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Our response to last year's assurance

In addition to creating value for our business and our stakeholders, having a strategy that addresses our material impacts, and reporting against them appropriately, is part of the Global Reporting Initiative (GRI). Having our materiality process externally assured helps give us confidence that we are following best practice.

Last year we commissioned KPMG to assure our reporting, focusing on the following three areas:

  • Diageo's alignment with the AA1000APS (2008) principles in our 2011 Sustainability & Responsibility Report
  • Diageo's self-declared GRI application level in our 2011 Sustainability & Responsibility Report
  • The reliability of global carbon emissions and water usage data included in both Diageo's 2011 Annual Report and Sustainability & Responsibility Report

In their public assurance statement, KPMG outlined a number of recommendations. The table below sets out these recommendations and explains how we have worked to address them.

Response to 2011 assurance recommendations

Topic addressed Recommendations How we responded
Stakeholder engagement In relation to the principle of inclusiveness: the approach to stakeholder engagement and the level of formalisation of activities varies across the different regions and functions. While recognising the need for flexibility in the planning and execution of stakeholder engagement to ensure local needs are met, we recommend that Diageo develops a principles-based global stakeholder engagement framework to ensure a more consistent and robust approach. Our focus this year has been on engaging global and local teams to introduce our framework for materiality – which includes stakeholder engagement. As part of this, we developed a stakeholder engagement toolkit for markets to use in later stages of our materiality process outlining our expectations and principles of best practice. We piloted elements of this toolkit with local markets, in particular planning.
Materiality process In relation to the principle of materiality: we recognise that Diageo’s materiality assessment process is relatively new and not yet fully formalised. Diageo would benefit from documenting materiality assessment criteria and establishing regular management reporting mechanisms from local to global levels. Local operations should report on the current and emerging issues identified. This year we developed a process for local markets to identify material issues. We trained teams in three markets this year on the process, and created draft materiality matrices. In future stages of this process, we will determine appropriate ways for the markets to report current and emerging issues internally.
Sustainability and responsibility management – co-ordination between markets and global In relation to the principle of responsiveness: we have seen evidence of Diageo responding to stakeholder concerns especially at a local level. As Diageo increases its presence in emerging markets, we recommend that Diageo increases the level of integration of oversight of sustainability issues at the global level in order to share knowledge effectively across the Group. A key piece of our approach to assessing our materiality impacts this year is to co-ordinate global and local analysis. Our global team responsible for sustainability and responsibility impacts will use the outputs of local materiality workshops and assessments to inform global strategy and programming.