King IV articulates the board's responsibilities of steering an organisation strategically, in line with its core purpose and values, by approving and monitoring an informed short, medium and long-term strategy while considering sustainability-related impacts, risks and opportunities.
As sustained value creation is founded on good governance and responsiveness to significant social and environmental challenges, our strategy is continuously monitored and assessed, and formally presented to the board for approval at least once a year. Before executive leadership presents the strategy to the board, iterative workshops, following a bottom-up process, and board governance sessions are held. During our annual strategy review process, management also demonstrates how sustainability and ESG objectives are integrated into the Sustainable Growth and Impact strategy, including status and progress in our context. The board therefore supports the King IV principles with regard to strategy setting and follows an iterative process. As part of the strategy process, a risk and opportunity assessment is conducted, which includes emerging risks and an assessment of material sustainability issues.
The board sets Exxaro's short, medium and long-term strategic direction through our Sustainable Growth and Impact strategy. It enables sustainable value creation through approval of a new capital allocation model and budget, setting and monitoring performance and culture expectations, and a group governance framework.
The board reviewed an integrated medium to long-term decarbonisation roadmap to achieve carbon neutrality by 2050. The roadmap, which is at an advanced stage, outlines strategic considerations and actions to increase our decarbonisation performance.
The board adopted an emergency response plan in 2019, focusing on capability interfaces for crisis management and business continuity, to ensure integrated disaster or incident response and recovery.
The RBR committee oversaw the process of updating various business continuity governance documents and policies. This process sought to align BUs with the board-approved business continuity plan template, which aligns with ISO 22301:2019 and British Standards Institution 11200:2014.
KPIs track the execution of our strategy for the board, board committees, and group and energy executive committees. We use a strategic performance dashboard that reports on the achievement of these KPIs. The dashboard was reviewed in 2022 and its reporting philosophy revised.
We developed a reimagined strategic performance dashboard to oversee strategy execution and facilitate strategic conversations at the right time within a tiered group governance structure. It aligns prioritised KPIs with the Sustainable Growth and Impact strategy to provide forward-looking insights, and support strategic discussions and resource allocation.
For more on our performance see:
Performance against our strategy and outlook
Delivering measurable results and impact (ESG report)
To strengthen greenhouse gas (GHG) mitigation and business resilience efforts, we included targets on water security and efficiency, and energy efficiency in the group's short-term incentive (STI) scheme in 2022.
The energy efficiency targets relate to diesel and electricity consumption. Diesel accounts for over 95% of our scope 1 GHG emissions, while coal-based electricity is 100% of our scope 2 emissions.
Implementation of these two KPIs is a progression of our Climate Change Response strategy, our goal to be carbon neutral by 2050 and further alignment with the TCFD recommendations.
Internal reporting to the board requires management to detail the outcomes of proposed recommendations to the board in respect of:
The board is committed to clear and comprehensive financial reporting and disclosure as well as constructive shareholder engagement, including transparency of activities and performance. The board therefore ensures that reports issued by Exxaro enable stakeholders to make informed assessments of our performance, and short, medium and long-term prospects.
See the ESG report on how we apply good corporate governance to support the achievement of our strategic objectives and how the SDGs are supported through specific steps taken in 2023.
Report Index
IR