The AA1000 Standard & Independent Verification

The AA1000 Assurance Standard is a rigorous reporting standard established by the Institute of Social and Ethical AccountAbility known as AccountAbility.

AccountAbility is the international professional body supporting organisational accountability and sustainable performance. Current membership includes over 300 major businesses, NGOs, service providers, professional bodies, academics and research establishments.

BAT has in the past appointed Bureau Veritas as independent verifier, to certify the social reporting process against the AA1000 Assurance Standard. Bureau Veritas is a professional services company that specialises in Quality, Health & Safety, Social and Environmental management. Ernst & Young are our preferred assurance provider for sustainability reporting. Ernst & Young's independent assurance activities on our Sustainability Report 2008 are described in their assurance statement in the Report.

More info : AccountAbility - www.accountability.org.uk

1. What is Assurance?

Assurance is an evaluation method that uses a specified set of principles and standards to assess the quality of a Reporting Organisation's subject matter, such as Reports, and the organisation's underlying systems, processes and competencies that underpin its performance. Assurance includes the communication of the results of this evaluation to provide credibility to the subject matter for its users.

2. AA1000 Assurance Standard

The AA1000 Assurance Standard is a generally applicable standard for assessing, attesting to, and strengthening the credibility and quality of organisations' sustainability Reporting, and their underlying processes, systems and competencies. It provides guidance on key elements of the Assurance process.

3. Key Characteristics

The AA1000 Assurance Standard's key characteristics are that it:

• Covers thefull range of organisational performance, i.e. 'Sustainability Performance'.
• Focuses on themateriality of subject matter to Stakeholders, as well as its accuracy.
• Examines thecompleteness of anorganisation's understanding of its own performance and impacts, and associated Stakeholder views.
• Assesses Reporting Organisations' responsiveness to Stakeholders, and in doing so interprets Reporting as part of anongoing engagement with them.
• Provides aforward-looking approach that indicates how able anorganisation is to carry out stated policies and goals, as well as to meet future standards and expectations.
• Establishes thebasis for public Assurance statements that build thecredibility of public sustainability Reports.
• Supports and integrates approaches to Assurance using multiple providers, approaches and standards, including specific compatibility with theGlobal Reporting Initiative Sustainability Reporting Guidelines.
• Applies to different types and sizes of organisations and Assurance Providers from diverse geographical, cultural and social backgrounds.
• Requires disclosure by Assurance Providers covering their competencies and relationships with theReporting Organisation (i.e. client).

4. The Accountability Commitment

Organisations adopting any part of theAA1000 Series, including theAA1000 Assurance Standard, commit themselves to thepractice of 'inclusivity', by which is meant anorganisation's:

• Commitment to identify and understand its social, environmental and economic performance and impact, and theassociated views of its Stakeholders.
• Commitment to consider and coherently respond (whether negatively or positively) to theaspirations and needs of its Stakeholders in its policies and practices, and
• Commitment to provide anaccount to its Stakeholders for its decisions, actions and impacts.

The principles set out below are thebasis on which thecredibility of anorganisation's fulfilment of this over-arching Accountability Commitment can be assured.

5. THE AA1000 PRINCIPLES

The following principles must be applied in anassurance process undertaken using theAA1000 Assurance Standard:

• Principle 1. (P.1.) Materiality
• Principle 2. (P.2.) Completeness
• Principle 3. (P.3.) Responsiveness

AA1000 Assurance Standard: Commitment and Principles

P.1 MATERIALITY
The AA1000 Materiality Principle requires that the Assurance Provider states whether the Reporting Organisation has included in the Report the information about its Sustainability Performance required by its Stakeholders for them to be able to make informed judgements, decisions and actions.

P.2 COMPLETENESS
The AA1000 Completeness Principle requires that the Assurance Provider evaluate the extent to which the Reporting Organisation can identify and understand material aspects (see P.1) of its Sustainability Performance.

P.3 RESPONSIVENESS
The AA1000 Responsiveness Principle requires that the Assurance Provider evaluate whether the Reporting Organisation has responded to stakeholder concerns, policies and relevant standards, and adequately communicated these responses in its Report.

6. Evidence

The Assurance Provider must evaluate whether the Reporting Organisation has provided adequate evidence to support the information contained in the Report.

7. Assurance Statement

The Assurance Statement should address the credibility of the Report and the underlying systems, processes and competencies that deliver the relevant information and underpin the organisation's performance.

8. Assurance Provider Standards...

ASSURANCE CREDIBILITY
The credibility of a Report's assurance relies on the Assurance Provider's competencies, independence and impartiality, as well as the use of appropriate standards, including the AA1000 Assurance Standard. The Assurance Provider should aim to be independent of the Reporting Organisation and impartial with respect to the organisation's Stakeholders. Any interests that detract from this independence and impartiality need to be transparently declared by the Assurance Provider.

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