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SGS Corporate Sustainability Report 2009



As the world’s leading inspection, verification, testing ...

As the world’s leading inspection, verification, testing
and certification company we help our customers to build trust in their own
products, services and operations. It is therefore only right that we meet their expectations,
as well as the expectations of investors, by applying the same level of integrity and scrutiny
to our own operations.



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    SGS Corporate Sustainability Report 2009 SGS Corporate Sustainability Report 2009 Document Transcript

    • who we are 6 why we need to be sure 7 about this report 8 CONTENT our reporting scope 9 Further inFormation and Feedback 9 Joint statement From our chairman and ceo 10 our approach to corporate sustainability 14 governance 15 sustainability management system 16 materiality 18 our stakeholders 20 measuring our perFormance 24 proFessional excellence 28 our contribution to sustainable development 29 integrity 30 risk management 33 what you told us 33 highlights and case studies 34 looking ahead 35 our people 38 people management 39 our perFormance 41 highlights and case studies 42 what you told us 43 looking ahead 43 environment 46 environmental management 49 contents our perFormance 50 highlights and case studies 51 what you told us 53 looking ahead 53 community 56 community management 57 highlights and case studies 58 our perFormance 61 what you told us 61 looking ahead 61 statement assurance 62 benchmark gri g3 guidelines 64 closing remarks 67 glossary 68 summary oF reported data 69 inFormation 70 4 5
    • WHO WHY WE WE ARE sgs is the world’s leading inspection, verification, testing and certification company, headquartered in geneva. we employ over 59,000 people to operate a global network of more than 1,000 offices and laboratories around the world. NEED TO our organisation comprises ten business units operating across ten geographical regions. each region is led by a chief operating officer (coo). each business line is led by an executive vice president (evp). the coos and evps, in conjunction with the functional senior BE SURE vice presidents (svps) and the group’s chief executive officer, chief Financial officer and general counsel make up the operations council which meets regularly throughout the year to determine group-wide strategies and priorities and review performance. management is as the world’s leading inspection, verification, testing who we are overseen by a board of eight non-executive directors, including the chairman, sergio marchionne. and certification company we help our customers to build trust in their own products, services and operations. it is therefore only right that we meet their expectations, From our beginnings in 1878 as a grain inspection house, as well as the expectations of investors, by applying the same level of integrity and scrutiny we have grown to become an industry leader. the to our own operations. it is imperative that we conduct our business professionally and with company, with 2009 revenues of chF 4.7 billion and an absolute integrity. however, we want to go beyond this and fully embrace the opportunities operating margin of 17.3%, is listed on the six swiss and responsibilities that come from operating all over the world. we also know that to retain exchange. an annual general meeting of shareholders is our leadership position we must continue to engage our stakeholders in demonstrating how held with the outcomes posted on the sgs website. sustainability is an integral and visible part of how we do business and involve them in the development of our services. 6 7
    • the scope of this first ABOUT THIS REPORT report OUR REPORTINg SCOPE represents we recognise that it will take time to fully compile sustainability data across all of our this is the first sgs corporate sustainability report, prepared for our employees, customers, operating territories with sufficient confidence to report publicly or accurately assess year-on-year performance. therefore, while we collect data for all operations, our suppliers, shareholders, investors and other stakeholders interested in our approach to doing all our group performance is tracked and reported using carefully selected countries which business responsibly. it provides an initial account of our responsibilities and performance and have been identified as representative of our group performance. these cover more than two-thirds of employees and over three-quarters of revenue. Joint ventures are explains how we are managing our sustainability agenda, through the services we deliver to customers and within our own operations. going forward, sgs will report its regions reported as our own operations. sustainability performance annually. and LImITATIONS Of SCOPE the data presented in this report covers employees but, with some minor exceptions, in this report, we have highlighted some of the outstanding efforts of employees and associates who are contributing to sustainable does not include professionals working on behalf of sgs. we are aware that there are business development. we want it to serve as a call to action to each employee to embrace our sustainability strategy and do what they can some differences in the way that data is being collected across our trend countries, to minimise our impacts and optimise our positive contribution to a more sustainable world. at the same time, we want to inspire often because of varying local context. this could result in some figures being under- our customers and other stakeholders to engage with us on our journey through active dialogue and collaboration. or overstated. we are working to standardise these going forward. while we have put we have chosen to report under the four pillars of our corporate sustainability management system: lines and a manual in place to specify our reporting requirements, we recognise that there may be ongoing variations until such time as we can align all countries and business units with this standard. relates to the in the interest of accurate disclosure, we have made a conscious decision to limit PROfESSIONAL our scope in these early years of reporting to areas where we have a high level year ending of confidence in the data. in doing so, we accept that we are not yet providing ExCELLENCE PEOPLE complete detailed coverage of every country. over time the scope will broaden as our sustainability reporting becomes more established and we gain a deeper insight into 31 december trust lies at the heart of the value we the issues which are important to our stakeholders. people are our single most important deliver to our customers and society asset. a highly skilled, motivated, we now routinely collect data using 80 indicators of sustainability, covering people, as a whole. our conduct is measured productive and committed workforce environment, business, community, reputation and trust. these are used internally to on our ability to consistently deliver integrity, ethics, capability and quality drives our business success. we have a responsibility to ensure that 2009. some highlight performance and drive improvement. the selection of data and other content published in this report have been mapped against the global reporting initiative g3 our report without compromise. our employees are safe at work, are treated fairly and with respect, and that narrative guidelines. however, our focus has been largely formed by the areas that we believe are important for our business and our key stakeholders. we have begun to test they are empowered to contribute. the validity of these with stakeholders during 2009. in developing our sustainability outlining our strategy, the structure and the content of this report, we have embraced the principles of materiality and completeness of disclosure, and responsiveness to stakeholders, which form the basis for the accountability aa1000as standard. at this stage, our progress stakeholder engagement is not sufficiently developed to declare full alignment. ENvIRONmENT COmmUNITY nevertheless, we plan further stakeholder dialogue in 2010 to build on the formal consultation process begun in 2009. we are committed to conducting our business local communities are critical to our includes in a way that protects the environment. we also reputation and success. many communities fURTHER INfORmATION AND fEEDBACk activities up recognise our broader role in contributing to also depend on us. we encourage the sound environmental management through our support of communities, by investing our For more information or to provide feedback on this report range of innovative products and services. time, expertise and resources. to the point please consult our corporate website sgs.com or contact corporate.sustainability@sgs.com. For employees we have the content of this report has been reviewed by an internal audit team and our sustainability steering committee. sgs of report set up a dedicated intranet site on sustainability where they can find more information, review the latest performance has commissioned second party verification of the report and has also sought independent verification of our compliance with the global reporting initiative g3 guidelines from gri. publication in data and share knowledge, advice and best practice. early 2010. 8 9
    • JOINT STATEmENT fROm THE DEAR STAkEHOLDERS, CHAIRmAN this is sgs’s first published corporate sustainability report for the employees, customers, suppliers, shareholders and investors who each play a vital role in shaping our future. it is an opportunity to share what it means to us to be a responsible and sustainable company in the 21st century and to continue a dialogue with our stakeholders about the opportunities and challenges for our global business. it outlines our progress so far and some of the major priorities for sgs. it is the first step on a journey that will play a significant part in the future success of our company. at sgs we believe it is vital to embrace sustainability as a positive challenge; a source of continuous enquiry, innovation and &CEO improvement. our strategic priorities are focused on maintaining the ethical integrity of our business operations, reducing our environmental impact, improving our safety performance and involving our employees in meaningful grass-roots activities in the communities where they live and work. over the past two years we have made significant strides in formalising our idea of sustainability by creating a structured management system. in 2008 we formed a sustainability steering committee comprising the heads of our regions and businesses to shape the group sustainability strategy. the strategy was endorsed by the operations council in 2008 and continues to be monitored periodically. our vice president corporate sustainability is supported by the chief operating officers and executive vice presidents in implementing the strategy across our global business and the establishment of regional sustainability sub-committees ensures that the strategy is being effected locally. we have benchmarked our approach against a number of industry peers and best practice companies and we have designed a robust sustainability management system that will provide the information we need for ongoing improvement. we do not regard these commitments as the end target in our drive to a more sustainable future but as a useful guide in helping to integrate sustainability into every aspect of our business practice. although we have some way to go in fully integrating sustainability throughout our global network, we are proud to highlight some important milestones on our journey so far. as a member of the carbon disclosure project since 2006, we have put significant effort into reducing our carbon emissions. in november 2009, sgs signed the world business council for sustainable development (wbcsd) manifesto for energy efficiency in buildings which pledges our company to a 10% reduction in co2 emissions from our owned buildings by 2013 and 20% by 2020. we are especially proud to be part of the dow Jones stoxx sustainability index. Joint statement as we enter 2010 it is timely to pause and consider what the next decade might mean for us. above all, we must continue to foster a culture of professionalism, integrity and personal safety and prepare our employees to act responsibly and appropriately in challenging situations and new territories. we will need to continue to adjust and respond to the changing needs of a society that expects increasing confidence in the products and services they use. we must also consider what political, economic and personal changes need to happen to put us on the path to a low carbon future. in particular, sgs has a very important role to play in helping our customers across all industry sectors as well as our own business lines to develop and adopt a range of technologies and practices that will contribute to a reduction in climate change. during 2010 we will be launching several important initiatives to ensure our alignment with international best practice through the training of employees and improving awareness on sustainability issues and supporting our employees in meeting our internal sustainability goals. we will be embarking on a group-wide initiative to train our 59,000 employees in the principles of sustainability and equip them to apply this knowledge in their respective roles. alongside this, we plan to implement a series of internal campaigns focused on key sustainability themes to empower teams of employees in every market to become protagonists of change and progress. these will serve to complement the existing contribution we are making as a business to develop new services, build global awareness on safety, implement continuous improvement projects in our labs, and promote diversity across our workforce. we will also be continuing our dialogue with stakeholders so that we can learn from them and improve our sustainability performance. this report underlines our commitment to dialogue and transparency and aims to stimulate purposeful discussion on our role in securing a more sustainable future. please take some time to read it and share your ideas on how you think we should progress by sending an email to corporate.sustainablity@sgs.com. we look forward to continuing our dialogue with you during 2010 and beyond. sergio marchionne christopher kirk chairman chief executive officer 10 11
    • gOvERNANCE in July 2008, we appointed a sustainability steering committee, chaired by our chief executive officer (ceo) with 12 members comprising chief operating officers (coos) and executive vice presidents (evps) from our regions and businesses: CEO COO EvP OIL, gAS & CHEmICALS SERvICES CORPORATE COmmUNICATION CONSUmER TESTINg SERvICES CHIEf COmPLIANCE OffICER ENvIRONmENTAL SERvICES SOUTH EAST ASIA PACIfIC SERvICES CERTIfICATION INvESTOR RELATIONS & mINERALS SERvICES AUTOmOTIvE & gIS WESTERN EUROPE NORTH AmERICA AgRICULTURE SYSTEmS & OUR APPROACH sustainability steering committee CHAIRmAN TO CORPORATE ENvIRONmENT PEOPLE SUSTAINABILITY BUSINESS COmmUNITY INTERNAL REPORTINg COmmUNICATION AND REPUTATION our approach at sgs we have strived to conduct our business responsibly and the sustainability steering committee meets twice a year and is responsible for developing the group sustainability strategy, ethically. we know that how we do business is as important as monitoring performance and identifying areas for improvement. our operations council endorses the strategy and formally reviews progress periodically. the services we deliver to our customers. given that sustainability the group sustainability programme is managed by the vice president corporate sustainability, who reports directly to the ceo and is now regarded as a significant driver of value to customers and is supported by the respective heads of businesses and regions. the chief operating officers and executive vice presidents provide society, it is especially important for us. strategic direction on sustainability and guide our individual businesses and employees to become engaged. we feel it is important that sustainability is not pre-defined or imposed. instead, we want each region to have the flexibility to implement the strategy sustainability is about managing a in a way that is right for their business. this approach will create both internal competition and innovation that will accelerate development across the company. long-term profitable business while taking into account all the positive and negative environmental, social and BOARD economic effects it has on society. during 2008, we integrated OPERATIONS COUNCIL sustainability into our corporate business strategy and began to formalise our approach through the adoption of a group-wide ExTERNAL INfLUENCE SUSTAINABILITY SUSTAINABILITY mANAgEmENT sustainability management system. AND ENgAgEmENT STEERINg COmmITTEE SYSTEm SUSTAINABILITY SUB-COmmITTEES at a corporate level, we will continue to provide support by integrating sustainability principles into our policies, business processes, training and communications. For example, we have included sustainability criteria into the evaluation process for our major suppliers. in addition, we have opted to gather sustainability performance data through our financial management system in order to apply the same rigorous standards. 14 15
    • below is a summary of our formal policies and internal guidelines linked to sustainability: PROfESSIONAL ExCELLENCE • SGS Code of Integrity and SUSTAINABILITY mANAgEmENT SYSTEm professional conduct in 2008, the sustainability steering committee approved a sustainability management system to define and measure the • Group Sustainability Control and company’s sustainability impacts, engage stakeholders in a dialogue around our shared goals, implement programmes, reporting manual1 and monitor and communicate our progress to stakeholders. • Group Financial Manual performance is monitored through a sustainability balanced scorecard. • Group Treasury Manual PEOPLE • Supplier Management Policy • Employment Policy • SGS Purchasing Terms (affiliates)1 • Quality, Health, Safety and Environment Policy • Information Security Guidelines • Health, Safety and Environment Manual SUSTAINABILITY mANAgEmENT SYSTEm • Fraud Prevention Guidelines • Travel Security Guidelines • General IT Guidelines • Residential Security Guidelines Key Performance Indicators Set targets Sustainability programmes Meet targets • SGS IT Resources Usage Policy • Security Guarding General Principles • Information Security Guidelines • Security Incident Reporting Procedures PROfESSIONAL ExCELLENCE ExCEL • Due Diligence Guidelines for the • Emergency Evacuation Procedure PEOPLE ImPROvE mONITOR engagement of agents, consultants • Recruitment Policy BASELINE mEASURE AND and other intermediaries ENvIRONmENT REDUCE REPORT • Expatriate Policy • Certifying Programmes Policy COmmUNITY INvOLvE • Bonus Policy our approach REPUTATION AND TRUST COmmUNICATION PLAN ENvIRONmENT COmmUNITY • environment policy • Community Policy1 • energy efficiency in • Community Investment Manual1 building policy1 1 policies currently under development a selection of our policies is available at www.sgs.com. SUSTAINABILITY SUB-COmmITTEES during 2008, two sub-committees were established in sgs china and hong kong and sgs west and central africa to focus on sustainability initiatives specific to these regions. Further sub-committees were set up in chile and the philippines in 2009, with more regional committees planned for 2010 and 2011. 16 17
    • RISkS AND SPHERE Of INfLUENCE at the start of our journey we conducted a sustainability risk profile with the sustainability steering committee to evaluate those issues which might potentially pose a risk to business revenue or our reputation. the process highlighted areas which posed the highest combined risk to revenue and reputation. mapping the topics identified by the risk modelling into the following priority matrix enabled us to focus on issues that warranted specific action over those which required routine monitoring. these topics are addressed throughout this report. RISk mATERIALITY OBSERvE ACT HIgH in determining which areas to focus and report on we have considered: Laws & Regulations • the significance of our impacts Risk Management • the risks to our business and our sphere of influence Health & Safety • the expectations of our employees and external stakeholders Corporate Governance Human Resources OUR ImPACTS Vision & Values Waste Management our sustainability management system defines our direct impacts and shared goals as follows: Code of Integrity & • Governance and risk management is defined by laws and regulations, financial and structural governance including internal our approach Professional Conduct controls, committees and shareholders, risk management systems, policies and procedures, and the direct and indirect impacts of our sustainability services. our shared goal is to excel in the way we do business. • Direct social impact is defined by our company vision and corporate values, as well as our code of integrity and professional Communication on Sustainability Conduct, our respect for human rights, our Quality, Health Safety and Environment policy, and our Human Resources and procurement policies and practices. our shared goal is to improve our social performance. Direct & Indirect SGS Community Involvement • Direct environmental impact is defined by our environmental management system, our environmental policy and the Sustainability Services Stakeholder Engagement measurement of performance, including our carbon footprint. key impact areas for us include climate change, water management, waste and pollution and biodiversity. our shared goal is to reduce our environmental impact. Climate Change • Philanthropy is defined by our guidelines for philanthropic activities, principles on charitable donations and our support for communities in need. our shared goal is to involve our people in supporting the needs of communities in which we live and work. Water Management Sustainable Procurement Biodiversity / Ecosystems ACTION LOW LOW HIgH REqUIRED 18 19
    • OUR STAkEHOLDERS we have consulted directly with a number of stakeholders and researched the views of others in forming our approach and areas STAkEHOLDER DIALOgUE during 2009, we began to test our sustainability approach with a selected group of internal of focus. we have also reviewed the disclosures made by customers in similar corporate sustainability reports. it is not possible to present a comprehensive map of our stakeholders across our diverse operations. each region and each business has a wide array and external stakeholders through formal dialogue using an independently moderated of specific organisations that they engage with in areas such as technical development, innovation and regulation. below we have electronic survey. the table below illustrates the scope of our dialogue across our regions presented an illustrative map of some common stakeholder groups that are applicable to the majority of our business areas. over time we intend to broaden and deepen this understanding, as we seek to engage with external partners to add value and to develop and businesses. our thinking. gOvERNmENTS & INSTITUTIONS SERvICES SYSTEmS AND SERvICES CERTIfICATION SgS STAkEHOLDER mAP EmPLOYEES CONSUmER TESTINg SERvICES BUSINESS LINE NOT SPECIfIED SHAREHOLDERS ENvIRONmENTAL SERvICES YS OIL, gAS AND CHEmICALS SUPPLIERS, AgRICULTURAL SERvICES RvE AUTOmOTIvE SERvICES LIfE SCIENCE SERvICES INDUSTRIAL SERvICES E SU mINERALS SERvICES BUSINESS OY E R Eg AUTHORITIES, PARTNERS BUSINESS LINES mPL UL A gOvERNmENTS YS AND ND E vE AND REgULATORS R CO R SU PS A ND CONSULTANTS mm RE L SA ROU gU SA AI UNI LA RC PR REgIONS US g P ,A C AT Om W m E f OC UN vI ION IC RE europe, middle east, E E E, BP, C E,C C E E,C E, BP, C E, C E, C E, S, Cs, C, AT IO africa N, SIg, A mEDIA N our approach REgULAR COmmUNICATION 1:1 SINgLE ISSUE CONSULTATIONS, SURvEY NgOs americas E E, C, S E E, C C E, C E E E, BP asia pacific E E E E, C E, C E,C E E, C E, N, C RE 1:1 I S gU TI ON LA ION NTE TA RC UL Om C AT S kEY: R v IE O N m UN EC COmmUNITIES UNI IC W S, SU AT E = employees BP = business partner IS IO mm E N CUS N gL C = customers Cs = consultant SI R CO T Om SPECIAL S = suppliers SIg = special interest group UL A ER S N = ngo A = academic INTEREST R Eg URv EY gROUPS AND fINANCIAL CUSTOmERS the exercise has been helpful in mapping out the issues of greatest importance to our ACADEmICS COmmUNITY stakeholders and understanding their expectations of sgs with regard to our own corporate responsibilities and our role in contributing to sustainable development through our services. extracts from the dialogue process are featured in each of the sections of this report. we will be extending our dialogue in 2010. 20 21
    • OUR APPROACH TO CORPORATE SUSTAINABILITY while the sgs annual report provides information on our financial position and performance it is also important to measure the broader economic impact of our organisation on society. in this process we take the economic value generated by sgs through our services and from other income and look at how this value is distributed amongst our stakeholders. these global figures are presented on an accruals basis. SgS gROUP STATEmENT Of ECONOmIC vALUE gENERATED & DISTRIBUTED gENERATED DISTRIBUTED RETAINED CHF Million 2009 % ECONOmIC vALUE gENERATED fINANCIAL INCOmE revenue 4,712 EmPLOYEES Financial income 12 REvENUES TOTAL ECONOmIC vALUE gENERATED 4,724 100.00 4’712 12 2’214 ECONOmIC vALUE DISTRIBUTED EmPLOYEE WAgES AND BENEfITS salaries and wages 2,214 TOTAL 2,214 46.87 OPERATINg ExPENSES OPERATINg ExPENSES subcontractors expenses 319 depreciation, amortisation and impairment1 228 other operating expenses 1,107 TOTAL 1,654 35.01 1’654 our approach SHAREHOLDERS & LENDERS PAYmENTS TO SHAREHOLDERS AND LENDERS gOvERNmENT (TAxES) Financial expenses 15 dividends paid 2 470 TOTAL 485 10.27 COmmUNITY PAYmENTS TO gOvERNmENT RETAINED 485 income taxes 200 other taxes 49 249 TOTAL 249 5.27 1 121 PAYmENTS TO COmmUNITY community contirbutions and charitable donations 1 TOTAL 1 0.02 TOTAL ECONOmIC vALUE DISTRIBUTED 4,603 97.44 ECONOmIC vALUE RETAINED 121 2.56 1 includes chF 5 million of impairment of a non-recurring nature 2 as proposed by the board of directors. 22 23
    • mEASURINg OUR PERfORmANCE our corporate Finance team in partnership with corporate sustainability has developed a new data management tool called solaris which uses the group financial management platform to input and consolidate sustainability data for all countries. during 2008, all countries were provided with a template to enable accurate and consistent data capture. an accompanying handbook provides guidance on the most reliable sources of information and the importance of having supporting documentation to substantiate all data. as a result, all countries are now able to track sustainability performance across a large number of quantitative indicators. this data will enable each business to understand how it compares to others within sgs, and also identify where we need to improve as a company. our approach Example of internal template for data gathering each country must report on sustainability performance every half-year. where appropriate, impacts are monetised to help us focus on the contribution that sustainability makes to our operational efficiency. all data is managed by our Finance team who apply the same standards to this as to our financial data. the team has strong support from respective functions including compliance, continuous improvement, corporate communications and investor relations, Human Resources, Quality, Health Safety and Environment and Technical Governance. ImPROvEmENT TARgETS it is too early to set concrete targets for all areas as we are still in the process of establishing the baseline. however, some initial, short-term improvement goals have been set and these are covered within each of the four main sections of the report. it is our intention to agree definitive targets during 2010. we intend through our ongoing dialogue with stakeholders to incorporate their feedback. 24 25
    • DID YOU kNOW? sgs global network has more than 1,000 laboratories and offices around the world. sgs is a founding member of the world business council for sustainable development. we provide comprehensive services in detecting and analysing dioxins that threaten global food chains. OUR CONTRIBUTION • Our Ecodesign service looks at the life cycle of customers’ products and helps • The illegal trade in counterfeit goods places consumers’ health and safety one of the key impacts TO SUSTAINABLE to reduce their environmental impacts at risk. our product conformity through packaging reduction, lifespan assessments assist governments to that sgs makes in terms DEvELOPmENT optimisation, streamlining of logistics, ensure that imported goods meet their energy and raw material efficiency technical and regulatory standards. we of corporate sustainability through our specialist services we are and environmental labelling. in 2009 work closely with the regulatory bodies able to instil trust in consumer products, is through the services we new technologies and manufacturing we developed a more integrated to check both the goods and their approach to assessing organisations’ origins. this protects the consumer’s provide to our customers. processes. we operate a network of carbon footprints, combining carbon safety, supports the local economy more than 1000 offices and laboratories as a result, it is imperative and offer testing and certification to foot-printing with carbon labelling, a by safeguarding local manufacturing thorough inventory of all greenhouse and helps to combat organised that we continually improve nearly all industrial sectors from mining gases and supporting customers in all counterfeiting. more generally, our to automobiles and from electronic our services and enhance goods to agriculture. professional stages of assessment, from training to destination inspection service routinely calculation and report writing. helps customs administrations to the positive impact we can excellence is more than the quality of facilitate compliant trade, optimise service our customers expect and more • We provide comprehensive technical proFessional excellence make as a company. than something which we aspire to as and project management support collection of import duties/taxes, and enhance the detection of fraudulent For us, professional individuals or as an organisation. it lies at PROfESSIONAL ExCELLENCE for wind farm projects throughout the heart of the value we deliver to our their tender, construction and transactions and illegal cargo. excellence means being customers and to society as a whole. commissioning phases and have recognised globally for high achieving professional excellence supported the building of poland’s SERvICE DELIvERY first wind farm which came online in standards of integrity and requires us to focus on three complementary aspects: september 2009. AND ImPROvEmENT for the range and quality of • Service Provision – providing services • In October 2009 the first safety, life sgs has a responsibility to all our duration and electrical performance clients to deliver the best services in a the services we provide. to our customers that also support the responsible and efficient manner. at needs of society. tests of solar panels were performed we play a vitally important in the newly built sgs photovoltaic the same time, the nature of some of • Service Delivery and Improvement our work means that we operate in laboratory in germany. role in providing inspection, – the skills, experience and quality sensitive areas which can impact on • We support many pharmaceutical verification, testing and assurance that we apply in delivering companies in the development and issues such as ethics, safety, health and certification services in and improving these services. the environment. For these reasons, the approval of new medicines, carrying • Integrity – the individual and collective delivery of services must be addressed as every region of decisions and judgments we make. out testing in good manufacturing practice and conducting clinical trials. a key issue in our corporate sustainability the world. india and china are the main locations approach. our ability to guarantee SERvICE PROvISION for active pharmaceutical ingredient excellence in service delivery comes from the combination and optimisation of skills, manufacturing worldwide and sgs through being in tune with our experience, technology and processes. plays a major role in their testing and customers’ own sustainability in 2008 we introduced a customer survey quality assurance. in addition our programmes, we have already built up tool, the “voice of the customer”, which anti-counterfeit drug programme a very broad range of services that not focuses on quality of service, technical establishes risk management, controls only support environmental initiatives, capabilities, turn-around time, responses and counter measures to ensure but also ensure the safety of consumer to queries and value for money. this has that medicines provided to some of products, monitor working conditions in been extended in 2009 and will continue the poorest areas of the world are developing world factories and certify the into 2010. voice of the customer legitimate and safe. safety management systems that protect has identified many improvement workers from injury. a small sample of opportunities and has enabled us to share these services serves to illustrate the best practices across sgs. extent to which sustainability lies at the very heart of our business: 28 29
    • INTEgRITY “ABOvE ALL WE mUST ACT WITH INTEgRITY TRAININg COmPLIANCE mONITORINg INTEgRITY. we operate in many countries where AND ASSURANCE the locally accepted custom and practice responsibility for ensuring compliance our integrity underpins sometimes falls short of what we would with the code, as well as all sgs policies everything we do. it is the expect, and we are aware that our and regulatory requirements, rests employees are sometimes faced with with regional chief operating officers WE SHOULD ALL THINk basis for us being trusted difficult situations or circumstances that and managing directors. serious legal by our customers, and we might not have been able to prepare non-compliances or health, safety or them for. environmental incidents are reported by consumers who buy as a priority to the appropriate member it is therefore vital that we make our the products we have position on business ethics very clear of the operations council. sgs also to every employee, and that they know has a compliance hotline where any tested. when a customer employee can report a concern safely they have the full support of sgs in employs sgs to perform making the right decision when faced and in confidence. every employee is vERY CAREfULLY ABOUT THE ImPACT Of OUR ACTIONS required to sign the code of integrity and “ a service, they must have with any kind of dilemma. we ensure that the highest standards of integrity are professional conduct (cipc) and refresher total confidence that it will be delivered reliably and applied to our activities around the world by providing annual mandatory training training is conducted every year. in addition, we monitor and assess . to all employees. this is complemented compliance with our code in a number CHRISTOPHER kIRk, CEO professionally. by an e-learning programme, available in of ways: english, French, spanish and chinese, to CODE Of CONDUCT • Most business lines have a Technical communicate this message and to help governance group to routinely proFessional excellence our professional standards of business employees explore some of the potential check the integrity of their own integrity are laid out in our code of dilemmas they might face. in this operations. integrity and professional conduct. programme, employees are confronted each employee is required to sign the with day-to-day challenges to help them • Operational management are required OUR PERfORmANCE AgAINST OUR CODE Of INTEgRITY AND PROfESSIONAL CONDUCT (CIPC) code, and our joint venture partners, test their understanding of sgs standards to sign a declaration of compliance with the code and to explain and action any Compliance Hotline Activity: Global Data covering all SGS operations agents, intermediaries, consultants of business conduct at a practical level. and subcontractors are also required to mandatory training will continue in 2010 non-compliances. comply with it. the code reflects the with a revised programme designed to • All operations are audited at least reflect the most topical integrity issues INDICATOR what does this measure? 2009 business principles for countering bribery once every three years by our internal issued by transparency international and for our business. audit team. CIPC REPORTS total number of professional conduct issues reported through the compliance hotline 136 social accountability international and • We have an integrity support service CIPC INvESTIgATIONS total number of valid reports investigated 19 incorporates the rules adopted by the SENIOR mANAgEmENT ROLES AND open to both employees and business CIPC NON-COmPLIANCES total number of breaches of cipc identified through the compliance hotline 17 international Federation of inspection RESPONSIBILITIES partners to ask questions or raise agencies (iFia), the professional concerns about professional conduct in the professional conduct committee association for the inspection industry. any country in which we operate. (pcc) meets twice yearly and oversees during the year, 136 cipc concerns were reported via our compliance hotline, of which 19 were investigated and 17 confirmed implementation of the code within the • Our Chief Compliance Officer assesses, breaches were identified. group and advises management on all reports and makes recommendations issues of business ethics. in addition on any significant non-compliances. to three board members including the there is a half-yearly report to the chairman, the pcc comprises the board of directors on non-compliances, chief executive and the chief which includes a summary of integrity compliance officer and the head of issues reported. internal audit. chief operating officers are responsible for implementing the code in the regions whilst the chief compliance officer monitors overall performance and conducts investigations of alleged misconduct. 30 31
    • WHAT RISk mANAgEmENT our customers see us as performing less strongly in our own environmental management and in our support for local like all companies, sgs is communities. several also suggested YOU faced with a growing range areas where we can improve: of risks to our business, • “SGS has the potential to significantly contribute to sustainability through its including some which relate TOLD product offerings by influencing many to sustainable development companies to be more responsible and sustainable.” and corporate responsibility. • “Consider your functional management US these generally relate to areas such as Health & Safety, the customers we choose Environment, Quality Management and traditional Sustainability Management to work for, the projects we efforts as being the single entity of whilst our customers may be familiar support with our services, Sustainable Management.” with our services, we are increasingly we are taking our stakeholders’ and the countries where we aware that they also want more information about how we are managing suggestions on board, and wherever operate. they are invariably sustainability. in our 2009 dialogue possible and feasible, will incorporate them into our future planning. complex risks to assess with some of our key stakeholders, our customers told us that they are well we were pleased that in our employee and can touch upon issues informed about sustainable development survey, our employees told us that we proFessional excellence of environmental in general, but that they do not have performed well in the area of ethics and enough knowledge of sgs to say integrity with 94% thinking we are above sustainability, human rights whether we are a leader in corporate average and best practice . this was rated and business ethics. sustainability within our sector. this sets as the most important aspect of corporate us the challenge of communicating what responsibility for us to focus on over the we do in this area more effectively; a next three years giving a strong indication in shaping our policies view that is supported by many of our that we must not become complacent. and making decisions in customers who told us that it is “quite some quotes from our employees: important” or “very important” for controversial areas, we sgs to publish an annual corporate • “SGS often set standards for their recognise the importance sustainability report. staff & operations that exceed the local laws, especially in developing of taking into account the our customers also expect sgs to be economies. This creates a visible a leader in the contribution we make to opinions of relevant and benchmark and a clear statement for all sustainability through our services and stakeholders that interact with SGS.” informed stakeholders. told us that we perform particularly well in business ethics and integrity, customer • “I think the corporate integrity and relations and account management and ethics standards are very good. The our technical knowledge and expertise. effort of the Group in the area of they acknowledge that we are making a integrity is quite impressive.” contribution to sustainable development • “SGS has a strong brand around the through many areas, including world. Some areas already combine environmental services, promoting their services to deliver to the market socially responsible standards and a single solution that embraces several working with customers to initiatives. This must be perceived as a improve their management of safety goal in all operations.” and the environment. 32 33
    • LOOkINg HIgHLIgHTS AND CASE STUDIES during 2010 we will: • Following two years of data capture, carry out a review CONTINUOUS ImPROvEmENT LEAN PROgRAmmE of the scope of data capture and calculation across our the need to standardise our services does not mean that we are unable to improve the way we deliver them. in 2008 we launched “lean”, a continuous improvement and operational efficiency programme. lean aims at improving the efficiency of our service operating territories to further improve consistency provision, shortening our delivery times, improving reliability and optimising the interface with our customers. it consists of four strategic programmes, looking at our laboratory operations, back office processes, sales relationships and our laboratory information • Continue to conduct our annual training on the Code of management systems. efficiency improvements are achieved through our employees who, working in small teams, design and integrity and professional conduct using a refreshed implement solutions to improve the way we work. in 2008 there were 25 live projects which increased to over 90 in 2009. we have started to roll out the programme through a network of “lean leaders” who are being trained in lean techniques. so far we have 22 training format leaders who have each undergone three days of training, and anticipate this will rise to over 80 by the end of 2010. • Continue to develop high potential people through our “Our laboratory has been facing a lot of challenges, including requests for faster leadership programme turnaround times from customers. We AHEAD are looking forward to a more efficient laboratory with the help of Lean and to upgrading our productivity after implementing this project. We have identified unreasonable waiting time and figured out solutions to speed up the lead proFessional excellence time and prevent unnecessary waiting.” ANDY TSAI, LAB mANAgER Of THE CONSUmER TESTINg SERvICES (CTS) LAB IN kAOHSIUNg, TAIWAN   OUR “Having attended Yale University, where I majored in Physics, I was recruited by the University of Wisconsin before coming to Geneva to join the European Organisation for EmPLOYEES Nuclear Research (CERN). I attained my PhD in elementary particle physics and spent ten years in research. AT WORk I then went to McKinsey & Co as a management consultant before joining the Continuous Improvement team at SGS almost five years ago. A team and I have developed an advanced tool which provides everything we need to know about our labs around the world – where they are, what they do, what accreditations they hold, who their customers are, what samples they have. I work with a core team of top lab experts; 22 outstanding colleagues representing practically all SGS services. “We want to get our labs to operate as one network, whilst respecting both the global and local entrepreneurial spirit. We are looking at critical lab operations to ensure highest quality deliverables with on-time delivery, whilst improving safety and ensuring our labs are the best places to work. We monitor and optimise resources for the benefit of our customers, staff and our shareholders. We are improving the physical footprint, looking at how we can best improve operational excellence. Our Voice of the Customer survey, which ran in 16 languages across 150 labs, resulted in 2,000 customer responses. We also use a blind customer experience process to sample our STEPHEN ARmSTRONg service delivery. (gLOBAL PROgRAm mANAgER “Lean has been very successful for our lab programme. As we move forward, we - ASSISTANT vICE PRESIDENT need to execute it virally. I have trained 60 colleagues as Lean leaders. We need to CONTINUOUS ImPROvEmENT) provide the tools to help people make changes in the best ways for their own lab. I am discussing how we integrate sustainability requirements into our programme and look forward to exploring these opportunities further as the programme evolves.” 34 35
    • DID YOU kNOW? globally, sgs spends over 53% of its revenues on wages and benefits to OUR PEOPLE employees and sub-contractors. last year there were 518 recordable incidents reported in our selected operating countries. over 178,000 hours of safety training were provided during 2009. sgs employs one of the world’s most diverse workforces with over 59,000 people PEOPLE delegates attend three workshops and develop a personal action plan which these group policies, each market is able to develop its own detailed policies and working in our laboratories, offices and mANAgEmENT directly impacts business growth and initiatives. to date, more than 100 approaches that are compatible with their local market context and needs. field locations in every geographical region, employees have attended the leadership ATTRACTINg EmPLOYEES programme. there has been particularly along with a large number of associates DIvERSITY we believe that our employees are our good take-up for our customised and sub-contractors. our management of as well as recruiting from a wide most valuable asset, recognised across leadesrhip programme in china and hong talent pool of varied backgrounds and kong where more than 200 employees human resources forms an integral part the world for their skills, knowledge and experiences, we actively encourage professionalism. the future success have now participated. of our corporate sustainability approach. the diversity of views and ideas, and of our business relies on us continuing it is particularly challenging to accurately recognise the value of this in nurturing recruitment, training, safety, health, to attract, develop and retain people predict market needs in services innovation and adapting to changing wherever we operate. this means relating to sustainability and corporate wellbeing and the treatment of employees markets. with operations all over creating a company where people can responsibility due to the rapid evolution of the world, almost all nationalities are are all important aspects of our social develop their potential and feel valued for these areas and the ongoing development represented in our company. our their contribution. our annual employee of formal standards. to match these responsibility. our market has changed operations council alone represents turnover across our regions was just market needs, it is important to maintain 14 different nationalities. beyond recognition since we were founded 10.3%, which is indicative of the current a workforce that is multi-skilled and highly economic climate. across sgs, each adaptable. we are constantly reviewing in 1878, and our customers’ needs continue region has developed programmes to our skills in relation to emerging markets RECOgNITION AND REWARD to change at an ever faster pace with the increase the awareness of our brand, to and looking for innovative ways to we recognise the importance of providing attract and retain talented individuals, and develop new disciplines. we have a a working environment which is fair, advent of new technologies and a sharper to develop the specialist skills that we will global human resources database that where each individual is recognised our people focus on safer, ethical and environmentally need in the future. helps us manage talent identification, for their contribution, and rewarded skills development, career planning and according to sgs bonus policy. our aim is sound consumer products. at the same succession management. to create an environment where there are DEvELOPINg TALENT time, we must provide our services we have a structured employee induction in 2010 we aim to launch an e-learning no barriers to progress and where each individual has the opportunity to fulfil their efficiently, reduce our own environmental that maps out the essential training programmes on sustainability to raise ambition and potential. needed during a new employee’s awareness across the company and to impact and further improve our safety first six months at sgs, covering job help employees understand how they WORk LIfE BALANCE performance. this, coupled with the current role and standards of performance as can contribute. the programmes will well as areas such as the sgs code also help managers understand how to our focus is on providing equal economic climate, will be a big challenge of integrity and professional conduct, build sustainable thinking into their day- opportunities for all employees within for our employees to innovate and improve. Quality, Health, Safety, Environment and to-day decision making. this initiative a fair system of recognition and reward personal security. thereafter we provide will be supported by the appointment based on merit. we recognise that, it also provides some exciting opportunities a wide range of technical, professional of sustainability “champions” who will in some countries, creating the right for us to demonstrate what we can do, and and personal learning programmes to promote programmes and initiatives at work life balance can be especially develop the right blend of skills to meet grass-roots level in each of the countries challenging for women with family or to consolidate our position of leadership. customers’ current and future needs. in which we operate. caring responsibilities and that such commitment can make it difficult to our talent programme identifies people OUR EmPLOYmENT PRACTICES pursue a chosen career within a globally with leadership potential, to ensure they diverse company. we routinely monitor are being developed within their current our group employment policy sets the gender ratio of both the number role. only employees who meet and common standards for the business that of employees and the proportion that exceed expectations in their performance are compatible with the core international are managers. currently, 23% of our are selected to participate. labour organisation conventions. this managers are women. is complemented by a relatively small set of core policies and guidelines. within 38 39
    • “BY fAR THE mOST ImPORTANT STRENgTH HEALTH AND SAfETY PERfORmANCE PEOPLE ABOUT THIS ORgANISATION IS THE one of the main challenges we have faced in improving our safety performance is to change the culture within our organisation to encourage employees to report near misses and minor accidents so we can act to avoid more serious injuries. the increased investment in training and communications that followed the establishment of the global QHS&E Council resulted in an increase in near miss reporting in 2008 and also a significant rise in the reporting of injuries. we are encouraged to see a continued rise in near miss reporting in 2009, combined with a downturn in injuries. we are seeking to reduce our trir below 1.0 next year, although we are reluctant to set a formal target at this stage as this might have a counter-effect on employees’ willingness to report accidents. in 2009, we found that a number of incidents were the result of slips, trips and falls, and inappropriate lifting. tragically, two people working on behalf of sgs lost their lives as a result of a single offsite incident in thailand whilst on sgs business. after an internal investigation, led by the Vice-Chairman of the QHS&E Council, we have implemented and reinforced a number of policies including training and mandatory personal monitors. WHO ARE IN IT.” CHRISTOPHER kIRk, CEO we will continue to drive improvements through the implementation of initiatives such as: • Expanding existing behavioural change programmes • Increasing the number of safety meetings • Providing more effective training HEALTH AND SAfETY • Documented induction on hazard identification and risk assessment for all employees providing a safe and secure workplace for everyone at sgs is paramount. it is our belief that all injuries are preventable and we • Ensuring the correct use of personal protective equipment strive to provide the best possible conditions, equipment and training to ensure our employees and those people working on behalf • Vehicle inspection and driver improvement programmes of sgs, can work safely and travel safely to and from their place of work. Our commitment to safety is contained within our Quality, Health, Safety and Environment (QHS&E) Policy and accompanying SECURITY manual that together set out the protocols that govern health and safety management across the Group. Our global QHS&E Council, security is an ever increasing concern and we carefully consider security risks for employees who travel by screening hotels, established in 2005, provides direction and support, and facilitates the sharing of best practices. responsibility and accountability for arranging airport pick-ups and even providing security guards in exceptional circumstances. cultural training is provided for performance sits within our regional and business management. all businesses are regularly audited by both internal and external employees and their families who are relocated to help them integrate into their host country. details of the support we provide to safety specialists. the cross functional technical governance group, which is an initiative sponsored by the evps of the agricultural, ensure security, safety and welfare are contained in our travel security guidelines and bulletin. minerals and oil, gas and chemicals business lines, audited 39 locations in asia, africa, europe and north america. in 2009 we strengthened our safety communications by introducing a set of 75 safety training modules that can be accessed via the our people internet. these modules are designed to be viewed by teams, with discussion facilitated by a qualified trainer. OUR PERfORmANCE 2006 2007 2008 2009 INDICATOR what does this measure? 2009 number of recordable incidents 415 451 569 518 EmPLOYEE NATURAL TURNOvER % of employees that leave sgs each year of their own will 10.3% total recordable incident rate (trir) 1.24 1.29 1.50 1.29 gENDER RATIO (mALE) % of male employees 65.4% lost time incident Frequency rate (ltiFr) 1.00 0.96 1.18 1.09 gENDER RATIO (fEmALE) % of female employees 34.6% near misses 355 358 830 1,491 training hours completed 48,982 61,381 79,145 178,166 EqUAL OPPORTUNITY RATIO (female managers / female employees) / (male managers / male employees) 0.58 SICkNESS ABSENCE RATE number of days of sickness absence as a percentage of total days worked 1.74 Injury rates are likely to be overstated as data includes people working on behalf of SGS, whereas working hours are TRAININg HOURS number of training hours per Fte 16.8 calculated using only SGS employees. Safety statistics exclude data from one scope country which is currently unavailable. Data will be integrated in future reports. our employee turnover fell in 2009, most probably due to a combination of factors including the global economic downturn. we have continued to restructure our business in line with business development and, despite some redundancies at a local level, we have increased our overall global headcount by 2.6%. we employ roughly twice as many men as women across the organisation. our equal opportunity ratio shows that a higher proportion of men reach management level and it is our goal to encourage and enable more of our female employees to pursue a management career path. we recognise that further research may be needed to better understand how to achieve this. we are well below our tolerance of 2.5 for sickness-absence rate and we aim to keep this rate low going forward. 40 41
    • HIgHLIgHTS AND CASE STUDIES WHAT YOU LOOkINg • In 2009, our Australian headquarters in Perth achieved certification OHSAS 18001, an international standard for safety management systems. TOLD US AHEAD • Over 178,000 hours of safety training were provided during 2009. • Our customers are looking to us • Our South-East Asia Pacific region set up a forum to discuss gender and promote women in leadership. From dialogue with our to provide ever-stricter safety performance, often as a condition • To date over 100 employees have participated in our leadership development programme and more than 200 employees stakeholders in 2009, we of contract. we must collaborate participated in a customised leadership course for the china and hong kong region. were made aware of a in creating even safer working environments, which is why we will few interesting points with THE SgS YOUNg ENgINEERS’ TRAININg PROgRAmmE be appointing a senior level specialist in canada we developed an essential engineering skills programme to encourage and train young engineering graduates in regard to how we manage to support and further strengthen our group safety management system. metallurgy, a discipline that is in high demand in minerals services and industrial services. each candidate has an individual plan that our people. one of the key is designed to develop professional job skills, a business background and knowledge of sgs. the programme can be broadened to • We need to continue to work offer experience of associated disciplines such as finance, project management, health, safety and environment. points we noted is that our strategically in partnership with stakeholders, including our communities and academic institutions to develop the skills that will be employees, were keen for needed for our future business, momentum is an internal sgs forum that has been set up by us to enhance training and particularly engineering, geology and deborah o’dwyer, leadership and development manager, life science services. south-east asia pacific, to raise awareness of gender diversity awareness on areas such and to promote women in leadership. employees were invited • Although we believe that we have as sustainability. this is maintained an excellent equal to engage in a pre-launch survey in June 2009 to provide insight into the information and events that they would like to something that we plan to do opportunities ratio, we want to see to promote diversity. continue to work to attract more   in 2010 using an e-learning women into sgs, and to create the programme. we were also right employment conditions to enable them to achieve work life balance very encouraged to learn that during their careers. 76% of our executive vice our people • We plan to launch a Group-wide OUR “I graduated in food science and first worked in a technical role within the dairy industry, then carrying out supplier presidents, chief operating e-learning programme during 2010 to raise awareness and understanding of EmPLOYEES audits for Ireland’s biggest supermarket chain. I came across officers and managing employees on key sustainability issues. WORk SGS who were looking for auditors and joined in 1995. we will also run a series of internal AT I think I have progressed through over seven different roles in my fourteen years at SGS; most of my time has been in directors surveyed wanted to take a leadership role or play campaigns to help bring sustainability to life in the workplace. SSC where I managed the Northern Ireland business. Soon afterwards I was given responsibility for all the Northern an active part in sustainability. Ireland businesses, then for SSC across the UK. I look back on this period with great pride, working with a team to make some quotes from our employees: this unit a high performing part of the UK and global business • “SGS should concentrate more on before moving on to my current role as Managing Director health and safety in the third world of SGS UK. It was not all easy as, even within the UK, the countries by making general awareness amount of travel required is significant. The variety of work, seminars and workshops to help experience and opportunity that SGS offers has always been authorities to be more aware of a strong attraction for me. We also have a particularly great products affecting public health.” team of people, not just in the UK but globally. I tell my team that if they have the right attitude and work hard, there • “We need to give all staff a better PAULINE EARL should be no reason to look for a job outside SGS.” understanding of sustainable  (mANAgINg DIRECTOR Uk) development.” • “Education is a good area for sustainable development. If you want to protect the environment, think about actions that can make people respect the environment or change the view they have of the environment.” 42 43
    • ANNUAL WATER vOLUmE PURCHASED 824,431 m3 review 44 45
    • DID YOU kNOW? sgs has one of the most comprehensive environmental testing capacities in the world. each employee produces on average over 4.23 tonnes of co2 each year while at work. sgs headquarters in geneva uses a thermal exchange system to cool and heat the building with water from lake geneva. our environmental impact can be divided • Our water consumption was • SGS has worked in India for the Central into two main areas: 824,431 m3. pollution control board to help develop • Internal: the impacts of our direct a baseline for dioxins, and develop a operations OUR SERvICES standard methodology for monitoring volatile organic compounds (vocs). • External: the impact of the services we as a service company, sgs also makes they are keen to apply international provide to our customers an important indirect contribution to directives and develop methods of in our own operations, we are continually environmental protection through the analysis and control that work for them. striving to minimise our environmental services we deliver to customers across • A gold mine in Ghana needed to return footprint. our principal environmental the world: the tailings piles to local farmers. sgs impacts derive from the waste water • Our System and Services Certification carried out soil analysis to assess its discharges and waste from our offices services help organisations to suitability to plant crops before the land and laboratories, co2 and other air manage their own impact by certifying was handed over to the community for pollutants associated with employee environmental management systems ongoing management. travel and the energy consumed in our (e.g. iso 14001). offices and laboratories. during 2009, • The SGS Institute for Applied • Our Environmental Services include chromatography in antwerp, belgium we have reduced air travel by 13% with ENvIRONmENT environmental quality monitoring provided an expert for three regional a consequent reduction of our in some of the most threatened workshops for part of a unep project c02 emission. environments in the world. on the assessment of existing capacity externally, sgs offers a range of and capacity building needs to analyse • Our Consumer Testing Services and inspection, testing, audit and verification persistent organic pollutants (pops) in systems and services certification services to help customers develop environment provide assurances to consumers developing countries. and implement environmental solutions that products have been sourced • SGS is working with industry pioneers we are aware of our responsibility towards protecting the across the world, from advising on from supply chains that meet to develop an auditable standard on bio sustainable forestry, monitoring dioxins, environment and minimising our footprint. as members of the designated environmental standards fuels covering verification of the source providing iso 14001 certification and and are designed and manufactured of materials to applied uses. carbon disclosure project since 2006 we have been dedicated carbon footprint studies, to supporting to minimise carbon and other to reducing our co2 emissions for some years the development of new wind farms. environmental impacts during • We are working with WWF in Hong kong to develop various standards in development, use and disposal. now and are confident that we can achieve the targets we have OUR ImPACT ON sustainable environmental practices. • Our Forestry Services have developed set for ourselves, despite the continuing growth of our business • Through our Environmental Services THE ENvIRONmENT a new service to verify tree planting in taiwan, sgs offers services in air and our headcount. this is a good start, but we still have some projects to provide independent sampling and monitoring, covering sgs has a direct impact on sustainable assurance to donors on the quality and way to go. as we embark on our journey towards sustainability, development through our business effectiveness of designated projects. emissions into the air as well as operations. based on the reported data ambient air and workplace monitoring. there are other important environmental factors for us to some examples of our work over the we can also provide a mobile laboratory from our selected operating territories: consider in the short-term, such as reducing the volume of past 18 months are summarised below: to investigate vocs onsite. • Our carbon footprint for 2009 was • SGS Poland acted as Owner’s waste and pollution sources from our laboratories as well as calculated at around 171,000 tonnes co2. of this, around: representative for energy provider, our consumption of water. rwe, on the construction and o 53% was from electricity commissioning of a wind farm which consumption in our offices and involved the installation of 18 wind laboratories (equivalent to turbines in suwalki, north-east poland. 182 million kwh); o 29% was from vehicle fuels; o 10% was from non-transport fuels; and o 8% was from air and train transport. 46 47
    • “I WANT EmPLOYEES TO BECOmE mORE ENvIRONmENTAL we are in the process of setting WASTE AND RECYCLINg long-term strategic targets for carbon the materials, resources and chemicals mANAgEmENT reduction, which will involve input from ENvIRONmENTALLY we consume in our laboratories and our coos and evps over the coming offices have the potential to generate months, and we will communicate this POLICY polluting wastes. we therefore take ACTIvE target in our next report. in november preventative measures to control our revised environmental policy was 2009, our ceo signed a pledge with the our activities and reduce potential launched by our ceo in June 2009. it wbcsd manifesto for energy efficiency environmental risks. waste management aims to ensure that employees deliver in buildings to reduce the co2 emissions is also a high priority because of the our services with minimal negative impact from our owned buildings by 10% possible risk to our reputation and to the environment and the communities by 2013 and 20% by 2020 using a financial impact on the company. where we work and live. it also requires 2010 baseline. our suppliers and business partners to in our laboratories we practise the we aim to achieve these reductions consider the environmental effects of highest standards of hazardous waste by implementing whenever and their activities and to take reasonable management, which are audited regularly wherever possible: steps to minimise them. there is by our technical governance team. any further encouragement from our • Innovative technologies for the potential non-compliance is reported . stakeholders to maximise the positive impact we can have on the environment through the development of new and heating and lighting systems within our buildings and ensuring centralised system controls for each building and investigated as a matter of urgency. in addition, our regional operations are putting in place a range of initiatives to I WOULD LIkE EvERYONE TO innovative services. • Reductions in the ‘stand-by’ mode consumption of all equipment and instruments used by adopting eco- help reduce materials consumption and increase recycling rates across all of our global operations. examples include: THINk HARD ABOUT WHAT THEY gOvERNANCE AND ImPLEmENTATION buttons which act as current breaks • Laboratory oils and chemicals recycling the ceo is ultimately accountable CAN DO for the environmental policy and the • Installation of adjustable shading • Paper minimisation initiatives (avoid, company’s environmental performance. systems in order to reduce the amount reuse, recycle) he is assisted by the sustainability of energy needed to cool buildings • Use of recycled paper and other steering committee which oversees • Improved building insulation recycled materials the implementation of all our social environment • Consideration of innovative and greener • Office recycling schemes for paper, and environmental programmes. technologies in new building plans. plastics, metal cans, toner cartridges, senior management is responsible for in addition, we will continue to support fluorescent light tubes and batteries ensuring policy compliance, including the establishment of improvement our employees in improving their own programmes and performance reporting. behaviour through a range of measures WATER AND NATURAL RESOURCES our aim is to empower our employees to including: we operate in many parts of the world put the tools into practice and reduce the • Cycle to work campaigns where water resources are becoming TO PROTECT THE ENvIRONmENT.” environmental impact of our activities. ENERgY AND CO 2 • Car sharing schemes • Office energy saving campaigns, e.g. increasingly precious. the main activities which require careful waste water management are in our laboratories CHRISTOPHER kIRk, CEO lighting, air conditioning, it equipment where we use a range of potentially the energy we consume in our • Use of web based conferencing polluting chemicals. in these cases it is an offices and laboratories and when we systems to minimise travel operating requirement that we meet local travel translates into co2 emissions. • Low-carbon emission car fleets regulatory standards as a minimum. although our impact overall is low compared to others in industrial sectors, • Economy class travel except for long climate change remains an urgent distance flights environmental issue for us all. since • Education on how to save energy at 2006, sgs has participated in the carbon work and at home disclosure project, the most widely used international accounting tool for • CO2 offsets and tree planting government and business leaders to understand, quantify, and manage greenhouse gas emissions. 48 49
    • OUR PERfORmANCE HIgHLIgHTS AND • In June 2009, SGS launched a ‘Living sustainability at sgs’ contest to invite we currently manage, monitor and report our environmental performance using indicators relating to co2 and water. we will be CASE STUDIES ideas from employees on how we agreeing indicators for waste management and look forward to communicating our progress in this area in future. in the table below can become more environmentally we have included a sub-set of our environmental key performance indicators to illustrate the current state of our performance. aside from managing our own impacts, responsible and innovative in our day- we are passionate about using our to-day operations. more than 290 worldwide resources and the enthusiasm INDICATOR what does this measure? 2009 ideas across six categories: transport, and knowledge of our employees heating, electricity, paper, water and to contribute to environmental local C02 EmISSIONS total annual co2 emissions (tonnes) 170,958 waste were contributed by employees improvement initiatives. in 41 countries. the following ideas CARBON INTENSITY (PEOPLE) annual co2 emissions per employee (tonnes/Fte) 4.23 • SGS Systems and Services Certification were considered the best examples CARBON INTENSITY (REvENUE) annual co2 emissions per revenue (tonnes/chF million) 47.2 (ssc) has launched a portfolio for sgs to adopt and contributors were of services around the equator each awarded a prize. The winning WATER USE annual water purchased (m3 ) 824,431 principles. designed to help financial ideas will be highlighted and promoted institutions carrying out project finance at group and country level during our WATER INTENSITY annual water purchased per employee (m3 /Fte) 21.6 activities, the services offer social 2010 internal campaign on energy and environmental assessments, efficiency in the workplace. independent reviews for banks and o sgs shutdown monitor (china): sgs mandated lead arrangers, independent would create an easy to use energy monitoring and reporting, gap analyses saving device for pcs and laptops to CO2 of environmental management systems maximise energy efficiency in labs our global emissions for 2009 are calculated as 4.23 tonnes co2 per full-time equivalent employee. this is the equivalent of each and training on the equator principles. and offices. employee driving approximately 48,000 km in a hybrid car (based on 89 g co2 per km). • World Environment Day. In response to o green client report (south africa): as a service company, our direct impact is actually quite low compared to industrial corporations. nevertheless it is greater than the global alarm about climate change, sgs would provide customers with some other service organisations due to the scale of our laboratory operations worldwide. we are not surprised to find that our sgs china and hong kong actively the option of a paperless reporting operations reported a wide range of results given the diversity of services we provide. nevertheless, our aim is for all our operations supported and participated in the wwF service to reduce resources, time to reduce their carbon intensity. achievement of the targets will almost certainly deliver bottom line results in addition to the earth hour on 28 march 2009. and costs. projected environmental savings. • Our Guangzhou branch set up a o water saving initiative (France): environment sustainability information corner and sgs would install a simple water placed slogans around the building to SOURCE Of CO2 saving device to taps that mix air remind employees to save energy. with water and drastically reduce nearly 30 sgs volunteers and around water consumption. 300 citizens took part in an event on 18 april 2009 where sgs promoted o energy conservation (australia): energy saving concepts and collected sgs would utilise filtered heat in fire used batteries for safe disposal. assay to dry mineral samples prior to 53% 8% 29% 10% • SGS Taiwan opened a new laboratory sample preparation. ELECTRICITY AIR & TRAIN vEHICLE fUELS NON- in kaohsiung to support continuous TRANSPORT TRANSPORT business growth. the building, fUELS which houses 500 employees, has a been designed to achieve maximum the accompanying graph indicates the sources of our emissions. around 37% come from transport, 10% from non-transport fuel energy efficiency using wide opening consumption and 53% from electricity consumption. our electricity footprint is evaluated to be 182 million kwh. we believe we can windows for better natural ventilation and must go further towards reducing the carbon intensity of our business. and lighting, low energy lighting and a waste water collection system. WATER USE our average water purchase per full-time equivalent employee in 2009 was 21.6 m3. we will continue to monitor it carefully to maintain or reduce this level. while we make every effort to collect water usage for all our facilities, we are aware that some operations are based in rented buildings where this information is not readily available. as we encourage our leasors to provide this information in future we expect that this figure may increase. 50 51
    • WHAT YOU TOLD US LOOkINg AHEAD during recent dialogue with some of our over the next two years, we will key stakeholders, a number of interesting conduct a more detailed assessment and important factors came to light. First, of our environmental impacts across it confirmed our expectations that our all of our businesses and regions. this stakeholders are very concerned with will help us to understand our most environmental issues; secondly it is clear significant impacts and review our key OUR EmPLOYEES AT WORk that while our stakeholders regard many performance indicators particularly around of our services as having a very positive waste. it will also enable us to set more “I qualified in labour economics and industrial relations, financial management, and environmental impact, they would also challenging targets for us as a group. business management before starting my career in education with a World Bank project like to see a greater focus on strategic as a priority we need to obtain a in Turkey and for the United Nations in Kyrgyzstan. After working with a leading wind issues within sgs such as environmental comprehensive inventory of sources turbine manufacturer and for an oil and gas consultancy, I joined SGS in July 2008. Today management and energy efficiency. of pollution and wastes across our I am responsible for testing wind farm developments and advising on the risks of wind these insights only further enhance our network of laboratories. although farm projects. We have built up a library of known issues and can advise developers on drive to improve our performance and our individual laboratories use relatively small how to make the best investment decisions. I was attracted to SGS because of their reporting on key environmental issues. quantities of chemicals and therefore strong business model but discovered that the people I work with are great and I love the employees in particular expect sgs to be generate small quantities of waste, the independence that SGS gives me to make decisions.” a leader in environmental management. cumulative effect of reducing our waste however, 53% of employees surveyed across our entire network could be JALE CAIRNEY (BUSINESS DEvELOPmENT mANAgER - WIND ENERgY SERvICES) thought we were best practice or above significant. our technical expertise in life average in this area, setting us a clear cycle analysis will be particularly useful challenge to do more. asked about the in prioritising where and how we can areas of environmental management achieve the greatest reduction in potential that are most important, our employees environmental risks across our activities. gave roughly equal weightings to co2 we can all find ways to reduce our emissions, waste and water. burden on the environment and as some quotes from our employees: an organisation we are committed to environment • “Everyone wants to have a clear supporting these efforts. For example, answer to the question of “how can I we can share more car journeys, use trust you environmentally?” web-conference facilities for more meetings, switch off computers and • “We need to be a ‘low carbon’ service photocopiers before going home, and provider so that clients gain benefits to print double-sided where possible. their own ‘carbon control’ programmes such simple steps, multiplied by 59,000 by using us compared with others.” employees can have a considerable • “I do believe that SGS can contribute effect, particularly if we extend the more in supporting development message and the good practice outside programmes, research and other of work. initiatives that can contribute to a better world with less CO2 emissions; these CURRENT TARgETS programmes can be in local universities • To develop and publish long-term or schools.” strategic carbon reduction targets. • “Travelling should be reduced • To reduce CO2 emissions from sgs worldwide to decrease our owned buildings by 10% by 2013 using carbon footprint.” 2010 baseline. • To produce an inventory of pollution sources and wastes from our laboratories by 2011. 52 53
    • DID YOU kNOW? we donated almost chF 800,000 on community programmes and charitable donations in 2009. our employees supported 96 community projects with a particular concentration in africa, central and north-west europe and south-east asia pacific. sgs china, hong kong and taiwan have, between them, given over 3,000 employee COmmUNITY volunteering hours to support primary schools in hongwei town in north-west china. our relationship with communities around the world across the world, sgs employees are passionate about supporting their local people and possessions away from areas at risk and deliver vital supplies, and we forms the backbone of our company. much of our work communities, offering their time, skills work with local aid workers to deploy and hands-on help. many also hold our technical services to assess risks to involves us using our technical skills to help minimise environmental impacts positions of responsibility as trustees, health, safety and the environment and and sustaining safe and healthy communities on behalf of our customers. at the governors and non-executive directors. provide timely advice on mitigating the majority of employees regard our further damage. same time, we are committed to supporting community development through relationship with the communities in all our community programmes are being an active and responsible employer as well as a good corporate citizen. which they work and live as one of the aligned to the millennium development most important features of being a our employees provide a vital link between the company and the community, goals, with a particular focus on responsible and responsive employer. combating the spread of hiv/aids, combining local customs, culture and knowledge with the professional and malaria and other diseases, as well as technical skills needed to support both local community and ensuring environmental sustainability and   business development. providing disaster relief. we are also involved in supporting universal primary • ASSPEL (SGS employee association in geneva) and sgs headquarters provide education and creating global partnerships ongoing support to the vital work of for development. avec, an ngo working to fight child the following pages illustrate some trafficking in the deprived town of “fOR mE, COmmUNITY ACTION IS ABOUT BEINg IN examples of our community involvement battambang in north-west cambodia. activities around the world: the organisation helps spare children community TOUCH WITH THE PEOPLE AND NEEDS AROUND US AND from the extreme dangers of living on COmmUNITY ACHIEvINg UNIvERSAL EDUCATION the streets and provides them with DOINg WHAT WE CAN AS mANAgEmENT safe houses and basic schooling. in INDIvIDUALS • SGS in Africa is a proud partner of december 2009, our employees raised the educatis university, a swiss sgs supports social and environmental almost chF 5,000, and are sponsoring graduate school of management causes through donations, sponsorship a range of kits designed to equip the offering distance learning programmes and in-kind support. whilst we do children with uniforms and books. OR AS A TEAm TO to individuals and companies whose operate a small number of core • SGS Headquarters provided financial education might otherwise be mAkE A programmes at group and regional levels, support to a local high school in geneva constrained by lack of time, financial we encourage local management to adopt to help them launch their ‘Year of resources or locality. the partnership a grassroots approach to communities by solidarity’. pupils were engaged in a with sgs allows students from working with employees to identify the DIffERENCE.” developing countries to use our offices series of activities to raise money for most relevant programmes of support. a wall to be constructed around a day to sit their examinations locally, thus an important aspect of our approach reducing costs and the need for centre for disadvantaged children in centres on providing humanitarian and travel. during a pilot scheme from ouagadougou in the small west african environmental support to communities october 2008 to october 2009, 21 country of burkina Faso. in January affected by natural and man-made students sat examinations in the ivory 2009, pupils from the school spent two CHRISTOPHER kIRk, CEO disasters. our employees, who typically coast, cameroon, mali and Zambia. weeks at the beorg neere (meaning live within the communities where Following the success of this pilot, the ‘for a better day’) Center helping to they work, are particularly effective at programme is now being extended to build the wall and meet the children. mobilising local support. For example, we other african countries. there are also use our premises as temporary shelters plans to offer residential seminars using for our employees who have lost their sgs premises in the future. homes, we use our vehicles to transport www.educatis.org 56 57
    • HIgHLIgHTS AND CASE STUDIES gLOBAL PARTNERSHIPS fOR DEvELOPmENT EDUCATION CASE STUDY: Employee Wellbeing Programme, Tamale gANSU PROvINCE, CHINA during 2009, gcnet extended its support to the tamale region by supporting a comprehensive employee wellbeing programme in collaboration with revenue sgs china and hong kong and sgs taiwan are committed agencies. the programme is designed to improve the health, wellbeing and financial wellness of staff, their families and the immediate community. up to 38,000 people to supporting primary schools in hongwei town, a deprived will benefit from the programme, including 15,000 local community residents, of mountainous area in the gansu province in north-west whom 60% are women. in the first year since its opening, significant numbers of people have begun to china. in august 2009, over 50 employees from hong benefit from health screening and advice and access to treatment, as well as financial Kong, Shanghai, Guangzhou and Beijing volunteered as pair awareness training and counselling. a total of 27 health information sessions were held which resulted in around 80% of staff being equipped with the knowledge to assistants to 83 underprivileged children in the region. to prevent non-communicable and preventable diseases, and offer advice on unwanted date, over 3,000 hours have been volunteered by employees. pregnancies. at least 50% of employees have been tested for diseases and of these, 80% of those diagnosed positive have been given access to treatment. new classrooms were constructed at the Jiajiawa school in longxi county within the Following a series of financial awareness seminars, 50% of employees now province following a company and employee donation of chF 35,000 in 2008. since understand the concept of financial wellness and 10% have received one-to-one then employees have continued to raise funds and donate essential equipment to the counselling on personal financial management, with 25% of these having been classrooms. sgs is also supporting the education of children by training employees as referred for further advice and support. as a result of raised awareness and volunteer teachers. at the end of 2008, the sgs education caring committee invited understanding, 6,000 residents are now members of health insurance and employees to apply to become volunteer teachers. over 100 employees attended retirement benefit schemes. a training event and 11 were selected as volunteer teachers. by november 2009, six had successfully been despatched to the school and the remaining teachers will Morton Community Healthcare Center, Lakefield complete their placements in the coming months. sgs canada at lakefield employs over 400 people from the local vicinity and was keen “it is helpless, as no one can choose their life because poverty and wealth have to support a $4 million fundraising campaign to build a new primary health care medical been set by destiny. however, i am very happy that we can help them change the community centre. in 2008 sgs donated us$150,000 over three years towards the building of a current situation, provide them with food and clothes and support them with funds for 12,000 ft2 medical centre on a one acre site just outside of lakefield in education. kindness does not expect reward and aid to the children in poverty means douro-dummer township. support to life and respect to the value of life.” “When we spoke to SGS there was never any doubt they were really behind the Jackie Zhu, ssc, beijing project. Perhaps some of our other corporate businesses in the area will look at this and see this as a lead example.” ken pipher, member of the lakefield medical center Foundation board of directors. on learning about sgs’s involvement in the gansu province, one of our long-term partners, synta - a leading manufacturer of telescopes was inspired to help. it donated one telescope to the Jiajiawa primary school and will donate two further telescopes to schools in the region. the donations are a first step in community collaboration between synta and sgs and we are excited by the prospect of synta supporting the volunteer teacher project in the future or maybe even training children in astronomy. 58 59
    • ENSURINg ENvIRONmENTAL SUSTAINABILITY COmmUNITY PERfORmANCE DATA sgs is a main sponsor of “toptotop”, a global climate expedition crossing the seven seas and climbing the highest summits in seven continents using only human effort and the power of nature to raise INDICATOR what does this measure? 2009 awareness of climate change. it is focused on teaching children everywhere to love and protect our planet. INvESTmENT IN COmmUNITY donations to community and voluntary groups CHf 348,345 toptotop is a non-profit organisation of volunteers under the patronage INvESTmENT IN SPONSORINg sponsorship of events CHf 446,310 of the united nations environment programme. the volunteers plan to sail 70,000 nautical miles, ride 18,000 km and climb 400,000 metres. TOTAL COmmUNITY PROJECTS total number of projects 96 in august 2010, the toptotop global climate solutions award will be presented to students from each of the seven continents who submit winning essays or theses on resolving or reducing global warming. Winners will be invited to a week-long expedition in Switzerland to collate stories of people who are making efforts to protect the gROUP COmmUNITY SURvEY environment and study the impact of climate change. during 2009, we conducted a group-wide community survey to better understand the needs of, and get more involved in, the www.toptotop.org communities where we live and work. results revealed that in 2009, sgs employees supported 96 community projects worldwide with many contributing personal time. we donated over chF 348,000 to community programmes. the findings from our community survey will be reviewed alongside feedback from our employee and external stakeholder surveys in order to develop a global community investment model during 2010. on 31 october 2009, employees in sgs hong kong participated in an international coast clean-up campaign hosted by the ocean WHAT YOU TOLD US conservancy. the event was held we gained a great deal of insight from the stakeholder dialogue programme we undertook in 2009. with regard to our approach to on the beach of chun kan Jiao. supporting communities, the expectation of stakeholders was high, yet their understanding or knowledge of our activity was very Quantities and types of waste were low. they made it clear to us that they were interested in the area of community support, wanted to participate and would like to recorded and submitted to the be better informed about sgs’s contribution. our employees expect sgs to play a more active role in communities with 28.5% of ocean conservancy to help identify those surveyed thinking we are above average in this area. major causes of pollution. some quotes from our employees: community • “I really believe SGS needs to be more connected with the communities where we live and work.” • “I think that SGS should look at developing a foundation where we can show the world, our [engagement] in charitable activity knowing that we have a presence in most, if not all countries in the world.” COmBATINg HIv/AIDS, mALARIA AND OTHER DISEASES • “Perhaps consider some testing of borehole and drinking water of poor communities to ensure these are safe and also crop • In April 2009, the Clinical Research team at Life Science Services in France and Corporate Communications sponsored one nutrition and fertility management by selecting some community farms.” family’s challenge to defeat cystic fibrosis. the record-breaking 42,000 km race in the north pole in -30° conditions involved 15 nationalities and raised vital funds for the charity www.vaincrelamuco.org • SGS donated money to a development project in Tambacounda in eastern Senegal over the past three years. The work is being managed by an ngo, le kinkeliba, which has been working to establish medical facilities in the district, offering access for the LOOkINg AHEAD population to basic medical care. www.lekinkeliba.org we know that it is very important to our employees to feel that sgs is in touch with and responsive to the needs of the communities where they live and work. we also recognise our broader responsibility to supporting local economic growth • SGS Geneva HQ provides financial support to the Synergies Africaines contre le SIDA et les Souffrances, a non-governmental by providing employment and training opportunities to people and deploying the skills and expertise of our employees during organisation which is focused on combating hiv/aids, malaria and other diseases in africa. times of need. PROvIDINg DISASTER RELIEf we are committed to building a strategic framework for community investment to enhance the synergistic relationships we have with local communities. we are currently working on a policy for global community involvement. where our employees have • On 8 August 2009, Morakot typhoon devastated Taiwan. In the immediate aftermath, SGS Taiwan, China and Hong Kong with the experience and expertise that is useful to those around them, we want potential benefits to be realised. on key issues such as support of employees donated more than chF 6,000 to local rescue organisations. sustainability, we aim to increase dialogue and knowledge transfer so that we can help to contribute to personal and economic • SGS Italy supported the Caritas Project Realization fund to build community centres for the people of Abruzzi following an development as well as community development. earthquake which devastated the town. • Tropical storms which hit the Philippines at the end of September 2009 caused catastrophic flooding and damage to the homes of employees and their families. sgs employees were offered the opportunity to donate via their salaries to help colleagues through the difficult times. COmmUNITY PERfORmANCE DATA 60 61
    • INTERNAL ASSURANCE STATEmENT REPORT ON THE INTERNAL ASSURANCE Of SgS CORPORATE SUSTAINABILITY REPORT 2009 DATA ASSURANCE the quantitative performance data in this report is an extract of a larger data set that has been compiled using financial data NATURE AND SCOPE Of THE ASSURANCE management processes. at this point in time we are confident to report data covering more than three-quarters of our revenues an internal assurance was carried on the sgs corporate sustainability report 2009. the scope of the assurance and two-thirds of our employees. sufficient rigour has been applied to the collection and amalgamation of this data to provide a included the text, 2009 data reported and a review of the management of this data. reasonable level of assurance. the sgs group has developed a set of protocols for the assurance of sustainability reports based on current best practice guidance provided in the global reporting initiative sustainability reporting guidelines (2006) and the aa1000 assurance standard (2008). these protocols follow differing levels of assurance depending on the reporting history and capabilities of the reporting organisation. gRI g3 gUIDELINES this corporate sustainability report has been assured using sgs’s own protocols to ensure consistency with in this report, sgs has fulfilled the requirements of gri to level c. this demonstrates that our disclosure of information on the the service offered to customers and follows the basic protocol for content veracity. the assurance comprised a company and its corporate sustainability performance is compliant with the gri g3 guidelines. combination of documentation review and validation and face-to-face interviews with relevant employees at the head office in geneva, antwerp and ellesmere port in the uk. remote audits were also carried out with sites in south africa, peru and china. the assurance team was assembled based on their knowledge, experience and qualifications for this assignment, and comprised auditors with the following qualifications: Lead Quality, Environmental and SA8000 Auditor and experience on the sra assurance service provisions. Financial data drawn directly from independently audited financial accounts has not been checked back to source as part of this assurance process. 2002 C C+ B B+ A A+ in accordance the responsibility of the assurance team is to express an opinion on the text, data, graphs and statements within Report Externally Assured Report Externally Assured Report Externally Assured the scope of verification and to inform improvements in the process for future reporting. SELf DECLARED (mANDATORY) ASSURANCE OPINION on the basis of the methodology described and the verification work performed, we are satisfied that the majority of information and data contained within corporate sustainability report 2009 is accurate and reliable and review gRI CHECkED (OPTIONAL) provides a fair and balanced representation of the sgs group’s activities in 2009 within the limitations of the stated reporting scope. we believe that sgs has chosen an appropriate level of assurance for this stage of its reporting journey. RECOmmENDATIONS there is a need to further standardise the scope and method of calculation for some key performance indicators where variations currently exist at business unit and country level. as this may require some adjustments to be made, we anticipate that there may be a need to re-state some of the performance data in subsequent reports to make accurate year-on-year comparisons. a report has been prepared for sgs management which includes a more detailed set of recommendations to help identify areas for future improvement. michel mooser, sra lead advisor rita godfrey, sra assuror February 2010 February 2010 62 63
    • gRI REqUIREmENT gRI LEvEL C COvERED SECTION REfERENCE / COmmENT REqUIREmENT 4. gOvERNANCE, COmmITmENTS, AND ENgAgEmENT 4.1 governance structure of the organisation including BENCHmARk AgAINST gRI g3 gUIDELINES committees under the highest governance body responsible for specific tasks, such as setting strategy governance p 15 the following index indicates the section references for the gri requirements and supports our alignment to a c level of reporting. or organisational oversight.   annual report pp 66-79 some requirements reference the sgs annual report 2009 which contains information about our organisational structure and 4.2 indicate whether the chair of the highest corporate governance. governance body is also an executive officer.   annual report pp 67-69 4.3 For organisations that have a unitary board structure, state the number of members of the highest gRI REqUIREmENT gRI LEvEL C COvERED SECTION REfERENCE / COmmENT governance body that are independent and/or annual report pp 67-68 REqUIREmENT non-executive members.   who we are p 6 4.4 mechanisms for shareholders and employees to 1. STRATEgY AND ANALYSIS provide recommendations or direction to the 1.1 statement from the most senior decision-maker highest governance body.   annual report p 80 of the organisation about the relevance of 4.6 processes in place for the highest governance sustainability to the organisation and its strategy.   statement from chairman and ceo p 10 body to ensure conflicts of interest are avoided.  annual report p 68 1.2 description of key impacts, risks, and opportunities.  materiality p 18 4.8 internally developed statements of mission or values, codes of conduct, and principles relevant 2. ORgANISATIONAL PROfILE to economic, environmental, and social performance 2.1 name of the organisation.   who we are p 6 and the status of their implementation.  our approach to corporate sustainability pp 14-17 2.2 primary brands, products, and/or services.   who we are p 6 4.9 procedures of the highest governance body for 2.3 operational structure of the organisation, including overseeing the organisation’s identification and main divisions, operating companies, subsidiaries, who we are p 6 management of economic, environmental, and and joint ventures. annual report pp 151-154 social performance.  our approach to corporate sustainability p 15 benchmark against gri g3 guidelines   2.4 location of organisation’s headquarters.   who we are p 6 4.11 explanation of whether and how the materiality pp 18-19 precautionary approach or principle is professional excellence pp 28-33 2.5 countries where the organisation operates and names addressed by the organisation.  annual report p 133 of countries with either major operations or that are specifically relevant to the sustainability issues covered who we are p 6 4.12 externally developed economic, environmental, in the report.   annual report pp 151-154 and social charters, principles, or other initiatives to which the organisation subscribes or endorses.  statement from chairman and ceo p 10 2.6 nature of ownership and legal form.   who we are p 6 4.14 list of stakeholder groups engaged 2.7 markets served.   annual report pp 24-61 by the organisation.   our stakeholders p 20 2.8 scale of the reporting organisation, including: number of employees : who we are p 6 4.15 basis for identification and selection of number of employees, net sales, total capitalisation, net sales: annual report p 85 stakeholders with whom to engage.   our stakeholders p 20 and quantity of products or services provided.   Total capitalization: Annual Report pp 67, 116, 150 Quantity of services provided: Annual Report pp 96-99 4.16 approaches to stakeholder engagement, including frequency of engagement by type 2.9 significant changes during the reporting period and by stakeholder group.   our stakeholders p 21 regarding size, structure, or ownership.   annual report pp 10, 11, 95. 4.17 key topics and concerns that have been raised professional excellence p 33 2.10 awards received in the reporting period.  currently we do not have performance data for through stakeholder engagement, and how the our people p 43 this indicator but will include it in our next report organisation has responded to those key topics and environment p 53 concerns, including through its reporting.   community p 61 3. REPORT PARAmETERS 3.1 reporting period.   our reporting scope p 9 5. mANAgEmENT APPROACH AND PERfORmANCE INDICATORS 3.2 date of most recent previous report.  n/a not applicable as this is the first report management approach disclosures for each 3.3 reporting cycle.   about this report p 8 indicator category.   materiality pp 18-19 3.4 contact point for questions regarding the our reporting scope p 9 reporting on at least ten performance indicators, report or its contents.   closing remarks p 67 including one from each of the social, economic and 10 indicators including 1 economic, 5 3.5 process for defining report content, including environmental aspects.   labour, 2 social and 2 environmental. p 69 determining materiality, prioritising topics within the about this report p 8 EC1. direct economic value generated and distributed.   our approach to corporate sustainability pp 22-23 report, and identifying stakeholders the organisation our reporting scope p 9 LA1. total workforce by employment type, employment expects to use the report.   materiality p 18 contract, and region.   annual report p 99 3.6 boundary of the report. our reporting scope p 9 LA2. total number and rate of employee turnover   our people p 38 by age group, gender, and region.   our people : our performance p 39, p 41 3.7 state any specific limitations on the scope or LA7. rates of injury, occupational diseases, boundary of the report.   our reporting scope p 9 lost days, and absenteeism, and number of work 3.8 basis for reporting on joint ventures, related fatalities by region.   our people : our performance p 40 subsidiaries, leased facilities, outsourced operations, LA10. average hours of training per year per and other entities that can significantly affect employee by employee category.   our people : our performance p 41 comparability from period to period and/or between organisations.   our reporting scope p 9 LA13. composition of governance bodies and breakdown of employees per category according 3.10 explanation of the effect of any re-statements to gender, age group, minority group membership, annual report pp 68, 72-74 of information provided in earlier reports, and and other indicators of diversity.   our people : our performance p 39, p 41 the reasons for such re-statement.  n/a not applicable as this is the first report SO3. percentage of employees trained in professional excellence : p 31 3.11 significant changes from previous reporting organisation’s anti-corruption policies and procedures.   integrity p 30 periods in the scope, boundary, or measurement methods applied in the report.  n/a not applicable as this is the first report SO4. actions taken in response to professional excellence : p 31 incidents of corruption.   integrity p 30 3.12 table identifying the location of the standard disclosures in the report.   benchmark against gri g3 guidelines pp 64-65 EN8. total water withdrawal by source.   environment: our performance p 50 3.13 policy and current practice with regard to EN16. total direct and indirect greenhouse seeking external assurance for the report.  about this report p 8 gas emissions by weight.   environment: our performance p 50 64 65
    • CLOSINg DEAR STAkEHOLDERS, we hope you have found this report a helpful introduction to corporate sustainability at sgs. it represents a key milestone in our corporate history as we begin to communicate publicly REmARkS what sustainability means to our company. this report is the culmination of months of planning, designing and developing a group sustainability management system; time spent listening to stakeholders, discussing and deliberating issues at the operations council and the sustainability steering committee; and weeks of researching and sharing our stories and practices with the independent consultants who have worked with us in preparing this report. we would personally like to thank everyone who participated. we have made a commitment to reporting each year and envisage the report and our performance developing significantly over time. we know we have some way to go to truly claim to be a leader in this field. we need to look carefully at what our performance data is telling us, and understand how markets that are doing well can help raise standards in others that may be lagging behind. we must demonstrate a very clear commitment to environmental management, each of us contributing to saving energy and reducing waste, and we must strive to make our workplaces even safer. closing remarks overall, we have made a very positive start and we should all be proud of the excellent work that is already being done across large areas of the business. in a highly competitive market, being a leader matters, and what this report does is to demonstrate very clearly that we have the collective passion, ambition and skills to occupy such a position. we are particularly keen to hear your feedback on this report along with your suggestions and expectations of sgs as a leader in sustainability. For more information or to provide feedback on this report please consult our corporate website sgs.com or contact us at corporate.sustainability@sgs.com we are genuinely looking forward to hearing from you. Christopher Kirk Daniel Rüfenacht chief executive officer vice president corporate sustainability 66 67
    • gLOSSARY promote responsible forest management worldwide. Fsc is a certification system and women. there are 178 member countries of the ilo, represented by signed by 147 heads of state and governments during the un millennium SUmmARY Of REPORTED INDICATORS Accountability AA1000AS that provides internationally recognised workers, employers and governments. summit in september 2000. an international assurance standard that standard-setting, trademark assurance KPI (Key Performance Indicator) Natural Turnover WHAT DOES THIS mEASURE? 2009 and accreditation services to companies, provides a framework for evaluating the number of employees who leave organisations and communities Quantitative or qualitative measures corporate sustainability reports against CODE Of INTEgRITY interested in responsible forestry. which help an organisation to define the company of their own will. excludes the accountability aa1000 principles. AND PROfESSIONAL and evaluate its performance, typically employees who leave due to dismissal, CONDUCT (CIPC) FTE used to track progress against retirement or death in service. Biodiversity Full-time equivalent employee. organisational goals. cipc reports total number of professional conduct the variability among living organisms from Near Miss issues reported through the all sources, i.e. terrestrial, marine, and other Greenhouse Gases (GHGs) LCA (Life Cycle Analysis) an event, situation or physical compliance hotline 136 aquatic ecosystems and the ecological environment which had the potential to gases which alter the thermal a process of evaluating the effects that a cipc investigations total number of valid reports investigated 19 complexes of which they are apart. cause injury, damage or loss to people, properties of the atmosphere. the main product has on the environment over cipc non-compliances total number of breaches of cipc Carbon Disclosure Project greenhouse gases are considered to be the entire period of its life thereby property and the environment, but which identified through the compliance hotline 17 the carbon disclosure project (cdp) is water vapour, carbon dioxide, methane, increasing resource use efficiency and was avoided by circumstance. an independent not-for-profit organisation nitrous oxide, chlorofluorocarbons, decreasing liabilities. Stakeholder HEALTH AND SAfETY which holds the largest database of halons and ozone. LTIFR (Lost Time Injury an individual, community or number of recordable number of lost time, restricted duty corporate climate change information GRI (Global Reporting Initiative) Frequency Rate) organisation that affects or is affected incidents incidents and fatalities 518 in the world. the data is obtained a multi-stakeholder process and the number of lost time incidents by some aspect of an organisation’s trir number of lost time, restricted duty from responses to cdp’s annual independent institution whose mission occurring per 200,000 hours worked. products, operations, markets, industries incidents and fatalities per 200,000 information requests, issued on behalf is to develop and disseminate globally and outcomes. hours worked 1.29 of institutional investors, purchasing OHSAS 18001 applicable sustainability reporting organisations and government bodies. Sustainable Development ltiFr number of lost time incidents occurring guidelines. the gri incorporates the an international standard for occupational since its formation in 2000, cdp has per 200,000 hours worked 1.09 active participation of representatives health and safety management system. development that meets the needs of become the gold standard for carbon the present without compromising the near misses an event, situation or physical from business, accountancy, investment, disclosure methodology and process, LEAN ability of future generations to meet their environment which had the potential to environmental, human rights, and research providing primary climate change data to lean is a philosophy, an approach, own needs. cause injury, damage or loss to people, and labour organisations from around the global market place. and a set of tools in order to optimise property and the environment, but which the world. started in 1997, gri became processes and achieve world-class Transparency International was avoided by circumstance. 1,491 Corporate Sustainability independent in 2002, and is an official responsiveness. the global civil society organisation training hours number of annual training on health alignment of an organisation’s collaborating centre of the united nations leading the fight against corruption, completed and safety 178,166 products and services with stakeholder environment programme (unep) that Management System that brings people together in a expectations in respect of its role in works in cooperation with un secretary- the company structure, responsibilities, powerful worldwide coalition to end the PEOPLE delivering economic, environmental and general kofi annan’s global compact. practices, procedures, processes devastating impact of corruption on men, social value. and resources for implementing the employee turnover % of employees that leave sgs each Human Rights women and children around the world. management of a policy or group year on their own will 10.3 its mission is to create change towards a glossary Dow Jones Sustainability Index a set of principles defined in the universal of policies. world free of corruption. gender ratio % male employees 65.4 a global investment index which tracks declaration of human rights (1948) and % female employees 34.6 the financial performance of leading based on the recognition of the inherent Manager TRIR (Total Recordable Incident Rate) dignity and the equal and inalienable rights equal opportunity ratio (female managers / female global sustainability-driven companies. employee with people management the number of lost time, restricted of all members of the human family as the employees) / (male managers / responsibility, income statement duty incidents and fatalities per 200,000 EEB foundation of freedom. male employees) 0.58 responsibility and/or reporting to an hours worked. energy efficiency in buildings manifesto, operation council member, managing sickness absence rate number of days of sickness absence ISO (International Organization for committing signatories to pledge energy director or business manager. UNEP (United Nations as a percentage of total days worked 1.74 Standardization) reductions. Environment Programme) training hours number of annual training hours per Fte 16.8 the world’s largest developer and Materiality (Sustainability) created in 1972, the unep promotes Equator Principles publisher of international standards, iso relevant topics and indicators that may leadership and encourages partnership ENvIRONmENT a voluntary set of standards for is a network of the national standards reasonably be considered important for in caring for the environment by determining, assessing and managing institutes of 161 countries, one member co2 emissions total annual co2 emissions (tonnes) 170’958 reflecting an organisation’s economic, inspiring, informing and enabling social and environmental risk in project per country, with a central secretariat environmental, and social impacts, or carbon intensity (people) annual co2 emissions per employee nations and peoples to improve their financing. in Geneva, Switzerland that coordinates influencing the decisions of stakeholders. (tonnes/Fte) 4.23 quality of life without compromising that the system. iso is a non-governmental it is the threshold at which an issue or Employee of future generations. carbon intensity (revenue) annual co2 emissions per revenue organisation that forms a bridge between indicator becomes sufficiently important (tonnes/chF million) 47.2 any individual who is formally contracted the public and private sectors. VOCs (Volatile Organic Compounds) that it should be reported. water use annual water purchased (m ) by an employer to fulfil a specified job 3 824,431 ISO 14001 volatile organic products such as role for which the individual receives Millennium Development Goals water intensity annual water purchased per employee solvents and light petroleum cuts. remuneration. an international environmental the millennium development goals (m3/Fte) 21.6 management standard. (mdgs) are eight goals to be achieved by WBCSD (World Business Council for FSC (Forest Stewardship Certification) 2015 that respond to the world’s main Sustainable Development) COmmUNITY established in 1993 as a response to International Labour Organisation development challenges. the mdgs a ceo-led coalition of 170 international investment in community donations to community organisations concerns over global deforestation, Fsc international organisation located in are drawn from the actions and targets companies united by a shared and voluntary groups (chF) 348,345 is widely regarded as one of the most Geneva, Switzerland, whose goal is contained in the millennium declaration commitment to sustainable development important initiatives of the last decade to to promote decent work for all men investment in sponsoring sponsorship of events (chF) 446,310 that was adopted by 189 nations and via the three pillars of economic growth, ecological balance and social progress. total community projects total number of projects 96 68
    • INfORmATION SgS SA CORPORATE OffICE CORPORATE COmmUNICATIONS & PROJECT mANAgEmENT 1 place des alpes INvESTOR RELATIONS SgS SA daniel rüfenacht p.o. box 2152 Jean-luc de buman Joana de brito ch – 1211 geneva 1 1 place des alpes melannie Fernandes t +41 (0)22 739 91 11 p.o. box 2152 ch – 1211 geneva 1 CONTENT DESIgN AND COPYWRITINg f +41 (0)22 739 98 86 t +41 (0)22 739 93 31 nicky amos csr ltd e sgs.investor.relations@sgs.com f +41 (0)22 739 98 61 chichester, uk www.sgs.com www.sgs.com CONCEPT, DESIgN, REALISATION STOCk ExCHANgE LISTINg AND PRODUCTION six swiss exchange, sgsn CORPORATE SUSTAINABILITY group charlescannon sàrl daniel rüfenacht STOCk ExCHANgE TRADINg Verbier, Switzerland 1 place des alpes six swiss exchange p.o. box 2152 PHOTOgRAPHY ch – 1211 geneva 1 COmmON STOCk SYmBOLS sgs employees t +41 (0)22 739 94 01 Jason Joyce, charlescannon bloomberg: registered share: sgsn.vx f +41 (0)22 739 98 48 reuters: registered share: sgsn.vx PRINTED BY e corporate.sustainability@sgs.com telekurs: registered share: sgsn www.sgs.com atar roto presse sa isin: registered share: ch0002497458 Vernier, Switzerland swiss security number: 249745 printed on chlorine and acid free paper in Switzerland 2010. review © 2010 sgs sa. all right reserved a special thank you to all employees and stakeholders for their constructive contribution to our first corporate sustainability report. SGS-COC-004251 70 71
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