Verification Objectives

Enviros has conducted an independent verification of Kelda Group plc’s (Kelda’s) community elements of the Corporate Social Responsibility (CSR) report and web pages, and the web-based environmental report. The objective was to provide assurance on the completeness, and accuracy of the text and data presented in the reports and to review the internal systems for data collection. We have also reviewed how Kelda have identified the material issues for reporting and their responsiveness towards their stakeholders.

Interim verifications will be conducted as appropriate when revisions are made to the website and reports.

Responsibilities
Kelda is responsible for the presentation of environmental and CSR reporting. This statement is the responsibility of Enviros and represents our independent opinion. We have not been involved in any part of the preparation of the reporting material.

Verification Scope and Methodology

The verification has been conducted through a series of interviews and telephone consultations with Kelda staff responsible for collating the text and data within the reports. The text has been discussed and substantiated, and the origins of data sampled.

This verification statement applies to the community elements of the CSR report and web pages, and updates to the web-based environmental section. This statement is in addition to previous statements applicable to the other content within the web-based environmental report, previously verified by Enviros.

For clarity, the updated web-based environmental sections which have been verified are:

• Highlights
• Hot Topic: Energy
• Hot Topic: Biodiversity
• Hot Topic: Waste Initiative
• Hot Topic: Improving the Aquatic Environment
• Case Study: Managing Our Woodlands
• Environmental Information Page
• Environmental Sustainability Indicators

The following community elements of the CSR report and web pages have been verified:

• CSR Report – pages 1, 4, 5
• Our People: Highlights
• Our People: Performance Management
• Our People: Case Studies
• Our Marketplace: Customer Communications
• The remainder of the CSR report verification is ongoing.

Opinion

Materiality and Responsiveness

As reported in the June 2005 verification statement, material issues for environmental reporting are identified by Kelda’s environment team, with advice from their independent Environmental Advisory Panel. The Panel, made up of representatives from key environmental organisations, is an appropriate forum for identifying material issues affecting YW (approx. 80% of Kelda). It does not, however, cover the views of all Kelda Group stakeholders.

Material issues for CSR reporting are currently identified internally by Kelda through the Internal Society Forum.

Accuracy of the Report

The web-based environmental text and data and community elements of the CSR report text and data are considered to be materially accurate.

Completeness of the Report

Although the reports adequately represent Yorkshire Water activities (which make up around 80% of Kelda), they still do not extend to complete coverage of the wider Kelda Group activities.

Recommendations

In order to ensure completeness and to provide a balanced understanding of Kelda’s CSR and environmental performance, reporting needs to extend to all subsidiaries of the Kelda Group.

The external stakeholder engagement process for both environmental and CSR reporting should be representative of the whole Kelda Group rather than be limited to Yorkshire Water stakeholders only.

We are pleased to see Kelda review and rationalise their environmental performance indicators. We would now encourage Kelda to consider development of wider CSR performance indicators through responding to stakeholder concerns and interests .

We support Kelda's proposal to carry out stakeholder research to truly understand concerns around social issues associated with Kelda’s activities. The exact engagement process is still to be determined but there maybe a formal panel created, similar to the company's Environmental Panel.

We are aware that Kelda is currently looking into the requirements of the Institute of Social and Ethical Accountability’s AA1000 Assurance Standard.

Rachel Pickering

Consulting Group Director

Sustainable Business Unit

Enviros