Home - GRI 3.13

Assurance Statement

BSD Consulting performed an independent assurance process for KPMG Brazil Sustainability Report 2012, which was developed according to the Global Reporting Initiative (GRI) G3 guidelines. The second year of assurance process continues to provide KPMG's stakeholders with an independent opinion about: the quality of the report, stakeholder's engagement process, the adherence to the three principles of AA1000 Assurance Standard (2008) and the management processes for sustainability aspects.

Independence

We work independently and ensure that none of the BSD staff members maintains business ties with KPMG. BSD Consulting is licensed by AccountAbility as an assurance provider (AA1000 Licensed Assurance Provider), registered under No. 000-33.

Our Qualification

BSD is a consulting firm specialized in sustainability. The verification process was conducted by a qualified team of professionals with long-standing experience in external assurance.

Responsibilities: KPMG Brazil and BSD Consulting

KPMG has prepared the Sustainability Report and is responsible for all its content. Our work did not include the verification of historical financial data. This assurance statement includes the confirmation of the self-declared GRI-G3 Application Level.

Scope and limits

The scope of our works covers all information included in KPMG 2012 Sustainability Report, full version, referring to the period from October 1, 2011 through September 30, 2012 (presented as 2012), and the total Emissions (CO2e tons/year) and DVA (value added statement) data covers the period from January 1, 2012 through December 31, 2012.

The assurance process was conducted according to the AA1000AS (2008) (AA1000 Assurance Standard 2008), type 1, moderate level of assurance. The Assurance Statement aims to inform stakeholders about BSD´s conclusions about the assessment that covers the adherence to three principles of AA1000AS: completeness, materiality and responsiveness. The verification of financial data was not object of BSD Consulting scope.

Methodology

The approach and procedures developed during AA1000AS verification process include:

• Sustainability Report 2012 content review;
• Understanding the process of generating information for the Sustainability Report;
• Research of public information about the company and industry (media, websites and legal bases);
• Interviews with managers from key areas regarding the relevance of information for reporting and sustainability management;
• Interviews with the company's partners;
• When relevant, confronting the sustainability performance information with the company's management;
• Assessment of evidences for the selected indicators and external stakeholders consultations;
• Assessment of the evidences of external stakeholders consultations;
• Based on sample testing, confirmation of the Sustainability Report information with supporting documentation, management reports, internal controls and official correspondences.

Main Conclusions on Adherence to AA1000AS 2008 Principles

1. Inclusion – addresses the stakeholders' participation in the process of developing and implementing a transparent and strategic sustainability management process.

• KPMG have used 2011 results of the stakeholders' engagement process. No goals were defined for the next engagement process cycle. It is recommended to review the stakeholders' map and widen the coverage of the engagement process, considering the inclusion of stakeholders that represent overall KPMG activities throughout Brazil.
• Corporative Citizenship area has maintained its activities within the company´s staff. The team responsible for information collection process was invited to assess the 2011 report, as well as to identify opportunities to improve the actual processes and also to incorporate new performance indicators.
  
• An internal campaign was made to help disseminate the sustainability e-learning program and encourage employees to attend to it. This theme is also presented to trainees in their integration process. The Executive Committee maintained its evolvement in the sustainability report elaboration and review process. It is important to expand internal knowledge of sustainability at all hierarchical levels, including both technical and administrative staffs, in order to broaden integration of the sustainability actions into daily activities.

2. Materiality (or Relevance) – subjects required for the stakeholders to make decisions on the organization's economic, social and environmental performance

• It is worth mentioning that the materiality process should be periodically reviewed, that is the reason why it is important to assess sustainability issues for the next cycle, to update results and identify material issues within the current company context, including other KPMG offices in the country and new stakeholders. Material issues review can also consider different external information, such as researches, sectorial analyses among others.
• Material issues for 2012 report are the same as last year's, and are aligned with KPMG´s strategy. Issues as "To conduct the businesses on ethical basis", "Accountable and transparent governance systems" and "To conduct top quality services with total independence" have specific and consolidated processes to ensure compliance with the rules, including policies, codes and specific trainings, aligned with KPMG International guidelines and Brazilian regulating agencies. SO3 GRI indicator "Trainings on Ethics and Independence and Anti-corruption" was verified and internal controls are considered standardized, periodically monitored and reported to senior management
• Fair treatment of employees: the company focuses on development and training of personnel, which are strong aspects in company's human resources management, have been maintained in this cycle. LA10 GRI indicator (hours of training) was verified in the assurance process and it was concluded that internal controls are considered standardized. The company has governance mechanisms for the staff, such as the Employees Commission. There were also improvements in internal tools for performance evaluation of employees. The management, monitoring programs and aspects related to health and safety at work are highlighted as an opportunity for improvement.
• Supply chain impacts: besides the inclusion of the human rights and labor practices clauses into new 2012 contracts, no other actions were taken concerning supplier´s management. It is highlighted as an improvement opportunity, the mapping of critical suppliers, concerning social and environmental risks, and also dissemination of ethical conduct and good social and environmental practices within the supply chain.
  
• Positive community contribution: investments in social, environmental and cultural projects in KPMG Brazil has been growing over the last couple of years, through company's own actions, pro bono activities and projects supported by government incentives and subsidies coordinated by the Corporative Citizenship department. It is worth mentioning that this is a strategic issue for KPMG International and in Brazil, thus attention should be given to the continuity of the projects, as well as monitoring the benefits generated by them.
  

3. Responsiveness – addresses the actions taken by the organization as a result of specific stakeholders' demands

• 2011 report was sent for stakeholder consultation in the engagement process and it was disclosed to the staff and KPMG´s leadership. Partners and Executive Committee ascribe fairly importance to sustainability reporting and assurance process, which was praised and recognized by stakeholders.
• There is an internal compilation process of GRI indicators, conducted by KPMG´s technical area of Climate Change and Sustainable Services. There was a reformulation and standardization of data collection forms for the areas involved, based on results of last year's assurance process, which reinforced the commitment of those involved.
  
• According to the verification process for the generation of sustainability performance indicators, internal controls related to local suppliers (EC6 GRI indicator) should be improved. There is no proper alignmentbetween areas and offices, thus it was not possible to track the origin of the information in the data consolidation process. Some information continued to be presented in different formats and without a single standard, as occurred in the previous reporting cycle.
  
• between areas and offices, thus it was not possible to track the origin of the information in the data consolidation process. Some information continued to be presented in different formats and without a single standard, as occurred in the previous reporting cycle.
• To improve sustainability management, it is recommended to define a local governance, led by the Corporate Citizenship area, with implementation of specific actions and focus on goals and commitments within the context and scope of activities in the country.

Level of GRI-G3 Application

Following GRI-G3 guidelines, BSD declares that KPMG 2012 Sustainability Report is classified as Application Level B+. The report comprises items related to the company's profile and offers a description of the management processes as well as sustainability approaches. The report provides information on all the performance indicator categories: economic, environment, human rights, labor practices, society and product. However, the report on the Strategy and Analysis (1.1 and 1.2) profile items can be improved.

Final Considerations

We have highlighted KPMG's efforts to improve the sustainability report by incorporating the assurance process. In our view, KPMG has several procedures and practices related to material topics (ethics, independence, quality, transparence and internal staff), and is seeking to consolidate sustainability management by implementing actions aligned with other material issues, such as supply chain impacts, environmental aspects and health and safety at work. It is important to integrate sustainability practices into administrative and technical areas, also seeking to expand the engagement of external stakeholders.


São Paulo, March 11th, 2013.
BSD Consulting – Brasil