sustainable development report 2003 - gdf suez

SUSTAINABLE DEVELOPMENT REPORT 2 0 0 3

Readers’ Guide to the Global CompactIn April 2003, Gaz de France signed the declaration of the United Nations’ Global Compact, committing itself to adopt and promote nineuniversal principles on human rights, labor standards and the environment in a spirit of sustainable and responsible development. Groupinitiatives related to these commitments are identified throughout the report by the Global Compact logo on the left.

The Global Compact’s nine principles (For more information on the Global Compact: www.unglobalcompact.org)

Human rights 1. Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence; and2. Make sure that they are not complicit in human rights abuses.Labor standards 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;4. The elimination of all forms of forced and compulsory labor;5. The effective abolition of child labor; and 6. Eliminate discrimination in respect of employment and occupation. Environment 7. Businesses should support a precautionary approach to environmental challenges;8. Undertake initiatives to promote greater environmental responsibility; and 9. Encourage the development and diffusion of environmentally friendly technologies.

Readers’ Internet Guide To complete the information contained in this report, Gaz de France’s Internet site now presents a French-language section on sustainabledevelopment, structured around key GRI concepts. It includes an index and a GRI readers’ guide. Throughout the report, the pictogram onthe left invites readers to consult www.gazdefrance.com.

C o n t e n t sMessage from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

// Strategy and Organization . . . . . . . . . . . . . . . . . . . . . 2Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Essential leverage to ensure progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

// Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Society-related performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Social performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Environmental performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Economic performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Performance indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Consolidated entity and methodology . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Panorama of the Gaz de France Group . . . . . . . . . . . . . . . . . . . . . . . . . . 40

GRI content index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

“This report was prepared in compliance with the 2002 guidelines of

the Global Reporting Initiative (GRI). It provides a balanced and reasonable

presentation of Gaz de France’s economic, environmental and social

performance and is tangible proof of the Group’s commitment.

Gaz de France also reports on the commitments it made when it joined

the United Nations Global Compact.”

Pierre Gadonneix

Gaz de France promotes its values

EthicsExcellence RespectSolidarityConviviality

Message from the Chairman

”Reconciling long-term intelligence and short-term imperatives”

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Gaz de France Sustainable Development Report 2003

As European Union directives take effect,

the market for natural gas and electricity

progressively defines the boundaries of

a new Europe with a unified energy system.

At the same time, sustainable development

has taken on a new dimension that reflects

consciousness of the changing role of

corporate entities in society. Every firm must

now furnish adequate responses when

addressing stakeholder concerns. This is

a prerequisite for performance.

It is in such an environment that Gaz de France

continues to integrate the new European

reality, focusing on basic principles of

continuous growth.

The creation of the Sustainable Development

division in July 2003 is a concrete example of

the Group’s determination to coordinate the

initiatives launched through its Agenda 21.

All Group divisions have contributed to the

Sustainable Development Action Plan, which

defines objectives for the next three years

that are specific and can be measured

by indicators.

To name just a few commitments, Gaz de France

chose to join AERES, a non-profit organization

of companies to reduce the greenhouse effect,

with the goal of a 10% reduction in greenhouse

gas emissions from its systems compared with

the level in 1990.

In addition, Gaz de France formed

a partnership with WWF France to evaluate

and reduce the impact of human activities on

the environment. Also during the past year,

Gaz de France bolstered its assistance to

underprivileged customers (through the

Energy Solidarity Fund) and promoted

employment and social integration, especially

through sports activities.

In addition, Gaz de France acquired the

German assets of Preussag Energie, further

securing and diversifying the Group’s natural

gas supplies for the benefit of end users.

The history of the Group, the nature of

its industrial activities and its economic

interest demonstrate that Gaz de France

has known how to reconcile long-term

intelligence with short-term imperatives.

The accomplishments catalogued in this third

Sustainable Development Report of the

Gaz de France Group prove that the key to

success lies in addressing the economic,

social and environmental challenges

the Group faces. They also show that,

in this area as in others, Gaz de France

invests in the future.

Pierre Gadonneix

Chairman and

Chief Executive Officer

Gaz de France

Define strategy and ensureconcrete implementation

Profile of the Gaz de France Group

// The historical natural gas operator in France. As the leading supplier of natural gas in France, Gaz de France targets the strategic acquisition of equity interests and assets, thereby assuring itselfof a privileged position at the heart of the European gas business.

// An integrated group active in all sectors of the gas industry. From exploration and production to customer services, Gaz de France chose to develop in all sectors of the gas industry. This choice and this dimension are unique in Europe. The Group is organized in two branches:• energy supply and services,• infrastructures (transmission, storage and distribution).

// An energy utility with a gas focus that is a leader in Europe. Gaz de France owns transmission, distribution and storage assets in strategic parts of Europe. Faced with the challenge of the openingof European energy markets, the Group intends to capitalize on its strengths in order to anchor its position:• as a major player in securing supplies in Europe,• as a benchmark marketer by expanding its product line to include dual energy solutions – naturalgas / electricity, natural gas / renewable energies – associated with energy services.

// A corporate culture in line with the values of sustainable development. For Gaz de France, sustainable development is a further expression of its culture and values as related to the Group’spublic service mission. Ethics, excellence, respect, solidarity and conviviality are the values in whichGaz de France grounds its commitments. Sustainable development is an integral part of the identityof Gaz de France. At the heart of the Group’s strategy, it is also a factor of differentiation at a timewhen competition in energy markets is growing.

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Strategy and Organization

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Redefined master plan for strategic action

2004 was a year of transition for the Group, which

responded to these new challenges by reaffirming its

commitments through three fundamental approaches,

each of which integrates sustainable development to a

large extent:

• its industrial development strategy is a strategic

response to the Group’s move into a larger competitive

universe; it defines growth objectives while reserving a

central place to the principles of sustainable development;

• its public service contract with the State provides

orientation for the Group’s objectives in France within the

framework of its ongoing commitment to public service;

• its sustainable development policy has been

redefined and translated into concrete actions and

commitments in a sustainable development action plan. It

formulates the Group’s ambition for and commitment to

development in harmony with the principles of social and

environmental responsibility.

Developed in synergy, these approaches are valid for the

next three years.

Gaz de France faces the challenges of the energy market

Commitments

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A changing environment

30% growth predicted for natural gas in Europeby 2010*Often considered as the energy of the twenty-first century

because of its economic, technical and environmental advan-

tages, natural gas is called upon to play an ever greater role in

the coming decades. Energy is essential to the development

of regions and the quality of life of citizens. In order to ensure

that energy contributes to sustainable development, the

industry should be committed to limiting the impacts linked

to its production, transmission, distribution and consumption.

New energy issues As they open to competition, European energy markets are

confronted by decisive challenges with regard to sustain-

able development – reliability of supplies, quality of service,

energy independence, continued supply, access to energy

for the underprivileged, limited impact on the environment.

In this rapidly changing environment, Gaz de France intends

to capitalize on its strengths in order to confirm its position

as an energy utility with a gas focus that is a leader in the

European market.

Three major objectives

To realize its ambition, Gaz de France must face three major

challenges:

• reconcile its culture and values, inspired by its public

service missions, with the new rules governing competition

in energy markets;

• develop energy solutions based on natural gas and

become a producer of electricity while controlling the

impact of energy on the environment, in particular as

concerns greenhouse gases;

• adapt the organization of Gaz de France to its new profile

as an energy utility with a European dimension.

The Group sees sustainable development as the key to a

fuller understanding, a more thorough analysis and more

effective action in these three areas.

Commitments

* International Energy Agency forecasts.

Gaz de France Sustainable Development Report 2003Strategy and Organization

Key stages in Gaz de France’s commitment

Building the Group’s industrial development strategy on fruitful dialogue

From July to the end of 2003, Gaz de France redefined its industrial development strategy

for the next three years. It targeted a broad spectrum of opinions, conscientiously

consulting all stakeholders – labor organizations, elected officials, local governments,

consumer groups and representatives of the civil society. The Group consulted 1,200 socio-

economic leaders and elected officials. The 23,000 men and women who work at Gaz de

France also participated through a ”Listen and Exchange” program which consisted of two

stages: meetings and discussions organized by managers for their teams, then regional

conventions with executive managers who responded to questions raised by employees.

More than 1,500 managers participated in these preparatory meetings held throughout

France. Three subjects were at the heart of the discussions:

• the opening of the markets and competition, public service missions and the role

of regulators;

• changes in the different businesses and their organization;

• Gaz de France’s industrial development strategy.

The analysis drawn up following this phase of dialogue validates the orientations of

the industrial development strategy and helps identify adjustments to be made during

implementation.

Gaz de France’s sustainable development management and Agenda 21 are engaged ina continuous improvement effort based on multiyear cycles in which action plans aredeveloped. Performance reviews evaluate implementation. Once completed, the plansare reviewed before new objectives are defined.

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Since 1993, Gaz de France’s commitment to the environ-

ment has been formulated in corporate environment

plans. In 2003, the last corporate environment plan was

replaced by a sustainable development action plan.

2003, results of the third corporateenvironment plan

67% of the actions proposed in the last corporateenvironment plan for 2000-2003 were accom-plished, in particular:• launch of Gaz de France’s Agenda 21 (review of the

situation, heightening of awareness, creation of a forum);

• publication of its Code of Business Ethics;

• integration of environmental criteria in commercial

offerings;

• respect of commitments concerning the reduction of

impacts (CO2, NOX, waste, noise).

33% of the actions are being finalized; many arecontained in the Sustainable Development ActionPlan.

2004, new impetus with theSustainable Development Action Plan

The Sustainable Development Action Plan for 2004-2006,

launched through Gaz de France’s Agenda 21 to promote

continuous improvement in sustainable development,

gives further impetus to the programs in the corporate

environment plan while introducing significant changes

reflecting developments in the energy situation. Five

priorities respond to the major challenges the Group faces.

The Sustainable Development Action Plan drives Gaz de France’s Agenda 21

WWF France comments on theSustainable Development ActionPlan

This plan includes what we are looking for, from reductions in

greenhouse gas emissions to the promotion of alternative

energies. The important thing is for this plan to become a reflex

for the Company. The plan is ambitious, but it needs to be broken

down into operating priorities to become a day-to-day reality.

Even if the solutions related to the coupling of natural gas

and renewable energies (solar, biomass, geothermal) are

recommended in the document, they are not a natural reflex in

the Company. We intend to provide directional assistance so that

this happens. With Gaz de France, we want to encourage the

cleanest new energy combinations. Priority should be given to the

people who are responsible for implementing these innovative

solutions with regard to both the quality of management

(i.e. the reduction of energy consumption) and the introduction

of new systems that reduce the ecological footprint.

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Ensure the growth of Gaz deFrance in the European market

Build a Group HR base on solidsocial grounds to meet theGroup’s industrial challenges

Play an active role in regional development

Fully exercise the Group’s responsibility to society and the environment in dealingswith the different stakeholders

Meet energy challenges throughinnovation and development of the range of products and services offered

> Promote the rational use of energy

> Develop research and the application of new energy solutions

> Fight against the greenhouse effect

> Develop innovative production techniques to optimize hydrocarbon recovery from deposits

> Lead forward-looking reflection

> Revamp rules of corporate governance

> Broaden social and environmental responsibility to include the extended enterprise,

via procurement and investment procedures

> Control operating risks and any risks linked to sustainable development in the broad sense

(image, attractiveness, confidence, etc.)

> Firm up the commitment of progress initiatives in all management aspects

> Limit the impact of industrial activities on the environment

> Improve facility safety

> Improve the quality of services to satisfy customers

> Bolster the reliability of supplies

> Enhance the adaptation of skills to the needs of the businesses

> Develop dialogue with stakeholders

> Define Group criteria for HR practices together with all interested parties

> Improve health and safety

> Fill in the natural gas network, ensure local presence

> Give new impetus to dialogue

> Broaden society-related initiatives to the whole Group by systematically involving all Group entities

PRIORITIES OF THE SUSTAINABLEDEVELOPMENT ACTION PLAN ACTION TO BE TAKEN


From left to right: children at the GeorgeSand school in Villejuif inthe suburbs of Paris, heated by natural gas; site of the Chémery underground storagefacility in central France;satellite view of Europe.

Sustainable Development Action Plan The Sustainable Development Action Plan involves a

three-pronged approach:

• centralization of proposals for action from all Group

divisions (end of 2003);

• definition of cross-division guidelines for the whole

Group;

• incorporation of external contributions through a pre-

liminary audit with the participation of the main

stakeholders (NGOs, local government representatives,

customers, etc.).

Monitoring the Sustainable Development Action PlanThe contribution of corporate divisions to the actions in

the Group’s Sustainable Development Action Plan for

2004-2006 will give rise to commitments monitored in

division performance reviews. The indicators provided will

be entered in a general audit to allow for piloting at the

Group level. External developments and requests by

stakeholders may lead to yearly adaptations.

TransparencyThe Group will keep the general public informed of its

progress vis-à-vis its commitments in its Sustainable

Development Report and on its Internet site.

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ACTIONS COMMITMENTS AND OBJECTIVES YEAR

ACCOMPLISHEDOR DEADLINE

PERFORMANCE 2003

Stages in the progress initiative

INTEGRATE SUSTAINABLE

DEVELOPMENT INTHE ORGANIZATION

MEET THE ENERGYCHALLENGES

OF TOMORROW

ACT RESPONSIBLY

ENSURE GROWTH

PROMOTE A GROUP

HR POLICY

CONTRIBUTE TO REGIONAL

DEVELOPMENT

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This roadmap lists the main commitments Gaz de France has made in its Sustainable Development Action Plan.

• Draw up a Code of Business Ethics 2002

• Create a sustainable development committee 1996

• Name a sustainable development manager 1996

• Create a sustainable development division 2003

• Study the feasibility of a committee of stakeholders 2004

• Integrate sustainable development objectives in division management contracts SINCE 1996

• Deploy management systems END OF 2006 80% of the staff covered

• Define a renewable energies policy END OF 2006

• Develop commercial offerings that incorporate CONTINUOUS

Launch of Gaz de France sustainable development priorities Énergies Communes®

• Develop research (demand-side management and the environment)

CONTINUOUS

• Extend the NGV offering to 15,000 individual customers END OF 2006

• Define an occupational health and safety policy 2004

• Formalize the industrial safety policy 2004

• Map risks 2004 Accomplished in 2003

• Integrate sustainable development criteria in procurement AS OF 2004 Progressive integration

• Reduce greenhouse gas emissions by 10% / 1990 (transmission / distribution) END OF 2006 AERES commitment

• Define a concrete commitment to control greenhouse gas emissions generated by services and exploration-production

2004

• Reduce NOX emissions from compressors by 83% / 1999 END OF 2007 Reduction of 68%

• Replace 50% of grey cast iron mains identified in 1999 2003 Objective achieved:59% replaced

• Replace 90% of grey cast iron mains identified at the end of 2003 END OF 2006

• Analyze all underground storage facilities (safety, environment, performance) END OF 2004 40% accomplished

• Ensure installation pipework safety of 5 million customers END OF 2007 3.2 million

87% of sites • Audit and eliminate any risks at former gas plant sites (467 sites) END OF 2006 audited,

80% rehabilitated

• Win over 4 million new customers in Europe / 2003 END OF 2006 15 million customers worldwide

• Maintain customer satisfaction index at more than 90% END OF 2006

• Increase geothermal energy sales by 1,000 equivalent dwellings / 2003 END OF 200640,000 dwellings in 2003

• Raise the production of electricity to 2,500 MW END OF 2006

• Maintain the accident frequency rate at < 5 (parent company) CONTINUOUS 4.6

• Heighten employee awareness of sustainable development issues CONTINUOUS

• Define Group criteria for HR practices together with all interested parties DECEMBER 2004

• Fill in the natural gas network to serve an additional 1 million heating JULY 2007 10.9 million customers between July 2003 and July 2007 in France

• Increase by 40% the frequency of communications on Seveso directive sites / 2004 END OF 2006

• Update the solidarity policy 2003 Accomplished

■ Commitments accomplished

Strategy and Organization


Reduce environmental impacts linked to gas activities• Reduction of atmospheric emissions and noise from above-

ground facilities • Management of aqueous effluents from

underground storage facilities • Processing of natural gas

Improve the safety of facilities and installations• Safety of transmission pipelines, furnaces and installation

pipework • Detection of methane leaks in the distribution

networks • Control of LNG risks

Develop the rational use of energy• Reduced heating distribution losses • Increased efficiency

• Low NOX burners, flameless oxidation, catalytic combustion,

co/trigeneration, processing of volatile organic compounds

• Lifecycle analysis

Seek long-term energy solutions • Fuel cells • Hydrogen as an energy source • Shared energy

• Biogas, methanation • Energy audit • Sequestration of CO2

• Development of dual offerings associating natural gas and

renewable energies

Gaz de France Researchand Development Center.

Natural gas/hydrogen compatibility for tomorrow

Hydrogen appears to be a potential solution to control global warming, improve air quality and

develop renewable energies. Its advantages include the absence of greenhouse gas emissions

at its point of use, great diversity in production processes (including renewable energies) and

very high efficiency in fuel cells. In 2003, two initiatives stimulated research: the creation of a

European technological platform, in which Gaz de France is a partner, and the creation of the

International Partnership for a Hydrogen Economy between Europe and the United States.

Target areas in the next few years include the construction of transition scenarios and deploy-

ment strategies (natural gas/hydrogen compatibility) in which synergies among gas utilities will

be decisive.

Today, Gaz de France is involved in:

• European and French research to define roadmaps to a hydrogen economy;

• partnerships for the production of hydrogen by the steam reforming of natural gas, which

combined with the sequestration of CO2 should open the way to the production of

competitive ”carbon free” energy;

• R&D in several fuel cell technologies and hydrogen injection in the natural gas grid.

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Innovation in response to energy challenges

Research provides strategic leverage for the development of

Gaz de France. The Group operates Europe’s leading gas

research center, with a workforce of 610 and an annual budget

of 72.5 million euros.

Energy challenges and sustainable development standards

encourage Gaz de France to:

• mobilize its ability to innovate in order to prepare new energy

solutions, aiming to reduce greenhouse gas emissions and

promote the rational use of energy;

• improve the safety of facilities and installations;

• reduce the impact of its own activities;

• develop research projects in partnership with other gas

industry players (for example in the European Gas Research

Group), public organizations like ADEME and universities, and

private-sector companies. With its partners, Gaz de France

proposes projects under the European Union’s fifth and sixth

Research and Development Framework Programs.

Research programs are organized around the following

objectives:

Essential leverage toensure progressEssential leverage

to ensure progress

For more information, visit www.gazdefrance.com, Innovation section

Improve the quality of relations,

in particular with local populations

Bolster visibility and the Group’s

image with stakeholders

Develop partnerships in the Group’s

key areas of action

• Definition of concrete actions in a sustainable development action plan:

better quality information, measurement of satisfaction

• Cooperation with the Orée non-profit organization on the best way

to consult local populations

• Study of the feasibility of a committee of stakeholders

• Development of Gaz de France’s own image to strengthen

its reputation

• New partnerships: with WWF France and with the non-profit

organization Droit à l’énergie SOS Futur

• Agreement renewed with the Samu social

• Official approval of the partnership between the Group

and its employees’ NGO, Codegaz.

• Partnership with ADEME in renewal

• QSE agreements with FNTP, SERCE and Les Canalisateurs de France

ACTIONS IN 2003 AREAS FOR IMPROVEMENT IDENTIFIED

A culture of sharing with stakeholders

For many years, Gaz de France has maintained structured and

regular relations with its partners. These relations are charac-

terized by the definition of objectives and the monitoring of

measurement tools in partnerships. Areas for improvement

were identified in the way Gaz de France handles its relations

with the main interested parties. The Group set out to respond

in 2003. This year, the definition of the Sustainable Development

Action Plan also provided the occasion to incorporate the

concerns of stakeholders more formally than in the past with

regard to the definition of a sustainable development policy.

Maurice Bruzek, President of the French Hiking Federation (FFRP)

How can a non-profit organization establish a balanced relationship with an industrial firm the size of Gaz de France?The principal key to success lies in our sharing common objectives and values.There is an explicit match between the basicdynamic of the FFRP and that of Gaz de France.We both owe our development to the riches nature offers us, for one hikingtrails and for the other gas, a natural resource of the planet.We also share the determination to give back to nature the benefits it has endowed us with. Our alliance is thus based on shared values – the protection of nature, the enrichment of regions and the desire to reinforce social ties.There is also a pragmatic approach. Our ten-year cooperation has beennurtured progressively. First, there were a few special events, then an annual protocol, and now ten years later an ambitiousprogram through our alliance.And then, the FFRP should not underestimate its contribution.We have more than 160,000 members and our hiking guides are bestsellers.

What are the main difficulties today and the major challenges of tomorrow?It is not a question of technical, commercial and financial difficulties or obstacles linked to a difference in size or nature.The basic issue is cultural.We should pursue our efforts to align the Company’s corporate culture and that of the FFRP byworking more closely together and sharing more. This requires that executive management, FFRP officials and their localrepresentatives find the time to deal with these issues.And don’t forget how important it is to extend our partnership tonew regions and new players (local governments, other non-profit organizations, etc.).10|

Gaz de France has formed major partnerships with two non-profit organizations, each of which works to

foster sustainable development with different objectives, procedures and programs:

• the French Hiking Federation with which the Company’s foundation, Fondation d’entreprise Gaz de France, has

strengthened ties in a partnership that for 13 years has worked to preserve and restore hiking trails in France;

• WWF France, with which Gaz de France formed a partnership in 2003 to go further in limiting greenhouse

gas emissions and in contributing to sustainable development in the country, two areas in which the goals

of the two partners converge.

As a family, discover nature

with FFRP hiking guides and

the federation’s ”Nez en l’air”

publications(éditions du

Moutard).


Daniel Richard, President of WWF France

Why are you in partnership with a company like Gaz de France?Gaz de France was attracted by our idea of ecological footprint, by which we measure the negative impact of human

activity on the earth. This footprint reveals an alarming situation, in particular owing to our energy consumption,

because today’s life styles require huge quantities of energy, and six billion people hope to attain a similar level of

consumption. Gaz de France understands these global issues and has agreed to work with WWF to develop an ecological

footprint reduction program. We have also joined forces to promote a new energy policy that will encourage

the development of renewable energies. Natural gas pollutes less than fuel oil and coal, and hence is the best option

in the transition to a less energy-intensive economy, which should depend on renewable energies. The strong commitment

to values expressed in the previous Sustainable Development Reports, the Chairman’s personal commitment, and the fact

that results are audited were also arguments in favor of this partnership. This commitment to values is more than a proof

of professionalism; it is a proof of good faith.

What does this partnership involve and how might it evolve?In this initial phase, we will first concentrate on building the awareness of the general public, local governments and

inside the Company. The alliance has just begun; so it is too early to define what kind of long-term developments

we might be able to achieve. But for us, this partnership will be successful if Gaz de France succeeds in mobilizing

its employees (engineers, sales force, technicians, etc.) to face these new energy challenges. Our hope is that the Group

will become a world leader in energy efficiency and clean energy in the broad sense, in particular by expanding its expertise

in renewable energies in France. |11

Support sustainabledevelopment with WWF.Campaign against global

warming.

Suppliers (excluding natural gas) transparent and fair purchase conditions

markets

Suppliers of natural gas purchase guarantees (price and volume)

long-term purchase agreements

Industrial partnersand professional federationsco-developmenttransfer of expertise

contribution to professional branch support for exports partnerships

Public authoritieseconomic performance social exemplarity transparency reliable supplies public service missions

conventions and protocols:the disabled, social integration, former gasplant sites, etc.

National andEuropean regulatorstransparency, economic performance, compliancewith regulations and faircompetition practices

information

Franchisors, local governmentsnetwork service and densitycoordination of excavationprojects serviceslocal Agendas 21

satisfaction surveysrepresentation on theboardlocal partnerships

Employees and labor organizationsrecognition safety at workinformation on the Group

satisfaction survey (parent company)representation on the boardEuropean works councilemployee informationdialogue with employeerepresentatives

Stockholdertransparent managementeconomic performance long-term visibility

public service contract,industrial developmentstrategy

Rating agenciestransparency

information

NGOs and non-profitorganizationsinformationimproved practices

project support and co-developmentpartnershipssponsoring

Educational andresearch institutionstransfer of expertiserecruitment

research partnerships internshipstraining contracts

Local populations at Seveso sitessafety

satisfaction surveys consultationinformation

Customers and consumer groupsprice, safety, listening, product diversification,energy efficiency information

satisfaction surveysinformation sales contracts representation on theboardprotocol agreement

Underprivileged customerslistening access to natural gas

listening and advisorystructures and services

Governance structure

The Group is governed by a Board composed of 18 mem-

bers: 6 representatives of the French State, 6 qualified

individuals (the Chairman and Chief Executive Officer of

Gaz de France, two local government representatives, two

representatives from the economic sphere and a consumer

representative) and 6 employee representatives.

The Chairman is nominated by the Board and appointed

by government decree. To accomplish his task, he chooses

a management team with which he defines corporate

strategy, determines the main options and coordinates

activities. He reports to the Board on a regular basis.

The Executive Committee of Gaz de France is made up of

the Chairman and Chief Executive Officer of Gaz de France,

three Executive Vice Presidents, the Chief Financial Officer,

the Vice President for Strategy and the Vice President for

Public Affairs. The strategy is broken down in business plans

by branch of activity. Once they have been validated by the

Executive Committee, these plans serve as the business’s

strategic and management benchmark. Management con-

tracts are based on detailed objectives, the achievement of

which is monitored and reported to executive management

using specific performance indicators.

The Board fully integrates sustainable development and

the Sustainable Development Action Plan into its

discussions and analyses. For risk control and priorities in

the field of sustainable development, the Board consults

its specialized committees: the Audit Committee and the

Strategy Committee. The ombudsman’s yearly report is

presented to the Board.

Relations with the stockholder

Relations between Gaz de France and its sole stockholder,

the French State, are governed by the contract between the

State and the Group for 2001-2003. The contract describes

the Group’s strategic objectives, spells out the actions to be

taken, identifies the required resources and indicates the

pertinent monitoring indicators. The actions and objectives

it specifies integrate the dimension and objectives of

sustainable development. For the period 2004-2007, a

public service contract is being prepared that should replace

the current contract between the State and the Group.

Code of Business Ethics and transparency

Ethics are a fundamental value at Gaz de France. To ensure

ethical conduct, the Group defined and published its Code

of Business Ethics in 2002. This document presents the

intangible principles that Gaz de France commits to respect

wherever it operates. These commitments are organized

around three priorities:

• respecting and promoting social rights;

• acting as a responsible company;

• maintaining relations of trust with partners.

The Vice President for Sustainable Development monitors

the application of these principles in the Group and presents

a report every year to the Board.

Reflection on changes in corporategovernance

Gaz de France is working to define rules for good gover-

nance with French government authorities. In 2004, it will

pursue its reflection on the adaptation of the Board’s pro-

cedures in the new context of corporate governance, inte-

grating its majority-owned subsidiaries.

Principles of corporate governance

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A full description of governance structures and principles is presented in the Annual Report and on the Internet site www.gazdefrance.com


In 2003, the structures set up to pilot sustainable devel-

opment issues evolved to give new impetus to this

approach.

The Sustainable Development and Quality Committee, a decision-making body

The preparation and monitoring of sustainable

development policies and actions are the responsibility of

the Sustainable Development and Quality Committee,

which is chaired by the Vice President for Sustainable

Development. This committee (the composition of which

was expanded in 2003) meets at least four times a year,

monitors implementation and submits proposals for future

orientations to the Executive Committee of Gaz de France.

The Sustainable Development division gives impetus to policies

The creation of the Sustainable Development division in

2003 illustrates the importance given to sustainable

development policies, as well as the determination to achieve

greater cooperation among Gaz de France’s different entities,

businesses and subsidiaries working in the field of sustain-

able development. Under the responsibility of Gaz de

France’s Vice President for Sustainable Development, Michel

Przydrozny, the division defines strategy and provides the

impetus required to implement and coordinate action plans

in the Group. It relies on a network of correspondents,

empowering each division. It steers polices and initiatives in

the Group in terms of quality, the environment, social and

economic responsibility and solidarity.

Integrate sustainable developmentinto management structures

Every Gaz de France entity is represented on the Sustainable

Development and Quality Committee and is responsible for

the practical implementation of its action plans.

Management commitments are taken into consideration in

manager evaluation reviews, as specified in the Group’s

management contracts.

Mobilizing management structures to support sustainable development

Left: platform in the North Sea.Right:team meeting in the Supply and Tradingdivision.

|13

Mobilizing employees for sustainable development

Beyond the definition of its policy and a concrete action plan, Gaz de France solicits

the involvement of its different divisions in the organization of the action plan, well

aware of the cultural and managerial importance of each employee’s acceptance of

and contribution to the cause of sustainable development. To this end, the Group

chose to align the development and definition of its policy in the medium term with

its corporate Agenda 21.Action plans are built over a period of three years in

a decentralized approach. Each division is accountable for defining its objectives and

implementing its actions. The Sustainable Development Action Plan is grounded in

the initiative of each business; no strict methodology has been imposed other than

the directive to associate each division’s stakeholders as much as possible.

This trend to increased participation has progressively created a managerial dynamic

at Gaz de France in favor of this program of change. Today, the main challenge is to

make sustainable development a corporate culture that is shared and understood by

all Group employees.

Mapping of standards used

From left to right: professional training

for interns; back view and inside view of a leak

detection vehicle.

14|

Risk management and management systems, interdependent leverage for action

The principal management systems and standards used

by Gaz de France are described in the following tables.

The Group’s approach is characterized by a joint

initiative targeting Quality Safety Environment (QSE)

and risks. It is based on the mapping of risks provided

by each division. Objectives are defined in contracts

between the divisions and the Group’s executive man-

agement.

Standard used Standard experimented QSE objective

Comprehensive risk analysis

Gaz de France has adopted a comprehensive approach to

risk analysis. The main risks considered are market risks,

technological and infrastructure risks (including IT risks),

social and health risks, risks related to the media and the

communication of information, legal, regulatory, political

(including country risks), environmental, credit or

counterparty, commercial (competition), expertise,

financial and strategic (including those related to climate,

management or external growth) risks.

Customers ISO 9001

Environment ISO 14001

Health, Safety OHSAS 18001,ISRS, SM2S (Company standard)

Professionals COFRAC

Objective QSE

AREAS FOR IMPROVEMENT IDENTIFIEDExploration- Supply Production and Trading Transmission Distribution Sales Services Research


Management systems

|15

Environment: ISO 14001

Safety of facilities and the workforce:OGP (International Association of Oil and Gas Producers)ISRS (International Safety Rating System)SM2S (Gaz de France’s health and safety management system)QualicertQSEP (Quality Safety Environment Performance)OHSAS 18001 (Occupational Health and Safety Assessment Series)

Quality: ISO 9001

SITUATION IN 2002 ACHIEVEMENTS IN 2003 OBJECTIVES

Envi

ron

men

tal

Soci

alEc

onom

ic

ISO 9001 > Certification of services• Transmission: transport and regasification• Distribution: works, meter reading 90%completed in France for residentialcustomers and 10% for large consumers• Supply and Trading: sales, billing andaccounting for customer accounts • Services: most French facilities andNEU2M • Research: 3 departments

ISRS> Evaluation of terminals (level 6 attained)and storage facilities (level attainedbetween 4 and 6)

SocialDefinition of Group criteria of humanresources practices together with all interested parties

ISO 14001 > Certification of four Transmission regionsfor 6 Seveso sites (out of a total of 8 regions and 14 Seveso sites) (terminalsand storage facilities)> Certification of all Distribution Areas(Distribution and Sales)> Certification of two research facilities(Research)

QSEP management system (Transmission )

ISO 9001> Certification of services (Transmission):• determining and making the quantity of delivered energy available to industrialconsumers• odorization of gas shipped to distributors• connection to the network and deliveryof gas> Certification of all units for four gasoperating processes and for access to gasby all customer categories (Distribution and Sales)

SM2S > Safety management system installed at 15 Areas (Distribution and Sales)> Installation of a safety management systemapplicable throughout France and certificationof the Haute-Normandie region (Services)> Specific Health Safety Environmentmanagement system in effect at allsubsidiaries (Exploration-Production)

ISRSEvaluation of terminals and storage facilities

ISO 14001 > Certification audit at two industrial sitesfor compression and storage (Transmission)> Certification of nine Distribution Areas

Management systemSpecific Health Safety Environmentmanagement system operative at allsubsidiaries (Exploration-Production)

ISO 9001 > Certification of meter reading andadvisory processes> Repairs (Distribution)> Certification of all R+M and SOGIMagencies in 2004 (Cofathec®)> Certification of DK6 in 2006 (Cofathec®)

QUALICERT Certification of all CGST SAVE agencies by the end of 2005

ISRS Level 6/10 of ISRS standards for Seveso sites (terminals and storage facilities) in July 2005

SM2SIntegration of safety into the management system (Distribution)

OHSAS 18001 > Certification in 2005 (Cofathec Omega)

ISO 14001 > Certification of all Transmission regions in 2005 for a part of their activity and atleast for all the Seveso sites in 2006(terminals and storage facilities)> Certification in 2006 of DK6 andCofathec Coriance

16|

Enhance performance every day

Key events in 2003

// Partnerships. The year 2003 was marked by three major initiatives:• the Gaz de France Group joined the United Nations Global Compact and its commitment to respect

the nine universal principles of human rights;• the Group entered into a partnership with WWF France based on the ecological footprint;• an agreement was signed with the French public works federation (FNTP) to promote safety,

quality and environmental protection.

// Solidarity and human resources. In these areas, significant progress was made in two fields:• the Group’s solidarity policy and quality policy were updated;• the parent company succeeded in bringing the accident frequency rate below 5.

// Environmental protection. Gaz de France stepped up its contribution to the fight against globalwarming through two concrete commitments:• a commitment with AERES to control direct greenhouse gas emissions;• the launch of a pilot operation for the sequestration of CO2 in the Netherlands.

// Risk control. In this area, the Group extended its corporate approach. The year 2003 was marked by:• the launch of a joint Quality Safety Environment and risks policy involving all Group divisions;• the finalization of efforts to map risks.


|17

Performance

Promote sustainable development through concrete actions

Society-relatedperformance

For a long time, Gaz de France has participated in discussions on sustainable development. With the emergence of major

issues like global warming, the Company’s involvement has increased and taken more varied forms.

Sharing of best practices between large companies

and small and medium-sized businesses

Consulting local populations

Sharing of awareness and expertise among

members of the civil society

Promoting renewable energies

and efficient natural gas solutions

Preparing reporting guidelines

Participating in international debates

on sustainable development issues

Participating in national debates

on sustainable development issues

Addressing issues specific to the gas industry

Heightening the awareness of the general

public and mobilizing citizens with regard to:

• global warming,

• concrete actions in support of sustainable

development

Above: partnership betweenMonoprix and Gaz de

France. At the end of 2003,four Monoprix storespresented household

recommendations sponsoredby Gaz de France.

CLIMAX, an exhibition tounderstand the issues

involved in global warming,from October 2003 to

November 2004 at the Citédes Sciences et de l’Industrie

de La Villette in Paris.

18|

Orée non-profit organization (member of the board)

www.oree.org

Comité 21 (member of the board)

www.comite21.org

Observ’ER, FONDEM, ATEE (member of the board)

www.observ-er.org

www.fondem.org

www.atee.fr

GRI (stakeholder and participation

in the structured feedback process)

www.gri.org

Sustainability (stakeholder)

www.sustainability.com

WBCSD, the Global Compact (member), Global

Forum on Sustainable Development (support)

www.wbcsd.ch

www.unglobalcompact.org

www.equitable-forum.org

EPE (member of the board), Orse (member)

www.epe-asso.org, www.orse.org

CNDD (participation)

www.environnement.gouv.fr

Eurogas, Marcogaz, IGU (chair of committees)

www.eurogas.org

www.marcogaz.org

www.igu.org

2003 National Sustainable Development Conference

Partner in the CLIMAX exhibition in Paris

www.cite-sciences.fr

Sponsorship of a television program on better living

(Gestes d’intérieur)

(First Prize, Top Com Business 2004, sponsorship category)

www.gestesdinterieur.com

Society-relatedperformance

FOCUSES FRAMEWORK OF INVOLVEMENT

Performance

Gaz de France considers its support of regional development

an integral part of its corporate responsibility. Beyond its

sector-based policies, the Group evaluates its economic,

environmental and social impacts and contributions at the

regional level.

Filling in the energy distribution market

Through its activities as an energy distribution system

operator, Gaz de France makes a direct contribution to

the economic development of regions. 8,770 French

municipalities now benefit from the advantages of natural

gas, representing more than 10 million customers in

France. For tomorrow, the group aims to serve more cus-

tomers from existing franchised networks. The goal is to

serve a million additional dwellings in the next four years.

Moreover, in order to meet the needs of rural communes,

Gaz de France has committed to participate actively in

Contributing to regional development

experiments on new modes of local presence in rural

environments in four French departments (Savoie,

Charente, Corrèze and Dordogne).

Promoting sustainable development sponsorship

Complementing the initiatives taken within the framework

of its responsibilities as an energy distributor, transporter

and marketer, Gaz de France works through the Company

foundation, Fondation d’entreprise Gaz de France, to

sponsor projects that contribute to personal and regional

development. For ten years, the foundation has actively

promoted solidarity and the defense of natural and cultural

heritage on the basis of four principles: local initiative,

contribution to balanced growth that benefits the greatest

number; strengthening of social ties that foster sharing;

and the enhancement of natural and cultural heritage.

|19

Accompanying local governments intheir development

Gaz de France works with local governments to encourage

their efforts to promote sustainable development. The

Group participates in the local Agendas 21 it helps organize

and shares its expertise, as for example in the partnerships

forged with Rueil-Malmaison and Vitré Communauté.

Through the Plato program, Gaz de France sponsors

small and medium-sized businesses, contributing to

regional economic development. The agreement signed

in 1999 with SPK (which launched Plato) was renewed

in 2002, extending the program to 15 regions. In ad-

dition, the Group actively supports the efforts of French

small and medium-sized businesses in gas-allied sectors

to develop their exports.

Left: the natural heritage siteof Gavarnie restored withthe support of the Fondationd’entreprise Gaz de France. Middle: local governmentswork in partnership with the Group. Above: a village connectedto natural gas mains.


For more information about Fondation d’entreprise Gaz de France, its sponsorship policy and activities, visit www.gazdefrance.com, Sponsorship section

Supporting solidarity and social integration

The Group’s support of solidarity is the natural continua-

tion of its commitment to regional development. Gaz de

France’s solidarity priorities were redefined in 2003. They

cover three main areas of commitment:

• offerings for underprivileged customers and social

welfare organizations, promoting local initiatives, access to

heating under adapted economic conditions (Energy

Solidarity Fund) and appropriate services with regard to

safety and the control of consumption;

• support for employment through measures in favor of

professional integration in partnership with sector orga-

nizations and through the subcontracting of activities to

social integration partners;

• commitment of the workforce and the recognition of

professional skills developed through their involvement in

solidarity initiatives.

In its efforts, the Group strives to:

• stimulate interaction among the initiatives taken in its

operations, those launched by its employees and programs

set up by foundations (Fondation d’entreprise Gaz de

France, Fondation Agir pour l’Emploi) in such way as to

multiply support;

• to rely on a active, decentralized network of partner-

ships with non-profit organizations and institutions;

Making artistic creationavailable to the disabled.Fresco on the themes of

nature and the environmentpainted by disabled artiststhrough the Personimages

non-profit organization. Thisproject was supported by the

European Union’s YOUTH programme and the

Fondation d’entreprise Gazde France.

SOLIDARITY WITH THE UNDERPRIVILEGED

>> 3 million euros contributed to the Energy Solidarity Fund in 2003

>> A policy to prevent interruptions in energy supply

>> A toll-free number for customers in difficulty

>> A special ”solidarity” customer serviceadvisor in each service center who works closely with social workers

>> 19 service centers open in sensitive zones at the end of 2003 and 15 being built

>> Creation or reinstatement of customer contact points

SUPPORT FOR SOCIAL INTEGRATION THROUGH EMPLOYMENT

>> 170 jobs created through the contribution of FAPE in 2003 (80 projects supported and subsidies of 1 million euros granted)

>> 940 contracts financed in 2003, including 510 jobs for young people, 430 apprenticeship contracts, qualification contracts, solidarity employment contracts and consolidated employment contracts

>> Agreement on the employment and recognition of disabled employees (2002-2004)

>> 35 disabled employees hired in 2003

Solidarity: facts and figures

20|

• to take account of the specific characteristics of the

regions in which it operates.

This awareness of fragility also finds expression in actions

that support the disabled and their access to employment.

Such initiatives reflect the Group’s general skills

management policy, i.e. the mobilization and development

of employees’ skills in function of the needs of Gaz de

France. In addition to this general policy, the Group adapts

working conditions to allow the disabled to enjoy career

prospects that are similar to those open to the rest of the

workforce. This specific policy, which is applied in the par-

ent company, was renewed for the period 2002-2004

within the framework of the fifth labor agreement. This

pact also includes measures to improve disabled access

(the creation of customer service centers in 2004 that are

accessible to the disabled, training of customer service

advisors to deal with the hearing impaired, bills available in

Braille, etc.). As well, through its Company foundation,

Gaz de France develops a program to allow the disabled to

participate more fully in cultural and social events (sports

events, festivals, etc.).

Performance

› Preservation of the resource› New uses of natural gas› Sharing expertise› Creation of jobs› Education in schools

and universities› Contribution to the defini-

tion of codes and standards› Registration of patents

› Local development› Market access for small and

medium-sized businesses andthe protected sector

› Safety of facilities› Personal health and safety› Creation of direct

and indirect jobs› Education› Payment of taxes› Human rights› Long-term contractual

relations

› Professional integration› Projects developed

with local input› Network safety › Personal health and safety› Creation of direct

and indirect jobs› Education› Payment of taxes› Preservation

of the landscape› Reduction of noise

from operations

› Professional integration› Market access for small and

medium-sized businesses andthe protected sector

› Professional relations in the branch

› Use of local suppliers› Access to natural gas› Creation of direct

and indirect jobs› Education› Payment of taxes› Sponsorship› Launch of local government

Agendas 21› Experiments

in industrial ecology› Local services

› Energy› Energy efficiency› Assistance to underprivileged

customers› Quality of life (HQE)› Personal safety

Research Exploration-Productionand Supply

Networks Local presence Sale of energy and services

Contributions of Gaz de France’s activities to society

SOCIETY-RELATED PERFORMANCE INDICATORS

|21

Index of satisfaction of localgovernments (France)

The satisfaction of local gov-

ernments reflects the number

of local governments that are

satisfied or very satisfied with

the services rendered by Gaz

de France. This rate is the high-

est since the indicator was

introduced (1993).

The number of municipalities

served in 2003 goes beyond

the objective of 8,500 set

in the 2001-2003 public

service contract.

Index of retail customer satisfaction (France)

The satisfaction of households

is measured by the number

of customers that are satisfied

or very satisfied. This rate remains

at a very high level.

Number of municipalities served (France)

Residual length of grey cast ironmains (kilometers)

Gaz de France outperformed

the goal of the 2001-2003

contract between the State

and the Group, i.e. to replace

50% of the grey cast iron mains

existing in 1999.


Human resources management adapted to the Group’s priorities

Social performance

In its industrial development strategy, Gaz de France for-

malized its commitment in the field of human resources

management. The goal is threefold: to guarantee employ-

ment, pursue gains in productivity and lead the changes

the Group requires.

It involves motivating employees, improving the skills they

need to do their jobs, preparing them for changes in their

lines of business and developing a feeling of belonging to

the Group. This commitment is of a nature to introduce

changes in Group practices in the fields of employment,

mobility, training, measures to accompany structural

developments, social dialogue and working conditions.

This commitment is implemented over time, in permanent

dialogue with employee representatives from all Group

entities.

To meet the challenges of the Group’s industrial develop-

ment strategy, the Human Resources division has struc-

tured its activity around three priorities – accompanying

change at the parent company, constructing a Group

human resources policy, and developing a skills manage-

ment system focused on the challenges of Gaz de France.

Construction of a mobilizing human resources policy

The growing internationalization of its activities has led

Gaz de France to adapt its human resources policy,

favoring initiatives that mobilize Group teams. These

initiatives are based on two main leverage tools.

CompensationCollectively, gainsharing includes a Group criterion based

on the performance of subsidiaries. In local gainsharing

agreements, certain divisions have introduced criteria

based on sustainable development. For example, the sup-

port functions of Gaz de France have adopted a plan to

support environmental citizenship with simple actions in

which all employees may take part. Gainsharing is linked

to the success of this initiative and, through a policy of

matched funds, encourages employee involvement.

Individually, the compensation system integrates the indi-

vidual contribution of employees to Group performance.

Thus in 2003, the portion of payroll dedicated to variable

compensation increased to 5.5% (3.5% in 2001) and the

individual percentage ranged from 0% to 15%.

TrainingIn 2003, Gaz de France earmarked a major part of its

budget to the adaptation and development of profession-

al skills. During the year, 60.2% of the workforce partici-

pated in training programs, and 18.7 hours of training

were organized per employee (at the parent company). In

addition, in order to maintain and develop the skills of

managers and executive managers, a professionalization

program called Cap Compétences has been introduced.

The objectives are to mobilize and ensure the loyalty of

managers and executive managers, and to integrate and

keep new management recruits. In 2003, for example, a

welcome program and strategic integration workshops

were organized for new management recruits, and the full

program will be implemented in the second half of 2004:

strategic integration workshops, programs on how to lead

change, sessions on finance, marketing and legal issues.

Regional representatives and managers from different lev-

els in the Group actively contributed to the definition of

the program’s contents.

22|

Working offshore in the North Sea.

Mobility in Exploration-Production

In 2001, the Exploration-Production division

(1,200 people working in five European countries and

Algeria) introduced a mobility program to develop

professional skills, propose motivating career paths,

and consolidate a common corporate culture.

Employment opportunities are posted on the division

intranet and employees can apply online.

The 25 job offers posted in 2003 led to 10 new

internal assignments, eight of which involved

geographic mobility.

”Two things could further facilitate mobility,”

comments Jean-François Dutzer, an expatriated

employee in Norway. ”Beyond the jobs offered, people

should be asked during their annual performance

review whether they are mobile, when and under what

family conditions. Expatriation conditions should then

be spelled out in a country-by-country expatriation kit.”

Social performance

Performance

Enhancing social dialogue

Changes at Gaz de France and the integration of new sub-

sidiaries have motivated the development of a Group

human resources policy. Gaz de France leads this change

on the basis of dialogue with employees and their repre-

sentatives:

• at the level of the professional sector through a

negotiation program started in 2001 on different subjects

(retirement, position classification and compensation, social

welfare systems, equal employment opportunity, etc.);

• at the level of the Group through the European works

council, which was created at the end of 2001 and serves

as a forum for information and exchange with the repre-

sentatives of the employees who work in the Group’s

European companies;

• at the level of the parent company, the ”Listen and

Exchange” program responds to employee concerns by

dialoguing about the changes in process.

Integrating employee preoccupations about the Group’s development: the “You and Your Company” survey

The ”You and Your Company” survey organized at the parent company demonstrates the

interest paid to employee perceptions and preoccupations and to the way executive manage-

ment integrates these concerns into its decision-making process. The survey canvassed one out

of every six employees. The people polled were chosen at random and asked to fill out a ques-

tionnaire sent to their home address. Three subjects were highlighted in 2003: the work situa-

tion and environment, the perception of the Company and its changes, and division issues.

The results were positive and encouraging. Employees were satisfied with their working condi-

tions, relations with their co-workers (86%), the interest of their job (80%), the balance

between their professional and personal lives (71%) and the possibility to take initiatives

(68%). They consider themselves generally well informed (66%) and know the objectives they

are to meet (79% of them know exactly the results expected of them). Nevertheless, these

results have to be read in context. Employees are divided when it comes to the future of the

Company. Even if they consider that the changes made in their unit are necessary, 73% think

they occur too frequently and are difficult to understand. In addition, certain employees

deplore the fact that their professionalism and responsibilities are not taken sufficiently into

account in the calculation of their individual compensation package.

To respond to these two areas open to improvement, Gaz de France launched a ”Listen and

Exchange” program to deal with employee concerns and provide fuller information on the

changes in process. Moreover, the compensation and position classification system now being

negotiated at the level of the gas and electricity industry also responds to these expectations.Left: teamwork in Sales.

|23


Accompanying change in the Group

Constant adaptation of human resources to needsIn this increasingly competitive environment, professional

skills and employee involvement are decisive advantages

for Gaz de France. To encourage the constant adaptation

of resources to the Group’s needs, division business plans

and budget estimates integrate these objectives. This new

approach, now integrated into strategy and steering pro-

cedures, makes it possible to base recruitment and pro-

fessionalization decisions on the priorities of each division.

In addition, a specific HR initiative has been launched for

cross-division functions (legal, human resources, finance,

corporate communications, procurement, IT, etc.). The

first stage in this approach requires that each cross-divi-

sion function map its resources in order to identify areas

of possible risk.

Defining Group criteria of human resourcespracticesIn 2003, a joint initiative was launched involving the

workforce, management and employee representatives

to formalize Group criteria of human resources practices

to serve as a self-evaluation touchstone for all Company

entities. These criteria will give concrete expression to

Gaz de France’s Code of Business Ethics and its industri-

al development strategy. It is grounded in an inventory

of managerial practices piloted by executive manage-

ment, the European works council and a work group

representing all Group entities.

In 2005, all European subsidiaries in which Gaz de

France has a majority interest will be able to conduct

self-evaluations. The results will eventually be integrated

into performance reviews in the different entities. This

initiative may be the subject of a Group protocol at the

European level.

Ensuring health and safety

Gaz de France is committed to providing its employees with

working conditions that ensure their health and safety and

to promoting initiatives targeting greater prevention in

these areas.

In 2003, the safety record was contrasted. Although at the

parent company the accident frequency rate with lost time

was less than 5, ten ”gas-specific” accidents were recorded

Above: working to extend

the natural gas transmission system.

Right: safety and environmental

protection guaranteed as an underwater crossing

is laid.

24|

when the objective was zero. The risk evaluation project

started in 2002 made it possible to reexamine the risks to

which employees may be exposed, business by business,

while taking local conditions into account, and to do what-

ever was necessary to reduce them. Carried out in a par-

ticipatory manner, it resulted in an evaluation method that

lists health and safety risks on the same scale. In this way,

action priorities can be better identified at the level of the

entities.

At the same time, studies of health risks are conducted to

determine the components of an active health policy.

Three types of risks mobilize Gaz de France – chemical

risks, risks of exposure to asbestos treated for a long time,

and psychosocial risks linked to violence and attacks,

which are assimilated progressively (quantification and

monitoring, preventive and corrective measures vis-à-vis

employees). Gaz de France also strives to improve human

factors engineering.

The divisions have conducted studies to learn more about

the safety records of their suppliers and to work with them

to build prevention plans (specific training on safety for

temporary employees, work site safety audits, etc.).

Accident frequency rate

For the parent company, the

accident frequency rate fell

below the objective of 5 set in

the 2001-2003 contract between

the State and the Group.

The percentage of stable jobs

corresponds to the number

of employees on permanent

hire contracts.

Accident severity rate

For the parent company, the

accident severity rate was

reduced from 0.28 in 2002 to

0.25 in 2003.

Percentage of stable jobs in the Group in 2003

Percentage of employees trained

Percentage of female managers

Performance

SOCIAL PERFORMANCE INDICATORS

|25

Employee involvement in Gaz de France’s solidaritypartnerships. Fightingexclusion with the Samusocial in Paris. AnnieBergamini, an employee at the Paris-AuroreDistribution Area, helps the homeless.

On platforms, safety comes first.


Controlling energy management and consumption

Environmental performance

Two major priorities guide Gaz de France – the fight against

global warming and the conservation of natural gas resources

in the medium term. To meet these challenges, Gaz de France

practices an active energy conservation policy, promotes effi-

cient energy solutions and couples natural gas with renew-

able energies. In its offerings, the Group also integrates solutions

that allow industrial customers to reduce the environmental

impact of their products and processes (processing of volatile

organic compounds, sludge and mud, NOX, particulate matter,

industrial ecology, etc.).

Integrating priorities of energy control and the fight against greenhouse gases

The objective set by Gaz de France for the year 2000 – to

integrate both demand-side management and renewable

energies into its offerings – has been achieved through its

different brands of products and services:

•Gaz de France energY® for large industrial customers;

•Gaz de France DolceVita® for residential customers;

•Gaz de France Énergies Communes® for local governments.

The Group also studies the best way to help customers

save energy, anticipating the introduction of energy saving

credits.

DolceVita® for residential customersPartnerships with sector professionals help optimize

boiler efficiency and, more generally, render the uses of

natural gas more economical and more environmentally

friendly. In particular, the technical solutions proposed in

the Gaz de France DolceVita® line incorporate 2000 thermal

insulation requirements. Three out of four offerings in

the line meet the standards of high energy performance

(-8%) and very high energy performance (-15%). The

equipment recommended helps reduce energy consump-

tion and atmospheric emissions, e.g. condensing boilers.

Energy audits and specific offerings for industrial and commercial customersIndustrial and commercial customers can benefit from

energy audits to reduce their energy consumption and

optimize equipment output. In 2003, Expertgaz handled

almost 350 requests from manufacturers. The application

of Gaz de France recommendations allowed them to

reduce their consumption of energy and their CO2 emis-

sions by some 50,000 metric tons.

In particular, Gaz de France allows its customers use the

software it has developed to calculate boiler output.

The objectives of energy efficiency and economic per-

formance are at the heart of the commercial offering Gaz

de France energY® designed for key accounts in Europe.

Controlling energy consumption at the local government levelUnder the brand Gaz de France Énergies Communes®, the

Group offers local governments different tools to identify

energy efficiency parameters, and in partnership with local

government employees, has developed the Energie

Territoria software package.

Together with ADEME, Gaz de France helps managers of

collective heating and hot water systems to reduce oper-

ating costs and to find modernization solutions. Lastly, the

periodic monitoring of boiler energy consumption is facili-

tated by management software developed to audit the

efficiency of installations in social housing complexes. This

service allows both renters and facility managers to be reg-

ularly informed of consumption levels.

State-of-the-art technologies contribute to environmental protection

Gaz de France mobilizes its technical skills to facilitate the

emergence of clean and efficient state-of-the-art technolo-

gies. The three focuses are research, demonstration and the

engineering of commercial offerings.

High efficiency equipment with reduced pollution levelsThe Group’s R&D center develops and conducts demon-

strations of clean technologies, including catalytic com-

26|

Below: NGV bus in Dunkerque.

Environmental performance

Performance

Industrial ecology helps inthe fight against the greenhouse effectGaz de France is a founding member of a partnership

created by manufacturers and institutions in the

Dunkerque area to undertake the first industrial ecology

experiment in France, which has taken the name Ecopal.

Once needs were identified, Ecopal piloted the studies

and networked its partners with the institutions or

organizations concerned (municipal syndicate, general

council, regional council,ADEME, etc.).

Commitment by manufacturers can also spur other local

initiatives. For example, in the fight against greenhouse

gases, Gaz de France and Charbonnages de France

joined forces in the economic interest group GIE

Méthamine as of 1990 to recycle mine drainage gas

(greenhouse gas containing methane).

This gas, which is concentrated in former coal mines in

northern France is re-injected into the natural gas trans-

mission system, procuring several advantages: decar-

bonization, safety of the mining region, the fight against

the greenhouse effect, use of an additional resource,

energy savings and the creation of jobs for former miners.

bustion and oxi-combustion (which lower nitrogen oxide

emissions significantly) and very low-NOX burners with

flameless oxidation for high-temperature applications that

reduce emissions by more than 50%, etc.

Cofathec®, which is specialized in services, enables the

Group’s customers to benefit from these innovative tech-

nologies and has developed an offering for the processing

of volatile organic compounds.

Cogeneration saves energyCogeneration involves the decentralized production of

heat and electricity from natural gas. This process offers

Gaz de France, a natural allyin High Quality Environment(HQE) initiatives Today, in areas served by natural gas, three out of four HQE

projects employ Gaz de France solutions. Gaz de France’s

involvement in HQE takes the following forms, in partnership

with construction companies and public authorities:

- advising owners (heightening awareness, visiting previous

projects, establishing contacts with environment advisors,

presentation of feedback, etc.);

- monitoring certain technical solutions;

- contributing to criteria for the environmental quality

certification of residential and commercial constructions.

Gaz de France produces diagnostic tools to reduce energy

consumption, in particular for local governments, and

participates in building heating improvement projects launched

by ADEME (the French agency for the environment and energy

control) and ANAH (the French agency for the improvement of

housing). It also helps design bioclimatic systems that provide

cool air naturally without any energy consumption.

overall energy efficiency of more than 70%. Cofathec® is

a major player in cogeneration, providing its industrial and

commercial customers with heat and electricity through

contracts with a commitment to produce results. The out-

come is a reduction in atmospheric emissions, particularly

of CO2.

Cleaner air conditioningClimo’Gaz®, Gaz de France’s air conditioning offering for

spaces with an area of more than 150 m2 is based on a

process that produces cool air by absorption with no fluids

that might damage the ozone layer (CFC).

|27

Left: trigeneration facility in Montpellier. Middle:Banque Populaire du Haut-Rhin equipped itsheadquarters with HQEarchitecture and a naturalgas air conditioning system.


Innovative waste processing With the brand Gaz de France Énergies Communes®,

launched in 2003, the Group advises local governments

on waste processing and recycling. Innovative processes to

treat industrial waste have been developed such as the

drying of urban and industrial sludge, mud, and the vitrifi-

cation of residue from the incineration of post-consumer

waste.

Cofathec® also provides waste management services for

certain manufacturers.

Limiting the environmental impact of operations

Gaz de France has a long-standing commitment to envi-

ronmental protection within a framework that was first

defined in 1993. There are numerous examples of concrete

actions it has undertaken to promote ecological objectives.

A good illustration is the management of the Group’s indus-

trial past with the rehabilitation of the sites of former gas

plants in France and Germany (Saxe-Anhalt).

In 2003, the Group continued its impact reduction programs

and strengthened its commitment to fight against global

warming through four significant initiatives:

• membership in AERES, a non-profit organization of compa-

nies to reduce greenhouse gas emissions, together with a

voluntary commitment to control direct greenhouse gas

emissions;

• experiments on the sequestration of CO2;

• a second stage of support to developing countries as an

active member of the Prototype Carbon Fund;

• finalization of a study on the localization of a new LNG

receiving terminal at Fos Cavaou.

Renewable energies often require a supplemental type of

energy to adapt to consumer needs. Because it is easy to

use, natural gas is the ideal complement. Gaz de France

develops innovative solutions to optimize this complemen-

tarity, with multiple objectives including cost control and

enhanced customer service as well as safety and environ-

mental protection. After a first R&D phase, renewable

energies are progressively integrated into commercial

offerings.

Geothermal, wind and wood power

Through its subsidiary Cofathec®, Gaz de France has

become France’s leading operator in district heating net-

works using geothermal power. Some 40,000 homes are

heated by these networks. Gaz de France offers local gov-

ernments a range of services to help them optimize, devel-

op and manage their networks by relying on the Group’s

expertise in heating solutions and on close partnerships

with professionals in the sector.

Cofathec® also contributes to the development of wind

energy in France as the leader in the market for technical

windmill maintenance. In addition, Cofathec® invests in

the development of the wood industry in France and Italy.

NGV, a major ally in the fight against urban pollutionThe Group facilitates local government access to natural gas

for vehicles (NGV) through the turnkey service offered by its

subsidiary GNVert®. Gaz de France promotes the use of NGV

as a tool to accompany local government sustainable devel-

opment policies. The use of NGV buses, garbage collection

vehicles and trucks is on the rise. In addition, Gaz de France’s

ambition is to convert the light vehicle market to NGV by out-

fitting 15,000 additional vehicles with natural gas.

Developing the complementarity of natural gas and renewable energies

28|

Below: Banque Populairedu Haut-Rhin headquarters:roof-top solar panels power

hot water boilers.Right:

heating system at the University of La Rochelle.

Coupled uses of natural gas andrenewable energies

Gaz de France recommends solutions based on the com-

plementarity of natural gas and wood. Natural gas is used

to supplement wood in approximately ten district heating

networks in France.

Energy solutions combining solar energy and natural gas

(to heat and provide hot water for residential and com-

mercial premises, for example) are integrated into the Gaz

de France DolceVita® line, which proposes individual solar

water heaters and combined solar energy and natural gas

heating solutions.

At Fos Cavaou, how can theCompany build an LNGreceiving terminal, integratethe project into the landscapeand reduce greenhouse gasemissions all at the same time?

The construction of a new LNG receiving terminal at Fos

Cavaou, which is scheduled to start operations in 2007,

meets economic and environmental objectives.

Economically, it reinforces the supply chain, improves the

geographic balance of natural gas imports to France (now

Performance

Left: the LNG tanker ”Gazde France energY” underconstruction at the Alstomshipyard in Saint-Nazaire. It is equipped withtechnology to fight againstthe greenhouse effect.

|29

Prototype Carbon Fund

Gaz de France is a founding member of the Prototype

Carbon Fund, which finances projects to save energy and

reduce CO2 emissions in developing countries or in nations

that do not have adequate environmental regulations.

In 2003, the Group joined with governments and other

Sequestration of CO2, a new way to reduce greenhouse gas emissions

Through CRUST (CO2 Re-use through Underground Storage), which is sponsored by the Dutch government, Gaz de France

Production Nederland B.V. is developing a pilot project to re-inject CO2 into a natural gas field off the coast of the Netherlands.

In 2003, a project feasibility study showed that it was possible to re-inject the CO2 extracted from gas produced by adapting

existing platform equipment.The pilot system being developed will be operational by mid-2004.The existence of nearby gas

fields with high CO2 content (which could be processed on the platform and then re-injected) would make the project

commercially attractive for the different operators.At the same time, Gaz de France is pursuing its research on the sequestration

of CO2 in cooperation with European manufacturers and research centers, e.g. the European CO2-NET2 network, the Recopol

project in Poland, and the Castor project under the European Union’s sixth Research and Development Framework Program.

primarily in the north) in relation to the regions of

consumption, and lastly secures and diversifies supplies in

the Provence-Alpes-Côte-d’Azur region. From an ecolog-

ical point of view, the terminal will mean a significant

reduction in atmospheric emissions, especially greenhouse

gases (a reduction of 200,000 metric tons of CO2 per

year), since the decrease in gas quantities moved from the

north to the south will reduce the quantity of compressed

gas in transmission facilities and the corresponding CO2

emissions.

Prior to the official public survey, Gaz de France presented

the project to the local population. The site was contested

because of the facility’s visual impact. Concerned to take

into account the remarks of the local public interest group

that was formed (Pour la défense du littoral du golfe de

Fos) and the observations of the government inspectors

after the public survey, the Group reduced the height of

the reservoirs from 60 meters to 39 meters and

programmed more extensive landscaping at the site.


industrial Fund members to finance some ten projects,

including the production of electricity on a river from

a natural gas power plant in Chile, the upgrade of the

energy efficiency of a district-heating system in Poland and

cogeneration from the reuse of agribusiness waste in India.

Exploration-Production

Transmission and Storage

• Atmospheric emissions

(CO2, CH4)

• Drilling mud, hydrocarbons

• Water pollution, brine

Environmental management system ensuring a control ofimpacts and waste management

Program to conduct environmental actions over three yearswith the Dutch government

Long-term energy efficiency program launched by GDFProduction Nederland (savings of 17% in ten years)

Geological sequestration of CO2 (prototype in the Dutch Northsea sector)

Rehabilitation of former industrial sites (agreement with theGerman government)

• Atmospheric emissions

(CO2, NOX, CH4)

• Direct emission of effluents

into the natural environment

(water used to reheat LNG,

effluents from storage

facilities, rainwater runoff

and firefighting effluents)

• Production of industrial waste

(non-hazardous, hazardous

solid and liquid waste)

• Chronic or accidental spilling

of products or effluents

• Mainlaying

Reduction of greenhouse gases AERES commitment formalized

Continued adaptation of compressorsObjective = -15% energy consumption and -83% NOX emissions / 1999

Optimization of LNG tanker engine performance

Waste management• Recycling in the salt and chemicals industry of brine from

salt cavity leaching• Selective onsite waste sorting

Monitoring the consumption of hazardous products (-25% since 1996 for methanol and -50% since 1999 for oil)

Preventive and corrective measures for accidental spills

In-depth impact study, reforestation, landscape rehabilitation

Energy (electricity, oil, natural gas)

Energy (electricity, fuel oil, natural gas), water (salt cavity leaching, reheating LNG, fire drills), main products (THT, sodium hypochlorite, methanol and TEG)

Impacts of Gaz de France’s activities at all stages of the gas industry and actions to reduce them

30|

Performance

Distribution and Services

Sites of former gas plants

Emissions of CO2 (Services)

Emissions of CH4 (natural gas

distribution network)

Noise and disruptions

from works (Distribution)

Various waste (Distribution)

General impact of distribution

activities

Demand-side management

Replacement of grey cast iron mains

ISO 9001 certification of excavation procedures, with environmental clauses incorporated into subcontractingagreements

Sorting and elimination

ISO 14001 certified control of impacts on the environment

• Ground pollution, water

pollution, demolition waste,

tar and hydrocarbons

• PAH, BTEX, ferric ferrocyanide

Status of rehabilitation program for the sites of former gasplants (protocol signed in April 1996):• 87% of the 467 sites audited, remainder in process• 80% rehabilitated, remainder in process

Energy (natural gas, fuel oil, wood, solar electricity, wind energy)

In function of processing and future use of the site

|31


Area of land reclaimed annually

Breakdown of total energy used in industrial activities

(excluding commercial activities)

Greenhouse gas emissions in CO2 equivalent grams/m3

(Distribution - France)

32|

Gaz de France has committed

to a program to reduce NOX emissions

at compressor stations by 83% before

2008 compared with 1999 levels and on

a constant operating basis. In 2003,

with a reduction of 68%, the Group

is ahead of forecast levels.

The base used for 2003

includes data that was not

integrated in 2002:

cogeneration facilities

(Services) and new

subsidiaries (Exploration-

Production).

The cumulated area of land

reclaimed for urban use since

1991 is moving toward the

objective set for 2006

(370 hectares). Since the largest

sites were treated first, the

annual surface now tends to

diminish.

Environmental expenditures

increased by 17% between

2002 and 2003 with a constant

base.

Total energy used (millions of kWh)in industrial activities

(excluding commercial activities)

ENVIRONMENTAL PERFORMANCE INDICATORS

Total environmental expenditures(millions of euros)

Emissions of CO2 and NOX compared with volumes of natural gas declined in exploration-production, transmission and distribution.

In 2003, the inclusion of a large cogeneration facility in the reporting base resulted in discontinuity in emissions of CO2 and NOX

and in energy consumption.

NOX emissions in grams/kWh(Transmission - France)

Emissions of greenhouse gases

from Gaz de France activities

basically concern the discharge

of CO2 (compressor stations,

cogeneration, boilers and

flares) and methane

(transmission and distribution

systems). Objectives for 2006

are in line with the Group’s

commitment to AERES.

NOX emissions from industrialactivities in milligrams/m3

of natural gas


(Exploration-Production)


(Transmission - France)

Performance

In a market open to competition, winning customers and

ensuring their loyalty are key priorities. The quality and

accessibility of its services, the anticipation of consumer

needs, and the importance given to safety are all factors

that contribute to and reinforce the Group’s industrial and

commercial performance.

Providing quality service

By signing the Quality Commitment Charter in 1999, Gaz

de France demonstrated its determination to ensure the

quality of customer service. The Sustainable Development

Action Plan drawn up in 2004 bolsters this commitment.

Every division should implement a strict customer

relationship policy through which it can identify

consumer needs as accurately as possible and obtain ISO

9001 certification for all its services. The objective is to

improve the good performance rate of key services like

the supply of natural gas, the regasification of liquefied

natural gas and the transport of gas through the trans-

mission and distribution systems, where the objective is

greater than 90%.

Ensuring maximum safety

More than 90% of accidents involving natural gas are relat-

ed to installation pipework, i.e. downstream from the gas

meter. To meet this major challenge, Gaz de France has taken

the initiative, with sector professionals, to foster consumer

awareness of the importance of safety. Under the control of

Qualigaz®, equipment installers issue compliance certificates

for new, upgraded or modified installations. Since 1997, the

Group proposes Diagnostics Qualité Gaz de France® audits

for in-service installations. Although Gaz de France covers a

large portion of the cost of these audits, which are conduct-

ed by approved independent inspectors, consumers agree to

have any necessary work done since they are responsible for

the safety of all equipment downstream from the gas meter.

In addition, in order to inform as many people as possible

about how to operate equipment and use natural gas safe-

ly, Gaz de France regularly organizes campaigns to heighten

awareness on its own or in partnership with the State.

Winning and keeping customers

Economicnces Performance

Availability also contributes to customer satisfaction and

loyalty. When a gas smell is reported, Gaz de France ser-

vice teams provide customer assistance free of charge and

with no delay, 24 hours a day, 7 days a week. In France,

Gaz de France also offers an around-the-clock telephone

assistance service to answer questions.

Exploration-Production, Distribution and Services have

set customer satisfaction objectives and defined action

plans. The system devised to measure customer satisfac-

tion will progressively be adapted as the market opens to

competition.

Well received by customers (approximately 500,000 audits

were conducted at their request in 2003), these actions

continue to bear fruit, e.g.

• every year, 7% more cooking appliance connections are

checked for safety, with 70% of total equipment now

inspected;

• the quality of new installations has improved with a signifi-

cant decrease in the number of anomalies detected during

Qualigaz® audits (less than 5% involve serious problems).

For more information, visit www.gazdefrance.com, Safety section

|33

Below: cooking with thecomfort of Gaz de France

DolceVita®. Right: opting for safety witha Diagnostic Qualité Gaz de

France® audit.

Economic performance


Results since 1997:

• 50% reduction in the number of accidents with injury

attributable to faulty natural gas installations downstream

from the meter;

• no serious accident with injury due to audited installation

pipework for several years;

• increase from 30% to 70% in the number of customers

stating they are aware of the importance of gas safety.

To continue to improve these results, Gaz de France has set

an objective: to verify the installation pipework safety of

five million households by 2007.

Anticipating needs

Tomorrow, many customers will want a dual energy

offering combining natural gas and electricity. Large

consumers purchase complete energy solutions, while the

majority of residential users of gas and electricity say they

prefer a dual energy offering combining the two types of

energy, and half of the commercial market is interested in

multienergy offerings.

To anticipate this trend and ensure consumer loyalty, Gaz de

France markets electricity and develops a dual energy offer-

ing combining natural gas and electricity. It has therefore

invested in electricity production facilities, financing the

construction of a combined cycle unit to recycle blast fur-

nace gas from the Arcelor plant at Dunkerque and the

acquisition of Shotton’s cogeneration assets in the United

Kingdom, which have been certified Good Quality

Combined Heat and Power.

Commitments to produce results in energy services

Cofathec®, the Group’s Services subsidiary, develops offerings that generate

energy savings, including the metered sale of heat and industrial fluids (steam,

compressed air and cooled water) or the sale of a level of comfort (most often in

the form of a commitment to maintain a certain temperature at residential or

commercial premises). In addition to the simplicity of such an arrangement for

the customer, the sale of a level of comfort helps reduce polluting emissions.

In fact, it is in the financial interest of the service provider to use the lowest

possible quantities of energy to achieve the desired result.

The contract signed in 2001 with the Trelleborg group, a manufacturer of rubber

components for the automotive industry, can serve as an example.

• Objective: to post additional savings every year at the Carquefou facility,

which uses steam, compressed air and cooled water.

• Result: work on the identification of compressed air losses and the optimiza-

tion of steam management since 2002 has led to average yearly savings of

approximately 140,000 euros for the customer on the purchase of electricity

and fuel oil.

This service offering is consistent with the action plan Cofathec® has developed

to redefine the control of installation consumption as a priority with a commit-

ment to reduce consumption by 3% in three years.

An ombudsman listens to consumers

The Group’s ombudsman dialogues with the representatives of national consumer

advocacy groups during the biannual meetings he organizes and in work groups at

the national consumer center (consumer information on the quality of collective

merchant services, definition of the role of the ombudsman). The meetings organized

by the Group allow it to keep up to date on consumer expectations, present

its projects and receive feedback. The subjects raised concern recurrent disputes and

the solutions applied by the Group as well as more specific topics linked to current

events. In November 2003, Gaz de France presented its industrial development

strategy to consumer advocacy groups, which pointed out the positive points and

brought up questions and subjects that require further examination.

The ombudsman settles disputes between the Group and its customers.

Forty-two cases were addressed in 2003. The ombudsman systematically

communicates the outcome to the consumer advocacy groups that processed the

customer requests.

34|

Beauval energy productionunit at Meaux.

With its procurement policy, Gaz de France has an instru-

ment with which to motivate its suppliers. In the frame-

work of procurement contracts, Gaz de France will introduce

criteria of environmental and social responsibility. The Group

will systematically sign an agreement with suppliers whereby

they commit to respect these environmental and social

criteria. The procurement policy provides a good example:

• incorporation of ethical, environmental and social criteria

in the different stages of the procurement process;

• facilitated access of small and medium-sized business to

appropriate markets;

• orders from companies in the protected sector for certain

general procurement items within the national agreement

on the integration of disabled workers.

In 2003, Gaz de France targeted fuller integration of sustain-

able development issues in its relations with suppliers. In

November 2003, it signed a three-year agreement with the

principal public works operators (FNTP and two of the main

professional organizations, Canalisateurs de France and

SERCE) to foster reciprocal and shared development.

This agreement should allow Gaz de France to move forward

with its suppliers with regard to the safety of individuals and

property, the quality of facilities and environmental protection.

The Group systematically evaluates the performance of

certain suppliers from the point of view of safety, quality

and health. Suppliers of essential items that serve in the

extension, maintenance and operation of transmission

systems are now evaluated regularly on the basis of these

criteria. Gaz de France also encourages its suppliers and

service providers to pursue their own efforts and offers to

accompany them in certain fields like employee safety.

In 2003, there was an increase in the volume of backfill

that is recycled during the extension and maintenance of

the distribution network. In addition, cooperation with

suppliers has led to an increase in the procurement of

durable goods. A contract was signed to recycle more used

printer and photocopier cartridges in support of environ-

mental protection. Likewise, on the social front, the Group

now buys reconditioned cartridges from the disabled advo-

cacy group Association des Paralysés de France.

Performance

Involving suppliers in sustainable development efforts

What project did you work on withGaz de France?In 2002, we helped lay a pipeline inNormandy. Safety was a priority. Thecontract included a no-claims bonus systemon the basis of eight criteria related tosafety management. Since we did not wantto apply a bonus payment system and wehad been thinking for some time of ahumanitarian project, we decided tofinance the construction of wells inCambodia in partnership with Codegaz (1)

using the bonus as motivation in the fieldof safety. And by lot, we chose fouremployees to go to Cambodia and, upontheir return, to report on what they saw.

What were the results of this initiative?Employees were very committed to thisproject from the beginning to the end, andthe impact on safety was evident. There wasnot a single accident at the worksite, aremarkable performance. We are ready tolaunch other projects of this type. With thisexperience and our QSE (Quality SafetyEnvironment) culture, we could provide realsolutions in the field of safety and the envi-ronment. But to be able to do so, we needcontracts and customers who are willing toapply such a system, whereas it is often onlythe economic aspect that carries weight.

(1) The non-profit organization of Gaz deFrance employees that supportshumanitarian initiatives.

Safety, environment and humanitarian issuesAn initiative by the pipelaying company DLE,Jean Gateau and Xavier Mony

|35

A Gaz de FranceDolceVita® customer

advisor at work.


For Gaz de France, securing its natural gas supplies and

maintaining its financial profitability are essential conditions

to ensure its growth and long-term prosperity.

Making supplies more reliable

The Group uses four types of leverage to secure its energy

supplies:

1) long-term contracts and diversified sources of supply

Gaz de France’s supply portfolio is based on contracts that

have an average life of 15 years, representing approximately

90% of the volume of natural gas purchased in 2003. This

provides the Group with access to the gas reserves of the

main suppliers of the European market: Norway, Algeria,

Russia, the Netherlands, the United Kingdom, Nigeria, and

tomorrow Egypt. In 2003, the Group signed a contract for

the annual delivery of 4.8 billion m3 of liquefied natural gas

from Egypt, beginning in 2005 and for 20 years. It also

launched the construction of a new LNG receiving terminal

at Fos Cavaou, which will enable the Group to meet the

challenge of increased LNG supplies.

2) trading in forward and spot markets – via its subsidiary

Gaselys – to develop natural gas supplies in short-term

markets.

3) exploration activities with two priorities –

(i) strengthening the Group’s presence in the North Sea,

an area that is traditionally favorable to European-based

supplies, and (ii) prospecting and developing fields in new

regions for which the Group has a license.

The recent acquisition of the assets of Preussag Energie

(finalized in May 2003), the development of CalEnergy’s

portfolio (acquired in 2002) and the significant enhance-

ment of the Group’s role upstream in Norway allow Gaz

de France to secure its developments in the North Sea.

More generally, these factors assure the Group of a posi-

tion as a major player in Europe, where it now has access

to many onshore and offshore sites.

4) strengthened presence and the development of its

operator role around the Mediterranean, where it

plans to play a major role. In Algeria, Gaz de France

launched works in 2003 to evaluate reserves at the Touat

Committing to lasting growth

36|

From the wellhead…Exploration and

production platform in the North Sea.

Scale model of the newLNG tanker ”Gaz de France

energY” currently underconstruction.

Performance


field, for which it has been the operator since 2002. The

year 2003 was marked by a significant rise in reserves

(from 480 million barrels oil equivalent in 2002 to almost

700 million boe at the end of 2003, representing almost

two years of gas sales in France) and an increase in produc-

tion, which was up 50%. These initiatives considerably rein-

force the reliability of the Group’s supplies and, therefore,

those of its customers.

Preserving the conditions for a soundrate of return

An essential condition of sustainable development, economic

performance can be measured on many bases that are other

than strictly financial – response to energy challenges, local

development and solidarity, employment, investments,

research and development.

Gaz de France’s industrial expertise is based on the long-term,

with a focus on securing supplies of natural gas and of

respecting its commitments. The Group now has a solid asset

base: the transmission systems in France made available to

the different European natural gas operators since August

|37

... to the burner tip.15 million customersthroughout the world.

Trading at the Companysubsidiary Gaselys.

Transmission via an inconspicuous grid of pipelines, indicated by yellow marker posts.

Detailed economic and financial information is provided in the annual report and at www.gazdefrance.com, Finance section

2000 (under the first European directive concerning common

rules for the internal market in natural gas), 14 underground

storage facilities, many delivery points and two LNG receiving

terminals, one at Montoir-de-Bretagne (still the biggest LNG

receiving terminal in Europe) and the other at Fos-sur-Mer,

where the Group is building a third terminal. To accompany

growth in the demand for natural gas, in 2003 Gaz de France

worked to secure its transmission system and optimize its

performance, expanding the system by laying almost 200 kilo-

meters of additional pipelines, improve infrastructures, inspect

and modernize installations, etc.

The Group implements a sustained and prudent investment

policy with the ambition to confirm its position as a bench-

mark operator in the European energy market. In 2003,

2.87 billion euros were invested. Capital expenditures, which

are dedicated to the maintenance and development of the

system, continued to grow (1.68 billion euros). In 2003,

external growth investments were mainly linked to the acqui-

sition of the German assets of Preussag Energie (in May

2003) and to the acquisition of a 40% equity interest in the

independent firm Italcogim, Italy’s fourth largest distributor

of natural gas.

PERFORMANCE INDICATORS

38|

Global GRI External 2003 % of Compact reference Indicator Unit Page verification 2001 2002 2003 (base 2002) base coveredMANAGEMENT SYSTEM INDICATORS

non-GRI % of workforce certified % 14-15 X 63.0 % 67.0% 62.3% 64.5% 95%non-GRI % of managers informed individually (Agenda 21) % 13 N/A 67.0% 56.2% 65.3% 99%non-GRI % of employees informed individually (Agenda 21) % 13 N/A 19.0% 25.5% 18.0% 99%non-GRI % of completion of Corporate Environment Plan % 6 36.0% 52.0% 67.0% 67.0% 100%

ENVIRONMENTAL PERFORMANCE INDICATORSGC8 EN1_2 Amount of steel used metric ton 30-31 N/A N/A 29,521 N/A 96%GC8 EN5 Industrial water use (excluding commercial activities) 106 m3 30-31 X 186 217 173 173 98%GC8 EN22 Total recycling and reuse of water % 30-31 X 100% 100% 100% 100% 98%GC8 EN12 Significant discharges to water m3 30-31 N/A N/A 29,460 N/A 98%GC8 EN13 Significant spills of chemicals, oils and fuels number 30-31 16 17 41 29 99%GC8 EN3_1 Total energy use at industrial facilities

(excluding commercial activities) GWh 30 -32 X 4,403 5,062 10,548 4,762 93%GC8 EN3_2_1 % of electric energy used % 30-31 X 4.2% 5.1% 3.5% 3.0% 93%GC8 EN3_2_2 % of gas energy used % 30-31 X 91.2% 92.3% 96.2% 96.7% 93%GC8 EN3_2_3 % of fuel oil energy used % 30-31 X 2.7% 2.6% 0.3% 0.3% 93%GC8 EN8_1 Greenhouse gas emissions by business unit CO2 equivalent

(Exploration-Production) g/m3 32 X 126.8 88.2 62.7 59.5 90%GC8 EN8_2 Greenhouse gas emissions by business unit CO2 equivalent

(Transmission) g/m3 32 X 14.6 17.7 16.8 16.4 100%GC8 EN8_3 Greenhouse gas emissions by business unit CO2 equivalent

(Distribution-France) g/m3 32 X 62.0 60.8 54.7 58.2 97%GC8 EN8_5 Greenhouse gas emissions from industrial activities thousand CO2

(excluding commercial activities) equivalent metric tons 29-32 3,012 3,249 4,327 3,092 93%

GC8 EN10 NOX emissions from industrial activities metric ton 30-31 X 5,346 4,181 4,560 3,219 96%GC8 EN10_1 NOX emissions by business unit (Exploration-Production) mg/m3 30-31 X 278 203 139 133 90%GC8 EN10_2 NOX emissions by business unit (Transmission) mg/m3 30-31 X 81.2 55.0 43.4 43.4 100%GC8 EN11 Total amount of waste thousand

metric tons 30-31 1,072 1,556 963 958 99%Non-GRI % of research budget dedicated to the environment % 9 X 22.9% 21.3% 29.3% 29.3% 100%EN35_2 Total environmental expenditures million € 30-32 X 101.6 113.9 149.6 133.2 96%non-GRI Area of land reclaimed annually hectare 30-32 X 33.0 39.4 19.0 19.0 100%non-GRI % of pipe insertion work (France) % 30-31 O 31.7% 36.6% 37.4% 37.4% 100%non-GRI % of buildings monitored for consumption (parent company) % 30-31 49.0% 48.7% N/A N/A 100%non-GRI % of clean vehicles purchased during the year % 30-31 N/A 14.3% 20.9% 20.9% 91%

SOCIETY-RELATED PERFORMANCE INDICATORSSO_GDF1 Index of satisfaction of local governments (France) % 19, 21, 26 O 93.8% 95.2% 95.7% 95.7% 100%PR8_1 Index of retail customer satisfaction (France) % 21, 26, 34 O 96.3% 96.4% 96.6% 96.6% 100%non-GRI Number of quality audits conducted (France) number 33-34 O 556,860 534,240 492,787 492,787 100%non-GRI Length of gray cast iron mains replaced (France) kilometer 8 O 921 773 803 803 100%non-GRI % of gray cast iron mains / total network length (France) % 8, 21 O 2.6% 2.0% 1.3% 1.3% 100%non-GRI Number of municipalities connected (France) number 8, 21 O 8,045 8,498 8,770 8,770 100%

SOCIAL PERFORMANCE INDICATORSLA1 % of permanent employees % 23-25 X 99.8% 98.8% 98.7% 98.7% 95%LA1_d Total number of employees number 23-25 25,531 37,853 38,101 38,101 100%

GC3 LA3 % of employees covered by collective bargaining agreements % 23-25 X 99.0% 96.0% 95.6% 95.6% 95%LA5_1 Accident frequency rate number 24-25 X 5.7 7.9 7.8 7.7 93%LA5_2 Accident severity rate number 24-25 X 0.29 0.33 0.34 0.35 93%LA9_1 Hours of training per employee per year hours/

employee/year 23-25 X 22.8 18.3 16.5 16.5 91%LA9_3 % of employees trained during the year % 23-25 X 59.0% 55.0% 54.0% 54.0% 95%

GC6 LA11 % of female managers % 23-25 X 23.0% 23.0% 22.5% 23.2% 93%Global GRI External Rest of Rest of % of Compact reference Indicator Unit Page verification France Europe the world base covered

LA1_d Breakdown of workforce by geographic region % 23-25 O 77% 21% 2% 100%ECONOMIC PERFORMANCE INDICATORSGlobal GRI External 2003 % of Compact reference Indicator Unit Page verification 2001 2002 2003 (base 2002) base covered

EC1 Net sales million € AR O 14,357 14,546 16,647 16,010 100%EC3_1 Cost of energy purchased million € AR O 7,885 7,287 7,718 7,519 100%EC3_2 Cost of goods, materials, and services

purchased (excluding energy) million € AR O 1,834 2,141 2,817 2,709 100%EC5 Total payroll million € AR O 1,900 1,984 2,055 2,000 100%EC8 Total sum of taxes paid million € AR O 191 184 209 187 100%

Global GRI External Rest of Rest of % of Compact reference Indicator Unit Page verification France Europe the world base covered

EC1 Geographic breakdown of net sales % AR O 77% 22% 1% 100%EC5 Geographic breakdown of payroll % AR O 86% 13% 1% 99%EC8 Geographic breakdown of taxes paid % AR O 87% 13% 0% 99%EC3_1 Geographic breakdown of cost of energy purchased % AR < 1% 52% 48% 100%EC3_2 Geographic breakdown of cost of goods, materials,

and services purchased (excluding energy) % AR O 75% 24% 1% 100%

N/A Not available - AR See the Annual Report and the Management Report - X: verified by an independent auditor - 0: checked for consistency with the Management Report.

|39

Preparation of the report: focus on improvementThe 2003 Sustainable Development Report was crafted on thebasis of a double external evaluation of the 2002 SustainableDevelopment Report.• Benchmark evaluation by Sustainability that it conductsperiodically for the United Nations Environment Programme(UNEP), Trust Us survey, and a readership survey with a repre-sentative sampling of stakeholders; this evaluation revealed:

- three positive points: reliability, completeness and accuracyof the information provided;- three areas for improvement: make the report more read-able, speak of prospects and solicit external opinions.

• Data verification by independent auditors: Gaz deFrance has attempted to take all these remarks into accountand invites you to communicate your impressions of this 2003report to the Sustainable Development division.

Base and methodology Base and methods of consolidation: the base used for theenvironmental and social performance indicators is the consoli-dated entity formed by Gaz de France and its subsidiaries that aremajority-owned or over which the Group exercises legal or effec-tive control. The base and methods of consolidation used for theeconomic performance indicators are identical to those appliedin financial consolidation. For more transparency, the portion ofthe base covered is mentioned for each indicator. The objective

is eventually to attain 100%. Data for 2002 related to theMexican subsidiary Energia Mayakan was used again in 2003.The consolidation also includes cogeneration facilities with athermal output of more than 20 MW operated by a majority-owned subsidiary of Gaz de France with an operating license.Protocol: all the rules governing collection, calculation and con-solidation are described in the Protocol on the measurement andreporting of sustainable development indicators drawn up by Gazde France. This document is available at Company headquartersfrom the Sustainable Development division (23, rue PhilibertDelorme - 75840 Paris cedex 17). The protocol was first drawn upin 2001, and is updated every year.Pertinence of indicators: the indicators published in this reportcorrespond to GRI Core Indicators (see page 38 or the Internetsite), with additional indicators that measure significant impactsand monitor action plans. These indicators will be redefined in2004 once the Sustainable Development Action Plan is finalized.Tool and responsibilities: data to inform the sustainabledevelopment indicators is now collected using a reporting toolthat has been operational since the end of 2003. This com-puter program is the same as the one the Group uses to veri-fy accounting and financial procedures. The divisions and busi-nesses are responsible for collecting indicators for their branchof activity, as well as for their subsidiaries. Group specialistsprovide methodological support and overall verification.Continuous improvement: to promote continuous im-provement, certain changes were made compared with theprevious year.

• When the new computer program was introduced, responsibil-ities were clarified between the heads of the businesses andGroup specialists. 2003 will remain a year of transition, since allthe new procedures are not yet fully operative.• Methodologies were defined, in particular concerning indicators(index of satisfaction of local governments, which now combinessatisfied and very satisfied governments, environmental expendi-tures and greenhouse gas emissions).External evaluation: reporting procedures and indicatorsmarked with an X in the table on page 38 were verified by anindependent auditor (see report below). The indicatorsmarked with an O were checked for consistency (quantities,base and methods) with the Annual Report and theManagement Report. In addition, the scope of external veri-fication was broadened to include the evaluation of conform-ity with GRI Sustainability Reporting Guidelines.Sector-based comparisons: sector-based comparisons are dif-ficult to make to the extent that methodologies are not yet har-monized, particularly at the European level, and that the activi-ties of Gaz de France cover several professional sectors: Oil andGas for its exploration and production activities, Utilities for itsservices, and the future regulated sector for gas transmissionand distribution. In addition, although it is not the role of a com-pany to publish sector-based comparisons, it will communicateperformance ratios by business for indicators related to green-house gases and NOX emissions (see page 32).

Performance


To the stakeholders of Gaz de France

At the request of Gaz de France, we have performed a review in the aim of pro-viding moderate assurance on the environmental and social performance indi-cators for 2003, identified by the symbol X on page 38.These indicators are the responsibility of Gaz de France’s ExecutiveManagement, in accordance with the Group Measurement and ReportingProtocol, which can be consulted at Group headquarters, SustainableDevelopment division, and is summarized above. It is our responsibility toexpress a conclusion on these indicators, based on our review.

Nature and scope of the reviewWe performed a limited review to provide moderate assurance that the select-ed data is free of material misstatement. Such a review does not include all therelevant controls for providing reasonable assurance. • We assessed the Protocol with regard to its reliability, understandability, neu-trality, completeness and relevance.• We met with the company officers in charge of the reporting and revieweddata at the different levels of consolidation, i.e. the Gaz de France Group, thesix businesses (Exploration-Production, Transmission, Trading and Supply,Distribution, Services, and Sales) and the support functions concerned(International, Subsidiaries, Environment, Research, Human Resources, Financeand Real Estate).• We reviewed data on a sample of entities in France and internationally repre-senting up to 19% of the Group’s consolidated data (average of 8%): a DutchExploration-Production subsidiary (GDF Production Nederland B.V.), aTransmission compressor station (Palleau) and a Services subsidiary operating acogeneration unit (Montoir).

In addition, we reviewed the compliance of the report with the Global ReportingInitiative Guidelines (June 2002) with regard to the content, indicators, the con-tent index and the message from the Chairman, as well as the consistency withgeneral principles (understandability, completeness, reliability, accessibility, etc.).

Comments on the Protocol We bring the following comments to your attention. • Compared with the previous year, the consolidation base has been broadened,responsibilities have been clarified and consolidation has become more reliableowing to the introduction of a reporting tool. Nevertheless:- the base of the Services business should be specified; in particular, the rulesgoverning the consolidation of cogeneration units should be better formalized;- calculation methods should be updated when they have changed (e.g. indexof satisfaction of local governments, greenhouse gas emissions).• Internal controls on methods used and the data reported by subsidiaries (i.e.entities other than the parent company), in particular by those included for thefirst time in the sustainable development reporting or that contribute signifi-cantly to the Group’s total indicators (in particular energy consumption, CO2 andNOX emissions and social indicators), should be reinforced in order to ensure theconsistency and reliability of reporting.Moreover, the report has been prepared in accordance with the GRI Guidelines;correspondence tables are presented on pages 38 and 41.

ConclusionBased on our review, nothing has come to our attention that causes us to believethat the reviewed indicators have not, in all material respects, been prepared inaccordance with the Protocol.

April 14, 2004

Ernst & Young et AssociésEnvironment and Sustainability

Éric Duvaud

ASSURANCE REPORT ON CERTAIN ENVIRONMENTALAND SOCIAL PERFORMANCE INDICATORS

• GRI indicators not considered to apply to Gaz de France: EC6, EC7, EN9, EN15, EN31 (additional indicator), SO5 (additional indicator), SO6 (additional indicator), SO7 (additional indicator)• Core indicators required by GRI, the publication of which has been postponed to 2004 - 2005: EC2, EC4, EC9, EC10, EN1, EN6, EN16, LA2, LA3• Other information required by GRI and contained in the report: EN2, EN4, EN7, EN17 (additional), EN14, EN30 (additional indicator), PR1, PR2, PR3, PR8 (additional indicator), LA4, LA5,

LA8, LA14 (additional indicator), LA15 (additional indicator), HR2, HR5, SO1, SO2, SO3• Other information required by GRI and contained in the Company commitments (roadmap, Code of Business Ethics, etc.): LA6, LA10, HR1, HR3, HR6, HR7, SO1, SO2, SO3

CONSOLIDATED ENTITY AND METHODOLOGY

PANORAMA OF THE GAZ DE FRANCE GROUP

Key figures for 2003

World’s fourth largest buyer of natural gasTransmission system of 31,185 kilometers2 LNG receiving terminals14 underground storage facilities in operation

Net sales of 16.65 billion euros 22% of net sales in Europe (excluding France)Net income of 910 million euros

4.6 billion m3 of natural gas produced60.2 billion m3 of natural gas sold (approximately 662 billion kWh)

Investments of 2.87 billion eurosCash flow of 3.18 billion eurosStockholders’ equity of 9.86 billion euros

15 million customers* throughout the world38,101 employees

* Cumulated data.

40|

Main subsidiaries included in the Sustainable Development Report

ENERGY SUPPLY AND SERVICES Equityinterest

(%)

Exploration - ProductionErdgas Erdöl GmbH group Germany 100Gaz de France Exploration Algeria Algeria 100Gaz de France Exploration Egypt Egypt 100Gaz de France Exploration Germany Germany 100Gaz de France Exploration Poland Poland 100Gaz de France Exploration UK United Kingdom 100Gaz de France Norge Norway 100Gaz de France Produktion ExplorationDeutschland (formerly Preussag Energie) Germany 100GDF Britain group United Kingdom 100GDF Production Nederland Netherlands 100

Purchase and Sale of EnergyDunelys* France 100Gaselys France 51Gaz de France Comercializadora* Spain 100Gaz de France Deutschland Germany 100Gaz de France Energy

Supply & Solutions United Kingdom 100Gaz de France International Trading France 100Gazocéan* France 100G.D.F. Armateur France 100GDF Armateur 2 France 100Med LNG & Gas* United Kingdom 50Messigaz France 100Méthane Transport France 50

ServicesCofathec ADF France 100Cofathec Benelux Belgium 100Cofathec Coriance France 100Cofathec Heatsave United Kingdom 100Cofathec Italia Italy 100Cofathec Omega France 100Cofathec Projis France 100Cofathec Services France 100Cofathec Servizi group Italy 100Finergaz France 100GNVert France 100

INFRASTRUCTURES

Transmission and Storage - FranceCFMH France 55

Transmission and Distribution - InternationalConsorcio Mexi-Gas Mexico 100Degaz Hungary 72.6Egaz Hungary 63.9Energia Mayakan Mexico 67.5Gaseba Uruguay Uruguay 51Gasoductos del Bajio Mexico 100Groupe GDF Québec Canada 100NatGasMex Mexico 100Tamauligas Mexico 100Transnatural Mexico 50

OTHERCOGAC France 100DK6 France 100Ecogaz* Russia 50Fragaz* Russia 50Gazinox* France 51GDF International France 100Mosparteplogaz* Russia 50Pétrofigaz France 54.7Société Financière et Immobilière du Gaz France 100

*Unconsolidated subsidiaries.

|41

Design, copywriting and production

English translationThomas Michael Gunther - Paris

PhotographsMédiathèque Gaz de France (Tel. 33 1 41 49 62 60)Cover: Éric Bernard, Francis Latreille, Nathalie de Moussacp. 2: Alain Kelerp. 3: Sylvain Cambonp. 4: Alain Keler, Franck Dunouau / Architecture Studio / ADAGP,

Paris 2004, Alexis Chézièrep. 5: Alain Kelerp. 6: Philippe Dureuilp. 7: Alexis Chézière / architects Chantalat et Liucci -

George Sand school - Villejuif, Noël Hautemanièrep. 9: Sylvain Cambonp. 10: Philippe Dureuilp. 11: Pierre Delaviep. 12: Franck Dunouau / Architecture Studio / ADAGP, Paris 2004p. 13: Pierre-François Grosjeanp. 14: Pierre Bérenger, Laurent Héloup. 16: Franck Dunouau, Pierre-François Grosjean, Christian Clotp. 17: Alain Keler, Christian Clotp. 18: Franck Dunouaup. 19: Alexis Chézière, Noël Hautemanière, David Carrp. 20: Éric Bernard / association Personimagesp. 22: Pierre-François Grosjeanp. 23: Frédérique Jouval, Alain Keler, Franck Dunouau / Architecture

Studio / ADAGP, Paris 2004p. 24: Franck Dunouaup. 25: Pierre-François Grosjean, Alain Keler,p. 26: Christian Clot, Franck Dunouaup. 27: Xavier Renauld, Jan Krotkyp. 28: Jan Krotky, Philippe Praliaudp. 29: Daniel Joubert, Philippe Dureuilp. 33: Alain Keler, Nathalie de Moussac, Xavier Renauldp. 34: Philippe Praliaudp. 35: Alain Keler, David Carrp. 36: Pierre-François Grosjean, Georges Le Pioufflep. 37: Pierre-François Grosjean, Patrick Osenda, Nathalie de Moussac

S. de Bourgiesp. 1

Image banksCover: Uwe Kerjci / Getty ImagesContents: Dugald Bremner / Stone, Lee Cohen / Corbis p. 3: Dugald Bremner / Stonepp. 4, 7: Getty Imagesp. 11: J.M. Robion – Norman Cobley / Pixp. 17: Lee Cohen / Corbisp. 18: Delphine Star / Getty Images / C Superp. 27: Nils-Udo

Médiathèque: 262B0504

GLOBAL REPORTING INITIATIVE CONTENT INDEX

1 Vision and Strategy1.1 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 to 81.2 Statement from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .contents, 1

2 Profile2.1 Name of reporting organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .cover, 12.2 Major products and/or services . . . . . . . . . . . . . . . . . . . . . . . .2, 26 + AR pp. 14 to 172.3 Operational structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Internet site + AR pp. 8-92.4 Major divisions and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 2.5 Countries in which the organization’s operations are located . . . . . . . . . . . . . . . . .402.6 Legal form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Internet site2.7 Nature of markets served . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2, 42.8 Scale of the reporting organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12, 402.9 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10-11, 392.10 Contact person(s) for the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39, back cover2.11 Reporting period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 + protocol2.12 Date of most recent report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 2.13 Boundaries of report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 + protocol2.14 Significant changes since the previous report . . . . . . . . . . . . . . . . . . .5, 17 to 37, 392.15 Basis for reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 + protocol2.16 Nature and effect of any re-statements of information . . . . . . . .17 to 37, 39 + protocol2.17 Decisions not to apply GRI guidelines . . . . . . . . . . . . . . . . . . . . . . . . .not applicable2.18 Criteria used in accounting for economic,

environmental and social costs and benefits . . . . . . . . . . . . . . . . . . . .39 + protocol2.19 Significant changes in measurement methods . . . . . . . . . . . . . . . . . . .39 + protocol2.20 Policies and internal practices

to enhance and provide assurance about the report . . . . . . . . . . . . . . . .contents, 392.21 Policy and current practice with regard

to providing independent assurance for the full report . . . . . . . . . . . . . . . . . . . . .392.22 Means by which report users can

obtain additional information . . . . . . . . . . . . . . .contents, back cover + Internet site

3 Governance Structure and Management Systems3.1 Governance structure of the organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123.2 Percentage of independent, non-executive board members . . . . . . . . .12 + AR pp. 4-53.3 Process for determining expertise board members . . . . . . . . . . . . . . . . . . . . .8,12-133.4 Board level processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123.5 Linkage between executive compensation and

achievement of the organization’s financial and non-financial goals . . . . . . . . . . . .223.6 Organizational structure and key individuals

responsible for oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, 13, 39 + protocol3.7 Mission and values statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-7, 17 to 373.8 Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123.9 Basis for identification of major stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . .10, 113.10 Approaches to stakeholder consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10, 113.11 Type of information generated by stakeholder consultations . . . . . . . . . . . . . .10, 113.12 Use of information resulting from stakeholder engagements . . . 7, 10, 11, 23, 34, 353.13 Precautionary approach or principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 3.14 Externally developed sets of principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, 183.15 Memberships in industry or business associations

and/or national and/or international advocacy organizations . . . . . . . . . . . . . . .1, 183.16 Polices and/or systems for managing upstream

and downstream impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 to 28, 33, 353.17 Reporting organization’s approach to managing

impacts resulting from its activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .9, 19, 30-313.18 Major decisions regarding the locations of, or changes in, operations . . . . . . .29, 363.19 Programs and procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-7, 17 to 37, 383.20 Certification of management systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14, 15

4 GRI Content Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

5 Performance Indicators (recap) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Profile of the organizationScope of reportProfile of report

Governance structureStakeholder engagementStrategy and management systems

AR: annual report.

GAZ DE FRANCESustainable Development division

23, rue Philibert-Delorme75840 Paris Cedex 17 - France

Telephone: 33 1 47 54 20 20Fax: 33 1 47 54 74 58

www.gazdefrance.com

sustainable development report 2003 - gdf suez

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