[PPT] - Results of the 2013 SRI Index review Corli le Roux, Head of SRI PowerPoint Presentation

SLIDE 1

Presenter Date

Results of the 2013 SRI Index review

Corli le Roux, Head of SRI Index and Sustainability Makhiba Mollo, SRI Index Associate

SLIDE 2

Overview of timeline

2

Initial public research commenced during June 2013
Company preliminary profiles sent out in three tranches between July and

September

Companies given two weeks to respond to profiles
USB responsible for researching most companies
Engagement with controversial issues and borderline cases during September

and November 2013

Results approved by Advisory Committee on 19 November 2013
Individual results distributed on 26 November 2013

SLIDE 3

Research methodology – criteria overview

3

Covers four areas of measurement
Environment
Society
Governance and related sustainability concerns
Climate change
Entry level threshold for each of the four areas of measurement
Environmental impact classification
Aligned to sector’s overall environmental impacts relative to economic contribution of the relevant

activity to company revenue

Currently no impact classification for social, governance or climate change

SLIDE 4

Research methodology – criteria overview (2)

4

No new indicators this year
However, two significant moves in evolution of index
Only publicly available information considered
Entire FTSE/JSE All Share Index automatically assessed

SLIDE 5

Experience of the process

5

157 companies assessed in 2013 (108 in 2012)
105 of these submitted detailed profile/survey responses – 66.9% of total (84% in 2012)

– Represents high level of engagement – increases robustness of data collection process – Small caps with few employees find difficulty in responding

Top 40 best responders – 92.5% of Top 40 companies responded with additional information

(83% in 2012)

SLIDE 6

Overview of results

6

46% of total assessed universe has qualified (70% in 2012)
5 companies qualifying for the first time
3 of these assessed for the first time
2 previously assessed but first time to qualify
Number of constituents in 2013:

72

SLIDE 7

Performance by size

7

* Source: Report by the Data Provider, EIRIS, November 2013

SLIDE 8

8 31 32 34 34 36 34 36 36 36 35 17 13 17 18 23 30 33 31 33 31

3 4 7 5 4 4 5 7 7 6

5 10 15 20 25 30 35 40

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number of companies Year of assessment

Top 40 Mid Cap Small Cap

Performance by size (2)

SLIDE 9

Sector performance

9

100% qualification by companies in life insurance sector (again)
Other strong sectors
Mining

 15 out of 19 qualified  Makes up 20.8% of total number of constituents

General Industrials

 83% qualified

Banks

 71.4% qualified

SLIDE 10

Individual research areas: Environment

1

65.6%
f

all assessed met environmental requirements in 2013 (79.6% in 2012)

Full disclosure requirement a challenge, particularly for high impact and first timers
Medium impact companies do best in policy, need to improve management

and reporting

Low impact category still strong in reporting
Lower threshold
High impact companies did best in environmental reporting this year, but

need to address disclosure of management systems

SLIDE 11

Individual research areas: Society

1 1

65% of all assessed met social requirements in 2013 (81.5% in 2012)

– Decline due to larger universe and public requirement

Strong themes

– Stakeholder engagement, Community relations – Demonstrates awareness of external / societal expectations and willingness to engage – Disclosures around health & safety, BEE and equal opportunities also sufficient

Challenging themes

– Decline in performance across training & development, employee relations, HIV/Aids – Attributable to public requirement – areas generally addressed, but not sufficiently available in public domain – Still room for increased transparency

SLIDE 12

Individual research areas: Governance & related sustainability concerns

1 2

90.4% of all assessed met governance requirements in 2013 (98% in 2012)
Strongest performance area
Attributed to influence of King III and integrated reporting focus
Improvement in Board practice
Decline in other areas –
Again due to public requirement – areas being addressed but not sufficiently disclosed
Strong areas
Business value & risk management remains strong
Broader economic issues
Governance reporting remains challenging area
Especially for companies being assessed for the first time

SLIDE 13

Individual research areas: Climate Change

1 3

56.7% of all assessed met climate change entry level requirements in 2013

(75.9% in 2012)

Decrease attributable to large number of new Small Cap companies
Companies assessed last year show improvement
Strongest performance by Top 40 companies – 92.5% meeting entry level

SLIDE 14

Successful constituents (in alphabetical order)

1 4

Advtech Barloworld Growth Point Properties Liberty Holdings Northam Platinum Sanlam AECI BHP Billiton Harmony Gold Mining Company Lonmin plc Oceana Group Santam African Bank Investments The Bidvest Group Limited Intu Properties Massmart Holdings Old Mutual Sappi Limited African Oxygen Business Connexion Group Illovo Sugar Mediclinic International Pick n Pay Sasol African Rainbow Minerals British American Tobacco Impala Platinum Holdings Merafe Resources PPC Sibanye Gold Allied Electronics Corporation Discovery Holdings Imperial Holdings MMI Holdings Rainbow Chicken Standard Bank Group Anglo American DRD Gold Investec Mondi Redefine Properties Steinhoff International Anglo American Platinum Exxaro Resources JD Group Mpact Remgro Sun International AngloGold Ashanti FirstRand JSE Limited MTN Group Reunert Tongaat Hulett ArcelorMittal South Africa The Foschini Group Limited KAP Industrial Holdings Nampak RMB Holdings Truworths International Aspen Pharmacare Holdings Gold Fields Limited Kumba Iron Ore Nedbank Royal Bafokeng Platinum Vodacom Group Barclays Africa Group Grindrod Lewis Group Ltd Netcare Limited SAB Miller plc Woolworths International Holdings

SLIDE 15

Best performers

1 5

Companies that meet additional levels of performance
All relevant core requirements in social and governance
Independent chair
Environmental best performer threshold
All climate change indicators (except for “Trend data”)
Number of best performers in 2013:

6

Contraction in BP numbers due to requirement for reporting in the public

domain

Mainly resulted from core indicators in social area not being disclosed

Quo vadis?

2 3

Strategy implementation begins in all earnest
Review of criteria
Addressing structural sector concerns
Expanding data availability
ESG Investor Briefing

SLIDE 24

Thank you

2 4

SLIDE 25

See you in 2014!

2 5

Advtech Barloworld Growth Point Properties Liberty Holdings Northam Platinum Sanlam AECI BHP Billiton Harmony Gold Mining Company Lonmin plc Oceana Group Santam African Bank Investments The Bidvest Group Limited Intu Properties Massmart Holdings Old Mutual Sappi Limited African Oxygen Business Connexion Group Illovo Sugar (BP) Mediclinic International Pick n Pay Sasol African Rainbow Minerals British American Tobacco Impala Platinum Holdings Merafe Resources PPC Sibanye Gold Allied Electronics Corporation Discovery Holdings Imperial Holdings MMI Holdings Rainbow Chicken Standard Bank Group (BP) Anglo American DRD Gold Investec Mondi Redefine Properties Steinhoff International (BP) Anglo American Platinum (BP) Exxaro Resources JD Group Mpact Remgro Sun International AngloGold Ashanti FirstRand JSE Limited MTN Group Reunert Tongaat Hulett ArcelorMittal South Africa The Foschini Group Limited KAP Industrial Holdings Nampak RMB Holdings Truworths International Aspen Pharmacare Holdings Gold Fields Limited Kumba Iron Ore Nedbank Royal Bafokeng Platinum Vodacom Group (BP) Barclays Africa Group Grindrod Lewis Group Ltd Netcare Limited (BP) SAB Miller plc Woolworths International Holdings