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To Hydro Tasmania’s stakeholders
Banarra Sustainability Assurance and Advice (Banarra) was commissioned by Hydro Tasmania to assure its Annual Report 2007 (The Report) against the AA1000 Assurance Standard. In conformance with the Standard, our approach assures in terms of materiality, completeness and responsiveness (identifying and addressing the right issues and ensuring the reliability of the information presented).
This is Banarra’s third reporting cycle with Hydro Tasmania, so we have built on our previous understanding of the organisation and its progress.
Summary
We believe The Report provides a fair and balanced representation of Hydro Tasmania’s material (most important) sustainability performance areas, issues and responses for 2006/07 in a way that allows stakeholders to make informed decisions.
We are pleased to note the frank approach that Hydro Tasmania takes to discussing key issues in The Report and also the openness and responsiveness with which the organisation addressed our challenges and feedback during the assurance process.
Assurance scope
Our report assurance scope included all sections of The Report, with the exception of the Sustainability Self-Assessment and the Financial Statements.
Banarra Assurance Methodology
We developed a register of material performance areas and issues, identified through research based on the AccountAbility five-part materiality test.
This included interviews with nine Hydro Tasmania external stakeholders and all nine members of the Executive Team including the CEO, Vince Hawksworth. Reviews were conducted of internal documentation such as policies, surveys and Board papers and we carried out internet-based research for sector issues, standards and peer sustainability reporting.
Of the 290 relevant areas and issues identified, our criteria found 41 to be material. Of these we ranked 20 as being the highest priority. These issues focused our testing of The Report, which was done by developing audit trails, investigating assumptions, reviewing data generation procedures and conducting interviews with 41 data owners. This testing enabled us to take a view on the materiality, completeness and responsiveness of The Report, along with the level of application of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.
Additions since last year
This year we also:
- Included the integrated annual report in our assurance scope; and
- Reviewed Hydro Tasmania’s application of the GRI.
Materiality – has Hydro Tasmania identified what’s important?
We are pleased to note that Hydro Tasmania has developed a systematic approach to identifying and prioritising the issues of greatest concern to internal and external stakeholders. This includes formal criteria for testing these issues as required by the AA1000 Assurance Standard Principles Guidance Note.
All the material issues that we identified in our testing were also identified by Hydro Tasmania’s own materiality process and are included in The Report.
Completeness - has Hydro Tasmania understood these issues?
Hydro Tasmania’s comprehensive self-assessment process continues to facilitate the organisation’s understanding of its material issues. While all the material issues we identified are addressed in The Report, the condition of key generation assets would benefit from greater discussion.
In terms of the boundary of The Report we are pleased to see greater discussion this year of the Roaring 40s joint venture and its approach to sustainability issues.
We are also pleased to note that Hydro Tasmania’s own internal checking processes have improved since last year, leading to greater robustness in terms of the data initially provided for assurance. We did identify a number of errors in the figures and claims presented. All were addressed and are corrected in The Report. However we were unable to sight sufficient evidence to come to an opinion on the figures for energy use (p. 50, Table 6) and for the energy reduction key performance indicator (KPI) (Table 3).
Responsiveness – has Hydro Tasmania responded to these issues?
The Report contains most of Hydro Tasmania’s responses to material issues, however there are two areas where a response is not accounted for – employee engagement and the results of the staff survey, and the challenges of embedding sustainability throughout the organisation.
We are pleased to note that Hydro Tasmania has responded to the key opportunities we identified in our assurance statement last year, with the exception of demonstrating the alignment of Corporate Plan goals, targets and objectives with other content in The Report. This year a number of key performance indicators and targets (P. 34, Table 3) have been excluded without explanation in The Report.
We believe Hydro Tasmania has adequate resources to enable the implementation of the commitments articulated in The Report, however this is a time of restructure and change for the organisation and as such some priorities may change.
Global Reporting Initiative
We concur with Hydro Tasmania’s own assessment that they have achieved GRI application level B+.
In the next report we would encourage more comprehensive identification of the management approach disclosures. Although not required for this application level, Hydro Tasmania could in future also consider the applicability of the GRI Electric Utility and Public Agency Sector Supplement performance indicators.
Opportunities
We have identified a number of opportunities for improvement, including:
- Address the tension between completeness and conciseness by increasing the availability of additional data and information on the web to enable future printed reports to focus primarily on key performance areas and issues;
- Introduce a formal review process to identify and analyse the underlying factors and trends for performance indicator results, such as injury, resource use and compliance metrics; and
- Review the energy reduction KPI to enable whole-of-business measurement that is not affected by fluctuations in energy generation.
These and other opportunities are presented in more detail in a report to Hydro Tasmania management.
Independence
Banarra was paid by Hydro Tasmania to conduct this assignment. Other than this payment the assurance team declares itself independent in relation to Hydro Tasmania and its stakeholders. There is a detailed statement on our independence, impartiality and competencies at www.banarra.com
Richard Boele
Certified Lead Sustainability Assurance
Practitioner IRCA No. 1188527
Katharine Walters
Sustainability Assurance Practitioner
Banarra Sustainability Assurance and Advice
Sydney, Australia
25 September 2007
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