KBR - Built on Values - Sustainability Report 2014

Transcription

Built on Values
Our Story Continues
SUSTAINABILITY REPORT 2014
2014 KBR SUSTAINABILITY REPORT
Contents
2
5
9
11
16
18
Commitment
Integrity
Transparency
Accountability
Responsibility
GRI
> ABOUT OUR REPORT
> OUR EMPLOYEES
> ECONOMICS AND
>ENVIRONMENT
>PROJECTS
> GLOBAL REPORTING
> LETTER FROM
THE CEO
>> Code of Business
Conduct / Ethics
>> Zero Harm
FINANCE
>>Economics
>>Finance
>> Message from
VP HSSE
>>Environmental
INDEX 4.0 INDICATORS
Statistics
>> Human Rights
>>Volunteering
>> Community Projects
>> Safety Statistics
>> Health and Wellness
>>EAP
ABOUT OUR REPORT
KBR’s Corporate Sustainability Report, “Built on Values – Our Story Continues”, discloses our significant social, environmental and economic impacts to provide
our stakeholders a way to assess our commitment to corporate sustainability. Our stakeholders include shareholders, customers, employees, government and
industry partners, and the communities we serve.
The Global Reporting Initiative (GRI) promotes the use of sustainability reporting as a way for organizations to become more transparent. GRI’s mission is to make
sustainability reporting standard practice.
This report, which covers business activity in calendar year January 1, 2014 to December 31, 2014, has been prepared according to GRI G4 Core guidelines and
reflects KBR’s relevant and material aspects of sustainable development. Previous reports were published on a three-year basis. With this report, our third, we
are moving toward an annual publication.
If you have questions on this report please email us at [email protected].
Click here for more information on our website
2
Commitment
A MESSAGE FROM OUR PRESIDENT AND CEO
We Deliver.
As a company that develops technology, designs and
builds energy infrastructure and provides services to
government clients around the world, we have the potential
to leave lasting footprints wherever we go. At KBR our
philosophy has always been to treat other people’s
communities with the same respect as our own. We
focus on Health, Safety, Security and Environment (HSSE)
because we believe in leaving a place as good as, or even
better than, we found it.
The theme of this year’s report – “Built on Values” – reflects our commitment
to doing the right thing for our people, our clients and partners, and the
communities and countries in which we do business.
When I joined this company as CEO in June of 2014, I knew I was coming
into an organization with a 100-year history of serving clients wherever
and whenever they needed KBR to be. Whether it’s providing the technology
and consulting know-how to develop our customers’ valuable global assets;
designing and constructing the infrastructure and facilities to develop the
world’s energy resources; providing support and services for men and
women of their countries’ armed forces; or navigating the intricacies of
undertaking major projects in geopolitically or culturally sensitive
environments, KBR delivers.
However, KBR’s proud tradition of service and accountability is not an end.
Rather it inspires a pressing and continuing commitment to live up to the
ideals established by those who came before us and to advance those
ideals for the next generation of KBR leaders and employees.
In 2014 we took steps to move our company toward a more sustainable
future.
Safety has been a core value of KBR since 1961 when Brown & Root
founder Herman Brown distributed a letter to each employee that
became the basis for our safety programs. In August we appointed a Vice
President of Health, Safety, Security and Environment (HSSE) and for the
first time established a direct line of HSSE reporting to the office of the
CEO, emphasizing our commitment to Zero Harm starting at the highest
levels of KBR and continuing throughout the organization.
n
In November we introduced our Zero Harm safety program. More than
merely an initiative, Zero Harm is a vision. It establishes a culture of
safety where safe execution is non-negotiable and no incidents are
tolerated. With an emphasis on training, personal responsibility and
accountability, Zero Harm underscores the belief that all incidents are
preventable and empowers everyone in the organization to avoid any
situation that could put our employees, subcontractors or clients at risk.
n
As part of our commitment to economic sustainability we conducted a
major strategic review of our operations and in December announced a
major business transformation creating a new KBR focused on our core
strengths in consulting, technology, engineering and construction, and
government services and structured along delivery lines that will enable
us to meet the expectations of our customers and other stakeholders.
This, combined with reduced complexity, will provide a more robust
balance sheet, greater accountability and empowerment for our people,
and position KBR to meet the challenges of the future.
n
In an effort to encourage greater communication and transparency,
KBR’s Executive Leadership Team began seeking opinions throughout
the organization including from the KBR IMPACT Group – the global
network for KBR’s future leaders – on how to bring alive the actions that
ultimately demonstrate our values and drive our day-to-day business
activities. Together we defined a collection of core behaviors that form
the backbone of our corporate culture and reinforce our shared mission
of We Deliver.
n
3
Commitment
A MESSAGE FROM OUR PRESIDENT AND CEO
We Deliver.
KBR’S BEHAVIORS ARE:
WE DELIVER
We are committed to standing by our promises
to deliver projects through collaboration, discipline, and the KBR Way.
WE VALUE OUR PEOPLE
We value and respect our employees as people.
We are committed to Zero Harm for every person.
We emphasize development of each person to
reach his or her full potential.
WE ARE PEOPLE OF INTEGRITY
We are people of character. We value honesty,
trust, courage, prudence, and tenacity. We will
not sacrifice our integrity.
WE EMPOWER OUR EMPLOYEES
We trust our employees to be independent
decision makers while being held accountable to
quality and delivery. We enable our employees
to be proactive in their work and adaptive to
change.
WE LEAD BY EXAMPLE
We own our work, individually and as a
company. We have a passion to deliver high
quality work and a will to succeed. We value the
success of KBR over individual success. We are
ONE KBR.
KBR is a company of people, more than 25,000 employees doing business in
70 countries, and it is to our people who we owe our best effort. We conduct
business ethics training and have a robust code of conduct that applies to all
employees and reflects how highly we value principled business practices.
We believe that every employee has the right to expect a safe, healthy workplace and so we begin meetings with a safety moment, discussing specific
on-the-job risks and how to mitigate them. Our Zero Harm culture underscores
and supports our safety commitments.
To do this requires the will and the courage to adapt to an ever-changing and
challenging future by understanding and meeting the needs of customers in
diverse markets without succumbing to market volatility and risk. It means
responding to the concerns and values of all of our neighbors in a respectful
and accepting manner in accordance with the customs and needs of each
community in which we operate. It means understanding that a company
thrives not just by capturing markets, but by serving the people, cities and
countries of our global community.
In addition to providing training, skill-enhancing and development
opportunities to employees in our offices and worksites, we also work
with local community colleges to identify needed job training courses in order
to help build and maintain the workforce of the future. We’re providing jobs to
local people, fair trade opportunities to local companies and support to
local communities.
We are honored to have the opportunity to work with clients around the
world building the projects of the future and helping to contribute to a better
tomorrow for everyone.
In turn, KBR employees commit thousands of hours to their communities –
supporting schools, cleaning parks, funding playgrounds, planting trees and
providing much needed supplies and assistance to those in the communities
who need it most. We also give hundreds of thousands of dollars to charitable
organizations around the globe to help support worthy causes aimed at
providing more educational opportunities, increased health or prevention
benefits, and environmental improvements in the communities in which
we live and work.
At KBR we understand that building a sustainable future – one that is built
on values – is a never-ending process. In today’s global society, the role of
a corporation goes beyond providing returns to shareholders, wages to
employees, and products and services to its immediate customers. We
believe we have a responsibility to also make our world a better place
and we embrace that responsibility.
Stuart Bradie,
KBR President and CEO
4
Integrity
Our Employees
CODE OF BUSINESS CONDUCT (COBC)
At KBR we believe that integrity is the most
important value we hold, and it must never be
sacrificed for the sake of profits. This belief is
reflected in our COBC – the ethical standards and
legal principles that are the foundation of our
company. KBR’s COBC influences every aspect of
our business, from how we help our customers
develop their resources, to the way we interact
with the communities where we live and work,
to how we treat our people and everyone with
whom we come into contact.
KBR’s Board of Directors adopted the COBC to
establish a common set of ethical standards and
legal principles that the company expects every
employee to exhibit when dealing with clients,
communities and each other. KBR also expects
third parties working on behalf of the company
to adhere to the same ethical standards, and will
not condone any illegal or unethical actions.
KBR conducts its business in compliance with all
applicable laws and in accordance with ethical
standards. In some situations, the applicable
laws of the United States may conflict with those
of another country. In such cases, the company
will endeavor to resolve such conflicts following
the guidance of our Legal Department. Where
such a conflict cannot be resolved, the applicable
laws of the United States will be observed and
complied with.
It is the personal responsibility of each employee
to adhere to the standards and restrictions
applicable to his or her assigned duties and
responsibilities, whether imposed by applicable
laws or the COBC. Each employee must avoid any
activities that would involve the company in any
practice that is not in compliance with the COBC.
Any employee who does not adhere to such
standards and restrictions is acting outside the
scope of his or her employment, responsibilities
or agency.
Beyond legal compliance, all employees are
expected to observe high standards of business
and personal ethics in the discharge of their assigned duties and responsibilities. This requires
the practice of fair dealing, honesty and integrity
by employees in every aspect of engaging with
company employees, the public, the business
community, shareholders, customers, suppliers,
partners, competitors and governmental and
regulatory authorities. Employees, when acting
on behalf of the company, will not take unfair
advantage through manipulation, concealment,
abuse of privileged information, misrepresentation of material facts, or other unfair practices.
Employees have the responsibility to read,
understand, and comply with the COBC and
to participate in company-mandated COBC
training. Any employee who compromises or
violates the provisions of the COBC may be
subject to disciplinary action including
termination and, if applicable, criminal or
civil proceedings.
Examples of conduct that may result in
disciplinary action include violating COBC
policy, requesting others violate COBC policy,
or failing to promptly report a known or
suspected COBC violation.
When in doubt about the propriety of a particular
course of action, employees are encouraged to
contact the Ethics Hotline or any member of the
Law Department.
Full disclosure of our COBC can be found at
https://www.kbr.com/Documents/COBC_English.pdf
ETHICS
The ethical principles contained in our COBC
demonstrate our commitment to perform our
mission with the highest integrity. KBR offers an
independently operated, global ethics hotline for
reporting possible violations of the KBR COBC or
applicable anti-corruptions laws.
In the United States in 2014, there were 24
discrimination claims resolved in mediation or
arbitration through KBR’s Dispute Resolution
Program and one harassment claim resolved in
arbitration. Globally, in 2014, KBR’s Ethics Hotline
received 465 calls, with 47 percent related to
COBC issues.
5
Integrity
The KBR Zero Harm Program
HSSE BRANDING
CMYK
We have reinvigorated our safety program through
a series of campaigns aimed at realignment and
refocus our efforts by creating a step change that
makes a good program greater.
measures and tracks the level of engagement
that project leadership expends towards
safety initiatives.
Keys to Life: The KBR Keys to Life are field
related activities that have been identified as
having the highest potential to cause serious
injury. The keys are diligently managed at all
field locations where they establish a clear
set of injury mitigation
standards in an effort to trigger robust
employee engagement.
n
The nature of KBR’s business requires
our people to meet challenges and
deadlines every day, safely and
responsibly. In 2014, KBR employees
worked more than 172,000,000 hours
at over 600 facilities around the
world with a resulting recordable
injury rate of 0.30.
The KBR Zero Harm initiative was launched in late
2014 with key components specifically designed
to engage employees with our overarching theme
that zero incidents are achievable. Central to
this are our seven fundamental HSSE Absolutes,
each of which contain elements that support our
company and HSSE program vision. These are:
Total Safety Task Instructions: The KBR
pre-task risk assessment and mitigation
conducted prior to task commencement.
Employees work together to identify task
related hazards reinforcing not only safety
training but also teamwork.
n
Courage to Care Conversations: The
Courage to Care Conversation process is a
behavioral and observational based safety
program that empowers employees to intervene with co-workers when unsafe acts are
observed in addition to reinforcing positive
behaviors. Employees are encouraged to
exercise the Courage to Care Conversation
process in their personal lives in an effort to
extend a safety mentality all day, every day.
n
While many consider this recordable injury rate
an admirable achievement, KBR views it as the
next threshold on which we must improve. The
only way to maintain this level of commitment
to continuous improvement is with a matching
commitment to the health and safety of our
people and to the environment.
At KBR, HSSE is highly integrated into our training,
facility and project planning, and a corporate
culture that values and believes in each person’s
ability to achieve complete HSSE success. That
success begins with being a safe and healthy
individual who mitigates safety risks at work and
home, and also has the courage and feeling of
empowerment to intervene when he or she sees
others at risk.
MyKey Stop Work Authority: MyKey
represents each employee’s right to stop any
task if there is a perceived danger or risk,
regardless of that employee’s position or level
of authority.
n
Safety Energy: Safety Energy is the KBR
leading indicator program that is a proven
best practice. Safety Energy continuously
n
Key Office Behaviors: The KBR Key Office
Behaviors are safe office behaviors that are
actively managed in all office locations. The
Key Office Behaviors provide a high level of
engagement in an environment that is typically
more introverted in nature.
n
Incident Review Board: The Incident
Review Board provides a method for incidents
to be reviewed through a fair, consistent,
and equitable process. The Incident Review
Board ensures all high potential incidents are
thoroughly reviewed by business segment
leadership as well as serves as a global
lessons learned communications platform.
n
Implementing and highlighting these HSSE
Absolutes within our business has proven
successful based on our incident rates. But at
KBR we view incident rates as a representation
of someone – a person, a family member, a friend
– who suffered as a result of an unsafe act or
condition. It is for this reason that we strive to
make continual improvements to our programs.
Zero Harm is about learning from our past to
make today successful and creating a sustainable
future for our employees and operations.
Message from HSSE Vice President
“Sustainability plays a vital role in the
future of our business. The demand for
businesses to contribute to the communities
where they operate is here, and we must
respond to that demand in a way that
demonstrates our commitment to create
value for our stakeholders. We have made
significant progress in our sustainability
efforts, from compliance initiatives that
ensure continuous improvement in our
safety, environmental and quality management systems to project pre-planning
efforts that incorporate programs designed
to serve the communities in which we are
engaged in. Sustainability is integrated
into all areas of our operations, and KBR
continues to be willing and capable of incorporating these sustainable development
activities for the benefit of the community,
our operations, and our clients.”
Nick Anagnostou, Vice President
Health, Safety, Security and Environment
6
Integrity
Safety Statistics
SAFETY INCIDENTS, 2011 – 2014
0.37
(468)
0.40
0.38
(277)
0.35
(284)
0.35
0.30
(257)
0.30
0.25
0.20
0.15
0.10
(128)
0.10
0.09
(73)
0.07
(48)
0.04
(34)
0.05
0.00
2011
2012
Recordable Incidents
2013
On Feb. 10, employees at KBR’s Corporate Headquarters gathered to sign a Zero Harm banner, a large, visible testament to each individual’s
personal commitment to safety. Personnel at office facilities and sites around the globe conducted similar banner signing ceremonies.
2014
Lost Time Incidents
Safety incident numbers include subcontractors and joint ventures
RECORDABLE INCIDENTS BY REGION, 2011 – 2014
5.3%
0.4%
1.7%
4.5%
4.6%
2.9%
1.4%
7.0%
13.6%
13.0%
1.4%
8.1%
8.3%
60.3%
51.4%
44.7%
2011
North America
Middle East
5.4%
2012
Europe
Africa
56.8%
6.2%
14.1%
27.5%
43.4%
17.9%
Australia
2013
Asia
2014
7
Integrity
Our Employees
EMPLOYEE HEALTH AND WELLNESS
Flu Shots
KBR people are known for their hard work,
dedication and drive to deliver innovative
solutions to every challenge – from creating safe,
efficient technology that helps customers develop
their resources, to designing and constructing the
facilities and infrastructure that power our world,
to providing support for militaries and governments
around the globe. To attract such people, we
must offer rewarding careers, opportunities
for professional and personal development,
equality of opportunity, flexible compensation,
fair treatment and the expectation that they will
be treated with dignity and respect.
In 2014, 1,617 employees received free flu shots
at seven KBR offices throughout the U.S. We
also provided flu shot vouchers for use at local
pharmacies to employees who work at locations
where it is not feasible to provide on-site
vaccinations.
WELLNESS PROGRAM
The most successful and productive employees
are usually the healthiest. Understanding the
many stressors and obligations that exist in our
employees’ lives and the challenges involved in
maintaining wellness with so many competing
demands in today’s world, KBR makes the health
of our employees a top priority. Through our many
health-focused programs, we demonstrate to our
employees that we care and want to retain them
as valued, long-term team members.
IN THE U.S.
Health Screenings
In 2014, 1,570 employees across the U.S.
participated in free on-site health screenings.
Screenings include a blood pressure, body fat
and body mass index measurement; a cholesterol
test (glucose, HDL/LDL and triglycerides); and
a waist-circumference measurement. At the
screening, participants may discuss their test
results and options for improving their health
with a health coach.
Healthy Steps
This wellness program rewards U.S. employees
financially for taking specific measures to
protect and improve their health. KBR employees
had the opportunity to participate in the Health
Screenings. If employees’ screening results were
within healthy ranges, they automatically earned
a premium discount for 2015. If employees’
screening results fell below the healthy ranges,
they were required to either participate in health
coaching or improve their numbers on their own
to receive the premium discount. For 2014, 1,151
employees received the discount on their 2015
medical premium.
GLOBALLY
In the U.K. and Australia, flu shots and vouchers
were offered to employees. Employees in South
Africa take advantage of a cash back benefit
from their medical plan that reimburses costs
associated with purchasing healthy foods, fitness
clothing and gym memberships. In the UAE,
health checks were carried out for the first time
in 2014. Singapore employees participated in
numerous organized wellness activities including
team sports and family days while also taking
advantage of on-site health screenings. Indonesia
conducted flu shots and sponsored several
employee sports activities.
In addition to these wellness programs, KBR
offers other initiatives to help employees stay
healthy including on-site health fairs, coaching
for lifestyle and chronic conditions, on-site chair
massages and discounts for fitness facilities,
weight-loss programs and retailers that offer
healthy food options.
EMPLOYEE ASSISTANCE PROGRAM (EAP)
As an integral part of our ONE KBR and Zero Harm
culture, KBR’s EAP provides confidential,
professional mental health counseling and
related services free of charge to employees
and their dependents. This helps to ensure
that KBR employees are emotionally healthy,
safe and productive and able to meet our
customers’ requirements.
KBR’s EAP organization is staffed internally in the
U.S. by a range of licensed mental health professionals, including licensed clinical social workers,
licensed professional counselors, licensed
chemical dependency counselors and certified
employee assistance professionals.
EAP offers 24-hour crisis intervention, stress
management for critical events and individual
consultations covering a wide variety of issues
including marital troubles, substance abuse, child
rearing, elder care and mental issues.
Additionally, EAP counselors routinely consult
with supervisors and managers on issues that
include workplace crisis intervention, addressing
employee performance problems, as well as
supervisory topics involving change management,
human relations, communications, and emotional
resiliency. EAP tools and resources are available
Employees attend the annual benefit fair sponsored by
Wellness@KBR where they receive free flu shots. The fair is
part of KBR’s commitment to ensuring the health and well being
of every employee.
to help our employees and their supervisors reach
their full potential so they can be independent
but accountable decision makers, proactive in
their work and responsive to the needs of
KBR’s customers.
8
Transparency
Economics and Finance
Economic sustainability for KBR means creating
a company that will last for generations to come.
In 2014, we strengthened our commitment to
deliver superior returns to our shareholders and
backed it with sustainable business practices
that ensure profits today and in the future. We
focused on our core strengths in consulting,
technology, engineering construction, and government services; restructured the organization to
better meet the expectations of our customers
and other stakeholders; and improved our capital
and operational efficiency.
Ensuring a sustainable company means creating
our own future rather than reacting to whatever
is happening in the marketplace. It means looking
beyond short-term gains and quick profits to creating opportunities for long-term financial value
and being valued by our customers.
ECONOMICS
Good governance is the hallmark of a well-run,
economically sustainable company. KBR’s Board
of Directors adheres to a fair and honorable model
of governance to guide its role as the guardian
of shareholder interests. KBR’s Board has four
standing committees to which it has delegated
certain duties and responsibilities: Audit,
Compensation, Nominating and Corporate
Governance (“NCG”), and Health, Safety,
Security, Environment and Social Responsibility
(“HSSE&SR”).
The NCG Committee’s responsibilities include,
but are not limited to:
developing, implementing and periodically
reviewing KBR’s corporate governance
guidelines;
n
developing and implementing a process to
assess board and committee effectiveness;
n
identifying individuals qualified to become
board members, consistent with boardapproved criteria; and
n
determining the composition of the board
and its committees, including selection of
director nominees for the next annual meeting
of stockholders.
n
The HSSE&SR Committee’s responsibilities
include, but are not limited to:
reviewing and providing input to KBR on the
management of current and emerging health,
safety, security, environmental, and social
responsibility issues;
n
reviewing the status of KBR’s health,
safety, security, environmental, and social
responsibility policies and performance,
including processes to ensure compliance
with applicable laws and regulations;
n
reviewing KBR’s health, safety, security,
environmental, and social responsibility
performance to determine consistency with
policies and goals;
n
overseeing KBR’s activities in managing
its major risk exposures within the health,
security, environmental, and social
responsibility areas; and
n
reviewing KBR’s political and charitable
contributions and social responsibility
activities.
n
9
Transparency
Economics and Finance
FINANCE
KBR operates in highly competitive markets throughout the world. We believe we offer
a competitive advantage in the following ways:
market-leading health, safety and environmental standards and sustainable practices
n
customer relationships
n
successful prior execution of large projects in difficult locations
skilled and experienced technical personnel. A large number of companies are competing in the markets
served by our business, including U.S.-based companies such as Bechtel Corporation, Fluor Corporation,
Jacobs Engineering Group Inc., AECOM Technology Corporation, and international-based companies
such as Amec Foster Wheeler plc, Chicago Bridge and Iron Company N.V., Chiyoda Corporation, JGC
Corporation, McDermott International, Inc., Petrofac, Saipem S.p.A., Technip S.A., Wood Group PSN
and WorleyParsons. Since the markets for our services are vast and extend across multiple geographic
regions, we cannot make a definitive estimate of the total number of our competitors.
n
technical excellence and differentiation
n
high value in delivered projects and services measured by performance, quality, operability and cost
Years ended December 31
n
service delivery, including the ability to deliver personnel, processes, systems and technology on an
“as needed, where needed and when needed” basis with the required local content and presence
n
Dollars in millions,
except per share amounts
2014
2013
2012
2011
2010
Statement of Operation Data:
consistent superior service quality
Revenues
$ 6,366
$ 7,214
$ 7,770
$ 9,103
$ 9,962
financial strength through liquidity, capital capacity and the ability to support warranties
Gross profit (loss)
(65)
417
518
640
689
Equity in earnings of unconsolidated
affiliates
163
137
151
158
137
Impairment of goodwill, asset impairments
and restructuring charges (a)
(660)
—
(180)
—
(5)
Operating income (loss)
(794)
308
299
587
609
n
n
breadth of proprietary technology, know-how and technical solutions and
n
robust risk awareness and management processes.
n
KBR conducts business in over 70 countries. Based on the location of projects executed, our operations
in countries other than the U.S. accounted for 63% of our consolidated revenues during 2014, 66% of our
consolidated revenues during 2013 and 73% of our consolidated revenues during 2012.
We market substantially all of our project and service offerings through our business segments. The
markets we serve are highly competitive and for the most part require substantial resources and highly
Please see our 10-K filing for more information on Global Operations.
KBR revenue by geographic location as a percentage of total revenues:
Other countries, 4%
Africa, 4%
Other countries, 2%
Other countries, 3%
Africa, 8%
Europe, 10%
Africa, 21%
Europe, 8%
United States, 34%
United States, 37%
Middle East, 13%
Middle East, 11%
United States, 27%
Europe, 7%
Middle East, 13%
Canada, 12%
Australia, 22%
2014
Canada, 10%
Australia, 25%
2013
Canada, 6%
Australia, 23%
2012
10
Accountability
Environment
ENVIRONMENTAL STATISTICS
KBR is committed to pursuing sustainable environmental solutions to offset human activities that may
contribute to global warming. We make efforts to
mitigate any negative contribution to this issue and
work to find ways to reduce carbon emissions. Year
after year we’ve been recognized by the Carbon Trust
Standard for reducing our carbon footprint.
Although the majority of our energy consumption
is by office operations, we continue to reduce the
overall usage of all natural resources.
Our employees are helping where and when they can
to reduce our greenhouse gas impacts. In 2014 KBR
U.S. offices recycled 360 short (U.S.) tons of paper.
PA P E R C O N S U M P T I O N , L B S
K B R N AT U R A L G A S C O N S U M P T I O N , t C O 2 e
120,000
1,200
100,000
We make every effort to reduce what we use and
recycle generated material as a method to help
sustain natural resources.
328
246
80,000
325,986
230,846
1,814
80,000
281
186,522
800
246
60,000
60,000
837,756
682,021
553,360
644,816
600
1,361
40,000
40,000
808
20,000
0
740
835
45,112
47,886
36,904
41,635
2011
2012
2013
2014
0
20,000
2011
2012
2013
2014
KBR ELECTRICITY CONSUMPTION, tCO2e
10,000
0
78,380
44,316
35,176
31,298
2011
2012
2013
2014
K B R O F F I C E FA C I L I T Y WAT E R U S A G E , G A L L O N S
15,000,000
325,986
8,000
12,000,000
2,372
309,032
800,000
2,448
186,522
230,846
2,918,308
2,315
2,073
6,000
9,000,000
2,242,127
600,000
2,242,127
4,000
400,000
837,756
682,021
553,360
3,662
3,443
3,493
3,224
5,433,490
2,000
27,492
2011
Greenford
30,819
2012
Leatherhead
34,492
2013
6,000,000
644,816
200,000
0
1,361
680
200
1,200,000
1,000,000
1,690
400
T O TA L W E I G H T O F O F F I C E WA S T E , L B S
We continue to work with our clients and suppliers to
find ways to minimize materials that will later become
waste before they get to the project sites. We make
every effort to recycle materials. Containers used to
transport materials to site are used on return trips
to deliver collected and segregated items to recyclers.
100,000
1,000
309,032
K B R G L O B A L T R AV E L E M M I S S I O N S , t C O 2 e
15,971
2014
Birmingham
0
3,053,036
2,920,157
2,999,145
3,000,000
2,802
2,448
2,315
2,073
2011
2012
2013
2014
0
2,854,643
4,588,845
4,165,421
3,064,966
2,216,615
2011
2012
2013
2014
Air
Hotel
11
Accountability
Environment
HUMAN RIGHTS
As an extension of our COBC, KBR adopted a
Global Human Rights Policy that acknowledges
the principles contained in the United Nations
Declarations of Human Rights. While KBR believes
it is the role of government in each country to
protect the human rights of its citizens, our
actions play an important role in upholding
equality, dignity and respect for all people in
the countries where we conduct business.
Our human rights policy serves as a powerful
guide for our employees and subcontractors. For
example, KBR has a zero-tolerance policy regarding
Trafficking in Persons compliance. We enforce
these requirements by conducting pre-award
reviews, mandating that all employees and
subcontractors deployed overseas attend a
Trafficking in Persons training program, performing
monthly inspections at subcontractor temporary
labor camps, and offering an ethics hotline for
employees to report any concerns, including
potential Trafficking in Persons violations.
VOLUNTEERING
EMPLOYEE INVOLVEMENT
KBR employees routinely solve problems and find
solutions for our customers. That’s the foundation of our We Deliver commitment. It’s also a
quality that extends to our employees’ volunteer
activities. Around the world, KBR employees
contribute many hours to the betterment of their
communities. At times, it involves small local
projects – planting trees; cleaning parks; adopting schools and repairing playground equipment;
and lending assistance to the ill, the elderly and
the disadvantaged. While these projects and
causes might seem small in nature, they are ones
for which employees have a real passion. Collectively, their efforts add up to thousands of hours
of volunteer service in hundreds of communities.
Community outreach in the form of volunteering
or cash donations is further encouraged and
facilitated through KBR’s corporate matching
donations and the KBR Cares volunteer program,
the company’s vehicle for organizing volunteer
activities and raising employee awareness of
community needs. A few examples of employee
involvement in 2014:
Bowling for dollars
One of the highlights of the year for KBR’s Houston
volunteers is the Junior Achievement Bowl-a-Thon.
Each year KBR employees volunteer as team
captains and bowlers/fundraisers competing to
raise the most money both within the company
and among other companies in the Houston area.
It’s a hotly contested event, with teams vying
to outdo each other in fund raising, costumes
and team spirit. KBR bowlers raised a total of
$21,476.58 in 2014 to provide financial literacy
training and experiences to America’s future
business professionals.
Lighting up
Hamilton is a small community in northern
Mississippi with a population of 631 and one local
school for grades K-12. For the past two years
KBR has provided maintenance and small capital
services to Tronox Limited’s titanium dioxide
manufacturing operation, which has been part of
Each year KBR employees contribute to the betterment of their communities, volunteering thousand of hours and raising money to
support worthy causes.
the town for more than 50 years. After making do
with an aging manual scoreboard for many years,
the school’s sports teams raised the money to
purchase a new electronic lighted scoreboard for
their baseball field. Unfortunately, the scoreboard
cost more than expected, leaving them without
the funds to have it installed. Hearing of their
predicament, KBR reached out to the school
and asked if they could help. Each day, schedule
permitting, KBR employees would load a forklift,
a manlift and other equipment onto trailers and,
accompanied by a police escort, drive two miles
to the school’s baseball field to work on the project.
It took five days to get the new scoreboard in
place but KBR met the students’ goal to have
it up and working for the Lady Lions baseball
team’s first game of the season. Once again KBR
Delivers – safely, on time and on budget!
Giving from the heart
KBR’s corporate matching donations program
helps employees make contributions to the
local or national charities that are closet to their
hearts. KBR absorbs all of the administrative
costs of the program and adds a 50 percent
matching donation for employee contributions
over $50.00. Employees may donate to one or
more organizations, either through a one-time
contribution or payroll deductions. In 2014, KBR
employee contributions helped fund parks, preserve
estuaries, and provide much needed financial
support to non-profit organizations involved in
education, health and welfare, civic programs,
arts and culture. KBR employee payroll deductions
of approximately $350,000 to various organizations were supplemented with KBR corporate
dollars, for a total of $523,500 in contributions to
worthy causes.
12
Accountability
Environment
COMMUNITY PROJECTS
RAISING THE BAR FOR SAFETY ACROSS QATAR’S
EXPRESSWAY PROGRAMME
It’s the safety superhighway. As Programme
Management Consultant for Qatar’s extensive
Expressway Programme, KBR has 18 projects
in construction, and safety is the driving value
across all project sites. Throughout, KBR’s
health, safety and environment team has guided
consultants and contractors in implementing
highly effective safety initiatives that empower
the project’s many workforces across Qatar. Among
the initiatives are health, safety and environment
toolbox talks and stand downs, weekly management walk throughs, issuing of first aid pouches
for all workers and the use of safety report cards.
The focus is paying off. In 2014, numerous
Expressway Programme projects celebrated
notable safety milestones:
Lusail Expressway, achieved 10 million workhours without a LTI.
n
F-Ring Road, demonstrating a commitment
to an incident and injury-free workplace,
achieved four million work-hours without a LTI.
n
As more Expressway Programme projects move
into construction, the safety focus is expanding
to include road users driving through and around
project sites. In a Qatar first, crash cushions have
been installed along temporary diversion roads.
Traffic mounted attenuator vehicles are also
being used to guide traffic to make journeys even
safer for road users.
By achieving project safety milestones and
expanding safety awareness into the community,
KBR and its program partners are helping to
shape an improved safety culture for construction
projects across Qatar.
KBR REACHES OUT TO CANADA’S ABORIGINAL
COMMUNITIES
Diversity in the workplace is one of the cornerstones that contribute to a stronger workforce.
In Canada, Aboriginal people make up a large and
growing segment of the workforce. That’s why
employees of the KBR Services Group has taken
steps to ensure that they encourage diversity by
reaching out to the local Aboriginal communities.
From hiring subcontractors and tradespeople
to work on KBR projects, to increasing Aboriginal
cultural awareness among KBR staff and establishing relationships within the communities, the
goal is to foster increased trust and openness
among KBR and the Aboriginal communities.
To this end, KBR established the Canada Aboriginal
and Local Engagement Committee designed to
increase Aboriginal awareness and inclusion
in the Canadian communities in which KBR
employees live and work.
Since most of Canada is governed by treaties
with the indigenous people, industry in Canada
has a duty to consult with Aboriginal people,
whose treaty and traditional rights may be
affected by oil and gas projects. But KBR wanted
to do more – honoring our client requirements
while also being proactive and developing our
own long-term relationships with First Nations
and Metis people.
Not only does it make for a better, more diverse
workforce for KBR projects, it also furthers our
sustainable development commitments to develop
projects efficiently and responsibly, reach out to
communities through initiatives that meet their
needs and create greater economic opportunities
for the entire region.
Dukhan Highway Central, with a workforce
of more than 3,000 people, achieved 25 million
hours without a lost time incident (LTI).
n
As Qatar’s ambitious Expressway Programme creates the vital transportation linkages to support the country’s growth, KBR’s highly
effective HSE initiatives are helping to instill a unified safety culture among the many workforces and create a safer future.
KBR Canada’s Aboriginal and Local Engagement Committee is designed to foster greater understanding and engagement with this large and growing segment of the country’s workforce.
13
Accountability
Environment
KBR TEAMMATES RAISE FUNDS, AIR AMBULANCE
AWARENESS AT LEATHERHEAD
CONVERTING TRASH TO ENERGY – SOLID WASTE
AUTHORITY OF PALM BEACH COUNTY
When an employee in KBR’s Leatherhead, U.K.,
office suffered a serious medical crisis while on
the job, his colleagues responded swiftly to help
him, contacting the emergency response service
to dispatch an air ambulance (helicopter) to the
campus, ensuring a successful outcome.
Converting municipal solid waste (MSW), or
trash, into energy is not a new process but new
and emerging technologies are making the process
cleaner and more economical than ever before.
KBR provided engineering, procurement and
construction (EPC) services for the Solid Waste
Authority of Palm Beach County’s Renewable
Energy Facility 2, the most advanced and cleanest
waste-to-energy power plant in North America.
The facility is designed to transform 3,000 trash
per day of MSW into 100 megawatts of clean
energy, providing power for an estimated 40,000
homes and businesses, while reducing the local
landfill deposit rate by up to 90 percent.
One of the biggest surprises for most KBR
employees that day was the fact that the air
ambulance service was not funded through
the U.K. National Health Service, but is
a registered charity that relies on fundraising
to survive. It costs £6 million (USD $9.7 million)
a year to fund the service, which covers the
English counties of Kent, Surrey and Sussex.
The single visit to the KBR campus cost
about £2,500 (USD $3,771).
Since the project was awarded in 2011, KBR
was embedded in the community, employing 259
local direct hire workers during peak construction
in December 2014 and contracting with 21
local subcontractors for engineering, concrete
construction, electrical work, roofing, landscaping,
plumbing, painting and other services. A total of
$136,943,953 was paid to Palm Beach County
firms, including $22,693,474 to small business
enterprises. KBR exceeded its local hire
commitment by 5% for skilled employees and
10% for unskilled employees.
To say thank you, Leatherhead employees decided
to raise money for the service. As part of dress
down Friday, all members of the project were
invited to wear the shirt of their favorite team,
whatever the sport, and pay a fee for the privilege.
The event, along with KBR fund matching, raised
more than £5,000 (USD $7,543) for the air ambulance service. The fundraising had a ripple effect;
KBR employees later ran in a local half marathon
sponsoring the air ambulance.
After a fellow Leatherhead, UK employee’s life was saved through the swift response of the region’s air ambulance service,
KBR employees raised £5,000 (USD $7,543) to fund the program, which relies on charitable contributions.
14
Accountability
Environment
A key element of the contract was to provide
training and development opportunities for
local workers. KBR trained 223 participants in a
wide variety of National Center for Construction
Education and Research courses, from field and
task-specific safety training to craft skills such as
pipefitting, electrical, rigging, project supervision
and crew leadership.
KBR also recruited and trained local U.S. Military
veterans, many of them out of work and living in
transitional housing. Through our award-winning
QuickTrain program, KBR’s ongoing feeder operation for entry level unskilled and semi-skilled
workers, they graduated with basic construction
skills and guaranteed jobs as helpers and laborers
on the project.
The City of Palm Beach’s state-of-the-art waste-to-energy
power plant designed and built by KBR will provide power for
an estimated 40,000 homes and businesses while reducing
landfill use.
KBR RECEIVES FINAL ENVIRONMENTAL
CERTIFICATION FOR FORMER CORPORATE
HEADQUARTERS PROPERTY
When KBR decided to sell the original Brown
& Root headquarters at 4100 Clinton Drive,
Houston, Texas, the company knew that extensive
remediation would be needed to make it ready
for future development. After more than 100 years
of industrial activity both with Brown & Root and
previous owners, the site contained residual
chemicals and other contaminants.
The KBR team knew that transforming the 136-acre
brownfield site for more productive use would be
no small feat. It took five years and multiple KBR
departments and teammates working together
with civic and local elected officials to complete
the remediation process. Approximately 36,000
cubic yards of soil was removed and recycled
for use in commercial/industrial projects,
enabling KBR to reduce the carbon footprint,
lessen resource consumption and lower the cost
of soil disposal.
KBR also applied for a Municipal Setting
Designation (MSD), a tool that is used to
streamline and facilitate urban redevelopment
in Houston.
An MSD creates an area within a municipality
where current and future property owners are
prohibited from using the groundwater for potable
purposes such as drinking, bathing, cooking or
irrigating crops. Since City of Houston water is
supplied by a closed system from surface water
bodies such as Lake Houston rather than shallow
groundwater, this prohibition is merely a formality.
By designating a property as being located within
an MSD, owners are not required to clean up the
groundwater to drinking water standards, thereby
shortening the remediation process and saving
significant sums of money. The Clinton Drive site
is the largest tract approved thus far for an MSD.
KBR received the final certificate of completion
from the Texas Commission on Environmental
Quality in September 2014. In the process it
turned a large, historically impacted, limited-use
site into a greenspace that is ready for new
life as a vibrant residential or commercial
development in the heart of Houston.
Through an innovative redevelopment and remediation program,
KBR transformed the 136-acre brownfield site of its original
Clinton Drive campus into a greenspace for urban development.
15
Responsibility
Projects
To a large extent, the scope and the boundaries
of our approach to corporate sustainability and
sustainable development is defined by who we
are as a service company and what we do for our
customers. As people, and as global corporate
citizens, we strive to make a difference in the
lives of the people who work for us, their families
and all those in the communities where we
operate. The following stories highlight some
of our achievements in 2014.
incinerated, with only minimal ash as a by-product.
An on-demand battery reduced generator use
and delivered an efficiency rating greater than
90%. The KBR TAU is now being used in military
exercises worldwide.
SUSTAINABLE WASTE MANAGEMENT SYSTEM
Built in 2013, the waste transfer system
provided on-site sorting/segregation of waste
into different streams, resulting in more than a
50% reduction in the use of landfill/incineration
through recycling.
CAMP BASTION (AFGHANISTAN)
Located northwest of Lashkar Gah, the capital of
Afghanistan’s Helmand Province, Camp Bastion
is a solitary fortress in the middle of an arid,
treeless, empty desert. Between 2005 and 2014
it was the logistics hub for International Security
Assistance Force operations in Helmand during
the War in Afghanistan and Operation Herrick
and was capable of accommodating over
32,000 people.
KBR arrived at Camp Bastion in 2007 under the
CONLOG (Contractor Logistics) contract with
Britain’s Ministry of Defence. At peak, more than
1,500 KBR staff worked at the base.
Operating in a remote desert with extreme
weather conditions, KBR faced many challenges
in performing its mission. But through broad
experience, a can-do spirit and sheer necessity,
(the mother of innovation), KBR successfully
navigated every challenge.
n
With a can-do attitude and a spirit of innovation, KBR provided a healthy environment for UK and international troops in a remote and
arid desert.
n
n
water, KBR designed, constructed and operated
an industrial water bottling plant at the camp.
Every day the plant produced 36,000 liters of
water — a total of 72.5 million bottles from
2008 through 2014, containing enough water to
fill 29 Olympic swimming pools. KBR not only met
the needs of each soldier, we also:
Saved the equivalent of 6,400 trucks
deliveries by transporting empty bottles
and preforms, which are 3% of the weight
and 9% of the volume of commercially
bottled water.
n
n
POTABLE DRINKING WATER
With summer temperatures exceeding 40ºC
(104ºF), each soldier needed on average, up to
10 liters per day of drinking water. Rather than
relying on road convoys to deliver bottled drinking
n
n
Delivered approximately £25 million
(USD $37 million) cost savings to the British
taxpayers – transport of bottled water into
Helmand being 60% more expensive than
the Bastion-produced product.
Reduced the carbon footprint by eliminating
repeated water delivery trips to and from
the camp.
n
Prevented human death and injury by
reducing the need for convoys through
a remote and hostile region.
n
n
n
n
Woods – 16,445 m3
Cans, tins and aerosols – 732 m3
Plastic bottles – 734 m3
Paper and cardboard – 7,300 m3
Scrap metals – 455,000 kg (circa 4,460 m3)
Waste oils – 372,610 liter
Waste fuel – 51,860 liter
Landfill/incineration – 25,681 m3
FULL REGENERATION CAPABILITY
KBR designed, constructed and operated a major
workshop repair facility for routine maintenance and
overhaul programs, extending equipment service
lives, reducing equipment rotation and backloading
to the UK, reducing transportation emissions and
green footprint and saving a total of £120 million
(USD $181 million).
TACTICAL BASE ABLUTION UNIT
KBR piloted the KBR TAU, a lightweight, economic
and robust yet easily transportable ablution
system that improved camp hygiene and living
conditions. With this system, 100% of grey water
was filtered and cleaned for re-use, requiring the
water tank to be replenished every two weeks
under normal conditions. Black water from toilet
flushing was transferred to a holding tank and
DEVELOPING LOCAL SKILLS
With a commitment to contributing to future
stability, reconstruction and sustainable
development in Afghanistan, KBR maximized
local recruitment and procurement by employing,
training and developing Locally Recruited Workers.
Maintaining a constant dialogue with the
employed “Mullah” or village headman as the
key point of contact for all health, safety, welfare,
and cultural issues, KBR employed and trained
thousands of Afghans to the highest standards
of quality and safety. Qualified as electricians,
plumbers, air con technicians, generator mechanics
and chefs, they now have skills to contribute to
their nation’s development.
16
Responsibility
Projects
AUSTRALIAN RAIL LINE
The Regional Rail Link is a landmark AU$ 4.1 billion
(USD $2.97 billion) infrastructure project in the
Australian state of Victoria. Designed to untangle
bottlenecks, improve reliability and provide new
services from the heart of Melbourne to growth
areas in the west, the project benefits both metropolitan and regional travelers, enabling more
Victorians to use sustainable public transport.
KBR, in joint venture with Arup (KAJV) was awarded
concept design for the project, which includes
45km of new rail track, 25 bridges, five new
upgraded stations and five grade separations within the operational rail corridor. The contract was
later extended to the development of reference
designs and technical advisory support for
procurement and subsequent construction phases.
The goal of all the stakeholders was to deliver a
project with a positive legacy for communities
along the tracks. Through close collaboration
between KBR, the other contractors and the
Regional Railway Authority project team, the
project has raised the bar for innovative sustainability practices on large infrastructure projects
nationwide.
Key successes include reducing constructionphase energy and carbon by 20 percent, developing
a groundbreaking environmental rating tool
for railway stations and achieving green star
certifications for five railway stations – a first
in Australia. The project also introduced
innovative practices for the recycling and reuse
of construction and demolition waste resulting
in large reductions in materials such as Portland
cement, timber and base building materials.
The project received the Infrastructure and
Buildings Award at the Premier’s Sustainability
Awards 2014, which recognizes and celebrates
achievements and dedication toward building
a more environmentally sustainable future for
Victoria. More importantly, it offers tangible
proof that with a strong commitment by project
stakeholders, sustainability can be successfully
built into large-scale infrastructure projects
from inception, encouraging further innovations
throughout its operating life.
The award-winning Regional Rail Link in Victoria, Australia is becoming the model for delivering an environmentally sustainable
infrastructure project.
17
Global Reporting Index 4.0 Indicators
General Standard Disclosures
EC Economic Performance
EN Environmental Performance
HR Human Resources and Human Rights
LA Labor Practices and Decent Work
PR Product Responsibility and Compliance
SO Social Performance and Society
Global Reporting Initiative (GRI)
2014
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
1
Provide a statement from the most senior decision-maker of the organization (such as CEO,
chair, or equivalent senior position) about the relevance of sustainability to the organization and
the organization’s strategy for addressing sustainability.
See CEO’s statement in our report content.
G4
2
Provide a description of key impacts, risks, and opportunities.
Our rate of growth and the success of our business depend upon our ability to attract, develop and retain a sufficient number
of affordable trained engineers and other skilled workers either through direct hire or acquisition of other firms employing such
professionals. The market for these professionals is competitive. If we are unable to attract and retain a sufficient number of
skilled personnel, our ability to pursue projects may be adversely affected, the cost of executing our existing and future projects
may increase, and our financial performance may decline.
A significant portion of our revenue is derived from foreign operations, which exposes us to risks inherent in doing business in
each of the countries where we transact business. The occurrence of any of the risks described below could have a material
adverse effect on our business operations and financial performance. With respect to any particular country, these risks may
include by are not limited to:
n
n
n
n
n
n
Expropriation and nationalization of our assets in that country;
Political and economic instability;
Civil unrest, acts of terrorism, force majeure, war or other armed conflict;
Currency fluctuations, devaluations and conversion restrictions;
Confiscatory taxation or other adverse tax policies;
Governmental activities or judicial actions that limit or disrupt markets, restrict payments, limit the movement of funds, result
in the deprivation of contract rights or result in the inability for us to obtain or retain licenses required for operation.
Due to the unsettled political conditions in many oil-producing countries and other countries where we provide governmental
logistical support, our financial performance is subject to the adverse consequences of war, the effects of terrorism, civil unrest,
strikes, currency controls and governmental actions. Our operations are conducted in areas that have significant amounts of
political risk. In addition, military action or continued unrest in the Middle Ease could impact the supply and price of oil and gas,
disrupt our operations in the region and elsewhere and increase our costs related to security worldwide.
Some of our services are performed in high-risk locations, such as Iraq, Afghanistan, Nigeria, Algeria, Egypt and Saudi Arabia
where the country or location and surrounding area is suffering from political, social, economic issues, war or civil unrest. In
those locations where we have employees or operations, we have and may continue to incur substantial costs to maintain the
safety of our personnel. Despite these precautions, we have suffered the loss of employees and contractors which could expose
us to claims and litigation. In the future, the safety of our personnel in these and other locations may continue to be at risk,
exposing us to the potential loss of additional employees and contractors. For more information, please view our Annual Report.
G4
3
Report the name of the organization.
KBR, Inc.
G4
4
Report the primary brands, products, and services.
KBR, Inc. and its subsidiaries (collectively, “KBR”) is an engineering, construction and services company supporting the global
hydrocarbons and international government services market segments.
G4
5
Report the location of the organization’s headquarters.
601 Jefferson Street, Suite 3400 Houston, Texas 77002
G4
6
Report the number of countries where the organization operates, and names of countries
where either the organization has significant operations or that are specifically relevant to
the sustainability topics covered in the report.
We conduct business in over 70 countries. KBR’s major operations in regards to revenue are in the following countries/regions:
U.S., Australia, Africa, Europe, Middle East, and Canada. KBR’s major operations in regards to property, plant and equipment are
in the following countries: U.S., U.K. and Asia-Pacific
G4
7
Report the nature of ownership and legal form.
KBR, Inc. was incorporated in Delaware on March 21, 2006 prior to an exchange offer transaction that separated us from our former
parent, Halliburton Company, which was completed on April 5, 2007. We trace our history and culture to two businesses, The
M.W. Kellogg Company (Kellogg) and Brown & Root, Inc. (Brown & Root). Kellogg dates back to a pipe fabrication business which
was founded in New York in 1901 and has been creating technology for petroleum refining and petrochemical processing since
1919. Brown & Root was founded in Houston, Texas in 1919 and built the world’s first offshore platform in 1947. Brown & Root
was acquired by Halliburton in 1962 and Kellogg was acquired by Halliburton in 1998 through its merger with Dresser Industries.
G4
8
Report the markets served (including geographic breakdown, sectors served, and types of
customers and beneficiaries).
Our business strategy is to provide our customers with differentiated and superior capital project delivery and services offerings
across the entire engineering, construction and operations project lifecycle. We aim to create enhanced customer satisfaction
leading to repeat business through a best-in-class delivery platform. Our projects are generally long-term in nature and an
essential feature of our global strategy is to establish local operations in locations where services demand growth is expected.
Our core skills are conceptual design, front-end engineering design (“FEED”), engineering, project management, procurement,
construction, construction management, logistics, commissioning, operations and maintenance.
19
INDICATOR
2014
PROFILE DESCRIPTION
RESPONSE
G4
9
Report the scale of the organization, including:
As of December 31, 2014, we had approximately 25,000 employees.
See G4-6
$6,366,000,000
N/A - Not a private sector organization
N/A - KBR does not sell specific products. We are an engineering and construction company that provides support on specific
projects.
G4
11
Report the percentage of total employees covered by collective bargaining agreements.
887 employees are covered by collective bargaining agreements.
G4
12
Describe the organization’s supply chain.
KBR’s supply management services leverage today’s technologies and logistics methods to make efficient decisions which
streamline the supply management process.
We have a global track record of ensuring timely and accurate material receipt through innovative expedition and quality assurance with vendors to minimize receiving delays and errors. We optimize transportation networks, operating hand-in-hand with
global freight forwarders with dedicated assets.
We also leverage the latest supply chain technology to ensure our customers’ material is accurately tracked throughout its
journey to its destination and installation.
Proportion of spending on local suppliers at significant locations of operation.
G4
13
Changes in the location of, or changes in, operations, including facility openings, closings, and
expansions;
Changes in the share capital structure and other capital formation, maintenance, and alteration
operations (for private sector organizations)
Changes in the location of suppliers, the structure of the supply chain, or in relationships with
suppliers, including selection and termination
In November 2013, we closed on the sale of a portion of a subsidiary, Allstates Technical Services, for $10 million in cash. The
sale resulted in a $3 million pre-tax gain and is recorded in “gain on disposition of assets” in our consolidated statements of
operations.
During the three months ended March 31, 2015, we entered into an agreement to acquire the noncontrolling interest in one of
our consolidated joint ventures for $40 million. We paid the partner previously accrued expenses of $8 million. The acquisition of
these shares was recorded as an equity transaction, with a $40 million reduction in our paid-in capital in excess of par.
G4
14
Report whether and how the precautionary approach or principle is addressed by
the organization.
KBR acknowledges the 15th principle contained in the United Nations Rio Declaration on Environment and Development
Principles as a general standard for sustainable development concerns worldwide. KBR will continue to play a role in upholding
sustainable development principles by our actions in the countries in which we do business.
G4
15
List externally developed economic, environmental and social charters, principles, or other
initiatives to which the organization subscribes or which it endorses.
Committee for Economic Development of Australia – The (CEDA) is a bipartisan, non-profit, national, independent, member-based
organisation providing thought leadership and policy perspectives on the economic and social issues affecting Australia. Its
expressed aim is to “promote national economic development in a sustainable and socially balanced way.
Carbon Disclosure Project – We have participated in the CDP since 2010. CDP works to transform the way the world does
business to prevent dangerous climate change and protect our natural resources.
Centers for Houston Future – We support this dynamic, community based organization that works to solve our region’s toughest
problems. This organization accomplishes this goal by providing meaningful research, defining innovative strategies, and
engaging diverse leaders. The overarching benefit to the community is that of an independent and respected source of
Leadership, Research and Solutions.
G4
16
List memberships of associations (such as industry associations) and national or international
advocacy organizations in which the organization: holds a position on the governance body;
participates in projects or committees; provides substantive funding beyond routine membership dues, views membership as strategic
KBR and its employees participated in the following during 2014:
n
n
n
n
n
n
n
n
n
n
Aerospace, Defence and Security Association
American Chamber of Commerce – Australia, Azerbaijan, Brazil
American Council of Engineering Companies of Texas (ACEC Texas)
American Fuel & Petrochemical Manufacturers (AFPM)
American Immigrations Lawyers Association (AILA)
American Institute of Architects
American Institute of Certified Public Accountants (AICPA)
American Institute of Chemical Engineers (AIChE)
American Institute of CPA’s
American Petroleum Institute (API)
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2014
PROFILE DESCRIPTION
RESPONSE
Continue
American Society of Civil Engineers
American Society of Mechanical Engineers (ASME)
American Welding Society (AWS)
nASIS
n Associated Builders & Contractors National Diversity Committee
n Association for Financial Professionals
n Association of Corporate Travel Executives (ACTE)
n Association of General Contractors (AGC)
n Association of the United States Army (AUSA)
n Australian Petroleum Production and Exploration Association (APPEA)
n Bayou Preservation Association
n Bi-lateral U.S. Arab Chamber of Commerce
nBIPAC
n Birmingham Business Alliance
n British Chemical Engineering Contractors Association (BCECA)
n British Safety Council
n Business Council of Alabama
n Business Council of International Understanding
n Business Roundtable – Golden Triangle, Houston
n CAPS Research
n Center for Houston’s Future
n Chamber of Commerce
n Committee for Economic Development of Australia
n Construction Industry Institute
n Construction Management Association of America (CMAA)
n Consult Australia – National Sustainability Roundtable
n Design Build Institute of America (DBIA)
n Energy Institute
n Engineering and Construction Contracting Association (ECC)
n Engineering and Construction Risk Institute (ECRI)
n Engineering Construction Industry Training Board (ECITB)
n Engineers Australia – Society for Sustainability and Environmental Engineering
n Gas Processors Association Ltd.
n Gasification Technologies Council (GTC)
n Global Business Travel Association (GBTA)
n Golden Training Business Round Table
n Greater Houston Partnership
n Gulf Coast Power Association
n Gulf Petrochemicals and Chemicals Association (GPCA)
n Houston Business Roundtable
n Houston Minority Supplier Development Council
n Institute for Supply Management
n Institute of Electrical and Electronics Engineers (IEEE)
n Institute of Materials, Materials and Mining
n Institute of Measurement and Control
n Institution of Engineering and Technology (IET)
n Institution of Structural Engineers
n International Facility Management Association (IFMA)
n IT Service Management Forum (ITSMF)
n Manufacture Alabama
n Manufacturers Alliance for Productivity and Innovation (MAPI)
n National Association of Industrial & Office Product (NAIOP) Northern Virginia
n National Association of Minority Contractors
n National Contract Management Association (NCMA)
n
n
n
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G4
16
17
2014
PROFILE DESCRIPTION
RESPONSE
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List all entities included in the organization’s consolidated financial statements or equivalent
documents.
KBR offers an extensive portfolio of proprietary technology and consulting services; engineering, construction, procurement and
asset maintenance services; and base operational, logistics, life support and asset management services, through our Technology
& Consulting, Engineering & Construction and Government Services business segments.
Report whether any entity included in the organization’s consolidated financial statements or
equivalent documents is not covered by the report.
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
National Defense Industrial Association (NDIA)
National Foreign Trade Council
National Petroleum Council
National Association of Minority Contractors
Partners for Environmental Progress
Petroleum Federation of India (PetroFed)
Process Industry Practices
Procurement Executives Group
Professional Services Council
Program Advisory Committee (PAC) Kitimat Valley Institute (KVI)
Project Management Institute (PMI)
Renewable UK
Restore America’s Estuaries
Roads Australia – Sustainability Chapter
Safety Institute of Australia
Simulation Australia
Society for Human Resource Management (SHRM)
Society of American Military Engineers (SAME)
Society of Naval Architects and marine Engineers (SNAME)
Society of Women Engineers (SWE)
South African Institution of Chemical Engineers
Subsea Energy Australia
Technical Association of Pulp and paper Industry (TAPPI)
US Chamber of Commerce – Iraq Business Initiative
US-China Energy Cooperation Program
US Green Building Council (USGBC)
Water Services Association of Australia
Women Business Enterprise Alliance
Women in Defence
Women’s Energy Network
We enter into joint ventures and alliances with other industry participants in order to reduce exposure and diversify risk, increase
the number of opportunities that can be pursued, capitalize on the strengths of each party and provide greater flexibility in
delivering our services based on cost and geographical efficiency. Clients of our E&C business segment frequently require EPC
contractors to work in teams given the size and complexity of global projects that may cost billions of dollars to complete. Our
significant joint ventures and alliances are described below. All joint venture ownership percentages presented are stated as of
December 31, 2014.
We are working with JGC and Chiyoda for the purpose of design, procurement, fabrication, construction, commissioning and
testing of the Ichthys Onshore LNG export facility in Darwin, Australia. The project is being executed using two joint ventures and
we own a 30% equity interest in each joint venture. The investments are accounted for using the equity method of accounting
and reported in our E&C business segment.
KJVG is a joint venture consisting of JGC, Hatch Associates, Clough Projects Australia and KBR for the purpose of design,
procurement, fabrication, construction, commissioning and testing of the Gorgon onshore LNG project located on Barrow Island
off the northwest coast of Western Australia. We hold a 30% interest in the joint venture which is consolidated for financial
accounting purposes and reported in our E&C business segment.
22
INDICATOR
G4
17
2014
PROFILE DESCRIPTION
List all entities included in the organization’s consolidated financial statements or equivalent
documents.
Report whether any entity included in the organization’s consolidated financial statements or
equivalent documents is not covered by the report.
RESPONSE
Continue
Aspire Defence Holdings Limited (“Aspire Defence”) is a joint venture currently owned by KBR and two financial investors to upgrade and provide a range of services to the British Army’s garrisons at Aldershot and around the Salisbury Plain in the U.K. We
own a 45% interest in Aspire Defence and we own a 50% interest in each of the two joint ventures that provide the construction
and related support services to Aspire Defence. The investments are accounted for using the equity method of accounting and
reported in our GS business segment.
Mantenimiento Marino de Mexico (“MMM”) is a joint venture formed under a Partners Agreement with Grupo R affiliated entities. The principal Grupo R entity is Corporative Grupo R, S.A. de C.V. and Discoverer ASA, Ltd., a Cayman Islands company. The
Partners Agreement covers five joint venture entities executing Mexican contracts with Petróleos Mexicanos (“PEMEX”). MMM
was set up under Mexican maritime law in order to hold navigation permits to operate in Mexican waters. The scope of the
business is to render maintenance, repair and restoration services of offshore oil and gas platforms and provisions of quartering
in the territorial waters of Mexico. We own a 50% interest in MMM and in each of the four other joint ventures. We account for
our investment in these entities using the equity method of accounting and report them in our E&C business segment.
G4
18
Explain the process for defining the report content and the Aspect Boundaries.
Explain how the organization has implemented the Reporting Principles for Defining Report
Content.
The content of this report is provide using the “in accordance “core to provide full disclosure of KBR managed operations; as
stated in previous reports the environmental data is provided for KBR owned facilities. Economic, social and environmental
information found in this report is also mentioned in our 2014 Annual Report, including Form 10-K and Annual Proxy Statements.
This report is prepared under the direction of the VP of HSSE and KBR’s Sustainable Development Committee which has
executive management representation.
G4
19
List all the material Aspects identified in the process for defining report content.
KBR’s material aspects continues to be our Core Values of Commitment, Integrity, Transparency, Accountability and
Responsibility, in short; our Employees, Economic and Environment focus . We have not made significant changes from
our previous reports in aspect boundaries.
G4
20
For each material Aspect, report the Aspect Boundary within the organization, as follows:
All aspects identified in G4-19 are material within our organization.
G4
21
For each material Aspect, report the Aspect Boundary outside the organization, as follows:
Not engaged with aspect boundaries outside of our organization.
G4
22
Report the effect of any restatements of information provided in previous reports, and the
reasons for such restatement
We have restated our Consolidated Statement of Operations for the year ended December 31, 2013. We determined the
restatement was necessary due to the materiality of the additional estimated costs to complete seven Canadian pipe fabrication
and modular assembly contracts within our Services business segment which we identified subsequent to filing our Form 10-K
on February 27, 2014. In addition, we identified a pre-tax error which resulted in an overstatement in our revenue recognition on
a long-term construction project. We also identified an error which resulted in an understatement of our income tax provision.
The adjustment to “provision for income taxes” on the consolidated statements of income for the year ended December 31, 2013
reflects this additional expense. In addition, we have corrected several immaterial errors which resulted in an increase in net
income. These errors resulted in misstatements in our Consolidated Statement of Operations for the year ended December 31,
2013 as follows:
In KBR’s Restated Consolidated Statement of Operations from 2013:
Net Income Attributable to KBR was $75,000,000 USD.
Services Revenue was $7,214,000,000 USD.
Cost of Services was $6,797,000,000 USD.
General and Administrative was $248,000,000 USD.
Provision for Income Taxes was $129,000,000 USD.
In KBR’s Consolidated Balance Sheets, Retained Earnings were $1,748,000,000 USD.
Please view KBR 2013 10-K/A for more information.
G4
23
Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.
The 2011-2013 Sustainability Report followed GRI 3.1. This report will provide information on GRIs indicators that may not have
been addressed in previous report.
G4
24
Provide a list of stakeholder groups engaged by the organization.
KBR engages with its stakeholder groups including shareholders, clients, communities, nonprofits, governments, suppliers and
employees.
23
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2014
PROFILE DESCRIPTION
RESPONSE
G4
26
Report the organization’s approach to stakeholder engagement, including frequency of
engagement by type and by stakeholder group, and an indication of whether any of the
engagement was undertaken
KBR, Inc. maintains an investors hotline that allows stockholders to call. Additionally, there is an Annual Meeting of Stockholders
which gives shareholders an opportunity to speak with the Board of Directors as well as the Executive Leadership Team.
G4
27
Report key topics and concerns that have been raised through stakeholder engagement, and
how the organization has responded to those key topics and concerns, including through its
reporting. Report the stakeholder groups that raised each of the key topics and concerns.
No key topics reported for 2014.
G4
28
Reporting period (such as fiscal or calendar year) for information provided.
January 1, 2014 through December 31, 2014
G4
29
Date of most recent previous report (if any).
KBR published its last report on April 2013; we reported in conformance with the Global Reporting Initiative (GRI) framework
using the GRI G3.1 Indicators. The report contained information for years 2011-2013.
G4
30
Reporting cycle (such as annual, biennial).
KBR will publish the report annually. Sustainability Report cover the 2014 calendar year, from January 1, 2014 through
December 31, 2014.
G4
31
Provide the contact point for questions regarding the report or its contents.
Please contact us at [email protected]
G4
32
GRI Context Index
“In accordance” – Core has been chosen by the organization.
G4
33
Assurance
This report was not third party verified.
G4
34
Report the governance structure of the organization, including committees of the highest
governance body. Identify any committees responsible for decision-making on economic,
environmental and social impacts.
KBR, Inc.’s Board of Directors is currently comprised of nine directors All of teh directors are independent , non-executive directors
except for the CEO. The Chairman of the Board is independent. All directors are elected annually, with nominees standing for
election to one-year terms. At this time, the Board has four standing committees to which it has delegated certain duties and
responsibilities: Audit, Compensation, Nominating and Corporate Governance (“NCG”), and Health, Safety, Security, Environment
and Social Responsibility (“HSSE & SR”).
The NCG Committee’s responsibilities include, but are not limited to:
developing, implementing and periodically reviewing KBR’s corporate governance guidelines;
developing and implementing a process to assess Board and committee effectiveness;
n identifying individuals qualified to become Board members, consistent with Board-approved criteria; performing an annual
evaluation of our independent directors;
n determining the composition of the Board and its committees,including selection of the Director nominees for the next annual
meeting of stockholders; and
n periodically reviewing the compensation paid to non-employee directors (including Board and committee chairpersons) in the
form of annual retainers and meeting fees, if any, and making recommendations to the Board regarding any adjustments.
n
n
The HSSE & SR Committee’s responsibilities include, but are not limited to:
reviewing the status of KBR’s health, safety and sustainable development policies and performance, including processes
to ensure compliance with applicable laws and regulations;
n reviewing KBR’s health, safety and sustainable development performance to determine consistency with policies and goals;
n reviewing and providing input to KBR on the management of current and emerging health, safety and sustainable
development issues;
n overseeing KBR’s activities in managing its major risk exposures within the health, safety and sustainable development areas;
and
n reviewing KBR’s political and charitable contributions and social responsibility activities.
n
G4
35
Report the process for delegating authority for economic, environmental and social topics from
the highest governance body to senior executives and other employees.
Members of the Health, Safety, Security, Environment and Social Responsibility Committee communicate with and delegate
HSSE and SR related tasks to senior executives and other employees during and outside of committee meetings.
G4
36
Report whether the organization has appointed an executive-level position or positions with
responsibility for economic, environmental and social topics, and whether post holders report
directly to the highest governance body.
KBR, Inc. appointed Nick Anagnostou as the global head of Health, Safety, Security, and Environment in 2014. Mr. Anagnostou
reports directly to the CEO and presents HSSE related status updates to the HSSE & SR Committee.
24
2014
INDICATOR
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RESPONSE
G4
37
Report processes for consultation between stakeholders and the highest governance body on
economic, environmental and social topics. If consultation is delegated, describe to whom and
any feedback processes to the highest governance body.
To foster better communication with KBR’s stockholders, KBR established a process for stockholders and other interested parties
to communicate with the Audit Committee and the Board. The process was approved by the Board and its Audit Committee and
is designed to meet the requirements of the NYSE and the SEC. Stockholders and other interested parties may communicate with
the Board or the independent/non-executive directors via mail (Board of Directors c/o Director of Business Conduct, KBR, Inc.,
P.O. Box 3406, Houston, Texas 77253-3406), telephone (1-855-231-7512 (toll-free from the U.S. or Canada) or 1-503-619-1884
(calling collect from any other country)), or e-mail ([email protected]). Information regarding these methods of communication
is also on the KBR website, www.kbr.com, under “Corporate Governance.”
G4
38
Report the composition of the highest governance body and its committees by:
At this time, the Board has four standing committees to which it has delegated certain duties and responsibilities: Audit,
Compensation, Nominating and Corporate Governance (“NCG”), and Health, Safety, Security, Environment and Social
Responsibility (“HSSE &SR”). Each committee is comprised of independent directors. The eight independent directors and
the committees on which they serve are:
n
n
n
n
n
n
n
n
Executive or non-executive
Independence
Tenure on the governance body
Number of each individual’s other significant positions and commitments, and the nature of
the commitments
Gender
Membership of under-represented social groups
Competences relating to economic, environmental and social impacts
Stakeholder representation
Mark E. Baldwin, 61 (Audit and HSSE & SR)
James R. Blackwell, 56 (Audit and HSSE & SR)
Loren K. Carroll, 71 (Chairman of the Board)
Jeffrey E. Curtiss, 66 (Audit Chairman and NCG)
Umberto della Sala, 66 (Compensation and HSSE & SR)
Lester L. Lyles, 68 (HSSE & SR Chairman and Audit)
Jack B. Moore, 61 (Compensation Chairman and NCG)
Richard J. Slater, 68 (Compensation Chairman and NCG)
G4
39
Report whether the Chair of the highest governance body is also an executive officer (and, if so,
his or her function within the organization’s management and the reasons for this arrangement).
KBR, Inc. Chairman of the Board is an outside, independent Director.
G4
40
Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting highest governance body members,
including:
The Board is responsible for filling vacancies on the Board. The Board has delegated to the NCG Committee the duty of selecting
and recommending prospective nominees to the Board for approval. The NCG Committee considers suggestions of candidates
for Board membership made by current Committee and Board members, KBR management, and stockholders. The Committee
may also retain an independent executive search firm to identify candidates for consideration. The NCG Committee will also
consider candidates nominated by the stockholders in accordance with KBR’s Bylaws. A stockholder who wishes to recommend a
prospective candidate should notify KBR’s Secretary.
Whether and how diversity is considered
Whether and how independence is considered
n Whether and how expertise and experience relating to economic, environmental and
social topics are considered. Whether and how stakeholders (including shareholders)
are involved
n
n
When the NCG Committee identifies a prospective candidate, the Committee determines whether it will carry out a full evaluation of the candidate. This determination is based on the information provided to the Committee by the person recommending
the prospective candidate and the Committee’s knowledge of the candidate. This information may be supplemented by inquiries
to the person who made the recommendation or to others. The preliminary determination is based on the need for additional
Board members to fill vacancies or to expand the size of the Board, and the likelihood that the candidate will meet the Board
membership criteria listed above. The NCG Committee will determine, after discussion with the Chairman of the Board and
other Board members, whether a candidate should continue to be considered as a potential nominee. If a candidate warrants
additional consideration, the Committee may request an independent executive search firm to gather additional information
about the candidate’s background, experience and reputation, and to report its findings to the Committee. The NCG Committee
then evaluates the candidate and determines whether to interview the candidate. Such an interview would be carried out by one
or more members of the NCG Committee and others as appropriate. Once the evaluation and interview are completed, the NCG
Committee recommends to the Board which candidates should be nominated. The Board makes a determination of nominees
after review of the recommendation and the Committee’s report.
Candidates nominated for election or re-election to the Board should possess the following qualifications:
personal characteristics:
- highest personal and professional ethics, integrity and values;
- an inquiring and independent mind;
- practical wisdom and mature judgment;
n broad training and experience at the policy-making level in business, government, education or technology;
n expertise that is useful to KBR and complementary to the background and experience of other Board members, so that an
optimum balance of members on the Board can be achieved and maintained;
n willingness to devote the required amount of time to carrying out the duties and responsibilities of Board membership;
n commitment to serve on the Board for several years to develop knowledge about KBR’s principal operations;
n willingness to represent the best interests of all stockholders and objectively appraise management performance; and
n involvement only in activities or interests that do not create a conflict with the Director’s responsibilities to KBR and its
stockholders.
n
25
G4
2014
INDICATOR
PROFILE DESCRIPTION
40
Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting highest governance body members,
including:
41
Continue
n
The NCG Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members
in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria. Diversity
in personal background, race, gender, age and nationality for the Board as a whole may be taken into account in considering
individual candidates, but KBR does not have a policy with regard to any particular aspect of diversity of its directors.
Report processes for the highest governance body to ensure conflicts of interest are avoided
and managed.
At this time, except for our CEO,all of our directors are independent, as set forth in KBR’s Corporate Governance Guidelines
and outlined below.
Report whether conflicts of interest are disclosed to stakeholders, including, as a minimum:
A director will be considered independent under KBR’s Corporate Governance Guidelines if he or she:
Whether and how diversity is considered
n Whether and how independence is considered
n Whether and how expertise and experience relating to economic, environmental and
social topics are considered. Whether and how stakeholders (including shareholders)
are involved
G4
RESPONSE
n
n
n
n
Cross-board membership
Cross-shareholding with suppliers and other stakeholders
Existence of controlling shareholder
Related party disclosures
has no material relationship with KBR;
has not been employed by us or any affiliate of ours during the preceding three years, and no member of the director’s immediate family has been employed as an executive officer of ours or any of our affiliates during the preceding three years;
n has not received, and does not have an immediate family member who has received, during any twelve-month period within
the preceding three years, more than $100,000 in direct compensation from KBR, other than director’s fees, committee fees or
pension or deferred compensation for prior service;
n is not a partner or an employee of KBR’s independent auditor, and was not during the past three calendar years a partner or
employee of KBR’s independent auditor who personally worked on KBR’s audit;
n does not have an immediate family member who is a partner of KBR’s independent auditor or an employee of KBR’s independent auditor who participates in that firm’s audit, assurance or tax compliance (but not tax planning) practice or was during
the past three calendar years a partner or employee of KBR’s independent auditor who personally worked on KBR’s audit;
n is not a current employee and does not have an immediate family member who is a current executive officer of any company
that has made payments to, or received payments from, KBR or any of its affiliates in an amount which, in any of the last
three fiscal years, exceeds the greater of $1 million or 2% of our or such other company’s consolidated gross revenues; and
n has not (and has not had a family member who) within the preceding three years served as an executive officer with
a company for which a KBR executive served on its compensation committee.
n
n
The definition of independence and compliance with this policy will be reviewed periodically by the NCG Committee. All directors complete independence questionnaires at least annually and our Board makes determinations of the independence of its
members under the listing standards of the NYSE and the SEC requirements for Audit Committee members. Our Board believes
that its membership should include no more than two directors who are also employees of KBR. While this number is not an
absolute limitation, other than the Chief Executive Officer, who should at all times be a member of the Board, employee directors
should be limited only to those officers whose positions or potential make it appropriate for them to sit on the Board.
G4
42
Report the highest governance body’s and senior executives’ roles in the development,
approval, and updating of the organization’s purpose, value or mission statements, strategies,
policies, and goals related to economic, environmental and social impacts.
KBR Board of Directors consists of four committees that address economic, environmental and social impacts.
Those committees are:
Audit Committee
Compensation Committee
Health, Safety, Security, Environment and Social Responsibility Committee
Nominating and Corporate Governance Committee
KBR Executives present to the Board of Directors.
G4
43
Report the measures taken to develop and enhance the highest governance body’s collective
knowledge of economic, environmental and social topics.
At Board of Directors and HSSE & SR committee meetings presentations from senior executives provide the Board with economic,
environmental and social topic information. In addition, Board Members takes tours of project sites located globally to better
understand how the Boards operations influence these topics.
G4
44
Report the processes for evaluation of the highest governance body’s performance with respect
to governance of economic, environmental and social topics. Report whether such evaluation
is independent or not, and its frequency. Report whether such evaluation is a self-assessment.
Report actions taken in response to evaluation of the highest governance body’s performance
with respect to governance of economic, environmental and social topics, including, as a
minimum, changes in membership and organizational practice.
Board members completes annual self-assessment questionnaires for the Board and each committee that they sit on which
they serve.
The members also complete an annual D&O Questionnaire and a NYSE Independence questionnaire. All of the and questionnaire
results are presented and discussed at the Nominating and Corporate Governance Committee meetings.
The Nominating and Corporate Governance Committee annually reviews the Committee assignments and reassigns members
as needed.
26
INDICATOR
G4
45
2014
PROFILE DESCRIPTION
Report the highest governance body’s role in the identification and management of economic,
environmental and social impacts, risks, and opportunities. Include the highest governance
body’s role in the implementation of due diligence processes. Report whether stakeholder
consultation is used to support the highest governance body’s identification and management
of economic, environmental and social impacts, risks, and opportunities.
RESPONSE
The KBR Board of Directors has four standing committees that address economic, environmental and social impacts.
Those committees are:
Audit Committee
Compensation Committee
Health, Safety, Security, Environment and Social Responsibility Committee
Nominating and Corporate Governance Committee
Additionally, KBR has an Annual Shareholders Meeting of Stockholders. Stockholders have an opportunity to submit items to the
agenda for review and vote.
G4
46
Report the highest governance body’s role in reviewing the effectiveness of the organization’s
risk management processes for economic, environmental and social topics.
KBR’s Board of Directors considers risk oversight to be an integral part of its role, and discussions regarding risks faced by the
company are part of its meetings and deliberations throughout the year. As part of the implementation of KBR’s new strategy,
KBR’s management is improving its enterprise risk management system to provide greater executive oversight for managing risks.
Once this update is complete, management will provide the Board regular reports regarding significant strategic, operational,
financial, and hazard risks determined by management to have a potential significant impact on the company as a whole. The risk
report involves both current and emerging risks and is the culmination of a process involving input from all business groups and
executive leadership. Management’s assessment of risk will include specific strategic, operational, financial and hazard risks, the
perceived trend for each of those specific risks — whether increasing, decreasing or stable — and the measures being taken to
monitor and mitigate those risks.
In addition to the enterprise risk management process described above, the Board also engages in risk oversight through the
project approval process, whereby projects reaching a threshold level of expected revenues require Board approval. Fixed-price
contracts have a lower threshold level than reimbursable-type contracts because of their potential price and financial risks. In
reviewing projects, the Board is presented with management’s assessment of a particular project’s cost exposure associated with
operations risk, liabilities and funding risks, among others. In this manner, KBR’s Board is engaged in risk oversight at the outset
of the largest projects, which could have a material effect on KBR’s operations.
The Board is also engaged in risk oversight through regular reports from its Audit Committee. The Audit Committee is charged
with reviewing with management the company’s major financial risk exposures, as well as other areas of risk exposure if requested to do so by the Board, and the steps management has taken to monitor and mitigate those exposures. The Audit Committee
receives periodic reports from management on these areas of potential exposure, including litigation, liquidity and capital
resources, financial reporting and disclosures, regulatory and tax risks, among others. The Audit Committee also receives reports
from management regarding compliance risks and Code of Business Conduct matters.
G4
47
Report the frequency of the highest governance body’s review of economic, environmental and
social impacts, risks, and opportunities.
The Health, Safety, Security, Environment and Social Responsibility Committee convenes at least twice a year.
G4
48
Report the highest committee or position that formally reviews and approves the organization’s
sustainability report and ensures that all material Aspects are covered.
The Health, Safety, Security, Environment and Social Responsibility Committee reviews KBR’s sustainability report and receives
sustainability updates at its meetings.
G4
51
Report the remuneration policies for the highest governance body and senior executives for the
below types of remuneration:
Pay for Performance in 2014
Fixed pay and variable pay:
n Performance-based pay
n Equity-based pay
nBonuses
n Deferred or vested shares
n Sign-on bonuses or recruitment incentive payments
n Termination payments
nClawbacks
n Retirement benefits, including the difference between benefit schemes and contribution
rates for the highest governance body, senior executives, and all other employees.
n
Report how performance criteria in the remuneration policy relate to the highest governance
body’s and senior executives’ economic, environmental and social objectives.
Our NEOs who were with KBR for the entirety of 2014 did not receive any payouts under our 2014 Short-Term Incentive Plan.
Likewise, the long-term cash performance awards payable for the three-year period ending on December 31, 2014, earned $0,
which represents 60% of our NEOs’ annual long-term incentive compensation opportunity. In addition, restricted stock unit and
stock option holdings, which represent 40% of our NEOs’ annual long-term incentive compensation, are significantly devalued
and all of our NEOs’ stock options granted in the last five years are currently underwater.
These results demonstrate a compensation plan designed on the principles of “Pay for Performance” and fully aligned with the
disappointing financial and operational results for 2014. Equally evident is the resultant challenge of ensuring retention and
forward-incentive for the existing and new members of our executive leadership team.
27
INDICATOR
G4
2014
PROFILE DESCRIPTION
51
RESPONSE
Continue
Clawback of 2013 Compensation
Due to the restatement of our 2013 financial results, our Compensation Committee and Board of Directors implemented our clawback policy and sought and recovered from our NEOs who are current executive officers and the former CEO and chief accounting
officer the portion of their 2013 Short-Term Incentive Plan payouts that should not have been paid in light of the restatement. Our
current CEO, Mr. Bradie, was not an employee in 2013, and our current chief financial officer, Mr. Ferraioli, joined KBR on October
28, 2013, and was not eligible for a 2013 Short-Term Incentive Plan payout. Thus, neither Mr. Bradie nor Mr. Ferraioli were
subject to any clawbacks.
Changes Made to 2015 Compensation
Upon the recommendation of our CEO, based on prior year performance and peer-comparative data, our Compensation Committee approved zero 2015 base salary increases, zero 2015 short-term incentive target increases, and zero 2015 long-term incentive
target increases for all NEOs (excluding the CEO).
Based on peer-comparative data for his level of compensation, on his non-involvement (pre-hire) in the 2013 financial and operational problems, and on our Board’s total satisfaction with his immediate personal engagement in formulating and leading KBR’s
business transformation actions, our Compensation Committee and Board approved modest increases to our CEO’s short- and
long-term incentive targets for 2015 but made no increase to his base salary. The CEO’s 2015 total target compensation was kept
below the median total target compensation for our E&C Peer Group.
G4
52
Report the process for determining remuneration. Report whether remuneration consultants
are involved in determining remuneration and whether they are independent of management.
Report any other relationships which the remuneration consultants have with the organization.
The Compensation Committee uses an independent conpensation consultant, Meridian, to assist the committee with renumeration decision.
G4
53
Report how stakeholders’ views are sought and taken into account regarding remuneration,
including the results of votes on remuneration policies and proposals, if applicable.
Stockholders may present a proposal to be considered for inclusion in KBR’s proxy material for its Annual Meeting of Stockholders
by submitting the proposal in writing to KBR’s Corporate Secretary at 601 Jefferson Street, Suite 3400, Houston, Texas 77002.
KBR must receive proposals not later than the 120th day prior to the date on which KBR estimates that it will send its materials
for its Annual Meeting of Stockholders. Proposals submitted for inclusion in KBR’s proxy materials must comply with Rule 14a-8
under the Exchange Act.
In order for stockholder proposals to have been properly submitted for presentation at KBR’s Annual Meeting of Stockholders,
KBR must have received notice of the proposal not earlier than the 120th and 90th days, respectively, prior to the intended date
of the Annual Meeting of Stockholders. Proposals must comply with Article I, Section 9 of KBR’s Bylaws.
A nomination or proposal that does not comply with the above procedures will be disregarded. Compliance with the above
procedures does not require KBR to include the proposed nominee or business in KBR’s proxy solicitation materials.
G4
56
Describe the organization’s values, principles, standards and norms of behavior such as codes
of conduct and codes of ethics.
KBR has built a rich heritage on a cornerstone of integrity. The COBC was developed to help you apply legal and ethical practices
to your everyday work-life and also to help you follow the law. Ethics is a vital part of who KBR is as a company. KBR has
adopted a “code of ethics,” as defined in Item 406(b) of Regulation S-K. KBR’s code of ethics, known as its Code of Business
Conduct, applies to all directors, officers and employees of KBR, including its principal executive officer, principal financial officer,
principal accounting officer and controller, and also applies to all employees of KBR and KBR’s agents. KBR has posted its Code
of Business Conduct on its website, www.kbr.com. In addition, KBR intends to satisfy the disclosure requirements regarding
any amendment to, or waiver from, a provision of the Code of Business Conduct that relates to any element of the definition of
code of ethics set forth in Item 406(b) of Regulation S-K, including the requirements of Item 5.05 of Form 8-K, by posting such
information on its website, www.kbr.com. Our ethical principles demonstrate our commitment to ensure we carry out our mission
with integrity. Our principles are contained in the COBC, which consists of the policies relating to the ethical and legal standards
of conduct to be followed by all in the conduct of our business.
G4
57
Report the internal and external mechanisms for seeking advice on ethical and lawful behavior,
and matters related to organizational integrity, such as helplines or advice lines.
Directors, Employees and Legal Agents may contact the Code of Business Conduct office to seek advice on ethical and lawful
behavior through a toll-free and online Ethics Hotline, Code of Business Conduct post office box, and contact directly to the
Director of the Code of Business Conduct, appropriate representative of the Law Department, Audit Services, Human Resources,
Health, Safety, Security & Environment or other compliance-related department, the Employee’s supervisor or manager, or
a member of the executive senior management. 28
G4
2014
INDICATOR
PROFILE DESCRIPTION
RESPONSE
58
Report the internal and external mechanisms for reporting concerns about unethical or unlawful
behavior, and matters related to organizational integrity, such as escalation through line
management, whistleblowing mechanisms or hotlines.
Under the Code of Business Conduct, Directors, Employees and Legal Agents must promptly report any suspected violation of
the Code of Business Conduct to an appropriate reporting outlet, which includes the toll-free and online Ethics Hotline, Code of
Business Conduct post office box, and reports directly to the Director of the Code of Business Conduct, appropriate representative
of the Law Department, Audit Services, Human Resources, Health, Safety, Security & Environment or other compliance-related
department, the Employee’s supervisor or manager, or a member of the executive senior management.
Employees may exercise their legal right or duty to report possible violations of law to the appropriate governmental authorities
at any time, without reporting the matter to, or seeking prior authorization from, the Code of Business Conduct department, Legal
Department or any other internal reporting outlet.
The Company prohibits retaliation in any form for reporting, in good faith, suspected violations of the Code of Business Conduct.
Disciplinary action will be taken against anyone who retaliates directly or indirectly against any Employee who reports actual or
suspected violations. Discouraging other Employees from making a report is prohibited and could result in disciplinary action.
Additionally, stockholders and interested parties may contact the Audit Committee and the Board of Directors through a Post
Office Box, toll-free and online Ethics Hotline or by email.
G4
EC1
Report the direct economic value generated and distributed (EVG&D) on an accruals basis
including the basic components for the organization’s global operations
Report the direct economic value generated and distributed (EVG&D) on an accruals basis including the basic components for
the organization’s global operations:
Revenues
$6,366,000,000
Economic value distributed:
Operating costs
$6,431,000,000
General and Administrative
$239,000,000
Other Non-operating income
($17,000,000)
Provision for Income Taxes
$421,000,000
Community investments
Corporate Giving $620,000; Employee Giving and
Corporate Matching $700,000
Net Income attributable to KBR
($1,198,000,000)
To better assess local economic impacts, report EVG&D separately at
country, regional, or market levels, where significant. Report the criteria
used for defining significance.
N/A
G4
EC2
Financial implications and other risks and opportunities for the organization’s activities due to
climate change
Existing or pending climate change legislation, regulations, international treaties or accords are not expected to have a shortterm material direct effect on our business, the markets that we serve or on our results of operations or financial position.
However, climate change legislation could have a direct effect on our customers or suppliers, which could impact our business.
For example, our commodity-based markets depend on the level of activity of mineral and oil and gas companies and existing or
future laws, regulations, treaties or international agreements related to climate change, including incentives to conserve energy
or use alternative energy sources, which could impact our business if such laws, regulations, treaties or international agreements
reduce the worldwide demand for minerals, oil and natural gas. We will continue to monitor developments in this area.
G4
EC3
Coverage of the organization’s defined benefit plan obligations
The defined benefit section of the KBR (UK) Ltd Pension Plan is a defined benefit plan obligation where there is a fund set up to
meet the liabilities. The latest full triennial actuarial valuation of the Plan looked at the Plan’s position as at 1 April 2012 and
showed that the defined benefit section had a deficit of £337m, equivalent to a funding level of 73%. This valuation was based
on the ongoing scheme specific funding assessment as required under the scheme funding framework in the UK. The methodology, assumptions and results are set out in the scheme funding report for that valuation. An assessment of the deficit at the latest
triennial valuation date of 1 April 2015 is currently underway.
There is a recovery plan in place under which KBR (UK) Ltd is currently paying contributions of £28m per year into the Plan. Under
this recovery plan, the deficit was projected to be eliminated by 31 December 2023. This projection is based on the assumptions
from the actuarial valuation and future assumptions about the returns achieved on the Plan’s assets. The recovery plan has been
agreed by KBR (UK) Ltd and the Trustees of the Plan.
The defined benefit section of the Plan is closed to new entrants and existing members are no longer building up new benefits.
There are therefore no regular employee or employer contributions towards the cost of new benefits being paid into the Plan.
29
INDICATOR
2014
PROFILE DESCRIPTION
RESPONSE
G4
EC4
Financial assistance received from government
None
G4
EC7
Development and impact of infrastructure investments and services supported
N/A
G4
EC8
Significant indirect economic impacts, including the extent of impacts
n
Changing the productivity of organizations, sectors, or the whole economy
- Providing the knowhow and project management behind the processes to convert natural gas to a liquid, such as in the
case of Gorgon, Ichthys, Skikda and Escravos, enabling export of a cleaner energy source in transportable quantities
resulting in new or better supplied markets for natural gas production.
- Transportability of “stranded gas” from regions with large supplies and relatively small market to regions with growing
demand and relatively little resource promotes a better global allocation of resources leading to greater efficiency for
many nations and the energy industry as a whole (Gorgon, Ichthys, Skikda, Escravos, Dyno-Nobel).
- Transfer of technology to produce ammonia and fertilizers that improve food supplies and yields for a growing population.
KBR has provided services in support of 3 number of ammonia and fertilizer facilities in 2014.
Economic development in areas of high poverty
- Offices in Luanda, Delhi, Chennai, Jakarta and Monterrey, which provide professional and clerical employment as well as
multiplier effects, where living conditions having been improving, but are not yet fully developed.
- Greater supplies of ammonia and urea translate into higher quantities of foodstuffs available for growing populations
n
Economic impact of improving or deteriorating social or environmental conditions
- Providing the knowhow and project management behind the processes to convert natural gas to a transportable liquid,
enabling wider use of a more environmentally-friendly fuel for heating, electricity and other energy requirements
- Natural gas powered facilities often replace existing and incremental coal-fired or oil-fired energy facilities, which contributes toward reducing SOX, NOX, particulate and other emissions.
- Higher crop yield using fertilizers derived from ammonia produced from a KBR process technology improves the overall
success of planting and availability of food and exports.
n
Enhancing skills and knowledge amongst a professional community or in a geographical region
- Providing professional engineering jobs and associated training in Angola, China, India, Indonesia, Mexico, Saudi Arabia,
South Africa
n
Jobs supported in the supply chain or distribution chain
- Thousands of jobs supported through sub-contractors and equipment vendors and OEM manufacturers throughout the
world through the construction of world-class processing plants
n
Stimulating, enabling, or limiting foreign direct investment
- Enabling large-scale FDI in Australia (Gorgan and Ichthys), Mozambique, Saudi Arabia (Dow), inward United States
(Dyno-Nobel) with competitive designs, schedules and pricing along with capable project management in LNG, refining,
petrochemicals and ammonia.
n
Economic impact of change in location of operations or activities
- Increasing presence in India provides professional and clerical job opportunities to a growing market.
n
G4
EC9
Proportion of spending on local suppliers at significant locations of operation
N/A
G4
EN3
Energy consumption within the organization
This information is provided in the report as a graph. See page 11.
G4
EN5
Energy intensity
This information is provided in the report. See page 11.
G4
EN6
Reduction of energy consuption
This information is provided in the report. See page 11.
G4
EN8
Total water withdrawal by source
Water sources consist of Municipal water supplies; we do not consider usage in an office environment to be significant.
However; we take every effort to reduce usage whenever possible.
G4
EN9
Water sources significantly affected by withdrawal of water
Water sources consist of Municipal water supplies; we do not consider usage in an office environment to be significant.
However; we take every effort to reduce usage whenever possible.
G4
EN10
Percentage and total volume of water recycled and reused
KBR does not use recycled and/or reused water for our office operations. However water is recycled and reused on projects in
some capacities for dust suppression and irrigation.
30
2014
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
EN11
Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high
biodiversity value outside protected areas
KBR does not own, lease, or manage any property in, or adjacent to protected areas and areas of high biodiversity value outside
protected areas.
G4
EN12
Description of significant impacts of activities, products, and services on biodiversity in protected
areas and areas of high biodiversity value outside protected areas
Aspire Defence Capital Works (a KBR joint venture), involves construction work at military sites on Salisbury Plain. These works
are close to sites designated as both a Special Protection Area (SPA) and Special Area of Conservation (SAC) under European
legislation, notably for the populations of stone curlew, common quail and hen harrier, and for the chalk grassland habitat, one of
the largest remaining areas of calcareous grassland in north-western Europe. The SAC is also designated for juniper formations
on heaths, semi-natural dry grassland and scrubland facies and the marsh fritillary butterfly. Much of the natural environment
is also protected through its designation as a Site of Special Scientific Interest (SSSI) for its populations of rare bumblebee
species, and many rare birds, plants and invertebrates.
A habitats regulations assessment (HRA) has concluded that no residual ecological or contamination impacts are anticipated as a
consequence of the Aspire Defence Capital Works proposals, including on the Salisbury Plain SPA, SAC and SSSI.
G4
EN13
Habitats protected or restored
For Aspire Defence Capital Works (a KBR joint venture), a programme of biodiversity offsetting will create habitats of equivalent
value to:
238,292 square meters of semi-improved calcareous grassland
641 square meters of unimproved grassland
n
n
Works will be undertaken in accordance with the U.K. National Planning Policy Framework and BS 42020:2013 Biodiversity - Code
of practice for planning and development. The works will be within land owned and managed by the UK Defence Infrastructure
Organisation (DIO). An independently prepared management plan has been submitted to the authorities for approval.
G4
EN14
Total number of IUCN red list species and national conservation list species with habitats in
areas affected by operations, by level of extinction risk
For Aspire Defence Capital Works (a KBR joint venture) Surveys indicate a total of 50 ICUN red list species are within 2 km of the
construction sites at Larkhill, Perham Down, Bulford and Tidworth in the U.K. In terms of status by level of extinction risk these
species comprise:
n
n
n
n
10 endangered;
19 vulnerable;
19 near threatened; and
2 least concern.
G4
EN15
Direct Greenhouse Gas (GHG) emissions (Scope 1)
This information is provided in the report as a graph. See page 11.
G4
EN23
Total weight of waste by type and disposal method
Recycled 46 tons of scrap metal recovered from a remediation project; 325 lbs of hazardous waste soil was sent for disposal.
G4
EN24
Total number and volume of significant spills
None
G4
EN25
Weight oif transported, imported, exported, or treated waste deemed hazardous under the
terms of the Basel Convention2 Annex 1, II, III, and VIII, and percentage of transported waste
shipped internationally
KBR did not transport, import, export or treat hazardous waste internationally.
G4
EN26
Identity, size, protected status, and biodiversity value of water bodies and related habitats
significantly affected by the organization’s discharges of water and runoff
KBR is not aware of our owned office operations’ discharges of water and runoff significantly affecting water bodies and/or
related habitats.
G4
EN27
Extent of impact mitigation of environmental impacts of products and services
N/A
G4
EN29
Monetary value of significant fines and total number of non-monetary sanctions for
non-compliance with environmental laws and regulations
None
G4
EN31
Total environmental protection expenditures and investments by type
Remediation Cost: $881,740.64 for three projects.
G4
EN34
Number of grievances about environmental impacts filed, addressed, and resolved through
formal grievance mechanisms
None
G4
HR1
Total number and percentage of significant investment agreements and contracts that include
human rights clauses or that underwent human rights screening
Current contracts do not include Human Rights screening. Our contracts include clauses requiring compliance with the laws of
the country where project is located and compliance with the COBC and/or KBR Supplier COBC where applicable.
31
INDICATOR
2014
PROFILE DESCRIPTION
RESPONSE
G4
HR2
Total hours of employee training on human rights policies or procedures concerning aspects of
human rights that are relevant to operations, including the percentage of employees trained
All employees are to complete COBC training as a requirement of the annual review process; Human Rights procedures are
covered in this training.
G4
HR3
Total number of incidents of discrimination and corrective actions taken
In the United States in 2014, there were 15 discrimination claims resolved in mediation through KBR’s Dispute Resolution
Program. In 2014, KBR’s Ethics Hotline received 465 calls with 47 percent related to COBC issues.
G4
HR4
Operations and suppliers identified in which the right to exercise freedom of association and
collective bargaining may be violated or at significant risk, and measures taken to support these
rights
None
G4
HR5
Operations and suppliers identified as having significant risk for incidents of child labor, and
measures taken to contribute to the effective abolition of child labor
As stated in KBR’s Code of Business Conduct and supported in a letter to employees by our CEO, KBR cannot in any way accept,
condone or tolerate any instance of unethical or illegal behavior. KBR is not aware of any operations or significant suppliers as
having significant risk for incidents of child labor. Measures taken to contribute to the effective abolition of child labor include
requiring employees, subcontractors and agents to complete KBR’s mandatory Code of Business Conduct (COBC) training, which
includes human rights training. The charter mission of KBR’s Board of Directors’ CSR Committee oversees the activities of KBR in
managing our major risk exposures in regards to sustainable development, including human rights. KBR does not employ anyone,
in any capacity, under the age of 18 years except where this minimum employment age requirement is superseded by local law.
G4
HR6
Operations and significant suppliers identifiedas having significant risk for incidents of forced
or compulsory labor, and measures tocontribute to the elimination of all forms of forced or
compulsory labor.
As stated in KBR’s Code of Business Conduct and supported in a letter to employees by our CEO, KBR cannot in any way accept,
condone or tolerate any instance of unethical or illegal behavior. KBR is not aware of any operations or significant suppliers
as having significant risk for incidents of forced or compulsory labor. Measures taken to contribute to the effective abolition
of forced or compulsory labor include requiring employees, subcontractors and agents to complete KBR’s mandatory Code of
Business Conduct (COBC) training, which includes human rights training. The charter mission of KBR’s Board of Directors’ CSR
Committee oversees the activities of KBR in managing our major risk exposures in regards to sustainable development, including
human rights.
G4
HR7
Percentage of security personnel trained in the organization’s policies or procedures concerning
aspects of human rights that are relevant to operations
100% of Security personnel have received formal training in KBR’s human rights policies and procedures. Ethics training, which
includes training on Human Rights, is required for all third party organizations providing security personnel.
G4
HR8
Total number of incidents of violations involving rights of indigenous peoples and actions taken
None
G4
HR9
Total number and percentage of operations that have been subject to human rights reviews or
impact assessments
None
G4
HR12
Number of grievances about human rights impacts filed, addressed, and resolved through
formal grievance mechanisms
In the United States in 2014, there were 24 discrimination claims resolved in mediation or arbitration through KBR’s Dispute
Resolution Program and 1 harassment claim resolved in arbitration through KBR’s Dispute Resolution Program. In 2014, 143 of
the 465 reports to the KBR’s Ethics Hotline related to grievances about human rights impacts. All 143 were addressed during
the reporting period. 125 of those grievances were resolved during the reporting period. 35 grievances from the prior reporting
period were resolved during this reporting period.
G4
LA2
Benefits provided to full-time employees that are not provided to temporary or part-time
employees, by significant locations of operation
KBR benefits by significant locations of operations
US
Canada
UK
Saudi
Medical
X
X
X
X
Pharmacy
X
X
X
X
Dental
X
X
Vision
X
X
Life Insurance
X
X
X
X
Accident Insurance
X
X
X
X
Disability
X
X
Employee Assistant Program
X
X
Retirement & Savings – 401(k)
X
X
X
Pension
X
Stock Purchase Program
X
Worker’s Compensation
Note: Significant locations of operations is defined as having a local headcount of 500 or more employees.
Australia
X
X
X
X
X
32
INDICATOR
2014
PROFILE DESCRIPTION
RESPONSE
G4
LA5
Percentage of total workforce represented in formal joint management–worker health and
safety committees that help monitor and advise on occupational health and safety programs
At KBR; each project location will have a formal joint management -employee health and safety committee. Committees are
responsible for implementation of the HSE Policies, Plans and Procedures for site, Training, Recording and Reporting Incidents
and Identification of Risk. Percentage of workforce participation has not been captured.
G4
LA6
Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total
number of work-related fatalities, by region and by gender
Zero Fatalities. Injury categories tracked (Slips, Caught In or Between, Strain, Strike Against Struck By)
G4
LA7
Workers with high incidence or high risk of diseases related to their occupation
KBR has more than 15,000 employees that support our clients in a petro chemical and construction industries; the industry is
high risk however our employees are protected from occupational illness by using engineering controls and proper protection
equipment when required.
G4
LA10
Programs for skills management and lifelong learning that support the continued employability
of employees and assist them in managing career endings
Educational Assistance
It is KBR’s intent that every employee realizes his or her full potential in an environment that values productivity and results. To
this end, KBR provides educational opportunities that enable employees to improve their skills and/or knowledge outside the
scope of standard on-the-job informal training.
Educational assistance whenever possible should be planned and budgeted in advance, and applicable to an employee’s current
or projected position. All costs incurred will be applicable to the cost center where the employee resides. Additionally, eligible
employees are approved based on managerial discretion, and on the condition that studies must be completed without jeopardizing the employee’s work performance. Further, employees must show evidence of successful course completion at the conclusion
of the course or course of study. In addition to country-specific eligibility requirements, specific monetary limits may be imposed.
Participation in this program does not guarantee a promotion or change in job responsibilities and earnings.
Following the reimbursement payment date of educational assistance, the employee is obligated for the course of one year to
reimburse monies paid in the event of resignation or separation for cause. Upon acceptance of reimbursement, the employee
authorizes the Company to take this deduction from any monies that may be owed to the employee. Reimbursement may also be
applicable to an employee transferring from one manager to another across budgetary lines.
Internal Training Courses
KBR is committed to the continued development of its employees and believes that the employee and the Company have a
shared responsibility for career and competency development. KBR recognizes the need for employees to acquire additional
skills, knowledge and experience to meet the short-term needs of their jobs, as well as the longer-term needs of the individual
and company.
The KBR Transferable Competency model is core to The KBR Way and the creation of a culture focused on hiring the right people,
requiring them to behave in a way that is consistent with our business values and brand, and executing processes that will allow
us to win in the marketplace. The educational material contained in KBRU is to assist KBR, managers and employees globally to
be more productive, and have more meaningful and consistent conversations about performance, putting us on the path toward
creating a more enriching experience at KBR. The competency model contains seven transferable competencies and is aligned
with KBR’s Mission, Vision and Values: • Quality, Health, Safety & Environment • Commercial Focus • Leadership • Business
Process Thinking • Strategic Process Thinking • Empowerment • Communications.
G4
LA11
Percentage of employees receiving regular performance and career development reviews, by
gender and by employee category
All employees are subjected to regular performance and career development reviewss, regardless of gender received
a performance review and career development review in 2014
G4
PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning
the health and safety impacts of products and services during their life cycle, by type of
outcomes
KBR received a total of five OSHA citations for non-compliance; corrective measures were implemented immediately where
possible and or actions were put in place to resolve incidents from reoccurring.
G4
PR7
Total number of incidents of non-compliance with regulations and voluntary codes concerning
marketing communications, including advertising, promotion, and sponsorship, by type of
outcomes
KBR did not have any incidents of non-compliance with regulations and voluntary codes concerning marketing communications,
including advertising, promotion, and sponsorship receive any complaints concerning breaches of customer privacy.
33
INDICATOR
2014
PROFILE DESCRIPTION
RESPONSE
G4
PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses
of customer data
KBR did not receive any complaints concerning breaches of customer privacy.
G4
PR9
Monetary value of significant fines for non-compliance with laws and regulations concerning
the provision and use of products and services
KBR did not receive any fines for non-compliance with laws and regulations.
G4
SO3
Total number and percentage of operations assessed for risks related to corruption and the
significant risks identified
All transactions are analyzed for risks related to corruption. KBR cannot in any way accept, condone or tolerate any instance of
unethical or illegal behavior. The charter mission of KBR’s Board of Directors’ CSR Committee oversees the activities of KBR in
managing our major risk exposures in regards to sustainable development, including human rights.
G4
SO4
Communication and training on anti-corruption policies and procedures
91% of employees completed training.
G4
SO6
Total value of political contributions by country and recipient/beneficiary
In 2014, PAC receipts, or contributions from employees to KBRPAC, were $84,992 and $220,250 was contributed to candidates for
public office. Undisbursed funds are held for future elections and campaigns. fec.gov and the Center for Responsive Politics
G4
SO7
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices
and their outcomes
None
G4
SO8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations
In the United States in 2014, KBR had no adverse determinations, fines or non-monetary sanctions from the federal Equal Employment Opportunity Commission (EEOC), any state or local human rights commission, the National Labor Relations Board (NLRB), or
the Office of Federal Contract Compliance Programs (OFCCP).
G4
SO11
Number of grievances about impacts on society filed, addressed, and resolved through formal
grievance mechanisms
In 2014, 29 of the 465 reports to the KBR’s Ethics Hotline related to grievances about impacts on society. All 29 matters were
addressed during the reporting period. 28 of those grievances were resolved during the reporting period. 8 grievances from the
prior period were resolved during the reporting period.
G4 GRI indicators (G4-10, G4-25, G4-49, G4-50, G4-54, G4-55, EC5,EC6, EN1, EN2, EN4, EN7, EN16, EN17, EN18, EN19, EN20, EN21, EN22, EN27, EN28, EN30, EN32, EN33, HR10, HR11, LA1, LA3, LA4, LA8, LA9, LA12, LA13, LA14, LA15, LA16, PR1, PR3, PR4, PR5,
PR6, SO1, SO2, SO5, SO9 and S10) are either not applicable or cannot be answered by our organization at this time. We anticipate being in a position to address in future reports.
.
www.kbr.com
34

KBR - Built on Values - Sustainability Report 2014

Transcription

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