Dear Stakeholders,

The past year was a positive one for SGS, not just in terms of our business growth and financial results, but also our sustainability performance. By the end of the year, we had grown the business by 16.3% and achieved an adjusted operating margin of 16.9% in line with the 2014 Plan. We acquired 18 new businesses and welcomed over 8,000 additional employees into the Company. In parallel, we achieved significant operational efficiencies by working smarter and optimising resources.

Doing more with less has become our business mantra; achieving operational excellence through leadership and expertise, streamlining processes, better utilising natural resources, and improving productivity. This approach is in perfect symmetry with our sustainability objective to support business growth while managing our social and environmental impacts. We have put significant investment into strengthening our systems and programmes aimed at driving operational excellence. As a result, we are beginning to see positive performance outcomes which are outlined in the following chapters.

This report showcases our sustainability programmes and presents the many architects and innovators in SGS who are driven by the desire to constantly push themselves to achieve operational excellence and deliver exceptional services. We celebrate their skills and imagination in seeking out new technologies, adapting to the constantly evolving needs of our customers and finding innovative solutions aimed at delivering positive results for our business and stakeholders. A highlight in 2012 has been the launch of The Green Book, a pioneering instrument which analyses our sustainability performance using qualitative, quantitative and monetary data across human resources, health and safety, environmental management, and community investment. The model identifies trends and ‘hot spots’ we need to be aware of in order to effectively manage risks and harness value at global and local levels. Based on our estimations, our current sustainability performance represents around 7% of revenue in our trend countries. Meeting our goals in areas such as employee turnover, sickness absence and overall energy consumption has the potential to reduce costs while improving employee wellbeing. This intelligence adds a compelling dimension to our sustainability and risk management and provides a catalyst for action across functions and business lines.

Managing growth, while safeguarding our existing talent base, remains a key focus. In the People section we discuss the global roll-out of SHINE, our new onboarding programme, and explain how we are developing future leaders as part of our enhanced learning and development strategy. In 2012, we launched Catalyst , our employee engagement programme, to ensure we stay in touch with and respond to the needs of our people. Linked to this we can measure employee involvement in sustainability through our Sustainability Engagement Index. The survey, which achieved an outstanding 85% participation rate involving more than 18,000 employees in 12 countries, indicates that 75% of employees are aware of SGS sustainability targets and the importance of sustainability to business growth.

We are encouraged by the progress that is being made in our energy efficiency in buildings programme and the gains we are starting to see from initiatives linked to clean power, green IT and green transport. While overall energy consumption increased in 2012 by 10.4%, it was markedly lower than business growth, with carbon intensity per employee and revenue remaining stable.

Looking to the year ahead, we plan to hold a series of employee events linked to specific sustainability themes, roll out a global campaign to drive environmental behaviour in the workplace, and launch an exciting global programme focused on reducing carbon emissions.

We thank all our employees for actively contributing to the 2014 Plan and for ensuring that sustainability remains a vital and integral part of the way we do business. This means seeking out ways, with all our stakeholders, to optimise efficiency while upholding our professional integrity, safeguarding employee health and safety, minimising our impact on the environment and contributing positively to our local communities.

We hope you find this report an interesting insight into our world. As always, we look forward to your feedback and suggestions on how we can further improve our contribution to sustainable development.

Chris Kirk
Chief Executive Officer