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Exxaro Resources limited
Environmental, social and governance report 2021

Strategic key performance indicators

Our KPIs are outlined in this strategic performance dashboard.

We remain within our sustainability risk appetite and have managed our strategic objectives by monitoring our KPIs through the strategic performance dashboard. This is done quarterly by Exxaro's board and executive committee.

We ensure strategy management is integrated with:

  • A sustainability framework
  • An integrated risk management framework including clearly defined material matters
  • KPIs aligned with material matters
  • Connected combined assurance, risks, material matters and KPIs

The board and executive committee measure and manage Exxaro's strategy and performance so that stakeholders can have a transparent and consolidated view of value creation and sustainability drivers.

Built-in risk appetite thresholds enable appropriate strategic decisions.

HOW TO INTERPRET THE DASHBOARD

The dashboard links strategic KPIs and our material matters to present our sustainable value creation in terms of the relationship amongst the capitals we impact. Performance indicators (out of appetite, worst tolerable, best realistic, target or opportunity) show whether KPIs are within our risk appetite thresholds.

We aim for "target", and avoid "worst tolerable" or "out of appetite" to remain within our defined risk appetite. When necessary, we implement or improve controls to ensure we achieve our strategy objectives. For example, our strategic objectives include improving operational performance using core operating margin as a KPI. We underperform when it is below best realistic.

KPI performance Current performance Indicator
Core operating margin 25% indicator
KPI threshold Out of appetite Worst tolerable Best realistic Target Opportunity
Core operating margin <15% 15% 15% to 20% 20% >20%
Indicator Brown light Red light Yellow light Olive light indicator
Pollution control dams

Pollution control dams at our ECC operation which Exxaro exited in September 2021

  • NATURAL CAPITAL
  • HUMAN CAPITAL
  • SOCIAL AND RELATIONSHIP CAPITAL
  • MANUFACTURED CAPITAL INTELLECTUAL CAPITAL
  • FINANCIAL CAPITAL

NATURAL CAPITAL

      2021     2020    
KPI Strategy Target Actual Indicator   Target Actual Indicator   Trend
based on
actual data
Incidents                
Reportable environmental incidents (level 2 and 3) Become a catalyst for economic growth and environmental stewardship 6 level 2s
0 level 3s
0 level 2s
0 level 3s
indicator   6 level 2s
0 level 3s
0 level 2s
0 level 3s
indicator   trend
Compliance                
Stoppage directives (includes section 54 in terms of MHSA*) Empower people to create impact 0 2 indicator   0 3 indicator   trend
Stoppage directives (includes directives in terms of NWA, NEMA and MPRDA**) Become a catalyst for economic growth and environmental stewardship 0 0 indicator   0 0 indicator   trend
Valid authorisations in place (EA, IWUL, WML, AEL, EIA ROD*** and reporting)
Current operations Become a catalyst for economic growth and environmental stewardship 100% 100% indicator   100% 100% indicator   trend
Projects   100% 100% indicator   100% 100% indicator   trend
Compliance to valid licences/authorisations in place (EA, IWUL, WML, AEL, EIA ROD*** and reporting)
Current operations Become a catalyst for economic growth and environmental stewardship 100% 96% indicator   100% 96.47% indicator   trend
Projects Become a catalyst for economic growth and environmental stewardship 100% 99% indicator   100% 99.33% indicator   trend
Environmental liability provisions in place
Commercial operations Become a catalyst for economic growth and environmental stewardship 80% and 80% to 100% and 100% 72% indicator   Between
80% and
100%
69% indicator   trend
Captive operations Become a catalyst for economic growth and environmental stewardship 80% and 80% to 100% and 100% 109% indicator   Between
60% and
100%
116% indicator   trend
Environmental management
Carbon intensity scope 1 emissions (ktCO2e) Be carbon neutral by 2050 Actual for previous year less 5% 3% deterioration indicator   Actual for
previous
year less
5%
10% improvement indicator   trend
Carbon intensity scope 2 emissions (ktCO2e) Be carbon neutral by 2050 Actual for previous year less 5% 11% deterioration indicator   Actual for
previous
year less
5%
9.6% deterioration indicator   trend
Water intensity (kL/tonne RoM****) Be carbon neutral by 2050 0.20 0.149 indicator   0.20 0.182 indicator   trend
* Mine Health and Safety Act, 1996 (Act 29 of 1996) (MHSA).
** National Water Act, 1998 (Act 36 of 1998) (NWA), National Environmental Management Act, 1998 (Act 107 of 1998) (NEMA) and Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002).
*** Environmental authorisation (EA), integrated water use licence (IWUL), atmospheric emissions licence (AEL), environmental impact assessment (EIA) and record of decision (ROD).
**** Run of mine (RoM).
Trend
Deteriorated
Improved
Unchanged
New KPI this period
KPI threshold Out of appetite Worst tolerable Best realistic Target Possible
waste or
opportunity
Core operating margin <15% 15% Between
15% to 20%
20% >20%
Indicator Brown light Red light Yellow light Olive light indicator

HUMAN CAPITAL

      2021     2020   Trend
based on
threshold
KPI Strategy Target Actual Indicator Target Actual Indicator
Safety                
Number of fatalities
Lost-time injuries = 12
Empower people to create impact 0 0 Olive light 0 0 Olive light Trend Orange
LTIFR # Empower people to create impact 0.11 0.08 indicator 0.11 0.05 indicator Trend Orange
Health
Number of accepted occupational health cases = 4
             
OHIFR# reported Empower people to create impact 0.31 0.16 indicator 0.31 0.19 indicator Trend Orange
People who received HIV/Aids awareness training Empower people to create impact 90% to 100% 79.3% Yellow light Between 90% and 100% 84.1% Yellow light Trend Orange
Employees who received awareness training and voluntarily tested for HIV/Aids Empower people to create impact 68% and above 71.3% Olive light 68% and above 47.6% Yellow light Trend green
HIV/Aids prevalence rate compared to country prevalence rate Empower people to create impact Less than country prevalence rate 3.7% Yellow light 0% 8.8% Yellow light Trend Orange
COVID-19 infection rate compared to country infection rate Make our minerals and energy business thrive Equal to the country infection rate 3.6% below the country infection rate indicator N/A N/A N/A Trend star
COVID-19 recovery rate compared to country recovery rate Make our minerals and energy business thrive Equal to the country recovery rate 3% more than the country recovery rate indicator N/A N/A N/A Trend star
Skills                
Skills provision (% of internal appointments for critical skills) Empower people to create impact 60% 62.17% indicator 60% 88.4% indicator Trend Orange
Scarcity skills retention Empower people to create impact 5% 3.7% indicator 5% 3.6% indicator Trend Orange
Security                
Fraud and corruption/asset destruction Empower people to create impact 0% 0% Olive light 0% 0% Olive light Trend Orange
# Lost-time injury frequency rate (LTIFR) and occupational health incident frequency rate (OHIFR).
* The HIV/Aids stats above are from quarter 4 only and the annual percentage for people who received the HIV/Aids awareness and training stands at 111% and employees who received the awareness training and voluntarily tested for HIV stands at 61%.
Trend
Deteriorated
Improved
Unchanged
New KPI this period
KPI threshold Out of appetite Worst tolerable Best realistic Target Possible
waste or
opportunity
Core operating margin <15% 15% 15% to 20% 20% >20%
Indicator Brown light Red light Yellow light Olive light indicator

SOCIAL AND RELATIONSHIP CAPITAL

      2021     2020   Trend
based on
actual data
KPI Strategy Target Actual Indicator Target Actual Indicator
Employment equity                
Black ownership at group level Become a catalyst for economic growth and environmental stewardship 30.1% 47.1% indicator 30.1% 38.22% indicator Trend
People living with disabilities Empower people to create impact 1.5 1.59 indicator 1.5 1.44 indicator Trend
Human resources development spend as % of payroll - Mining Charter III Empower people to create impact 5% 5.51% indicator 5% 4.92% indicator Trend
HDP& representation - top management Empower people to create impact 50 66.66 indicator 50 66.67 indicator Trend
HDP representation - senior management Empower people to create impact 60 65 indicator 60 57.95 indicator Trend
HDP representation - middle management Empower people to create impact 60 78.52 indicator 60 74.49 indicator Trend
HDP representation - junior management Empower people to create impact 70 79.52 indicator 70 78.15 indicator Trend
Women representation in top management bands Empower people to create impact 20% 33.33% indicator 20% 33.33% indicator Trend
Women representation in senior management bands Empower people to create impact 25% 20.48% indicator 25% 19.32% indicator Trend
Women representation in middle management bands Empower people to create impact 25% 38.19% indicator 25% 36.16% indicator Trend
Women representation in junior management bands Empower people to create impact 30% 29.25% indicator 30% 26.12% indicator Trend
Business sustainability                
B-BBEE level Empower people to create impact Level 1 Level 2 indicator Level 1 Level 2 indicator Trend
Enterprise development (% of NPAT& ) Empower people to create impact 1% 0.308% indicator 1% 0.45% indicator Trend
Supplier development (% of NPAT) Empower people to create impact 2% 0.694% indicator 2% 0.86% indicator Trend
Socio-economic development (% of NPAT) Empower people to create impact 1% 0.56% indicator 1% 1.23% indicator Trend
Human resources development spend for black people as % of payroll - B-BBEE Empower people to create impact 3% 3.20% indicator 3% 3.19% indicator Trend
SLPs@                
Project delivery measure - local economic development projects per SLP time variance from plan Become a catalyst for economic growth and environmental stewardship 0% behind schedule 8% indicator 0% behind schedule 11% indicator Trend
Cost variance from plan Become a catalyst for economic growth and environmental stewardship 0% over budget 19% indicator 0% over budget 59% indicator Trend

& Historically disadvantaged persons (HDP) and net profit after tax (NPAT).

Trend
Deteriorated
Improved
Unchanged
New KPI this period
KPI threshold Out of appetite Worst tolerable Best realistic Target Possible
waste or
opportunity
Core operating margin <15% 15% 15% to 20% 20% >20%
Indicator Brown light Red light Yellow light Olive light indicator

MANUFACTURED CAPITAL

        2021     2020   Trend
based on
actual data
KPI Strategy   Target Actual Indicator Target Actual Indicator
Capital project delivery measure                
Capital projects time overrun Make our minerals and energy businesses thrive 0% behind schedule 10.3 Red light 0% behind schedule 11.1 Red light Green
Capital projects cost overrun Make our minerals and energy businesses thrive 0% over budget 3 yellow light 0% over budget 6.3 Yellow light Green
Operational performance                
System availability (Core P1 and ERP Solutions) Make our minerals and energy businesses thrive 97 99 blue light 97 98 blue light orange
Digitalisation programmes (cost overrun) Make our minerals and energy businesses thrive 0% over budget 0% olive light 0% over budget 0% olive light orange
Digitalisation programmes (time overrun) Make our minerals and energy businesses thrive 0% behind schedule 0% olive light 0% behind schedule 9% brown light green
Trend
Deteriorated
Improved
Unchanged
New KPI this period
KPI threshold Out of appetite Worst tolerable Best realistic Target Possible
waste or
opportunity
Core operating margin <15% 15% Between
15% to 20%
20% >20%
Indicator Brown light Red light Yellow light Olive light indicator

FINANCIAL CAPITAL

        2021     2020 Trend
based on
actual data
KPI Strategy Target Actual Indicator Target Actual Indicator
Core operating margin Make our minerals and energy businesses thrive 20% 21% indicator 20% 17% Yellow light Green arrow
Core ROCE@ excluding Cennergi Make our minerals and energy businesses thrive 20% 40% indicator 20% 27% indicator Orange arrow

@Social and labour plans (SLPs) and return on capital employed (ROCE).

Trend
Deteriorated
Improved
Unchanged
New KPI this period
KPI threshold Out of appetite Worst tolerable Best realistic Target Possible
waste or
opportunity
Core operating margin <15% 15% Between
15% to 20%
20% >20%
Indicator Brown light Red light Yellow light Olive light indicator
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OVERVIEW
Add section
Introduction
About this report
About Exxaro
Evolution of a 21st century company
Our ESG perspective
Measuring our performance
Strategic key performance indicators
Stakeholder management

ENVIRONMENT
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Environment
Air quality
Climate change resilience
Energy management
Water security management
Waste management
Biodiversity
Environmental liabilities and rehabilitation
GOVERNANCE
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Governance
Ethical culture
Performance and value creation
Adequate and effective control
Trust, good reputation and legitimacy
Board of directors
Our executive team
Remuneration and nomination committee report
Remuneration committee report
Nomination committee report
Risk and business resilience committee report
Social, ethics and responsibility committee report
Audit committee report
Investment committee report
King IV application register
Remuneration report
SOCIAL
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Social
People
Communities
Human rights

ADDITIONAL INFORMATION
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GRI index
SASB index
Task Force for Climate-Related Financial Disclosures (TCFD)
Assurance report
Appendix A: Criteria
Glossary
Administration