Our success is also determined by the way we use resources, manage our impacts on the land, invest in communities and protect the safety of our employees and our neighbours. These measures of sustainability - of balancing environmental, economic and social needs in everything we do - are core principles of our company.

From this report, we think you'll agree that we've made significant progress in putting these principles into action. Some of our highlights in 2003 include:

• substantially improving our record for environment, health and safety (EH&S) compliance
• reducing our company-wide sulphur dioxide emissions by more than 20 per cent
• becoming one of Canada's largest producers of wind power
• reducing our employee injury frequency rate to its lowest level ever
• donating land to an important new conservation area in central Alberta
• announcing major corporate donations to Centralia College in Centralia, Washington and Hull Child and Family Services in Calgary, Alberta

To this list, we would add our continued efforts to diversify our fuel mix to increase the use of natural gas-fired generation and wind power. This approach creates new opportunities for business growth while reducing the intensity of our environmental impacts. In 2003, we made some major progress in this regard, with the commercial launch of two gas-fired plants in Mexico, the completion of our cogeneration plant in Sarnia, Ontario, and the opening of our newest - and largest - wind farm at McBride Lake, Alberta. Given the capital-intensive nature of our business, these are remarkable achievements.

We're not only improving our performance but our gains are being recognized in Canada and internationally by our peers. In 2003, TransAlta was recognized as the most respected corporation for environmental stewardship by Alberta Venture magazine in its annual survey of businesses in the province. The Canadian Electricity Association recognized our efforts to improve safety in our workplace with the President's Award of Excellence for Employee Safety. And for the fifth consecutive year, we were listed on the Dow Jones Sustainability Index (DJSI) as one of the world's most sustainable companies.

While we are proud of our efforts so far, we recognize that more work remains to be done. We can - and will - do even better in the future.

Currently we are attempting to address the rising public expectations on the environment and the evolving regulatory changes imposed by government. We will continue to provide leadership on reducing all types of emissions. Climate change and mercury emissions are two key issues where we are hard at work.

We also believe that corporate social responsibility is a fundamental element of how we approach what we do at work and in the communities. We will continue to look for opportunities to invest in charitable initiatives we believe will make a difference. And in our communities, we will strive to listen to the needs and concerns of our stakeholders and to effectively engage them in our business decisions.

Integrating these considerations into all that we do is hard work and will continue to challenge our people and our organization. But our commitment to sustainable development remains unwavering. At TransAlta, we believe that sustainable development is smart business and the right thing to do.

As we move forward, we will continue to use our talents and the dedication of our people to aggressively promote sustainable business practices in our operations and our relationships. We believe this approach is imperative to growing our business, preserving and enhancing our reputation and delivering long-term shareholder value.