Independent Assurance Statement

Scope and objectives
EDF Energy commissioned csrnetwork to undertake an independent assurance engagement over the information and data within the online version of the EDF Energy 2006 Corporate Responsibility Performance Report (‘the Report’). The objectives of the assurance process were to check claims and the systems for collection of data, and to review the arrangements for the management and reporting of sustainability issues. The assurance process was conducted in accordance with the AA1000 Assurance Standard, and we have commented on the report against the principles of materiality, completeness and responsiveness. Any financial information contained within the Report is excluded from the scope of this assurance process, as are any information or claims relating to the separate ‘Our Climate Commitments’ website.

Responsibilities of the directors of EDF Energy and the assurance providers
The directors of EDF Energy have sole responsibility for the preparation of the Report. In performing our assurance activities, our responsibility is to the management of EDF Energy, however our statement represents our independent opinion and is intended to inform all EDF Energy’s stakeholders including the management of EDF Energy. We were not involved in the preparation of any part of the Report. We have no other contract with EDF Energy. This is the first year that we have acted as independent assurance providers for EDF Energy, although we previously acted as assurers for the former London Electricity. We adopt a balanced approach towards all EDF Energy stakeholders and a Statement of Impartiality relating to our contract with EDF Energy will be made available on request. The opinion expressed in this assurance statement should not be relied upon as the basis for any financial or investment decisions. The independent assurance team for this contract with EDF Energy comprised Jon Woodhead, Andy Riley and Louise Hawson. Further information, including a statement of competencies relating to the team can be found at: www.csrnetwork.com

Basis of our opinion
Our work was designed to gather evidence on which to base our conclusions. We undertook the following activities:

• We conducted interviews with a selection of directors and senior managers responsible for areas of management and stakeholder relationships covered by the Report. The objective of these discussions was to understand EDF Energy’s governance arrangements and management priorities.
• We discussed EDF Energy’s approach to stakeholder engagement with relevant managers, and we interviewed the Chairman of the independent Stakeholder Panel, Will Hutton.
• We conducted a top level review of issues raised by external parties that could be relevant to EDF Energy’s policies to provide a check on the appropriateness of statements made in the report.
• Subject to the exclusions set out below under ‘Observations’, we reviewed data collated at the corporate level, and claims made in the Report. We undertook verification of specific data and claims through meetings with managers responsible for gathering data, reviewed their processes for gathering and ensuring the accuracy of data, and requested supporting evidence.
• The scope of our work included a visit to an operational site at Cottam, a coal-fired power station. Selected performance data at site and Divisional level were reviewed as part of our review of consolidated corporate data.
• We undertook an assessment of the company’s reporting and management processes against the principles of materiality, completeness and responsiveness as described in the AA1000 Assurance Standard.

Observations:

Materiality – has EDF Energy provided information on material issues to enable stakeholders to make informed judgments?
In our opinion the scope of issues included in the Report covers the most material issues, and sufficient information and detail has been provided to enable informed judgements to be made. However, the following exceptions should be viewed as recommendations for improved reporting in future years.

• Clearly, energy prices were of high concern to many stakeholders in 2006. Whilst the report includes information on the company’s ongoing support to vulnerable customer groups, the ability of stakeholders to make judgements in this area would be improved by inclusion of further information on the assistance offered to specific customer groups during the year to minimise the effect of price rises.
• A more detailed comparison of headline energy prices during the reporting period against other leading suppliers would also enable stakeholders to make better informed judgments on the company’s performance relative to the industry as a whole.
• Reporting on the carbon intensity of electricity supplied would be improved through further explanation of how these data compare with other leading suppliers, the reasons for the differences identified, and how this relates to the long term vision set out in ‘Our Climate Commitments’.
• As the financial risks and opportunities associated with climate change are increasing in importance, more detailed reporting could be included on the financial impacts of emissions trading, the costs of investments (made and provisioned) in renewables and lower carbon technologies.

Completeness – does EDF Energy have systems in place to understand changes to stakeholder expectations and to provide complete and accurate information against the issues identified as material for inclusion in the Report?
During 2006 the company took steps to strengthen its governance and stakeholder engagement arrangements. This included formalizing the reporting lines between the CR&E Committee and the Board, strategic activities under the Sustainable Future project, and the creation of the Stakeholder Advisory Panel to provide external challenge and advice to the EDF Energy Executive Committee on the priority issues facing the company.

The Stakeholder Advisory Panel represents a 'best practice' model of interaction with expert stakeholders at a high level. The Panel and the Executive Committee met twice during the development of the report, with priorities for discussion driven by the Panel Chair. The Panel Chair has praised the enthusiasm and commitment of the Committee, and the high trust relationship that has developed with the Panel.

Future Reports should include comment from the Stakeholder Panel, and should report against the performance targets set under ‘Our Climate Commitments’.

On the basis of the method and scope of work undertaken and the information provided to us by EDF Energy:

• For environmental performance data, nothing came to our attention to suggest that these data have not been properly collated from information reported at divisional level.
• For health and safety performance data, nothing came to our attention to suggest that these data have not been properly collated from information reported at divisional level.
• For other social performance data, nothing came to our attention to suggest that these data have not been properly collated from information reported at divisional level.

The company developed an internal validation process for all data and claims made in the Report, providing a central data quality and reliability control point. Refinement and earlier deployment of this process in the future will strengthen further the reporting process and increase confidence in the accuracy of data reported.

Responsiveness – how does EDF Energy demonstrate that it has responded to stakeholder concerns?
The Report states that stakeholder feedback on the 2005 Report has informed the development of this Report. The Stakeholder Panel has commented on the priorities set out in ‘Our Climate Commitments’, discussed the selection of targets and commitments, and questioned the company on how they will be met. In the view of the Panel, the Executive Committee has been both candid and open to being challenged, and concerns raised by Panel members have been taken into account in the drafting of the document.

The Report could be improved through articulating how the company understands stakeholder viewpoints on key performance issues and strategy. Future reports should explain in more detail what the company understands about stakeholder concerns relating to key aspects of the sustainability, affordability and security of energy supply, and how these concerns are integrated into strategy and decision making.

csr network ltd
U.K. July 2007

Jon Woodhead
Director

Andy Riley
Associate

Louise Hawson
Senior Consultant