Independent Assurance Statement
Hydro Tasmania Annual Report 2008
To Hydro Tasmania’s stakeholders
Banarra Sustainability Assurance and Advice (Banarra) was commissioned by Hydro Tasmania to assure its Annual Report 2008 (The Report) against the AA1000 Assurance Standard. In conformance with the Standard, our approach assures in terms of materiality, completeness and responsiveness – in other words, we assure whether The Report identifies and discusses the most important issues to stakeholders and that the information is reliable and meaningful. In addition, Banarra undertook a validation of The Report against the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.
This is Banarra’s fourth reporting cycle with Hydro Tasmania, so we have built on our previous understanding of the organisation and its progress.
We believe The Report provides a fair and balanced representation of Hydro Tasmania’s material (most important) sustainability performance areas, issues and responses for 2008 in a way that allows stakeholders to make informed decisions. We were pleased in particular with Hydro Tasmania’s frank discussion of the drought’s impact on its sustainability performance during the reporting period. Nevertheless, we have identified opportunities for improvement within this statement and these are presented in more detail in a report to Hydro Tasmania management.
The scope of our assurance included data and claims relating to Hydro Tasmania in all sections of The Report, with the exception of the Statement of Corporate Intent and the Financial Statements. While we provide no opinion on the self-assessment performance descriptions or scores, we conducted a review of the sustainability self-assessment methodology and our findings are below.
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 five of Hydro Tasmania’s external stakeholders and all nine Executive Team members, including the CEO Vince Hawksworth. Reviews were conducted of internal documentation including policies, surveys and Executive Board papers. We also carried out internet-based research for sector issues, standards and peer sustainability reporting.
Our criteria found 20 issues to be material and these focused our testing of The Report. All testing was carried out at Hydro Tasmania’s head office in Hobart, Australia. Testing included 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 GRI Sustainability Reporting Guidelines.
For the sustainability self-assessment review we interviewed 11 participants and reviewed the methodology.
Materiality – has Hydro Tasmania identified what’s important?
The majority of the material issues we identified are acknowledged in The Report. The only material issue not identified was the year’s Basslink outages.
Hydro Tasmania’s materiality process did not include a comprehensive approach to engaging with its stakeholders so was unable to demonstrate how the report content was drawn from the results of stakeholder engagement. The systematic process used last year for evaluating and prioritising stakeholder issues was not used this year. Consequently some issues were excluded from the initial draft report, therefore we recommend the process be re-established.
Completeness - has Hydro Tasmania understood these issues?
Hydro Tasmania has articulated its understanding of most of its material issues in The Report in a way that informs stakeholders. We were pleased with the significant discussion of the challenges in managing Hydro Tasmania’s sustainability performance during the drought.
Stakeholders would have benefited from greater discussion of the potential impact of the Tasmanian government’s direction to prioritise reliability of electricity supply on the corporation’s carbon neutrality objectives, within the context of continuing drought and reliance on Bell Bay and Basslink.
Hydro Tasmania’s strategy is to build water storages through the use of Bell Bay and Basslink. However, there is no discussion in The Report of the broader carbon impacts of this strategy.
The Hydro Tasmania Consulting business in India is excluded from The Report scope and in future we recommend its inclusion.
We identified a number of errors in the figures and claims presented. All were addressed and corrected in The Report. While Hydro Tasmania presents year on year data in many areas, there remains an opportunity to provide trended data to improve understanding of relative performance. For example, redundancies would benefit from being trended.
Responsiveness – has Hydro Tasmania responded to these issues?
The Report contains Hydro Tasmania’s responses to most of its material issues. We believe Hydro Tasmania’s response to its community survey findings could be more fully described.
We were pleased to note the review and improvement of the sustainability self-assessment process. Notwithstanding, we believe the self-assessment process would benefit from a more central and formal positioning within Hydro Tasmania’s approach to business planning and management. There is also an opportunity for the self-assessment process to better ensure the various parts of the organisation are engaging with their stakeholders, identifying their stakeholder issues and appropriately responding.
Hydro Tasmania responded to most of the opportunities we identified in our assurance statement last year. One key opportunity yet to be responded to was addressing the tension between completeness and conciseness by putting more data online.
We believe Hydro Tasmania has adequate resources to enable the implementation of the commitments articulated in The Report. However, if the low water inflows continue, this may see some priorities change.
Global Reporting Initiative
We concur with Hydro Tasmania’s own assessment that they have achieved GRI application level B+. We note that there was an increase in the provision of management approach disclosures as encouraged in last year’s assurance statement and that some of the GRI Electric Utility Sector Supplement indicators were addressed.
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.
Certified Lead Sustainability Assurance Practitioner IRCA No. 1188527
Sustainability Assurance Practitioner
Banarra Sustainability Assurance and Advice, Sydney, Australia
29 September 2008