McConnell Dowell 6 Environmental, Social and Governance The business continued to embed its Environmental, Social and Governance (ESG) framework, guiding organisational decision-making and driving a range of programs and initiatives, in line with the Group’s Purpose and Values. In the environmental area there were no serious incidents recorded, the result of consistent application of the Group’s accredited Management System and a strong focus on environmental awareness training. Carbon reduction and resource minimisation initiatives included the increased use of solar on sites, such as solar generators and lighting, greater use of recycled products, and reduced potable water use through site capture and increased usage of recycled water. In the social area, the health, safety and well-being of employees and the community remained paramount, with the Group’s lead safety indicators showing positive trends. The primary lead safety indicator, Potential HarmAll Injury Ratio (PHAIR), exceeded the target set by 76%, demonstrating a healthy reporting culture across the business. While the impacts of the COVID-19 pandemic started to normalise in the second half of FY22 across all operations, the business continued to provide support to staff and communities through localised response plans and programs. The business continued to take a leadership role in the construction industry’s focus on improving the culture and wellbeing of the workforce. In Australia, MCD led a ground-breaking pilot program on wellness on the Mordialloc Freeway Project. Undertaken in partnership with government and a local university, the successful program is now being adopted across the industry. Social procurement spend exceeded targets, where set, by an average 46%, while the Australian Business Unit advanced through the first stage of its formal reconciliation action plan. In New Zealand, the 2021 formation of a local Diversity and Inclusion committee has led to the rollout of several important initiatives across the business including Māori language and customs training for senior managers. From a governance perspective, the business continued to operate with strong policy compliance and rigorous oversight and audit regimes in place. Visiting Manager Reports (VMR) exceeded target by 22% and included the use of virtual visits via technology – a positive legacy of the COVID-19 pandemic. The Group maintained all third-party systems accreditations and licences across its operations and met all its obligations as a signatory to the UN Global Compact. People and Leadership The Group’s strong leadership foundation was further bolstered in the financial year with several key appointments. In Australia, these included the appointment of a national pre-contracts manager and a new general manager for the New South Wales region. The pre-contracts appointee is an experienced female staff member, while the new general manager was externally appointed and brings a strong local network and reputation within this critical growth market. The South East Asian business also saw the appointment of several new local senior leaders, with sourcing underway for the managing director role. The leadership teams in New Zealand & Pacific Islands and Built Environs business units remained unchanged throughout the period, as did the composition of the Group’s Executive Committee, highlighting the stability of the business. Resourcing in all geographic markets remained under significant pressure as record-breaking levels of construction activity, along with the challenges of immigration and mobility during the pandemic, combined to create imbalanced demand and supply of critical capabilities. Internal resource sharing between business units relieved some pressure and created opportunities for staff to build their careers in new regions. An international recruitment campaign was also launched, initially focused on the UK and Europe. Looking to future recruitment requirements, an outsourced model is being implemented in Australia to better respond to the needs of the business. Graduate programs are also now in place in all four business units with strong annual intakes. Within a tight talent market, retention of key talent is crucial and investment in learning and development remained a primary focus for the Group. The business has partnered with Australia’s top-ranked business school, The University of Melbourne - Melbourne Business School, to deliver an integrated Senior Leadership Program aimed at developing leadership capabilities in an intensive learning environment. The inaugural program was delivered during the year with great success. The second cohort will complete the course in late 2022. An Operational Leadership Program – a five-day intensive program targeting emerging leaders in project management– will launch in the coming year. Looking ahead The Group enters the 2023 financial year in a strong financial position with no debt except for a small value of asset finance , solid work in hand, and a robust pipeline of preferred contractor positions and qualified opportunities across its operating regions and businesses. Government infrastructure investment continues to be strong, while energy transition and climate change related projects will grow in number and scale over the coming decades. While market headwinds remain, including residual COVID challenges, price escalation, increasing government debt, resource shortages, and supply chain disruptions, the Group has robust management responses and strategies in place and working effectively. With a clear eye on the future, the Group’s Board-endorsed Horizon 2030 strategy provides a robust framework and roadmap for long term decision making and investment, centred on the business’s engineering-led heritage and ‘Creative Construction’ value proposition. S. V. Cummins CEO
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