16 May 2022

Dear stakeholders,

I am pleased to confirm that Harworth Group plc reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Lynda Shillaw
Chief Exectuive, Harworth Group plc

Harworth supports the Universal Declaration of Human Rights. As part of this, Harworth is committed to implementing systems and controls aimed at ensuring that modern slavery is not taking place anywhere within our organisation or in any of our supply chains. We expect that our suppliers, contractors and business partners to adhere to the principles of our Code of Conduct, which is prepared in accordance with our Anti-Slavery and Human Trafficking Policy.

The Board recognises the benefit of a diverse (in its widest sense) Board and workforce comprising individuals with different backgrounds, experience, perspectives and ideas. In common with much of the real estate and construction sectors, achieving that objective remains a significant challenge, but we are committed to it.

Any person concerned about a breach of the Code of Conduct or our Anti-Slavery and Human Trafficking Policy may report their concerns on a confidential basis to our Company Secretary.

The Nomination Committee of the Board takes the lead in monitoring the effectiveness of the initiatives we have introduced to improve diversity, and the progress we are making. A review is undertaken annually, the results of which are reported to the Board.

The Nomination Committee also has responsibility for the Group’s whistleblowing policy and procedures, and the appropriate investigation of whistleblowing reports

In 2021,Harworth reported a 16% mean gender pay gap, increased from 9% in 2020. Whilst we believe that our gender pay gap is a function of historic trends across the property and construction sectors, this does not diminish the importance of, or the Board’s commitment to, reducing it as quickly and effectively as we can.

There were no incidents of whistleblowing in 2021. The Nomination Committee undertook its annual review of the policy and procedures in March and approved the introduction of an external “Speak Up” platform to supplement the Group’s existing internal reporting mechanisms. This new platform is already live and offers employees and external stakeholders another means of reporting concerns (on a confidential basis if preferred).

Since Harworth’s formation in 2012 we have been committed to creating a working environment that is free from discrimination, harassment and victimisation, where everyone feels valued and respected. This includes:
• promoting equality and fairness for all in our employment;
• making reasonable adjustments for disabled employees and giving full and fair consideration to disabled applicants for roles in our business; and
• providing equal opportunities for continuing professional development and promotion within our business to any disabled employees.

Harworth is committing to upholding and championing labour rights within the company and across our supply chain. The company has a number of policies aimed at supporting this, including our Business Conduct policy, Equal Opportunities & Dignity in the Workplace policy, Anti-Slavery and Human Trafficking policy and the Employee Code of Conduct.

Our Risk & Compliance team ensures that health & safety is embedded into all our activities. In 2021 mandatory health and safety training was delivered to all employees in the form of half- day interactive training sessions, which for the first time also included training on mental and physical wellbeing.

We now have five employees who hold a mental health first aid qualification. We have continued measures designed to promote mental and physical wellbeing for our staff, including:
• monthly yoga sessions provided at our head office;
• a series of six “Mind Gym” sessions, teaching mental wellness techniques; and
• raising awareness through Mental Health Awareness week in May 2021.

Harworth also runs an Employee Assistance Programme (EAP) for all staff. The EAP is designed to help employees deal with any personal problems that might impact their work performance, health and wellbeing. These interventions typically include assessment, short-term counselling and referral services for employees and their immediate family.

Our annual employee engagement survey gauges employee views on a wide range of topics, including culture, values, working practices, career opportunities and communication. This information is key to measuring the success of our people policies and informs areas for focus and improvement. In 2021, we added questions on diversity and inclusion, and hybrid working.

There were no accidents involving Harworth personnel during the year. There was one minor accident involving a contractor under Harworth supervision. Where we have appointed a Principal Contractor under the Construction Design and Management (CDM) regulations, it and its sub-contractors take responsibility for health & safety whilst works are ongoing, but we continue to monitor health & safety via our consultants or via our Project Managers. There was one RIDDOR accident on an area of our site for which our contractor had responsibility for health & safety. There were no other accidents on contractor controlled areas.

The response rate to our 2021 survey remained high at 77% (2020: 81%) Of the respondents:
• 97% said they were proud to work for Harworth;
• 93% would recommend Harworth as a good place to work;
• 92% said that they had a clear understanding of the
Company’s aims and targets;
• 90% were satisfied with their line manager; and
• 89% of respondents said they felt personally driven to go beyond what is expected of them to make Harworth successful.

The survey identified some areas for improvement, such as communication, sharing of knowledge and best practice, career progression and hybrid working. These will be a focus for the Senior Leadership team in the coming year.

There were no incidents of employee whistleblowing in 2021.

As a specialist regenerator of land and property, a commitment to sustainability is embedded across our culture, strategy and operations, and we view this as critical to making a lasting positive impact on our communities and the environment.

We minimise our environmental impact through the use of renewable resources, energy efficiency, and sustainable construction practices. We also enhance biodiversity and climate resilience through the creation, protection and enhancement of green spaces across our sites.

Harworth’s Transformation to Net Zero will set out our commitment to reaching Net Zero Carbon by 2030 for Scope 1 & Scope 2 emissions, and those Scope 3 emissions relating to business travel and employee commuting. We also commit to reaching Net Zero Carbon for all emissions by 2040.

We implemented several measures to improve energy efficiency during the year:

• Introduced a hybrid working policy whereby employees are entitled to work up to two days a work from home, reducing employee commuting
• Introduced a salary sacrifice car scheme exclusively for electric and hybrid vehicles, reducing emissions associated with employee transport
• Improved monitoring of energy usage data to identify opportunities for reduction
• Continued our upgrade programme for Investment Portfolio assets, aimed at improving EPC ratings
• Towards the end of the year, we installed over 400 sq. metres of solar PV panels on the roof of our head office, Advantage House

As is the case for most real estate companies, Scope 3 emissions will comprise the largest proportion of our carbon footprint. We have already started to engage suppliers and occupiers, and adapt our own invoice and expenses systems to enable us to accurately measure a larger proportion of this footprint, with a view to reporting this data in the near future.

The company saw a 36% year-on-year increase in recorded GHG emissions but a 23% reduction in energy intensity during 2021.The increase in recorded emissions was largely because comparative data for 2020 was significantly impacted by Covid-19 restrictions, which reduced energy consumption across our sites.

When compared with 2019, GHG emissions for 2021 reduced by 50%. By far the largest driver of this decrease was a reduction in fuel used for leased plant at Harworth sites, consequent on the discontinuance of the processing of coal fines operations

It is Harworth’s policy to conduct all its business in an honest and ethical manner. We take a zero-tolerance approach to bribery and corruption and are committed to acting professionally, fairly and with integrity in all our business dealings and relationships wherever we operate and implementing and enforcing effective systems to counter bribery and corruption. We will uphold all laws relevant to countering bribery and corruption.

Our Anti-Corruption and Bribery Policy applies to all persons working for Harworth or on our behalf in any capacity, including employees at all levels, directors, officers, agency workers, seconded workers, volunteers, interns, agents, contractors, external consultants, third-party representatives and business partners, sponsors, or any other person associated with us, wherever located.

Harworth’s Board of Directors has overall responsibility for ensuring this policy complies with Harworth’s legal and ethical obligations. The Executive Committee has overall responsibility for ensuring that all persons who work for or on behalf of Harworth comply with the policy.

The Company Secretary has primary and day-to-day responsibility for implementing this policy, ensuring that all employees are given adequate and regular training on it, monitoring its use and effectiveness, dealing with any queries about it, and auditing internal control systems and procedures to ensure they are effective in countering bribery and corruption.

Management at all levels are responsible for ensuring those reporting to them understand and comply with our policy.

We are committed to ensuring no one suffers any detrimental treatment because of refusing to take part in bribery or corruption, or because of reporting in good faith their suspicion that an actual or potential bribery or other corruption offence has taken place, or may take place in the future.

A written record of all gifts, donations, sponsorship and hospitality must be kept in accordance with the Gifts, Donations, Sponsorship and Hospitality Policy.

An explanation of our policy forms part of the induction process for all individuals who work for us, and training will be provided on it periodically.

Our zero-tolerance approach to bribery and corruption must be communicated to all suppliers, contractors and business partners at the outset of our business relationship with them.