Read the SGS annual account of our sustainability performance and plans. http://www.sgs.com/~/media/Global/Documents/Technical%20Documents/Reports/Policies/sgs_sustainability_report_en_11.pdf?WT.mc_id=sl030002

1. Sustainable
CORPORATE
sustainability
report 2011

2. when
we
need
to be
sure
2

3. 24 hours
We are continually pushing
ourselves to deliver innovative
services and solutions that
help our customers move their
a day
businesses forward.
7 days
a week
12 months
a year

4. Contents
06 Summary of performance 37 Professional excellence 55 Environmental management
08 Summary of commitments 38 Strategic Transformation 57 Global programmes
09 Report focus 38 Sustainability e-learning 58 Energy efficiency in buildings
13 Who we are 39 Security 59 Green IT
13 Why WE need to be sure 39 Innovation teams 59 Sustainable capital investment
40 Compliance and Integrity 60 Green procurement
14 Joint statement from the 40 Our performance 60 Green cars
Chairman and CEO 40 Progress on 2010 commitments 61 Waste management
41 Looking ahead 61 Progress on 2010 commitments
16 Sustainability services at SGS 62 Clean power
17 Global economy and trade 43 Our People 62 Water
17 Human development 46 Global programmes 62 Environmental compliance
18 Preservation of forests 46 Selecting and recruiting talent 62 Carbon disclosure
and biodiversity 46 Engaging new talent 63 Our performance
18 Energy and power 46 Managing performance
18 Agriculture and food production 47 Learning and development 65 Community
20 Buildings 49 Succession planning 66 Community management
20 Mobility and transport 49 Reward and recognition 68 Core programmes and projects
21 Materials and mining 49 Retaining talent 72 Recognition and awards
49 Human rights 72 Looking ahead
23 Our approach to corporate 49 Diversity and equal opportunity 72 Progress on 2010 commitments
sustainability
49 Environmental behaviour 73 Our performance
24 Sustainability vision
49 Employee security
24 Governance
49 Employee consultation 76 Report Assurance
25 Sustainability management system
50 Our people performance
26 Our stakeholders
52 Operational Integrity 78 Closing remarks
28 Risk management
53 Our Operational Integrity performance
28 Our strategic agenda
53 Progress on 2010 commitments 80 Key terms
29 Measuring our performance
53 Looking ahead
32 Embedding sustainability
82 contact information
35 Our shared goals
4

5. total recordable incident rate
OFFICES AND LABORATORIES
per 200 000 hours worked
tonnes of C0 2 /FTE
SOURCE OF C0 2
EMPLOYEES
Focus on
Compliance 1350
Operational Strategic and
Integrity transformation Integrity electricity
page
52
page
38
page
40 56% 70000
sustainability 4.2
community services Leadership vehicle
fuels
involvement at SGS Development 27%
page page page
66 16 47 1.47
non-
transport
fuels
9%
air & train
transport
8%
5

6. PEOPLE Employees 100%
receiving
Summary of regular
Performance performance
reviews 65.2%
67.4%
% of employees
receiving regular
performance reviews
PROFESSIONAL Natural
turnover
Safety Training
Hours
286043
EXCELLENCE % of employees that leave
SGS each year of their 13.8% <14%
Number of annual safety
training hours
own will
11.1% 199076*
Code of Gender ratio Number of
Integrity % male employees
recordable 739
reports % female employees
incidents
to helplines 168 ■ m m The number of lost time, 691*
150
Total number of integrity 64.8% 65.6% restricted duty, medical
issues reported through treatment incidents
integrity helplines f and fatalities
f
35.2% 34.4% Zero fatalities in 2011
Code of Equal 1 TRIR
Integrity opportunity The number of lost time,
investigations ratio restricted duty, medical
1.64*
Total number of valid (Female managers/ 0.67 treatment incidents 1.47
53 0.60
52 ■
reports investigated female employees) and fatalities per 200 000
concluding in no breaches hours worked <1
(Male managers/
male employees)
Code of Sickness LTIFR
Integrity absence rate Number of lost time
non- Number of days of
1.65%
incidents occurring per
0.80*
compliances 29 sickness absence 1.46% <1.5% 200 000 hours worked 0.67
Total number of breaches 22 as a % of total
of Code identified through days worked
integrity helplines
Employees 100% 100% Training hours Near misses
signing the Number of annual Event, situation or
Code of training hours/FTE physical environment
1982*
Integrity 23.0 with the potential to 1904
(Includes safety 21.1
% of employees signing cause injury, damage or
training hours)
the Code of Integrity loss to people, property
and the environment, but
which was avoided by
circumstance
Employees 100% Training ratio 1%
completing the % of total employment
sustainability costs spent on training
e-learning 0.72%
(Includes safety 0.63%
% of employees
training hours)
completing sustainability
e-learning
19.9%
6

7. ENVIRONMENT Building energy
intensity in
SGS-owned 229♦
COMMUNITY
offices 223
-10%
Annual kilowatt hours
per square metre for
SGS-owned offices
CO2 emissions Building energy Investment in
Total annual CO2
intensity in Community
emissions (tonnes)
SGS-owned 430♦
Donations to community 418
201814 Laboratories 402 organisations and 356
192211
Annual kilowatt hours -10% voluntary groups 317
per square metre for (‘000 CHF)
SGS-owned laboratories
Renewable Water use Total
energy Annual water 1039904
community
Total renewable energy purchased (m3) 960886 projects
certificates of origin Total number 306
12497
purchased (tonnes of CO2) of projects
155
Carbon Water investment in 590
intensity intensity sponsorship 516
547
(People) 4.5
Annual water purchased
22.5 21.8 Sponsorship of community
Annual CO2 emissions per 4.2 per employee (m3/FTE) programmes (‘000 CHF)
-10%
employee (tonnes/FTE)
Carbon Hazardous
intensity waste
(Revenue) 59.0
generated
Annual CO2 emissions 54.4 Total weight of hazardous 5812*
52.2
per revenue (tonnes/ waste generated (tonnes)
CHF million) -10% We established a baseline in 2010
against which we will measure and
report performance up to 2014 and
beyond for our key indicators. In order
to provide a meaningful year-on-year
Total Non-Hazardous comparison throughout our growth
electricity waste programme, we have aligned our data
consumption generated
reporting with that used by Finance to
Total annual kilowatt 223 Total weight of
199 show revenue-related indicators in both
hours of electricity non-hazardous waste
consumed (million kWh) generated (tonnes) ▲
absolute terms and 2010 data adjusted
16829
on a constant currency basis.
2010 Pro forma (constant currency basis)
2014 Target
2010 Performance
Electricity
consumption 2011 Performance
(People) * Statistics exclude data for one trend country
4662 4661 ▲
Annual kilowatt hours Statistics exclude data for three trend countries
of electricity consumed
per FTE ♦ Restated to reflect more accurate data and
subject to future amendment
■
Includes data from the confidential hotline
dedicated to investigating potential cases of
discrimination in the US.
7

8. Summary of commitments
PROFESSIONAL Roll out our revised Code of Integrity and integrity training across all areas of the business.
EXCELLENCE
Develop a new global integrity e-learning programme for new employees.
Improve our internal Code of Integrity reporting to better capture and report
all breaches globally.
Excel Roll out the new system for tracking employees’ travel plans to alert them
to dangers or hazards.
in the way we do Expand our Strategic Transformation programme and enhance dialogue with our customers.
business Provide leadership and support to the Innovation Teams in the design, resourcing and
successful delivery of innovation projects that benefit the business and our stakeholders.
People Launch the SGS global onboarding programme, ‘SHINE’, across all regions.
Complete staffing review process for 100% of SGS operations to support succession planning.
Improve Review local initiatives in trend countries relating to people, including equal opportunity
in employment, natural turnover, investment in training, performance reviews, sickness
our social
absence rate, total recordable injury rates.
Launch development planning and associated manager and employee training.
performance Launch the third module of our Leadership Development Programme.
Conduct a review of reward tools and establish a global framework for our reward strategy.
Monitor our performance around natural turnover and share our insights with Affiliates.
Roll out SGS Rules for Life.
Implement ‘Crystal’ incident reporting across the Group.
ENVIRONMENT Compile a global database of EEB projects with details of investments and projected savings.
Implement the projects identified during 2011 and continue to identify new opportunities for
energy efficiency.
Reduce Implement our Green Building Guidelines in as many sites as possible, and work with
property owners to build EEB aspects into our lease agreements.
our environmental Complete installation of cold aisle cooling in the Geneva data centre and begin global roll-out.
impacts Pilot videoconferencing and consider roll-out based on the results of pilots.
Implement managed print services in Geneva and other offices worldwide.
Continue to work at a global level to review more fuel-efficient vehicles and recommend
appropriate replacements.
Monitor the uptake of environmentally responsible vehicles by SGS businesses and report
on the overall impact of replacements on our carbon footprint.
Focus our efforts on further waste reduction initiatives, supporting the in-country
programmes, sharing best practices and providing further guidance and communications.
Roll out our Sustainable Sourcing Charter to suppliers who are under global agreements.
Continue to broaden the application of our supplier appraisal process to incorporate
suppliers who are sourced and managed locally.
Continue to raise awareness of sustainability considerations when making
investment decisions.
COMMUNITY Support Affiliates in implementing the Group Community Guidelines and Policy.
Identify a global community programme based on the framework developed in 2011.
Involve employees in Conduct a global survey to re-evaluate our community project impact and alignment with
supporting our communities the Millennium Development Goals.
Ongoing 2012
8

9. This year, our third report is published
alongside the annual report and provides
an integrated view of our business A large majority of you felt the 2010
and sustainability performance. It Report had increased your level of
Report Focus describes how innovation is shaping understanding of sustainability and
SGS’ professional sustainability-related thought it was important that SGS
services alongside our approach to publishes a corporate sustainability
managing our key impacts and risks report. We have responded to your
SGS publishes an annual corporate (outlined on page 28) and embedding comments in this year’s Report by
sustainability statement for its sustainability across our global network. including more local content and
employees, customers and other We would like to thank the 1 319 explaining how we are embedding
stakeholders who have an interest in employees, customers, contractors, sustainability across SGS. We have also
the Company’s sustainability approach investors, NGOs and other stakeholders tried to enhance the overall design and
(see Our Stakeholders section on pages who responded to our survey on last presentation of data. A summary of
26 and 27). year’s Report. feedback appears on page 29.
Report structure and scope business lines, subsidiaries, Company- been verified by third-party auditors
The Report has been developed owned and leased facilities. In the in accordance with the International
using the AA1000 Accountability narrative sections of the Report we have Standard of Related Service (ISRS
Principles Standard as a framework for also included examples of initiatives 4400) as established by the International
identifying, prioritising and responding to from non-trend countries. Performance Federation of Accountants (IFAC).
sustainability challenges. As previously, relating to suppliers is not included. We As in 2010, the auditors spent time in
we have chosen to report under the four track sustainability performance using key countries analysing the quality of
pillars of our corporate sustainability over 85 indicators covering people, data collection and reporting and made
management system: Professional environment, business, community, recommendations to the management
Excellence, People, Environment and reputation and trust. In line with our team. By the end of 2012, the first
Community. The scope covers all financial reporting, any sustainability cycle of auditing of trend countries will
regions and business lines and relates to KPIs which are geared to our financial be complete. We are confident that
the year ending 31 December 2011. performance, such as revenue, have at this point in time this method of
also been stated on a constant currency assurance delivers the most value to our
During the year the average headcount
basis which eliminates the effects of sustainability approach.
of full-time employees or equivalents
exchange rate fluctuations. In 2011 we
grew by over 10% and the Company In addition to the internal review of the
added new indicators relating to energy,
acquired 22 new businesses. We Report by the Sustainability Steering
waste, and biodiversity. We accept that
evaluate the material bearing of our Committee, management and elected
it will take time for us to reach a level of
business growth and acquisitions on employee representatives of the
confidence on reported data for these
SGS’ sustainability performance and SGS European Works Council, we
new indicators across all our trend
provide explanations for any substantive have also put in place a process for
countries. Therefore, we have provided
changes in performance data or restated country Managing Directors (MDs) to
explanations of any assumptions used
data in the relevant sections. A full list of provide feedback. We continue to use
and techniques underlying estimations in
acquisitions is available on our website the Global Reporting Initiative (GRI)
the appropriate sections of the Report.
Guidelines to inform our reporting
Reported data process and facilitate comparability with
Report assurance
Reported data covers permanent, other organisations. For this report we
This year, as planned, we have refined have referenced the revised GRI G3.1
temporary and casual employees
our assurance methodology by taking Guidelines and are pleased to have
working for SGS but excludes sub-
the additional step of commissioning progressed from Level C to Level B+.
contractors working on behalf of SGS.
a third party auditor. Our second party For clarity, we have decided to prepare
In the interest of accurate disclosure,
auditors continue to be responsible for a separate document benchmarking this
we have limited our scope to areas
checking the accuracy and veracity of Report against GRI Guidelines G3.1.
where we have most confidence in
reported data and content using SGS’ We have also mapped our disclosures
the data. While we routinely collect
own sustainability reporting assurance against the United Nations Global
data from every country we operate
framework. This year, they also provided Compact Principles, available on
in, performance is tracked and
assurance and a gap analysis against our website.
reported using countries identified as
the Global Reporting Initiative (GRI)
representative of Group performance.
Sustainability Reporting Guidelines
These ’trend countries’ cover more
2011 (G3.1). The scope for their review
than two-thirds of employees and over
included text, performance data and
three-quarters of revenue, and include
data management, which has now
9

11. 14:00 Introduction

12. We employ over
70 000 people
and operate a
network of more
than 1 350 offices
and laboratories
around the world

13. SGS helps customers to operate in a Our value lies in how our services
more sustainable way by improving benefit our clients and ultimately,
their customers.
Who we are quality and productivity, reducing risk,
verifying compliance and increasing As well as delivering services linked to
speed to market. Our services cover all sustainability, in our own operations we
industry sectors and touch the products are committed to managing a long-term
and services that consumers around the profitable business while taking into
SGS is the world’s leading world rely on every day. SGS provides account all the positive and negative
inspection, verification, testing independent services that make a environmental, social and economic
and certification company. difference to people’s lives. effects we have on society.
Our vision Our values Our history
We aim to be the most competitive and We seek to be characterised by our Established in 1878, SGS started by
the most productive service organisation passion, integrity, entrepreneurship offering agricultural inspection services
in the world. Our core competencies and our innovative spirit, as we to grain traders in Europe. From those
in inspection, verification, testing and continually strive to fulfil our vision. early beginnings, we grew in size and
certification are being continuously These values guide us in all that we do scope as our agricultural inspection
improved to be best-in-class. They are and are the bedrock upon which our services spread around the world.
at the heart of what we are. Our chosen organisation is built. During the mid 20th century, we
markets will be solely determined by our began to diversify and started offering
ability to be the most competitive and to Why WE need to be sure inspection, testing, certification and
consistently deliver unequalled service verification services across a variety of
Our success and value to society is
to our customers all over the world. sectors, including industrial, minerals and
dependent on us exercising foresight,
oil, gas and chemicals among others.
judgement and responsiveness to the
The Company became listed on the
needs of all our stakeholders. This
SIX Swiss Exchange in 1981. The SGS
means applying the same scrutiny to our
Group posted revenues of CHF 4.8
own operations as to our customers’ and
billion and an operating margin of 17%
ensuring operational excellence.
in 2011. An annual general meeting
of shareholders is held with outcomes
posted on the SGS website. Our
headquarters are in Geneva, Switzerland.
europe,
africa &
middle east asia
Americas 50.4% Revenues pacific
21.4% Revenues
20.5% Employees
43.2% Employees 28.2% Revenues
36.3% Employees
13

14. Joint
statement
from the
Chairman
& CEO

15. Dear Stakeholders, global network of laboratories, and
The past year has been an important enhanced our offer through new ultimately be judged on our ability
milestone for SGS in fulfilling our services and the acquisition of to marry competitiveness with
sustainability commitments whilst 22 outstanding companies. responsibility, while ensuring that ethics
growing the business in line with the We also recruited nearly 8 000 and sustainability remain a priority.
2014 plan. 2011 saw a solid operating people to complement our existing To succeed we must continually adapt
profit on a constant currency basis and strong talent base. and respond to market challenges and
top line growth across all business This progress was achieved in the uncertainties whilst upholding the highest
lines and regions. During the year we context of challenging global standards of operational excellence.
continued to push ourselves to deliver economies, rapid growth in emerging This year’s report aims to present
innovative services and solutions that countries and the increasingly an integrated account of our
help our customers to move their visible human and environmental business alongside our key
businesses forward. We improved consequences of climate change. sustainability commitments, initiatives
operational efficiency, expanded our We know that our success will and performance.
We are proud that SGS has been listed We are also proud to share some of and help them to live and work more
in the Dow Jones Sustainability Index for the important contributions we make sustainably. We also plan to expand our
the third consecutive year, and that we locally to sustainable development programme of stakeholder dialogue and
were able to progress from Application through our many community will further evaluate our human rights
Level C to Level B+ of the Global engagement programmes. impacts and responsibilities.
Reporting Initiative’s 3.1 Guidelines. We have continued to strengthen our We are proud of the significant progress
During 2011, we invested in embedding global offer with the launch of new we have made towards the 2014 plan
sustainability across the business, sustainability services including landfill and are confident that with the leadership
conducting numerous workshops in management solutions, photovoltaic and commitment from our managers
our trend countries and engaging more testing, biogenic carbon and fugitive and employees, sustainability will
than 300 senior stakeholders across emissions testing, and a range of continue to play an integral role in our
our network. We are encouraged by services relating to vehicle battery success. We have shown during 2011
the enthusiastic response and support technologies. We have also expanded our how sustainability is helping both SGS
from our Affiliates resulting in pledges laboratory network across Canada, the and our customers to operate smarter
by the Managing Directors to implement United States, Europe and Asia, allowing by increasing productivity and efficiency,
over 250 local sustainability initiatives us to invest in more upstream activities. ensuring quality and safety, reducing
to complement our global programmes risk, delivering trust and enabling speed
on environment (for example: building During the year, the significant number
of acquisitions made has enabled SGS to market. We are convinced that by
energy efficiency, green IT, green cars) working together with our stakeholders,
and people (for example: health and to gain additional analytical testing
capabilities and expertise in areas such positive change can happen.
safety, equal employment opportunity,
leadership and development). as electromagnetic compatibility and We hope you find this Report an
electronic and electrical product safety, interesting insight into our world and
At Group level, we strengthened our and consolidate our leadership in crop look forward to hearing your feedback.
sustainability management system with research and precision agricultural
the integration of sustainability criteria services. In addition, we have increased
into our major capital investments and our presence in the pipeline integrity
acquisitions processes, and introduced industry, acquired a state-of-the-art
the ‘Green Book’, a new tool aimed at laboratory in Colorado specialising in
senior management which presents engine emissions and vehicle mileage
our sustainability performance using accumulation testing, and broadened our
quantitative, qualitative and monetary scope in non-destructive testing.
data. In the following pages you will
discover how we are attracting and Looking ahead, our priority remains to
developing talent to support our uphold operational excellence, build our Sergio Marchionne
accelerated business growth; learn technical expertise to support ever more Chairman of the Board
about our refreshed Code of Integrity; complex industries and further drive
follow our global Operational Integrity innovation through our services. We
programme which is driving a strong have formed regional Innovation Teams
health and safety culture and read how to support us in these aims, comprising
our investment in renewable energy people with the ability to inspire new
alongside energy reduction initiatives is thinking and implement change.
helping to minimise our carbon footprint. Globally, we will continue to encourage Christopher Kirk
employees to contribute to our targets Chief Executive Officer
15

16. Sustainability
services at SGS
Success can only be achieved if we
are able to continuously look beyond We believe there
is a direct link
customers’ and society’s expectations
to develop market-leading services
wherever they are needed. Harnessing
ideas and driving innovation have always
been integral to the sustainability of between addressing
sustainability issues
SGS’ business. In this new section of
the Report, we provide some
concrete examples of how we use
our expertise and global network to
bring about innovative and sustainable and achieving our
strategic growth
solutions delivering positive results for
our stakeholders and our organisation.
objectives
Our ability to innovate, take on board new technologies and adapt to
the constantly evolving needs of our clients is the lifeblood of SGS.
What makes us unique is that we do this across such a broad range
of industries and regions. Christopher Kirk CEO
16

17. Global SGS plays a role in the testing and
inspection of goods throughout their
economy entire life-cycle, from raw materials,
and trade Biofuel export certification through manufacturing, distribution
SGS has been involved for several years and use. We help ensure that
International trade has tripled since
in the development of green field bio- standards are in place that safeguard
1990 and is set to continue to rise. ethanol production projects in Africa all people along this supply chain. For
Global economies are becoming and Latin America. SGS’ principal role example we test for pesticides in food,
increasingly dependent upon has been to advise financial institutions, labour conditions in factories, for the
generally development banks, on the safety of automotive design and for
trade in food, energy, minerals,
technical aspects of the projects through the safe manufacturing of toys and
resources and raw materials. due diligence and project monitoring other consumer goods. The following
Most trade is only possible with services. One such project is the are just two examples that illustrate
independent inspection, testing, Makeni Ethanol Project in Western our broad and unique contribution.
verification and certification which Africa, sponsored and run by private
form the backbone of SGS’ business, companies, with additional funding from
ensuring that goods are safe and fit a consortium of development banks.
for purpose. We monitor and measure The project, which will be operational
conformity throughout the supply in 2013, will consist of a sugar cane
Checking labour standards
chain, certifying raw material quality, plantation, ethanol distillery and co-
in supply chains
monitoring labour standards in factories, generation power plant and related
independently testing goods being infrastructure. It will produce about 85 SGS is a global leader in social
shipped and certifying them against 000 m3 of ethanol per annum, primarily responsibility auditing services, playing
international quality standards. for export to the European Union but an active role in the development of
also for the local market, and 100 000 international audit methods to help
MWh of renewable power per annum, improve labour conditions within
which will supply the distillery and factories and sites of employment.
power plant and feed the remainder into We cover the main countries where
the national grid. In order to be sold on consumer goods are manufactured. This
Ballast water certification EU markets, the ethanol produced by is supported by a global team of experts
the project needs to meet EU biofuel who supplement monitoring activities
Ballast water, which stabilises ships
sustainability criteria and be certified with training and support for production
during transit, can contain unwanted
accordingly. SGS has been advising the sites to help drive improvement.
marine species and microorganisms
which can upset the delicate consortium of lenders on the technical
ecosystems when the ballast water feasibility of the ethanol and power
is discharged in port. SGS operates a plants. SGS services provide confidence
fleet of mobile laboratories which use to the lenders that renewable production
the latest devices to sample and test of fuel and electric power based on
biomass is viable in Western Africa. Combating corruption
ballast water to prevent marine pollution,
Corruption has disastrous effects on
including testing for temperature, salt,
struggling economies and is ranked
contaminants and microorganisms
as one of the biggest obstacles to
as well as levels of healthy marine
life. Such testing is set to become a Human economic development and growth.
requirement by many international ports. development SGS works in a number of ways to
combat corruption associated with trade
SGS is also developing techniques to
Globalisation and increased and many other aspects of business.
certify the water treatment systems
consumer awareness has put We help to develop policies and offer
used on ships to guarantee the quality
training in corruption awareness,
of ballast water. more responsibility on companies
identifying risks throughout supply
to ensure that the goods they chains and checking that anti-corruption
sell are made in safe working measures have been put in place. We
conditions, at fair rates of pay and support the World Bank Voluntary
Disclosure Program through
respect the basic human rights of
specialised monitoring services and
those involved in production. have partnered with ETHIC Intelligence,
a specialised anti-corruption certification
body, to offer formal assessments of
anti-bribery programmes.
17

18. Preservation partnership with the National Institute
for Space Research, which detects
incineration plants using waste as a
fuel to determine the proportion of fuel
of forests agricultural crops in deforested areas. which is carbon neutral.
and SGS is currently the only independent SGS has introduced a unique service
biodiversity company involved in the monitoring of which can differentiate between the
this programme. We use the satellite different types of fuels being burned.
Forests, covering about 30% data, combined with site inspections, Working exclusively with the only
of the world’s land area and to ensure that the moratorium is being commercial laboratory doing large-
providing a habitat for over 70% followed, identifying soya beans that scale carbon dating, we have combined
have been grown responsibly. Our this technology with the latest power
of land animals and plants, play monitoring during 2010/2011 found station sampling techniques. The carbon
a crucial role in maintaining the crops on over 11 000 hectares that had isotope C-14 is present in carbon neutral
earth’s water cycle and balance of been deforested illegally. As a result of fuels but absent in materials derived
greenhouse gas levels. Yet each the monitoring carried out to date, the from fossil fuels. By measuring the
moratorium was renewed in 2011. proportion of C-14 in flue gases we are
year an area of forest nearly twice
able to accurately measure the overall
the size of Switzerland (41 300
carbon footprint of the power generated.
km2 ) is being lost, mainly due to The mechanism has been accepted
agriculture. Halting deforestation Energy and under both the Clean Development
and increasing yields from planted power Mechanism and the European Union
Emissions Trading Scheme.
forests is a major priority for a Population growth, predominantly
sustainable future. in developing countries, is
SGS provides a wide range of services resulting in increased global
to support sustainable forestry, including energy demand. At the same time, Agriculture
the certification of forests to the
international Forest Stewardship Council
urgent measures are required to and food
standard, providing advice on responsible
stabilise climate change through production
forest management, mapping the the reduction of energy usage The global population grew to
degradation of the rainforest and seeking and the adoption of carbon-free 7 billion this year and is expected
ways to maximise production from energy sources. The transition to to rise to over 9 billion by 2050.
existing forested areas.
a lower carbon society is being The UN Food and Agricultural
driven by both environmental and Organisation predicts that food
commercial imperatives, with production needs to increase
the private sector representing by 70% to provide food that is
a major source of innovation to safe, nutritious, adequate and
Preventing deforestation
generate solutions. affordable. At the same we
In 2006, members of the Brazilian
face a challenge to reduce the
vegetable and grain industries signed SGS helps customers to reduce
a moratorium that prevents companies greenhouse gas emissions through a food lost through poor handling
around the world from acquiring soya wide array of services, ranging from and spoilage.
beans grown in deforested areas of energy reduction advice to the testing SGS fulfils a vital role by helping to
the Amazon. The system is monitored of clean energy technologies as well as increase crop yields, testing new
through satellite imagery, developed in energy monitoring and auditing. varieties of crops, piloting new
production technologies, testing food
safety and ensuring the safe keeping of
food during storage and transport.
Monitoring emissions from
renewable sources
The use of waste is gaining traction as a
fuel source to generate heat and power. Increasing yields through
The majority of waste is made up of a precision farming
wide variety of materials, ranging from Large differences in the quality of soil
carbon neutral elements such as paper, may prevent farmers from optimising
cardboard or wood, to materials which crop yields. Until now, farmers have
are derived from fossil fuels like plastics. often either under- or over-fertilised
Until now, it has not been possible for arable land which causes environmental
Satellite image which detects agricultural crops in
deforested areas
18

19. pollution, additional cost, or significantly
reduced yields. SGS provides a solution
to this problem through the GPS tracking
of soil conditions, measuring acidity
Sustainable aquaculture
and nutrient levels at regular positions
and fisheries
to produce a soil fertility map. This
allows a farmer to only apply fertiliser Aquaculture is considered to be a
and treatments where they are needed, sustainable means of increasing seafood
achieving balanced growing conditions supply to meet global food needs as
which can result in up to 5% increased well as to reduce pressure on natural
yields. SGS introduced the service to resources. Farm-reared production
Kenya in 2011, working with 42 farms to from aquaculture facilities now
help improve yields. accounts for approximately 25% of
seafood consumption.
SGS is at the forefront of the Carbon footprinting food
certification of sustainable aquaculture. production in China
Our Consumer Testing Services are In December 2011,
actively involved in the development SGS published the
Reducing food spoilage of the World Wildlife Fund’s results of the first ever
It is estimated that up to 10% of global Aquaculture Stewardship Council food product carbon
cereal production and up to 40% of certification programme. We also carry footprint in China. The
fresh produce is lost through poor out certification under the Marine Zhangzidao Fishery
handling and storage before it reaches Stewardship Council’s Standard for Group in China’s North-
the consumer. The transport and storage Sustainable Fishing which ensures East Liaoning province is one of China’s
of food is a complex challenge which that the wild caught fishery products largest fishery companies, farming a
needs to be resolved if we are to meet originate from well managed fisheries variety of bottom-cultured seafood
global targets for food production. and are sourced from a sustainable such as scallop, squid and prawns. SGS
SGS is developing an integrated food stock. In June 2011, SGS signed an undertook pioneering work to calculate
safety and loss prevention facility to agreement with the Best Aquaculture the carbon footprint associated with
store and distribute fresh foods in Practices (BAP) organisation to perform farming scallops throughout their entire
countries where there is a high spoilage facility inspections and certification lifecycle. The objective was to evaluate
rate. Currently being piloted in Mumbai, audits for aquaculture farms, hatcheries, the environmental impacts of scallop
India, this integrated storage facility processing plants and feed mills. farming so that the company could take
checks and tests food on intake and The BAP standards address measures to reduce this impact. SGS
then stores it in different, carefully environmental and social responsibility, deployed experts across a range of
controlled environments by product animal welfare, food safety and disciplines such as lifecycle assessment
type. Once piloted it is hoped this facility traceability. Jim Heerin, BAP’s Executive consultants, energy consumption
will offer an affordable and effective Director commented that “We are specialists and marine biologists. We
means of storing food safely and very pleased to work with an auditing assessed the overall greenhouse gas
economically in countries with no organisation with such worldwide emissions and awarded an SGS Product
access to such facilities. capacity and capabilities as SGS”. Carbon Footprint Mark to the operation.
Map illustrating fertility of soil conditions through GPS tracking
19

20. Buildings buildings and systems, building energy
audits, energy management certification
Mobility and
and related training (e.g. ISO 50001), transport
The construction industry indoor environmental quality testing, Transport is one of the largest
green building certification (e.g.
accounts for approximately 40% global sources of greenhouse
LEED, BREEAM), decommissioning
of the total flow of raw materials of buildings and the certification of gases. The potential for reducing
into the global economy. Existing materials for recycling and reuse. demand for transportation is
buildings are responsible for currently limited and therefore
more than 40% of the world’s international efforts focused on
primary energy consumption and technologies to improve fuel
approximately one-quarter of economy and transform the
Certification of New Delhi airport types of energy used for
greenhouse gas emissions.
The terminal three building at New transport are crucial.
SGS has built up over 20 years’
Delhi’s Indira Gandhi airport was
experience in responsible building SGS works closely across all modes
opened in July 2010 and is built to
management and we are currently of transport, helping to develop
handle over 34 million passengers
refocusing our services to provide new technologies and carrying out
each year. It provides South Asia’s
more integrated solutions to help tackle testing and certification to promote
most important aviation hub, receiving
the environmental impact of buildings improvements in safety and efficiency.
over half of its air traffic. Throughout
through their lifecycle
its design and construction, SGS
provided commissioning, monitoring
and verification services to ensure
that environmental aspects were
incorporated into the airport’s design
Vehicle emissions testing
and construction. This included the
Integrated green During 2011, SGS acquired
commissioning of more than 800 air
building services handling units over an air conditioning Environmental Testing Corporation, a
SGS already works across a range of area of more than 4 000 000 m². Built in specialist company based in Colorado,
industries to promote efficient building just 37 months, the airport was awarded USA, which is able to accurately test
design construction, management LEED Gold rating for new construction, how engine emissions vary during a
and end-of-life services. In 2011 we becoming the world’s largest LEED Gold vehicle’s life. ETC’s state-of-the-art
began to offer an even more complete certified building. laboratory measures a wide variety
service, helping customers to develop of emissions from both engines and
and implement total sustainable asset whole vehicles, including emissions
solutions. This brings together building to which drivers and passengers
and material lifecycle analysis, building could be exposed. This provides vital
energy modelling, commissioning of information that helps manufacturers
optimise the engine efficiency of
vehicles over their lifespan.
20

21. Materials outreach programmes to establish
potential impacts on local populations.
and mining In addition, we deliver health and safety
Supporting electric and hybrid training for employees, and technology
As global demand for consumer
vehicles (e-mobility) to help to control entry in and out
products continues to rise,
The electrification of vehicles is the of certain parts of a mine using our
so does the requirement for bespoke system. Through dedicated
key to sustainable individual mobility.
During the last 10 years, the capacity the raw materials needed laboratories we are able to build up pilot
for using electric and hybrid cars has for manufacturing, leading to models of development sites to improve
increased and with the possibility of the efficiency of extraction during the
exploration of minerals and
lower-cost, high-performance batteries, planning stages of site development.
materials in increasingly remote We continue to provide independent
the widespread use of hybrid cars is
becoming possible. and difficult territories. monitoring throughout the life of
SGS helps extractive industries to the mine and also during
For more than 10 years, SGS has
be both efficient and responsible decommissioning when sites are
provided testing and certification
over the long-term. We play a part in returned to their natural state.
services to ensure the safety of Lithium
batteries for use in mobile phones, determining where a site should be built,
laptops and power tools and has how it is designed and in monitoring
recently expanded this competency to its environmental and social impacts
cover vehicle batteries. This is carried throughout its lifecycle.
out in our new Battery Test House
local minerals skills training
and E-Mobility Competence Centre
in Munich, Germany where we offer Given the shortage of suitably qualified
services needed to develop and test and experienced candidates into the
safe electric, hybrid and fuel cell cars. Minerals business in West Africa, SGS
The Centre has over 60 specialists Responsible Mining West Africa has established a Minerals
in e-mobility. Mines are large consumers of energy Training Academy to create a talent
and water and are increasingly located pipeline. The Academy, based in Ghana,
in environmentally or politically sensitive will be fully operational from early 2012
territories. SGS assists the mining and will offer tailored and structured
industry in a number of ways, helping training on the procedures, instruments
to minimise negative environmental and equipment pertinent to SGS’
For more information on and social impacts from mines, and laboratory operations in the region. The
SGS Sustainability Services providing expertise to maximise training will follow a three-tier approach,
please visit our website efficient operation. This may include with each tier comprising a combination
preliminary environmental and social of theoretical and practical training and
impact assessments such as community will last six weeks.
21

23. Our approach to
21:00 corporate sustainability
Our approach to corporate sustainability

24. Corporate sustainability plays an • Embedding a culture of operational
important role in helping us deliver excellence and upholding the highest
doing
our growth objectives. Our four-year standards of integrity, safety and
strategic plan, launched in 2010, aims business integrity
to drive revenues to CHF 8 billion by • Making a positive socio-economic
2014 and achieve an operating income contribution to the communities
of CHF 1.6 billion. The 2014 plan
more
where we operate, for example by
defines the strategic lines that we are encouraging job creation, supporting
pursuing to strengthen our market- skills development and investing
leading position in testing, verification, in communities
inspection and certification. It explains
• Providing a stimulating and rewarding
with
how we can continue to deliver
strong organic growth while using work environment based on effective
acquisitions to expand certain areas human resource policies and
of our service offering and geographic programmes that attract, develop and
coverage. Underpinning this agenda is retain the best talent
less
an appreciation that our growth drivers • Reducing our environmental
cannot be achieved effectively without footprint across the Group, particularly
a commitment to sustainability. with regard to greenhouse gas
Our sustained growth and value to emissions, energy consumption,
society is dependent on SGS: and waste minimisation
Operational Excellence and Business Excellence are the driving
forces to reach the 2014 plan. The key message on sustainability is
to do more, using less resources. Christopher Kirk CEO
External Influence
Sustainability GOVERNANCE and Engagement
vision
The Operations Council formally
endorsed the SGS Group sustainability
To manage a strategy in 2008. Since then we have Board of directors
long-term, profitable focused our efforts on developing the
policies, governance structure and
business while taking performance data systems to manage Operations Council
our sustainability impacts and drive
into account all the performance. SGS’ Sustainability Sustainability
Steering Committee
positive and negative Steering Committee, chaired by the
Chief Executive Officer, is a sub-
environmental, social committee of the Operations Council
regional and local
Sustainability committees
and comprises Chief Operating Officers,
and economic effects Executive Vice Presidents and Senior
we have on society. Vice Presidents across our operating
regions. The Committee meets twice Sustainability
per year and is responsible for strategy Management System
development, reviewing performance
and agreeing core programmes and
improvement targets.
24

25. The Group sustainability programme is Company policies
managed by the Corporate Sustainability All SGS operations are governed by
team and is led by the Vice President policies which set out clear parameters
Corporate Sustainability who reports for operating in a responsible and
to the Chief Executive Officer. The sustainable manner. A summary of
team is responsible for overseeing the SGS policies linked to sustainability
Group’s core sustainability programmes and copies of selected policies
and management system, as well as can be found on our website. Each
supporting Affiliates on sustainability country is accountable for identifying
matters. It also manages the Company’s and implementing local initiatives
engagement with external organisations which support the core sustainability
such as the World Business Council for programmes, and reporting
Sustainable Development (WBCSD), sustainability performance on a regular
sustainability the Carbon Disclosure Project, and the basis via Solaris, our sustainability group
management system Global Reporting Initiative. management accounting system.
Sustainability Sustainability
Pillars and KPIs programmes
Professional Excellence Excel
ts
ge
Corporate governance Professional integrity
Laws and regulations SGS Sustainability e-learning
tar
Procurement
Mo
Risk management
Stakeholder engagement
set
ni t
Sustainability Services
or , m
People improve
e a s u r e , m o n e t is e ,
Code of Integrity - Human rights Annual performance reviews
Human resources Equal employment
BASELINE
Operational Integrity (Health Safety) Human rights
Natural turnover
Sickness absence
Total recordable incidents
Training
Environment reduce
Biodiversity Energy efficiency in buildings
ve
Climate change Green cars
rif
Waste management Green IT
y,
Water management Green procurement
au
Sustainable capex
Waste management
d it,
im
Community involve
pr
ov
Community involvement Alignment to Group policy e,
and guidelines re
Community po
programmes and rt
projects an
dc
om m
unicat e
25

26. Our stakeholders
AND SUB-CONTRACTORS
SUPPLIERS, BUSINESS
SHAREHOLDERS AND
SPECIAL INTEREST
PARTNERS AND
CONSULTANTS
CUSTOMERS
ACADEMICS
EMPLOYEES
INVESTORS
NGOS AND
GROUPS,
Face-to-face dialogue Face-to-face dialogue Regular briefings and Direct dialogue Face-to-face dialogue
Internal workshops and Site visits and business presentations Workshops and Conferences and
meetings meetings Corporate website meetings meetings
SGS intranet/CEO Voice of the customer Annual General Site visits Corporate
Corner survey Meeting Sustainability website
SGS teamsites Brochures Annual Report questionnaire Workshops
Social media/mobile Corporate website Corporate Corporate website Carbon disclosure
phone apps Trade shows and Sustainability Report Social media response
Training and e-learning seminars Corporate
Internal newsletters White papers Provide the financial Provide quality products Sustainability Report
and posters Corporate Sustainability capital necessary to and services to support
Performance reviews Report/Factsheet sustain growth our service delivery and Offer a deeper insight
Corporate Sustainability operations into socio-economic
Report /Factsheet trends and challenges
Customers drive our To provide sustainable
business growth and growth and To provide opportunities
Employees are our core success returns on investment for growth and
To respect open and
asset, delivering services development
honest dialogue
with integrity and
harnessing trust in our To help customers
business and our brand to operate in a more
sustainable manner
by improving quality
To provide a safe,
and productivity,
stimulating and
reducing risk, verifying
rewarding work
compliance and
environment within a
increasing speed to
long-term sustainable
market
company
26

27. Stakeholder
Understanding and responding to the
needs of our customers and society is How we engage
fundamental to our business. Our ability The following diagram, compiled by the Relationship to SGS
to deliver services and create value Corporate Sustainability team in liaison Our commitment
requires us to foster relationships with with heads of key functions, illustrates
Ongoing
a wide range of stakeholders through the nature of our key relationships and
direct dialogue and engagement, our engagement activities. It will be Periodic
particularly at a local level. reviewed and updated annually. Annual
FINANCIAL COMMUNITY;
SOCIALLY RESPONSIBLE
LOCAL COMMUNITIES
AND ASSOCIATIONS
AND REGULATORS
UNIONS, WORKS
GOVERNMENTS
TRADE BODIES
AUTHORITIES,
INVESTORS
COUNCILS
MEDIA
Regular briefings Face-to-face Face-to-face Direct dialogue Regular briefings Annual meetings
dialogue meetings Workshops and and presentations Dialogue
Impartial Employee Business meetings Corporate website with union
commentary on engagement organisation Conferences Annual Report representatives
our activities and and volunteering meetings Corporate European Forum/
performance in community Written Sustainability European Works
projects communication Professional insight Report Council
Corporate Corporate website into industry trends
To respect open engagement and challenges;
and honest dialogue Corporate Financial advice Employee feedback
in community Sustainability lobbying
and commentary
projects Report on Group financial To share business
To share knowledge and sustainability performance and
Provide our license and insight into performance engage in dialogue
Provide our license
to operate locally industry challenges
to operate at global
and opportunities
and national levels To respect
To contribute to open and honest
socio-economic dialogue
To contribute to
development
socio-economic
through
development
employment, skills
through
development and
employment, skills
support for local
development and
initiatives
support for local
initiatives
27