Independent Assurance Statement
Scope and objectives
RWE npower commissioned DNV Two Tomorrows Limited to undertake independent assurance of its 2012 Corporate Responsibility (CR) Report (the ‘Report’) as published at www.rwenpowercr.com including the printed “Corporate Responsibility Summary Report 2012”.
The assurance process was conducted in accordance with AA1000AS (2008). We were engaged to provide Type 2 moderate level assurance, for the following areas:
- evaluation of adherence to the AA1000APS (2008) principles of inclusivity, materiality and responsiveness (the Principles); and
- reliability of specified sustainability performance information, as listed under RWE npower’s Key Performance Indicators (KPIs) section (available here).
We used the Global Reporting Initiative (GRI) Quality of Information Principles as Criteria for evaluating performance information.
Responsibilities of the directors of RWE npower and of the assurance providers
The directors of RWE npower have sole responsibility for the preparation of the Report. In performing our assurance work, our responsibility is to the management of RWE npower, however our statement represents our independent opinion and is intended to inform all of RWE npower’s stakeholders including its management. We were not involved in the preparation of any part of the Report. In addition to this contract, we have provided verification of RWE npower’s submission to the Green Energy Supply Certification Scheme. This is the seventh year that we have provided assurance for RWE npower. We adopt a balanced approach towards all RWE npower stakeholders.
Our team is comprised of Doug Farquhar, Anne Euler, Elvin Ozensoy, and Samantha Parsons. Further information, including individual competencies relating to the team, can be found at: www.twotomorrows.com
Basis of our opinion
Our work was designed to gather evidence with the objective of providing moderate assurance as defined in AA1000AS (2008). We undertook the following activities:
- Review of the current sustainability issues that could affect RWE npower and are of interest to stakeholders;
- Interviews with selected directors and senior managers responsible for management of sustainability issues and review of selected evidence to support issues discussed;
- Review of information provided to us by RWE npower on its reporting and management processes relating to the Principles;
- Review of supporting evidence for key claims in the Report. Our checking processes were prioritised according to materiality and we based our prioritisation on the materiality of issues at a consolidated corporate level; and
- Review of the processes for gathering and consolidating KPIs using the GRI Quality of Information Principles and, for a sample, checking the data consolidation. Where data had been checked by another third party or submitted to regulatory authorities, we tested transposition from these sources to the Report. This included: financial information audited by RWE npower’s financial auditors, data already submitted to regulatory audit such as EU ETS and community investment data assured by the London Benchmarking Group and social spend data which was submitted and used by Ofgem.
Our work did not cover any claims related to RWE AG at Group level.
We reviewed and provided feedback on drafts of the Report and where necessary changes were made. On the basis of the work undertaken, nothing came to our attention to suggest that the Report does not properly describe RWE npower’s adherence to the Principles or its performance.
Without affecting our assurance opinion we also provide the following observations.
During 2012, RWE npower focused on implementing the company-wide sustainability strategy developed in 2011. We note that despite the recent changes to the business, RWE npower continues to focus on its core commitments in relation to its customers and communities. The next report will benefit from showing how the existing strategy has been adapted for the newly restructured business and how it will be implemented moving forward.
Inclusivity concerns the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability
- In our statement last year we recommended that future Reports should provide additional detail on the how the Customer Stakeholder Council (CSC) and CR Committee influence decision making. We note that RWE npower have strengthened the roles of these groups in the decision making process. Future reporting would benefit from a summary of the core recommendations and concerns raised through the CSC and CR Committee and how RWE npower responded to these.
- This year’s Report provides a balanced account of the issues RWE npower experienced when moving to its new customer service platform. RWE npower was proactive in engaging with customers and Ofgem about the issues experienced and the negative results on customer satisfaction. Next year’s report will provide RWE npower with an opportunity to show how these issues have been resolved and how customer satisfaction has been restored.
- We observed an improved understanding across RWE npower’s leadership team of the issues facing vulnerable customers. This is also reflected in RWE npower’s ongoing commitment to its customer transformation strategy.
- We noted a shift towards more systematic and targeted strategic engagements on a number of material issues, such as RWE npower’s engagement on sustainable biomass at Tilbury.
Material issues are those which are necessary for stakeholders to make informed judgments concerning RWE npower and its impacts
- Last year we recommended that RWE should provide stakeholders with more information on impacts of assets on biodiversity, how changes to the generation portfolio impact the company’s carbon intensity target, and how investments made in energy efficiency will reduce carbon emissions over the long term. We are pleased to see that RWE npower have responded to these recommendations.
- We restate our recommendation from last year that RWE npower should consider reporting on emissions from its own fuel supply chain to demonstrate a leadership position in accounting for carbon emissions.
- Although outside the scope of this year’s assurance, we understand that RWE npower is publishing a ‘Tax explained’ report. We welcome this report and recommend that future CR reporting cover the issue of tax payments. We recommend that RWE npower conduct detailed benchmarking of companies in the extractives and utilities sector to ensure that financial reporting and disclosure of payments to government are in line with industry best practice and stakeholder expectations.
- We understand that RWE npower is conducting research into understanding the company’s socio-economic impacts at asset level and the overall contribution to the local economies in which it operates. Future reports will benefit from disclosing the findings of this research by region, county or asset.
- We observed that RWE npower’s community investment partnership with Macmillan demonstrates strong strategic alignment to the core business. There is opportunity for RWE npower to increase the existing alignment of other community investments to a similar level as demonstrated by this partnership.
Responsiveness concerns the extent to which an organisation responds to stakeholder issues
- RWE npower have now implemented a target for women in leadership and expanded the diversity strategy beyond gender.
- This year, RWE npower has simplified its billing and improved transparency over pricing ahead of regulation. We recommend continuing efforts on this issue, especially engaging with vulnerable customers on assisting them in understanding their energy bills.
- We note that RWE npower has remained consistent in its approach to sustainability especially in regards to engaging employees and continuing with the BITC Framework despite undergoing significant changes.
- As RWE npower continues to undergo restructuring, we recommend that future reports should disclose more information on how RWE npower supports employees through this process.
- We observed that for a number of KPIs data protocols were not in place or the reporting processes have changed. We recommend developing data protocols for the most material data and KPIs. While we found no significant inaccuracies, we also recommend the implementation of additional review processes for manually transcribed or collated data in order to reduce the risk of misstatement.
- We restate our recommendation that the suite of KPIs should be reviewed to achieve a better representation of the key impacts of the company. This should be aligned to material issues and targets and to ensure that KPIs chosen track performance on the issues that matter most to the business.
- We restate our recommendation from previous years that emissions data, both by KWh generated and absolute numbers could be put into the context of wider societal norms including a trajectory and timeframe linked to national and international targets. This would illustrate RWE npower’s contribution to these targets and reflect the consideration of policy in RWE npower’s strategic decision making. Alternatively, engagement with external stakeholders that articulates why this is not appropriate to RWE npower would address expectations in this area.
- As users of high volumes of water, we recommend that RWE npower should provide additional performance data and information on the implications of water use at the company’s generation sites, in the context of local availability.
Two Tomorrows (Europe) Limited
Two Tomorrows (Europe) Limited trading as Two Tomorrows is an international corporate sustainability agency. We deliver deep insight, strategic advice and pragmatic support to major companies, enabling them to create long-term value by doing business sustainably. www.twotomorrows.com