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To the management of mmO2
We have been asked to review mmO2's first corporate responsibility report (the Report) in order to provide assurance on its contents. mmO2's management has prepared the Report in response to stakeholder interests in its management of corporate responsibility issues. mmO2 is responsible for the collection and presentation of information within the Report. The scope of our work did not include a review of the data in the Report or the underlying data reporting processes. This statement provides assurance on the content of the Report and should not in itself be taken as a basis for interpreting mmO2's performance in relation to corporate responsibility.
Our review
There are currently no statutory requirements in the UK relating to the preparation, publication or independent review of corporate responsibility reports. The AA1000 Assurance Standard that was published by AccountAbility in March 2003 sets out principles for social and environmental report assurance. We have set out our conclusions by reference to the assurance principles described in the AA1000 Assurance Standard.
Our review process involves the main steps outlined below:
1. Interviews with a selection of mmO2 executives and senior managers, to discuss the aspects of performance which underpin corporate responsibility in order to understand the objectives and means to accomplishing those objectives, and the degree to which those objectives have been met.
2. Review of selected documents which provide guidance and briefings to mmO2's management on corporate responsibility. Documents reviewed included Board minutes and associated Board papers and the minutes of the Corporate Responsibility Advisory Council meetings. The purpose of this review was to assess the Report's content against those issues considered significant by mmO2's management.
3. Review of transcripts from independent stakeholder engagement activities to understand the issues raised in these discussions and assess the coverage of these issues within the Report.
4. Review of a selection of international, national and local media sources and trade press covering mmO2's management of corporate responsibility issues and risks, as a further check on the balance of the information contained in the Report.
5. Visits to selected mmO2 businesses and sites to review evidence in support of the Report's statements and assertions presented in the Report.
- O2 Germany in Munich
- O2 UK in Slough and UK Customer Services in Preston Brook
- O2 Ireland in Dublin
6. Obtain and consider evidence in support of assertions and claims made in the Report regarding mmO2's corporate responsibility activities in order to substantiate them.
Our conclusions
Based on the work our conclusions and observations are outlined below:
Completeness and responsiveness
- The objectives and business processes described in the Report are consistent with those observed through the course of our work.
- The Report addresses the key issues highlighted in our media review and the independent stakeholder research with the exception of how mmO2 is addressing specific corporate responsibility issues in its supply chains (such as materials sourcing and labour standards). As described in the Report, mmO2 has established an ethical procurement policy and is engaging suppliers on a wide range of issues. We understand that mmO2 will be reporting progress in these areas in future years.
- The mmO2 businesses visited by us undertook routine and planned interactions with local communities to understand their concerns and needs. In addition, we have seen evidence of ongoing discussions with relevant media and non governmental organisations. We have observed that feedback from these activities is documented and discussed in management fora such as the Corporate Responsibility Advisory Council and the Board.
- mmO2 has signed up to the 10 Commitments of the Stewart Report, which require evaluation of potential mast sites and planned levels of engagement with stakeholders. A review by an independent organisation on the implementation of the 10 Commitments across the industry is currently underway and we understand that results should be available during Summer, 2003.
Materiality
- The Board has received regular briefings on corporate responsibility issues considered by the Executive Committee to be material to mmO2. Those issues considered material by senior managers interviewed during our work are included in the content of the Report.
Evidence and commentary
- Claims and statements. We have obtained evidence to support claims and statements made in the report.
- Data. Our scope of work did not include the processes for gathering or reporting the various data presented in the Report and therefore we provide no assurance on the quality and accuracy of it.
Main observations from the visits to sites and businesses:
- Corporate responsibility has been integrated within the risk management and governance processes for each business area with oversight from regional management teams. mmO2 recognises that further work is required to ensure consistent coverage of corporate responsibility risks within these processes.
- The Business Principles have been distributed widely. The majority of employees interviewed through our activities were aware of the Business Principles, however, our visit to Preston Brook in May 2003 indicated that awareness needed to be improved further. We understand that mmO2 plans to continue to raise employee awareness and to survey the result of this activity in the future.
- Networks were being established to report on corporate responsibility issues across the business. The Corporate Responsibility Advisory Council has attendance from representatives covering the significant areas of the business. Attendance at the Council is reviewed periodically and will continue to be so as to ensure appropriate coverage of issues and business entities.
- Objectives and targets relating to corporate responsibility have been developed further as part of the Reporting process. This should increase the focus from all parts of the business going forward.
- The Corporate Responsibility Advisory Council provides a vehicle for reviewing performance across the broad range of corporate responsibility issues. mmO2 recognises the need to establish further assurance processes in relation to this area and has extended the scope of the independent operational risk reviews to cover corporate responsibility risks. In addition, we understand the intention to further integrate corporate responsibility assurance into mainstream assurance processes such as governance certificates, quality management audits and internal audit activities.
Our independence
Ernst & Young has not previously advised mmO2 on any aspects relating to the organisation's approach to corporate responsibility or any business processes relating to the management of the issues discussed in the report.
Our assurance team
Our team has been drawn from the UK social and environmental reporting team, part of the business risk services practice at Ernst & Young. All members of the team are experienced in social and environmental assurance, having worked on similar engagements for a number of significant UK and international businesses.
Ernst & Young LLP
London, 27th June 2003
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