, are flexible in terms of where they work and who are able to pass a 'selection centre'. Over a six month period

candidates work through a variety of modules, combining workshop attendance, in-store activities and written modules. They are supported

throughout by performance coaches in much the same way as Academy participants are supported by Board mentors. 43 team leaders and

team members from retail completed their AIM programme in 2004/05 and over 70% of the "graduates" have now been promoted into

management positions within stores. Due to the exceptional success of the programme last year, intake has been increased to more than

100 staff this year.

The Barton Centre; This centre (one of two in the business) is open 24 hours a day, offering the 400 strong team at the Barton

Distribution centre the chance to improve skills in literacy, numeracy and information technology on site. The centre houses a LearnDirect

link centre and is attached to a local college. As well as online courses, the centre allows colleagues to access training on various Argos


systems, the intranet and a central library of reference material. Work-related internet sites are also accessible such as environmental

information and the Health & Safety Executive. 40 courses have been completed since December 2004 (29 in IT and 11 in key skills) and a

further 42 courses are under way across a number of disciplines.

Training and development case study - The Homebase Way

A considerable effort has already been invested by Homebase to achieve its vision of being the UK home enhancement retailer. This effort is

seen principally through the introduction of the "Homebase Way" which aims to offer an enhanced product portfolio supported by an

energised work force, at store level and behind the scenes. Initial training of 17,000 store staff and 1,000 head office staff took place

between September and December 2003.

Homebase staff are encouraged to solve problems through "Buzz" sessions: small teams meeting together to look at and improve the way

the business works. These teams use the well established 'Plan, do, review' method and many stores have developed teams to ensure staff

energy levels are kept high and that working at Homebase is fun. The successes of the Buzz sessions are regularly reported in the internal

newsletter "Homepage".

An excellent example of this in action comes from one of the stores in North London (New Southgate) which held a Plan-Do-Review (PDR)

buzz session with their replenishment team to overcome some obstacles.

Despite the fact that six staff members worked on stock replenishment between the hours of 05.30 and 13.30, Monday to Friday and other

staff also supported them between 08.00 to 10.00, the store found that they could not get the warehouse clear from one day to the next. A

solution was needed before the peak trading period led to an even heavier delivery schedule. The replenishment team considered the issue

and suggested splitting their shift in half, one team working 21.00 to 05.00, with the other team taking over at 05.00 and working until

13.00. This would give a continuous replenishment shift of 16 hours. An additional team member was also recognised as a necessity. The

team at the store thought this was a great idea and implemented it within a week. Within one more week the store had noticed the benefits

- the fresh stock was completely replenished every day and the non-replenishment staff were only needed for one hour a day instead of two.

Staff in the store also sought to gain a better understanding of the different roles in the store by swapping jobs for a day. Everyone got

involved including the store manager who worked in the Garden Centre all day while another member of the team took over the reigns. Not

only did the team pull together, working hard for the "new" manager, it also provided the management with much to consider in terms of

succession planning; many of the team enjoyed the different roles and demonstrated their suitability to them.


Training and development case study - Experian International

Experian International's development and training activity, for individual employees and at the functional level, is driven by a Performance

Review as part of the corporate Performance Management Process.

Typically Experian focuses its development and training activity in the following areas: sales capability; professional technical skills

development; project management professional development; management and leadership development; and customer service. Experian

invests over £600 per employee per year on training in the UK, although this figure varies between divisions dependent on the nature of

their products and disciplines. Evaluative measures are included in all development and training activities ranging from immediate post

learning feedback to full return on investment appraisal.

Over the last few years Experian has experienced a growth in the demand for e-learning solutions; letting people learn at their own pace

using a computer. Many of the needs of the business have been resolved through the use of this form of learning media, providing a

tracking and recording function via a learning management system which makes it extremely well suited to training on important compliance

issues. Examples of this are training to meet the requirements of the Data Protection Act and information security needs. It is planned to

expand the use of this learning media to cover other areas of employee training.

Training and development case studies - Experian North America

Employee Training; During the 2005 fiscal year an average of 38 hours of learning and development was delivered to the 4,600

employees across ENA. Courses are delivered using a variety of delivery methods (instructor-led, e-Learning, web-cast) to provide

individuals flexible learning opportunities. Courses were offered in sales skills, product knowledge, information technology and systems, as

well as management and professional development topic areas. Employees are encouraged to participate in developmental opportunities to

expand their knowledge and grow their skills.

Information security; Experian North America has a business requirement to educate and raise awareness of all employees regarding

information security. To satisfy this need the Experian Learning Centre partnered with Experian's Chief Information Security Officer to

identify the course content requirements. Several courses have been developed and deployed that focused on awareness, IT specific topics

and incident investigations. This education effort has resulted in employees understanding their role and responsibility in keeping

information and the work environment secure. During the last year, 3,902 employees (89% of the total workforce) completed the training,

and all new employees are trained within 45 days of joining the company.

Leadership development; As Experian North America grows as a business it is important to develop leadership strength. The Learning

Centre researched and selected an executive level development program from the Centre for Creative Leadership. The program assists the organisation

to identify and develop potential senior leaders and the initial pilot included 24 senior leaders from across all of the North

American businesses. It is planned that this will be extended to 48 additional senior leaders next year.

Employee Skill Development; In order to ensure that development programs are closely aligned with business requirements and with an

individual's development need the Learning Centre has developed 32 job specific 'skill maps'. Each skill map documents the skills that are

required for a specific job family or functional area (e.g. first line manager, sales account executive, technical call centre specialist and data

centre operator). Individuals and their managers review the skill map and determine an appropriate development plan each year. Feedback

indicates that the skill maps help them to create constructive and meaningful development plans.

Other incentives

Sharesave Schemes; Sharesave is a simple way to buy shares in GUS plc at a 20% discount using a special tax-free savings account.

Under the Sharesave scheme, employees choose whether to save for either three or five years and, at the end of the savings periods,

receive a guaranteed tax-free bonus. At the end of the three or five year period, members have the option of using all of their savings and

bonus to buy GUS shares at a 20% discounted option price or taking all of their savings and bonus in cash.


The UK Sharesave scheme was launched in 2001. Invitations have been made on an annual basis since this date. There are currently 9,770

GUS employees participating in the UK Sharesave scheme. Scheme members can save any amount between £5 and £250 per month as long

as the total monthly savings across all Sharesave contracts does not exceed £250 per month.

3,800 employees had options maturing under the 2001 three-year scheme in May 2004, at an option price of £3.84. A total of 2,843

employees used the 2001 first exercise facility, with 35% of GUS employees opting to keep their GUS shares as an investment. Those

employees that chose not to keep their shares bought them at the reserved £3.84 option price and sold them for £7.85, immediately

obtaining a £4.01 profit on each share option they held.

The success of the UK Sharesave scheme is now being replicated round the world and GUS now offers some type of all-employee share

scheme in 13 countries. Tax approved schemes are run in France, the USA and Ireland. This year, 33% of the eligible employees at Experian

North America enrolled in the NA Sharesave Plan.

International Sharesave now operates in: Germany, Spain, Italy, Netherlands, Denmark, Norway, Monaco, Australia and Hong Kong.

The first International maturity will take place in September 2005 in Germany, Spain, Italy and the Netherlands.

Employee recognition; All our businesses believe that while a remuneration package is important to recruiting and retaining staff, it is not

the only reason people come to work: they need to feel valued and hope that the contribution they make is recognised. The Group

businesses have responded to this need with a number of schemes designed to recognise employees who go the extra mile.

Simply Thank You: Argos has a reward and recognition scheme known as 'Simply Thank You', which started in 2004 as a scheme in Argos

distribution but has now been rolled out across Argos. The scheme recognises individuals nominated by colleagues for doing something

above and beyond their day job with their contribution being presented in the internal newspaper, the Argos Post. The scheme is backed by

a quarter of million pounds investment in awards for those individuals who stand out by living the Argos values in the way they go about

their job. Local awards start at £25 of Argos gift vouchers and progress to £5,000 of holiday vouchers for the annual company winner.

Stars in Store: The Homebase recognition scheme relies on feedback from customers about excellent staff performance, which is

recognised and shared across the company in the 'Stars in Store' section of the company's magazine, Homepage. This is supplemented by a

formal recognition award scheme for all employees that rewards colleagues for going 'above and beyond' in their work and living the

company's values. Staff are awarded a certificate, pin badge and leisure vouchers (redeemable against meals, activities, holidays, etc) in

incremental amounts depending on the level of the award. In the year to April 2005, 2262 Bronze, 50 Silver and 3 Gold awards were

presented.

Experiences: In Experian UK and Experian North America a written publication is regularly produced about its people and for its people.

The magazine features examples of high performing individuals and teams who have contributed to the growth and success of Experian and

provides an excellent way of acknowledging and recognising employee contributions. Both publications are sent to our offices across Europe

uniting our people in Experian's global success.

Listening; All our businesses have adopted a policy of regular employee opinion surveys enabling us to respond to staff concerns. In Argos,

this is called "Speak Out" and 85% of all Argos employees completed the third annual Speak Out survey, results of which were published to

staff in August 2004. The Empower Group, which conducted the surveys, designed to measure changes in employees' opinions, for the last

three years, said the response was "astounding". Most noteworthy amongst the results are the significant increases in satisfaction,

motivation and employee advocacy - the number of people who recommend Argos to others. Among store based employees, motivation

increased by 12 points to 74%. More employees are aware of and understand the Argos values and see them being lived by line managers

and colleagues. As another example, Argos' recognition in the Employee Benefit Awards 2005 specifically commented on the fact that the

company had created a voluntary benefits scheme internally on the back of staff feedback, rather than buying an off-the-shelf product.

Communications in Experian: Experian is committed to communicating with its people, which includes having effective two-way

communication channels to ensure its people not only feel communicated with, but also listened to.

On a company-wide scale Experian has recently introduced the People's Forum, providing an opportunity for representatives to meet with

senior management to be informed about business performance and to discuss any potential developments. The meetings are interactive

and encourage representatives to share their views, and those canvassed from colleagues, with those who are seen as the decision-makers.

Experian has invested in training for each representative, enhancing their consultation and communication skills to maximise the benefits

gained from the forum.

In addition Experian hosts divisional conferences allowing the cascade of information relating to financial results, organic growth and

strategic objectives to all people. There are also a number of specialist internal committees that have been set up to listen to the views of

Experian people; these are far reaching in subject matter and include canvassing opinion on charitable donations, environmental procedures,

information security, the introduction and implementation of new software, down to Experian organised social events.


Experian listens to the whole employee population through a regular survey, hearing views on learning and development, performance

management and reward, communications and management.


Working at GUS: Health and safety

A safe workplace

GUS places great importance on ensuring the safety of our employees, customers and visitors to our premises. Each of our businesses has developed the appropriate

health and safety policies, management arrangements and reporting mechanisms for its needs. These typically include the recording of accidents, 'near-misses' (which

could have led to an accident) and investigation of potential causes.

As a basic measure of the Group's overall safety record, we record the number of incidents under the UK Reporting of Incidents, Diseases and Dangerous Occurrences

Regulations 1995 (RIDDOR) that have occurred over the year and the frequency of these incidents per 100,000 hours worked. In broad terms, these are accidents that

occur at work or on our premises causing an individual to take more than three days off work. This information only relates to parts of our business located in the UK, as

health and safety legislation varies between countries and makes like for like comparison difficult. However, the health and safety teams in other countries do collect

equivalent statistics, which are reported to the Group, but given the different reporting bases, these have not been included in the summary below.

UK businesses only No. RIDDORS RIDDORS per 100,000 hrs worked

2003 2004 2005 2003 2004 2005

ARG

Experian (UK)

Burberry (UK)

653

6

10

669

179

1

6

186

238

3

9

250

1.16

0.05

0.33

1.22

0.38

0.02

0.2

0.33

0.50*

0.05

0.3

0.44

* Changes to the ARG reporting system during the year led to incomplete data for 2005. This figure has been extrapolated from the partial data.

Argos - health and safety arrangements

ARG has developed a new reporting process and management arrangements for health and safety in Argos. The stores began using the new system in December 2004,

with distribution centres following in June 2005. Details of accidents and an analysis of trends are provided to the HR and Retail Directors of Argos. The Argos team has

also started to work more closely with third party contractors so that detailed accident information can be made available to them regarding their staff working on Argos

premises. Argos has had a long running health and safety management training programme for store managers. This was updated and adapted in 2004 and is now

aimed at any individual who is in charge of a store. Over 500 people were trained in 2004.

Homebase - health and safety arrangements

The process for reporting to the Homebase Board on health and safety is being re-developed following management changes. Homebase has eight staff in its health and

safety department and six more in the field, all of whom are qualified to at least IOSH standard. The department has a senior risk advisor and a risk advisor for each of

the South/Central/North divisions within the business. The three senior risk advisors have specialities (fire/health/safety) and with the risk advisors provide advice and

guidance to stores and Homebase-managed distribution centres as well as auditing stores for health and safety compliance.


Experian UK - health and safety arrangements

The Experian group health and safety advisor is responsible for advising the Experian UK Board on health and safety matters. The advisor monitors developments in

legislation and develops policy for Experian management to consider and approve. The role also includes supporting the business in developing appropriate systems to

ensure compliance with relevant legislation and manage health and safety risks. Further, the health and safety advisor has pro-active responsibilities in terms of new

construction and improvement projects. Regular site visits to primary UK and overseas offices are performed.

A healthy workplace

Our concern for employees' health extends beyond a responsibility for safety and into wider measures to maintain a healthy productive team at work. We have taken a

number of measures to help safeguard and improve employee health.

Managing stress (Experian); Experian International has a formalised process to deal with potential cases of stress. The business has a mechanism to identify any

employee suffering from stress or related conditions, such as depression and anxiety. In order to ensure that line managers are fully briefed, the HR team has designed

a risk assessment presentation which is used to help prepare the line manager for discussions with the individual concerned. The line manager and HR Advisor then meet

with the employee using an assessment process which comprises five steps, including future monitoring of the situation.

Managing stress (ARG); The topic of stress management has been included with ARG's recently launched 'Business Principles' initiative. A Booklet giving guidance on

how employees should treat each other (and others, such as customers) has been provided to each employee, setting out best practice for dealing with these issues

within the business environment. The process is aimed at preventing problems such as excessive stress and helps employees to become more aware of recognising the

symptoms of stress. For those who need support, ARG has also introduced a free confidential helpline with BUPA. The Business Principles booklet and helpline were

launched earlier this year and are currently being supported by briefings across the business.

Third party support; Experian UK offers an Employee Assistance Programme (EAP) through BUPA to help, support and guide employees when faced with difficult


situations. HR will actively encourage employees to contact the EAP and the company also has an outsourced occupational health service in place. As part of a health

initiative offered to Experian North America employees, individuals are given the opportunity to sign up for a voluntary programme to improve their health. Employees

are asked to complete a health questionnaire, and are given suggestions about how to make changes to their lifestyle to manage their health and wellbeing based upon

their responses. This is a confidential report and the company has no access to the information. This initiative offers benefits both for improved employee health, and

also reduced costs of health care coverage. For its part, ARG has recently launched a free confidential helpline with BUPA, as described above.


CR at GUS: Our commitment to accessibility

GUS recognise the importance of providing a website that is inclusive and

available for all user groups. This page explains

● our approach to making this website accessible, including what we have

done and will do in the future;

● the facilities that we have provided for different disability groups;

● guidance on how to use particular features;

● what to do if you have any questions or feedback for us.

Approach

The GUS website is being developed to support Internet users who have

disabilities. We believe the web pages on the site are in line with RNIB's "See It

Right" accessibility criteria, which includes all of the priority level 1 criteria of

W3C's Web Content Accessibility Guidelines. Any new information added to the

site will be compliant with RNIB's "See It Right" accessibility criteria.

Select the following links to access specific details for:

● Screen reader/voice browser/screen magnifier users ● Partially sighted users - changing the font size ● Colour-blind users ● Keyboard-only users ● Deaf users ● Changing the style sheet ● Questions and feedback

Screen reader/voice browser/screen magnifier users

Our navigation mechanisms are accessible by screen readers and voice

browsers. In addition, skip links allow the user to by-pass the navigation to the

main content and also to directly navigate the main site areas.

All pages on this site define the following access keys:

● Access key n - Skip menus

● Access key 1 - CR at GUS

● Access key 2 - GUS in the environment

● Access key 3 - GUS & the community

● Access key 4 - GUS' supply chain

● Access key 5 - GUS in the marketplace

● Access key 6 - Working at GUS

● Access key a - small text

● Access key b - medium text


● Access key c - large text

Text equivalents of all images have been provided and the relevant page and

table header tags inserted.

Alternative mechanisms have been provided where JavaScript is used within

the site.

Partially sighted users - changing the font size

We have provided the facility to change the font size of the text used on our

web pages. If you are using Internet Explorer, select "View" from the menu

bar, then "Text Size" and select from "Smallest" to "Largest". In Netscape,

select "View" from the menu bar, then "Text Size" and select from "Smaller",

"Larger", % values or "Other".

Colour-blind users

We have checked the site font and background colour combinations for the

different colour blindness conditions and ensured that items are not referenced

by colour alone.

Should you wish to change the colour of text and background by introducing

your own style sheet, please follow the instructions in changing the style sheet.

Keyboard-only users

The web pages on the site have been tested for use in keyboard-only operation.

When using the forms or controls for the tools, the keys to use are as follows:

● To move forward between links, use the tab key

● To move back between links, use the Shift + tab keys

● To initiate an action button, use the Enter key when the action button is

selected.

● 'tab' moves you through the different page elements.

● 'backspace' moves you back through the pages you have already visited.

● 'alt' and 'left arrow/cursor' moves you back through the pages you have

already visited.

● 'alt' and 'right arrow/cursor' moves you forward through pages you have

already visited.

● 'ctrl' and 'home' takes you to the beginning of the page.

● 'ctrl' and 'end' takes you to the end of the page.

● 'spacebar' moves the page down.

● 'page up' and 'page down' moves the page up and down.

Deaf users

Any multi-media/audio files will have transcripts provided.


Changing the style sheet

Users may import their own style sheet into the website. In Internet Explorer,

select Tools, then Internet Options and then Accessibility. Next click on any or

all of three checkboxes to ignore colours, font styles or font sizes. In the same

window, you can change the style sheet by clicking the checkbox that says

'Format document using my style sheet', then simply browse to your preferred

style sheet and click ok. In Netscape, select Edit, then Preferences and then

Appearance. You will then be given a choice of colours and fonts.

Questions and feedback

email: [email protected]

cr at gus: introduction - investis digitalfiles.investis.com/gus/storage/pdf/guscr2005bg.pdf · gus...

Documents