Assurance report of the independent auditor
To: Supervisory Board and Board of Management of AkzoNobel N.V.
Based on our review, nothing has come to our attention that causes us to believe that the sustainability information included in the Report 2016 of Akzo Nobel N.V. does not present, in all material respects, a reliable and adequate view of:
- The policy and business operations with regard to sustainability
- The events and achievements related thereto for the year ended December 31, 2016
in accordance with the sustainability report criteria as described in Note 2: Reporting principles.
In our opinion, Note 1: Managing our sustainability agenda, in the Report 2016 is prepared, in all material respects, in accordance with the sustainability reporting criteria as described in Note 2: Reporting principles.
What we are assuring
The sustainability information contains a representation of the policy and business operations of Akzo Nobel N.V., Amsterdam (hereafter: “AkzoNobel”), regarding sustainability and the events and achievements related thereto for 2016.
We have reviewed the sustainability information for the year ended December 31, 2016, as included in the following sections in the Report 2016 of AkzoNobel:
Additionally, we have audited sustainability information for the year ended December 31, 2016, as included in Note 1: Managing our sustainability agenda of the Report 2016 of AkzoNobel.
The sustainability information contains several links to external sources or websites and are not part of the sustainability information. Therefore, we do not provide assurance over information outside of this sustainability information.
The basis for our conclusion and opinion
We conducted our assurance engagement in accordance with Dutch law, including Dutch Standard 3810N “Assurance-opdrachten inzake maatschappelijke verslagen” (Assurance engagements on corporate social responsibility reports). This engagement is aimed to obtain a combination of limited assurance on the sustainability information and reasonable assurance on Note 1: Managing our sustainability agenda. Our responsibilities under this standard are further described in the paragraph “Our responsibilities for the assurance engagement of the sustainability information” of this assurance report.
Independence and quality control
We are independent of AkzoNobel in accordance with the “Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten” (ViO, the Dutch auditor independence regulations for assurance engagements) and other relevant independence requirements in the Netherlands. Furthermore, we have complied with the “Verordening gedrags-en beroepsregels accountants” (VGBA, the Dutch Code of Ethics for Professional Accountants and regulation with respect to Rules of Professional Conduct).
We apply the “Nadere voorschriften accountantskantoren ter zake van assurance opdrachten” (RA/AA, the Dutch detailed rules for auditing firms on assurance engagements) and accordingly maintain a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards and other applicable legal and regulatory requirements.
We believe that the assurance information we have obtained is sufficient and appropriate to provide a basis for our conclusion and opinion.
AkzoNobel developed its reporting criteria on the basis of the sustainability reporting criteria as described in Note 2: Reporting principles of the Report 2016. The information in the scope of this assurance engagement needs to be read and understood in conjunction with these reporting criteria. The Board of Management is responsible for selecting and applying these reporting criteria. The absence of a significant body of established practice on which to draw, to evaluate and measure non-financial information allows for different, but acceptable, measurement techniques and can affect comparability between entities and over time.
The sustainability information includes prospective information such as expectations on ambitions, strategy, plans, estimates and risk assessments based on assumptions. Inherently, the actual results are likely to differ from these expectations, due to changes in assumptions. These differences may be material. We do not provide any assurance on the assumptions and achievability of prospective information in the sustainability information.
Responsibilities for the sustainability information and the assurance engagement responsibilities of the Board of Management
The Board of Management of AkzoNobel is responsible for the preparation of the sustainability information, in accordance with the sustainability reporting criteria, as described in Note 2: Reporting principles, including the identification of stakeholders and the definition of material subjects. The choices made by the Board of Management regarding the scope of the sustainability information and the reporting policy are summarized in Note 2: Reporting principles. The Board of Management is responsible for determining that the applicable reporting criteria are acceptable in the circumstances.
The Board of Management is also responsible for such internal control as it determines is necessary to enable the preparation of the sustainability information that is free from material misstatement, whether due to fraud or errors.
Our responsibilities for the assurance engagement of the sustainability information
Our responsibility is to plan and perform the assurance engagement to obtain sufficient and appropriate assurance information to provide a basis for our conclusion and opinion.
Our review engagement is aimed at obtaining limited assurance on the sustainability information. In obtaining a limited level of assurance, the performed procedures are aimed at determining the plausibility of information and are less extensive than those aimed at obtaining reasonable assurance in an audit engagement. The performed procedures in this context consisted mainly of gathering information from the company’s employees and applying analytical procedures set out in relation to the information included in the sustainability information. The assurance obtained in review engagements aimed at obtaining limited assurance is, therefore, significantly lower than the assurance obtained in audit engagements aimed at obtaining reasonable assurance.
Our audit engagement is aimed at obtaining reasonable assurance on the sustainability information presented in Note 1: Managing our sustainability agenda. It has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud.
Misstatements may arise due to fraud or error and are considered to be 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 and audit, as well as the evaluation of the effect of identified misstatements on our conclusion and opinion.
We have exercised professional judgement and have maintained professional scepticism throughout the assurance engagement, in accordance with the Dutch Standard 3810N, ethical requirements and independence requirements.
Our main review procedures include:
- Performing an external environment analysis and obtaining insight into relevant social themes and issues, relevant laws and regulations and the characteristics of the organization
- Evaluating the appropriateness of the reporting policy and its consistent application, including the evaluation of the results of the stakeholders’ dialog and the reasonableness of management’s estimates
- Evaluating the design and implementation of the reporting systems and processes related to the sustainability information in the Report 2016
- Interviewing relevant staff at corporate and local level responsible for the sustainability strategy and policy
- Interviewing relevant staff at corporate level, responsible for providing the sustainability information in the Report 2016, carrying out internal control procedures on the data and consolidating the data in the sustainability information
- Joining the internal audit of Health, Safety and Environment management at the local production sites in Cologne (Germany), Malmö (Sweden) and Lancaster (United States)
- An analytical review of the data and trends submitted for consolidation at corporate level
- Reviewing internal and external documentation to determine whether the sustainability information, including the disclosure, presentation and assertions made in the sustainability information, is substantiated adequately
- Assessing the consistency of the sustainability information and the information in the Report 2016 not in scope for this assurance report
- Assessing whether the sustainability information has been prepared in accordance with the AkzoNobel sustainability reporting criteria
- Reviewing the relevant work of the Internal Audit function
In addition to the procedures mentioned above, we performed the following audit procedures on Note 1: Managing our sustainability agenda:
- Corroborating the information disclosed in Note 1 through multiple interviews with selected staff throughout the company
- Testing the operating effectiveness of relevant key controls related to how AkzoNobel manages its sustainability agenda
- Corroborating supporting documentation to determine whether the information in Note 1 is substantiated adequately, such as management meeting agendas and minutes and internal management information
Amsterdam, February 14, 2017
PricewaterhouseCoopers Accountants N.V.
R. Dekkers RA