The pandemic has highlighted the importance of employee Health & Safety and Wellness programmes and the impacts that Coats can have by supporting our communities. Ensuring that all Coats employees work in a safe environment, are remunerated fairly under Living Wage benchmarks and have good development opportunities is central to Coats employee value proposition.
“Employing people from over 60 nationalities and different environments around the world normally means that we deal with multiple different social and people issues at any one time. This was clearly not the case in 2020 as the pandemic deeply impacted on our activities across all our sites, and it was, by a long way, the single defining issue of the year. The crisis touched every single Coats employee and their families in one way or another, and, undoubtedly, the fact that we were dealing with the same issues in multiple locations simultaneously or on close succession helped bring the global Coats family together to deal with the challenge.
Our social media channels have been alive all year with experiences, suggestions and messages of support. We have also developed our ability to broadcast clear, consistent and universally relevant messaging directly from top management across the whole organisation, combined with opportunities for direct feedback. Pulse surveys during the year have helped us to be sure that communications were functioning effectively.
Not withstanding the impact of the pandemic and the need for the whole organisation to pivot to deal with it, we were still able to continue to make progress in some crucial areas of our social agenda. This was especially the case in completing our Living Wage analysis, the conclusions from which are now being actioned where appropriate.”
Chief Human Resources Officer
By 2022, we aim to have all employees contributing to community activities
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. During the pandemic in 2020 our community activities naturally focussed on the Health and Wellbeing pillar and most other community activity had to be postponed due to restrictions on gatherings. We are planning to pick up our earlier plans for external collaborations in 2021.
"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 two years to ensure that over 80% 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, so it was not repeated in 2020. 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 introduced an overarching People Principles policy which is available along with other policies at https://www.coats.com/en/Sustainability/Policies-and-downloads. As part of our continuing focus on labour standards we participated in a recent UN Global Compact Network UK Business and Human rights Summit.
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. Notwithstanding the challenges of performing audits remotely because of the pandemic, they were still able to complete 13 audits in 2020 (10 in 2019), and areas of non-compliance, if found, are rigorously addressed. In the 2020 audits 24 issues were raised and corrected (31 in 2019).
While we always pay our employees at or above the minimum wage,during 2019 we initiated a detailed assessment of our global remuneration polices against ‘living wage’ methodologies. During 2020 this work was completed. We found that in a small number of countries there were some employees who are paid below the relevant living wage benchmark for that country or location. These cases will all be resolved during 2021 and we will continue to benchmark ourselves to ensure that all of our employees are paid at or above the living wage.
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. Our Anti-Bribery and Anti-Corruption policy applies to all our employees and sets out clear measures to counter bribery and all forms of corruption including facilitation payments, fraud, money laundering and tax evasion. We pay particular attention to high-risk jurisdictions as measured by the Transparency International Corruption Perceptions Index, together with other indexes and metrics gathered internally.
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 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. During 2020 the training was completed by an additional 700 people.
Our training cycle for our key compliance packages, covering Ethics, Competition Law and Anti-bribery & Corruption is biennial, and all relevant staff undertook the training using updated on-line training and testing during 2020. In total over 4200 completed the training. In addition all senior and customer facing employees (over 4100 employees) were required to self-certify their continued compliance to our Ethics code.
Opportunities for the senior management on-site Ethics workshops that we have run previously were frustrated due to pandemic travel and face to face meeting restrictions. However, we kept our ‘Doing the right thing’ programme active through virtual meetings. The main global event was a company-wide open discussion forum on our internal social media platform. This took place on Global Ethics Day on the 21st October with over 600 employees actively participating under the leading theme of “#Speak Up”. This meeting tied in to townhall meetings taking place in many Coats locations on or around the same day. This is the second year that we have run participative company wide discussions like this on Global Ethics Day and attendance increased 20% on the 2019 session. During the course of the hour long session over 200 different conversations were initiated and developed. This participative way to build direct engagement and discussion around important issues has proven highly successful and we will continue to build on this positive experience.
To ensure all workers have an appropriate mechanism to report any possible non-compliance, we have a confidential Whistleblowing Hotline (email@example.com) which is accessed and managed by the Group Internal Audit team and the Group Legal team. We also operate a confidential Ethics Concerns Voicemail (+44 208 2105 088) which individuals can use to report any ethical issue. Our suppliers and customers are also made aware of the Ethics Concerns Voicemail and the Whistleblowing Hotline and these are available to representatives of both suppliers and customers to use. Members of the public are also invited to report any possible non-compliance by Coats’ employees or related to Coats. If you have any concerns regarding actual or potential contravention of our policies by anyone connected with Coats, please contact firstname.lastname@example.org or call our confidential Ethics Concerns Voicemail.
Our Whistleblowing Hotline continues to be well used and received 88 incidents (119 in 2019). Not all the investigations have been closed, but of those finalised 22% were upheld (30% in 2019). In addition our GIA team review corruption issues during their audits, and no cases of corruption were detected.
‘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. Our plan is to have those sites successfully certified by 2022. The certifications will then need to be renewed every two years.
Because of pandemic restrictions our 2020 plans in this area were halted and we were not able to certify any new locations or renew existing certifications in all locations. For this reason the number of our employees working in a GPTW certified location dropped from 19% in 2019 to 6% by the end of 2020. We have a plan in place to complete our 2020 and 2021 certification plans during 2021 and are still confident that we will reach our target in 2022.
Continuously listening to our people
Getting direct and regular formal feedback from our employees is embedded into our culture and is vital as it allows senior managers and the Board to pinpoint issues early. We have one Non-Executive Director, Fran Philip, who is the Board Representative for Workforce Engagement, and she held more than 20 virtual sessions with representative groups from across the Coats units, covering all of our clusters. She also had meetings with all of our Cluster Managing Directors.
In 2020 we had planned to run a full Employee Engagement Survey as well as move to a model of ‘continuous listening’ via a series of pulse surveys. Unfortunately due to Covid we had to postpone the full engagement survey to protect the safety of our front line employees who do not have access to their own computers. However, we did run a series of pulse surveys with our wired employees. In the early months of the pandemic we asked them about our response to Covid, our communication, whether they had the resources they need and about their well-being. Results across the board were positive. We also ran some other pulse surveys, one to test understanding of, and alignment with, our company priorities, and for some of our locations we also ran surveys to find out how people feel about returning to the office. Again the results for these were positive. The main learning from these surveys is that while achieving a healthy balance between home and work life is the biggest challenge for our staff while working from home, over two thirds want to retain flexibility between home and office working in the future, with very few wanting to return primarily to office-based working. We have therefore published a new flexible working policy that responds to employee needs.
Also in 2020 we piloted a new employee mobile app. Forming part of our wider employee experience strategy, the app has the potential to allow us direct two way communication with all our employees in their own language as well as give them access to our self-service HR tools such as annual leave booking.
We support employees who wish to join labour unions and at the end of 2020 47% of our employees were members of unions (43% in 2019) and 46% were subject to collective bargaining agreements (43% in 2019).
Promoting a diverse and inclusive workforce
Our aim is to promote a workplace environment that is inclusive, respectful and diverse. We believe that diversity of all sorts in the workplace should be encouraged and supported. We employ people from 60 countries (60 in 2019), and there are 31 nationalities represented in our senior management group (31 in 2019). We track our gender diversity regularly and at the end of 2020 the percentage of females at Board level was 40% (up from 33% in 2019), with the appointment of our first female Executive Director, while within the senior management group the percentage of females was 23% (24% in 2019).
We are delighted that in 2020 our Brazil team was recognised as a great place to work for women. Coats also ranked 45th in FTSE250 companies in a report released by the Hampton-Alexander Review: FTSE Women Leaders.
We remain committed to increasing the diversity of our workforce and despite the Covid pandemic continued to take action in this area. Inclusion has been ever more important during Covid. With so many people working from home it was especially crucial that people remained connected and we were able to support this through our communications as well as through our Learning Zone sessions and encouraging line managers to keep in touch with their teams regularly. Throughout all of the training courses we ran in 2020 we ensured that there was a good representation of both men and women. In addition we continued to run our Diversity and Inclusion Network calls and held two in the second half of the year. These were well attended and covered subjects such as our support for the Black Lives Matter principles and how we were supporting inclusion.
Highlighting our commitment to diversity, we signed up to the Confederation of British Industry’s ‘Change the Race Ratio’, a campaign to increase racial and ethnic participation in British businesses. We are also members of the UN Global Compact network UK Diversity & Inclusion Working Group.
During Covid we took the decision to move all of our training online. In 2020 our training portfolio consisted of continuing our most successful long term programmes, introducing new courses to supplement those and specific Covid related courses.
In 2020 our employees increased their training hours in Minerva, our digital learning library by 40%. The nearly 3,000 employees accessed 1,700 courses across 13 topics including Growth Mindset and Conflict Management. Our Management Capability Development programme has also continued with two cohorts in EMEA and the US taking part in the blended learning programme consisting of eLearning, webinars, psychometric assessments and coaching. In 2020 Our Supervisory Skills training remained in place with short webcasts on 12 topics from ‘Building the Team’ to ‘Relating to Others’.
We have built on our Learning Zones concept that launched in 2019 and delivered 280 training hours in seven languages in 2020 via this very successful format. As well as general topics such as Emotional Intelligence and Collaborative Negotiations we offered Covid specific courses such as Productive Remote Learning. Significantly, for the first time, we extended one of our courses ‘Wellbeing for Coats Families’ to family members of our employees to support them during the Covid pandemic.
New for this year has been Subject Matter Expert training which is a series of peer-to-peer sessions led by internal experts. We ran 14 sessions for more than 300 participants across topics such as Project Management and Data Analytics.
Underpinning all our employee development programmes is our performance appraisal process. This is used to identify career aspirations and developmental needs for our people leading to the creation of bespoke training and other programmes. It also forms a critical input into our succession planning processes where we seek to develop internal talent pools for all areas.
Health, Safety and well-being: our number one priority
Health & Safety has always been top of our priorities, and is underpinned by a comprehensive management system that includes 4 top level policy documents, covering policies, principles and responsibilities, 9 management system documents, covering Risk Assessment, H&S Committee structure and employee involvement, Accident investigation, Training, Communications, Internal Auditing, Reporting, Change Management and Programme Management, and over 30 detailed Guidelines covering individual risk areas. During 2020 nine of our sites were certified under OHSAS 18001 and three had transitioned to ISO 45001 certification, meaning that overall 24% of our sites were covered by external certifications.
However, one effect during 2020 of focusing significant resources on managing the pandemic and avoiding high risk activities was that our programme of normal activities under our Journey to Zero strategy was interrupted early in the year. This was especially noticeable for employee training where the number of hours per employee dropped from 29 in 2019 to 23 in 2020. As a result of this we saw an increase in incidents in our plants, with a consequent rise in the recordable incident rate, climbing from 0.50 in 2019 to 0.59 in 2020. While this incident rate is still well below our industry benchmark of 2.9 from the latest available (2019) US Occupational Safety and Health Administration data for ‘Fiber, yarn and thread mills’, in our view this is a clear example whereby a drop in a key preventative measure or leading indicator results in an increase in actual incidents, and reinforces the importance we have given to delivering improvements in all the leading indicators in order to deliver progress in the lagging incident rate. We have the processes and resources in place to understand where the issues are and in 2021, as well as continuing our fight against Covid, we will refocus our efforts on our Journey to Zero strategy which was seeing very encouraging results on our leading and lagging indicators before Covid struck. As noted when we launched our ‘Journey to Zero’ programme, early identification and remediation of potential risks in our operations is central to our approach, and we will continue to focus on hazard reporting as a key indicator. Each year we take the top five risk areas identified and create a detailed programme of actions to address them. Health & Safety risk analysis is also built into the process for developing new operations and projects and this approach was used in 2020 in planning the new Gotex production site in Spain. In the case of acquisitions it is not always possible to do a detailed risk analysis prior to purchase, in which case it is tabled as one of the first actions to be done after completion.
After a drop at the height of the pandemic we have already see a steep recovery in the rates of hazards reported and improvement actions completed, both of which measures improved significantly versus 2019.
We continue to focus also on commuting safety, with training and awareness sessions frequently running in our units. We track and investigate all incidents (as we do for work related ones) and saw a reduction in our incident rate to 0.37 in 2020 (0.42 in 2019).
Responsibility in our supply chain
Given the complex supply chains in our industry we recognise that it is not enough for us to take ownership just for our own behaviour but that we must ensure that our direct and indirect suppliers are also operating in a responsible way that aligns with our principles, ethics and approach to sustainability.
We have updated and reissued our Supplier Code in 2020, as planned. The main changes are an increased focus on modern slavery concerns and a broadening of our environmental expectations, especially around emissions reductions. The relaunch was also the opportunity to clarify the roles and responsibilities within Coats around the implementation of the Code. During 2019 we started to move from a hybrid model that used both internal and external audit teams to monitor compliance in key and high risk suppliers to one that used purely external auditors. Bureau Veritas, our partner for this audit work, have completed 92 audits using our template but because of the pandemic from April onwards the programme had to be suspended as most of our suppliers, like us, were unwilling to have on-site visitors.
The programme will continue in 2021. From the audits done to date 89% have been rated as good or acceptable with 11% rated as needing improvement. None have been rated as having a high risk. All suppliers identified as requiring improvement will be re-audited in 2021. To date we have ceased to trade with one supplier because of their lack of compliance to our Code. The decision to stop trading with them was taken after they confirmed that they would not take action on the issues raised from the audit.
Highly critical issues within our Supplier Code scope, such as cotton sourcing and conflict minerals are not applied only to our tier 1 suppliers but extend to our tier 2 and higher 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’. This focus ensures that there is close alignment between our community engagement activities and our business strategy.
During 2020, our planned programme of activities was curtailed because of pandemic restrictions on gatherings, and we focussed the projects that we did undertake on providing educational and material support on pandemic-reated health issues.
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. We started work during 2019 to develop global partnership relationships with organisations that do have this expertise. While we had to suspend this programme during 2020, we are looking forward to launching the first such partnership in 2021 with the aim being to run pilot projects during 2021 and then to extend the partnership more widely in subsequent years.
Thanks to our strong Health & Safety culture and the momentum established in 2019, we were able to pivot early and refocus our prevention efforts towards Covid as soon as it emerged as an issue in our China operations. As a result we were able to develop and roll-out to all of our units a structured response two weeks before the pandemic was declared. This was based on the well known PPRR (Preparedness, Prevention, Response & Recovery) crisis management model. Our cautious and proactive approach to keeping our employees safe continued throughout the year.
Closing all standalone offices to allow us to focus on the safety of our manufacturing employees, restrictions on travel and visitors to our sites, encouraging employees to wear face masks and demonstrate their creativity through a Face Mask Fashion Show competition, identifying and implementing social distancing best practice in all of our sites, distributing health and safety kits to all employees with items to help keep them safe from the virus, regular awareness training and education sessions to help keep employees safe, using an internally developed mobile app to track and trace cases enabling us to support any employees who contracted the virus, identify any employees at risk of catching it and prevent it spreading, a global approach to re-opening manufacturing sites as lockdowns lifted including policies and guidelines about social distancing, hand santising, temperature screening, disinfecting, and re-setting factory layouts to include one way systems and to allow for social distancing, we were able to use artificial intelligence systems on existing health & safety monitoring cameras in our plants to monitor whether messaging on mask use and social distancing were being adhered to, introducing risk assessments for sales and customer visits as these restarted, creating a recovery matrix to carefully remove controls as the pandemic eases.
Very sadly, by the end of 2020, 14 of our employees had died from Covid infections contracted outside the workplace. The early action we took to change working practices, introduce safety measures and track contacts to 4 levels meant that we did not have a single confirmed case of infection transmission happening in our operations, and a small handful of infections where the source is unconfirmed and could have occurred on site.
Our health and safety efforts did not stop with our employees, we also extended them into the community for example by providing health and safety kits into our local communities and, in India, providing hand wash stations to primary schools and police stations, Covid testing booths and sanitary gloves to health care professionals.
This shows that rapid progress in gender diversity can be achieved with a clear programme and full management support.