Veolia Environnement Sustainable Development Report 2002

Couv Dév Durable 2 ANGLAIS

20/05/03

10:31

Page 1

Head office: 36-38 avenue Kléber 75116 Paris France Tel.: +33 1 71 75 00 00 Fax: +33 1 71 75 10 00 www.veoliaenvironnement.com

Sustainable Development Report 2002

Couv Dév Durable 2 ANGLAIS

20/05/03

10:31

Page 2

Table of contents 1 Editorial 2 Our strategic vision

4 Group profile

10 Our resources

18 Our social responsibilities Our responsibility to our employees

Our responsibility to society

30 Our environmental performance Conserve natural resources

Limit discharges and emissions

44 Methodology

1 24 10 18 30 44

NRE Act (France) This non-mandatory report presents VE’s strategy and achievements in the field of sustainable development. The environmental reporting requirements pursuant to Article 116 of the New Economic Regulations (NRE) Act are included in the Document de Référence published by the Group. Some NRE data are shown, however, in the appendix of this report.

2 2 2

Combine performance and responsibility Sustainable development charter The Institut VEOLIA Environnement

4 6 8

Our core business is to serve the needs of the environment The effects of our activities on society and the environment Taking responsibility throughout the world

10 12 14 16

Execution of our strategy Involvement of our entire staff Research and development in pursuit of sustainable development Dialogue with our partners

19 20 21 22 24 25 26 28 29

Our priorities and our action plans Develop and secure employment Improve employees’ working conditions Identify, anticipate and develop skills Foster dialogue and innovation in social affairs Guarantee that human rights and workers’ rights are respected Broaden access to essential services Prevent public health risks Foster local development

31 32 34 35 36

40 41 42

Our priorities, action plans and targets Conserve water resources Preserve soil and biodiversity Recycle and economize raw materials Conserve energy resources and combat climate change Control greenhouse gas emissions and combat climate change Limit atmospheric pollutants Curb local nuisances Curb effluent discharges

44 45 46

A note about methodology Third-party audit Key performance data

48

Learn more about our strategy

38

Editorial

Henri Proglio Chairman

2002

represented a key milestone in our efforts to translate the principles and goals of sustainable development into concrete action around the world. Likewise, it was a highly significant year in the history of our Company.

One of the major achievements of the World Summit in Johannesburg was that it identified the key issues (population growth, urbanization, universal access to essential services), set quantified objectives (e.g. halving the number of people without access to water and wastewater services) and marked out clear paths for improvement (need for higher spending, savings of scarce resources, relations between public-sector authorities, businesses and NGOs, etc.).

For the first time, the role of business was clearly highlighted, particularly the public-private partnerships, which have always formed the basis for our activities.

Against this backdrop, Veolia Environnement has been able to assert its identity. Our company’s independence, which is symbolized by its new name, signals its fresh impetus and marks a new era in its 150-year history, with its future now firmly secured. This independence will allow us to voice with conviction and realism our commitment, our values and our strategic vision, which are presented in detail in this report.

Our Company does so each day through its 302,000 employees in the field in the hundred or so countries in which it operates, as well as at the major global and national summits where its experiences may be telling. It never acts alone, but always in partnership with its natural customers, i.e. municipal authorities and industrial companies, and with the international authorities, as illustrated in particular by its membership of the UN Global Compact program.

Sustainable development report for 2002

VEOLIA Environnement 1

Our strategic vision Combining efficiency and responsibility

> Ethics VEOLIA Environnement has identified and endeavors to abide by the Fundamental Corporate Values to which the Group and all its employees adhere, i.e.

Customer focus, Responsibility, Innovation, Efficiency, Cohesion.

ECONOMICS The growth in our environmental services and essential services activities helps to combine wealth creation with environmental protection and a contribution to the well-being of populations.

Our business activities are by their very nature geared to sustainable development.

> The Institut VEOLIA Environnement lies at the heart of our sustainable development strategy To stay one step ahead of the changes that are likely to influence the environmental sector, as well as the economic and social decisions of the future, Veolia Environnement relies on a forecasting unit that focuses on issues such as public health, the financing of sustainable development, climate change and urban planning.

Since its inception in November 2001, the Institut Veolia Environnement has carried out its research programs in close partnership with the members of the Foresight Committee. This committee, which is made up of international experts from various different academic disciplines, helps to broaden the scope of thinking about all aspects of sustainable development. Through Pierre-Marc Johnson, former Prime Minister of Quebec and a specialist in environmental issues who attended the Johannesburg World Summit, the Institut Veolia Environnement asserted its international dimension and its privileged position with regard to the issues that represent the major challenges for the 21st century.

Sustainable development report for 2002

2 VEOLIA Environnement

From an economic perspective, our sustainable development performance derives from our ability to expand our business. To this end, we harness our technical and managerial know-how and our financing capabilities for infrastructure projects in the form of public-private partnerships. We reconcile the short-term profitability goals of the financial markets and the need for long-term economic development by anticipating the needs of municipal authorities and industrial customers, by designing efficient, technological solutions using our research and development capabilities and by facilitating long-term public-private contractual arrangements.

SOCIAL RESPONSIBILITY

Furthermore, VE has adopted an Ethics, Conviction and Responsibility Charter, which sets out guidelines for the activities of the Group, its subsidiaries and employees, as they conduct their dayto-day business.

This charter emphasizes values such as loyalty, social responsibility and a commitment to sustainable development.

Whatever the circumstances,the Group’s business must conform to national standards and the guidelines laid down by international organizations.

An Ethics Committee chaired by Henri Proglio will be responsible for examining, coordinating and settling any issues relating to compliance with the fundamental corporate values by the Group’s companies. It will report to VE’s Management Board on the application of the Charter, any difficulties it encountered and desired improvements.

Our water distribution, wastewater treatment, waste management, heating and transportation businesses naturally contribute to the well-being of the populations they serve. In this respect, we believe that our contribution to sustainable development consists in providing access to essential services for as many people as possible by offering economically viable solutions that are geared to local conditions.

We also have a responsibility towards the 300,000 employees that we employ around the world.We strive to make their jobs secure, to improve their working conditions and to develop their skills.

Lastly, using our local businesses as a platform, we seek to forge relationships with local communities and to create social ties while preserving the economic equilibrium and respecting fundamental human rights.

ENVIRONMENT By its very nature, our business consists in anticipating, designing and implementing services to protect the environment. But our activities may generate waste or pollution or impact the environment, and it is up to us to control and reduce these side effects. This vision is made a reality on a daily basis by means of our Environmental Management System (EMS). Its quantified targets and indicators allow the environmental performance of our activities to be assessed.

OUR SUSTAINABLE DEVELOPMENT CHART Our

1

> Corporate Governance

10 commitments

Protecting the environment, conserving resources and reducing pollution at all the sites we operate.

2

Implementing an Environmental Management System that, based on clearly identified priorities, enables us to execute appropriate action plans that can be assessed through indicators of the progress achieved.

3

Upgrading all facilities and services for which we have full responsibility so that they conform to applicable regulations and standards under preparation and, where there are none, proposing the most appropriate improvements.

4

Fostering the improvement, beyond legal requirements, of people’s safety and health protection by adopting an integrated risk management policy.

5

Increasing our research, development and innovation efforts in order to use our expertise to meet the environmental challenges of every situation in the most efficient and economically acceptable manner.

6

Encouraging our partners, subcontractors and suppliers to adhere to our sustainable development guidelines and commitments.

7

Taking into account immediately, and anticipating as far as possible for the future, the public’s needs and expectations, in particular through the work of the Institut Veolia Environnement.

8

Providing our employees with efficient training and promotion opportunities, such as the Urban Environment Institute, and enhancing job opportunities within and at the periphery of our operations.

9

Integrating within its improvement program the standards and recommendations established by international organizations covering basic human rights, ethics, the environment, occupational safety and labor law.

10

Broadening dialogue with non-governmental organizations (NGOs) in order to increase access to essential services everywhere and for the benefit of the maximum number of people possible, even the most disadvantaged.

VEOLIA Environnement’s recently gained independence has prompted it to adopt an appropriate corporate governance model founded on transparency and harmonious and effective stewardship. Consequently, a proposal will be made at the Combined General Meeting of the shareholders on April 30, 2003 that would give the Company a Board of Directors featuring a larger number of independent directors. In addition, two committees are set to play an advisory role and to ensure good corporate governance, namely the Remuneration and Appointments Committee and the Accounts, Audit and Commitments Committee. The purpose of these committees will be to apply the best practices in their respective fields, such as those recommended in the Bouton report.

Sustainable development report for 2002

VEOLIA Environnement 3

Group Profile Our core business is to serve the needs of the environment

Breakdown of revenue

by Division 8.8% 11.4% 44.2%

15.2%

Waste Management

Water

Energy services

Transportation

We provide energy management services to municipal and industrial customers (heating and air-conditioning, industrial fluids, steam and compressed air, etc.), structured mainly as follows: ● heating and air conditioning systems management ● energy management and technical services ● industrial utilities ● integrated facilities management services ● installation of climate control and electrical services, and industrial maintenance ● electrical services for public roads.

We offer a broad and innovative range of mobility solutions that respect the environment and allow passengers to travel comfortably: ● private operation of public urban and regional services using all types of transportation (buses, coaches, tramways and trains) ● regional and local transportation services ● diversified transportation services ● freight transportation and logistics.

20.4%

Water Waste Management Energy Services Transportation FCC

Trend in VE’s consolidated revenues (in billions of euros) 30.08

29.13 30

26.26

We are present at every stage in the water cycle and regard water as an advanced technology product. Our water services include: ● the design, manufacture and supply of water treatment equipment, systems and installations ● outsourced water and wastewater services for municipal authorities ● outsourced industrial water services (process water and industrial wastewater) ● services for residential customers.

We offer services spanning the entire waste management chain: ● collection, transfer, treatment, and recycling of solid, liquid, hazardous and non-hazardous waste on behalf of municipal, industrial and residential customers. ● waste-to-energy conversion, composting and recycling ● street and sewer cleaning services ● industrial cleaning services.

20

5.4 10

billion cubic meters of drinking water

million metric tons of waste collected in 2002.

1.4

billion passenger

1.3

billion passenger kilometers

carried during 2002.

distributed during 2002.

0

2000

2001

The Group collected waste from

2002

Breakdown of customers by category (proportion of consolidated revenues)

35%

35

48.6

million per capita equivalents

63.4

of urban wastewater treatment plants capacityin 2002.

54

65%

70,000

thermal facilities managed worldwide in 2002.

million residential customers during 2002.

300

heating and air-conditioning networks managed in 2002.

million metric tons of waste processed in 2002.

Municipal Industrial and service companies

Heating services provided to

447,000

cubic meters per day of installed industrial wastewater plants capacity in 2002..

Sustainable development report for 2002

4 VEOLIA Environnement

15

covered in 2002.

FCC – Fomento de Construcciones y Contratas

No.1 in waste management in Spain ● Total of 43 million residential customers served in 1,500 municipalities ● 550,000 metric tons of industrial waste processed per year Number two in Spanish water services ● Water provided to 7.2 million residential customers ● 9 million residential customers connected to the wastewater treatment network Construction and public works ● Civil engineering, infrastructure and residential construction ● Cement, public works VE owns 49% of B 1998 SL, a company that has a majority shareholding in Spanish company Fomentos de Construcciones y Contratas (FCC).

million residential customers in 2002.

Sustainable development report for 2002

VEOLIA Environnement 5

Group Profile The effects of our activities on society and the environment

AIR

The use of mass transit systems has a beneficial impact on air quality, particularly because clean fuels are utilized.

WATER

To protect water resources, we decontaminate wastewater while controlling the quality of effluents.

We produce and distribute drinking water.

Our combustion facilities (waste incineration, power generation) generate atmospheric pollutants. We reduce them by enhancing our technical processes.

We combat network leakages.

Landfill sites produce leachate, which we collect and treat prior to discharge.

Our landfill sites produce methane, which we collect and reuse.

ENERGY

We are developing the use of renewable energy sources (waste, biomass, geothermal, solar thermal and photovoltaic energy).

SOIL

We enrich the soil with sludge and compost while carefully assessing their impact on public health and the environment.

We carry out soil remediation.

We offer our customers solutions for enhancing the energy efficiency of their facilities.

We use energy, particularly at our water treatment plants and networks, and are developing the use of biomass energy.

MATERIALS

>

We recycle and recover materials from waste.

QUALITY OF LIFE

Our waste management, wastewater treatment, power generation and transportation systems may cause pollution (noise, odors, landscape integration). We employ innovative solutions to reduce them.

We assure the cleanliness of the streets and sidewalks in towns and cities.

SOCIETY We provide access to essential services, including water, hygiene and sanitation, comfort, heating and mobility services.

Controlling the public health implications of our activities is a prime concern.

Positive effects resulting from the very nature of our business activities.

Sustainable development report for 2002

6 VEOLIA Environnement

We participate in the local development of employment and skills.

We make a contribution to health and environmental education.

Effects that the Group takes actions to mitigate.

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VEOLIA Environnement 7

Group Profile Taking responsibility right around the world

Europe ■ ■

“Never in the entire history of our planet has population growth

236,600 employees Revenue of € 22.8 billion

been as rapid, urbanization as strong and the gap as wide in terms of living standards and the needs between the different regions of the world. Given these realities, action is needed rather than words. ” Henri Proglio

VE, which is present in around one hundred countries on five continents, operates in radically different social, economic and cultural environments. To respect and allow for this diversity, Veolia Environnement intends to conduct its business around the world while carefully adhering to its Fundamental Social Rights charter, which was inspired by the International Labour Organization’s principles, particularly with regard to abolishing child labor and protecting the freedom of association.

Through its employees at all its units around the world, the Group works to reconcile the imperatives of social responsibility, economic growth and environmental equilibrium.

North America Asia-Oceania

25,700 employees ■ Revenue of € 3.4 billion ■

■ ■

Africa-Middle East South America ■

16,600 employees ■ Revenue of € 0.5 billion

■

■

Headcount of

>

12,700 employees Revenue of € 1.1 billion

10,700 employees Revenue of € 0.6 billion

302,000

employees in 2002

Contractual framework for our operations The contractual framework for our activities varies according to the host country and the contract type (i.e. private or public

enhance the efficiency of installations, we keep our customer up to date and propose the most appropriate technical and

sector). Contracts set out the legal responsibilities of the customer and the operator on a case-by-case basis. Under conces-

economic solutions for optimizing their performance.

sion or BOT (build, operate and transfer) contracts, we have ownership of and take full responsibility for installations, nota-

This said, we have decided to include 100% of these contracts in the scope of our reporting, since we take the view that we

bly by controlling investments, as specified in the contract. However, in most cases, our customers retain ownership of the

have at least partial control over these operations.

facilities and control investment decisions. In these cases in order to ensure compliance with regulatory standards and to Sustainable development report for 2002

8 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 9

Our resources Execution of our strategy Our management system now encompasses social and environmental issues related to all our business activities.

The following table summarizes our objectives and the measures we have planned. Our objectives are quantified in the Environmental Performance section.

THEMES

OBJECTIVES

PROGRESS 2000

2001

2002

COMMITMENTS

■

Deploy the Sustainable Development charter across the Divisions

STRUCTURE AND RESPONSIBILITIES

■

Set up an environmental committee at each of the four Divisions

100%

SOCIAL AND ENVIRONMENTAL

■

Define the priorities, objectives and targets

100%

■

Draw up action plans for each Division

50%

Increase the percentage of relevant activities* covered by an Environmental Management System (EMS)

15%

MANAGEMENT PROGRAMS

DEPLOYMENT OF ENVIRONMENTAL

■

MANAGEMENT SYSTEMS MONITORING OF AND COMPLIANCE WITH REGULATIONS

■

SOCIAL AND ENVIRONMENTAL

■

INDICATORS AND REPORTING

Conduct internal audits at priority sites*

50%

2003

2004

2005

2006

2007

100%

r e c u r r i n g

100%

10-15%

a c t i o n s

evaluation

r e c u r r i n g

a c t i o n s

evaluation

r e c u r r i n g

a c t i o n s

60%

80%

of relevant activities

of relevant activities

80% of priority sites

■

Introduce worldwide social and environmental reporting

100%

Switch from gross indicators to performance indicators and track their progress

25%

50%

75%

100%

75%

100%

r e c u r r i n g

a c t i o n s

r e c u r r i n g

a c t i o n s

■

Formalize the action plan with our suppliers

100%

■

Implement the planned measures

20%

50%

RISK MANAGEMENT

■

Identify and prevent risks and coordinate a crisis management plan

90%

100%

INTERNAL COMMUNICATIONS

■

Raise employee awareness about the environment and sustainable development

r e c u r r i n g

a c t i o n s

DIALOGUE WITH STAKEHOLDERS

■

Maintain a relationship with local stakeholders

r e c u r r i n g

a c t i o n s

■

Organize dialogue with stakeholders at Group level

r e c u r r i n g

a c t i o n s

■

Publish a sustainable development report each year

r e c u r r i n g

a c t i o n s

■

Maintain a web site devoted to sustainable development

r e c u r r i n g

a c t i o n s

PURCHASING AND OUTSOURCING

CORPORATE COMMUNICATIONS

2008

50%

100%

100%

* See page 13

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10 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 11

Our resources Getting everyone involved Waste to energy plant in Montgomery, Alabama (US) ISO 14001 certified.

AUDIT AND SITE IMPROVEMENT PROGRAMS

AN ORGANIZATION DEDICATED TO SUSTAINABLE DEVELOPMENT Divisional Management

Executive Management

Regional units Sustainable Development Committee

Operational sites

Our sustainable development program extends to each and every level of our organization and assumes its full meaning only when put into practice by our operational sites.

The sustainable development department, which reports directly to the Executive Management, has run a sustainable development committee for the past three years comprising twenty or so representatives from the Divisions, as well as the Group’s various departments. The sustainable development committee meets ten times a year. It oversees VE’s sustainable development strategy and ensures that targets are met. It promotes the sharing of information and best practices. Its remit spans all the company’s business activities throughout the world.

The minimum requirements of the environmental management system defined by the Group relate to the following tasks: ■ making employees aware of the environmental policy ■ identifying the impacts of each business line ■ providing acces to a regulatory update system to operational staff ■ training staff in the best environmental practices ■ auditing priority sites ■ circulating operational guidelines to mitigate the impact of businesses.

THE DEPLOYMENT OF MANAGEMENT SYSTEMS

The various Group entities and sites adapt these imperatives to fit their individual characteristics and may extend their efforts to ISO 14001 accreditation, if they so desire.

Over the past two years, we have been introducing a Group-wide management system to deliver continuous improvement in our environmental and social performance.

We reached a major milestone this year, by setting quantified objectives and deadlines. > Objective: deploy our Environmental Management System (EMS) at 60% of relevant activities* by 2005 and 80% by 2008.

(*) Relevant activities refer to water distribution, wastewater treatment, waste treatment, energy services and freight and passenger transportation.

Sustainable development report for 2002

12 VEOLIA Environnement

A system covering the entire perimeter of VE’s global activities was introduced in 2002 for social issues.

Further progress was made in environmental reporting, with the introduction of performance indicators for VE and the Divisions, enabling us to track progress towards the achievement of our objectives. Lastly, environmental committees were set up in each Division.

Our management system includes an audit program to track regulatory compliance and to enhance the performance of our sites. The Group has drawn up a general framework to ensure the consistency of the audit systems developed by the Divisions, while each Division retains responsibility for defining and implementing its own system. These minimum standards define the scope of the businesses audited, the topics covered (environmental regulations, quality of products, etc.) and the frequency of the audits, how they should be conducted, and the 15 most sensitive issues for each activity and the procedures for tracking corrective measures. > Objective: carry out audits at 80% of priority sites by 2005 and 100% by 2008.

Priority sites are the main water production plants, the main urban wastewater treatment units, waste treatment sites, Dalkia’s installations that are classified under environmental protection or equivalent regulations and certain Connex transportation centers.

56

relevant* activities % of covered by a certified (environmental or quality) management system

14

% of relevant* revenue covered by an EMS (including ISO 14001)

Number of ISO 14001 certified sites 265

300 250 200

169 132

150 100 50 0

2000

2001

2002

The number of VE’s ISO 14001 accredited sites has risen steadily since 2000. It increased by more than 50% between 2001 and 2002.

Sustainable development report for 2002

VEOLIA Environnement 13

Our resources Research and development in pursuit of sustainable development Pilot study concerning legionnaire’s disease, Anjou-Recherche (France).

Research and development plays a central role in Veolia’s sustainable development policy. It enables the Group to stay one step ahead of future needs and to implement efficient technologies and services tailored to our customers’ expectations.

CONSERVING RESOURCES Electrodeionization at US Filter’s site in Lowell (US).

Waste separation trial at CREED (France).

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14 VEOLIA Environnement

Conserving natural resources is a top priority, and the Group’s R&D function devotes a great deal of its efforts to this issue. This program naturally encompasses water (development of systems for reusing wastewater for industrial use or for irrigation purposes), as well as materials (recycling of mineral waste, such as building materials, for instance), soil (enhancement of soil fertility by converting waste into highquality fertilizer) and energy (recovery of biogas from bioreactors at landfill sites or biomass as an alternative fuel).

EFFICIENCY DRIVE The solutions developed by VE will be adopted by our partners, chief among which are our industrial and municipal customers, only if they are geared to their needs and make good economic sense.

ENVIRONMENTAL AND SANITARY QUALITY Economic and industrial development and urbanization pose new challenges for public health. The emergence of new risks within our industrialized societies calls for an appropriate response, i.e. the development of tools to evaluate the risks, increasingly sophisticated analytical techniques and, where necessary, specific corrective action. Our programme for legionnaire’s disease and other pathogenic germs (see page 28) or for controlling the emission of pollutants from thermal processes are part of this approach.

The measures taken by Veolia Environnement to control the impact of its activities are underpinned by its R&D activities, e.g. the purification of gaseous and liquid effluents, the use of clean fuels, renewable and alternative energies. The R&D department also works to protect the health of the Group’s employees. For instance, a specific program has been launched to improve working conditions and the safety of employees at the waste sorting facilities.

The Group’s R&D Department designs and develops the innovations of the future while constantly keeping these criteria in mind: ■ by offering new services, e.g. electrodeionization to supply ultra-pure water continuously to the pharmaceutical and electronics industries, a tram system without overhead wires to preserve the architectural integrity of the cityscape, (water and energy) service management integrated with industrial processes, transportation on demand and mass transit hub planning, ■ by improving quality, e.g. water treatment by means of membrane technology, planning of passenger journeys using ICT technology and geo-positioning systems, and elimination of catering waste by producing a “green” fuel, ■ by improving productivity, e.g. mechanized collection of household refuse, energy storage and research to improve the availability of cogeneration plants, ■ or by implementing integrated programs drawing on expertise from all VE’s business activities, e.g. integrated wastewater management encompassing the treatment of wastewater and of the by-products

created by sewer cleaning, the treatment of liquid industrial effluents, and the use of clean vehicles with reduced atmospheric emissions.

THE STRENGTH THAT COMES FROM HAVING A NETWORK Veolia Environnement’s R&D department encompasses close to 600 researchers working at three main facilities: ■ Water: Anjou-Recherche and its affiliated units in the US, Canada, Germany and Austria, ■ Energy and Waste Management: the Centre de Recherches pour l’Environnement, l’Energie et le Déchet (CREED) and its satellite units in Northern Europe and Australia, ■ Transportation: Eurolum.

>

These centers, which form part of Veolia Environnement’s Research, Development and Technology department, work closely with the Group’s operational staff around the world.

They have the most sophisticated tools and techniques at their disposal, e.g. modeling, digital simulations, logistics, operational research and artificial intelligence. They carry out their trials on installations ranging from pilot runs to an on-site pre-industrial unit, with all conclusions systematically validated in the field by operational staff. They can rely on one of the largest networks of analytical laboratories in Europe, namely CAE (Centre d’Analyses Environnementales).

A number of partnerships

Scientific partnerships: ■ France : Ecole des Mines,

Ecole Nationale Supérieure de Chimie de Paris, INSA Lyon and Toulouse.

■ Rest of Europe :

University of Sheffield, Imperial College of London, Madrid and Lund (Sweden) universities.

■ North America :

Argonne and Irvine laboratories in California, University of Florida, Ecole Polytechnique of Montreal.

Participation in institutional research programs : ■ France : CNRS, INRA, CCPC, BRGM, Institut Pasteur, CNRL (Centre National de Référence de la Légionelle), Water Agencies, CEA, INRETS, ANVAR, ADEME, ALPHEA (hydrogen center of expertise) and several ministries.

Development, Purification and Protection of Water in Switzerland).

■ US :

AWWARF (American Water Works Association Research Foundation).

■ Worldwide: GWRC (Global Water Research Center).

■ Rest of Europe : UK Environment Agency (EA), the European Commission, CEN (Comité Européen de Normalisation), EAWAG (Federal Institute for the

Sustainable development report for 2002

VEOLIA Environnement 15

Our resources Dialogue with our partners

2,600 employees informed > about eco-housing “A question and answer guide to sustainable development” This handbook was distributed in 2002 to the 2,600 employees of Proxiserve, a VE subsidiary specializing in in-home services. It explains how each employee may make a contribution to sustainable development and eco-housing.

First green electricity supply

> contract in France EdF has launched Option Equilibre, the first electricity offering in France guaranteed to come from renewable energy sources. In November 2002, VEOLIA Water signed up to the first “green” electricity contract available in France at eligible sites (i.e. with consumption of over 16 GWh and 7 GWh from 2003) with EdF, specifying that 15% of the energy supplied is generated from renewable energy sources in France (i.e. primarily water and wind power).

The relevant sites and generation systems are audited, certified and inspected by RECS (Renewable Energy Certificate System), an independent European organization. Veolia Water thus taps into a unique (but more expensive) source of energy, the price of which reflects its commitment to renewable energy.

This contract, which now covers 11 VEOLIA Water facilities in France, embodies the Group’s sustainable development-oriented purchasing strategy.

Sustainable development report for 2002

16 VEOLIA Environnement

The values of respect and responsibility for the environment, local populations and future generations form part of the corporate culture because the Group continuously strives to raise the awareness of its internal and external partners and to rally them to the cause.

MOBILIZING OUR EMPLOYEES VE’s 302,000 employees are the key players working towards the Group’s sustainable development goals through their day-to-day activities.

Training is a key means of raising their awareness, and the Group attributes great importance to it (see “Our social responsibilities” on page 22).

But VE also harnesses the energies of its men and women by keeping them regularly informed of internal achievements in the field of sustainable development.

Some Group Divisions now publish their own environmental report, e.g.

Onyx, Connex and several companies within each business (Three Valleys at Veolia Water in the UK, Onyx UK and Collex Onyx).

Furthermore, more and more workshops and meetings are devoted to the issue of sustainable development, such as the September 2002 conference in Bucharest, which brought together all Dalkia’s managers operating in central and eastern Europe.

RAISING THE AWARENESS OF OUR SUPPLIERS It is only natural for VE to involve its suppliers and customers in its sustainable development strategy.

Consequently, a Purchasing charter was adopted by VE and all of its Divisions during 2002.While seeking to make the Group’s worldwide purchasing operations as efficient as possible, the purchasing function must also systematically remain responsible in its dealings with suppliers.

This type of partnership consists in forging enduring and transparent relationships backed up by mutual efforts to promote quality and efficiency, as well as securing a commitment from them (which may be contractual in certain cases) to pursue sustainable development. Once established, this commitment is monitored and checked by Veolia Environnement throughout its contractual relations with the supplier.

The Charter sets out the five following values: Group Vision, Behavior, Professionalism,Safety and Environment, and Confidentiality.

Lastly, Veolia Environnement has created a web site dedicated to the theme of sustainable development.

www.d.durable.veoliaenvironnement.com

Dialogue with our various partners in civil society continues on a daily basis by virtue of the very nature of VEOLIA’s business activities. Environmental and social issues can be progressed only through an ongoing exchange of views.

MAINTAINING AND ORGANIZING OUR STAKEHOLDER RELATIONS VE’s teams are in daily contact with key players in civil society owing to the very nature of their activities, which are firmly rooted in the everyday life and concerns of communities. The Group encourages the Divisions to formalize this type of contact so that they get to know their partners better and gain more insight into their expectations.

VE has been a longstanding supporter of organizations, of which it is an active member, including the WBCSD(1) and Comité 21, ORSE(2) and 4D(3) in France. In addition, it is organizing partnerships with the French Red Cross, Caritas and Action contre la Faim (Action against Hunger) charities, and training programs, such as the one set up by France Nature Environnement and the Urban Environment Institute (IEU), the Group’s training center.

PARTICIPATING IN THE INTERNATIONAL DEBATE Our active participation in preparations for the World Summit on sustainable development in Johannesburg reflects our commitment to sustainable development and our involvement in global thinking.

Henri Proglio, who was invited to the

Multi-stakeholder session

French government’s seminar on sustainable development, emphasized the responsibilities of businesses within the fabric of society.

> in London

This session, which was organized by VE on December 11, 2002, was attended by several NGOs, not-for-profit associations, public authorities, financial analysts, investors and scientists, who were able to ask questions about a wide range of topics, such as access to water, a reduction in greenhouse gas emissions, a reduction in dioxin emissions, the use of renewable energies and clean fuel, as well as access to essential services, North-South dialogue, ethics, employee training and publicprivate partnerships. VE gave a presentation about some of its achievements and objectives. Detailed written answers were sent to participants. All the answers are available on the web site.

INFORMING OUR SHAREHOLDERS AND INVESTORS Coinciding with the changes in the Group’s ownership structure, VE’s management team met numerous Socially Responsible Investors (SRI) and specialist ethical fund managers. We participated in the debate organized by certain specialized financial institutions about ethical investing. Lastly, VE joined the Ethibel Sustainability index during 2002. This agency specializes in the evaluation of sustainable development criteria.In addition, VE is working closely with Storebrand to define an analytical framework specific to the environmental services sector.

1:World Business Council for Sustainable Development 2: Observatoire sur la Responsabilité Sociétale des Entreprises 3: Dossiers et Débats pour le développement durable

> Listening to stakeholders STAKEHOLDERS

MAIN REQUIREMENTS

Investors

● ●

Employees

● ●

Industrial and municipal customers

●

Consumers

●

Job mobility Professional development

Contribution to their sustainable development performance ● Technical innovation ●

Public authorities

●

Not-for-profit organizations and NGOs

●

Quality of service Cost-efficiency

Contribution to public sustainable development policies ● Compliance with and anticipation of regulations ●

Scientific partners

Transparent information Ethical behavior

● ●

Transparent dialogue Innovation Research and development Debate and foresight

Sustainable development report for 2002

VEOLIA Environnement 17

Our social responsibi lities Our priorities, and action plans OUR RESPONSIBILITY TO OUR EMPLOYEES PRIORITIES

ACTION PLANS

Develop and secure employment

Offer secure jobs Avoid job insecurity

Improve employees’ working conditions

Promote hygiene, and health and safety in the workplace Develop high-quality social protection Evaluate and compare levels of remuneration

Identify, anticipate and develop skills

Provide career-long training Anticipate demographic challenges and improve competency management Organize job mobility and foster employee loyalty

Foster dialogue and innovate in social affairs

Promote innovation in social affairs Monitor and evaluate employee satisfaction Ensure that employees have representation at all levels

Guarantee human rights

Uphold fundamental social rights

OUR RESPONSIBILITY TO SOCIETY PRIORITIES

Sustainable development report for 2002

18 VEOLIA Environnement

ACTION PLANS

Broaden access to essential services

Increase access to drinking water Produce and distribute heating and climate control services Promote efficient mass transit services Raise public hygiene and sanitation standards

Prevent public health risks

Control dioxin emissions Guarantee the quality of water supplies Control risks arising from legionnaire’s disease

Contribute to economic and social development

Forge partnerships Promote health and environmental education Foster social cohesion and sponsor good causes.

Sustainable development report for 2002

VEOLIA Environnement 19

Our responsibility to our employees Developing and securing employment

Improving working conditions Onyx waste management agents in Chennai (India).

> Worldwide social reporting A worldwide employee database comprising one hundred or so indicators is compiled from the information supplied by each of VE’s companies around the world.

This social reporting provides a better insight into each company and a more accurate overview of social trends, especially employmentrelated developments. It represents an invaluable tool for the implementation of targeted human resources management policies and facilitates the production of a set of worldwide indicators, while going well beyond the new requirements of the New Economic Regulations (NRE) Act in France.

OFFERING SECURE JOBS

AVOIDING JOB INSECURITY

VEOLIA Environnement continues to contribute to the economic and social development of the geographical regions in which its Divisions operate.

Between 2001 and 2002, total headcount increased by 7,000, including a rise of almost 1,200 on a comparable structure basis.

The data from the worldwide employee database point to the following employment trends within the Group:

VE pursues a policy of stabilizing its workforce and combating job insecurity. By making use, therefore, of all possible alternatives the Group was able to limit the number of group redundancies caused by the deterioration in economic conditions. Redundancies numbered 1,511 in 2002 (0.5% of the total workforce), representing a fall of 10% compared with 2001.

In addition,VE and its Divisions have for some considerable time been developing expertise in social engineering.For instance, Dalkia’s facilities management contracts often stipulate that customers’ teams are to be transferred to the Group, and Dalkia offers each employee the requisite support and guidance. At present, 2,800 of the 7,000 employees working in this sector used to work for customers. This also applies to municipal contracts where the integration of existing personnel forms part of the contractual provisions incumbent upon the operator. Between 1999 and 2001, Veolia Water took on 23,000 staff under all its contracts.

In the Czech Republic, for instance, Vivendi Water has become the number one local private-sector employer, overseeing the transfer of expertise and providing training for employees, the majority of whom are locals.

■

302,000

●

Total headcount*

●

Number of companies included in the scope of the social reporting:

1,962

(*) Total workforce at Dec. 31, 2002, including two-thirds outside France. This figure includes 100% of Group employees, including FCC’s.

Breakdown of the headcount by type of contract (at Dec. 31, 2002)

14.4%

85.6%

■

The percentage of full-time equivalent employees on a permanent employment contract remains at 85.6% of the total headcount.

Temporary staff account for just 4.1% of the total headcount on a full-time equivalent basis.

Employee-related initiatives, especially professional training programs and promotion, have led to a tangible decline in resignations (down 12%).

PROMOTING HYGIENE, AND HEALTH AND SAFETY IN THE WORKPLACE All VE companies are currently implementing measures to improve the physical safety of employees. The level of accident frequency and severity rates, though reflecting the specific nature of the risks faced, especially at construction sites, warrants a redoubling of existing efforts.

Dalkia France has carried out a survey of all its employees to identify and evaluate risks in this area.

The 7,300 employee representative and management committees which oversee health and safety issues within the Group illustrates VE’s commitment to bringing the risks of occupational accidents rapidly under greater control at all its Divisions. The sharing of knowledge and new methods, has led through concrete examples, to the development

Temporary employees (i.e. with a fixed-duration employment contract)

Sustainable development report for 2002

20 VEOLIA Environnement

DEVELOPING HIGH-QUALITY SOCIAL PROTECTION Social protection is one of the main priorities of VE’s social policy. All the Group’s employees in France are covered by sickness, provident and retirement savings programs. In the rest of the world, VE guarantees in most cases its employees social protection exceeding regulatory requirements and those laid down in collective bargaining agreements. One initiative taken during 2002 was gradually to pool the sickness and provident insurance programs operated by individual companies in order to unlock economies of

> Health and safety in Chennai (India) A second phase covering the entire workforce will soon be launched.

The program also includes employee training in safety and the supply of suitable protective equipment.

Thanks to the health program organized

by Onyx in conjunction with social service volunteers, over 800 workers have already received a full medical check-up and systematic annual vaccinations.

Occupational accidents 100 60 40 20

(number of occupational accidents per million man-hours)

1.18 46.2 1.11

29.2

24.7 0.76

38.6 22.9

0.64

0.47

0.83

0

Connex Dalkia

scale and thus to enhance the coverage they provide for employees. A total of 130,000 employees are already benefiting as a result.

EVALUATING AND COMPARING LEVELS OF REMUNERATION VE’s primary aim is to pursue a fair remuneration policy and to promote equality between men and women performing the same jobs. The gap in average remuneration is mainly attributable to the nature of the jobs carried out and their constraints, as well as differences in age, seniority and qualification level, which are frequently seen between male and female members of the workforce.

The ratio of the average remuneration of Group employees to the average minimum remuneration in all countries was calculated for the first time in 2002. In countries where there is a statutory level of minimum pay and which together account for two-thirds of VE’s workforce, the weighted average salary came to € 26,835, i.e. 2.3x the average legal minimum wage in these countries.

●

Gross average annual remuneration worldwide:

●

Difference between the remuneration of men and women:

Frequency rate

70.9

80

Permanent employees (i.e. with a permanent employment contract)

of a strong corporate culture of safety in the workplace.In Colombia,for instance, a program of monthly inspections to curb the risk of accidents or occupational illness has been drawn up.

FCC

Onyx VEOLIA Total Water VE

Severity rate (number of days lost per thousand man-hours)

€ 23,927

14.7%

N.B.These average figures are for information purposes only and should be interpreted with a degree of caution. They cover a large variety of different situations owing to the nature of the Group’s activities and jobs, as well as their geographical location.

Sustainable development report for 2002

VEOLIA Environnement 21

Our social responsibi lities Identifying, anticipating and developing skills

2

IEU (Urban Environment Institute) - Jouy-le-Moutier (France).

of the Group’s payroll

%

was devoted to training expenditure during 2002.

56

% of employees received training during 2002.

3,4

million hours of training were carried out.

Employees that received training 25,000

22,692 21,399

VEOLIA Environnement’s commitment to employment is backed by a set of measures intended to exert a major influence over the content of jobs, adapt them to technical and social developments, while raising the qualification levels and professionalism of employees. Through its training and competency management policy, VE aims to offer all its employees a route to social advancement and to highquality professional development.

CAREER-LONG TRAINING 0

2001

2002

Management-level employees

150,000

147,200 125,309

The Urban Environment Institute (IEU), which provides preliminary and continuous training, specializes in one core business, namely environmental services, and offers diplomas tailored to economic and regulatory developments, such as the university diploma in environmental services.

0

2001

2002

Other employees

Providing training around > the world The IEU (Urban Environment Institute) has three affiliated centers around the world, namely the UK College for Environment and Transport, Victoria University in Melbourne, Australia, the Environment Services Institute in the Czech Republic and several training centers across Europe (Germany, Italy, Spain), the US, Africa and the Middle-East (Gabon, Egypt, Morocco) and Asia (Hong Kong, Malaysia).

It cultivates international partnerships, such as with San Pablo University in Spain, ISCAE in Morocco and the University of Leeds in the UK.

Sustainable development report for 2002

22 VEOLIA Environnement

Preliminary training By training a large number of young people each year in VE’s businesses through work-study training programs and guaranteeing them a job at VE after they obtain their diploma, the Institute represents an efficient tool helping to integrate them and offering them secure employment prospects.

Continuous training The IEU, which helps to develop knowhow within the Group, provided training for 5,000 employees during 2002.

In most cases, these training courses lead to the award of a recognized diploma, which represents a source of empowerment and confidence.

In sum, IEU prepared candidates for 15 diplomas during 2002.

Continuous training is also provided by the Divisions, which trained a total of over 170,000 employees in 2002.

Relations with universities and schools In addition, VE plays host to a large number of students and schoolchildren each year. Almost 3,000 students (up by 17%) took advantage of this policy during 2002, preparing the way for future recruitment and raising awareness of environmental services among young people. In addition, VE attends the forums organized at leading French universities as part of its Club Campus program.

The Group’s training and personal development programs, which show that VE genuinely acts to facilitate social advancement, can be measured through two indicators: ■ a significant increase during 2002 in the percentage of employees that received training (up 14%) compared with 2001; ■ the 11,000 employees (up 8%) who received promotion as part of the Group’s efforts to standardize the classification of or reclassify jobs.

ANTICIPATING DEMOGRAPHIC CHALLENGES AND IMPROVING COMPETENCY MANAGEMENT Competency management takes various forms, including continuous professional training and recruitment on workstudy programs, such as the mechanics and electricians hired in India during 2002 and the future business school graduates hired in Argentina. It also includes measures in France to validate the knowledge acquired through experience, which carried on from the Group’s existing program of validating professional knowledge.

Competency management represents a major priority for VE. Given the current trend towards the gradual contraction in the supply of labor owing to an ageing population, VE needs to ensure that its employees regularly update their knowledge and develop new skills. To this end, the Group has launched a group program to consider career path management, skill improvement and the organization of its workforce.

ORGANIZING JOB MOBILITY, BOOSTING EMPLOYEE LOYALTY AND DEVELOPING JOB AND PROFESSIONAL DEVELOPMENT PROSPECTS VE continues to develop ways of increasing its employees’ professional and geographical mobility. An international mobility charter, as well as a common classification for all the 29,000 management positions at all the Group’s companies was introduced during 2002.

An intranet site for employees dedicated to promoting job mobility is currently being prepared. This additional tool is intended to foster employee transfers between business sectors, Divisions and international regions, and thus represents a crucial way of offering employees genuine opportunities to broaden and enrich their professional experience.

Between 2001 and 2002, transfers between VE companies increased by 28%, with 2,800 employees switching from one company to another during 2002.

> Training simulator The IEU and Onyx have together developed a training simulator for managing household refuse incineration plants.

Designed by operators,this tool is intended to enhance process expertise, as well as the economic and environmental performance of plants. The simulator, which is currently installed at the IEU, has been designed for the 2,000 operators of Onyx’s plants around the world and should shortly be deployed in the UK to support the entry into service of three new plants in Hampshire.

> Social Observatory Founded in 2001 as part of the IEU (Urban Environment Institute), the purpose of the Social Observatory is to provide insight into economic, social and cultural trends affecting the Group’s businesses. It carries out research, investigations and pilot measures in the field of human resources.

It thus helps the Group to anticipate new competencies and resources required both by the Group and by its socio-economic and institutional partners. The work currently being undertaken by the Observatory includes an investigation into the working conditions of drivers at Connex, pilot operations to validate experience acquired by employees and an analysis of union relations and practices in Europe.

Sustainable development report for 2002

VEOLIA Environnement 23

Our social responsibi lities Fostering dialogue and innovation in social affairs

PROMOTING INNOVATION IN SOCIAL AFFAIRS A sense of autonomy and responsibility are among VE’s corporate values.

They encourage employees to take various initiatives, especially in social matters. For instance, in a bid to cultivate a spirit of innovation in this area, the social initiatives launched by VE companies are monitored each year. In 2002, more than 220 such measures were recorded around the world.

To raise as much awareness as possible about these social initiatives, a new compendium is due to be published in early 2003. The initiatives vary tremendously in nature and reflect the diversity of the links between our business activities and society. They include for instance: ■ basic educational courses run close to where Onyx-Est employees live, ■ developing skills and organizations within the 46 companies that make up the Générale des Eaux Economic and Social Unit (ESU), ■ personalized assistance for bus drivers at Connex’s network in Amiens who have been assaulted, ■ social innovation measures taken

by Onyx that accompanied the pri vatization of waste collection ope rations in Chennai (India), ■ publication of a book of multi-cultu ral recipes that was compiled by Connex employees working on the Stockholm metro system.

MONITORING AND EVALUATING EMPLOYEE SATISFACTION For the first time,VE carried out a satisfaction survey during 2003. One thousand managers in eight countries were asked by the CSA polling organization their view of the company and their professional experiences. Although the survey results have yet to be fully processed, it is already clear that VE and its Divisions have earned the trust of over 80% of the respondents, due mainly to the Group’s solidity, career development and job mobility prospects and its international dimension. To keep track of managers’opinions a survey of this kind will now be carried out every year.

ENSURING EMPLOYEES HAVE REPRESENTATION AT EACH AND EVERY LEVEL Social dialogue continued throughout 2002 within the Group Works Council and the European Social dialogue unit set up in 1996 by Générale des Eaux.

Following the deconsolidation of VE, Number of collective agreements signed during 2002 (as a % of the total)

an agreement was signed with the Group’s employee and union representatives with a view to adapting these bodies and setting up a French Works Council and a European Works Council specific to VE. Social dialogue is actively pursued at each company and at every level. This dialogue is deliberately decentralized to meet the expectations of employees and to factor in local working conditions. Over 1,500 collective agreements were signed during 2002 (up 37%), 65% of which were related to employee remuneration.

The Group focuses on consultation, as well as on systematically finding appropriate solutions, where the risk of conflict arises.

An emergency procedure was introduced under a collective agreement covering the Générale des Eaux economic and social unit (14,000 employees) to foster social dialogue and to limit the number of conflicts by seeking points of compromise. For instance, this procedure may be implemented before industrial action is instigated.

11,982 employee representatives around the world 1,512 collective agreements signed

Guaranteeing fundamental rights and workers’ rights UPHOLDING FUNDAMENTAL SOCIAL RIGHTS In 1996, VE – or the Générale des Eaux group as it was at the time – officially signed up to the principles laid down by the ILO (International Labour Organization) by adopting together with its social partners a charter of fundamental social rights, the main provisions of which (ban on child and forced labor, freedom of association, prohibition of any kind of discrimination) are now included in the Global Compact program.

In practice, VE has not encountered any particular problems with any of these points so far, but has had only a very small presence in the relevant countries.

Nonetheless, the expansion of its international operations will necessitate greater vigilance and verification of these rights during audits carried out in these countries.

These social rights include sexual equality in the workplace. VE’s policy is to promote equal pay for men and women who carry out the same job and have the same level of qualification.

VE pays particular attention to employment conditions for young people and complies with the minimum working age in each country.

It endeavors to create a healthy working environment and conditions around its sites for local economic activities, which are essential for preserving the local economic and social equilibrium. These activities are developed in independent entities, which are usually family-run, e.g. the operation of fire hydrants by communities, waste sorting and recycling.

Example of a social initiative

> The Multi-service Information and Mediation Kiosk (Connex) As part of its risk prevention and social integration policy in the underprivileged areas of Saint-Etienne (France), the transportation company endeavors to enhance relations with its customers, to forge closer ties with them and to reduce situations giving rise to conflicts.

It also participates in a local forum that serves as a focal point for all its dialogue with the community.

Breakdown of the workforce (at Dec. 31, 2002)

19.3%

80.7%

Men Women

during 2002 21% Remuneration-related agreements 6.5%

Agreements related to health, safety and working conditions

11.3% 61.5%

Agreements related to social dialogue Agreements related to other issues or several of the above

Sustainable development report for 2002

24 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 25

Our social responsibi lities Broadening access to essential services Onyx’s waste management contract in Alexandria (Egypt).

VE has signed up to the UN Global Compact > action program Global Compact, an action program set up by UN Secretary General Kofi Annan in 1999, comprises significant commitments for member companies, which pledge to uphold the following nine principles: • Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence.

• make sure that they are not complicit in human rights abuses.

• Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining • the elimination of all forms of forced and compulsory labor • the effective abolition of child labor; and • eliminate discrimination in respect of employment and occupation.

• Businesses should support a precautionary approach to environmental challenges; • undertake initiatives to promote greater environmental responsibility; and • encourage the development and diffusion of environmentally friendly technologies.

These principles are to be pursued through partnerships between private-sector companies and specialized UN institutions, NGOs and public-sector authorities.

Several programs launched by Veolia Environnement show how it is living up to its various commitments, some of which are presented in this report: • Its initiative with UNITAR to create competency centers in Asia-Pacific and Latin America (page 29); • The school refurbishment program in partnership with UNICEF in Tangiers (page 29).

Sustainable development report for 2002

26 VEOLIA Environnement

Water and wastewater, sanitation and hygiene, heat and climate control, and mobility are the essential services that VE delivers each and every day to local populations which help raise living standards while paving the way for economic development in harmony with the environment.

BROADENING ACCESS TO DRINKING WATER Worldwide,a total of 1.5 billion people do not have access to drinking water and 2.5 billion do not have a wastewater system.

In September 2002,the UN undertook to halve the number of people without access to drinking water or a wastewater system by 2015. VE participated in drafting the charter on access to essential services presented by the French delegation at the Johannesburg summit.

This declaration sets out the conditions that will have to be fulfilled if universal access to water is to be made a reality. In France, this is embodied by the Water Solidarity charter.

… BY PROPOSING PUBLICPRIVATE PARTNERSHIPS Our responsibility under the publicprivate partnerships that we enter into with local authorities extends well beyond purely technical solutions because they cover the provision of essential services. These partnerships have three targets: I) to ensure that the municipal authority retains control over the public service, II) to perform the service to the highest technical standards and as cost-effectively as

possible, and III) to achieve a sufficient return on capital employed. WATERDEV, which has its roots in this partnership culture, is a research and solidarity program for developing countries that was launched by Veolia Water in conjunction with public-sector authorities and NGOs. Its objective is to implement concrete solutions to increase universal access to water and wastewater services. WATERDEV works with several United Nations agencies, including UNESCO and UNITAR.

… AND BY HARNESSING EFFICIENT AND APPROPRIATE SOLUTIONS Reconciling economic development with social progress entails the use of different technologies depending on local circumstances. For instance, WATERDEV offered to set up fire hydrants in Niamey (Niger) in underprivileged areas, representing a pragmatic alternative to setting up a network. Our know-how is also geared to the needs of developed countries. It extends to the overall management of the water cycle using a range of efficient technologies that are tailored to the steadily growing expectations of our customers and populations, such as membrane technology for the production of drinking water, ultra-pure water for industry and the treatment of urban and industrial wastewater.

Lastly, we act in emergency situations (i.e. natural disasters, conflicts) through WATERFORCE, our humanitarian aid unit.

PRODUCING AND DISTRIBUTING HEATING AND CLIMATE CONTROL SERVICES Our business (operation, maintenance and refurbishment of thermal facilities, etc.) consists in supplying our customers with energy services, such as the operation of thermal facilities and heating networks, assistance with controlling consumption, and the management of urban lighting systems. Our expertise enables us to offer technological solutions that are adapted to local conditions and provide a cost-effective way of improving the living standards and comfort of local populations.

This represents a particularly major commitment in northern Europe, where outside temperatures may sink to below -30ºC during the winter months.

Since 2002, Dalkia has served 80% of the population of Vilnius, the capital of Lithuania, i.e. 600,000 inhabitants, through its urban heating network, which is linked to two cogeneration thermal plants. A program to refurbish the installation and to introduce remote management and individual control systems is now underway.

Measures have already been taken to curb leakages, and in line with its commitments, Dalkia has already reduced heating bills by 5%,a figure that will rise to 7% from April 2003.

PROMOTING EFFICIENT MASS TRANSIT SERVICES

Unfortunately, growing demand for transportation services has brought networks to saturation point and pollution to the maximum tolerable levels. Against this backdrop, Connex provides innovative solutions tailored to the specific needs of local communities. For instance, following an assessment of the situation with local partners, the pedestrian zone in central Amiens is now served by small electric vehicles.

RAISING HYGIENE AND SANITATION STANDARDS Today’s consumer society generates too much waste around the world.This may pose a threat to the natural environment and the health of local populations, especially where toxic waste is concerned. Our goal is to reconcile the profitability of our contracts with environmental and social priorities. For the past year, Onyx’s integrated waste management program in Alexandria has delivered cleaning and waste management services to a city of 3.5 million inhabitants. The landfill site constructed by the Group has replaced the previous tips and complies with the most stringent international environmental standards. Each day, 2,200 tons of waste is collected, with 600 tons being composted, making for a tangible improvement in the population’s quality of life.

Paratransit provides > long-term mobility solutions Connex’s Yellow Transportation subsidiary, which operates in Baltimore (US), provides door-to-door h e a l t h c a r e transportation services for handicapped people to administrative or healthcare facilities in line with the statutory provisions guaranteeing them equitable access to education, employment and transportation. This system now allows 8,000 people to move around more freely.

In addition, its PZN subsidiary in the Netherlands specializes in transportation services for the elderly or people with reduced mobility.

Transportation is a vital service since it allows freedom of movement, exchanges and leisure. It is also a proven driver of economic growth.

Sustainable development report for 2002

VEOLIA Environnement 27

Our social responsibi lities Preventing public health risks

Example of semi-continuous > dioxin monitoring At the Onyx plant in Reims, the semi-continuous analysis of dioxins allows more representative monitoring of the quantities of dioxins actually emitted by an incinerator. In a study performed by CREED concerning this technology, the Reims plant was fitted with measuring devices. The results provided insight into the quantities of reagent that need to be injected to exceed the regulatory requirements.

In addition to providing essential services that help promote public health, we endeavor to control the public health risks that are directly linked to our businesses.

CONTROLLING DIOXIN EMISSIONS(*) Objective: to offer to introduce semicontinuous dioxin monitoring for all our customers.

This method helps to check and control dioxin emissions more closely than is required under regulatory standards.

(See page 40 “Limit atmospheric pollutants”).

GUARANTEEING WATER QUALITY Percentage of waste managed at household waste processing units equipped with dioxin processing systems 80

70 60 50

67% 46%

56%

40 30 20 10 0

2000

2001

2002

The same percentage stands at 61% at plants where Onyx controls capital expenditure and with dioxin emissions of less than 0.1 ng/Nm3.

Sustainable development report for 2002

28 VEOLIA Environnement

In Europe and North America, water is the food product that is subject to the most stringent controls. In addition, a lack of wastewater treatment facilities, as well as various types of pollution, including from industrial sources, adversely affect the quality of natural resources, which may become unfit for use in water supply. Minimizing public health risks therefore entails preventing the contamination of natural resources, enhancing the efficiency of treatment systems, identifying the critical points of distribution systems (from the resource to the tap) and controlling the quality of water in drinking water networks. Efforts by water services to achieve ISO 9001 or ISO 14001 accreditation and the development of risk classification procedures,

such as Hazard Analysis and Critical Control Point (HACCP), which is currently being rolled out in France, embody our commitment to guaranteeing reliability and the continuous improvement of our processes.

CONTROLLING RISKS ARISING FROM LEGIONNAIRE’S DISEASE Legionnaire’s bacteria, traces of which may be found in cold water networks, thrive in the hot water systems of buildings and industrial processes. Their proliferation may be curtailed using specific treatment. We go further at the majority of our plants by formulating a specific plan to combat the development of legionnaire’s bacteria at each stage of the relevant process, i.e. the design of facilities, preventative maintenance, control of the conditions affecting bacterial growth and identification of strains.

Objective: to build a system which controls the risk of proliferation of the bacteria responsible for legionnaire’s disease, especially in sanitary hot water installations and cooling towers, maintain it and verify its application at the relevant sites.

Encouraging local economic development

LOCAL ECONOMIC DEVELOPMENT VEOLIA Environnement’s network activities are very close to populations,both where they live and work. They thus have a major influence over the immediate socio-economic surroundings.

Their positive effects can, for instance, be seen in terms of the local jobs they create in and outside France, as well as job placement schemes, such as in Spain, where FCC has signed agreements with local authorities to take on people experiencing social integration difficulties, and professional advancement programs, which increase employees’ purchasing power.

All these initiatives have positive implications for economies in the geographical regions where VE is present.

VE took the opportunity provided by the Johannesburg summit to review all action taken in the field by its Divisions over the past few years in pursuit of sustainable development.

VE has now established a replicable set of policies and best practices relating to technologies, participatory management methods and social support measures.

PROMOTING HEALTH AND ENVIRONMENTAL EDUCATION

(*) By dioxins, we mean all the polymers (dioxins and furans) that may be produced by combustion.

Our strategy is based on three principles: I) tight integration of the educational program with operating activities, II) in-depth analysis of the local socio-cultural environment, without which educational policies may be counter-productive, and III) indicator-

based evaluation tools reflecting changes in behavior, as well as the progress achieved on the sanitation front. As a result, educational and awareness programs targeting populations are a way of promoting sustainable development.

For instance, a major program to refurbish the sanitary infrastructure of schools in Morocco (Tangiers region) in conjunction with UNICEF is being backed by information sessions. In Durban (South Africa), an integrated policy (Participatory health and sanitation transformation) is taking over from the measures implemented over the past five years. It relates to the use of grey water, particularly for market gardening and the watering of parks, which will make a contribution to the social and economic development of local communities.

FOSTERING SOCIAL COHESION AND SPONSORING GOOD CAUSES VE’s workforce rallied to support those affected by the floods in France and central Europe during 2002.

They are involved in campaigns to improve safety on transportation systems (France and the UK) and public health (Colombia, Australia, etc.).

VE has focused its corporate sponsorship program around a charter emphasizing solidarity measures to support authorities and communities in regions or countries experiencing particularly tough situations, together with an appropriate procedure.

This type of assistance can be illustrated by the action taken in Niamey (Niger), where VE is providing the most underprivileged sections of the city with a program of free individual water connections and fire hydrants, subject to rigorous management of this equipment together with evaluations.

> Competency centers, a “type II initiative” Type II initiatives are those in which private companies, public authorities and local authorities all work together. Veolia Environnement has become involved in a multi-year plan run by UNITAR (United Nations Institute for Training and Research), international municipal federations and NGOs to support sustainable urbanization.

Good local governance methods and an array of technical solutions for managing local public services will be on offer through a

worldwide network of competency and expertise centers, the first two of which will open during 2003 in Kuala Lumpur (Malaysia) for the Asia-Pacific region and Curtiba (Brazil) for the South America and Caribbean region.

The seminars at these UNITAR centers, which will play host to local elected officials and senior-ranking municipal managers, will also be made available over an interactive webbased platform.

Sustainable development report for 2002

VEOLIA Environnement 29

Our environmental Our priorities, action plans and targets

performance CONSERVE NATURAL RESOURCES PRIORITIES

ACTION PLANS

OBJECTIVES

Reduce leaks from water distribution networks

>Maintain a network efficiency ratio of over 80% in the European Union

Control the Group’s water consumption

>Control consumption of industrial water

Preserve soil and biodiversity

Reuse waste for agricultural purposes

>Increase the percentage of waste reused for agricultural purposes

Economize raw materials

Develop recycling and waste recovery

>Increase the amount of waste recovered

Conserve energy resources

Optimize the energy efficiency of thermal facilities

>To be defined

Develop renewable energies

>Increase the percentage of overall production accounted for by renewable energies

Conserve water resources

REDUCE EMISSIONS PRIORITIES Combat climate change

30 VEOLIA Environnement

Help reduce emissions of CO2 under energy service contracts

OBJECTIVES >Define appropriate indicators for the main energy sources managed by Dalkia that help to measure the efficacy of our efforts to reduce CO2 emissions

Collect and recover biogas from landfill sites

>Equip 100% of landfill sites* by 2005

Foster the use of cleaner fuels and vehicles

>Reduce bus emissions of CO by 20%,of HC by 16% and of particles by 22% by 2005

Improve flue gas scrubbing processes

>Bring emissions of pollutants,particularly dioxins, under tighter control

Curb local nuisances

Limit odors, enhance quality of life and facilitate the integration of installations within the local landscape

> Factor these issues into the design of installations

Limit discharge of pollutants to water

Help to prevent industrial effluents entering the urban wastewater collection networks

> Propose a program for 50 networks by the end of 2005

Collect and treat leachates from landfill sites

> Equip 100% of landfill sites* by 2005

Enhance the treatment efficiency of our water treatment plants

>Keep treatment efficiency at over 80% out to 2005

Limit atmospheric pollutants

Sustainable development report for 2002

ACTION PLANS

Quantified target in the Environmental Management Program

* in operation

Our environmental

performance

Conserving water resources Treatment of wastewater from the city of Mexicali to supply the reactors of the La Rosita power station (Mexico).

Efficiency ratio of VEOLIA Water’s water network in the European Union (%) 100 90

82.3%

81.7%

Freshwater accounts for just 2% of worldwide water resources. VEOLIA Environnement’s primary contribution to the conservation of water resources is to combat waste by reducing leakages from water distribution networks.

82.1%

REDUCING LEAKAGES

80 70

Objective: maintain the efficiency ratio of the water distribution network at over 80% within the European Union.

60 50 40 30 20 10 0

2000

2001

2002

Efficiency ratio of VEOLIA Water’s water network worldwide (%) 80

73%

71%

75%

To meet this goal, we use constantly improving techniques at all our contracts, e.g. refurbishment of networks throughout their life cycle, effective maintenance to prevent any deterioration, pressure sensors and remote and acoustic monitoring systems to detect and locate leakages.

The contract signed with the cities of Tangiers and Tetouan in Morocco during 2001 exemplifies our commitment. When the contract was taken over, the network efficiency ratio stood at around 55%. We have committed to raise it to 85% over the 25-year duration of the contract.

The reduction in leakages from Dalkia’s district heating networks helps to save both water and energy. Refurbishment work is carried out, while information and remote management systems are installed to monitor the networks. At certain sites, such as in Vilnius (Lithuania), studies have been launched to discover the optimum flow rate, pressure and temperature to increase overall network efficiency. To this end, leaks per unit length are monitored in an area covering most central and eastern European countries to assess the impact of the optimization studies.

70 60 50 40 30 20 10 0

2000

2001

2002

The variations observed are linked to changes in the reporting perimeter (see the Methodology section).

OTHER MEASURES IMPLEMENTED Desalinating seawater To put less pressure on water resources and to stay ahead increased demand in areas where there is a shortage, Veolia Water has developed its expertise in distillation and reverse osmosis techniques paving the way for the desalination of seawater and salty water. At Ashkelon (Israel), the construction of a plant in two successive stages, each with capacity of 50 million cubic meters p.a. (32 reverse osmosis units) will supply 1.4 million inhabitants by using seawater, thereby remedying the shortage of water confronting the region.

Informing and educating consumer citizens The techniques developed by VE make sense only if they are complemented by efforts to raise consumer awareness. Water needs to be regarded as a scarce and precious resource and should thus be economized. Hence VE strives to introduce individual metering for apartment blocks and carries out campaigns to raise awareness, such as a newsletter and an international schools competition for schools launched to mark worldwide “the Year of Freshwater” .

Controlling the Group’s consumption

Recycling wastewater Another way of conserving water resources consists in reusing decontaminated wastewater from treatment plants for industrial purposes. In Mexicali (Mexico), a plan to build a power station (La Rosita) includes the reuse of municipal wastewater to supply reactors. The Group has built and commissioned the wastewater treatment plant, as well two pipelines, one carrying wastewater to the treatment plant and the other carrying the treated water to the power station.

Lastly, our Group needs to set an example in this area, even though it does not consume substantial quantities of water. Consequently, we strive to control our own energy consumption, especially when washing vehicles (e.g. waste collection or mass transit vehicles), when cleaning streets and in our office activities.

Monitor networks to combat water losses unaccounted for > water Improvements in the network efficiency ratio of major urban areas represent a major economic and environmental priority. It also constitutes a permanent challenge with old and particular dense networks.

The use of wireless technologies for reading meters for fixed networks thus represents a major advance. A radio module and integrated emitter is fitted to each meter, which transmits the data to a receiver and allows remote monitoring and triggers leak alerts, where appropriate. This is the principle behind the ARCHE system, which is currently being tested on part of the Paris network. Not only does this system facilitate compliance with the latest regulatory requirements in terms of individual metering, it also improves comfort for users and helps to meet safety and resource management targets.

VEOLIA Water: repairing leaks in a water distribution network.

Sustainable development report for 2002

32 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 33

Our environmental Preserving soil and biodiversity

performance Recovering and economizing materials Waste sorting plant in Portsmouth (UK).

VEOLIA Environnement’s > efforts to protect the Antarctic The Antarctic, the last unspoiled continent on the planet, was designated in the Madrid Protocol as “a natural reserve devoted to Peace and Science”, thereby embodying several of the Group’s environmental values.

In 2001, VE entered into an agreement with the Australian government to supply the Australian Antarctic Division with 240 watertight waste containers.

In 2002, it signed a similar 10-year agreement with the Chilean Ministry of the Environment relating to all the Group’s activities and leading to a better assessment of the impact of human activities.

Aside from experiments into pollution abatement technologies in extreme environments, the assignment also increases some R&D in relation to biodiversity issues.

Compost produced by Onyx (thousands of metric tons) 756 800 700 600 500

579 395

400 300 200 100 0

2000

2001

2002

Proportion of sludge recovered for agriculture use by VEOLIA Water (%) 50%

37

37

2001

2002

Soil represents a key asset for the planet’s food resources. Maintaining its fertility, stability and quality constitutes a top priority. VE helps to preserve soil by harnessing the agricultural reuse of organic waste, and by guaranteeing its quality and traceability.

REUSING WASTE FOR AGRICULTURAL PURPOSES Human activities produce a growing quantity of organic waste. Returning it to the soil, especially in the form of compost,helps to restore the soil’s fertility.

To illustrate the agricultural value and the safety of urban composting, our researchers are carrying out a ten-year field trial in partnership with INRA*.

Three types of composting have been tested, i.e. bio-waste, sludge and green waste, and household waste.

VE is developing ways to guarantee the quality of products for agricultural reuse, such as policing the municipal wastewater network to improve sludge quality and also implementing seperate collection operations for the biodegradable waste fraction. Products that fail to satisfy these quality standards are treated in a different way.

The Group’s Central Analysis Laboratory (CAE) has developed rapid analytical methods, ensuring that only products satisfying the most stringent standards are earmarked for agricultural reuse.

25%

0%

Sustainable development report for 2002

34 VEOLIA Environnement

* INRA: French National Institute for Agricultural Research

OTHER MEASURES Guarantying the quality and traceability of waste reuse The agricultural reuse of waste needs to be handled transparently with guaranteed inspections and quality. Onyx is pursuing two avenues of development, which are intended to satisfy and reassure all participants in the waste reuse chain: ■ selection of raw materials and traceability based on strict criteria: origin, safety, etc.

■ implementation of shredding, fermentation, formulation and packaging techniques suitable for agricultural reuse.

The Loriol-du-Comtat platform we operate has received the European Ecolabel accreditation as an environmentally friendly soil enrichment agent, which certifies that the compost produced helps to combat soil and water pollution.

Carrying out soil remediation To participate in pollution abatement, we are constantly expanding the scope of our activities to new processing techniques, such as thermal desorption, a process whereby pollutants are volatilized by heating the contaminated soil (400-600°C) and which is well suited to light and heavy hydrocarbons. Soil treated in this way may easily be reused as fill material.

Reductions at the source waste recovery and recycling help to economize on raw materials (metals, glass, textiles, etc.) and to cut the quantities of waste disposed of at landfill sites.

REDUCING PRODUCTION OF WASTE AT SOURCE The most enduring way of economizing on raw materials is to plan to use as little as possible when products are designed and manufactured. We advise a number of industrial customers on their strategy regarding changes in manufacturing processes to reduce the quantities of waste produced at the source and to help produce waste that can easily be recycled. For instance, we can help reduce the quantities of sludge produced in spray booths in the automotive industry by treating them with biological conditioners.

IMPROVING WASTE COLLECTION AND SORTING Efficient organization of waste collection helps prevent uncontrolled dumping and to curb the adverse effects on public health, especially in developing countries. Together with source separation, it makes for improved recovery of waste, thereby helping to combat wastage.

The increased automation of waste sorting units helps to boost efficiency and to reduce risks for the operator. The numerous mechanical waste separators introduced by Onyx sort waste into several categories prior to manual sorting, which facilitates the work of the operators.

DEVELOPING RECYCLING AND WASTE RECOVERY It was several years ago that Onyx first developed recovery processes, and these have now reached some degree of maturity (cardboard, glass, etc.). We are now focusing our efforts on new areas, such as electrical and electronic equipment, the strong growth potential for which is currently held back by difficulties related to organisation and their collection. To overcome these obstacles, Onyx has set up Triade Electronique, a company dedicated to the collection,recovery and recycling of electrical and electronic equipment.

Quantities of waste recovered by Onyx through sorting, recycling, composting (in millions of metric tons) 4.6 5

3.6

4 3 2 1

1.8

0

2000

2001

2002

Quantities of sludge produced by the Group (thousands of metric tons of dry material) 1000 750

664

687

500 250

OPTIMIZING MANAGEMENT OF THE WASTE PRODUCED

BY THE GROUP The quantities of waste generated by the Group’s own activities are small in relation to the quantities treated by Onyx on behalf of its customers. This said, we apply the same reduction at source and recovery targets to our own waste, as reflected by our handling of the sludge from wastewater treatment plants, which represents the main type of waste produced by VEOLIA Environnement.

0

2001

2002

Improvements in Veolia Water’s treatment processes contribute directly to the higher quantities of sludge produced, which leads the Group to develop techniques for treating and recycling sludge.

Sustainable development report for 2002

VEOLIA Environnement 35

Our environmental

performance

Conserving energy resources… and combatting climate change CREED’s photovoltaic energy installation at Limay (France).

Group’s total energy consumption (TWh) 100 80

77 48

56

60 40 20

Controlling energy consumption is a key priority for achieving energy self-sufficiency, conserving resources and combating climate change.

Consequently, the authorities in Europe and around the world have introduced measures to promote energy efficiency, renewable energies and efficient techniques, such as cogeneration.

0

2000

2001

2002

The increase in thermal energy and electricity consumption is attributable to the overall increase in business and the scope of the reporting entity (see the Methodology section).

Renewable energies used by Dalkia (GWh) 1712

2000 1500 1000

416

592

500 0

2000

2001

2002

Dalkia’s consumption of renewable energy is increasing significantly and comparatively faster than its total energy consumption.

Sustainable development report for 2002

36 VEOLIA Environnement

OPTIMIZING THE ENERGY EFFICIENCY OF THERMAL FACILITIES By improving the energy efficiency of thermal facilities through its operational and maintenance expertise, Dalkia considerably reduces its customers’primary energy consumption. The efficiency of heating networks (notably the use of a combination of fuels and the development of preventative maintenance) and the roll-out of remote management systems are instrumental in promoting sound management of thermal facilities. Efficiency tripled between 1998 and 2001 at certain units in the Czech Republic. The stakes are just as high in industry, where Dalkia is able to commit to quantified reductions in energy consumption.

These efforts are of great significance because the consumption of a large industrial site is roughly equivalent to the domestic needs of a city with several hundred thousand of inhabitants.

PROMOTING THE RATIONAL USE OF ENERGY

Percentage of natural gas consumed by Dalkia at its cogeneration facilities (%)

Developing waste-to-energy conversion

Developing cogeneration By raising the energy efficiency of thermal facilities, cogeneration (i.e. the simultaneous generation of thermal energy and electricity) reduces primary energy consumption by around 10% and minimizes emissions of atmospheric pollutants. Dalkia is one of the leading private operators of cogeneration plants in Europe for industrial sites or for its heating networks.

Developing renewable and alternative energies

Waste incineration represents the second main source of renewable energy in industrialized countries after hydroelectric power. Onyx has 70 household waste to energy plants. The recovery of biogas from landfill sites is another avenue currently undergoing intensive development. Onyx has led the way in the field and has equipped 29 of its landfill sites around the world.

Dalkia also uses the heat recovered by ten of Onyx’s incineration plants across its networks, which amounted to 463 GWh in 2002 (out of a total of 5,093 GWh).

60

45%

45

33%

31%

30 15 0

2000

2001

2002

Thermal energy and electricity sold by Onyx resulting from waste-to-energy conversion (GWh) 10 000 7 500 5 000

4,055

4,972

5,093

2 500

Dalkia is diversifying its energy sources and introducing multi-energy solutions drawing on local resources,primarily for its heating networks. It is also helping to balance resources and to promote renewable energy, a growing proportion of which are used alongside fossil fuels. They include geothermal energy, mining gas, biomass, thermal solar energy, together with the thermal recovery of biogas, waste and industrial effluents.

Controlling our own energy consumption Lastly, we are careful to control our own energy consumption, whether it be electricity to power water treatment or transmission facilities or fuel to run our vehicles.

In conjunction with our customers, we are optimizing the journeys made by our field staff, notably in the Ile de France (Paris) and Rennes regions.

Leveraging the experience gained by Connex, the Group has equipped vehicles with on-board information systems helping to plan journeys logically.

We also aim to reduce our fuel consumption, which represents a major source of greenhouse gas emissions.

0

2000

2001

2002

> Solar energy to protect the environment At the Saint-Jean Saint-Pierre development zone in Narbonne (France), Dalkia supplies heating services from a central steam plant and sanitary hot water to residential customers produced by solar panels. Panels with a total surface area of 622m2 are used and cover 48% of demand from 950 housing units, while reducing prices per cubic meter and lowering emissions of CO2 by 190 tons p.a. and sulfur emissions by 1 ton. This represents a first in a residential environment.

Sustainable development report for 2002

VEOLIA Environnement 37

Our environmental

performance

Controlling greenhouse gas emissions… and controlling climate change

Reducing greenhouse > gas emissions Dalkia and its english experience To reduce greenhouse gas emissions, the UK has taken two series of measures. The first was the creation of a green tax raising the cost of energy consumption. The second was the introduction of a system of negotiable emission permits. Thirty-four companies pledged in this first emission credit market to reduce their emissions by 4 million tons of CO2 equivalents by 2006, representing a reduction of 11% compared with the 1998-2000 average. Dalkia was the only energy services company among those selected. It undertook to reduce emissions from a portfolio of four hospitals and 134 commercial buildings by 100,000 tons or 37% of the total.

The voluntary commitment system in France In France, 18 industrial groups have set up a voluntary commitment system for reducing their greenhouse gas emissions. Dalkia is gearing up to help its customers meet their targets, notably through energy efficiency measures and by introducing cogeneration plants.

Help our customers to reduce their emissions In the UK, Dalkia is set to build and operate a 23 MW cogeneration plant to supply AstraZeneca’s unit in Macclesfield with steam and electricity. This new installation will pave the way for a 39,000 ton reduction in the site’s carbon dioxide emissions each year.

THE CHALLENGES

sions). It also helps its industrial customers (33% of worldwide emissions) to meet their own reduction targets. In line with the guidelines currently being drafted, we have decided to account for direct emissions, as well as emissions avoided at businesses over which we have operational control.

VE is involved in combating the greenhouse effect by undertaking together with its municipal customers to use technological solutions with a low carbon content for housing, transportation and waste purposes (respectively 24%, 17% and 3% of worldwide emis-

VE’s greenhouse gas emissions* (millions of metrics tons of CO2) 25

19.6

20 15

15.4

REDUCING EMISSIONS ARISING FROM THE USE OF FOSSIL FUELS The use of fossil fuels (gas oil, heavy fuel oil, natural gas, LPG, coal, etc.) contributes to the production of greenhouse gases and CO2 in particular.

Through their expertise and skills, Dalkia’s teams can help to reduce CO2 emissions by optimizing thermal efficiency and by harnessing renewable energies and cogeneration technology.

Objective: define appropriate indicators for the main energy sources managed by Dalkia that can be used to measure the success of our efforts to reduce CO2 emissions.

14.5

10 5

REDUCING TRANSPORTRELATED EMISSIONS

0

-1.5

-0.1

-5

2000

-1.9

-0.1 -2.7

-3.1

2002

2001

Direct emissions of greenhouse gases (excluding landfill biogas) Emissions de CO2 évitées

By training its employees in controlled driving techniques and environmental efficiency, as well as by optimizing its passenger transportation services, Connex helps to reduce CO2 emissions.

Emissions of CO2 economized due to cogeneration Direct emissions of greenhouse gases are increasing primarily owing to the growth in Dalkia’s business and the expansion in the reporting perimeter, with the start-up of the Tallin, Vilnius and Poznan contracts and the acquisition of the Siram Group in Italy. All in all, Dalkia’s direct CO2 emissions increased by 3.4 million tons during 2002.

At the same time, the group has pursued the development of solutions in partnership with its customers to avoid emissions, such as: - recovery of biogas from landfill sites, as well as mining gas,

- recovery of thermal energy from waste incineration - use of renewable energies (especially biomass and geothermal energy).

Lastly, the method used to calculate avoided emissions was altered during 2002 following national and European analyses in which our Group participated. We now assess electrical energy with emission factors by major geographical region rather than by country and use standard natural gas boilers as our benchmark.

Objective: Connex undertakes to train 90% of its driving personnel in environmental efficiency over the next five years of their career.

COLLECTING AND TREATING BIOGAS The decomposition of organic waste at landfill sites produces biogas, around 50% of which is methane (CH4).

Methane has a very potent greenhouse effect, which is 21 times stronger than that of CO2. Onyx, which has expertise in biogas recovery technologies, is also developing a more advanced technology for landfill site management, namely the bioreactor. This process relies on the controlled recirculation of leachate, which provides humidity and nutrients to the bacteria contained in waste, thereby speeding up the decomposition process.

Bioreaction provides greater control and accelerates the production of biogas.

Biogas collection at Caracas - Onyx (Venezuela).

Biogas 600 500 400 300

399

200

221

145

187

74

82

88

1999

2000

2001

100 0

Objective: Install biogas collection and treatment systems at 100% of the landfill sites* in operation that accept biodegradable waste by 2006.

111

2002

Avoided emissions of methane through biogas treatment (thousands of metric tons of CH4) Number of sites equipped with biogas recovery and processing systems

* at which Onyx is responsible for capital expenditure.

> Example of cogeneration Millions of tons of CO2 emissions economized

by Dalkia as a result of cogeneration in France 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0

Cogeneration, an efficient technique of simultaneously producing heat and electricity, is one of the most effective ways of reducing greenhouse gases in view of its good energy efficiency.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

*excluding methane from waste landfills (MtCO2)

Sustainable development report for 2002

38 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 39

Our environmental Limiting atmospheric pollutants

performance Limiting local nuisances Dalkia’s site in Nantes (France).

Improvement in unit emissions by Connex’s passenger transportation vehicles (rebased 100 for 2001) 120

113 108 100 103 110

100

94 93

90

92

80

2000

2001

2002

Particles Hydrocarbons CO (carbon monoxide)

Emissions from waste incineration plants operated by Onyx (g/ton incinerated) 2000

Atmospheric pollutants give rise to environmental problems, such as acid rain, and may cause respiratory problems among the local populations.To combat this type of pollution, fuels and motor engines need to be improved and flue gas emissions treated.

ENCOURAGING THE USE OF CLEANER FUELS AND VEHICLES Objective: reduce overall pollutant emissions from Connex’s buses and coaches by the following proportions by 2005: ■ CO: 20%, ■ Hydrocarbons: 16%, ■ Particles: 22%.

To this end, Connex refurbishes older vehicles by using very low sulfur fuels and installing catalytic particle filters.

Connex also improves its fleet by taking older vehicles out of service and replacing them with newer ones meeting the latest anti-pollution specifications.It also prioritizes vehicles running on cleaner fuels such as LPG(*), natural gas, or even electricity, especially in the historic center of towns and cities.

254 1500

212

260 102

153 67

1188

1202

1000

1215

HCI Dust NOx

500

SOx 0

240

164

138

2000

2001

2002

Sustainable development report for 2002

40 VEOLIA Environnement

ENHANCING THE TREATMENT OF INCINERATOR FLUE GAS EMISSIONS The gas effluents from waste incineration plants are subject to extremely precise monitoring. In close liaison with Onyx’s incinerator operators, CREED carries out research into reagents for treating flue gas emissions. New reagents are regularly tested and guidelines for their use improved. At present, highly pulverized lime, which is used by the Group, represents one of the most effective agents. It collects a larger amount of the pollutants when used in small quantities, thereby reducing the volumes of residual waste.

Furthermore, the treatment of dioxins and furans in incinerator gas flue emissions is one of our major priorities.

Objective: equip all waste treatment plants with efficient flue gas treatment systems to reduce dioxin emission levels to less than 0.1ng per Nm3.

(See also page 28 “Prevent public health risks: control dioxin emissions”).

In view of the proximity of our businesses to places where local people live and work,controlling the impact of our activities on the local surroundings of the facilities we manage, in whatever form it may take—odor, noise or visual nuisances—is essential to integrate them within the local environment.

REDUCING ODOR NUISANCES We are pursuing research to eliminate odors that may affect local people living close to wastewater treatment facilities. Saphyr®, which represents an alternative to lime treatment, is a new process used at Cortina d’Ampezzo (Italy) and Cognac (France). It consists in chemically stabilizing and disinfecting liquid sludge as soon as it forms.

This destroys bacteria and eliminates once and for all the odors occurring when sludge is stored, transported or spread on farmland.

IMPROVING THE LIVING ENVIRONMENT OF TOWN AND CITY DWELLERS Over the years, water and wastewater networks grow older and need to be replaced. VE Water has thus developed techniques allowing repairs to be made within piping systems.Refurbishment is carried out using several processes, such as sleeving, tubing, projection, injection or work performed without trenching, using directional drilling or microtunneling systems. These techniques reduce the disruption to traffic, curb dust and

noise emissions and allow businesses to continue operating on site.

Connex is also developing efficient and practical services in a bid to improve the living environment for town and city dwellers. For instance, it has developed the Vivabus bus concept in partnership with travelers and operators, which makes space more modular and the transport system more practical, thereby making buses a more pleasant and welcoming proposition.

The Nantes urban heating

> network, an example of

efforts to preserve the living environment In Nantes, work on modernizing the urban heating network and the central steam plant is making a concrete contribution to improving the local population’s living environment, with the use of natural gas, introduction of dust collectors and opacimeters, sound traps at the air inflows and outflows, special wall coverings and landscape integration.

PURSUING LANDSCAPE INTEGRATION Integrating our activities as harmoniously as possible within the urban and rural landscape is one of our major design goals for new installations. This notably applied to the Côte d’Azur water treatment plants at Antibes and Toulon-Amphytria.

Likewise, Onyx endeavors to give a new lease of life to landfill sites that have reached the end of their operational cycle by restoring them and planting new vegetation appropriate for their future use (wood, park). In 2002, 177 hectares were restored.

Lastly, Connex is participating in a feasibility study for a tram line without any overhead wires in certain districts to preserve the existing cityscape.

Vivabus: inside of buses overhauled.

(*) LPG: Liquefied petroleum gas

Sustainable development report for 2002

VEOLIA Environnement 41

Our environmental

performance

Limiting pollutant discharges Wastewater treatment plant at Ruhleben - Veolia Water (Germany).

Water tables and rivers need to be protected from various types of pollution (bacteria, organic compounds and heavy metals). As well as collecting wastewater, we seek to keep the treatment efficiency of plants at a high level, we encourage customers to control industrial effluents before they are discharged into sewer networks and we treat the leachates produced by our waste landfill sites.

BOD5(1) treatment efficiency of biological plants(2) with a capacity of over 50,000 per capita equivalents 100

85%

84%

86% OBJECTIVE:

80% 75 50 25 0

2000

2001

2002

(1) Biological Oxygen Demand (2) Biological treatment plants eliminate any dissolved pollution, which is the main environmental priority. This process is used to treat most of the effluents received by VW.

IMPROVING THE EFFICIENCY OF WASTEWATER TREATMENT PLANTS Objective: keep the BOD5(1) treatment efficiency of biological urban wastewater treatment plants(2) above 80%.

VEOLIA Water designs and operates wastewater treatment plants that should discharge into the natural environment only the amount of residual pollution that the latter can tolerate according to: ■ the climatic conditions (dry, rainy weather); ■ the nature or the type of pollution source (i.e. urban, industrial).

Improving the efficiency of treatment plants requires constant fine-tuning of our facilities. To this end, each operator has a set of technical guidelines that is regularly updated and improved by Veolia Water. In addition, networking paves the way for the sharing of best practices and the pooling of experiences. Lastly, operators use a plant management support tool. This software, which is a genuinely expert decisionsupport system, records technical and event data and analyses medium-term trends in the biological treatment processes.

HELPING CONTROL INDUSTRIAL DISCHARGES INTO URBAN WASTEWATER NETWORKS

■

■

■

The treatment efficiency of wastewater is directly dependent on the quality of effluents for treatment and thus the effluents discharged into the sewer networks.

Objective: set up a program for controlling industrial discharges for 50 collection networks by 2005.

In France, our ACTIPOL software contains a list of all the industrial activities performed within the local area and identifies the type of effluents associated with each industrial activity.

This system, which has been deployed across all our networks, provides:

■

an exhaustive inventory of all nondomestic effluents, an analysis of the risks associated with each type of effluent, faster response times in the event of pollution, an appropriate action plan for obtaining authorization for overflows and, where appropriate, special overflow agreements.

EQUIPING LANDFILL SITES WITH LEACHATE(3) COLLECTION AND TREATMENT SYSTEMS Onyx has adopted successful methods for landfill site containment. Our goal is now to bring the volumes and the quality of the leachate produced under greater control. The majority of units are equipped with technologies to treat them on site (reverse osmosis-type membrane processes, thermal processes, etc.). We have also developed a treatment system based on the evaporation of leachate using energy from the biogas produced through the decomposition of the waste. Only treated water that meets controlled quality standards is then discharged into the natural environment.

79

% of waste landfill sites,

where we control capital expenditure, are equipped with a system for collecting and treating leachates.

Objective: collect and treat leachates at 100% of the landfill sites in operation where the Group is responsible for the investment by 2005.

(3) Leachate: the effluent produced by as a result of liquid seeping through the deposited waste in a landfill.

Sustainable development report for 2002

42 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 43

Methodology A note about the methodology used to compile the environmental and social data

External Opinion MODERATE-LEVEL ASSURANCE REPORT ON CERTAIN ENVIRONMENTAL DATA

REPORTING PRINCIPLES AND METHODOLOGY In the absence of relevant reporting standards commanding worldwide recognition, the Group has for several years defined its own reporting protocol by incorporating the latest international advances in the field (GRI, ISO, WBCentre de Stockage des Déchets, IPCC, FEE, etc.). This protocol, which comprises one document for social data and another for environmental data, is refined each year. It contains the definitions, procedures and methodology required for reporting purposes (scope, period, operational control, calculation methods, consolidation rules, internal control, etc.). It is available upon request from the Sustainable Development Department at 38 avenue Kléber, 75016 Paris, France.

SCOPE OF REPORTING The indicators relate to all of the worldwide activities over which VE has operational control. In line with this guideline, the environmental data for Proactiva are included and those for FCC are excluded for Onyx and VEOLIA Water.

There are still some exceptions to this rule, however, and notably the construction and equipment manufacturing activities (VEOLIA Water Systems, SADE, US Filter Equipment), as well as Connex’s freight business, which are not taken into account.

In addition, the scope of the social reporting includes FCC.

CHANGES IN THE REPORTING PERIMETER BETWEEN 2001 AND 2002 The scope of the relevant business activities is constantly changing (with additions or losses of contracts, acquisitions and divestments of subsidiaries). To a great extent, these changes account for the fluctuations in the gross data.

This year, the main changes in the scope of environmental reporting were as follows*: ■ VEOLIA Water : ● Additions: Taiwan, China, Morocco, Poland, Dungun (Malaysia), Goerlitz (Germany) ● Withdrawals: Puerto Rico, FCC (Spain) ■ Dalkia : ● Additions: primarily Italy, Estonia, Slovakia and other countries (Benelux countries, Sweden, Romania, Spain, Brazil, Portugal) ■ Onyx : ● Additions: essentially internal movements (mergers, etc.) without any material impact on consolidated data ● Withdrawals: Malaysia, Thailand, Macao with no material impact ■ Connex : ● Additions: Groupe Verney, several networks in France (St Chamond), Slovenia, New Caledonia and the US (TCT and Yellow Transportation) ● Withdrawals: several networks in France (Guéret, Landerneau).

JUSTIFICATION FOR THE CHOICE OF SELECTED INDICATORS The environmental and social priorities for the Group’s business activities have been the subject of an in-depth analysis, which is updated annually and discussed with the stakeholders. The indicators have been chosen to monitor our performance with respect to the main priorities identified.The indicators referred to in the body of the report are primarily for tracking attainment of our objectives. They are shown in greater detail together with other data in the following key performance data summary table which follows on pages 46 and 47.

A significant number of performance indicators could not be published this year due to methodological difficulties.

Efforts will continue in 2003 to solidify the protocole for these new indicators.

CHANGES IN METHODS BETWEEN 2001 AND 2002 The main changes in accounting methods relate to: ■ cogeneration: the calculation methods for avoided and economized emissions were altered during 2002 following the recent work performed at national and European level together with the ADEME and the industry.

■ consumption of fossil fuel energy: the method used to assess this consumption in France was fine-tuned (better estimate of self-consumption), which led to a downward revision in our total consumption.

As statutory auditors of VE and specialists in the area of sustainable development, and in accordance with your request, we conducted a partial review of the 2002 data identified by the ● sign in the following key performance data tables. VE’s management was responsible for preparing the environmental data in accordance with the Group’s Measurement and Reporting Protocol (hereinafter “the Protocol”), which is available upon request from the Sustainable Development department. Our role is to express a conclusion on these data.

Nature and extent of our work After reviewing the suitability of the Protocol against the requirements of the International Standard on Assurance Engagements (ISAE), our procedures included: ● inquiries at both the Divisions and business levels (Veolia Water UK, the Flanders Artois Picardy region of CGE, Sarp Industrie, Onyx France, Dalkia France, Dalkia Nord and Connex Rouen) to ensure proper implementation of the Protocol, ● verification of the calculations and data consolidation process and the testing of documentation evidence at certain of these entities, which account for between 0% and 17% of the Group total, depending on the data.

Procedures of this kind do not include all the verifications specific to an audit providing a higher level of assurance, but still provide a moderate level of assurance as to whether the data are free of material misstatement.

Comments Based on these procedures, we wish to make the following comments: ● The relevance of the Protocol has improved compared with 2001 owing notably to the preparation of indicators to monitor attainment of the Group’s objectives. This said, the methods used to calculate the data, particularly where they have changed from the previous year or involve the use of estimates, are not stated in the Protocol.

In addition, even though the scope of the operations over which VE has operational control is more clearly defined this year, further clarifications are still needed concerning the definition of this concept for each Division. ● Lastly, the procedures and internal control arrangements for these data have not been systematically formalized, distributed and applied at all levels of the Group, which may engender material risks of error.

Conclusions Based on our review, no material misstatements came to our attention concerning the data prepared in accordance with the Protocol, subject to the following exceptions: ● “Percentage of relevant activities covered by an Environmental Management System” owing to the insufficiently precise definition with regard to the ISAE criteria. ● “Number of ISO 14001 certified sites” for which we noted two instances of under-estimates. ● “Direct emissions of greenhouse gases” the larger scope of which this year was not defined clearly enough. ● “Efficiency ratio of water distribution networks” owing to the insufficiently formalized methods used to prepare estimates.

Neuilly-sur-Seine, March 21, 2003 Statutory Auditors

Expert

Barbier Frinault et Compagnie Ernst & Young

Ernst & Young Environment and Sustainability

Jean Bouquot Alain Grosmann

Eric Duvaud

* Withdrawals related to either the loss of a contract or a more accurate definition of the perimeter under VE’s operational control.

Sustainable development report for 2002

44 VEOLIA Environnement

Sustainable development report for 2002

VEOLIA Environnement 45

Methodology Key performance data - Social

Key performance data - Environment 2001 Unit

ENVIRONMENT

2002

2002

VEOLIA Environnement

VEOLIA Water

Onyx

2002 Dalkia

SOCIAL

Connex

MANAGEMENT – Relevant revenues covered by a certified management system (ISO 9000 or 14001)

€m

-

11 357

5 165

2 452

3 290

449

– Percentage of revenues covered by a certified management system (ISO 9000 or 14001)

●

– Relevant revenues covered by an EMS (including ISO 14001 certified sites) – Percentage of revenues covered by an EMS (including ISO 14001 certified sites)

%

-

56

77

41

81

13

€m

-

2 804

2 131

-

596

76

%

-

14

32

-

15

2

– Relevant revenues covered by ISO 14001 certification

€m

-

2 463

1 790

-

596

76

– Relevant revenues covered by ISO 9000 certification

€m

-

8 782

5 165

-

3 290

326

– Revenues of relevant activities

€m

-

20 319

6 690

6 139

4 063

3 426

Nbr

-

265

63

155

37

10

Nbr

88

111

111

-

-

millions of metric tons of CO2

15,4

19,6

0,2

4,7

13,7

1,0

millions of metric tons of CO2

-1,9

-2,7

-

-2,0

-0,7

-

millions of metric tons of CO2

-0,1

-3,1

-

-

-3,1

-

g/ton incinerated

164

138

-

138

-

-

g/ton incinerated

1188

1202

-

1202

-

-

g/ton incinerated

102

67

-

67

-

-

g/ton incinerated

260

153

-

153

-

-

– Number of ISO 14001 certified sites*

●

●

AIR – Number of sites equipped with biogas collection and treatment systems* – Direct emissions of greenhouse gases (excluding landfill biogas)* – CO2 emissions avoided

●

●

– CO2 emissions economized as a result of cogeneration

●

– SOx emissions from waste incineration plants (hazardous and non-hazardous) per ton of waste incinerated* – NOx emissions from waste incineration plants hazardous and non-hazardous) per ton of waste incinerated* – Dust emissions from waste incineration plants (hazardous and non-hazardous) per ton of waste incinerated* – HCl emissions from waste incineration plants (hazardous and non-hazardous) per ton of waste incinerated* – Index showing improvement in unit CO emissions from vehicles

●

Base of 100

100

92

-

-

-

92

– Index showing improvement in unit HC emissions from vehicles

●

Base of 100

100

93

-

-

-

93

Base of 100

100

94

-

-

-

94

-

61

-

61

-

-

– Index showing improvement in unit particle emissions from vehicles

●

– Percentage of waste treated in incinerators with dioxin emissions below 0.1 ng/Nm3 and where Onyx has control over capital expenditure*

%

●

WATER – Efficiency ratio of water distribution networks in the European Union ●

%

82

82

82,1

-

-

-

– Worldwide efficiency ratio of water distribution networks

%

71

75

75,0

-

-

-

millions of cubic meters

-

259

242,3

15,2

-

1,6

%

84

86

86

-

-

-

%

-

79

-

79

-

-

●

– Consumption of industrial water* – Treatment efficiency (biological treatment plants with a capacity of of over 50,000 per capita equivalents)*

●

– Percentage of waste landfill sites collecting and processing leachates internally or externally) where Onyx has control over capital expenditure ENERGY – Power generation (thermal and electricity)

thousands of MWh

– Percentage of renewable energy consumed

%

– Use of renewable energies – Total energy consumption* – Percentage of gas consumed by Dalkia at cogeneration units

51 908

-

5 093

46 815

-

1

2

-

-

3

-

592

1 712

-

-

1 712

-

%

-

83

-

83

-

-

millions of MWh

56

77

4

3

65

6

%

33

45

-

-

45

-

thousands of MWh

– Percentage of incineration plants equipped with waste-to-energy systems

-

WASTE – Quantity of sludge produced

thousands of metric tons

– Percentage of treated waste that is recycled – Quantity of treated waste that is recycled – Quantity of compost produced*

664

687

687

-

-

-

%

7

9

-

8,6

-

-

millions of metric tons

4

5

-

4,6

-

-

579

756

-

756

-

-

thousands of metric tons

– Proportion of sludge recovered for agriculture reuse* – Landfill areas restored

Sustainable development report for 2002

46 VEOLIA Environnement

TOTAL HEADCOUNT AT Dec. 31, 2002 – Total headcount at Dec. 31, 2002* Number of employees on permanent employment contracts Number of employees on fixed-term employment contracts Number of men Number of women Number of management-grade staff Non-management staff – Total weighted average headcount (full-time equivalents) Total weighted average number of employees on permanent contracts Total weighted average number of employees on fixed-term contracts

●

%

38

37

ha

260

177

Indicators that have been verified by a third party

37

-

-

-

-

177

-

-

- Indicators not available, not meaningful or not applicable

VEOLIA Environnement

VEOLIA Water

Onyx

Dalkia

Connex

FCC

302 283 258 731 43 552 243 895 58 388 28 835 273 448 282 271 253 197 29 074

55 242 65 991 11 638 60 670 16 958 13 037 64 591 75 043 71 022 4 020

73 328 62 343 10 985 58 540 14 788 5 066 68 262 67 522 60 359 7 163

40 075 37 533 2 542 33 924 6 151 4 826 35 249 38 128 36 226 1 902

55 242 50 167 5 075 45 932 9 310 2 093 53 149 48 439 45 175 3 264

55 794 42 488 13 306 44 737 11 057 3 621 52 173 52 985 40 264 12 721

RECRUITMENT – Total number of new recruits* o/w hired on permanent contracts* o/w hired on fixed-term contracts*

84 790 42 653 42 137

10 902 3 715 7 187

30 010 13 986 16 025

7 265 4 774 2 491

12 303 8 219 4 084

24 082 11 745 12 337

DEPARTURES – Total number of staff departures* o/w number of individual redundancies* o/w number of group redundancies*

82 420 10 716 1 511

14 716 989 513

28 702 4 203 178

7 374 1 729 676

9 952 1 891 126

21 663 1 905 18

OVERTIME – Total number of overtime hours* – Average amount of overtime per employee p.a.

hours hours

16 494 824 54,7

3 365 624 43,4

5 217 644 71,2

1 472 786 36,8

3 283 375 59,4

3 155 396 56,6

EXTERNAL LABOR – Temporary staff (full-time equivalents)* – Amount paid to temporary staffing agencies

euros

11 515 285 022 773

3 900 73 726 096

5 102 131 107 033

1 312 55 888 161

891 17 895 810

302 6 224 540

days days days

38,5 15 322 3 974 418 2 746 558 397 421

38,4 1 877 1 277 997 810 258 59 751

38,8 6 315 796 095 440 953 127 358

37,5 712 364 268 288 217 41 125

37,5 3 826 893 717 673 282 62 335

39,7 2 588 641 630 533 392 106 852

euros euros euros %

23 927 24 572 20 949 14,7

28 086 28 802 25 444 11,7

21 907 22 428 19 437 13,3

22 272 23 104 17 327 25,0

24 758 25 030 23 294 6,9

20 876 22 121 15 064 31,9

% euros euros euros

27,6 36 240 537 38 620 242 35 755 828

23,9 18 611 379 16 645 874

24,2 5 959 294 8 487 553

45,1 8 566 969 9 979 909

2,3 26,1 2 801 376 3 486 597

27,6 301 521 20 309

1 512 930 171 96 322 11 982

563 440 49 31 51 2 334

206 111 31 6 59 3 058

166 70 24 25 48 1 715

225 137 28 26 34 2 627

351 173 40 10 130 2 227

18 521 397 421

2 922 59 751

5 299 127 358

1 892 41 125

2 022 62 335

6 386 106 852

38,60

22,90

46,20

29,20

24,70

70,90

0,83 81 247 7 301

0,47 23 751 410

1,10 22 285 566

0,64 15 269 323

0,76 11 945 253

1,18 7 995 5 749

2 169 734 22 691 147 043 139 280 30 454 3 397 455 20

47 763 10 094 37 669 37 001 10 762 1 131 879 24

36 127 3 054 33 073 31 662 4 465 549 439 15

30 573 3 484 27 090 26 659 3 914 509 100 17

30 696 1 728 28 968 25 414 5 282 848 370 28

24 526 4 282 20 244 18 524 6 003 357 568 15

3 960

1 083

895

658

765

559

74 259 455

22 088 835

24 608 228

18 303 183

5 046 762

4 151 646

ORGANIZATION, WORKING TIME, ABSENTEEISM – Average length of the working week* – Number of part-time employees (full-time equivalents)* – Total number of days of staff absence* o/w total number of days of sick leave* o/w total number of days of leave caused by occupational accidents* – – – – – – – – –

COMPENSATION, BENEFITS, PAYROLL CHARGES, BONUSES AND EMPLOYEE PROFIT-SHARING Average gross annual remuneration paid worldwide* Average gross annual remuneration paid to men Average gross annual remuneration paid to women Percentage difference between remuneration paid to men and women* Ratio between average remuneration and average minimum remuneration in countries with a guaranteed minimum salary Ratio of payroll charges* Total amount of bonus payments (France)* Total amount of employee profit-sharing payments (France)* Total amount paid into Séquoia corporate savings plans

hours

PROFESSIONAL RELATIONS AND COLLECTIVE AGREEMENTS – Total number of collective agreements signed* o/w number of remuneration-related agreements o/w number of agreements related to health, safety and working conditions o/w number of agreements related to social dialogue o/w number of agreements related to other issues or several of the above – Total number of employee representatives HYGIENE AND SAFETY CONDITIONS – Total number of accidents leading to sick leave – Total number of work days lost as a result of occupational accidents – Frequency of occupational accidents (number of occupational accidents per million man-hours worked)* – Occupational accident severity rate (number of days lost as a result of occupational accidents per thousand man-hours worked)* – Total number of employees who received safety-related training during the year – Total number of committees dedicated to occupational health and safety TRAINING – Training expenditure as a percentage of the total payroll* – Total number of employees who received training during the year o/w management-grade staff o/w non-management staff o/w men o/w women – Total number hours devoted to training Average length of training courses

days

%

hours hours

EMPLOYMENT AND INTEGRATION OF HANDICAPPED WORKERS – Number of handicapped employees*

SOIL

*Indicators satisfying NRE-related reporting requirements

Unit

CHARITABLE WORK – Subsidies paid for social activities*

euros

** N.B. The 2002 figures also include data for VE’s head office (VE SA).

Sustainable development report for 2002

VEOLIA Environnement 47

Learn more about our strategy

A REPORT AND A STRATEGY This report is the result of a collective effort throughout the year by many different Group participants, including representatives of VE’s functional departments and of its four Divisions.

It was coordinated by the sustainable development team.

Aside from the social and environmental reporting methods, the production of this report requires everyone involved to ask questions and raise awareness in order to compile high-quality information from the four Business Divisions present in close to 100 countries, thereby helping to spread the culture of sustainable development.

CONTACTS Sustainable development department

Jean-Pierre TARDIEU Eric LESUEUR Bérengère LAGRAULET

YOUR THOUGHTS WILL HELP US TO MAKE FURTHER PROGRESS We kindly request that your send us any comments or suggestions you may have about this report and our strategy: ■ by mail to the following address: Sustainable Development department, VEOLIA Environnement 36-38, avenue Kléber 75116 PARIS ■

or to the following e-mail address:

developpement.durable @groupve.com

Division Representatives WATER VEOLIA WATER WASTE MANAGEMENT ONYX

Bruno LACAMP

Gary CRAWFORD Pascal LEFEVRE

ENERGY SERVICES DALKIA

Daniel CAPPE

TRANSPORTATION CONNEX

Jean-Claude ESCARD

VEOLIA Environnement Representatives

Patrick FLICOTEAUX (Human Resources)

Dominique HERON

OTHER SOURCES OF INFORMATION www.d.durable.veoliaenvironnement.com is the Group’s sustainable development web site. On it you will find the full version of the report, plus other information.

The Group and its Divisions also publish a number of documents about sustainable development. You may request them at the general corporate web site at the following address: www.veoliaenvironnement.com

(General Secretariat)

Jacques HAYWARD (Institutional relations)

Gérard JEANPIERRE (Legal Affairs)

Published by VEOLIA Environnement’s Sustainable Development department Design and production: MFTL Photo credits: Photothèque VE - Christophe Majani d’Inguimbert Printed in France - April 2003.

Sustainable development report for 2002

48 VEOLIA Environnement