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Verification statement

ERM (Environmental Resources Management Limited) was asked by GSK to independently review the environment, health and safety (EHS) sections of its 2004 Corporate Responsibility report (at Section 2 'Employment practices' and Section 11 'Caring for the environment') and supporting background information provided at GSK.com.

This is the fourth year that ERM has verified GSK's EHS reporting. The objectives of our review were to: check that the information presented is accurate, and that it represents GSK's performance fairly; critically review the completeness and relevance of the information presented; and, assess the effectiveness of GSK's data management systems. All pages that contain verified EHS data are marked with the following symbol.

We have focused on understanding GSK's EHS data management and reporting processes and EHS performance. The assessment covered 22 percent of GSK manufacturing sites and 17 percent of the R&D facilities, expanding ERM's coverage of sites compared to 2003.

Overall findings
Subject to the comments and scope set out below, we believe GSK's Corporate Responsibility report covers the key EHS issues that interested parties need to know to inform decision making (i.e. is relevant), does not avoid major issues (i.e. is complete) and fairly reflects programmes and performance on the ground (i.e. is accurate).

ERM scope
Between November 2004 and March 2005, ERM:

1. Reviewed EHS data management and reporting processes, and performance changes, at a cross-section of sites, through four site visits and 20 telephone interviews.
2. Interviewed personnel responsible for data collation in Corporate EHS (CEHS) and checked sample group data;
3. Interviewed corporate representatives to obtain supporting information on the following EHS programmes: acquisitions and divestitures, contaminated
land, climate change and ozone depleting potential, auditing of suppliers and contract manufacturers, and EHS reporting by the Commercial business support team;
4. Participated in the final CEHS data-checking and review process undertaken after the sites had submitted all EHS data; and
5. Checked that the EHS sections of the 2004 Corporate Responsibility report reflect our findings.

Findings

Relevance and completeness Overall, the EHS sections of the 2004 Corporate Responsibility report cover the key issues that are relevant to GSK's business.

Each year, ERM makes recommendations for improvement. In response to an ERM recommendation made in the Sustainability in Environment, Health and Safety report 2003, GSK has attempted to collect information on the reasons for changes in site EHS performance. ERM has noted improvement to GSK's reporting of the reasons for performance change in the 2004 EHS report sections.

We have also noted progress made in 2004 in relation to GSK's reporting of transport-related greenhouse gas emissions.

In 2004 GSK obtained EHS performance data from 14 contract manufacturers (versus seven in 2003), as part of its effort to quantify GSK's broader 'EHS footprint'. GSK has focused on collecting key EHS indicator data from business-critical contract manufacturers (this data was not verified by ERM).

Accuracy
This year, corporate data checking processes have been strengthened to increase the quality of the data, through involvement of additional GSK personnel and ERM's participation in the final checking process. GSK also observed ERM's verification process at one site visit. Next year, GSK proposes to use its myEHS database system to track data-checking actions with each site.

During 2004, we have seen examples of increased reporting of illness and injury data by sites, which may in part be due to improved awareness as a result of the introduction of the myEHS 'Incidents' database. Associated training has been provided to GSK personnel at approximately 100 sites.

ERM identified three material data inaccuracies relating to wastewater quality (COD), wastewater volume, and production use of ozone depleting substances. These were subsequently addressed by GSK to ensure accurate reporting in the 2004 Corporate Responsibility report.

ERM identified potentially material under-reporting of EHS data (in particular injury and illness data) by GSK's Commercial business, which includes office-based and field sales-force staff.

Responsiveness
GSK has reported that stakeholders would like GSK to prepare a combined Corporate Responsibility report incorporating EHS and would like to better understand management and performance of a number of non-financial issues. In response, GSK has produced this single web-based Corporate Responsibility report, and is in the process of preparing position papers on a selection of issues (e.g. climate change).

Recommendations
ERM recommends that GSK:

• Builds on work undertaken in 2004 to strengthen internal reporting processes, better understand the reasons for EHS performance changes and enable more consistent and explicit external reporting;
• Further improves collection and reporting of performance data from contract manufacturers and suppliers, focussing on those which are business critical and those with the greatest EHS risk profile;
• Improves the accuracy of environmental key performance data by more comprehensively checking completeness of data reported by the operations;
• Supports key operations to more accurately monitor material flows and discharges related to key environmental performance indicators;
• Assesses the potential for material data inaccuracies resulting from under-reporting by GSK's Commercial operations and puts in place improvement programmes to obtain a more complete data set; and
• Reviews the limitations of EHS performance data, in particular the potential scale of statistical uncertainty for target-related key EHS performance data, including transport derived emissions of greenhouse gases.

ERM
March 2005

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