About this report

Our ESG report for the year ended 31 December 2021 reflects how we measure and manage our impact on the environment and society, and our commitment to good corporate governance.

MATERIALITY

The information included in our reporting is influenced by our materiality determination process. This year, we followed a double materiality process that considers an outward and inward focus. The outward focus considers our impact on society and the environment, and the inward focus considers the impact of a matter on our ability to create and preserve value over time. We further group these material matters into themes that link to the resources we use and affect.

Refer to the integrated report for a detailed discussion on this process and the material matters we identified.

Theme				Material matters
	Adapting to the changing context The operating context is changing rapidly. Social, political and economic issues all impact our ability to create value. We operate in a long-term asset class with significant infrastructure investment. To remain a leader, we must respond to both the current context and anticipate the future.			Geopolitical context Macro-environment Supporting a just transition to a low-carbon economy
	Helping our people thrive Exxaro's employees are the enablers of the organisation's performance. To deliver on our strategic goals, we need to foster a culture that supports adaptability and innovation, while leveraging the strength of diversity, equity and inclusion. We are deeply committed to protecting our people's health, safety and wellness and building relationships based on trust.			Health, safety and wellness Workforce: culture, capability, diversity, inclusion and innovation Labour relations
	Building sustainable communities We operate in an environment of stakeholder capitalism# and where our business activities impact our stakeholders who respond to these impacts. Our social licence to operate depends on how we look after our communities and the natural world around us. We are committed to a social and just transition sensitive to the potential impacts of Exxaro, its communities, South Africa and the planet. #  Where organisations are oriented to serve the interests of all their stakeholders.			Human rights Job and business creation Responsible environmental stewardship Supporting a just transition to a low-carbon economy
	Executing our strategy Climate change is no longer a refutable occurrence. We are committed to the Paris Agreement and have established a strategy and business objectives to respond to both the short and long term risks and opportunities presented by climate change.			Coal portfolio optimisation Diversify into minerals Build a leading global renewable energy solutions business
	Driving business resilience Underpinning our strategic goals is the drive to enhance our business resilience through safe production, the delivery of financial results, effective capital allocation, compliance excellence as well as entrenching innovation and capitalising on digitalisation. Over and above these, the way we conduct ourselves as a business strengthens our reputation and resilience.			Financial performance and resilience Legal, regulatory and compliance excellence Capital allocation Operational excellence (innovation and digitalisation) Transparency, ethics and integrity

For material matters relevant to this report, refer to our material matters.

We report on our progress in the 2021 financial year in terms of how we create and preserve value, and prevent the erosion thereof over time. This report contains the most material information about our value creation, transparently and understandably.

FRAMEWORKS AND GUIDELINES

The content of this report is guided by:

• Our materiality determination process
• Companies Act, 2008 (Act 71 of 2008), as amended (Companies Act)
• International Financial Reporting Standards (IFRS)
• JSE Limited (JSE) Listings Requirements and Debt Listings Requirements
• Department of Trade, Industry and Competition (dtic) broad-based black economic empowerment (B-BBEE) codes of good practice
• The effective parts of the Broad-based Socio-economic Empowerment Charter for the Mining and Minerals Industry 2018 (Mining Charter III)
• International Integrated Reporting Council's Integrated Reporting Framework 2021 ( Framework)
• United Nations Global Compact (UNGC)
• Global Reporting Initiative (GRI) standards
• King IV Report on Corporate Governance for South Africa, 2016 (King IV™)¹
• The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, 2016 edition
• Sustainability Accounting Standards Board (SASB)

BOUNDARY 

This report contains material information about our ESG performance for the period 1 January 2021 to 31 December 2021 (the 2021 financial year). It covers financial and non-financial environmental and social information of our wholly owned and joint operations in South Africa. The reporting boundary now incorporates material information about Cennergi Proprietary Limited (Cennergi) following our acquisition of the 100% interest of this business in 2020. Following the disposal of Tronox in March 2021, information on this investment is no longer included unless stated. We have consolidated material information related to Cennergi's safety incidents into the Exxaro group. The health, environmental, water, energy and climate change key performance indicators (KPIs) will be fully integrated in 2022.

We include limited information on operations where we do not have management control but hold a significant equity interest, namely Sishen Iron Ore Company Proprietary Limited (SIOC), a subsidiary of Kumba Iron Ore Limited, or joint control, namely Mafube Coal Proprietary Limited (joint venture) and Moranbah South coal project.

¹ Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

Inside a coal beneficiation plant at our Grootegeluk BU