Advisor's Statement

Upstream Sustainability Services, part of Jones Lang LaSalle, has been advising Grainger plc on its CR strategy for several years. This programme of work includes helping Grainger set its CR targets, and assessing the extent to which it achieved these targets.

Due to Upstream’s long-standing relationship with Grainger, the review of performance against targets and this statement itself cannot be considered as fully independent, nor should any data be viewed as formally verified. However, Upstream has carried out a full and documented review of Grainger’s performance and management of sustainability over the company’s financial year 1st October 2009 – 30th September 2010 and all information presented is accurate to the best of our knowledge.

 The method for assessing Grainger’s level of performance against CR targets and commitments was based on:

• Meetings and telephone interviews with Grainger representatives responsible for target delivery.
• Detailed review of documentation and information submitted by Grainger and collected by Upstream over the year.

An achievement rating has been awarded against each target, depending on the evidence received to validate completion. Upstream has made the following specific findings:

• Target achievement improved over last year; this is partly attributable to aligning sustainability targets more closely with core business drivers, as a result of the sustainability strategy review in 2009.
• Grainger has achieved all of the targets relating to its ‘Responsibility to Stakeholders’ and ‘Investing in Communities and Places’ pillars.
• The only target related to ‘Influencing the Future’ was deemed not applicable due to changes in the government agenda after the election. It is challenging to set meaningful performance targets for this pillar as by its nature it is measurable more by programmes of activity than by outcomes. Grainger should therefore seek to demonstrate progress in this area through more qualitative reporting.
• Grainger achieved a listing in the FTSE4Good this year. This is a welcome external recognition of a two year programme of work to improve systems and processes.
• Grainger’s ‘Driving Efficiency’ targets are most directly linked to measurable performance. Of the three 2009/2010 targets, one was fully achieved and one was partially achieved (and due to be completed next year). Given the effort that went into reducing office electricity this year, it is disappointing that Grainger did not achieve its goal. We encourage them to consider an audit of energy consumption in offices to identify high impact areas for change in 2010/11.
• Grainger has a number of longer term targets that are due to be completed by the end of the next financial year (September 2011). Achievement of these targets will be an interesting indicator of the continued success and relevance of the revised sustainability strategy that was implemented in 2009.

Having undertaken significant work to review its sustainability strategy in 2009, it is encouraging to note an improvement in Grainger’s target achievement levels for the past financial year. A renewed focus on sustainability risks and opportunities and better understanding of sustainability issues throughout the business had a positive impact on progress. Upstream also welcomes Grainger’s renewed engagement with policy makers and its commitment to become a sustainability leader.