Society

Suppliers
The Group sets and manages rigorous performance standards for suppliers through its quality system, Supplier Advanced Business Relationships (SABRe). This includes a supplier code of conduct, which is complemented by the Group's purchasing code of conduct that ensures suppliers and employees work together consistently.

The Group continues to foster productive supplier relationships which:

• deliver mutual business benefits;
• minimise the environmental impact of business operations;
• encourage the highest standards of ethical behaviour; and
• promote human rights.

The expansion of sourcing in Asia and the Americas continues, along with supplier training and the sharing of best practice. During 2008, we expanded our supplier training programme by 25 per cent.

Promotion of 'lean' techniques and waste elimination continues, such as our drive to reduce packaging waste. We have also run a pilot programme, engaging 30 suppliers, which has identified significant environmental benefits which we will continue to develop.

Continuing our success in recycling metals within our manufacturing facilities, including 1,250 tonnes in 2008, we are now working with our suppliers to support them in recycling their waste metals. We have also introduced metal recycling opportunities as a consideration in our sourcing decision process.

Building on internal success, we have conducted trials with 11 suppliers to embed process basics such as HS&E, visual management and workplace organisation. Self-assessment allows suppliers to create programmes to improve their performance and the feedback has been very encouraging.

Rolls-Royce supports the voluntary MoD Charter on Sustainable Procurement. The Charter defines sustainable procurement as meeting demand for goods, services, works and utilities in a way that achieves value for money with minimal adverse impacts on the environment and society. We will monitor progress over the coming years across all elements of the maturity matrix, one of which is engaging suppliers.

The use of e-business conferencing has doubled during 2008, improving global co-working particularly in the area of supply chain management.

Local sourcing policies reflect government regulations, such as in the US where particular rules towards working with small and disadvantaged businesses apply.

Community investment
The Group has a long-standing commitment to supporting its local communities. Community investment is an intrinsic part of the way we do business, supporting the Group's strategy and future success, particularly in the areas of:

• recruitment and retention of employees, particularly by investing in the science skills we need;
• employee engagement, by encouraging a sense of loyalty, pride and motivation about our organisation;
• development of professional and personal skills such as teamwork, leadership, adaptability and ethical behaviour; and
• reputation, by building proactive and mutually beneficial relationships in the communities in which we operate.

During 2008, we conducted our fifth global survey of community contributions, including cash, employee time and gifts in kind, using the London Benchmarking Group model. The Group's total contributions across all these areas amounted to approximately £6.8 million.

Donations and sponsorship
The Group's charitable donations policy is to 'directly support causes primarily relating to educational, engineering and scientific objectives, as well as social objectives connected with the Group's business and place in the wider community'. The Group's charitable donations amounted to £1.6 million, of which £1.1 million were made in the UK. These included support for Community Foundations, The Prince's Trust and Help for Heroes. Elsewhere, Rolls-Royce made charitable donations of £300,000 in North America, £100,000 in Germany and £100,000 in other regions. These donations included support for the work of United Way in North America and for the victims of the earthquake in China, among others.

A further £2.7 million was contributed in sponsorships and educational programmes, including the Smithsonian National Air and Space Museum in North America, the Brandenberg Summer Festival in Germany, and sponsorship of the Cub Scout Scientist Badge in the UK.

The Group has a stated policy of working closely with governments and institutions to highlight the many career opportunities that science and engineering can offer.

Our flagship education programme, the Rolls-Royce Science Prize, recognises excellent and innovative science teaching in the UK and Northern Ireland. This year's winner, St Anne's Primary School in Antrim, Northern Ireland, received a total of £20,000 for their project on the treatment and uses of water. In all, £120,000 was awarded to 59 schools to improve science teaching and learning.

During 2008, the Science Prize programme was extended through the sponsorship of Project ENTHUSE. This project will provide free professional development courses to teachers in the UK through the National Science Learning Centre.

Employee time
Employee time contributed during 2008 is estimated at a value of at least £1.7 million, with more than 4,000 employees participating in activities such as community projects and team building activities with societal benefits.

A number of employees in the UK, North America and Germany completed a substantial community project as part of their personal development. Over 150 employees took part in 15 projects during the year, which are recognised at the Group’s Annual Learning and Development Awards.

A UK project with arts partner sinfonia ViVA was awarded the Arts & Business People Development Award 2008, which recognised our innovative approach to managing business change through an arts-based programme for team building.

Employee giving
In addition to the Group’s own contributions, Rolls-Royce finances the administration of a Payroll Giving Scheme for UK employees, enabling them to make tax-free donations to their chosen charities. During 2008, employees gave almost £444,000 to more than 350 charitable causes of their choice. The scheme is recognised as Gold Award standard by the UK Government’s Payroll Giving Quality Mark, with approximately 16 per cent of employees participating in the scheme. In North America, employees have contributed £172,000 directly from payroll to good causes through the United Way scheme, a percentage of which is matched by the Group.

In-kind support
The Group also supports community and educational organisations with in-kind donations, including places on Group training courses and the loan of engines and components.