Terms of Engagement
This Assurance Statement has been prepared for Chevron U.S.A. Inc.
Lloyd's Register Quality Assurance, Inc. (LRQA) was commissioned by Chevron U.S.A. Inc., on behalf of Chevron Corporation (Chevron), to assure its processes used to produce the Corporate Responsibility Report (CRR) for the calendar year 2011 (hereafter referred to as "the CRR"). Our terms of engagement were to review the processes for reporting health, environmental, and safety (HES) performance indicators. Verifying the accuracy of data and information was not included in the assurance.
LRQA has reviewed Chevron's CRR reporting processes since 2008 (for the 2007 CRR).
Management Responsibility
Chevron's management was responsible for preparing the CRR and for maintaining effective internal controls over the data and information disclosed. LRQA's responsibility was to carry out an assurance engagement on the CRR in accordance with our contract with Chevron.
Ultimately, the CRR has been approved by, and remains the responsibility of, Chevron.
LRQA's Approach
Our verification has been conducted against the requirements of LRQA's Report Verification procedure. The objectives of the assurance engagement were to validate the integrity of Chevron's reporting processes and to evaluate consistency with the IPIECA/API/OGP Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (2010).
To form our conclusions, the assurance was undertaken as a sampling exercise and covered the following activities:
- Visiting 18 entities, including 16 operating units on five continents, and addressing Chevron's principal functional oil and gas, chemical and mining operations throughout 2011 to assess local understanding and implementation of Chevron's HES reporting requirements.
- Visiting Chevron Upstream and Gas headquarters in Houston, Texas, and Chevron Downstream and Chemicals headquarters in San Ramon, California, to assess business-unit understanding and implementation of Chevron's HES reporting requirements.
- Interviewing key personnel to identify and gain an understanding of Chevron's reporting requirements.
- Reviewing the documented reporting requirements to validate consistency of scope, definition and reporting for each of the HES performance indicators.
- Reviewing the processes used at the corporate level to aggregate data and information for inclusion in the final report.
Level of Assurance
The opinion expressed in this Assurance Statement has been formed on the basis of a reasonable level of assurance.
LRQA's Opinion
Based on LRQA's approach, it is our opinion that Chevron's reporting process was effective in delivering HES indicators that are useful for assessing corporate performance and reporting information consistent with the IPIECA/API/OGP Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (2010).
- Processes were in place that ensure that sites contributing to core HES metrics understood corporate reporting procedures and requirements.
- Methods used for calculating each HES performance metric were clearly defined and communicated.
- Chevron's reporting requirements for HES metrics were understood and carried out. Data collected at the site/local and business-unit levels were checked and aggregated into corporationwide metrics.
- Responsibility for annually reviewing and updating reporting guidelines was clear, with improvement in methodology regularly undertaken.
LRQA's Recommendations
Observations and areas for potential improvement are provided in a report to Chevron management. These observations do not affect our conclusions.
Andrea Bockrath
On behalf of Lloyd's Register Quality Assurance, Inc.
1330 Enclave Parkway, Suite 200, Houston, Texas 77077
April 12, 2012
LRQA Reference: UQA4000679
LRQA
This Assurance Statement is only valid when published with the Report to which it refers. Lloyd's Register Quality Assurance Limited, its affiliates and subsidiaries and their respective officers, employees or agents are, individually and collectively, referred to in this clause as the "Lloyd's Register Group." The Lloyd's Register Group assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever provided, unless that person has signed a contract with the relevant Lloyd's Register Group entity for the provision of this information or advice, and in that case, any responsibility or liability is exclusively on the terms and conditions set out in that contract.
Because of the inherent limitations in any internal control, it is possible that fraud, error, or noncompliance with laws and regulations may occur and not be detected. Further, the verification was not designed to detect all weakness or errors in internal controls so far as they relate to the requirements set out above, as the verification has not been performed continuously throughout the period and the verification carried out on the relevant internal controls was on a test basis. Any projection of the evaluation of control to future periods is subject to the risk that the processes may become inadequate because of changes in conditions, or that the degree of compliance with them may deteriorate.
The English version of this statement is the only valid version. The Lloyd's Register Group assumes no responsibility for versions translated into other languages.
Updated: May 2012