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Independent reports
Independent Verifier's Report on Corporate Responsibility
Ernst & Young LLP was commissioned to provide independent assurance of the corporate responsibility (CR) content of National Grid plc's (National Grid) Operating and Financial Review in the 2006/07 Annual Report and Accounts (the Report) and the website (http://www.nationalgrid.com/corporate/Our+responsibility). This statement relates to the corporate responsibility content of the Operating and Financial Review in the Annual Report and Accounts 2006/07. For our full opinion and scope please see our statement at: http://www.nationalgrid.com/corporate/Our+Responsibility/Assurance/. The Report has been prepared by the management of National Grid, who are responsible for the collection and presentation of information within it. Our responsibility, in accordance with National Grid management's instructions, is to carry out a limited assurance engagement on the Report in order to provide conclusions in relation to the AA1000AS1 Principles of Materiality, Completeness and Responsiveness. We do not therefore accept or assume any responsibility for any other purpose or to any other person or organisation. Any reliance any such third party may place on the Report is entirely at its own risk.
Our observations and areas for improvement will be raised in a report to National Grid's management.
What we did to form our conclusions
Our assurance engagement has been planned and performed in accordance with the AA1000AS and ISAE30002 Standards. The AA1000 assurance principles have been used as criteria against which to evaluate the Report.
In order to form our conclusions, we undertook the steps outlined below:
- Interviews with a selection of National Grid executives and senior managers to understand the current status of Corporate Responsibility (CR) activities and progress made during the reporting period.
- Visits to National Grid offices in the US and the UK and operations at the Isle of Grain, Milford Haven and Landulph site, Cornwall to review the systems and processes in place for managing and reporting on CR activities and to review evidence in support of claims made in the Report regarding National Grid's CR performance.
- Review of selected corporate level documents to assess management awareness of performance against non-financial policy commitments and test the coverage of the Report.
- Review of stakeholder engagement activities, including engagement with the socially responsible investment community, regulators and communities.
- Review of a selection of external media reports relating to CR aspects of National Grid's performance, as a check on the scope and appropriateness of statements made in the Report.
- Review of social investment, employee and health, safety and environmental (HSE) data samples and processes to assess whether they have been collected, consolidated and reported appropriately at corporate level and at the business level.
- Test the consistency of the claims made in the Report regarding National Grid's CR performance against the evidence obtained through our work.
Level of assurance
Our evidence gathering procedures have been designed to obtain a limited level of assurance (as set out in ISAE3000) on which to base our conclusions. The extent of evidence gathering procedures performed is less than that of a reasonable assurance engagement (such as a financial audit) and therefore a lower level of assurance is provided.
The limitations of our review
Our work and conclusions are limited to the CR content of the Operating and Financial Review in the Annual Report and Accounts found under the following headings: responsibility, safety, people, community involvement, community investment and people. Our review does not cover the content of the individual business summaries or CR data for previous years.
The scope of our work was limited to corporate level activities and visits to the offices and operations highlighted above.
Our conclusions
Based on the scope of our review our conclusions are outlined below:
Materiality
We are not aware of any material aspects concerning National Grid's CR activities that have been excluded from the Report. However, given the importance National Grid is placing on process safety following reports issued by the Baker Panel, the US Chemical Safety and Hazard Investigation Board and the Buncefield Major Incident Investigation Board, we would expect to see further coverage on this topic in future reports.
Completeness
- We are not aware of any material issues excluded from National Grid's judgements on the content of the Report.
- We are not aware of any misstatements in the assertions made by National Grid management in the Report regarding CR activities.
HSE, Social Investment and Employee Data
- We are not aware of any material reporting units that have been excluded from the Company wide data relating to the topics above.
- Nothing has come to our attention that causes us to believe that the data relating to the above topics has not been collated properly from information reported at operations level.
- We are not aware of any errors that would materially affect the data as presented in the Report.
Responsiveness
- With the exception of the issue highlighted in relation to Materiality, we are not aware of any additional issues of stakeholder interest that are not currently included in the Report's scope and content.
Our Independence
This is the first year Ernst & Young LLP has provided independent assurance services in relation to National Grid's CR reporting. With the exception of this work, we have provided no other services relating to National Grid's approach to CR reporting.
Our Assurance Team
Our assurance team has been drawn from our global environment and sustainability network, which undertakes similar engagements to this with a number of significant UK and international businesses.
Ernst & Young LLP London, 16 May 2007
1 AA1000AS – AA1000 assurance standard from the Institute of Social and Ethical Accountability.
2 ISAE3000 – International Federation of the Accountants' International Standard for Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.