Assurance statement

BAA Limited (BAA) appointed Environmental Resources Management Limited (ERM) to provide independent assurance on BAA London Stansted’s progress against selected airport level environmental targets presented in the BAA London Stansted 2006/07 Corporate Responsibility (CR) Report (the Report).

Scope of our work

The environmental targets selected for our assurance engagement were:

• Air quality: To deliver Section 106 commitments for air quality monitoring and modelling;
• Biodiversity: Identify 0.5 hectares of land that can be enhanced for improved ecological value in line with Stansted’s biodiversity management plan;
• Climate change: CO2 derived from energy use to be less than 45,649 tonnes of CO2;
• Noise: Introduce a new noise and track keeping system; at least 98% of aircraft departures ‘on track’ on the flight paths where they cannot leave below 4,000ft; a minimum of 99 % of aircraft departures ‘on track’ on the flight paths where they cannot leave below 3,000ft during the day; and at least 95 % of aircraft departures ‘on track’ on each individual flight path;
• Surface transport: To complete the construction of the PTI (bus and coach station) by 31 May 2007 and to introduce a real-time information system to the bus and coach station by the time the PTI is open;
• Waste: To recycle at least 26% of airport waste between April 2006 and March 2007; and
• Water quality: To initiate improvements in water quality monitoring, with installation of new monitoring equipment and to initiate additional water sampling, including a new biological monitoring programme.

We did not assess the appropriateness of the selected targets or the airport’s wider management and reporting of the selected environmental issues. If the engagement had required us to do so, our conclusions may have been different.

Reporting Criteria and Assurance Standards

BAA applies its own environmental target assessment criteria, set out in the Summary of target achievements.

We performed our work in accordance with ERM’s assurance methodology which is based on the international assurance standards; ISAE 3000, AA1000 AS and ISO19011.

Respective responsibilities and ERM’s independence

BAA and Stansted Airport’s management is responsible for preparing the CR report and is responsible for the collection and presentation of information in it. ERM’s responsibility is to express our assurance conclusions on the selected scope of work agreed with BAA and Stansted Airport.

During 2006/7 we have worked with BAA on other consulting engagements. However, we operate strict conflict checks to ensure independence of the company and individuals involved in our assurance activities is not compromised.

Our assurance activities

A multi-disciplinary team of environmental, noise and air quality, corporate responsibility and assurance specialists performed the engagement.

We conducted the following assurance activities:

• Reviewed self-assessment reports of progress against each target provided by each target owner;
• Visited the airport to interview the relevant environmental target owners and review documentary evidence to support their self-assessed progress against each target and challenged the self-assessment on the basis of our findings;
• Reported our assurance findings to management as they arose to provide them with the opportunity to correct them prior to finalisation of our work; and
• Reviewed the presentation of information relevant to the scope of our work in the CR Report to ensure consistency with our findings.

Our conclusions

Based on the work undertaken, and in consideration of the limitations of our assurance engagement presented above, we conclude that, in all material respects, progress against the selected 2006/07 environmental targets set out on in the Summary of target achievements are appropriately reported.

Our key observations and recommendations

2006/07 has been a significant year for BAA including the change of ownership to the ADI Consortium led by Ferrovial, the introduction of new airport security rules and the Competition Commission inquiry. This context has been a challenging one and has affected progress against some of the targets within the scope of our work, as described in this report. However, we have observed through our assurance work that BAA has remained committed and focused on managing its CR impacts.

Based on our assurance activities set out above, and without affecting our conclusions, we provide the following observations and recommendations for improvements;

Highlights observed in target achievement:

• HSE governance: Health, Safety and Environment (HSE) management now reports directly to the managing director of the airport, demonstrating the clear priority of HSE issues;
• Waste: A new waste contractor has been appointed, with contractual obligations to improve recycling rates to deliver the overall BAA 2010 target to recycle 40% of waste collected; and
• Energy: Improved maintenance of the heating system at the airport and upgrading the electrical power supply have enabled the target to be exceeded.

Areas for Stansted Airport to consider for future improvements:

• Target achievement: Ensure that management continues to work towards delivering the 2006/07 targets where no or some progress was made;
• Climate change: Expand the scope of measurement and management from fixed energy sources to Stansted’s full direct carbon footprint; and
• Target setting: Ensure future targets are performance rather than process based, and that they reflect the overall objectives and stakeholder concerns for each issue.

Environmental Resources Management Limited
London, UK
6 July 2007

ERM is an independent global provider of environmental, social and corporate responsibility consulting and assurance services. Over the past four years we have worked with over half of the world’s 500 largest companies, in addition to numerous governments, international organisations and NGOs.

BAA London Stansted’s response to ERM’s recommendations

I would like to thank ERM for their assessment of our corporate responsibility and environmental management. The recommendations made are consistent with the aims of BAA and we intend to respond positively to them.

We will continue to work towards the 2006/07 targets where some or no progress was made. For a full discussion of our plans, please see the individual sections of this report. In many cases target areas have been rolled over into this year’s set of targets, for example waste recycling. In other cases, we will remain committed to fulfilling the outstanding target within the next few months and reporting this back in our next report.

Our assessment of carbon emissions suggests that energy use is the most significant source of carbon emissions for which we are directly responsible and hence is the area we directly target. This year our aim is to reduce direct energy usage as well as develop our carbon management strategy which will review options for measuring and targeting our other direct and indirect carbon emissions.

We agree that future targets should be performance based where appropriate. New measures may have to be developed in some cases, but we will ensure we remain consistent with external good practice whilst incorporating local stakeholder interests.

Andy Jefferson
BAA London Stansted Environment Manager