We have voluntarily reported on our environmental and social performance since 1997.

We do it because of our commitment to being transparent and honest; and because this performance matters to our stakeholders and to our business performance.

One size fits none

Stakeholders have very different reporting needs. For investors, our approach to managing environmental and social risks and opportunities is described in our 2006 Annual Report/Form 20-F. We co-operate with many groups that provide investors with information and analysis about the environmental and social performance of companies, including the producers of the Dow Jones Sustainability Indexes, FTSE4Good, Goldman Sachs Global Energy Environmental, Social and Governance Index, and the Carbon Disclosure Project. For staff, we provide a separate Sustainability Review. It is part of a wider internal communication effort to illustrate what our commitment to sustainability means for their day-to-day work.

Our Sustainability Report is targeted at external stakeholders, often specialists. Our Environment and Society website lets this audience explore our response to their particular environmental and social issues in greater depth, as well as introducing a wider public to our approach to sustainability.

Workshop with reporting experts London,
October 2006.

What assures?

There is still much to learn about assuring sustainability reporting. We were pleased to see the Global Reporting Initiative’s new G3 guidelines giving companies room to experiment with different assurance models. We continue to improve on the approach we launched in 2005 – using an External Review Committee of experts to check that our reporting is balanced, relevant and responsive to stakeholders. Reactions from readers to the 2005 Committee were strongly positive. We benefited from the Committee’s wide-ranging challenges and advice, which were based on their deep knowledge of the issues and their first-hand experience working with us. In 2006, the Committee was expanded, involved earlier in the selection of topics for the Report, and provided with greater access to senior management.

Between 1998 and 2004, with the advice of external auditors, we developed a range of internal controls to help assure accuracy of the facts in our Sustainability Reports.These controls include audit trails for all the data and statements included in the Report, signed off by senior managers and available for internal audit. In 2006, our internal controls were improved further.

For example, senior business leaders now sign-off on the quality of their HSE data. Extensive statistical checks have been introduced to detect errors in these data. In Nigeria, KPMG provided external assurance on the accuracy and completeness of the HSE and social investment data. Work is underway to strengthen controls on the information received from the internal questionnaire we send to our senior representatives in each country where we operate. The aim is to improve the reliability of that data.

Alignment with emerging guidelines

The Global Reporting Initiative released its new G3 guidelines for sustainability reports in late 2006. In response, we have made a number of changes, mainly on the web, to align with these guidelines. According to our own assessment, we achieved an A+ level of application of the guidelines. We also report in line with the guidelines of the International Petroleum Industry Environmental Conservation Association and describe on the web our contribution to the UN Global Compact and to the Millennium Development Goals.