Material matters in 2019

The ESG report has been informed by matters of material significance to Exxaro and our stakeholders at large for the period under review. We determined these material matters through a rigorous materiality determination process.

Materiality determination process

Assess against global reporting context

Our material matters

The identified matters were mapped and grouped under five themes.

Material matters 1 Financial resilience 2 Key customer dependency 3 Cost competitiveness of product 4 Product substitution 5 Capital project execution and capital allocation 6 Workforce culture, diversity and capability/innovation 7 Transparency, ethics and integrity 8 Safety and health 9 Legal and regulatory excellence 10 Social unrest 11 Supporting job and business creation 12 Cybersecurity 13 Climate change 14 Responsible environmental stewardship 15 Country risk (political) 16 Price and currency volatility 17 Short-term investor/shareholder focus 18 Infrastructure access and capacity

Broader themes:

• Macro-environment
• Business resilience
• Our people
• Social licence to operate
• Climate change

 

Changes to our material matters

Material matters are significant in terms of Exxaro's existence and sustainability, and change in relation to our evolving context and business environment.

The nature of our operating context is changing rapidly with sentiment hardening towards companies within the fossil-fuels sector, particularly over the past 12 months. While climate change and related environmental matters have always been of material significance to Exxaro, in the past year, the necessity to elevate this matter to a broader, more prominent theme became apparent.

We seek to be part of the solution in the transition to a low-carbon economy in response to greater risks posed by climate change. However, we recognise the complexity of meeting current energy requirements while supporting this critical aim, which is reflected in our strategic direction for 2019 and beyond.

The challenges faced by Eskom are also cause for material concern as it is a major customer. We have therefore regrouped this matter as we believe that this key customer dependency is a matter to be viewed through the lens of business resilience. We have also grouped capital allocation and capital project execution under the same theme as we believe these matters determine our business resilience.

The material matters in each theme, as well as the related risks, SDGs and impacts or influences of each material matter are outlined in the table below.

 

							Impact/influences
Theme	Matters of significance		Related risks		Sustainable development goals		Links to strategy		Links to business model		Capitals		Stakeholders
Business resilience	Financial resilience Key customer dependency Cost competitiveness of product Capital project execution Legal and regulatory excellence Climate change		Climate change concerns Loss of social licence to operate Water allocation and shortage Cybersecurity threats Safety and health concerns Legal and regulatory non-compliance Capital project execution Competition and project execution Cost competitiveness of products Price and currency volatility Competition and product substitution Community unrest Labour unrest Eskom systemic risk Country risk (political) Short-term focus of investor/shareholder				✓		✓		Financial Manufactured Social and relationship Natural Human		Industry peers Customers Suppliers Government Analysts Investors Communities Employees Unions NGOs
Our people	Workforce culture, diversity and capability/innovation Transparency, ethics and integrity Safety and health Legal and regulatory compliance Supporting job and business creation		Loss of social licence to operate Community unrest Labour unrest Unavailability of critical skills Safety and health concerns Legal and regulatory non-compliance Fraud and corruption				✓		✓		Financial Manufactured Social and relationship Intellectual Human		Suppliers Government Communities Employees Contractors Unions NGOs
Social licence to operate	Social unrest Supporting job and business creation		Loss of social licence to operate Community unrest Country risk (political)				✓		✓		Manufactured Social and relationship Intellectual Natural Human		Suppliers Government Communities Employees Contractors Unions NGOs Media
Climate change	Climate change Responsible environmental stewardship		Climate change concerns Loss of social licence to operate Legal and regulatory non-compliance Water allocation and shortage				✓		✓		Financial Manufactured Social and relationship Natural		Customers Government Communities Employees Contractors Unions NGOs Suppliers Media Investors Analysts
Macro- environment	Product substitution Climate change Country risk (political) Price and currency volatility Short-term investor/shareholder focus Infrastructure access and capacity		Eskom systemic risk Price and currency volatility Competition and product substitution Community unrest Fraud and corruption Country risk (political) Capital project execution Short-term focus of investor/shareholder Cost competitiveness of products				✓		✓		Financial Manufactured Social and relationship Natural Human		Customers Suppliers Government Communities Employees Contractors Unions NGOs Media Investors Analysts