INDEPENDENT ASSURANCE STATEMENT TO THE DIRECTORS AND MANAGEMENT OF
NEDBANK GROUP LIMITED

 

Scope of Our Engagement

Nedbank Group Limited’s (Nedbank’s) 2009 Sustainability Report (‘the Report’) has been prepared by the Directors and management of Nedbank (‘Management’). Management is responsible for the collection and presentation of information within the Report and for maintaining adequate records and internal controls that are designed to support the sustainability reporting process.There are currently no prescribed requirements relating to the preparation, publication and verification of sustainability reports.

Our responsibility, in accordance with Management’s request, was to carry out a ‘reasonable’ assurance engagement over five key performance indicators and a ‘limited level’ assurance engagement over fourteen key performance indicators; the self-declared GRI G3 application level; and on the South African section of the Report and its adherence to the AccountAbility’s 1000 Principle Standards 2008 (AA1000PS) principles of materiality, responsiveness and inclusivity.

Our responsibility in performing our assurance activities is to the Management of Nedbank only and in accordance with the terms of reference for this engagement as agreed with them.We do not therefore accept or assume any responsibility for any other purpose or to any other person or organisation.Any reliance any such third party may place on the Report is entirely at its own risk.

Our assurance engagement was planned and performed in accordance with the International Federation of Accountants’ (IFAC’s) International Standard on Assurance Engagements (ISAE) 3000,Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.The Report has been evaluated using the following criteria: the principles of materiality, responsiveness and inclusivity as set out in AA1000PS; as well as against the application of the Global Reporting Initiative G3 Sustainability Reporting Guidelines (the Guidelines).

Work Performed

In order to form our conclusions we undertook the steps outlined below:

Interviewed a selection of Nedbank’s management responsible for the functional and divisional areas as well as sustainable development issues to understand the current status of sustainable development activities and progress made during the reporting period.

• Interviewed four key external stakeholders to Nedbank to understand their sustainable development concerns in relation to Nedbank and assessed how these issues are responded to in the Report.
• Conducted a high-level benchmarking exercise of the material issues and areas of performance covered in the sustainable development reports of Nedbank’s peers.
• Reviewed a selection of external media reports to determine the level of inclusion and discussion of material topics in the Report.
• Reviewed selected group level documents relating to aspects of Nedbank’s performance linked to sustainable development, to test the coverage of topics within the Report.
• Reviewed the Report to check whether material topics and performance issues, identified during the performance of our engagement, had been adequately disclosed.
• Tested the processes used to record, collect, consolidate and report the nineteen key performance indicators, listed below, by testing the indicators at the bank level and at selected operational sites, as well as random samples of data related to these key performance indicators.
  

  –	Reasonable assurance – Audited the following five key performance indicators
  	Payroll Giving Scheme contributions The Green Trust contributions Head office environmental data relating to: Paper use (Campus sites), Energy use (Campus sites) and Water use (Campus sites)
  –	Limited assurance – Reviewed the following eleven key performance indicators
  	Equator Principle statistics in terms of: Number of deals and Value of deals Carbon emissions data Total recycled material (Campus sites) Electricity use (Retail) Staff dismissals for dishonesty (%) Number of client complaints via the Client Complaints Tracker system Internal Ombudsman (Number of incidents) Nelson Mandela Children’s Fund (Rand value) Holsboer Benefit Fund (Rand value of medical costs) CSI spend (Rand value) AskOnce promise (Rand value of donations paid)

• Reviewed whether Nedbank’s reporting has applied the GRI G3 Guidelines to a level described on page 91.
• We have sought to answer the following questions, in order for us to evaluate the Report against the principles of materiality, responsiveness and inclusivity, as set out in AA1000PS, specifically as follows:
  

  –	Materiality:
  	Has Nedbank provided a balanced representation of material issues concerning its sustainability performance? Has Nedbank included sustainability performance information from all material entities in its defined boundary for its reporting of identified material issues? Are there any material aspects that are not addressed in the Report? – Responsiveness: Has Nedbank responded to material issues in a balanced and comprehensive manner in the Report?
  –	Inclusivity:
  	How has Nedbank identified and engaged with stakeholders? How has Nedbank managed its stakeholder participation process? How has Nedbank responded to stakeholder concerns?

Level of Assurance

Our evidence-gathering procedures have been designed to obtain a ‘limited level’ of assurance (as set out in ISAE 3000) on which to base our conclusions for the eleven specified key performance indicators; the self-declared GRI G3 application level; and the Report’s adherence to the AA1000 PS.The procedures conducted do not provide all the evidence that would be required in a reasonable assurance engagement and, accordingly, we do not express a ‘reasonable’ assurance opinion. Our procedures relating to the five key performance indicators for which we provided ‘reasonable’ assurance indicated within the work performed discussion have, however, provided sufficient evidence for us to provide a ‘reasonable level’ of assurance.While we considered the effectiveness of Management’s internal controls when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

 

Limitations of Our Scope

• The review of the key performance indicators was performed at head office (Nedbank South Africa) except the environmental data where the following sites were visited:
  

  –	Electricity: 105 West, Nedbank Park, 135 Rivonia, Braampark, 100 Main, Maponya Mall Nedbank Branch, East Rand Mall Nedbank Branch, Sandton City Nedbank Branch
  –	Water: 105 West, Nedbank Park, 135 Rivonia, Braampark, 100 Main
  –	Paper use : Braampark, 115 West, 135 Rivonia, Nedbank Park, 100 Main, Kingsmead, 105 West
  –	Paper recycling: 105 West, 135 Rivonia, Nedbank Park, Kingsmead, Braampark

• We have not reviewed and consequently do not provide any assurance on historical data, except if assured in our prior-year assurance engagement.
• When considering responsiveness under AA1000PS we did not attend any stakeholder engagement activities.
• We provide no assurance over the web content relating to sustainability information.

Our Conclusions

Subject to our limitations of scope noted above and on the basis of our procedures for this assurance engagement, we provide the following conclusions:

 

Materiality

Indicators:
Based on the work performed:

• The indicators – Environmental data (electricity, paper and water use), Payroll Giving Scheme and Green Trust – reported by Management are fairly stated in all material aspects, based on the collation of information reported at the various locations and on internal reporting mechanisms; and
• Nothing has come to our attention that causes us to believe that there are any errors that would materially affect the following indicators – Equator Principle statistics, Carbon emissions data, Total recycled material (Campus sites), Electricity use (Retail – South Africa), Staff dismissals for dishonesty (%), Number of client complaints via the Client Complaints Tracker system, Internal Ombudsman (Number of incidents), Nelson Mandela Children’s Fund (Rand value), Holsboer Benefit Fund (Rand value of medical costs), CSI Spend (Rand Value), and AskOnce promise (Rand value of donations paid – reported by Nedbank Management. Nothing has come to our attention that causes us to believe that data pertaining to these key indicators has not been properly collated from information reported at the various locations and in line with the internal reporting mechanisms.

Report:

Based on our work performed, nothing has come to our attention that causes us to believe that:

• Any material aspects concerning Nedbank’s sustainability performance have been excluded from the Report.
• Any material issues have been excluded from, or misstatements made in relation to information on which Nedbank has made judgements in respect of the content of the Report.
• The information or explanations on statements or assertions on Nedbank’s sustainability activities presented in the Report that we have reviewed have been misstated.

Responsiveness

Based on our work performed, nothing has come to our attention that causes us to believe that any issues of stakeholder interest were not included in the Report’s scope and content.

 

Inclusivity

Based on our work performed, nothing has come to our attention that causes us to believe that any material issues were excluded or misstated in relation to the content of the Report.

 

GRI

Based on our work performed, including consideration of the Report, and elements of the annual report, nothing has come to our attention that causes us to believe that Management’s assertion that their sustainability reporting meets the requirements of the A+ application level of the Guidelines is not fairly stated.

 

Selected Observations

We noted that:

• The report clearly articulates areas where Nedbank does not comply with King III and provides an explanation of how this will be implemented in the ensuing year.This demonstrates Nedbank’s commitment in addressing these issues when King III became effective on 01 March 2010.
• Many sections of the report do not demonstrate clearly the impact and the value to Nedbank of the specific initiatives or activity.
• As reported in the prior year, goals and targets for key performance indicators exist in certain areas. This should be revised to include the development and disclosure of specific goals and targets to enhance the performance measurement process.
• The report could be improved by providing forward-looking information pertaining to:
  

  –	Targets
  –	Company’s plans in the future to reach the targets – investment required and any risks or limiting factors that may affect the achievement of the targets
  –	Any trade-offs involved in reaching the targets

Our Independence and Assurance Team

The firm and all professional personnel involved in this engagement are independent of Nedbank and our team has not performed any work for Nedbank that may conflict with our ability to express independent assurance over this Report. Our team is drawn from our Climate Change and Sustainability Services Department and has the required competencies and experience for this engagement.

Ernst & Young Inc          5 March 2010          Sandton, Johannesburg

 

 

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