BAA Limited (BAA) appointed Environmental Resources Management Limited (ERM) to provide independent assurance on selected information presented in its Corporate Responsibility Report 2007 (the Report).

Scope of our work

The environmental targets selected for our assurance engagement were:

Air quality: Establish a baseline of activity of Auxiliary Power Units (APU) usage in hours for Heathrow in 2007, and target for reduction in APU use in 2008.

Energy: Reduce Heathrow’s direct impact on carbon dioxide emissions by 2% against the business as usual forecast between January and December 2007, through improvements in energy.

Noise: Prepare a draft noise action plan for Heathrow and develop a plan for consultation with key stakeholders by 31 December 2007 to enable the action plan to be agreed with key stakeholders by 30 April 2008.

Waste: Increase the general waste handled by the airport waste contract from 25% in 2006 to 30% by 31 December 2007.

Water quality: Conduct a review of at-source pollution control solutions for reducing aircraft de-icant pollution load discharged to surface water run-off. This target will support our overall aim to ensure compliance with current and future discharge consent limits.
 
Objectives, basis of our work and limitations

We planned and performed our work to obtain all the information and explanations that we believe were necessary to gather sufficient evidence to provide a basis for our assurance conclusions as to whether the reported information and data set out in the ‘Scope of our work’ was appropriately reported.

We undertook assurance work at airport level only for this scope of work. We did not assess the appropriateness of the selected targets or the airport’s wider management and reporting of the selected environmental issues. If the engagement had required us to do so, our conclusions may have been different.

If we had been asked to conclude on whether the reported information on the selected assurance topics is materially accurate, we would have needed to conduct more in-depth work and gather further evidence to support our assurance opinion.

The reliability of the reported information and data associated with the targets is subject to inherent uncertainties given the available methods for determining, calculating or estimating the underlying information. It is important to understand our assurance conclusions in this context.

Reporting criteria and assurance standards

BAA applies its own environmental target assessment criteria. We performed our work in accordance with ERM’s assurance methodology which is based on the international assurance and audit standards: ISAE 3000, ISO 19011 and, where appropriate to our scope of work, AA1000AS.

Respective responsibilities and ERM’s independence
BAA and Heathrow Airport’s management are responsible for preparing the Report and for the collection and presentation of information within it. ERM’s responsibility is to express our assurance conclusions on the selected scope of work agreed with BAA and Heathrow Airport.

During 2007, ERM has worked with Heathrow Airport and other BAA companies on other consulting engagements. ERM operates strict conflict checks and we have confirmed our independence to BAA for delivering this assurance engagement.

Our team and assurance activities

A multi-disciplinary team of environmental, corporate responsibility and assurance specialists performed the engagement. We conducted the following assurance activities:

• Reviewed self-assessment reports of progress against each target provided by each target owner
  
• Visited the airport to interview the relevant target owners and review documentary evidence to support their self-assessed progress against each target and challenged the self-assessment on the basis of our findings
  
• Reported our assurance findings to management as they arose to provide them with the opportunity to correct them prior to finalisation of our work
  
• Reviewed the presentation of information relevant to the scope of our work in the Report to ensure consistency with our findings.

Our conclusions
Based on our work undertaken as described above, we conclude that, in all material respects, progress against the selected 2007 targets are appropriately reported.

Our key observations and recommendations
Based on the assurance activities set out above, and without affecting our assurance conclusions, we provide the following key observations and recommendations for future improvements:

Highlights observed in target achievement:

Waste: Improvements in the waste infrastructure have contributed to Heathrow exceeding its waste recycling target. For example, a materials recycling facility was introduced as a result of changing waste management contractors.

Energy: Energy efficiency initiatives, poster campaigns, and accreditation by the Carbon Trust for Energy Efficiency have all helped to exceed this target.

Areas for Heathrow Airport to consider for future improvements:

Setting performance targets: Ensure targets set are specific, measurable, achievable, realistic and time-based (SMART) so that performance can be effectively measured and monitored against them.

Achieving targets: Continue to work towards delivering the 2007 targets where no or some progress was made.

Energy target achievement: An action plan should be prepared to clearly set out the initiatives and activities required to achieve the 2008 energy target.

Environmental Resources Management Limited
London, UK
9 July 2008

ERM is an independent global provider of environmental, social and corporate responsibility consulting and assurance services. Over the past 4 years we have worked with over half of the world’s 500 largest companies, in addition to numerous governments, international organisations and NGOs.

Our assurance statement provides no assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the information since first published. These matters are the responsibility of BAA but no control procedures can provide absolute assurance in this area.