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SUSTAINABILITY REPORT 2005

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Vision and
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Environmental
Performance
Indicators

Social
Performance
Indicators

Independent
Verification

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Report 2005
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Please see our Independent Verification

Verification of sustainability
reports by KÖVET

KÖVET’s verifying methodology is different from consultants validating: Our association assumes an obligation to verify the report and create the sustainability ranking of the company with the involvement of the stakeholders as a professional, independent, non-profit organization. This verification is more complex and gives an overall picture of the company’s performance. We take into account GRI-guidelines and give operational and strategic recommendations in accordance to be more sustainable.

Corporate sustainability
evaluation system of KÖVET

The „Sustainability Ranking of Organisations” is a new initiative by KÖVET-INEM Hungary. Based on site visits, interviews, documents and the opinions of stakeholders, it evaluates how the company is related to sustainability on an easy-to-understand scale. The method has two main innovations. First, it works as a rating, i.e. it gives an evaluation and not a vast array of indicators. As a final result it classifies the company on a five-grade scale (1. sustaining; 2. public-spirited; 3. compliant; 4. self-interested; 5. destructive) from the perspective of the effects on local economy, environmental responsibility and social responsibility. Second, the rating opens questions that require value judgment.

This can be always argued, but by sticking to only „objective” information, we might lose the most critical sustainability issues. Such issues are the effects of the product on sustainability, the ratio of local control vs. the size of the company, or the effect on just distribution.

When evolving the Sustainability Ranking of Organisations, we try to determine the steps of becoming a sustainable company. Our main aim during the development of the system was, that the ranking

• should involve, but go beyond the implementation of ISO 14001 or eco-efficiency;
• should take into account the forgotten sustainability aspects;
• should deal with the question of environment in relation with economic sustainability and social responsibility;
• should be credible, but at the same time simple, easy to be understood for non-experts as well;
• should make general judgment and mass use possible.

The organisation is evaluated from 15 aspects on a 5-grade scale (see the table below). It can be seen, that in all three dimensions, only four are fix, the fifth is subjective, based on the impressions and the reliability of the information.

Ranking an organisation without visiting it or collecting data is possible, but a responsible approach requires more caution. Information needed for ranking is gained above all from interviews with the managers and employees of the company, site visits and data collection as well as random control. This all is then compared with the best practices within the industrial sector, and finally, ranking is carried out by involving stakeholders or experts knowing the company.

Neutrality is an important question. Since the ranking has been applied as part of the verification procedure of environmental and sustainability reports, the company assigned KÖVET to rank it. Based on our value commitment, the clear categories, and the involvement of external stakeholders, we believe that the result of the ranking does not depend on our relation to the company or how much we charge, but rather reflects reality.