WH Smith PLC

1 WH Smith PLCC orporate Responsibility report 2017E S T 1 7 9 2 Celebrating 225 years01 GovernanceEnvironmentMarketplaceWorkplac eCommunityAssuranceWH Smith PLC Corporate Responsibility report 2017 Welcome to WH Smith PLC s 2017 Corporate Responsibility reportContents1. GovernanceAbout us 3 Group at a glance 4 Our business model and strategy to create value 4 Management and accountability 5 Our stakeholders 5 Identifying our key impacts and driving continual improvement 7 Benchmarking our performance 72. Environmental managementManaging our carbon emissions 8 Reducing energy consumption 9 Improving transport efficiency 10 Waste management 10 Helping our customers to reduce waste 12 Conserving water resources 12 Tar get s 123. Responsibility in the marketplaceCustomer focus 13 Improving access for customers 14 Responsible retailing 14 Forest sourcing 15 Ethical trading 16 Tar get s 174. Workplace practiceEngaging with our staff 18 Learning and development 19 Valuing our people 20 Promoting diversity 22 Employee share ownership 23 Health and safety 24 Accidents and injuries 24 Tar get s 245.

2 Community impactCelebrating WHSmith s 225th anniversary 25 Race for Life 27 Championing literacy 28 Celebrating world book day 29 WHSmith Group charitable trust 29 Supporting our local communities 30 Save the Children UK 30 Save the Children Australia 31 Supporting charities through the carrier bag levy 31 Measuring our community investment 31 Tar get s 316. AssuranceIndependent assurance report 32 Definitions of Corporate Responsibility key 34 performance indicatorsFind out more at @whsmith @whsmithofficial this reportThis is our 10th published Corporate Responsibility report, covering our social, environmental and ethical performance for the year 1 September 2016 until 31 August 2017. It is an annual report issued alongside the WH Smith PLC Annual report and accounts 2017 and published in October OF THIS REPORTThis report focuses primarily on the continuing activities undertaken by our retailing operations in the UK and Ireland under the WHSmith brand, also under other WHSmith brands including the Funky Pigeon and Card Market brands.

3 The impacts resulting from franchise operations are excluded from this report. The impacts resulting from directly-run international operations are included in some cases, and this is made clear in the definitions for each key performance indicator. Our international operations now account for nine per cent of turnover. Some of the data reported may not be exactly aligned to the year ended 31 August 2017 but is reported for a consistent period each year. Other variances in reporting boundary are highlighted in the relevant IS THE REPORT WRITTEN FOR?Our report is written to provide information to a wide audience, which is interested to understand how WHSmith is performing in terms of managing the social, environmental and ethical impacts of our have aimed to provide both general information for our stakeholders who want to understand how we manage our performance as a responsible company, as well as more detailed technical data for those requiring more in-depth information.

4 The report is published on our website at , where it is also available as a PDF. In addition, a summary of the report and the PDF of the full report are also available to our employees via our OF REPORT CONTENTC orporate Citizenship have been engaged to provide assurance over selected aspects of this report for the reporting year ended 31 August 2017. A copy of their independent assurance report can be found on page FEEDBACKWe welcome your comments and feedback on our corporate responsibility performance, either through our website or by writing to Head of Corporate Responsibility, WH Smith PLC, Greenbridge Road, Swindon SN3 Smith PLC Corporate Responsibility report 2017 Introduction by Stephen Clarke Our 225th anniversary celebrations have really brought the business together and we hope that our three charity partners will see the benefit of our fundraising for many years to come. Stephen Clarke, Group Chief ExecutiveWELCOME TO WH Smith PLC S 2017 CORPORATE RESPONSIBILITY REPORT2017 is a very special year for WHSmith, marking the 225th anniversary of the first WHSmith railway newsstand in 1792.

5 To celebrate this anniversary, we wanted to make a lasting difference to charities which our employees care about and this Report gives a flavour of the huge amount of activity which our employees have been undertaking as they work together to reach our 2m fundraising target. Some of my personal highlights have been joining with hundreds of other WHSmith employees to run Race for Life in aid of Cancer Research UK, taking part in a charity spinathon, and seeing our Waterloo store completely wrapped in MIND logos and messaging to mark Mental Health Awareness Week. It has been a fantastic year so far, really bringing the business together in a shared objective, and we hope that our three charity partners, Cancer Research UK, MIND and the National Literacy Trust, will see the benefits for many years to highlight of the year has been our continued work to raise awareness and reduce the stigma around mental health. In February 2017, I was pleased to sign the Time to Change pledge on behalf of WHSmith.

6 As we rollout our training programmes, we are getting ever closer to our goal to have as many mental health first aiders as physical first aiders and really beginning to change attitudes to mental health within our business. In light of all the progress made, I was particularly delighted when our Head of Strategic Projects, Alison Garbutt, who has been the driving force behind our mental health programmes, was awarded an everywoman Retail Ambassador Award. Alison s passion and commitment has been key to our achievements so far and I could not be more proud of timber remains one of our key environmental impacts. In July, WWF released the results of their 2017 Timber Scorecard, a survey of retailer timber sourcing policies. WHSmith was praised for making very good progress and we were one of a group of companies awarded WWF s top three trees ranking in the survey. There is a lot of hard work that goes into making sure that the paper and wood products we buy use pulp from sustainably managed forests.

7 More than 85 per cent of the pulp used in our own-brand stationery products now comes from certified sustainable forest sources, and we have set a target to get to at least 90 per cent by 2020. It was very pleasing to get recognition from WWF for the progress we have been CR programmes stretch across a much wider range of issues than those I have been able to mention here. During the year, we have continued our focus on managing those social and environmental issues which are most material to our business and to our stakeholders. I am pleased to say that, across each of these pillars, we are making good progress towards meeting our 2020 corporate responsibility goals. In this Report, we outline the progress we have made under each of our CR pillars: Environment, Marketplace, Workplace and Community. We will maintain our focus on successfully meeting our 2020 CR targets over the coming ClarkeGroup Chief Executive, WH Smith PLC03 GovernanceEnvironmentMarketplaceWorkplac eCommunityAssuranceWH Smith PLC Corporate Responsibility report 2017 WHSmith reaches customers online via and its specialist personalised greetings cards and gifts websites, and WHSmith employs approximately 14,000 colleagues.

8 WH Smith PLC is listed on the London Stock Exchange (SMWH) and is included in the FTSE 250 Index. A commitment to the principles of corporate responsibility is a key focus for WHSmith. Find out more about WHSmith at The leading retailer in convenience , books and news for the world s travelling customer. Britain s most popular high street stationer, bookseller and newsagent. WHSmith Travel has a presence in a wide range of locations including airports, train stations, hospitals and motorway service areas with a growing international business. WHSmith High Street is present on most of the significant high streets in the usWH Smith PLC is one of the UK s leading retailers and is made up of two core businesses Travel and High Street. Our goal is to be:04 GovernanceEnvironmentMarketplaceWorkplac eCommunityAssuranceWH Smith PLC Corporate Responsibility report 2017 Group at a glanceTRAVELHIGH STREETT ravel sells a range of products to cater for people on the move or in need of a convenience goal is to be the leading retailer in news, books and convenience for the world s travelling at 31 August 2017, the business operated from 815 units (2016: 768 units) mainly in the UK in airports, railway stations, motorway service areas and hospitals.

9 233 of these units (2016: 192 units) are outside the UK and mainly in delivered another strong profit1 performance, up ten per cent year on year. We made good progress in Travel s growing international business, winning an additional 41 units, bringing the total number of units won to 273 Street sells a wide range of Stationery, Books, Newspapers, Magazines and Impulse goal is to be Britain s most popular high street stationer, bookseller and at 31 August 2017, the business operated from 611 High Street stores (2016: 612 stores), located on most of the UK s significant high digital business operates through two websites: and Street delivered a good profit performance, matching the strong performance from last shareholder returnsTravelFocused Use of CashWinning new space and developing new formats and channels in the UK and InternationallyImproved execution and serviceHigh StreetOptimise returns from a forensic focus on spaceMargin growth from category mix managementCost efficiencyDriving like for like sales.

10 Profit growth and high levels of cash generation with a growing International businessForensic focus on space and category returns to meet the changing needs of our customersDelivering sustainable profit growth and cash generationUtilising our assets and third party partnerships to enhance our customer offer Post OfficesRight people and skillsOperating responsiblyOur customersOur business model and strategy to create valueReturn surplus cash to shareholders through a progressive dividend policy and share buybacksValue accretive acquisitionsInvesting in the business where returns are greater than our cost of capital05 GovernanceEnvironmentMarketplaceWorkplac eCommunityAssuranceWH Smith PLC Corporate Responsibility report 2017 GovernanceAt WHSmith, we have a long-standing commitment to high standards of corporate responsibility (CR). Our programme plays an important role in risk management, business development and meeting the expectations of our stakeholders.