Sustainable Development Overview
Eskom has integrated sustainable development issues into decision-making for many years. Given that our sector is long term in nature and that many decisions have implications for decades, it is vital that we take robust and responsible decisions.
Sustainability at Eskom refers to providing affordable energy and related services through the integration and consideration of economic development, environmental quality and social equity into business practices in order to continually improve performance and underpin development. This allows us to take a long-term view and ensure that the scope of our work covers all relevant elements, assesses the practicality of implementation and includes issues such as technology development and deployment, quality, risk, safety and skills development.
Eskom has integrated sustainable development into decision-making for many years. Given that our business is long term in nature and that many decisions have implications for decades, it is vital that we take robust, responsible decisions well in advance.
In order to ensure the relevance of our sustainability strategy, workshops were held with the Exco sustainability and safety subcommittee and board sustainability committee during the first quarter of 2009. These were aimed at reviewing recent developments, both locally and internationally, initiating a review of sustainable development in Eskom, related strategies and addressing focus areas into the future.
While the existing sustainability strategy (2004) is still valid, these principles have been revised to ensure alignment with our long-term strategic business priorities1 and support of our reframing principles2, while addressing short-term priorities.
Our sustainability performance index was developed in 2002 to provide an overarching view of our long-term sustainability status, through the use of appropriate indicators drawn from different indices within the business. The index addresses economic (including financial), environmental, social and technical aspects of the organisation and provides a score from a holistic perspective, and is used to determine our long-term sustainability status.
The index has 20 indicators and each indicator is allocated a relative weighting. Each indicator is further modified with regard to the relative contribution of each of the four areas of economic, environmental, technical and social aspects to that indicator. The overall performance is considered sustainable if the score is equal to or greater than three on a five-point scale.
Our overall performance was 2,5 (2008: 2,5) for the reporting period (April 2008 to March 2009), with sector scores as follows:
2,4 (2008: 2,5)
2,4 (2008: 2,5)
2,2 (2008: 2,2)
2,8 (2008: 2,6)
After three years of decline, this year saw the stabilisation of sustainability performance. The performance was the result of the low electricity reserve margin, the declining operating income before tax and the unacceptable safety performance in terms of our goal for excellence. Other areas under pressure were the increased interest charge due to funding the build programme and the declining return on capital employed, as well as contraventions of environmental legislation. Areas that performed well included the reduction in electricity demand through demand-side management, race, gender and disability equity, and black economic empowerment.
Going forward, we plan to reassess the index as part of the review of our overall sustainability strategy. The outcome of the revision is to provide an overall view of our long-term sustainability position.
- Continuity of supply; new build; climate change; financial sustainability; public confidence; EDI restructuring.
- Provide electricity to all South Africans; supporting other industries; driving transformation; creating jobs and new industries; providing a reliable electricity infrastructure. This to form a united, democratic and prosperous South Africa; eradicate poverty and unemployment; create a thriving economy connected to the world and integrated with the broader African continent; a sustainable economy, not harmful to the environment and committed to climate change mitigation initiatives; enhancing the potential of each citizen through an integrated education and skill development system; and leveraging the role of state-owned enterprises to set a foundation for growth and development of the economy.
Eskom Safety, Health and Environmental Policy
Eskom’s vision is to build the powerbase for sustainable growth and development − generating a sustainable foundation for growth and creating value for stakeholders and society, while reducing the safety, health, and environmental impact of our operations.
Through our safety, health and environmental policy, we commit ourselves to excellence in safety, health, and the environment and confirm to all employees, contractors, visitors, stakeholders, and the public that we will conduct our business in a caring, responsible manner. We will implement sustainable strategies to develop and manage the entire electricity value chain so as to deliver high-quality, affordable electricity in a changing business, social, natural, and political environment, without compromising future sustainability.
We will continuously advance our business practices in line with international best practice, legislative requirements, and corporate best practice innovations. The implementation of this policy will be measured progressively to ensure sustainable excellence in safety, health, and environmental management. Accountability for safety, occupational health, and environmental management will be held by the Board of Directors, including the Chief Executive. Compliance with the Safety, Health, and Environment Policy and applicable regulations shall be the responsibility of every employee and contractor.
1. establish appropriate management systems to address safety, occupational health, and environmental issues with a view to minimising risk and ensuring duty of care and the management of pollution and environmental degradation, performance monitoring, and continuous improvement;
2. comply with all legislative and policy requirements and, in the absence of appropriate principles, set standards to meet the objectives of this policy;
3. promote open communication on SHE issues with employees and all stakeholders;
4. educate, train, motivate, and develop its employees in terms of occupational health, safety, and environmental issues;
5. provide and maintain a safe and healthy work environment and protect individuals against risk associated with occupational health and safety arising out of Eskom’s business; and
6. contribute towards sustainable development through cost-effective resource use and efficient production, distribution, and use of energy.
Current Performance Figures
Eskom’s sustainability performance, using 2005 data, was independently assessed by SR&I and KPMG against the Socially Responsible Investment (SRI) index of the JSE. Participation in the index is open to companies listed in the FTSE/JSE All Share Index. In the 2005/06 review of the SRI index 62 companies participated, of which 58 qualified for inclusion in the index.
Eskom is not eligible for inclusion in the index as it is not a listed company but was assessed against the index criteria, which forms a benchmark for integrating the triple bottom line into business activities, and provides stakeholders with a unique tool to assess company performance. Eskom’s assessment against the criteria indicated not only a score that complies with the minimum requirements for inclusion in the SRI index, but a score that is comparable to the top performers in the category for high environmental impact.
Eskom sustainability performance index
The index uses 21 selected technical, economic, environmental and social measures and compares performance to set parameters, both short and long term. The overall performance is considered sustainable if the score is greater than or equal to three on a five-point scale.
Overall performance for the last financial year was 3,4 with sector scores as follows:
• Technical: 3,9.The areas of good performance were overall customer satisfaction and demand-side management performance. The score was adversely influenced by the energy availability factor and reserve margin
• Economic: 3,6.This sector performed well overall
• Environmental: 3,0.The overall thermal efficiency and line losses on the power line network were areas of relative poor performance
• Social: 3,0. Although race and gender equity performed well, the overall sector performance was adversely affected by the poor safety performance
With all sectors above three, the overall performance for the review period is regarded as sustainable.
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