General Information

Independent Verifier’s Report on Operating Responsibly

Assurance statement

URS Verification Ltd (URSVL) has been commissioned by National Grid Transco to provide independent assurance of the corporate responsibility elements of its Annual Report & Accounts and Annual Review 2004/05 (‘the reports’) and the website (www.ngtgroup.com/responsibility). This statement covers the reports; a further statement that covers the information on the website will be provided when the website is updated.

top

Responsibilities of Directors and Verifier

The information contained in the reports is the sole responsibility of the Directors of National Grid Transco. This assurance statement represents the independent opinion of URSVL in relation to the reports. URSVL has not been involved in the development of the reports or associated systems. URSVL receives approximately 10% of its income from National Grid Transco.

URSVL has carried out its services by checking samples of information and documents that have been made available to URSVL by National Grid Transco. Accordingly, URSVL has not checked or reviewed all of National Grid Transco's information and documents. This assurance statement is not intended to be used as advice or as the basis for any decisions, including, without limitation, financial or investment decisions.

top

Method

URSVL has performed this assurance process following the principles of the AA1000 assurance standard. URSVL auditors also apply the general principles of auditing and audit procedures as contained within international standard, ISO 19011. We also consider ISO/IEC Guide 66 and International Accreditation Forum (IAF) Guidance to this document (IAF GD 6:2003), frameworks for bodies operating independent assessment and certification of management systems.

The assurance process included:

  • interviews with 38 key National Grid Transco personnel at both Group level and within the most significant business operations in the UK and US;
  • interviews with two of the non-regulated businesses, Crown Castle UK and Basslink; and
  • review of the changes in data processes with particular focus on accidents and environmental incidents.

top

Opinion

We continue to be impressed with the level of engagement of all members of the executive and senior management team. National Grid Transco has achieved a significant improvement in safety performance, which reflects the top priority that safety is given throughout the Group. Governance has further improved through enhancements in the operation of the Risk & Responsibility Committee and by the formation of a Social Policy Committee to develop the Group's community investment policy and framework. An Inclusion and Diversity strategy has been developed and a Health strategy is planned, the results of which, when rolled out, should improve workplace performance.

In relation to recommendations made by URSVL last year, the Group has:

  • developed further its systems and procedures; these now need to be implemented in all areas including business development and supply chain management;
  • improved internal communication; as the Group continues to develop, harmonising corporate cultures remains important;
  • planned how to manage and communicate its response to stakeholders on issues;
  • communicated trends in its performance against previous years, which demonstrates continual improvement; and
  • included in the reports the key challenges faced by the Group during the year.
Materiality

National Grid Transco has an established process to identify and manage risks, and continues to integrate this process into the business. There is evidence that the process is providing benefits at an operational level. In URSVL's opinion, the report covers the material risks and issues to the business for the reporting year. However, there is no formal process to identify issues that are not material but should be disclosed.

Completeness

Information within the reports is generally accurate and representative of performance. Data collection processes and systems continue to be reviewed and improved across the organisation.

URSVL considers that the reports provide a fair and balanced account of National Grid Transco's activities and performance for the reporting year. Reporting on objectives, targets and future challenges would help to communicate the Group's current position, against which its progress could be assessed.

Responsiveness

The Group engages with a range of stakeholders. However there is not a coordinated approach to identifying and engaging with the Group's various stakeholder groups and ensuring the Group responds appropriately. URSVL was encouraged by National Grid Transco's response to the employees' survey feedback, its recognition of issues raised and the implementation of actions to address these.

top

Recommendations

To build further on the progress made in developing and integrating its strategy, systems and reporting, National Grid Transco should consider:

  • monitoring its progress on health, inclusion and diversity, and community investment policy, as these strategies and initiatives are rolled out;
  • continuing to improve sharing of information and developments through internal communication;
  • developing a more formal process for determining which risks and issues are disclosed;
  • discussing how the Group's activities translate into impacts on the environment and society, to assist stakeholders' understanding of its performance; and
  • communicating objectives, targets and future challenges to increase transparency of the Group's performance achievements and expectations.

Belinda Howell
Director
For and on behalf of URS Verification Ltd
London
May 2005

top