Materiality analysis

At the end of 2009, we completed a materiality review to assess the key economic, social and environmental issues our business faces in the areas that we operate and their relevance to our business and our stakeholders.

Cairn invests in projects at different stages in the value chain, from the early stages of exploration through to production, and in vastly different operating environments, from the deserts of Rajasthan in India to the waters around Greenland. The economic, social and environmental issues faced in each location are very different, and their relevance to our stakeholders varies considerably too. The materiality process is, therefore, an amalgam of different views and represents an attempt to define a complex position for the Group as a whole.

These key issues were then plotted on a materiality matrix, ranging from low to high relevance to our business on one axis, and to our stakeholders on the other. Those appearing in the top-right of the matrix (i.e., of high relevance to both Cairn and to our stakeholders) are discussed in detail in the following pages of this section. These key issues cover:

• legal and regulatory compliance;
• business ethics;
• occupational health and safety;
• local communities;
• spills;
• security of installations;
• climate change;
• human rights;
• fraud and corruption; and
• road accidents.

Stakeholder Input

The key internal and external inputs to the development of the matrix, which has been endorsed by Cairn's Group CR Committee, are summarised below.