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The data used in this report is gathered by the HSE management teams within each GBU. That data is provided to the Group management teams in accordance with the Group HSE Policy.  The parameters used have been chosen to reflect the principal HSE impacts of our business. We recognise the impact of our business on global warming.  It arises primarily from the CO2 emissions associated with the energy we consume and from the transportation of our goods and travel.  We are striving to reduce our energy consumption and have achieved success, particularly when taking into account increased production.  We have started to liaise with our service providers so that we can bring the same level of attention to the emissions associated with transport and travel.

The other key parameters included in this Report are waste, water usage and health and safety, accident and occupational ill health rates.

In 12 of the 32 countries in which Smith & Nephew have sales and marketing operations, our businesses operate separately, often from different locations, and are under the direct control of the Global Business Units. These are referred to as direct markets. The remaining indirect markets operate from a single location and are managed as joint operations.  

Health and safety data from the Indirect and Direct Markets has been included for the first time so as to build a more complete picture of the Group’s health and safety performance. Environmental data has not been collected from the markets because by far the greatest environmental impact stems from the operation of the manufacturing and research sites.

The normalisation process, which used to adjust environmental impact for the level of production, was modified in 2006 to exclude the contribution to production from third party suppliers. This gives a more accurate picture of the effect of increased production.  However, it means that normalised data is only available from 2005.

Group targets are recommended to the Board by the HSE Steering Group and are included in this Report. They address the Group's principal impacts, setting targets for improvements in lost time accident frequency rate, lost time occupational ill health, energy consumption and therefore CO2 emissions, non hazardous and hazardous waste. A target was also set for an improvement in HSE Audit performance over a two-year cycle.

Smith & Nephew recognises the importance of the introduction and maintenance of appropriate environmental management systems which are based on international standards, for example ISO 14001 (International Standard on Environmental Management Systems). We are pleased that our Wound Management site at Hull and our Orthopaedic manufacturing sites in Memphis and Tuttlingen retained accreditation to ISO 14001 for their environmental management systems.

The Group Environmental and Health and Safety Policies are published as a single document setting out our HSE vision, aims, commitment, and operating principals.

The third two-year cycle of HSE Audits was begun with Audits of the  Orthopaedics site at Memphis, the Wound Management sites at Hull and Largo, and the Research site at York.

Audits were carried out against a series of set performance criteria by teams comprising two HSE professionals drawn from elsewhere in the Group or external consultants. The approach reduces subjectivity, encourages improvement and provides consistency in the audit performance. All sites re-audited exceeded the target for improvement. The cycle will be completed in 2008.  This will include an Audit of the Group's new acquisitions in China.

The GBU sites continued to pursue HSE improvements considered to best suit their needs.