Annual report 2016

Corporate social responsibility MAKING A DIFFERENCE LOCALLY AND NATIONALLY


As a leading pub company in the UK, with 3,035 pubs, restaurants and hotels, two breweries and 44,000 team members, we understand the importance of making a positive contribution to the communities we serve and operating in a responsible, sustainable way.

During this year, we have been focused on integrating Spirit Pub Company, taking learnings and applying a ‘best of both’ approach to our corporate social responsibility (CSR). We are pleased to have made considerable progress on the integration and we are now reporting as one business.

We will continue to develop our CSR strategy around four key areas: our customers, our teams, our communities and our environment.

We pride ourselves on offering our customers the very best experience when they visit us and we continue to focus on delivering industry-leading value, service and quality to our customers. With over 3,000 pubs, restaurants and hotels across the country, we want to make sure that everybody’s time is well spent when they visit us.

We are committed to supporting our customers to make healthier lifestyle decisions and providing them with safe, affordable and memorable experiences.

Healthy eating

We continue to review the nutritional profiles of a range of our dishes and made some positive changes to enable our customers to make healthier eating choices.

We continually review our products and, as part of this, we have made improvements to a range of sauces, such as an 80% reduction of sugar in our standard French dressing. We are reviewing the children’s menu choices across our brands to improve the nutritional profile of our dishes. One of our premium children’s burgers now has a 59% reduction in salt. Our Hungry Horse children’s menu also now includes a number of dishes that are lower in salt, including chicken curry and rice, penne pasta and a salad bowl. This will continue to be a key focus area for Greene King.

We continue to provide a range of lower calorie menu options for customers who are counting the calories and looking for a lighter option when dining out. As a key part of the menu development process, we will review and develop our menus and our focus for the future is to continue to expand our nutritional expertise along with providing lower calorie and healthier options for our customers.

Allergens

We are working towards the development of our company strategy on nutrition. Following our acquisition of Spirit, we have an opportunity to review our nutritional policies to ensure we have a clear set of guidelines. We are evaluating all of our allergen procedures to ensure that we have one process in place across the group. This will ensure we remain safe and compliant with legislation as we continue to provide our customers with allergen information about the meals we provide.

Gluten

We continue to respond to the growing demand to provide a range of dishes for customers wishing to avoid gluten. Our spring/summer menus include a number of new non-gluten dishes including a mushroom and goat’s cheese risotto and chilli salmon, with kale, sweet potato and toasted seeds.

Awards

Our hard work and focus on providing our customers with the very best value, service and quality has once again been recognised this year:

  • We won Best Managed Operator at the Publican Awards, which recognised our food offering, diverse portfolio of brands, commitment to investing in our people and our charity work.
  • Wacky Warehouse won UK’s Best Children’s Activity Provider 2016 at the Tommy’s awards.
  • We won Best Premium High Street Pub Menu 2016 at the MIDAS (Menu Innovation and Development Awards).
  • We were given a Good Egg Award by Compassion in World Farming in recognition of our commitment to using only free range eggs across the business in the next five years.

Food standards

Providing our customers with consistently high quality food is paramount to us and we do this by actively promoting kitchen standard excellence. In Pub Company, this is achieved through training, external audits, open dialogue with local authorities and operational incentive schemes.

We are proud that out of the 1,618 pubs visited in the year by local environmental health officers, 1,521 (94%) received a 4 or 5 star rating. Such high scores are a reflection of how hard our managers and team members work to maintain the highest standards, along with our continued investment in improving the quality of our kitchens. We will continue to work hard to ensure all of our pubs are doing everything they can to maintain the highest standards of hygiene.

Quality standards for our beers

Once again, the Westgate Brewery in Bury St Edmunds and the Belhaven Brewery in Dunbar both maintained an A grade rating with the new British Retail Consortium version 7 standard, confirming that our beers are produced to the very highest of quality and food safety standards.

The quality and dispense services team in our Brewing & Brands division completed over 1,400 trade quality audits, including 850 independent Cask Marque audits covering our entire Pub Partners and Inns estates. As a result, we have again improved the quality standards in our cellars and dispense equipment, which has led to improved standards and a pass rate of 95%.

We have seen many of our beers win awards at the Monde Selection, an independent quality award, and we were proud that four of our beers, Old Speckled Hen, Abbot Ale, Belhaven Black and Belhaven Wee Heavy, received the Gold Award this year.

Responsible retailing

Tackling under-age sales

We train all new Pub Company bar team members on our central online training tool, which provides training on the obligations and responsibilities of the employee including materials highlighting the impact of alcohol on children. The training course must be completed and passed before our team members can serve alcohol.

All of our Pub Company premises operate the ‘Challenge 21’ or ‘Challenge 25’ programmes. We also support the principles laid out in the Portman Code of Practice on the responsible retailing of alcohol.

Not only are all general managers and front of house team members trained when they join us, but we also ensure this training is ongoing so they always understand their role in promoting the responsible consumption of alcohol by our customers.

Best Bar None and Pub Watch schemes

We are proud that a significant number of our Belhaven pubs achieved Best Bar None accreditations this year, including 19 golds, ten silvers and three bronze awards.

In England, our pubs belong to Pub Watch and Best Bar None where access to these schemes is available.

Designated driver campaign

We are passionate about encouraging our customers to ‘enjoy responsibly’ and during 2015’s festive season, we once again supported Coca Cola’s Designated Driver Christmas Campaign. This was the seventh year in a row that we rewarded designated drivers with free soft drinks.

Minimum unit pricing for alcohol

We continue to call on the government to introduce minimum unit pricing in the UK. Alcohol should never be cheaper to buy than water and government policy must address the sale of alcohol at ‘pocket money’ prices. We believe that the minimum unit pricing of alcohol would be a meaningful step in reducing alcohol-related harm.

We have an ongoing commitment towards developing healthier menu options for our guests.

As a pub company, we have a unique opportunity to play an active role in the communities we serve and support good causes.

We have been running pubs for over 200 years and are committed to continuing to being present and involved with community life for many more. That is why our charity programme is so important to us.

Macmillan Cancer Support

In March this year, we announced that our teams and customers had raised more than £2m for our national charity partner, Macmillan Cancer Support, doubling our initial target. To mark this milestone, we were proud to renew our partnership with the cancer charity for a further three years.

Our team members have carried out a wide range of fundraising activities including cake sales and taking part in challenges such as the Yorkshire Three Peaks and the London Marathon. Our pubs, restaurants and hotels across the country have pulled together with national campaigns such as the World’s Biggest Coffee Morning as well as supporting many local fundraisers within their communities.

We were proud to be recognised by the All Party Parliamentary Beer Group by winning the 2016 PubAid award for our fundraising for Macmillan.

Prince’s Trust

As a leader in the hospitality industry, we want to support young people into work by offering opportunities to learn a skill and a trade and helping them start their career journeys. As part of this ambition, this year we announced a partnership with The Prince’s Trust.

The ‘Get into Hospitality’ programme will offer 150 of the UK’s most disadvantaged 16-25 year olds an opportunity to develop skills in the hospitality sector, achieve accredited hospitality qualifications and support them into jobs and other positive outcomes in the industry.

Subject to successfully completing the three week programme, we aim to offer jobs and a place on our award-winning apprenticeship scheme to as many course participants as possible.

There will be ten programmes offered around the country over the next 12 months. We have successfully completed our first course in London. Other locations include Liverpool, Portsmouth and Glasgow.

Pub is the Hub

For the third year, we have donated to the Pub is the Hub Community Services Fund in order to support rural pubs that want to diversify their services for the benefit of their communities. Over the course of the three years, the money we have donated to the fund comes to £45,000.

The Community Services Fund, which has been running since April 2013, aims to offer funds to licensees who are looking to broaden their services to the wider community but are unable to find suitable funding from other sources. With grants available of up to £4,000, applicants have to demonstrate that they will be offering a new service or replacing a service that has already been lost to the local community, such as a local shop or a library.

Prostate Cancer UK

Over 600 of our pubs across the country raised more than £71,000 for Prostate Cancer UK during last year’s Rugby World Cup.

Taylor Walker, Flaming Grill and Chef & Brewer pubs partnered with Prostate Cancer UK last autumn to help support the charity’s Men United movement in reaching men.

As well as individual pub fundraising events, a select few were fully transformed into Men United Arms. The pubs were rebranded for a few days using Prostate Cancer UK branded signs, bunting, beer mats, drip trays and team uniforms.

Great Ormond Street Hospital

Our Taylor Walker pub brand celebrated completing a ten year charity partnership programme with Great Ormond Street Hospital which raised £100,000 for the children’s charity.

ITV Text Santa

Customers and team members at our pubs raised £26,000 in aid of ITV’s 2015 Text Santa fundraising appeal by holding Christmas quizzes.

Pubs across the country, including the Hungry Horse and Chef & Brewer brands and Greene King Local pubs, took part in the national Text Santa Christmas Quiz during December. The much-needed funds contributed to the appeal’s record-breaking £8.5m total.

Cash raised during the appeal is being split between ITV Text Santa’s chosen charities, Macmillan Cancer Support, Make-A-Wish® UK and Save the Children.

We are supporting 150 young people through our prince's trust partnership.

Our people are our greatest asset. We now have 44,000 team members and our ambition is to be the best employer for each of them. We continue to focus on attracting and retaining the best people but also understand the importance of motivating, engaging and developing our team members right across the business.

Employee engagement

Our Employee Engagement Survey is a valuable tool to help us build the best pub company in Britain. This survey provides us with a wealth of information that we are committed to actioning across the business.

Developing our talent

We recognise the talent that all our team members bring to Greene King and, by nurturing this talent when they first arrive, we aim to provide an environment through development and opportunity that allows them to flourish and craft their own career.

Apprenticeships

We pride ourselves on developing and investing in our team members and also supporting those who are just beginning their careers. In March, we pledged to take on a further 10,000 apprentices during the next three years. Since the launch of our award-winning apprenticeship scheme in 2011, we have helped support over 7,400 apprentices to achieve a qualification while working in our pubs.

The scheme offers bespoke qualifications that cover a range of job roles including front of house, kitchen and management roles which are tailored to each of the Greene King retail brands. The course, which has been commended by the Prime Minister David Cameron at a reception hosted at 10 Downing Street, has received numerous awards this year including: Apprenticeships 4 England’s Macro Employer of the Year; National Apprenticeship Service Regional Winner (East of England); VQ Employer of the Year; and was named as a Top 100 Apprenticeship Employer by the National Apprenticeship Service.

Creating jobs

Thanks to the opening of newly-built Hungry Horse and Farmhouse Inns pubs, we have been able to create 1,000 new jobs across the country in the last 12 months.

In many areas of the country where we run recruitment drives for our new pubs, we hold a two week pre-employment training programme in conjunction with local Job Centre Plus teams. The schemes prove to be very popular and successful and we are able to welcome successful candidates to our team.

Diversity

We take pride in making sure all of our team members are given the same opportunities to achieve their full potential. We are committed to our equal opportunities policy to ensure that our team members and candidates are recruited, developed, remunerated and promoted on the basis of their skills and suitability for the work performed.

We promote an environment in our pubs, restaurants, hotels, headquarters, pub company support centre and breweries, that is free from discrimination. We work to a policy in which no employee receives less favourable treatment on the grounds of their colour, nationality, race, religion/belief, ethnic or national origin, sex, marital or civil partnership status, gender reassignment (whether proposed, started or completed and under or not under medical supervision), disability or past disability, part-time or fixed-term status, pregnancy or maternity, parental responsibilities, sexual orientation or age (a protected characteristic).

Gender diversity

Male Female Total Percentage
female
Directors 6 1 7 14
Senior managers (excluding directors) 164 51 215 24
All employees 23,051 21,085 44,137 48

Workplace pensions

We are fully compliant with Workplace Pensions Reform Regulations and enrol our employees automatically into a qualifying workplace pension.

Support for our tenants

We have been successfully providing opportunities for self-employed entrepreneurs for over 200 years and, following the acquisition of Spirit, our Greene King Pub Partners division has grown to more than 1,200 pubs.

We continue to provide a variety of different agreement options for a high quality estate of pubs, ranging from Michelin-starred premium food pubs to the village local at the heart of the community. Our pubs are as individual as the people who run them and often thrive on offering genuine local provenance and community activity.

The level of support that we provide to our tenants and lessees is central to us being a preferred partner to the best licensees in the country.

Our support is tailored to meet the individual needs of our licensee partners and their staff. This year we have developed industry-leading training courses to support our partners in a number of areas, including digital marketing, management development and becoming a multiple operator.

In keeping with our ‘best of both’ approach, we have taken on an innovative food supply service which was originally used in Spirit and is now, in its first year, supplying food to around 120 pubs.

Our Brewing & Brands dispense team helps our tenants and lessees to maintain consistently outstanding cellar quality ensuring that our beer brands are always being offered at their best. This is all underpinned by our professionally qualified business development managers (BDMs) who are trained to the highest levels in the industry and who are dedicated to supporting all our licensee partners in making the most of their business opportunities.

We pledge to recruit 10,000 apprentices during the next three years.

Energy

We are compliant with the government’s Energy Saving Opportunity Scheme (ESOS), which is a mandatory energy assessment scheme in the UK. It looks at actions taken and plans made by businesses to reduce energy usage and must be completed every four years.

We audited the energy used by our buildings, pubs and breweries to identify cost-effective energy saving measures. Procedures in place include but are not exclusive to:

  • The ability to measure electricity usage on a 24/7 basis in all of our pubs, allowing us to analyse any long or short-term changes. We have similar information for mains gas usage in c. 97% of our pubs.
  • Ongoing engagement across our business to encourage teams to save energy provided it does not detract from our customers’ experience.

65% of our pubs’ internal lighting is now via LED bulbs. We also have an enhanced boiler replacement programme to move older sites to energy-saving condensing technology and linked to heating control systems to reduce gas usage.

Waste

We are signatories to Courthauld 2025 – a voluntary ten year agreement that brings together organisations across the food system, with a goal of making food and drink production and consumption more sustainable. As part of this commitment we have partnered with SWR waste management to deliver a recycling-led waste management solution to our pub estate. The ultimate aim is to achieve zero waste to landfill and propel the business to the forefront of the hospitality industry with a ‘best practice’ waste initiative. Short-term plans involve all pubs segregating food from dry materials and in the longer term we plan to implement Spirit’s award-winning backhaul solution to the entire Greene King estate.

We will continue to implement the ‘best of both’ philosophy, by following Spirit’s lead in its diversion from landfill rate, which is currently 96% for all waste collected direct from ex-Spirit pubs. In the last year the ex-Spirit pubs have also seen a reduction in general waste of 2%, glass volume of 23% and overall waste volume of 6%. Across the Greene King estate diversion of waste from landfill stands at 57% with 20,696 tonnes of waste being recycled in total.

We were winners of the water efficient project at the engergy awards and the economic sustainability category at the footprint foodservice awards.

CO2 emissions by type

Source of emissions 2015/16
tonnes
of CO2e
2014/15
tonnes
of CO2e
Direct emissions scope 1 Natural gas 61,940 41,741
Gas oil 1,186 806
Kerosene 188 197
Liquefied petroleum gas 5,525 2,624
Red diesel 78 81
Refrigerants 3,115 3,196
Owned vehicles 7,669 7,486
Total direct emissions scope 1 79,700 56,131
Indirect emissions scope 2 Electricity 167,562 111,240
Gross emissions 247,263 167,371
Revenue in Pub Company and Brewing & Brands (£’000) 1,885,100 1,193,400
Tonnes CO2e per £100k revenue 13.117 14.025

Mandatory greenhouse gas reporting

The table above, which has been produced in compliance with the requirements of the Companies Act 2006 (Strategic and Directors’ Report) Regulations 2013, shows the main greenhouse gas emissions in tonnes of CO2 equivalent (CO2e) for our scope 1 (direct) and scope 2 (indirect) CO2 emissions. The figures below include those of Spirit from the date of acquisition, 23 June 2015, except where stated.

Scope 1 relates to the direct emissions from the fuels we use in our breweries, pubs, restaurants, hotels and offices such as natural gas and liquid petroleum gas. It also includes (although not for Spirit) emissions from owned vehicles (including company cars) but excludes logistics where we outsource this to third parties. Refrigerant gas and F-gas emissions in respect of our breweries, pubs and restaurants are also included, except in relation to Spirit.

We have used the UK government’s greenhouse gas (GHG) Conversion Factors for Company Reporting for all scope 1 emissions (2014 for 2014/15 and 2015 for 2015/16). GHG emissions from refrigeration and air conditioning units have been determined using the simplified material balance method as described in the Environmental Reporting Guidelines 2013.

Scope 2 relates to the indirect emissions associated with the generation of electricity consumed in our sites. Emissions have been calculated using the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme factor (2014 for 2014/15 and 2015 for 2015/16).

Electricity and gas figures in the table below cover the CRC reporting period from 1 April to 31 March each year, whilst all other figures cover our respective financial years. The intensity ratio refers to revenue in our Pub Company and Brewing & Brands businesses as the vast majority of our CO2 emissions relate to those businesses.

Water

In readiness for market deregulation in 2017, we have been working hard to take best practice from the acquisition of Spirit and apply a ‘best of both’ approach across the estate. Water benchmarking across brands continues and we have conducted 149 audits of high-consuming pubs to highlight opportunities for greater efficiency.

We have again managed to reduce consumption on a like-for-like basis. Spirit was named winner of the Water Efficient Project at the Energy Awards, and, as a group, we won the Economic Sustainability category at the Footprint Awards. Both awards recognised our continued effort to drive water usage downwards.

Our focus has been to ensure that our water data is in the best possible shape to allow us to target more effectively and take advantage of any opportunities that the opening market has to offer from a fiscal or socially responsible perspective.

At our Bury St Edmunds brewery we are continually looking at ways to reduce our water usage. Current initiatives include reviewing tank cleaning programmes and pipeline flushes to maximise efficiency.

Case study: supporting our communities

Angefrancois Kevin Grah, 21, is one of the students from the Prince’s Trust pilot scheme, which was held in London in April and May. He successfully completed the course and is now one of our team members at Loch Fyne Covent Garden, where he received his on-the-job training. He now hopes to move onto our apprenticeship scheme.

‘I’d been unemployed for a couple of months after having to leave my job as a chef at a local Chinese restaurant. I left school with only one GCSE, in Italian. So, I was struggling to be offered job interviews.

‘A friend of mine actually told me about the Prince’s Trust and so I decided to attend the open day, and I’m glad I did.

‘The course taught me a lot, but my highlight really was the work placement at Loch Fyne. I was mostly in the kitchen, learning the role of the chef, and it was great to be able to be so involved. Working in such a fast-paced team was brilliant. I was in my element and everybody was so welcoming.

‘I’m so pleased my hard work paid off. I’ve been offered a job at the Loch Fyne in Covent Garden and, around my college classes, I work evenings and weekends as a waiter. I would love nothing more than to have a long future with Greene King. Maybe, one day, I’ll be running my own pub or restaurant and helping to support young people.’

David Redpath, general manager of Loch Fyne Covent Garden, who was a ‘buddy’ during the London programme, said:

‘I thought this was a great programme and was honoured that it was piloted in our restaurant. ‘Get into Hospitality’ gives young people who haven’t yet had the best of chances, the opportunity to showcase themselves and prove that they really can get the job done. It’s a fantastic scheme, which really does help young people learn and progress, and I’d definitely volunteer to help out again.

‘We had two students train at our restaurant, and it felt great to watch them ‘graduate’ at the end of the programme and I was proud to offer our candidates two full time jobs. They have a lot of work and training ahead of them, but I know and trust they can do it.’

Case study: investing in our people

Despite the many celebrity chefs on our televisions, there is an industry shortage of chefs. However, our award-winning apprenticeship scheme aims to buck the trend, with 719 out of 2,876 apprentices working in our kitchens.

Gabrielle Green, 18, has been an apprentice chef at the Ship in Bedford for nine months. After completing her GCSEs, she decided that she did not want to continue with typical further education and left school at the age of 16.

Now working towards her Level 2 in Hospitality certificate, Gabrielle said: ‘I’ve always had an interest in cooking, right from a very young age, so being a trainee chef as a Greene King apprentice really was an easy move to make. I didn’t want to be stuck in a classroom all the time, and now I get the chance to learn while being paid at the same time.

‘I really enjoy working in such a fast-paced team and developing not only my education, but also myself. For instance, I have the chance to cook and taste food that I’ve never experienced before, and preparing meals is such an important responsibility. I really can see myself growing as a person and would recommend to anybody wanting to learn on the job to look into becoming an apprentice. It’s not only for young people either – anybody, at any stage of their lives – can do it.’

Being a trainee chef as a Greene King apprentice was an easy move to make.

APPROVAL OF THE STRATEGIC REPORT

Pages 2 to 44 of the printed annual report form the strategic report.

By order of the board

Lindsay Keswick
Company secretary
28 June 2016