Sustainability reporting process and methods
This chapter provides specific information on the reporting process and reporting methods BAM has used to arrive at the sustainability figures and topics included in this report.
BAM reports its sustainability policy and the associated results to all stakeholders. BAM’s stakeholders include clients, the Company’s employees, suppliers and subcontractors, shareholders, other organisations in the construction industry, NGOs, knowledge institutes and public authorities.
Reporting criteria – GRI Standards – Core
This report has been prepared ‘in accordance’ with the GRI Standards: Core option. An overview of the GRI disclosures covered by this report is available on BAM’s website (www.bam.com/en/csr/sustainability-reports). In this overview, more information is disclosed on the nature and coverage of reporting per GRI disclosure (e.g. quantitatively or qualitatively).
Reporting period and reporting frequency
This report presents both quantitative and qualitative data for the calendar year 2018. An exception is made for all CO2 and waste data reported by BAM International, which applies a reporting period of 1 December 2017 to 30 November 2018. BAM allows for this different reporting period as BAM International has a complex operating and reporting structure and more time is required to ensure that the reported data are reliable and adequate. BAM considers the effects of a different reporting period by BAM International is to be not material to the Group’s integrated report. All other data are reported annually. There have been no significant changes from previous reporting periods in the scope and boundaries.
This report contains data of all operating companies and thus BAM’s own activities. Sustainability performance and data are accounted for according to BAM’s share of equity. As an exception to this rule, BAM International reports all sustainability data for joint arrangement projects in which it is the leading party. In general BAM views disclosure regarding acquisitions and divestments on a case-by-case basis.
The integrated report, including all material aspects, is approved by the Supervisory Board and the Executive Board. Data collection takes into account BAM’s organisational structure. Both qualitative and quantitative information is reported by operating companies to the Group. The data are consolidated and validated first at company level and then consolidated and further validated at Group level. Every reporting entity has a CSR manager, CSR controller and director responsible for CSR who are together responsible for accurate and reliable reporting. In 2009 BAM established a reporting system for non-financial information (including safety, CO2, waste and HR), this system was launched as an extension of the financial reporting system.
The applied reporting processes and definitions are formalised in BAM’s CSR reporting manual. The CSR reporting manual provides guidance on how to measure, calculate and estimate data.
For BAM’s main sustainability indicators this chapter provides further insight below. For other quantitative indicators disclosures on the reporting scope and methods used are given in the annual report itself. Where relevant, figures are presented in a relative way (using percentages and ratios). This allows readers to monitor and measure progress year-on-year, unless the reporting criteria require absolute figures to be disclosed.
BAM defines its incident frequency (IF) as the number of BAM employees involved in industrial incidents per million man-hours worked on construction sites. Reportable incidents are based on actual occurrences and are never extrapolated or estimated. Despite all measures and an open safety culture there is an inherent risk of incomplete accident reporting. BAM is partially dependent on information provided by the person involved in an accident. Reported hours are measured, calculated or estimated. Outsourced BAM site employees to external companies are not included in the IF BAM calculation. The absolute number of reported serious accidents consists of BAM employees (including office employees), subcontractors, hired employees and thirds on own projects and BAM employees, BAM subcontractors and direct hired employees by BAM on joint ventures. BAM defined a serious accident as an accident that leads to the employee involved being admitted to hospital for more than 24 hours or results in electrocution (with enter- and exit mark on the body), amputation and/or fracture (including a hairline fracture in the bone).
For all companies, except for BAM International, BAM includes only BAM employee-related accidents and hours. BAM International takes into account all persons working under its direct supervision even though they may not have a labour contract with BAM directly. As a result, the accidents and hours worked by all persons working under the supervision of BAM International and irrespective of their labour contract are included in the reported incident frequency. This is inherent to BAM International’s business model.
Creating uniform safety reporting across all operating companies is one of the strategic objectives which create access to the right management information. BAM is in the process of enhancing the reporting process for worked hours of subcontractors. The Group strives to obtain reliable information by implementing automated on-site entrance systems such as tourniquets, fingerprint readers, iris scans and card systems.
When a fatal industrial accident occurs that involves a BAM employee or a subcontractor, the following actions are taken:
- The operating company informs the Executive Board and the Corporate Safety Officer (CSO) immediately after the accident.
- The first details of the accident are communicated within 24 hours after the accident.
- At the latest on the day after the fatal accident, a notice will be published on the BAM intranet.
- If the accident occurred in Western Europe, the COO, assisted by the CSO, will visit to the operating company within 15 days of the accident.
- For accidents occurring outside Western Europe a video conference replaces this visit.
- Three weeks after the accident, a ‘safety start’ takes place in the country where the fatality occurred and a safety presentation/bulletin is drawn up, highlighting the lessons learned and whose responsibility it was to intervene. This must be communicated to all operations.
BAM Safety Behavior audit
The audit was carried out following the official BAM Safety behaviour audit (BAM-SBA) questionnaire 2016. This questionnaire is aligned with the BAM Health and Safety Directive of January 2015. The audit template is broken into three sections: safety climate, management system and site conditions. Each section is scored independently with all elements collated to provide the overall score. Additional points may be added for innovative practices and where areas of concern, points deducted. The scoring of the various sections is marked from 1 to 5 as below:
No evidence of commitment
0% - 40%
Slight evidence of commitment
41% - 60%
Commitment evident but room for Improvement
61% - 80%
Good commitment demonstrated
81% - 90%
Excellent commitment demonstrated
91% - 100%
Safety climate: Management ambition and commitment to keeping workers safe is demonstrated through their words and actions. Visual leadership coaching/ supporting the organisation, demonstration of intervention and enforcement where necessary.
Management system: Systematic way in which an organisation manages to achieve its objectives. Safety policies, processes and procedures used to the task specific requirements (including resources) to achieve its safety objectives by risk management, supply chain management and continuous improvement. Demonstrate learning ability of the organisation. Compliance with the law and safety regulations (including the Royal BAM Safety Directive).
Site conditions: Site setup, site logistics, collective- and personal measurements to mitigate the task specific risks. Safe physical work environment and equipment. Demonstrate how to plan for safety and engage with the workforce.
The reported SBA score is the average of all individual operating company scores. It is the responsibility of the safety officer from the operating company to organise the SBA interviews in detail and select the projects within the overall planning. The safety officer has to take into account the diversity in areas, business units, type of projects, phase of the projects. As the selection of projects differs each year, the selected projects affect the score as the operating company can decide to go either to a well-performing project or to a project that requires more attention. This could result into fluctuation of the score between the years within the same operating company. There is an inherent risk of personal bias of the auditor of the SBA as the auditor has to rate the projects based on professional judgement. BAM mitigates this risk by making sure that during all SBAs an independent person is present to oversee the results of all SBAs.
Human Resources (HR)
HR data are obtained twice a year using a standardised reporting platform. HR data are derived from the HR accounts held by BAM’s operating companies. Due to different definitions used, breakdowns in chapter Employee recruitment, development and retention are based on figures that do not match the total number of FTE in Key figures. This does not result in different insights.
Energy consumption and CO2 emissions
BAM’s energy consumption and greenhouse gas inventory is based on the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, Revised Edition (2013: Corporate Standard) as issued by the World Business Council for Sustainable Development and the World Resources Institute. For greenhouse gas emissions BAM has chosen to report only on CO2. Other greenhouse gases, such as CH4 (methane), N2O (nitrous oxide) are excluded from BAM’s emissions inventory, as they are considered not material. BAM calculates the energy consumption (in TJs) and CO2 emissions associated with BAM’s energy consumption, using conversion factors from reputable and authoritative sources. The factors follow the Kyoto protocol and UNFCCC charter as closely as possible. BAM applies country specific conversion factors for electricity and natural gas. These are based on GHG emissions reported in national inventory reports (NIR). All conversion factors are updated annually.
The Group’s reporting scope includes its direct CO2 emissions (scope 1 emissions, from BAM’s own sources), indirect CO2 emissions from the generation of purchased electricity consumed by BAM (scope 2 emissions) and three indirect categories of CO2 emissions that are a consequence of BAM’s business activities from sources not owned and controlled by BAM: employee air travel, employee car travel with privately owned cars and business travel (scope 3 emissions).
The GHG Corporate value chain (scope 3) accounting and reporting standard for full scope 3 reporting has not been implemented. Contrary to the Greenhouse Gas Protocol BAM reports fuel consumption by leased vehicles under scope 1 emissions. Energy consumption from district heating and use of public transport are considered negligible and therefore not included in BAM’s overall energy consumption and related CO2 emissions.
The basis for consolidated energy consumption and CO2 emissions is activity data, which in turn are based mostly on meter readings, invoices and data provided by suppliers. Where reliable data are not available, BAM uses calculations or estimations using reliable methods and input data. BAM is satisfied that the estimates are reliable in all material respects.
Where clients provide BAM with electricity and BAM is able to receive reliable information on its client supplied electricity consumption, the company includes this consumption in its carbon footprint. Also, as BAM only receives information on CO2 emissions associated with air travel, which BAM includes in its scope 3 emissions.
It occurs on projects that BAM supplies fuel and electricity to subcontractors. BAM’s CSR reporting manual states that fuel and electricity supplied to subcontractors should be measured and excluded from reported figures, unless fuel and electricity is supplied under the supervision of BAM. In practice, however, it is not always possible to determine how much fuel is supplied to subcontractors. In that case BAM accounts for all CO2 emissions. BAM continues to encourage measuring fuel and electricity supplied to third parties. This will result in more accurate figures of its own CO2 emissions and further insight in reduction potential to all involved.
BAM’s reporting scope includes all waste leaving its sites and offices, mainly based on waste tickets and data provided by suppliers. Reported waste is either measured, calculated or estimated using reliable methods and input data which can be based on BAM’s experience in comparable works, e.g. the relation of asphalt and aggregates. Excavation waste and demolition waste are especially difficult to measure and is more often calculated.
The percentage on waste separation relates to BAM’s Dutch companies and is based on information from BAM’s waste management suppliers.
In 2011 BAM started reporting on the amount of materials used and the recycled content of various materials used by Dutch operating companies. BAM has selected the raw materials which are consumed in large quantities and which have a significant impact on natural resources. The Group reports on concrete, timber, asphalt and steel.
The raw material consumption in the Netherlands was determined using supplier reports. Extrapolation of data is applied to cover all suppliers. BAM aspires to keep the extrapolated data smaller than 20 per cent. The results are verified against BAM’s procurement database, internal and external experts. The recycled content is determined based on information provided by suppliers.
True Price of asphalt
The True Price calculations of LE2AP and conventional asphalt in section materials are made by a third party and contain inherent estimates and specialised supplier data. The methodology has been checked for logic and consistency, yet it is known that different visions on the cost of CO2 are available and that the cost of CO2 is subjective.
A comparison by True Price has been performed to evaluate the bandwidth of CO2 cost, in which a conservative estimate is used by True Price. LE2AP is a product with new data and is compared to conventional asphalt, of which the most accurate data are five years old.
Potable water consumption is reported for the UK. Data are based on meter readings, where available. When they are not, estimations based on process analysis are used to calculate the total water consumption on project sites.
For the Dutch companies BAM has investigated the extent to which its purchases are sourced locally. BAM has defined local sourcing as a purchase done with a supplier who is located in the same country as the construction site. BAM determines the percentage of local sourcing based on the country of residence of its suppliers.
Business conduct includes information regarding the Group’s business principles and Code of Conduct, on which BAM reports qualitatively. BAM stimulates its employees to report any suspicion of misconduct to be able to provide appropriate response to all inquiries. In addition, this report contains qualitative information on a mandatory e-learning course to increase awareness and understanding of the Code of Conduct and expected ethical behaviour.
Verification of this report
In order to provide BAM’s stakeholders comfort over BAM’s sustainability information, the Executive Board has appointed Ernst & Young Accountants LLP (EY) to provide independent assurance of the Report. As in previous years, BAM has obtained reasonable assurance for the following KPIs: IF BAM, number of serious accidents, safety behaviour audit, as included in the ‘Safety’ section in chapter 3.2. Additionally EY has provided reasonable assurance over the ‘Material themes’ section in chapter 2.3 and the ‘Business conduct and transparency’ section in chapter 3.2. For all other information reported in chapters 2.1, 2.2, 2.3, 3.2, 3.3 and 9.3, 9.6 and 9.7 BAM has obtained limited assurance.
As BAM applies the ‘best standard’ principle with regard to external assurance, the Group has asked EY to apply NV COS 3810N, a standard explicitly developed to verify sustainability reports. This standard includes strict requirements for the quality of accounts, the indicators used and the wording of the Report. Readers can therefore be confident that the report provides a fair and true representation of sustainability within BAM. The Group aims to achieve the highest level of assurance (reasonable assurance) through a staged approach, focusing on the most material themes. Increasing the maturity of internal processes in the coming years will help in also increasing the level of assurance of the report.
Other sources of information
Royal BAM Group welcomes your comments on sustainability. If you have any questions or remarks, please contact BAM’s sustainability department via e-mail (firstname.lastname@example.org).