SGS Corporate Sustainability Report for 2011
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SGS Corporate Sustainability Report for 2011



Read the SGS annual account of our sustainability performance and plans. ...

Read the SGS annual account of our sustainability performance and plans.



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SGS Corporate Sustainability Report for 2011 Document Transcript

  • 1. Sustainable CORPORATE sustainability report 2011
  • 2. whenweneedto besure 2
  • 3. 24 hoursWe are continually pushingourselves to deliver innovativeservices and solutions thathelp our customers move their a daybusinesses forward. 7 days a week 12 months a year
  • 4. Contents06 Summary of performance 37 Professional excellence 55 Environmental management08 Summary of commitments 38 Strategic Transformation 57 Global programmes09 Report focus 38 Sustainability e-learning 58 Energy efficiency in buildings13 Who we are 39 Security 59 Green IT13 Why WE need to be sure 39 Innovation teams 59 Sustainable capital investment 40 Compliance and Integrity 60 Green procurement14 Joint statement from the 40 Our performance 60 Green cars Chairman and CEO 40 Progress on 2010 commitments 61 Waste management 41 Looking ahead 61 Progress on 2010 commitments16 Sustainability services at SGS 62 Clean power17 Global economy and trade 43 Our People 62 Water17 Human development 46 Global programmes 62 Environmental compliance18 Preservation of forests 46 Selecting and recruiting talent 62 Carbon disclosure and biodiversity 46 Engaging new talent 63 Our performance18 Energy and power 46 Managing performance18 Agriculture and food production 47 Learning and development 65 Community20 Buildings 49 Succession planning 66 Community management20 Mobility and transport 49 Reward and recognition 68 Core programmes and projects21 Materials and mining 49 Retaining talent 72 Recognition and awards 49 Human rights 72 Looking ahead23 Our approach to corporate 49 Diversity and equal opportunity 72 Progress on 2010 commitments sustainability 49 Environmental behaviour 73 Our performance24 Sustainability vision 49 Employee security24 Governance 49 Employee consultation 76 Report Assurance25 Sustainability management system 50 Our people performance26 Our stakeholders 52 Operational Integrity 78 Closing remarks28 Risk management 53 Our Operational Integrity performance28 Our strategic agenda 53 Progress on 2010 commitments 80 Key terms29 Measuring our performance 53 Looking ahead32 Embedding sustainability 82 contact information35 Our shared goals 4
  • 5. total recordable incident rate OFFICES AND LABORATORIES per 200 000 hours worked tonnes of C0 2 /FTE SOURCE OF C0 2 EMPLOYEESFocus on Compliance 1350Operational Strategic andIntegrity transformation Integrity electricitypage52 page 38 page 40 56% 70000 sustainability 4.2community services Leadership vehicle fuelsinvolvement at SGS Development 27%page page page66 16 47 1.47 non- transport fuels 9% air & train transport 8% 5
  • 6. PEOPLE Employees 100% receivingSummary of regularPerformance performance reviews 65.2% 67.4% % of employees receiving regular performance reviewsPROFESSIONAL Natural turnover Safety Training Hours 286043EXCELLENCE % of employees that leave SGS each year of their 13.8% <14% Number of annual safety training hours own will 11.1% 199076*Code of Gender ratio Number ofIntegrity % male employees recordable 739reports % female employees incidentsto helplines 168 ■ m m The number of lost time, 691* 150Total number of integrity 64.8% 65.6% restricted duty, medicalissues reported through treatment incidentsintegrity helplines f and fatalities f 35.2% 34.4% Zero fatalities in 2011Code of Equal 1 TRIRIntegrity opportunity The number of lost time,investigations ratio restricted duty, medical 1.64*Total number of valid (Female managers/ 0.67 treatment incidents 1.47 53 0.60 52 ■reports investigated female employees) and fatalities per 200 000concluding in no breaches hours worked <1 (Male managers/ male employees)Code of Sickness LTIFRIntegrity absence rate Number of lost timenon- Number of days of 1.65% incidents occurring per 0.80*compliances 29 sickness absence 1.46% <1.5% 200 000 hours worked 0.67Total number of breaches 22 as a % of totalof Code identified through days workedintegrity helplinesEmployees 100% 100% Training hours Near missessigning the Number of annual Event, situation orCode of training hours/FTE physical environment 1982*Integrity 23.0 with the potential to 1904 (Includes safety 21.1% of employees signing cause injury, damage or training hours)the Code of Integrity loss to people, property and the environment, but which was avoided by circumstanceEmployees 100% Training ratio 1%completing the % of total employmentsustainability costs spent on traininge-learning 0.72% (Includes safety 0.63%% of employees training hours)completing sustainabilitye-learning 19.9% 6
  • 7. ENVIRONMENT Building energy intensity in SGS-owned 229♦ COMMUNITY offices 223 -10% Annual kilowatt hours per square metre for SGS-owned officesCO2 emissions Building energy Investment inTotal annual CO2 intensity in Communityemissions (tonnes) SGS-owned 430♦ Donations to community 418 201814 Laboratories 402 organisations and 356 192211 Annual kilowatt hours -10% voluntary groups 317 per square metre for (‘000 CHF) SGS-owned laboratoriesRenewable Water use Totalenergy Annual water 1039904 communityTotal renewable energy purchased (m3) 960886 projectscertificates of origin Total number 306 12497purchased (tonnes of CO2) of projects 155Carbon Water investment in 590intensity intensity sponsorship 516 547(People) 4.5 Annual water purchased 22.5 21.8 Sponsorship of communityAnnual CO2 emissions per 4.2 per employee (m3/FTE) programmes (‘000 CHF) -10%employee (tonnes/FTE)Carbon Hazardousintensity waste(Revenue) 59.0 generatedAnnual CO2 emissions 54.4 Total weight of hazardous 5812* 52.2per revenue (tonnes/ waste generated (tonnes)CHF million) -10% We established a baseline in 2010 against which we will measure and report performance up to 2014 and beyond for our key indicators. In order to provide a meaningful year-on-yearTotal Non-Hazardous comparison throughout our growthelectricity waste programme, we have aligned our dataconsumption generated reporting with that used by Finance toTotal annual kilowatt 223 Total weight of 199 show revenue-related indicators in bothhours of electricity non-hazardous wasteconsumed (million kWh) generated (tonnes) ▲ absolute terms and 2010 data adjusted 16829 on a constant currency basis. 2010 Pro forma (constant currency basis) 2014 Target 2010 PerformanceElectricityconsumption 2011 Performance(People) * Statistics exclude data for one trend country 4662 4661 ▲Annual kilowatt hours Statistics exclude data for three trend countriesof electricity consumedper FTE ♦ Restated to reflect more accurate data and subject to future amendment ■ Includes data from the confidential hotline dedicated to investigating potential cases of discrimination in the US. 7
  • 8. Summary of commitmentsPROFESSIONAL Roll out our revised Code of Integrity and integrity training across all areas of the business.EXCELLENCE Develop a new global integrity e-learning programme for new employees. Improve our internal Code of Integrity reporting to better capture and report all breaches globally.Excel Roll out the new system for tracking employees’ travel plans to alert them to dangers or the way we do Expand our Strategic Transformation programme and enhance dialogue with our Provide leadership and support to the Innovation Teams in the design, resourcing and successful delivery of innovation projects that benefit the business and our stakeholders.People Launch the SGS global onboarding programme, ‘SHINE’, across all regions. Complete staffing review process for 100% of SGS operations to support succession planning.Improve Review local initiatives in trend countries relating to people, including equal opportunity in employment, natural turnover, investment in training, performance reviews, sicknessour social absence rate, total recordable injury rates. Launch development planning and associated manager and employee training.performance Launch the third module of our Leadership Development Programme. Conduct a review of reward tools and establish a global framework for our reward strategy. Monitor our performance around natural turnover and share our insights with Affiliates. Roll out SGS Rules for Life. Implement ‘Crystal’ incident reporting across the Group.ENVIRONMENT Compile a global database of EEB projects with details of investments and projected savings. Implement the projects identified during 2011 and continue to identify new opportunities for energy efficiency.Reduce Implement our Green Building Guidelines in as many sites as possible, and work with property owners to build EEB aspects into our lease agreements.our environmental Complete installation of cold aisle cooling in the Geneva data centre and begin global roll-out.impacts Pilot videoconferencing and consider roll-out based on the results of pilots. Implement managed print services in Geneva and other offices worldwide. Continue to work at a global level to review more fuel-efficient vehicles and recommend appropriate replacements. Monitor the uptake of environmentally responsible vehicles by SGS businesses and report on the overall impact of replacements on our carbon footprint. Focus our efforts on further waste reduction initiatives, supporting the in-country programmes, sharing best practices and providing further guidance and communications. Roll out our Sustainable Sourcing Charter to suppliers who are under global agreements. Continue to broaden the application of our supplier appraisal process to incorporate suppliers who are sourced and managed locally. Continue to raise awareness of sustainability considerations when making investment decisions.COMMUNITY Support Affiliates in implementing the Group Community Guidelines and Policy. Identify a global community programme based on the framework developed in 2011.Involve employees in Conduct a global survey to re-evaluate our community project impact and alignment withsupporting our communities the Millennium Development Goals. Ongoing 2012 8
  • 9. This year, our third report is published alongside the annual report and provides an integrated view of our business A large majority of you felt the 2010 and sustainability performance. It Report had increased your level ofReport Focus describes how innovation is shaping understanding of sustainability and SGS’ professional sustainability-related thought it was important that SGS services alongside our approach to publishes a corporate sustainability managing our key impacts and risks report. We have responded to yourSGS publishes an annual corporate (outlined on page 28) and embedding comments in this year’s Report bysustainability statement for its sustainability across our global network. including more local content andemployees, customers and other We would like to thank the 1 319 explaining how we are embeddingstakeholders who have an interest in employees, customers, contractors, sustainability across SGS. We have alsothe Company’s sustainability approach investors, NGOs and other stakeholders tried to enhance the overall design and(see Our Stakeholders section on pages who responded to our survey on last presentation of data. A summary of26 and 27). year’s Report. feedback appears on page 29.Report structure and scope business lines, subsidiaries, Company- been verified by third-party auditorsThe Report has been developed owned and leased facilities. In the in accordance with the Internationalusing the AA1000 Accountability narrative sections of the Report we have Standard of Related Service (ISRSPrinciples Standard as a framework for also included examples of initiatives 4400) as established by the Internationalidentifying, prioritising and responding to from non-trend countries. Performance Federation of Accountants (IFAC).sustainability challenges. As previously, relating to suppliers is not included. We As in 2010, the auditors spent time inwe have chosen to report under the four track sustainability performance using key countries analysing the quality ofpillars of our corporate sustainability over 85 indicators covering people, data collection and reporting and mademanagement system: Professional environment, business, community, recommendations to the managementExcellence, People, Environment and reputation and trust. In line with our team. By the end of 2012, the firstCommunity. The scope covers all financial reporting, any sustainability cycle of auditing of trend countries willregions and business lines and relates to KPIs which are geared to our financial be complete. We are confident thatthe year ending 31 December 2011. performance, such as revenue, have at this point in time this method of also been stated on a constant currency assurance delivers the most value to ourDuring the year the average headcount basis which eliminates the effects of sustainability approach.of full-time employees or equivalents exchange rate fluctuations. In 2011 wegrew by over 10% and the Company In addition to the internal review of the added new indicators relating to energy,acquired 22 new businesses. We Report by the Sustainability Steering waste, and biodiversity. We accept thatevaluate the material bearing of our Committee, management and elected it will take time for us to reach a level ofbusiness growth and acquisitions on employee representatives of the confidence on reported data for theseSGS’ sustainability performance and SGS European Works Council, we new indicators across all our trendprovide explanations for any substantive have also put in place a process for countries. Therefore, we have providedchanges in performance data or restated country Managing Directors (MDs) to explanations of any assumptions useddata in the relevant sections. A full list of provide feedback. We continue to use and techniques underlying estimations inacquisitions is available on our website the Global Reporting Initiative (GRI) the appropriate sections of the Report. Guidelines to inform our reportingReported data process and facilitate comparability with Report assuranceReported data covers permanent, other organisations. For this report we This year, as planned, we have refined have referenced the revised GRI G3.1temporary and casual employees our assurance methodology by taking Guidelines and are pleased to haveworking for SGS but excludes sub- the additional step of commissioning progressed from Level C to Level working on behalf of SGS. a third party auditor. Our second party For clarity, we have decided to prepareIn the interest of accurate disclosure, auditors continue to be responsible for a separate document benchmarking thiswe have limited our scope to areas checking the accuracy and veracity of Report against GRI Guidelines G3.1.where we have most confidence in reported data and content using SGS’ We have also mapped our disclosuresthe data. While we routinely collect own sustainability reporting assurance against the United Nations Globaldata from every country we operate framework. This year, they also provided Compact Principles, available onin, performance is tracked and assurance and a gap analysis against our website.reported using countries identified as the Global Reporting Initiative (GRI)representative of Group performance. Sustainability Reporting GuidelinesThese ’trend countries’ cover more 2011 (G3.1). The scope for their reviewthan two-thirds of employees and over included text, performance data andthree-quarters of revenue, and include data management, which has now 9
  • 10. 14:00 Introduction
  • 11. We employ over70 000 peopleand operate anetwork of morethan 1 350 officesand laboratoriesaround the world
  • 12. SGS helps customers to operate in a Our value lies in how our services more sustainable way by improving benefit our clients and ultimately, their customers.Who we are quality and productivity, reducing risk, verifying compliance and increasing As well as delivering services linked to speed to market. Our services cover all sustainability, in our own operations we industry sectors and touch the products are committed to managing a long-term and services that consumers around the profitable business while taking intoSGS is the world’s leading world rely on every day. SGS provides account all the positive and negativeinspection, verification, testing independent services that make a environmental, social and economicand certification company. difference to people’s lives. effects we have on society.Our vision Our values Our historyWe aim to be the most competitive and We seek to be characterised by our Established in 1878, SGS started bythe most productive service organisation passion, integrity, entrepreneurship offering agricultural inspection servicesin the world. Our core competencies and our innovative spirit, as we to grain traders in Europe. From thosein inspection, verification, testing and continually strive to fulfil our vision. early beginnings, we grew in size andcertification are being continuously These values guide us in all that we do scope as our agricultural inspectionimproved to be best-in-class. They are and are the bedrock upon which our services spread around the the heart of what we are. Our chosen organisation is built. During the mid 20th century, wemarkets will be solely determined by our began to diversify and started offeringability to be the most competitive and to Why WE need to be sure inspection, testing, certification andconsistently deliver unequalled service verification services across a variety of Our success and value to society isto our customers all over the world. sectors, including industrial, minerals and dependent on us exercising foresight, oil, gas and chemicals among others. judgement and responsiveness to the The Company became listed on the needs of all our stakeholders. This SIX Swiss Exchange in 1981. The SGS means applying the same scrutiny to our Group posted revenues of CHF 4.8 own operations as to our customers’ and billion and an operating margin of 17% ensuring operational excellence. in 2011. An annual general meeting of shareholders is held with outcomes posted on the SGS website. Our headquarters are in Geneva, Switzerland. europe, africa & middle east asia Americas 50.4% Revenues pacific 21.4% Revenues 20.5% Employees 43.2% Employees 28.2% Revenues 36.3% Employees 13
  • 13. Jointstatementfrom theChairman& CEO
  • 14. Dear Stakeholders, global network of laboratories, andThe past year has been an important enhanced our offer through new ultimately be judged on our abilitymilestone for SGS in fulfilling our services and the acquisition of to marry competitiveness withsustainability commitments whilst 22 outstanding companies. responsibility, while ensuring that ethicsgrowing the business in line with the We also recruited nearly 8 000 and sustainability remain a priority.2014 plan. 2011 saw a solid operating people to complement our existing To succeed we must continually adaptprofit on a constant currency basis and strong talent base. and respond to market challenges andtop line growth across all business This progress was achieved in the uncertainties whilst upholding the highestlines and regions. During the year we context of challenging global standards of operational excellence.continued to push ourselves to deliver economies, rapid growth in emerging This year’s report aims to presentinnovative services and solutions that countries and the increasingly an integrated account of ourhelp our customers to move their visible human and environmental business alongside our keybusinesses forward. We improved consequences of climate change. sustainability commitments, initiativesoperational efficiency, expanded our We know that our success will and performance.We are proud that SGS has been listed We are also proud to share some of and help them to live and work morein the Dow Jones Sustainability Index for the important contributions we make sustainably. We also plan to expand ourthe third consecutive year, and that we locally to sustainable development programme of stakeholder dialogue andwere able to progress from Application through our many community will further evaluate our human rightsLevel C to Level B+ of the Global engagement programmes. impacts and responsibilities.Reporting Initiative’s 3.1 Guidelines. We have continued to strengthen our We are proud of the significant progressDuring 2011, we invested in embedding global offer with the launch of new we have made towards the 2014 plansustainability across the business, sustainability services including landfill and are confident that with the leadershipconducting numerous workshops in management solutions, photovoltaic and commitment from our managersour trend countries and engaging more testing, biogenic carbon and fugitive and employees, sustainability willthan 300 senior stakeholders across emissions testing, and a range of continue to play an integral role in ourour network. We are encouraged by services relating to vehicle battery success. We have shown during 2011the enthusiastic response and support technologies. We have also expanded our how sustainability is helping both SGSfrom our Affiliates resulting in pledges laboratory network across Canada, the and our customers to operate smarterby the Managing Directors to implement United States, Europe and Asia, allowing by increasing productivity and efficiency,over 250 local sustainability initiatives us to invest in more upstream activities. ensuring quality and safety, reducingto complement our global programmes risk, delivering trust and enabling speedon environment (for example: building During the year, the significant number of acquisitions made has enabled SGS to market. We are convinced that byenergy efficiency, green IT, green cars) working together with our stakeholders,and people (for example: health and to gain additional analytical testing capabilities and expertise in areas such positive change can, equal employment opportunity,leadership and development). as electromagnetic compatibility and We hope you find this Report an electronic and electrical product safety, interesting insight into our world andAt Group level, we strengthened our and consolidate our leadership in crop look forward to hearing your feedback.sustainability management system with research and precision agriculturalthe integration of sustainability criteria services. In addition, we have increasedinto our major capital investments and our presence in the pipeline integrityacquisitions processes, and introduced industry, acquired a state-of-the-artthe ‘Green Book’, a new tool aimed at laboratory in Colorado specialising insenior management which presents engine emissions and vehicle mileageour sustainability performance using accumulation testing, and broadened ourquantitative, qualitative and monetary scope in non-destructive In the following pages you willdiscover how we are attracting and Looking ahead, our priority remains todeveloping talent to support our uphold operational excellence, build our Sergio Marchionneaccelerated business growth; learn technical expertise to support ever more Chairman of the Boardabout our refreshed Code of Integrity; complex industries and further drivefollow our global Operational Integrity innovation through our services. Weprogramme which is driving a strong have formed regional Innovation Teamshealth and safety culture and read how to support us in these aims, comprisingour investment in renewable energy people with the ability to inspire newalongside energy reduction initiatives is thinking and implement change.helping to minimise our carbon footprint. Globally, we will continue to encourage Christopher Kirk employees to contribute to our targets Chief Executive Officer 15
  • 15. Sustainabilityservices at SGSSuccess can only be achieved if weare able to continuously look beyond We believe there is a direct linkcustomers’ and society’s expectationsto develop market-leading serviceswherever they are needed. Harnessingideas and driving innovation have alwaysbeen integral to the sustainability of between addressing sustainability issuesSGS’ business. In this new section ofthe Report, we provide someconcrete examples of how we useour expertise and global network tobring about innovative and sustainable and achieving our strategic growthsolutions delivering positive results forour stakeholders and our organisation. objectives Our ability to innovate, take on board new technologies and adapt to the constantly evolving needs of our clients is the lifeblood of SGS. What makes us unique is that we do this across such a broad range of industries and regions.  Christopher Kirk CEO 16
  • 16. Global SGS plays a role in the testing and inspection of goods throughout their economy entire life-cycle, from raw materials, and trade Biofuel export certification through manufacturing, distribution SGS has been involved for several years and use. We help ensure thatInternational trade has tripled since in the development of green field bio- standards are in place that safeguard1990 and is set to continue to rise. ethanol production projects in Africa all people along this supply chain. ForGlobal economies are becoming and Latin America. SGS’ principal role example we test for pesticides in food,increasingly dependent upon has been to advise financial institutions, labour conditions in factories, for the generally development banks, on the safety of automotive design and fortrade in food, energy, minerals, technical aspects of the projects through the safe manufacturing of toys andresources and raw materials. due diligence and project monitoring other consumer goods. The followingMost trade is only possible with services. One such project is the are just two examples that illustrateindependent inspection, testing, Makeni Ethanol Project in Western our broad and unique contribution.verification and certification which Africa, sponsored and run by privateform the backbone of SGS’ business, companies, with additional funding fromensuring that goods are safe and fit a consortium of development banks.for purpose. We monitor and measure The project, which will be operationalconformity throughout the supply in 2013, will consist of a sugar cane Checking labour standardschain, certifying raw material quality, plantation, ethanol distillery and co- in supply chainsmonitoring labour standards in factories, generation power plant and relatedindependently testing goods being infrastructure. It will produce about 85 SGS is a global leader in socialshipped and certifying them against 000 m3 of ethanol per annum, primarily responsibility auditing services, playinginternational quality standards. for export to the European Union but an active role in the development of also for the local market, and 100 000 international audit methods to help MWh of renewable power per annum, improve labour conditions within which will supply the distillery and factories and sites of employment. power plant and feed the remainder into We cover the main countries where the national grid. In order to be sold on consumer goods are manufactured. ThisBallast water certification EU markets, the ethanol produced by is supported by a global team of experts the project needs to meet EU biofuel who supplement monitoring activitiesBallast water, which stabilises ships sustainability criteria and be certified with training and support for productionduring transit, can contain unwanted accordingly. SGS has been advising the sites to help drive improvement.marine species and microorganismswhich can upset the delicate consortium of lenders on the technicalecosystems when the ballast water feasibility of the ethanol and poweris discharged in port. SGS operates a plants. SGS services provide confidencefleet of mobile laboratories which use to the lenders that renewable productionthe latest devices to sample and test of fuel and electric power based on biomass is viable in Western Africa. Combating corruptionballast water to prevent marine pollution, Corruption has disastrous effects onincluding testing for temperature, salt, struggling economies and is rankedcontaminants and microorganisms as one of the biggest obstacles toas well as levels of healthy marinelife. Such testing is set to become a Human economic development and growth.requirement by many international ports. development SGS works in a number of ways to combat corruption associated with tradeSGS is also developing techniques to Globalisation and increased and many other aspects of business.certify the water treatment systems consumer awareness has put We help to develop policies and offerused on ships to guarantee the quality training in corruption awareness,of ballast water. more responsibility on companies identifying risks throughout supply to ensure that the goods they chains and checking that anti-corruption sell are made in safe working measures have been put in place. We conditions, at fair rates of pay and support the World Bank Voluntary Disclosure Program through respect the basic human rights of specialised monitoring services and those involved in production. have partnered with ETHIC Intelligence, a specialised anti-corruption certification body, to offer formal assessments of anti-bribery programmes. 17
  • 17. Preservation partnership with the National Institute for Space Research, which detects incineration plants using waste as a fuel to determine the proportion of fuel of forests agricultural crops in deforested areas. which is carbon neutral. and SGS is currently the only independent SGS has introduced a unique service biodiversity company involved in the monitoring of which can differentiate between the this programme. We use the satellite different types of fuels being burned.Forests, covering about 30% data, combined with site inspections, Working exclusively with the onlyof the world’s land area and to ensure that the moratorium is being commercial laboratory doing large-providing a habitat for over 70% followed, identifying soya beans that scale carbon dating, we have combined have been grown responsibly. Our this technology with the latest powerof land animals and plants, play monitoring during 2010/2011 found station sampling techniques. The carbona crucial role in maintaining the crops on over 11 000 hectares that had isotope C-14 is present in carbon neutralearth’s water cycle and balance of been deforested illegally. As a result of fuels but absent in materials derivedgreenhouse gas levels. Yet each the monitoring carried out to date, the from fossil fuels. By measuring the moratorium was renewed in 2011. proportion of C-14 in flue gases we areyear an area of forest nearly twice able to accurately measure the overallthe size of Switzerland (41 300 carbon footprint of the power generated.km2 ) is being lost, mainly due to The mechanism has been acceptedagriculture. Halting deforestation Energy and under both the Clean Developmentand increasing yields from planted power Mechanism and the European Union Emissions Trading Scheme.forests is a major priority for a Population growth, predominantlysustainable future. in developing countries, isSGS provides a wide range of services resulting in increased globalto support sustainable forestry, including energy demand. At the same time, Agriculturethe certification of forests to theinternational Forest Stewardship Council urgent measures are required to and foodstandard, providing advice on responsible stabilise climate change through productionforest management, mapping the the reduction of energy usage The global population grew todegradation of the rainforest and seeking and the adoption of carbon-free 7 billion this year and is expectedways to maximise production from energy sources. The transition to to rise to over 9 billion by 2050.existing forested areas. a lower carbon society is being The UN Food and Agricultural driven by both environmental and Organisation predicts that food commercial imperatives, with production needs to increase the private sector representing by 70% to provide food that is a major source of innovation to safe, nutritious, adequate andPreventing deforestation generate solutions. affordable. At the same weIn 2006, members of the Brazilian face a challenge to reduce thevegetable and grain industries signed SGS helps customers to reducea moratorium that prevents companies greenhouse gas emissions through a food lost through poor handlingaround the world from acquiring soya wide array of services, ranging from and spoilage.beans grown in deforested areas of energy reduction advice to the testing SGS fulfils a vital role by helping tothe Amazon. The system is monitored of clean energy technologies as well as increase crop yields, testing newthrough satellite imagery, developed in energy monitoring and auditing. varieties of crops, piloting new production technologies, testing food safety and ensuring the safe keeping of food during storage and transport. Monitoring emissions from renewable sources The use of waste is gaining traction as a fuel source to generate heat and power. Increasing yields through The majority of waste is made up of a precision farming wide variety of materials, ranging from Large differences in the quality of soil carbon neutral elements such as paper, may prevent farmers from optimising cardboard or wood, to materials which crop yields. Until now, farmers have are derived from fossil fuels like plastics. often either under- or over-fertilised Until now, it has not been possible for arable land which causes environmentalSatellite image which detects agricultural crops indeforested areas 18
  • 18. pollution, additional cost, or significantlyreduced yields. SGS provides a solutionto this problem through the GPS trackingof soil conditions, measuring acidity Sustainable aquacultureand nutrient levels at regular positions and fisheriesto produce a soil fertility map. Thisallows a farmer to only apply fertiliser Aquaculture is considered to be aand treatments where they are needed, sustainable means of increasing seafoodachieving balanced growing conditions supply to meet global food needs aswhich can result in up to 5% increased well as to reduce pressure on naturalyields. SGS introduced the service to resources. Farm-reared productionKenya in 2011, working with 42 farms to from aquaculture facilities nowhelp improve yields. accounts for approximately 25% of seafood consumption. SGS is at the forefront of the Carbon footprinting food certification of sustainable aquaculture. production in China Our Consumer Testing Services are In December 2011, actively involved in the development SGS published theReducing food spoilage of the World Wildlife Fund’s results of the first everIt is estimated that up to 10% of global Aquaculture Stewardship Council food product carboncereal production and up to 40% of certification programme. We also carry footprint in China. Thefresh produce is lost through poor out certification under the Marine Zhangzidao Fisheryhandling and storage before it reaches Stewardship Council’s Standard for Group in China’s North-the consumer. The transport and storage Sustainable Fishing which ensures East Liaoning province is one of China’sof food is a complex challenge which that the wild caught fishery products largest fishery companies, farming aneeds to be resolved if we are to meet originate from well managed fisheries variety of bottom-cultured seafoodglobal targets for food production. and are sourced from a sustainable such as scallop, squid and prawns. SGSSGS is developing an integrated food stock. In June 2011, SGS signed an undertook pioneering work to calculatesafety and loss prevention facility to agreement with the Best Aquaculture the carbon footprint associated withstore and distribute fresh foods in Practices (BAP) organisation to perform farming scallops throughout their entirecountries where there is a high spoilage facility inspections and certification lifecycle. The objective was to evaluaterate. Currently being piloted in Mumbai, audits for aquaculture farms, hatcheries, the environmental impacts of scallopIndia, this integrated storage facility processing plants and feed mills. farming so that the company could takechecks and tests food on intake and The BAP standards address measures to reduce this impact. SGSthen stores it in different, carefully environmental and social responsibility, deployed experts across a range ofcontrolled environments by product animal welfare, food safety and disciplines such as lifecycle assessmenttype. Once piloted it is hoped this facility traceability. Jim Heerin, BAP’s Executive consultants, energy consumptionwill offer an affordable and effective Director commented that “We are specialists and marine biologists. Wemeans of storing food safely and very pleased to work with an auditing assessed the overall greenhouse gaseconomically in countries with no organisation with such worldwide emissions and awarded an SGS Productaccess to such facilities. capacity and capabilities as SGS”. Carbon Footprint Mark to the operation.Map illustrating fertility of soil conditions through GPS tracking 19
  • 19. Buildings buildings and systems, building energy audits, energy management certification Mobility and and related training (e.g. ISO 50001), transportThe construction industry indoor environmental quality testing, Transport is one of the largest green building certification (e.g.accounts for approximately 40% global sources of greenhouse LEED, BREEAM), decommissioningof the total flow of raw materials of buildings and the certification of gases. The potential for reducinginto the global economy. Existing materials for recycling and reuse. demand for transportation isbuildings are responsible for currently limited and thereforemore than 40% of the world’s international efforts focused onprimary energy consumption and technologies to improve fuelapproximately one-quarter of economy and transform the Certification of New Delhi airport types of energy used forgreenhouse gas emissions. The terminal three building at New transport are crucial.SGS has built up over 20 years’ Delhi’s Indira Gandhi airport wasexperience in responsible building SGS works closely across all modes opened in July 2010 and is built tomanagement and we are currently of transport, helping to develop handle over 34 million passengersrefocusing our services to provide new technologies and carrying out each year. It provides South Asia’smore integrated solutions to help tackle testing and certification to promote most important aviation hub, receivingthe environmental impact of buildings improvements in safety and efficiency. over half of its air traffic. Throughoutthrough their lifecycle its design and construction, SGS provided commissioning, monitoring and verification services to ensure that environmental aspects were incorporated into the airport’s design Vehicle emissions testing and construction. This included theIntegrated green During 2011, SGS acquired commissioning of more than 800 airbuilding services handling units over an air conditioning Environmental Testing Corporation, aSGS already works across a range of area of more than 4 000 000 m². Built in specialist company based in Colorado,industries to promote efficient building just 37 months, the airport was awarded USA, which is able to accurately testdesign construction, management LEED Gold rating for new construction, how engine emissions vary during aand end-of-life services. In 2011 we becoming the world’s largest LEED Gold vehicle’s life. ETC’s state-of-the-artbegan to offer an even more complete certified building. laboratory measures a wide varietyservice, helping customers to develop of emissions from both engines andand implement total sustainable asset whole vehicles, including emissionssolutions. This brings together building to which drivers and passengersand material lifecycle analysis, building could be exposed. This provides vitalenergy modelling, commissioning of information that helps manufacturers optimise the engine efficiency of vehicles over their lifespan. 20
  • 20. Materials outreach programmes to establish potential impacts on local populations. and mining In addition, we deliver health and safetySupporting electric and hybrid training for employees, and technology As global demand for consumervehicles (e-mobility) to help to control entry in and out products continues to rise,The electrification of vehicles is the of certain parts of a mine using our so does the requirement for bespoke system. Through dedicatedkey to sustainable individual mobility.During the last 10 years, the capacity the raw materials needed laboratories we are able to build up pilotfor using electric and hybrid cars has for manufacturing, leading to models of development sites to improveincreased and with the possibility of the efficiency of extraction during the exploration of minerals andlower-cost, high-performance batteries, planning stages of site development. materials in increasingly remote We continue to provide independentthe widespread use of hybrid cars isbecoming possible. and difficult territories. monitoring throughout the life of SGS helps extractive industries to the mine and also duringFor more than 10 years, SGS has be both efficient and responsible decommissioning when sites areprovided testing and certification over the long-term. We play a part in returned to their natural to ensure the safety of Lithiumbatteries for use in mobile phones, determining where a site should be built,laptops and power tools and has how it is designed and in monitoringrecently expanded this competency to its environmental and social impactscover vehicle batteries. This is carried throughout its lifecycle.out in our new Battery Test House local minerals skills trainingand E-Mobility Competence Centrein Munich, Germany where we offer Given the shortage of suitably qualifiedservices needed to develop and test and experienced candidates into thesafe electric, hybrid and fuel cell cars. Minerals business in West Africa, SGSThe Centre has over 60 specialists Responsible Mining West Africa has established a Mineralsin e-mobility. Mines are large consumers of energy Training Academy to create a talent and water and are increasingly located pipeline. The Academy, based in Ghana, in environmentally or politically sensitive will be fully operational from early 2012 territories. SGS assists the mining and will offer tailored and structured industry in a number of ways, helping training on the procedures, instruments to minimise negative environmental and equipment pertinent to SGS’For more information on and social impacts from mines, and laboratory operations in the region. TheSGS Sustainability Services providing expertise to maximise training will follow a three-tier approach,please visit our website efficient operation. This may include with each tier comprising a combination preliminary environmental and social of theoretical and practical training and impact assessments such as community will last six weeks. 21
  • 21. Our approach to21:00 corporate sustainability Our approach to corporate sustainability
  • 22. Corporate sustainability plays an • Embedding a culture of operational important role in helping us deliver excellence and upholding the highestdoing our growth objectives. Our four-year standards of integrity, safety and strategic plan, launched in 2010, aims business integrity to drive revenues to CHF 8 billion by • Making a positive socio-economic 2014 and achieve an operating income contribution to the communities of CHF 1.6 billion. The 2014 planmore where we operate, for example by defines the strategic lines that we are encouraging job creation, supporting pursuing to strengthen our market- skills development and investing leading position in testing, verification, in communities inspection and certification. It explains • Providing a stimulating and rewardingwith how we can continue to deliver strong organic growth while using work environment based on effective acquisitions to expand certain areas human resource policies and of our service offering and geographic programmes that attract, develop and coverage. Underpinning this agenda is retain the best talentless an appreciation that our growth drivers • Reducing our environmental cannot be achieved effectively without footprint across the Group, particularly a commitment to sustainability. with regard to greenhouse gas Our sustained growth and value to emissions, energy consumption, society is dependent on SGS: and waste minimisation Operational Excellence and Business Excellence are the driving forces to reach the 2014 plan. The key message on sustainability is to do more, using less resources. Christopher Kirk CEO External InfluenceSustainability GOVERNANCE and Engagementvision The Operations Council formally endorsed the SGS Group sustainabilityTo manage a strategy in 2008. Since then we have Board of directorslong-term, profitable focused our efforts on developing the policies, governance structure andbusiness while taking performance data systems to manage Operations Council our sustainability impacts and driveinto account all the performance. SGS’ Sustainability Sustainability Steering Committeepositive and negative Steering Committee, chaired by the Chief Executive Officer, is a sub-environmental, social committee of the Operations Council regional and local Sustainability committees and comprises Chief Operating Officers,and economic effects Executive Vice Presidents and Seniorwe have on society. Vice Presidents across our operating regions. The Committee meets twice Sustainability per year and is responsible for strategy Management System development, reviewing performance and agreeing core programmes and improvement targets. 24
  • 23. The Group sustainability programme is Company policies managed by the Corporate Sustainability All SGS operations are governed by team and is led by the Vice President policies which set out clear parameters Corporate Sustainability who reports for operating in a responsible and to the Chief Executive Officer. The sustainable manner. A summary of team is responsible for overseeing the SGS policies linked to sustainability Group’s core sustainability programmes and copies of selected policies and management system, as well as can be found on our website. Each supporting Affiliates on sustainability country is accountable for identifying matters. It also manages the Company’s and implementing local initiatives engagement with external organisations which support the core sustainability such as the World Business Council for programmes, and reporting Sustainable Development (WBCSD), sustainability performance on a regular sustainability the Carbon Disclosure Project, and the basis via Solaris, our sustainability group management system Global Reporting Initiative. management accounting system. Sustainability Sustainability Pillars and KPIs programmes Professional Excellence Excel ts ge Corporate governance Professional integrity Laws and regulations SGS Sustainability e-learning tar Procurement Mo Risk management Stakeholder engagementset ni t Sustainability Services or , m People improve e a s u r e , m o n e t is e , Code of Integrity - Human rights Annual performance reviews Human resources Equal employment BASELINE Operational Integrity (Health & Safety) Human rights Natural turnover Sickness absence Total recordable incidents Training Environment reduce Biodiversity Energy efficiency in buildings ve Climate change Green cars rif Waste management Green IT y, Water management Green procurement au Sustainable capex Waste management d it, im Community involve pr ov Community involvement Alignment to Group policy e, and guidelines re Community po programmes and rt projects an dc om m unicat e 25
  • 24. Our stakeholdersAND SUB-CONTRACTORS SUPPLIERS, BUSINESS SHAREHOLDERS AND SPECIAL INTEREST PARTNERS AND CONSULTANTS CUSTOMERS ACADEMICSEMPLOYEES INVESTORS NGOS AND GROUPS, Face-to-face dialogue Face-to-face dialogue Regular briefings and Direct dialogue Face-to-face dialogue Internal workshops and Site visits and business presentations Workshops and Conferences and meetings meetings Corporate website meetings meetings SGS intranet/CEO Voice of the customer Annual General Site visits Corporate Corner survey Meeting Sustainability website SGS teamsites Brochures Annual Report questionnaire Workshops Social media/mobile Corporate website Corporate Corporate website Carbon disclosure phone apps Trade shows and Sustainability Report Social media response Training and e-learning seminars Corporate Internal newsletters White papers Provide the financial Provide quality products Sustainability Report and posters Corporate Sustainability capital necessary to and services to support Performance reviews Report/Factsheet sustain growth our service delivery and Offer a deeper insight Corporate Sustainability operations into socio-economic Report /Factsheet trends and challenges Customers drive our To provide sustainable business growth and growth and To provide opportunities Employees are our core success returns on investment for growth and To respect open and asset, delivering services development honest dialogue with integrity and harnessing trust in our To help customers business and our brand to operate in a more sustainable manner by improving quality To provide a safe, and productivity, stimulating and reducing risk, verifying rewarding work compliance and environment within a increasing speed to long-term sustainable market company 26
  • 25. Stakeholder Understanding and responding to the needs of our customers and society is How we engage fundamental to our business. Our ability The following diagram, compiled by the Relationship to SGS to deliver services and create value Corporate Sustainability team in liaison Our commitment requires us to foster relationships with with heads of key functions, illustrates Ongoing a wide range of stakeholders through the nature of our key relationships and direct dialogue and engagement, our engagement activities. It will be Periodic particularly at a local level. reviewed and updated annually. Annual FINANCIAL COMMUNITY; SOCIALLY RESPONSIBLE LOCAL COMMUNITIES AND ASSOCIATIONS AND REGULATORS UNIONS, WORKS GOVERNMENTS TRADE BODIES AUTHORITIES, INVESTORS COUNCILSMEDIA Regular briefings Face-to-face Face-to-face Direct dialogue Regular briefings Annual meetings dialogue meetings Workshops and and presentations DialogueImpartial Employee Business meetings Corporate website with unioncommentary on engagement organisation Conferences Annual Report representativesour activities and and volunteering meetings Corporate European Forum/performance in community Written Sustainability European Works projects communication Professional insight Report Council Corporate Corporate website into industry trendsTo respect open engagement and challenges;and honest dialogue Corporate Financial advice Employee feedback in community Sustainability lobbying and commentary projects Report on Group financial To share business To share knowledge and sustainability performance and Provide our license and insight into performance engage in dialogue Provide our license to operate locally industry challenges to operate at global and opportunities and national levels To respect To contribute to open and honest socio-economic dialogue To contribute to development socio-economic through development employment, skills through development and employment, skills support for local development and initiatives support for local initiatives 27
  • 26. risk management Observe ActSGS has an established risk Riskmanagement process which involves Laws and Regulations (p. 41) Health & Safety (p. 52)the systematic capture of key risksfrom senior management across the Risk Management (p. 28) Human Resources (p. 44)business. Top level risks are managed Corporate Governance (p. 24) Waste Management (p. 60)and monitored at Group level whilelower grade risks are managed at Code of Integrity and HIGHregional or business levels. The Professional Conduct (p. 40)adequacy of our risk managementand associated internal controls isreviewed by our Internal Audit function Direct and Indirect SGS Communication on Sustainability Services (p. 16) Sustainability (p. 35)and overseen by the Audit Committee.Sustainability parameters are an integral Community Involvement (p. 66)part of the overall assessment of risk.In addition to the above process, we Stakeholder Engagement (p. 26)specifically assess sustainability-related Climate Change (p. 62)risks against a profile to map out our keyimpacts and response levels. We havebeen working to address the risks in Water Management (p. 62)this matrix since 2008 and have put in LOWplace a mitigation strategy for the critical Sustainable Procurement (p. 60)areas. The diagram provides relevant Biodiversity / Ecosystems (p. 9)page numbers within the Report wherewe cover these parameters. Following LOW HIGHa four-year cycle, the matrix will beupdated in 2012. Action RequiredOur strategic agenda commitment to corporate sustainability and use our growing network to expand implementation of our programmes. A series of one-day workshops,Our primary focus is on ’doing more our reach further than ever before. undertaken by the Vice Presidentwith less‘. This means ensuring that Corporate Sustainability, werewe balance the positive effects of our During 2011 we put significant effort into embedding sustainability across conducted across our trend countriesgrowing business by minimising the during the year. More detail on thenegative effects of our environmental the network, engaging key internal stakeholders in our trend markets, sustainability workshops, their purpose,footprint. As we embark on this implementation and outcomes can beendeavour we will maintain our and facilitating dialogue on the local found on pages 32 to 34.Embedding Global programmes driven by Corporatesustainability and Sustainability in collaboration with corporate functionsengaging our people core Programmes Local implementation of projects and initiatives with local management teams Equipping employees with the knowledge and skills to apply sustainability locally Supporting Motivating employees to play their part in driving employees innovation in sustainability Demonstrating the added value of sustainability to Engaging SGS and our customers Customers 28
  • 27. A cULture of excellence and the attitude to drive sustainabilityWhat you to understand better what sustainability performance looks like at a regional During 2011 we further strengthened our sustainability data management withtold us level. You also asked us to improve the the development of the Green Book.We would like to thank everyone who overall design and incorporate more This bi-annual report, which will betook the time to provide feedback on financial data in our reporting to highlight reviewed by the Sustainability Steeringour 2010 Sustainability Report. Based the actual or potential costs and benefits Committee in 2012, contains detailedon your comments it is evident that of implementing our sustainability oversight of the Group’s sustainabilitymany of you agree that sustainability initiatives. We have taken your performance and provides qualitativeis an important opportunity for SGS. comments on board and have begun to explanations about the movement ofIn particular, you recognise that SGS address them in this Report as well as in data. Through the Green Book, we havehas the knowledge, expertise and the our planning for future reporting. introduced value-based metrics againstglobal reach to lead from the front each KPI to monetise our sustainabilityon sustainability. At the same timewe must drive efficiency through the Measuring our performance. There is still some way to go to refine the methodology behindorganisation and minimise the impacts performance this approach and we intend to shareof our global operations. A number SGS is committed to providing reliable our progress on this area in next year’sof you were keen to highlight the and transparent reporting of our Sustainability Report.importance of SGS achieving the right sustainability performance. Data is Recognising the need to ensurebalance between being profit-driven routinely consolidated and monitored comparable year-on-year data andand ensuring sustainability. Some also via Solaris, our sustainability data to report accurately on the impact ofhighlighted the challenge of adopting management system, using more than business growth and acquisitions, wemore sustainable practices in outlying 85 key performance indicators (KPI). continue to put significant effort intoareas which lack basic infrastructures for This enables individual countries evolving our data management system.recycling or managing waste. Many of to evaluate and compare their own During 2011 we supported individualyou commented on the need to nurture sustainability performance against countries in the collation and reportingthe right culture within the organisation other trend countries and it provides of data and arranged for key countries toto drive sustainability and described a Group perspective on overall be visited by our second party auditorshow, like occupational health and safety, sustainability performance. In 2009 we to check the effectiveness of Solarissustainability must become a habit created a Group Sustainability Control locally. We also conducted webinarsand not simply a behaviour. Looking to and Reporting Manual (GSM) which with finance managers in our trendthe future, many of you would like to sets out the sustainability reporting countries to review lessons learnedsee SGS involving more employees in requirements for countries and offers from the audits and introduced newcontributing to the community and to detailed guidance on input fields and KPIs for 2011. With the measurestake advantage of our global presence to KPI calculations. Countries are required we put in place, we are confidentbe more active in disaster relief. When to report on sustainability performance that data reported is robust enoughasked specifically about how we might every six months. All data is managed to substantiate our analysis.improve our Report, many of you were by the Corporate Finance team whichkeen to see more local case studies and applies the same rigour to this as to financial data. 29
  • 28. CHF 4 767 000 000 30
  • 29. In this process we take the economicSGS Group Statement While the SGS Annual Report provides value generated by SGS through ourof Economic information on our financial position and performance it is also important to services and from other income and look at how this value is distributed amongValue Generated measure the broader economic impact our stakeholders. These global figuresand Distributed of our organisation on society. are presented on an accruals basis. Retained(CHF million) 2011 % EMPLOYEES Economic Value GeneratedRevenue 4 797Financial Income 10Total Economic Value Generated 4 807 100.00 Economic Value distributed RevenueEmployee Wages and BenefitsSalaries and wages 2 304Total 2 304 47.93Operating ExpensesSubcontractors’ expenses 331Depreciation, amortisation and impairment 225Other operating expenses 1 100Total 1 656 34.45Payments to Shareholders and Lenders operating expensesFinancial expenses 36Dividends paid * 521Total 557 11.59Payments to GovernmentIncome taxes 203Other taxes 46Total 249 5.18 shareholdersPayments to Community and lendersCommunity contributions and charitable donations 1Total 1 0.02TOTAL ECONOMIC VALUE DISTRIBUTED 4 767 99.17 ECONOMIC VALUE RETAINED 40 0.83 government (Taxes)* Dividends due to non-controlling interests and to shareholders asproposed by the Board of Directors. financial income Community 31
  • 30. SGS is ready andwilling to respondto the task ahead 2011 marked a significant step in fortifying the involvement of SGS’ management and employees in our sustainability programme. Over the course of five months I visited every region in which SGS operates and facilitated workshops with key decision makers, from the Managing Directors to HR, Facility and Finance Managers. In total, over 300 managers participated in the one-day workshops. The objective was to drive countries in understanding gaps in their performance and to implement local programmes based on our core sustainability pillars: Professional Excellence, People, Environment, and Community. Each workshop had two clear outcomes: firstly, a demonstrable commitment from the Managing Director of each country in the form of a pledge setting out short- and longer-term sustainability initiatives that would be managed and driven locally; secondly, a commitment from the Group and the Managing Directors to equip employees with the knowledge, skills and tools to add value to our service offering and our operational excellence while achieving the 2014 plan. I have worked with enthusiastic and motivated colleagues who share the belief that sustainability has a critical role to play in SGS’ business success. The outcome of the workshops signals that our organisation is both ready and willing to respond to the task ahead of us. Each country now has a clear action plan with designated roles and responsibilities. Over the next year the Corporate Sustainability team will support the Managing Directors in the implementation of their sustainability initiatives and will encourage the exchange of knowledge and best practice. I look forward to working with my colleagues across SGS as we progress towards our 2014 goals.  Daniel Rüfenacht Vice President, Corporate SustainabilityEmbedding While historically we have focused efforts on raising sustainability Global programmes were presented at each workshop and teams workedsustainability awareness, this year we turned to our together to develop concrete ways toacross the Affiliates to play a part in the delivery implement the programmes locallySGS network of global environmental and social within their functions and business improvements. In order to embed lines. By the end of the year, MDs had sustainability and to help our businesses committed to over 250 short-term develop sustainable practices, we initiatives and longer-term projects, carried out a ‘sustainability roadshow’, confirming the successful uptake of the holding workshops in each of our trend workshops. These will be supported countries over the course of the year. by global SGS experts who will help to share best practices and provide tools and guidance when needed. 32
  • 31. Changing cultural and personal behaviour is a difficult task. However,I think that with the support and commitment from top managementand the passion of policy executors, we are on the road towardsachieving the SGS Group targets.  Kitty Wong Corporate Logistics and Administration, SGS ShanghaiWorkshop Group Work 1 Sustainability at SGS and locally • How is my country currently performing?Introduction to Sustainability at SGS • Which core projects are most relevant to my country?Sustainability Group Work 2 • Benefits to SGSe-learning Global programmes –> local commitments • Implementation challenges • How can I contribute? Detailed targets and projects Country • High impact projects + quick wins Presentations • Benefits to SGS • Benefits to stakeholders Short-term initiatives and • How to communicate long-term projectsWorkshop format Project Matrix • Agreed projects • Assigned responsibilities Project Charter and Plan • Signed pledge by MD • Project matrix • Project implementation 33
  • 32. Workshop outcomes What an efficientFollowing the workshops, MDs one-day journey. Mike Mediouni  Businesscommitted to over 250 short-term Development Manager,improvements and longer-term SGS Singaporeprojects across 15 focus areas. These Feedback from participantsmainly related to human resources, At the end of the workshop, participantsoccupational health and safety and the were asked to complete an evaluation Very enjoyable and informative.environment and are described in more form. In addition to questions about I now have a clearer view of whatdetail in the People and Environment workshop content and delivery, they sustainability is all about and how itsections of this Report. With project were asked for specific feedback on will benefit SGS. Terry Dobbinscharters and action plans now registered their role in sustainability at SGS.   Business Support,  SGS UKin the trend countries, the focus in 2012 The workshop achieved an overallwill be on implementing initiatives and satisfaction rating of 87%. Participantsprojects, monitoring and communicating particularly appreciated the balance It’s a very good way to start changingprogress towards targets and sharing between theory and practice, the people’s minds to be sustainablebest practices across regions. On the quality of content and the relevance at every level. Carmen Gasparfollowing page is a summary of our 2014 of their participation in the workshop.  Assistant to Technical shared Group goals which the country Based on the feedback we were able to  Director, SGS Spaincharters and plans will collectively work establish that participants had a goodtowards. At the end of 2012 we will be understanding of what is expectedhalf-way towards our 2014 plan. In line of them and that the workshop The workshop is critical to steerwith this, we will conduct a review of was effective in helping to launch our company in a sustainableprogress and report to the Sustainability sustainability projects in support of the direction. Spencer YeungSteering Committee. 2014 plan and corresponding targets.   MD, SGS Hong Kong I joined SGS in September 2009 as HR manager for the Netherlands and two years later I assumed the role of Regional HR manager for Central and North West Europe. A key focus for me has been on creating awareness among employees around our social performance. My philosophy is that goals can be achieved if you are able to create awareness and engage people’s hearts and minds. In my previous role as HR manager for the Netherlands I prepared a social report mapping out where SGS has different businesses to help employees gain a deeper insight into other parts of the business operating in their neighbourhood. The report told a story about key achievements and what our priorities were for the future. It also included performance indicators relating to HR and health and safety to help people to understand what improvements needed to be made locally. I recently attended the sustainability workshop in Belgium which brought together a cross section of disciplines to determine which sustainability initiatives we should commit to in our country. I really felt that the process benefited from the different perspectives each function was able to contribute and ensured a collaborative approach to achieving our sustainability goals. I would like to see more cross functional learning and collaboration happening through workshops and training sessions. I am passionate about ensuring that people are equipped with the knowledge and awareness to contribute to our goals. This is why I have arranged for the sustainability e-learning module to be translated into Dutch for our more than 3 000 Dutch speaking employees in Belgium and the Netherlands. I believe every employee at every level should be provided with relevant information on a regular basis. Managers should be encouraged to incorporate sustainability updates into their weekly departmental or team meetings to ensure that it remains front of mind. I am looking forward to the challenge of my new regional role and to sharing our HR and sustainability initiatives in the future.  Harry Postema Regional HR Manager, CNWE 34
  • 33. To align our sustainability goals with the 2014 plan, the Steering Our 2014 Committee has defined a set of shared goals shared goals. PROFESSIONAL ENVIRONMENT EXCELLENCE Excel Reduce in the way we do our environmental business impacts 100% of employees completing Carbon intensity SGS sustainability e-learning (people): -10 %* Carbon intensity (revenue): -10 %* Building energy intensity in SGS-owned offices: -10 %* People Building energy intensity SGS-owned laboratories: -10 %* Complete waste inventory and reduction plan for SGS operations Improve our social COMMUNITY performance Equal opportunity ratio: 1.0 Involve Natural turnover: <14 % employees in supporting Training costs as % of total employment costs: 1.0 % our communities % of employees receiving regular performance reviews 100 % Sickness absence rate: <1.5 % 100% of community projects and investments aligned to SGS Total recordable Group Community Policy and incident rate: 1.0 Guidelines* on 2010 baseline 35
  • 34. 15:00 professional excellence
  • 35. As SGS continues to expand to achieve the 2014 plan, we need, in parallel,Professional excellence to develop the functions, systems and skills that support our services.describes some of the The growth of our Company poses potential challenges for our internalinitiatives we are undertaking communications, for the handlingto support the growth of our and processing of data and for the back-office functions that handle theservices, to maintain thousands of transactions that occur across SGS every day. As we expand,our reputation and ensure it is vital we also develop even more efficient ways of delivering our servicesthat our business remains which in turn requires us to bothsustainable beyond 2014 understand and work closely with our customers. In a world where technology is accelerating and the sectors we work in are constantly evolving, we must fully utilise the creativity of our employees to develop new approaches fresh ideas and the new services that will secure our future. Christopher Kirk CEOStrategic 1. Achieving growth Strategic Transformation will be supported by enhanced dialogueTransformation Better understanding our with our customers including regular customers and adapting the rightDuring 2011 we expanded the scope surveys across all areas of the business sales organisation and appropriateand focus of our successful continuous so that we remain in touch with and are sales processes to generate newimprovement programme (Lean) to able to predict and respond to their opportunities and new business.take a broader approach to the delivery evolving needs.of sustainable value to customers andshareholders. Our business is set to 2. Back-office operationsgrow considerably over the next few Engineering the most efficient Sustainabilityyears and this makes it even more and effective ways to support our e-learningimportant that we operate as efficiently front-end businesses. To date, nearly 10 000 employees haveas we can across all areas. A revised completed our sustainability e-learningprogramme was developed under the 3. Laboratory improvement programme. Corporate Sustainabilitytitle ‘Strategic Transformation’ to take Coordinating laboratory has been working with HR on a globalan overall view of the business so that improvement initiatives into a and regional level to ensure all SGSit not only meets the objectives of single plan to achieve a employees complete the training andthe 2014 plan but also remains ‘world class standard’. it has been formally incorporated intosustainable thereafter. our onboarding programme, SHINE.Strategic Transformation will take our 4. Laboratory information The e-learning enables current andcontinuous improvement programme to management new employees to better understandthe next level, including a deep review Understanding the future information sustainability at SGS and engage at aof our business in the areas of process, needs of our customers so that we personal level in the Company.innovation and efficiency. This will look have the best systems possible inat all opportunities to increase value and place to deliver outstanding andefficiency and reduce costs. efficient data communications.This programme is based around fivekey business areas: 5. Inspection methods Looking at our commodity businesses to standardise best practice methods across the trading industry sectors we service. 38
  • 36. Security with local communities and stakeholders websites; and removing opportunities helps ensure that SGS becomes a for criminals to claim to represent SGSSGS operates in a range of trusted and respected member of the through false e-mail addresses. Inenvironments throughout countries and local community. addition we are working with Yahoo™regions where it has a presence. SGS and Hotmail™ to dismantle all fake e-mailis active across the value chain within a An important aspect of our security addresses where people have attemptedbroad spectrum of business and industry operation is to ensure that all third to fraudulently represent SGS.sectors. We are committed to protecting parties employed by SGS to carry outour people, material assets and guarding are trained to fulfil this rolereputation from deliberate harm and do professionally. SGS has implemented Innovation Teamsso by identifying and assessing security Group-wide guarding standards which Harnessing ideas and encouragingthreats, then minimising the vulnerability include measures to ensure that human innovation is a cornerstone of SGS’by applying risk controls. We recognise rights are upheld. These standards enduring success. In the precedingthat not all threats can be avoided but are made available to all business section on Sustainability Services atwe do seek to keep all security threats managers. Our global security assurance SGS we outlined a selection of exampleswithin acceptable operating limits. programme ensures that any guards of how we have adapted technologiesTo ensure that we are anticipating and employeed have received appropriate and developed new approaches toplanning for all types of security risks, and adequate training. This year we help our customers meet their ownwe strengthened our Corporate Security introduced a global standard for personal sustainability objectives. Internally,function in 2011 and now have a team security. We have also been developing innovation, fresh ideas and our ability toof six dedicated security professionals. employee traveller security solutions, adapt and evolve are embedded withinTheir purpose is to use their professional including smart phone applications our culture of operational excellence.skills, knowledge and expertise, where employees’ travel plans and travel The Chief Executive Officer has madecombined with the latest technology, movements may be assisted through it a personal goal to promote creativeto develop innovative and sustainable active monitoring. The same system thinking within SGS through thesecurity solutions. At the heart of this will ensure that SGS is alerted, should formation of innovation teams. Duringthinking lies a detailed risk assessment an employee unexpectedly deviate from the year, a number of teams, eachprocess which operates globally safe or planned routes and will allow consisting of 10 to 12 people, haveand locally to develop a thorough travel alert information to be sent direct come together in the Americas, Europe,understanding of each situation, location to the employee’s phone. This will help Africa and Asia. Each team, underor site. We believe that security is best our people to avoid entering locations the leadership of the Chief Operatingmanaged by understanding the local where unrest may be known to be Officer, is tasked with generating newcontext and stakeholders in detail so taking place. ideas which are then developed intothat individual tailored responses can In addition to strengthening our corporate detailed business proposals, outliningbe put in place. For example, we are security system, during 2011 we also their value to the Company, theirincreasingly able to avoid the use of addressed a number of global threats implementation potential at local andphysical security such as perimeter at a corporate level. These initiatives global levels, and their ability to befences and security guards as a result include a programme to combat the financed and resourced. The best ideasof being sensitive to local communities counterfeiting of SGS documents and will be recognised with a cash reward ofand by working with them rather than certificates which threaten to undermine CHF 10 000. Already, some remarkablecreating physical barriers. In our view, our services; identifying and removing outputs have emerged from thesethis positive and visible engagement false certification claims on e-commerce regional teams. did you know I just discovered the SGS is introducing an guidance on new areas Sustainability eLearning course and LOVE it! 1 innovative system to enhance employee of business conduct including social media. Excellent course. I plan protection by identifying hazards on rolling this out next year and alerting employees who are SGS has a unique to all my employees in the North America travelling in remote areas. 3 relationship with major search engine Automotive division. During 2011, we and social media providers to Shannon McGlinchey Automotive Training Manager, 2 revised the SGS Code of Integrity to clarify protect us against fraud and counterfeiting. SGS North America existing requirements and provide 39
  • 37. Our performanceagainst our Codeof IntegrityGlobal data covering all SGS operations 2010 Performance Code of Integrity 2011 Performance reports *Includes data from the confidential hotline Communicating our to helplines 168 ■ dedicated to investigating potential cases of standards of integrity 150 discrimination in the US. Total number of integrity The SGS Code of Integrity applies to issues reported through integrity helplines all SGS employees and people acting on behalf of SGS, and serves to ensure that our standards are understood and applied across all businesses. The Code Code of Compliance is supported by policies and guidelines Integrity investigations and integrity at Group, regional and country levels. All employees are required to attend Total number of valid SGS prides itself on upholding the annual integrity training on the Code. An 53 52 ■ reports investigated highest possible standards of integrity e-learning module, ‘Doing Business with concluding in no breaches throughout all areas of our global Integrity’, exists for new employees who operations. Each year we commit must complete the training as part of the significant resources and time to Company’s new onboarding programme. developing and updating policies, training During 2011, the expansion of our new and existing employees, bringing business, acquisition of new companies Code of new businesses on board and monitoring Integrity and tightened legislation led to a review non- risks. We operate an integrity helpline of the Code which was updated to compliances 29 for employees and business partners to make some existing requirements Total number of breaches 22 confidentially report serious concerns clearer, provide guidance on new areas of Code identified through and also have many local and regional integrity helplines of business conduct such as social reporting channels and support networks. media, incorporate new legislation, Our business integrity is overseen by the and to better reflect external standards Professional Conduct Committee, chaired such as ILO Conventions. The revision by the non-executive Chairman of the included inputs from a range of internalDuring 2011, 168 concerns were Board of Directors, Sergio Marchionne. and external stakeholders includingreported via our Global and US board members, senior management,Integrity Helplines or directly to Global Raising concerns internal functions and experts, SGSCompliance. Ninety-four were found to Encouraging employees to raise and integrity trainers, legal counsels, thebe unrelated to the Code of Integrity; discuss concerns remains an ongoing European Works Council and NGOs.of the 74 remaining concerns, further challenge that many international The revised Code is being launched andinvestigations revealed 52 non-breaches companies face. Whilst we continue rolled out across all businesses duringand 22 confirmed breaches of the to make our integrity helpline globally 2012. It is accompanied by refreshedCode of Integrity. As a result of these accessible, we are also aware that many integrity training which will be deliveredinvestigations 10 employees were employees prefer to report concerns to all employees through a network ofdismissed during 2011. Thirteen cases locally or to the Compliance function. specially trained facilitators who runfrom the Global Integrity Helpline and In addition to our Global Integrity face-to-face workshops in all regions.the US Helpline related to discrimination. Helpline, in the US we have a Each year, the workshops provide theAll were investigated and none were dedicated confidential hotline to opportunity for employees to openlyfound to involve discrimination. All cases receive and investigate potential cases discuss areas of the Code and exploreare now closed. of discrimination. how they apply to individual job roles. Progress on 2010 Commitments Continue to expand the Lean continuous improvement Expanded during 2011 into a global Strategic programme Transformation programme Integrate sustainability e-learning into global HR development E-learning now incorporated into SHINE programmes 40 onboarding programme Ongoing 2012 achieved in progress  not achieved 40
  • 38. Indicator 2011 Performance / commentsPercentage of total number of All SGS businesses and locationsbusiness units analysed for risks fall under our risk identification,related to corruption. assessment and mitigation processes.Value of financial and in-kind SGS adopts a strictly neutralcontributions to political parties, political position and does not makepoliticians and related institutions. donations to any political institutions, organisations or campaigns.Number of legal actions for Zero.anti-competitive behaviour,anti-trust and monopoly practicesand their outcomes.Value of significant fines and number Zero. No non-monetaryof non-monetary sanctions for non- sanctions served.compliance with laws and regulations.Percentage of security personnel 100%trained in SGS policies and proceduresconcerning aspects of human rights The revisedthat are relevant to operations. code is beingNumber of substantiated complaintsregarding breaches of customer None. launched andprivacy and losses of customer data. rolled outValue of significant fines for non- Zero as at 31 December 2011. One across allcompliance with laws and regulationsconcerning the provision and use of pending investigation in the Netherlands relating to alleged mis-labelling of a client businessesproducts and services. sample containing hazardous material. during 2012 LOOKING AHEAD • Expand our Strategic Transformation programme and enhance dialogue with our customers.stakeholder engagement • Roll out our revised Code of IntegrityEthos promotes sustainable development through the and integrity training across all areas of the business.provision of research and advice to investment funds worth • Develop a new global integrityover CHF 1.6 billion. To this end, Ethos engages in dialogue e-learning programme for newwith companies believing that this presents an opportunity work towards creating additional long-term value for all • Roll out the new system for trackingthe company’s stakeholders. SGS contacted Ethos during employees’ travel plans to alert them to dangers or hazards.the development of its revised code of integrity and we • Provide leadership and support towelcomed the opportunity to provide feedback and input. the Innovation Teams in the design,Ethos believes that the development of a strong culture of resourcing and successful delivery ofintegrity with corresponding guidelines and boundaries is innovation projects that will benefit the business and our stakeholders.central to business sustainability. Therefore Ethos supportsthe initiative by SGS.  Jean Laville Deputy Managing Director, Ethos 41
  • 39. 07:00 Our People
  • 40. did you know We recruited nearly I am proud of the 1 8 000 people into our business in 2011. unique range of skills More than 300 managers and experience weOur peoplesection is have within SGS. As 2 participated in sustainability workshops which included the Company grows,structured commitments to People indicators and targets. our success willaround the depend as much onprogrammes SGS participates inand initiatives the passion, energy and drive of our 3 Entrypark, a combined print, online and mobileundertaken employees as it will media recruitment platformin Human on the development which targets the top one millionResources, opportunities students from 300 leading universities and business schools.Operational we provide.Integrity and More than 40 000Corporate  Christopher Kirk CEO 4 employees have registered on our variousSustainability e-learning platforms.Human Resources, 2014 and beyondThe 2014 plan accelerated the need to adapt our Human Resources (HR) initiatives and programmes tosupport the rapid pace at which SGS is evolving and acquiring businesses. Now more than ever, we need toensure that we have the right people at the right time, engaged in the right way to deliver on the businessstrategy. Aligning HR to the new business challenges has been the primary focus of the Global HR teamin 2011. Our goal is to attract new skills, fresh perspectives and a broad understanding of global markets inorder to give the business the means to be successful, while ensuring our current workforce is continuouslydeveloped and engaged to contribute to new growth targets. As a Company we have recruited close to8 000 new people during 2011 and supported employees in their integration into SGS from businesses thathave been acquired. Our core management and leadership development programmes have been enhancedand we have developed a new onboarding programme called SHINE to ensure new people becomeoperational quickly and can efficiently contribute to the Group’s success. Speed in action, quality in ourdelivery and a strong business focus have been essential HR ingredients at this critical time and I ampleased with the progress we have made in 2011. While there is still a considerable way to go, I amconfident we have the skills, competencies, structure and programmes in place to deliver against our HRvision: to score amongst the top companies to work for in 2014; to play a key role in meeting the 2014targets and beyond; and to establish a learning environment within SGS where employees can realise theirpotential and drive our business success.  Dominique Ben Dhaou Senior Vice President, Human Resources 44
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  • 42. Chief Operating Officers in each region have strategic responsibility for people management and enhancing our managing talent, from acquisition to reputation as an employer of choice. engagement, development and reward. At country level, Managing Directors It has also worked collaborativelyGlobal programmes drive the recruitment and management with the regions to develop enhancedThe SGS Group Employment Policy of people. During 2011 the HR team learning solutions that will provide SGSsets common standards for the worked in partnership with business with a capable and engaged globalbusiness that are aligned with the core leaders to identify how HR can best workforce ready to drive current andILO Conventions. support the business in efficiently future business success.An outstanding team first three first six pre-arrival first day first week first month months months plan and prepare introduction immersion exploration discovery engageSelecting and sense of belonging and pride in new and transferring employees.Recruiting Talent The process is based on six criticalThe intensity of our talent acquisition stages of employee integration over thefocus in 2011 has driven a review of our initial six months of joining SGS.selection and recruitment approach.Whilst recruitment strategies are now SHINE is aimed at new recruits andtailored to different industries and talent employees joining SGS from businessespools, we believe there is also value in the Company has acquired, as well asdeveloping a more creative approach existing employees transitioning betweento sourcing talent and adopting a roles, for example from a non-manager tostandardised approach to recruitment a manager role, or relocating to a differentto ensure employment advantage, part of the network. The programme aimsconsistency and overall effectiveness. to ensure all new recruits feel welcome and know what is expected of them.During 2011 we hired and structuredrecruiters to focus on specific industriesand key talents for our top recruiting Managingbusinesses and geographies. PerformanceNew technologies and social network As our business grows and employeetools were enhanced to consolidate mobility increases, it is imperativeSGS’ profile as an employer brand. that we apply a consistent approachMore than 8 000 people regularly to managing performance. It is alsofollow SGS activities via our dedicated vital that we align individual goals andSGS LinkedIn™ page. We have also behaviours with our organisation goals,significantly increased our presence and ensure that individual and teamon Facebook™ . capabilities are developed to deliver results in line with the 2014 plan. WhileEngaging new talent many Affiliates use local performance evaluation forms which are in line withOnce recruited, we want new local labour laws and regulations, Groupemployees to have a positive and HR has developed a web-based tool forproductive start and are dedicated to managers and employees which hasfast tracking their success in their role been used by selected teams in moreand in the business. SHINE is SGS’ than 59 countries. We aim to launchnew global onboarding programme development planning and associatedlaunching in 2012 aimed at fostering a manager and employee training in 2012. 46
  • 43. development and associated learningLearning and and development activities to enhance management, business management and leadership, coaching, working inDevelopment individuals’ progress within SGS. remote teams, recruitment and selection,As the industry leader, it is vital that Our Leadership Development finance for non-finance managers,we nurture a culture of learning and Programme (LDP) has been developed communication and performancedevelopment in our skills base and help to provide leaders with the skills and management. The core curriculum isemployees to feel supported in reaching competencies to perform at their peak global, with the regions developingtheir individual potential. In addition to our and drive SGS success now and into programmes locally to meet themandatory training on the SGS Code of the future. The LDP consists of three challenge of our diverse learning needs.Integrity and our onboarding programme, modules focused on the current and Technical expertise is the cornerstoneannual development plans are used by future leadership needs of the Group. of SGS’ service delivery to customersmanagers and employees to consider To date, approximately 250 Level 5 and our business sectors provideprofessional, technical and personal skills managers and high potential Level 4 employees with a wide array of technicaldevelopment aimed at contributing to managers have completed Module 1 skills training to meet the demands ofindividual and Group success. Following and over 100 have completed Module 2. daily operations. In 2011 our Oil, Gasour sustainability workshops in 2011, Participants have been drawn from and Chemicals business had over 6 000almost all MDs in our trend countries North America, South East Asia Pacific, employees registered for computer-committed to initiatives to increase Europe, Africa, China and Australia. The based training, and successfullyinvestment in training in support of the third module is under development and launched their second online technicalGroup target to 2014. will be launched in 2012. module. Computer-based learningAt every level of the organisation, SGS SGS’ Manager Passport is our allows employees easy access toleaders have a clear understanding of primary learning platform for Level skill-based training and assessment,our corporate values and the leadership 3 and 4 managers and transitioning increasing the effectiveness of learningbehaviours that drive results and foster Level 2 employees in some regions. delivery across multiple geographies andour organisational culture. We are This consists of multiple learning giving employees the flexibility to learnstrengthening our approach to career programmes covering project at their own pace and time. Lead leaders AND grow business Level 6 lead others AND manage business Level 5 Operations Level 4 Senior Council Managers • Executive Vice Managers Level 3 Presidents at Affiliates/ • Managing Directors • Chief Operating Team country level Officers • Regional Lead others Managers • Business Managers • Senior Vice • Operations Managers Presidents Level 2 • Global Managers • Functional Function Roles Team Managers • Branch • Experts Leaders Managers • Large Lab Managers • Office • Lab Managers Lead self Supervisors • Senior • Sales Specialists Level 1 • Lab Managers Supervisors • Individual • Specialists Contributors • Chief Inspectors • AuditorsSGS provides leaders with the skills andcompetencies to perform at their peak 47
  • 44. Profile Trevor Pilbeam Facility and Sustainability Manager, SGS Australia I have always been interested in sustainability so when exposed to the corporate sustainability programme in 2010, I wanted to see how the work I had done at the site on energy efficiency and recycling could be extended and replicated across Australia. Taking the Facility Manager role was an opportunity to use my experience and make a difference. We have laid the foundations for change, educating teams through workshops, challenging existing cultures and practices and helping people to think differently. For example, all new starters now have integrity, safety and sustainability as part of their induction. We have also been working to measure our environmental impacts. I’m excited by the prospect of bringing about real change in our performance next year and beyond.Has SGS lived up to my expectations? We share the principle of creating a better workplace and I’m pleasedto see that integrity, safety and sustainability are becoming an ever more important part of this workplace.SGS gives me the opportunity to work in a highly professional environment alongside dedicated expertswhere I am exposed to, and can take part in, projects that are managed to the highest standards. This is themost satisfying aspect of working for SGS. ProfilePatrick Lerner Regional HR manager, SGS South AmericaI joined SGS as Regional HR Manager for South America in 2011. This role exists to proactively supportbusinesses on their strategic HR needs around acquisitions, business development and workforceplanning. As such, we must demonstrate our value to the business as both advisors and experts on talentmanagement. I have been meeting with internal stakeholders to quickly understand the drivers for businessgrowth and business expectations. In moving towards a leaner HR structure, it is vital that we maximise ouruse of technology, align our activities behind core global programmes and procedures to ensure consistency,and implement robust data monitoring systems to provide reliable indicators of our current performance.Key priorities in 2012 will centre on managing and rewarding performance and growing and developing talent.Given the Company’s growth plan, it is important that we look to nurture leaders from our existing talentbase as much as possible. There are many managers who are doing a great job in developing talent,which is a complex process and takes time, but this is not always documented and this makes it hard forHR to harness and share best practice. Our challenge is to encourage people to own their own growth.As a priority we need to implement our performance management plan. This in turn should help to boostmorale as employees seek out their potential within SGS. 48
  • 45. Succession Planning the reward team was strengthened at corporate and regional levels with With operations SGS has a standardised process for the recruitment of compensation and reviewing our staffing needs annually. benefits professionals. The newly touching every During 2011 Corporate HR supported formed team will conduct an in-depth businesses, functions and regions in corner of the succession planning, covering more review of our reward tools and establish a global framework for our reward world, diversity than half of our business and regional strategy in 2012. operations. Our plan is to complete the is at the heart of process across the entire organisation Retaining talent our business. Of by the end of 2012. The same process and tools are used in our Affiliates where Our service delivery and our ability the 24 members HR supports management in ensuring to innovate and grow are dependent that potential successors are identified on our ability to retain talent in the comprising SGS top to take over key positions within the next business. This is why we have set a Group target to achieve a natural management, 11 two to three years and that development plans are defined to accompany identified turnover of less than 14% by the end different nationalities successors in their journey. of 2014. To help us work towards this target, we are focusing on gaining a are represented. Reward and deeper understanding of the reasons why employees choose to leave the Dominique Ben Dhaou Recognition Company of their own will. We will be Senior Vice President, Human Resources Recognising and rewarding performance monitoring our performance in this area in a fair, competitive and consistent through performance reviews and exit manner is an essential part of our interviews and will share our insights employee reward approach. During 2011 with the Affiliates during 2012.Human rights long-term sustainability. Our Operations Council, which comprises four female In addition to the Company’s e-learning modules on sustainability (see page 38),During 2011 we began to evaluate our members and 11 nationalities reflects an internal campaign aimed at drivingalignment to the human rights principles our commitment to ensuring diversity green behaviour in the workplace will beof the UN Global Compact by analysing at the highest level of management. launched during 2012.the prevailing regional human rights issues We encourage our people to workand risks across our trend countries.This included an analysis of labour rights, across many functions, geographies Employee security and cultures throughout their careers.political risks, corruption and business At SGS we are committed to We are committed to bringing togetherrisks and provided us with an initial map protecting our people from deliberate individuals from different backgroundsof issues. We are further assessing any harm by identifying and assessing and cultures to build an inclusivepotential direct or indirect human rights security threats, then minimising their environment where all opinions areimpacts of our own operations which vulnerability by applying risk controls. valued. As part of our diversity approachwill enable us to better understand (See page 39 for more details.) we focus on gender ratios and equalour responsibilities and how best to opportunity in employment. Our equaluse our influence. The human rights employment opportunity strategy aims Employeeof our employees are reflected in ourEmployment Policy which covers areas to achieve the right balance between consultation male and female managers. This themesuch as diversity and equal opportunities. SGS places high value on ensuring that was particularly well supported by employees are both well informed and the Affiliates during our sustainability consulted on business activities thatDiversity and equal workshops, with almost all MDs directly relate to them and have theopportunity committing to programmes promoting opportunity to communicate their views equal opportunity in employment.We base all aspects of our employment to management. Individual businessesrelationship on the principle of equal operate communication and consultationopportunity regardless of apparent Environmental systems that are tailored to meeting thedistinctions such as gender, age and behaviour specific needs of each business. SGSethnicity, as well as less apparent Euroforum provides an arena for the Employees are encouraged to adoptdifferences such as educational exchange of relevant and appropriate environmental practices in thebackground or religion. At SGS, our information and ensures constructive workplace through various energyability to understand, embrace and dialogue between management and reduction, green travel, wasteoperate in a multicultural world is employees on transnational issues minimisation and recycling initiatives.critical to our business success and which affect them. 49
  • 46. While our gender ratio experienced America. Following our sustainability a subtle increase in the proportion of workshops in 2011, three-quartersOur People male to female employees in 2011, our of MDs in our trend countries haveperformance equal opportunity ratio increased as committed to programmes focusing onEmployee turnover across the Group more female employees were appointed reducing sickness absence in supportincreased in 2011, reflecting ongoing to manager level. This reflects both of the 2014 target.volatility in economies around the an improvement in reporting as well During 2011, we continued to increaseworld and increased competition for as an overall trend to promote equal our investment in employee training,talent with certain skill sets and in opportunity in our recruitment and with employees receiving an average ofspecific geographies. While turnover succession planning strategies. 23 hours of training annually. At the samein the European region remained low, We observed further improvement in our time, our expenditure on training also rose,we experienced a higher turnover of sickness absence rate, which remains despite the Company now using moreemployees in our South East Asia Pacific below our tolerance level of 2.5% and cost-effective methods for some training,and Americas regions where we have a is in line with our 2014 target of below such as e-learning. We expect to seeconcentration of services relating to the 1.5%. Whilst sickness absence remains continuing improvement in our trainingmining, oil, gas and chemical sectors. highest across our European countries, performance as we roll out our newlyWe are continuing to work with these significant improvements were noted developed and updated learning andsectors as part of our retention strategy. in countries based in North and South development programmes during 2012.workingsmarterSustainability Workshops 100%In addition to our core OperationalIntegrity and Human Resourcesprogrammes, the Sustainability Steering 80%Committee has identified a number ofpeople-related targets which we must sickness absence ratemeet to achieve the 2014 plan. These 60% annual performancewere communicated via sustainability equal employment opportunity ratio natural turnoverworkshops conducted in our trend Total Recordablecountries during 2011. Through theworkshops, MDs committed to over a 40% human rights Incident Rate100 short-term initiatives and longer-term projects related to people. trainingCommitments were made across nearly 20% reviewall countries relating to improving theirequal employment opportunity ratio,reducing natural turnover, optimising 0%employee training, and completingannual performance reviews. In addition, This chart shows the percentage committment to sustainability programmes across trend countries and illustrates alocal targets were set to decrease particularly high uptake of programmes relating to promoting equal employment opportunity, investment in employeesickness absence and reduce incidents. training, improving recordable incident rates and ensuring alignment to human rights principles. 50
  • 47. Natural Training ratio 1%turnover % of total employment% of employees that leave costs spent on trainingSGS each year of their 13.8% <14% 0.72% (Includes safety 0.63%own will training hours) 11.1%Gender ratio Employees 100%% male employees receiving% female employees regular m m performance 67.4% reviews 65.2% 64.8% 65.6% % of employees f f receiving regular 34.4% performance reviews 35.2%Equal 1opportunityratio(Female managers/ 0.67 0.60female employees)(Male managers/male employees)Sicknessabsence rate 1.65%Number of days ofsickness absence 1.46% <1.5%as a % of totaldays workedTraining hoursNumber of annualtraining hours/FTE 23.0(Includes safety 21.1training hours) 2014 Target 2010 Performance 2011 Performance 51
  • 48. Key 2011/2012 initiatives Starting in 2012, incident reporting will be captured using the Crystal incident crystal incident reporting tooloperational reporting tool, designed to better track and manage incident data across all sitesintegrity globally. The tool will form part of a wider industrial hygieneSGS believes that our commitment to Operational Integrity management management systemhealth, safety, quality and protection of system which is being implementedthe environment is one of the driving across the business to be in line with communication & accessibilityforces behind our ability to consistently the best practices underlying worldwideprovide a world class level of service recognised standards such as ISO 9001, workshopSto our customers. In last year’s Report, ISO 14001, ISO 17020, ISO 17025,we outlined our goals to eliminate OSHAS 18001 and ISO 26000 by 2015. safety videosfatalities, minimise injuries and improve Our regional workshops are designedthe mitigation of major health and safety sgs rules for life to cover a selection of QHSE technicalrisks. Significant progress was made areas and provide SGS employees withtowards these goals in 2011, most assurance and governance consistent assessment methodologies,notably in increased safety dialogue tools and databases to improve theirwith employees and the raising of safety efficiency and effectiveness as OI instigated an active programme of trainingawareness across the Company. professionals. Such tools include the and communications designed to driveDuring 2011, SGS began the process SGS Rules for Life which offers clear awareness and knowledge of health andof reorganising the corporate function non-negotiable safety rules focusing safety through the business. Our ultimateresponsible for the management and on the prevention of serious injury and goal is to eliminate occupational fatalitiesoversight of Quality, Health, Safety, and fatal incidents. SGS is in the process and achieve a significant reduction in theEnvironment (QHSE) into a single function of strengthening the professional number of injuries.renamed Operational Integrity (OI). competence of employees assigned to In addition, we have established aThe process is expected to be completed OI, especially in the area of industrial number of internal online resourcesin 2012. The new function has a wider hygiene. In order to accomplish including an intranet portal providingremit to manage and drive improvement in this, we have instituted professional a central knowledge base for globalall areas which are a potential risk. continuing education, established a QHSE information and a mobile phoneOI has led a campaign to raise awareness, global industrial hygiene data application to assist line managers andcreated a central knowledge base for management tool, hired more staff supervisors in completing leadershiprecording and sharing best practices, specifically trained in industrial hygiene site visits and leading safety meetings.developed regional intranet sites for local management and procured additional A series of in-house safety trainingcommunications and launched a mobile monitoring equipment. Alongside videos are currently being producedphone application to provide a structure establishing a governance framework to addressing various QHSE matters facingfor site assessments. oversee and manage OI, we have SGS employees every day at work. Case studyA head for SafetyFollowing a strategic review of our major families, we implemented a mandatoryQHSE risks in 2010, road transport safety policy on road safety linked to businesswas identified as the number one priority. trips, ensuring accurate reporting ofThroughout the world SGS employees incidents and near misses. The policy isrely on various modes of transport in accompanied by a road safety trainingtheir professional and personal lives, programme. Class A helmets and highcommuting to and from work, transiting visibility reflective jackets compliantbetween sites and operating a variety of with the EN471 safety standard havevehicles and heavy duty machinery. been allocated to all employees and,Under the guidance of Paul House, on request, to family members. PaulManaging Director, SGS India, a country- notes, “SGS will provide you with thewide road safety initiative was launched correct tools and PPE required to carryin 2011. The growing incidence of road out your work with utmost safety, but ifaccidents is a concern in India with too behaviourally we are not inclined to usemany fatal accidents from trucks and these tools, or understand how or whytwo-wheeler vehicles, caused by a lack they are to be used, then we still runof information and education. In an effort significant safety risks” .to protect SGS employees and their 52
  • 49. Our operational Number of LTIFRintegrity recordable incidents 739 Number of lost time 0.80*performance The number of lost time, 691* incidents occurring per 200 000 hours worked 0.67 restricted duty, medical treatment incidents and fatalities Zero fatalities in 2011 Safety Training 286043 TRIR Near misses Hours The number of lost time, Event, situation or 1.64* 1982* Number of annual safety restricted duty, medical physical environment treatment incidents 1.47 with the potential to 1904 training hours and fatalities per 200 000 cause injury, damage or 199076* hours worked <1 loss to people, property and the environment, but which was avoided by circumstance 2014 Target 2011 continued to show improvements we believe incidents may be under- 2010 Performance in the quality of incident reporting and reported. This will be significantly helped 2011 Performance also in our overall performance with by the global implementation of the encouraging downward trends in TRIR Crystal reporting system in 2012 which* Statistics exclude data for one trend country and LTIFR. Our focus continues to will make reporting easier and more be on raising general awareness and consistent. We are pleased to report strengthening reporting systems where that there were no fatalities during 2011. Progress on 2010 Commitments Continue to report on progress of the global roll-out of HR Completed and ongoing programmes to support the 2014 plan Continue to develop employees’ understanding of Sustainability e-learning incorporated into formal sustainability through our e-learning modules HR onboarding programme, Shine Carry out a benchmark study to map our impacts and Benchmark conducted in 2011 responsibilities in relation to human rights Report over the next four years on the restructuring of our Completed and ongoing HSE programme and initiatives and their impact on the safety performance across our Group Ongoing 2012 achieved in progress  not achieved looking ahead• The SGS global onboarding reviews, sickness absence rate, total • We will conduct a review of reward programme, SHINE, will be launched recordable injury rates and alignment tools and establish a global framework across all regions. with the human rights principles. for our reward strategy.• 100% of SGS operations will have • We aim to launch development • We will monitor our performance completed a staffing review process planning and associated manager and around natural turnover and share our to support succession planning by the employee training in 2012. insights with our Affiliates. end of 2012. • Crystal incident reporting tool will be • The SGS Rules for Life will be• We will by the end of 2012 have implemented across the Group. rolled out during 2012. completed an interim review of local • We will launch the third module of our initiatives in trend countries relating Leadership Development Programme to people including equal opportunity in 2012. in employment, natural turnover, investment in training, performance 53
  • 50. 12:00
  • 51. Environmental Management
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  • 53. policies and identifying best practices.Global programmes By building this infrastructure we areDuring 2011 we made substantial confident that we can not only achieveprogress in implementing the the majority of sustainability targets Sustainability workshopsenvironmental initiatives outlined in last we have set ourselves as part of the The global programmes were presentedyear’s Report. Our global programmes 2014 plan, but also create a sustainable at the workshops and teams suggestedremain the backbone of our strategy. business, built on a low-carbon and ways they could support them withinTheir aim is to make it easy for our environmentally responsible platform their own businesses. By the end ofoperations to reduce their environmental that will take us forward beyond 2014. 2011 MDs had committed to over 100impacts by providing a sustainable During 2011 we expanded the short-term improvements and longer-infrastructure for responsibly sourced environmental indicators that support our term initiatives aimed at reducinggoods and services, carbon neutral global programmes, adding indicators our environmental impact. These willenergy sources, energy-efficient for the generation of hazardous and non- be implemented over the next yearsbuildings, green vehicles and the latest hazardous waste and for buildings which with support from key corporateIT technology. Each programme has a are located near protected areas or areas functions and an update will appear inGroup lead responsible for developing of high biodiversity value. next Reports. global programmes • energy efficiency delivery of key sustainability LOCAL in buildings • Green Cars indicators and shared goals WORKSHOPS • Green IT • Green procurement • sustainable capex • waste management did you know It has always been my SGS Minerals has In April 2011, SGS 1 developed a method to recycle solar panels, 3 participated in a summit for Chinese businesses, view that if everyone at SGS makes evenreclaiming valuable metals and “Responsibility and Innovation a small contribution,producing glass that is pure in a Shifting World” which was , the overall benefitsenough for recycling. attended by more than 700 people. will be enormous. The commitment shown SGS published a white SGS Hong Kong achieved across the Group this 2 paper in 2011 highlighting the importance of 4 a 48% saving in lighting energy at its laboratory year indicates that we are well on our wayensuring that biofuels are produced following a two-year complete to achieving a stepsustainably and suggesting ways review and refit. change in embeddingto ensure that their production is sustainability in ourenvironmentally responsible. operations. Christopher Kirk CEO 57
  • 54. Energy and are in the process of carrying out audits across ten of our largest offices environmental impact and minimising air, water and noise pollution of its Efficiency in and laboratories. immediate surroundings. It has been Buildings During 2011 we created better links HQE certified for construction.SGS has over 1 350 buildings between our internal energy-saving • In Pszczyna, Poland we haveworldwide. In 2009 we signed the programme and the EEB resources undertaken a major renovation ofWBCSD Manifesto for Energy Efficiency we offer to our clients to maximise our our 2 200 m² laboratory which wasin Buildings (EEB), committing to a collective expertise. completed in October 2011. The10% reduction in CO 2 emissions from refurbished building incorporates This has been a year when we have builtour owned buildings by 2014 and a a wide range of green features, some solid foundations for changing20% reduction by 2020, compared including energy-efficient materials, the way our buildings are managed. Allwith a 2010 baseline. We developed a high insulation, double-glazed of our trend countries committed tophased implementation programme: windows, and solar hot water panels. EEB projects during our sustainabilityestablishing a baseline; evaluating workshops and, although it may be too In addition to these examples, we havecurrent performance and identifying early to see this work reflected in our secured financing for energy monitoringbest practices; developing tools overall performance, we have already equipment at our laboratory in Perth,and implementing energy made some very significant progress in Australia and are planning an energyefficiency measures; and tracking some locations: health check prior to the expansion ofand reporting performance. • At our head office in Switzerland we this facility in 2012. We have a number are implementing energy efficiency of major projects in Germany, includingWhere we are now at one site an energy health check to measures, based on findings from aHaving established a baseline in 2010, detailed energy audit conducted last explore options to upgrade heatingwe began to communicate our EEB year. We are also piloting displays systems, retrofit lights, introduce antargets and strategy across the Group of real-time energy consumption improved energy management system,during 2011. Through our sustainability and targets so as to motivate better and install a combined heat and powerworkshops, the portfolio of buildings building management and promote plant. We have planned energy audits oncoming under the scope of the EEB behavioural change. three laboratories and one office buildingprogramme is gradually being expanded in India, two major facilities in Spain and • In Geneva, we have signed a charter our new headquarters in Singapore. Ourto cover all SGS properties, including agreement with our electricity new vehicle testing facility in Spain willlong-term leases. We also began to supplier, SIG, to participate in an be sustainably designed, and our newestimate the cost saving potential energy reduction scheme. Under the laboratory in Kolcatta is seeking LEEDassociated with the programme to scheme, SIG will provide financial certification to Gold level.strengthen the business case and support for a dedicated energyaccelerate change. manager to deliver further reductionsIn 2011 we introduced our Green in electricity consumption and CO2Building Guidelines which cover emissions. This project will help usnew construction, major renovation, create new opportunities for energy looking aheadowned buildings and leased sites. efficiency and also benefit from theThese include a green building self- • We will compile a global database expertise of SIG.assessment checklist to identify the key of EEB projects with details of • Lighting has been identified as a investments and projected savings.sustainability elements which need to quick-win energy-saving opportunitybe considered during new construction • We will continue to implement the in many of our operations. Ouror major renovation of laboratories or projects we have identified during laboratory in Hong Kong has alreadyoffices. We have supported this with 2011 and continue to identify new achieved a 48% saving in lightinga range of tools and guidelines which opportunities for energy efficiency. energy following a two-year completeare now available to facilities managers review and retrofit. • We will implement our Greenworldwide including: a dedicated project Building Guidelines in as many sitesteam site to share best practices; an • Our new headquarters in France as possible, and work with propertyEEB portal; a building energy rating tool; have been built to the highest owners to build EEB aspects into ourand an energy management system. We environmental standards using lease agreements.made funding available for energy audits materials selected for their lowHeadquarters building in France. Refurbished laboratory in Poland. New laboratory in Kolkata, India. 58
  • 55. Green This modification will now be rolled out in future years across other data centres. Sustainable IT capital We are also supporting the increasedSGS has over 45 000 computers and use of videoconferencing as an investment almost 2 800 data servers which alternative to face-to-face meetings, As our environmental programmecontribute to our overall energy particularly in countries where there is becomes more established it will beconsumption and carbon footprint. Our high communication traffic between even more important to incorporateGreen IT programme seeks to identify SGS sites. Pilots are planned for sustainability considerations into theareas where we can minimise the Switzerland, China, Germany and investment process. This meansenvironmental impact of all types of IT, France. Finally, technology is being weighing sustainability costs andfrom large servers to individual printers used to expand the issue of electronic benefits of our investments alongsideand computer peripherals, as well as use test certificates offering a significant economic aspects. This year, we haveIT to green our operations. opportunity to save both paper and brought sustainability to the forefront energy. Green IT was one of the most in our capital expenditure process. NotWhere we are now successful themes adopted during our only is this good for our own footprintGreen IT is an example of where we are global sustainability workshops with but it also ensures we are building asuccessfully managing environmental 100% take-up and over 20 programmes long-term sustainable business.improvements at both global and local committed to by Affiliates. Somelevels. The focus is to build a more exciting initiatives have been introduced, Where we are nowsustainable IT infrastructure across including: server virtualisation in data We have built an integrated investmentthe Group whilst also promoting centres (Singapore, UK, Geneva); approach where sustainability is nowthe responsible use of energy and re-use of computer components as spare considered in our mainstream capitalequipment within our individual offices, parts to extend the life cycle of existing investment processes. Our revisedlaboratories and buildings. In March equipment (Taiwan and Hong Kong); and Group Capital Investment Manual was2011 we launched our Green IT Policy managed print services such as duplex published in October 2011. Under thecovering procurement, management printing, access control and cost cross-of resources, innovative use of charging (Spain, Australia and Peru). guidelines, sustainability reviewerstechnologies, data centres, disposal of must be assigned for each projectequipment and employee behaviours. to ensure their alignment with ourThis policy is supported by handbooks sustainability policies.designed for our IT staff, employees, In December 2011 our first “sustainableand data centre managers. looking ahead capex” for Green IT investments wasGlobally, we are rolling out • The installation of cold aisle approved using the new screening process.improvements in the energy efficiency cooling in the Geneva data centreof data centres through significant will be completed in 2012 andmodification of the cooling system to rolled out globally.directly cool the equipment rather than • Videoconferencing will be piloted andcooling the entire room. This was piloted future roll-out considered based on looking aheadin Geneva in 2011 where our present the results of pilots. • We will continue to raise awarenessdata centre consumption is 1 140 MWhper year and the initial findings show • Managed print services will be of sustainability considerations whenpotential savings of 50%, with a return implemented in Geneva and other making investment decisions.on investment of less than three years. offices worldwide. The Energy Efficiency in Buildings project was launched by the World Business Council for Sustainable Development in 2006 to bring about a transformation of the building sector to achieve an 80% cut in energy use by 2050. From the start, SGS has recognised the significance of the EEB Manifesto, committing to a 20% reduction in CO2 emissions from its owned buildings by 2020. SGS has not only made significant progress towards this goal, but has also committed to supporting its clients and other Manifesto signatories in reaching similar targets on a global scale. Collectively this offers an exciting opportunity to bring about real and significant change in the environmental impact of buildings throughout their life cycle. We would like to recognise and commend SGS for its continued commitment and leadership in this initiative. Over 100 member companies have now signed the EEB Manifesto and, following this success, the WBCSD is currently developing a second phase of the project which will focus on bringing the results of EEB to an implementation stage with the help of partnerships with key players, such as the International Energy Agency (IEA), the World Green Building Council (WGBC), the Urban Land Institute (ULI), as well as the WBCSD Regional Networks. This will be launched in 2012 with the broad objective of signing up 1 000 localities by 2015.  Peter Bakker President World Business Council for Sustainable Development 59
  • 56. Green Green Waste Procurement cars managementOptimising our procurement of goods SGS has over 7 000 vehicles with SGS stores and disposes of thousandsand services is a central element in vehicle fuels making up around 27% of of laboratory test samples each year.the achievement of the 2014 plan. This our total carbon footprint. Our target Many of these contain materialsinvolves streamlining our commercial under the 2014 plan is to reduce the that are classified as hazardoustransactions and ensuring our suppliers average carbon emissions to 130g per waste. We are committed to furtherare sustainable in terms of their social, kilometre across this fleet. developing a detailed assessment andethical and environmental performance. management of these waste streams Where we are now through in-country waste managementWhere we are now programmes aimed at identifying further During 2011 we continued to work with opportunities to minimise waste andIn 2011 we assigned sustainability vehicle manufacturers and distributors associated costs.responsibility within the Procurement to trial electric and hybrid vehicles asteam and implemented a set of suitable replacements for our existingqualifications for new suppliers, fleet cars. We are still actively seeking Where we are nowadding an assessment of suppliers’ a sustainable commercial solution that During 2011 we added four new globalsustainability to our broader process for can be rolled out across all markets. In environmental indicators for waste,evaluating new sources. This supplier the short- to mid-term we are trying covering hazardous and non-hazardousappraisal process was rolled out to all to facilitate a transition at local level waste generated and its responsiblemajor suppliers under global agreements through local fleet managers within our disposal through approved contractors,during 2011. Furthermore, we have businesses. More than two-thirds of our with corresponding certificates ofmade a start on developing a formal trend countries made a commitment treatment. Through our sustainabilitySustainable Sourcing Charter. This will to research and implement more workshops, we have developed a wastebe gradually rolled out to our supply sustainable vehicles during worksheet which outlines the measureschain during 2012 and 2013, initially our sustainability workshops. needed to track, dispose of and reduceto centralised sources and then to This demonstrates the benefits waste across all waste streams.suppliers that are managed locally. The of combining global with local Three-quarters of our trend countriesCharter is being written with input from programmes, achieving a local way committed to waste managementcustomers and other key stakeholders forward when a global solution has not programmes this ensure it incorporates their values and been possible in the short-term.requirements alongside our own. looking ahead looking ahead • We will focus our efforts on furtherlooking ahead • We will continue to work at a reduction initiatives, supporting the• During 2012 we will begin to global level to review new fuel- in-country programmes, sharing roll out our Sustainable Sourcing efficient vehicles and recommend best practices and providing further Charter to suppliers who are under appropriate replacements. guidance and communications. global agreements. • We will monitor the uptake of• We will continue to broaden the environmentally responsible vehicles application of our supplier appraisal by SGS businesses and report on the process to incorporate suppliers who overall impact of replacements on our are sourced and managed locally. carbon footprint. Profile Monika Sharma Head of Softlines and Sustainability Manager, SGS India My first exposure to sustainability was when I joined SGS 10 years ago and worked in the Softlines testing laboratory in India. We used to test eco-friendly garments and textiles for restricted chemicals and my background as a textile engineer helped me to understand their environmental impacts, particularly water pollution and health hazards to humans. Personally I’m attracted to the climate change agenda. My favourite quote is “there is no planet B” so when I had the opportunity to manage sustainability I instantly accepted. I feel proud of SGS; this organisation is diverse and dynamic and is an infinite source of learning and information. I am also very proud of our commitment to the fundamentals of integrity. One of my favourite accomplishments was environment week which we ran across India this year, involving 3 500 people in 30 locations. 60
  • 57. There was huge enthusiasm and participation and it was truly gratifying to see how inspired people are towards saving planetEarth. Within SGS we are doing some exciting work on Energy Efficiency in Buildings and waste management. We haveclose to 100 leased and owned facilities in India which have immense scope for energy savings. We have kick-started a planfor energy audits and are expecting to see some visible improvements next year. We are also focusing on recycling of paperand e-waste, and planning better water management through a zero discharge effluent treatment plant in our laboratories andthrough rain water harvesting. Our workshops this year enabled us to align key decision makers and stakeholders with thecorporate sustainability goals. The e-learning is helping to communicate this message to all employees. We need to sensitisethe masses in order to bring about change, and change is what we are trying to achieve. It is challenging, but not difficult. Progress on 2010 CommitmentsDevelop and implement new technologies wherever Significant progress made through regionaltechnically and commercially possible, and raise environmental workshops and global programmesawareness across the businessRoll out best practice solutions throughout the business Best practices offered to Affiliates at sustainability workshopsDevelop effective models for sustainable acquisitions to identify Sustainability built into acquisition processesbest practices, transfer technologies and skillsCreate locally grown initiatives and solutions by empowering local Over 100 initiatives generated and committed toteams to implement environmentally responsible programmes by AffiliatesMeasure and monitor what our buildings are consuming Progress is being made through theand report our performance publicly each year. We aim to EEB programme and publication ofregularly benchmark our performance across our own building Green Buildings Guidelinesstock and also against other companies to make sure weare setting the bar as high as we can. We will also continueto benefit from regular engagement with other signatorycompanies to exchange and compare experiencesCapitalise on our in-house expertise by sharing with operations Project team site established on our intranetand facilities managersDevelop a set of tools and resources for Affiliates to use in Green Buildings Guidelines and selfgreening their own operations and encourage the exchange of assessment toolexperience between sites to maximise knowledge transferRoll out our green IT programme to provide solutions that cover Green IT policy and handbooks launchedthe selection, purchasing, use and disposal of IT equipment. Thiswill be accompanied by detailed monitoring and measurementExtend cold aisle technology to a further 10 data Deferred until 2012centres during 2011Provide firm targets for implementing electric vehicles plus We are testing electric vehicles and are workinga carbon savings forecast once we have selected a preferred on a sustainable commercial solutionmodel and completed trialsPresent an update on our waste inventory in our 2011 Report Four additional indicators for waste and projectsalong with a review of waste management projects embedded through workshop commitmentsContinue to actively engage suppliers in highlighting Ongoing through implementation ofgreen product options supplier appraisal process Ongoing 2012 achieved in progress  not achieved 61
  • 58. 2010 SOURCE 2011 SOURCEOF CO2 (Tonnes) OF CO2 (Tonnes) -12 497 renewable energy CLEAN POWER capacity in Norway. The certificates we purchased in 2011 were for electricity certificates The carbon footprint of electricity varies generated at storage hydro power purchased significantly depending on how and plants at Rendalen (93 MW output) where it is produced. The majority of and Savalen (58 MW output) and at our electricity is purchased at country the run-of-river hydro power plant at level and is generated by the prevailing Hunderfossen (116 MW output). generation methods. This mix of sources may include a proportion of renewable energy. Renewable sources WATER derived from hydro-electric, solar, As a service company, SGS consumes wind or biofuel are classified as carbon relatively little water in our laboratories neutral, meaning that no additional and offices and therefore we do not CO 2 is released into the atmosphere have a formal global programme for 103 328 through their use. Electricity produced in this way may be certified through a water conservation. However, water consumption is managed through ourelectricity system of tradeable certificates called EEB programme with efforts already 113 189 Guarantees of Origin (GO) – also known being made at some of our larger as Renewable Energy Certificates laboratories and offices to reduce electricity (RECs). The GO is tracked through a usage. Water efficiency is also covered European platform, European Energy by our Green Buildings Guidelines and Certificate System (EECS), and each corresponding self-assessments. It unique certificate documents exactly has been included as a monetised KPI where the energy is produced and from in our Green Book. Collectively, we which type of renewable energy source. expect these initiatives to drive further awareness and reduction in water usage The goal of the GO system is to where feasible across the Group. stimulate the creation of more renewable power production, thus contributing towards a less CO 2 ENVIRONMENTAL intensive energy mix. Recognising the COMPLIANCE significant positive impact that this All judicial breaches of environmental market could have on the renewable legislation or regulations are reported energy industry, SGS signed a contract to, and investigated by, our Group in December 2011 with a Norwegian Compliance function. During 2011, company, ECOHZ, to purchase SGS did not incur any fines for such renewable energy certificates each breaches. Two incidents were reported:53 043 year that correspond to 100% of the the first where an employee working electricity consumption in our trend on a client’s site mistakenly opened an Vehicle 53 988 European countries. This effectively incorrect valve resulting in a containable means that the electricity supplied to fuels discharge of material; the second these countries was carbon neutral in Vehicle 2011. During the year, 58 GWh incident involved the mislabeling of a fuels (58 000 certificates) were purchased, sample which contained hazardous material. This second case is still under corresponding to a reduction in our investigation with the outcome pending. carbon footprint of 12 497 tonnes CO 2. At the same time, SGS will continue to drive energy saving measures CARBON DISCLOSURE 19non- 483 19 070 throughout the business to minimise our energy consumption and our overall SGS is a member of the Carbon Disclosure Project (CDP), a global carbon footprint. ECOHZ provides SGS climate change reporting organisation Transport non- which holds the largest database of with renewable certificates from a fuels Transport fuels selection of hydro-electric power plants corporate climate change information in Norway, representing one of the in the world. Through its membership, 16 357 15 567 cleanest forms of electricity generation. These plants are owned and run by SGS provides an annual disclosure of the risks and opportunities facing the Air & Train Air & Train Transport Eidsiva Energi, which is heavily engaged business in relation to climate change. Transport in implementing solutions for renewable A copy of SGS’ latest response to energy production and developing the CDP can be accessed on the192 211 189 317 additional hydro-electric generation CDP website. 62
  • 59. Our Performance Electricity consumption (People)Our work with Affiliates has strengthened an average 10% were achieved through Annual kilowatt hours 4662 4661the consistency of environmental data behavioural change related to fume hood of electricity consumedand has improved our confidence in data usage and shutting down equipment, per FTEaccuracy. Where significant changes to as well as recovering lost energy from2010 data have come to our attention we exhaust air.have re-stated this data in the Report. Vehicle fuels emissions increased by 2%SGS’ environmental performance is against an increase of 11% in the numberclosely linked to the intensity of our of fleet cars. This is largely explained Building energy intensity inoperations. In 2011, our carbon footprint by vehicles with expired leases being SGS-owned 229♦increased by 5% to 201 814 tonnes CO2, replaced by more efficient models. In offices 223against the backdrop of a 13.7% annual addition, a programme for the control -10% Annual kilowatt hoursgrowth in revenue (constant currency of fuel consumption was introduced in per square metre forbasis). The overall distribution of our Spain, and vehicle mileage in the UK SGS-owned officesCO2 emissions by source remained decreased offset by an increase in theconsistent with 2010, with a slight use of train travel. Total air and trainincrease in electricity representation. transport emissions fell by 5% due, inDuring 2011 we purchased renewable part, to improvements in the reporting Building energyenergy certificates equivalent to 12 process and better classification of long- intensity in497 tonnes CO2 which brought down haul versus short-haul flights, as well as SGS-owned 430♦our overall CO2 emissions to 189 317 Laboratories 402 increased cost awareness associatedtonnes, slightly less than in 2010. with air travel. Annual kilowatt hours -10% per square metre forElectricity consumption (kWh) grew by Water consumption remains SGS-owned laboratories12% due to the impact of acquisitions in comparable to 2010 at 21.8 m3 perSpain and Poland, expansion of buildings FTE with continued improvementsin Russia, Korea and Peru, and an overall seen in the accuracy of the data dueincrease in business activity and related to better communication with utilityuse of equipment across the Group. Water use companies. Information on hazardous 1039904Overall non-transport fuel consumption Annual water and non-hazardous waste generated purchased (m3) 960886decreased slightly due to a milder was gathered for the first time in 2011.winter in Europe, despite increased We are anticipating some changes toconsumption in certain countries related the figures in the near future and expectto business expansion. In our owned our waste data to be robust enough forbuildings, progress was made towards commentary next year.our 2014 EEB targets in particular acrossour network of laboratories where weare now over half way to achieving our Carbon Watergoals. Our laboratory in Adelaide reduced intensity intensityenergy consumption by over 25% (People) 4.5 Annual water purchased 22.5 21.8through the introduction of skylights to Annual CO2 emissions per 4.2 per employee (m3/FTE) -10%reduce lighting loads and the strategic employee (tonnes/FTE)consolidation of shifts and machineryusage to increase lab efficiency. InFrance, efficiency gains in the labs of CO2 emissions Carbon Hazardous intensity waste Total annual CO2 (Revenue) generated emissions (tonnes) 59.0 201814 Annual CO2 emissions 54.4 Total weight of hazardous 5812* 192211 52.2 per revenue (tonnes/ waste generated (tonnes) CHF million) -10% Renewable Total Non-Hazardous energy electricity waste consumption generated Total renewable energy certificates of origin Total annual kilowatt 223 Total weight of 12497 199 purchased (tonnes of CO2) hours of electricity non-hazardous waste consumed (million kWh) generated (tonnes) 16829 ▲ 2010 Pro forma (constant currency basis) 2014 Target 2010 Performance 2011 Performance countries ♦ Restated to reflect more accurate data and subject to future amendment* Statistics exclude data for one trend country ▲ Statistics exclude data for three trend 63
  • 60. 10:00 Community
  • 61. As a global company,SGS reaches outto many localcommunities andas such makes asignificant differenceto the lives ofthousands of peoplearound the world did you knowSGS may be a global company but our SGS employeesbehaviours and actions are defined byour sense of place and purpose withinlocal communities. We work hard to Our actions are 1 volunteered over 8 500 hours and contributed todemonstrate our respect and support inspired by the more than 300 community projects.for the communities we operate in andwant to play our part in helping them passion, intuition and SGS sponsored communityto thrive through economic, social andcultural development. We believe inbuilding lasting and mutually-beneficial entrepreneurship of our employees 2 programmes to the value of CHF 547 247.relationships with local stakeholdersthrough dialogue and close collaboration. around the world The Group donated moreIn this section we highlight a smallnumber of the many local communityprogrammes that have been developed who want to make a difference. 3 than CHF 300 000 to community organisationsand run through the goodwill and and voluntary groups.dedication of our employees around Christopher Kirk CEOthe world.Community Group-level programmes are approved by Corporate Sustainability in line This will ensure that our projects are aligned to the United Nations Millenniummanagement with the annual budget and Group Development Goals which addressSGS offers support to communities Community Policy and Guidelines. The the world’s most critical developmentthrough sponsorship, in-kind support, majority of programmes, however, are challenges. Community investmentemployee volunteering and charitable identified and managed locally. Through performance is monitored and reporteddonations. We also provide immediate our global sustainability workshops, the by all countries via our sustainability datasupport to communities in the aftermath Affiliates have committed to align SGS management system, Solaris.of major disasters. community projects with the Guidelines. 66
  • 62. 67
  • 63. Core programmesand projects Eradicating Child Achieving extreme health universal poverty and education Decorating Children’s wards at hunger Tianjin HoSPital with Paint SGS China supports Yingtao a Smile Primary SchoolEmployees from SGS China When SGS planned the opening of its Volunteers of SGS Chongqing visitedprovide supplies to first Wind Energy Testing Centre in Yingtao Primary School to donatepoverty stricken children Tianjin (WETC), China in May 2011, it stationery and money to pay for theThrough its long-term commitment to annual lunch fees for ten students. seemed fitting for the launch event tothe JiaJiaWa School and neighbouring Money has also been pledged to buy involve the local community. Paint aprimary schools, employees of SGS two ping pong tables, pay for internet Smile is a non-profit organisation whoseChina have developed deep-rooted access for five computers and to create mission is to reduce patient anxietysupport for the poverty-stricken children a reading room in the school. and make hospitals more cheerfulin the Gansu Province. by decorating the wards. Given thatThis year 100 tailor-made jackets and 35 Tianjin’s WETC represents the future SGS Group sponsors Educatisschool bags were donated to students. in terms of sustainable energy supply, Foundation to promote universalStaff from the Tianjian branch were SGS wanted to invest in the future of higher educationalso inspired to take action when they Tianjin’s community and decided to SGS continues its support of thisnoticed that the water in JiaJiaWa is sponsor four Smile Painters who worked distance-learning university based inboth scarce and of poor quality, causing for one month in Tianjin’s children’s Switzerland which aims to providelocal people to rely on drinking rain hospital alongside representatives from universal, affordable higher educationwater. A water filter was despatched the hospital and SGS. They brightened to low-income students throughto the community to ensure that the up two children’s wards by painting online training. During 2011, SGS waschildren and families could rely on safe colourful and fantasy landscapes. able to provide practical support bydrinking water. hosting examinations in its offices and laboratories in Senegal, Tunisia, Burundi, Mali, Burkina Faso, Côte d’Ivoire, France and Cameroon. 68
  • 64. Promoting Combating a genetic blood disease, as well as those involved in serious road traffic accidents. gender HIV/AIDS, In collaboration with various blood equality and malaria banks, SGS employees contributed empowering and other 800 units of blood in 2011. women diseases SGS Ivory Coast supports fightSGS Bangladesh collaborates Staff from SGS Sri Lanka donate against HIV/AIDSwith Dhaka Ahsania Mission blood to fight Dengue epidemic With an estimated prevalence of 3.9Microfinance Programme An outbreak of Dengue fever was per cent among adults, the IvorySGS Bangladesh continues to support reported in Sri Lanka in February 2011, Coast remains one of the countriesthe Dhaka Ahsania Mission (DAM) resulting in 17 000 cases and 124 deaths most affected by HIV in West Africa.and its microfinance project focused by September. Dengue is a flu-like illness The first case of AIDS in the countryon ‘restoration of livelihood through which is transmitted by mosquitoes was detected in 1985; it now hasjob creation, gaining of assets by rural and, with no vaccine currently a generalised epidemic. Through apoor’ (ROJGAR). This scheme supports available, treatment is offered via blood collaboration with SICTA (Sistemathe villagers of Sreepur Upazila in the transfusions. SGS employees responded de Integracion Centro-Americana deremote Gazipur district. To date, 37 to the call from hospitals for blood by Tecnologia), both SGS Ivory Coast andpeople have received access to credit organising a blood donation campaign SICTA have established an annual fundworth approximately CHF 9 287 towards with the Ministry of Health in September. of CHF 5 627 to purchase antiretroviralwhich SGS contributed approximately Around 50 employees from SGS and drugs. In addition, we supportCHF 5 387. neighbouring companies participated. employees, and their families throughIn October 2011, the SGS management a partnership with BRIC (Integratedteam paid their first visit to the project SGS India responds to national Research Center Bio Clinic in Abidjan)site in Sreepur Upazila to meet a call for blood donations providing medical monitoring, biologicalnumber of participants, learn about More than 9 million units of blood are assessment and support alongside thetheir businesses and disburse required in India every year but there is a distribution of drugs. Both companiescheques to groups. forty per cent shortfall in blood donated. have established committees to fight This creates a dilemma for people with HIV and AIDS through officer training, life-threatening conditions such as peer educators and internal awareness children suffering from thalassemia, raising campaigns. Case study ROJGAR Rubia lives in Sreepur, Bangladesh. Her husband passed away when her second child was three months old. She started working as a domestic help before being introduced to the ROJGAR team. With their support, Rubia was able to learn tailoring skills. With a loan equivalent to CHF 240 she managed to start her own tailoring enterprise. With business picking up, she now plans to establish a shop selling hand-made garments. This opportunity has enabled Rubia to secure a livelihood for herself and her young family and provides her with the potential to apply for more loans in order to grow her business in the future. 69
  • 65. Ensuring SGS Indonesia promotes sustainable farming through beautiful New Zealand environment. It’s a great fit with the principles at the environ- train the trainer programme heart of our corporate sustainability mental To help promote organic and sustainable programme – people, environment sustain- farming techniques, SGS hosted a and community.” ability training programme for farmers from the Magelang and Baturaden areas of SGS Group sponsors ToptoTopSGS Group and SGS Vietnam Indonesia. This comprised 20% theory Global Climate Expeditionpartner with UNEP to promote and 80% field practice and covered topics SGS Group has been a main sponsorsustainable lifestyles such as the ecosystem, basic organic of TOPtoTOP since 2008. This globalAs a joint sponsor of The Centre for farming management, solid compost, expedition seeks to raise awarenessDevelopment of Community Initiative liquid fertiliser, nutrition testing and of climate change by summiting theand Environment, a number of capacity organic pest control. Weekly sessions highest peak on each continent andbuilding workshops took place in took place over a five month period and travelling between them using onlyVietnam during 2011. These included involved more than 60 farmers. human power and the forces of nature.two workshops on planning and During 2011 TOPtoTOP travelledsustainability (in conjunction with the SGS New Zealand continues its through India, Myanmar, Thailand,Ministry of Planning and Investment) support of the Project Kiwi Trust Malaysia, Singapore, Indonesia, Australiawhich were attended by more than 60 SGS New Zealand has continued its (Cocos (Keeling) Islands), Mauritiusstudents from the National Economic support of the Kiwi Trust project, (including Rodríguez Island), La ReunionUniversity in Hanoi and Ho Chi Minh donating CHF 14 000 to help protect (France), Tanzania and South Africa.City (HCMC); two workshops on New Zealand’s indigenous, endangered Key activities included: the ‘TOPtoTOPsustainability leadership involving 60 bird. While SGS’ expertise is used to Climate Solution Contest’; participationyouth leaders and eight environmental sample and test Kuaotunu stream water, in the ‘Clean Energy Expo Asia’ inclubs in Da Nang and HCMC; and a employees and their families have taken Singapore; and a beach clean-up inworkshop in the Can Gio mangrove on core conservation tasks such as Malaysia and five surrounding islandsforest for 30 students. In addition, transporting kiwi chicks for return to in conjunction with the Navy. The250 students from Da Nang universities the wild, helping with beach clean-ups highlight of the year was the ‘Cleanparticipated in a workshop promoting and track building, and assisting with Up Kilimanjaro Expedition’ in Tanzania.vegetarianism; a further 2 000 students night-time kiwi-call surveys. Mount Kilimanjaro was the fifth TOPtook part in the Green Festival, reached, with two further mountains, SGS New Zealand MD, Peter Hart, says‘Green Future for Children Programme’, Denali (in Alaska) and Mount Vinson (in he is delighted but not surprised thatorganised by the Foreign Trade Antarctica), to be climbed by 2015. To his team has taken the project underUniversity; and a Recycle Festival was date the expedition has travelled more its wings: “Protecting kiwi where weorganised for four secondary schools in than 40 000 nautical miles, attracted live and work is something we feelHueThua Thien. over 56 000 people to its presentations, passionate about. We wanted to support and has collected a total of 27 tonnes of a uniquely New Zealand initiative that waste through its clean-up operations. our people could get involved with personally. Project Kiwi Trust allows us to do this and get out as a team into the 70
  • 66. SGS Hong Kong contributes totree-planting Providing employee contributions and dollar- for-dollar matching by SGS AustraliaIn January 2011, employees, families disaster Management. SGS Indonesia, Singaporeand friends from SGS Hong Kong relief and Thailand also made donationsand Xerox joined forces to climb the bringing the total to CHF 11 293 for thecountry’s highest mountain, Damao Queensland Flood Relief, region. The funds were used to directlyMountain. The aim was to prepare Australia assist SGS employees and families withthe ground for tree planting by Significant flooding occurred in many their rebuilding efforts.removing ground cover to facilitate areas of Queensland, during latethe healthy growth of saplings. December 2010 and early January 2011, Thailand Flood ReliefIn the same year, the director of SGS with three-quarters of the state declared In October, the worst flooding to hitSustainable Growth (North China) and a disaster zone. At least seventy Thailand in decades affected thousandsmanager of Qingdao Branch led nearly towns and over 200 000 people were of people, including SGS employees30 employees to plant trees in North affected. The floods killed 35 people in working in the southern and northernof Zhangjiakou, helping to restore the Queensland. SGS set up a flood relief areas of the country. In response, SGSSanbei shelter forest system. fund and donations from employees Thailand raised funds to support disaster totalling CHF 5 825 were matched by recovery. By the close of this Report SGS Australia to make a total of a total of CHF 4 508 was donated to CHF 11 650. This was used to assist provide relief to victims. SGS also families with funeral expenses and donated emergency survival kits to help people and businesses within the people directly affected by the floods. Toowoomba Region recover from the affects of the floods. SGS India provides relief to Sikkim Quake Victims New Zealand Earthquake Relief A major earthquake, measuring On February 22nd, Christchurch, 6.9 on the Richter scale, rocked Sikkim New Zealand was hit by a devastating and parts of Nepal and Tibet in the 6.3 magnitude earthquake causing Himalaya in September, 2011. The death significant damage to buildings and toll exceeded 100 people. The north homes, with roads, sewage systems, district of Sikkim was badly hit as it water lines, gas, and electricity cut was closest to the epicenter, followed off. In total, 181 people were killed in by other districts where there were the earthquake, making it the second- cases of loss of human life, damage to deadliest natural disaster recorded in property, loss of cattle and agricultural New Zealand with nationals from more land and flash floods. SGS provided than 20 countries among the victims. relief aid to tremor affected people The government declared a state of by providing warm clothing, blankets, national emergency and SGS New rice, sugar, and medicines through a Zealand initiated an Earthquake collaboration with the Government of Relief Fund contributing CHF 6 899 India, UNDP and Sikkim State Disaster to the appeal which included Management Authority. 71
  • 67. Most Influential Person Award In January 2011, ‘Zhejiang’s pride— the most influential people in 2010’ award was unveiled in Hangzhou. SGS employee, Yan Yina, won the Person of the Year title in recognition of her effortsRecognition to build the Ningbo Citizen Love Bridge. The initiative came about whenand Awards Yan Yina participated in the SGS volunteer teaching programme in theSGS Hong Kong receives Caring Gansu Province. Along with otherCompany Award volunteer teachers, she witnessed theOn 19 April 2011, SGS Hong Kong joined perils children faced as they crossedThe Caring Company NGO Partnership two mountains on their way to school.Day to celebrate achievements with An appeal was launched to raise moneyover 3 500 participants. We were proud to provide a safe route to be awarded the recognition of With the support of SGS leaders and5 Years Plus Caring Company by the colleagues and the citizens of Ningbo,Hong Kong Council of Social Service the appeal raised CHF 160 480 and an(HKCSS) since 2005. embankment was built. looking ahead• We will support Affiliates in • We will identify a global community • We will conduct a global survey to implementing the Group Community programme based on the framework re-evaluate our community project Guidelines and Policy. developed in 2011. impact and alignment with the Millennium Development Goals. Progress on 2010 Commitments During 2011 we will communicate our Group Community Policy Policy communicated and Guidelines and Guidelines across the Company available via Intranet We will review SGS Group community projects to explore Ongoing possible additional programmes and ensure that we are operating our community programmes in accordance with the new Community Policy At a corporate level, SGS will provide strategic support Collaborated with Paint a Smile to decorate and funding to the Paint a Smile Foundation which creates children’s wards at hospital in Tianjin, China inspiring stories and uplifting images on the walls of children’s hospitals SGS Group will identify and recruit a charity partner with Framework for evaluating global opportunities has which to collaborate on a new global community programme been developed. Further research and dialogue will be undertaken in 2012 to identify a suitable programme and partner Ongoing 2012 achieved in progress  not achieved 72
  • 68. Our performance Investment in Total investment in 590 Community community sponsorship 516 547 Donations to community 418 projects Sponsorship of community organisations and 356 Total number 306 programmes (‘000 CHF) voluntary groups 317 of projects (‘000 CHF) 155The community projects supported community decreased slightly toby our employees across our selected CHF 317 000, while the amount givenreporting countries almost doubled in by business to sponsorships increased2011, rising from 155 to over 300. With by 6% (on a constant currency basis) tothe increase in projects, the number of nearly CHF 550 000 in volunteering hours given 2010 Pro forma (constant currency basis)by our employees also rose by 7%across our trend countries, particularly 2014 Targetin the regions of North America and 2010 PerformanceAsia Pacific. Our overall investment in 2011 Performance 73
  • 69. assurance and09:00 closing remarks
  • 70. REPORT ASSURANCE Statement from the Chairman of the European Works Council the last year to embed sustainability into the business, particularly in theAll information presented in this context of employee safety, wellbeing In my role as Chairman of the SGSReport has been formally reviewed and performance. We are encouraged to European Works Council, my aim is toand approved by the Sustainability help employees integrate sustainability learn that the process has involved localSteering Committee. in their everyday work place, which I management teams in identifying and recognise to be a major task. Together selecting sustainability programmes thatStatement from external auditor with the Employee Representatives, our support the 2014 plan. Such evidenceDeloitte SA was appointed by the challenge is to encourage employees that sustainability is being taken seriouslySGS Group to perform agreed-upon to learn about sustainability within the within the network is a very importantprocedures with respect to the SGS context of their own jobs and be proactive message to share with employees. We in its application. As part of our ongoing are also encouraged to see a reduction inSustainability Report for the year ended dialogue with Corporate Sustainability, the Company’s environmental impact inDecember 31, 2011. This engagement the European Works Council was involved relation to its significant growth, indicatingwas undertaken in accordance with in the review of the SGS Sustainability that we are becoming more efficientthe International Standard on Related Report prior to its publication. This in our operations. We look forward toServices (ISRS 4400) as established followed from our annual consultation working closely with management andby IFAC and applicable to agreed- session with Daniel Rüfenacht, Viceupon procedures engagements. The the Corporate Sustainability team over the President Corporate Sustainability, atprocedures were performed solely to coming year to help drive sustainability SGS Euroforum meeting. Based on thisassist the SGS Group in supporting the through the business. dialogue and our daily insight, we believeassurance process conducted by SGS the latest Report accurately reflects the Guus WiesemanN Chairman, SGS European Works Councilsubcontracted assurors with respect significant effort that has been made into the SGS Sustainability Report forthe year ended December 31, 2011.This agreed-upon procedures reportwas issued only for the information ofthe SGS Group. In addition, a copy ofthe report was provided to the Global GRI G3.1 guidelinesReporting Initiative (GRI). In this Report SGS has fulfilled the requirements of GRI to level B+ as validated in the GRI Application Level Check. This year we have developed a separate content indexStatement from SGS which lists our GRI disclosures and indicators and this is available on our website.Managing Directors We have also cross-referenced each of the ten principles of the United Nations Global2011 was an important year for the Compact to relevant sections of this Report.Affiliates as we became formally engagedwith the Group sustainability programmethrough the workshops and the resultingproject charters which commit us todriving sustainability improvements inour countries. Having participated inthis process, we were pleased to beinvited to review the draft CorporateSustainability Report prior to publication.Given the scale and complexity of thebusiness, we appreciate it is challengingto provide a complete account of oursustainability approach globally. However,we believe this Report has gone furtherthan previous ones by offering a broadaccount of our professional services linkedto sustainability and a deeper insight intothe steps we are taking at corporate levelto manage our environmental and socialfootprint alongside our growth targets. Aswe embed our sustainability programmesin our countries, we are playing anincreasingly active role in bringing the2014 targets to fruition. We view theSGS’ annual Corporate SustainabilityReport as an essential communicationstool and we look forward to sharing thislatest Report with our colleagues andexternal stakeholders. 76
  • 71. ASSURANCE STATEMENTReport on the Internal Assurance of SGS Corporate Sustainability Report 2011NATURE AND SCOPE THE ASSURANCEThe scope of assurance included the text, performance data and a review of the management of this data.This Corporate Sustainability Report has been assured using SGS’ own protocols to ensure consistency with the service offered tocustomers and follows the basic protocol for content veracity. The assurance comprised a combination of documentation reviewand validation and face-to-face interviews with relevant employees at the Head Office in Geneva. Audit reviews of data samplesand management were also carried out in selected sites (France, Hong Kong, Taïwan, Brazil and Poland). Financial data drawndirectly from independently audited financial accounts has not been checked back to source as part of this assurance process.The assurance team was assembled based on their knowledge, experience and qualifications for this assignment, andcomprised auditors with the following qualifications: Lead Quality, Health and Safety, Environmental and SA8000 Auditor andCSAP Assurance Practitioner.The responsibility of the assurance team is to express an opinion on the text, data, graphs and statements within the scope ofverification, to evaluate the report against the Global Reporting Initiative Sustainability Reporting Guidelines GRI 3.1 (2011) and toinform improvements in the process for future reporting.ASSURANCE OPINIONOn the basis of the methodology described and the verification work performed, we are satisfied that the information and datacontained within the Corporate Sustainability Report 2011 is reliable and provides a fair and balanced representation of SGS Groupactivities in 2011 within the limitations of the stated reporting scope.In our opinion, the SGS Corporate Sustainability Report 2011 fulfills the content and quality criteria for GRI G3.1 Application Level B+.We believe that SGS has chosen an appropriate level of assurance for this stage of its reporting journey.COMMENTS ON MATERIALITYThe report is quite clear on the subject of critical factors for enabling organisational success. The report scores well on materiality inrespect to peer, global and social materiality but loses points on the inclusion of stakeholders in identification of issues material toSGS stakeholder groups specifically, and local to sites. Future reporting would benefit from a more detailed coverage of results ofstakeholder engagement, outcomes and how these have been used in the identification of material issues.GLOBAL REPORTING INITIATIVE REPORTING GUIDELINES (2011) CONCLUSIONS, FINDINGS AND RECOMMENDATIONSIn our opinion, the SGS Corporate Sustainability Report 2011 meets the content and quality requirements of the Global ReportingInitiative G3 Version 3.1 Application Level B+.Principles and management approach – In our opinion the content and quality of the report adheres to the ten GRI Principles.Opportunities were identified for consideration in future reporting cycles to ensure continual improvement, including:• reporting on both favourable and unfavourable aspects of performance and challenges to the company• the comments on the principle of Materiality also apply to the principle of Stakeholder Inclusiveness• increasing content on the management approach to human rights and product responsibility.RECOMMENDATIONSThrough our data review we have observed SGS’ efforts to improve its data collation and consolidation process. However SGSshould continue to improve consistency of implementation throughout its Affiliates.A report has been prepared for SGS management which includes a detailed set of recommendations to help identify areas forfuture improvement. Rita Godfrey SRA Lead Assuror Michel Mooser SRA Assuror February 2012 February 2012 77
  • 72. ClosingRemarks 78
  • 73. Dear Stakeholders, print management initiatives in Spain,We hope you found this Report an Australia and Peru.interesting read and learned something We would like to applaud colleagues At the same time, we must remainnew about our journey to becoming in SGS India for bringing together over focused on protecting our reputation asa sustainable business. Our aim has 3 500 employees in 30 locations to a responsible business by upholding thebeen to share with you our Group celebrate environment week, and the highest standards of professional integrityaspirations, our innovative solutions many hundreds of employees who and safeguarding the health and safety ofand our services linked to sustainability, participated in local community projects. ourselves and others at all well as the global programmes we In particular, we wish to recognise Having put in place the framework forare implementing to help support the the amazing efforts of employees in action, we are confident that we canCompany’s achievement of the 2014 Thailand, India, Japan, Australia and make considerable progress this comingplan. Much of the inspiration behind this New Zealand who provided vital hands- year. We hope our employees will feelyear’s Report has come from you – from on support and funding to the local inspired to play their part in drivingthe comments you provided in our online citizens affected by the most appalling local sustainability programmes andsurvey, the case studies you contributed natural disasters. developing sustainable solutions forand through your participation in our Looking to the future, operational our customers and ourselves. Successsustainability workshops and interviews. excellence is the driving force behind will be dependent on us harnessing theOf the many local initiatives involving our goal of achieving our growth targets passion, innovation, knowledge andemployees around the world in 2011, the by the end of 2014. In sustainability skills of our employees, customers,highlights for us included: establishing terms, this means doing more with less. business partners, suppliers and othera Minerals Skills Training Academy in In 2012 we are focusing our efforts on stakeholders. We invite you to engageWest Africa to create a talent pipeline; achieving greater energy efficiency in in our programmes and help guide ourintroducing server virtualisation in SGS offices and laboratories; reducing approach by sharing your thoughts, ideasdata centres in Singapore, the UK and our carbon footprint through greening our and feedback with us. We would like toSwitzerland; re-using computer parts in IT, car fleet and our capital expenditures; thank you for your ongoing support andTaiwan and Hong Kong; and reducing and increasing our involvement in local look forward to working with you in 2012energy and resources through sound community initiatives. to achieve remarkable change.2011 marked a significant step infortifying the involvement of SGSmanagement and employees in oursustainability programme Christopher Kirk Chief Executive Officer Daniel Rüfenacht Vice President Corporate Sustainability 79
  • 74. Key terms Dow Jones Sustainability Index (DJSI) Launched in 1999, the Dow Jones Sustainability Group Sustainability and Reporting Manual (GSM) Index tracks the financial performance of the leading A manual for use by SGS finance managers which sustainability-driven companies worldwide. They defines the Company’s sustainability indicators and provide asset managers with benchmarks to manage data reporting requirements. It includes definitions sustainability portfolios. for all input fields and KPI calculations as agreedAffiliate (SGS) between the Corporate Finance and CorporateAn SGS business or market which is part of the Electromagnetic Compatibility (EMC) Sustainability functions.SGS Group. Taking measures to prevent unwanted electromagnetic energy from equipment from Guarantee of Origin - see RenewableAquaculture interfering with radio and telecommunication, EnergyThe farming of aquatic organisms such as fish, and to ensure equipment itself is not susceptible Guarantee of Origin.crustaceans and molluscs under carefully to disruption from radio emissions whencontrolled conditions. Haute Qualité Environnementale (HQE) used as intended. certificationAquaculture Stewardship Employee A French certification scheme designed to promoteCouncil (ASC) An individual who is formally contracted by SGS and certify sustainable buildings.A body responsible for working with independent, under a full-time, part-time, permanent or temporarythird parties to certify that farms comply with Hazardous Waste contract of employment.responsible aquaculture standards. Waste that is regulated under strict specifications Energy Efficiency in Buildings (EEB) in order to prevent or limit the potential negativeBest Acquaculture Practices (BAP) Term used by the World Business Council effects on the environment and on human health dueThe Best Aquaculture Practices (BAP) standards for Sustainable Development to refer to the to inappropriate management.address environmental and social responsibility, consumption of energy in new and existinganimal welfare, food safety and traceability in a Human Rights buildings. The EEB project and accompanying EEBvoluntary certification programme for Manifesto, which has been signed by over 100 A set of principles defined in the Universalaquaculture facilities. member companies, collectively aim to transform Declaration of Human Rights (1948) and based on the international building sector to reduce energy the recognition of the inherent dignity and the equalBiodiversity and inalienable rights of all members of the humanThe variability among living organisms from all consumption by 2050. family as the foundation of freedom.sources, i.e. terrestrial, marine and other aquatic Equator Principlesecosystems, and the ecological complexes of which International Organisation for A voluntary set of standards for determining,they are a part. Standardisation (ISO) assessing and managing social and environmental risk in project financing. ISO is a non-governmental organisation and isBiogenic carbon the world’s largest developer and publisher ofCarbon dioxide which is produced by burning carbon Forest Stewardship Council (FSC) International Standards. It is a network of thesourced from natural renewable materials such as A council established in 1993 to provide national standards institutes of 161 countries, onefood waste or paper. Biogenic CO2 is usually treated internationally recognised standard-setting member per country, with a Central Secretariat inas having no impact on climate change, as it is part and labelling of products derived from Geneva, Switzerland.of the natural carbon cycle. responsible forestry. ISO 9001BREEAM FTE An international quality managementA voluntary environmental assessment method and Full-time equivalent employee. system standard.rating system for sustainable buildings establishedin the UK by the Building Research Establishment. Fugitive emissions ISO 14001 Greenhouse-gas emissions as by-products, waste or An international environmentalBS EN471: 2003 loss during the process of fuel production, storage, or management standard.The current European standard for high-visibility transport e.g. methane produced during oil and gasclothing worn for professional use. ISO 17020 drilling, or leakage of natural gas from pipelines. An international standard on the operation ofCarbon dating Global Reporting Initiative (GRI) bodies performing inspections.A type of radioactive dating which is applicable to A multi-stakeholder process and independentmatter which was once living and presumed to be ISO 17025 institution whose mission is to develop andin equilibrium with the atmosphere, taking in carbon disseminate globally applicable Sustainability An international standard on the competence ofdioxide from the air for photosynthesis. Reporting Guidelines. The GRI incorporates the testing and calibration laboratories.Carbon Disclosure Project (CDP) active participation of business, accountancy, ISO 26000The Carbon Disclosure Project is an independent investment, environmental, human rights, and An international standard for organisations on thenot-for-profit organisation which holds the largest research and labour organisations from around the management of social responsibility.database of corporate climate change information world and is an official collaborating centre of UNEP that works in cooperation with the UN ISO 50001in the world. Since its formation in 2000, CDP has Global Compact. An international energy management standard.become the gold standard for carbon disclosuremethodology and process, providing primary climate Global Positioning System (GPS) International Labourchange data to the global market place. A constellation of orbiting satellites which Organisation (ILO)Certified Emission Reduction (CER) provide navigation data to military and civilian International organisation located in Geneva, users worldwide. Switzerland, whose goal is to promote decent workA unit of emissions, equivalent to 1 metric tonne for all men and women. There are 178 memberof CO2., issued under the Clean Development Green Book countries of the ILO, represented by workers,Mechanism for emission reductions from An internal bi-annual report of sustainability data employers and governments.CDM initiatives. and analysis, including monetary valuation of KPIs. Key Performance Indicator (KPI)Clean Development Mechanism (CDM) Green Information Technology A quantitative, qualitative or relative measure whichA mechanism which allows a country with (Green IT) helps an organisation to define and evaluate itsan emission-reduction or emission-limitation Group-wide and local IT initiatives aimed at performance, typically used to track progress againstcommitment under the Kyoto Protocol to minimising our environmental footprint through organisational goals.implement an emission-reduction project in the responsible purchase, provisioning, use,developing countries. maintenance and disposal of computers, servers and Leadership in Energy and associated equipment across our operations. Environmental Design (LEED)Corporate Sustainability A third-party certification programme establishedManaging a long-term profitable business Greenhouse gases (GHGs) in the USA covering the design, operation andwhile taking into account all the positive and Gases which alter the thermal properties of the construction of high performance green buildings.negative environmental, social and economic atmosphere. The main greenhouse gases areeffects on society. considered to be water vapour, carbon dioxide, Life Cycle Analysis (LCA)Crystal methane, nitrous oxide, chlorofluorocarbons, A process of evaluating the effects that a product halons and ozone. has on the environment over the entire period of itsSGS environmental, health and safety data life thereby increasing resource use efficiency andmanagement software. decreasing liabilities. 80
  • 75. Lost Time Incidents Frequency Personal protective equipment (PPE) Total Recordable Incident Rate (TRIR)Rate (LTIFR) Equipment which is intended to be worn or held by The number of lost time, restricted duty, medicalThe number of lost time incidents occurring per a person at work to protect them against health or treatment incidents and fatalities per 200 000200 000 hours worked. safety risks. hours worked.OHSAS 18001 QHSE Trend countriesAn international standard for occupational health Quality, health, safety and environment. A selection of countries that are identified asand safety management system. representative of SGS Group performance. These Renewable Energy Certificates (RECs) cover more than two-thirds of employees and overLaboratory Tradeable certificates that are produced at the point three-quarters of revenue.An SGS-owned building with laboratory and storage of generation to accompany each megawatt-hourarea representing 50% or greater of total floor space. of energy produced from a renewable source. RECs United Nations Environment Program can be sold either alongside, or separately from the (UNEP)Lean electricity itself. Created in 1972 the UNEP promotes leadership andA philosophy, an approach, and a set of tools encourages partnership in caring for the environmentdesigned to optimise business processes, minimise Renewable Energy Guarantee of by inspiring, informing and enabling nations andwaste and achieve world-class responsiveness. Origin (REGO) peoples to improve their quality of life without A scheme under the Directive 2009/28/EC requiring compromising that of future generations.Management system EU Member States to certify eligible renewableThe company structure, responsibilities, practices, energy sources of electricity. REGOs are designed United Nations Global Compact (UNGC)procedures, processes and resources for to facilitate trade in renewable energy between A strategic policy initiative for businesses that areimplementing the management of a policy or group Member States. committed to aligning their operations and strategiesof policies. with ten universally accepted principles in the SGS Product Carbon FootprintManager areas of human rights, labour, environment and (PCF) MarkEmployee with people management responsibility, anti-corruption. A product mark awarded by SGS covering the GHGincome statement responsibility and/or reporting to (greenhouse gas) quantification processes at each World Bank Voluntary Disclosurean Operations Council member, Managing Director product life cycle stage. Information relating to the Program (VDP)or Business Manager. calculation is shown adjacent to the mark. The mark A voluntary initiative designed to combat the illicitMarine Stewardship Council (MSC) must be assessed annually for renewal. diversion of Bank funds. Under the scheme, firms,standardS NGOs, individual consultants and contractors SGS Sustainability SteeringStandards for sustainable fishing and seafood disclose to the Bank the results of internal Committeetraceability that ensure that MSC-labelled investigations into past fraudulent, corrupt, collusive, A sub-committee of the Operations Council chaired or coercive acts in projects or contracts financed orseafood comes from, and can be traced back to, by the Chief Executive Officer. Members includea sustainable fishery. supported by the Bank Group. Chief Operating Officers, Executive Vice PresidentsMateriality (Sustainability) and Senior Vice Presidents across SGS operating World Business Council forRelevant topics and indicators that may reasonably regions. The Committee meets twice a year and Sustainable Development (WBCSD)be considered important for reflecting an is responsible for the strategic development, A CEO-led coalition of 170 international companiesorganisation’s economic, environmental, and social performance review and setting of core with a shared commitment to sustainableimpacts, or influencing the decisions of stakeholders. programmes and improvement targets relating to development using the three pillars of economicIt is the threshold at which an issue or indicator corporate sustainability. growth, ecological balance and social progress.becomes sufficiently important that it should SHINEbe reported. SGS’ new onboarding programme developed toMillennium Development Goals (MDGs) help new and transferring employees to becomeEight goals to be achieved by 2015 that respond integrated into SGS and their the world’s main development challenges. SolarisDrawn from the actions and targets contained inthe Millennium Declaration that was adopted by A data management system, linked to SGS’ Group Terms and189 nations, and signed by 147 heads of state and Financial reporting, used to collate and report corporate sustainability data across SGS operations. Abbreviationsgovernments during the UN Millennium Summit inSeptember 2000. Stakeholder C-14 An isotope of carbon An individual, community or organisation that CEO Chief Executive OfficerNatural turnover affects or is affected by some aspect of anThe number of employees who leave the company of organisation’s products, operations, markets, CFO Chief Financial Officertheir own will. Excludes employees who leave due to industries or outcomes.dismissal, retirement or death in service. CHF Swiss francs Sub-contractorNear miss CO2 Carbon dioxide Full-time equivalent personnel working on behalfAn event, situation or physical environment which of the Company and representing SGS. COO Chief Operating Officerhad the potential to cause injury, damage or loss butwhich was avoided by circumstance. Sustainable Development CSR Corporate social responsibility Development that meets the needs of the present DJSI Dow Jones Sustainability IndexNon-hazardous waste without compromising the ability of futureWaste that is not classified as hazardous (see generations to meet their own needs. EMS Environmental management systemHazardous Waste) e.g. paper, glass, metals, plastics,rubber, leather textiles, wood and food scraps. SIX Swiss Exchange EVP Executive Vice President SIX Swiss Exchange is a leading securities exchange, GWh Gigawatt hourOffice owned by the SIX group and regulated by the SwissAn SGS-owned building with office area Financial Market Supervisory Authority (FINMA). KWh Kilowatt hourrepresenting 50% or greater of total floor space. The 2014 Plan M MillionProtected area Unveiled in 2010, the 2014 plan defines the strategic m 2 Square metreA geographically defined area that is designated, lines SGS is pursuing in order to strengthen itsregulated or managed to achieve specific dominant position in the testing, inspection and m 3 Cubic metreconservation objectives. certification industry, delivering strong organic MD Managing DirectorOperations Council growth and relying on acquisitions to expand certainThe Operations Council comprises individuals areas of its service offering and geographical MWh Megawatt hourresponsible for the operational management of SGS coverage. With the 2014 plan SGS aims to achieveGroup activities and is chaired by the Chief Executive revenues of CHF 8 billion and an operating incomeOfficer (CEO). Its remit includes the approval and of CHF 1.6 billionimplementation of business strategy and coverselements relating to sustainability. 81
  • 76. contact INFORMATION STOCK EXCHANGE LISTING SIX Swiss Exchange, SGSN CORPORATE COMMUNICATIONS & STOCK EXCHANGE TRADINGSGS SA CORPORATE OFFICE INVESTOR RELATIONS SGS SA SIX Swiss Exchange1 place des Alpes Jean-Luc de BumanP.O. Box 2152 1 place des Alpes COMMON STOCK SYMBOLSCH – 1211 Geneva 1 P.O. Box 2152 Bloomberg: Registered Share: SGSN.VXt +41 (0)22 739 91 11 CH – 1211 Geneva 1 Reuters: Registered Share: SGSN.VXf +41 (0)22 739 98 86 t +41 (0)22 739 93 31 Telekurs: Registered Share: SGSNe f +41 (0)22 739 98 61 ISIN: Registered Share: Swiss security number: 249745A special thank you to all employeesand stakeholders for their constructivecontribution to our third corporatesustainability reportcorporate sustainability PROJECT team photographyDaniel Rüfenacht Daniel Rüfenacht Group Charlescannon Sàrl1 place des Alpes Esther Bares SGS EmployeesP.O. Box 2152 Monica Da Costa 24 hour imagesCH – 1211 Geneva 1 Zosia Brown Page 10 - Torresol Energy,t +41 (0)22 739 94 01 Gemasolar thermosolar plant. CONtent design and copywritingf +41 (0)22 739 98 48 Fuentes de Andalucía, Spain Nicky Amos CSR Services Ltde Page 22 - SGS Headquarters. Chichester, UK Geneva, CONCEPT, design, photography, Page 36 - Port and city scape. REALISATION AND PRODUCTION Vancouver, Canada Group Charlescannon Sàrl Page 42 - Faces of people. Verbier, Switzerland Page 54 - Wind farm. Mojave Desert, USA PRINTED BY Page 64 - Construction of the Feria de Abril. DZS Grafik d.o.o Seville, Spain Ljubljana, Slovenia Page 74 - Downtown. Printed on 100% recycled BalancePure New York City, USA offset paper, February 2012. 82
  • 77. Furtherinformationand feedbackThis Report is available as aninteractive and downloadable pdf and issummarised in a fact sheet. These canbe accessed via our website.If you have a moment, please share yourcomments on this Report and our overallsustainability approach in a short survey.Alternatively you can contact a memberof our Corporate Sustainability team viacorporate.sustainability@sgs.comEmployees can access a dedicatedintranet site on sustainability formore information, review the latestperformance data and share knowledge,advice and best practice.
  • 78. © 2012 SGS SA. ALL RIGHTS RESERVED. www.sgs.coM