Addressing our material sustainability pillars: The report at a glance
The following diagram provides a schematic presentation of Sanlam's Sustainability Management Framework (SMF) and presents an overview of our Sustainability Report. The structure and content of this report has been informed by the SMF, which have been developed to address the sustainability risks and opportunities facing Sanlam. The diagram:
- identifies our material sustainability pillars, clustered into five thematic areas (each of which forms a section of the report);
- outlines the selected KPIs associated with each of these pillars; and
- describes where the material pillar is addressed in more detail in our report.
The process for identifying these material pillars is briefly reviewed in the Reviewing our 2011 performance table below. A summary of our 2011 performance on each of these material pillars is provided in the table below, which also includes an assessment of our progress against the commitments we made last year.
Sanlam's Sustainability Management Framework
Identifying our material sustainability pillars
The identification of our material economic, social and environmental risks and opportunities was undertaken as part of the process of developing our Sustainability Management Framework (SMF), approved by the Board in December 2011. The aim of the SMF, and the manner in which it was developed, is reviewed in more detail under Our Sustainability Management Framework.
The process of identifying our material sustainability pillars involved an assessment of the views and interests of our stakeholders, as well as engagement with our risk department to identify how sustainability risks affect our business value drivers. Workshops were conducted with our internal sustainability champions to further interrogate and prioritise the material sustainability risks in relation to each cluster's core business, and to reach agreement on the key performance indicators (KPIs) for each of these material pillars at a cluster and Group-level.
Through this process we identified a range of issues that have been clustered into the following five thematic areas, reflecting our focus on Sustainability through Responsibility:
- Sustainability governance
- Responsibility for developing our people
- Responsible products and services
- Responsibility towards a prosperous society
- Responsibility towards the natural environment
Each of the material pillars within these thematic areas includes a set of key performance indicators (KPIs). We have assigned internal responsibilities for each of the KPIs to ensure accountability for effective implementation of our sustainability strategy. In 2012 we will develop policy guidelines for each KPI to ensure that they are implemented. We are in the process of developing a dashboard to measure and monitor progress against these KPIs.
There is a momentum in the organisation- and clear responsibilities to achieve a shared sustainability journey."
- Lulu Letlape, Executive Head: Group Corporate Affairs
Our material sustainability pillars: reviewing our 2011 performance
This table provides a summary of our 2011 sustainability performance against each of the material issues included within our SMF. It also assess how we did in terms of the commitments we made last year, and identifies our commitments for the years ahead.
| 1. SUSTAINABILITY GOVERNANCE | |||
| Our Material Sustainability Pillars |
OUR COMMITMENTS: What we said we'd do in 2010 |
OUR PERFORMANCE: What we did in 2011 |
FUTURE COMMITMENTS: What we plan to do |
| Management quality and commitment | • Further develop structures for accountability on sustainability. | • Finalised appropriate structures for accountability on sustainability throughout the company, under the leadership of the Social, Ethics and Sustainability Committee, and increased awareness of the strategic nature of sustainability, particularly amongst the executive team. | • We will seek to embed sustainability more effectively throughout the company by improving understanding of the strategic value of sustainability below the executive level, including in particular within our product and service portfolio and within our investment decisions. |
| • Sanlam RSA to finalise and implement its Sustainability Management Framework (SMF). | • Significant improvements achieved in the co-ordination of sustainability internally through finalisation of our SMF and approval of company-wide key performance indicators (KPIs) on sustainability.
• Agreed to include sustainability-related pillars as a key performance area (KPAs) throughout the organisation from January 2012. |
• We will leverage off the development of our SMF to help us become a recognised leader on sustainable development in this sector within the next three years.
• We will drive sustainability in the revised KPAs, and include sustainable development within the internal leadership training programme. |
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| • Aim to increase our forensic capacity, in support of a robust anti-corruption programme for the Group. | • Head of Sanlam's Group Compliance & Forensic Services maintained an involvement and contribution to various anticorruption initiatives.
• Sanlam Group Compliance is currently conducting a high-level group-wide assessment of the readiness of the Sanlam businesses for the proposed Protection of Personal Information Bill (POPI). • Sanlam Group Compliance conducted an assessment of the readiness of Sanlam RSA businesses for the implementation of the underlying principles of international anti-money laundering (AML) standards. |
• A detailed roadmap will be presented to the business for an in-depth impact study to prepare the Group for POPI.
• A fraud risk management assessment (FRMA) will be conducted to determine the fraud and corruption risk exposure of the business in Sanlam RSA. |
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| • Sanlam RSA to undertake an ethical risk assessment in 2011 and expand and enhance training on ethical issues. | • An independent ethical risk assessment was undertaken by KPMG.
• All of our staff underwent ethics training and signed the Group's code of conduct. Each business conducts its own training and awareness, monitored by the Group Social, Ethics and Sustainability Committee on a quarterly basis. |
• We will institute programmes in 2012 to address the issues identified by the assessment.
• We are exploring the optimal coordination of training at a group level. |
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| Stakeholder engagement | • Aim to develop a formal stakeholder engagement strategy and framework. | • A stakeholder mapping exercise was undertaken and a more structured engagement process is being finalised. | • Finalising our stakeholder mapping exercise and implement a more structured engagement process with our identified key stakeholders. |
| 2. RESPONSIBILITY FOR DEVELOPING OUR PEOPLE | |||
| Our Material Sustainability Pillars |
OUR COMMITMENTS: What we said we'd do in 2010 |
OUR PERFORMANCE: What we did in 2011 |
FUTURE COMMITMENTS: What we plan to do |
| HR management | • Revise our HR service approach for office staff, to ensure a more efficient and effective service. | • We have developed and implemented a shared service - all transactional service delivery will be streamlined and centralised.
• We have increased levels of awareness and focus around the legislative requirements, from an HR perspective, throughout the organisation; greater integration throughout the organisation, with issues highlighted from CEO down. |
• Key focus areas for 2012 are: Talent Management' Performance Management and Transformation.
• Enhanced and focused leadership development programme. • Staff turnover will be reported at cluster and Group level, as well as to the Board HR and Social, Ethics and Sustainability Committees. |
| • Focus will be directed to the formalisation of record keeping systems to improve BBBEE information consolidation. | • Improved collation of HR management information especially head count and skills development. | • We will optimise the process of collating Group wide information through the implementation of our Business Intelligence system. We expect improved collation of all HR management information. | |
| Attracting and retaining talent | • BBBEE plans: We aim to maintain our newly achieved level 3 status by improving our systems and targets. | • We maintained our level 3 status. A contributing factor was the improvement in both our Skills Development and Employment Equity scores. | • Improved talent attraction process, particularly at middle to senior management level and to improve diversity profile. • Revitalise retention strategies, especially, for top performing talent. • Focused succession planning to bolster retention processes will be implemented. |
| Skills development and career progression | • Finalise development of a Graduate Leadership Programme (GLP). | • We have launched the GLP, and additional learnership and management development programmes. Nineteen candidates successfully completed these programmes in 2011.
• A total of 66 staff members across the Sanlam Group successfully completed the Senior Management Development and Business Management programmes. • A learnership aimed specifically at leaners with disabilities was implemented and completed during 2011 with approximately 70% of the learners being placed permanently in the organisation. |
• Fifteen high performing, high potential delegates have been identified to complete the GLP in 2012. • A Graduate recruitment Programme will be launched. • TOPP (Training Outside Public Practice) will be launched. • The number of staff members completing management development programmes will be doubled. • Further support for Learnership for Persons with Disabilities following the success of previous learnership programmes which has even encouraged SPF to commence with 30 disability learnerships by May 2012. • An Executive Leadership Programme will be launched during the 2nd half of the Year. |
| • We achieved a marginal improvement in the skills development performance pillar of our BBBEE scorecard, due to the introduction of our disability learnerships. | • Group HR and business clusters are implementing a strategy to meet our target. We expect, once again, to be awarded full points for participating in Registered Learnerships or Category B, C or D training. | ||
| Workplace transformation and employee diversity | • Seek to improve employment equity at senior levels. | • There was a slight increase in the overall unverified BBBEE score at the senior management level. A re-categorization exercise in one of the businesses resulted in a negative impact on the score associated with black representation at the senior management level. | • We will further improve our performance on BBBEE particularly as regards employment equity. Continuous monitoring takes place quarterly to monitor the progress at the various management levels. |
| • The new Employment Equity targets for 2012 will be finalised in the first quarter of 2011. | • All businesses set new Employment Equity targets for 2011 and 2012. At the end of 2011 the black/ white ratio increased from 59% in 2010 to 61%. | • During 2012 an extensive Employment Equity analysis will be conducted and the results of this analysis will be taken into consideration when the next three year Employment Equity plans are developed. | |
| Employee wellness and Sanlam Culture | • Group-wide focus on further entrenching the business culture to align this to Sanlam's business strategy. | • Preliminary investigations and development to identify the Sanlam business culture commenced in 2011. | • A company wide process involving all staff members in the assessment of the Sanlam Business Culture will be launched during the 2nd quarter of 2012. |
| • Sanlam plans to obtain accreditation as 'Investors in People' for the investment cluster. | • All clusters with the exception of Sanlam Investment Cluster have undergone the "Investors in People" accreditation process. | • SPF will be undergoing a further assessment during 2012, to maintain their current "Investors in People" accreditation. SI will be partaking in the accreditation process as well. | |
| 3. RESPONSIBLE PRODUCTS AND SERVICES | |||
| Our Material Sustainability Pillars |
OUR COMMITMENTS: What we said we'd do in 2010 |
OUR PERFORMANCE: What we did in 2011 |
FUTURE COMMITMENTS: What we plan to do |
| Promoting responsible investment | • Sanlam Multi Managers International (SMMI) will be launching a new SRI product in 2011. | • Signed Code for Responsible Investing in South Africa (CRISA).
• Enhanced engagement with investee companies through our proxy voting policy. • Drafted guidelines on incorporating sustainability principles into investment decisions. • The SMMI SRI Balanced Fund was launched in October 2011. • SMMI incorporated CRISA explicitly into our manager research and assessment process. |
• Seek to increase levels of client interest in driving social and environmental agendas within our investment portfolios.
• The SMMI SRI Balanced Fund will continue to be marketed during 2012. |
| Responsible procurement | • Sanlam RSA plans to implement a web-based system that allows suppliers to upload their own BBBEE certificates. | • Obtaining an integrated procurement system enabling seamless interaction with suppliers as well as internal stakeholders is paramount. Finding a suitable solution is still in process.
• Engaged with our supply base to obtain all valid certificates manually. |
• Sign off of an integrated procurement system and possible implementation of certain modules.
• Aligning our processes to engage with our supply base re use of system. |
| • Sanlam RSA is entrenching environmental selection processes. | • Finalised a new procurement policy that includes reference to the requirement for selecting suppliers with a good environmental track record. | • We will encourage our supplier network to adopt best environmental practice, and will positively recognise those suppliers that do.
• We will review our approach to property acquisition: in addition to the rental component of costs, we will consider resource demands, and potential to minimise these. |
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| • Further research will be done into maximising web-based solutions that will lessen the need for business travel. | • Increased the video conferencing facilities in Cape town and Gauteng.
• Experienced a positive trend in the usage of the facilities. |
• Promote an increase in the use of video conferencing as an alternative to carbon emissions intensive business travel.
• Check the viability to roll out video conferencing facilities to other offices. |
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| Treating our clients fairly | • Sanlam will further gear resources to adapt to changes that the Statement of Intent (SOI), the anticipated Treating Customers Fairly regulation. | • Until the legislation comes into effect, the focus remains on preparation and raising levels of awareness. | • Strive to meet new regulatory requirements.
• Sanlam RSA will measure progress on the TCF principles applicable from 2014 onwards. • Each cluster will define an ombudsman most applicable to the business and will measure ombudsman complaints received relative to agreed targets. SIM and SPF will continue reporting on compliance with the Financial Advisory and Intermediary Services (FAIS) Act. SIM will measure client retention rates against targets, providing an indication of client satisfaction, while SPF will measure percentage of lapses and client retention relative to prior years and targets. |
| • Sanlam aims to grow the Sanlam Professional Market Financial Literacy Campaign by 30% during 2011. | • A formal assessment was not conducted to determine the exact growth. We however expanded the campaign to 4000 students from 2500 in 2008. | • We will conduct a formal assessment of the campaign. | |
| 4. RESPONSIBILITY TOWARDS A PROSPEROUS SOCIETY | |||
| Our Material Sustainability Pillars |
OUR COMMITMENTS: What we said we'd do in 2010 |
OUR PERFORMANCE: What we did in 2011 |
FUTURE COMMITMENTS: What we plan to do |
| Access to financial services | • Strive to improve our clients' product access and the financial security benefits they derive from our products. | • Successfully expanded our product reach.
• Sanlam Sky (now a part of SPF) focuses specifically on improving access to financial services in entry-level markets in SA. • Realised new opportunities to engage in public private partnerships. |
• We will expand Sanlam's presence into new markets – and develop skills to ensure greater transformation amongst agents and brokers.
• We will seek to develop products that meet both the needs of the Group and of the market, particularly the need for savings products in lower income markets. |
| Corporate social investment | • Establish the Sanlam Foundation in 2011. | • Launched the Sanlam CSI Foundation in September 2011, to facilitate more focused and coordinated efforts linked to Sanlam's core business, and to achieve more sustainable socioeconomic benefits.
• Annual CSI spend in 2011 was R 34,59m, representing 0.77% of Group net profit after tax; this compares with last year, in which we spent R19.3 million (0.52% of Group net profit after tax) |
• Ensure continuing alignment of CSI efforts across the business as part of a coordinated strategy. |
| • Refine our CSI programme in line with Sanlam Foundation Strategy.
• Maintain commitment to core sponsorships – notably Takalani Sesame and the Sanlam Cancer Challenge. |
• Our CSI programme focuses on education, covering four core components: | • Seek to build a leadership position in our community investment programmes by addressing stakeholder issues/concerns, and resonate with the nature of the business.
• Continued investment in sponsorships is pivotal in growing Sanlam's brand awareness within our target markets in South Africa. |
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| • Skills Development: promoting financial literacy for high school and university students. • Education Development: investing in leadership in maths, science, English and technology (for High Schools), as well as in teachers, principals and parents through the Department of Education. • HIV & Aids awareness and education: investing in programmes for high schools. • Environmental awareness: promoting environmental protection programmes. |
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| Social enterprise development | • Focus on supporting the growth and upliftment of black entrepreneurs through our procurement practices, focusing on black female-owned businesses. | • Sanlam continues to achieve full points on the enterprise development component of the dti scorecard through our Ubunto-Botho (UB) transaction. This provides broad based UB empowerment groupings access to capital, business advice and cross-selling opportunities between shareholding businesses.
• Ongoing challenges experienced around ensuring the viability of some BBBEE suppliers. |
• Sanlam expects to continue to achieve full points on this element through the UB transaction. |
| 5. RESPONSIBILITY TOWARDS THE NATURAL ENVIRONMENT | |||
| Our Material Sustainability Pillars |
OUR COMMITMENTS: What we said we'd do in 2010 |
OUR PERFORMANCE: What we did in 2011 |
FUTURE COMMITMENTS: What we plan to do |
| Environmental Management | • The Group Environmental Policy will be signed off early in 2011.
• Further resources will be allocated to the implementation of the Sanlam RSA Environmental dashboard in 2011. |
• Group Environmental Policy refined and endorsed by the Sanlam Board of Directors, the Board Social, Ethics and Sustainability Committee, Sanlam's Group CEO and his executives.
• A process of developing a Group Environmental Sustainability Framework and Dashboard is underway, assisted by external consultants, to establish a broader dashboard covering a range of environmental key performance indicators. |
• Finalising the development of our environmental dashboard. |
| • New resource reduction targets will be set for Sanlam RSA. | • Resource reductions targets have been set for 2011-2015, providing clear direction for the Group. The targets, based on the 2010 baseline year, are applicable to all Sanlam business units and were approved by the Board Social, Ethics and Sustainability Committee in June 2011. | • Achieve further improvements in the management of our direct environmental impacts, particularly through improved waste management practices and enhanced energy and water efficiency initiatives. | |
| • Strive to position Sanlam RSA as a corporate leader in, and champion of, environmental sustainability. | • Focus has been on improving reliability of performance measurement, setting priorities and introducing pilot projects.
• More efficient use of energy and water, and reduced waste generation, through behavioural change. |
• Maintain a focus on communication and engagement with our staff, aimed at encouraging responsible environmental practice. | |
| Climate change and energy | • Improving measurement of energy usage and other climate change related performance indicators. | • Sanlam RSA's CO2 emissions for 2011 decreased slightly on last year's performance.
• Sanlam was ranked 8th overall on the South African Carbon Disclosure Leadership Index. |
• Maintain focus on promoting energy efficiency – primarily at our head office, and progressively at our other offices – through energy saving initiatives under the management of our Facilities team.
• Prioritise initiatives and start to implement bigger projects. |
| • Seeking to improve efficiencies and identify opportunities to implement initiatives to reduce environmental impact. | • We have set ambitious targets for reducing our greenhouse gas emissions and energy usage informed by a baseline assessment and performance benchmark. | • Introducing improved measurement and reporting systems, enabling a more informed, coordinated and strategic approach to identifying and responding to our environmental priorities.
• Explore opportunities to develop a portfolio of onsite renewable generation initiatives. |
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| Sustainable water use | • No specific commitments made. | • We have set ambitious targets for reducing our municipal water demands informed by a baseline assessment and performance benchmark. | • Water saving measures will be introduced, and rainwaterharvesting opportunities will be considered. |
| • Renewed our partnership with the World Wide Fund for Nature (WWF) for the Sanlam Living Waters programme. As a key sponsor Sanlam contributed R3,343,000.00 in support of WWF's Marine and Fresh Water Programme in 2011.
• Conducted a desktop study to determine current consumption (including a comparison between Sanlam and Santam Head office buildings); based on assumptions we have made predictions on how to reduce water consumption based on a variety of technologies that could be implemented. |
• Sanlam will dedicate resources to assess and identify how Sanlam can use its sphere of influence in a systemic way to influence responsible water use and management in South Africa. We also plan to conduct research into water risks that may impact Sanlam business. | ||
| Materials and waste management | • Maintain focus on separating waste and recycling decentrally; encourage increased recycling, double-sided printing and e-statements, as part of our drive to minimise the volume of paper used in client communications. | • Sanlam Head Office introduced waste separation at source to increase its average levels of recycling of all waste (including food waste). | • We have committed to improve measurement of the proportion of waste reused/recycled and the amount of responsible disposal of technological waste. |
| • We have set ambitious targets for reducing our total waste and paper usage informed by a baseline assessment and performance benchmark.
• Undertook desktop research aimed at better understanding potential opportunities to improve our materials and waste performance. |
• Investigate additional measures aimed at reducing our waste to landfill by 50%. | ||