Sustainability Report
Transcription
Sustainability Report
Accountability – Sustainability report I for the financial year ended 30 September 2013 1 About this report 2 Our commitment 2 ABIL’s sustainability management approach 2 Governance 2 Awards and recognition 4 Human capital 4 Our approach 4 4 6 7 8 10 13 15 15 17 18 18 20 24 Banking unit Workforce movement, composition and turnover Employee relations Employee satisfaction Employee wellbeing programme Skills development and talent management Transformation and employment equity Retail unit Workforce movement, composition and turnover Employee relations Employee benefits Employee wellbeing programme Skills development and talent management Transformation and employment equity 26 Human rights 27 Social capital 35 35 35 37 37 39 45 45 45 45 45 Banking unit A sustainable approach to community development Overall approach Community development activities during the year Distribution of funds during 2012/13 Flagship projects Retail unit Bursary scheme Siyanakekela Community Investment Programme Ekukhanyeni Community Development Centre School donations 46 Product responsibility 46 Our approach 46 46 46 47 48 48 48 49 50 50 50 50 Banking unit Employee experience Channel experience ABIL Consumer Advocate’s Office Treating customer fairly Financial Care Centre (FCC) consumer education Responsible lending Performance indicators Retail unit Marketing communications Customer privacy Compliance 27 Our approach 27 Economic value added statement 28 28 28 28 29 29 29 30 30 30 30 30 30 31 31 31 31 31 31 32 32 33 33 34 i Banking unit Developmental scorecard Equity ownership Management and control Employment equity Skills development Preferential procurement Retail unit Developmental scorecard Management and control Skills development Preferential procurement and enterprise development ABIL plans going forward Supplier development Banking unit Overview Relationships Retail unit Overview Relationships Assessment of compliance Environmentally responsible procurement Customer product information and labelling Sustainability roadmap 52 Natural capital 52 Our approach 52 Environmental strategy 52 Reporting, monitoring and measuring ABIL’s carbon footprint 55 Weaknesses and shortfalls 56 Energy 56 Going beyond green 56 Water 56 Information technology 57 Paper 57 Waste and recycling 57 Greening the supply chain 57 Non-merchandise 58 Merchandise 58 Employee education and awareness campaigns 59 Green collaboration 59 Biodiversity 59 Going forward 60 INDEPENDENT THIRD-PARTY assurance statement 63 INDEPENDENT VERIFICATION statement accountability About this report ABIL’s 2013 sustainability report covers the performance and activities of the group that relate to sustainable practices, and presents a comprehensive analysis of all key dimensions of sustainability that are relevant to the group and its stakeholders. Most of the information in this report is presented at a business unit level, which comprises the Banking unit and the Retail unit. The business units have different requirements for dealing with employees and customers. The report covers all operations of the Banking unit and the South African operations of the Retail unit. Since 2012, the Banking unit has been reporting on transformation progress using the financial sector code for Broad-based Black Economic Empowerment (B-BBEE) framework. The Retail unit continues to use the Codes of Good Practice (CoGP) framework. The Global Reporting Initiative’s (GRI) G4 guidelines were launched in 2013. As this is the first year of the new guidelines, ABIL has reported against these indicators in conjunction with the financial services sector supplement, and as such we have reported at a core level in terms of the GRI G4 guidelines. This score will improve over the next few years, as the new guidelines are cemented into the group’s sustainability strategy. Assurance over ABIL’s 2013 sustainability report, including the sustainability content within the integrated annual report, has been provided by Integrated Reporting & Assurance Services (IRAS), and is aligned to AccountAbility’s AA1000AS (Type I, moderate) assurance standard. The comprehensive assurance statement from IRAS can be found within the sustainability report. Additional detail regarding the assurance process can be requested by emailing Michael H Rea at [email protected]. Group internal audit’s review of the report, in line with the combined assurance approach under the King Report on Corporate Governance for South Africa (King III), provides support for the assurance statement. We welcome comments from all stakeholders on this report and the way we approach our sustainability priorities. Please contact Marilyn Budow, Consumer and Sustainability Advocate, at MBudow@africanbank. co.za or on +27 11 256 9743 with your feedback. Terms used in this report to describe our operations are: ABIL or group Includes African Bank Limited, Ellerine Holdings Limited (EHL), The Standard General Insurance Company Limited, Relyant Insurance Limited and Relyant Life Banking unit African Bank Limited, including The Standard General Insurance Company Limited Retail unit Ellerine Holdings Limited, excluding foreign operations, but including Relyant Insurance Limited and Relyant Life African Bank Investments Limited I Sustainability report I 1 Our commitment It is ABIL’s aim to continuously improve value creation for shareholders and customers, while creating an atmosphere for employees in which they can thrive and provide outstanding service to customers. ABIL’s sustainability management approach The sustainability priorities are agreed by the sustainability committee, which is a subcommittee of the board. Implementation is coordinated by both business units, and the priorities are agreed by the committee on the recommendation of the executive director of group sustainability. Each business unit reports its sustainability performance to ABIL on an annual basis. Governance Sustainability reporting is the responsibility of the ethics and sustainability committee, which assists management in the formulation and implementation of policies, principles and practices to foster the sustainable growth of the group. Sustainable growth shall encompass a business model that creates value consistent with the long term preservation and enhancement of financial, environmental and social capital. ABIL board Group audit committee Group risk and capital management committee Group remuneration and transformation committee Ethics and sustainability committee Directors’ affairs committee Awards and recognition The Ombudsman for Banking Services For six years in a row, African Bank has won the Ombudsman for Banking Services award for excellence in complaints handling in Category B. (This category is for all banks, excluding the four major banks which compete in Category A.) Certificate of excellence in reporting Sustainability Data Transparency Index (SDTI) awarded ABIL for providing sufficient quantitative data to allow for useful comparable analysis in the Banking sector, coming first in this category, and in the top 10 overall. 2 accountability BANKSETA awards African Bank won the award for domestic captive, a category honouring a company that offers in-house training, for its Monyetla Work Readiness Programme. The Banking unit won the special commendation award from the BANKSETA for best practice in skills development for the third year in a row. Innovation award A second EHL distribution facility in Port Elizabeth, constructed by Growth Point Properties, has won the South African Property Owners Association’s (Sapoa) innovative excellence award in industrial property development. Ernst & Young excellence in financial reporting ABIL is proud to have again received an excellent rating for disclosure in its 2012 integrated report. JSE SRI and Dow Jones Sustainability Index (DJSI) ABIL was included in the JSE’s Socially Responsible Investment (SRI) Index for the tenth consecutive year, and was also included in the Dow Jones Sustainability Index (DJSI) in 2013. This attests to our commitment as a group to responsible business practices. African Bank Investments Limited I Sustainability report I 3 Human capital Our approach One of the group’s core objectives is to promote and maintain a harmonious relationship with its employees, create a working environment that is conducive for employees to learn, grow and perform, and to foster good relations with the unions. ABIL promotes and respects freedom of association and employee rights in terms of the constitution and current labour legislation of South Africa, and is committed to fair treatment and non-discriminatory work practices. As a group, we need to attract, develop and retain the best talent at all levels of the business. Therefore, we need to recruit, manage performance, train, develop and promote from within each business unit. Most of the information in this section is presented at a business unit level, which comprises the Banking unit and the Retail unit. The business units have different requirements for dealing with employees and customers. The report covers all operations of the Banking unit and the South African operations of the Retail unit. As a group, we have 13 643 employees (which includes 569 temporary or contract employees). Of the permanent employees, 62,5% are female and 37,5% are male. A total of 42% of the group’s permanent employees are unionised. Banking unit Workforce movement, composition and turnover Within the Banking unit, the increase in number of employees is largely as a result of the expansion in the call centres, and is detailed below: Opening balance Employee gains Less: attrition Resignations Retrenchments Dismissals (misconduct) Deaths (not work-related) Other* Closing balance Temporary employees Total employees 2013 2012 2011 2010 2009 5 182 1 026 (978) 4 978 1 317 (1 113) 3 935 1 790 (747) 3 476 1 049 (590) 3 426 586 (536) (663) – (228) (17) (70) (842) – (191) (28) (52) (540) (13) (110) (15) (69) (372) (62) (85) (27) (44) (352) (8) (36) (32) (108) 5 230 5 182 4 978 3 935 3 476 463 442 439 216 169 5 693 5 624 5 417 4 151 3 645 * Other refers to emigration, abscondment and mutual terminations. 4 accountability The regional workforce composition for the Banking unit is as follows: Province Permanent Nonpermanent* Total Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 240 134 3 252 573 168 180 46 205 432 5 1 401 52 – – 1 – 3 245 135 3 653 625 168 180 47 205 435 Total 5 230 463 5 693 * Non-permanent includes temporary and contract staff. Of the 5 230 permanent employees in the Banking unit, 65% are female and 35% male. Of employees below the age of 40 years, 80% are male and are considered to comprise a reasonably young workforce, with the majority of employees in the sales and call centre environments. This correlates to 70% of employees having tenure with the Banking unit of between 0 and 5 years. Age analysis (%) Tenure with company (%) 3,0% 5,0% 9,4% 15,1% 17,9% 43,2% 69,7% 36,7% Under 30 0 to 5 years 30 to 39 6 to 10 years 40 to 49 11 to 15 years over 50 over 15 years plus 50 African Bank Investments Limited I Sustainability report I 5 As at year end, the Banking unit had a total of 5 230 permanent employees, an increase of 1% relative to 2012 (5 182). Employee turnover (%) 23,90 25 20 18,29 18,08 15 13,22 12,60 18,59 12,20 10 6,50 5,70 5,07 5,82 5,99 5 0 Voluntary 2010 2011 Involuntary Total turnover 2012 2013 Involuntary turnover refers to employees whose service has been terminated by the Banking unit. Employee relations Union membership within the bargaining unit is 56,1% (2012: 52,2%). African Bank concluded a recognition agreement with SASBO in 2009 and is therefore governed by the principles contained therein. Since inception of the agreement, the Banking unit has successfully negotiated collective agreements in terms of reward and continued to do so in the year under review. The standard operating period for consultation and negotiation with union and/or non-union members is a minimum of one month. Union membership 2013 (%) Union membership 2012 (%) 43,9% 43,9% 55,9% 6 52,0% SASBO SASBO SACCAWU (0,1%) SACCAWU (0,1%) UASA (0,1%) UASA (0,1%) Non-union Non-union G4-11 accountability During the year under review, the Banking unit received 89 referrals to the Commission for Conciliation, Mediation and Arbitration (CCMA), an increase of 15% over last year, of which 7% were in favour of the employee. The number of employees dismissed and terminated increased to 259, in comparison to 129 last year, due to the Banking unit’s zero-tolerance stance on fraud or any type of misconduct. Employee satisfaction For the past two years, the Banking unit has undertaken an employee engagement survey to determine the levels of engagement of employees with African Bank. The results for 2012 and 2013 were as follows: Employee satisfaction (%) 80 70 60 62 62 50 40 30 20 20 18 20 18 10 0 Disaffected Agnostic True believer 2012 2013 Compared to the results for 2013 as detailed below: Engagement scores (%) 60 59 50 40 32 30 20 10 0 9 Disengaged Nearly engaged Engaged (true believer) Distribution of engagement within African Bank African Bank Investments Limited I Sustainability report I 7 In the years 2011 and 2012, the Banking unit measured the engagement levels of its people using the corporate leadership council (CLC) survey. This survey compared the engagement levels of the Banking unit against the average engagement levels globally. As much as the average comparison is a reasonable measure of how we compare with others, the lack of a fixed minimum acceptable engagement level percentage means the engagement levels comparing base could never be static, as that figure is always expressed as an average of the engagement levels of the other participating companies globally. The Banking unit ended up at 20% engagement level against the global benchmark of 8% in 2012, and 7% in 2011. During 2013, the Banking unit used a different survey to ascertain the minimum acceptable engagement levels that are fixed and not expressed as an average. The engagement levels of the Banking unit are therefore at 59% against the 60% minimum. Therefore, the 2012 and 2013 engagement levels are not comparable, as the methodologies are quite different. Employee wellbeing programme (EWP) During the past year, the Banking unit’s employee wellbeing programme continued to support employees’ wellbeing and drive minimisation of behaviour risk, both to the employee making use of the service and to the Banking unit. As the success of any organisation rests heavily on its human capital, employees contacting the EWP early ensures that they receive the necessary emotional and psychological assistance in dealing with their issues before these escalate and affect productivity. Engagement with the EWP services through ICAS case management, and macro-level trends remained stable for the year. It is positive to note there has been active engagement with the EWP regarding financial management issues. More debt management/budgeting problems were managed through the programme and employees were assisted with managing their financial difficulties. There has also been an increase in the number of money management issues, which included affordability/ budgeting, other financial issues, debt consolidation, blacklisting/credit report, and tax, savings and investments. Financial wellbeing Emoluments attachment order (EAO) audit With the current challenges regarding the abuse of employee attachment orders (garnishees) by various debt collectors, the Banking unit has secured the services of Summit Financial Services to audit EAOs for irregularities, such as legality and overcharging. If irregularities are found, the debt collector is challenged and the EAO rectified. The Banking unit assisted on employees’ behalf and at no cost to them. Summit was furnished with a list of 563 emolument attachment orders, spread across 134 collectors/attorneys. The final outcome of this process was not yet available at the time of this report. Progress from the Financial Care Centre Since its launch in 2012, the Financial Care Centre (FCC) has dealt with 1 450 applications from employees. 712 were assisted, of which the majority pertained to consolidation loans. To date, the FCC has consolidated R36 million of employee debt, of which R20 million related to external debt and R16 million to internal debt. Employees who were declined based on affordability were referred for debt counselling. The majority of reasons for distress are bad spending patterns, education, medical, funeral and building expenses. 8 accountability Physical wellbeing Physical wellbeing forms an important part of employees’ daily lives and is a key area of focus within the wellbeing space. A health risk assessment (HRA) is a proactive tool used to assess the state of one’s current health in order to track physical wellbeing. Post-test counselling helps to better understand one’s risk status. For this reason the group developed a workshop, the Balancing Act, to encourage a healthier lifestyle. Approximately 1 500 employees voluntarily participated in the HRA during the year, and focused interventions have been developed to educate employees on physical wellbeing, fitness and initiatives with specific focus on healthier lifestyles and nutrition. HIV/AIDS workplace programme The Banking unit acknowledges the seriousness and implications of HIV/AIDS, and therefore remains committed to providing a supportive working environment for employees living with HIV/AIDS. In 2012, the Banking unit embarked on a process of transferring the treatment of all HIV-positive employees to their respective medical aids. The Banking unit provides employees with a subsidised medical aid, which assists with comprehensive HIV/AIDS cover on all the medical aid options. The future strategy within the Banking unit is to approach HIV/AIDS as a chronic condition and focus on positive living. There has been significant progress during past HIV/AIDS awareness programmes and we continue to educate employees on the importance of early detection, prevention and healthy living through a holistic wellness methodology. The statistics below are from testing and training during 2013: Employees that participated in HIV/AIDS awareness programmes 353 Number of employees tested 184 % of employees who tested HIV-positive 4,8% Health, safety and wellbeing The Banking unit strives to ensure legal compliance with all relevant health and safety requirements. In recognition of our responsibility as an employer in terms of the Act, we have instituted the following: uu Emergency and fire evacuation policy and procedures; uu A comprehensive employee wellbeing programme; uu Fully trained first-aid officers; uu Regular safety and first-aid training for employees; uu Annual independent health and safety compliance audits; and uu Future initiatives – to place all relevant policies and procedures on the intranet. The incident rate has improved since the last financial year, with an almost 50% reduction in health and safety-related incidents. The Banking unit strives for continuous improvement and, to ensure this, has set specific objectives and targets. African Bank Investments Limited I Sustainability report I 9 The number of workplace injuries in the Banking unit is as follows: Number of injuries Lost time (hours) Lost time (days) Injury rate Work-related fatalities 2013 2012 2011 2010 2009 17 456 57 1,6% – 11 336 42 1,1% – 20 540 67,5 2,0% – 14 224 28 1,8% – 32 296 37 4,6% – All injuries were minor and mostly back or ankle/foot-related. Skills development and talent management The Banking unit’s business performance is dependent on our ability to attract, retain and develop highperforming employees, as well as to ensure business continuity and sustainable growth through building a talent pipeline to meet current and future business objectives. Learnership programmes These remain an important focus area to introduce learners to the workplace. The objectives of these programmes are: uu To build the internal pipeline. This has been effectively implemented in the collections call centre, with 73% of people on learnership programmes appointed to permanent positions in 2013; and uu Create employment opportunities for the unemployed. Opportunities were granted which benefited 373 unemployed people. African Bank won the award for domestic captive, a category honouring a company with in-house training, for the Monyetla Work Readiness Programme last year. This award was given to the Banking unit by the Department of Trade and Industry, and is designed to accelerate training for entry level jobs in the call centre industry. It is a response to the need to develop local talent and is aimed at matriculants and diploma holders and unemployed young South Africans between the ages of 18 and 35 years. ABIL Institute The ABIL Institute has grown from strength to strength and now provides leadership and management programmes to permanent employees of the Banking unit, thereby developing the management and leadership skills important to their respective roles. A total of 222 employees enrolled and attended the programmes in the last financial year. BANKSETA partnership The Banking unit is an accredited SETA service provider. This partnership, with its main focus on skills and leadership development, thus far has 42 beneficiaries. The Banking unit won the special commendation award from the BANKSETA for best practice in skills development for the third year in a row. 10 accountability African Bank leadership development programmes In addition to the above, the Banking unit, in partnership with accredited service providers, successfully launched the following programmes. (The number of people who benefited is indicated in brackets): uu Women In Conversation – aimed at coaching up-and-coming young female leaders (75) uu Executive coaching (22) uu Emotional intelligence training (60) uu Mentorship (40 mentors and 56 mentees) uu Diversity and inclusion workshops (32) uu Personal mastery (674) uu Leadership development programme (173) uu Coaching for performance (793) uu African Bank high performance programme (18) Study assistance programmes The Banking unit is passionate about people development. This business sponsors deserving employees to further their academic studies through bursaries and interest-free study loans. Ninety-four employees benefited during the 2013 financial year. Summary of skills statistics for 2013 2013 2012 2011 Investment in employee training and development* R21,7 million Proportion of the above focused on black employees** R20,0 million Training and development interventions 54 186 Employees trained on learnerships 453 Number of employees who received leadership training *** 1 952 Learners attending BANKSETA programmes 42 Talent development programme participants All R21,0 million R19,3 million 26 553 240 936 20 144 R9,7 million R19,3 million 14 242 224 515 83 13 * Including the compulsory 1% skills levy. ** African, Coloured and Indian people. ***New launch leadership programme: 1 887 and new manager programme: 65. African Bank Investments Limited I Sustainability report I 11 Total number of people trained on internal and external programmes* African Coloured Indian White Female Male Female Male Female Male Female Male Total people trained Customer interface Compliance Selling skills 24 083 11 438 4 678 2 281 1 641 915 1 823 815 47 674 2 925 439 1 546 240 444 74 345 51 105 1 133 10 108 13 71 7 5 677 835 Total 27 447 13 224 5 196 2 677 1 747 1 058 1 944 893 54 186 Male Total hours trained Types of training Total number of hours trained on internal and external programmes African Coloured Indian White Types of training Female Male Female Male Female Male Female Customer Interface Compliance Selling skills 78 862 6 832 1 884 39 251 3 627 1040 8 633 817 272 4 696 667 218 4 548 221 8 3 038 272 30 6 679 215 52 2 888 148 595 145 12 796 36 3 540 Total 87 578 43 918 9 722 5 581 4 777 3 340 6 946 3 069 164 931 Number of hours trained by employee category African Occupational levels Female Coloured Indian White Male Female Male Female Male Female Male Total hours trained 12 24 21 15 73 187 216 697 1 686 5 850 22 617 795 1 449 6 867 679 914 3 560 835 1 018 2 821 882 857 1 448 1 899 2 329 2 487 1 423 970 433 9 783 19 356 94 870 27 40 225 Senior management 149 Professionally qualified 1 584 Skilled technical 5 969 Semi-skilled 54 637 Temporary employees 25 239 13 753 587 407 88 80 44 Total 43 918 9 722 5 581 4 777 3 340 6 946 87 578 3 069 164 931 * These numbers represent the total number of courses/training – i.e. each employee could have undertaken more than one course/training programme. 12 G4-LA10 accountability African Bank, proudly the only bank invited to the National Skills Development conference The National Skills Authority (NSA), in collaboration with the Department of Higher Education and Training (DHET), hosted the National Skills Conference. This was undertaken to tackle the challenges of unemployment, poverty and inequality. African Bank was the only bank/financial institution invited by the BANKSETA to the exhibition, and showcased the different opportunities and careers within the bank to approximately 4 000 scholars from 12 different schools in the Johannesburg area. African Bank exhibition stand Transformation and employment equity The Banking unit’s transformation approach is to change the business so that employees are equitably representative of the demographic profile of the South African population. The Banking unit’s employment equity committee was reconstituted, meets on a quarterly basis and has put every effort into accelerating our transformation process. The Banking unit committed to a two-year plan that will end in 2014. The graph below shows the breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity. Performance against targets 58,36% Employment equity 51,98% 53,96% 10,63 8,42 B-BBEE scorecard 8,87 0,40% People with disabilities 0,13% 0,23% Current G4-LA12 August 2012 Target 2013 African Bank Investments Limited I Sustainability report I 13 Permanent employees Employment equity People with disabilities Overall Initial profile Aug 2012 % Target 2013 % 51,98 0,13 52,11 58,36 0,44 58,77 All employees Current Sep 2013 % Initial profile Aug 2012 % Target 2013 % Current Sep 2013 % 53,96 0,23 54,19 56,02 0,13 56,15 61,55 0,40 61,96 57,42 0,23 57,65 Employment equity People with disabilities Occupational level Aug 2012 % Current % Target 2013 % Target gap under/ (over) % Top management Senior management Professionally qualified Skilled technical Semi-skilled Unskilled 3,47 6,23 7,41 12,36 12,27 10,25 4,72 6,17 7,91 12,90 12,02 10,25 4,16 8,54 9,49 13,32 12,60 10,25 (0,56) 2,37 1,58 0,42 0,59 – Male Occupational level Top management Senior management Professionally qualified Skilled technical Semi-skilled Unskilled Total permanent Temporary employees Total Current % Target 2013 % – – 0,04 0,06 0,04 – – – 0,06 0,04 0,12 0,02 – – 0,04 0,06 0,29 0,02 – – (0,02) 0,02 0,17 – Female Foreign nationals A C I W A C I W 1 5 47 255 886 3 – 5 13 46 118 – 1 5 34 48 61 – 3 27 118 87 19 – – 3 48 294 2 163 8 – 2 17 56 266 – – 2 20 69 126 – – 11 71 165 118 – – 1 1 1 1 – – – 4 1 – – 5 61 373 1 022 3 758 11 1 197 182 149 254 2 516 341 217 365 4 5 5 230 160 8 5 7 252 13 5 10 3 – 463 1 357 190 154 261 2 768 354 222 375 7 5 5 693 Key: A = African, C = Coloured, I = Indian, W = White 14 Aug 2012 % Target gap under/ (over) % Male Female Total accountability Retail unit Workforce movement, composition and turnover The breakdown of total employees of the Retail unit is as follows: 2013 2012 2011 2010 Opening balance Employee gains Less: attrition 9 248 2 413 (3 711) 10 303 2 527 (3 582) 9 439 2 099 (3 788) 13 454 2 283 (3 745) Resignations Retrenchments Dismissals (misconduct) Deaths (not work-related) Other* (2 837) (242) (448) (64) (119) (2 393) (537) (491) (73) (88) (2 171) (819) (583) (97) (118) (2 636) (327) (536) (104) (142) 7 950 9 248 10 303 11 992 Total employees* * Total number of employees in RSA and foreign operations. The workforce regional composition for the Retail unit is as follows: Permanent Nonpermanent Total Botswana Eastern Cape Free State Gauteng KwaZulu-Natal Lesotho Limpopo Mpumalanga Namibia North West Northern Cape Swaziland Western Cape Zambia 283 845 432 2 240 1 115 109 531 685 214 463 192 79 524 132 – 7 6 38 13 – 7 9 1 4 7 – 14 – 283 852 438 2 278 1 128 109 538 694 215 467 199 79 538 132 Total 7 844 106 7 950 Province/country Non-permanent includes temporary and contract staff. The Retail unit has a gender split of 40% male and 60% female. Employee tenure remains low, with 53,7% in the 0 to 5 year category. The average age of employees is between 30 and 39 years. G4-10 African Bank Investments Limited I Sustainability report I 15 Age analysis (%) Tenure with company (%) 20,2% 17,1% 20,2% 10,1% 53,7% 33,5% 29,2% 23,8% Under 30 0 to 5 years 30 to 39 6 to 10 years 40 to 49 11 to 15 years over 50 over 15 years plus 50 The Retail unit showed an increase in turnover, which can be attributed to: performance management on non-performing sales personnel; the process of outsourcing the warehousing function and related employees to external service providers; and outsourcing the general assistant function and related employees to an external service provider. Some of the affected employees who did not want to or could not transfer to the various new facilities opted for voluntary retrenchment. Employee turnover (%) 140 127,6 120 100 80 60 43,0 42,8 35,2 40 20,7 20,4 20 8,7 0 Voluntary 2010 2011 16 29,4 24,9 2012 2013 33,9 36,1 13,5 Involuntary Total turnover accountability Employee relations In the Retail unit, acceptable behaviour by employees is an essential requirement for the successful maintenance of the employer-employee relationship. In this way, the employer is able to achieve business objectives, while at the same time creating a pleasant working environment for employees. All employees have the right to freedom of association with trade unions, irrespective of their position within the company. Collective bargaining as a process of engaging with organised labour is a fully integrated work practice within the Retail unit, with 34% of our total South African workforce being SACCAWU members, relative to 28% in 2012. Union interactions and negotiations occur in all countries the Retail unit trades in, except for Namibia. In South Africa, the Retail unit has concluded a three-year remuneration agreement without any labour unrest/disruption. As a general point of departure, disciplinary steps focus primarily on progressive (remedial/corrective) action, rather than punitive action. The latter is generally only taken when informal steps have been unsuccessful, or where the offence is so serious that the continued service relationship has become untenable or intolerable. During the year under review, EHL received 179 dispute referrals to the CCMA, an increase from 103 in 2012, of which 8% were in favour of the employee. Union membership 2013 (%) Union membership 2012 (%) 28% 34% 66% 72% G4-11 SACCAWU SACCAWU Non-union Non-union African Bank Investments Limited I Sustainability report I 17 Employee benefits Within the Retail unit, full-time employees receive the following benefits: uu Retirement benefits; uu Medical aid; uu Bonus/incentives, either as a 13th cheque or as part of an incentive scheme; uu Staff discounts on normal-priced furniture; uu Flexible working hours; uu Annual leave, which includes maternity, paternity, compassionate, study and birthday; uu Funeral scheme – half of the contributions subsidised by the Retail unit; uu Employee wellbeing programme (EWP), which includes a 24-hour call centre, medical advice line, trauma and crisis line, specialist advice on chronic diseases, referral to a doctor or clinic, financial advice line and legal support services; uu Long service awards, a monetary reward based on five-year service intervals; and uu E-learning, which includes various modules at no cost to the employee, sales development programme, interacting with customers, promotional activities, service excellence, etc. Temporary or contract employees do not have access to these benefits. Parental leave is available for both male and female employees. Currently, all permanently employed female employees qualify for 26 weeks’ paid maternity leave. All male employees qualify for paid paternity leave of five working days. This period of paid paternity leave is also available to male employees for a legal adoption. Over the financial period, 76% of all employees that made use of parental leave returned to work, and 89% of these employees were retained for at least 12 months after this period of parental leave. Employee wellbeing programme Physical wellbeing The Retail unit has measures in place to increase understanding and accessibility of support for those employees in crisis. In 2013, EWP support for employees infected or affected by HIV/AIDS was extended to include employees’ spouses. Participation in the programme is voluntary and anonymous. The only information supplied to the employer is statistical information regarding the number of calls received in the call centre as per the various categories covered. EWP – 2013 (calls received) (%) 12% 23% 17% 12% 6% 6% 8% 16% 18 Legal Trauma Financial HIV Migration Chronic Medical Medical Medical accountability Health, safety and wellbeing The Retail unit also strives to ensure the health, safety and wellbeing of all employees, as well as to ensure the safety and health of all customers, contractors and any other person who may be affected by the activities of the Retail unit. All employees are accountable for workplace health and safety. The Occupational Health and Safety (OHS) management programme encourages involvement at all employee levels and provides for leadership and governance at all levels of management. Executive management is accountable for ensuring that standards, guidelines and policies are in place, while brand managing executives ensure that the standards, policies and guidelines are effectively implemented and monitored. The Retail unit’s OHS management programme is designed to facilitate continual improvement. The basic programme has been successfully introduced into the Retail unit, and is being expanded into the transport operation. The programme consists of monthly branch health and safety reports, required equipment inspections, training and appointment of first aiders and health and safety representatives where required, as well as other site-specific appointments (e.g. fire wardens, stacking supervisors). The operational compliance team carries out cycle inspections against compliance scorecards in all the brands and operates independently from the brands. The compliance scorecard comprises a series of questions that provides a list of key indicators with which to measure legal compliance with the Occupational Health and Safety Act, 85 of 1993. OHS compliance tracking The following graph tracks the Retail unit’s percentage compliance with the internal OHS compliance scorecard. OHS compliance tracking (%) (Sep 2012 to Aug 2013) 100,0 87,5 75,0 62,5 50,0 Sep 12 Oct 12 Nov 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Goal Monthly compliance score Group average Operations undergo external risk audits in accordance with the requirements of the Retail unit’s insurer. The health and safety committee meets quarterly to discuss policy and procedural related matters. Each brand also has a national consultative forum (NCF) which meets quarterly. The NCF consists of all levels of employees, and discusses various matters, including health and safety. African Bank Investments Limited I Sustainability report I 19 Accidents are reported in accordance with section 24 of the Occupational Health and Safety Act (OHSA). All employees are encouraged to report near-miss incidents. Accident statistics 20131 2012 2011 2010 Lost hours Lost days2 Number of work-related fatalities Number of work-related diseases Number of work-related injuries 1 371 171,4 – – 19 1 541 192,6 – – 32 658 82,3 2 – 34 770 96,3 – – 40 1 Figures are reported from October 2012 to August 2013, while 2011 and 2012 results are reported for a full financial year. 2 Calculated on an eight-hour working day. The increase in the total lost hours between 2010/2011 and 2012/2013 can be attributed to the nature of the incidents where employees have been booked off for longer periods of time. The majority of these incidents are due to injuries as a result of motor vehicle accidents (MVA) and handling accidents, while the majority of lost time is attributed to MVAs, followed by slip/trip and handling. Injury cause (%) Lost time cause (%) 5% 7% 16% 27% 37% 37% 29% 5% 37% Handling Handling Personal Personal MVA MVA Slip/trip Slip/trip Unknown/other Unknown/other Skills development and talent management In the Retail unit, 53 employees were identified as top talent from the middle and senior management levels. These employees were paired with senior executives as their mentors. The equity breakdown of these 53 employees is 75% from the designated group, 49% black and 47% female. The programme is formally known as Leaders for Tomorrow. Regular get-togethers were held with prominent business leaders, from CEOs to motivational speakers, sharing their success stories and leadership advice. 20 accountability Out of this programme developed another forum called the Women’s Dialogue Forum. The aim of this forum is to encourage women to become part of the solution, share their ideas and discuss their difficulties, help one another bring about change, make a difference and reach their full potential. Three employees were nominated to participate in the Rising Star Awards, hosted by the Human Capital Institute Africa, and one of them was announced as the winner in the FMCG/retail category. Given the recent announcement to ABIL shareholders of the pending sale of the EHL group and its effect on employees, it was decided not to conduct an employee satisfaction survey this financial year, as the survey results may be unduly impacted by the announcement. Training and development is a critical component for advancement. Various programmes are available, and specific functional training programmes have been identified for employees at middle and junior management levels. These training programmes are available as e-learning programmes and employees are being assessed through skills tests. Specifically within the Retail unit, this year has been marked by a substantial change in the management of top talent, potential top talent and succession planning in general. During the year, 158 people participated in three learnerships pitched at NQF levels 4 to 5, which were sponsored by the Wholesale and Retail SETA. In addition, the W&R SETA also sponsored an international leadership development programme (ILDP) for one learner and a regional management development programme for 15 learners. Summary of skills statistics Investment in employee training and development* Proportion of the above focused on black employees** Number of training and development interventions Employees currently on learnerships Employees receiving leadership training Learners currently on a Wholesale & Retail SETA programme Employees currently on a talent development programme 2013 2012 2011 R6,3 million R5,4 million 15 725 71 72 103 57 R12,0 million R9,2 million 14 404 222 175 312 41 R9,3 million n/a 9 478 161 51 282 56 * Excluding the compulsory 1% skills levy. **African, Coloured and Indian people. African Bank Investments Limited I Sustainability report I 21 Internal programmes (number of people trained) Male Types of training Female A C I W A C I W Total Sales course 267 Management development course 258 Regional managers’ course 9 Beyonders 86 Biometric time and attendance 51 Coaching and mentoring – CPA 944 In-store product knowledge 1 794 Other training (CPS, tax back, loan improve, client affordability, Gridding, etc.) 592 Synergy 231 Telephone etiquette 6 47 15 20 448 34 11 29 871 37 2 13 6 – 106 226 17 4 9 3 – 93 155 41 219 6 8 10 108 5 65 1 – 174 1 976 237 2 555 53 5 17 8 1 235 530 19 1 6 3 – 144 314 73 717 9 44 28 277 8 149 – 2 388 4 060 628 6 439 71 26 1 60 16 – 171 22 1 136 138 4 64 64 – 264 2 177 79 961 12 28 535 372 Total 4 238 819 385 4 688 6 587 1 161 626 1 518 15 725 Internal programmes (training hours) Male Types of training Female A C I W A C I W Sales course 32 040 Management development course 30 960 Regional managers’ course 1 080 Beyonders 10 320 Biometric time and attendance 6 120 Coaching and mentoring – CPA 113 280 In-store product knowledge 215 280 Other training (CPS, tax back, loan improve, client affordability, etc.) 71 040 Synergy 27 720 Telephone etiquette 720 5 640 1 800 2 400 53 760 4 080 1 320 3 480 104 520 4 440 2 040 4 920 26 280 6 360 2 280 8 760 86 040 240 1 560 480 1 080 720 1 200 960 12 960 600 2 040 120 720 1 080 3 360 5 280 33 240 720 360 600 7 800 960 360 960 17 880 – 12 720 – 11 160 120 20 880 – 237 120 120 28 200 – 17 280 – 46 560 240 487 200 27 120 18 600 28 440 306 600 63 600 37 680 75 360 772 680 8 520 3 120 7 200 1 920 20 520 2 640 98 280 46 200 16 320 16 560 7 680 7 680 31 680 9 480 261 240 115 320 120 – 120 480 480 – 1 440 3 360 64 200 44 640 Total 22 508 560 82 560 790 440 139 320 Total 75 120 182 160 1 887 000 accountability External programmes (number of people trained) Male Types of training Female A C I W A C I W Total New managers’ programme Finance for nonfinancial managers Managing managers for results Matric equivalent Higher certificate in business management – retail Essential in retail maths (RSA) Essential in retail maths (ROA) 10 1 1 2 9 3 – 1 27 2 2 9 – – 2 – 2 – 2 2 – 1 – 12 2 – 4 – – – 3 1 2 10 7 29 13 2 61 2 – 3 1 – – 2 2 5 15 8 18 5 – 2 1 1 – 6 2 4 45 15 93 Total 99 8 4 15 63 16 2 19 226 External programmes (training hours) Male Types of training New managers’ programme Finance for nonfinancial managers Managing managers for results Matric equivalent Higher certificate in business management – retail Essential in retail maths (RSA) Essential in retail maths (ROA) Total Female A C I W A C I W 1 600 160 160 320 1 440 480 – 160 4 320 48 – – 48 24 48 72 240 64 1 440 – 320 64 – 64 – – 1 920 – 640 – 320 32 224 4 640 2 184 336 168 336 2 520 840 168 1 008 7 560 16 – – 16 64 – 8 16 120 32 744 488 24 – 40 144 16 – 5 840 840 392 824 6 112 2 024 496 Total 1 320 17 848 Key: A = African, C = Coloured, I = Indian, W = White African Bank Investments Limited I Sustainability report I 23 Total hours trained by employee category – internal and external African Occupational levels Female Professionally qualified 4 563 Skilled technical 406 488 Semi-skilled 337 464 Defined decision-making 10 927 Total 759 442 Coloured Indian White Male Female Male Female Male Female 7 895 302 954 179 989 504 107 821 48 005 1 255 47 452 23 521 248 20 611 7 729 911 9 373 5 590 4 922 193 343 28 890 37 016 – 2 037 496 160 – 527 853 156 026 74 265 29 083 16 033 227 155 Male Total hours trained 13 904 34 200 84 579 1 172 621 15 857 647 046 345 50 982 114 685 1 904 849 Figures have been rounded, therefore totals may differ. The average training hours per employee amounted to 223 hours, while the average training hours per female employee amounted to 231 hours. The average training per male employee was lower, at 205 hours. Transformation and employment equity Permanent employees Employment equity People with disabilities All employees Average July 2012 % Current July 2013 % Target July 2014 % Average July 2012 % Current July 2013 % Target July 2014 % 94,6 5,0 95,0 2,0 96,0 2,0 94,6 4,9 95,0 2,0 96,0 2,0 Employment equity Occupational level Top management Senior management Professionally qualified and middle management Skilled technical and junior management Semi-skilled Unskilled 24 Target gap (under)/ over % Target gap (under)/ over % July 2012 % Current July 2013 % 0,0 (2,0) 0,0 0,0 0,0 0,0 0,0 0,0 60,0 (2,0) 47,0 33,0 0,0 91,0 99,0 100,0 (2,0) 0,0 0,0 84,0 99,0 100,0 70,0 99,0 100,0 (1,0) 0,0 0,0 July 2012 % Current July 2013 % 0,0 43,0 40,0 50,0 55,0 90,0 99,0 100,0 G4-LA9, LA12 People with disabilities accountability Male Foreign nationals Female Occupational levels A C I W A C I W Male Female Total Top management Senior management Professionally qualified Skilled technical Semi-skilled Unskilled Permanent employees Temporary workers 1 3 – 1 1 2 3 10 – – – – – – – 4 – – – – 32 458 1 188 264 9 74 135 23 29 83 44 – 122 20 196 703 36 2 406 – 1 7 193 294 – 12 101 100 – 70 328 167 – – 2 1 – 1 302 1 2 139 2 4 373 – 288 1 946 72 242 11 159 1 367 3 130 8 126 494 21 213 6 569 14 3 – 4 7 127 1 260 Total 2 018 253 160 375 3 256 515 219 583 3 5 7 387 5 20 Key: A = African, C = Coloured, I = Indian, W = White Please note that the difference in the workforce composition numbers and the group employment equity numbers is due to the fact that the equity numbers are aligned with the reporting period to the Department of Labour, i.e. July 2013, while the workforce composition numbers are as at 30 September 2013. Various strategies and programmes have been implemented to achieve the targets: uu An employment equity executive has been appointed to manage the EE portfolio; uu Sufficient time off is allowed for all representatives of the consultative forum to prepare for and participate in meetings; uu Mentoring programmes are an effective channel for transferring knowledge across the organisation. These were introduced during 2011, and the main objective is to identify potential employees for the programme; and uu Various human capital governance structures are in place to ensure we deliver on the employment equity agenda. These structures involve monthly exco meetings, quarterly capital forums, quarterly board meetings, etc. Diversity and sensitisation training Members of the various EE consultative forums will continue to receive training on diversity and sensitisation. A sensitisation programme was conducted during 2013 which addressed unfair discrimination, diversity and tolerance. The principles of employment equity and diversity are incorporated into the distance-learning programme for branch and regional managers. Succession planning Various succession planning programmes were implemented, from brand level to corporate level, to train, develop, coach and mentor employees to be appointed to executive levels. The following senior appointments into executive positions were made for the year under review: four African males, one Indian male, two White females, and one Coloured female. Communication strategy The EE consultative forums within each brand serve as the leading communication vehicle. Communication has been identified as a barrier, hence a concerted effort is being made to rectify this perception. Vehicles like the marketing divisions and the brand magazines have been used extensively to overcome this barrier. African Bank Investments Limited I Sustainability report I 25 Human rights The group is committed to a policy of fair dealing and integrity in conducting our business. This commitment is actively endorsed by the board, and is based on a fundamental belief that business should be conducted honestly, fairly and legally. We expect all employees to share the commitment to these high moral, ethical and legal standards. This declaration is contained in the Business and Retail units’ code of ethics. The code further states that the board has agreed to give its full support to the code of corporate practice and conduct, as contained in the recommendations of the King Committee. One of the key points discussed in this code of ethics deals specifically with discrimination. It states the following: “All employees have the right to work in an environment which is free from any form of harassment or unlawful discrimination with respect to race, colour, sex, sexual orientation, place of origin, citizenship, creed, political persuasion, age, marital or family status, disability or religion.” All employees had to consent to and sign an agreement to this code of ethics when it was initially launched. Since then, it forms part of the employment pack and induction process. In addition, a training programme on diversity has been developed and is available to all employees via the intranet. It is our policy that no individual younger than 18 years of age will be employed, nor people without a matric or equivalent qualification. We do, however, have a programme offering to assist employees without a matric or equivalent to obtain this, at no cost to the employee. 26 accountability Social capital Our approach Our vision will only become a reality through the continued commitment, energy and passion of our people. Their engagement and development is therefore central to the execution of our vision. ABIL continues its commitment to deliver economic, social and employee development through enforcing policies that drive transformation beyond mere compliance to focus on sustainable development. ABIL believes that small businesses play a vital role in creating jobs and wealth in the economy. It is for this reason that the group supports small and medium enterprises (SMEs) through the Banking unit’s supply chain, by channelling business towards these companies to help them be financially independent, and through granting customers personal credit to use towards starting or supporting their small businesses. From 2014 onwards, the procurement action plan to launch reporting and measurement of the achievements of the Banking and Retail units’ suppliers will be incorporated into ABIL’s sustainability reporting. Most of the information in this section is presented at a business unit level, which comprises the Banking unit and the Retail unit. The business units have different requirements for dealing with employees and customers. The report covers all operations of the Banking unit and the South African operations of the Retail unit. The scorecards detailed in this capital are measured on the previous year’s audited numbers. Economic value added statement 2013 R million 2012* Value added Income from operations Insurance claims Credit impairment charge 21 933 (1 664) (9 155) 19 172 (972) (4 842) Risk-adjusted income from operations Other interest and investment income Interest expense Capital items and loss on sale of assets 11 114 393 (4 564) (4 656) 13 403 219 (3 680) (17) 2 287 9 925 Value allocated Employees and directors Suppliers of various services Provide shareholders with cash dividends Government (direct taxes, STC, VAT and RSC) Retention for growth 2 859 2 875 887 866 (5 200) 2 614 2 544 1 549 1 582 1 636 Depreciation and amortisation Deferred taxation (Loss)/profit for the year (net of dividends paid) 375 (489) (5 086) 298 (203) 1 541 2 287 9 925 Total value added Total value allocated * Restated figures for 2012. African Bank Investments Limited I Sustainability report I 27 Banking unit Developmental scorecard The Banking unit improved its B-BBEE status dramatically, achieving level 3 status under the Financial Services Charter (FSC) compared with a level 4 (2011) and a level 6 (2010) under the CoGP codes. While there has been significant and consistent improvement on the empowerment scores, we continually strive to further improve. To achieve this target, we continue to conduct reviews of opportunities to enhance the Banking unit’s empowerment and transformation status, and identify areas for improvement using the FSC scorecard as a guide (as illustrated in the table below). In the short term, we are prioritising ownership, management and employment equity; we continue to uplift the skills base of employees and suppliers through preferential procurement and enterprise development. Below is the Banking unit’s empowerment information for the past three years. B-BBEE scorecard information – Banking unit FSC targets Banking unit FSC score 2012 Equity ownership Management and control Employment equity Skills development Preferential procurement Enterprise development Socio-economic development 14,00 8,00 15,00 10,00 16,00 15,00 3,00 Total score 81,00 Element CoGP target Banking unit CoGP score 2011 Banking unit CoGP score 2010 6,68 5,52 9,71 9,00 12,74 15,00 3,00 20,00 10,00 15,00 15,00 20,00 15,00 5,00 7,35 5,40 8,80 12,60 16,79 15,00 4,03 6,45 4,28 8,59 6,73 15,22 0,72 4,11 61,65 100,00 69,97 46,10 Equity ownership This pillar measures access to finance and also looks at the ownership element of the scorecard. The Banking unit continues to deliver on its primary commitment to improve the lives of South Africans through broadening and deepening access to credit. While our target market has broadened to include all South Africans who would like to access credit, the majority of customers remain those who historically had no access to credit. The focus remains to provide credit to individuals to improve their homes and quality of life, educate their children, to assist new and striving entrepreneurs to start and support their businesses through personal loans, as well as to address individuals’ general personal and household needs. During 2008 and 2011, ABIL enabled shareholders to create wealth through its two empowerment vehicles, Eyomhlaba and Hlumisa, where the shares were sold at a substantial discount to a broad base of black shareholders (which included employees, customers and other qualifying black people in South Africa). As at 31 August 2013, the two companies owned 74 million ABIL ordinary shares, which equated to an effective B-BBEE shareholding of 9,1%, of which 2% is owned by black women, and 1,6% is owned by black directors of ABIL. Management and control For the 2012 financial year, 11 (2011: 12) directors served on the board; four executive and seven non-executive; five members were black, of which two were women. At Exco level, there were 14 (2011: 12) members, of whom three (2011: three) were black and two (2011: one) were women – an improvement from 2011. 28 accountability Employment equity Employment equity is at the heart of the group’s strategy for 2013. ABIL is committed to creating equal opportunities for all races to be represented at all managerial levels, especially putting more focus on middle management, senior management and employees with disabilities. In the past few years, the Banking unit has focused on achieving the internal and employment equity targets set by the Department of Labour (DoL) at executive levels. In 2012, we continued to improve black representation at exco level, by appointing two black women. We continue to do well on our targets with junior management under both the CoGP and the FSC. The Banking unit achieved 9,71 on employment equity, a slight improvement of 1%, while the Retail unit score also improved to 4,66, an increase of almost 1%. More work is being done to ensure improvement in these scores. Skills development In 2011, skills development was one of the Banking unit’s main focal points, resulting in an excellent improvement in 2012, achieving 9 points out of an FSC target of 10 points. The Banking unit aims to obtain full points on this element going forward. This has been the result of introducing various learnerships, namely BANKSETA-supported programmes with an 85% retention rate, internal learnerships for aspiring and junior managers, and learnerships for the unemployed relatives of the Banking unit’s employees. The focus on leadership programmes has had a positive reception. This includes executive coaching, leadership-based coaching for women and personal mastery classes. Other internal skills development programmes included internal mentorship for all employees, roadshows and career assessments. Preferential procurement Preferential procurement within the Banking unit is promoted through enabling B-BBEE empowered companies that are exempted micro enterprises (EMEs) and qualifying small enterprises (QSEs) to be part of the Banking unit’s supply chain. Currently the Banking unit has just over 1 000 service providers, with a total measured spend of R886 million (2013) and R996 million (2012). In the previous two B-BBEE verifications, the Banking unit did well in the overall preferential procurement scores. Although it has not achieved its internal targets of 90% on B-BBEE empowered companies and 50% on EMEs and QSEs, it is planning to achieve the targets in two to three years. In 2012, approximately 50% (2011: 52,2%) of the Banking unit’s total spend was channelled through B-BBEE empowered companies, and of this 26% (2011: 32,2%) went to EMEs and QSEs. Under the FSC, the Banking unit received an overall B-BBEE status of a level 3 (2011: level 4 – CoGP). Our preferential procurement score under FSC dropped to 12,74 compared to 16,79 in 2011 due to changes in the scoring of both empowerment codes. As a group, we aim to improve this score for 2013 and beyond, by channelling even more business to empowered service providers, advising non-empowered service providers on ways to improve their B-BBEE status and introducing a service provider rotation system where we shall select three service providers as preferred providers for most commodities, with at least one provider being black owned and the business being awarded on a rotational basis. The Banking unit believes in stimulating job creation through buying from local suppliers, knowing that, through increased local procurement, more people will be employed, which will boost the South African economy. The Banking unit engages with its service providers and business units on the procurement policy and strategies through annual summits and regular interactions on service delivery. Environmental sustainability is the focus this year and going forward. The Banking unit’s procurement policy incorporates green sustainability, which is in its early development stage. African Bank Investments Limited I Sustainability report I 29 Retail unit Developmental scorecard The Retail unit achieved a level 5 accreditation for both 2012 and 2011. While there was no improvement in the B-BBEE accreditation level, the Retail unit is pursuing a level 4 accreditation in 2013. B-BBEE scorecard information – Retail unit Element Retail unit CoGP score 2012 CoGP target Retail unit CoGP score 2011 Retail unit CoGP score 2010 Equity ownership Management and control Employment equity Skills development Preferential procurement Enterprise development Socio-economic development 9,82 4,19 4,66 5,07 16,93 15,00 5,00 20,00 10,00 15,00 15,00 20,00 15,00 5,00 7,35 – 3,97 5,62 18,34 15,00 5,00 6,45 1,49 3,99 2,44 16,78 12,65 5,00 Total score 60,67 100,00 55,28 48,80 Management and control The Retail unit did not have black representation at board and senior management levels in 2012, but with the recent appointments of two black executives at board and exco levels, these numbers will improve. Skills development The Retail unit decreased marginally on its skills development score, from 5,62 to 5,07. This number is targeted to improve through an enhanced focus on training, as well as participation in learnership programmes. Preferential procurement and enterprise development The Retail unit achieved 16,93 out of 20 for preferential procurement, and 15 out of 15 for enterprise development. For the B-BBEE accreditation in 2013, the Retail unit prioritised employment equity, skills development and preferential procurement as the aspects of the CoGP scorecard that must be improved to achieve the targeted level 4 rating. ABIL plans going forward Going forward, ABIL will broaden its transformation initiatives to include economic development, employee development and socio and business development, which cover elements that are in the FSC, and are illustrated below: 30 Economic development Employee development Socio & business development Ownership Access to finance Empowerment financing Management control Employment equity Skills development Preferential procurement Enterprise development Socio-economic development accountability Supplier development Banking unit Overview The Banking unit has focused on value creation in its supply chain through empowering small and medium service providers by paying some of them early to improve their cashflow. The unit also assists and guides them to achieve their B-BBEE credentials, and supplies them with used office furniture and computers to improve their working conditions and environment. For the first time since the FSC sector charter was gazetted, the Banking unit surpassed its targets, achieving full points on enterprise development. This was as a result of the Banking unit offering loans to individuals for starting up their businesses or buying stock for their informal micro businesses, like spaza shops. This information is gathered by an independent research company employed by the Banking unit. These results show that 1% of the loans made by customers are used towards starting or supporting small businesses. Also, it has emerged in our CEO and customer roadshows that a growing number of customers use the loans to start small businesses through third parties. We plan to maintain this score going forward. Relationships The Banking unit relies heavily on developing long term relationships with core suppliers and has worked hard over the years to foster strong ties with suppliers. It is as a result of this dedication that the Banking unit is able to work with these suppliers in reaching its goal of sustainable business practices. Sustainability within procurement is governed through the continued use of supplier contracts, which provide guidelines regarding the terms and conditions of purchase and trade. No suppliers are able to do business with the Banking unit without first undertaking to sign and to uphold our terms and conditions. At present, the terms and conditions for suppliers include a declaration of compliance in terms of the Consumer Protection Act 2010 and the B-BBEE Act, 53 of 2003. Going forward, the inclusion of a global best practice declaration by suppliers is being investigated. It is envisaged to include declarations regarding the proper treatment of workers and work conditions, as well as proper management of environmental resources. This will include regulations from the Occupational Health and Safety Act, 85 of 1993 and the following International Organisation for Standardisation standards: uu ISO 14000 – Environmental Management; and uu ISO 9001 – Supply Chain Management. The continued belief that long term relationships with suppliers will lead to mutually beneficial partnerships is the cornerstone of meeting sustainability targets in the future. Suppliers have been requested to complete a questionnaire that informs the Banking unit of their environmental responsibilities and compliance. This information is used to rate suppliers in terms of the Banking unit’s overall governance requirements. Retail unit Overview The Retail unit achieved the maximum score in this category, and has done so for the previous two accreditations. The past year has been one of the toughest trading periods in decades, with severely depressed sales resulting in the need for significantly reduced purchases from suppliers. This has been an industry feature and is not limited to the Retail unit, although it has been exacerbated by credit cutbacks. This economic downturn has coincided with a need to look at opportunities to reduce costs, one of which has been a focus on reducing inventory holdings throughout the Retail unit. African Bank Investments Limited I Sustainability report I 31 We recognise the impact that slower sales in the Retail unit have on suppliers and we have been cautious in maintaining regular communication with suppliers to: uu Keep them apprised of the sales volumes situation; uu Identify opportunities for new products, or enhancements to existing products, of lower cost, but equal or better quality to stimulate sales; and uu Ensure that while total purchases are reduced, there is still a fair distribution of purchases across the majority of the key suppliers to aid them in dealing with current economic pressures. We continue to work with the small and medium suppliers on an ad hoc basis to assist them in alleviating cash flow pressures, by arranging early payment agreements. We have also assisted some suppliers with the purchases of raw materials for merchandise and, in some instances, we have also assisted with the purchase of equipment for suppliers. Relationships Formal interaction with suppliers has taken place, which included a supplier breakfast led by the CEO, during which an update was provided on the business at both a macro and a micro level. This proved most beneficial in that it laid the foundation for the ongoing trading environment with suppliers and has helped to manage expectations accordingly. In recognition of the dependency on the peak trading period for the success of both the Retail unit’s business and, as such, the suppliers’ business, it was decided to leverage the supply chain network to: uu Hold a series of meetings with the key suppliers to explain the requirements and expectations; uu Hold individual meetings with each supplier at which they receive a purchase order and an associated confirmed booking for each of these orders for the entire period from October through January; uu Continuously review forecasts; and uu Regularly review supplier relationships from a supply chain perspective. Not only is packaging always a focus to ensure that the product is adequately protected, but increased focus has been placed on looking at opportunities for reuse or recycling. Further to this, please refer to the natural capital section: waste and recycling in this report. Assessment of compliance Currently supplier assessments are conducted with a focus on governance issues before suppliers are approved as preferred suppliers of the Retail unit, and assessments are further conducted on current preferred suppliers. We assess areas of risk, B-BBEE compliance and environmental sustainability compliance. The risk assessment includes submission of a valid tax clearance from SARS and a letter of good standing from the supplier’s bank. However, the health and safety assessment impact of products and services does not exist in a pre-emptive format. Supplier compliance is measured in the service level agreement (SLA) reviews which take place at agreed intervals. These sessions not only review contract compliance but also examine other performance aspects such as service delivery, quality and cost. The scope of the SLA review mechanism is being expanded to include OHASA compliance, risk management and mitigation strategies to effectively manage any attendant risks. The Retail unit is largely reactive to products which show some health or safety concerns and relies on its suppliers to address issues of non-compliance. The suppliers are bound to comply with the requirements of the Consumer Protection Act, 68 of 2008 and declare their awareness of that obligation before signing the supplier terms and conditions when doing business with the group. 32 GRI PR 1 and 2 accountability Environmentally responsible procurement The Retail unit is committed to ensuring that the products used are environmentally responsible and sustainable. The establishment of minimum requirements for all procurement is in its early developmental stage. It is the Retail unit’s aim to collaborate with all suppliers to ensure compliance with local environmental regulations, and strive to reach environmental targets that exceed those specified in regulation. The reduction in water and electricity usage by factories and adoption of environmentally sustainable practices by manufacturers among those factors considered being explored. Already, the impact of timber furniture manufacturing on the environment is taken into consideration with imported furniture items and items produced for Wetherlys, and responsible environmental management solutions are being considered as part of long term business strategies throughout the Retail unit. Formalised policies and procedures regarding the responsibilities of suppliers to the environment are being formalised. In addition, the topic of sustainability and positive environmental contribution and reduction of harmful carbon emissions is a fundamental component of the fabric of supplier engagements both current and future, and is tabled in each strategic sourcing process that is undertaken by the Retail unit. Customer product information and labelling In the Retail unit, informing customers of the proper use, care and composition of the products that they purchase is an important component of our customer interaction. We want customers to purchase products knowing that they are of good quality, safe and produced responsibly. Care is taken to ensure that suppliers provide the legally prescribed labelling on products so that customers are informed of the composition and origination of materials, where applicable. We are in the process of creating a list of requirements that align with the compliance expectations of the Occupational Health and Safety Act, 85 of 1993 that will form part of the terms and conditions of doing business with the Retail unit. Due to the above strict processes in dealing with marketing compliance issues, we have not had any incidents of non-compliance with regulations concerning marketing communications which have resulted in fines, penalties or warnings. GRI PR 3 and 4 African Bank Investments Limited I Sustainability report I 33 Sustainability roadmap EHL Sustainability Tek/Defy Plug Advise issues to be considered by product category and assist with development of applicable scorecards Auvere Florentine Lounge Case Restonic Bedding Legal compliance Legal: scorecard Good corporate governance GCG: scorecard Questionnaire Packaging Commence with an end-to-end evaluation of opportunities around packaging and waste management as lowhanging fruit that can be actioned quickly Interaction with specific suppliers to obtain industry input Delta Waste management DCs and Xdocks Recover waste from customer Recover old appliances Evaluate current process etc regarding waste, power and water; action for improvement Evaluate if there is a business case to retrieve all packaging material from customers’ homes on delivery. If so, develop proposal and implement Evaluate if there is a business case to recover old appliances for recycling, friendly disposal, etc. Develop proposal Waste management at supplier Roll out recycling, environmental friendliness, etc. to suppliers, initially focusing on waste management Action plan by supplier Develop link to the scorecard whereby the action plan may suggest the use of “RE” as third party to assist The above is a roadmap for engagement with suppliers in respect of understanding the current levels of compliance, gaps, interventions required, and associated timelines for sustainability issues related to merchandise suppliers. Essentially the key components of the roadmap are: uu Supplier compliance levels; uu Waste management at distribution centres; and uu Supplier relationship management. Surveys have been completed by key suppliers and the data is currently being assimilated in order to provide a supplier scorecard as per the following example. One aspect links directly to legal compliance issues and the other to good corporate governance issues. Once the scorecards, by supplier, have been completed, suppliers will be engaged in respect of the actions required to increase the levels of compliance accordingly. In order to provide case study reference for these engagements, the Retail unit has engaged with a waste-management company to do an analysis of one supplier in each of the categories so that we can 34 accountability understand constraints to achieving compliance (cost, resource, time, payback, etc.) as well as the specific interventions required. The initial case study has commenced with one factory and will be completed across all identified suppliers (for case study purposes) by December 2013. Sustainability scorecard Legal compliance Environmental management systems Waste management Energy management Packaging management Transport management Procurement Sustainable sourcing (raw materials, components, parts) Air emissions End of life 10% 15% 10% 10% 10% 10% 15% 10% 10% Sustainability scorecard Corporate governance Nuisance management Community relations Education and training Employment Charity work Competitiveness 20% 15% 15% 15% 15% 20% Banking unit A sustainable approach to community development Corporate social investment (CSI) plays a vital role in South Africa, bringing about transformation for the benefit of all the people living in our country. The social needs facing our country are substantial and it is the moral duty of government and big business to make a difference in the lives of our communities. Uplifting communities has always been central to the group, and we continue to seek out CSI opportunities to further enhance the lives of South African citizens and communities. For the 2013 verification year, ABIL spent R9,6 million delivering 49 CSI projects within communities in Gauteng, KwaZulu-Natal, Limpopo, the Eastern Cape and Western Cape. The number of beneficiaries of the CSI projects was approximately 90 807, all of whom have derived direct benefit from these initiatives. They are based in highly impoverished environments. Both the Banking and Retail units achieved full points for socio-economic development on the FSC and CoGP scorecards, respectively. Overall approach The Banking unit’s sales distribution network is divided into five geographic areas within South Africa. To ensure that social investment takes place in each of these five regions, the CSI community development initiatives are active within each of these regions. The implementation strategy is based on a principle of identifying specific focus areas of extreme poverty and unemployment, one within each of the five designated sales areas, and then, in conjunction with project partners, delivering social development projects within these focus areas that meet the needs of the community. African Bank Investments Limited I Sustainability report I 35 These community development projects are focused on: 10% Health and welfare 10% Environment 10% Sports development 20% Job creation 50% Education* *With particular focus on the sciences, mathematics, English and computer literacy. Once a community need has been identified, project proposals are submitted for evaluation to regional CSI committees. These comprise both employees of the Banking unit, as well as external members with specific skills or interest, who participate on these regional committees on a voluntary basis, giving their expertise and time in order to enhance the quality of decisions taken. Each project is scrutinised carefully against the strategic framework set by the trustees, as well as project-specific criteria, including inter alia: the implementation timeline; proposed outcomes or results which must be clearly and quantitatively defined in order to measure success in every project; overall budget requirements; the cost per beneficiary; the administration or project management cost as a percentage of the overall project, the latter measure being aimed at ensuring that a high percentage of the funds allocated are used to the benefit of the front-line beneficiaries. Once approved by the respective regional committees, an agreement is entered into, formalising the relationships with the project implementers. Next, a process of monitoring and evaluation is implemented, during which key performance indicators are measured, with staged draws being approved against successful achievement of these milestones. 36 accountability On implementation, each project is allocated a project monitor, generally one of the regional committee members, whose task is to monitor project progress and to ensure that no barriers or blockages to success are encountered, but without reducing the project implementers’ accountability nor intervening in the project. Repeat project proposals are only considered once all deliverables for an approved project have either been met in full and in accordance with the signed project charter, or where sufficient progress towards meeting these projects has been made with a clear indication that the project will succeed. Community development activities during the year In this financial year, the ABIL CSI funding impacted the lives of 90 807 primary beneficiaries through the delivery of 49 projects in five regions. Distribution of funds during 2012/3 Funds allocation (%) 2% 7% 9% 12% 70% Education Sport Health and welfare Environment Other Active projects in 2013 (%) 2% Due to the overwhelming challenges being faced in education, the largest portion of the CSI spend was disbursed to this need. 14% These projects played a significant role in helping disadvantaged children in key subjects such as Information Technology (KwaZulu-Natal, Gauteng and Eastern Cape); Physical Science (with projects in all five regions); Mathematics (in two regions); English literacy (in three regions) and Early Childhood Development (in three regions). 8% 33% 12% 31% Eastern Cape KwaZulu-Natal Western Cape Gauteng Limpopo Other Gauteng implemented 16 projects in Tembisa and Ivory Park, followed by KwaZulu-Natal with 15 projects in the Ilembe District. The Eastern Cape delivered seven projects in iBhayi, Limpopo six projects in Blouberg, and the Western Cape four projects in the Blackheath/Electric City/Eersterivier/ Mfuleni area. While there is an overwhelming need for job creation in South Africa, the challenges remain extremely high. Many training institutions offer skills training, often at high cost and subsidised through various SETAs. However, very few of these projects guarantee employment on successful completion of the training, nor do they offer vital support or mentorship on the job during the first few months. Both of these criteria are prerequisites for approval for funding in the Banking unit’s programmes. Entrepreneurial programmes have seen a small measure of success but, to make a significant difference to the unemployment challenge in South Africa, innovative measures need to be found to escalate efforts. African Bank Investments Limited I Sustainability report I 37 A highlight for the CSI initiative has been spontaneous partnering with other organisations where the social impact of our projects has been recognised. This gearing effect served to add further momentum to the projects or to complement the CSI activities where funders have chosen to fund other activities aligned to our work, but which the CSI division has been unable to fund. An example is the donation of libraries and resources to various schools in Limpopo and KwaZulu-Natal, secured through the efforts of the English literacy partners in each of these areas, thereby increasing the social impact of these schools. Individuals and organisations who have partnered on these initiatives to date include Billy Selekane, the Ilembe Chamber of Commerce, Industry and Tourism (ICCIT), Enterprise Ilembe, Afrisun, Rotary and the Gavin Hood Foundation. A primary school library in Blouberg, Limpopo – half of these books were donated by partners of the African Bank English literacy project. Highlights for the year under review are as follows: uu The number of beneficiaries reached through the programmes (90 807 in 2012/13 vs 43 065 for 2011/12) and the increase in number of projects undertaken (49 during 2013 vs 38 during 2012); uu Administration/overheads maintained at 11% of total cost of CSI, with the result that, for every R1 spent on administration, approximately R9,50 is invested in project spend (i.e. beneficiaries); uu Measured benefit to participants is evident on all programmes, with those which have been running for two or more years showing very positive trends; uu Governance of the CSI programme is improving steadily with monitoring, evaluation and reporting of projects now well entrenched; and uu The financial year has shown a more even geographic distribution of project investment as CSI matures in those regions where activities began more recently. 38 accountability Flagship projects English literacy and teacher mentorship – KwaZulu-Natal, Limpopo and the Eastern Cape The English language, as the basis for the majority of subjects taught throughout a learners’ school career, is critical to the success of any further learning. Research into NSC English, the entrance language test for the University of Pretoria and the National Benchmarking Test’s literacy marks concluded that, institutionally, NSC Grade 12 English results are the best predictor of first-semester academic achievement. In another analysis, a researcher showed that for every percent an English mark increased, the student’s chances of academic success increased. The philosophy of empowering teachers through training, on-site support, teaching aids and tools, with the specific outcome of improving English literacy in Grades 3 to 6, has borne positive results in all primary schools where these projects have been implemented. There are 47 schools participating in the project, with approximately 250 educators and 13 500 learners across the board. In particular, the Banking unit’s essay, poetry and spelling bee competitions have proved to be very successful. Progress is tracked through stringent pre- and post-assessments relating to literacy levels per grade to ensure the effectiveness of the project. The same assessments are conducted in non-participating schools and compared to the results of participating schools. Educators are assessed throughout the year by the project facilitator and those who achieve the best results and demonstrate a willingness to go the extra mile are recognised and rewarded accordingly. The following graph depicts the pre- and post-assessment results of participating schools in all three provinces compared to the pre- and post-assessment of non-participating schools. As can be seen, all grades that participated in the programme fared markedly better than those at schools which did not participate. National English literacy results (% of children at appropriate reading age) 26 20 0 Pre 2012 2013 Post Grade 3 48 40 30 31 36 36 40 41 46 51 53 60 53 66 76 80 85 87 100 Pre Post Grade 4 Pre Post Grade 5 Pre Post Grade 6 (11 years old) African Bank Investments Limited I Sustainability report I 39 TRAC – reaching tomorrow’s engineers The ABIL development trust is supporting five mobile science laboratories in an effort to address the major shortage of learners choosing a career in science, engineering and electronics. Nationally, this programme has engaged 33 schools, 62 Physical Science educators and 4 893 learners. Spelling contest winners, English literacy project Children from disadvantaged backgrounds are, for the first time, being exposed to computers and laboratory equipment. Each school has set a target to increase the number of learners obtaining 60% or more in Physical Science and to support that target, a 10% improvement on pre- and posttesting cycles has been set. Interactive Intelligence, a supplier to the Banking unit, partnered with us, providing nine deserving learners with financial assistance through full payment of their university entrance registration fees. Young Mphaho – flanked by her principal, the African Bank project coordinator and her educator – obtained 93% in the 2013 ANA English assessments. She is a learner from the Maleboho East district in Blouberg, Limpopo – a highly impoverished community Billy Selekane, motivational speaker and a well-known figure in African Bank, gave one full day to encourage matriculants in KZN 40 accountability TRAC – National Grade 12 (% pass rate) 60 55,81 50 52,56 47,25 45,53 40 30 20 10 0 2011 2012 Non-participating schools Participating schools The graph above depicts Grade 12 pass rates in schools participating in the TRAC mobile science programme, compared with pass rates of a population of schools in the vicinity. Two noticeable trends are evident from the above: uu The pass rates in TRAC schools have generally been better than non-TRAC schools in both years. uu There is a marked improvement in 2012, a trend which we expected to see as matriculants with longer exposure to TRAC come through the system. (TRAC intervention targets Grades 10, 11 and 12.) Computer literacy and internet connectivity In today’s world of work, computer literacy is regarded as an entry-level requirement to meaningful work. Anyone without a working knowledge of computers is seriously disadvantaged and their choice of career is limited. While the cost of any IT project is generally more expensive than most other projects, the Banking unit has aggressively pursued projects that effectively close the gap in disadvantaged communities. The following projects were sponsored in 2013: uu Schools connectivity projects – in KwaZulu-Natal and Gauteng, 224 computers were donated to 30 schools and all of them have been connected to the internet through a wireless network. This programme has three implementation stages: uu Stage 1: provides teachers with access to resources and administration tools to improve their teaching methods and content; uu Stage 2: implementing a computer lab for the use of students in schools where adequate space is available; and uu Stage 3: gives local entrepreneurs access to the wireless network to establish internet kiosks. uu Through this programme, educators are becoming computer literate. Some 40 655 learners are benefiting from additional learning resources, access to education portals, the national education database, the new skills set of their educators and improved administrative processes. Access to social networking sites and harmful content has been blocked. African Bank Investments Limited I Sustainability report I 41 uu The Dominion Internet Café and Resource Centre, sponsored by the Banking unit as an entrepreneurial initiative and partially for educational purposes, has proven to be a valuable community service. The internet café is located on the premises of Groutville Secondary School and, besides offering an internet service to 1 300 learners, it also sells refurbished computers at very competitive prices, offers photocopying services and provides muchneeded job opportunities. uu TRAC – mobile science laboratories. All learners in Grades 10 to 12 are exposed to and use computers in their learning. Practical experiments, mobile science laboratory project The Western Cape CSI committee led by Hannah Jackson, head of operations, northern region, visited and encouraged Grade 12 Physical Science students in Blackheath, Western Cape 42 accountability Teachers training, IT education project Sport development for age groups 9, 11 and 13 The football and netball projects are implemented in conjunction with leading sporting personalities, such as AmaZulu’s Clive Barker. Active in 45 primary schools in three regions and a further three community fields in the KwaDukuza area, seven full-time coaches assist 244 school coaches, who have been trained to actively engage the 7 017 children participating in the project. The school-based outreach focuses primarily on the coaches, with daily on-site technical and management support, ensuring effective training sessions for the children and organising inter-school matches and tournaments. As part of the project, each age category participates in five tournaments with 12 players chosen to represent the Banking unit in prestigious soccer club tournaments for developing sides. Soccer clubs partnering with the Banking unit are AmaZulu and Ajax. African Bank Investments Limited I Sustainability report I 43 Community coaching project Western Cape soccer buddies Linda Odolo – Eastern Cape netball coach cheers on her teams Job creation projects Unemployment in South Africa remains the single greatest challenge to a better quality of life for all. Over the past three years, the Banking unit has sponsored nine entrepreneurial projects, all of which achieved improved business results, but with limited success in terms of addressing the job creation problem. The job creation projects sponsored to date are: uu Training and placing 40 unemployed youth in the hospitality industry; uu Training and assisting 20 unemployed women to become entry-level nail technicians and start their own small businesses; uu Establishing and assisting a women’s beading cooperative in the development and production of a beaded tableware range; uu Sponsoring the Eagles’ Nest/The Entrepreneur competition in partnership with ICCIT and Enterprise Ilembe; uu Dominion Internet Café and Resource Centre; uu Tembisa entrepreneurial development programme for Grade 12 learners; uu Ivory Park SML poultry enterprise development project; uu Tswelelane Bakery; uu Training nine unemployed youth in design, development and production of needlework/craft items through the Raymond Mhlaba Skills Centre; and uu Training 12 project coordinators in project management. 44 accountability In total, a modest 144 sustainable jobs were created through these initiatives. Retail unit Development is at the core of CSI initiatives of the Retail unit. This includes the development of people, organisations and communities. The principle is that the “hand-up” approach is known to create dignity and independence for the beneficiaries, as opposed to the more traditional “hand-out” methodology, which fosters continued reliance of the beneficiaries on the donor community. Bursary scheme Bursary grants, valued at R493 000, assisted 60 academicallydeserving undergraduate and postgraduate students with their studies at universities and universities of technology. Bursary recipients are dependents of employees in the Retail unit. A total of 58% female and 42% male students were assisted, and a total of 90% were from previously disadvantaged communities. The 2013 Entrepreneur Winner – Siyanakekela Community Investment Programme Employees collected R420 810 through the Siyanakekela Community Siphesihle Gumede – Superior Kitchens Investment Programme, which was launched as a special tribute to Nelson Mandela. These funds were donated to registered non-profit organisations that work with orphans and vulnerable children, the prevention of child abuse and the prevention of HIV and AIDS in the youth. Ekukhanyeni Community Development Centre (ECDC) This year, the Retail unit continued to provide this centre with premises in central Germiston (the old Ellerines head office) at no charge, while continuing to pay for the municipal rates and taxes, security and building maintenance. This equates to an investment of R740 000. As the building’s location provides easy access for out-of-school and out-of-work youth from nearby townships and informal settlements, the ECDC raised funds to purchase the building to secure occupancy. The ECDC has accreditation from the Media, Information, Communication and Technology (MICT) SETA, the Education, Training, Development and Practitioners (ETDP) SETA and the Wholesale and Retail (W&R) SETA and is now registered to undertake the training components for internships and learnerships. Next year, the Fabric, Processing and Manufacturing (FRP) SETA will provide a special grant to the ECDC for the practical sections of their training programmes. School donations This year, group merchandise and brands provided donations of products to a number of schools and registered non-profit organisations in the local communities. African Bank Investments Limited I Sustainability report I 45 Product responsibility Our approach The African Bank customer experience mission statement states that “African Bank will create differentiated experiences across all our touch points that are relevant to our customers’ individual needs, supported by our brand, our products and processes and delivered by our emotionally engaged, passionate and empowered people.” Most of the information in this section is presented at a business unit level, which comprises the Banking unit and the Retail unit. The business units have different requirements for dealing with employees and customers. The report covers all operations of the Banking unit and the South African operations of the Retail unit. Banking unit The Banking unit’s customer experience objectives for 2013 were to: uu Improve the customer value proposition, including the customer experience, employee experience, brand experience and channel experience in terms of service, take-up and turnaround times; uu Treat customers fairly through the Consumer Advocate’s Office (CAO) as an independent voice of customers, and responsible lending practices; uu Provide side-by-side community empowerment; and uu Implement customer experience performance indicators. Employee experience In 2013, we continued with various initiatives to improve the employee experience by empowering them to deliver and receive the best service experience. The objectives of the initiatives remain for all employees to walk side-by-side with their colleagues, where employees will be able to visit another division or branch to experience and better understand the daily operations. It also included an internal service improvement campaign to measure the level of service provided against a clear set of tracked performance measurements. We tracked the results over two quarters and there was an improvement in service level Q1: 79,7% and Q2: 80,2%. Channel experience Branch – Our Branch Service Index, which is an external, objective measurement executed by a reputable South African research house, recorded a national result of 80% against the target of 80% during the 2013 financial year. The service index measurement has evolved substantially from 2012, when basic service was measured, to creating authentic customer experience moments during 2013, making the 80% achievement even more significant, as the voice of the customer was also included. We have completed the new branch look-and-feel upgrades to accommodate customer preferences and support business integration. For added convenience, banking hours have been extended and certain branches also trade on Sundays and public holidays. Remote – We offer self-services to customers that allow them to apply for credit, check their balances or simply buy airtime via their cell phones. On cell phone services, we reported an increase in number of users to 281 251, with a reported 77% of users having an active card or loan account. Customers are also able to SMS a keyword to 49 494 or visit www.inseconds.africanbank.co.za to apply for and receive a credit offer in seconds. The inseconds applications sales figures increased by 116 659 to 140 423 (20%), which indicates that a greater proportion of customers opt for instantaneous indication of whether they qualify for credit. 46 accountability 2013 – Self-service indicators Cell phone banking Total activations Average monthly unique users Total usage % New activations inseconds applications Number of applications % increase Capital disbursed Result 281 251 46 418 17% 23 226 140 423 20% R3 060 million ABIL Consumer Advocate’s Office For six years in a row, African Bank has won the Ombudsman for Banking Services award for excellence in complaints handling in Category B (this category is for all banks, excluding the four major banks which compete in Category A). ABIL established an internal ombuds office, the Consumer Advocate’s Office (CAD), in 2004, to act as a protector of the rights and interests of ABIL consumers. Its key success is based on the fact that it operates independently of the group’s operations with a mandate to make its own rulings on consumer complaints, to which the business is bound. Its terms of reference, which inform its rulings, include determining matters not only on the basis of law, but, most importantly, on the basis of fairness. The CAO receives most of its complaints directly from consumers who have been to the Banking, Insurance or Retail unit, and are unhappy with the outcome. The Banking unit branches, Retail unit outlets and departments also escalate matters to the CAO where consumers are unhappy with the outcome of their complaint. The CAO has also established a consumer lounge as part of its Midrand central office, for consumers who prefer a direct, one-on-one, face-to-face engagement to meet personally with CAO staff. During the past year, 1 578 consumers visited the lounge. The CAO is also responsible for assessing and responding to complaints from regulators, statutory bodies and the media, to ensure a fair resolution in these instances. During the financial year, the CAO received 8 618 complaints, a decrease of 21% from the previous year. This decrease indicates an improvement in African Bank’s service delivery at first port of call. Of the matters brought before the CAO in 2013, 42% (2012: 57%) were resolved in favour of the consumer, either as a valid complaint or a gesture of goodwill. A total of R3,23 million was written off or refunded to consumers (2012: R6,28 million). We attribute the decline in valid complaints and compensation to consumers to the fact that the NCA in duplum adjustments have now addressed many of the previous allegations relating to balance disputes. The CAO is also committed to promoting consumer rights through consumer education, and completed the African Bank jointly funded consumer education project with Deutsche Investitions- und Entwicklungsgesellschaft GmbH (DEG) in 2013, with the publication of two further financial education comics – one on understanding how a loan works, the other on understanding debt. African Bank Investments Limited I Sustainability report I 47 Treating customers fairly (TCF) A group TCF steering committee has been established and comprises members from the Banking unit, Stangen and the Retail unit. Regular meetings are being held to further the implementation of TCF throughout the ABIL group. A TCF presentation was made to the group insurance boards in May 2013 and they have adopted the principles. A TCF action plan has been developed and will be presented to the executives in October 2013, in terms of the initial roll-out of the action plan. Financial Care Centre (FCC) consumer education Consumer education forms an integral part in retaining customers by improving their ability to stay credit healthy and to empowering them to make informed financial decisions. The main objective is to continuously inform and educate customers within the various credit and collections lifecycles, to improve their ability to manage their finances responsibly. The following initiatives were implemented during 2013 as part of the consumer education focus: uu Awareness of products and services was created through the various communication channels within the Banking unit to assist customers to make informed financial decisions; uu Root-cause analysis was done to understand customers’ financial needs and what additional financial literacy is required to enhance their ability to manage their finances; uu Multi-media messages have been designed across carefully selected customer segments and credit life cycles, with the aim of informing customers about the status of their accounts, how to improve their financial profile and the benefits of effective payment management; uu Statements were enhanced with educational messages to assist customers to manage their debt, avoid over-indebtedness, and be informed about the negative consequences of falling behind with payments; and uu Money Matters, an electronic information leaflet, was designed to provide customers with information and knowledge around their rights and responsibilities with respect to credit, the importance of responsible borrowing, solutions available to customers should they find themselves in financial distress, steps on how to remedy this and sustain a good credit record, and effective query resolution processes. As part of the employee value proposition, the Banking unit has implemented various initiatives to educate and support employees, and to assist them to remain financially healthy. This includes financial planning, setting financial goals, self-realisation, and the importance of savings. The aim of these initiatives is to improve the lives of employees and to offer relief in terms of financial distress, which in turn will enhance the Banking unit’s ability to support customers better. Responsible lending The Bank is committed to adhering to its legal and moral requirements in practising responsible lending practices. We provide independent results on how customers choose to utilise the finance they obtain from us, versus their initial intent. This research shows that loans obtained from the Bank are continuously used for social upliftment purposes. 48 accountability The top reasons, as disclosed by customers in the survey, are: Loan usage – African Bank loans (%) 35 30 25 20 15 10 5 0 Debt 2010 mean 2011 mean Housing/home Education improvements Furniture Assist family Vehicle Death/ funeral Small business Other 2012 mean 2013 ytd mean Performance indicators – external customer experience performance ratings External customer benchmark studies are conducted by an independent research company. The benchmark study was conducted in 2012 and tracked through two waves in 2013. The wave three results indicate that, on average, 42% of customers remained committed and loyal to the Bank (2012: 52%). The reduction in customer loyalty can be attributed to increased competitor activity in the unsecured credit market. Combined with improved customer experience and ease of loan application through such competitors, this has had a negative impact on African Bank’s customers’ perceptions. African Bank Investments Limited I Sustainability report I 49 Overall perception of African Bank (weighted on 2012 income brackets) Overall value Emotional affinity to African Bank Mean 2013ABComp 77% Loan 84% 9 & 10 Rating AB Comp 46% 57% (79%:83%) (81%:81%) (46%:57%) (50%:52%) C Card 76%(76%) 81%(78%) 47%(48%) 52%(50%) 86% (89%: 92%) Committed customers – high value and preferred supplier African Bank 42% (47%: 53%) Net promoter score/recommendation African Bank Preferred supplier index (using future intention questions) African Bank 56% (66%: 79%) 71% (74%: 83%) ()indicate 2013 Wave 1: 2012 results. Retail unit Marketing communications In a highly competitive environment, the Retail unit is committed to fair competition principles, ensuring its practices are ethical and adhere to responsible communication of products and the codes of the Advertising Standards Authority (ASA), as well as responding speedily to any issues raised by customers. There were no complaints lodged with the ASA against our brands during this past year. We have also established channels to deal with customer feedback and cooperate with the National Credit Regulator (NCR) and National Consumer Commission (NCC). All marketing communications, advertising, promotions and sponsorships follow strict adherence to a range of laws, standards and codes, in particular the National Credit Act (NCA), ASA, Electronic Communications and Transactions Act (ECT), Direct Marketing Association (DMA) and the Consumer Protection Act (CPA). A range of training programmes have been implemented and these are continuously run for all relevant employees, to ensure a thorough understanding of the implications of the National Credit Act. Customer privacy There has been no legitimate breach of customer privacy or a loss of customer data within the Retail unit. All processes are compliant with South African law and therefore the Information Capital unit is rated as a centre of excellence. 50 G4 PR 6, 7 and 8 accountability Due to the above processes for dealing with marketing compliance issues being in place, the Retail unit has not had any incidents of non-compliance with regulations concerning marketing communications which have resulted in a fine, penalty or warning. Compliance The Consumer Goods Services Ombud (CGSO) has been launched and the Retail unit’s legal representative, who has been an active member of the CGCSA Ombud working group, continues to serve on this group. The legal representatives also represent Ellerine Group in matters arising from the offices of the CGSO through our call centre. Corporate directives are distributed as and when necessary, and there is an escalation process in place to resolve conflicts expeditiously. Employees are aware that they must escalate certain categories of complaints to the call centre, which then escalates them to the relevant brand as well as the legal department. G4 PR 9 African Bank Investments Limited I Sustainability report I 51 Natural capital Our approach ABIL was included in the JSE’s Socially Responsible Investment (SRI) Index 2013 for the tenth consecutive year, and also the Dow Jones Sustainability Index (DJSI) this year. This attests to our commitment as a group to contribute to the development of responsible business practices in South Africa. It is important to note that all the data in the Carbon Disclosure Project (CDP) refers to the 2012 financial year, as the analysis and assurance is done on a retrospective basis. As a good corporate citizen, ABIL complies with the King III recommendations on environmental sustainability. As a group, we have a direct environmental impact due to the use of natural resources within the business operation. ABIL has voluntarily participated in the CDP report for the past three years. Through this voluntary reporting system, we have identified all possible sources of consumption and related greenhouse gas (GHG) emissions and used this information to compile a greenhouse gas inventory that reflects approximately 90% of the group. The measured inventory has allowed us to implement actions to reduce the impact on the environment, monitor and measure progress closely, identify opportunities to reduce consumption and save costs, as well as consider environmental sustainability when making business decisions. Environmental strategy There have been many difficulties along our greening journey, but since 2011, the year of inception, ABIL has: uu Developed a group wide environmental policy with reduction targets; uu Developed a green procurement policy; uu Participated in the CDP for the past three years; uu Established formal environmental committees at board level; uu Integrated environmental sustainability training into the induction programmes; uu Run successful environmental education and awareness campaigns for employees; uu Invested in energy-saving equipment; uu Implemented measures and processes to collect emissions data; and uu Developed a supplier questionnaire for both merchandise and non-merchandise, to determine the green efficiency level of suppliers. This is, however, a journey, and the group is committed to making the necessary changes. Reporting, monitoring and measuring ABIL’s carbon footprint The carbon disclosure programme is a key area of reporting on environmental sustainability and through this channel and others, ABIL publishes environmental sustainability and carbon footprint data. ABIL’s Scope 1, 2 and 3 emissions were verified by the group’s internal audit team, as well as Global Carbon Exchange, an independent third party. ABIL adopts the operational control method when compiling the GHG inventory. 52 accountability ABIL’s carbon footprint Methodology The GHG emissions were prepared in accordance with the GHG protocol. An external expert was consulted where clarity was needed for emission factors that were not available for SA. Inclusions ABIL’s group activities, equipment and operations, as well as employee commuting, business travel, and waste generation for head offices and branches are also included. Exclusions Exclusion 1: All EHL non-SA operations Reason: A number of challenges were encountered in collecting complete and accurate data for SA. Only once ABIL has established reliable data systems in SA, will non-SA branches be included. Relative to ABIL’s total emissions, non-SA emissions are insignificant. Exclusion 2: EHL facilities as follows: uu Roodekop and Cape Town distribution centres uu Roodefurn assembly plant uu 24 cross-docks Reason: Data not available. However, EHL is working on processes to obtain data from the cross-docks and the Roodefurn and Cape Town distribution centres. Operational boundaries The following Scope 1 and Scope 2 emissions were reported on: Scope 1 uu Company-owned vehicles uu Stationary equipment (generators) uu Refrigerants (Kyoto gases) Scope 2 uu Purchased electricity The following Scope 3 and other direct emissions sources were also included: Scope 3 uu Business travel (flights, car hire, reimbursed employee travel and shuttle services) uu Third-party transport and distribution (courier deliveries only) uu Employee commuting uu Waste generated in operations Other uu Refrigerants (non-Kyoto gases) It should be noted that ABIL’s FY12 GHG emissions were reported in conformance with the GHG Protocol Corporate Standard only (i.e. not the GHG Protocol Corporate Standard and the GHG Protocol Scope 3 Standard). Reporting on Scope 3 emissions is optional and the company may report any Scope 3 emissions it chooses. African Bank Investments Limited I Sustainability report I 53 The carbon footprint for the reported period 1 October 2011 to 30 September 2012 (2012 financial year) was 119 323 metric tonnes of carbon dioxide equivalent (CO2e). Emissions are broken down as follows: ABIL carbon emissions (tonnes) 98 782 100 000 0 Scope 1 Scope 2 14 346 13 938 13 152 20 000 39 044 61 303 24 345 20 468 24 328 60 000 73 450 80 632 80 000 40 000 119 323 120 000 Scope 3 Total 2010 2011 2012 Statement of GHG emissions for the financial years ended 30 September 2010, 2011 and 2012 Scope per GHG protocol Tonnes CO2e FY 2010 Group FY 2011 Group FY 2012 Group Scope 1: Direct GHG emissions Refrigerants central office and branches Stationary fuels (generators)1 Mobile fuels (company-owned vehicles)2 Scope 2: Indirect GHG emissions3 Scope 3: Other indirect emissions from: Employee commuting Waste in central office operations Employee vehicles reimbursed Business flights Car rental Transportation and distribution metric metric metric metric metric metric metric metric metric metric metric metric 24 328 5 095 6 19 228 61 303 13 152 10094 – 678 579 30 1771 20468 2535 40 17892 39 044 13 938 10 656 379 604 485 54 1 760 24 345 768 108 23469 80 632 14 346 11 467 1 345 907 435 50 142 Total CO2 emissions metric 98 782 73 450 119 323 The above graph illustrates the carbon emissions calculated for the group for the 2010, 2011 and 2012 financial years. 1 Conversion to Gigajoules for diesel 1 768. Conversion to Gigajoules for petrol 292 470; conversion to Gigajoules for diesel 100 736. 3 Conversion to kilowatt hours 81 446 651. 2 54 accountability The CDP 2013 report submission, which is based on the 2012 financial year data, has proved to be the most complete and accurate of the entire three years of data collection, due to many contributing factors: uu An increase in data integrity; uu An expansion in the report boundary and scope; uu Limited use of projections and estimations; and uu Improved carbon footprint methodologies. A technical error was made in the 2012 CDP submission regarding the Scope 2 emissions. As we are committed to transparent and responsible reporting, this error is disclosed in this year’s report. The carbon emissions data for the financial years 2010 and 2011 was re-baselined according to trading area to allow for a like-for-like comparison. The re-baselined figures have not been reported this year, as advised by experts in the field, as it is a stringent process to employ. However, ABIL will consider restating its baseline, as data integrity has improved in the three-year period of our environmental sustainability journey. Weaknesses and shortfalls ABIL believes that the important lessons are learnt from the obstacles faced as the group continues on this greening journey. The CDP report is the main reporting channel for the group and all other reports flow from this. The 2013 CDP submission was ABIL’s third to the National Business Initiative’s (NBI) Carbon Disclosure Project (CDP). When the previous two years’ CDP data was reviewed, it became evident that the projections and estimations used were not a true reflection of the business, due to a lack of data. During the CDP process, gathering accurate and complete data has proven to be a mammoth task in itself. However, as we progress on this journey of accurate reporting and disclosure, ABIL is making great strides in improving its data accuracy and completeness and will continue to do so by implementing the recommendations made by Global Carbon Exchange (GCX) after the last CDP audit and verification. Compared to the previous two reporting years, this year has been the most difficult and challenging because, as each year passes, we become more aware of the intricacies of the group’s business operations. In the 2013 CDP submission, ABIL has extended its reporting boundaries and aims to include all its operations, even if they are considered insignificant, so that a true reflection of the business can be achieved. The Banking unit uncovered numerous billing errors, which have limited its ability to report accurately on the consumption of water and electricity. Electricity meters have now been installed at the Midrand central office and linked to the building management system for accurate recording and reporting. During various investigations, we discovered that there is no municipal water meter linked to one of the pipes that feeds one of the buildings. The local municipality has been notified and the Banking unit is in the process of applying for a water meter. This should enable us to record water consumption more accurately. Procedures and processes have been set up to collect accurate data on a regular basis from various departments and third parties. It is difficult to obtain accurate data from third-party suppliers, as some suppliers do not record the required type of data. Water and electricity billing in leased properties still continues to be problematic. However, the Retail and Banking units have implemented actions that will aid the group in obtaining accurate data from the branch network. ABIL is cognisant of the fact that we are still on a learning curve. As we progress on the journey, we will continue to build a strong foundation and processes to ensure all environmental initiatives are sustainable. African Bank Investments Limited I Sustainability report I 55 Energy Energy has been a key focus area for ABIL, not least because of rising costs, the proposed carbon tax, and energy being the biggest area of emissions. The Banking unit has installed a new energy-efficient heating ventilation air-conditioning (HVAC) system at the Midrand central office, replacing the old chilled water air-conditioning system that was a high power user. The system is able to modulate the flow of refrigerant, depending upon the capacity requirements of the building, and produce the right amount of output to match the exact requirement of any building. This results in greatly reduced running costs. The new system also uses R410A refrigerant, a safe, chlorine-free refrigerant with zero ozone depletion potential (ODP). Accordingly, this system requires less energy to run and has significantly lower indirect global warming potential. The building management system (BMS) has been fully commissioned and allows for better monitoring and measuring of energy consumption at the Midrand central office. Apart from the benefits of the BMS in terms of light control, switching geysers off during peak times and managing the HVAC system, it allows us to set certain thresholds so that we do not exceed the maximum demand. Going beyond green A second EHL distribution facility in Port Elizabeth, constructed by Growthpoint Properties, has won the Sapoa innovative excellence award in industrial property development. Architectural features range from thermally insulated roofing and wall cladding, natural ventilation and lighting levels, to energy-saving devices, recycled materials utilised in the building, minimal use of PVC materials and green-friendly siteworks and landscaping. Water ABIL is a relatively low-level water user, consuming approximately 27 860 kilolitres on both central office campuses during the 2012/2013 financial year. This, however, is not necessarily an accurate account of ABIL’s water consumption due to water billing issues at the Banking unit’s central office. This is the first year the Banking unit has reported on its branches’ water consumption. Despite relatively low consumption, it is striving towards a more complete report in relation to environmental metrics. The branches within the Banking unit network consumed 12 621 kilolitres of water during the 2012/2013 financial year. It must be noted that this is not a comprehensive consumption value due to billing issues from the municipalities and landlords, who either do not provide water consumption rates or only provide estimated values. This poses a real obstacle for ABIL in terms of accurate and complete reporting. A significant investment is required to install water meters in the branch networks and, due to ABIL being a low-level water user, this will be considered as a future project. The Retail unit’s central office uses 24 000 kilolitres of municipal water per annum and 16 056 kilolitres of grey water for ablutions, thus realising a consumption saving of 23% of total municipal water needs per annum. These statistics are based on municipal water bills received, as well as metering of grey water that consists of seepage water on the campus that is being harnessed and deployed to serve ablutions. In the venture to achieve true sustainability, water coolers have been installed in most boardrooms to avoid the need for bottled water. ABIL is committed to ensuring that bottled water is phased out at most corporate events, training workshops and board meetings. Information technology (IT) ABIL continues to improve its efficiencies within the information technology space in term of systems and infrastructure. During the 2013 financial year, 489 energy-expensive monitors were replaced with 305 LED 56 accountability and 184 LCD monitors. This equated to a total saving of 85 425 kilowatt hours, based on a running time of eight hours per day, saving 20 tonnes of CO2e emissions. ABIL has sent a total of 770 printer cartridges back to Green Office for remanufacture and reuse, which has contributed to the following environmental benefits: uu 722,9 kilograms of plastic will be reused and be diverted from landfill space; uu 780 kilograms of recyclable metals have been sent for reuse or recycling and have been diverted from entering landfill; uu Recycled 146 printer cartridges; and uu 9 785 green remanufactured cartridges purchased with secondary environmental benefits such as energy savings, preventing 28 tonnes of carbon emissions and the use of oil. Paper ABIL only purchases paper that is approved by the Forest Stewardship Council (FSC) to ensure that this resource comes from a sustainable source. During the 2012/2013 financial year, the Banking unit used a total of 16 384 boxes of paper. We have also focused on reducing consumption. However, this campaign needs to be revisited with more vigour and proper monitoring, and measurement actions will need to be implemented. Waste and recycling The Banking and Retail units recycle all general waste at the central office campuses. The Banking unit uses separate confidential paper shredding, which is then recycled. Over the 2012/2013 financial year, ABIL collectively recycled 38 093 kilograms of general waste made up of cans, cartons, plastic, Tetra Pak®, newspaper and magazines. ABIL’s general waste recycling efforts have avoided the generation of 49 tonnes of CO2e emissions. The Banking unit also recycled a total of 44 954 kilograms of shredded paper. The Retail unit continues to recognise the importance of suppliers in its overall business strategy and operations. As part of the formal interaction with suppliers, it has engaged regarding packaging to improve sustainability of the supply chain. Not only is packaging always important to ensure that the product is adequately protected, but increased focus has been placed on investigating opportunities for reuse or recycling. The Retail unit has engaged with CHEP, a global provider of reusable packaging, and has received input from a number of suppliers in an effort to develop appropriate, reusable packaging solutions. While the Retail unit is some way from a final solution, they are in the process of finalising the business case and pilot products that can be used on a trial basis. They have also engaged with a reputable waste management company to identify opportunities to recycle the current packaging, which would include reclaiming packaging at the time of delivery, as well as reclaiming old merchandise, such as white goods and bedding. Once again, the business case is almost completed, after which pilot exercises will be conducted in defined distribution centres and cross-dock networks. Greening the supply chain Non-merchandise ABIL has developed a green procurement policy (GPP). The first phase of implementation was to determine the green efficiency levels of ABIL suppliers. However, during the implementation of the GPP, which is an addendum to the group procurement policy, we realised that a single, integrated procurement policy should be the way forward. This once again points to the fact that incorporating sustainability aspects, including environmental issues, is a journey and we learn as we move forward. The policy will still endeavour to ensure African Bank Investments Limited I Sustainability report I 57 that ABIL procures goods and services in a manner that allows the organisation to make choices where material costs are a key consideration, yet where the true costs, including environmental and social costs, are taken into account. The Retail unit has included a section that deals with environmental matters in its standard supplier accreditation documentation for new suppliers and providers. The information provided forms part of the adjudication exercise for listing on the Ellerines supplier database. During the year under review, 11 new suppliers were accredited and listed on the Ellerines supplier database. Merchandise During the year, the Retail unit identified suppliers and a waste company who have committed to a case study at one of the distribution centres, plus an associated cross-dock, in order to identify areas for improvement and the necessary interventions. This will initially focus on waste management at distribution centre level and will then extend to a potentially commercially viable solution for the reverse logistics of packaging from customers and branches. This could possibly extend to servicing customers with respect to end-of-life issues, e.g. old refrigerators for environmentally safe disposal. As part of the overriding focus on improving supplier relationships, we are placing a greater deal of focus on sustainability issues. As such, in the spirit of collaboration, we are not only developing scorecards with suppliers, but also giving suppliers the proactive opportunity to engage with appropriate industry bodies to ensure that sustainability issues are considered in all aspects of the supplier’s value chain. Employee education and awareness campaigns In 2013, ABIL held its annual Earth Hour campaign under the theme “Wear it bright, turn off the lights”, and engaged and educated employees about the importance of saving energy. The branches created an Earth Hour display which served as a talking point for customers and spread the message. The Banking unit included a message on Earth Hour on electronic statements to create awareness among customers. At the Banking unit’s central office’s Earth Hour, 129 kilowatt hours were saved, which equates to saving 121 kilograms of carbon emissions, by switching off the lights and non-essential electrical equipment. ABIL understands that all environmental initiatives need to be sustainable and go beyond employees. Therefore, volunteers from the Banking unit’s collections department and the ABIL sustainability team went out to Phumolong Secondary School to celebrate Arbor Day with the students. The significance of Arbor Day was shared, pledges were made and seedlings were planted on the school grounds. The Retail unit used an internal magazine to educate and create awareness among employees about environmental issues and, with help from Eskom, has published inserts on energy-saving actions that can help employees save energy and money. Earlier this financial year, the collections call centre at the Banking African Bankers at Phumolong Secondary School on Arbor Day unit’s central office held a recycling competition, where consultants were asked to participate by designing an outfit made out of recycled material, such as old newspapers, plastics, bottle caps, cardboard, etc. The entries were creative, wonderful and well planned. This competition was run in conjunction with making people more aware of the greening of ABIL project, and how climate change affects everyone. 58 accountability Green collaboration ABIL recognises the need for collaboration between various partners on the environmental transformation journey. Green collaboration opens doors for knowledge sharing and future greening projects, and it serves as a platform to secure the environmental safety of the planet. ABIL partnered with Plastics SA, Coca-Cola, the National Recycling Forum and PETCO for National Clean-up week and embarked on a clean-up campaign of a portion of the Jukskei River, Buccleuch on 18 September 2013. The Banking unit also partnered with Eskom to help educate employees about reducing their energy usage during peak periods in their homes. Energy-efficient hot-water bottles were distributed by Eskom at our central office and the regions. National Clean-up Campaign This campaign was very successful in creating awareness about South Africa’s current energy situation and reducing usage. These collaborative efforts foster good relationships that will aid in building a sustainable future. Biodiversity South Africa has the third highest level of biodiversity in the world but, due to the effects of climate change, biodiversity is dwindling. ABIL’s business operations do not have a major impact on biodiversity, but we ensure that the central office gardens and distribution centres are landscaped with indigenous plants to suit the natural habitat and contribute to the ecosystem. Going forward As ABIL progresses on the greening journey, we have realised that environmental issues are just the starting point. Sustainability is all-encompassing and all issues need to be incorporated and looked at holistically. Through the 2014 financial year, ABIL will look at engaging on a more significant level with suppliers, landlords, municipalities and employees to really start entrenching an environmental culture within the company. Future key focus areas will include: uu Continuous improvement in terms of data accuracy; uu Measuring and monitoring against objectives and targets and driving down emissions with a focus on electricity; uu Re-education: employee awareness and training; and uu Working with stakeholders and building solid relationships. Reducing our environmental impact is an evolving project that we are committed to, even though it is marked by numerous obstacles. Through collaborative leadership, support from stakeholders and a clear action plan, ABIL can achieve the goals we have set. African Bank Investments Limited I Sustainability report I 59 Independent third-party assurance statement To the board and stakeholders of African Bank Investments Limited (ABIL): Integrated Reporting & Assurance Services (IRAS) was commissioned by ABIL to provide independent third-party assurance (ITPA) over both the sustainability report and the sustainability content within the 2013 integrated annual report (hereafter, both documents being referred to as the report), covering the period 1 October 2012 to 30 September 2013. The assurance team consisted of Michael H Rea, our Lead Certified Sustainability Assurance Practitioner, with more than 14 years’ experience in environmental and social performance measurement, including sustainability reporting and assurance, and our team of junior associates. AccountAbility AA1000AS (revised, 2008) To the best of our ability and significant experience in sustainability report assurance, this engagement has been managed in accordance with AccountAbility’s AA1000AS (2008) assurance standard, where the format of the engagement was structured to meet the AA1000AS Type I (moderate) requirements. Independence IRAS has not been responsible for the preparation of any part of the report, nor undertaken any commissions for ABIL that would conflict with our independence. Responsibility for producing this report lay solely with ABIL and its report authorship consultants. Thus IRAS is, and remains, an independent assurer over the content and processes pertaining to this Report. Assurance objectives The objectives of the assurance process were to provide ABIL’s stakeholders an independent ‘moderate-level assurance’ opinion on whether: uu The sustainability content within the report adheres to the AA1000AS (2008) principles of inclusivity, materiality and responsiveness; uu The sustainability content within the report meets the core reporting requirements of Global Reporting Initiative (GRI) G4 guidelines; and uu The sustainability content within the report meets reasonable local and international reporting expectations for transparency and accountability, inclusive of the presence of key sustainability data points (i.e. quantitative performance data). Assurance approach and limitations The process used in arriving at this assurance statement is based on AccountAbility’s AA1000AS (2008) guidance, the GRI’s G3 Application Level requirements, as well as other best practices in sustainability reporting assurance. Our approach to assurance included the following: uu A review of sustainability measurement and reporting procedures at ABIL’s head offices to determine the context and content of sustainability management by the company; uu A review of ABIL’s information collation and reporting procedures to define the content of the report by looking at the materiality of issues included in the report, stakeholder engagement responses to issues identified, determination of sustainability context and coverage of material issues, ultimately leading to adherence to the AA1000AS principles of inclusivity, materiality and responsiveness; uu Reviews of drafts of the report for any significant errors, anomalies and/or insupportable assertions; uu Reviews of drafts of the report to confirm that the GRI’s G4 core reporting expectations have been met; and uu Reviews of drafts of the report to test for reasonable disclosure of key sustainability data, as assessed against IRAS’s Sustainability Data Transparency Index (SDTI). 60 accountability The process was limited to the content and assertions made within the report for the period under review, and did not extend to a comprehensive analysis of the accuracy, reliability, completeness and/or consistency of the data presented by ABIL. Rather, sustainability data presented within the report was subjected to reasonability tests during draft reviews. The process was further limited to reviewing policies and procedures for ethics, governance and stakeholder engagements, and did not extend to the physical engagement of any stakeholders to arrive at our assurance opinion. Findings Based on our review of the report, as well as the processes employed to collect and collate information reported herein, it is our assertion that: uu ABIL adequately adheres to the Accountability AA1000APS principles of inclusivity, materiality and responsiveness. uu The report, inclusive of the approach to identifying the material issues to be reported on, and thus the identification of the GRI material aspects and indicators to be included, reasonably meets the GRI G4’s reporting requirements. However, room for improvement continues to exist within the way in which certain performance data is collected, collated and reported – as identified within the report as continuous improvement self-assessment disclosures – particularly for certain health & safety, environmental and human capital indicators. Moreover, it should be noted that while the disclosures on management approach meet minimum reasonable reporting expectations, additional attention ought to be paid to improving the quality of information for these indicators. uu Although scoring relatively highly against IRAS’s SDTI expectations – for the second year in a row, more improvements can yet be made with respect to the collection, collation and reporting of data for key sustainability performance indicators that have not yet been included within either the sustainability or integrated annual reports. Conclusions and recommendations Based on the information reviewed via desk research and management interviews, IRAS is confident that this report provides a comprehensive and balanced account of ABIL’s social and environmental performance for the period under review. The information presented is based on systematic processes and we are satisfied that the reported sustainability data reasonably represents ABIL’s ability to manage and/or report on its performance, while meeting the AA1000AS (2008) principles of inclusivity, materiality and responsiveness. Moreover, and although the quality of some responses can yet be improved, this report reasonably meets the GRI G4 core level reporting requirements. However, the following recommendations have been identified: uu Given that the Report is for ABIL as a group (i.e. inclusive of the Banking and Retail divisions), all data should be consolidated and reported as a group. While the presence of segmental reporting makes sense when comparing the business units against Banking and Retail peers, this should not come at the expense of ensuring that sustainability data is presented in the same manner as the annual financial statements, as the group. uu With respect to adherence to AccountAbility’s AA1000APS principle of responsiveness, ABIL should continue to ensure that feedback to stakeholders on sustainability matters occurs in line with King III’s recommendations for integrated reporting. African Bank Investments Limited I Sustainability report I 61 uu ABIL should improve the extent to which explanations are offered, relative to how the company manages key sustainability elements, as per the GRI’s guidance around indicator-specific disclosures on management approach. ABIL should ensure that clear explanations are offered with respect to what is measured, how often, via what measurement technique(s), and to who results are reported for control purposes. uu Having successfully addressed the requirements of GRI G4 core level of reporting, it is our recommendation that ABIL continue to seek process improvement towards the ultimate goal of meeting the GRI’s comprehensive level requirements. For more information about the assurance process employed to assess the sustainability information contained within ABIL’s 2013 integrated annual report and integrated annual report, email [email protected]. Integrated Reporting & Assurance Services 16 December 2013 Johannesburg 62 accountability Independent Verification Statement INDEPENDENT VERIFICATION STATEMENT To the Board of Directors and Management of African Bank Investments ToLimited the board of directors and management of African Bank Investments Limited Introduction African Bank Investments Limited (hereafter referred to as ABIL) operates through two primary businesses, Introduction African Bank (AB) and Ellerine Holdings Ltd. (EHL). ABIL commissioned Global Carbon Exchange (GCX) to African Investments Limitedverification (hereafterof referred to as ABIL) through two primary perform anBank independent, limited-level its greenhouse gas operates (GHG) emissions inventory as businesses, African Bank (AB) and Ellerine Holdings Ltd. (EHL). ABIL commissioned Global calculated in-house for the period 1 October 2011 to 30 September 2012 (FY12). The verification was Carbon Exchange (“GCX”) to perform an independent, limited-level verification of its performed in accordance withemissions the International Standard ISO14064-3 (2006) Greenhouse Gas (GHG) inventory as calculated in-house forSpecification the period 1with October guidance validation2012 and verification greenhousewas gas performed assertions. in accordance with the 2011 tofor 30the September (FY12). Theofverification International Standard ISO14064-3 (2006) ‘Specification with guidance for the validation and Objectives, performance criteria and scope verification of greenhouse gas assertions’. For the purposes of public disclosure through the Carbon Disclosure Project (CDP), the GHG assertions verified were the following: Objectives, Performance Criteria and Scope uu That ABIL’s FY12 GHG inventory was developed in accordance with common industry practice and For the purposes of public disclosure through the Carbon Disclosure Project (CDP), 2004 the GHG conforms to the WRI-WBCSD GHG Protocol Corporate Accounting Standard, 2nd Edition, (GHG assertions verified were the following: Protocol). • the That ABIL’s GHG Inventory wasindeveloped in accordance with common industry uu That ABIL GHG FY12 quantification presented the spreadsheet “ABIL Carbonfootprint_2012FY practice and conforms to the WRI-WBCSD Protocol Corporate Accounting 21 May_VERIFIED.xlsx” for the FY12 reporting period,GHG consolidated according to the operational 2nd Edition, 2004 (GHG Protocol). control Standard, approach, was 119 323 tonnes CO2e, broken down as follows: • That ABILtonnes GHG quantification presented in the spreadsheet “ABIL uu Scope 1: the 23 709 CO2e Carbonfootprint_2012FY uu Scope 2: 80 632 tonnes CO2e 21 May_VERIFIED.xlsx” for the FY12 reporting period, consolidated according uu Scope 3: 14 346 tonnes CO e to the operational control approach, was 119,323 tonnes CO2e, broken down as2 follows: uu Other direct: 636 tonnes CO2e 1 Scope 1: included 23,709 tonnes CO2e of: the reporting approach and boundaries selected; The scope of the verification an assessment Scope 2: 80,632 2e the quantification methodology and tonnes emissionCO factors used; the integrity of the activity data used; the Scope 3:of14,346 tonnes CO2e and overall GHG reporting to ensure conformance accuracy and completeness the GHG calculations; Other direct: CO2e 1 with the principles/criteria of the 636 GHGtonnes Protocol. Exclusions The scope EHL of the verification included assessment of: the reporting approach The following entities/facilities fall underan ABIL’s operational control but were excluded and from the FY12 boundaries selected; the quantification methodology and emission factors used; the integrity disclosure due to data availability: of the activity data used; the accuracy and completeness of the GHG calculations; overall reporting to ensure conformance with the principles/criteria of the GHG Protocol. uuGHG All non-SA operations uu Roodekop and Cape Town Distribution Centres (DCs) uu Roodefurn Assembly Plant Exclusions uu 24 Cross-docks The following EHL entities/facilities fall under ABIL’s operational control but were excluded from the FY12 disclosure due to data availability: • • • • All non-SA operations Roodekop and Cape Town Distribution Centres (DCs) Roodefurn Assembly Plant 24 Cross-docks 1 The GHG Protocol states that emissions from non-Kyoto listed refrigerant gases should be reported separately from the scopes. (Reported herethat as “other direct” For consistency withshould base year reporting, these emissions 1 The GHG Protocol states emissions from emissions). non-Kyoto listed refrigerant gases be reported separately from should be reported with scope 1 direct emissions. the scopes. (Reported here as “Other direct” emissions). For consistency with base year reporting, these emissions should be reported with scope 1 direct emissions. Global Carbon Exchange SA (Pty) Ltd I Co Reg. 2012/144204/07 I PO Box 30944 Tokai 7966 [e] [email protected] [w] www.globalcarbonexchange.com [t] +27 21 702 4058 [f] +27 21 702 4373 African Bank Investments Limited I Sustainability report I 63 Independent IndependentVerification VerificationStatement Statement ToTo the the Board Board ofof Directors Directors and and Management Management ofof African African Bank Bank Investments Investments Activity data for the following emissions sources was excluded or incomplete due to data availability: Limited Limited Scope 1 and other direct: Introduction u uIntroduction Refrigerant gas refills for all EHL DCs African African Bank Investments Investments Limited Limited (hereafter (hereafter referred referred toto asas ABIL) ABIL) operates operates through through two two primary primary Scope 3:Bank businesses, African African Bank Bank (AB) (AB) and and Ellerine Ellerine Holdings Holdings Ltd. (EHL). (EHL). ABIL ABIL commissioned commissioned Global Global u ubusinesses, EHL-contracted transport and distribution for the DCsLtd. Carbon Carbon Exchange Exchange (“GCX”) (“GCX”) toto perform perform anan independent, independent, limited-level limited-level verification verification of of its its uu Waste generated in operations for all AB and EHL branches and EHL DCs Greenhouse Greenhouse Gas Gas (GHG) (GHG) emissions emissions inventory inventory asas calculated calculated in-house in-house forfor the the period period 1 October 1 October u u2011 Employee commuting for all EHL DCThe employees 2011 toto 3030 September September 2012 2012 (FY12). (FY12). The verification verification was was performed performed in in accordance accordance with with the the International International Standard Standard ISO14064-3 ISO14064-3 (2006) (2006) ‘Specification ‘Specification with guidance guidance for the the validation validation and and The above exclusions should be disclosed when respondingwith to question 8.4forof the CDP questionnaire. verification verification of of greenhouse greenhouse gas gas assertions’. assertions’. ABIL’s responsibility ABIL was responsible for the preparation and presentation of the selected subject matter/data to GCX Objectives, Objectives, Performance Performance Criteria Criteria and and Scope Scope (as detailed in the verification report). ForFor the the purposes purposes of of public public disclosure disclosure through through the the Carbon Carbon Disclosure Disclosure Project Project (CDP), (CDP), the the GHG GHG Responsibility of the independent verification provider (GCX) assertions assertions verified verified were were the the following: following: The verification task was to form an opinion at a limited level of assurance about the above GHG assertions, • • That That ABIL’s ABIL’s FY12 FY12 GHG GHG Inventory Inventory was was developed developed in in accordance accordance with with common common industry industry regarding: practice practice and and conforms conforms toto the the WRI-WBCSD WRI-WBCSD GHG GHG Protocol Protocol Corporate Corporate Accounting Accounting Edition, Edition, 2004 2004 (GHG (GHG Protocol). Protocol). Standard, Standard, 2 2the uu Conformance with general requirements of the GHG Protocol. uu Completeness and accuracy of the quantified GHG emissions for the FY12“ABIL reporting • • That That the the ABIL ABIL GHG GHG quantification quantification presented presented in in the the spreadsheet spreadsheet “ABIL period. nd nd Carbonfootprint_2012FY Carbonfootprint_2012FY 2121 May_VERIFIED.xlsx” May_VERIFIED.xlsx” forfor the the FY12 FY12 reporting reporting period, period, Work performed consolidated consolidated according according toto the the operational operational control control approach, approach, was was 119,323 119,323 tonnes tonnes The verification performed by GCX applied broken broken down down asas follows: follows:the ISO14064-3 (2006) International Standard for GHG CO CO 2e,2e, verifications. In conformance with this standard, the following verification activities were conducted: Scope Scope 1: 1:23,709 23,709 tonnes tonnes CO CO 2e 2e 1. Preliminary review of ABIL’s GHG documentation and methodologies, including historical GHG data. Scope Scope 2: 2:80,632 80,632 tonnes tonnes CO CO 2e 2e 2. Overall risk assessment to identify high-risk areas for further scrutiny. In these areas, Scope Scope 3: 3:14,346 14,346 tonnes tonnes CO CO 2e 2e clarification or a sample of source/corroborating data was requested. Other Other direct: direct: 636 636 tonnes tonnes CO CO 2e21e 1 3. Investigation to ensure the inclusivity of all relevant facilities in the organisational boundary. 4. Discussion with ABIL personnel and service providers regarding systems and procedures, review of The The scope scope of of the the verification verification included anan assessment assessment of:of: the the reporting reporting approach approach and and relevant documentation, andincluded clarification requests where necessary. boundaries boundaries selected; the the quantification quantification methodology methodology and and emission emission factors factors used; used; the the integrity integrity 5. In-depth selected; assessment of GHG documentation and methodologies, as well as analysis of selected of of the the activity activity data data used; used; the the accuracy accuracy and and completeness completeness of of the the GHG GHG calculations; calculations; overall overall source data. This included checking: GHG GHG reporting reporting toto ensure ensure conformance conformance with with the the principles/criteria principles/criteria of of the the GHG GHG Protocol. Protocol. uu Completeness, accuracy, relevance, consistency and transparency of the selected activity data used for the quantification; uu Accuracy of arithmetical calculations for the selected data; The The following EHL EHL entities/facilities entities/facilities fallfall under under ABIL’s ABIL’s operational operational control control but but were were excluded ufollowing u Methodology and any assumptions, estimation or extrapolation used pertaining toexcluded the selected from from the the FY12 FY12 disclosure disclosure due due toto data data availability: availability: data; and u• u •Reliability andoperations appropriateness of emission factors applied to the selected data. AllAll non-SA non-SA operations Exclusions Exclusions • • Roodekop Roodekop and and Cape Cape Town Town Distribution Distribution Centres Centres (DCs) (DCs) • • Roodefurn Roodefurn Assembly Assembly Plant Plant • • 2424 Cross-docks Cross-docks 1 The 1 The GHG GHG Protocol Protocol states states that that emissions emissions from from non-Kyoto non-Kyoto listed listed refrigerant refrigerant gases gases should should bebe reported reported separately separately from from thethe scopes. scopes. (Reported (Reported here here as as “Other “Other direct” direct” emissions). emissions). ForFor consistency consistency with with base base year year reporting, reporting, these these emissions emissions should should bebe reported reported with with scope scope 1 direct 1 direct emissions. emissions. Global Global Carbon Carbon Exchange Exchange SASA (Pty) (Pty) LtdLtd I Co I Co Reg. Reg. 2012/144204/07 2012/144204/07 I PO I PO BoxBox 30944 30944 Tokai Tokai 7966 7966 [e] [e] [email protected] [email protected] [w][w] www.globalcarbonexchange.com www.globalcarbonexchange.com [t] +27 4058 [f] +27 4373 [t] +27 21 21 702702 4058 [f] +27 21 21 702702 4373 64 accountability Independent IndependentVerification VerificationStatement Statement ToTo the the Board Board ofof Directors Directors and and Management Management ofof African African Bank Bank Investments Investments 6. Review of the consistency between the selected sample data and the related activity data used for the Limited Limited GHG quantification, using a materiality threshold of 5% for each scope. 7. Revision of the GHG quantification by ABIL, incorporating the amendments and corrective actions Introduction Introduction requested by GCX. African African Bank Investments Limited (hereafter (hereafter referred as as ABIL) ABIL) operates operates through through two two primary primary 8. Final Bank check ofInvestments the revisedLimited GHG quantification byreferred GCX. to to businesses, businesses, African African Bank (AB) (AB) and and Ellerine Ellerine Holdings Ltd. (EHL). (EHL). ABIL ABIL commissioned commissioned Global Global 9. Completion of theBank verification process andHoldings issuing ofLtd. the verification statement by GCX. Carbon Carbon Exchange Exchange (“GCX”) (“GCX”) to findings to perform perform anan independent, independent, limited-level verification verification of of its its 10.The verification proceedings, and opportunities forlimited-level improvement were then documented by Greenhouse Greenhouse Gas Gas (GHG) (GHG) emissions emissions inventory inventory as as calculated calculated in-house in-house forfor thethe period period 1 October 1 October GCX in a final verification report. 2011 2011 to to 3030 September September 2012 2012 (FY12). (FY12). The The verification verification was was performed performed in accordance in accordance with with thethe International International Standard Standard ISO14064-3 ISO14064-3 (2006) (2006) ‘Specification ‘Specification with with guidance guidance forfor thethe validation validation and and Carbon Disclosure Project verification verification of of greenhouse gas gas assertions’. assertions’. For the purposes ofgreenhouse CDP reporting, and in accordance with the limited assurance guidelines of the ISO 14064-3(2006) standard, the following was concluded: Objectives, Objectives, Performance Performance Criteria Criteria and and Scope Scope Scope 1: ForFor the the purposes purposes of of public public disclosure disclosure through through the Carbon Carbon Disclosure Project Project (CDP), (CDP), the GHG GCX is satisfied that therethe are noGHG Total Scope 1 emissions reported for FY12: 23 709the tonnes CO2e.Disclosure assertions assertions verified verified were were thethe following: following: material discrepancies in the revised activity data. • That That ABIL’s ABIL’s FY12 FY12 GHG GHG Inventory Inventory was was developed developed in accordance in accordance with with common common industry industry CDP •8.5: Data accuracy: 10-20% Uncertainty range (assumptions and data management) practice practice and and conforms to to thethe WRI-WBCSD WRI-WBCSD GHG GHG Protocol Protocol Corporate Corporate Accounting Accounting CDP 8.6a: Proportion ofconforms Scope 1 emissions verified: 90-100% Edition, Edition, 2004 2004 (GHG (GHG Protocol). Protocol). Standard, Standard, 2nd2nd Scope 2 • • That That thethe ABIL ABIL GHG GHG quantification quantification presented presented in the in the spreadsheet spreadsheet “ABIL “ABIL e. GCX is satisfied that there are no Total Scope 2 emissions reported for21FY12: 80 632 tonnes CO Carbonfootprint_2012FY Carbonfootprint_2012FY 21 May_VERIFIED.xlsx” May_VERIFIED.xlsx” for2for thethe FY12 FY12 reporting reporting period, period, material consolidated discrepancies in the revised activity data. consolidated according according to to thethe operational operational control control approach, approach, was was 119,323 119,323 tonnes tonnes CDP 8.5:CO Data 5-10% e, broken broken down down asUncertainty as follows: follows: range (sampling and extrapolation) CO 2e,2Accuracy: CDP 8.7a: Proportion of Scope 2 emissions verified: 90-100% Scope Scope 1: 1: 23,709 23,709 tonnes tonnes CO CO 2e 2e Scope 3 Scope Scope 2: 2: 80,632 80,632 tonnes tonnes CO CO 2e 2e Total Scope 3 emissions reported for FY12: 14CO 346 tonnes CO2e. GCX is satisfied that there are no Scope Scope 3: 3: 14,346 14,346 tonnes tonnes CO 2e 2e material discrepancies in the revised activity data. Other Other direct: direct: 636 636 tonnes tonnes CO CO 2e 21e 1 CDP 14.2a: Proportion of Scope 3 emissions verified: 90-100% Other direct The The scope scope of of thethe verification verification included included anan assessment assessment of:of: thethe reporting reporting approach approach and and e. emission GCX is satisfied that there are no Total other direct emissions reported for FY12: 636 tonnes CO boundaries boundaries selected; selected; thethe quantification quantification methodology methodology and emission factors factors used; used; thethe integrity integrity 2and of of thethe activity activity data data used; the accuracy accuracy and and completeness completeness of of thethe GHG GHG calculations; calculations; overall overall material discrepancies inused; thethe data checked. GHG GHG reporting reporting to to ensure ensure conformance conformance with with thethe principles/criteria principles/criteria of of thethe GHG GHG Protocol. Protocol. Note: other direct emissions, like Scope 1 emissions, are direct emissions that occur on-site and can therefore be reported under the Scope 1 section of the online submission, as was done for the FY10 base year. Exclusions Exclusions The The following following EHL EHL entities/facilities entities/facilities fallfall under under ABIL’s ABIL’s operational operational control control but but were were excluded excluded from from thethe FY12 FY12 disclosure disclosure due due to to data data availability: availability: • • • • • AllAll non-SA non-SA operations operations • Roodekop Roodekop and and Cape Cape Town Town Distribution Distribution Centres Centres (DCs) (DCs) • Roodefurn Roodefurn Assembly Assembly Plant Plant • 2424 Cross-docks Cross-docks 1 The 1 The GHG GHG Protocol Protocol states states that that emissions emissions from from non-Kyoto non-Kyoto listed listed refrigerant refrigerant gases gases should should be be reported reported separately separately from from thethe scopes. scopes. (Reported (Reported here here as “Other as “Other direct” direct” emissions). emissions). ForFor consistency consistency with with base base year year reporting, reporting, these these emissions emissions should should be be reported reported with with scope scope 1 direct 1 direct emissions. emissions. Global Global Carbon Carbon Exchange Exchange SA SA (Pty) (Pty) LtdLtd I CoI Co Reg. Reg. 2012/144204/07 2012/144204/07 I PO I PO BoxBox 30944 30944 Tokai Tokai 7966 7966 [e] [e] [email protected] [email protected] [w] [w] www.globalcarbonexchange.com www.globalcarbonexchange.com [t] +27 4058 [f] +27 4373 [t] +27 21 21 702702 4058 [f] +27 21 21 702702 4373 African Bank Investments Limited I Sustainability report I 65 Independent Verification Statement To the Board of Directors and Management of African Bank Investments Inherent Limited limitations There is an inherent limitation in providing verification of GHG data. Non-financial data is subject to more inherent limitations than financial data, given both the nature and the methods used to determine, Introduction calculate, sample or estimate such data. African Bank Investments Limited (hereafter referred to as ABIL) operates through two primary This assurance engagement did and not include examination of theABIL derivation of emission factors, businesses, African Bank (AB) Ellerinean Holdings Ltd. (EHL). commissioned Global conversion factors, or(“GCX”) other derived third-party information. limited-level verification of its Carbon Exchange to perform an independent, Greenhouse Gas (GHG) emissions inventory as calculated in-house for the period 1 October GCX has not conducted any work outside of the agreed scope and we therefore restrict our opinion to the 2011 to 30 September 2012 (FY12). The verification was performed in accordance with the agreed subjectStandard matter. ISO14064-3 (2006) ‘Specification with guidance for the validation and International verification greenhouse gas assertions’. Final verifierofopinion and qualifications On the basis of the limited assurance procedures followed in accordance with ISO 14064-3, there is no Objectives, Performance andfor Scope evidence that ABIL’s revised GHGCriteria quantification FY12, as presented in the spreadsheet “ABIL Carbonfootprint_2012FY 21 disclosure May_VERIFIED.xlsx”: For the purposes of public through the Carbon Disclosure Project (CDP), the GHG assertions were the following: with the general requirements of the WRIWBCSD GHG 1. Has notverified been prepared in conformance Protocol Accounting Standard (2004); and • ThatCorporate ABIL’s FY12 GHG Inventory was developed in accordance with common industry and conforms WRI-WBCSD GHG Protocol Corporate 2. Is notpractice materially correct and a to fair,the complete and accurate representation of theAccounting GHG data and nd Edition, 2004 (GHG Protocol). Standard, 2nd information for the FY12 reporting period, with the following qualifications: u• u Total ABIL may be under-estimated to the exclusions ThatGHG the emissions ABIL GHGfor quantification presented in thedue spreadsheet “ABIL and incomplete data listed above. Carbonfootprint_2012FY 21 May_VERIFIED.xlsx” for the FY12 reporting period, consolidated according to the operational wasdata 119,323 uu Activity data for Kyoto and non-Kyoto refrigerant control gas refillsapproach, was poor. This was tonnes estimated broken as follows: CO22e, where possible ordown else omitted. There is thus a fairly high level of uncertainty regarding the accuracy of these Scope 1/other direct emissions. Scope 1: 23,709 tonnes CO22e uu Electricity consumption for ABIL’s branches was estimated (using kWh/m2 from a sample of Scope 2: 80,632 tonnes CO22e branches). Invoices for individual branch consumption and branch trading areas were not checked. Scope 3: 14,346 tonnes CO22e uu ABIL has a reduction target against FY10 (base year) emissions. These emissions require Other direct: 636 tonnes CO22e 11 recalculation as a result of changes to boundaries, calculation methodologies and emission factors. Checking the recalculated figures for FY10 was beyond the scope of this verification engagement. Theuscope ofvisits the verification included an assessment of: the reporting approach and u No site were conducted. boundaries selected; the quantification methodology and emission factors used; the integrity of the activity data used; the accuracy and completeness of the GHG calculations; overall GHG reporting to ensure conformance with the principles/criteria of the GHG Protocol. Exclusions Signed: Kerry Evans Signed: Ohad Shachar Lead GHG Verifier Managing Director The following EHL entities/facilities fall under ABIL’s operational control but were excluded GLOBAL EXCHANGE GLOBAL CARBON EXCHANGE from the CARBON FY12 disclosure due to data availability: Date: • 23.05.2013 All non-SA operations • • • Roodekop and Cape Town Distribution Centres (DCs) Roodefurn Assembly Plant 24 Cross-docks 11 The GHG Protocol states that emissions from non-Kyoto listed refrigerant gases should be reported separately from the scopes. (Reported here as “Other direct” emissions). For consistency with base year reporting, these emissions should be reported with scope 1 direct emissions. Global Carbon Exchange SA (Pty) Ltd I Co Reg. 2012/144204/07 I PO Box 30944 Tokai 7966 [e] [email protected] [w] www.globalcarbonexchange.com [t] +27 21 702 4058 [f] +27 21 702 4373 66