Exxaro Resources limited
Environmental, social and governance report 2021

Social, ethics and responsibility committee report

Geraldine Fraser-Moleketi: SERC chairperson

Geraldine Fraser-MoleketiSERC chairperson

Dear shareholders,
I am pleased to present the SERC report for the year ended 31 December 2021.

The board felt the need to include responsibility in the committee title and mandate. As part of the group's governance review, as an agile response to organisational change, the board chose to strengthen the committee's mandate by entrenching responsible corporate citizenship as part of the committee's focused activities.

It was of paramount importance, being mindful of a difficult business climate, which included a change in company strategy, that we maintained organisational ethics in the way we conduct our operations.

Thus, the committee performed a pivotal role in the deliberate pursuit of enhanced governance through oversight and regular monitoring of the organisation's actions and outputs. Particularly, in the wake of heightened sensitivity toward ESG, with concern for employees' integrated wellness, health and safety, and in light of stark social inequalities, exacerbated by the COVID-19 pandemic.


The committee is chaired by the lead independent director of the board with a documented career in pursuit of social justice, racial and gender equity, and global governance. The committee consisted of a majority of independent non-executive directors throughout the period as per the recommendations of King IV, which facilitated the application of independent judgement on the committee deliberations and decisions taken.

The chairperson of the board and all board members are welcome to attend all meetings, as observers. The CEO is a standing invitee at all committee meetings, including the CEO designate, FD, executive head: human resources, executive head: sustainability and executive head: stakeholder affairs. Other individuals with specific skills and expertise are also invited to report and assist members in their deliberations, including the information officer, head of legal, chief audit executive and chief risk officer.


Nine meetings were held during 2021, including three combined board committee sessions where the subject matter required a nexus of oversight, with complementary lenses, from other board committees.

In addition, five hybrid stakeholder engagement days were dedicated. All members were in full attendance at all meetings and supported by observers in attendance. Committee attendance throughout the year illustrates high levels of engagement and commitment by members to the objectives of the board committee.

The following table provides an overview of member designations and attendance:

Members Designation Attendance
Geraldine Fraser-Moleketi Lead independent non-executive director and chairperson 100%
Peet Snyders Independent non-executive director 100%
Likhapa Mbatha Non-executive director 100%
Isaac Mophatlane Independent non-executive director 100%

Committee calendar highlights linked to the key focus areas for 2021


The committee's terms of reference were extensively reviewed in 2021 to include responsible corporate citizenship in its role and responsibilities, which amendment was approved by the board. The terms of reference continue to be aligned with legislation, regulations and King IV.


  1. Oversee implementation of diversity and inclusion strategy in support of the overall Exxaro strategy as a key business value driver
  2. Scrutinise human capital strategies, human capital investment and oversight (strategic workforce issues) that impact the group's brand and reputation
  3. Oversee the implementation of the stakeholder engagement strategy and KAM of the eight identified stakeholder groupings
  4. Monitor the ESD programme execution and targets achievement
  5. Review the ongoing anti-bribery and anti-corruption programme implementation, including the rolling out of the conflict of interest programme and ensuring an ethical culture
  6. Ensure ESG is levered to build long-term competitive advantage, enhance resilience to sustainability risks and attract the socially conscious investors, talent and customers


1. Oversee implementation of diversity and inclusion strategy in support of the overall Exxaro strategy as a key business value driver

Exxaro has a strong commitment to combating GBV in the workplace. This coincided with the national initiative, undertaken in conjunction with the Minerals Council, the committee approved to recommend to the board a group policy, which would redress racial and sexual harassment in the workplace.

As part of consistent internal racial policy review of diversity and inclusion, focus was placed on our group policy on racism. The organisation has consulted the specialist expertise of a civil rights expert, who advises on process and system improvements, which are continually introduced.

The approach ensures alignment and focused efforts in respect of peer and industry norms in response to human rights, and a broad spectrum of diversity and inclusion.

2. Scrutinise human capital strategies, human capital investment and oversight (strategic workforce issues) that impact the group's brand and reputation

The year commenced with a targeted focus on employment equity progress to date and an action plan with specific focus on the women agenda and people living with disabilities. The stipulated interventions and deliberate strategies in support of the targeted areas for improvement will be revisited early in the coming reporting cycle.

In partnership with the board committee that looks at remuneration, fair pay or pay parity forms part of the key oversight areas. The driver being the need to address social inequalities and poverty as part of a broader national agenda bearing in mind the company's role as a responsible corporate citizen in the mining sector as a South African black mining house, specifically. The board holds the view that Exxaro forms part of a chain of contributing builders of a society that looked different, felt different and behaved differently.

In this regard, some of the specific measures adopted included:

  • The establishment of a task team of functional and technical representatives, nominated by leadership, to review the design and define job families, sub-streams and organisational capabilities to better cluster jobs
  • The revision of the structured development policy and associated policies to ensure that it supported career progression
  • The documentation of key principles that govern the fair pay implementation programme for consistent application and longevity

In light of work-from-home employment condition changes, the committee monitored the equipping and change management efforts undertaken to address cybersecurity and other risks.

3. Oversee the implementation of the stakeholder engagement strategy and KAM of the eight identified stakeholder groupings

Unable to make in-person visits, as is preferred, the committee with management undertook multi-level, multi-region, virtual engagement sessions, which were conducted over a period of five days and a Capital Markets Day. The advantage afforded by the virtual platform was the integration of simultaneous engagement with community and government stakeholders, which contributed to a richness in discussions. A number of learnings were gleaned and actions identified.

Relationship building is a key outcome of the stakeholder engagement strategy in redressing the plight of the poor in the communities surrounding the operations. Progress in respect of COVID-19-related delays in SLP delivery were at the heart of discussions aimed at turnaround implementation plans. At the end of the third quarter, the organisation was 8% behind schedule and 16% under budget spend. The committee is overseeing planned improvements in the delivery of community development projects and the efforts to meet commitments under lowered COVID-19 lockdown levels.

The committee's oversight of stakeholder engagement includes weekly reports in respect of business activity and media review as an indicator of reputation management.

4. Monitor the ESD programme execution and targets achievement

The ESD programme execution and targets will receive ongoing focused attention in 2022 as part of the Sustainable Growth and Impact strategy.

Detailed information and positive results are reported in the Communities section. The committee remains committed to ESD and its monitoring.

5. Review the ongoing anti-bribery and corruption programme implementation, including the rolling out of the conflict of interest programme and ensuring an ethical culture

The group's ethics processes are managed by the management ethics committee, which comprises prescribed officers, representatives of the internal audit and the chief audit officer. Chaired by the chief risk officer, it meets either monthly or as required to consider issues of non-compliance to the group code of ethics or conflicts of interest policy as well as matters reported on the ethics hotline or to management.

Required investigations are conducted by a dedicated forensic team that reports its findings independently to the chief audit executive.

The ethics committee formally reports to this committee to ensure the board has full oversight of ethics-related matters.

During the period under review, the group revised its insider dealing and external communications policies. The committee oversaw this revision with the support of the audit committee as well as the RBR committee. These revised policies were approved by the board for implementation from 3 June 2021.

Key innovations implemented during the year in review have assisted with the automation, improved access and dissemination of company policy and awareness training. The ongoing digital innovation and process improvements in respect of conflicts of interest, and all company policies in general, continue into 2022. It is anticipated to contribute positively to the ethics management plan, which is in the process of formulation following the detailed ethics risk assessment undertaken in the third and fourth quarters of 2021.

The ongoing anti-bribery and anti-corruption programme encompasses the identification and combating of at least two different forms of bribery-related activity especially when engaging the state or organs of state as one of our stakeholders, and when engaging suppliers or vendors of goods and services.

Contractors, vendors and third parties are also made aware during the process of engagement with the group that they are also expected to report corrupt activity when identified. The mechanisms to do so are written into contracts and published on our website, and made visible by the use of posters.

During 2021, the company implemented compulsory anti-bribery and anti-corruption awareness training. All employees and identified contractors were required to complete the revised training on principles of fraud and corruption. It is a requirement that all employees have a thorough understanding of these concepts, how to prevent such practices and how to respond when such practices are brought to their attention.

6. Ensure ESG is levered to build long-term competitive advantage, enhance resilience to sustainability risks and attract socially conscious investors, talent and customers

Sustainable Growth and Impact strategy

Exxaro's Sustainable Growth and Impact strategy is an integrated socio-economic development strategy in response to the dual challenges of social inequality (aggravated by COVID-19) and the systemic and additive impacts of climate change (and increasing biodiversity losses) and aims to transition Exxaro to a low-carbon future.

The committee, along with management, dedicated time to ensuring delivery in respect of SLP commitments and developing the Sustainable Growth and Impact strategy.

The intent of the Sustainable Growth and Impact strategy is aimed at changing the quality of life of people, the natural environment and economies in coal mining and windfarm areas.

Health, safety and integrated wellness

Health and safety-related reporting in respect of the COVID-19 pandemic was elevated to the board but, in keeping with the committee's mandate, all particulars in respect of policy, funding and other related decisions were submitted for the committee's attention.

As of 29 December 2021, the company was able to report that 73.56% of total employees had been vaccinated (10 789 vaccinated of the total workforce of 14 667). In conjunction with partners, the programme was extended to family members and communities through the clinic facilities. The continuing COVID-19-related programme includes mass mandatory COVID-19 screening and testing of all employees. The established COVID-19 24-hour call centre (to support infected employees) and deployment of oximeters to all active cases in the business as well as awareness and psychosocial support through the EAP was intensified to provide additional support to all our employees. Return-to-work protocols were also implemented following the holiday season.

More detailed information can be found in People of the ESG report.

The committee is pleased to report in respect of the safety statistics as at 3 November 2021, that the group had achieved a record of 56 months without a fatality. On the back of the Khetha Ukuphepha safety campaign as our launching platform, risk awareness messages to the broader workforce on identified safety risks areas, which were trending out of appetite, were disseminated.

The integrated wellness approach was an innovation that considers the whole person and, based on specific focus areas, interventions were designed to support the employee. Management placed focused efforts on the emotional, financial and occupational dimensions. The committee was pleased with the outcomes and impact of this targeted approach, as demonstrated.

Other matters addressed in 2021

The grace period for implementation of POPIA ended on 1 July 2021. The committee oversaw the group's steering committee's efforts in compliance and pursuit of implementation of measures to safeguard and meet conditions of lawful processing of personal information.


There is currently not a legal or regulatory requirement for the committee to complete annual performance evaluations and, while King IV recommends regular performance evaluations for all board committees, it has become a governance practice at Exxaro to have the committee's performance and effectiveness evaluated every two years.

As Exxaro's board committees embarked on a significant transformation journey in 2020, which culminated in the group governance framework, revised delegation of authority, board committee mandate and work plan review as well as committee name changes following this process. Allowing an opportunity for the changes to settle and make impact, the board did not undertake a review in 2021 following the high-level assessment in 2020 but will commence formal performance evaluations in November 2022 for disclosure in the integrated report 2022.


The SERC is pleased to confirm that, in carrying out its duties, as prescribed, it has had due regard to the principles and recommended practices of King IV, and has discharged its responsibilities in accordance with its terms of reference and the Companies Act during the period under review. The committee is furthermore satisfied that it has fulfilled its mandate and that there are no material instances of non-compliance to disclose and, if any material non-compliance existed, it was duly considered during the year in review.

In closing, the committee remains committed to contributing positively to the responsible pursuit of the SDGs as "the blueprint to achieve a better and more sustainable future for all people and the world by 2030".

On behalf of the committee

Geraldine Fraser-Moleketi
SERC chairperson
4 April 2022


ConneXXion employees gathered for Arbor day celebrations prior to COVID-19

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Appendix A: Criteria