Strong stakeholder relationships are critical to supporting Exxaro's business success, particularly during challenging periods and times of change. Stakeholder surveys indicate that our relationship strength varies but is generally high and comes with high expectations.
Our stakeholder relationships are a critical enabler of our sustainable development and business success. It is through collaborative and mutually beneficial partnerships with our stakeholders that we are able to leverage opportunities, mitigate risks and respond to issues facing our business in a just, responsible and effective manner.
The current operating environment continues to be characterised by high demand for service delivery and job creation to advance social progress, an incoherent political context with policy uncertainty, geopolitics and economic and market volatility threatening livelihoods through inflation. Business is increasingly called to intervene and apply its resources to the advantage and benefit of communities and society. We follow an intentional engagement approach in our response to stakeholders, which involves aligning our thoughts, decisions, actions and expected outcomes. This approach has been in place since 2017 and guides us in creating mutual value with our stakeholders.
Our stakeholder engagement procedures clarify the reasons for, methods and monitoring of relationships and are supported by our stakeholder engagement policy, plans, principles and key account management (KAM) approach. The strategy-led and outcomes-driven KAM approach ensures we address stakeholder issues, manage risks, leverage opportunities and deliver on our strategic objectives.
For detail on the KAM approach, refer to Stakeholder management in Exxaro's 2019 integrated report.
Our stakeholder engagement plans align with our strategy and include levels of accountability, material issues and risks, and enable us to track feedback, and monitor and report on our performance. We regularly update these plans to ensure they are fit for purpose.
We ensure engagement effectiveness by conducting assurance and audits of our procedures. Exxaro's board and executive committee are responsible for stakeholder management and engagement.
We are responding to issues raised and interests highlighted by stakeholders in our 2022 reputation tracking survey and regular engagements in 2023.
Read about how we are engaging with shareholders in our climate commitments (integrated report).
We use our ERM process and project workshops to identify and analyse our stakeholders, assessing the impact of our activities on them and their impact on our ability to deliver on our strategy, contribute to our ESG performance and address risks. We categorise our stakeholders into four key groupings (government, communities, business and value chain participants) and identify relevant engagement objectives and strategies as required.
Government
Value chain participation
Business
Communities
The management and quality of our relationships with stakeholders impact Exxaro's ability to deliver on our strategy. We measure the quality of relationships through different assessments (such as reputation, baseline and culture surveys or self-assessments) and our engagement strategies, which include stakeholder feedback and response strategies.
No existing relationship or the relationship has challenges
Good relationship with opportunity for improvement
Established relationship but can be improved
Very strong relationship based on mutual trust and respect
Stakeholders in this category include the Department of Mineral Resources and Energy (DMRE), Department of Public Enterprises, Department of Health (DoH), dtic, Department of Cooperative Governance and Traditional Affairs, Presidency, Parliament's Portfolio Committee on Agriculture, Land Reform and Rural Development, the Presidential Climate Change Commission, the Mpumalanga and Limpopo premiers' offices, local municipalities, Industrial Development Corporation of South Africa, South African Local Government Association, Municipal Infrastructure Support Agent and provincial growth agencies.
* Refer to the communities table for information on this multi-stakeholder issue.
Several partnerships and initiatives enable us to address government's expectations, including:
Exxaro aims to go beyond compliance in our business activities. Stakeholders include the DMRE, Department of Water and Sanitation (DWS), Water Tribunal, Department of Forestry, Fisheries and the Environment (DFFE), Department of Employment and Labour (DEL) and the JSE.
Understanding our employees’ needs and expectations is linked to our success. Employees see us as an agent of change.
Our collaborative relationship with labour unions is critical to ensure successful employee relations. Exxaro has a pluralist approach to union recognition but only formally engages with unions where recognition agreements have been concluded and these unions maintain their collective bargaining rights. These stakeholders include elected officials of recognised labour organisations at BU level and provincial or regional level (National Union of Mineworkers (NUM), National Union of Metalworkers South Africa (NUMSA), Association of Mineworkers and Construction Union (AMCU) and Food and Allied Workers Union (FAWU)).
Through engagements, relationship building and collaboration with labour unions, we aim to better understand their objectives to ensure fair labour practices, minimise the risk of labour unrest and maintain workplace harmony. This enables us to proactively resolve issues or concerns and keep engagements functional.
Ongoing issues for labour organisations are employee wages and benefits, health and safety, diversity, learning and development, reskilling the workforce and post‑platforms.mine business development.
Dissatisfaction with the new LOS incentive scheme is surfacing with production cutbacks due to Transnet challenges.
At Grootegeluk, AMCU is close to the recognition threshold, whicht platforms could be part of wage negotiations in 2024.
We operate in four local municipalities in Limpopo and Mpumalanga, with closed mines in three other municipalities, including two in KwaZulu-Natal.
Community expectations remain consistent across all our host communities. These include:
| * | The Impact Catalyst is a collaborative partnership founded by Anglo American, the Council for Scientific and Industrial Research, Exxaro and World Vision South Africa to create mechanisms that drive large-scale, socio-economic development initiatives through public-private partnerships. The initiatives are designed to leverage collaboration across sectors – selected for impact beyond the scale of individual participants. Joint programmes are established between the Impact Catalyst and the Office of the Premier in certain provinces through collaborative regional development platforms. The first regional socio‑economic development platform was launched in Limpopo in 2018, focusing on improving health, wellbeing and living conditions. The Impact Catalyst then expanded to include Mpumalanga and Northern Cape communities. |
Our investors include shareholders (78.5% South African and 22.1% offshore) and analysts. We include ESG ratings agencies (such as FTSE Russell, MSCI and Sustainalytics) in this stakeholder group.
We prioritise regular engagement with our shareholders to keep them well informed and updated on our strategy, performance, capital allocation, dividends, remuneration and other governance policies. We aim to foster transparency, maintain our reputation, and promote our ESG performance. We also aim to demonstrate how we preserve shareholder value, protect returns and prudently allocate capital while upholding a strong culture of transparency – enhancing our ability to access capital and facilitating the successful execution of our Sustainable Growth and Impact strategy.
Through these continuous updates, we build trust and enhance our overall reputation as a responsible and sustainable business.
We proactively seek engagement with underweight and nonholder investors to gain a deeper understanding of their views on Exxaro and their specific investment criteria. This allows us to gather valuable insights that help us better align our strategies with market expectations.
We engage with ESG ratings agencies to gain valuable feedback and recommendations that inform our efforts to enhance our overall ESG ratings. These ratings, in turn, shape external perceptions of our performance and guide our ongoing strategy development.
Engagements with investors in 2023 focused on key themes such as capital allocation and deployment strategies, and cash retention in light of our strategy. Discussions also focused on our growth ambitions to transition away from coal into new minerals opportunities and growing the energy business. The availability of value accretive opportunities in the identified minerals and Exxaro’s ability to successfully execute on these are key concerns for investors. The ongoing rail logistics issue remains a key concern for investors given the impact this has on our export business.
Regarding engagements on ESG matters, investors indicated general satisfaction on Exxaro’s transparency around ESG. Many indicated that previous concerns were adequately dealt with. Remuneration was a key theme of the 2023 governance roadshow, with largely positive investor sentiment towards Exxaro’s remuneration approach. More detailed disclosure on Exxaro’s scope 3 emissions reduction roadmap was requested and some investors indicated that they are actively encouraging a higher level of accountability around the sustainability function at Exxaro. The non-tabling of resolutions proposed by Just Share was raised as a concern of several investors. However, most investors were satisfied that the board was proactively engaging with Just Share on the issues raised.
We have domestic and offshore customers in Europe, Asia and other markets. Eskom remains our largest customer with 73% of our sales (2022: 75%). The lower energy availability factor in 2023 impacted Eskom's offtake of coal across several power stations.
Suppliers are crucial participants in our value chain. We have over 5 000 active registered vendors in the provinces where we operate. We categorise our suppliers as strategic, SMMEs and local.
Engagements aim to achieve mutually beneficial operational, financial, environmental and social impact goals.
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