Dear shareholders,
I am pleased to present the SERC report for the year ended 31 December 2024. The committee executed its statutory and board mandates by overseeing Exxaro's impact and ethical performance, focusing on sustainable value creation and entrenching responsible corporate citizenship in the group.
Geraldine Fraser-Moleketi
SERC chairperson
In terms of the company's MoI, committee members are elected annually at the AGM by shareholders on recommendation from the board.
The committee is chaired by the lead independent non-executive director, enhancing the importance and relevance of the shareholder-entrusted, social, ethical and corporate responsibilities.
The following changes were made to the committee:
Refer to board of directors for members' qualifications and experience.
The committee comprised a majority of independent non-executive directors in 2024, as per King IV recommendations, which facilitated the application of independent judgement on committee deliberations and decisions.
As per the standard committee terms, the chairperson of the board and all board members are welcome to attend all meetings as observers.
The chief people and performance officer and chief sustainable impact officer are standing invitees to meetings. Other individuals with specific skills and expertise are also invited to report and assist members in their deliberations, including the chief strategic resilience and governance officer, managing director: energy and head: internal audit. The group company secretary attends each meeting and is the committee secretary.
Gender and racial diversity as at 31 December 2024
Four committee meetings were held in 2024. The table below provides an overview of member designations and attendance:
| * | Likhapha Mbatha retired at the 2024 AGM. |
| ** | Effective 1 February 2025, executive directors are not members of the SERC but hold standing invitations. |
The committee mandate derives from Exxaro's commitment to proactively manage its economic, environmental and social impacts, and public interest, in addition to section 72(4) of the Companies Act, read with regulation 43, the MoI and King IV.
The company recognises that Exxaro forms part of an interrelated community and, as such, may have positive and negative impacts on public interest and the global goal of sustainable development. The board has primarily entrusted the committee to oversee the company's impact on public interest and its ethical performance. It ensures compliance with Exxaro's statutory duties and oversees that the core purpose and values, strategy and conduct are aligned with the group's responsible corporate citizenship.
The committee oversees the company's ethics regarding business practices and its relationships with employees, other stakeholders and the natural environment. It also assists the board by monitoring the group's achievement of its shared sustainability goals and has oversight of stakeholder management and ethics management.
As part of its responsibility mandate, the committee has oversight of how the company impacts planet, people and prosperity.
ESG oversight by board committees
The committee's terms of reference are reviewed annually. The review took place in the first quarter of 2025 and revised terms of reference were subsequently approved by the board. The review ensured the terms of reference remain aligned to relevant legislation, regulations and King IV.
Although there is no regulatory requirement to conduct an annual committee performance evaluation, Exxaro evaluates committee performance every third year, in line with King IV's recommendation regarding regular performance evaluations for board committees.
At the beginning of 2025, we conducted an internal evaluation of the committee's performance and effectiveness in accordance with King IV recommendations. The evaluation aimed to identify and record areas needing strengthening or refinement while considering internal and external dynamics and factors that may positively or negatively impact the committee's ability to enhance its performance and effectiveness in these areas. The assessment concluded that the committee functions effectively.
| Key highlights | Material themes | |
|
 |
|
|
 |
|
|
  |
|
|
 |
The committee has a statutory and board mandate to oversee the company's impact on the public interest and its ethical performance, to assist in sustainably creating value, considering the economy, society and natural environment, and to entrench responsible corporate citizenship within the group.
Social impact, which is part of Exxaro's strategy, seeks to address material social and compliance matters, which require an integrated and long-term perspective, leveraging resources and collaboration. Exxaro's Social Impact strategy aims to provide a proactive response to step up Exxaro's community engagement and development efforts in line with Exxaro's purpose.
The SERC oversaw ESG governance.
ESG imperatives increasingly shape the future of mining and energy industries. As such, the SERC oversees management's plans to take advantage of opportunities identified for the minerals and energy businesses, including resource transition, linking ESG outcomes to value creation, unlocking new sources of value such as reskilling employees beyond mining services, mining responsibly and strategically for the future and decarbonising our business.
Engagements with various ESG rating agencies such as FTSE Russell ensure that Exxaro continues to improve its disclosure and implementation of ESG-related initiatives. An ESG PMO was established and capacitated to further ensure success and optimal operation.
The board is invested in a low-carbon transition and supports the path to sustainability in an era of climate change. Demonstrated commitments to a low-carbon transition include Exxaro's investment in wind and solar power and preparation for a response to various global climate scenarios. The committee confirms that the company aims to be carbon neutral by 2050.
Climate change position statement
The committee was informed of the Durnacol underground water decant incident and its impact. Exxaro conducted reviews of the completeness of current procedures in place to address the mines in closure and similar incidents. Subsequently, Exxaro rolled out enhanced groundwater management procedures at relevant operations.
Exxaro manages biodiversity as part of our environmental strategy, which is under review. Each mine has a biodiversity plan aligned with the group biodiversity management standard. The plan guides how inspections, audits and biomonitoring programmes should be conducted, including mitigation or management of any impacts identified through monitoring.
All environmental incidents and mitigation measures are reported to and monitored by the SERC. The committee monitored the development of the 2050 decarbonisation roadmap that reflects short, medium and long-term targets. Priority actions are essential to the success of the journey, therefore further efforts went into refining actions. The decarbonisation plan was approved in the first quarter of 2025.
The SERC oversaw the integration of the Exxaro social vehicle structures and continued to monitor performance against the Social Impact strategy.
The committee oversees the implementation of the Social Impact strategy, an integrated socio-economic development strategy in response to the dual challenges of social inequality and the systemic impacts of climate change.
The Social Impact strategy is based on three pillars:
The committee and management continue ensuring delivery of the group's SLP commitments and ESD programmes, leading to impactful contributions towards long-term community sustainability. The committee continues to engage robustly with the sustainable impact function to ensure successful performance.
The SERC monitored Exxaro's human rights practices and the need to consider new elements, such as air and water pollution and relocation of people.
Exxaro attended an engagement with the Human Rights Commission in Limpopo and the Limpopo mining sector regarding concerns about practices that were possibly in violation of human rights. Exxaro made a presentation on its work within the areas it operates, highlighting its economic development strategy as part of the Social Impact strategy.
Human rights have evolved over time and this necessitated that Exxaro consider exposure to air pollution, water pollution and relocation of people as elements that fall within human rights for reporting purposes.
The SERC oversaw the prioritisation of improving safety performance by approving a safety improvement plan to maintain responsible corporate citizenship. We received recognition for being fatality-free in 2023 and 2024 due to our continued focus on safety.
The committee was informed of the development of a safety improvement plan, which included reviewing the five key safety focus areas and strategy in 2024. Various safety initiatives to educate and create awareness took place in pursuit of improved safety throughout the business.
In response to a rise in lifestyle diseases, Exxaro introduced health education, advanced monitoring technologies and personalised guidance on wellness initiatives with the aim of promoting health and reducing the risk of related illnesses.
Exxaro's integrated wellness approach continues to improve, and is designed to support employees holistically. Management makes concerted efforts to support the emotional, financial and occupational dimensions of wellness for all employees. The committee is pleased with this approach's outcomes, impact and demonstrated results.
Coal mine dust class action certification process
The committee monitors progress of the coal mine dust class action certification process, and noted that Exxaro served and filed an answering affidavit in the coal lung disease class action on 6 December 2024.
Prioritising safety outlines our approach and performance, and governance and leadership includes more information about the class action.
The SERC continued to oversee the implementation of the DEI strategy in support of the overarching Exxaro strategy as a key business value driver.
Leadership's pledge to DEI is based on the following principles:
Overseeing the challenges and solutions brought about by this ideal is part of the committee's joint accountability model.
Maintaining sound employee relations
Exxaro launched an employee engagement and culture survey early in 2023 as part of the DEI journey. The survey included employee engagement, leadership, DEI and culture. The survey results were independently managed and indicated employee sentiments which will set the baseline for tracking progress, including the Exxaro strategic dashboard.
Following the survey, the results per BU and function were unpacked and bespoke action plans were developed, aligned with the specific results for that business area. The committee is monitoring the execution against these action plans to ensure that continuous progress is made in addressing the key matters highlighted by the survey as needing attention.
The committee is pleased with the progress made to date, but this will remain a priority area for 2025. The employee engagement and culture survey will be run again during 2025.
DEI strategic priorities
Our strategic priorities continue to drive the group's DEI-enabling initiatives. Key objectives include:
See our website under careers for more on our DEI journey.
Exxaro is a signatory to the UN's Women Empowerment Principles, which prioritise gender equality, full and productive employment and decent work for all.
The committee scrutinised the people strategy and human capital levers in support of the five strategic objectives.
Achieving the Sustainable Growth and Impact strategy relies on properly executing the people strategy. The committee is therefore responsible for assuring the company's standing regarding the ILO Protocol on decent work and working conditions and the educational development of employees.
The SERC recommended the approval of a revised human rights policy towards the end of 2022, which continues to be implemented.
The policy confirms the group's commitment to promoting human rights as set out in the ILO's declaration on fundamental principles and rights at work.
The committee oversaw progress against employment equity targets, with a focus on key Exxaro considerations flowing from the amendments to the EEA.
The committee was informed of the changes to the EEA and reviewed the key considerations for Exxaro in view of the amendments.
The committee continued to engage the eight key stakeholder groupings in terms of the key account management approach.
Exxaro has an approved stakeholder management policy in which establishing and maintaining strong, trusting and collaborative stakeholder relationships is equally beneficial for all stakeholders. The policy confirms Exxaro's key account management approach to stakeholder management.
The committee supports the principle that managing social and ethics risks requires meaningful engagement with key stakeholders, as identified in the committee's terms of reference.
Management conducted various stakeholder engagement initiatives in line with the Sustainable Growth and Impact strategy.
Relationship building remains a key outcome of the stakeholder engagement strategy in redressing the plight of poor people in communities surrounding Exxaro's operations.
Stakeholder-inclusive approach
The committee reviewed the ongoing anti-bribery and anti-corruption programme implementation, including rolling out the conflicts of interest programme and ensuring an ethical culture.
As guided by OECD recommendations, the company has an antibribery and anti-corruption policy and adopted adequate internal controls, ethics and compliance programmes and measures to prevent and detect bribery.
Based on the board-approved statement of strategic ethical intent, the committee oversees implementation of the ethics management strategy and plan. Throughout the year and through the management ethics committee, measures were assessed and adapted for continued effectiveness, and to mitigate the risk of becoming complicit in bribery, bribe solicitation, small facilitation payments and extortion.
Building an ethical culture under this committee's oversight.
| Key focus areas 2024/2025 |
| Monitor the coal mine dust class action litigation launched against Exxaro in November 2023 to ensure our conduct aligns with being a responsible corporate citizen |
| Monitor the implementation of mitigation measures as reflected in Exxaro's decarbonisation roadmap to support Exxaro's strategy to be carbon neutral by 2050 and build resilience to the impacts of climate change |
| Monitor and review ongoing anti-bribery and anti-corruption programme implementation, ensuring an ethical culture and respect for human rights, including the whistleblowing mechanisms for effectiveness |
| Oversee the implementation of the DEI strategy, including the ESD programme, in support of the overall Exxaro strategy as a key business value driver |
| Oversee sustainability-related disclosures in line with IFRS Sustainability Disclosure Standards |
| Oversee the implementation of employment equity plans |
| Oversee the refresh of Exxaro's culture transformation journey and continue embedding the action plans from the 2023 culture and engagement survey |
The SERC is pleased to confirm that, in carrying out its duties, it regarded King IV principles and recommended practices, and discharged its responsibilities in accordance with its terms of reference and the Companies Act. Beyond mere compliance, the committee is also satisfied that it has fulfilled its non-statutory mandate and that there are no material instances of non-compliance to disclose. If any material non-compliance existed, it was duly considered during the year in review.
On behalf of the committee
Geraldine Fraser-Moleketi
SERC chairperson
15 April 2025
IR