Independent Assurance Statement
Scope and objectives
FirstGroup plc commissioned Two Tomorrows (Europe) Limited * to undertake independent assurance of its Corporate Social Responsibility Report 2009 ('the Report'), and supporting information on the web site which is found at www.firstgroup.com/corporate/csr.
The assurance process was conducted in accordance with AA1000AS (2008). We were engaged to provide Type 2 assurance, which covers:
- Evaluation of adherence to the AA1000APS (2008) principles of inclusivity, materiality and responsiveness (the Principles)
- The reliability of specified sustainability performance information
The performance information included in the scope of our assurance engagement was: all data and key claims in the Report and supporting web-based information, excluding any financial information taken from the annual report. We used the Global Reporting Initiative (GRI) Quality of Information Principles as Criteria for evaluating performance information.
Responsibilities of the directors of FirstGroup plc and of the assurance providers
The directors of FirstGroup plc have sole responsibility for the preparation of the Report. In performing our assurance work, our responsibility is to the management of FirstGroup plc, however our statement represents our independent opinion and is intended to inform all stakeholders including the management of FirstGroup plc.
We were not involved in the preparation of any part of the Report. We have no other contract with FirstGroup plc and this is the sixth year that we have provided assurance. We adopt a balanced approach towards all stakeholders.
Our team comprised: Mark Line, Louise Hawson, Todd Cort, Thomas Krick, Jenn Rosenberg and Anne Euler. Further information, including individual competencies relating to the team can be found at: www.twotomorrows.com
Basis of our opinion
Our work was designed to gather evidence with the objective of providing moderate assurance as defined in AA1000AS (2008). We undertook the following activities:
- Review of the current sustainability issues that could affect FirstGroup and are of interest to stakeholders
- Interviews with selected directors and senior managers responsible for management of sustainability issues and review of selected evidence to support issues discussed. This included directors and senior managers based in Cincinnati and Dallas, USA, and in London and Aberdeen in the UK. We were free to select interviewees.
- Review of FirstGroup's approach to stakeholder engagement and materiality determination. This included interviews with senior managers responsible for engagement, an interview with the Chair of the newly formed CSR External Advisory Group, and specific investigation of stakeholder engagement activity at 2 sites (named below) in the UK.
- Review of information provided to us by FirstGroup on its reporting and management processes relating to the Principles
- Four site visits in the US and the UK to evaluate the internal audit process for review of relevant operating company processes and strategy, and validation of data contained in the Report. The sites we visited were First ScotRail in Glasgow, First West Yorkshire in Leeds, First Student in San Francisco and First Transit in California. We were free to select these sites.
- Review of supporting evidence for key claims in the report
- Review of the processes for gathering and consolidating 12-month corporate responsibility data collated at the corporate level and, for a sample, checking the data consolidation
Findings
We reviewed and provided feedback on drafts of the Report and where necessary changes were made. On the basis of the work undertaken, and with the exceptions set out below, nothing came to our attention to suggest that the Report does not properly describe FirstGroup plc's adherence to the Principles or its performance.
Observations
Without affecting our assurance opinion we also provide the following observations on FirstGroup's adherence to the three Principles and on the published performance information:
Inclusivity concerns the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.
At Group level, a variety of engagement efforts have improved the company's ability to understand stakeholder concerns, and integrate them into its decision making processes. Of particular note, the creation of the CSR External Advisory Committee is a welcome step.
The mechanisms in place at site and operating company level in the UK are helpful in identifying local stakeholder issues and concerns. We note that procedures for obtaining and aggregating the outcomes of UK customer and employee surveys at the Divisional/Group level have been improved this year. FirstGroup could benefit further by extending this to feedback from other local stakeholders, including community representatives, local authorities and environmental and social advocacy groups.
Local and regional stakeholder engagement in the US is focused on customers and regulators, and appears to be strong and capable of addressing the primary risks and opportunities in local operations. FirstGroup could benefit from more proactive engagement with stakeholders such as suppliers, community members and local advocacy groups in the US.
Material issues are those which are necessary for stakeholders to make informed judgments concerning FirstGroup and its impacts.
The Report includes information on FirstGroup's material corporate responsibility performance issues and should enable stakeholders to make informed judgements. FirstGroup has systematically reviewed its material sustainability issues; however procedures for initial identification of material issues could be made more rigorous and the criteria used to determine materiality could be more fully disclosed in the Report.
On specific material issues:
- Labour unions in the US: Appropriate mechanisms are now in place to resolve disputes and FirstGroup has shown commitment to greater transparency through appointment of the Independent Monitor. By allowing the Monitor to decide jurisdiction and to make its actions in response available, FirstGroup is demonstrating its commitment to the Freedom of Association programme.
- Reducing fuel use: FirstGroup's approach to reducing fuel use in the UK Bus and Rail divisions, and the initiatives being rolled out in the US, represent a significant step forward and a clear move towards sector leadership in this area, including both engineering and driver behaviour solutions.
- Climate change targets: We recommend that future reports discuss the challenges of long-term planning to achieve targets under limited-time franchise agreements, and the efforts FirstGroup is making to involve the wider industry.
Responsiveness concerns the extent to which an organisation responds to stakeholder issues
At Group and site level the company is effectively responding to employee concerns raised through the employee survey. Reporting in this area could be improved by including survey findings, to enable a better understanding of how material employee-related issues develop over time.
In our statement last year we recommended a shift in the customer engagement approach toward more cooperative and strategic problem solving. This year we observed examples in the UK of strategic cooperation and recommend continuation of this approach across the Group.
Performance Information
We found evidence that appropriate systems are in place for monitoring and gathering information on relevant management arrangements and performance.
While we did not identify any significant errors or omissions, we offer the following specific observations on the basis of the method and scope of work undertaken and the information provided to us by FirstGroup:
- Data collection and reporting systems in the US are currently not line with the standards in the UK. Data collection systems vary and in many cases rely on manual compilation procedures which would benefit from more consolidated data collation methods.
- We note the continued efforts being made to obtain an accurate baseline for fuel efficiency by vehicle in the US, and efforts to reduce the need for estimation and increase coverage of carbon footprint data.
Two Tomorrows (Europe) Limited
London
June 2009