External assurance

Statutory auditor's assurance report on a selection of environmental indicators

Further to Veolia Environnement's request and in our capacity as statutory auditor of Veolia Environnement, we have performed a review in order to express the limited assurance that the environmental indicators for the financial year 2007 identified by the(1) symbol in the 2007 environmental performance report situated of the sustainable development report (the "Indicators") have been prepared in accordance with the reporting protocol applicable for 2007 (the "Criteria"),
a summary of which being included in the "information about methodology" .
Our review was conducted in accordance with the professionnal practice defined by IFAC's (International Federation of Accountants) ISAE 3000(2). It is Veolia Environnement's responsibility to establish the Criteria, ensure its accessibility on its website(3) and establish the Indicators according to the Criteria. It is our responsibility to express, on the basis of our review, a conclusion on the Indicators, in accordance with the Criteria. A higher level of assurance would have required more extensive work.

Nature and scope of our review

To express our conclusion, we conducted the following review :

• We have assessed the Criteria with respect to its accuracy, understandability, neutrality, completeness and its relevance towards the group's activities and the environmental reporting practices of a selected sample of nine comparable environmental services companies (water, energy, waste managment services and transport).
• At the level of the Group and its four divisions (Water, Environmental Services, Energy and Transport), we have interviewed those in charge of environmental reporting. At these levels, based on a materiality and risk analysis,
  we have verified the application of the Criteria, implemented analytical procedures and verified, on a sample basis,
  the calculations and consolidation of data.
• We have selected a sample of twenty business units(4) or equivalent in nine countries (Germany, Australia, Spain, United States, France, Mexico, Poland, Sweden and Venezuela), based on their activity, their geographical location, their contribution to the Indicators and the results of the verification works carried out over the past six years.
• The selected business units account for an average 22% (between 13% and 49%,according to the Indicators)(5) of the total value of the Indicators. At their level, we have verified the appreciation and application of the Criteria,and tested the data by means of random checks which consisted in verifying calculations and comparing source data with supporting documents.

Information about the Criteria

Relevance

• The Group publishes indicators related to the management of sanitary risks related to Legionella, dioxins and drinkable water quality.
• The Group has innovated in the field of measurement of sanitary quality of drinkable water (percentage of the population served by excellent quality or high quality water) and wastewater treatment efficiency (overall efficiency)
• The Group has clarified the presentation of its energy consumptions and productions, especially regarding renewable energies. Notwithstanding, energy consumptions do not account for the energy coming from waste whereas waste treatment plants energy production is accounted.
• The Group has published this year an indicator on the performance of landfill gas collection systems (CH4 capture rate from landfills). The Group could also enhance the reporting of equipment ratio for other sites by measuring their performance.
• Indicators related to NOx and SOx emissions measure the impact of waste incineration activity but do not cover the impacts of energy production and transport. Transport performance indicators (passenger transportation vehicle emissions per unit) could be stated in more operational terms (for example,typology or renewal rate of vehicle fleet).
• Indicators related to waste recycling (treated or produced) could be clarified, in accordance with Group objectives.
• Some activities (engineering and works,wastewater network management, industrial water management, waste collection, other energy services) are yet to be fully covered by the Group's environmental reporting. The Group could also strengthen its accounting of the environment beyond the scope of its operational activities: demand management, management of subcontractors, eco conception,etc.

Completeness

• The reporting perimeter is described in the " information about methodology ", most importantly regarding the perimeter of activities controlled by the Group worldwide.
• The Group could be more specific as regards the notion of operational control, in particular in the case of joint control (for example, Proactiva in South America), subcontracted activities or financial year acquisitions and cessions.

 Understandability and neutrality

• The Group provided detailed information in the " information about methodology ", in the footnotes of the environmental performance data table or in associated comments in the presentation of the environmental indicators in the "Environmental Performance" and "Combating climate change" sections, most importantly regarding limits of the methodology associated with Indicators, in particular for methane fugitive emissions, estimated using national or international models.
• The indicator "Global reduction of greenhouse gases emissions" measures the gap between emissions thatwould be emitted in the framework of reference scenarios defined by the Group and the reported emissions. This indicator is innovative but remains complex to manage.
• The Group could clarify standards for the accounting of environmental management systems and environmental audits, taking into account available operational feedback.
• The Group could systematize constantperimeter analysis for the indicators (business units, contracts or sites).

Reliability

• The Indicators reporting reliability has been strengthened by the deployment of the Group environmental information system in all divisions and in mostbusiness units. Its deploymentis yet to be systematized in the rest of the business units.
• Environmental data management could be reinforced, in particular with a follow-up of synthetic dashboards several times a year.
• The Group must better anticipate methodological modifications and validate the Criteria update before the reporting campaign begins.

Conclusion

We can not express a conclusion on the indicator "Global reduction of greenhouse gases emissions", given the late inclusion of avoided emissions thanks to waste material recycling in the calculation, that accounts for more than 13% of the indicator, on which we could not perform all the required verification works.

Based on our review,and except for the above qualification,nothing has come to our attention that causes us to believe that the Indicators were not established, in all material respects, in accordance with the Criteria.

Neuilly-sur-Seine (France), April 14, 2008

The Statutory Auditor
ERNST & YOUNG et Autres
Jean Bouquot et Patrick Gounelle

Assisted by ERNST & YOUNG
Environment and Sustainable
Development
Éric Duvaud

(1) Protocol for the measurement and reporting of environment indicators 2007, Veolia Environnement, updated in April 2008 (French version).

(2) ISAE 3000 "Assurance Engagement other than audits or reviews of historical data", International Federation of Accountants, International Assurance Board, December 2003.

(3) www.sustainable-development.veolia.com ; « Publications » chapter.

(4) In France, the Banlieue de Paris and Sud-Ouest regions (Water), the main facilities of the Ile-de- France, Nord, Est, Centre-Méditerranée and Atlantique regions (Energy), the Sud-Est and Ile-de-France regions (Environmental Services), and the Ile-de-France region (Transport); in Europe, Berliner Wasser Betriebe (BWB and Veolia Wasser Deutschland business units(Germany), Dalkia Poland and Dalkia Spain, Veolia Transport Sverige AB (Sweden) ; in the rest of the world, United Water et Veolia Water Australia (Australia), Proactiva Medioamabiente Mexico and Venezuela (Environmental Services) and Veolia Transportation (United States).

(5) 33% of relevant activities turnover, 25% of priority facilities; 21% on average (direct and indirect CO2 and greenhouse gases emissions, global reduction of greenhouse gases, carbon performance of more than 20 MW facilities of energy consumption and production, including renewable energy); 13% of landills for which the group has control over capital investments; 49% of sites involved in Legionella risk prevention plan (hot sanitary water production plants and cooling towers of Veolia Energy); 15% on average (volumes of drinkable water introduced into networks, water network length and population served); 16% of indicators related to water treatment and sewage sludge (polluting charge -DBO5-received by more than 3 metric tons per day capacity wastewater treatment plants, quantity of sewage sludge produced); 24 % of road transport vehicles taken into account for passenger transportation vehicle emissions (accounting for 72% of the total road vehicles fleet).