Corporate Social Responsibility (CSR) is very important to us at Inchcape. It supports our Core Purpose,Creating the Ultimate Customer Experience for our Brand Partners and reflects the way we run our business. It is reinforced by our Values,and is reflected in our leadership skills.

Our brand partners and our Customers expect and demand that we are socially responsible members of the international business community. It is our understanding of and belief in the benefits of a CSR based culture that encourages us to consistently take further steps to improve the quality of life for our employees, the local communities in which we operate as well as wider society.We believe that ultimately CSR will help us to create greater value for our shareholders, attract and retain the best people within our industry, achieve our shared goals and simply become a better company.

Developing our CSR policies

Last year,we announced our commitment to integrating socially responsible behaviour into every aspect of how we operate and define ourselves. 2007 has seen our employees and specialist external consultants working together to start building the foundations of a global approach to CSR that will make responsible economic,environmental and social behaviour intrinsic to the way we work.

As an indicator of our commitment, we have engaged an external specialist CSR consulting firm to help us start the process of developing and implementing an effective CSR strategy and relevant performance management measures.

In 2007 we carried out the following:

• external benchmarking, to identify and agree issues that are core to businesses in and outside of our sector;
• internal benchmarking,based on questionnaires,comparisons and feedback throughout the business to identify our stakeholders and the issues important to them in respect of the business we operate;
• a facilitated workshop to investigate the findings of the benchmarking process and determine the issues on which we should focus;
• a review of best practice and peer activity on environmental standards and reporting;
• environmental reviews and surveys focusing on opportunities for environmental plans for our sites globally.

This work has prepared the way for 2008 and beyond

Management of CSR

The Board is ultimately accountable to our shareholders for our CSR policy.Day to day management of CSR strategy has been delegated to the CSR Committee, comprised of the Group Chief Executive,Group HR Director,Group Communications Director and General Counsel and Group Company Secretary.

Employees with both global and local responsibilities support the work of the CSR Committee across the three key strategic areas of focus: our People, our Communities and our Environment.

As part of the risk management processes embedded throughout the Group, environmental, social and governance risks are identified and mitigated appropriately.

Fundamentally,we believe it is the enthusiasm and understanding of our people that will shape and empower Inchcape’s CSR culture.

To this end a major employee engagement and awareness programme in 2007 has helped us to lay firm foundations on which we can build in 2008 and beyond.

Going forward,we plan to combine the local knowledge,enthusiasm and expertise of our employees worldwide with our clearly defined Values, standards and policies to enable us to contribute responsibly and sustainably to society.

2007 Review

In parallel with formalising our approach to CSR activities and reporting, during 2007 we have concentrated on three areas:

• our People: we have introduced a number of initiatives to improve the performance and prospects of our People which are outlined below;
• our Communities:we have participated in the numerous communities in which we operate and again,a selection of activities are detailed later in the report;
• our Environment:we have begun analysing our impact and are increasing the awareness of our environmental management.

Objectives for 2008

In the context of the early stage of our CSR journey, we have chosen a few strategically important targets for 2008.

In 2008,our objectives include:

• raising employee engagement through the various initiatives from our People Strategy, including significant reward and development plans;
• extending our employee survey to our global employee base;
• extending best practice in health and safety to our operations worldwide;
• identifying and defining environmental initiatives for 2009 and beyond.