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DELIVERING THE ESSENTIALS OF LIFE

07ACTIVITIES AND SUSTAINABLE

DEVELOPMENT REPORT

COUV_RADD_SUEZ_GB_V7.indd 1 23/05/08 19:38:03

OUR IDENTITYSUEZ, an international industrial

and services Group, designs sustainable

and innovative solutions for the management

of public utilities as a partner

of public authorities, businesses

and individuals in electricity, natural gas,

energy services, water and waste management.

OUR MISSIONDelivering the essentials of life.

TABLE OF CONTENTS MESSAGE FROM THE CHAIRMAN 2

KEY FIGURES 6

OUR VISION 10

SUSTAINABLE DEVELOPMENT 66

OUR PERFORMANCE 100

GLOSSARY 120

OUR BUSINESSES AT THE HEART OF THE CHALLENGES FOR THE 21st CENTURY 24


HARNESSING

PLANETARY CHANGES

WITHOUT FALLING

PREY TO THEM

CLIMATE CHANGE 1PRESERVATION

OF RESOURCES

2

MARKET SHIFTS 3TERRITORIAL ROOTS 4

QUALITY OF LIFE 5

State of this century’s major challenges,

the various actions undertaken

to meet them, and the involvement

of SUEZ as a leading player.

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3

Fighting climate change, combating pollution, turning water into a shared resource, and creating true ecological growth, by changing not only production methods, but also attitudes and our consumption patterns… These issues have all become today’s priorities.

In 1997, SUEZ chose to take a position on these crucial questions. We united major French and Belgian companies around a strong industrial project: to create a European leader in energy and the environment. Today, SUEZ is the 5th largest power producer in Europe, the 6th largest gas operator and the leader in energy services; it is also one of the two major utilities in water and waste management in the world.

To accomplish our mission of meeting the essential needs of cities and businesses, we chose to establish a solid and balanced growth model which consistently creates value and jobs. This is what has driven the Group to its excellent performance today and its ensuing ability to keep providing services to its customers over time and under the best conditions.

Our model is based on economic and industrial drive, but also on social responsibility. The Group deliberately distributes the proceeds of its growth to its shareholders – who demonstrate their confidence day after day – and to its employees, whose skills and commitment allow the Group to meet the major challenges facing our societies.

The Group’s financial performance is also the source of significant investments devoted to the research and development of tomorrow’s solutions given the tremendous needs for innovation in energy and the environment. This search for solutions has led SUEZ to identify five major challenges as the cornerstone of its businesses: the fight against climate change, the preservation of resources, territorial roots, market shifts and quality of life.

These issues are now, more than ever, the focus of universal debate and concerns. Although technological and scientific progress has led the way in the development of more sustainable consumption and production methods, it won’t suffice. A change in behavior, both individually and collectively, is urgent.

The requirement for a sustainable form of development involves us all. It is only by combining our efforts that we will be able to provide a response to the magnitude of the current threat to our resources, our ecosystems and our societies. Regardless, our lifestyles will change.

Such is the reality we need to prepare ourselves for.

BUILDING TOMORROW TODAY

FOREWORD

GÉRARD MESTRALLETCHAIRMAN AND CEO OF SUEZ


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Climate change


5


After six years of work, to which more than 2,500 international scientists contributed, the Intergovernmental Panel on Climate Change (IPCC) published its summary report in November 2007. It predicts an average temperature increase of 1.8 to 4°C, which could reach up to 6.4°C in 2100 compared to 1990.

A THRESHOLD NOT TO BE CROSSEDIn order to limit the warming to a level tolerable

for humans, global temperature should not rise

more than 2°C. If that were to be the case,

the IPCC predicts that greenhouse gas

emissions would peak in 2012, before declining

to 23 billion tons of CO2 per year, compared

with 27 billion currently emitted every year. But

to achieve that, we would have to reduce our

emissions by one billion tons per year.

The experts are unanimous: there is no

universal response, but an array of solutions.

Different approaches and actions will be

necessary, from societal and behavioral

changes to technological innovation.

One of the greatest challenges is to coordinate

efforts at the international level. The solution

will come only through coordinated policy

initiatives around the world.

It was through this method that the Kyoto

Protocol in 1997 set a target for a 5%

reduction in greenhouse gases by the

industrialized countries over the period

from 2008-2012. At the same time, the

European countries agreed in 2000 on

a climate change program which led in 2005

to trading in CO2 emissions quotas, a system

that will take a few years to regulate itself.

PREVENTING WASTE The response is both short term and part

of a longer-term strategy. The short-term

reaction is to prevent energy waste daily

by lighting, heating or air conditioning,

and to make real efforts for a rational use

of energy. For SUEZ, this means major

investments in the generation of renewable

energy and in improvements to the energy

efficiency of its power plants and the

industrial activities of its customers.

Over the long-term, a balanced strategy covers

a set of solutions: the development of new

In recent years, the world’s climate has

experienced increasingly frequent extreme

phenomena. Different regions have

experienced heat waves or winters

characterized by temperatures outside

the normal range, periods of strong rains

with flooding,or drought with a lack

of potable water, even increasingly

violent and recurring tornados.

While refraining from predicting with

certainty the long-term consequences

of global warming, the scientific community

notes the facts: the change in temperature

over the last 100 years can be explained

only if we consider the impact of greenhouse

gas emissions related to human activities.

Man is slowly but surely impacting

climate change.

INVESTMENT RHYMES WITH EFFICIENCY

Climate change 11


nuclear power plants, carbon capture and

storage, the inexpensive production of

hydrogen, and the production of new fuels

for the transport of goods and people.

MAKING THE CURRENT TECHNOLOGIES EFFICIENT In its baseline scenario, the International

Energy Agency (IEA) projects that, at the

current rate, global emissions of CO2 should

more than double by 2050, which would

represent a 137% increase compared to 2003

levels. The IEA believes, however, that it would

be possible to reduce CO2 emissions to their

present level for a reasonable cost of

US$25 per ton, if all available technologies

were effectively implemented.

Improvements in energy efficiency

have become crucial to reducing the

concentration of greenhouse gases in the

atmosphere today. According to the IEA,

the adoption of more efficient

technologies in the transportation,

building and industrial sectors would result

in a drop in energy consumption of

between 17% and 33% in 2050 and

a total reduction of 45% to 53% in

CO2 emissions.

SUEZ believes that energy efficiency

must result in a reduction in consumption,

in pollution and in costs, while maintaining

the same level of service and comfort.

The objective is to better produce

and use energy by relying on the best

technologies and on the optimization

of existing facilities.

A precise analysis of needs is the first step

in finding the most effective solution –

whether through an audit, evaluation,

engineering, the choice of a facility, an

improvement or the maintenance of existing

facilities. After that, tracking equipment

throughout its life cycle will ensure

the best energy yield over the long-term.

This aspect is far from insignificant because

global demand for energy has not only pushed

market prices up, it has also increased the cost

of the infrastructure and equipment of power

production plants. To cover its needs alone,

the IEA estimates that Europe would have

to develop more than 750 GW in additional

capacities by 2030, representing

an investment of about 650 billion euros.

There is no universal response to global warming, but an array of solutions.

7


Between 2005 and 2007, fuel prices rose 60% for oil, 50% for natural gas, and 30% for coal. Partially impacted by the CO2 market, the high energy prices represent a window of opportunity: the short-term profits are being used to prepare the long-term solutions for global warming.

At the current time, predictions from

climatologists all agree on one point:

by 2020-2030, demand for energy will rise

and fossil fuels will continue to satisfy more

than 80% of that demand. The industrial

growth of countries like China and India

prevent any hope for a reversal of this trend

by the end of the century.

Although a majority of experts

agree that hydrocarbon reserves will

be sufficient to cover demand in this

century, the development of those

resources requires enormous investments

to meet global energy demand. The total

is estimated by US$20,000 billion

by 2030, according to the International

Energy Agency (IEA).

ENSURING SAFETY AND COMPETITIVENESS In order to offer its customers a safe

and competitive energy that protects

the environment, SUEZ has chosen

to guarantee them a balanced energy

mix based on all energy sources.

Its production facilities, with over 55,000 MW

of installed capacities and 10,000 MW

under construction, ranks third in the world

and is one of the most diversified

technologically and one of the most

balanced geographically.

Composed 32% of nuclear and hydraulic,

and 46% natural gas, this production

capacity is one of the most efficient and least

CO2 emitting in Europe. The Group believes

that nuclear deserves its place in such a mix

as an energy that saves resources

and is competitive at an economic level.

It is in large part thanks to nuclear that

its subsidiary Electrabel increased its

production of electricity by 7% in Belgium

between 1990 and 2007, while at the same

time reducing its CO2 emissions by 25%,

which represents 30% less per MW produced.

Concerned about maintaining production

facilities that emit fewer greenhouse gases,

SUEZ is actively investing in renewable

energy, which today represents more than

20% of its installed capacities worldwide.

A number of projects in biomass and solar

were completed in Europe, in 2007, along

with wind projects in France, Portugal

and Canada.

COUNTERING PRICE INSTABILITY At the European level, the Group supports

the ambitions of the Commission in the

energy sector. The Commission has set

a goal of 20% renewable energy

in total energy consumption by 2020

(compared to 8.5% in 2005).

The objective of this policy is to capitalize

on the many advantages offered by

renewable energy: strong supply security

and protection of the environment,

a reduction in the risks generated by

volatility and instability in fossil fuel

prices, greater energy independence,

and the creation of new jobs.

In order to balance and compensate

for price changes in the various energy

resources, SUEZ has opted for a

diversified production portfolio strategy.

Just as the Group wants nuclear to remain

a stable proportion of its capacities,

maintaining coal in its mix is a

reflection of its desire to guarantee Europe’s

energy dependence with long-term visibility

on electricity prices.

Although the price of coal has almost doubled

since 2003 to more than US$100 a ton,

it is currently one-fifth as expensive as oil and

one-third the cost of natural gas. It will remain

ON ALL TYPES OF ENERGY

Climate change11


one of the most competitive energy

sources in the years to come even though

it is a long way from unanimous acceptance

by the public. In the United States, several

coal power plant projects have had to be

cancelled because they were poorly received by

the population. This is not the case for SUEZ’s

two coal plants under construction in Germany

and the Netherlands, which have been

designed on the basis of the most recent

studies on reducing greenhouse gas emission.

Thanks to an energy yield of 46% – the highest

to date – they will reduce CO2 emissions

by 15 to 20% per MWh. For example,

the Wilhelmshaven plant will prevent the

emission of approximately 900,000 tons

of CO2 per year in comparison with a

traditional plant currently operating

in Germany.

FINANCING A CARBONLESS FUTUREThe increase in energy prices, although

not desirable in the absolute sense, does

help to finance efforts in the research and

development of long-term technological

solutions, some of which are not yet

commercially viable. This is the case

for carbon capture and storage (CCS), in

which the technologies and the regulatory

framework have not yet advanced sufficiently

to be applied.

If applied today, capture and storage

would have the effect of drastically reducing

the power and efficiency of power plants,

which significantly increase the production

cost of electricity. In time, it would reduce

CO2 emissions from the use of coal

and natural gas by major industrial facilities,

such as power plants, cement works or steel

works, to almost nothing. According to the

Intergovernmental Panel on Climate Change

(IPCC), in 2050 the volume trapped could

represent 21% to 45% of all CO2 emitted

by human activities.

One thing is certain: to meet demand,

power companies have no choice other than

to boost their production capacities using

the latest technologies to counter the effects

of global warming. This is the strategy that

will be implemented by SUEZ, which plans

to increase its capacities to 75,000 MW

in 2012, including 40,000 MW in Europe,

and to 100,000 MW by 2013 in the context

of the merger with Gaz de France. The Group

will retain all the current fuel sources in its

facilities in similar proportions with

the exception of one source, the percentage

of which will continue to rise in the coming

years – renewable energy.

Although not desired, the increase in energy prices contributes to financing efforts in the research and development of long-term technological solutions.

9


The resources

of our planet are limited.

Such was the lesson

of the 20th century.

It is also the challenge

it left us. In a world with

a growing population,

we must guarantee

each person access to

resources and energy,

while learning to preserve

them. Public authorities

and industrial groups

are now working to

reinvent production

models that are both

efficient and respectful

of the environment.

The resources

of our planet are limited.

Such was the lesson

of the 20th century.

It is also the challenge

it left us. In a world with

a growing population,

we must guarantee

each person access to

resources and energy,

while learning to preserve

them Public authorities

i l groups

The preservation


11

of resources


The preservation of resources

Climate disturbances have passed the potential danger stage to become a real threat to our ecosystems. The protection and preservation of natural resources must be an essential concern. What should be the response? To implement methods for sustainable management of our resources, while there is still time…

The finding calls into question our economic

and political systems which maintain

non-sustainable production methods

and consumption patterns.

The effort required does not demand

as many concessions as one might think.

According to the conclusions of the IPCC,

the increase in global energy demand could

be cut in half over the next 15 years by using

only the existing technologies. Managing climate

changes could cost only 0.1% of the world

Gross Domestic Product per year over

the next 30 years without any impact

on world growth.

PREVENT RATHER THAN CURE The concrete measures cited by the IPCC

range from stricter standards for air

conditioners and refrigerators to improved

energy efficiency in industry, construction

and transportation. These are all

simple measures to be taken to reduce

the use of energy resources and,

as a result, production needs.

Although a majority of corporate executives

still believe that environmental problems

are risk factors, a study in the U.S.

journal McKinsey Quarterly reports that more

and more executives are considering them

as a source of commercial opportunities.

In February 2008, 61% believed that

climate changes would have a positive

impact on their activities.

SUEZ views the problem of global

warming as an opportunity to innovate

in environmental services and launch

new types of projects that save even

more resources. Compared to the

energy and transportation sectors,

the environment is a low greenhouse

gas emitter. Most of the emissions

come from the decomposition of waste

Mathis Wackernagel and William Rees,

the inventors of the ecological footprint,

calculated that Man had reached 85%

of the planet’s limits in 1972. They believe

that Man’s footprint has exceeded the

capacities for reconstitution of the

biosphere since 1990. Today, it is at 125%

of the long-term sustainable level.

Launched early in the 1990s,

the ecological footprint allows each

person to measure the impact of his lifestyle

on the environment and the quantity

of natural resources it has. Like the carbon

footprint which prepares an inventory

of greenhouse gas emissions related

to Man’s activities, its objective is to make

us aware of our impact on the environment

and to take the necessary measures.

REINVENTING OUR RELATIONSHIPWITH THE ENVIRONMENT

22


placed in landfills which produce biogases,

including methane. But major efforts

have been made to reduce the volume.

Examples include the recovery of

methane gases from landfills, recycling

and recovery of materials, or sludge

combustion in the cement industry and

in power plants burning coal.

Another challenge is the treatment of

water to make it drinkable – an area in which

SUEZ has developed leading-edge expertise.

Demographics and economic explosions alone

generate such an increase in water consumption

that, by 2050, 40% of the world’s population

which is then expected to be 9.4 billion people,

will suffer from hydric stress. This represents

3.8 billion men, women and children who will

not have the water resources necessary

to meet their basic needs.

The regions most affected will be the large

Mediterranean basin – North Africa and the

Middle East, northwest China, southern India,

Pakistan, as well as certain regions of the

United States and Mexico. Now, hydric stress,

which is the last stage before shortage,

represents a real obstacle to sustainable

development. The consequences are

serious: threats to food security, pollution,

economic losses.

Today, only 0.5% of the planet’s water

resources are available for human use,

and only 2% of the wastewater treated

is reused. However, contrary to popular

opinion, access to drinking water does not

depend on the availability of the resources,

but on the effectiveness of management.

In fact, the water resource can only be managed

locally and take into account all parameters at

the same time: state of the resources, quality

of the infrastructure and the weight of the

various consumption stations. All the technical

solutions exist, from recycling to sea water

desalination to the reuse of wastewater.

The most important consideration is using

them with maximum efficiency.

PRESERVING ECO-SYSTEMSToday, there are large-scale action plans for

dealing with depletion of natural and energy

resources, increased pollution and industrial

13

waste. However, it must not be forgotten that

destruction of ecosystems reduces biological

diversity and ecological systems will be

increasingly hard pressed to support species

living in them.

The scientific community agrees on the fact

that over the last two centuries, species have

been disappearing at a rate of 10 to 100 times

greater than the natural rate of extinction

(one species out of 50,000 per 100 years).

If average global warming reaches 3°C in 2050,

close to half of living species could vanish.

Currently, deforestation affects 13 million hectares,

or an area the size of Greece, every year. According

to UNESCO, the 34 top priority ecological zones

cover only 2.3% of the Earth’s surface but are

home to 50% of the known species of vascular

plants and 42% of mammals, birds, reptiles and

amphibians. Preserving them calls for investing

some US$50 billion, or less than 0.1%, of the

world’s Gross Domestic Product.

Anxious to participate in the collective effort being

made with respect to the environment, consumers

around the world want to buy safer, higher quality

products. Their purchase choices are increasingly

in favor of products and services that meet

stringent criteria. According to a McKinsey

Quarterly survey from September 2007, the use

of energy-saving domestic appliances, systematic

recycling and the purchase of energy efficient

vehicles are among the prime efforts cited

by consumers in the most industrialized countries.

However, two thirds of survey respondents

admitted to not taking social or environmental

criteria into account when shopping.


Market shifts


15

The world stage

is being redesigned.

New countries

are bringing new

wealth but also

new energy needs.

Supply networks and

distribution models

must adapt to this

challenge.

One of the major

stakes for Europe

here is energy

independence while

emerging countries

will have to respond

to the growing needs

of their populations. emergwill have to respond

to the growing needs

of their populations.


Market shifts 33

The stakes are cultural as well as environmental: we must change our lifestyle before all else. As United National Secretary General Ban Ki-Moon has said, we must not only create a cleaner, healthier and safer world but also open the door to transforming the world’s economy ecologically.

some people call a “liberal” economy is the

accumulation of endless waste. Though

advances in technology and science have

ushered in spectacular progress in recycling

and recovery, there is too much of it for

systematic treatment.

Some see less growth – lower consumption

and production – as a solution here.

Unfortunately, this idea does not expand

the prospects of the three billion men and

women around the world who live on less

than €2 a day.

NOTHING IS LOST, EVERYTHING CAN BE RECYCLEDWe must promote new modes of sustainable

production and change our consumption

patterns and in this way set up a new form

of ecology driven growth. Economic growth

based on an ecology that drives employment

and leads to development of countries

in the third world and a reduction

of inequalities.

In Europe, various initiatives aim to deploy

an alternative to the linear-type economy

that leads to factory-made products ending

up in dumps and a depletion of resources:

a “circular” economy, also known as industrial

ecology. Based on an ecosystems model,

the aim of this kind of economy is to favor

ecological industrial development by reusing

waste and used products through recycling

(GLOBAL) and energy recovery.

In other words, various plans set in motion

by European countries – several of which

have signed partnerships with SUEZ – aim

to turn costly-by-nature waste management into

an industrial asset for the economy and the

environment. Aircraft, ships, cars, domestic

and electronic appliances can all be broken

down for recycling and be re-introduced into

the business cycle.

In the 18th century, the advent of

steam-driven coal-powered machines

and the systematic use of fossil fuel had led

to the shift from an agrarian economy into

an industrialized one, and the first industrial

revolution. At the end of the 19th century

and beginning of the 20th, the second industrial

revolution saw the introduction of petroleum

and the internal combustion engine,

the systematic use of electricity, early modern

forms of communications and the beginning

of urbanization.

The birth of the computer and Internet era

and the first effects of globalization marked

the end of the 20th century. And now the third

industrial revolution is underway with the advent

of a green economy.

The ongoing search for profitable growth

for everyone spurs us all to purchase and

consume and an explosion in the production

of goods. One of the undesirable effects of what

LEADINGAN IN-DEPTH REVIEWOF ECONOMIC MODELS


BRIC COUNTRIES LEADING THE WAYThis new playing field is not limited

to the industrialized world and has already

been understood by other countries such

as China (See page 27). It is one of the

adaptations the government and local

companies have called for to try and deal with

the exponential development of various types

of infrastructure and basic needs. In the same

way as the other countries in the BRIC group

– Brazil, Russia and India – China has become

aware that successful integration into the world

economy will entail moderated management

of its new consumption habits.

According to the Organization for Economic

Cooperation and Development (OECD),

the four BRIC countries alone represent more

than one fourth of the world’s Gross Domestic

Product (GDP), compared to 17% in 1990.

By 2040, their GDP should be equal to that

of the G6 (United States, Japan, United

Kingdom, Germany, France and Italy).

This spurt of prosperity creates new

opportunities for growth for Western countries

in markets that are becomingly increasingly

open to international trade and investment.

In 2004, trade in goods and services accounted

for two-thirds of the GDP in China, 56%

in Russia, 40% in India and 31% in Brazil,

compared to an average 42% in the OECD

countries.

It is up to each country to choose its growth

model by selecting the technologies it seeks

to promote depending on its natural resources,

technological capabilities, territorial constraints

and political preferences. However, it is the

responsibility of all players – both public

and private – to do so wisely and to adapt

as needed for the common good of all citizens.

LONG-TERM BENEFITSMan’s capacity to question resource

management and methods of production

has become a basic factor in the development

of our economies and societies. This evolution

entails above all else a change in our behaviors

both individually and collectively but must

also spring from the political arena.

The institutional framework should contribute

to helping individuals and companies step up

It is the responsibility of all players – both public and private – to manage growth wisely and to foster adaptations as needed for the common good of all citizens.

their efforts by providing a long-term

perspective. It is up to public authorities

to create a context that is friendly to energy

savings and environmental protection

so that they are no longer perceived

as generating cost overruns but profits.

As Al Gore said in December 2007 when

he was awarded the Nobel Prize,

“We have everything we need to get started,

save perhaps political will, but political will

is a renewable resource.”

17


We all share the same

planet but we do not

all live the same way.

Needs are experienced

differently in different

geographical areas.

To respond to this

diversity, we must

listen to what is

being said. Only this

approach will make

it possible to find the

right solutions and

to respond to each

situation appropriately.

We all share the same

planet but we do not

all live the same way.

Needs are experienced

differently in different

geographical areas.

To respond to this

diversity, we must

listen to what is

being said. Only this

approach will make

it possible to find the

right solutions and

t respond to each priately.

Territorial roots


1919


Territorial roots 44Demographically speaking, 2008 is a watershed year: more than half of the world’s 6.6 billion inhabitants now live in urban areas. This concentration has raised the stakes for regions of the globe.

In Europe, North Africa, the Middle East,

China and Latin America, many cities have

turned to SUEZ to achieve better business

efficiency either in quality of service,

or in numbers of people served.

RESPECTING BALANCEThe efficacy of action taken by companies

depends as much on technical capabilities

as their sense of connectedness to regions,

the pillar for succeeding in partnership.

It is preferable for private players to act through

their local subsidiaries which have a stake

in the community and often work with local

partners.

This is even truer when it’s a matter

of distributing water, supplying electricity,

treating effluents and waste, all of which depend

on locally available resources. And companies

engaged in these activities do so over the long

term. Local constraints must be transformed

into real opportunities for innovation

and performance.

There is, however, one condition that must

be met for services to be successful: clarity.

Any partnership needs transparent rules

so balance is respected and so it may work well.

As decision makers, public authorities draw up

public policies by defining specifications

and performance. It is up to the operator

to contribute its technical expertise

and capacity for innovation.

COMMITMENT TO PARTNERSHIPS IS MORE CRUCIAL THAN EVER BEFORE Only partnerships will give us the chance

to fulfill the commitment the world community

took on at the 2002 Earth Summit

in Johannesburg: to reduce by half by 2015

the number of people without access to drinking

water and minimum sanitation. Today,

more than 1.1 billion people in the world still

have no access to drinking water and 2.6 billion

are not connected to a sanitation system.

More than 25,000 people – half of whom

are children – die from water-related illnesses.

Market liberalization, a higher standard of living,

population growth, urbanization and stricter

environmental regulations are some of the current

global phenomena that are making it more

complex to manage cities, regardless of size,

both technically and budget-wise.

The IPCC (Intergovernmental Panel on Climate

Change) predicts that by 2100 ocean

temperature levels may rise by as much

as 80 centimeters. Bearing in mind that today

39% of the world’s population lives fewer than

100 kilometers from the ocean,

potential effects on regional demographics

are considerable.

The fact is that increasingly

sophisticated capabilities and access

to more consistent sources of investment

have become indispensable in dealing

with the new needs of local populations.

Across the world, local communities

are turning to the capabilities of the private

sector in responding to their specific needs

or improvements to infrastructure and upgrading

of services.

THE SOLUTION LIES AT THE HEART OF THE REGION


21

A 2004 World Health Organization report

confirmed that access to water and sanitation

represented the starting point for the process

of development as it brings positive health

effects with decreased infant mortality and time

savings for women and children, improving

their prospects for education.

DIALOGUE: AN ESSENTIAL CONSTANT Innovation in the area of social engineering

and the involvement of local people in the

development of basic services are currently

some of the elements for successful projects.

However, having a dialogue with the

stakeholders is the second social component

of this success. Participating in local life

is like creating subsidiaries involved in the

business and social fabric of a region

by using the expertise of local suppliers,

for example, or by responding to specific

job pool issues in matters of integration

and training.

This is why SUEZ is undertaking many

training information and communication

initiatives for disadvantaged populations

through charitable, resource and technical

support.

The initiatives are aimed at helping people

who have lost everything or are stuck

dealing with an uncertain economic future

or natural disasters. Responding to the needs

of public institutions with which real

partnerships are established, the Group’s

employees become part of a local,

dynamic approach.

Whenever a project begins, local SUEZ

teams go out to meet all community

partners (local unions, non-governmental

organizations, user committees, company

representatives, and neighborhood groups)

to present their mission and jointly identify

the impact the project will have on the daily

lives of local people.

Accordingly the Group’s experience

in the design and construction of major

waterworks and their integration into

the natural and social environment is

articulated around respecting ecological

equilibrium and neighboring populations.

This has been the case in Brazil where the

Exchange among community partners is one of the foundations for transparency, quality and efficiency of public utilities.

Group operates major hydroelectric plants

and is building others.

This exchange is one of the foundations

of transparency, quality and efficiency

of public utilities. It facilitates understanding

of the social stakes in the region and is one

of the determining factors for success

in a partnership. Communities thus become

involved in their own development.


Quality of life


23

Billions of inhabitants

obtain no benefits

from globalization,

continue to go hungry,

have no access to

drinking water, medical

services, electricity,

education or minimal

shelter. Improvement

of the quality of life is

also a struggle for social

equity: the satisfaction

of the basic needs of

every person.

ch


Quality of life55

Being a citizen involves having the right to a clean environment and access to basic resources and the duty to respect collective surroundings and make responsible use of resources. It is up to the public authorities to find ways for everyone to live better together and it is up to the individual to take their lead.

a detailed climate and energy action plan.

EU countries were the first to set regional target

restrictions on greenhouse gas emissions.

The goal is clear: reduce emissions by 20%

in 2020 to the 1990 levels.

GREEN INDUSTRY CREATES EMPLOYMENTEuropean strategy has an eco-innovation

aspect to promote efforts in the areas

of environmental protection, conservation

of natural resources, competitiveness

and employment. The goal of this policy

is to promote “green” sectors of industry such

as climate friendly technologies, the fight against

air pollution, wastewater management and

recycling technologies. This market is estimated

to be worth €600 billion a year with a 5% annual

growth rate and direct employment of over

two million people.

Europe has also taken the lead in increasing

spending in the area of eco-technologies

by allocating €2.3 billion to conduct research on

more sustainable energy sources and €4.1 billion

to a greener and more intelligent,

integrated, pan-European transportation

system.

Some European industries,

funneled through the old-style economy,

fear that the international competitiveness

of their companies will suffer and that

thousands of jobs might be lost through

offshoring to countries not subject

to emissions’ quotas.

The response from the European

Commission is clear: new markets shall

arise and nearly a million jobs

will be created. One Munich-based consulting

firm foresees that more people will be

employed in Germany in the environmental

technology sector than in the automobile

sector by the end of the next decade.

The stakes now call for a consensus.

Climate changes are harming the ecological

balance of system and hover threateningly

over our environment, and, more broadly,

over our societies. Only a carbon-sober economy

will enable consequential advances in the well

being and health of citizens, economic growth

and sustainable employment.

On a worldwide scale, about 80%

of greenhouses gases are emitted in urban

areas. Pollution is added on to concentrations

of poverty, spreading slums, unhealthy living

conditions and the social disturbances found

in cities as so many threats to those living there.

The European Environmental Agency (EEA)

finds that the number of Europeans exposed

to pollutants in the atmosphere has risen

from 51 million people in 1966 to

103 million in 2001.

Heeding warnings from the scientific community,

Europe has led the way in coming up with

RETHINKING THELIVING ENVIRONMENT ON A BROAD SCALE


25


poised to pass the United States as the world

biggest polluter. In 2006, China brought on

stream 105,000 MW of new plants – the

equivalent of all France’s installed base –

90% of which are coal powered. And by the

year 2030, it will have brought 1.3 million

additional megawatts on stream, 70% of

which will be coal according

to the International Energy Agency (IEA).

Aware of the environmental implications here,

Prime Minister Wen Jiabao did commit his country

to a 20% reduction in energy consumption

per unit of Gross Domestic Product. China also

has plans to invest US$10 billion

in renewable sources of energy in 2008.

THE IMPERATIVE TO FOCUS ON GROWTH Quality of life has also become a recurring

topic in other areas of the world. That is the

case in China where the standard of living is

rising and there has been an unprecedented

explosion in urbanization since the country has

become a market economy. Its steep growth

curve is forcing it to deal with development,

particularly industrial development, which is

creating serious environmental problems:

air, water and ground pollution, and

accumulations of all manner of waste.

By increasing efforts to respond to the

exponential growth of its needs, China is

Quality of life55


The country has also launched a new strategy:

a circular economy whose goal is to use resources

in the most efficient manner possible and

to protect the environment. To do this,

China is developing a regulatory scheme that

will facilitate setting up eco-parks and eco-cities

throughout the country. By 2020, 400 new

ecological cities should be accommodating

300 million rural Chinese.

The first-ever “ecological” city in the world,

Dongtan should be up and running in

three years. Its features will include buildings

no more than eight stories high, pedestrian

walkways no more than six times the size

of those in London, buses with fuel cells,

vegetable matter roofs and recycled

rain water.

ZERO FOSSIL FUEL, ZERO CO2In Europe and North America, cities have taken

numerous sustainable initiatives at the urging

of local and regional communities.

This new, sustainable urban planning with

its energy- and climate-related facets applies both

to new buildings and to rehabilitation of existing

properties. The mobilization of the public and

private sectors, elected officials, civil society

members and researchers is enabling

eco-technology responses to redefine

quality of life.

Designing sustainable neighborhoods favors

collective solutions and implies rethinking building

methods, energy production, water and waste

management and transportation methods.

Energy-positive houses have photovoltaic solar

and heating panels that produce more energy

than they consume.

Today, the road to energy efficiency – especially

in buildings – must be travelled as it has

significant potential. In the low income housing

sector, French officials estimate that

850,000 housing units are performing below par.

Mining this wealth of energy savings could save

at least 7 billion kWh with a reduction

of one million tons of CO2 per year.

By 2050, the potential reduction in

energy consumption in the residential

and commercial building sector is 35% according

to the EEA. Installing boilers, air conditioners,

urban heating, intelligent meters and use of new

energy sources such as solar cells, geothermal

and heat pumps in better insulated individual

houses will contribute to increasing the energy

yield of new buildings by more than 70%.

Combining quality architectural choices

and techniques that respect environmental,

economic and social values is the SUEZ vision.

The goal is to show that it is possible to build

in urban environments while respecting ecological

values and to improve the quality of life for

everyone without huge increases in the local

community, and, indirectly, the tax payer budgets.

A sustainable urban planning policy mobilizes the public and private sectors, elected officials, civil society members and researchers for redefining the meaning of quality of life.

27


The requirement for a sustainable form of development involves us all. It is only by combining our efforts that we will be able to provide a response to the magnitude of the current threat to our resources, our ecosystems and our societies.

“”Gérard Mestrallet


ASDR 20072007

OUR BUSINESSES

AT THE HEART OF THE

CHALLENGES FOR THE 21st CENTURYOUR BUSINESSES

AT THE HEART OF THE

CHALLENGES FOR THE 21st C

2

SUSTAINABLE DEVELOPMENT

SUSTAINABLE DEVELOPMENT3OUR PERFORMANCEOUR PERFORMANCE4

OUR VISIONOUR VISION1

RADD_SUEZ_01_09_GB_V8.indd Sec2:1 26/05/08 14:33:30

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Sir, Madam:

The year 2007 was marked by continued improvement in the performance achieved by SUEZ with strong growth in results that exceeded our objectives and by sharp acceleration in our industrial development.

The Group again improved its operating performance and its profitability.

In 2007, SUEZ recorded steady growth in its businesses, with revenues totaling €47.5 billion. The Group recorded organic growth, excluding currency and consolidation effects, of 6.2%.

Current Operating Income was €5.2 billion, up 15%. Gross operating income totaled €7.9 billion, representing growth of 12.4%, ahead of the 10% target announced and reflecting the sustained and continuing efforts made on profitability by the Group. Net income, Group share, was the highest to date at €3.9 billion.

By relying on strong cash generation, the Group maintained its debt ratio at a very solid level (53%) while it continued to accelerate development (€6.1 billion in investments over the year) and to implement its policy of dynamic compensation for shareholders

2007, CONFIRMATION OF A SOLID, BALANCED MODEL THAT CREATES VALUE AND EMPLOYMENT

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(a dividend of €1.36 per share – up 13.3% – and a share buyback program for €1.1 billion).

This performance reflects the strength and visibility of our growth model and our industrial vision.

In an economically uncertain environment, the long-term businesses of the Group ensure that we can implement an ambitious growth strategy. Sustainable growth markets, a large number of commercial successes, balanced contribution from all business lines to the growth in results are all factors that give the future performance of the Group strong visibility and clarity over time.

This performance highlights the ability of SUEZ to combine steady growth, financial discipline, balanced strategic positioning and recurring profitability, an ability that will be strengthened by the proposed merger with Gaz de France.

2007 was marked by a sharp acceleration in our industrial development.

Our capital expenditures rose 60% over 2006 and were used in particular to increase our power-generation capacity. Today, SUEZ has 55,000 MW of power in operation and 65,000 MW if we include capacity currently under construction. The Group now has one of the most balanced production bases in terms of both geography and energy mix – the third largest in the world in terms of capacity.

We have chosen to position ourselves heavily in favor of the major energy-related challenges: preservation of resources, the fight against global warming and safety of supply. We have decided to highlight our approach:

the joint and balanced development of different energy sources. This is our belief and our commitment.

In 2007, we expanded in the renewable energy segment. In wind power, the Group acquired Compagnie du Vent in France and Ventus in Canada and opened wind farms in Portugal. We also launched major hydraulic projects in Brazil and continued our biomass and solar programs in Europe.

In nuclear power, our expertise as an historical operator through Electrabel enabled us to sign a major partnership with Total and Areva to offer the United Arab Emirates an EPR plant with two 1,600 MW reactors. In the long term, the Group plans to maintain a stable proportion of nuclear power within its energy mix and, therefore, is planning to develop additional capacities in Europe by 2019-2020. Our belief is that nuclear is an unavoidable solution for ensuring the energy supply and fighting global warming.

Internationally, our expertise in natural gas and liquefied natural gas was further strengthened last year, particularly on the American continent. In the United States, the authorities have issued all authorizations necessary for the Neptune project, an offshore LNG terminal, near Boston. In Chile, our teams launched construction work on one of the first LNG terminals in Latin America. In Europe, the Group also plans to seize opportunities in the developing Spanish market and raised its stake in Gas Natural to 11%.


4

Our expertise meets the demand for energy efficiency and a reduction of emissions.

In 2007, SUEZ recorded strong commercial activity in energy services, a sector in which it remains the leading European player. Energy efficiency is, in fact, at the very core of the three ambitious objectives set by the European Union for the year 2020, based on the “3 x 20”: a 20% reduction in primary energy consumption, 20% renewable energy in total energy consumption, and a 20% reduction in greenhouse gases.

The greatest challenge of our century will be to create truly ecological growth. The change will require a more global approach to needs, integrating transportation and mobility factors, along with architecture, waste management and recycling, energy production, as well as heating and lighting.

All these changes are growth vectors for the Group.

Fighting climate change, protecting resources, providing access to energy or water lie at the very heart of our businesses. This is why the subsidiaries of the Group can respond pragmatically and innovatively to the expectations of public authorities and businesses in terms of handling increasingly stringent regulations. To comply with the requirements related to sustainable development, SUEZ has integrated the new needs generated by changes in our societies into its offer. The Group meets the requirements

of ecological growth by becoming a benchmark player in the “circular economy” where nothing is lost and everything is recycled, particularly products at the end of life –from airplanes to cars, to household appliances and electronics.

Our teams are therefore implementing major reindustrialization and revitalization projects around these new high-growth businesses, as reflected in the partnerships signed in 2007 with Renault for the deconstruction of cars and with Michelin for the creation in Toul of a European industrial center dedicated to the recycling of products at the end of life.

In northern France, 2007 marked the completion of the SITA Agora project, which cleaned up and reindustrialized the old Metaleurop site using environmental technologies, resulting in the arrival of 14 companies and the creation of 420 jobs to date.

Our teamsare implementingmajor reindustrialization and revitalizationprojects around the new high-growthbusinesses

“

”

The greatest challenge of our century will be to create a low-carbon economy without stifling growth“

”


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It is also a mark of our corporate social responsibility.

Since its foundation, the Group has given priority to a model of solid, balanced growth that creates value over time and jobs. Our long-term businesses mean that we can implement an ambitious development strategy, which is based on solid foundations.

That strategy includes a strong drive to create jobs. As a result, the Group recruited 26,000 new employees around the world in 2007, including 10,000 in France and 3,800 in Belgium. The Group plans to hire 130,000 people in all its businesses by 2013, which represents a net creationof 15,000 new jobs.

The industrial vitality of SUEZ goes hand in hand with the vitality of its human resources, with a model that makes all employees partners in the performance of the entire Group. Thus, in 2007, we distributed 14 bonus shares to each of the 149,000 employees worldwide, including all nationalities and categories. From 2004 to 2007, the Group distributed €31.5 billion to its employees in the form of compensation, while at the same time devoting €27.5 billion to development investments.

Over the same period, SUEZ paid €5.3 billion to its shareholders in the form of dividends, with a growth strategy based on the balance between financial growth and the ability to create value for shareholders. In this respect, the Board of Directors has decided to propose to the Shareholders’ Meeting in May 2008 an ordinary

dividend of €1.36 per share for 2007, an increase of 13.3% over 2006, and 70% over 2003.

Our objectives will continue to be ambitious for 2008.

We will continue to increase our investments in 2008 to a level higher than in 2007, while maintaining the Group’s financial discipline, both in terms of our investment criteria and in maintaining our category A rating over the medium term.

The ability of SUEZ to combine steady growth, financial discipline, a balanced strategic positioning and recurring profitability will be strengthened by the proposed merger with Gaz de France, a project that should be finalized in 2008. The recent changes in the energy sector in Europe and around the world have again demonstrated the logic of this excellent industrial project that serves our customers, our teams, and our shareholders.

Gérard Mestrallet Chairman and CEO


CURRENT OPERATING INCOMEin billions of euros

2006 2007

4.5

5.2

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

29.131.4 31.5

33.938.5

40.7 39.6 40.7 41.544.3

47.5

CONSOLIDATED GROUP REVENUESin billions of euros

+7.2%growth in 2007

+15.1%growth in 2007

KEY FINANCIAL FIGURES SUEZ results rose sharply in 2007 and exceeded the objectives announced. The Group again demonstrated the effectiveness of its industrial model and its ability to create value for its shareholders. In an uncertain economic and financial environment, the Group’s long-term businesses ensure the implementation of an ambitious development strategy that combines steady growth, financial discipline and recurring profitability.

+10.3%

+5.9%

+5.1%

+5.4%

17.6

12.0

6.611.3

REVENUES BY BUSINESS LINEin billions of euros

SUEZ recorded revenues of €47.5 billion for 2007, an increase of +7.2% over 2006, with accelerated growth over the second half.

The commercial vitality of the Group was refl ected in the signifi cant contribution of each of the business lines to growth.

Current Operating Income reached an historic high at €5,175 million. It rose sharply: +15.1% gross and +10.5% organic.

6

2006 2007

7.17.9

EBITDAin billions of euros

+12.4%growth in 2007

EBITDA was €7,965 million, an increase of +12.4% over the announced objective of +10%.


RETURN ON CAPITAL EMPLOYEDin percentages

2005 2006 2007

10.7%

13.7%13.0%

NET INCOME,GROUP SHARE in billions of euros

2006 2007

3.93.6

KEY

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€37.1 billion in capital employed at the end of 2007

+8.8%growth in 2007

Net income, Group share amounted to €3.9 billion, an increase of +8.8%.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0.460.54 0.60 0.66 0.71 0.71 0.71

0.80

1.00

1.201.36

DIVIDEND GROWTHin euros per share

The very strong growth in the dividend since 2004 (+70%) refl ects the dynamic policy to remunerate Group shareholders, consistent with the trend in results, and offering a competitive yield within the entire sector.

CASH GENERATION in billions of euros

Net cash flow

1.4

Free cash flow

4.0

Cash flow

5.9

Working capital

requirements

(0.3)

Maintenance investments

(1.6)

Disposals and other

1.9

Development investments,

including financial investments

(4.5)

Free cash fl ow rose +16.5% to €4 billion.

The return on capital employed (ROCE) rose 13.7%, refl ecting a new improvement in margins and a decline in capital intensity.

DYNAMIC SHAREHOLDER COMPENSATION in billions of euros

* including dividends paid to minority shareholders

2006 2007

1.7*1.1

2.0*

Stock purchases

Dividends

3.1

The dynamic dividend policy has been complemented since 2007 by a share buyback program that will be continued in 2008.

ACCELERATED INDUSTRIAL DEVELOPMENT in billions of euros

3.1 1.7

0.40.9

The Group recorded €6.1 billion in industrial and fi nancial investments in 2007 (+60%), particularly developing its operations in power generation, renewable energy, natural gas and Liquefi ed Natural Gas.

7

€6.1 billion in investments in 2007

+13.3%growth in 2007 +81%


2003 2004 2005 2006 200720

30

40

5047.9

50.345.7

42.7

48.2

KEY ENVIRONMENTAL FIGURES

SUEZ encourages the development of certifi ed management systems. This again resulted in an increase in the portion of revenues covered by a certifi ed Environmental Management System (EMS). This represented more than 50% of the total revenues in 2007. More than 92% of the revenues were covered by a policy or declaration of environmental commitment at the end of 2007, despite the inclusion of new non-certifi ed contracts.

PORTION OF REVENUES COVERED BY A CERTIFIED EMS in percentages

8

7

6

5

4

3

2

1

02003 2004 2005 2006 2007

Recovered sludge

Total specific waste and byproducts

Recovered waste and by-products(excluding recovered sludge)

Excluding waste not sorted or composted through SUEZ Environment’s waste activity (as unfi t for recovery), the recycling rate for waste rose sharply in 2007, while the total production of waste declined by 6%. Specifi c waste includes fl y ash, bottom ash, desulfuration by-products and refi om.

RECOVERED WASTE AND BY-PRODUCTS in millions of tons

2003 2004 2005 2006 2007

Emissions of SO2 related to energy production/ Energy produced (GWheq/T)

Emissions of NOx related to energy production/ Energy produced (GWheq/T)

Emissions of CO2 related to energy production/ Energy produced (MWHheq/T)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Emissions of atmospheric pollutants dropped substantially for gases such as CO2, SO2 and NOx while energy production rose signifi cantly.

ENERGY PERFORMANCE

2005 200720042003 20060

50

150

250

100

200

Water consumption – Industrial process – Total

Water consumption – Cooling – Total

Water consumption – Total

The Group’s effort to manage water consumption effi ciently last year generated a signifi cant decline in the water related to the industrial process.

WATER CONSUMPTION in millions of m3

2005 200720042003 2006

747373 73

75

The effi ciency of the network is a point on which SUEZ Environment devoted a signifi cant effort. The decrease observed does not refl ect the efforts on current contracts, but corresponds to a change in the scope of reporting, i.e. the inclusion of the new service contract with the city of Algiers.

TECHNICAL EFFICIENCY IN DRINKING WATER DISTRIBUTION NETWORKS in percentages

Installed capacity for power and heat production from renewable resources rose substantially, in large part because of the full consolidation of Compagnie Nationale du Rhône. Wind energy and biomass also grew signifi cantly.

INSTALLED CAPACITIESOF RENEWABLE ENERGYin MWeq

2003 2004 2005 2006 2007

Hydraulic(small + large)

Biomass(including incineration)

Biogas

Wind

4,000

6,000

8,000

10,000

Geothermal

8


KEY

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KEY SOCIAL FIGURES

The breakdown of the workforce by region remained stable in 2007. This refl ects the long-term nature of the concessions (water and waste services), as well as the balanced development of the energy-related operations (Europe in general, Middle East, Americas). Europe represents 90% of the employees, France and Belgium 60%.

The frequency rate (FR) for the Group again improved signifi cantly in 2007, with a decline of 17% from 2006 and 45% from 2003. The four business lines all contributed to this remarkable progress, with special mention for SES (-19%). The severity rate (SR) also continued to decline (-14% over one year, -37% over fi ve years), exceeding the Group’s objective. Progress was signifi cant for SES (-17%) and SE (-10%).

Workers represented more than 50% of the personnel and the percentage of managers increased slightly. The percentage of women in the work force also rose from 2006.

BREAKDOWN OF WORKFORCE BY REGION in percentages

CHANGES IN THE FREQUENCY AND SEVERITY RATES OF WORKPLACE ACCIDENTS

BREAKDOWN OF WORKFORCE BY SOCIOPROFESSIONAL CATEGORYin percentages

0

10

20

30

40

60

80

100

50

70

90

2005 2006 2007

AfricaSouth AmericaNorth AmericaAsia-OceaniaRest of EuropeRest of the EUUnited KingdomBelgiumFrance

0

10

20

30

40

60

80

100

50

70

90

2005 2006 2007

WorkersTechniciansManagers

2005 20062003 2004 20075

10

15

20

25

30FR SR

0.0

0.2

0.4

0.6

0.8

1.0

Gravity rate

Frequency rate

The average number of training hours remained higher than 30 hours per trainee per year. Combined with the broad distribution of training, this fi gure illustrates the Group’s ongoing commitment to improving the skills of all its employees, managers, technicians or workers.

CHANGE IN THE NUMBER OF TRAINING HOURS PER TRAINEE

2005 2006 200720222426283032343638

31.532.3

28

The average salaries paid by the four business lines are in line with or exceed the averages in their reference sector for all socioprofessional categories. The highest ratios of “SUEZ salary to sector salary” were achieved by SEI in countries with sustained growth and high salary ranges.

SUEZ COMPENSATION COMPARED TO SECTOR AVERAGES BY SOCIOPROFESSIONAL CATEGORY

SEE SEI SES SE0.0

0.5

1.0

1.5

2.0

WorkersTechniciansManagers

In line with its policy to boost the employability of its employees, SUEZ raised the percentage of persons trained in 2007 to over 60%, up signifi cantly from previous years. This is a remarkable proportion for the “utilities” sector.

PROPORTION OF TRAINED EMPLOYEES

2005 2006 200750

52

54

56

58

60

62

64 61.2

56.457.6

9


10

INTERNATIONAL

MANAGEME

MANAGEMENT

MANAGEMENT

OAD MAP

ROAD MAP

ROAD MAPINTERNATIONAL

INTERNATIONAL

CHALLENGES

ORGANIZATION

ORGANIZATION

CHALLENGESOUTLOOK

INTERNATIONAL

ORGANIZATION

STRATEGY

CHALLENGES

RADD_SUEZ_10_23_GB_V8.indd 10 26/05/08 19:50:55

OUR VISIONSUEZ is a leading international player in two rapidly changing and high-growth markets: energy and the environment. In order to develop its activities at the heart of the planet’s problems, the Group is developing a dynamic model that combines economic performance, protection of the environment and social equity. Sustainable development,the focus of its strategy is the driver of its growth and the guarantee of its continuity.

12 • LONG-TERM BUSINESSES AND CHALLENGES

14 • OUTLOOK 16 • GOVERNANCE Corporate governance under the sign of effectiveness Board of Directors Committees of the Board of Directors Ethics and risk management Executive Committee 22 • SHAREHOLDER AND INVESTOR RELATIONS

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the yield of facilities and

reduce the use of resources.

It is developing water recycling,

desalination facilities and waste

treatment technologies so that

the waste can be used as a

“secondary raw material”.

QUALITY OF LIFE One of the goals of sustainable

development is to preserve

and enhance the quality of

life of both present and future

generations. The challenge is

more than strict compliance

with social and environmental

regulations. By ensuring the

safety of its facilities, reducing

discharges and sound levels,

integrating them within the

landscape, protecting the

ecosystems, etc., SUEZ is

working to minimize the impact

of its activities on its employees,

its customers, the residents

near its plants and the populations

it serves. As a major player in

local economies, the Group is

mindful of being actively involved

in the social development and

well-being of the communities

for which it works.

MARKET SHIFTSGlobalization, technological

changes, the dynamic growth

of emerging countries, and

awareness of the environmental

challenges are radically

transforming economic rules.

Powerful new players (Brazil,

China, India, etc.) are playing

a decisive role in world trade.

The deregulation of entire sectors

of the economy (like the opening

of the European energy market)

and more stringent environment

regulations are significantly

changing the rules of the game.

Anticipating these changes,

SUEZ is positioning itself as

a player for the future, active

For more than 150 years,

the companies that formed

the SUEZ Group have been

delivering services essential

for the economic and social

development of populations:

electricity, natural gas, energy

services, water and waste

management. These businesses

are conducted locally and

over the long term by controlling

their impacts. The challenges

facing the Group are planetary

challenges that greatly

exceed the framework

of its businesses.

CLIMATE CHANGE The reduction of greenhouse

gases (GHG), one of the causes

of climate abnormalities and

global warming, is one of

the major challenges of

development policies at

the global level. It directly

affects the SUEZ businesses:

energy and heat production,

like burial of waste,

are significant sources

of greenhouse gas emissions.

For the Group, this means

controlling greenhouse gas

emissions due to its own

operations without threatening

its competitiveness, but it

also means offering its

customers the most effective

solutions so that they can

achieve their own objectives

to control emissions.

Between 1980 and 2007, SUEZ

reduced its emissions of CO2 per

kilowatt-hours produced in Europe

by 50% and continues its efforts

to further improve its performance.

RESOURCE PRESERVATION The depletion of fossil fuels,

the deterioration of biodiversity,

tensions over access to water

remind us of the imperative

need to establish rigorous and

reasonable management of

the natural resources useful

for the development of human

societies. As an energy producer

and water manager, SUEZ is

directly concerned with these

issues. The Group must reduce

its own use of fossil fuels

and those of its customers,

preserve water resources,

and develop industrial sites

while protecting ecosystems.

Renewable energy represents

more than one-fourth of the SUEZ

production facilities. The Group

favors technologies that increase

LONG-TERM BUSINESSES AND CHALLENGES

Energy and the environment, the two business sectors of SUEZ, are at the center of the vital challenges that exceed simple economic and industrial considerations. In a rapidly changing economy, this responsibility has led the Group to place sustainable development at the very core of its concerns.

SUEZ ENERGY EUROPE 2007 revenues: €17.6 billion• Electricity• Natural gas• LNG• Energy services

SUEZ ENERGY INTERNATIONAL 2007 revenues: €6.6 billion• Electricity• Natural gas• LNG• Energy services

SUEZ ENERGY SERVICES 2007 revenues: €11.3 billion• Energy services• Engineering• Installations and related services

SUEZ ENVIRONMENT 2007 revenues: €12.0 billion• Water and sanitation services• Water-treatment engineering• Waste services

4 OPERATIONAL BUSINESS LINES


in high-growth markets and

able to seize opportunities

for sustainable growth.

TERRITORIAL ROOTS Despite its international scope,

the issues of sustainable

development are still resolved

locally, based on different

geographic, social and

economic situations.

The preservation of water

resources calls for different

OPERATIONAL PERFORMANCE FOR THE GROUP AND CREATION OF VALUE FOR

STAKEHOLDERS

• COMPETITIVENESS OF COSTS

• QUALITY OF SERVICE

• REPUTATION AND CREDIBILITY

• MISSION EFFECTIVENESS IN PUBLIC UTILITIES

REFLECTING THE VALUES

OF SUSTAINABLE DEVELOPMENT IN

OUR PRACTICES AND OUR CULTURE

PROMOTING THE SOCIAL COMMITMENT

OF THE COMPANY

INTEGRATING SUSTAINABLE DEVELOPMENT

IN OUR COMMERCIAL OFFERS

ACTING AS A CORPORATE

CITIZEN

PROTECTING THE ENVIRONMENT

OUR SUSTAINABLE DEVELOPMENT APPROACH FOR PERFORMANCE

solutions in temperate countries

and in arid zones, in Europe

or the Middle East. SUEZ operates

worldwide in activities with

a strong local implication –

the supply of energy or water,

local services.

A water network, a power plant,

a waste management centre

cannot be moved: they are local

infrastructures built to provide

service over the long term. Their

impact on jobs, economic

development, health and the

local environment is important.

For SUEZ, it is therefore

imperative to establish sustainable

operations in the countries where

the Group conducts its activities

and to develop relationships of

confidence and respect with the

local populations for the long term.

A VOLUNTARY APPROACH By placing development at the

center of its strategy, SUEZ has

set economic, environmental and

social priorities. They all contribute

to its competitiveness and quality

of service, ensure its operational

performance and create value

for its stakeholders (employees,

customers, shareholders, users,

neighboring residents…).

13

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14

the Group’s investment committee

in 2007. SUEZ plans to invest

€15 billion over the period from

2007-2012, primarily to expand

its power production capacities in

renewable and thermal energy in

Europe, Latin America and Asia

(€8 to 9.5 billion). The Group will

also invest €4 to 4.5 billion in

the environment (water treatment,

desalination projects in the Middle

East, Asia, Europe, etc.), between

€1 and 1.5 billion in energy

services and between €1 and

2 billion in LNG infrastructures

(new terminals in the United

States and Latin America,

development of European

capacities, etc.).

132,000 NEW EMPLOYEES Anticipating the changes

in its businesses, SUEZ plans

to recruit 132,000 people by

2013 to support its growth

and replace its teams.

56,000 people are expected

to be hired in France and

10,000 in Belgium, which

should make the Group one

of the top recruiters in Europe.

In an international context

marked by uncertainties,

a sharp increase in the cost

of raw materials, tensions

on the energy market and

increased awareness of

environmental challenges,

in 2007, SUEZ confirmed

the relevance of its long-term

strategy in the crucial

and sustained growth

markets of energy

and the environment.

HISTORIC PERFORMANCE IN GROWTH MARKETS The Group recorded historic

performances, that exceeded

the objectives announced,

with revenues increasing by

7.2% (€47.5 billion) and income

from continuing operations up

15.1% (€5.175 billion). All

activities contributed to the growth.

Electricity sales rose in Europe,

marked by market deregulation

and steady rates in 2007

(+17.6% for reference prices in

Northwest Europe), as well as in

Latin America where demand

remained very strong.

LNG activities improved in

Latin America and right across

the board, the service businesses

(energy, water, waste services)

continued to grow in dynamic

markets.

€15 BILLION IN INVESTMENTS In rapidly changing markets

marked by a global increase

in energy demand and dynamic

prices in Europe, the Group made

€6 billion in industrial investments

in 2007, up 60%, and expects

to raise them again in 2008.

80 projects were approved by

OUTLOOK SUEZ recorded an historic performance in 2007. The Group continues to implement a major development program to move with changes in its markets. It is planning to hire 132,000 people by 2013.

€6 BILLION IN INVESTMENTS IN 2007

CNR – Hydroelectric plant in Pierre-Bénite (France). Control room

€47.5 BILLION IN REVENUESIN 2007


NORTH AMERICA €4.2 billion

4,000 employees

EUROPE €37.9 billion

133,400 employees

AFRICA €0.7 billion

3,350 employees

ASIA & PACIFIC €2.5 billion

5,750 employees

REVENUES AND WORKFORCE BY REGION

WATER AND ENERGY IN THE MIDDLE EAST By implementing the synergies

from its two principal businesses,

water and energy, SUEZ is

becoming the principal investor

in Middle East projects.

In western Saudi Arabia, the

Group is building a combined unit

which, in 2009, should supply

2,750 MW of electricity (10% of

the country’s electrical capacities)

and 800,000 m3 of fresh water

per day (twice the consumption of

Paris). This is a colossal project,

representing an investment of

US$3.4 billion covered by SUEZ

and regional partners.

In Barka, in the Sultanate of

Oman, another project is in the

works: 678 MW of electric power

coupled with a plant to produce

120,000 m3 of fresh water per

day, which will use the reverse

osmosis process, an innovative

and more energy efficient

desalination technique in which

SUEZ subsidiary Degrémont

is the world leader.

In Abu Dhabi, the Group is one

of the principal shareholders

in one of the largest water

and energy plants in the world

at Taweelah. In Dubai in the

United Arab Emirates, it won an

US$800 million project at the end

of 2007 to build and operate for

10 years a plant that will reuse

waste water from an enormous

new city under construction.

At the end of March 2008,

it won another giant desalination

and power project in Qatar.

In Oman, Bahrain, Qatar,

Jordan… SUEZ operates

electrical plants, re-treats

and distributes water. In

20 years, the Group has become

the leading investor

in projects in the Middle East.

And the region’s potential is

immense. To cover the needs

of its demographic growth and

industrial development, in

10 years the Middle East would

have to invest US$14 billion

in desalination, US$7 billion in

water reuse, and double its power

capacities, which represents

three to four projects a year.

Over the longer term, Areva, Total

and SUEZ announced early in

2008 that they intend to develop

joint nuclear projects in the region.

SOUTH AMERICA€2.2 billion

2,500 employees

2007 revenues: €47.5 billionTotal workforce: 149,000

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16

compromise the exercise of his

freedom of judgment.”)

It will be up to the Shareholders’

Meeting on May 6, 2008 to renew

the terms of Edmond Alphandéry,

René Carron, Étienne Davignon,

Albert Frère, Jean Peyrelevade

and Thierry de Rudder.

SIGNIFICANT HOLDINGS BY THE DIRECTORS The Group’s bylaws request

Directors to own a minimum of

2,000 shares during their term

of office. The Directors hold a

substantial number of shares

(see p. 17). This level of

ownership, much higher than

normal practice, demonstrates the

involvement of the Directors and

the confidence they have in the

future of the company.

INTENSE ACTIVITY FOR THE BOARD The Board of Directors met eight

times to review strategic changes

for the Group. The attendance

rate at meetings was 90%

(12 meetings in 2006,

with attendance of 82%).

Reaffirming its focus on corporate

governance rules, in January

2002, the Board of Directors

adopted a “Director’s Charter”

to transparently define the rights

and duties of a Director (this

document can be found at

www.suez.com).

In addition, as has been the case

every year since 2004, an

assessment of the operations of

the Board was conducted under

the responsibility of Étienne

Davignon, chairman of the Ethics

Committee, with the assistance

of an outside expert.

This analysis noted the

improvements made following

previous studies, but also assessed

the operation of this body during

the process to prepare for the

proposed merger with Gaz de

France. For 2007, the Committee

noted the results of the study

conducted at a Board meeting

in February 2008.

In 2007, the SUEZ Board

of Directors consisted of

13 members, six with French

citizenship, five with foreign

citizenship and two with dual

citizenship (French and other).

Five of the 13 Directors were

considered by the Board meeting

on March 7, 2007 as being

“independent of the company”

as defined by the criteria set out

in the Bouton Report. (“A Director

is independent when he has no

relationship of any kind with the

Company, its Group or its

Management which could

CORPORATE GOVERNANCE UNDER THE SIGN OF EFFECTIVENESS The Group culture of transparency and efficiency is naturally reflected at the highest levels of corporate governance. The smooth operation of the managing bodies is in fact essential to guarantee performance for shareholders.

Between January 1st and the end

of February 2008, the Board of

Directors has already met twice.

In 2007, the total directors’ fees

distributed amounted to

€658,500, down from €793,500

in 2006 (down 17%).

Gérard Mestrallet, as Chairman,

and Jean-Jacques Salane,

as an employee of the Group,

do not receive directors’ fees.

12MEETINGS OF THE BOARD OF DIRECTORS IN 2007

Presentation of the SUEZ 2007 results


� GÉRARD MESTRALLET • 59 years old.

• Citizen of France.

• Chairman and Chief

Executive Offi cer.

• 54,652 SUEZ shares held.

� ALBERT FRÈRE*• 82 years old.

• Citizen of Belgium.

• Board Vice-President Chairman

and Managing Director,

Bruxelles Lambert Group.


� EDMOND ALPHANDÉRY(1)*• 64 years old.


• Chairman of the Oversight

Committee, CNP Assurances.


• Member of the Audit Committee.

� RENÉ CARRON*• 65 years old.


• Chairman of the

Board of Directors,

Crédit Agricole SA.


• Chairman of the

Appointments Committee.

• Member of the Committee for

Ethics, the Environment and

Sustainable Development.

� ÉTIENNE DAVIGNON*• 75 years old.


• Chairman of Recticel.


• Chairman of the Committee

for Ethics, the Environment

and Sustainable Development.

• Member of the

Compensation Committee.

� PAUL DESMARAIS JR.• 53 years old.

• Citizen of Canada.

• Chairman of the Board

and Co-Executive Offi cer,

Power Corporation of

Canada.


• Member of the Compensation

Committee.

� RICHARD GOBLET D’ALVIELLA(1)

• 59 years old.


• Managing Director, Sofi na.


• Member of the Audit

Committee.

� JACQUES LAGARDE(1) • 70 years old.

• Citizen of France

and the United States.

• Former Vice-President,

The Gillette Company.


• Chairman of the Audit

Committee.

� ANNE LAUVERGEON(1)

• 48 years old.


• Chairwoman of the Executive

Committee, Areva.


• Member of the Committee



• Member of the Appointments

Committee.

� JEAN PEYRELEVADE*• 68 years old.


• Vice-President,

Leonardo France.


� THIERRY DE RUDDER*• 58 years old.

• Citizen of Belgium

and France.

• Managing Director,

Bruxelles Lambert Group.


� JEAN-JACQUES SALANE • 56 years old.


• Chairman of the French

Oversight Committees,

The Spring Fund.


• Member of the Committee



� LORD SIMON OF HIGHBURY(1)

• 68 years old.

• Citizen of the United

Kingdom.

• Former Minister of State.


• Chairman of the

Compensation Committee.

Secretary to the Board

of Directors:

PATRICK VAN DER BEKEN

(1) Independent director.*Director whose term is subject to renewal by the Shareholders’ Meeting of May 6, 2008.

At the end of the Shareholders’ Meeting of May 6, 2008, and subject to approval of the resolutions at the Meeting, the Board of Directors of SUEZ will consist of 13 Directors, including six French members, five non-French members, and two members with dual citizenship. At its meeting on March 7, 2007, the Board of Directors of SUEZ considered that five Directors were independent and that eight others were not independent based on the criteria defined by the Bouton Report.

MEMBERS OF THE BOARD OF DIRECTORS

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��The Audit Committee

Three Directors all considered

“independent” and “financial

experts” sit on this committee

which is responsible for oversight

of the financial statements: Jacques

Lagarde, Chairman; Edmond

Alphandéry and Richard Goblet

d’Alviella. They carefully monitored

the valuation process used to

value the Group’s assets at the

end of 2007. They also receive

regular presentations on the

financial position and, more

specifically, cash flows, debt

status, changes in investments,

financial flexibility, updates

relating to the main legal disputes

still pending and key financial

management performance

indicators. Following the analysis

conducted in 2006 concerning

the proposed SUEZ - Gaz de France

merger, the Audit Committee

wanted, after the Boards of

Directors of the two groups

approved new strategies

for the project, to review a series

of issues before they were

presented to the Board.

The analysis focused particularly on:

– the terms of the merger

and the acceptance of those terms

by the market based on the

reactions received during road-

shows in fall 2007 and the change

in the respective stock prices for the

two Groups;

– the principles of governance, very

close to those adopted last year on

the basis of a memorandum of

understanding;

– the merger calendar;

– an analysis of the joint business

model, the outlook and the new risk

profile of the Group.

Concerning the listing of SUEZ

Environnement, the following issues

were also considered: the progress

of the process, the scope of

consolidation, the valuation of the

assets, the financing policy and the

governance rules. In 2007, the

Audit Committee met six times, with

an average attendance rate of 78%.

The Auditors attended four

meetings. Six are scheduled for

2008 and two have already been

held at the end of February 2008.

� The Committee for Ethics, the Environment and Sustainable Development Four Directors sit on this committee:

Étienne Davignon, Chairman;

René Carron; Anne Lauvergeon;

Jean-Jacques Salane.

This committee reviews the

ways and means to achieve

the Group’s objectives for

Sustainable Development.

Four meetings were held in

2007, with an average attendance

rate of 88%.

The Committee reviewed the

annual report from the Group’s

Ethics Officer concerning the

deployment of the new SUEZ

ethical procedures

(ethics training program,

implementation of control

and prevention procedures,

risk management policy).

It also requested reports from

the Department of Human

Resources on the Corporate

Social Responsibility

policy (Diversity, Workplace

Safety).

With regard to compliance

and environmental reporting,

the Directors received information

on the processes for processing

environmental data, the control

methods, and the outside

verification procedures.

� The Appointments Committee

Two Directors, René Carron,

Chairman, and Anne Lauvergeon,

submit to the Board their

recommendations on changes

within the Board of Directors

or Group Management.

Given the merger with Gaz

de France, no meeting

was held in 2007.

� The Compensation Committee

Three Directors, Lord Simon

of Highbury, Chairman

(considered “independent”), Étienne

Davignon and Paul Desmarais Jr.,

recommend compensation packages

to the Board both for Directors and

Executives on the Executive

Committee.

The Committee also recommended

for the Board’s decision the contents

and parameters of the 2007 stock

option plan and the definition of the

powers granted to Gérard Mestrallet,

Jean-Pierre Hansen and Gérard

Lamarche, along with the bonus

share allotment program. The

Compensation Committee met three

times in 2007, with an average

attendance rate of 89%.

To assist it in its work, the Board of Directors has established four Committees, with the mission to study specific issues in order to prepare for certain Board deliberations, and provide the Board with informed opinions and recommendations on decisions to be made.

COMMITTEES OF THE BOARD OF DIRECTORS

Jacques Lagarde

Étienne Davignon

René Carron

Lord Simon of Highbury


Ethics is one of the founding values of the SUEZ Group. A specific organization formalizes and ensures respect for the principles defined by the Group. It is a pledge of good governance, and risk control is based on the organization and rigorous methods deployed throughout the Group.

ETHICS AND RISK MANAGEMENT

SUEZ was one of the first French

groups to develop a formal

ethics process. This policy is

designed to protect it against risks

which could adversely affect its

operations, its integrity or its image,

comply with ongoing changes in

increasingly stringent national and

international regulations, and meet

the demands of investors and

ratings agencies.

CREATION OF A COMPLIANCE DEPARTMENT The business ethics organizational

structure is the purview of the

Secretary General and Group Ethics

Officer, who reports to the

Committee for Ethics, the

Environment and Sustainable

Development. An Ethics department

is responsible for developing and

communicating rules and principles.

It manages a network of ethics

officers, which was expanded in

2007 (from 82 to 93 members),

present in the field in all major

operating units. In 2007, this

organization was complemented

with the creation of a Compliance

department, charged with the

implementation and effective control

of the rules and principles developed

by the Group. In particular, it must

detect and prevent any conduct that

may adversely affect the integrity of

SUEZ. A set of documents

formalizes the values and standards

that define the Group’s rules of

conduct in all circumstances. The

Group Ethics Charter, which was

revised and completed in 2006, has

been translated into 17 languages

and distributed to 75,000

employees. It complements other

key documents, including the

“Rules of Organization and Conduct

for Group Companies” and the

“Commercial Relations Guidelines”,

which sets out the guidelines for the

principal management acts of Group

companies.

2,400 ETHICS E-TRAINING SESSIONS An extranet ethics site has been set

up to provide, in several languages

(English, French, Dutch, Arabic,

Chinese, etc.) all the ethics

documents and decision-making

tools. More than 200 managers in

the Group received specific ethics

training in 2007 and more than

2,400 employees took a computer-

based training module (e-learning)

available in seven languages. In

2008, 7,000 people are expected to

take this module to accelerate

communication of a culture of ethics

based on clear principles throughout

the Group.

INTEGRATED RISK MANAGEMENT SUEZ has established an integrated risk management system (Enterprise Risk Management, ERM) based on tools and methods common to all the entities. Each management is coordinated by a Chief Risk Officer, reporting to the Group Chairman, who also directs Internal Audit and Insurance. He relies on a Group Risk Officer who directs a network of risk officers charged with deploying the ERM tools. A Risk Advisory Committee, composed of this network and four staff directors (Audit, Insurance, Internal Control, Management Control) organize the sharing of best practices and the development of common tools. The Group’s risks are mapped at the international level, classified by category (strategic, financial, operational, random), ranked in order of importance and frequency and, to the extent possible, quantified in order to set up adapted prevention plans. Integrated risk management is regularly evaluated by the transversal internal audit teams, and the internal control is designed to provide guarantees on the quality of risk prevention and control within the Group, as well as on the reliability of the SUEZ accounting and financial information, its compliance with the laws and regulations and its operational effectiveness. The Group’s internal control procedures comply with an international model: COSO (Committee of Sponsoring Organizations of the Treadway Commission). Known as CODIS (“Control and Disclosure”), this program has strengthened internal control in all areas and improved the quality of financial reporting. Common to all entities, it contributes to the development of a culture of good governance.

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GÉRARD MESTRALLET

CHAIRMAN AND CHIEF EXECUTIVE

OFFICER

JEAN-PIERRE HANSEN

CHIEF OPERATIONS OFFICER,

VICE-CHAIRMAN OF THE

EXECUTIVE COMMITTEE,

MANAGER OF SUEZ ENERGY

EUROPE

GÉRARD LAMARCHE

CHIEF FINANCIAL OFFICER

DIRK BEEUWSAERT

EXECUTIVE VICE-PRESIDENT

IN CHARGE OF SUEZ ENERGY

INTERNATIONAL

JEAN-LOUIS CHAUSSADE


IN CHARGE OF SUEZ

ENVIRONMENT

JÉRÔME TOLOT


IN CHARGE OF SUEZ ENERGY

SERVICES

MEMBERS OF THE CENTRAL MANAGEMENT COMMITTEE*

The Central Management Committee is comprised of the members of the Executive Committee and the central-department heads:

HENRY MASSON: Group Senior Vice-President for Risk, Organization and Central Services (attends the Executive Committee)

MARC PANNIER: Group Senior Vice-President in charge of Performance Management and Organization

*at December 31, 2007

MEMBERS OF THE EXECUTIVE COMMITTEE*


21

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The Executive Committee examines questions of Group strategy, development,

and organization at the request of the Chairman and CEO. Its 10 members include

functional managers from Headquarters and operational managers from the

four business lines. Questions that have to be submitted for the approval of

the Chairman and CEO or Board of Directors are also submitted to the Central

Management Committee for approval.

ROBERT-OLIVIER LEYSSENS: Group Senior Vice-President in charge of Corporate Finance, Tax and Treasury

CHRISTELLE MARTIN: Group Senior Vice-President in charge of Strategic Planning, Control and Accounting

PAUL RORIVE: Group Senior Vice-President in charge of the Monitoring and Development of Nuclear Activities

XAVIER VOTRON: Group Senior Vice-President in charge of the Promotion of Technological Innovation and Renewable Energy

VALÉRIE BERNIS


IN CHARGE OF COMMUNICATIONS

AND SUSTAINABLE DEVELOPMENT

EMMANUEL VAN INNIS


IN CHARGE OF GROUP

HUMAN RESOURCES

YVES DE GAULLE

GENERAL SECRETARY

ALAIN CHAIGNEAU


IN CHARGE OF STRATEGY


22

participation in the various

events offered and answers to the

questions asked all go through

these communication tools.

The Group attaches great

importance to the quality of

its relations with its individual

shareholders. The percentage

of capital held by individual

shareholders is 13.5%, including

3% held by employee shareholders.

A RELATIONSHIP OF TRUST WITH INDIVIDUAL SHAREHOLDERS…To communicate more effectively

with all its shareholders, SUEZ

was one of the very first groups to

establish a club for shareholders,

which can be joined whatever

the number of shares held. The

purpose was to ensure ongoing

dialogue with all shareholders and

keep them informed of Group news

and businesses.

Club members receive regular

communication through the

Shareholders’ Letters published

five times a year; they can also

obtain information at shareholders’

meetings, through site visits (five

in 2007) or by looking for the

SUEZ Shareholders Space at the

Actionaria trade show in Paris,

The business culture of SUEZ is

based on a foundation of values,

including professionalism, which is

a pledge of performance, but also

a commitment to openness and

transparency in its relations with

the shareholders.

SUEZ owes all its shareholders

and investors identical, regular

and available information. The

availability of the departments

which are devoted to dialogue with

shareholders is possible because

of the interactive communication

tools that have been established:

toll-free numbers, and the SUEZ

website “Shareholders Space”.

Memberships in the Club or

Transparency and dialogue are the keystones to the SUEZ shareholder culture. The department responsible for relations with individual and institutional shareholders has carried this requirement to the highest level of best practices in the market.

SHAREHOLDER AND INVESTORS RELATIONS

0.460.60

0.540.66 0.71 0.71 0.71

0.80

1.00

1.20

1.36

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

The very strong growth in the dividend since 2004 (+70%) refl ects the Group’s dynamic compensation policy for shareholders, consistent with the trend in results, and offering a yield competitive with the entire sector.

+13.3% growth in 2007

Institutional investors (stable shareholders)Individuals and employee shareholdersOther

Treasury stock

78.1%13.5%

6.1%2.3%

BREAKDOWN OF CAPITAL AT DECEMBER 31, 2007

DIVIDEND GROWTHin euros per share


where the Group is present every

year in November.

A number of cultural or sports

events are offered to shareholders

both in France (Musée Jacquemart-

André, exhibits at the Guimet

Museum, Institut du Monde Arabe,

soccer, etc.) and in Belgium with

the recent Magritte exhibit.

Five conferences in 2007

presented the technologies of the

Group. SUEZ also developed useful

tools for a good understanding of

the issues affecting shareholders

through a training program to

discover or learn more about the

operation of the financial markets,

reading financial statements, taxes,

and more.

For Belgian shareholders, these

sessions are organized through

the Shareholders Business School

which offers a diploma and courses

over time.

Two toll-free numbers:

– 0800 177 177 for French

shareholders;

– 0800 25 125 for Belgian

shareholders, available only from

their respective countries, provide

contact with dedicated services, all

year long, Monday through Friday,

from 9:00 a.m. to 1:00 p.m. and

from 2:00 to 6:00 p.m.

Finally, so that all shareholders

can follow the Shareholders’

Meeting every year, this Meeting is

retransmitted live in its entirety on

the Group’s website, and is then

rebroadcast for three months.

… AND WITH THE FINANCIAL COMMUNITY SUEZ organizes information

meetings for professionals and

financial journalists when it

publishes its annual and semi-

annual results. At the same

time, the Department of Investor

Relations is continuously in

contact with financial analysts and

international institutional investors.

Road shows (conferences with

Group executives) are organized in

Paris, London, Brussels, Frankfurt,

New York, etc. They give investors

more information about SUEZ.

Transparency, completeness,

reactivity are the principles that

guide this information. In 2007,

special effort was made to explain

the steps involved in the merger

process, as well as the acceleration

of the industrial development and

the drivers of growth and improved

profitability.

The mission of the Department

of Financial Communication is

also to analyze changes in the

perception of the Group by analysts

and investors, and the comments

and expectations expressed by

individual shareholders. In addition

to this daily watch, weekly reports

and analyses of the sector or

comparable companies completed

for the executives, these activities

are discussed in a report and a

file is submitted at each Board

meeting.

90

100

110

120

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007

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007

03.2

007

04.2

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05.2

007

06.2

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CAC 40+1.30%

DJ EUROPE STOXXUTILITIES+17.95%

SUEZ +18.70%

Since early in 2007, the SUEZ share has widely outperformed the CAC 40 index, and remained ahead of the benchmark sector index (DJ Europe Stoxx Utilities). This performance was generated by the characteristics of the SUEZ business model, both defensive and growth. Investors are attracted by the energy and environment sectors and by the quality of the specifi c positioning of SUEZ, which will be strengthened with the merger.

SUEZ SHARE TREND IN 2007(base 100 at January 1, 2007)

CONTACTSDepartment of Financial Communication Arnaud Erbin: [email protected]

Tel. +33 (0)1 40 06 66 29

Investor Relations Sophie Charrier: [email protected]

Loïc de Fontaubert: [email protected]

Éléonore de Larboust: [email protected]

Shareholder Relations � IN FRANCE Rita Rio: [email protected]

Toll-free number: 0 800 177 177 (from France only)

� IN BELGIUM Guy Dellicour: [email protected]

Toll-free number: 0 800 25 125 (from Belgium only)

www.suez.comInvestors and shareholders will fi nd two dedicated sections

under the “Finance” tab on the SUEZ website.

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OUR BUSINESSES AT THE HEART OF THE CHALLENGES OF THE 21st CENTURY

26 • ENERGY, A SUSTAINABLE RESPONSE TO RAPIDLY GROWING NEEDS

28 • ELECTRICITY An international player 36 • NATURAL GAS From one side of the Atlantic to the other

40 • ENERGY SERVICES The European leader in multi-technology services

46 • ENVIRONMENT: A WORLD LEADER IN WATER AND WASTE SERVICES

48 • WATER SERVICES Complete mastery of the water cycle

54 • WASTE SERVICES Waste: from collection to recovery

60 • RESEARCH & INNOVATION, INNOVATION FOR SUSTAINABILITY

SUEZ is developing leading global positions in two high-growth sectors: energy and the environment. Ranked among the top 10 power companies in the world, the Group is also the Europeanleader in energy, the sixth largest gas operator in Europe and a leader in the water andwaste services sectors.


26

by giving priority to the best

performing energy depending

on circumstances.

� Natural gas represents 46.6%

of the installed capacity. The gas

produces the least amount of fossil

energy and there are still abundant

reserves. Latest-generation

combined-cycle gas turbines

(CCGT) have excellent yields of up

to 60%. The gas plants, which are

particularly flexible and quick to

implement, help provide a rapid

response to consumption needs.

� Renewable energy, which is

carbon neutral (no CO2 emissions)

represent nearly one-fourth of the

installed capacity (20.8%):

– hydraulic power, with

18.1% of the energy mix, is

the main renewal energy of the

Group, which has a large capacity

in France and Latin America,

particularly Brazil;

– biomass (wood, wood waste,

vegetable oils, etc.) is expanding

significantly;

– wind energy is also growing

substantially. In 2007, SUEZ

expanded its capacity through the

Directly correlated with

development and economic

growth, global energy consumption

is rising steadily: by 2030, it could

increase by 50%. Countries like

China or India will have doubled

their consumption in 25 years.

This soaring demand, combined

with the depletion of fossil fuel

resources, is the source of strong

tensions in the global markets.

All around the world, energy

prices are rising, affected by the

increase in prices for fossil fuels

(oil, natural gas, coal, etc.), the

environmental challenges that

generate new constraints, rising

costs for power plant construction,

an imbalance between supply and

demand, etc.

SUSTAINABLE ENERGY MANAGEMENT Faced with these tensions, SUEZ,

like the world’s major utilities,

faces a triple challenge:

– guarantee the energy supply in all circumstances, by securing

supplies (a major challenge for

regions like Europe, that are

practically without fossil energy

resources) and by building new

production capacity where

demand is growing rapidly;

– at prices that are as controlled and accessible as possible given

the increase in the price of the

resources;

– while controlling the environmental effects, and particularly greenhouse

gas emissions.

A DIVERSIFIED AND COMPETITIVE ENERGY MIX To meet these challenges,

SUEZ is giving priority to the

most efficient technologies

and is trying to limit the use

of fossil fuels. Today, the

Group has one of the most

balanced energy mixes in the

market, but also one of the

most respectful of the

environment: 37% of its production

units do not emit CO2 and 46.6%

have low emissions levels.

This diversity also gives it a

competitive advantage by

reducing its exposure to one

type of energy and allowing

it to adapt rapidly to external

constraints (prices of raw

materials, regulations, etc.),

86,500EMPLOYEES IN ENERGY BUSINESSES WORLDWIDE

€35.45BILLION IN REVENUES IN ENERGY BUSINESSES IN 2007

ENERGY A SUSTAINABLE RESPONSE TO RAPIDLY GROWING NEEDS

Present in electricity, natural gas and services, SUEZ is one of the leading world energy players. As a major operator in Europe, the Group also holds strategic positions in North and South America, Asia and the Middle East.


4.8% Other

20.8% Renewable energy

11.4% Nuclear

Natural gas

46.6% with low CO2 emissions

37% with no CO2 emissions

8.4% Fuel

8% Coal

Power production plant at Al Ezzel (Bahrain)

acquisition of Compagnie du Vent

in France, and Ventus

in Canada;

– SUEZ is also developing

innovative technologies in

geothermy and the recovery of

waste (incineration, biogas, etc.)

to produce energy.

� Nuclear represents

11.4% of the Group’s

capacity, which operates seven

reactors in Belgium and has a

BREAKDOWN OF INSTALLED CAPACITY BY TYPE OF FUEL AT THE END OF 2007

large capacity in French reactors.

As a technology that does not

emit CO2, nuclear is a perfect

response to the basic needs

to produce reliable energy at

competitive prices and is seeing

new world interest in providing

an effective response to growing

demand. SUEZ plans to develop

its nuclear holdings, first in

Europe and then, in the longer

term, in North America or the

Middle East.

� Traditional thermal energy (fuel oil and coal) represents

16% of the energy mix. These two

fossil fuels have made significant

technical progress (increase in

yields, reduction in emissions)

but still produce the most CO2

emissions. They are, however, still

useful to effectively meet “basic

needs” in certain regions.

SUEZ is participating in a major

R&D effort to continue to reduce

their environmental impact.

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The installed capacity correspond to 100% of the power of the plants included in the scope of consolidation.

Between 1980 and 2007, SUEZ reduced its CO2 emissions per kilowatt-hours produced in Europe by 50%

“

”


28

ELECTRICITY

10 thLARGEST WORLD PRODUCER

64,206LARGEST EUROPEAN PRODUCER

MW IN PRODUCTION CAPACITY

5 th


SUEZ is one of the leading

European energy companies,

but it is also a top-tier

international player: the world’s

10th largest power producer.

47% of its production capacity

are located outside Europe,

primarily in North America,

Latin America, Asia and

the Middle East.

In Europe, wholly owned

subsidiary Electrabel is the leading

electric company in the Benelux

countries, the second largest in

France and holds a large capacity

in the main markets of the Union:

Italy, Iberian peninsula and

Germany. The company is also

expanding to the East, particularly

in Poland and Hungary. Its

plant holdings, one of the most

diversified and balanced on

the continent, includes nuclear

capacity (in Belgium and France),

latest generation gas plants,

co-generation, hydraulic,

biomass and traditional thermal

plants. In 2007, a study involving

22 leading European electricity

producers ranked Electrabel

eighth in CO2 emissions.

Outside Europe, SUEZ is active

in 18 countries, where it employs

5,000 people in electricity and

operates facilities representing

nearly 30,000 MW (essentially

hydraulic, natural gas and

traditional thermal facilities).

Through new projects,

it contributes to meeting the

sharp increase in demand from

the emerging economies

(Brazil, Chile, Asia, etc.)

223,317 GWheq PRODUCED IN 2007Benefiting from continued strong

demand and the launch of new

capacity, the Group’s energy

production rose 15% in 2007

to 223,317 GWheq (gigawatthour

equivalent). In a global market

that remains tight, characterized

in particular by the surge in the

prices for raw materials, energy

prices continued to trend upward,

both in Europe and internationally.

In Europe, business remains very

dynamic, supported by demand,

and the Union’s objectives

for reducing carbon – which

favours the many projects for

renewable technologies or

technologies emitting fewer

greenhouse gases – and the

full deregulation of the European

energy market since July 1, 2007.

Gas plants are expanding

worldwide, particularly in Europe.

In order to guarantee their supply,

utilities are working to develop

their own gas capacity.

This gas-electricity convergence

is intensified by the full

deregulation of the gas and

electricity markets since the

summer of 2007. It confirms the

strategy of SUEZ which, by playing

a major role in natural-gas supplies,

particularly LNG, is completely

securing the supply for its facilities,

in which 47% of the capacity

uses gas.

A thousand billion “green” watts in Poland.Three years after the transition to co-combustion, the Polianec coal-biomass plant in Poland exceeded one terawatt/hour (one thousand billion watts) of energy without carbon.

HIGHLIGHT

The fifth largest power producer in Europe, SUEZ also has a significant production capacity in Latin America, North America, Asia and the Middle East. In a high-demand global market, the Group will expand its production capacity by 25% over the next four years, focusing on the most effective solutions for the environment.

AN INTERNATIONAL PLAYER

Objective: 75,000 MW of power capacityin 2012“

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Power production and distributionGlow Energy (Thailand)


30

HIGHLIGHT

INVEST €8 TO 9.5 BILLION IN ELECTRICITY IN TWO YEARSTo meet growing demand,

the Group has launched a major

investment program in both

Europe and internationally. At

the end of 2007, production

capacity totaled 64,206 MW

(installed or under construction).

More than 10,000 MW are still in

the planning stage and should raise

the Group’s capacity to 75,000 MW

in 2012, an increase of 50% over

2006. 41% of these projects use

gas, 35% traditional thermal and

20% renewable energy. In 2007,

SUEZ expanded its production

capacity by 1,200 MW in Italy

(three new gas-steam turbines),

launched construction of three

plants in the Netherlands (gas-

steam and coal-biomass), and two

in Germany (coal, 850 MW)

For each type of energy, the Group

gives priority to the most efficient

with the least amount of emissions.

Equipped with facilities to

reduce discharges (denitrification,

desulfuration), the future

coal plants will achieve

a yield of 46.5%.

Five new plants for Europe.Electrabel is launching the construction of five new power plants, expected to come on stream between 2009 and 2012: two gas-steam turbines and one co-combustion (coal-biomass) in the Netherlands and two coal plants in Germany. An investment of €3.8 billion.

Tension over raw materials and energy are particularly high in Latin America, where they have generated several severe crises. SUEZ is the leading power supplier in northern Chile and provides about 50% of the local production. Until the end of 2005, power production relied heavily on gas, all of it supplied by neighboring Argentina. Argentina, which was also facing a serious energy crisis, stopped its supplies, plunging its neighbor into serious shortage and massive outages. To deal with the crisis, SUEZ assisted the Chilean authorities in implementing a true emergency plan. In the first phase, the gas turbines were reconditioned to run on fuel oil, while additional diesel capacity was mobilized to supply industry. In agreement with the Chilean authorities, SUEZ then launched construction of one of the first LNG projects in Latin America in Mejillones. With a capacity of 5.5 million m3 per day (the equivalent of electrical production of 1,100MW), the terminal, built at an accelerated speed, should receive its first gas at the end of 2009. This natural gas will supply the gas turbines and major mining customers. At the same time, SUEZ launched construction of two coal and biomass plants, expected to come on line in 2010, which will supply new mining projects. As a result, the “rescue plan” will have secured Chilean gas supplies using LNG and strengthened its energy mix (gas, fuel oil, coal and hydraulic), which should reduce the risks of interruptions in the power supply.

SUEZ HELPS CHILE TO OVERCOME A SERIOUS ENERGY CRISIS

FOCUS

A HIGH-YIELD COAL PLANT IN THAILAND In 2007, Glow Energy, the first independent producer in Thailand and a SUEZ subsidiary, won a bid for the construction of a 660 MW coal plant in the industrial zone of Map Ta Phut. The facility, which will comply with the most stringent environmental standards and will comply with European regulations, should be one of the cleanest coal plants in the world. Its energy yield will clearly exceed 40%, above the 30 to 40% for traditional coal plants. The new plant, by diversifying the supply sources of the country, which is currently very dependent on gas and oil, will secure and better control electricity prices in Thailand. The project will strengthen the capacity of Glow Energy, which already operates 1,710 MW on the basis of gas and cogeneration in Thailand.


Power plant under construction in Antofagasta (Chile)

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969

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622580 568 532

528 514 490 476 474 464 441

314264 247

132 120 107 99

0

Carbon factor Europe 2008: 372 kg of CO2/MWH

ELECTRABEL IS ONE OF EUROPE’S MOST EFFICIENT ELECTRICITY PRODUCERS IN TERMS OF THE CARBON FACTOR

Between 1990 and 2007, the

average yield of Electrabel’s

fossil burning plants rose from

35% to 44%: they now consume

20% less energy to produce one

kilowatt-hour. Outside Europe,

SUEZ is building a total capacity

of 6,500 MW in Latin America,

Asia and the Middle East,

principally in the latter. In 2007,

the Group brought on stream two

new power plants in Oman and

Bahrain, while continuing to build

the largest power and desalination

plant in the world in Saudi Arabia.

Similar projects are underway in

Oman and Abu Dhabi.

HIGH PERFORMANCE NUCLEAR CAPACITYSUEZ is one of the largest

nuclear plant operators in Europe.

Its Electrabel subsidiary, with

more than 30 years’ experience,

operates seven reactors in Belgium

(5,800 MW) and has capacity

of 1,100 MW at its Chooz and

Tricastin plants in France.

Nuclear power plants, which

represent 11% of SUEZ’s total

capacity, are designed to operate

on an ongoing basis with controlled

costs and in 2007 accounted for

take place every 18 months

instead of the conventional

12 months), a technique largely

developed by Electrabel, which

considerably increases power plant

productivity. The Belgian nuclear

power capacity is also one of the

safest as confirmed in a report by

the International Atomic Energy

Agency (IAEA) conducted in May

2007 at Tihange. Armed with

this expertise, SUEZ plans to be

involved in renewing the nuclear

power industry worldwide.

20.5% of the electricity produced

by the Group.

MORE THAN 90% AVAILABILITYWith an availability rate of over

90%, Electrabel’s reactors

are among the top performers

in the world. Last year, the

Tihange 2 power plant achieved

an extraordinary availability rate

of close to 100%. These levels of

availability are made possible by

raising the fuel cycle to 18 months

(shutdowns for refueling

In 2007, a study of 22 electricity producers in Europe conducted by PriceWaterhouseCoopers ranked SUEZ among eight electricity producers that emit the least amount of carbon per megawatt-hour of output.

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Dallas goes green. The city of Dallas, Texas has selected SUEZ Energy Resources N.A. to supply 90% of its energy needs in 2008. The deciding factor: half this power will be “green” and guaranteed to be CO2 free.

HIGHLIGHT

of high production capacity

(1,600 MW for new generation

reactors), without adversely

affecting a country’s carbon

balance. SUEZ is a contender

for several new reactor projects

in Europe and elsewhere.

WORLD LEADER IN RENEWABLE ENERGYAs the core business of energy

and the environment converge,

renewable energy represent a

major focus of the SUEZ

sustainable development policy.

Thirty seven percent of the Group’s

electricity output does not emit

any CO2 due to nuclear power

and renewable resources.

In late 2007, the Group’s capacity

of renewable energy exceeded

12,000 MW in addition

to 3,000 MW under construction

or in the planning stages.

In Europe and internationally,

projects under construction

should allow renewable energy

to quickly surpass the 21%

of total capacity recorded

by SUEZ at the end of 2007.

The capacity is very diversified

and SUEZ is developing across

all its renewable technologies from

hydraulic and wind energy,

to biomass and solar power,

waste incineration and biogas.

In Europe, the market is

very dynamic, buoyed by EU

regulations and strong demand

from local communities,

industries, and even consumers.

SUEZ now has more than

6,000 megawatts of capacity in

that continent and is planning

to build close to 2,000 MW

more. However, to avoid style

effect distortions, the Group

is investing only in projects

that are economically viable

and proven: every new

investment must meet

its usual profitability criteria.

After a relatively stagnant

period, nuclear energy is now

on the rebound. Propelled

simultaneously by an increase in

demand, declining resources and

climate conditions, it appears

to be one of the most obvious

solutions for resolving the energy

crisis. Nuclear energy can

meet a country’s “basic” energy

consumption needs on a massive

scale at controlled cost levels

(prices for uranium, which follow

the general trend of increases in

raw materials, accounts for only a

very small portion of the nuclear

kilowatt-hour cost of nuclear

power). Nuclear power does not

emit CO2 and enables deployment

NO.3BIOMASS OPERATOR IN THE UNITED STATES

HYDRO POWER: 80% OF THE GROUP’S RENEWABLE ENERGYHydro power, a major source

of energy around the world,

represents 10% of the electricity

produced in the European Union.

Aside from its environmental

qualities, it is a relatively

inexpensive resource whose price

does not fluctuate. It can be used

at any time and is also the only

renewable energy that can be

stored. It therefore plays a key

role in the energy mix.

Eighty percent of the renewable

energy produced by SUEZ come

from hydro power. In Brazil,

the Group operates six dams

(5,760 MW) and is building two

more (1,327 MW). The 68 hydro

power plants the company

operates on the Rhône River

(via CNR) and in the Pyrenees

(via SHEM) represent a capacity

of 3,710 MW and ranks the

company second among French

electricity producers. Numerous

projects are underway or being

studied in Latin America (Brazil,

Chile, and Peru), as well as in

Asia, and France, where thanks

to the renovation of facilities,

SUEZ is looking to develop its

700 MW capacity.

NO.1 BIOMASS OPERATOR IN EUROPEWith seven biomass power

plants in Belgium, the

Netherlands and Poland,

SUEZ is the No. 1 operator of this

type of energy in Europe.

It is also one of the world’s

leading experts in this area,

most notably operating seven

plants in the United States and

one in Brazil, as well as smaller

ones in places such as Polynesia.

Biomass energy, along with

hydraulic and geothermal

energy, is a renewable energy that

HYDROELECTRIC 10,031 MW Europe:

Belgium, France,

Italy, Portugal

International:

Brazil, Chile,

United States, Peru, Laos

WIND AND SOLAR 833 MW Europe:

Belgium, France,

Italy, Portugal

International:

Canada

BIOMASS 627 MW Europe:

Germany, Belgium,

France, Netherlands,

Poland

International:

Brazil, United States

INCINERATION 281 MW

BIOGAS 165 MW

RENEWABLE CAPACITY LOCATIONENERGY

SUEZ CAPACITY OF RENEWABLE ENERGY

The installed capacity represents 100% of plant-generated power in consolidated terms.


Doel nuclear power plant (Belgium)

After years of relative inactivity, nuclear energy projects are starting up once again in Europe.Finland was the first to announce construction of an EPR, a 1,600 MW new generation reactor. France will also build an EPR reactor in Flamanville. Others projects should materialize and SUEZ has clearly signaled its intention to participate in them. Several EPR projects are currently being studied in the United Kingdom, France and even in the United States. But as these are long-term undertakings, decisions to move ahead are still a few years away. In Central Europe, nuclear energy should also make it possible for new European Union members to meet the energy needs of their fast-growing economies. In Romania, SUEZ, through its subsidiary Electrabel, is actively involved in a medium-power nuclear reactor project (700 MW using Canadian technology) that has brought together seven European partners including RWE (Germany), Iberdrola (Spain) and Enel (Italy). The Group is also competing for another similar reactor in Romania as well as for a VVER reactor project that makes use of Russian technology (pressurized water comparable to Western technology) – which is currently under study in Bulgaria. In the long term, SUEZ is also interested in projects in countries where nuclear energy is emerging as an energy solution for the future. In early 2008, the Group joined forces with Total and Areva for future development of two EPR reactors associated with two water desalination plants in the United Arab Emirates.

NUCLEAR ENERGY MAKES A COMEBACK

FOCUS

can be used in primary

energy production. In Europe,

SUEZ uses it primarily

for the purposes of co-combustion

in coal-fired power plants, in

order to reduce CO2 emissions.

In 2007, the Group began

construction on this kind of

power plant in the Netherlands.

Along with conventional biomass

resources such as wood and wood

waste, sawdust and pallets, SUEZ

has developed unique expertise

for converting new resources such

as olive pits and pulp, vegetable

oils, spent coffee grounds, sludge,

rice husks, sugar cane, cassava,

cotton, etc., and is also continuing

research to improve burning

techniques.

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New horizons. In 2007, SUEZ positioned itself for the first time in Panama where it plans to develop new electricity capacity and the Philippines where it acquired a major coal-fired power plant.

HIGHLIGHT

MAJOR ADVANCES IN WIND ENERGY Wind power, a decentralized

and intermittent form of energy

(on average, land-based wind

plants operate only 20% to 25%

of the time in Europe but up to

40% in windy areas of Canada),

has increased dramatically in the

last three years, due to technical

improvements as well as subsidies

and support systems particularly

in the European Union. In 2007,

SUEZ made two major

acquisitions. The first was the

fast-growing Ventus Energy in

Canada with a portfolio of 29 MW

of electricity generation and more

than 2,000 MW in the

development stage, including

350 MW in short term projects.

The company also has major

projects in the United States

where the federal government

Solar panels in Ghent (Belgium)

did not sign the Kyoto Protocol

but many individual states are

developing their own environmental

protection policies and requesting

“carbon-less” energy. Ventus

therefore gives SUEZ a new point

of entry into an area of the U.S.

market with strong development

appeal.

In France, the Group’s second

acquisition – of La Compagnie du

Vent – propels it among the ranks

of top wind energy operators. It

represents 96 MW of electricity

generation to be added to the

34 MW already produced by the

Group, which has major short-term

objectives with the development

of a few hundred additional

megawatts by 2010. SUEZ is also

planning to further develop its

existing wind capacity in Portugal

(585 MW), Italy and the

Netherlands.

EXPLORING THE FULL RANGE OF “RENEWABLE ENERGY”SUEZ has also developed

remarkable expertise in resource

recovery using waste incineration

(with a capacity of 440 MWe) and

biogas from fermented waste

(150 MWe). Although solar energy

is one of the renewable sources of

energy with the greatest potential,

its development has been stymied

by the cost of yet-to-mature

technologies. However, estimates

show that the amount of solar

energy received by the Earth in

one hour would be enough to meet

the needs of all the economies

of the world for a full year…

To get a head start on this market,

SUEZ has acquired two companies

which develop and manufacture

solar energy collectors, so it may

offer the clients, communities and

corporate clients that it serves with

a comprehensive offering (design,

installation and management

of solar facilities). It signed its

first solar contract with Honda in

Belgium to install 6,500 square

meters of collectors at its plant.

To participate in efforts to develop

this technology, SUEZ also began

construction on the largest solar

power plant in Europe in early

2008, located at an altitude

of 1,000 meters near the town

of Lubéron. This region enjoys

a high rate of sunlight all year

long and the solar captors to be

installed over an area of more than

200 hectares could produce up

to 50 MW at full capacity – the

equivalent of 20 wind turbines. In

the much longer term, the Group

is active in R&D programs that

are exploring ways to develop new

sources of renewable energy. For

example, off the coast of Portugal,

it has been involved

in experiments using sea swells

to produce power.


In 2007, SUEZ acquired Ventus Energy in Canada and La Compagnie du Vent in France“

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36

NATURAL GAS6 thGAS OPERATOR IN EUROPE

2 ndIMPORTER OF LNG IN NORTH AMERICA

669,000M3 OF LNG TRANSPORTATION CAPACITY


The Group is the number one

gas supplier in Belgium through

Distrigas* and Electrabel. It

also manages the Belgian gas

transportation network through

Fluxys, an independent operator,

which makes it network available

to all gas players in Belgium. In

2007, Distrigas sold 177 TWh

of natural gas, 80% in Belgium

but also in the Netherlands

and Germany where the company

continues to develop. It also

does business in France,

Spain and the United Kingdom.

35% OF LNG IMPORTS IN NORTH AMERICASUEZ is one of the world’s

key players in the fast-developing

LNG gas market. The Group

controls 35% of the LNG trade

in North America and 10% in

Europe. It is the only operator

with such a strong presence

on two major markets and that

operates regasification facilities

on both sides of the Atlantic: in

Boston, in the United States, and

in Zeebrugge, in Europe. Due to

major technological innovations

that enabled the cost of LNG

tankers and liquefaction plants to

decline sharply, LNG is currently

experiencing robust growth. Since

2001, world consumption of

LNG has been rising at a rate of

roughly 7% per year – compared

to 2% for gas, constrained as

it is by transportation capacity.

Free of the heavy restrictions and

exorbitant costs associated with

pipelines, LNG has enabled the

gas industry, which, until recently

was very regional, to go global, and

due to LNG’s flexibility, Africa and

the Middle East have also started

to supply gas to Europe (Europe

used to consume only Russian,

Norwegian or Dutch gas, while

Japan turned to Australian

or Asian sources).

Development in Germany. In continuing its development in Germany, which started in 2006, Distrigas signed a new gas supply contract in 2007 with the distributor for the Aachen region.

HIGHLIGHT

The Everett LNG terminal near Boston (United States)

Natural gas is the number one energy used by SUEZ in the production of electricity and accounts for 47% of its capacity. SUEZ is actively involved in the sale and trading of gas, transportation of gas and LNG, as well as the storage, distribution, design, construction and operation of gas infrastructure throughout the world.

FROM ONE SIDE OF THE ATLANTIC TO THE OTHER

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* In compliance with commitments to the European Commission as part of the SUEZ-Gaz de France merger, SUEZ plans to sell its equity stake in Distrigas.


38

OFFSHORE LNG: AN INNOVATIVE SOLUTION IN BOSTON Demand for gas in the Northeast of the United States, spurred by electricity producers, should rise at an annual rate of between 1% and 2% for the next 20 years. Since current capacity is saturated, the region may experience a 14 million m³ gas shortfall as early as 2010. SUEZ already operates a major LNG terminal in Boston and will build a new one to supply up to 21.2 million m³ of gas per day. Neptune will become one of the largest offshore LNG terminals in the world. Ships used to carry the gas will be designed to transport and regasify the LNG, which will then be offloaded via a buoy system linked to an underwater pipeline located sixteen kilometers off the Boston coast. The benefits here are that the facilities will not be visible from the densely populated, already equipment-saturated shoreline, safety will be enhanced and unloading operations for the tankers will be easier. This project, which was under study for several years and will be key to ensuring a very secure supply to the region, was approved by the U.S. authorities in 2007.

DOUBLING LNG CAPACITY AT ZEEBRUGGE On September 12, 2007, Distrigas received its one thousandth shipment of LNG in Zeebrugge. In 20 years, the methane tanker terminal operated by Fluxys received and injected more than 70 billion m³ of natural gas into the network. Extension work will double capacity to 9 billion m³ of natural gas per year as early as 2008. Adding more capacity by 2015-2016 is currently being studied.

HIGHLIGHT

Capacity at the Fos Cavaou LNG terminal.Distrigas and three energy companies win a bid for access to capacity at the new Fos Cavaou methane tanker terminal near Marseille, operated by Gaz de France.

As a result, in under five years,

more than 20 LNG-terminal

projects were proposed in

Europe and half should actually

materialize. SUEZ is developing

major projects in this fast-growing

market: the Group will build

an innovative offshore terminal

near Boston, while a second

similar one is being planned for

Florida. A third terminal is also

under development in northern

Chile while the capacity of the

With the development of LNG, the gas market is now going global

“”

Zeebrugge terminal will be doubled

to 9 billion m3 by 2009. To

secure its supplies, the Group has

diversified suppliers. In 2007, its

Distrigas subsidiary received its

first shipment of Qatari gas as

part of an annual supply contract

for 2.75 billion m3 over a period

of 20 years.


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ENERGY SERVICES

No.1IN MULTITECHNICAL SERVICES IN EUROPE

67,400PEOPLE IN 30 COUNTRIES

€11.3 BILLIONIN SALES


SUEZ Energy Services offers

manufacturers, tertiary sector

companies and local governments’

comprehensive technical

solutions ranging from the design,

construction and maintenance

of equipment to management

of energy and utilities (facilities

management). This global,

multitechnical offering meets the

demand of companies for having

a single key contact that is able

to manage a range of services

so they may focus on their core

business.

SUEZ Energy Services brings

together well-known companies,

which are often leaders in their

respective markets, such as Axima,

Elyo, Endel, GTI, Ineo, Seitha and

Tractebel Engineering. The Group

employs 67,000 people in

more than 1,000 sites in 30

countries, mostly in Europe. No.1

in France and in the Benelux

countries, it also has a strong

presence in the United Kingdom,

Germany, Italy, Spain, Switzerland

and Austria, and is growing in

Portugal, Greece and the new

EU member countries in

Central Europe.

A COMPREHENSIVE MULTITECHNICAL OFFERING� DesignTechnical studies and economic

research for setting up technical

facilities.

SUEZ Energy Services is

contributing to the construction

of the first new generation EPR

reactor in Finland and to the

preliminary studies for the France-

Italy high-speed train network.

� Building Facilities and Installing EquipmentSUEZ builds, renovates and

upgrades electrical equipment

(power plants, high voltage

New EPR Contract.EDF has selected Endel, a subsidiary of SUEZ Energy Services to carry out studies and supply and install, fluid networks for nuclear auxiliaries at the future EPR plant in Flamanville, a contract worth €70 million.

HIGHLIGHT

Wind Power Takes Off.In 2007, Ineo carried out more than 15 wind projects (studies and construction) for some 12 clients such as EDF Énergies Nouvelles, Erelia 2 and Ecotechnia.

networks, industrial electricity,

transportation networks, public

lighting, etc.), mechanical

equipment (pipes and

networks, etc.) and HVAC

engineering. The Group

installs wind farms, biomass

and conventional thermal power

plants, oil platform equipment,

information systems at airports,

urban heating systems…

��Multitechnical management and maintenanceFrom management of industrial

facilities, to renovation and

maintenance operations and

operations support (optimizing

delivery, etc.).

SUEZ performs industrial

facilities maintenance in steel

and power plants, including nuclear

power plants, and also carries

out work at gas terminals,

provides assistance for turbine

operations, etc.

EUROPEAN LEADER IN MULTITECHNICAL SERVICES

SUEZ Energy Services (SES), the specialist in energy efficient solutions, offers companies and local governments comprehensive solutions ranging from design to technical facilities management (energy, heating, lighting, etc.).

A single contact for comprehensive technical solutions“

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Health in Germany.Axima won a series of hospital contracts in Germany. In Bade-Wurtemberg, the company that manages technical facilities for Buchen Hospital will install a biomass boiler that should reduce its energy costs by 40%.

HIGHLIGHT

� Management of energy networksSUEZ activities include production

of electricity, heat and cold

for industrial or tertiary sector

sites, management of urban

heating and air conditioning

networks and public lighting.

The Group manages 65 urban

heating networks in Europe as well

as heating, electricity production,

lighting and air conditioning for

industrial sites, offices, and public

institution infrastructure such as

hospitals and malls.

� Facilities managementTechnical maintenance and

services for buildings. Complete

building management (power,

heating, air conditioning,

security, green spaces, cleaning

and upkeep).

ENERGY AND ENVIRONMENTAL EFFICIENCYThe rational use of energy is

at the heart of the offering

from SUEZ Energy Services.

In producing energy, heating,

air conditioning, lighting,

transportation and industrial

processes, the company designs,

sets up and manages solutions

that are more efficient

and cost effective and reduce

energy consumption to obtain

either the same or a higher level

of comfort and performance

at a lower price.

SUEZ Energy Services is a major

player in renewable energy, actively

involved in the areas of biomass

hydraulic and wind power and

photovoltaic systems. It acts

to improve energy efficiency in

buildings, a growth business area.

For example, 46% of energy

in France is consumed in buildings

and major gains in efficiency are

possible. In Amsterdam, the Group’s

Dutch subsidiary GTI, is in charge

of energy efficiency for the

prestigious Oosterdokseiland

renovation project where CO2

emissions will be reduced by

62% by the solutions to be

implemented. During peak

consumption (cold periods in

winter), the additional demand

for heat will, for example,

be covered by a heating system

that makes use of vegetable oil.

The Group is the world’s number

two in urban heating networks,

managing more than 65 networks

in Europe. The simpler more

flexible, more efficient

and less costly urban networks

can replace thousands of individual

boilers and their chimneys with

one or more central heating

systems. These are better

maintained and combine several

types of energy (biomass, gas,

energy recovered from waste

incineration) so as to best meet

market conditions. In Paris,

SUEZ Energy Services manages

the third-largest urban network

in the world (CPCU). Forty nine

percent of its power comes from

waste incineration. Continuously

optimized, these facilities have

reduced CO2 emissions by

400,000 tons per year compared

to 2001. Additional capital

expenditures in biomass will

further enhance performance.

Eco-neighborhoods are relatively recent in France but the phenomenon is spreading since the broad-based public policy debate, or Grenelle de l’Environement, that has spurred these projects and their development.In the French suburb of Limeil-Brévannes, one such project, the Quartier des Temps durables, will include 1,076 housing units, retail shops and activities over an area of roughly 10 hectares with no cars allowed. For this project, Elyo designed, set up and, for a period of 33 years, will operate its zero greenhouse-gas emission heat network to supply heating and domestic hot water to the neighborhood. An innovative biomass heating system using wood and fatty acids for fuel will provide enough energy for heating. Electricity for the network will come from photovoltaic panels built into the rooftops of the buildings and any surplus will be sold to the national grid. Hot water will come from thermal solar panels. Heat pumps will improve heating to buildings receiving little sunlight. The combination of these innovative techniques will enable the neighborhood to meet 95% of its heating needs without any waste, a first in France. Thanks to this showcase, SUEZ is involved in numerous other projects under development in France and Europe.

ELYO DEVELOPS the first urban network with zero CO2 emissions in France

FOCUS


SUEZ is active in the maintenance of many industrial facilities“

”

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Identifying the sources of energy savings through energy efficiency audits

“

”

The CO2 free Volvo Europa Truck plant in Ghent (Belgium)

GEOTHERMAL ENERGY IN SUCY-EN-BRIEWith its management contract

for the urban heating network

in Sucy-en-Brie renewed for

18 years, Elyo will strengthen its

geothermal resources by developing

new wells. The project will supply

an additional 12,000 MWh to link

500 “housing unit equivalents”

to the network that already covers

2,350 units.

AIX-EN-PROVENCE ELIMINATES 40,000 TONS OF CO2

SUEZ subsidiaries Elyo and SITA

will set up a plant to treat biogas

from waste fermented at the Arbois

plant in Aix. A 4.2 MWe facility will

use biogas to produce electricity

and cut emissions by 40,000 tons

over 15 years.

CHAMBÉRY ELIMINATES 20,000 TONS OF CO2

SUEZ Energy Services is

modernizing a waste incineration

plant in Chambéry in order to use

the heat produced in the urban

heating network. As of 2009, this

project will prevent 20,000 tons

of CO2 from being emitted into the

atmosphere every year.


The first zero-CO2 emission vehicle production plant has been operating since December 2007 in Ghent, Belgium.Volvo Europa Trucks and Electrabel invested €10 million in this pilot project that will be operated for 20 years by SUEZ Energy Services subsidiaries GTI and Axima. Prior to project start-up, an in-depth energy efficiency audit identified major sources of efficiencies from the reorganization and layout of the premises. Installing skylights or the use of new paints helped to improve lighting and heating. The solution that was implemented combines four different types of energy. Three 2 MW wind turbines will produce approximately 13.4 GWh per year, a portion of which will be sold to neighboring communities. Additional electricity – when the wind turbines are not operational – will come via the network from hydraulic dams operated by SUEZ in France. A 5 MW wood-fired boiler provides primary heat and hot water while the old boiler, which was converted to an oil-fired bio-boiler is to be used when demand peaks. The second phase will see a hectare of photovoltaic cells, producing 1 MW of power, installed on the roofs of the plant. Before its conversion, the Volvo plant emitted 14,000 tons of CO2 each year and it is now down to zero.

THE FIRST CO2-FREE PLANT FOR VOLVO

FOCUS LARGEST FRENCH SOLAR POWER PLANT ON THE ROOFTOP OF A WAREHOUSE ON LA RÉUNION ISLAND In 2007, SUEZ subsidiary Ineo installed 8,500 m2 of solar panels on the roof of the warehouse of a major distributor’s purchasing department. More than 6,000 solar panels will produce 1 MW a year of electrical power, equivalent to the consumption of 500 homes. Sold back to EDF, the electricity will power the island’s network. Completed with funding from the regional authorities and the European Union, the installation is part of the Regional Plan for Renewable Energy and the Rational Use of Energy, which was implemented in 2000 by the local authorities and the government to reduce the island’s energy dependence and even strive for energy independence through renewable energy (hydraulic, biomass and solar energy, etc.). One hundred MWc of photovoltaic cells should be installed at La Réunion by 2025.

MULTI-ENERGY TECHNICAL CENTER FOR TURBOMECA Elyo will design, build, finance and, for a period of 20 years, operate a center that will be able to produce and distribute heat, cold, compressed air, pressurized water and electricity from the new French plant of wind turbine world leader Turbomeca in Bordes. A 3 MW biomass boiler will supply 85% of the site’s heating while avoiding the emission of 1,500 tons of CO2 per year.

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STRONG GROWTH MARKETSSUEZ Environment is a

steward of scarce resources that

promotes recycling and recovers

resources whose value were

overlooked until recently.

The company is developing

in the markets of the future

that are already experiencing

robust growth.

Rational use and preservation

of resources play a decisive

role in the new economy

developing around the world

in response to the challenges

of sustainable development.

Increased environmental

awareness, high public

expectations and more

stringent regulations are

also growth factors for

its activities.

€4.5 BILLION IN CAPITAL EXPENDITUREWith this positive outlook,

the Group is targeting

dynamic growth

in the coming years

and plans to invest

€4.5 billion from 2007 to 2009.

SUEZ is one of the world’s two

specialists in environmental

services. In 2007, SUEZ

Environement earned 12 million,

equally divided between water and

waste services. Although 80% of

its business is in Europe, the Group

operates in 25 countries in all

continents. Among its international

activities, SUEZ distributes water in

New York, Algiers and 16 Chinese

cities, collects and treats waste

in Hong Kong and Macao, and

desalinates seawater in Perth and

Abu Dhabi. One billion people use

water from plants built by

the Group.

61,900 EMPLOYEESIN ENVIRONMENTBUSINESSES AROUND THE WORLD

€12.02 BILLIONIN SALES IN ENVIRONMENT-RELATED BUSINESSES

ENVIRONMENT A WORLD LEADER IN WATER AND WASTE MANAGEMENT

With operations in water and waste management, SUEZ is one of two world class players in environmental services. It does 80% of its business in Europe but is also active in the Middle East, Asia and the Americas.

Raw-water inlet - Macao Water (China)


SUEZ Environment distributes water in New York, Paris, Algiers, Florence and Jakarta; collects and treats waste in Hong Kong, Shanghai and Macao; and desalinates seawater in Perth and will soon do so in Barcelona…

“”

SUEZ is seen as a benchmark company in China. Nearly 20% of city dwellers in China get water produced by the 180 treatment plants built by Degrémont throughout the country since the 1970s. With a presence in China of more than 30 years, the Group has gradually built up its presence in that country through a partnership strategy based on long-term contracts (up to 50 years), giving it a unique status. As a leader in the water market, it supplies drinking water to 13.5 million Chinese in 16 cities including Shanghai, Chongqing and Qingdao, through the Sino-French Water Development joint venture. In Hong Kong, Swire SITA, another joint venture, operates 12 waste transfer stations and two of the biggest, most modern landfills in the world. In Macao, the Group distributes water, manages waste and produces electricity. Near Shanghai, SUEZ has a 50-year contract to manage drinking and industrial water, and treat waste and hazardous waste from the largest petrochemical complex in China. On the 29 km2 site, the Group installed the only station of its kind in the world with the capacity to treat close 50,000 m3 of industrial effluents per day to avoid any contamination. In late 2006, it inaugurated the largest hazardous waste incinerator in China. With a capacity of 60,000 tons per year, this facility is to date the first in the world that can treat solid, liquid and gas waste. On this market with very strong growth potential, the Group plans to continue developing its environment and energy business while pursuing its partnership strategy.

30 YEARS OF PARTNERSHIP IN CHINA

FOCUS

In its European domestic

market where the most stringent

environmental regulations in the

world sere to boost the market,

the Group plans to strengthen

its positions in the EU’s flagship

countries and develop its business

in new member countries that have

strong growth potential.

SUEZ is also looking to boost its

positions in Australia and North

America where environmental

awareness and fast-rising demands

create significant opportunities,

especially, in public-private

partnerships. In emerging

countries where environmental

concerns have yet to become as

acute, the Group wants to develop

its business by rigorously selecting

projects using, profit-based

criteria, especially by developing

partnerships as it has done in

China, the Middle East and

North Africa.

As Samra wastewater treatment plant in Amman (Joradan)

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WATER SERVICESWATER SERVICES68MILLION INDIVIDUALSSUPPLIED WITH DRINKING WATER

5BILLION M3 OF DRINKING WATER PRODUCED IN 2007

10,000 WATER-TREATMENT PLANTS BUILT WORLDWIDE


The Group primarily manages

water distribution and other

services on behalf of local

governments under long-term

(10 years or more) delegated

public service concession

contracts or leases or provides

technical services to them

(e.g. for building water treatment

plants, etc.).

SUEZ Environment also provides

technical services to manufacturers

for the design, construction

and management of treatment

facilities.

SUEZ Environment integrates

a comprehensive chain of

expertise which enables it to

act anywhere in the water

cycle from the collection

and production of drinking

water to treatment of wastewater,

water distribution and management

of the resource.

� Research, guidelines and project managementSafège is the international

benchmark company in the

area of water engineering and

consulting, providing such

services as water table modeling

planning of waterways, dams,

networks and water treatment

plants, management of the

resource, etc. It has references

in roughly 100 countries

and 35% of its business

is international.

� Design, construction and management of water treatment plantsDegrémont is the world’s water

treatment specialist. One billion

people use water from one of

its plants around the world. The

company designs drinking water,

desalination, and wastewater

treatment and sludge treatment

facilities. Over 60 years, the

company has built 10,000 plants

in more than 70 countries.

China recognizes the SUEZ brand.Two subsidiaries of SUEZ Environment were recognized by respondents in a national survey on the water industry in China. Sino-French Water Development that supplies water and sanitation services to 13.5 million people ranked first “among the most reputable companies in the water sector” while Degrémont was chosen as “The Best Environmental Engineering Company”.

HIGHLIGHT

� Distribution of drinking water and wastewater treatmentIn Europe, the United States,

China, Brazil, Mexico, Morocco,

Jordan and South Africa, to name

a few, SUEZ Environment owns

or holds an interest in water

distribution companies that

provide services to major public

authorities.

COMPLETE MASTERY OF THE WATER CYCLE

Ranked No.2 in water services in Europe and around the world, SUEZ Environment produced 5 billion m3 of drinking water and distributed water to 68 million people in 2007. It also provided wastewater treatment services to 44 million people.

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Leak detection in Chongqing (China)

Degrémont’s know-how covers

the entire capability chain:

water pumping and treatment,

storage and distribution, client

services (for example, meter

readings, invoices and customer

service), collecting and treating

wastewater, treatment and

recovery of treated sewage sludge.

� Production and treatment of water for industryOndeo Industrial Solutions is

the world specialist in the

management of wastewater from

industrial processes. The company

assists its clients in optimizing

water resources, reducing

consumption, improving processes,

treating effluents and producing

specific water quality (ultra-pure

water, for example).

It has built 1,800 water

production and 2,000 wastewater

treatment facilities worldwide.

STRONG POSITIONS IN EUROPEIn Europe, the Group has a strong

position in France thanks to

Lyonnaise des Eaux, the number

two player in the business with

sales of 1.9 billion in 2007

(+2.8%). The company manages

water services on behalf of

2,600 local governments, bringing

drinking water to 14 million

people and treating water

for another 9 million.

WATER AND SANITATION FOR EVERYONE At the United Nations Millennium Summit in 2000,more than 180 UN member countries made a commitment to achieve the Millennium Development Goals by the year 2015: reduce poverty, improve child nutrition, health, education and fight environmental degradation. As part of these goals, it was decided that the proportion of the population without permanent access to drinking water and sanitation (goal seven) should be reduced by half. SUEZ is contributing to achieving this goal. Over the last 15 years, SUEZ Environment has provided drinking water to more than 11 million people and linked more than 5 million to a sanitation system in emerging countries.

Only 2% of the wastewater collected in the world is reused

“”


Taking a position in New York.In February 2007, SUEZ subsidiary United Waters finalized acquisition of Aquarion New York one of the 10 largest water distribution companies in the United States.

HIGHLIGHT

REUSING WATER TO SAVE ITOnly 160 billion m3 of the

369 billion m3 of wastewater

collected around the world every

year are treated, and barely

7.1 billion m3 is reused. The

objective of wastewater treatment

is to eliminate suspended matter

and pollutants such as carbon,

nitrogen and phosphorous

compounds. Reuse of this

wastewater at little cost for

agricultural or industrial purposes

is now possible due to advances

in ultra-filtration techniques

which allow a treatment process

to be added.

To make this water drinkable,

an additional treatment process

is needed – and may be justified –

in areas with insufficient water

resources. The “re-use” of water

offers two ways of preserving the

resource: it limits how much water

is used up and reduces the volume

of wastewater discharged into

the environment. For many

communities, this alternative

source of water helps save natural

resources.

The market is growing rapidly.

Between now and 2015, the

volume of reused water in the

world should grow by 180%.

SUEZ Environment’s subsidiaries

manage capacity of more than

2.4 million m3 of reusable water a

day in countries with acute water

shortages such as Qatar, Mexico

and Australia, as well as in

Northern countries where re-use

allows for more rational and less

costly management of the

resource. Near Milan, for example,

the Group designed and now

operates the largest wastewater

treatment plant in Europe. It

provides irrigation water to more

than 20,000 hectares of farmland.

In Grasse, as part of the renewal

of the wastewater contract signed

in 2007 with the town, Lyonnaise

In 2007, the Group significantly

strengthened its presence in

Spain, its second largest market,

by raising its interest in Agbar (it

now owns 90% of the company

together with its Spanish

partners), a major services

company in Barcelona, ranked

No.1 in Spain’s water and

sanitation market, which serves

500 municipalities representing

a population of 12 million.

The company also does business

in Latin America and the United

Kingdom and is developing

projects in North Africa.

In October, SUEZ acquired

33% of Agua de Valencia (AVSA),

which serves 3 million people.

With a presence in the water

market in Italy (including in

Milan, Florence and Pisa) as well

as in Germany and Greece,

SUEZ is looking to strengthen

its business in the principal

European Union markets

and further develop its presence

in new member countries such

as the Czech Republic, Hungary,

Slovakia and Slovenia.

Degrémont, which installs water

treatment and desalination plants

around the world, spearheads

international development in water.

Outside Europe, SUEZ

Environment essentially

supplies water in the United

States, Mexico, Indonesia,

the Middle East and North Africa

in partnership with cities or private

companies. The Group has been

present in China for more than

30 years, in particular, through

some 20 subsidiaries involved

in joint ventures with local

governments for the distribution

of water.

TOULOUSE-BLAGNAC: THE FIRST PPP FOR WATER IN FRANCE In spring 2007, Lyonnaise des Eaux and the Toulouse-Blagnac Airport signed the first-ever public-private partnership contract in the waterand sanitation sector in France. Lyonnaise des Eaux will finance, design and build a 10 million rainwater treatment plant for the airport, which it will then operate for 20 years. Two other SUEZ subsidiaries will also participate in the project: Ondeo Industrial Solutions will be involved in providing some treatment equipment while Ineo will provide electrical installations. The extension of the airport’s waterproofed surfaces necessitates the construction of a new treatment unit for the 700,000 m3 in annual runoff that mixes with kerosene and other pollutants on the tarmac. Lyonnaise des Eaux, known for its expertise in this area, particularly in providing such services to Aéroports de Paris, plans to reuse part of the treated water to clean and water green spaces.

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in the Southern Hemisphere. In

Barcelona, the company built

the largest plant in Europe and

has just started another project

in Alicante, Spain. As the

desalination reference market in

terms of its extensive needs, the

Middle East also benefits from

these innovations. In Fujaiirah,

United Arab Emirates, the largest

plant in the world (63 million m3 of

water per year) is single-handedly

responsible for supplies to one

million people and, for the first

time ever, combines reverse

osmosis with more conventional

distillation processes. These

records must now be broken.

To respond to the challenges

presented by demographics,

urbanization and industrial

development in the Middle East,

the region must increase its

desalination capacity by

15 to 20% a year. The estimated

capital expenditure is more than

$14 billion.

The desalination market should grow 15% per annum in the next 10 years“

”des Eaux will re-use part of the

treated water for watering green

spaces such as gardens and golf

courses. In Toulouse-Blagnac,

the company will also use part

of the treated runoff water from

the airport for cleaning and

watering green spaces.

REVERSE OSMOSIS TAKES DESALINATION GLOBAL The world desalination market

is developing fast. Oceans contain

97% of all the water on Earth

and 40% of the world’s population

lives less than 100 kilometers

from seacoasts. Desalinating

seawater, along with re-use of

treated water, appears to be the

way of the future for supplying

water to an increasing number

of people living in urban areas.

In the next 10 years, this market

should grow by 15% a year and

provide additional water capacity

of close to 80 million m3 per day,

enough to supply 300 million

people. Behind the momentum of

this market are new technologies

that consume less power than

the more conventional distillation

processes. As a historical player

in the market with more than

250 plants, Degrémont is the

world leader in the most recent

and most effective of these

innovations: reverse osmosis. Due

to this lower energy-consuming

technology, desalination can

now be developed beyond the

Middle East. In 2007, Degrémont

inaugurated in Perth, Australia,

the largest desalination plant

GRASSE BETS ON SUSTAINABLE DEVELOPMENT In March 2007, Degrémont inaugurated a new wastewater treatment station in Grasse with a unique process in France. To protect water in a river classified as environmentally sensitive, the station uses a “biological membrane reactor”, which protects marine animals and aquatic plants, and provides a higher level of purification than is required by law. As desired by the city that has its own sustainable development policy, the new plant blends as much as possible into its surroundings due to its discrete architecture and new anti-noise and odor-reducing processes. Ten months after the inauguration, in January 2008, Grasse renewed its public utility service contract with Lyonnaise des Eaux for 20 years. The new contract contains major environmental protection commitments. The system for collecting residual wastewater, (an 130-km network with four treatment plants), will be strengthened and the pollutant measuring system improved. Equipment will be built to specifically treat the effluents from the many perfume manufacturers located in Grasse. Part of the wastewater treated by the city’s stations will be used to water green spaces and keep public roadways clean.

AUSTRALIA: THE LARGEST DESALINATION PLANT IN THE SOUTHERN HEMISPHERE Since 1990, Australia has been dealing with a severe period of drought and has therefore started many projects to diversify and secure its access to water. In April 2007, SUEZ Environment inaugurated in Perth the largest desalination plant in the Southern Hemisphere with a capacity of 140,000 m3 per day. The entire project was designed and built in eighteen months in collaboration with an Australian public works partner. The desalination equipment alone cost €170 million while plant operations, under Degrémont’s management for the next 25 years, represent a contract of €300 million. The operation was undertaken as a public-private partnership with the Regional Water Agency.


Drinking water in India.In Chennai (formerly Madras), India, Degrémont opened one of the largest drinking-water plants in India. For seven years, the company will operate the unit that has a daily capacity of 530,000 m3 and provides water to 4 million people.

Agbar in Algeria.The Group’s Spanish subsidiary, Agbar, has a five-year contract to manage water and sanitation services for the 1.5 million residents of Oran.

HIGHLIGHTS

The Grasse Roumiguières wastewater treatment plant (France)

By 2015the volume of water reused worldwide should increase by 180%

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WASTE SERVICES40 MILLION TONS OF WASTE TREATED EACH YEAR

935WASTE-TREATMENT SITES

49 INCINERATION UNITS


The waste service business is

being completely redefined. From

a service activity that involved only

removal, storage and destruction

of waste products, today recycling

is clearly moving this business

towards the production of

“secondary raw materials”. Getting

rid of unwanted waste is no longer

enough; the focus is now on

recycling the waste. SUEZ

Environment has a presence right

across the urban and industrial

waste treatment chain through

SITA and other specialized

subsidiaries.

� Waste management for cities and companiesSITA manages a fleet of 11,800-

strong dump trucks worldwide that

collect waste that is first sent to

sorting centers and then on to

recycling. Hazardous or polluting

waste such as batteries and

aerosol cans are processed at

special centers. Non-recyclable

waste is incinerated and may be

used to produce energy (heat or

electricity) or be stored. The

biogas from fermentation is also

recovered in the form of energy.

� Hazardous waste management (excluding nuclear) SUEZ Environment treated

2.8 million tons of waste in 2007.

Its specialized services can handle

packages weighing just a few

grams (lab products) to heavy

loads weighing several hundred

tons. Hazardous waste (chemicals,

metals, hydrocarbons, etc.), often

originating from industrial sources

can be regenerated (treated and

reused: oils, solvents, etc.),

processed for recovery as fuel

substitutes, incinerated at

high-temperatures with energy

recovery, undergo physicochemical

or biological treatment, depolluted

and then buried. In Shanghai,

SUEZ designed and operates the

largest hazardous waste treatment

center in China.

� Rehabilitation of polluted industrial sitesSUEZ dismantles industrial

facilities at the end of their

lifecycle, treats the sites and

depollutes the soil, sub-soil and

water tables thereby recovering

them for future uses. Two billion

hectares of land are estimated

to be polluted by human activity

every year. Recovering them

is a major sanitation and

environmental challenge.

Tire Recycling.SITA France has inaugurated a new 100% automated process for processing tires in Montauban. The resulting rubber pellets and powders will be used to build playgrounds for children, flooring to go under sports’ equipment, tires and urban fixtures.

HIGHLIGHTS

43%of the waste treated by SUEZ Environment are recovered

“”

WASTE: FROM COLLECTION TO RECOVERY

No.2 in Europe and No.3 worldwide in waste services, SUEZ treats more than 40 million tons of waste every year, 43% which is recycled.

Anaerobic digestion in Montpellier.Novergie, a SUEZ subsidiary specializing in waste-to-energy recovery has won a 10-year contract to operate a digestion plant in Montpellier. 200,000 tons of waste will be treated every year to recover 30,000 MWh of biogas (representing consumption by 25,000 residents) while the organic residues will be used for compost.

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� Urban sanitation and waste services: maintenance of roadways

and urban fixtures, municipal

networks industrial sites, etc.

� Specialized recycling: disassembly and recycling of

vehicles, aircraft, ships, etc.

NO.2 IN EUROPEIn Europe, SUEZ Environment

does half its business outside

France. The Group is present

in Germany, the United Kingdom,

Belgium, the Netherlands,

Scandinavia and in some new EU

member countries such as Poland,

the Czech Republic and Slovakia

where it has significant activities

in cleaning up industrial sites and

recycling hazardous product.

The Group is also present in China

providing urban waste services

in Hong Kong and Macao (waste

collection and street cleaning)

and hazardous waste treatment

in Shanghai, where SUEZ operates

the main plant specialized for

this activity in China. It is also

working in Taiwan, Australia

and the Middle East.

CONVERTING WASTE INTO RESOURCES Getting rid of waste is no longer

enough. Today, it must be

recovered through recycling.

Technological advances are giving

waste a second life so it may

be integrated into the production

cycle of many industries.

Spurred by environmental

challenges and regulations,

this business activity is slated for

significant growth. EU regulations

– the most stringent worldwide –

prohibit, for example, dumping

waste that has not been

pre-sorted. To extend the

waste recovery chain, SITA

is developing plants for mechanical

pre-processing of waste

that separates organic matter

for biological recovery as well as

high calorific waste products

recovered through

co-incineration at cement plants.

“SUSTAINABLE” WASTE COLLECTION IN LYON AND NÎMES The demands of sustainable development are now included in waste service contracts with local governments. In 2007, SITA France won a major contract (€84 million over seven years) to collect the waste produced by the 100,000 residents and clean 132,000 m2 of the community. The company will use “silent trucks” that make use of “clean” energy (biofuel and electricity), and the drivers will learn new eco-driving methods to save up to 15% on the consumption of gasoline. In the city of Lyon, which renewed and extended its contract, SITA will use new tools to optimize the runs of their diester-powered vehicles.

The circular economy strives to maximize resource use by constantly putting end-of-life products back into the business cycle. Throwing away used products is no longer an option. They must now be recycled for new uses. In one exemplary experiment, SITA applied this principle to transforming and revitalizing a derelict industrial area to give it a second life. Apart from clean-up issues relating to the demise of industries that are sometimes centuries old, the rehabilitation of an industrial site must also be socially and economically recoverable through new activities that make depressed employment areas dynamic once again after periods of abandonment. In the Pas-de-Calais region, the dismantling of the old Metaleurop metal foundries in 2003, left behind 830 employees and a 50-hectare site contaminated by a century of lead, zinc and cadmium discharge. It was viewed as one of the most polluted sites in the European Union. With support from public authorities and local governments, SITA spent €80 million on a long-term project to not only decontaminate the site but also make it into a new, future-oriented development center. In early 2008, 14 companies with 420 employees set up shop on the newly refurbished Agora eco-center. Among them are five eco-industries with some 50 former foundry workers. After being the symbol of delocalization and a certain kind of industry of the past, the site is now a major asset for regional development and employment. At least four more businesses are scheduled to open there in 2008. With this industrial and social expertise under its belt, SITA is now undertaking comparable projects on the former Renault site in Romorantin and Kléber site in Toul.

FOCUS

METALEUROP: TRANSFORMING AN INDUSTRIAL

WASTELAND INTO A FUTURE CENTER OF ATTRACTION


SUEZ recovers waste and converts it into new resources “

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Australia.SUEZ has won two major contracts in Australia: The first (€40 million) for collecting and treating waste from the city of Penrith and the second (€35 million) for building and operating a waste treatment facility in Liverpool, near Sydney.

HIGHLIGHTS

SITA recycles waste from Renault.Renault is renewing its contract with SITA for full waste management services at Cléon, the carmaker’s premier mechanical site. The three-year contract is valued at €20 million.

NEW RESOURCESAlthough paper, cardboard,

wood and plastic, for example,

have been being recycled for

a long time, the list of waste

products now being reprocessed

through recovery keeps growing.

Treated sludge from some

treatment stations used to be

reused in agriculture. Thanks

to innovations from recent R&D,

SUEZ has developed processes

to reduce the volume of this

sludge and reuse it as a fuel for

electricity production, for example.

Biogas from fermented waste

is also used in small heating

plants. 90% of the waste

managed by SUEZ

therefore captures and

burns biogas, producing

approximately 700 GWh

of electricity per year.

In Paris, SUEZ operates the third

largest urban heating network

system in the world (more than

200,000 housing units and many

public and administrative

buildings), and 49% of the energy

used comes from incineration

of household waste. Preserving

fossil resources, reducing CO2

emissions, recovering “national”

and non-imported energy

resources, etc., the economic

and environmental results of

all these recovery operations is

very positive. SUEZ is also

developing highly specialized

processes, particularly, in the

area of transportation vehicle

end-of-life recycling (cars, ships,

airplanes) that offer products

with high added value.

”

27% of treated waste in France becomes secondary raw materials

“

For example, it supplies Airbus

with recycled, certified aircraft-

quality steel to be used in new

aircraft.


End-of-life vehicle disassembly and recycling unit in Romorantin (France)

AIRCRAFT, SHIPS AND CARS: END-OF-LIFE RECYCLING Under European law, by 2015, 95% of the total vehicle weight taken out of service should be recovered and 85% should be recycled. SUEZ Environment, which already recycles 230,000 tons of metal and cables every year, is positioning itself in this market driven by EU deadlines. After testing feasibility of the project in an European program, SITA partnered with Airbus and others to create Tarmac Aerosave, the first industrial outfit for aircraft disassembly. An initial disassembly site should be operational in Tarbes in 2008 and will process both civil aviation and military aircraft. 300 planes reach the end of their lifecycle every year and Tarmac Aerosave is counting on its early positioning and its partnerships to make its mark on this nascent market. In February 2008, SITA and Renault teamed up for a project to recover end-of-life automobiles in compliance with European goals. Although 85% of the total vehicle weight can today be recycled, moving to a rate of 95% involves developing new techniques for recycling non-metal parts such as rubber, plastics, textiles and glass. Renault and SITA have joined forces to take over a company managing 230 disassembly centers in France. They plan to spend €150 million to process 150,000 vehicles of every brand per year. Beyond its environmental results, this project will allow Renault to get “secondary raw material” for its own plants at prices below those for raw materials. SITA is also positioning itself on the market for ships, which are also covered by the EU directive. In partnership with Endel (a SUEZ Energy Services subsidiary) and CMN, a mechanical engineering firm, the company has won the first contract for taking apart and disassembling the Lucifer, a military ship.

Mechanical biological sorting center in Alès.SITA France signed a 22-year contract with a joint entity from the Alès region to design, build and manage a center for sorting household waste using mechanical and biological processes. Over the term involved, the contract is expected to earn €123 million.

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730RESEARCHERS AND EXPERTS

8R&D CENTERS

€100MILLION INVESTED IN R&D

RESEARCH AND INNOVATION


technicians and experts present

at client companies, where they

can identify specific needs and

R&D teams. New solutions are

often tested and improved on site

under real operating conditions.

SUEZ’s development relies

primarily on its mastery of

technology. The Group has

developed a world benchmark

for techniques used in

membrane ultra-filtration

of water. Its installed base

of nuclear power stations are

some of the best performers in

Europe with availability rates of

over 90%. In alternative energy,

the Group – the first to convert

a coal-fired plant to a biomass

plant – has premier international

know-how.

A WORLDWIDE SCIENTIFIC AND TECHNICAL NETWORK SUEZ employs more than

600 researchers and experts

in its eight R&D centers, some

of which rank as international

benchmarks. As called for under

SUEZ’s decentralized model,

its centers are connected to

the company’s subsidiaries

and develop their own research

programs. In its environment

activities, SUEZ has

200 test laboratories for

controlling water quality

wherever the company does

business, including France,

the United States, China, Spain

and the United Kingdom.

MARKET-ORIENTED R&DThe aim of R&D is to find

innovative solutions that respond

to the expectations of consumers,

manufacturers and communities.

Greatly decentralized, the

Group’s R&D is largely steered

by its various business lines

(energy, energy services, water

and waste services) that have their

own research resources, closely

matching market needs.

Most innovations developed

by SUEZ come from the close

working relationship between

INNOVATION FOR SUSTAINABILITY

A culture of innovation closely matched to it markets enables SUEZ to strengthen competitive capabilities and performance and to come up with new answers to the challenges facing its energy and environment sectors.

320PATENTS IN THE PORTFOLIO

Organic chemistry, sample preparation at CIRSEE (France)

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MEETING THE CHALLENGES OF BUSINESS AND THE ENVIRONMENTManaging consumption of raw

materials properly, reducing

discharge and conserving

resources… to energy efficiencies

and environmental challenges lie

at the core of many of the research

programs conducted by SUEZ.

Strong demand from society and

the law for sustainable

development is a powerful engine

for innovation. That is what brings

clients, manufacturers and

communities more efficient, less

costly solutions that anticipate

changes in regulations and allow

them to strengthen their own

competitive capabilities.

INTERNATIONAL PARTNERSHIPS The Group’s R&D centers develop

partnerships with French and

international university laboratories

or public research centers,

such as the CNRS or the CEA.

In the environment businesses,

more than 50 partnerships with

universities provide access to new

technologies and methodologies

and expand areas of research.

SUEZ is also a partner in

large-scale international programs,

especially in the energy sector. In

European R&D programs (PCRD),

the Group is a partner in projects

for controlling CO2 gas (through

collection, transportation and

storage) such as the Castor

program that brings together

the main European oil and

electricity producers.

It also plays a major role in

European projects such as

EU-Deep and Reliance for securing

electrical networks within the

single European market.

SUEZ is a partner in projects that

are developing the fourth-

generation nuclear reactors

of the future (scheduled for

2030). Moreover, it is also

participating in the ambitious

ITER project for the production

of energy by nuclear fusion.

ELIMINATING PCBs FROM WATERWAYS Polychlorinated biphenyls (PCBs), which have been illegal for some 20 years now, are still polluting much of the sediments in soils and waterways. In the Lyon area, SUEZ Environment is a major player in the Axelera industrial park, which brings together manufacturers and university research centers working in the area of environmental chemistry. The research program to remove PCBs from the Rhône River includes studies on methods of analysis (for quantifying the presence of PCBs), the manner in which they are spread and solutions to remedy the problem. The objective is to develop decontamination technologies to be used in other waterways, some of which are even more contaminated than the Rhône River.

FACILITATING THE DEPLOYMENT OF DECENTRALIZED ENERGY SOURCES Electricity grids can be hard pressed to handle unplanned power fluctuations from decentralized production units (such as wind, solar or small biomass plants), and this curbs development of renewable energy. SUEZ is a partner in the EU-Deep program that brings together some 40 players from nine European countries to invent technologies for improved management of networks that can safely integrate mass development of decentralized production units. EU-Deep has a major R&D component and also includes deployment of new solutions in the areas of forecasting, management, support, etc., to safely adapt networks for the large-scale deployment of decentralized production units.

The demands of sustainable development are a powerful driver of innovation“

”


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THE TOWN: A LIVELY, FRIENDLY PLACE

- An optimized water network that detects leaks

- Power supply with low CO2 emissions

- Pneumatic waste collection to avoid pollution and noise for better health

- A community heating system powered by renewable energy that saves energy

- An air conditioning system that uses the safest technologies for health

- Reuse of wastewater to irrigate open spaces

- Street lighting that saves energy and improves security

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ENERGY AND TECHNICAL SERVICES - consulting and engineering- on-site utility management: electricity, compressed air, heating, cooling, etc.- industrial maintenance, logistics management, systems integration, etc.

SANITATION SERVICES- waste cycle management- waste collection- separation and recycling- treatment and recovery of hazardous and non-hazardous wastes- maintenance and industrial cleaning- rehabilitation of polluted sites and soils

A MORE EFFICIENT INDUSTRIAL SITE

GAS SUPPLY (Natural gas, Liquefied Natural Gas - LNG) offering a balanced combination of flexibility (competitive pricing, flexible volumes) and supply reliability

WATER SERVICES - water cycle management- consulting and engineering- water process management- wastewater management- sludge and byproduct management

ELECTRICITY SUPPLYbased on a production mix low in CO2, or even CO2-free

ENERGY AND TECHNICAL SERVICES - consulting and engineering- technical installation of HVAC and electric and communication systems, etc.- management and maintenance of climate control installations (heating, hot water, air conditioning) and other types (electricity, elevators, video surveillance, etc.)- facilities management

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WASTE COLLECTION WITHOUT TRUCKS SITA is working on developing a pneumatic system for collecting domestic waste in France. This is an approach developed by the Spanish group Ros Roca, which has tested it in a new district of Barcelona. Waste is deposited in containers on the street, sucked into underground pipes and sent to a transfer center where it is handled using traditional methods. The advantage is that garbage trucks or associated nuisances (noise, traffic jams, pollution and CO2 emissions) are eliminated. It is a simple solution to be used in new districts, but it could also be implemented during restorations of historic neighborhoods with narrow streets. Several cities in Ile-de-France and the Lyonnaise region are studying the system. An initial trial will take place in the Paris area between now and 2010.

REMOTE MONITORING OF TURBINES In Europe, South America and Asia, there aremore than 100 turbine groups monitoredremotely from Brussels using the LVMS (Laborelec Vibration Monitoring System) developed by Laborelec, the Group’s Belgian laboratory. A crack in a turbine’s wing is a serious problem that can result in the shutdown of the electric plant and major repair costs. With LVMS, sensors allow us to detect vibrations produced by the occurrence of the slightest flaw in a wing. These recordings are transmitted over the Internet and analyzed thousands of kilometers away in Laborelec’s offices. With thousands of hours of historical data, the location and developments of a flaw can be analyzed in detail to decide whether or not a shutdown is required for repair work. Maintenance costs are thus significantly reduced and the installation’s availability is improved.

Laborelec research center (Belgium)


66

RADD_SUEZ_66-99_GB_V10.indd 66 26/05/08 17:55:22

SUSTAINABLE DEVELOPMENTSustainable development is at the heart of the SUEZ strategy. An engine of growth and promise of survival, it allows the companyto grow while fostering economic performance, environmental protection and corporate responsibility.

68 • SUSTAINABLE DEVELOPMENT, AN ENGINE OF GROWTH

70 • A COMMITTED PLAYER 72 • INVOLVEMENT FROM THE ENTIRE GROUP

74 • RESPONDING TO THE EXPECTATIONS OF OUR STAKEHOLDERS

80 • MAKING THE MOST OF OUR HUMAN RESOURCES

88 • HEALTH AND SAFETY: SUSTAINABLE IMPROVEMENT IN PERFORMANCE

90 • CONTROLLING THE ECONOMIC IMPACT OF OUR ACTIVITIES

98 • SOLIDARITY AND CORPORATE SPONSORING

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68

partners, and neighbors of the

facilities are all in part dependent

on our activities. This responsibility

demands implementation of

sustainable solutions and behavior.

OUR VOCATION: CREATE VALUE ON A SUSTAINABLE BASISSUEZ’s mission is to grow on a

sustainable basis by creating value

through sustainable development.

Innovation to create new solutions

that are more respectful of the

environment has become a major

competitive issue. Developing new

tools to respond to the growing

demand for water and energy,

anticipating needs and long-term

trends to avoid improvising in

emergency situations, controlling

the effects of its business

operations, recovering byproducts

that had been neglected until now:

all of these initiatives allow us to

improve plant efficiency, cut costs,

open new markets, develop new

businesses – in short, to create

value, consistently.

OUR BUSINESS: OFFERING SUSTAINABLE SOLUTIONS Producing and supplying

dependable energy, while

controlling costs and conserving

resources; providing clean water

that’s available to all; controlling

and treating industrial

and domestic waste…

The Group’s companies have

always provided essential

services which have now become

the focus of concerns about

sustainable development. Rather

than talk about “constraints”,

SUEZ prefers to refer to the

“challenges” of the environment

and sustainable development.

By offering meaningful answers

to these challenges, the Group is

developing competitive products

and services for its clients and

partners who are increasingly

environmentally conscious and

demanding.

OUR RESPONSIBILITY: CONTROLLING OUR IMPACTLike all industrial activities,

the businesses of SUEZ have a very

significant impact on people and

the environment: SUEZ

has 149,000 employees,

serves 200 million people,

500,000 companies and

3,000 municipalities. More than

1 billion people use water produced

by plants built by the Group.

SUEZ operates thousands of

industrial facilities and electrical

plants worldwide. Health, wellbeing,

safety, the environment of millions

of people – employees, clients,

SUSTAINABLE DEVELOPMENT, AN ENGINE OF GROWTH

Energy and the environment: these two areas of SUEZ’s business are at the heart of the challenges of sustainable development. Reconciling economic growth with social development and environmental preservation is more than just a requirement – it is the core mission of SUEZ and the basis of its strategy… as well as a competitive advantage.

Construction of the hydroelectrical plant in São Salvador (Brazil)

40%OF THE GROUP’S ENERGY PRODUCTION CAPACITY IS “CARBONFREE”

APPROXIMATELY


The Group is developing innovative solutions to recover waste that has been neglected until now more efficiently“

”

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CSR Europe is also a major player

in coordinating discussions on

businesses’ social responsibility,

which are initiated by member

organizations. Through the

channels of this network,

businesses are represented in

multi-party dialogues and have

more influence to present their

positions on these topics.

SUEZ is an active member

of Comité 21 (French

Committee for the Environment

and Sustainable Development)

which was created in 1994 as part

of Agenda 21 at the Terre de Rio

Summit. Comité 21 includes more

than 300 members (businesses,

local authorities, public bodies

and associations, and the media)

and is a discussion forum where

the Group can explain its positions

to stakeholders, and in some

cases, develop them even further.

SUEZ has notably been involved in

a series of educational programs

on sustainable development

published by Comité 21.

SUEZ is also involved in the

work of organizations including

EPE, IMS and ORSE.

SUEZ has been a member of the

United Nations Global Compact since its creation, giving the

company a global perspective on

its commitments to sustainable

development. The Group has

undertaken to observe the

10 fundamental principles

regarding human rights, labor

rights, the environment, and

anti-corruption that were adopted

by the Global Compact. Each

year SUEZ publishes a report

describing the measures it

has undertaken to fulfill this

commitment. This report

was commended by the Global

Compact as being one of

170 reports that demonstrate

proof of a concrete, in-depth

commitment to implement the

10 principles. In 2007, SUEZ

CEO Gérard Mestrallet signed

two documents that directly

concern the Group’s businesses:

“Caring for Climate” formulates

the commitments of business

leaders in the struggle against

climate change and the “CEO

Water Mandate” which calls upon

companies to manage their water

resources wisely.

ACTIVE INVOLVEMENT WITH ORGANIZATIONSThe Group is an active participant

in the WBCSD (World Business

Council for Sustainable

Development), a network of more

than 200 international companies

that are committed to sustainable

development, economic growth,

ecological equilibrium and

social progress. It is particularly

involved in the Energy and Climate

working group, whose objective

is to suggest innovative solutions

to help businesses reduce the

carbon footprint of their activities.

SUEZ is an active member

of CSR Europe, a European

network of companies organized

by Jacques Delors and several

other business leaders to discuss

and share best practices and to

coordinate the environmental

and social parameters of their

operations. During MarketPlace

2007, the annual discussion

forum developed by CSR Europe,

SUEZ was recognized for the work

it performed for the “Dialogue

with Stakeholders” laboratory;

SUEZ codirected this project with

Total within the framework of the

European Alliance for Corporate

Social Responsibility.

A COMMITTED PLAYERSUEZ plays a leading role in a number of national and international organizations that encourage reflection on corporate social responsibility, facilitate the exchange of best practices and the emulation and formulation of shared points of view.

SUEZ has been a member of the United Nations Global Compact since its creation

“”


In 2007, Gérard Mestrallet signed “Caring for Climate”, committing the SUEZ Group to move ahead with concrete actions in the fight against global warming

“”

NAME Members Member since SUEZ’s role Signifi cance for SUEZ

Global Compact

Companies 2000 Steering Committee of French Friends of the GC

Signing of Caring for Climate and the CEO Water mandate

WBCSD Companies 1999 Member of the core team of the Business Role working group

Working groups:- Energy and Climate- Electric utilities- Business role- Water and SD- Development

CSR Europe Companies 1997 Member of the Board of Directors

Participation in MarketPlace (a forum on best practices)

Committee 21 Companies,local authorities, associations

1997 Member of the Board of Directors

Participation in working groups:- Agendas 21 and local authorities- Food, energy, construction, waste and transport- Mobility and training- Responsible purchasing: assistance to SMEs and SMIs- Responsible marketing- Innovation- Education at DD

IDDRI/FONDDRI

Companies, experts

2001 Member of the Board of Directors

Participation in research projects: “Climatic vulnerability of industrial activities” and “Scenarios under carbon constraints”

ORSE Companies, unions

2005 Member Participation in working groups:- Sustainable purchasing- Finance club

EPE Companies 1997 Member of the Board of Directors

Participation in the working group: Energy effi ciency in buildings

IMS Companies 1996 Member of the Board of Directors

Participation in the working group “Access to services and products for disadvantaged populations”

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72

Sustainable development

commitments are deployed at the

very highest levels of the Group.

The Chairman of the Group is

personally involved in issues and

regularly expresses his views

on these issues, which are then

reviewed by the Board of Directors which includes a Committee

for Ethics, Environment and Sustainable Development. At the

Executive Committee level, one

of the members is specifically

responsible for these issues.

A Sustainable Development Steering Committee, including

four members of the Executive

Committee and a representative

from each of the Group’s four

business lines, defines the

principle guidelines of the Group’s

policy in this area and focuses

on implementation and

coordinated action.

The Sustainable Development Department proposes measures

to the Steering Committee

and coordinates the network

of members responsible for

implementing initiatives in the

operating units. It represents

the Group before national and

international authorities on issues

regarding social responsibility.

It sets up ad hoc working groups

for important subjects and policies

to be developed throughout the

entire Group and works in close

cooperation with our marketing

teams to create “sustainable

development” product offerings

for clients.

The Sustainable Development

Department is also responsible

for maintaining relations with

non-financial rating agencies and

socially responsible investors

through financial communications.

The Sustainable Development Network includes 42 members

representing the Group’s

major operating divisions and

those directly involved in the

operating units. It monitors the

implementation of action plans

in the field and is responsible

for communicating best practices

recognized in each unit to

the Sustainable Development

Department, which can in turn

propose to the Sustainable

Development Steering Committee

that such measures be made

standard practice.

THE ENTIRE GROUP IS INVOLVED

To support its strategy, SUEZ has created an organization that is dedicated to sustainable development, with specialized management tools and a prioritized action plan that is embraced by the entire Group.

ORGANIZATION

COMMITTEE FOR ETHICS,

ENVIRONMENT AND SUSTAINABLE

DEVELOPMENT

GROUP EXECUTIVE COMMITTEE


STEERING COMMITTEE

SUSTAINABLE DEVELOPMENT DEPARTMENT


NETWORK:42 MEMBERS


Sustainable development training for managers.Creating awareness about sustainable development issues is an integral part of SUEZ’s training programs. During 2007, 150 managers at the headquarters received training on the issues and policies implemented by the Group. Widespread implementation of this training program is currently underway. Special modules have been integrated into the SUEZ University training programs (which are designed for integration of new officers, financial managers and senior managers). At business conventions as well as during the annual convention of senior managers and meetings of the internal audit communications network, the challenges of sustainable development issues, and the policies that have been implemented are presented systematically.

HIGHLIGHT

RESPONSIBLE AND SUSTAINABLE PURCHASING The SUEZ Purchasing Division is responsible for selecting suppliers, optimizing purchasing procedures for all subsidiaries, and observing quality and profitability criteria. In 2003, it developed an “Ethical Purchasing Charter” that stipulates that every purchaser must observe “the Group’s commitments in the area of sustainable development” when making purchases and “integrate environmental and corporate concerns as criteria in selecting suppliers and products”. This charter has been widely distributed and is available on both the Internet and intranet; it is brought to the attention of all of the Group’s purchasers and suppliers.In 2007, a working group comprising members of the purchasing network and the sustainable development network was organized to strengthen this policy, particularly to encourage suppliers and their subcontractors to make a commitment to observe the principles developed by SUEZ. As a result, a clause on “Ethics and sustainable development” is being incorporated into purchasing contracts.

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FIVE PRIORITIES FOR SUEZ’S LONG TERM DEVELOPMENT SUEZ’s sustainable development

action plans are aimed at

efficiently responding to the

expectations of its stakeholders,

who are divided according to

five priorities defined by the

Group in connection with

its businesses. The

implementation of these action

plans, directed by Senior

Management, is regularly audited

and measured in the field.

1 – Reflecting the values of sustainable development in our practices and cultureEach SUEZ entity develops a

sustainable development program

that comprises measurable

actions. The sustainable

development correspondent

network monitors the application

of action plans decided by the

Group and by the businesses in

the field. They also ensure that

“best practices” are collected

and communicated throughout

the Group. Social, corporate

and environmental criteria are

progressively being integrated into

the Group’s sound management

practices, particularly purchasing

policies and investment criteria.

A series of indicators facilitates

measurement of the progress

of the sustainable development

action plan.

2 – Integrating sustainable development into our commercial offers for the benefit of clients and usersUnder the pressures of corporate

and environmental challenges and

increasingly stringent regulations,

the demand for sustainable

development has continued

to increase and now represents

a powerful engine of growth.

ONGOING DIALOGUEThe Group’s effective performance

depends on the quality of its

dialogue with “stakeholders”

in order to establish a climate

of confidence, to reconcile all

their expectations, and to create

value for everyone. SUEZ has

therefore established a number of

forums for discussion among its

stakeholders. Examples include

the social dialogue with personnel

representatives in Europe,

regular meetings with individual

shareholders, the Foresight

Advisory Council, debates with

local partners, and Group

participation at all levels of the

Grenelle de l’Environnement.

RESPONDING TO STAKEHOLDER EXPECTATIONS

SUEZ provides essential services including water, energy, and waste services, to millions of people throughout the world. Jobs, services, research, investment and development projects, as well as the potential issues that may be raised by our business activities and plants, have an impact on a growing population. The Group’s responsibilities thus extend far beyond mere economic parameters.


SUEZ offers local authorities and

businesses products and services

that allow them to achieve their

own sustainable development

objectives, to limit their impact

on climate change, to provide

water to new populations, and

to economize on their use of

natural resources. Sustainable

development objectives create

value for the Group.

PRIMARY TOOLS OF DIALOGUE WITH OUR STAKEHOLDERS

OUR CLIENTS

Inquiries about satisfaction

Periodicals targeted to types of customers: local authorities, big businesses, SME, individuals

Dedicated Internet sites

Information campaigns

UNIONS AND EMPLOYEES

European Consultative Committee

Group Committee in France

Local entity-level instances of dialogue

Intranet

Company periodicals, newsletters

Inquiries about satisfaction

SHAREHOLDERS AND FINANCIAL INSTITUTIONS

Shareholders Space with individual investors; Group participation in specialized forums

Group participation in specialized forums

Regular meetings with financial analysts Investor Relations Department for institutional investors

Dedicated Internet site

Letter to the shareholders

CIVIC SOCIETY AND PUBLIC AUTHORITIES

Group’s instances:

• SUEZ Institutional Relations Department

• SUEZ Environment’s Strategy and Outlook Council

• Regular debates at headquarters on subjects such as workplace integration and biodiversity

• Local committees implemented up by entities

Membership in organizations

• International Social Observer

• Comité 21

Participation in external demonstrations

• World Water Forum, Mayors’ Forums, etc

EXPECTATIONS• Transparency and information

• Ethical, responsible conduct

• Compliance with regulations, human and labor rights

• Financial results

• Long term visibility

• Risk prevention

• Participation in company decisions

• Sustainable job management

• Preservation of the environment

• Quality of service, competitiveness

• Innovation, reactivity

• Partnership

BEST PRACTICES FOR EVERYONE The network comprising 50 members who are responsible for communicating SUEZ programs and initiatives in the field also identifies and communicates best practices implemented by operating units across the Group level. Preventive measures against AIDS in Peru, innovative green energy projects in Brazil and Belgium, wildlife protection, access to water for the most disadvantaged… more than 2,000 concrete initiatives worldwide are compiled and accessible via the Group’s intranet to allow each entity to be informed and inspired to achieve its own initiatives.

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3 – Protecting the environmentSUEZ applies the same

environmental protection goals

that it promotes to its clients.

An environmental management

system allows the Group to control

and improve the impact of its

activities over the long term.

Environmental impact studies are

carried out before each project.

4 – Promoting the Group’s social commitmentSUEZ opposes all forms of

discrimination and encourages

equitable access to employment:

it encourages the participation

of women and diversity among

its personnel. Forums of

discussion allow effective social

dialogues to be maintained

at all levels of the Group.

5 – Acting as a corporate citizen and ensuring a local emphasis in our activitiesSUEZ is involved in activities over

the long term, under contracts

that may last as long as 20,

or even 50, years and is thus a

major player in local sustainable

development. It has a significant

impact on local job markets and

economies. To enhance its local

emphasis, the Group maintains

a dialogue with all stakeholders

(authorities, governments,

clients, and neighbors) ensures

compliance with rigorous ethical

requirements in its activities and

undertakes numerous patronage

and solidarity initiatives.

SUEZ encourages the participation of women and diversity among its personnel and maintains a social dialogue at all levels of the Group

“”

SOCIALLY RESPONSIBLE INVESTMENTS The “socially responsible” aspect of companies is now an important assessment criterion in the financial community.Constantly questioned on these matters, SUEZ endeavors to respond very specifically to questions posed by investors on the Group’s non-financial performance. Meetings and site visits are organized.On these occasions, the Group can also present its sustainable development strategy to investor committees.

HIGHLIGHTS

Carbon Disclosure Project: this study on the transparency of information on climate change provided by the FTS 500 companies named SUEZ to the Corporate Leadership Index, which recognizes corporate leaders. SUEZ’s carbon risk is rated AA (ratings range from CCC to AAA.)

Innovest: SUEZ was rated AA in 2006, ranking it among the leaders in its sector (ratings range from CCC to AAA and are awarded every other year).

In 2007, Vigeo rated SUEZ: human resources (++), environment (=),clients and suppliers (+), corporate governance (=),social commitment (+), human rights (+).

A COUNCIL OF INTERNATIONAL EXPERTS ON THE ENVIRONMENT Created by SUEZ Environment, the Foresight Advisory Council is composed of 24 independent experts (universities, members of NGOs, elected representatives, etc.) from 14 countries. Its mission is to help the business lines to analyze the major political, social, economic and technical trends that may influence its businesses. Its advice has been particularly helpful in assisting SUEZ Environment to develop its sustainable development action plan.

The Marbella purifi cation station in Biarritz (France)


Employee meeting (French Polynesia)

Cabinet Sustainability (with the support of Standard and Poor’s and the United Nations Program for the Environment): this rating, carried out every other year, ranked SUEZ among the 50 companies that are leaders in sustainable development at the global level in 2007. Only three French companies were recognized this year.

In 2007, Capital Com (a French financial communications agency) carried out a survey on the communications relating to environmental challenges issued by CAC 40 companies; it ranked SUEZ among the seven best companies.

Oekom: in 2007, the agency gave SUEZ a B- rating in its social and environmental ratings (on a scale ranging from D- to A+).

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PRIORITIES FOR SUEZ LONG-TERM

SUEZ is committed to ongoing improvements. In 2007, the Group achieved additional progress in all of its priority areas.

51

2

3

4

5

149 131COLLABORATEURS (+ 6,7%)

REFLECTING THE VALUES OF SUSTAINABLE DEVELOPMENT IN OUR PRACTICES AND CULTURE

Developing a sustainable development program in each SUEZ entity Raising awareness and training employees about the challenges of sustainable development and the responses implemented by the Group

Sharing best practices within the Group

Integrating social, corporate and environmental evaluation criteria into our management initiatives Presenting an annual progress report to the Committee for Ethics, the Environment and Sustainable Development of the Board of Directors

Expanding the coverage of social and environmental reporting

Raising the level of external certification of environmental and social reporting

INTEGRATING SUSTAINABLE DEVELOPMENT INTO OUR COMMERCIAL OFFERS TO BENEFIT CLIENTS AND USERS

Adapting our business models to market shifts, and to local political and regulatory environments

Designing products and services that allow governments and manufacturers to improve their social and environmental performance

Consolidating customer relationships through regularly monitoring of customer satisfaction

PROTECTING THE ENVIRONMENT Maintaining our site compliance and managing regulatory changes

Measuring and controlling environmental risks as part of the SUEZ risk management policy

Minimizing the environmental impact of our activities over the long term

Expanding environmental management systems Implementing an action plan to preserve biodiversity on the Group’s vulnerable sites

Increasing SUEZ’s renewable energy production capacity

PROMOTING THE GROUP’S SOCIAL COMMITMENT Encouraging equitable access to employment Attracting and retaining talent Encouraging diversity and respect human rights Maintaining strong social dialogue at all Group levels Developing skills to promote employability

Guaranteeing health and safety in the workplace

Enhancing motivation and professional development with regular collective and individual assessments

ACTING AS A CORPORATE CITIZEN, AND PROVIDE LOCAL FOCUS FOR OUR ACTIVITIES

Identifying the stakeholders in each entity

Ensuring dialogue with civil society and NGOs

Strengthening the Group’s ethics policy

Formalizing the Group’s social and cultural sponsorship activities Integrating subcontractors and suppliers into our sustainable development approach Ensure that the Group’s activities have a positive impact on local economies


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DEVELOPMENT

All business lines have an action plan, as do all the Business UnitsImplementation of a sustainable development training program for managers (since 2006).Familiarizing employees with “eco-gestures”A data base of more than 200 best practices has been created,which is available on the Group intranet as archives and filmExtra-financial criteria are increasingly being integrated into purchasing and investment activitiesA progress report was presented on Nov. 14, 2007, to the Committee for Ethics, the Environment and Sustainable Development The average coverage ratio of social indicators was 97.8% in 2007, and greater than 98% for 90% of environmental indicatorsThree year action plan to improve the certification level from a moderate assurance opinion to a reasonable assurance level

Development of public/private partnerships and increasing integration of Group companies in local economies to secure contracts over the long termNumerous contracts have been won due to integration of sustainable development into the products and services offered to the clientLaunch of a Group inquiry on the expectations of major industrial clients regarding SUEZ in the area of sustainable development

Implementation of an EMS self-evaluation system designed for operating sites

Environmental risks are integrated into the Group’s risk assessment process

SUEZ has made 10 formal commitments in connection with the Grenelle de l’Environnement

More than 50% of the Group’s sites are covered by a certified EMS

Development of Locamaps, localization software for vulnerable sites

Objective: to increase renewable energy capacity in Europe from 15% in 2006, to 18% in 2009.Development of wind, biomass and hydraulic power outside of Europe

Publication of a “Talent Recruitment” guide for recruiters, including a section on diversity Recruitment campaign and implementation of the Campus program: 132,000 hires anticipated between now and 2013Six objectives to enhance women’s participation. Participation in BLIHR’s francophone workSignature of the Social Pact: three commitments with global scope61.2% of employees received training in 2007Strengthened SUEZ rules for subcontractors. Completion of the audit campaign.Launch of a new campaign (follow-up audits). Development of a new action planSignature of a 3-year supplementary profit sharing plan tied to the Group’s performance, to benefit employees worldwide

Publication of a Group tool identifying stakeholders with ORSE in connection with the Alliance for CER laboratories

Active participation in the work of the Grenelle de l’Environnement

Creation of a Compliance Department, increase in the number of people who received ethical training via e-learning

Formalized patronage policy; two patronage committee meetings in 2007, and one in 2008

Widespread use of the “Ethics and Sustainable Development” clause in purchasing contracts

Conversion of industrial sites and transformation into an eco-activity zone (Metaleurop and the Kléber site in Toul)


80

in all the Group’s entities during

2007. Developed with the input

from human resources teams in

all the business lines, it defines

shared objectives and approaches

to identify needs, define profiles,

seek out the strongest candidates,

optimize costs, etc. This guide puts

particular emphasis on the struggle

against discrimination. In 2008,

a specific training program will

be sent to recruiters to accelerate

communication of these “Group”

approaches.

FORWARD-LOOKING MANAGEMENT OF JOBS AND SKILLSHuman resources will become a

major challenge to the Group’s

growth over the next few years.

The aging European population

and changing demographics of the

workplace will result in massive

retirements, which are expected

to lead to a scarcity of skills,

particularly in technical areas,

and increased competition among

large groups to attract talent.

At the same time, the pursuit of

SUEZ’s growth and international

expansion, growth in renewable

energy and the re-launch of

the nuclear program will raise

new requirements. Forward-

At the end of 2007, SUEZ

had 149,131 employees

worldwide, up 6.7%, driven

primarily by the strong growth

in the Group’s activities. Ninety

percent of employees were

in Europe, including 60% in

France and Belgium. There were

28,000 new recruits last year.

When adjusted for retirement and

employment contract terminations,

the net number of jobs created

was 6,000, including 2,500 in

France and 600 in Belgium.

132,000 NEW HIRES BETWEEN NOW AND 2013To support the development of

its businesses in fast-growing

markets and adjust the

demographic profile, SUEZ plans

to recruit 132,000 people between

2008 and 2013, including 20,000

this year. If a new nuclear project

is inaugurated, as the Group

hopes will be the case, these

figures would again be revised

upwards. 56,000 of these hires

would be in France and 10,000 in

Belgium, To assist in this effort, the

Group has launched a European

communication campaign intended

to enhance its reputation among

future new hires, among other

objectives. This ambitious program

also represents an opportunity

to coordinate recruitment efforts

within the Group. A guide,

“Recruiting Talent”, was distributed

to human resources departments

MAKING THE MOST OF OUR HUMAN RESOURCES

SUEZ has more than 149,000 employees in five continents. In keeping with its commitments to sustainable development, its social policy is aimed at allowing employees to develop confidently within the Group and improve their performance. To support its growth and continue to renew its staff, SUEZ plans to make more than 130,000 new hires in the next five years.

Control room at a hydroelectrical plant

TOTAL ACTIVE EMPLOYEES ON DEC. 31, 2007 GROUPSEE 15,030

EIS 4,088

SES 67,395

SE 61,915

HEADQUARTERS 703

TOTAL 149,131


looking management of human

resources aims to anticipate these

phenomena by seeking

upstream solutions. In 2007,

a Group agreement on

“Forward-looking management

of jobs and skills” was signed

in Europe with union organizations.

It primarily addresses

employability and training policies

and establishes conditions

for mobility within the Group,

by creating “inter-subsidiary”

connections to facilitate movement

from one business line to another

(energy, waste services,

water, etc.).

ATTRACTING NEW TALENTFaced with an increasingly

competitive employment market,

recruiting young graduates is a

major challenge. The Campus

Program, which has been

implemented at the Group level,

allows us to promote the SUEZ

image to students by emphasizing

the diversity of its activities. In

2007, the Group held 21 recruiting

fairs in France and Belgium.

International implementation is

planned in 2008. Technical skills

are also much sought after in the

employment market, and recruiters

must increase their expertise to

develop new profiles. Facing a

very tight local labor market,

the Electrabel site in Doel,

near Antwerp, has decided

to expand its recruiting sources

with the “Technicians in Progress”

program; this allowed 20 or so

people with minimal qualifications,

who did not meet standard hiring

criteria, to join with open-ended

employment contracts. Thanks

to the motivation of these new

employees and the involvement

of technical teams around them,

individualized attention over

the course of one year enabled

them to acquire skills and work

independently. Based on this

success, Electrabel decided

to share this experience.

61.2% of SUEZ employees received training in 2007“ ” YOU’RE GOING TO LOVE THE FUTURE! SUEZ will recruit 20,000 employees worldwide in 2008 and it doesn’t hesitate to let the world know about it: a communication campaign was inaugurated in seven European countries to announce the good news. Visual displays are appearing in the press, on posters, on the web, in train stations and on buses…large scale publicity support for the recruiting campaign. Against a lackluster socio-economic backdrop, SUEZ’s objective is to strengthen its image in Europe and showcase itself as the bearer of good news and the creator of solutions for the future in strategic sectors: energy and the environment. It’s an optimistic vision that will strengthen the Group’s appeal to potential recruits who are in increasing demand.

Ove

r 65

0.3%60

- 64

2.4%

55 -

59

9.4%50

- 54

13.3%

45 -

4915%

40 -

44

16.3%

35 -

39

15.2%

30 -

34

12.4%

25 -

29

11%

Und

er 2

5

4.8%

The SUEZ age pyramid is balanced and has remained stable over the last three years. The average age for SUEZ employees remains 41, primarily due to the efforts of entities such as Electrabel in Belgium. In SEE, employees under 30 now constitute 20% of employees. In SEI, a youthful demographic profi le has remained constant since the business line was created: 50% of its employees are under 40. The two business lines with the most employees, SES and SE, show balanced profi les similar to those of the Group as a whole. Although it is not immediate problem, the issue of an aging population is bound to become a key concern for these business lines; almost 25% of their staff is 50 or older. The initial results of the recruitment campaign – even if these new hires are not confi ned solely to young people – are expected to be seen beginning in 2008-2009.

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The SUEZ Group will be hiring 20,000 newemployees worldwide in 2008. www.suez.com

GROUP AGE PYRAMID (EMPLOYEES WITH OPEN-ENDED CONTRACTS)


82

AN EQUITABLE, ATTRACTIVE SALARY POLICYFaithful to its commitment to

“strive for improved quality of life

for its employees” (International

Social Charter, Article 5), the

SUEZ Group has adopted an

equitable, attractive salary

policy. At a time when recruiting

and employee loyalty are strategic

challenges, the compensation

offered must at least match

the practices of the reference

sectors; it must avoid creating

distortions between the

socioprofessional categories

or local compensation levels,

but also reward individual

and collective performance.

ATTENTIVE TO THE STANDARDS OF LIVING OF ITS EMPLOYEES, THROUGHOUT THE WORLDThe salaries offered by SUEZ –

particularly to manual laborers

– must permit achievement of a

quality of life greater than the local

cost of living in all countries. To

verify that this is the case, SUEZ

has been performing an intensive

review of the salary practices

of its entities throughout the

world since 2001.

In every country, sectoral and

national benchmarks give

assurance that the compensation

offered by the Group is

consistently superior to the

country’s minimum wage level.

Additional comparisons with

the local cost of living allow

us to refine the analysis,

particularly when minimum

wages are too low or non-existent.

In connection with the annual

review in application of the

International Social Charter, the

European Consultative Committee

evaluates developments in the

compensation practices of its

subsidiaries each year.

Comparison with reference

sectors (see graph) allows us to

manage compensation practices

compared to competitors of the

Group. Compensation for employee

performance generally includes

variable compensation amounts, as

well as incentive and profit sharing

programs based on the entity’s

income, when national legislation

permits. In 2007, the Group

incentive agreement took the

form of the distribution of bonus

shares and targeted the sharing

of a portion of SUEZ’s net income

with all its employees uniformly,

whatever their position or country.

Finally, employee shareholder

offers are carried out on a regular

basis and have been very well

received: employees now own

3% of the Group’s capital.

SUEZ worker salary/worker salary in sector

SUEZ worker salary/local minimum wage

SUEZ worker salary/local cost of living

1.6

3

4.2

SEE SEI

1.8

9.3

5.3

SES

1.21.8 1.6

SE

1.2

2.2 2

SUEZ WORKER SALARIES COMPARED TOAVERAGE WORKER SALARIES IN THE SECTOR, BASED ON THE LOCAL

MINIMUM WAGE AND THE LOCAL COST OF LIVING

The fi rst comparison shows that the compensation offered by SUEZ is competitive. Overall, SUEZ entities offer salaries that are slightly above sector averages. SUEZ‘s compensation is particularly competitive in energy production, with fewer employees. In many countries in Latin America, this situation is attributable to “cohabitation” with a public sector that is still powerful, but whose compensation packages are more modest. The ratios are close to 1 for energy – and environment-related services, and for highly labor inten-sive businesses where competitive pressures directly impact compensation levels. The second and third comparisons should be analyzed together. They are designed to evaluate the quality of life that can be achieved with the average salary paid. The report, “SUEZ Salaries Compared to Minimum Wage”, which is still generally above 1 at the business line level – shows that the Group’s practices refl ect its commitments in every country where it operates. The report, “SUEZ Salaries Compared to the Local Cost of Living”, com-plements this analysis; in certain countries, there is no minimum wage, so the amount may sometimes be too low to guarantee a “decent” standard of living to those who receive it; hence the interest in introducing an additional comparison with the local cost of living.


16% of SUEZ employees are women. In management, the percentage is 17.8%. Convinced that gender representation and diversity spur exchanges of information, innovation and performance, the Group is committed to a voluntary policy promoting increased participation by women. In 2004, it signed the Institut Montaigne’s Diversity Charter and then created a European task force to perform an analysis of the male/female balance in its entities. This work began at the beginning of 2007 with the creation of the Observatory (a focus group on the place of women in SUEZ). The clearly stated objective was to suggest concrete steps to improve the male/female balance, remove obstacles, and reverse prejudices and “organizational habits.” Composed of about 50 women of all nationalities, coming from various Group businesses, the Observatory presented six distinct objectives with concrete proposals in December:• accelerate the promotion of women to senior management positions. A third of candidates for each senior management position must be women. High potential women (“Leader for the future”) will enjoy dedicated professional advice among other things;• increase the presence of women in all businesses, particularly technical areas. The “short list” of candidates for every position should include at least one woman. For each new recruit, the rate of women represented must be equal to that of the target schools and universities; • support women’s professional career progress, particularly during maternity leaves;• encourage more open, flexible management practices, particularly with awareness of atypical female career paths, validating such experience within the Group;• assist women to create a WIN (Women in Networking) network within the group to encourage exchanges of information and experience;• give credibility to and monitor gender initiatives: a number of indicators will facilitate measurement of improvements in gender progress in the Group. A report on the topic will be prepared for each business line and a global communication plan will be implemented to facilitate the measurement of progress.

AN OBSERVATORY TO PROMOTE WOMEN S PARTICIPATION AT SUEZ

FOCUS

PROMOTING DIVERSITY

To confront the need for new employees and assist its reentry into nuclear projects, Electrabel will need to recruit 700 specialized engineers and technicians in coming years. However, after years of enforced hibernation, the nuclear training channels often lack students. Anticipating future needs, the Group’s nuclear companies have inaugurated an assistance program for Belgian universities to award a specialized diploma that will be recognized throughout Europe. This program would allow scholarships to be provided to foreign students and to send students on internships abroad. In addition, SUEZ has created its Nuclear Trainee Program designed for future engineers wishing to specialize in nuclear technology. For a 12-to-18-month period, it allows 70 young engineers to have internships in its plants in 2007.

The internal diversity network is a place to exchange best practices where concrete initiatives are being developed to fight against discrimination. An agreement with France’s National Employment Agency (ANPE) has facilitated efficient coordination between the needs of subsidiaries and those of individuals affected by exclusion from the employment market. Signed with institutional and association partners, the “Enlarging diversity sourcing” agreement broadens the recruitment scope for SUEZ subsidiaries by including candidates who have been affected by discrimination in hiring efforts.SUEZ is also a leader in business clubs discussing topics of equal opportunity and local commitment. Following an analysis carried out in 2006 on employment restrictions affecting the disabled, action plans were implemented by subsidiaries. The exchange of best practices and the emergence of principles of conduct were encouraged by the creation of a network for the disabled during 2007.

Almost 16% of SUEZ employees are women. This percentage rises to 17.8% in management. Although there has been steady progress since 2003, these fi gures are not satisfactory. SUEZ has organized an Observatory to improve the Group’s gender diversity.

Women employees Women in management

2003 2004 2005 2006 2007

13.80%

13.20%

15.50%15.90% 15.50% 15.98%

16% 15.90%16.80%

17.79%

REPRESENTATION OF WOMEN EMPLOYEES AND MANAGEMENT

SUEZ IS SEARCHING FOR 700 NUCLEAR ENERGY SPECIALISTS

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AXIMA: A NEW CAREER PATH IN THE FACE OF SHORT SUPPLY OF MANUAL LABOR Axima has decided to deploy a number of tools: a relationship policy coordinating schools and apprenticeships, broader recruiting sources, and development of training modules.A specialist in climatic engineering, Axima is confronted with a severe shortage of labor in certain areas: site supervisors, specialized maintenance technicians, etc. The company has strengthened its ties with graduate schools (IUT, BTS and engineering schools) by participating in an increasing number of student forums and by increasing the number of internships at the end of schooling. In 2007, 130 people had six-month internships, which are now considered to be the first step to being hired. Apprentice contracts, which are intended for the Bac Pro and CAP populations who represent more than 5% of Axima’s employees, also aim to integrate their participants. At the same time, to encourage employee loyalty, career prospects have been broadened by offering long-term training programs that facilitate the training of site supervisors and steer technicians toward project management.

PROMOTION OF THE “WORKSITE” COURSE OF STUDY AT INEO A specialist in electrical installation, INEO has made a major effort to promote its “Worksite” sector, which is responsible for carrying out installation contracts in the field. Formerly, the “Worksites and Services” sector posted no job descriptions beyond the position of worksite manager, which limited career development prospects and led some qualified employees to leave this sector to use their skills elsewhere. In order to end this pattern and foster the loyalty of skilled employees, INEO redefined its job descriptions by creating new careers (project manager, technical operations manager, head of project services, technical operations director and project director), thus allowing broader possibilities for career development and internal promotion. This model, which has produced good results internally, also offers more attractive prospects to young recruits.

HARMONIZATION OF SOCIAL PROTECTION PROGRAMSWith the partial disengagement

of the State from the financing

of social protection programs, it

is essential for a multinational

group to develop a pragmatic,

coordinated response. At SUEZ,

the social protection policy

includes insurance (health

expenses, disability coverage,

and death) and supplementary

retirement plans; these are all

in the process of restructuring,

with the goal of increasing the

attractiveness of the Group’s

entities. The existence of plans

responding to the same general

principles also facilitates

mobility between entities. This

is an admittedly ambitious goal,

given the diversity of collective

agreements with various entities

across Europe and throughout the

rest of the world.

Although it may not be feasible

to arrive at a single system, the

convergence of these programs

is a medium-term goal for HR.

The principle of equity among

salaries is affirmed, both for the

various entities and for the various

socio-professional categories. A

benchmark for several large SUEZ

subsidiaries has been met with

the creation of new supplementary

retirement systems at the

employer’s expense.

BROAD ACCESS TO INFORMATIONTraining is a key aspect of

career management and SUEZ’s

professional efficiency: all

employees must have access

to training to allow them to

strengthen their skills and

promote their careers. In 2007,

61.2% of the Group’s employees

benefited from training, a truly

exceptional level in the energy

and environment businesses.

Each trainee received an average

of 31.5 hours of courses. Almost

half of these training sessions

(40%) covered “business”

techniques and more than a

quarter (29%) addressed quality-

security-environment issues;

the rest covered languages,

management techniques, etc.

Most of this training is organized

and implemented in various

SUEZ business lines, closer to

the field. At the Group level,

SUEZ University offers thematic

training intended for managers;

in 2007, 4,350 managers from

all subsidiaries (a 20% increase)

took a course at SUEZ University,

whose offerings are constantly

being expanded. These training

courses reinforce the Group’s

culture by developing a shared

strategic vision and reinforcing

consistent managerial practices.

Managers17%

Workers46%

Technicians37%

EMPLOYEES RECEIVING TRAINING

Managers16%

TOTAL EMPLOYEES

Workers51%

Technicians33%

ALLOCATION OF EMPLOYEETRAINING BY SPC

The correlation between total employees and em-ployees receiving training underlines the equitable distribution of training within the Group’s entities. No socioprofessional category is at a disadvantage, and this has been the case for years.


INCORPORATING SOCIAL RESPONSIBILITYSUEZ makes the personal

development of its employees

a priority and considers it one

of its corporate responsibilities.

Beyond strictly professional

aspects, there are training courses

targeted at disadvantaged and

at-risk populations. More than

2,300 individual are employed

by the Group under work-study

contracts. Certain businesses

are particularly well suited for

apprenticeships or the tutorial

system based on teamwork at

worksites and on longstanding

relationships with schools

(electrical installations, energy

50% of managerial positions are filled through internal mobility“

”

Everett LNG terminal near Boston (United States)

Languages7%

Business40%

QSE29%

Other24%

BREAKDOWN BY TYPE OF TRAINING

The breakdown by type of training emphasizes the importance of business training sessions (which include plant qualifi cations). The Group’s major efforts in the areas of health and workplace safety are also refl ected in the amount of training on this subject (between 27% and 31% of all training over the last three years).

services and water distribution).

In addition, a number of waste

service businesses are well suited

to work-study or re-employment

initiatives. Confronted with difficulty

in recruiting young technicians,

Elyo launched an ambitious

tutorial program; for example, at

the end of 2007, all work-study

contracts (apprenticeships and

professionalization programs)

together represented 3.6% of total

employees, up 14% compared

to 2006. Apprenticeship is now

considered an essential step in

pre-recruitment, and Elyo teams

are motivated to make this phase

successful. The hiring rate for

apprentices, currently at 50%,

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A social agreement, signed in 2007, addresses equal opportunity issues and applies to the entire Group“

”


is expected to grow in coming

years. To achieve this goal,

Elyo has taken proactive steps:

working upstream with schools,

finding a better selection of

candidates, reconsidering

compensation for apprentices,

strengthening the integration

process and providing broader

growth opportunities for

candidates.

Tutors are essential to this

project, and their role is receiving

recognition. They are now involved

in selecting young candidates

and are given a special tutorial

training module. SITA Rebond

is a SITA subsidiary that

specializes in reinserting

individuals at risk into the

economy. (These include the

long term unemployed,

government subsidy recipients,

the unskilled, etc.). In partnership

with local authorities, companies,

associations and governmental

services, SITA Rebond recruits

these candidates, integrates

them into a team, and provides

them with personalized assistance

(in mastering the French

language, basic training, housing,

over-indebtedness, etc.) under

work-study contracts that range

from three months to two years.

SOCIAL AUDITIn 2007, SUEZ continued to

implement its internal social audit

system, aimed at verifying how the

group’s commitments in the areas

of human resources and respect

for human rights are actually

enforced in practice. By mapping

the HR policies in place in a

given entity and directly involving

various stakeholders concerned

(managers, the HR team, social

partners, and employees), the

social audit model complements

the quantitative data provided by

social reporting.

THREE “GROUP” SOCIAL COMPACTS IN 2007SUEZ’s European Consultative

Committee includes 47 personnel

representatives from every

entity and includes 15 different

nationalities. In 2007, it provided

a negotiating framework and

signed three broad-based new

agreements on topics that are

novel and rarely addressed at the

European or global level: advance

planning for employment and

skills, equal opportunity, and an

employee incentive system based

on the Group’s profits. These

agreements apply to the entire

Group, which wishes to develop

and strengthen the social initiatives

already implemented in the

entities. The European Consultative

Committee is also responsible for

monitoring the social commitments

undertaken by the Group under

the International Social Charter,

with an audit carried out annually.

It is based on the social auditing

module that is increasingly used

by the subsidiaries.

SHARE OF WORK-STUDY CONTRACTS SES FRANCE, SE FRANCE AND SUEZ GROUP

200520062007

SE FranceSES France Group

3.35%

2.85%

1.78%

2.70%

2.96%

1.94%

2.52%

1.36%

1.65%

Within the framework of the pact

on the modernization of social

dialogue, Lyonnaise des Eaux

has implemented a number of

provisions that benefit its social

partners. Specific budgets

are planned to allow union

representatives to organize

their annual conference, while

“national preparation time for

unions” has been granted since

2006. This time credit can be

transferred to other Lyonnaise

des Eaux employees, to allow

them to compile information on

issues open to negotiation and

consultation. In addition,

a Commission on Union Delegate

Careers has been set up.

Initiated several years ago, the work-study paradigm has produced good results. The Group’s total number of employees increased 6.7% between 2006 and 2007, whereas the number of employees under work-study contracts rose 15.4%. The Group’s work-study policy has succeeded primarily due to initiatives by the Group’s French entities, whose efforts are supported by a legal framework that favors apprenticeships and professional development. The percentage of work-study contracts was 3.1% at Ineo, 3.6% at Lyonnaise des Eaux and 5% at Elyo Ile-de-France (see below). The situation in international units varies due to differing legal environments.

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HEALTH AND SAFETY: SUSTAINABLE IMPROVEMENT IN PERFORMANCE

Preserving the health and safety of its teams is a priority at SUEZ whose industrial activities may involve risks. The group dedicates substantial resources towards improving its performance and moving towards “zero accidents.”

CEM electric plant in Macao (China)

The Group’s 2007 results show

a 17% decline in accidents

with work shutdown and a

14% reduction in their severity

compared with 2006. Over a

longer period, there has been a

spectacular drop in both frequency

and severity (down 45% and 37%

respectively compared to 2003;

see graphs). The Group profoundly

regrets the nine fatal accidents in

2007 (one more than in 2006)

and remains particularly attentive

to this issue. Efforts made with

outside providers have been

productive; four fatal accidents

occurred among them in 2007,

compared to 13 in 2006. A system

for monitoring accident frequency

for temporary employees has also

been implemented.

AMBITIOUS OBJECTIVESIn keeping with its demand for

ongoing improvement, the Group

has set ambitious, quantified

objectives for coming years:

between now and 2009, the

accident frequency rate must

be below 10 and the severity

rate must fall below the 0.4

barrier; these figures represent

an average decline of 15% a

year. In 2001, SUEZ formed

a Health and Safety Network

composed of experts who are

responsible for coordinating safety

initiatives in all of the Group’s

subsidiaries. The Health and

Safety Network has systematically

developed a complete reference

framework: in 2007, four new

governance rules applicable to

the Group were issued. Two of

these are aimed at guaranteeing

to outside service providers the

same safety conditions as those

enjoyed by SUEZ employees.

Another significant target is an

exhaustive analysis of risk factors

for accidents. These rules have

contributed to a significant

improvement in performance and

complement the work carried out

under the 2005-2010 Global

Action Plan, whose goals have

been achieved: external audits,

training and awareness programs,

inclusion of temporary workers

and external service providers in

action plans, factoring health and

safety objectives into manager

evaluations (and thus in variable

compensation), etc.


TRAINING EXTERNAL SERVICE PROVIDERS IN NUCLEAR SAFETY Since October 2006, Electrabel has trained more than 2,100 external service providers in nuclear safety at the Tihange plant in Belgium. Over a four day period, this very comprehensive training module includes two days of orientation to the culture of safety in a nuclear plant, a day on practical precautions (safety equipment, handling of hazardous waste, etc.) and a “worksite school day” when participants carry out “full scale” interventions.At the end of these training sessions, the service providers are coached by their trainers as they perform “real time” interventions. This training package, which significantly improves safety conditions on worksites, has been implemented in Electrabel’s other nuclear plant in Doel since October.

SITA TEAMS CREATE A SYSTEM TO IMPROVE SAFETY IN WASTE COMPRESSORS

The compressors used to compact waste can expose their operators to the risk of serious accidents. To drastically reduce this risk, SITA Center East has developed a system internally that causes the compressor to stop automatically when an operator enters the conveyor area. Developed at the Chemaudin site (Doubs) by the entire team, the “Hazardous Zone Access Control” has prevented worksite accidents involving the compressor, while enhancing productivity. The system received the “Safety Challenge” prize from SITA and was included in the SUEZ Innovation Trophies in 2007. It is now being adapted for other SITA sites.

The external audit campaign

was completed in 2007, and

follow-up audits are now aimed at

measuring management and safety

systems in the entities. Health

and safety continue to represent

a very significant part of training

received by employees: almost

30% of all training within the

Group is focused on quality-safety-

environment issues. In addition,

more than 1,600 managers

and senior officers have taken

the training module “Safety

Management in the Workplace”,

which has been offered by SUEZ

University since 2005. A module

covering behavioral issues will be

added in 2008.

SOCIAL DIALOGUE AND SHARING EXPERIENCESSince the Health and Safety

Charter was signed in 2002,

social dialogue has become an

essential tool in SUEZ’s policies.

The zero accident culture has

been embraced by everyone as

part of the Group’s objectives.

The Health and Safety

Management Committee is

responsible for verifying the

enforcement of this charter; it

includes members from senior

management and employee

representatives. This committee

regularly reviews action plans and

performance in the business lines,

analyzes the underlying causes

of serious accidents, and reviews

the results of external audits

carried out onsite. Information

days held each year gather more

than 100 representatives of local

health and safety committees

(CHSCT in France, CPPT in

Belgium, etc.) with the goal

of benefiting from onsite

experiences and heightening

the attention given to emerging

health challenges. They

systematically consider

workplace-related health issues

(including psycho-social problems,

musculoskeletal ailments,

and addictive behaviors) that

have a direct impact on

our social partners.

SEVERITY RATE OF WORKPLACE ACCIDENTS

FREQUENCY RATE OF WORKPLACE ACCIDENTS

The Group’s frequency rate dropped 17% compared to 2006 and 32% compared to 2004. A continued decline in severity rate (down 14%) is further proof of the progress made. All of the business lines contributed to this remarkable progress, with special mention going to SUEZ Energy Services (FR -19%, SR -17%). In absolute terms, the FR and SR of SUEZ Energy Europe and SUEZ Energy International remain at a remarkably low level, among the best in the energy production sector. The frequency and severity of accidents are greater at SUEZ Energy Services and SUEZ Environment. They are affected by special issues in environmental services: there are incidents on roadsides, worksites and locations that do not belong to the Group. The improvement in their performance is thus even more remarkable.

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2005 20062003 2004 2007

13.56

28.45

24.41

21.5 21.89

18.47

25.58

24.7420.04

20.07

18.05

18.59

14.69

11.90

3.983.974.61

4.19

5.95

5.06

4.49

2.47 3.011.41

16.31

Total GroupSUEZ Energy EuropeSUEZ Energy International

SUEZ Energy ServicesSUEZ Environment

2005 20062003 2004 2007

0.53

1.04

0.95

0.870.83

0.74

0.78

0.57

0.65

0.57

0.47

0.84

0.69 0.69

0.62

0.10.15

0.180.13

0.09

0.110.08 0.06 0.05 0.05


90

to its impact on the environment.

It makes sure that the necessary

investments are made to ensure

that all its operations and

facilities are permanently in

compliance with the increasing

number of health and

environmental regulations in

all countries in which it operates.

In addition to these obligations,

it often anticipates new

legislation to provide a better

response to the needs of

its customers and all

stakeholders. Employee training,

innovation and research programs

contribute to the operational

control of these risks.

NETWORK OF REPRESENTATIVES AND ENVIRONMENTAL MANAGEMENT SYSTEM Within the Group, the

Environment and Innovation

Department coordinates and

directs environmental measures

conducted within the Business

Units. It develops the Group’s

environmental policies, ensures

approval by branch managers,

and is responsible for reliable

and verifiable feedback of

non-financial, environmental

information. It collects and

distributes information concerning

the environmental risks related

to our businesses. A network of

more than 100 environmental

coordinators deploys the

Group’s policy in the subsidiaries

and operating units.

All the subsidiaries deploy

their environmental policy

based on their operations,

local economic conditions,

and the expectations of their

customers – manufacturers

as well as communities. Risk

management is a daily activity

thanks to a large number of

Environmental Management

Systems (EMS) set up within

The activities and facilities

operated by SUEZ may present

a health risk for populations

(employees, suppliers,

residents, etc.) and a risk

for the environment. SUEZ

in particular handles dangerous

products (fissile materials, fuels,

water treatment chemicals).

Waste management presents

risks of greenhouse gas emissions,

acid rain, toxic gases, dust, etc.

Some of our facilities treat

special industrial or medical

waste that can be toxic.

The Group devotes substantial

resources to the prevention

and control of those risks and

CONTROLLING THE ENVIRONMENTAL IMPACT OF OUR ACTIVITIES

While the Group’s operations can have a positive impact on the environment, they also have an impact on the environment and natural resources, which must be measured, controlled and reduced to a minimum in a process of ongoing improvement.

23.04%

13.27%

1.27% 0.84%20.48%

20.14%

20.97%

■ Traditional thermal plant■ Gas-steam turbine■ Cogeneration■ Gas turbine, turbojets, motors

■ Small hydroelectric plant

■ Large hydroelectric plant

■ Wind■ Solar■ Special biomass combustion facilities

■ Special biogas combustion facility

■ Incinerator (non-biodegradable portion of waste)

■ Geothermal

0.33%

17.30%

0.17%

0.00%

0.80%

0.40%

1.11%

0.02%

■ Incinerator (non-biodegradable portion of waste)■ Nuclear plant■ Renewable energy

2007 ENERGY PRODUCTION: 223,317 GWheq – BREAKDOWN BY TECHNOLOGY

In 2007, the portion of renewable energy (44,959 GWheq) more than doubled from 2006. The increase is primarily the result of the integration of the major dam management activity, known as Large Hydraulic. This increase was intensifi ed because of the abundant rainfall both in Europe and in Latin America. It should also be noted that there was a signifi cant increase in production related to cogeneration and the natural-gas activity. These values take into account the production in GWheq of the entities included in the scope of the environmental reporting.


the Group or the risk management

plans deployed for this purpose.

Most of the EMS are certified

under international standards

(ISO 14001, 9001, etc.).

At the end of 2007, more than

50% of the Group’s revenues

were covered by a certified

Environmental Management

System. 1,254 sites operated

by the Group were certified

ISO 14001.

In 2006 and 2007,

SUEZ set up a self-assessment

system for the EMS to allow

the operational sites to easily

identify vectors for improvement

and evaluate the adequacy

of their environmental

management system for

local circumstances. This

system also lets them track

their changes and make

a comparative analysis with other

Group sites. In addition to this

ongoing improvement

in the environmental management

systems, the Group has

implemented a program to

provide continuous training on

environmental problems

to employees: 29.1% of the total

number of training hours provided

in the Group focused on

“quality-safety-environment”,

which represented a budget

of over €21.7 million

in 2007.

In order to direct the deployment

of its environmental policy,

control environmental risks,

and encourage communication

of its environmental performance

to its stakeholders, SUEZ

began to establish a special

reporting system in 1999.

The development of this system

AN ENVIRONMENTAL PRIZE IN BRAZIL Early in 2008, Tractebel Energia and its partners in the Machadinho hydroelectric facility (1,140 MW) were recognized by the Jornal do brazil with the award of the «Brazil environmental prize» for their «Sistema florestal Cambona 4» project, designed to minimize the impact of the dam construction on the population and the environment. The project includes, among other components, the planting of tea, which will provide new activities for local residents.

Machadinho hydroelectric plant (Brazil)

“ A budget of €21.7 million was allocated to the quality-safety-environment training sessions ”

NUMBER OF SITES OR ACTIVITIES COVERED BY AN EMAS OR ISO 14001 ENVIRONMENTAL MANAGEMENT SYSTEM

ISO 14001 EMAS

925

1,082

1,254

67

11

2005 2006 2007 2005 2006 2007

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Compagnie Nationale du Rhône (France) hydrology and measurement laboratory

was based on the work conducted

within international dialogue

associations, such as the

Global Reporting Initiative or

the World Business Council

for Sustainable Development

(WBCSD). The reporting exercise

completed in 2007 and the

Group’s practices in this area

have contributed, through a

process of ongoing improvement,

to better collection and

distribution procedures

for environmental data.

ENVIRONMENTAL REPORTINGThe environmental reporting

is closely related to the reporting

of operational performance and

has thus become a management

tool. The formalized processes

for regular information feedback

cover five areas:

• the environmental performance

indicators intended for official

report (Reference Document,

Annual Report);

• compliance letters for branch

executives and the report by the

environmental representative;

• the statement of legal

compliance and plans for

achieving compliance if

a problem is detected, based

on a questionnaire;

• the situation of environmental

liabilities and the related provisions,

compiled at the same time as any

non-compliance issues;

• the environmental risks

collected by the SUEZ risk cell.

The year 2007 marked the

first deployment of a self-

assessment questionnaire on

environmental management

(ESA) developed in addition

to the “level 1” audit, which

verifies whether the basic

requirements of SUEZ are being

met in the operating entities.

Tested in 160 entities, this

questionnaire reflects the


requirements of the ISO-14001

standard in concrete terms,

provides an image of the

efforts made in the Group and

strengthens the involvement of

the teams in place.

GREENHOUSE GASES In 2007, greenhouse gas

emissions, excluding the

vehicle fleet, totaled

82.1 million tons equivalent

CO2 for the Group. Most of

those emissions result from

energy production, which alone

represented 76.6 million tons

equivalent CO2. The combination

of energy production, energy

efficiency, liquefied natural gas

sales, services to industry and

local governments allows SUEZ

to make major efforts in energy

PROTECTING THE RED KITE IN BOURGOGNE A splendid bird of prey, with a span of 1.75 m, the red kite is also an endangered species in France. In partnership with associations and public authorities, SITA has initiated a program to stabilize the population of these birds in Bourgogne. In addition to other activities, a platform allows them to be regularly supplied with meat to replace the animal carcasses that are disappearing from the countryside. Ten employees from the company have also been trained to participate in operations to count and protect the bird of prey.

IDENTIFYING SENSITIVE SITES Developed in 2007, Locamaps is a unique tool in Europe which identifies, using Google Maps, all the SUEZ industrial sites (electrical plants, water treatment facilities, landfills, etc.) and superimposes any sites that are ecologically sensitive (waterways, wetlands, etc.) over those sites. This new tool allows the potential risks for each site to be identified in a few minutes and corrective actions to be planned, as needed. First developed for France, Locamaps will be expanded to European sites in 2008.

efficiency and diversify energy

resources towards those that

yield the best performance

and the least emissions.

Environmental activities generated

5.1 million tons equivalent CO2

in 2007, an increase essentially

due to the change in the scope

of the contracts.

SUEZ actively participates

in the development and

promotion of renewable energy

(wind, hydraulic, biomass) when

economic circumstances permit.

This energy in 2007 represented

nearly 9.8 GW of installed electric

equivalents, an increase of more

than 49% over 2006. Electrabel

achieved a world first in the

Walloon region. Awirs 4, which

previously operated on coal,

is today exclusively fed with

wood-burning pellets, to provide

80 MW of power.

In Europe, the Group is

in line with the objective set

by the European Union to

reach 20% renewable energy

in its energy consumption

by 2020. Electrabel’s objective

is to have a power production

capacity from renewable energy

of 6,300 MW in 2009,

representing 18% of its total

installed capacity.

SO2 emissions related to energyproduction/Energy produced(t/GWheq)

NOx emissions related to energy production/Energy produced (t/GWheq)

CO2 emissions related to energy production/Energy produced (t/MWheq)

2003 2004 2005 2006 20070.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

ENERGY PERFORMANCE

7.6%

92.4%

0.3%0.3%

3.2%

2.8%

0.1%0.9%

CO2 emissions – Gas transmission and storageCH4 emissionsGas transportation, storage and distribution

Greenhouse gas emissionsLandfill center

Greenhouse gas emissionsIncineration (non-biodegradable portion of the waste)

CO2 emissions – Vehicle fleet

Greenhouse gas emissions – Waste treatmentCO2 emissions

Energy production

BREAKDOWN OF GREENHOUSE GAS EMISSIONS (TONS EQ.CO2)

Emissions of atmospheric pollutants were down very signifi cantly for gases like CO2, SO2 and NOx, while energy production rose substantially

BIODIVERSITY

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80 MILLION TONS OF CO2 ELIMINATED71% of the emissions eliminated,

which totaled more than

80 million eq CO2 in 2007,

were generated by nuclear

and hydraulic technologies.

Recycling of materials,

flyash and incineration

residue generated 13%,

co-generation 7%, the use

of biomass 3%, while

waste-to-energy recovery

and heat recovery 3%.

SUEZ is attentive to the

opportunities that arise for

Clean Development Mechanism

(CDM) and Joint Implementation

projects when the revenues

expected cover the additional

costs related to greenhouse gas

reduction measures. Several

experiments are taking place in

both energy and the environment.

Ten or so new CDM projects are

being studied in Latin America

and Asia.

In the context of controlling the

CO2 emissions resulting from

the operations of thermal power

plants, SUEZ and Electrabel are

studying the promising method

of geological capture and storage

of CO2. A multi-year joint

research and demonstration

program in this area was started

several years ago and benefits

from significant financing

within the Group. The technology

of carbon capture and storage

will secure investments in new

coal capacity in an increasingly

tight carbon context and will

maintain the flexibility that

currently characterizes the

Group’s electrical production

capacities.

PRESERVATION OF NATURAL RESOURCES The depletion and deterioration

in the quality of resources

in certain countries in which

the Group operates have

led SUEZ to increase the

awareness of its sites to the

need for integrated management

of natural resources, particularly

in terms of dependence on

fossil fuels, economizing raw

materials, protection of the

quality of bodies of water, etc...

Management of water resources

integrates all problems related

to water and sanitary services

(protection of the resource,

agriculture, land-use

planning) and the resolution

of potential conflicts by

negotiating with all users-

consumers.

Quality control of the drinking

water that is produced and

distributed and the discharges

from purification stations is

conducted at the local level

through auto-monitoring controls

and reported to the central level,

which monitors performance

assessments. In the area of

wastewater treatment, SUEZ

Environment, in partnership

with the communities for which

it works, ensures compliance

with and, if possible, anticipates

the standards for wastewater

discharge and the future

fate of sludge.

In 2007, the Group consumed

approximately 230 million m3 of

water for industrial processes and

uses. This was an increase over

2006 because of an expansion

of the reporting perimeter. The

fight against water leaks has made

advances, which is reflected in

an increase in the technical yield

from drinking water adduction

networks, but this progress

does not show up in the

indicators, which integrate

the new management contract

for drinking water for the city

of Algiers.

PROTECTING BIODIVERSITY During the “Grenelle de

l’Environnement”, SUEZ made

a commitment to integrate

biodiversity into the management Construction of the Tétouan wind farm commissioned in 2005 by Compagnie du Vent (Morocco)


of its sites in France by the end

of 2009, and into its European

sites by 2012. In order to

assess its impact on fauna

and flora, SUEZ is precisely

mapping its industrial sites and

their surrounding environment

(proximity to sensitive areas,

etc.) using the Locamaps

mapping tool, developed

specifically for this

purpose.

When potentially sensitive sites

are identified (proximity

of wetlands where there is

fragile fauna, for example),

prevention and protection

measures are taken. In Belgium,

for example, an artificial pond

was created near a power plant to

encourage the reproduction

of a specific species of

amphibians. Compagnie

Nationale du Rhône integrates

biodiversity into the nature of

its business. For example, in

collaboration with local scientists

and associations, it develops

atlases of sites of ecological

interest, which are used as the

basis for preparing local action

plans along the Rhône, which is

now classified as a Natura

2000 zone.

Purifi cation station in Grasse Roumiguières (France)

The geological capture and storage of CO2 is a promising method for controlling greenhouse gas emissions

“

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10 COMMITMENTS FOR THE ENVIRONMENT Actively involved in the “Grenelle

de l’Environnement”, an enormous

consultation process that

took place in France to bring

political action to environmental

protection requirements,

SUEZ publicly made a series

of concrete commitments

which involve the entire Group.

As a professional in the energy,

water and waste service

businesses, SUEZ has made

a commitment to:

1 Provide solutions that

meet the ambitious objectives

of the Grenelle for building

energy efficiency by:

• proposing, together with our

partners, an integrated offer

that optimizes the following

aspects: emissions, energy

consumption, and interior

air quality;

• developing for these services

performance contracts over

time, including initial diagnostic

and tracking indicators in order

to provide customers with a

guarantee of real and lasting

energy savings (typically 20%).

2 Participate in the transition

to zero-carbon energy production,

both in France and abroad by:

• significantly raising our renewable

power production capacity

(hydraulic, photovoltaic, wind,

biomass): in France, to contribute

to the ambitious objective of

20% renewable energy in final

consumption in 2020; in Europe,

by raising our renewable energy

capacity to 18% starting in

2009; internationally, based on

resources and local priorities;

• developing renewable thermal

energy directly in buildings

and through the heating networks;

• participating actively in applied

research in carbon capture and

storage projects, and research and

development in fourth-generation

nuclear energy.

3 Promote the circular

economy based on the reduction,

reuse and recycling of

waste by:

• developing, in partnership with

manufacturers, deconstruction

or treatment processes in order

to improve the eco-design of

products; optimizing the recovery

of the materials that make up

those products;

• by setting an objective of

at least 35% for material and

biological recovery in France

by 2012.

Recovery of biogas at the Mably (France) storage unit

4 Fight waste by improving

the yield from drinking water

networks in order to save

the equivalent of the water

consumption, in France, of a

city of 700,000 residents by

the end of 2010.

5 Develop public-private

partnerships (concessions,

partnership agreements, etc.)

so that local communities

can make the investments

necessary to meet the wastewater

purification standards set by the

European Union, while limiting

their impact on the price of the

service.

6 Integrate biodiversity,

before the end of 2009, into

the management of the

Group’s sites in France and

set up action plans for


Between July and October 2007, the French government launched an extensive consultation process to consider decisions to be made in the long term with respect to the environment and sustainable development. Dozens of meetings were held with politicians, unions, associations, businesses, researchers—organized around six themes (the fight against climate change, controlling energy demand, protection of biodiversity and natural resources, the environment and health), and each theme was divided into workshops (transportation, buildings, energy, waste, GMOs, etc.), in a process that covered all sustainable development issues. At the end of this work, a general report was submitted to the President of the Republic, in the presence of two Nobel peace prize winners, Wangari Maathaï and Al Gore, and the President of the European Commission. The report defines a consistent framework for French public action based on three priorities: the fight against global warming, the protection of biodiversity, and the reduction of pollution. A major series of measures was announced for sectors such as transportation, construction, agriculture and others. SUEZ was actively involved in this process. Several of its experts and officers actively participated in the work and final negotiations. All French employees were involved, primarily via an Intranet site that welcomed 2500 participants. SUEZ was then one of the first companies to announce clear commitments in line with the objectives of the “Grenelle”. .

GRENELLE DE L ENVIRONNEMENT»AN UNEQUALLED PROCESS

FOCUS

Biomass boiler- Heating network in La Rochelle (France)

sensitive sites; expand this

experiment to our European

sites by 2012.

7 Hire 110,000 employees

by 2012 and 20,000 people in

2008, who will contribute to our

development in the energy and

environment businesses.

As a responsible corporation,

SUEZ has made a commitment to:

8 Continue its efforts to

reduce its environmental

impact and make its employees

ambassadors of sustainable

development by:

• ensuring that 100% of the

permanent lighting in the Group’s

administrative buildings around

the world will save energy in

2009;

• systematically giving priority

to vehicles with lower CO2

emissions;

• raising awareness about

eco-citizen measures among all

Group employees by the end

of 2009 (and by the end of 2008

for all employees in France).

9 Continue active dialogue

with its stakeholders at

all governance levels in the

Group:

• defining by the end of 2008

a methodology for the

identification and census

of all stakeholders;

• regularly organizing cooperation

meetings at all levels of the

Group.

10 Convince its shareholders

that the Group’s sustainable

development strategy is a real

“asset” by:

• expanding communication on

these issues, particularly at each

Shareholders’ Meeting;

• expanding the role of the Ethics,

Environment and Sustainable

Development Committee within

the Group’s corporate governance

bodies.

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98

SOLIDARITY AND CORPORATE SPONSORSHIP

As an international Group, SUEZ is also a local player that provides essential services to a wide variety of customers. This local presence and these local ties imply a heavy social responsibility, which is reflected in the employment and hiring policies, but also in solidarity and sponsorship programs.

SUEZ encourages and supports

many solidarity programs

for disadvantaged groups.

A Sponsorship Charter provides

the guidelines for these programs,

which must be consistent with

the Group’s businesses and

its requirements in terms of

sustainable development. In

order to improve its effectiveness

in these areas, SUEZ generally

works in partnership with special

agencies and associations.

SUEZ FOUNDATION Created in 1992 under the aegis of

the Fondation de France, the SUEZ

Foundation in 2007 celebrated

15 years of a commitment to

children in trouble. Active in

approximately 100 countries, it

has supported more than 100

projects over 15 years, half of

them outside Europe. The projects

vary greatly and are designed to

ease suffering and promote the

integration and development of

children. The projects include

programs to fight disease (support

to families of children suffering

from AIDS in Germany or Chileans

suffering from mental illness),

prevention and integration

programs (vacation colonies for

children from poor neighborhoods

in Brazil, nurseries for immigrant

families in Belgium), educational

projects (academic assistance in

Peru and China, development of

an entrepreneurial spirit in Brazil),

and projects designed to raise

awareness about issues related to

society (integration, environmental

protection, etc.). Several hundreds

of thousands of children have

received support from the SUEZ

Foundation.

PARTNERSHIPS SUEZ has developed a number

of partnerships in sports, cultural

areas and the environment.

As a leading partner of the

French team and the French

Soccer League, it is also involved

in judo and handball. Its various

subsidiaries and sites support a

number of clubs and associations

at the local level. The Group

also supports certain individual

athletes. All these initiatives

are strictly framed by the

Sponsorship Charter, which

defines the ethical rules for all

sponsorships. As a specialist in

lighting museums and monuments,

through its Ineo subsidiary, SUEZ

is also a major partner of cultural

life. The Group is a partner of the

Guimet museum and the Louvre

in Paris, the Palais des Beaux-

Arts and the Magritte Museum

in Brussels, along with the

Metropolitan Museum of New York.

The Group also supports symbolic

projects for the protection of

the environment, such as the

International Polar Foundation or

the Living Tomorrow home of the

future project, which has attracted

more than 5 million visitors

to Brussels.

SOCIAL SOLIDARITY AND INTEGRATION The Group supports a number of

solidarity projects either initiated

by its employees or in which they

participate. All these projects are

also framed by the Sponsorship

Charter. Founded in 1994,

Aquassistance is a humanitarian

association that provides assistance

in the field to populations suffering

from a shortage of water, by

sending experts and equipment.

In 2007, it conducted projects in

Angola (water supply system and

hygiene in roughly 10 villages),

in Madagascar (water access and

sanitation), as well as in Congo

Casa Vhida, a home for children suffering from AIDS SUEZ Foundation (Brazil)


(rehabilitation, etc.). Energy

Assistance, created in Belgium in

2001, works for similar goals in the

energy sector.

In 2007, SUEZ notably worked

in Burkina Faso, Burundi,

Congo-Kinshasa, Ethiopia, India,

and other countries in order

to connect isolated populations,

establish groups in schools

or clinics, install pumps

and more.

In its commitment to fight any

form of exclusion, SUEZ works to

promote the integration of disabled

persons and change society’s

perceptions about disabilities

and disease. Most of the Group’s

entities have initiated projects for

better inclusion of the disabled,

ZERO EMISSIONS IN ANTARCTICA Electrabel is a partner in the construction of a new Belgian scientific base in Antarctica. The Princess Elizabeth station, designed by the International Polar Foundation, can house 20 people during the four months of the Antarctic summer and will focus on the effects of global warming. This will be the first station of this type to use 100% renewable energy and recycle its waste. SUEZ is lending its technical expertise, along with other support, for the design of the station.

PROTECTION OF CHILDREN IN MOROCCO In Morocco, the SUEZ Foundation supports the Bayti (“My house”) association created by a pediatrician, which leads major projects: “Street children”to find homes for and reintegrate young outcasts in Casablanca, Meknès and Essaouira, or “little maids”to reduce domestic and sexual exploitation of young girls.

AID TO AIDS ORPHANS IN SOUTH AFRICA With 5.3 million persons with HIV/AIDS, South Africa leads all countries affected by the pandemic that has created hundreds of thousands of orphans. Since 2006, the SUEZ Foundation has supported an extra-school program set up by the François-Xavier Bagnoud association. Designed for orphans and children with the virus, the projects support the communities in the major townships of Soweto, Alexandra and Witbank.

both in public services and within

society as a whole.

In addition to the involvement

of Group employees, these

efforts on behalf of the

disabled also include the

Group’s publics:

For example, Lyonnaise des Eaux

sends it bills and its information

magazine in Braille on request

from customers with vision

problems. The SUEZ website is

also adapted for consultation by

those with vision problems. Finally,

in addition to its own publics,

SUEZ is also involved in a number

of projects to improve society’s

perception of disabled persons.

In Belgium, Electrabel is a

partner in a number of projects

BAYTI – educational support, customized educational workshops (Morocco)SUEZ Foundation

to improve society’s perception

of the disabled.

The company also supports the

Belgian Paralympic Committee

for the Olympic Games in Beijing.

Corporate Citizen Trophy.Gepsa is an Elyo subsidiary dedicated to reintegrating prisoners into society. It trains the prisoners in the energy service businesses, then prepares them for their return to society and assists them when they leave prison. In 2007 it won the Corporate Citizen Trophy.

HIGHLIGHT

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INANCIAL STATEMENTS

BALANCE SHEETFINANCIAL DATA

INDICATORSFINANCIAL STATEMENTS


INDICATORSFINANCIAL STATEMENTS


REPORTINGINDICATORS

FINANCIAL STATEMENTS



OUR PERFORMANCE Whether on the social, environmental or financial level, SUEZ policy is based on the publication of reliable and certified financial data. In order to measure changes in its performance accurately, SUEZ continues to enhance the reporting systemit established in 2001 on the basis of indicators covering all its businesses.

102 • 2007 ENVIRONMENTAL REPORTING PROCEDURES

104 • ENVIRONMENTAL INDICATORS

108 • 2007 SOCIAL REPORTING PROCEDURES

110 • SOCIAL INDICATORS

114 • REPORT BY THE STATUTORY AUDITORS

116 • CONSOLIDATED BALANCE SHEET – ASSETS AND LIABILITIES

117 • CONSOLIDATED INCOME STATEMENT

118 • CASH FLOW

119 • APPLICATION OF THE U.N. GLOBAL COMPACT PRINCIPLES

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102

In order to ensure the transparency

and reliability of the data it

publishes, SUEZ has initiated the

progressive review by its Auditors

of the quality of certain indicators

related to the environmental and

corporate data published. The first

step performed for the data from

fiscal 2001 consisted of a review

of the reporting procedures for

performance indicators. In 2003

and 2004, the work performed led

to an opinion on the reporting

procedures for environmental

and corporate data and

on the quality of a limited number

of indicators for selected entities.

By incorporating the

recommendations made by

the Auditors, SUEZ continues

the reinforcement of its systems

of non-financial reporting.

In 2005, the scope of the

verification work was extended,

which allowed the Auditors to

expand the scope of their opinion

to all data, and not limit their

opinion only to the entities

visited. In 2006, the number

of indicators verified was

increased and new methodology

guides were distributed following

the comments made by the

auditors during the previous

fiscal year.

2007 ENVIRONMENTAL REPORTING PROCEDURES

For environmental reporting,

the year 2007 was marked by

the completion of work in the

following areas: clarification

of the rules for definition of the

reporting scope with regard to

closed landfills and sub-contracted

materials services, revision

of certain coherence tests,

and definitions and revision of

existing methodology references

(SO2, NOx and PM emissions,

mercury emissions, water

consumption and waste). A review

of Management indicators has

been carried out in order to

reduce their number and increase

their relevance.

Special attention has been paid

to improvement of the CERIS tool.

CERIS is an IT solution for

environmental reporting, developed

by SUEZ in 2003 in its first

version. It enables the

management of the network

of environment correspondents

and coordinators, the management

and documentation of the

environmental reporting scope,

the input, checking and

consolidation of indicators,

the production of reports and

finally the supply or publication

of the documentation necessary

for the collection of data and the

control of information feedback.

In addition, CERIS has been

reviewed by the Group’s internal

audit department.

In 2007, the migration of the

CERIS reporting solution to a new

version enabled SUEZ to put the

accent on strengthening the

system for controlling the figures

input by the business units. CERIS

now covers all the business lines

and is today deployed directly

inside certain business lines and

subsidiaries. In 2007, this system

was used at business line level

for the Water business of SUEZ

Environnement, which greatly

increased the quantity of data

managed within the system.

The procedures for defining the

environmental reporting scope are

such as to cover the performance

and impact as a whole for the

facilities in which the Group holds

technical operational control.

The legal entities included in the

reporting scope were those whose

operations were relevant in terms

of environmental impact

(excluding, therefore, energy

trading and financial and

engineering activities), and

that were either fully

or proportionately consolidated

(based on the financial


consolidation rules). Those entities

report the performance and impact

of the facilities in which they hold

technical operational control,

including facilities operated on

behalf of third parties. These

totals are then consolidated

depending on the level of financial

consolidation, with the exception

of the sites or operations covered

by SMEs, which are fully

consolidated.

On the basis of consolidated

revenues, relevant revenues

(after excluding the revenues

generated by the activities that

are not considered relevant in

terms of environmental impact)

are defined and identified for each

legal entity. The coverage of these

relevant revenue figures by each

of the environmental management

indicators is carried over.

The set of procedures for reporting

environmental data consists of

a generic procedure based on

standard guidelines to be used

at the appropriate levels of the

reporting process. The deployment

of the procedures throughout

the Group relies on a network

of duly authorized environmental

agents and coordinators.

These procedures and work

guidelines at the Group and

business line level detail the

collection, control, consolidation,

validation and transmission

of environmental data at the

various levels of the organization

as well as the rules that define

the scope and consolidation.

They include technical documents

that provide methodological

guidelines for calculating certain

indicators. The list of the entities

included in the scope

of environmental reporting

is attached to the procedures

and guidelines.

The definitions of indicators used

to measure environmental

performance in the Group’s

activities have been revised

on the basis of the Auditors’

comments. They have also

benefited from comments by

operational managers represented

in a dedicated work Group.

The entire documentation is

available on request from the

Group’s environment division.

The following should be noted about the data published in this report and in the Activity and Sustainable Development Report:

1 SUEZ has established a new

indicator to measure its mercury

emissions. However, because the

concentration measured is close

to the detection limits, the values

reported are not sufficiently

reliable for use in monitoring

performance over time. In

addition, some entities do not yet

take these measurements

2 Responsible for the waste

generated by its activities, the

SUEZ Group maintains indicators

of the value enhancement of its

waste. However, concepts of waste

and recovery vary between

countries and local regulations.

In addition, the data on recovered

sludge include the tonnage of

incinerated sludge without

waste-to-energy recovery. With

a view to continually improving

the indicators it uses, the Group

intends to examine closely those

indicators and underlying concepts

for its next reporting so as

to harmonize waste accounting

and tracking.

3 The reliability of the scope of

the environmental reporting is one

of SUEZ’s priorities which evolves

in an international context of the

sale and acquisition of businesses.

In this respect, the Group has

undertaken an internal review

for a better management of that

scope. This will result among

other things in the modification

of existing procedures or the

creation of a new procedure

dedicated to the definition of the

scope and applicable as of the

next environmental report. This

approach has been motivated

by the fact that two SEI entities,

considered as equity affiliates,

were included by error

in the 2006 reporting.

4 Conscious of the stakes

involved in the management

of Water, SUEZ is also pursuing

its efforts in the global control

of water consumption, for all uses

and types of site combined.

Particular attention will be paid

to the risks of double counting

and the possible confusion

between industrial water use

and cooling water.

5 For consistency, the factor

for conversion of thermal energy

produced (GWhTh) into electrical

energy (GWhe) is maintained at

0.35 in order to show performance

development during 2007. It will

be revised if necessary for the

work groups in 2008.

6 It should be noted that only

leachings from Class 2 Storage

Centers are reported.

7 Indicators concerning

auto-consumption of energy for

energy producing activities have

been eliminated and replaced by

more relevant indicators that allow

measurement of the energy

efficiency of such operations.

8 The increase in the number

of sites covered by certified

systems of originates in changes

in the methods adopted by certain

entities during the fiscal year. The

concept “site” applies at present

to the lowest level (industrial site)

and not to intermediate levels

(regional entities) as previously.

The correspondence of the Group’s

environmental performance

indicators with the New Economic

Regulations and the Global

Reporting Initiative is documented

in the summary table of

environmental performance

published in the Annual

Activity and Sustainable

Development Report.

OUR

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104

MANAGEMENT Environmental commitment policy or declaration %REV 80.7 83.7 90.2 89.8 92.2 100.0 Environmental program %REV 62.8 62.7 65.3 69.6 75.2 100.0 ��Certified Environmental Management Systems (EMS) %REV 42.7 45.7 48.2 47.9 50.3 95.3 � Sites or activities covered by certified EMS - ISO 14001 Nb nd 865 925 1,082 1,254 (3) 100.0�� Sites or activities covered by certified EMS - EMAS Nb nd 10 6 7 11 100.0� Sites or activities covered by certified EMS - Other local standards Nb nd 160 86 1,163 (2) 3,210 (4) 100.0 Environmental analyses %REV 55.7 60.9 57.7 58.0 57.2 99.8 Environmental risk prevention plans %REV 49.6 55.0 60.9 65.1 63.8 99.3 Environmental crisis management plans %REV 78.6 64.6 70.1 76.9 70.5 98.9 Environmental reports published by rank N-2 companies %REV 52.6 42.3 45.2 46.9 41.4 98.1 Environmental expenditures (Capex + Opex) kEuros 2,287,675 2,268,023 2,679,112 3,109,865 2,670,400 (5) 100.0 Complaints related to environmental damage Nb 94 62 111 54 34 99.4 Judgements related to environmental damage Nb 22 19 29 9 16 99.8 Indemnities paid for judgements (related to accidents affecting the environment) kEuros 1,485 327 384 119 667 99.6 ENERGY ��Installed capacity - Electricity and heat - Total renewable sources MWeq 4,834 4,984 5,945 6,549 9,755 80.1�� Installed capacity - Electricity - Small hydraulic MW 230 252 100.0�� Installed capacity - Electricity - Large hydraulic MW 5,266 8,244 (6) 100.0�� Installed capacity - Electricity - Hydraulic MW 4,388 4,388 5,292 5,496 8,495 100.0�� Installed capacity - Electricity - Wind MW 24 23 48 128 238 100.0�� Installed capacity - Electricity and heat - Geothermal MWeq 18 18 19 19 22 100.0�� Installed capacity - Electricity and heat - Biomass MWeq 142 171 185 318 373 100.0�� Installed capacity - Electricity and heat - Biogas MWeq 91 120 130 152 148 80.1�� Installed capacity - Electricity and heat - Incineration (biodegradable portion of waste) MWeq 170 264 271 436 479 � 100.0� Quantity of electricity and heat produced - Renewable sources GWheq 26,008 23,388 22,951 20,864 44,959 (11) 100.0��Primary energy consumption - Total GWh 278,522 292,864 293,444 309,262.6 (1) 319,024 95.3�� Primary energy consumption - Energy production GWh 276,393 290,193 289,118 295,573.1 (1) 314,082 100.0�� Primary energy consumption - Gas transport, distribution and storage GWh 1,323 1,574 1,477 2,097 1,900 100.0�� Primary energy consumption - Waste treatment GWh 807 974 2,181 2,761 2,356 100.0�� Primary energy consumption - Wastewater collection and treatment GWh 0 123 669 651 686 95.3��Electricity consumption - Total GWh nd 4,512 4,948 10,890 4,946 98.8�� Electricity consumption - Energy production GWh nd 1,147 2,146 8,251 2,072 (12) 100.0�� Electricity consumption - Waste treatment GWh 722 315 350 209 244 99.9�� Electricity consumption - Wastewater collection and treatment GWh 2,111 1,154 1,067 1,050 1,067 98.8�� Electricity consumption - Drinking water treatment and distribution GWh 1,982 1,896 2,026 1,380 1,563 99.1�� Energy efficiency of fossil-fuel plants (inc. Biomass) (8) % – – 42.0 100.0 AIR Total Green House Gas (GHG) emissions T.eq.CO2 78,710,688 81,778,664 79,593,754 80,692,788 82,865,722 95.3��Total Green House Gas (GHG) emissions (excluding vehicle fleet) T.eq.CO2 81,153,251 78,987,093 80,040,783 82,144,335 100.0�� CO2 emissions - Energy production tons 71,086,899 74,240,459 71,974,721 74,397,654 (1) 76,571,027 100.0�� CO2 emissions - Gas transport & storage tons 263,679 286,402 263,395 288,538 271,262 100.0�� CH4 emissions - Gas transport, storage & distribution(9) tons 25,340 16,362 13,625 10,222 9,875 (13) 100.0�� GHG emissions - Landfills T.eq.CO2 4,179,943 3,527,597 3,669,788 2,400,410 2,654,691 100.0�� GHG emissions - Incineration (non biodegradable portion of waste) T.eq.CO2 2,508,921 2,712,763 2,672,160 2,626,217 2,319,317 100.0�� GHG emissions - Wastewater treatment T.eq.CO2 139,098 42,420 120,910 113,319 120,663 95.3��CO2 emissions - Vehicle fleet tons 868,455 625,413 606,662 651,978 721,387 98.7��NOx emissions tons 117,076 124,502 110,589 104,785 (1) 98,037 (14) 100.0��SO2 emissions tons 192,339 226,155 189,270 204,196 (1) 202,151 100.0��Particulate matters emissions tons 13,508 16,618 9,882 9,976 9,974 100.0��Mercury emissions kg 310 (10) 96.8

ENVIRONMENTAL INDICATORS Units SUEZ SUEZ SUEZ SUEZ SUEZ Coverage 2007 2003 2004 2005 2006 2007 2007

� Reviewed by the Statutory Auditors. (1) In 2006, the fi gures for the two SEI plants, Al Ezzel and Tractebel Bahrain, excluded from the scope

of reporting, were consolidated.– Tractebel Bahrain: combined cycle with potable water production – 938 MW – 5,681 m3/h;– Al Ezzel: combined cycle - 954 MW.

(2) In 2007, the indicator also included the ISO 9001 v 2000 sites, which were reported separately in previous years. Thus, the 2006 fi gure was revised to also include the ISO 9001 v 2000 sites and allow a comparison between 2006 and 2007.

(3) The number of sites certifi ed ISO 14001 rose sharply, primarily in the water and waste treatment sector (Czech Republic and France), at SES (Great Britain and Spain) and at Electrabel (SHEM).

(4) The defi nition of the indicator was changed and includes the ISO 9001 v 2000 sites with an environmental component. 2,575 sites were reported by Lyonnaise des Eaux.

(5) Decline in environmental expenditures, primarily in the waste services sector. (6) Inclusion of CNR in the scope of reporting.

(7) CAPEX = Term describing investments in intangible assets and property, plant and equipment. OPEX = Term referring to the expenses and costs related to the operations of the company (personnel costs, raw materials, etc.)

(8) New indicator replacing energy auto-consumption for energy production activities.

(9) Factor 21 used to calculate the impact in tons equivalent CO².(10) New indicator reviewed. See the methodological note on this subject. (11) Inclusion of CNR in the scope of reporting and increase in hydroelectric production because of heavy

rain volumes last year in Latin America (primarily Itasa and Tractebel energia).(12) In 2006, electric auto-consumption was added. This year, it was decided to return to the 2005 situation

and no longer include it. (13) Decrease primarily the result of the efforts made in the LNG business to reduce methane emissions

during the unloading of tankers. (14) Decline partially due to the modernization of equipment at the Polanieç plant (SEE), and based

on the same Electrabel scope, inclusion of treatment facilities (SOx, NOx) at the Ruien plant, shutdown of the Monceau coal plant, and reduction in the production from the Amercœur plant. In the SES branch, the emissions factors used in previous years indicated emissions that were higher than reality. These emissions factors were refi ned this year.

92.2 75.2 50.3

1,254 , (3) 11

3,210 (4) 57.2 63.8 70.5 41.4

2,670,400 (5)

34 16

667

9,755 252

8,244 (6)

8,495 238

22 373 148 479

44,959 (11) 319,024 314,082

1,900 2,356

686 4,946 2,072 (12)

244 1,067 1,563

42.0

82,865,722 82,144,335 76,571,027

271,262 9,875 (13)

2,654,691 2,319,317

120,663 721,387 98,037 (14)

202,151 9,974

310 (10)


MANAGEMENT Environmental commitment policy or declaration %REV 82.3 94.0 97.0 90.5 3 4.8 Environmental program %REV 77.3 94.0 57.3 86.3 3 4.8 ��Certified Environmental Management Systems (EMS) %REV 62.0 31.4 34.2 73.3 3 4.8� Sites or activities covered by certified EMS - ISO 14001 No. 50 41 184 979 3 4.8�� Sites or activities covered by certified EMS - EMAS No. 5 0 1 5 3 4.8� Sites or activities covered by certified EMS - Other local standards No. 1 0 92 3,117 3 4.8 Environmental analyses %REV 76.5 80.6 37.7 59.6 3-4 – Environmental risk prevention plans %REV 74.0 92.7 30.0 85.1 6 4.9 Environmental crisis management plans %REV 74.3 93.6 40.5 92.9 6 4.9 Environmental reports published by rank N-2 companies %REV 63.6 22.1 21.5 63.9 6 – Environmental expenditures (Capex + Opex) kEuros 295,950 153,382 62,705 2,160,690 5 EN30 Complaints related to environmental damage No. 4 9 2 19 8 EN28 Judgements related to environmental damage No. 0 6 0 10 8 EN28 Indemnities paid for judgements (related to accidents affecting the environment) kEuros 0 1 0 666 8 EN28 ENERGY ��Installed capacity - Electricity and heat - Total renewable sources MWeq 4,283 4,704 220 548 1 EN5 - EN6�� Installed capacity - Electricity - Small hydraulic MW 203 0 49 – 1 EN5 - EN6�� Installed capacity - Electricity - Large hydraulic MW 3,699 4,545 0 – 1 EN5 - EN6�� Installed capacity - Electricity - Hydraulic MW 3,901 4,545 49 – 1 EN5 - EN6�� Installed capacity - Electricity - Wind MW 234 0 4 – 1 EN5 - EN6�� Installed capacity - Electricity and heat - Geothermal MWeq 0 0 22 – 1 EN5 - EN6�� Installed capacity - Electricity and heat - Biomass MWeq 122 159 92 – 1 EN5 - EN6�� Installed capacity - Electricity and heat - Biogas MWeq 0 0 9 139 1 EN5 - EN6�� Installed capacity - Electricity and heat - Incineration (biodegradable portion of waste) MWeq 26 – 44 409 1 EN5 - EN6��Quantity of electricity and heat produced - Renewable sources GWheq 18,289 22,930 470 3,270 1 EN5 - EN6��Primary energy consumption - Total GWh 159,415 127,930 28,136 3,544 1 EN3�� Primary energy consumption - Energy production GWh 158,365 127,080 28,136 502 1 EN3�� Primary energy consumption - Gas transport, distribution and storage GWh 1,050 850 0 – 1 EN3�� Primary energy consumption - Waste treatment GWh 0 0 0 2,356 1 EN3�� Primary energy consumption - Wastewater collection and treatment GWh 0 0 0 686 1 EN3��Electricity consumption - Total GWh 1,609 0 261 3,076 1 EN3�� Electricity consumption - Energy production GWh 1,609 0 261 202 1 EN3�� Electricity consumption - Waste treatment GWh 0 0 – 244 1 EN3�� Electricity consumption - Wastewater collection and treatment GWh 0 0 – 1,067 1 EN3�� Electricity consumption - Drinking water treatment and distribution GWh 0 0 – 1,563 1 EN3�� Energy efficiency of fossil-fuel plants (inc. Biomass) (8) % 44.3 40.7 36.0 – 1 EN5 - EN6 AIR�� Total Green House Gas (GHG) emissions T.eq.CO2 40,196,480 30,897,757 6,328,169 5,443,314 1 EN16��Total Green House Gas (GHG) emissions (excluding vehicle fleet) T.eq.CO2 40,101,040 30,890,491 6,328,169 4,824,634 1 EN16�� CO2 emissions - Energy production tons 39,925,328 30,587,587 6,058,111 0 1 EN16�� CO2 emissions - Gas transport & storage tons 118,760 152,502 0 0 1 EN16�� CH4 emissions - Gas transport, storage & distribution(9) tons 2,712 7,162 1 0 1 EN16�� GHG emissions - Landfills T.eq.CO2 0 0 0 2,654,691 1 EN16�� GHG emissions - Incineration (non biodegradable portion of waste) T.eq.CO2 0 0 270,037 2,049,280 1 EN16�� GHG emissions - Wastewater treatment T.eq.CO2 0 0 – 120,663 1 EN16��CO2 emissions - Vehicle fleet tons 95,440 7,266 0 618,681 1 EN16��NOx emissions tons 39,147 37,826 15,560 5,504 1 EN20��SO2 emissions tons 42,553 153,621 5,711 266 1 EN20��Particulate matters emissions tons 1,732 8,084 73 85 1 EN20��Mercury emissions kg 37 3 – 270 1 EN20

Units SEE SEI SES SE CORRESPONDENCE 2007 2007 2007 2007 2007 NRE GRI3

UNITS OF MEASUREMENT

%REV = percentage of revenues

No. = Number

W = Watt = unit of measurement of power per unit of time: 1 joule/second

Wh = Watt hour = unit of measurement of the energy developed by 1 W of power for 1 hour - = 3,600 joules

We = Electrical Watt / Whe = Electrical Watt hour = unit of measurement of power and electrical energy

Wth = Thermal Watt / Whth = Thermal Watt hour = unit of measurement of power and thermal energy

Weq = Watt equivalent = unit of measurement of electrical and thermal power (for 2007, SUEZ set the equivalence of Whth at 0.35 Wheq)

Wheq = Watt hour equivalent = unit of measurement of electrical and thermal energy (for 2007, SUEZ set the equivalence of Whth at 0.35 Wheq)

Bq = Becquerel = unit of measurement of radioactivity

t = Ton = 1,000 kilograms

T.eq.CO2 = tons equivalent CO2 (1 T CH4 = 21 T CO2)

m3 = cubic meter

k = Kilo = 103

M = Mega = 106

G = Giga = 109

T = Tera = 1012

4,283 4,704 220 548 203 0 49 –

3,699 4,545 0 – 3,901 4,545 49 –

234 0 4 – 0 0 22 –

122 159 92 – 0 0 9 139

26 – 44 409 18,289 22,930 470 3,270

159,415 127,930 28,136 3,544 158,365 127,080 28,136 502

1,050 850 0 – 0 0 0 2,356 0 0 0 686

1,609 0 261 3,076 1,609 0 261 202

0 0 – 244 0 0 – 1,067 0 0 – 1,563

44.3 40.7 36.0 –

40,196,480 30,897,757 6,328,169 5,443,314 40,101,040 30,890,491 6,328,169 4,824,634 39,925,328 30,587,587 6,058,111 0

118,760 152,502 0 0 2,712 7,162 1 0

0 0 0 2,654,691 0 0 270,037 2,049,280 0 0 – 120,663

95,440 7,266 0 618,681 39,147 37,826 15,560 5,504 42,553 153,621 5,711 266 1,732 8,084 73 85

37 3 – 270

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WATER ��Water consumption - Industrial process - Total Mm³ 47.35 62.63 73.57 78.13 71.41 72.7�� Surface water Mm³ 17.31 28.86 45.31 54.68 53.16 72.7�� Ground water Mm³ 3.63 5.29 4.62 4.52 4.14 100.0�� Public networks Mm³ 25.20 28.47 23.64 18.94 14.11 (15) 97.7�� Water consumption - Cooling process - Total Mm³ 140.99 145.24 147.06 142.04 156.06 71.6�� Evaporated surface water Mm³ 129.50 133.98 136.51 130.52 140.71 71.6�� Ground water Mm³ 7.85 7.72 6.83 7.11 7.27 100.0�� Public networks Mm³ 3.64 3.54 3.73 4.41 8.09 99.9 Drinking water delivery Quantity input to the network Mm³ 7,291 5,599 5,154 3,213 3,425 96.0 Coverage rate of the population % 93 92 93 92 97 100.0�� Networks technical yield % 73 73 73 75 74 100.0 Wastewater treatment Quantity of wastewater treated Mm³ 2,396 2,244 2,160 2,017 2,211 95.3 Coverage rate of the population % 78 78 84 95 96 100.0 Length of networks km 95,540 82,741 84,672 76,411 73,137 98.4 Number of WWTP - Treatment capacity � 120 kg DBO5/day No. 802 752 743 740 733 95.3 Number of WWTP - Treatment capacity � 120 kg DBO5/day No. 777 741 733 714 843 95.3�� Pollution load treated (tons of DBO5 per year) tons 1,033,288 590,869 503,865 471,504 489,497 95.1 WASTE �� Specific waste � Fly ashes, Refioms tons 3,598,542 3,280,292 2,998,283 3,269,161 3,224,969 100.0�� Bottom ashes tons 2,373,793 2,859,815 2,663,097 2,688,399 2,758,263 100.0�� Desulphurization by-products tons 199,738 219,529 153,415 203,164 179,739 100.0�� Sludge from wastewater treatment plants (WWTP) tons 846,566 583,365 507,188 489,486 438,651 95.3�� Non-specific waste � Other non-hazardous waste tons 1,946,437 3,765,568 3,673,113 4,939,578 446,074 (16) 99.7�� Other hazardous waste tons 187,604 114,714 106,430 84,157 210,234 (17) 100.0��Recovered waste and by-products (excluding sludge recovery) tons 3,701,343 3,991,200 4,154,354 3,813,934 4,198,508 (18) 93.5��Recovered sludge tons 231,209 292,888 264,878 275,445 246,476 95.1 �� Quantity of leachates collected m³ 3,097,871 3,292,610 4,030,936 2,935,769 3,461,925 100.0��Quantity of leachates treated (internally or externally) m³ 3,105,995 3,718,966 4,185,674 3,075,266 3,366,311 100.0�� Energy recovery from waste � Electricity sold (Incineration + landfills) GWh 1,848 2,143 2,142 2,516 2,624 100.0�� Energy recovery from waste - Heat sold (Incineration) GWh nd 2,346 2,479 1,245 1,379 100.0 NUCLEAR Radioactive gaseous emissions Rare gases TBq nd 18.4 14.1 18.2 33.5 100.0 Iodine GBq nd 0.0700 0.0700 0.1000 0.1629 100.0 Aerosols GBq nd 0.0000 0.0400 1.7300 0.0144 100.0 Radioactive nuclear waste (weak and average activity) m³ 177.9 147.9 180.7 229.1 272.3 100.0 Radioactive liquid discharge - Beta et Gamma emitters GBq nd 44.63 26.25 34.41 24.29 100.0 Radioactive liquid discharge - Tritium TBq nd 87.50 84.68 90.18 110.83 100.0 VEHICLES Total number of vehicles No. 16,971 13,226 13,960 12,420 13,138 100.0 Number of ‘green’ vehicles No. 8,747 180 10,785 11,598 11,662 95.6 Number of ‘alternative fuels’ vehicles No. 421 542 651 95.4 Part of ‘green’ vehicle fleet in total vehicle fleet % 51.5 1.4 77.2 93.4 88.8 95.6 Part of ‘alternative fuels’ vehicle fleet in total vehicle fleet % 3.0 4.4 5.0 95.4 ECO-EFFICIENCY Energy produced/CO2 emissions related to energy production MWheq/T 2.53 2.51 2.51 2.43 2.83 – Energy produced/SO2 emissions related to energy production GWheq/T 0.93 0.85 0.99 0.95 1.10 – Energy produced/NOX emissions related to energy production GWheq/T 1.56 1.50 1.69 1.84 2.28 – Natural gas transported/CH4 emissions related to gas transport GWh/T 23.26 49.60 57.52 84.50 85.26 – Natural gas distributed/CH4 emissions related to gas distribution GWh/T nd 96.20 106.40 77.75 65.04 –Wastewater treatment - Sludge recovered/Sludge produced by WWTP % 27 50 52 56 56 – Incineration - Energy sold/incinerated waste with energy recovery kWh/T 277 373 376 375 388 – Landfills - Energy sold (biogas)/landfilled waste kWh/T 14 20 20 37 40 – Tonnage of recovered waste (energy and matter)/Tonnage of waste treated % 29 34 33 42 45 –

ENVIRONMENTAL INDICATORS

� Reviewed by the Statutory Auditors. (15) In previous years, the Norvegie cooling water (SITA France) was also included in the industrial water.

This was also true for the TERIS France entity. This represented a double counting of about 2.7 million m3 in 2006.

(16) In 2007, refuse from sorting and composting in the waste services sector is no longer included in this indicator; this is why there is a signifi cant variance from previous years.

(17) Increase due primarily to operations in the waste services sector at TERIS Spain and SITA Walloon and at Electrabel in Belgium.

(18) Includes all specifi c waste (fl y ash, bottom ash, desulphurization by-products) and non-specifi c waste (hazardous and non-hazardous).

71.41 53.164.14

14.11 (15)

156.06 140.71

7.27 8.09

3,425 97 74

2,211 96

73,137 733 843

489,497

3,224,969 2,758,263

179,739 438,651

446,074 (16) 210,234 (17)

4,198,508 (18) 246,476

3,461,925 3,366,311

2,624 1,379

33.5 0.1629 0.0144 272.3 24.29

110.83

13,138 11,662

651 88.8

5.0

2.83 1.10 2.28

85.26 65.04

56 388

40 45

Units SUEZ SUEZ SUEZ SUEZ SUEZ Coverage 2007 2003 2004 2005 2006 2007 2007


WATER��Water consumption - Industrial process - Total Mm³ 10.78 40.76 15.90 3.97 1 EN8�� Surface water Mm³ 4.41 34.73 14.02 0.00 1 EN8�� Ground water Mm³ 1.66 2.27 0.20 0.00 1 EN8�� Public networks Mm³ 4.70 3.75 1.68 3.97 1 EN8�� Water consumption - Cooling process - Total Mm³ 117.25 34.12 0.57 4.12 1 EN8�� Evaporated surface water Mm³ 117.18 22.62 0.00 0.91 1 EN8�� Ground water Mm³ 0.02 6.87 0.38 0.00 1 EN8�� Public networks Mm³ 0.06 4.63 0.18 3.21 1 EN8 Drinking water delivery Quantity input to the network Mm³ – – – 3,425 1 – Coverage rate of the population % – – – 97 – – � Networks technical yield % – – – 74 – – Wastewater treatment Quantity of wastewater treated Mm³ – – – 2,211 2 EN26 Coverage rate of the population % – – – 96 2 EN26 Length of networks km – – – 73,137 2 EN26 Number of WWTP - Treatment capacity � 120 kg DBO5/day Nb – – – 733 2 EN26 Number of WWTP - Treatment capacity � 120 kg DBO5/day Nb – – – 843 2 EN26�� Pollution load treated (tons of DBO5 per year) tons – – – 489,497 2 EN26 WASTE��Specific waste � Fly ashes, Refioms tons 785,406 2,150,159 30,085 259,319 1 EN22�� Bottom ashes tons 411,039 986,856 97,922 1,262,447 1 EN22�� Desulphurization by-products tons 179,739 0 0 0 1 EN22�� Sludge from wastewater treatment plants (WWTP) tons 0 0 0 438,651 1 EN22��Non-specific waste � Other non-hazardous waste tons 87,767 31,751 24,334 302,222 1 EN22�� Other hazardous waste tons 60,877 1,606 2,599 145,152 1 EN22��Recovered waste and by-products (excluding sludge recovery) tons 1,460,847 1,531,899 63,556 1,142,206 1 EN22��Recovered sludge tons – – 0 246,476 1 EN22�� Quantity of leachates collected m³ – – – 3,461,925 1 EN22��Quantity of leachates treated (internally or externally) m³ – – – 3,366,311 1 EN22��Energy recovery from waste � Electricity sold (Incineration + landfills) GWh – – 4 2,620 1 EN6�� Energy recovery from waste - Heat sold (Incineration) GWh – – 375 1,005 1 EN6 NUCLEAR Radioactive gaseous emissions Rare gases TBq 33.5 – – – 1 – Iodine GBq 0.1629 – – – 1 – Aerosols GBq 0.0144 – – – 1 – Radioactive nuclear waste (weak and average activity) m³ 272.3 – – – 1 – Radioactive liquid discharge - Beta et Gamma emitters GBq 24.29 – – – 1 – Radioactive liquid discharge - Tritium TBq 110.83 – – – 1 – VEHICLES Total number of vehicles Nb 80 – nd 13,058 1 EN29 Number of ‘green’ vehicles Nb 0 – nd 11,662 1 EN29 Number of ‘alternative fuels’ vehicles Nb 0 – nd 651 1 EN29 Part of ‘green’ vehicle fleet in total vehicle fleet % 0.0 – – 89.3 1 EN29 Part of ‘alternative fuels’ vehicle fleet in total vehicle fleet % 0.0 – – 5.0 1 EN29 ECO-EFFICIENCY Energy produced/CO2 emissions related to energy production MWheq/T 3.33 2.42 1.78 2.50 1 EN16 Energy produced/SO2 emissions related to energy production GWheq/T 3.12 0.48 1.97 19.25 1 EN20 Energy produced/NOX emissions related to energy production GWheq/T 3.39 1.96 0.72 0.93 1 EN20 Natural gas transported/CH4 emissions related to gas transport GWh/T 164.63 38.33 – – 1 EN16 Natural gas distributed/CH4 emissions related to gas distribution GWh/T 0.00 65.04 62.87 – 1 EN16 Wastewater treatment - Sludge recovered/Sludge produced by WWTP % – – – 56 1-2 EN22 Incineration - Energy sold/incinerated waste with energy recovery kWh/T – – – 365 1-2 EN6 Landfills - Energy sold (biogas)/landfilled waste kWh/T – – – 40 1-2 EN6 Tonnage of recovered waste (energy and matter)/Tonnage of waste treated % – – – 45 1-2 EN6

Units SEE SEI SES SE CORRESPONDENCE 2007 2007 2007 2007 2007 NRE GRI3

785,406 2,150,159 30,085 259,319 411,039 986,856 97,922 1,262,447 179,739 0 0 0

0 0 0 438,651

31,751 24,334 302,222 1 60,877 1,606 2,599 145,152

1,460,847 1,531,899 63,556 1,142,206 – – 0 246,476– – – 3,461,925 – – – 3,366,311

– – 4 2,620 – – 375 1,005

33.5 – – – 0.1629 – – – 0.0144 – – – 272.3 – – – 24.29 – – –

110.83 – – –

80 – nd 13,058 0 – nd 11,662 0 – nd 651

0.0 – – 89.3 0.0 – – 5.0

3.33 2.42 1.78 2.50 3.12 0.48 1.97 19.25 3.39 1.96 0.72 0.93

164.63 38.33 – – 0.00 65.04 62.87 –

– – – 56 – – – 365 – – – 40 – – – 45

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108

As in previous fiscal years,

the specialized services of the

Statutory Auditors were at the

forefront of a mission to verify

selected company indicators

published by the Group. Issuing

from the work carried out on

entities’ sites and at the head

offices of the Business Lines and

the Group, the recommendations

made in 2007 have enabled

SUEZ to undertake a variety

of actions for progress.

Developed in close collaboration

with the teams from the Business

Lines and entities, the “User’s

Guide” contains all the definitions

and procedures that comprise the

Group’s shared guidelines. Since

its conception in 2005, its content

has been enriched and made more

accurate. Cooperation has been

intensified with the Health and

Safety Network, which manages

consolidation of data linked to

accidents at work.

In addition, thanks to the

additional functions provided

by the new Group reporting tool

(“Magnitude”, see point 1 of

the note), control procedures

during the feedback of social

data are both more extensive and

2007 SOCIAL REPORTING PROCEDURES

easier to employ. Together these

developments have created greater

uniformity and increased reliability

in reporting practices on the part

of correspondents.

Since 2005, a series of new

indicators has been progressively

introduced into the reporting

tool and tested by the reporting

correspondents. These indicators

will be published as soon as

they meet the requirements of

quality and reliability and the

scope of their cover is sufficiently

representative.

The quantitative corporate

data in this report comes from

the HR phase of Magnitude,

a Group consolidation tool.

After collection, it was processed

and consolidated according

to clearly defined procedures

and criteria.

1 Magnitude, a consolidation

software package, collects,

processes, and reports the

data entered by local legal

entities that are subsidiaries

of the SUEZ Group. Each

company, including those

in the HRD phase, is dealt

with according to the following

financial consolidation method:

full consolidation (FC),

proportional consolidation (PC),

and equity affiliates (EA).

The analyses of the companies

in this report deal exclusively

with entities in the FC phase,

in which SUEZ controls

both capital and management.

Once a company is included

in SUEZ’s financial statements

as fully consolidated,

its company data are

completely integrated,

no matter how much capital

SUEZ may own in the

company.

2 Scope of reporting. A scope of reporting is attached to

each indicator, corresponding to

the coverage of the indicator as a

percentage of the Group workforce

(workforce of companies fully

consolidated in the SUEZ financial

results). Some companies may not

have sent their data, or there may

be some inconsistencies

in the data provided. This will

cause us to exclude the data

in question from the scope of

reporting.

3 Two methods for

the consolidation of indicators

are used:

– aggregation for structural data,

workforce flow, working conditions,

training and safety data;

– individual weighting for salaries.

4 External data used for the

calculation of salary indicators are

provided by UBIFRANCE as part

of a country information collection

agreement by the network of local

economic missions. This data

is supplemented by statistics

from the United Nations (United

Nations Population Fund), the

World Bank, and the OECD.

UBIFRANCE procedures

are ISO 9000 certified, and

information provided as

part of this partnership is

available from the SUEZ

head office.


The following should be noted regarding the data published in this report:

1 The total number of

employees in the divisions is

703 persons lower than the total

published number of employees.

This difference is due primarily

to the number of employees at

headquarters and to the number

of employees in financial sector

activities who are not attached

to one of the operational branches.

2 The distribution of

employees by socio-professional

category (SPC) decided in 2005

is maintained. Administrative

employees are accounted for

with the Senior Technicians and

Supervisors (techniciens

supérieurs et agents de

maîtrise or T.S.M.) for greater

consistency. The SEE branch has

recorded a number of movements

to the TSM category, in

order to stabilize the

distribution of its workforce

by SPC and be consistent

with the Group definitions.

3 Unlike social reporting, health

and safety reporting includes data

from entities leaving the Group or

acquired during the year, taking into

account the criteria for operational

control or reliability of the data.

This aspect is not yet handled

identically by all the branches and

will be clarified during revision of

the reporting procedure for health

and safety. This situation results in

a slight difference in the employee

perimeter covered by the two

reports.

4 The employee turnover

indicator only takes account of

terminations and resignations.

It is calculated from half-yearly

movements compared

to the average staffing level

for the half year.

5 Given the time lags, data

for training apply to forecasts.

Definitive items are available in the

second half of the year only.

6 The construction of

compensation indicators has

continued its refinement:

national salary practices are

better understood thanks to

the identification of benchmark

sectors of activity and a better

knowledge of the means of

remuneration practiced locally.

Information by country on salaries

paid in each sector is available

from the Group’s Industrial

Relations Office at the SUEZ head

office. Cost of living is determined

by private consumption per person,

based on information provided

by UBIFRANCE and additional

information from the Organization

for Economic Co-operation and

Development (OECD) and national

statistics offices.

7 Some values lower than 1.0

were recorded under the indicator

“gross worker’s wage/local gross

minimum wage.” Verification

showed that these were Group

companies that emphasized

insertion or with a significant level

of part-timers.

8 The salaries of some French

entities (excluding overseas

departments and territories) from

the SES business line covered

under the collective agreement

for the Building and Public Works

industry have been adjusted. The

average amount reported was thus

increased by 13.14% to take into

account the fact that the industry’s

paid vacation funds directly cover

paid vacation time.

9 Although it is a staple of

business culture in France, the

French concept of “cadres”

(managers) is sometimes difficult

to understand, in other countries

where SUEZ is present. This state

of affairs can lead to a slight

underestimation of the number of

managers because some entities

may take only their own director-

level management into account.

10 As regards the number of

handicapped persons, the figures

given represent the total number

of declared disabled employees

in relation to the average

monthly and half-yearly number

of employees for the Branch

concerned. These figures provide

the best information possible on

the integration of handicapped

persons into the SUEZ Group.

We do not consider it relevant

to provide a scope definition

for this indicator.

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110

WORKFORCE PER GEOGRAPHIC ZONE LA1 European Union 15,812 12,770 15,030 185 165 218 LA1 Rest of Europe 0 0 0 49 48 0 LA1 North America 1,183 1,196 1,291 LA1 South America 1,564 1,631 1,833 LA1 Africa – Middle East 19 44 176 LA1 Asia – Oceania 1,066 809 570 LA1��TOTAL 15,812 12,770 15,030 4,066 3,893 4,088 (scope) (100%) (100%) (100%) (100%) (100%) (100%) DISTRIBUTION OF EMPLOYEES BY SOCIO-PROFESSIONAL CATEGORY LA1� Managers 2,861 2,699 3,478 1,017 1,063 1,167 LA1�� Senior technicians and supervisors (T.S.M.)^ 2,887 8,607 9,753 1,117 1,199 1,174 LA1�� Workers, employees, technicians (O.E.T.)^ 10,064 1,464 1,799 1,932 1,631 1,747 LA1 TOTAL 15,812 12,770 15,030 4,066 3,893 4,088 (scope) (100%) (100%) (100%) (100%) (100%) (100%) PROPORTION OF WOMEN WITHIN THE GROUP LA13�� Proportion of women in workforce 23.0% 25.3% 25.8% 19.0% 19.9% 20.3% LA13 (scope) (100%) (100%) (100%) (100%) (100%) (100%) Proportion of women in management 15.0% 16.6% 17.9% 21.1% 20.5% 22.2% LA13 (scope) (100%) (100%) (100%) (100%) (100%) (100%) BREAKDOWN OF EMPLOYEES BY TYPE OF CONTRACT LA1 Open-ended 91.5% 91.6% 92.8% 99.2% 98.3% 97.2% LA1 Other 8.5% 8.4% 7.2% 0.8% 1.7% 2.8% LA1 (scope) (99.8%) (99.1%) (100%) (100%) (100%) (100%) AGE PYRAMID (based on employees with open-ended contracts) � Under 25 4.1% 5.7% 6.2% 4.1% 4.0% 2.7% LA1� 25-29 9.4% 11.7% 13.8% 13.8% 12.8% 12.2% LA1� 30-34 11.0% 11.0% 11.5% 20.9% 19.7% 18.4% LA1� 35-39 13.3% 13.1% 13.5% 17.3% 17.2% 17.0% LA1� 40-44 16.0% 14.9% 13.7% 16.6% 17.2% 17.6% LA1� 45-49 17.4% 16.2% 15.4% 13.2% 13.3% 14.0% LA1� 50-54 17.2% 16.3% 15.3% 8.4% 9.2% 10.1% LA1� 55-59 11.1% 10.3% 9.8% 4.1% 4.7% 5.6% LA1� 60-64 0.5% 0.8% 0.9% 1.2% 1.4% 2.0% LA1� 65 and over 0.0% 0.0% 0.0% 0.4% 0.4% 0.4% LA1 (scope) (99.8%) (99.1%) (100%) (100%) (100%) (100%) EMPLOYMENT h1 h2 h1 h2 h1 h2 h1 h2 h1 h2 h1 h2 LA2� ��Turnover 2.0% 1.7% 2.1% 2.4% 2.4% 2.1% 5.7% 5.8% 7.0% 6.3% 5.0% 4.1% LA2 (scope) (98.9%) (99.9%) (99.9%) (99.1%) (99.9%) (94.45%) (99.5%) (100%) (100%) (100%) (100%) (100%) Voluntary turnover 1.6% 1.3% 1.7% 1.8% 1.9% 1.8% 4.0% 4.4% 6.0% 5.6% 4.6% 3.4% LA2 (Minimum value) (98.9%) (99.9%) (99.9%) (99.1%) (99.9%) (94.45%) (99.5%) (100%) (100%) (100%) (100%) (100%) Entrance rate 5.5% 7.2% 6.3% 8.8% 8.2% 10.0% 8.0% 6.9% 10.0% 7.6% 9.5% 9.8% LA2 (scope) (98.9%) (99.9%) (99.9%) (99.1%) (99.9%) (94.45%) (99.5%) (100%) (100%) (100%) (100%) (100%) Entrance rate, open-ended contracts 46.2% 42.3% 55.0% 59.0% 66.2% 57.6% 93.9% 98.6% 88.0% 58.5% 86.3% 84.8% LA2 (scope) (98.9%) (99.9%) (99.9%) (99.1%) (99.9%) (94.45%) (99.5%) (100%) (100%) (100%) (100%) (100%) % of disabled persons/avg. workforce 0.30% 0.27% 0.24% 0.22% 0.30% 0.32% 0.07% 0.07% 0.08% 0.08% 0.10% 0.18% LA10 WORK CONDITIONS S1 S2 S1 S2 S1 S2 S1 S2 S1 S2 S1 S2 LA7 Absenteeism (days of absence/person) 9.6 8.29 10.8 7.36 8.59 7.46 3.8 2.8 2.4 2.3 2.52 1.92 LA7 (scope) (99.7%) (99.8%) (99.8%) (99.1%) (99.96%) (99.3%) (100%) (100%) (100%) (100%) (100%) (99.9%) Overtime 2.6% 3.3% 2.5% 2.8% 2.3% 2.3% 6.1% 6.7% 6.9% 6.7% 7.5% 7.3% Ø SUEZ (scope) (99.8%) (98.5%) (99.9%) (98.9%) (99.98%) (99.84%) (100%) (100%) (100%) (100%) (100%) (99.9%)

SOCIAL INDICATORS SUEZ Energy Europe SUEZ Energy International

GRI 2005 2006 2007 2005 2006 2007

LA1LA1LA1LA1LA1LA1

LA1LA1LA1

LA13

LA13

LA1LA1

LA1LA1LA1LA1LA1LA1LA1LA1LA1LA1

LA2

LA2

LA2

LA2

LA10LA7LA7

Ø SUEZ


OUR

PER

FOR

MA

NCE

111

SUEZ Energy Europe SUEZ Energy International GRI

2005 2006 2007 2005 2006 2007

� Verified by Auditors.

^ Verified for 1st time in 2006.

¤ In this ratio only worker gross average salary has been verified.

Ø SUEZ: The “Ø SUEZ” indicators are developed in addition to those listed in the GRI.

COMPENSATION EC5� Worker’s average gross salary/local gross minimum salary 4.0 4.8 4.2 9.3 8.7 9.3 EC5 (Minimum value) 1.5 1.2 1.6 3.8 2.1 2.3 (scope) (95.5%) (99.7%) (97.6%) (88%) (99.4%) (92.6%) Average gross salary/Sector average gross salary Ø SUEZ Managers 1.6 1.4 1.4 1.7 2.0 1.8 Ø SUEZ (scope) (94.5%) (99.7%) (98.9%) (99%) (96.6%) (97.5%) T.S.M. 1.4 1.2 1.1 1.8 1.9 1.9 Ø SUEZ (scope) (90.6%) (98.5%) (95.4%) (98.6%) (97.4%) (96.1%) O.E.T. 1.8 1.4 1.6 1.8 2.1 1.8 Ø SUEZ (scope) (95.5%) (99.7) (99.9) (97.8%) (99.4%) (92.6%) Worker’s average gross salary/local cost of living 3.7 2.9 3.0 5.3 5.8 5.3 Ø SUEZ (scope) (95.5%) (99.7%) (99.9%) (97.8%) (99.4%) (92.6%) OCCUPATIONAL SAFETY LA7� No. of accidental deaths (employees) 0 0 0 0 0 0 LA7 � Frequency rate 4.61 3.97 3.98 2.46 3.01 1.41 LA7� Severity rate 0.18 0.13 0.09 0.06 0.05 0.05 LA7 (scope) (99.6%) (100%) (92.1%) (94.7%) (99.8%) (97.8%) TRAINING LA10� % of workforce 68.2 79.8 88.3 73.0 76.3 72.8 LA10 (scope) (94.6%) (99.5%) (100%) (78.7%) (100%) (99.7%) Proportional of managers and non-managers trained Managers 18.9% 21.4% 22.1% 24.0% 24.1% 22.6% LA10 T.S.M. + O.E.T. 81.1% 78.6% 77.9% 75.9% 75.9% 77.4% LA9 (scope) (94.6%) (97.8%) (100%) (78.7%) (100%) (99.7%) Training costs per person (€/person) 1,156.8 1,231.5 1,104.3 1,008.6 1,128.4 1,478.9 LA10 (scope) (94.6%) (99.5%) (100%) (78.7%) (100%) (99.72%) Number of training hours per person trained (hrs/pers) 41.4 46.5 49.5 76.5 65.9 66.6 LA10 (scope) (89.8%) (99.5%) (100%) (78.7%) (100%) (100%) Training costs per hour of training (€/hour) 27.9 26.5 22.3 13.2 17.1 22.2 Ø SUEZ (scope) (94.6%) 99.5%) (100%) (100%) (100%) (99.72%) Hours of training by subject Ø SUEZ Job techniques 48.8% 46.9% 47.8% 37.2% 32.3% 26.1% Quality, Environment, Safety 16.1% 15.2% 18.1% 22.5% 24.4% 30.0% Languages 5.1% 7.1% 9.4% 9.6% 8.0% 9.6% Other 30.0% 30.8% 24.7% 30.7% 35.3% 34.3% (scope) (94.6%) (99.5%) (100%) (100%) (100%) (99.72%)

EC5

Ø SUEZØ SUEZ

Ø SUEZ

Ø SUEZ

Ø SUEZ

LA7 LA7LA7

LA10

LA10LA9

LA10

LA10

Ø SUEZ

Ø SUEZ

OUR

PER

FOR

MA

NCE

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112

WORKFORCE PER GEOGRAPHIC ZONE LA1 European Union 60,401 59,401 62,070 47,261 48,364 52,477 LA1 Rest of Europe 2,520 3,547 2,901 79 73 78 LA1 North America 10 8 10 3,261 2,553 2,704 LA1 South America 435 344 448 15,548 272 231 LA1 Africa – Middle East 0 0 0 3,255 3,552 3,646 LA1 Asia – Oceania 1,658 1,744 1,966 2,726 2,632 2,779 LA1�� TOTAL 65,024 65,044 67,395 72,130 57,446 61,915 (scope) (100%) (100%) (100%) (100%) (100%) (100%) DISTRIBUTION OF EMPLOYEES BY CATEGORY LA1� Manager s 9,506 9,692 10,340 6,783 7,091 7,766 LA1� T.S.M.̂ 24,226 25,375 26,276 11,835 10,406 11,365 LA1� O.E.T.̂ 31,292 29,977 30,779 53,512 39,949 42,784 LA1 TOTAL 65,024 65,044 67,395 72,130 57,446 61,915 (scope) (100%) (100%) (100%) (100%) (100%) (100%) PROPORTION OF WOMEN IN GROUP LA13� Proportion of women in workforce 10.7% 10.7% 11.1% 18.5% 18.0% 18.3% LA13 (Minimum value) (100%) (100%) (100%) (99.9%) (99.9%) (100%) Proportion of women in management 10.8% 11.2% 11.7% 21.4% 22.7% 23.9% LA13 (scope) (100%) (100%) (100%) (99.9%) (99.9%) (100%) BREAKDOWN OF EMPLOYEES BY TYPE OF CONTRACT LA1 Open-ended 93.9% 92.8% 92.7% 94.5% 92.9% 92.1% LA1 Others 6.1% 7.2% 7.3% 5.5% 7.1% 7.9% LA1 (scope) (99.9%) (100%) (100%) (99.9%) (99.9%) (100%) AGE PYRAMID (based on employees with open-ended contracts) � Under 25 5.2% 5.3% 5.5% 5.0% 4.1% 4.0% LA1� 25-29 11.1% 11.3% 11.7% 10.2% 9.3% 9.6% LA1� 30-34 12.6% 12.2% 12.1% 14.0% 13.4% 12.5% LA1� 35-39 15.4% 15.0% 14.5% 16.4% 16.4% 16.1% LA1� 40-44 15.7% 15.8% 15.7% 16.6% 17.7% 17.5% LA1� 45-49 14.2% 14.4% 14.3% 14.4% 15.2% 15.7% LA1� 50-54 13.4% 13.4% 13.5% 11.9% 12.6% 12.9% LA1� 55-59 10.2% 10.3% 10.1% 8.4% 8.6% 8.7% LA1� 60-64 1.9% 2.2% 2.5% 2.6% 2.4% 2.7% LA1� 65 and over 0.1% 0.2% 0.2% 0.5% 0.4% 0.5% LA1 (scope) (99.9%) (100%) (100%) (99.9%) (99.9%) (100%) EMPLOYMENT S1 S2 S1 S2 S1 S2 S1 S2 S1 S2 S1 S2 LA2� Turnover 3.6% 5.1% 4.4% 4.8% 4.9% 4.7% 5.0% 5.6% 4.3% 4.7% 4.3% 4.4% LA2 (scope) (81.8%) (99.8%) (100%) (98.3%) (97.9%) (100%) (96.7%) (99.9%) (99.9%) (99.9%) (99.7%) (99.6%) Voluntary turnover 2.2% 2.9% 2.9% 3.5% 3.6% 3.5% 2.0% 2.3% 2.4% 2.9% 2.9% 2.8% LA2 (scope) (81.8%) (99.8%) (100%) (99.3%) (97.9%) (100%) (96.7%) (99.9%) (99.9%) (99.9%) (99.7%) (99.6%) Entrance rate 6.2% 8.6% 8.1% 9.3% 9.4% 10.4% 9.7% 9.1% 7.9% 8.7% 9.1% 10.5% LA2 (scope) (81.8%) (99.8%) (100%) (98.3%) (97.9%) (100%) (96.7%) (99.9%) (99.9%) (99.9%) (99.7%) (99.6%) Entrance rate, open-ended contracts 69.2% 60.7% 67.8% 54.2% 68.6% 61.7% 65.3% 69.8% 59.8% 58.1% 59.9% 59.4% LA2 (scope) (81.8%) (99.8%) (100%) (98.3%) (97.9%) (100%) (96.7%) (99.9%) (99.9%) (99.9%) (99.7%) (99.6%) % of disabled persons/avg. workforce 1.34% 1.30% 1.31% 1.37% 1.42% 1.47% 1.34% 1.42% 1.60% 2.25% 1.63% 1.69% LA10 WORK CONDITIONS H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 LA7 Absenteeism (days of absence/person) 7.1 7 7.2 6.5 7.12 6.72 8.0 7.3 8.5 8.8 7.7 7.8 LA7 (scope) (97.6%) (99.1%) (100%) (100%) (100%) (98.1%) (99.6%) (99.6%) (99.1%) (99.9%) (99.4%) (96.2%) Overtime 2.7% 3.2% 2.9% 3.1% 2.3% 3.3% 4.9% 3.3% 5.2% 5.0% 5.0% 4.9% Ø SUEZ (scope) (99.0%) (78.8%) (99.9%) (100%) (100%) (97.75%) (99.6%) (97.8%) (94.6%) (99.5%) (99.7%) (99.88%)

SOCIAL INDICATORS SUEZ Energy services SUEZ Environment

GRI 2005 2006 2007 2005 2006 2007

LA1LA1LA1LA1LA1LA1

LA1LA1LA1

LA13

LA13

LA1LA1

LA1LA1LA1LA1LA1LA1LA1LA1LA1LA1

LA2

LA2

LA2

LA2

LA10

LA7

Ø SUEZ


OUR

PER

FOR

MA

NCE

113

REMUNERATION EC5� Worker’s average gross salary#local gross minimum salary 1.9 1.7 1.8 2.3 2.2 2.2 EC5 (Minimum value) 0.7 0.8 0.9 0.7 0.7 0.7 (scope) (89%) (91.5%) (93.1%) (91.3%) (83.6%) (89.2%) Average gross salary/Sector average gross salary Ø SUEZ Managers 1.0 1.0 1.1 1.3 1.2 1.2 Ø SUEZ (scope) (85.3%) (85%) (86.1%) (98.3%) (93.7%) (99.7%) T.S.M. 1.0 1.0 1.0 1.0 1.1 1.1 Ø SUEZ (scope) (75.1%) (79.2%) (81.6%) (97.3%) (92.2%) (99.5%) O.E.T. 1.2 1.2 1.2 1.2 1.2 1.2 Ø SUEZ (scope) (87.9%) (92.7%) (94.2%) (99.1%) (93.5%) (98.6%) Worker’s average gross salary/local cost of living 1.7 1.5 1.6 2.1 2.0 2.0 Ø SUEZ (scope) (90.9%) (92.7%) (94.2%) (99.2%) (93.5%) (98.6%) OCCUPATIONAL SAFETY LA7� No. of accidental deaths (employees) 7 4 4 4 4 6 LA7� Frequency rate 18.41 14.69 11.90 21.50 21.89 18.47 LA7� Severity rate 0.65 0.57 0.47 0.87 0.83 0.74 LA7 (scope) (98.2%) (99.85%) (98.7%) (95.9%) (98.9%) (94.2%) TRAINING LA10� % of workforce 50.8 55.4 55.3 59.8 58.6 60.0 LA10 (scope) (77.1%) (87.9%) (88.7%) (95.5%) (99.9%) (94.37%) Proportional of managers and non-managers trained Managers 15.5% 15.3% 15.4% 9.8% 13.6% 16.5% LA10 T.S.M. + O.E.T. 84.5% 84.7% 84.6% 90.1% 86.4% 83.5% LA10 (scope) (77.1%) (87.9%) (88.7%) (95.5%) (99.9%) (94.37%) Training costs per hour of training (€/hour) 667.2 711.1 763.1 519.8 703.8 889.9 LA10 (scope) (76.9%) (87.9%) (88.72%) (95%) (99.9%) (94.37%) Number of training hours per person (€/person) 25.6 32.5 27.7 23.1 24.8 25.3 LA10 (scope) (76.9%) (87.9%) (88.72%) (96.3%) (99.9%) (94.37%) Training costs per hour of training (€/hour) 26.1 21.9 27.5 22.5 28.4 35.2 Ø SUEZ (scope) (76.8%) (87.9%) (88.72%) (95.8%) (99.9%) (94.37%) Hours of training by subject Ø SUEZ Job techniques 46.0% 58.5% 46.1% 30.0% 29.8% 31.2% Quality, Environment, Safety 29.3% 24.0% 30.0% 40.7% 38.5% 36.3% Languages 4.0% 2.4% 3.7% 5.2% 8.2% 8.5% Other 20.7% 15.1% 20.3% 24.1% 23.6% 24.1% (scope) (76.9%) (87.9%) (88.72%) (96.2%) (99.9%) (94.37%)

SUEZ Energy services SUEZ Environment GRI

2005 2006 2007 2005 2006 2007

� Reviewed by Auditors.

^ First reviewed in 2006.

¤ On this ratio, only the “average gross salary” indicator was reviewed.

Ø SUEZ: The “Ø SUEZ” indicators are developed in addition to those listed in the GRI.


114

At the request of SUEZ and in our capacity as the company’s Statutory Auditors, we performed a review in the aim

of providing moderate assurance on the environmental and social indicators selected by SUEZ (“the data”)

identified by the symbol � among the environmental and social indicators shown on pages 104-107 and 110-113

for fiscal year 2007.

The data, which is the responsibility of SUEZ management, has been prepared in accordance with the following internal

reporting criteria:

� set of procedures relating to environmental data reporting,

� set of procedures relating to social data reporting, available for consultation at the Human Resources and Environment

& Innovation departments, and summarized on pages 102-103 and 108-109. It is our responsibility, based on the work

performed, to express a conclusion on the selected data.

NATURE AND SCOPE OF OUR WORK We performed a limited review to provide moderate assurance that the selected data does not contain any material

anomalies. A higher level of assurance would have required more extensive work. Our work covers the consolidated data

at Group level; it does not include the rate of coverage related to the data.

� We assessed the environmental and social data reporting criteria with regard to its relevance, reliability, neutrality,

understandability, and completeness.

� We met with the persons responsible for the application of the reporting criteria at the Environment & Innovation

Department, at the Social Relations Department, at the SUEZ headquarters, and in the business lines: SUEZ

Energy Europe (SEE), SUEZ Energy International (SEI), SUEZ Energy Services (SES), SUEZ Environment (SE).

� We performed validation tests at 31 sites belonging to 19 selected entities(1) for environmental data, representing on

average 72% of SUEZ consolidated data(2), and at 26 selected entities for social data(3), representing 68% of SUEZ

consolidated staff.

� In addition, we have carried out analytical reviews and consistency tests for 5 additional entities for environmental

reporting and 14 additional entities for social reporting.

� We examined, on a sampling basis, the calculations and verified data reporting at different consolidation levels.

To assist us in conducting our work, we referred to the environment and sustainable development experts of our firms

under the responsibility of Mr. Éric Duvaud for Ernst & Young and Mr. Éric Dugelay for Deloitte & Associés.

AUDITORS’ REPORT ON THE REVIEW OF ENVIRONMENTAL AND SOCIAL INDICATORS


(1) � SEE : Electrabel SA (Saint Ghislain, Doel, Langerlo and Ruien sites), Polaniec, Voghera, SHEM, Electrabel Spain (Castelnou), Electrabel Nederland NV (Almere site)– SEI: SEGNA (Syracuse, Nassau and NEPCO sites), Enersur (Chilca, Yuncan sites), Electroandina (Tocopilla) - SES: Elyo France (Elyo Centre Ouest headquarters and Airbus site), Elyo UK (Elyo Industrial Limited headquarters and London Hall site) – SE: Lyonnaise des Eaux (headquarters), Degrémont (Rithala and Sonia Vihar, India), United Water (Camden and Pennsylvania, USA), SITA France (headquarters, Scori, Hersin, Montlouis, Inveko sites), SITA UK (headquarters and Cleveland and Ellington sites), SITA Wallonia (headquarters and Grâce-Hollogne site), SITA Poland (headquarters and Lublin site), Teris Belgium (headquarters and Grimbergen site).

(2) � Number of sites covered by certified EMS: 86%, Total primary energy consumption: 56%, Electricity consumption (excluding own consumption): 77%, Energy efficiency (electric production equivalent): 59% Installed capacity – Electricity and heat – Total renewable energy sources: 66%, Quantity of electricity and heart produced – Renewable sources: 64%, Greenhouse gas emissions (excluding vehicle fleet): 62%, SOx emissions: 88%, NOx emissions: 66%, Dust emissions: 79%, Mercury emissions: 98%, Industrial water consumption: 44%, Cooling process water: 73%; Pollution load treated (purification): 87%, Non-specific and non-hazardous waste: 73%, Non-specific hazardous waste: 82%, Specific waste: 76%, Total waste: 79%, Quantities of treated leachates: 69%.

(3) � SEE: Electrabel, Electrabel Nederland, SHEM, CNR, N-ALLO – SEI: SENA, Enersur – SES: Fabricom GTI SA, Groupe Ineo, GTI, Axima Service Belgium, Elyo Iberica, Elyo France,– SE: Lyonnaise des Eaux France, Eurawasser, Degrémont India, SITA France, SITA Netherlands, SITA Flanders, SITA UK, SITA Poland.

COMMENTS ON THE PROCEDURES SUEZ has continued to improve the reliability of environmental and social data reporting practices and took into account our comments formulated

in the auditor’s report on the 2007 environmental and social indicators. We would like to draw your attention to the following comments regarding

these practices:

Environmental reporting� Since the previous fiscal year, controls at certain division and entity levels have been improved, especially for SEI and certain SE entities.

However, internal control measures should be strengthened, particularly for a certain number of entities, especially with respect to identifying

their relevant industrial sites.

� The application of the reporting criteria and the control of its application need to be reinforced at site and entity level, especially concerning

the following indicators: “greenhouse gas emissions– landfills”, “consumption of primary energy – waste collection and treatment” and

“total recovered waste and by-products”.

Social reporting� The implementation of a new reporting tool has enabled the reliability of the social data reporting process to be improved and the reinforcement of

control implementation and formalization. Nevertheless,

� • the implementation of controls should be continued for all entities;

� • the application of reporting criteria for certain indicators, especially “turnover”, and “number of staff trained” should be improved.

� Health and safety reporting can still be improved by reinforcing the application of reporting criteria and the control of its application, especially for the

reporting perimeter, and for the “number of hours worked” and “number of days of sick leave” indicators.

CONCLUSIONDuring our review, the following anomalies were identified.

� Mercury emissions were reported for the first time this year for which we identified errors and omissions at several sites, which have not

all been corrected.

� Industrial water consumption for which we have identified reporting errors at several entities, which have been corrected.

Based on our review and subject to the exceptions mentioned above, we did not identify any material anomalies likely to call into question the fact that

the data examined was prepared, in all material respects, in accordance with the above-mentioned reporting criteria.

Neuilly-sur-Seine, February 22, 2008

The Auditors

Ernst & Young & Autres Deloitte & Associés

Pascal Macioce Nicole Maurin Jean-Paul Picard Pascal Pincemin

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116

CONSOLIDATED BALANCE SHEET – ASSETS AND LIABILITIES

*The notes are featured in Section 20 of the SUEZ 2007 Reference Document available on www.suez.com.

In millions of euros Note* Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2005

NON-CURRENT ASSETSIntangible assets, net 10 3,497.7 3,488.1 3,453.5

Goodwill 9 14,902.8 13,404.6 13,033.2

Property, plant and equipment, net 11 22,597.1 21,002.8 20,212.4

Available-for-sale securities 14 4,120.7 2,816.5 2,671.5

Loans and receivables carried at amortized cost 14 2,107.0 2,170.1 2,440.2

Derivative instruments (incl. commodity derivatives) 14 1,140.1 1,014.1 2,145.9

Investments in associates 12 1,214.3 1,259.7 3,154.9

Other non-current assets 17 730.5 778.8 1,686.5

Deferred tax assets 7 1,085.0 871.0 1,225.2

TOTAL NON-CURRENT ASSETS 51,395.2 46,805.7 50,023.3 CURRENT ASSETS

Loans and receivables carried at amortized cost 14 331.3 298.8 194.0


Trade and other receivables 14 11,869.3 10,412.2 10,394.7

Inventories 16 1,571.8 1,483.4 1,344.8

Other current assets 17 2,556.5 2,336.6 2,693.1

Financial assets at fair value through income 14 1,319.5 833.0 885.6

Cash and cash equivalents 14 6,720.2 7,946.3 10,374.4

TOTAL CURRENT ASSETS 27,732.0 26,628.9 30,419.8 TOTAL ASSETS 79,127.2 73,434.6 80,443.1Shareholders’ equity 22,192.8 19,503.8 16,255.9

Minority interests 2,668.1 3,060.0 2,567.3

TOTAL EQUITY 18 24,860.9 22,563.8 18,823.2 NON-CURRENT LIABILITIESProvisions 19 8,448.5 8,419.7 9,118.8

Long-term borrowings 14 14,526.0 13,000.6 16,406.9

Derivative instruments (incl. commodity derivatives) 14 800.9 711.7 2,191.7

Other financial liabilities 14 778.0 467.5 858.5

Other non-current liabilities 1,004.5 917.3 949.5

Deferred tax liabilities 7 1,643.6 1,444.5 1,165.8

TOTAL NON-CURRENT LIABILITIES 27,201.5 24,961.3 30,691.2 CURRENT LIABILITIESProvisions 19 1,106.6 1,366.1 1,724.4

Short-term borrowings 14 7,129.8 6,678.5 9,079.9


Trade and other payables 14 10,038.1 9,209.4 10,078.8

Other current liabilities 5,588.4 5,286.0 4,856.7

TOTAL CURRENT LIABILITIES 27,064.8 25,909.5 30,928.7 TOTAL EQUITY AND LIABILITIES 79,127.2 73,434.6 80,443.1


CONSOLIDATED INCOME STATEMENT

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In millions of euros Note* Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2005

*The notes are featured in Section 20 of the SUEZ 2007 Reference Document available on www.suez.com.

REVENUES 47,475.4 44,289.2 41,488.9Purchases (21,289.4) (21,010.0) (18,678.7)

Personnel costs (8,141.5) (7,640.8) (7,902.9)

Depreciation, amortization and provisions (1,912.7) (1,684.8) (1,701.9)

Other operating income and expenses, net (10,956.4) (9,457.1) (9,303.2)

CURRENT OPERATING INCOME 4 5,175.4 4,496.5 3,902.2Mark-to-market on commodity contracts other than trading instruments 67.8 17.1 (151.1)

Impairment of property, plant and equipment,

intangible assets and financial assets (132.0) (150.3) (657.9)

Restructuring costs (42.6) (88.8) (101.5)

Disposals of assets, net 339.4 1,093.1 1,529.9

INCOME FROM OPERATING ACTIVITIES 5 5,408.0 5,367.6 4,521.6Financial expenses (1,709.5) (1,610.6) (1,582.2)

Financial income 987.3 879.6 856.9

NET FINANCIAL LOSS 6 (722.1) (731.0) (725.3)Income tax expense 7 (527.5) (815.1) (585.3)

Share in net income of associates 12 457.9 372.7 565.5

NET INCOME 4,616.3 4,194.2 3,776.5 Minority interests 692.7 587.9 1,263.8

Net income Group share 3,923.5 3,606.3 2,512.7

Earnings per share 8 3.09 2.86 2.39

Diluted earnings per share 8 3.04 2.83 2.36


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In millions of euros Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2005

NET INCOME 4,616.3 4,194.2 3,776.5• Share in net income of associates (457.9) (372.7) (565.5)

+ Dividends received from associates 229.8 355.7 467.1

• Net depreciation, amortization and provisions 1,925.3 1,743.3 2,242.7

• Net capital gains on disposals (incl. reversals of provisions) (339.4) (1,097.7) (1,652.9)

• Mark-to-market on commodity contracts other than trading instruments (67.8) (17.1) 151.1

• Other items with no cash impact 110.8 31.7 21.4

• Income tax expense 527.5 815.1 585.3

• Net financial loss 722.1 731.0 725.3

Cash generated from operations before income tax and working capital requirements 7,266.6 6,383.5 5,750.9 + Tax paid (1,005.6) (985.4) (722.9)

Change in working capital requirements (244.3) (225.9) 797.5

CASH FLOW FROM (USED IN) OPERATING ACTIVITIES 6,016.6 5,172.2 5,825.5 Acquisitions of property, plant and equipment and intangible assets (3,129.7) (2,367.6) (2,667.1)

Acquisitions of entities net of cash and cash equivalents acquired (1) (1,508.3) (1,088.2) (9,060.2)

Acquisitions of available-for-sale securities (1,361.9) (315.6) (526.6)

Disposals of property, plant and equipment and intangible assets 131.1 181.8 355.0

Disposals of entities net of cash and cash equivalents sold 554.9 2,009.9 1,972.9

Disposals of available-for-sale securities 406.3 777.8 650.1

Interest received on non-current financial assets 116.0 151.3 69.8

Dividends received on non-current financial assets 202.4 288.7 134.3

Change in loans and receivables originated by the Group and other (92.1) (4.0) 79.7

CASH FLOW FROM (USED IN) INVESTING ACTIVITIES (4,681.2) (365.9) (8,992.0)Dividends paid (1,968.5) (1,720.9) (1,521.6)

Repayment of borrowings and debt (7,579.0) (8,744.0) (3,245.8)

Change in financial assets at fair value through income (265.3) 346.3 (538.4)

Interest paid (1,230.9) (1,081.4) (1,029.2)

Interest received on cash and cash equivalents 272.8 326.9 347.3

Increase in borrowings and debt 8,478.7 3,538.3 8,515.5

Increase in capital (1) 832.9 162.4 2,962.1

Assignment of litigious receivables 995.4

Treasury stock movements (1,058.2) 234.3 2.9

CASH FLOW FROM (USED IN) FINANCING ACTIVITIES (2,517.5) (6,938.1) 6,488.3 Effect of changes in consolidation method, exchange rates and other (44.0) (296.3) 166.3

TOTAL CASH FLOW FOR THE PERIOD (1,226.1) (2,428.1) 3,488.2 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,946.3 10,374.4 6,886.2 CASH AND CASH EQUIVALENTS AT END OF PERIOD 6,720.2 7,946.3 10,374.4

CASH FLOW

(1) In 2005, this item does not include €2,414 million corresponding to the issue of SUEZ shares as part of the cash and share bid for Electrabel.


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� To ensure that sustainable development values are reflected in our activities and culture

� To integrate sustainable development in our commercial offers.� To preserve the environment� To promote the company’s social commitments

� To act as a corporate citizen

OUR PRIORITIESIn order to evaluate the performance of Global Compact business partners, Innovest, a social responsibility rating agency, awards them with green, orange and red indicators. In 2005, all SUEZ indicators were green.

THE 10 GLOBAL COMPACT PRINCIPLES REFERENCES

1 Businesses should support and respect the protection of internationally P. 16-19, 70-73, proclaimed human rights 78-79, 87-89

2 Ensure that they are not complicit in human rights abuses P. 16-19, 70-73, 78-79, 87-89

3 Businesses should uphold the freedom of association and the effective recognition P. 16-19, 70-73, of the right to collective bargaining 78-79, 87-89

4 The elimination of all forms of forced and compulsory labor P. 16-19, 70-73, 78-79, 87-89

5 The effective abolition of child labor P. 16-19, 70-73, 78-79, 87-89

6 The elimination of discrimination in respect of employment and occupation P. 16-19, 74-77, 78-79, 80-87

7 Businesses should support a precautionary approach to environmental challenges P. 16-19, 78-79, 90-97

8 Undertake initiatives to promote greater environmental responsibility P. 2-5, 12-13, 27-65, 68-79

9 Encourage the development and diffusion of environmentally friendly technologies P. 2-5, 27-65, 70-79

10 Businesses should work against corruption in all its forms, including extortion and bribery P. 16-19

APPLICATION OF THE U.N.

GLOBAL COMPACT PRINCIPLES

The United Nations Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, environment and anti-corruption. SUEZ signed on to the Global compact as soon as it was launched in 2000, and complies with its commitments, which are in line with its values and priorities with respect to sustainable development.


120

Dioxin: Very toxic chemical compound

resulting from the combustion of

certain organic matter. There are

210 types of dioxins, 17 of which

are considered harmful.

Drinking-water supply: Equipment, services, and activities

that, starting with untreated water,

produce water that complies

with applicable water quality

standards and is then distributed

to consumers. The process

consists of four distinct steps:

intake/catchment, treatment to

make water drinkable, conveyance

(transportation/storage), and

distribution to the consumer.

Earnings before interest, tax, depreciation and amortization (EBITDA): This is the amount of the funds

that the company generates from

operations before deducting

related interest. It corresponds

to operating income before

depreciation, amortization and

provisions, plus the share in

the recurring income of equity

affiliates and net financial income

not related to net debt.

Eco-efficiency: According to the World Business

Council for Sustainable Development,

eco-efficiency consists in providing

products and services at competitive

prices in a way that satisfies

the needs of the population and

offers a better quality of life, while

progressively reducing environmental

impacts and consumption of

natural resources throughout the

life cycle. Eco-efficiency indicators

are developed by comparing the

value of the product or service to its

environmental impact (e.g. tonnes

of greenhouse gases [GHG] emitted,

tonnes of incinerated waste, etc.).

Certified environmental management system: An environmental management

system (EMS) that is operational

(with written procedures and

documentation and clearly defined

objectives as part of a continuous

improvement approach) is declared

to be certifiable when it is

regularly audited to ensure control

over environmental risk inherent to

the business. The decision to have

the EMS certified by an external

body comes under the company’s

business policy.

Chemical water treatment: Service provided to industrial

customers to enable them to

define, implement and control, on

a day-to-day basis, the products

that they need to ensure the

quality of water required by the

industrial process.

Circular economy: Also called industrial ecology,

a circular economy takes its

inspiration from the dynamics of

ecosystems to offer optimizing

energy and material flows, thereby

reducing the waste of natural

resources at production sites,

activity zones or employment

centers. The principle is to reuse

raw material or energy used in the

process of manufacturing finished

products, as a resource for another

industry located close by. This

approach is the opposite of what is

called a linear economy that uses

up resources and discards waste

without controlling the flows and

discharges that are produced.

Cogeneration/tri-generation: The simultaneous production of

thermal energy (refrigeration and/

or heat) and electricity in dedicated

installations. This production

system has a higher energy yield

and a reduced impact on the

environment. It is particularly

suitable for use in small and mid-

sized generation facilities located

near consumers in urban areas.

Comité 21: French committee for the

environment and sustainable

development made up of the

various elements of French society

(businesses, local governments,

associations, public agencies,

and research and training

institutions) to entrench sustainable

development principles in social

and business practices.

Composting: The transformation, in the

presence of water and oxygen, of

organic waste by micro-organisms

(microscopic fungi, bacteria, etc.)

into a product called compost.

Delegated management: See Public-Private Partnership

(PPP).

Desalination: Process whereby the concentration

of salts in water is reduced to

make it fit for human and animal

consumption as well as for other

uses, in particular industrial

activities.

Allowance: Emission allowance to be submitted

for each ton of CO2 emitted by a

facility covered by EC Directive

2003/87/EC.

Anaerobic digestion: Process of decomposition of

organic matter in the absence of

oxygen. Anaerobic digestion gives

off mainly methane.

Arbitrage: In the field of energy, the possibility

for an operator to choose at any

time between several activities,

according to their relative

profitability (e.g. burn gas to sell

electricity or sell gas and buy

electricity from another producer).

Biogas: All gases, such as methane and

carbon dioxide, resulting from

fermentation of landfilled waste.

Biogases can be recovered and

treated in storage facilities as well

as in specific fermentation tanks

(digesters).

Biomass: All organic products of plant and

animal origin used to produce

energy (electricity and heat) or

for agronomic purposes.

Bottom ash: By-product of the incineration of

waste made up of ashes removed

from the bottom of the incinerator

oven.

GLOSSARY


Effluent: General name for any fluid

produced by a pollution source,

whether from populated areas

or industrial facilities.

Energy spot market: A market where the short-term

energy supplies are bought

and sold.

Energy trading: Energy buying and selling

on energy exchanges.

Environmental analysis: A thorough analysis of

environmental-related problems,

impact, and results arising from

activities at a site.

Environmental, Management and Audit System (EMAS): A certificate based on ISO 14001

certification and a published

environmental statement certified

by European auditors, accredited

by the European Commission and

published.

EU ETS: Greenhouse Gas Emission Trading

Scheme based on European

Directive 2003/87/EC which

applies to CO2 emissions from

certain sectors of industry since

January 1st, 2005.

European Consultative Committee: A European works council

established by SUEZ in 1995

in preparation for the European

Directive of 1996. It is made up

of employee representatives of

the Group’s European companies

based on the proportion of each

country in the workforce.

European Power Reactor (EPR): European concept for a new-

generation nuclear plant.

Facilities management: The outsourcing by industrial

customers to a single provider

of the management of services

and utilities necessary for the

functioning of their environment

(operation and maintenance

of technical facilities, delegated

management for works and

all services relating to the

building upkeep – security

and general services).

Frequency rate: Number of work-related accidents

that occur over the period per

million hours worked.

Gas hub: Connection point of a natural gas

transmission network supplied

from different sources. It enables

operators to physically exchange

gas between these sources and

end users.

Global footprint: This concept, which was created

by an American scientist in the

early 1990s, states that the

ecological footprint of a population

corresponds to the productive land

and sea area required to produce

the resources consumed by this

population and also assimilate the

waste it generates. The higher

a standard of living, the deeper

the footprint. Three planets would

therefore be needed if everyone

adopted the current lifestyle of an

average European, and five planets

would be needed for the lifestyle

of an American.

Global Compact: The Global Compact, launched

in July 2000, is made up of

10 universal principles relating

to human rights, labor and

environmental standards.

It represents the voluntary

commitment by major companies

to contribute to promoting

and implementing sustainable

development policies at a global

level.

Global Reporting Initiative (GRI): An initiative of the Coalition

for Environmentally Responsible

Economies (CERES) in partnership

with the United Nations

Environment Program (UNEP).

It is a long-term, international

process involving the participation

of a diverse range of stakeholders

such as businesses, NGOs,

consultants, professional

associations and universities.

The GRI’s mission is to develop

and issue globally applicable

Sustainability Reporting Guidelines

that businesses may use to report

on the economic, environmental,

and social aspects of their

activities, products, and services.

Green Certificate: Certificate issued free by public

authorities to an electricity

generator and certifying the

production of a certain quantity

of electricity from renewable

energy sources. The certificate

may be freely transferred

or sold, for example, to electricity

providers obliged to hold

such certificates for a part

of their sales to end users.

Greenhouse gas (GHG): Gases that contribute to solar heat

retention in the atmosphere.

The most common is carbon

dioxide (CO2). The greenhouse

gas build-up as a result of human

activity is one of the causes

of the global warming observed

in recent years and its

consequences on the ecosystem.

Incinerator: A facility for burning waste that

is subject to authorization. An

increasing number of incinerators

convert waste into electricity

or thermal energy. Incineration

by-products (bottom ash and fly

ash (REFIOM)) are processed to

control the impact of this process

on people and on the environment.

Independent producer: A company whose main activity

is to generate electric power with

the sole intention of selling it to a

distributor or to consumers, via a

third party.

Inter-community: Association of towns or villages

whose objective is to provide

public services, often in

collaboration with a private partner

(in this case, it is referred to as

a mixed inter-community).

International Social Observatory: Independent association launched

in 2000 at the initiative of SUEZ

to maintain social dialogue with

all parties involved in the labor

market (companies, unions,

associations, universities and

public affairs institutions).

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122

IPCC (Intergovernmental Panel on Climate Change): Organization created in 1988

by the World Meteorological

Organization (WMO) and

the United Nations Environment

Program (UNEP). The IPCC

produces climate change

assessment reports on

the basis of scientific and

technical information.

ISO 9001: An international standard

establishing quality criteria

for work procedures. It applies to

product design, control of

the production and manufacturing

process as well as quality

control of the end product.

ISO 14001: An international standard that

verifies a company’s organizational

procedures and methods, as

well as the effective

implementation of environmental

policy and objectives.

Kyoto Protocol: Intergovernmental agreement

signed in 1997 at the Conference

of the Parties to the United

Nations Framework Convention

on Climate Change designed to

stabilize greenhouse gas emission

levels in the atmosphere.

Leachates: Water containing organic or

mineral pollutants that has been

in contact with landfill waste.

Liquefied natural gas (LNG): Composed primarily of methane,

LNG is a natural gas that is

cooled at a temperature of

approximately -163° C for

condensation to a liquid state.

Natural gas liquefaction reduces

its volume 600 times, facilitating

its transport by sea over long

distances. Roughly two times

lighter than water, LNG is a

transparent, odorless, non-toxic,

non-corrosive liquid.

Net income, Group share: This is the total net income or loss

(from all Group companies) less

the portion attributable to third-

party shareholders of subsidiaries

that are not wholly owned by

SUEZ. It is the sum of net current

income, Group share, and net

exceptional income.

OET: Category of workers, employees

and technicians.

Organic growth: A company’s growth measured

at constant consolidation and

exchange rates, determined under

the same accounting policies.

To calculate organic growth of

revenue, the Group excludes

the impact of natural gas price

variations which do not impact

growth in volumes insofar as there

is an equivalent symmetrical

change in purchases.

Public-private partnership (PPP): A contractual arrangement

adapted to each local situation

whereby the public sector authority

assigns certain functions to a

private operator and specifies

objectives. The public sector

partner retains ownership of the

asset and regulatory control, as

opposed to privatization which is

based on the transfer of ownership

of the infrastructure assets.

Local authorities are increasingly

resorting to PPP agreements in

managing water services.

Rational energy use (REU): All the measures to promote

rational use of energy by

simultaneously addressing

energy, economic and

environmental requirements.

Recovery: Reemployment, recycling or any

other action aimed at obtaining

reusable materials or energy from

waste. Among the various types

of energy recovery are:

• waste-to-energy recovery:

recovery of calories contained in

incinerated waste, allowing thermal

or electric energy production;

• physical recovery: waste

treatment method that enables

reemployment, reuse or recycling

(for example, waste originating

from voluntary separation and

recycling, bottom ash used in

road sub-bases);

• biological recovery: an organic

waste processing technique

using composting or anaerobic-

digestion techniques.

Recycling: The direct reintroduction of waste

into the production cycle from

which it originates as a total

or partial replacement for

new material.

Recycling centre: Specific facility where collected

waste is sorted and stored.

Refiom: An abbreviation for the treatment

of residues from the incineration

smoke of household waste

or residual waste.

Regulated market: Market in which local authorities

are not responsible for drinking

and sanitation water services.

Private companies are therefore

given licenses or franchises

to provide such services, in

which case they become owners

of the facilities, utility rates being

fixed by a regulating agency.

This is the basis on which the U.S.

regulated public utilities

market operates.


GLO

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123

Return on capital employed (ROCE): The ratio between net operating

profit after tax (NOPAT) and

capital employed. Net operating

profit is gross operating income

(EBITDA) less net increases

to depreciation and operating

provisions (excluding goodwill

amortization) and recurring income

tax expense. Capital employed

corresponds to the resources

allocated to the development of each

Group business and includes total

assets (excluding cash assets and

marketable securities) net of special

concession accounts, provisions

for contingencies and losses,

miscellaneous accounts payable and

accrued liability accounts. The Group

uses this ratio as one of its criteria

for selecting investments and as a

tool for assessing the performance

of its various businesses.

Sanitation: All the wastewater and rainwater

collection, transportation, and

treatment techniques used by

an urban area, industrial site, or

private parcel before discharge

into the natural environment.

Sanitation includes the disposal

of sludge resulting from the

wastewater treatment process.

Severity rate: Number of days lost as a result of

work-related accidents that occur

over the period per thousand hours

worked.

Specific waste: Residue or sub-product generated

in industrial quantities by the

Group’s own activities (fly ash,

sludge, etc). They may or may not

be hazardous, depending on their

composition and the applicable

legislation in the region where

they are produced.

Storage center: Formerly known as a “controlled

landfill site”, a storage facility

for residual waste that could not

be converted in any way. Storage

centers are classified according to

the type of waste handled: class I

sites, geologically safe, for special

industrial waste; class II sites,

impermeable, for household or

equivalent waste; class III sites for

inert waste such as rubble

and building debris.

Treated sewage sludge: A mixture of water and solids

separated from various types

of water through biological or

physical processes.

TSM: Statutory employee category

in France of personnel having

substantial technical expertise

in their field and responsibility

for task or project execution.

This category can also cover

administrative positions.

Ultrafiltration: An advanced water treatment

technique involving the

filtration of water via membranes

with pores that are some

10,000 times smaller than those

of human skin. The filtered water

is ultra-pure because all particles

larger than 0.01 microns

(i.e. pollen, algae, parasites,

bacteria, viruses, germs and

cysts), have been removed.

Voluntary separation: Any collection that separates

certain types of waste

for conversion.

Waste: Waste is divided into four

categories:

• domestic waste: waste resulting

from the daily activities of

households that can be processed

by traditional collection or

voluntary separation methods;

• non-hazardous industrial

waste: non-household, non-toxic

waste arising from industrial or

commercial activities;

• hazardous waste: Waste

requiring special precautions

during processing to protect the

environment;

• medical waste: waste resulting

from medical activities or hospital

waste.

Waste-to-energy recovery unit: Waste incineration plant that

recovers calories contained in

the incinerated waste to provide

energy for urban heating, steam

for industry and/or electricity.


124

LEARN MORE

CONTACTS

www.suez.comAll publications prepared by the SUEZ Department of Communications are available on the Group’s website:

“Sustainable development, the cornerstone of our strategy” Group Charters, including “Our values, our Ethics” “10 years of social responsibility initiatives” “Nuclear expertise in the energy mix” “Renewable energy” “The fight against climate change” Detailed presentation of SUEZ commitments under the Global Compact

Sustainable Development Department Stéphane Quéré: [email protected]. +33 (0)1 40 06 27 38

Financial Communication Department Arnaud Erbin: [email protected]. +33 (0)1 40 06 66 29

Investor Relations Sophie Charrier: [email protected]ïc de Fontaubert: [email protected]éonore de Larboust: [email protected]

Shareholder Relations in FranceRita Rio: [email protected] number: 0 800 177 177 (from France)in BelgiumGuy Dellicour: [email protected] number: 0 800 25 125 (from Belgium)


The present document was printed on a 100% recyclable and biodegradable coated paper fabricated from ECF (Elementary Chlorine Free) bleached pulp in a European factory that is certifi ed ISO 9001 (for its quality management), ISO 14001 (for its environmental management), PEFC CoC (for using paper obtained through sustainable forest management) and is EMAS-accredited (for its environmental performance). The 2007 Activities and Sustainable Development Report was fi rst distributed along with the 2007 Reference Document at the Group’s Annual General Meeting held in Paris on May 6, 2008. Its English edition had a print run of 5,000 copies. The 2007 Activities and Sustainable Development Report is also available in French, Spanish and Dutch from the Group’s website (www.suez.com) where all SUEZ publications can be downloaded.

Publisher: Design and production: English translation:

Illustrations on pages 63 and 64: Barthelemy-Griño Architectes.

Photo libraries: SUEZ, SUEZ Energy Europe, SUEZ Energy International, SUEZ Energy Services, SUEZ Environment. Cirsee, Compagnie Nationale du Rhône, La Compagnie du Vent, Degrémont, Edelnor, Electricité de Tahiti, Electrabel, Elyo, Fabricom GTI, Glow Energy, Laborelec, Lyonnaise des Eaux, Re-source Industries, SITA France, SUEZ Foundation, Tractebel Energia.

Photographers: Abacapress, China Photos, Corbis, Gamma Eyedea, Getty, ImageForum, R.E.A., Reuters, AP/Sipa, TP.Arruza , P.Aventurier, R.Beckers, R.Boyce, A.Brunet, P.Crié, R.De Barse, S.De Bourgies, O.Douliery, M.Dubrac/Anyone, J.Eder, M&P.Fogden, D.Gray, Ch.Guibbaud, N.Gouhier, P.Hounsfi eld, R.Jones/Sinopix, J.Karageorge, S.Leen, Ph.Lesage, B.Levy, F.Lolley, P.Loriferne, W.Lyons, Ph.Matsas, L.Moscia, D.Mossiat, Th.Orban, A.Abd Rabbo, M.Ralston/AFP, D.Rose/Panos, M.Sasse/Laif, L.Schifres, J.Shaw, B.Sherif, P.Sittler, R.Shroeder, P.Souders, F.Werner, X. © 04/2008


A Public Limited Company with a share capital of €2,615,529,924 Corporate headquarters: 16, rue de la Ville l’Évêque - 75008 Paris - FranceTel.: +33 (0)1 40 06 64 00 Paris Register of Commerce: 542 062 559 RCS PARISVAT FR 52 542 062 559

www.suez.com

OUR VALUESProfessionalism

Sense of partnership

Team spirit

Value creation

Respect for the environment

Ethics


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