This year, the IPESD formulated its recommendations on the basis of a process of analysis consisting of the following: review by all members of the panel of Abengoa's CSRR12; an in-person meeting of the members of the panel with those in charge of the company's most representative CSR-related areas, which took place in September 2013 in Seville; and the evaluation of ten questions formulated by the panel for response by company management, the answers to which were verified with a reasonable level of assurance by KPMG.

 

Concluding Report

The IPESD (« the Panel ») was appointed again in June 2013, with the same membership as in the previous year.

The Panel conducted an analytical review of Abengoa's 2012 Corporate Social Responsibility Report in line with the following objectives:

• To provide an external and independent viewpoint on Abengoa's CSR reporting from the perspective of the Panel member's individual expertise.
• To provide Abengoa with feedback and challenge on its performance regarding CSR issues as reflected in the CSR report mainly via the submission of questions to the management of Abengoa.
• To advise on improvements in the clarity, consistency and structure of the Abengoa CSR report, also through an internal letter of recommendations to management.
• To evaluate Abengoa's process of determining which issues are most significant for inclusion in the CSR report.
• To provide Abengoa with insight on the latest CSR developments and practices around the world.
• To advise Abengoa on how to achieve the maximum value from the process of reporting and from the Panel's review.

Specifically, this involved the Panel in conducting the following steps:

• A reading of the 2012 report;
• The formulation of ten questions for response by management, following the same process and scope as in the previous year;
• A review of the company's responses to these questions.

As in 2012, the Panel had the opportunity to visit Abengoa's head office to discuss the company's sustainability strategy, activities and its CSR reporting.

The ten questions directed by the Panel to Abengoa management had been prepared this year in time for face-to-face discussion with Abengoa in Seville.

The Panel's visit to Seville was organized so as to allow interactive sessions with key company contributors to the Report. This was of particular value in explaining some of the data and figures included in the Report and in providing preliminary answers to the Panel's questions.

Our concluding comments are therefore augmented both by explanations and written documentation received during our visit to Seville. The Panel does not review the accuracy of the data included in the report; assurance of this data is provided by the company's external auditors.

 

General observations on the 2012 report

The Panel commends Abengoa's continuing commitment to sustainability and to transparent reporting. The report contains a large volume of valuable information, amply demonstrating this commitment to transparency as well as compliance with leading corporate sustainability and reporting standards.

The company again demonstrated to us that it is open to discussions both on the substance of CSR and also on ways of improving the reporting. The Panel therefore continues to take a strong view that further progress can be achieved by reducing general descriptions of external standards and regulations, assuming that readers will either know these or can refer to them outside of the report.

Rather than concentrating on how internal processes are designed, the report would benefit from more focus on the actual performance of the company's systems and procedures, including reports of outcomes against quantified targets, what challenges the company is facing, and using examples and case studies to illustrate these. The same comments apply to some of the answers to this year's questions.

Several of the Panel's previous suggestions have been reflected in the 2012 report. This relates both to further improvements in the section on the GHG inventory and in the focus on supplier compliance with Abengoa standards. This in turn provides the Panel with the opportunity to enquire with further questions on the new information provided. We have also repeated some more specific questions where previous years' questions were not fully taken up by the company.

We believe that progress was made in 2012 to reduce the length of the report, but it is still a long read and tries to contain comprehensive information on the company's sustainability efforts and processes. It is therefore not easy to identify the most material issues that Abengoa wishes to communicate. We continue to encourage efforts to use the materiality analysis to focus on a reduced number of key issues in the report and leave more comprehensive descriptions to an interactive website designed around the needs of the different stakeholders. We believe that this will serve to enhance the quality of the report as an instrument of good and effective communications.

In determining these key issues there is room for more active selection of and outreach to external stakeholders and using their input alongside the company's own sustainability priorities to respond in the report to these more company-specific sustainability issues.

An explanation of how external stakeholders are selected for interview based on their materiality from Abengoa's perspective would be helpful. Current procedures still concentrate principally on a review of general external information which can only provide non-company-specific insights. Our questions on the 2012 CSRR continue to press for this emphasis given the pressure of complying with GRI's G4 set of criteria and, further ahead, the challenge of integrated reporting.

 

Specific comments on Abengoa's responses to the Panel's questions

GHG emissions - The Panel recognizes the greater effort in the report to provide information and trends on GHG emissions. As revenues are used as the common measure at group level, this information remains difficult to interpret and we welcome the additional information provided in
answer to this year's question 4 against three different measures to assess relative GHG reductions. We have recommended further analysis by areas of activity where performance can differ strongly.

Information on sustainability efforts in major locations – given the large volume of Abengoa's business in Latin America, it would be valuable for the reader to understand in more detail Abengoa's CSR efforts and special challenges in this continent and in any other countries, such as the USA, with significant investment and activities.

Jermyn Brooks

President of the Panel, December, 2013