“Our recently completed biennial Materiality Assessment has highlighted the increasing importance of Social issues, with talent attraction and retention, training, engagement and employment conditions all increasing markedly in importance. This is a clear reflection on the key role that skilled and motivated employees play as our business becomes more digitally enabled.
The foundations that we have laid over many years and which underpin our strong engagement levels are robust and remain at the core of what we do, and our new functional structure is enabling us to be agile and globally consistent in developing and supporting our people with the capabilities, skills and mindset that they need to prosper in an increasingly fast moving and complex environment.
We are a hugely diverse organisation, employing over 60 nationalities around the globe and speaking many languages. While that diversity enriches the business in many tangible and cultural ways, it is the development opportunities that the company can offer to employees from many backgrounds, and which mean that we have over 30 nationalities in our senior management group, that underpin our employee engagement and performance.”
Our target is to substantially increase the number of our colleagues who are involved in community engagement projects while also increasing the level of beneficial impact that these have on our surrounding communities. This means increasing the number of projects that we undertake, broadening the opportunities for our employees to get involved and also targeting more precisely the projects to meet community needs and delivering impact.
To achieve this we have expanded the scope of our programmes to cover three pillars; Education, Health & Wellbeing and Business & Textiles. We have been working towards establishing global external partnerships to ensure that we maximise the impact of our activities and can measure the results, and we are planning to launch the first pilot projects with an external partner in 2020.
"Great place to work" or equivalent awards for all our key sites by 2022
We have worked with Great Place to Work® (GPTW) for some years in Brazil and with HR Asia in Vietnam, and have found their approach to workplace assurance to be rigorous and insightful, and where feasible we intend to work with them to validate all of our major employment locations.
Our certification programme will spread across 16 units over the next three years to ensure that around 85% of our employees are in units that have external validation. The benefits of working with a recognised provider with a reasonably global footprint, like GPTW, is that we can ensure that the same criteria are being used in assessments in different countries, while also being able to draw on their skills in terms of assessing our company-wide performance and identifying areas for improvement.
High ethical standards
Underpinning all of our sustainability effort is a deep commitment to running our business in an ethical, responsible and transparent way. We expect our employees and our suppliers to behave ethically in all their dealings relating to our business.
Our employees are core to the business, and we value them highly. Their leadership, talent and commitment ensure we remain leaders in our sector, are competitive in the marketplace, and operate our businesses effectively and efficiently. In return, we offer a safe, respectful and inclusive environment in which our employees can thrive.
Similarly, as a supplier of yarns, threads, zips and related products to a range of manufacturing industries and retailers, we play a key role in the industry supply chain. As such, one of our responsibilities is the maintenance of high environmental and social standards within the supply chain.
We support the UN Guiding Principles on Business and Human Rights throughout our operations. Underpinned by our global policies, we uphold the requirements of the UN Declaration of Human Rights and the Convention on the Rights of the Child, the core ILO Conventions and the OECD Guidelines for Multinational Enterprises. Every two years we update our Human Rights Risk Assessment and this was done in 2019. We use a range of external data sources to identify country risk levels and then we weight the risk by our employee numbers by country. Our 2019 assessment shows a marginal (4%) reduction in the weighted risk compared to our 2017 assessment. This change is not enough to warrant any change in our strategy or actions. The risk assessment helps us to ensure that we can focus activities where the risks are highest. Also in 2019, to improve the transparency of our employment practices we have introduced an overarching People Principles policy which is available along with other policies at https://www.coats.com/en/Sustainability/Policies-and-downloads.
Our Group Internal Audit team are a key resource for policing our internal compliance with employment and human rights standards. Included in their audit scope are 30 human resource audit areas and many of these focus on compliance with policies or directly with Human Rights issues. They normally complete 10-15 audits per year (10 in 2019), and areas of non-compliance, if found, are rigorously addressed.
During 2019 we initiated a detailed assessment of our global remuneration polices against ‘living wage’ methodologies. During 2020 this work will continue, building our approach to ensure our remuneration policies are globally consistent and align with ‘living wage’ concepts.
Our global Ethics Code, Business Code of Conduct, Supplier Code and our raft of policies covering the full range of ethics and compliance issues set out what we expect from our employees, our suppliers and our partners. We uphold the aims of the California Transparency in Supply Chains Act of 2010 and the UK Modern Slavery Act 2015 and publish a statement on our website on what we are doing to prevent modern slavery in our business and supply chains. (https://www.coats. com/en/Modern-Slavery-Act-Statement)
In early 2019 we launched an internal training programme on Modern Slavery. The purpose of this was to inform employees about the profile of modern slavery in industrial environments, to highlight the areas of risk in our operations and to help people identify the signals and to guide them on the action to take if they have any concerns. By the end of 2019 over 3800 employees have undertaken the training and it is now a mandatory training module for new starters in roles for which it is appropriate.
As the training cycle is biennial, in 2019 only new starters or those moving into new positions were required to undertake our compliance training modules (Anti- Bribery, Ethics and Competition Law), so slightly over 300 people completed the three training courses. In addition, all senior and customer facing employees (more than 3,700) were required to self-certify their continued compliance to our Ethics Code in 2019. New, updated compliance training packages will be released for completion by all relevant employees in 2020.
This year, through our global ‘Doing the right thing’ programme, we ran several Compliance, Controls and Culture Workshops. These workshops, led by members of the senior leadership team were used as an opportunity to share real life experiences. In 2019, more than 600 employees participated in the 10 sessions held at various Coats sites located in Brazil, Bangladesh, Mexico, Honduras and India. These workshops will continue in 2020.
We continue to actively promote our Whistleblowing Hotline through numerous ways and the number of incidents reported in 2019 increased to 119 (99 in 2018). All reports are fully investigated and the number that have been upheld has reduced from 39% in 2018 to 30% (provisionally) in 2019. This means an absolute reduction in detected infringements. Group Internal Audit also look at a range of corruption issues during their audits and identified 3 minor policy infringements in audits during 2019, none of which were evidence of corruption.
‘Great Place to Work’
We aspire to have all of our key units certified as a Great Place to Work® (GPTW) or equivalent awards. We are focussing on getting GPTW certification for our top 16 countries, which account for approximately 85% of our workforce. We should successfully have certified all those sites by 2022. Those certified will then be reviewed every two years.
In 2019, so far, we have 19% of our employees working in a GPTW, or equivalent, certified location, which puts us on track to meet our target.
Continuously listening to our people
Consistent with the cultural oversight and direction coming from our Board, it is important we continue to provide opportunities to listen to our people.
Over the last eight years, we carried out an annual global employee engagement survey. In 2019, we decided to enhance our approach moving towards a ‘continuous listening’ model which will include a series of digitally enabled pulse surveys for every stage of the employee experience. This will enable us to track real-time results so we can make immediate corrections and improvement where we need to. This year we held three pulse surveys on key areas of employee engagement – Health and Safety, Communications, and Ethics and Compliance. In the H&S survey the results continued the positive progress from previous years, with 99% of units recording results above the benchmark industry average and 62% of units improving their score from the previous year. In the case of the Communications survey, 95% of respondents confirmed they get effective communication while 85% felt that they get enough communication. Regarding the Ethics and Compliance survey 95% of respondents confirmed that they were trained and motivated to deal effectively with workplace ethics and compliance challenges.
We actively support employees who wish to join labour unions. 43% of our employees are members of a labour union and 43% of our workforce are subject to collective bargaining agreements. Both of these rates have increased substantially in 2019 due to the inclusion of sites in China where union membership and collective bargaining have been implemented.
Promoting a diverse and inclusive workforce
It is important for us to create a respectful and inclusive environment, and we strive to be an organisation in which our employees come from diverse background. We want our employees to feel valued, respected and supported, and for the right conditions to be in place for everyone to be confident and authentic at work.
Coats employs people from 60 countries and we had 31 nationalities represented in our senior management group (2018: 32). In the last year, we rolled out and assessed 40 Diversity & Inclusion (DI) training modules, and around 400 people have completed the unconscious bias training. Our D&I network continues to grow. We continued to have our quarterly network calls where we discussed progress, shared best practice, and brought in relevant guest people. We’ve had over 200 people joining those calls with a gender split that is generally about 50:50. In March 2019, we marked International Women’s Day across our business, using the theme #BalanceforBetter. On the occasion, we asked our teams to consider which local actions could have the capability to be rolled out globally for more impact. We’ve had a high level of engagement from our employees, and events took place globally in 28 countries and with a great degree of involvement online.
We have continued to run unit-level D&I resource groups to share best practice. This year, we particularly focused on building out our flexible working initiatives both globally and locally through our cluster D&I groups.
In 2019, our Digital and Technology function has started its own focus effort to encourage more women to enter the world of technology. Through actions including mentoring and closer partnerships with recruitment agencies, our ‘Women in Tech’ programme is starting to break down the myths often associated with working in technology. We have also started to engage with external organisations who are known to have well established D&I programmes.
As part of approach to D&I, we aim to regularly measure our demographics to track progress and establish talent acceleration programmes to develop female, multicultural and millennial leaders of the future. In 2019, the percentage of females at board level increased by 3% to 33%, and the percentage of females at senior levels increased by 1% to 24%. This will continue to be an area of focus in 2020.
Attracting talent and enabling them to grow
It is important to Coats that we harness and nurture the best talent amongst our workforce and provide them with the skills and opportunities to succeed. In 2019, we reviewed and refreshed our Recruitment Policy and guidelines to help us retain our best people and acquire specialist talent. As part of the update, we reconfirmed our commitment to diverse candidate pools and refreshed our new process for sharing roles internally to make open roles more visible and support employees in their career development.
We also continued to embrace the digital age and to leverage the power of growth mindset across our business. To support this, our ‘SuccessFactors’ tool, launched in 2018, has given us better visibility of our talent pool globally, and insights on talent utilisation, requirements, attraction, development and retention. Building on this in 2019, we have started to articulate a clearer message on career development, moving away from linear career paths towards more modern career paths designed around learning experiences that focus on the importance of gaining a set of key experiences to build necessary capabilities towards a key organisational role.
To embrace the digital age, we have also been working in partnership with the Neuro Leadership Institute to deliver growth mindset training to our employees. In 2019, we delivered this training to over 100 employees who have responded positively to the training and provided very positive feedback, with 80% of participants feeling better prepared to embrace a growth mindset after having taken the training. It will be rolled out systematically to more people during 2020.
We also added ‘Learning zones’ to our in-house portfolio of training in 2019. These are delivered both virtually and face to face to allow as many people as possible to benefit from them. These sessions covered 10 different topics, including an introduction to our refreshed Leadership Capability Framework (LCF), interviewing and coaching skills. More than 1,000 people attended these sessions in 2019.
The refreshed framework is centred around four capabilities; innovating with the customers through disruptive thinking, digital and data to drive sustainable value; collaborating to connect and share learnings and create value together for One Coats; energising for change to drive outcomes and shape Coats for the future; and developing diverse talent to build a robust talent pipeline.
We have continued to roll out our Transcend leadership programme, targeted at our senior managers which aims at developing the essential leadership competences that will drive success for Coats in the coming years. This includes topics such as coaching, digital learning, case studies and peer learning, and also innovative use of social networking. Over the last two years, 29% of participants were women, 44 employees have graduated from the programme and, of those, 47% have started new or expanded roles.
In support of our continual learning imperative, our online learning platform, Minerva, continues to be a popular way for our employees to develop their skills and capabilities.
Health, Safety and well-being: our number one priority
In 2018, we launched our ‘Journey to Zero’ strategy, which provides a clear roadmap for the long-term approach to health and safety. It focuses on the identification and management of risk, taking a much more proactive approach to safety management and placing more emphasis on ‘leading’ indicators rather than ‘lagging’ indicators. In other words, with our approach, we are targeting the root of potential health and safety risks and addressing them hopefully before any injuries ever happen.
In 2019, we rolled out our digital incident reporting tool ‘Intelex’, including a mobile version that allows employees to spot and immediately report anything of concern as soon as they observe it. Supported by the use of these tools we developed over 46,000 improvement action plans and increased the rate of ‘near miss’ reporting by 36%.
We also held the inaugural ‘Journey to Zero’ week, our first ever global week of events dedicated to Health and Safety. The week generated great levels of engagement with activities about health, safety and wellbeing, taking place in more than 24 countries and over 200 conversations on our enterprise social networking tool Yammer. Following from the success of this week, we will be organising these once a year from now on.
In 2019, we also provided 29 hours of safety training per employee, a 2% increase on 2018, including extensive NEBOSH and IOSH training. 9 of our sites are also accredited to the international H&S standard OHSAS 18001 and 3 of our sites have upgraded their accreditation to the international ISO 45001 standard. Our aim is to have implemented ISO 45001 to all our sites by 2025.
With all the above focus on accident prevention, we are very pleased to see strong progress in terms of the ‘lagging’ incident rates. There were no fatalities within our business in 2019 and there was a 24% reduction in the number of recordable incidents and a 20% reduction in the number of lost time incidents during the year. This led to a 19% reduction in the work-related recordable injury rate, from 0.62 to 0.50.
While we understand that we cannot control every aspect of our employees’ commute to work, we take safe commuting very seriously and we have also been working actively to help our employees reduce the number of commuting to work incidences across all of our sites. In 2019, we delivered driving lessons, defensive driving training and driver awareness training to equip our employees with the skills they need to reduce their risks. As a result of this increased focus we have improved the reliability of our reporting in this area and the number of incidents reported to us has increased from 96 in 2018 to 114 in 2019. In 2020 we will continue to invest in making the journey to and from work safer for our employees.
Over recent years, we have placed greater emphasis on health and wellbeing and have introduced several programmes across the business. This year, we have again increased our activity in this area. For example, in Vietnam, China and India, we have included health checks for our employees; in Brazil and China we offered various, healthy eating and fitness activities. We aim to continue to build both proactive health monitoring and healthy lifestyle programmes across all our sites in 2020.
Responsibility in our supply chain
Our success in the marketplace relies on responsible behaviour and good corporate citizenship. Therefore, it is vital that our relationship with business partners and suppliers is aligned with both our business principles and our sustainability approach.
Our Supplier Code, updated in 2018 and due for update again in 2020, outlines the issues we engaged our suppliers and partners on. It covers labour practices, including specific requirements around human trafficking, forced and bonded labour, environmental management, responsible sourcing of materials/products and business conduct more generally.
To engage with them, we have a due diligence and review protocol for our procurement teams to use when assessing supplier credentials. To build on the opportunity for collaborative work with our suppliers we have initiated in 2019 a programme that seeks to ensure that their sustainability activities are aligned with ours. This will lead to much greater transparency on impacts along the whole supply chain and will make it much easier for us to start building a full Life Cycle Assessment for our products and to quantify the upstream Scope 3 emissions attached to our purchased materials. We will continue to develop this programme in 2020.
Our human rights risk assessment, mentioned earlier, also helps us identify the areas of highest risk in our supply chain, initially on a geographic basis. We also assess our supply chains to identify industry/ sectoral risks as well as risks from their geographical location, and will be revisiting this assessment in early 2020 based on the latest geographic review. Based on this assessment, we have a programme of engagement with suppliers, providing support and guidance on our expectations and compliance with our Supplier Code. This includes face to face workshops and supplier audits for ‘high risk’ suppliers.
Being a part of the communities where we operate
At Coats, we always try to be an active corporate citizen and encourage our teams to engage with their local communities in ways that best suits them and the circumstances. We recognise the prosperity of our business is closely aligned to the health and well-being of the communities in which we live and work. This is why we have a specific target to get all our employees involved in community activities by 2022.
In 2019, to strengthen our approach to community engagement we started to align all our local and global actions toward three areas of focus: ‘Education’; ‘Health & Wellbeing’ and actions related to our ‘Business and Textiles’.
During 2019, we ran well over 400 activities in 19 different countries worldwide. We have been developing improved tracking mechanisms to be able to more accurately identify the level of input activity for these projects, and will be able to give more accurate information for 2020.
Measuring the impact of our community activities has always been challenging for us, as it is for other organisations, and we are also conscious that we are not experts in identifying needs and developing solutions, so we have been working during 2019 to develop global partnership relationships with organisations that do have this expertise. We are looking forward to launching the first such partnership in 2020 with the aim being to run pilot projects during 2020 and then to extend the partnership more widely in subsequent years.
Building a more diverse and inclusive business in Sri Lanka
For many years after operations commenced there in 1981 the bulk of our employees in Sri Lanka were men. Attempts to change this had previously faltered on cultural and organisational barriers. By 2015 only 4.5% of employees, and only 3% of shop floor employees were women, with none working on production machines. A new campaign was started in 2015. A number of structural and organisational changes were made to ensure that women felt comfortable and supported working in production environments. Initially the changes provoked some resistance from existing employees and unions, but through dialogue and training and a focus on the need to provide employment opportunities to women for the benefit of all, this resistance was rapidly turned into full support for the programme.
In 2016 the first women started operating production machines, and working on all three shifts and there has been steady progress since then. Initially women were integrated into winding operations, and in 2019 this was extended to operating dyeing machines, and there are now women representatives on the company H&S committee also. The percentage of women employees has risen to 16% and 18% of shop floor operators are now women. Importantly this progress is not limited to factory roles; in 2015 there were no women in the field sales team and now it is 40% women, and 25% of executive roles are now held by women, up from 8% in 2015.
This shows that rapid progress in gender diversity can be achieved with a clear programme and full management support.
12018 data has been restated without NA Crafts, with Gotex and Patrick Yarn Mills and with finished goods output basis to help with like for like comparisons to 2019
22018 accident statistics have been marginally restated because of the analysis lag on some incidents
For more information on our historical performance download our full data disclosure.