ESG Report 2021
Exxaro Resources Limited
Integrated report 2021
Our social and relationship capital refers to mutually beneficial relationships that provide our social licence to operate. To ensure we have a holistic, positive and lasting impact on our people, communities and society at large, we conduct our business activities in a way that promotes development and success for us and our stakeholders.
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We recognise that South Africa faces many challenges, including unemployment, poor access to basic services such as electricity, water, sanitation and education, exacerbated by the effects of COVID-19. As a business, we believe we can help our host communities overcome these challenges. |
We aim to positively impact our social and relationship capital by:
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| Material theme | Matter | Our strategic response | Our impact on the SDGs | ||||||
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Building sustainable communities |
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As we transform our business, we continue ensuring that our transition contributes to the socio-economic wellbeing of the communities in which we operate. We do this through collaboration efforts driven via our Impact at Scale approach, SLP projects and ESD initiatives.
Cennergi is committed to investing 2.1% of revenue in projects that support host communities. Cennergi founded the Amakhala Emoyeni Community Fund Trust and the Tsitsikamma Community Windfarm Trust to disburse and manage its socio-economic development and enterprise development programmes. Community projects outside a 50km radius of those operations are funded through Cennergi's CSI budget.
Our integrated approach to infrastructure development, education, healthcare and ESD aims to advance and strengthen communities. We understand that our success is measured in the short term by delivery of initiatives and, in the long term, by the legacy we leave for our communities.
Exxaro's approach to socio-economic development focuses on sectors aligned to the SDGs and is considered strategic within South Africa's socio-economic development. The contributions to the various sectors are as follows:
Social investment projects in local economic development (Rm)
excluding ESD financial support
Our social investment activities continued to gather momentum in 2021 after lockdown disruptions in 2020 with a primary focus on ESD and community infrastructure projects. Unfortunately, some projects were halted by community members who expressed concerns regarding the preferential procurement process. We also experienced delays in the approval of the Belfast, Matla and Leeuwpan SLPs. The DMRE has since approved the Belfast and Leeuwpan SLPs, and has given guidance on the Matla SLP, which will be concluded and submitted for approval in the first half of 2022.
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Provided |
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| Created jobs on infrastructure projects, which included building an ESD hub, social services, water and schools’ infrastructure | Socio-economic development expenditure, including SLPs, ESD, CSI and COVID-19 relief, totalled (2020: R198.64 million) | ||
Our Impact at Scale concept has driven our approach to community development since its introduction in 2020. It seeks to establish inclusive, collaborative cross-sectoral platforms, initiatives and partnerships to achieve systemic socio-economic impact through public-private partnerships at regional level. These activities complement our SLP, CSI and ESD initiatives.
Our Impact at Scale approach is guided by Exxaro's Sustainable Growth and Impact strategy, and focuses on:
Our operations have valid mining rights granted by the DMRE, which are at various stages of execution of their five-year SLPs. We delivered our approved SLP projects in 2021, with improved efficiency compared to 2020.
In 2021, we spent R56.44 million on SLPs, which included school infrastructure, delivering the ESD hub and programmes, and water and sanitation infrastructure projects in Mpumalanga and Waterberg. We estimate that approximately 53 000 community members will benefit from services to be provided from these projects. During the construction periods, 202 jobs were created.
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Exxaro's coal sites: R4.3 million (non-financial support equivalent) to 126 beneficiaries |
Cennergi: R25 million (18 369 beneficiaries) |
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| * | Excludes SLP ESD non-financial support. |
Exxaro's ESD initiatives are a key component of our socio-economic development response and contribute to achieving our strategic objectives. The initiatives provide financial and non-financial support to small businesses with preference given to businesses in areas where we operate.
We provided R53.3 million to seven enterprise development (qualifying enterprises that are not Exxaro service providers/contractors) and R74.4 million to eight supplier development beneficiaries (qualifying enterprises that are Exxaro service providers/contractors).
These approvals represented 100.2% of the available R127.4 million for ESD loans and grants to create a sizeable self-sustaining loan fund. The higher than budgeted for approvals were also in response to the significantly higher than forecast latest NPAT. The ESD programme engaged the dtic to lessen the impact of the upward change in forecasted NPAT. An option that was proposed to the dtic was for Exxaro to commit to spend the difference between the original and latest NPAT forecasts in 2022, and be evaluated on the original 2021 forecast.
The dtic was not amenable to this proposal and agreed instead that funding commitments made before 31 December 2021 would count towards 2021 recognition, although actual funding would be done in 2022.
What differentiates Exxaro's ESD strategy is our holistic and collaborative approach to development. We developed the contractor development programme with Gordon Institute of Business Science to address the common challenges many SMMEs face such as the basics of running a contract business, operations management and mentorship. Further, Exxaro and Cennergi partnered with SAICA ED to implement SAICA ED's financial excellence programme to enable our suppliers to learn about the financial management systems needed to run effective operations and, in doing so, become more robust and sustainable.
Cennergi's ESD programmes support the development of SMMEs. This aims to promote entrepreneurship, create jobs; increases economic activity in local communities; and empowers previously disadvantage people.
Refer to the social section in the ESG report for more details of our Impact at Scale, SLP projects and ESD initiatives.
Exxaro supported the Solidarity Fund with a donation of R15 million and handed over two water bowsers to the Lephalale and Emakhazeni municipalities, to the total value R2.3 million, to address water shortages during COVID-19 lockdown.
Our partnerships with local health departments are outlined on Our people.
Going forward, we intend to power better lives on a larger and more integrated scale, leveraging partnerships to become a catalyst for economic growth and environmental stewardship that we have set out as one of our five strategic objectives. As a catalyst, Exxaro intends to be an agent in starting or accelerating the creation of impact projects rather than controlling the entire process as we do in many other areas of our business.
We will do this by:
Refer to safety, health and wellness in the ESG report for details on our response to COVID-19.
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