BUSINESS STRATEGY: NMBS
indirect emissions (not including purchases on behalf of its members). This is typical for most service
organisations in the building industry. Scope 3 often accounts for about 80% of these organisations’ emissions and represents a hard challenge to tackle, although NMBS has already identified ways it thinks it can reduce these emissions, including: encouraging lower carbon employee commuting, lower carbon events and lower carbon business travel. Implementing improvements to its vehicle fleet (aiming for fully electric by 2026), moving away from gas heating in its buildings and switching to a green electricity tariff should mean that NMBS can meet its target to reach Net Zero on scope 1 and 2 emissions by 2030. Scope 3 may take a decade longer. As Langford explains, “We need to be realistic about what can be changed. But we are committed to making permanent changes – we are not seeking to claim Net Zero status by using offsetting, unless there really is no other way.”
The social challenge goes global On the social bit of ESG, NMBS has been considering its impact on wider society and workplace culture, with a focus on two big issues: what it describes as Human Capital Management, and on tackling the scourge of modern slavery in parts of the construction products industry.
Human capital management really boils down to treating people well: employees, customers and the communities where they live and work. Here, NMBS has made strong commitments to fair wages, high levels of employee engagement and volunteering support for local charities.
NMBS has always been an exceptional employer, maintaining the highest possible accreditation in Investors in People and
earning itself an outstanding reputation for how well it treats its people. New initiatives for the future will focus on diversity and inclusion, including involvement in the Construction Leadership Council’s inclusivity campaign. The research by Mazars in 2022 also highlighted the opportunity for NMBS to make a meaningful difference in promoting and enforcing anti-slavery policies held by materials and product suppliers. Indeed, Langford explains that NMBS has a passionate and unreserved commitment to do all it can to eliminate modern slavery in its value chain.
“We are working hard to encourage other organisations within our membership community and the wider merchanting industry to fully engage, to share what we know and have found to be effective, to offer our collateral at no cost to others, to share our challenges, to be open to learning, to lead and support innovative approaches and to identify risks,” she says.
“We also want to lead the way and speak out when instances of modern slavery are found. Our message is clear: we are focused on building knowledge, confidence and respect for human rights. Our people are fully engaged, and the Board is clear that we always say, ‘no to modern slavery’.” NMBS is committing to annual monitoring of suppliers to check their compliance with modern slavery legislation. It has already been working with all its suppliers to encourage them to publish their modern slavery policies. It is also putting particular scrutiny on suppliers that explicitly state operations within the highest risk locations, including Vietnam and Asia Pacific, the Middle East, China and India, or linked to core commodities such as granite, stone, timber, tantalum, tungsten and tin. “NMBS is committed to tackling the fundamentally unacceptable practice of modern slavery and human trafficking and will not tolerate the use of any form of modern slavery or child labour across its business and supply chain,” Langford repeats again.
Good governance
Finally, turning to governance, Langford explains how NMBS has adopted the 10 principles of the QCA Code – principles that focus on the pursuit of medium to long-term growth in value for shareholders without stifling the entrepreneurial spirit in which the company was created.
The QCA Code comes from the Quoted Companies Alliance, but NMBS believes that its rigorous requirements can just as easily be applied to its own governance, helping the NMBS Board and management team
February 2024
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ensure NMBS is run better for members, staff, partners and all its stakeholders. “We are owned and controlled by our members who are independent merchants that support cooperative values and principles of working. Together, we are committed to delivering growth in long-term shareholder value,” explains Langford.
“This requires an efficient, effective and dynamic management framework and should be accompanied by good communication which helps to promote confidence and trust. These are the aspects of our corporate governance which we believe we can continue to improve, and which make up a key part of our ESG strategy.”
Taken together, the environmental, social and governance elements of NMBS’s business plan create a powerful set of promises that will influence all its decision-making and business relationships. They are closely linked to the company’s commitment to the UN Sustainable Development Goals.
“Embedding ESG into our strategy is a transformational journey, helping us to create more value for all our stakeholders. We are rolling out our ESG plan across the business and are actively sharing best practice with our suppliers and members too,” concludes Julie. “By considering and addressing these ESG factors, NMBS can not only contribute to a more sustainable and socially responsible world but also enhance its own long-term success and the success of members. ESG considerations can attract socially conscious customers, investors, and partners, and can also help mitigate risks and improve operational efficiency.
“We see this as a priority for 2024, a year when we will all need a strong set of guiding principles to see us through choppy economic waters and yet more social, political and technological change.” BMJ
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