Independent Assurance Statement

EDF Energy commissioned Csrnetwork to undertake an independent assurance engagement over the information and data within the online version of the EDF Energy 2007 Sustainability Performance Report (‘the Report’).  The objectives of the assurance process were to check claims and the systems for collection of data, and to review the arrangements for the management and reporting of sustainability issues.  The assurance process was conducted in accordance with the AA1000 Assurance Standard, and we have commented on the report against the principles of materiality, completeness and responsiveness.  We did not review EDF Energy’s use of the Global Reporting Initiative Sustainability Reporting Guidelines.  Any financial information contained within the Report is excluded from the scope of this assurance process, as are any links leading beyond the 2007 Sustainability Performance Report section of the EDF Energy website.

The directors of EDF Energy have sole responsibility for the preparation of the Report.  In performing our assurance activities, our responsibility is to the management of EDF Energy, however our statement represents our independent opinion and is intended to inform all EDF Energy’s stakeholders including the management of EDF Energy. We were not involved in the preparation of any part of the Report.  We have no other contract with EDF Energy.  This is the second year that we have acted as independent assurance providers for EDF Energy. We adopt a balanced approach towards all EDF Energy stakeholders and a Statement of Impartiality relating to our contract with EDF Energy will be made available on request. The opinion expressed in this assurance statement should not be relied upon as the basis for any financial or investment decisions. The independent assurance team for this contract with EDF Energy comprised Jon Woodhead, Louise Hawson, Judith Murphy and Anne Euler.  Further information, including a statement of competencies relating to the team can be found at: www.csrnetwork.com

Our work was designed to gather evidence on which to base our conclusions. We undertook the following activities:

• We conducted interviews with a selection of directors and senior managers responsible for areas of management and stakeholder relationships covered by the Report.  The objective of these discussions was to understand EDF Energy’s governance arrangements and management priorities;
• We discussed EDF Energy’s approach to stakeholder engagement with relevant managers, we attended a meeting of the independent Stakeholder Panel, and held individual interviews with all 5 members of the Panel, including Will Hutton, the Chair.
• We conducted a top level review of issues raised by external parties that could be relevant to EDF Energy’s policies to provide a check on the appropriateness of statements made in the report;
• Subject to the exclusions set out below under ‘Observations’, we reviewed data collated at the corporate level, and claims made in the Report.  We undertook verification of specific data and claims through meetings with managers responsible for gathering data, reviewed their processes for gathering and ensuring the accuracy of data, and requested supporting evidence. 
• The scope of our work included a visit to the EDF Energy Networks operational site at Fore Hamlet, Ipswich. Selected performance data at site and divisional level were reviewed as part of our review of consolidated corporate data.
• We undertook an assessment of the company’s reporting and management processes against the principles of materiality, completeness and responsiveness as described in the AA1000 Assurance Standard.

Materiality – has EDF Energy provided information on material issues to enable stakeholders to make informed judgments?

On the basis of the method and scope of work undertaken and the information provided to us by EDF Energy, in our opinion the scope of issues included in the Report covers all material issues.

Last year the company announced a range of medium and long term targets entitled Our Climate Commitments.  This year, EDF Energy has added to this range with the announcement of Our Social Commitments.  These targets form the basis for a clear vision for the future that distinguishes EDF Energy from other UK utility sector companies, and in future should provide a useful reference point against which to judge progress.  To enable stakeholders to make such judgements, systematic reporting on progress towards these targets should be introduced, and it will be essential to explain in the narrative how different factors could influence progress over the lifetime of the targets.  The summary of performance currently included in the Report is mainly based around measures relating to the company’s ‘five ambitions’ which were applicable during 2007, together with some supplementary measures.  Going forwards, we recommend that summary performance measures be reviewed to ensure that a complete overview of performance under all of the company’s key sustainability impacts is provided.

In our statement for the Report last year we made a number of recommendations for improved reporting in future years, relating to reporting on energy prices and the assistance offered to specific customer groups during the year, reporting on the carbon intensity of electricity supplied, and the financial impacts of emissions trading, the costs of investments (made and provisioned) in renewables and lower carbon technologies.  In our opinion, improvements to reporting under each of these areas have been made, but there is still room for improvement, particular in terms of comparison of EDF Energy’s performance in some of these areas with other energy companies.

Completeness – does EDF Energy have systems in place to understand changes to stakeholder expectations and to provide complete and accurate information against the issues identified as material for inclusion in the Report?

The company has further refined the internal validation process developed last year for all data and claims made in the Report, providing a central data quality and reliability control point. This has significantly improved the amount and quality of evidence available to support the accuracy of data and claims reported, and strengthened the assurance process. 

On the basis of the method and scope of work undertaken and the information provided to us by EDF Energy:

• For environmental performance data, nothing came to our attention to suggest that these data have not been properly collated from information reported at divisional level.
• For health and safety performance data, nothing came to our attention to suggest that these data have not been properly collated from information reported at divisional level. 
• For other social performance data, nothing came to our attention to suggest that these data have not been properly collated from information reported at divisional level.

In our statement for the Report last year we recommended that future Reports should include comment from the Stakeholder Panel.  This year’s Report does include commentary from the Panel, describing its role and making positive observations about the company’s approach to sustainability governance and reporting.  In future reports we would encourage further discussion of the Panel’s views on EDF Energy’s approach to issues under consideration such as fuel poverty and climate change.

Responsiveness – how does EDF Energy demonstrate that it has responded to stakeholder concerns?

Our interviews with the Stakeholder Panel made it clear that Panel members believe that the company is addressing its key social responsibilities in a professional and pragmatic way. In their opinion the company responds well to their concerns and requests for information, and senior management are willing to be open and candid about challenges as well as successes. Panel members have been particularly impressed with the commitment of senior management to understanding and tackling the complex challenges of energy security, sustainability and affordability. In future years, EDF Energy could consider reporting on the process for agreeing Stakeholder Panel priorities and demonstrate how these have influenced the company’s engagement with other key stakeholders.

We recommend that future reports should include detailed information on the improvements that are being made to safety management for example through the Zero Harm project, given the significance to the business of the fatalities that occurred in the reporting year.  We also recommend EDF Energy should consider providing the facility to download detailed performance data, to enable stakeholders to access information on local impacts, for example emissions, waste and resource use associated with individual power stations.

The Report includes examples of how stakeholder engagement has contributed to specific areas e.g. the development of Our Climate Commitments.  We restate the recommendation made in our statement last year that the Report could be improved through articulating how the company understands stakeholder viewpoints on key performance issues and strategy. This could be achieved through inclusion of observations and quotes from representatives of stakeholder groups or independent experts on specific issues, to illustrate the outputs of dialogue between the company and its stakeholders during the year.

 csr network ltd

U.K. April 2008

Jon Woodhead                                    Louise Hawson                                   Judith Murphy

Director                                              Senior Consultant                               Senior Consultant

csrnetwork is an international corporate social responsibility consultancy organisation.  www.csrnetwork.com