WEF Core ESG Metrics — Disclosures and Index
CareTech’s 2021 ESG Report covers its UK business; more recent acquisitions (e.g. Smartbox and Purple) and international operations are not fully included in this report but will be integrated into future reporting.
Materiality Evaluation — World Economic Forum Core 21 Topics
Tier 1: Topics of High Strategic Importance and Impact
Tier 1
Governing Purpose
G1.1
Setting Purpose
CareTech Disclosure
CareTech’s purpose is inherent in all that we do. We enable children, young people and adults with complex needs to make their own life choices, and build confidence and independence to live, learn, thrive and engage, building better futures. We refer to this as providing Extraordinary Days, Every Day.
Comment
All of our stakeholders value our purpose-led culture - it is a unique aspect of CareTech culture that differentiates our service and unites us behind a shared intent to deliver the very best that we can for all those in our care.
G2
Quality of Governing Body
G2.1
Governance body Composition
CareTech Disclosure
Comprising seven directors (of which three are non-Executive) the board is committed to the highest level of corporate governance and believes that effective corporate governance framework is essential to underpin the success of the business; supporting management while ensuring an appropriate level of challenge and exercising proper oversight while facilitating decision making.
The board is focused on taking steps to enhance standards of governance and disclosure and is committed to achieving the highest standards of integrity, ethics, professionalism and business practice throughout the Group operations. Last year we welcomed the changes to corporate governance in the new UK Corporate Governance Code. We implement an annual ‘Well Led’ review following the CQC methodology and lines of enquiry.
The board is assisted by three committees: Care Quality & Governance Committee; Audit Committee; and Remuneration Committee.
The directors combine their extensive experience in the social care sector to inform strategic direction. A full profile of the board’s experience, tenure and other accountabilities/responsibilities can be found in the CareTech Annual Report 2021. An annual review of Executive leadership responsibilities and capabilities is conducted, with training provided as required – specifically with reference to mandatory training requirements (e.g., IG, Bribery & Fraud Act). An annual declaration of interest & gift & hospitality register is completed.
CareTech is a regulated business in the social care sector with care quality and ethics governance at its core. As an emerging agenda, expertise in environmental topics is less well represented at board level and the board is taking steps to ensure that they are equipped to meet forthcoming regulatory and business requirements to address the strategic challenges of climate change and social responsibility with the launch of a new Responsible Business programme and ESG reporting framework in 2021.
CareTech employs a highly diverse workforce, and the board recognises that similarly diverse representation at the highest level is important. The Board has good diversity in respect of members from minority ethnic communities and Executive Director Mike Adams OBE, as a leader in disability rights, also brings an important perspective to the board. The Board recognises that women are under-represented on the board and is focussed on addressing this issue, building on recent appointments to the Board including Dr Moira Livingston’s role as Chair of the Quality Committee.
There is no direct stakeholder representation at board level, but the business formally consults with shareholders on a twice-yearly basis and its Staff Consultative Committee provides a formal channel for staff to provide feedback.
Comment
The composition of our governing body is of importance to all stakeholders, in particular the investment community and our regulators. To protect the integrity, expertise, professionalism and success of our business we are focused on ensuring that our board not only meets the statutory requirements but is equipped to deliver the financial and quality performance standards that we are committed to meeting.
G3
Stakeholder Engagement
G3.1
Material issues affecting stakeholders
CareTech Disclosure
CARE4 is constructed to address the sustainability issues that we have identified as material to our business; 21 of these are drawn from the WEF ESG framework and an additional set is drawn from our understanding of our stakeholder priorities. We consult with shareholders on a formal basis twice a year and on an ad hoc basis throughout the year to identify priorities. In response to requests from staff in 2020, we launched a new staff forum and a staff survey in 2021 to facilitate engagement and feedback. We regularly receive feedback from our commissioning and regulatory bodies. We are currently exploring digital tools that will enable us to engage better with our diverse service users across multiple locations.
Comment
Understanding the material ESG issues that affect the success of CareTech is foundational to business success. We recognise the importance of this to our stakeholders and are committed to stakeholder consultation to ensure that we align business strategy to their priorities.
G4
G4.2
Protected ethics advice & reporting mechanisms
CareTech Disclosure
As the Group extends into new service areas and develops wraparound offerings, such as ‘Smartbox’ assistive technology, ethics and advisory committees provide oversight and assurance of the efficacy and best interests of individuals who participate in our innovative programmes.
There is a commitment to seeking independent expert advice to inform our development of, and commitment to new service offerings that goes ‘beyond commercial’ and promotes the rights, preferences, and quality of life for all individuals in our care. Where there are legislative requirements, such as the rights of individuals detained under the Mental Health Act in our services, we actively promote all staffs’ understanding of equality and human rights.
Comment
Our success is dependent upon the positive impact that we have for individuals in our care, thus a focus on ethics and efficacy is of primary importance and is inherent in out processes and culture. This is an essential aspect of our approach for all stakeholders, in particular for our service users and their families, and the people who work for us, and of course also to commissioners and regulators.
G5
Risk & Opportunity Oversight
G5.1
Integrating risk and opportunity into business processes
CareTech Disclosure
CareTech is long-term contractor with the public sector over 26 years, and Social Care is not an inherently high-risk business proposition.
We identify five key corporate risks categories:
• Finance (including market oversight activity with the CQC)
• Compliance (including quality assurance and improvement)
• Safety (including Health & Safety responsibilities)
• Service delivery/operations
• Reputation and engaging with stakeholders
These categories are closely managed through the Corporate Risk Register with regular review to assess degree of risk and response to any issues arising conducted by the executive team. Accountability for the Risk Register lies with the Group Board. The Risk Register is assessed using a RAG rating and the Board addresses issues rated as ‘red’. An updated Group Board Accountability Framework to include risk appetite is in place for 2021-22 operating year
The business undertakes an annual review of business continuity plans for each service and consolidates any actions to mitigate risk from adverse weather incidents, flu outbreaks etc. A full winter pressures/emergency planning procedure is submitted to the CQC and to commissioning local authorities on request.
Business continuity plans cover property heating, insulation, flooding, and other local risks to individuals living in properties and to staff working in services. An annual schedule of maintenance and improvement is in place with ambitions to actively contribute to reducing the corporate carbon footprint.
Comment
As a regulated business, management of risk is central to our approach and our ‘license to operate’. Our risk profile is of significant importance to financial and commercial partners as well as our ability to capitalise on opportunities arising. As a care provider we have a long-term business model and effective risk management is essential to protect continuity for those in our care.
PP2
Health & Wellbeing
PP2.1
Health & Safety
CareTech Disclosure
DISCLOSURE A:
Zero work related fatalities. All work-related injuries are recorded and reported to insurers. High value claims (in excess of £100,000) are monitored through the Board. Work related injuries account for less than 1% of workforce annually.
DISCLOSURE B:
The company provides an employee support line that includes access to a range of mental health and counselling services. Through the CareTech Foundation, all employees and their families can apply for support if they face significant financial hardship, including for example, support with funeral costs.
Comment
Health and wellbeing are of particular importance to our employees, and as a business dependent on skilled and committed people, we recognise the critical importance of protecting and enhancing their wellbeing
PP3
Skills for the Future
PP3/1
Training Provided
CareTech Disclosure
DISCLOSURE A:
On average, each employee receives 5 days of training per annum. We are not able to break down by gender/employee category at this time.
DISCLOSURE B:
Total training costs, including our Apprenticeship Levy contributions, of approximately £5.2m have been incurred across the total Group headcount of 11,000+ to provide an average training and development expenditure per employee of £452.
Comment
The quality of service we provide is heavily dependent on the people who deliver it and so we are committed to ensuring that they have access to the skills development required. This is a key strategic priority.
All our stakeholders place importance on a skilled workforce. Our employees seek to constantly improve the standards of care that they deliver and so we invest in enabling high standards.
PR1
Employment and Wealth Generation
PR1.1
Absolute number & rate of employment
CareTech Disclosure
We currently record age, gender and ethnicity data for new joiners, during 2022 we will extend data capture to all staff.
DISCLOSURE A:
New joiners in 2021 by gender, ethnicity, age group and hourly pay by gender
New Joiners – Gender
Women: 2672
Men: 1197
Ratio W:M 2.2:1.
New Joiners – Ethnicity
|
ETHNICITY |
|
| White | 1400 |
| Mixed or Multiple Ethnic Groups | 42 |
| Asian or British Asian | 74 |
| Black, African, Caribbean, or Black British | 283 |
| Other Ethnic Group | 21 |
| Not disclosed | 2050 |
| TOTAL | 3870 |
New Joiners – Age Group
|
AGE CATEGORY |
||
| 18-24 | 796 | 21% |
| 25-34 | 1227 | 32% |
| 35-44 | 764 | 20% |
| 45-54 | 671 | 17% |
| 55-64 | 362 | 9% |
| Above 64 | 42 | 1% |
| Not disclosed | 8 | 0% |
| TOTAL | 3870 |
New Joiners – Hourly Pay by Gender
|
PAY GROUP |
FEMALE |
MALE |
| £90+ | 1 | 2 |
| £60.01 - £75 | 2 | 3 |
| £45.01 - £60 | 2 | 5 |
| £30.01 - £45 | 19 | 21 |
| £15.01 - £30 | 196 | 65 |
| £9.01 - £15 | 1321 | 507 |
| £9/hr | 667 | 278 |
| No rate recorded | 464 | 316 |
| TOTAL | 2672 | 1197 |
*1 employee undisclosed
DISCLOSURE B:
Employee Turnover: Our staff retention rate is 71%
Comment
CareTech services play an important role in local economies and we recognise the importance of meeting the priorities and needs of the communities in which we operate. Our success provides work and opportunity for those who we employ and also the businesses that we engage with. Conversely, our success is intrinsically linked to the positive interactions that we have with community stakeholders.
PR1
Employment and Wealth Generation
PR1.2
Economic Contribution
CareTech Disclosure
DISCLOSURE A:
- Revenues - £489M
- Operating costs - £88.9M
- Employee wages and benefits - £285M
- Payments to providers of capital - (working capital, equity capital and debt capital) - Payments to providers of debt consist of £12.4M interest, £5.8M capital and £0.4M arrangement fees.
- Payments to government - £28.7M
- Community investment - Charitable donations to the CareTech Foundation amounted to £1.2M. The Group has committed to donation 2.5% of our pre-tax profits to the Foundation.
DISCLOSURE B:
Covid-19 social care grants received of £2.7M
The Group has incurred additional costs as a result of COVID-19 in relation to higher sickness absence rates, personal protective equipment (PPE) costs, infection control and higher administration costs. The Group has received additional funding by way of Government grants through local authorities to assist in dealing with this. The Group has worked closely with all local authorities in establishing a dedicated funding arrangement to support our services which has been collected to offset the additional costs, as noted above, that the Group has incurred in relation to COVID-19.
Comment
Sustainable economic contribution enables our business to continue to provide value for all stakeholders. As a core objective for our business and our stakeholders, we place considerable focus on this issue.
PR1
Employment and Wealth Generation
PR1.3
Financial Investment Contribution
CareTech Disclosure
DISCLOSURE A:
Capital expenditure was £31.5m which includes £11.8m to purchase and develop new sites, £16.8m maintenance capex and software development of £2.9m. Depreciation and amortisation for the year amounted to £19.5m and £10.3m respectively.
DISCLOSURE B:
Dividends paid in the year of £14.4m
We continue to maintain a progressive dividend policy. The Board has proposed a final dividend of 9.5p (2020: 8.75p) per share bringing the total dividend for the year to 14.1p (2020: 12.75p) per share. This represents a full year increase of 10.6% year on year.
No share buybacks occurred during the year.
PR2
Innovation - Better Products & Services
PR2.1
Total R&D Expenses
CareTech Disclosure
Research costs expensed £0.95M
Development costs capitalised £1.6M
Comment
To deliver on stakeholder expectations of growth and impact, we are committed to investing in innovation that will enable us to meet our purpose and enable independence for increasing numbers of people in our care.