Independent External Assurance Statement

Transcription

1 Anthesis-Caleb The Future Centre, 9 Newtec Place Magdalen Road, Oxford OX4 1RE United Kingdom Independent External Assurance Statement Caleb Management Services Ltd (Anthesis-Caleb), a wholly owned subsidiary of Anthesis Consulting Group, has been commissioned by Kingspan Insulation Ltd. to complete an independent review of its printed Sustainability & Responsibility Report - based on data for the Calendar Year 2016 and to provide an external assurance statement for the report. 1. Objectives As previously, the objectives of the independent review are to provide an opinion on: a) Data accuracy, capture processes and controls b) The corporate processes and mechanisms in place for the preparation and delivery of the report; c) Adequacy and relevance of information contained in the report; and d) Compliance of the report against the Global Reporting Initiative Sustainability Reporting Guidelines (in this case GRI 3) 2. Scope of Work In preparing this statement, Anthesis-Caleb followed an evidence-based process comprising of the steps below: -

2 Page 2 3. Findings 3.1 Overall The Sustainability & Responsibility Report based on data for the Calendar Year 2016 (hereinafter called the 2016 Report ) builds on a series of reports delivered by Kingspan Insulation Ltd. since 2004, and which, until 2008, applied a SPeAR appraisal framework. 1 However, this has now been superseded by the GRI Reporting Framework. Despite considerable internal discussion on the option of adopting the GRI G4 criteria for the 2016 Report, Kingspan Insulation has opted to stay with the GRI G3 reporting framework for this year. This decision has largely been driven by wider discussions within the Kingspan Group about the future of sustainability reporting, since the option exists to report at Group level within the foreseeable future. With alignment of sustainability reporting more closely with financial reporting now seen as best practice, the re-structuring of the sustainability reporting approaches used at divisional level within the Kingspan Group is believed to be overdue. The idea of changing from GRI G3 to GRI G4 at such a stage was viewed as counter-productive, since it would result in the loss of a significant time series, making the tracking of trends more difficult for the reader. In line with GRI G3 practice, content is reviewed for materiality, stakeholder inclusiveness, sustainability context and completeness, while quality is assessed in terms of balance, clarity, accuracy, timeliness, comparability and reliability. In preparing this external assurance statement, Anthesis-Caleb has, once again, taken account of these Reporting Principles and the associated criteria. As with the 2015 Report, has targeted a B+ Application Level for the 2016 data which requires reporting on a minimum of 20 Performance Indicators, with at least one covering each of the specified areas. In this instance, 23 Indicators were selected based on the following distribution: 1 SPeAR (Sustainable Project Appraisal Routine) has been developed by Arup as a framework that assists in the appraisal of sustainability issues relating to an organisation, project or product

3 Page 3 Although it is often difficult to get substantive feedback from the stakeholders for which they are primarily produced, those that have commented appear to be happy with the layout and the coverage of the Report in its current format, so this has remained unchanged in the 2016 version. 3.2 Content Materiality The GRI reporting indicators selected by Kingspan Insulation Ltd. continue to be consistent with a manufacturing business of this type and reflect the areas where sustainability performance is tracked by peers and competitors and where opportunities for improvement are known to exist. Understandably, the focus of any company in this sector is to help their customer base maximize energy savings, so there can be a tendency to pay less attention to their own sustainability metrics. The discipline of sustainability reporting therefore forces attention across a wide range of other sustainability metrics which can then be compared by stakeholders with others in the field. There is also a strong alignment with other reporting obligations, such as the group-wide submission to the Carbon Disclosure Project which similarly focuses on critical performance indicators, thereby minimising business risk. As a group, Kingspan consistently acts as a thought-leader amongst its peers and has continued to champion initiatives which demonstrate its commitment to sustainability goals a good example being the 2020 Net Zero Energy target for its global operations, where progress in 2016 reached over 50% of the total goal with contributions from investment in renewables at Selby and elsewhere Stakeholder Inclusiveness In keeping with the established bi-yearly pattern, Kingspan Insulation conducted their Staff, Community and Customer Surveys in 2016, with the main focus on the local communities. However feedback was limited, probably indicating that there were no particular issues of concern at this point. In reaching staff and external stakeholders, the company has introduced a quarterly magazine entitled Insulation Insight which allows for the communication of key messages to these various audiences. TV screens continue to be used at Pembridge to convey current information to staff and visitors Sustainability Context The 2016 Report continues to present the company s performance in the wider context of sustainability in all its facets economic, social and environmental. From the economic perspective, Kingspan Insulation continued to show robust performance in 2016 driven by the continued growth in TEK and OPTIM-R vacuum panel sales, as well as continued market penetration of its phenolic product, Kooltherm, stimulated in part by the introduction of the K100 series. While always seeking efficiencies, the staff levels have continued to grow in 2016 to support a relatively buoyant trading position and this has been achieved with relatively little impact on staff turnover rates.

4 Page Completeness In its reporting approach, Kingspan has continued to adopt the coverage of 14 key themes spanning all aspects of the economic, social and environmental elements. This approach continues to underpin the treatment of the 23 GRI reporting indicators. The current GRI indicators are appropriately distributed across economic, environmental and social areas of the business. Reporting data are drawn from a comprehensive internal management system normalised for comparability over time. The Pembridge and Selby reporting streams are now fully integrated, which is important as consideration is given to wider inclusion within a Group-wide approach. However, the current reporting scope remains limited to the Pembridge and Selby sites which is frustrating to the reader bearing in mind that there is at least one other site in the UK which could be included. However, for the reasons given earlier, it may not be the time to introduce one additional site into the scope of this Report when the plan is set to broaden the scope of reporting more dramatically. There is no doubt that the Kingspan Group is making every effort to raise the sustainability reporting activities of all its sites within the Group, but this will continue to be a challenge when the company continues to acquire new businesses on a regular basis. It is important that the lack of performance consistency does not become a stumbling block to Group reporting, especially for those operations that have been in the Group for some time. 3.3 Quality Balance The layout of earlier reports has been maintained in the 2016 Report following stakeholder feedback that the current layout meets the objectives. Although the Report inevitably focuses on highlights, it is systematic in its coverage of the identified themes and remains transparent in highlighting areas where progress has been less than expected. As previously, there is a significant level of pragmatism in the narrative, recognizing that the company has to balance its on-going commitment to social and environmental aspects with its economic sustainability. Nonetheless, there are clear indicators of significant investment being made to meet key sustainability goals. As mentioned in last year s External Assessment Report, there is still a lack of balance between short-term (year-to-year) performance and the achievement of longer term goals. One way of achieving better balance in future would be to map-out a five year Gantt Chart to capture the Action Plans against each theme and then provide a commentary around that structure. This would avoid the need for readers to have to compare the annual Reports side-by-side in order to track the evolution of the Action Plans Clarity As in previous years, considerable effort has been made to ensure that a complex sustainability journey is reported in a systematic way with Context, Activities, Achievements

5 Page 5 and Forward Plans addressed for each of 14 themes. As with all reports of this type, there is a tension between providing the level of detail required to allow independent scrutiny, while making the information sufficiently accessible for the reader. The size of some of the graphs and footnotes could continue to be a challenge for some readers, especially where they do not have access to electronic versions that can be magnified easily. One option for future reports would be to move the graphs into an Appendix where they could be scaledup. This would be particular relevant if future Reports adopt the Gantt Chart approach discussed in the previous section Accuracy Kingspan Insulation continues to operate a comprehensive and thorough data collection process which is designed to allow the derivation and monitoring of the GRI reporting indices. This was once again reviewed and inspected during the development of this External Assessment Statement. It was noted that some correction in the employee data for 2014 and 2015 had been required, but this was tracked to an inputting error rather than any systematic issue with the process. In our opinion, Kingspan s approach continues to be close to an exemplar of such processes. We have noted in previous Reports that this can create a barrier to the inclusion of new sites, but hopefully this best practice will be transferred into any Group-wide approach adopted in future Timeliness The timing of the 2016 Report has slipped a little this year, but has still been achieved within the calendar year following the year to which the Report relates. Coordination with other reporting deadlines such as CDP and BES 6001 would be useful, but it is understood that this would place particular pressures on the reporting staff. Again, this is something that should be reviewed at Group level in due course Comparability The time-series of information now contained in the 2016 Report continues to allow a full comparison of annualized data and is certainly sufficient for the reader to identify key trends and to raise questions resulting from those trends. Careful consideration will need to be given as to how the integrity of the data can be retained in future within a Group reporting environment Reliability The dataset on which the 2016 Report is based continues to be viewed as robust. The full integration of the Selby operation makes the Report more reliable than in earlier years. This level of reliability should be maintained in future provided that best practice from the Kingspan insulation team can be incorporated into future reporting structures developed at Group level.

6 Page Boundary Setting As noted previously, the 2016 Report continues to be based on data from both the Pembridge and Selby sites. The quality of reporting from both sites in the 2016 Report is self-evident and commendable. The way in which this data is incorporated into any Groupwide process in future will be important in maintaining distinct boundaries and there is a case for continuing with parallel reporting at the divisional level and subsequent aggregation at the Group level. However, even this approach requires a consistency of methodology which doesn t yet exist across the Group. 4. Caleb Management Services Limited (Caleb) Opinion The trading conditions for Kingspan Insulation have remained healthy and arguably strengthened in 2016, setting a strong platform for investment, despite uncertainties over energy policy in the post-2015 election cycle and the pending impact of BREXIT. The company has certainly continued to demonstrate its commitment to its sustainability goals by its levels of investment in measures to meet its Net Zero Energy Buildings target in 2020, with the Group passing the 50% mark during Kingspan s relationship with its stakeholders has once again been shown to be in good order, although the responses from some quarters have been somewhat lethargic. The company s continuing commitment to regular surveying and benchmarking indicates its keenness to be sure that it is bringing its customers, suppliers and employees with them. The further integration on the supply-side of BRE BES 6001 (Responsible Sourcing) is an important additional indicator of that commitment, but may need to be extended still further in future to take in additional metrics from its suppliers. This will require even greater focus on supply-chain partnerships. In addition, the company is now beginning to make serious strides to include other sites within the Kingspan Insulation business, although this may ultimately be incorporated into a Group-wide initiative. In Anthesis-Caleb s opinion the Sustainability & Responsibility Report - based on data for the Calendar Years 2016 (the 2016 Report) provides a reasonable and balanced presentation of performance, taking into account the data provided as well as the overall selection of content. Based on this review, Kingspan Insulation Ltd. meets the GRI G3 requirements at the B+ application level. Caleb Management Services Limited (Anthesis-Caleb) - December

7 Page 7 Caleb Management Services Ltd - Competence and Impartiality Caleb Management Services Ltd (Anthesis-Caleb), a wholly-owned subsidiary of the Anthesis Consulting Group is an international sustainability consultancy advising governments, multi-lateral agencies and businesses on sustainable development challenges and opportunities. The company has extensive experience in conducting reviews on environmental, social, ethical and economic aspects of sustainability and supporting clients in the implementation of sustainability based systems and processes in accordance with best practice. It has particular expertise in advising construction sector clients on how to effect organisational transitions that take account of risk, vulnerabilities and that build resilience. Caleb is an independent provider of advice and has prepared this External Assurance Statement in broad accordance with AA 1000AS (2008) guidance, although the Statement is not explicitly written to the Standard.