ScottishPower commissioned csrnetwork to undertake an independent assurance engagement over the information and data within the online version of the ScottishPower 2007 Corporate Responsibility 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.  Any financial information contained within the Report is excluded from the scope of this assurance process, as are case studies and any information or claims relating to Iberdrola.  The scope of our work did not include a review of the Report against the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.

The directors of ScottishPower have sole responsibility for the preparation of the Report.  In performing our assurance activities, our responsibility is to the management of ScottishPower, however our statement represents our independent opinion and is intended to inform all of ScottishPower’s stakeholders including the management of ScottishPower. We were not involved in the preparation of any part of the Report.  We have no other contract with ScottishPower.  This is the sixth year that we have acted as independent assurance providers for ScottishPower.  We adopt a balanced approach towards all ScottishPower stakeholders and a Statement of Impartiality relating to our contract with ScottishPower 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 ScottishPower comprised Jon Woodhead, Todd Cort, Louise Hawson and Judith Murphy.  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 ScottishPower’s governance arrangements and management priorities;
• We discussed ScottishPower’s approach to stakeholder engagement with relevant managers;
• We conducted a top level review of issues raised by external parties that could be relevant to ScottishPower’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 selected data and claims through meetings with managers responsible for gathering data within the Credit 360 system, reviewed their processes for gathering and ensuring the accuracy of data, and requested supporting evidence.
• In addition to our review of consolidated corporate data we reviewed the business level controls and assurance processes in place.
• The scope of our work included a site visit to Warm Zones to review their work in delivering domestic energy efficiency measures funded by ScottishPower to meet their EEC commitments, as well as benefits advice funded by the ScottishPower Energy People Trust.
• 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.
• We reviewed claims and data contained within the Report presented to us on 18th April 2008 with the understanding that this material would be published on the ScottishPower website.

Materiality – has ScottishPower provided information on material issues to enable stakeholders to make informed judgements?

• In our opinion the Report includes information on ScottishPower’s main corporate responsibility performance issues and should enable stakeholders to make informed judgements.
• In our statement last year we commented on ScottishPower’s approach to reporting on prices, targets for emission level reductions, and the impact areas of procurement, and waste and resource use.  In our opinion, reporting in these areas has improved this year in terms of identification of material issues and provision of information on issues of concern to stakeholders.
• The report includes improved analysis on two key issues in particular; progress against atmospheric emissions reduction targets, and the company’s approach to managing the impact of price volatility on vulnerable customers.  We recommend that future reports should set out a clear vision for how the company expects to manage its carbon footprint for the period up to 2012, the possibilities for the period 2012-2020, and how this outlook compares with the published targets for CO₂ emission reductions and increases in generation from renewables for the UK and Scotland.  We also recommend that future reports provide further information on the company’s work on social tariffs, and the impact of the scheme planned for introduction in 2008.
• We recommend that future reports should include further information on ScottishPower’s contribution to local economies, through its employment and supply chain activities.

Completeness – does ScottishPower 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?

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

• 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.  Systems for reporting waste data have continued to improve, and new emissions data have been included relating to CO₂ from coal shipments.
• 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 last year we recommended that future reports include data on all complaints received by the business in addition to those received via Energywatch.  These data have now been included in this report.
• Credit 360 software is used to manage and approve Corporate Responsibility data and text. In some areas where there have been changes in staff during the year Credit 360 has not been used effectively. We suggest training is undertaken for new staff and refresher training provided where necessary.

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

• In our statement last year we recommended that the report would be improved through specific recognition of how the company understands the concerns of its stakeholders, and explicit links to where the report provides information on the company’s response.  We re-state this recommendation.
• The report is notable for its inclusion of data and information on issues relating to coal procurement, including the Indonesian mine case study.  We understand that the corporate responsibility implications of sourcing raw materials for generation activities such as coal, gas and biomass are under active review by ScottishPower.  We recommend that consideration be given to providing more systematic information on these issues in future reports, including where possible, reporting on the findings of independent verification of social and environmental impacts and supplier management standards.

Csrnetwork ltd
U.K. April 2008

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