Transnet Online Integrated Report 2018

Market Demand Strategy (MDS) themes
  • Financial sustainability
  • Capacity creation and maintenance
  • Market segment competitiveness
  • Operational excellence
  • Human capital
  • Organisational readiness
  • Sound governance and ethics
  • Constructive stakeholder relations
  • Sustainable developmental outcomes
Sustainable Developmental Outcomes (SDOs)
  • Employment
  • Skills development
  • Industrial capability building
  • Investment leveraged
  • Regional integration
  • Transformation
  • Health and safety
  • Community development
  • Environmental stewardship
The Capitals
  • Financial Capital
  • Manufactured Capital
  • Intellectual Capital
  • Human Capital
  • Social and Relationship Capital

Material aspects impacting strategy Material aspects impacting strategy

Levels of accountability for determining material aspects

Transnet determined material aspects through a structured process of identifying relevant issues and prioritising those that are most material to the Company’s commercial, social and environmental contexts. Figure 10 summarises the levels of accountability for identifying, validating and approving Transnet’s material issues, as well as the criteria used during each stage of the process.

Validating material issues

In validating material aspects, we considered the severity of impact on the Company. Figure 10 shows the areas of the business considered during the process of deriving and validating material aspects. Aspects were measured quantitatively in potential ZAR impact (e.g. top risks), and qualitatively in terms of value impacted (e.g. the impact on reputation, natural capital, relationship capital and strategy).

Changes in reporting on material aspects

With Transnet’s transition from the MDS to Transnet 4.0, we identified a sixth materiality cluster and associated aspects:Anticipating the future and developing methods of minimising the effects of shocks and stresses of future events. Material aspects include:

  • Business continuity
  • Extreme weather events
  • Disruptive technologies
  • Restructuring of value chains and value networks
  • Investing in emerging technologies and ensuring digital readiness

Further, results from the 2017 Multi-Stakeholder Perception Survey reflected that Transnet’s brand and reputation were severely compromised during the year by inadequate stakeholder engagement and a perceived lack of transparency and accountability. Accordingly, we identified the material issue of ‘Transparency and accountability’ as an addition to the materiality cluster, Build social trust through ethical leadership and corporate citizenship.

The Company does not yet have firm measures for tracking performance for these aspects. Where appropriate, they are addressed qualitatively in this Integrated Report.

The levels of accountability for identifying, validating and approving Transnet’s material issues
Figure 10

        Identification criteria
Stage 1 Identification      
  • Frequency of aspect being raised
  • Relevance of topics to multiple stakeholders
  • Applicability to Transnet’s mandate, strategy and SDOs
  • Efficacy of the Transnet control environment in mitigating associated risks
  • Emerging risks
Transnet SustainabilityDepartment
Group Finance
         
      Validation criteria
Stage 2 Validation  
Transnet Sustainability Department
Group Finance
Group Corporate Governance and Regulatory
Transnet Operating Divisions
 
  • Actual incidents arising during the year
  • Continuing applicability from the prior year
  • Stakeholder inclusivity
  • Management assessment, discussion and approval
  • Appropriateness of the range of aspects to be covered in Transnet’s integrated reporting process
  • Severity of impact on the business*
  • How and where material issues occur and impact in terms of Transnet’s reporting boundary
  • Relevance within the 2018 reporting period
         
        Prioritisation criteria
Stage 3 Prioritisation  
Transnet Sustainability Department
Group Finance
Group Corporate
Governance and Regulatory
 
  • Align ‘relevance’ of material aspects with ‘boundary context’
  • Management perspective on impact and likelihood on Transnet’s business context, strategy
  • Alignment with top 10 risks
  • Consideration of ‘relevance’ both in terms of challenges and opportunities
    (i.e. overall impact on the Company’s ability to create sustainable value)
         
Stage 4 Approval  
Sustainability Forum
Remuneration, Social and Ethics Committee (material sustainability aspects)
Group Financial Committee (material financial and commercial aspects)
Risk Committee (all material aspects)
Transnet Group Leadership (all material aspects)
Transnet Board of Directors (all material aspects)
  * Quantitatively measured in potential ZAR impact and qualitatively measured in terms of value impacted (e.g. impact on reputation, natural capital, relationship capital and strategy).