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.
How we deliver value through our social and
relationship capitalWe strive to leave a positive legacy in our communities by implementing large-scale community development initiatives. We deliver value and achieve tangible impact through the Social Impact strategy, which focuses on land use management, education and SMME development.
The strategy is a proactive response to mitigate the systemic social challenges in our communities through a long-term perspective. When viewed through the lens of the SDGs, this will have a lasting positive impact on communities and reduce poverty by combining multidimensional approaches that address education, economic wellbeing and access to land for economic activity. The strategy will also allow us to influence other areas of wellbeing without additional investment.
The strategy enables us to deliver impact at scale through the following key principles:
The value we deliver through the Social Impact strategy is supported by:
The investment we make in our communities demonstrates the importance we place on our social responsibility. Guided by sustainability, stakeholder inclusiveness and collaboration, we uplift and develop our host communities to build better futures.
| Material theme | Matter | Supporting our strategy | Our broader impact |
 Building
sustainable
communities |
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R223.51 million invested by Exxaro and Cennergi in socio-economic and enterprise development programmes (2022: R205.81 million)
Looking ahead
Our long-term commitments aim to enhance our shift towards greater social impact. To achieve this, we have:
Read co-creating and preserving value with communities (ESG report) for details about our approach and performance.
We manage and mitigate the positive and negative impacts of our activities on the environment and society by creating socio-economic development in our communities as we pursue operational efficiency, growth and regulatory compliance.
We achieve tangible impact in our communities through the three pillars of the Social Impact strategy:
Our ESD programme is a critical element of the Social Impact strategy and our purpose of powering better lives in Africa and beyond. ESD initiatives provide financial and non-financial support to small businesses in areas where we operate, thereby promoting economic transformation and establishing sustainable communities. The programme delivers sustained stakeholder value by securing our licence to operate while being financially self-sustaining; reducing enterprise-wide supply chain risk; and supporting economic transformation by growing the number and size of black-owned businesses.
Our supply chain sustainability activities integrate supply chain choices that support socio-economic development, preferential procurement, ethical conduct and our climate change response. Sustainable procurement and supply chain processes are critical components of our social and environmental responsibilities as we are sensitive to South Africa's socio‑economic challenges, and the effects of climate change on our supply chain.
Socio-economic development and CSI
| Exxaro | Cennergi |
| R86.91 million invested in social investment projects for socio-economic development (SLPs and CSI) (2022: R181.31 million) | R25.3 million invested in socio-economic development initiatives, including education, welfare, agriculture development and health (2022: R24.5 million) |
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Implementation of our prevailing five-year SLPs experienced delays due to challenges with small enterprises and suppliers lacking relevant skills, maturity and capabilities. The difficult economic environment also impacted the viability of these enterprises and suppliers, with some withdrawing due to liquidation. We are managing these challenges through ESD interventions aimed at building capabilities. In addition, a developmental approach through technical and administrative mentoring support has been given by the project teams to guide local contractors.
We will continue to drive delivery of the Social Impact strategy in terms of education, land use management and SMME development, as well as create value through collaboration and partnerships. We also plan to advance the Impact Catalyst's integrated waste management study and will be moving the material recovery facility and waste advocacy proposals into implementation phase. We are seeking funding partners for the viable feasibilities.
ESD
| Retained 355 jobs (2022: 1 037) | Spent R111.3 million (2022: R2 912 million), positively impacting 14 qualifying small enterprises and exempt micro-enterprises, and one youth-owned and nine women‑owned businesses |
ESD approvals since programme inception have combined grants and loans. Approvals have steadily increased since their drop in 2020, which was caused by a poor pipeline of funding applications related to challenges from COVID-19 and a distressed economy. The ESD programme reached self-sustainability at the end of 2022, meaning the loan fund was able to ensure compliance and support new beneficiaries through loan repayments, instead of annual funding from Exxaro's budget. The 2023 funding is from loan repayments and will ensure that Exxaro's overall B-BBEE performance target is achieved.
We are focused on streamlining our ESD process and building the capabilities of our small enterprises and suppliers. We plan to implement an end-to-end supplier development framework in 2024 to improve the conversion from prospective to actual suppliers and support first-time contractors to deliver on their contractual obligations. We are also rolling out a tender readiness programme in 2024 to improve the capabilities of small enterprises in our host communities to respond to requests for quotations.
To augment our existing ESD funding, we intend to leverage additional funding through co-funding.
Supply chain sustainability
| More than R1.3 billion of our procurement spend was directed to 263 local black-owned SMMEs (2022: R1.09 billion; 246) | Local contracts worth R1.9 billion were awarded to 31 suppliers (2022: R525 million; 38) |
We developed support structures for black contractors and simplified the onboarding process with a supplier portal.
Our future focus areas include:
Report Index
IR