SearchAssurance report of the independent auditor
To: the readers of the Sustainability Report 2018
Our conclusion
We have reviewed the data and the accompanying disclosures for the following indicators (further ‘the sustainability information’) in the Sustainability Report 2018 of Saudi Basic Industries Corporation (hereafter: SABIC) based in Riyadh:
The total absolute values and the intensity values (per metric ton of product sales) at corporate level of the Environmental Footprint indicators:
The total percentages at corporate level of the Environmental Footprint indicators:
- Flaring reduction compared to 2010.
- CO2 utilization.
The corporate values of the Ethics and Integrity indicators:
- Compliance concerns raised
- Incidents closed
- Violations found and addressed
- Code of Ethics training completion
The corporate values of the Environmental, Health, Safety and Security indicators:
- Total Recordable Incident Rate (RIR)
- EHSS rate
- Hazardous substances released
- Fatalities
- Process safety Total Incident Rate
- Occupational Illness Rate
The data for the indicators included in the scope of our engagement are marked with an asterisk (*).
A review is aimed at obtaining a limited level of assurance. Based on our procedures performed, nothing has come to our attention that causes us to believe that the sustainability information is not prepared, in all material respects, in accordance with the applied reporting criteria as included in the section “Reporting period, scope, and boundaries”.
Basis for our conclusion
We have performed our review on the sustainability information in accordance with Dutch law, including Dutch Standard 3000A ’Assurance opdrachten anders dan opdrachten tot controle of beoordeling van historische financiële informatie (attest-opdrachten)’ (Assurance engagements other than audits or reviews of historical financial information (attestation engagements).
This review engagement is aimed at obtaining limited assurance. Our responsibilities under this standard are further described in the section ‘Our responsibilities for the review of the sustainability information’ of our report.
We are independent of SABIC in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands.
We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Reporting criteria
The sustainability information needs to be read and understood together with the reporting criteria. SABIC is solely responsible for selecting and applying these reporting criteria, taking into account applicable law and regulations related to reporting.
The reporting criteria used for the preparation of the sustainability information are the applied internal reporting criteria as disclosed here.
SCOPE OF THE REVIEW OF THE GROUP
SABIC is the parent company of a group of entities. The sustainability information incorporates the consolidated information of this group of entities to the extent as specified in ‘Reporting period, scope, and boundaries’ here.
Our group review procedures consisted of both review procedures at corporate (consolidated) level and at site level. Our selection of sites in scope of our review procedures is primarily based on the site’s individual contribution to the consolidated information. Furthermore, our selection of sites considered relevant reporting risks and geographical spread.
By performing our review procedures at site level, together with additional review procedures at corporate level, we have been able to obtain sufficient and appropriate assurance evidence about the group’s sustainability information to provide a conclusion about the sustainability information.
Responsibilities of management for the sustainability information
Management of SABIC is responsible for the preparation of the Sustainability Report in accordance with the reporting criteria as included in the section ‘reporting period, scope and boundaries’, including the identification of stakeholders and the definition of material matters.
Management is also responsible for such internal control as Management determines is necessary to enable the preparation of the sustainability information that is free from material misstatement, whether due to fraud or error.
Our responsibilities for the review of the sustainability information
Our objective is to plan and perform the review in a manner that allows us to obtain sufficient and appropriate assurance evidence for our conclusion. Procedures performed to obtain a limited level of assurance are aimed to determining the plausibility of information and vary in nature and timing from, and are less in extent, than for a reasonable assurance engagement. The level of assurance obtained in review engagements with a limited level of assurance is therefore substantially less than the assurance obtained in audit engagements.
Misstatements can arise from fraud or errors and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of the sustainability information. The materiality affects the nature, timing and extent of our review procedures and the evaluation of the effect of identified misstatements on our conclusion.
We apply the ‘Nadere voorschriften kwaliteitssystemen’ (NVKS, Regulations on quality management systems) and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
We have exercised professional judgement and have maintained professional scepticism throughout the review, in accordance with the Dutch Standard 3000A, ethical requirements and independence requirements.
Our review included amongst others, the following procedures:
- Performing an analysis of the external environment and obtaining an understanding of relevant social themes and issues, and the characteristics of the company;
- Evaluating the appropriateness of the reporting criteria used, their consistent application and related disclosures in the sustainability information. This includes the reasonableness of estimates made by the management board;
- Obtaining an understanding of the reporting processes for the sustainability information, including obtaining a general understanding of internal control relevant to our review;
- Identifying areas of the sustainability information with a higher risk of misleading or unbalanced information or material misstatements, whether due to fraud or error. Designing and performing further assurance procedures aimed at determining the plausibility of the sustainability information responsive to this risk analysis. These procedures included among others:
- Interviewing management and relevant staff at corporate and local level responsible for the sustainability results;
- Interviewing relevant staff responsible for providing the information for, carrying out internal control procedures on, and consolidating the data in the sustainability information;
- Determining the nature and extent of the review procedures for the group components and locations. For this, the nature, extent and risk profile of these components are decisive. Based thereon we selected the components and locations to visit. The visits to 7 production sites in the Kingdom of Saudi Arabia, Europe, United States of America and China are aimed at, on a local level, validating source data and evaluating the design and implementation of internal controls and validation procedures;
- Obtaining assurance information that the sustainability information reconciles with underlying records of the company;
- Reviewing, on a limited test basis, relevant internal and external documentation;
- Performing an analytical review of the data and trends in the information submitted for consolidation at corporate level;
- Evaluating the consistency of the sustainability information with the information in the Sustainability Report which is not included in the scope of our review;
- Evaluating the presentation, structure and content of the sustainability information;
- To consider whether the sustainability information as a whole, including the disclosures, reflects the purpose of the reporting criteria used.
We communicate to the Management of SABIC regarding, among other matters, the planned scope and timing of the review and significant findings that we identify during our review.
Amstelveen, 9 April , 2019
KPMG Sustainability,
Part of KPMG Advisory N.V.
W.J. Bartels, Partner