Independent Assurance

To the stakeholders of Network Rail.

Scope of assurance
The scope of the assurance was to provide:

• verification of web-based CR report content;
• confirmation of verification on every verified online page and a full independent assurance statement on the report as a whole including: the scope of verification, methodology, impartial opinion, highlights of good practice, recommendations to improve and a statement of impartiality;
• verification of print-based summary CR report content;
• detailed analysis of waste and carbon emissions raw data, and of data management processes, in order to verify the related numbers in the CR report.

For the online version of the report, the assured web pages are indicated by the statement ‘This page has been externally assured by Bureau Veritas; July 2011’.

Limitations
The assurance work was planned and carried out to provide limited assurance, using an internal methodology designed by Bureau Veritas based on the principles of ISAE3000. It should not be relied upon to detect all errors, omissions and misstatements that may exist within the report.

Exclusions
The following exclusions apply to the scope of assurance:

• operating performance and safety data audited by the Office of Rail Regulation
• company position statements including the foreword to the printed summary report, expressions of opinion, belief, aspiration, or future intent
• activities outside the defined reporting period
• financial data taken from Network Rail’s Annual Report and Accounts.

In order to form its conclusions, Bureau Veritas undertook the following activities:

• interviews with 23 staff within Network Rail’s London offices, including an overview of the company’s strategy from David Higgins, Chief Executive of Network Rail
• review of Network Rail’s CR governance through the assessment of its ongoing CR related initiatives and activities throughout the business
• review of Network Rail’s existing practices for identifying CR issues
• verification of performance data and factual information and assertions through document review, data sampling of supporting databases and reporting systems (e.g. carbon and waste data, customer and employee surveys, the level crossings closure programme, charitable giving amounts) and a materiality review via external media
• detailed review of the integrity of selected datasets and data sources and of the assumptions and exclusions made by Network Rail to support the reported information relating to the company’s carbon emissions and waste.

Opinion
It is Bureau Veritas’ opinion that Network Rail’s 2011 web-based Corporate Responsibility (CR) report content and printed summary report:

• provides a fair summary of Network Rail’s CR-related activities and performance ;
• contains factual information and performance metrics and data that are free from significant error;
• demonstrates an understanding of the material issues that are important to many of its key stakeholder groups.

Areas of good practice  

• the Chief Executive’s message addresses some of the key challenges for Network Rail in becoming a more sustainable company; this lead from the top should encourage the significant development of priority areas of CR in the coming year;
• Network Rail is developing a more strategic approach to issues of importance to stakeholders e.g. safety at level crossings;
• Network Rail continues to develop effective CR initiatives such as the Sustainable Procurement programme, lineside biodiversity and waste management;
• Network Rail continues to report its CR performance online; this can encourage clarity of reporting and positions the company well for more regular assessment of its CR performance in the future.

Recommendations
Network Rail’s CR reporting could be further improved by addressing the recommendations outlined below.

• Strategy development

Network Rail is in the process of developing strategies for six priority areas of CR: carbon, climate change adaptation, waste, biodiversity (encompassing ecology and land use), diversity and inclusion, and accessibility. The company should ensure that these strategies are informed by and support its overarching aims for a sustainable rail network; it is recommended that this overarching aim is further developed in tandem with the six key areas to ensure consistency of approach.

The strategy development should be inclusive (i.e. including internal and external stakeholders) and mapped to existing issues, risks and business priorities where these have been identified. Specifically, the sustainability strategy should be incorporated into Network Rail’s CP5 (2014-19) preparations and future CR reports should focus on the Company’s performance against this strategy.

• Stakeholder Engagement

Network Rail should establish a process to ensure that the views of all of its stakeholders are taken into account during the strategy development outlined above. Feedback mechanisms should be included within this process to encourage and integrate the ongoing opinions and views of its stakeholders as the strategy is approved and implemented;

• Communication

As previously recommended by Bureau Veritas, Network Rail should obtain, from its intended audience, external feedback on its online CR report, to determine whether the CR information is being consistently communicated in enough detail and in a balanced way.

• Clarity

Network Rail should consider the publication of source data and any assumptions, inclusions and exclusions made in the calculation of reported metrics as separate information sheets appended to the online reporting. Examples of this can already be seen in the carbon and waste sections of the online report.

• Balance and transparency

Network Rail’s 2011 CR report contains improved reporting of performance, including in areas where performance is below expectations. However, more could be done to consistently report year-on-year performance, or to highlight areas where existing commitments and targets have been superseded by new or amended programmes.

Statement by Bureau Veritas of independence, impartiality and competence
Bureau Veritas is an independent professional services company that specialises in quality, environmental, health, safety and social accountability with over 180 years history. Its assurance team has extensive experience in conducting assurance over environmental, social, ethical and health and safety information, systems and processes. The assurance team for this work does not have any involvement in any other Bureau Veritas projects with Network Rail. Bureau Veritas has implemented a Code of Ethics across its business to ensure that its staff maintain high ethical standards in their day-to-day business activities.

July 2011