Independent Practitioner’s Assurance Report
(Translation from the Finnish original)
To the Management of Kesko Corporation
We have been engaged by the Management of Kesko Corporation (hereinafter also the Company) to perform a limited assurance engagement on the economic, social and environmental performance indicators for the reporting period 1 January 2015 to 31 December 2015 disclosed on Kesko Corporation’s website in the “GRI report” section of “Kesko’s annual report 2015” (hereinafter CR Information).
In terms of the Company’s GRI G4 reporting and G4 Content Index, the scope of the assurance has covered economic, social and environmental performance indicators listed within the Specific Standard Disclosures as well as General Standard Disclosures G4-10, G4-11 and G4-32.
Furthermore, the assurance engagement has covered Kesko Corporation’s adherence to the AA1000 AccountAbility Principles with moderate (limited) level of assurance.
The Management of Kesko Corporation is responsible for preparing the CR Information in accordance with the Reporting criteria as set out in the Company’s reporting instructions and the G4 Sustainability Reporting Guidelines of the Global Reporting Initiative. The Management of Kesko Corporation is also responsible for such internal control as the management determines is necessary to enable the preparation of the CR Information that is free from material misstatement, whether due to fraud or error.
The Management of Kesko Corporation is also responsible for the Company’s adherence to the AA1000 AccountAbility Principles of inclusivity, materiality and responsiveness as set out in AccountAbility’s AA1000 AccountAbility Principles Standard 2008.
Our responsibility is to express a limited assurance conclusion on the CR Information and on the Company’s adherence to the AA1000 AccountAbility Principles based on the procedures we have performed and the evidence we have obtained. We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised) “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”. That Standard requires that we plan and perform the engagement to obtain limited assurance about whether the CR Information is free from material misstatement.
In addition, we have conducted our work in accordance with the AA1000 Assurance Standard 2008. For conducting a Type 2 assurance engagement as agreed with the Company, this Standard requires planning and performing of the assurance engagement to obtain moderate (limited) assurance on whether any matters come to our attention that cause us to believe that Kesko Corporation does not adhere, in all material respects, to the AA1000 AccountAbility Principles and that the CR Information is not reliable, in all material respects, based on the Reporting criteria.
In a limited assurance engagement the evidence-gathering procedures are more limited than for a reasonable assurance engagement, and therefore less assurance is obtained than in a reasonable assurance engagement. An assurance engagement involves performing procedures to obtain evidence about the amounts and other disclosures in the CR Information, and about the Company’s adherence to the AA1000 AccountAbility Principles. The procedures selected depend on the practitioner’s judgement, including an assessment of the risks of material misstatement of the CR Information and an assessment of the risks of the Company’s material nonadherence to the AA1000 AccountAbility Principles.
Our work consisted of, amongst others, the following procedures:
- Interviewing senior management of the Company.
- Interviewing employees from various organisational levels of the Company with regards to materiality, stakeholder expectations, meeting of those expectations, as well as stakeholder engagement.
- Assessing stakeholder inclusivity and responsiveness based on the Company’s documentation and internal communication.
- Assessing the Company’s defined material corporate responsibility aspects as well as assessing the CR Information based on these aspects.
- Analysing references to the Company from the reporting period in online media.
- Visiting the Company’s Head Office as well as one site in Finland.
- Interviewing employees responsible for collecting and reporting the CR Information at the Group level and at the site where our visit took place.
- Assessing how Group employees apply the reporting instructions and procedures of the Company.
- Testing the accuracy and completeness of the information from original documents and systems on a sample basis.
- Testing the consolidation of information and performing recalculations on a sample basis.
Limited assurance conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that Kesko Corporation does not adhere, in all material respects, to the AA1000 AccountAbility Principles.
Furthermore nothing has come to our attention that causes us to believe that Kesko Corporation’s CR Information for the reporting period ended 31 December2015 is not properly prepared, in all material respects, in accordance with the Reporting criteria, or that the CR Information is not reliable, in all material respects, based on the Reporting criteria.
When reading our assurance report, the inherent limitations to the accuracy and completeness of corporate responsibility information should be taken into consideration.
Our assurance report has been prepared in accordance with the terms of our engagement. We do not accept, or assume responsibility to anyone else, except to Kesko Corporation for our work, for this report, or for the conclusions that we have reached.
Observations and recommendations
Based on the procedures we have performed and the evidence we have obtained, we provide the following observations and recommendations in relation to Kesko Corporation’s adherence to the AA1000 AccountAbility Principles. These observations and recommendations do not affect the conclusions presented earlier.
- Inclusivity: The Company has processes in place for stakeholder inclusivity, collection of feedback and stakeholder engagement. The Company’s divisions actively collect feedback through many channels. We recommend that Kesko Corporation develops the group level analysis of stakeholder feedback collected in the divisions in order to develop its corporate responsibility and ensure the benefits of the responsibility work.
- Materiality: Kesko Corporation has a process in place to evaluate and determine the materiality of corporate responsibility aspects. During 2015, the Company set up a steering group in order to promote the responsibility work in operating countries. Country specific material aspects were included in Kesko’s responsibility programme. We recommend that the Company continues mapping and updating the operating country specific responsibility aspects as well as the development of reporting on these aspects.
- Responsiveness: The Company takes its stakeholders’ expectations into account in its operations and responds to them through the continuous development of its activities. During 2015, especially the digital services and communications have been expanded and further developed. We recommend that the Company continues the monitoring of responsibility trends and stakeholder expectations in order to be able to respond to them in its business operations also in the future.
Practitioner’s independence, qualifications and quality control
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
Our multi-disciplinary team of corporate responsibility and assurance specialists possesses the requisite skills and experience within financial and non-financial assurance, corporate responsibility strategy and management, social and environmental issues, as well as the relevant industry knowledge, to undertake this assurance engagement.
PricewaterhouseCoopers Oy applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Helsinki, March 8 2016