DNV Assurance Statement

TITAN Group CSR and Sustainability
Report 2009
WBCSD-CSI measurement and reporting guidelines for CO₂ and H&S

Introduction

Det Norske Veritas (hereafter ‘DNV’) has been engaged by the management of TITAN Cement Company S.A. (hereafter ‘TITAN’) to provide assurance services in connection with the English version of Titan’s Corporate Social Responsibility (CSR) and Sustainability Report 2009 (hereafter ‘the Report’). This engagement focused on the information provided in the Report and the underlying management and reporting processes. It also included an assessment of the Report’s alignment with the WBCSD-CSI performance measurement and reporting guidelines for CO₂ and H&S.

This Assurance Statement is aimed at the readers of the Report. The management of TITAN is responsible for all assertions and information provided in the Report, as well as the processes for collecting, analysing and reporting that information. DNV’s responsibility regarding this assurance engagement is to the management of TITAN only, in accordance with the scope of work commissioned. DNV disclaims any liability or responsibility to a third party for decisions, whether investment or otherwise, based on this Assurance Statement or the detailed Assurance Statement for CO₂ and H&S, available at www.titan.gr/en/corporate-social-responsibility/

Scope

The scope of DNV’s assurance engagement included the verification of data management processes and reported information. This was carried out in the context of Titan’s CSR and Sustainability strategy, management processes and performance in the 12 month period ending on 31 December 2009. The scope of work included a review of:

CSR and Sustainability policies, objectives, initiatives, practices and achievements in 2009, described in the Report. These were verified at Group and Regional levels, and in the following countries: Albania, Egypt and the United States;
The extent to which Group, Regional and Country-level policies, practices and procedures are known, understood and implemented at the following sites: Alexandria (Egypt), Antea construction project (Albania), Beni Suef (Egypt) and Roanoke (United States);
Processes for defining the boundary, focus and content of the Report;
Processes and tools for collecting, analysing, aggregating and reporting quantitative and qualitative data in the Report;
Adherence to WBCSD-CSI measurement and reporting guidelines for CO₂ and H&S;
Reliability of CO₂ and H&S performance data for 2009, presented in the WBCSD/CSI table on page 39 of this Report, and associated assertions in the relevant sections of the Report;
Adherence to the principles set out in the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (2006), as well as the application level declared by TITAN;
Adherence to the principles of Materiality, Inclusivity and Responsiveness established in AA1000 APS (2008);
Reliability of information relating to Titan’s management approach and achievements;
Reliability of performance data presented in the Environmental and Social Footprint sections of the Report, and associated assertions.

This assurance engagement included an assessment of the quality of data, information and assertions made in the Report. It did not include a detailed assessment of the adequacy, effectiveness or efficiency of Titan’s strategy or management of CSR and Sustainability issues. It also excluded an assessment of CSR and Sustainability management, performance and reporting practices by Titan’s suppliers and other third parties mentioned in the Report.

Statement of Independence

DNV states its independence and impartiality with regards to this assurance engagement. In 2009, DNV did not work with Titan or any of its stakeholders on any engagements which could compromise the independence or impartiality of our findings, conclusions or recommendations. Moreover, DNV was not involved in the preparation of any text or data provided in the Report, with the exception of this Assurance Statement and the detailed Assurance Statement for CO₂ and H&S provided online.

Approach

This assurance engagement was carried out between January and May 2010, by a multi-disciplinary team of suitably qualified and experienced professionals. It was carried out in line with the DNV Protocol for Verification of Sustainability Reports, which is based on the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (2006), AA1000AS (2008) and AA1000APS (2008).

The verification of CO₂ performance information was carried out in accordance with the criteria established in ISO14064 (Part 3), the verification protocol developed by the International Emissions Trading Association and the WBCSD-CSI CO₂ Accounting and Reporting Standard for the Cement Industry (June, 2005). The verification of H&S performance information was carried out in line with the WBCSD-CSI Safety in the Cement Industry: Guidelines for Measuring and Reporting (October, 2008). All elements of this assurance engagement were carried out in accordance with the requirements of AA1000AS (2008) for Type 2, moderate level of assurance.

This assurance engagement comprised the following tasks:

Interviewed over 10 management representatives at Group level, focusing on the following functional areas: CSR and Sustainability; Human Resources; Environmental Management; Health and Safety Management; Audit and Compliance; Research and Development; Procurement; and Finance;
Facilitated a 1-day workshop in Cairo, aimed at verifying Titan’s perceptions of material issues in Egypt. This workshop was attended by representatives from Titan Group, regional, country and site management (Beni Suef and Alexandria). This enabled DNV to perform a comprehensive verification of the Report’s content, particularly with respect to materiality. This reflects TITAN’s commitment to demonstrating transparency and ensuring adequate adoption of relevant reporting principles;
Carried out a four-day assessment of the Antea plant construction project focusing mainly on labour relations, working conditions, and environmental, Health & Safety, local community and social issues. This visit included interviews with: Antea’s project management team, representatives from the EBRD and IFC, representatives from local authorities (mayors of Kruja and Thumana), Titan’s social worker in Kruja and the head of Brret village. The visit also included interviews with Titan personnel, representatives from principal contractor and subcontractor organisations, site observation and the review of management documents, performance records and data;
Carried out a one-day visit to the Alexandria plant to assess the alignment of on-site practices with Titan Group’s strategy, policies and processes. This visit included: interviews with plant, operations and functional area managers (mainly H&S, Environment and Human Resources), observation of plant operations, review of documentation, records, data, data management processes and practices. This site was selected on the basis of its significance from a CSR & Sustainability perspective and following Titan’s programme for external assurance;
Carried out a two-day visits to the Beni Suef (Egypt) and Roanoke (United States) plants. The primary purpose of those visits was to assess the adequacy and effectiveness of the site-level processes to collect, manage and report CO₂ and H&S performance data. Selected data samples, records and reports were verified in order to assess the reliability of data and information managed at Country and Site levels;
Analysed corporate data management systems (for Human Resources, Social, Health & Safety, and Environmental data, including CO₂ emissions), assessing the materiality, reliability and completeness of selected data reported by Titan in accordance with the requirements of AA1000AS (2008) and AA1000APS (2008), WBCSD-CSI and other topic-specific guidelines mentioned above. The assessment of reliability (including completeness and accuracy) of data and information was based on explicit assertions regarding sustainability performance on material issues. It included a review of the methods, practices and tools used in collection, management, internal quality control and reporting of data and information, as it is transferred and managed at different levels in the organisation. DNV’s assessment also included: high-level trend analysis, the identification and analysis of causes behind significant changes in performance, compared to 2008, a review of data traceability, and record checks at different stages in data flows from source to Group level;
Challenged data, assertions and claims made in the Report and reviewed supporting information;
Reviewed a selection of internal communications, external stakeholder engagement plans and reports, and external media reports relating to TITAN’s CSR and Sustainability management and performance.

Conclusions

In DNV’s opinion, based on the work carried out, the Report provides a reliable and fair representation of Titan’s CSR and Sustainability-related policies, objectives, initiatives, practices and performance in 2009. DNV also believes that the Report generally meets the content and quality requirements of CSI, Global Compact, GRI (2006) and AA1000AS (2008) and AA1000APS (2008) and fulfils the requirements for the GRI (2006) application level of A+ declared by Titan.

Regarding the alignment of reported information with the WBCSD-CSI guidelines and other relevant standards mentioned above, DNV concludes that, based on the work undertaken, the information provided is reliable and:

CO₂ - Boundary setting (at Group and Site levels) meets the mandatory requirements of the relevant performance measurement and reporting standards and guidelines. Testing of the reporting systems currently in place demonstrated a robust and well managed process for collection, management and reporting of CO₂ performance data at Group level and in the countries and sites visited;
H&S - Robust corporate procedures and guidelines for H&S data collection, management and reporting exist at Group level. These are aligned with the principles and fulfil the requirements of relevant measurement and reporting guidelines. Corporate procedures and guidelines are generally well known and implemented in the countries and sites visited.

Further conclusions and observations on the adoption of reporting principles and specified performance information are made below.

Inclusivity and Responsiveness

Titan has adopted a structured approach to stakeholder consultation and engagement, described in detail in the Report (mainly in connection with employee surveys and external stakeholder consultation in Greece, community engagement in FYROM and community engagement and development in Egypt);
The Report has been informed by the results of stakeholder consultation and feedback received in previous versions of the Report. There is strong evidence of Titan’s efforts to respond to the main concerns and interests of stakeholders.

Materiality

In addition to the stakeholder engagement initiatives mentioned above, TITAN has continued to engage with SRI rating agencies, WBCSD-CSI groups, academia and industry working groups in order to identify and better understand the CSR and Sustainability issues which are most material to the sector, operations and regions within which the Group operates;

The scope of Titan’s materiality assessment has increased, with greater focus being placed on Titan’s operations in Egypt. Further progress has also been made on the materiality assessment activities in Greece and South-East Europe;
Titan’s materiality assessment has been adequately used as a basis for the preparation of the Report, guiding the identification of issues and ensuring that the emphasis given to assertions and information on various topics is proportionate to their relative materiality.
Reliability
The data measurement techniques and basis for calculations have been adequately described to DNV. No systematic or material errors have been detected for data and information verified in accordance with AA1000AS (2008), WBCSD-CSI and other relevant guidelines. When potential errors or omissions were identified in CO₂ or H&S performance data, these were promptly justified or corrected by Titan;
A structured and robust performance monitoring and reporting system is in place for CO₂, H&S, SOx, NO_x and dust performance data, which is believed to be capable of providing consistent and reliable performance information;
The Report covers all entities that meet the criteria of being subject to control or significant influence of the Reporting organisation;
Further information could be provided on biodiversity, water use, socio-economic impact, and sustainability performance of products.

Neutrality

The report generally provides a fair and balanced representation of TITAN’s CSR and Sustainability management approach, performance and challenges in 2009, both in terms of content, tone and emphasis.
Comparability and Clarity
Significant progress has been made in presenting information in a format which facilitates understanding and the comparison of performance with previous years, highlighting the key efforts and achievements over the last 10 years;
However, ensuring the comparability of Titan’s performance over time continues to be a challenge on a number of CSR and Sustainability issues (e.g. environmental performance and employment) mainly due to changes in product output and the composition of the Group over the last two years. It is not always easy to establish whether changes in reported performance are the result of changes in actual performance, the composition of the Group, or due to changes in efficiency of production activities. However, Titan is committed to continually improving this aspect of its performance reporting, mainly through the development of better Key Performance Indicators and reporting approaches.

Overall, DNV commends Titan for its commitment and achievements in continually improving their understanding of material issues, the concerns and expectations of stakeholders, and addressing these in a constructive manner, minimising detrimental impacts from its operations and seizing opportunities to benefit its stakeholders. Titan has also demonstrated its commitment to continually improve the quality and credibility of its Report and underlying processes.

Opportunities for improvement

Based on the findings of this assurance engagement, the following recommendations are made to encourage continual improvement, not affecting the conclusions above:

Continue to expand materiality assessment and stakeholder engagement initiatives to further regions, countries and sites;
Continue to raise awareness and internally verify compliance with Group data management processes and reporting guidelines, increasing emphasis on processes for aggregation and reporting of data at regional and country levels;
Continue the development and implementation of enduring Key Performance Indicators and targets, to ensure comparability and facilitate the assessment of performance as the composition of Titan Group, production levels, product mix and the characteristics of its products change over time;
Develop a more structured approach to measuring and reporting performance on biodiversity, water use, socio-economic impact, and sustainability performance of products;
Consider developing a more structured approach to reporting on the CSR and sustainability performance of new development projects;
Investigate the level of interest in the CSR and Sustainability Report of various stakeholder groups in the countries where Titan operates. This should also consider the role of the Report as part of a suite of channels and strategies for communication on CSR and Sustainability, supplementing other stakeholder or locally-appropriate communication methods.