Introduction 2010 was a landmark year for integrated reporting. In August, the Prince of Wales’ ‘Accounting for Sustainability Project’ and the Global Reporting Initiative (GRI) announced the formation of the International Integrated Reporting Committee (IIRC), whose remit is “to create a globally accepted framework for accounting for sustainability”. Since its inception, there has been huge support for the IIRC. Indeed, many stakeholder groups have got behind the movement for integrated reporting. This is because stakeholders are no longer content with a Corporate Responsibility Report to simply be ‘bolted on’ to an Annual Report. Instead, they want to see clear and compelling evidence that non-financial issues are integral to overall business strategy and performance. In short, they want to see reporting that reflects an integration of business and sustainability in everyday operations. International Integrated Reporting research With integration rising on the corporate reporting agenda and with the recent formation of the International Integrated Reporting Committee (IIRC), Black Sun felt the time was right to gain greater insight into global integrated reporting trends and developments. This publication is part of our International Integrated Reporting research suite. ‘The Integrated Journey’ Focuses on individual companies from around the globe currently recognised for their integrated reporting progress www.blacksunplc.com 4 Towards Global Sustainability A country by country review of the international integrated reporting landscape www.blacksunplc.com © Black Sun Plc 2011 5 8 Towards Global Sustainability A country by country review of the international integrated reporting landscape www.blacksunplc.com © Black Sun Plc 2011 9 ‘Towards Global Sustainability’ Examines integrated reporting on a country-by-country basis and highlights different national and international approaches. International Summary This research study aims to provide an overview of integrated reporting practices and trends and an assessment of the current state of integrated reporting across seven key G20 markets and countries, including: Country statistics South Africa ¦ Looked at purely from an integrated reporting perspective, South African reports could credibly claim to be leading the way. Although many good examples of integrated reporting can be seen for individual companies in other nations, South Africa as a country, stood on its own in our sample group as the most advanced in terms of integrated reporting. The majority of the reports reviewed have made some progress on the integrated reporting journey. This lead is likely driven by the legislative requirements of the King Report on Governance 2009 (King III) which from March 2010 requires listed companies to issue an integrated report. This report is de ned as: ‘a holistic and integrated representation of the company’s performance in terms of both its nance and sustainability’. South Africa’s main exports are gold, diamonds, metals and minerals and this representation is re ected in our sample group, with most companies operating in the basic materials sector. The increasing regulation in the industry around issues such as local economic development, environmental management and climate change strategies has also been a driver of integrating sustainability into corporate strategies. Overall, these companies represent the strongest group at attempting to integrate nancial and non- nancial information throughout the report. Most of the reports clearly identify relevant issues and the potential impact on the business, although there are only a few that explicitly disclose the materiality process. The strength of this integration also acts as a weakness. Annual reports need to communicate as well as comply and the ‘one report’ approach to meet all audience needs means that South African reports, Europe ¦ Well developed guidelines and regulation drives a practical, targeted and measured approach to reporting. Key statistics 100% state a clear overall vision of the company 62% make a commitment to wider stakeholders 63% link non- nancial issues to overall group strategy, objectives or vision 63% mention business model, 40% of those refer to non- nancial elements 75% identify non- nancial risks factors, 62% disclose impacts and mitigation activities 62% have a board level sustainability committee 87% provide non- nancial performance data A country-by-country review of the international integrated reporting landscape Brazil China Europe Belgium France Italy Norway Switzerland Finland Germany Netherlands Spain UK on average, are the longest at 336pp. They also have the longest average narrative at 185pp, sometimes making them quite overwhelming to read. This is often not helped by the approach to the creative, which is usually quite conservative, focused on demonstrating the quality of the assets or the business and not particularly inspirational or engaging. Key statistics 46% link non- nancial issues to overall group strategy objectives or vision 80% outline long-term business objectives 28% of reports convey non- nancial issues are integral to the group strategy 38% of reports non- nancial discussion complements the group strategy 82% report on non- nancial performance data 55% make a commitment to wider stakeholder groups in the overall vision whilst 20% make a commitment to shareholders only Key highlights • Most reports outline a clear vision along with a commitment to deliver value to their wider stakeholders. • Majority of reports present very good market reviews and opportunities, using supporting external data which helps to put the strategy into context as well as enabling the company to provide clear objectives and targets for the future. • Most companies report strategically on the business with many setting strategic agendas which are a mix of nancial and non- nancial elements and de ne how sustainability is core to delivering growth drivers. • In some cases sustainability is built into the investment case for business. A few companies use the explanation of their business models to do this. • Many report on their engagement with stakeholders, identifying key material issues and relationships. • Risks and opportunities seem to be more integrated into reporting overall rather than a standalone section – a few are outlining strategic risks directly related to stakeholder interests. • All reports contain very detailed operating reviews. Europe as a sample group was certainly not homogeneous. No country dominated the sample group with representation from ten different countries in total. Three quarters of the sample group was made up from the UK, France, Germany and Switzerland. Sectors that dominate include: consumer goods, nancial or oil & gas and a few broad trends transcend geography and sector: simple businesses usually have simple reports, complex organisations usually have complex reports. Other trends are noticeable too. Consumer facing businesses often pay more attention to communicating through their reports, giving more focus on products and brands in ‘telling the story’ and seem to be more responsive to meeting the growing social and environmental concerns of their customers, than business-tobusiness organisations. Financial services companies focus more on the numbers than the narrative, which is clearly driven by their extensive disclosure requirements. In addition, there is little evidence of integration of non- nancial issues into their core businesses. Overall European reports, tend to be more developed and consistent in the subject matter, covering market context, strategy, performance, governance, risks and sustainability issues. However, reporting on non- nancial activities and performance, for the most part, the approach seems to be split between two categories: those where non- nancial issues are integral to the business and strategy and reported on as such and; those where reporting on nonnancial issues is dominated by a conservative and almost ‘box ticking’ approach driven largely by quite established mandatory and voluntary frameworks. An emerging group of companies seem to be moving to a place where non- nancial issues are presented as integral to business strategy and reported on as such. In addition, there are also examples of innovative approaches where companies are de ning their role in meeting some of the global sustainability challenges, although few demonstrate how this will be achieved with their business strategy. India South Africa Republic of Korea United States Key highlights of reporting: • Structured approach to reporting with the majority of the companies covering key elements of strategy, risk, performance and governance. • The strategic discussions are quite developed with many companies providing clear details of their objectives and priorities. • Majority of reports have detailed strategic information included in the report but only a select few of the reports effectively discussed the integration of non- nancial issues within the strategy. • Most of the companies in the sample group discuss non- nancial issues and the policies in place to manage these issues although; the approaches to reporting on these varies across countries and sectors. • Prominence given to Board and governance processes. Companies reviewed by sector (%) Basic materials Consumer goods Consumer services Financials Healthcare Industrials Oil & gas Technology Telecommunications Utilities Conglomerate 11 8 2 26 6 3 13 9 10 7 6 Average length of report by country (pages) 350 336 Average annual report length Average length of narrative Average length of nancials 300 250 Full sample 135 203pp Full sample Longest average narrative 113pp Full sample Longest average nancials 91pp 249 239 Longest average annual report 206 101 200 150 100 China 50 0 South Africa 106 336pp South Africa Shortest average narrative 185pp South Africa 60pp Brazil 151pp 30pp Average report length 150 Shortest average annual report Shortest average nancials Rep. of Korea South Africa United States 106pp United States Average length of narrative Average length of financials Number of ‘integrated’ reports Average report length Average length of narrative Average length of financials Number of ‘integrated’ reports Europe Brazil India 336 pages 185 pages 151 pages 6 out of 8 reports 239 pages 138 pages 101 pages 2 out of 40 reports US Business description setting the scene? Sasol annual review and summarised financial information 2010 Business description setting the scene? Anglo Platinum 2010 ANGLO PLATINUM LIMITED ANNUAL REPORT Financial, social and environmental performance 2010 Annual Review focused and energised 2010 Annual Report Basic Materials South Africa Xstrata 2010 Annual Report Basic Materials United Kingdom Tran m sfor ation al growth Oil & Gas South Africa r Ope a ation l excel lence le ainab Sust value Annual Report 2010 PLATINUM, A PRECIOUS METAL FOR A PRECIOUS PLANET A review of how international companies are evidencing their approach to integrated reporting WHO WE ARE Contents Who we are www.xstrata.com | 1 ABOUT ANGLO PLATINUM LIMITED Our business Our structure Our global presence Our integrated business model Our products Our key relationships Our vital statistics Our strategic direction Our growth opportunities worldwide Principal integrated risks Our board of directors Our group executive committee Business reviews Chairman’s statement Chief executive’s report Operating reviews Sasol Mining Sasol Gas Sasol Synfuels Sasol Oil Sasol Synfuels International (SSI) Sasol Petroleum International (SPI) Sasol Polymers Sasol Solvents Sasol Olefins & Surfactants Sasol Nitro, Sasol Wax, Sasol Infrachem, ChemCity and Merisol Sasol Technology Sasol New Energy Sasol Financing Sasol group services Human resources Safety, health and environment (SH&E) Legal compliance Corporate affairs Sasol Inzalo Foundation Information management Supply chain management Summarised financial information Salient features Statement of financial position Income statement Contact information 2 3 4 6 8 9 10 14 16 18 20 22 26 The adoption of the third King Code of Governance Principles (King III) in 2010, and its specific requirements for “integrated reporting”, is reflected in the changes made to the narrative structure of this year’s annual review. We believe that a more holistic articulation of a business – one that does not artificially split financial and “nonfinancial” disclosure – will provide a more complete analysis to satisfy the information needs of the broad range of stakeholders that use the annual review. A core part of this approach is the integration of social and environmental performance issues within our operating reviews. This complements our separate sustainable development report on www.sasolsdr.com. In line with this approach, the sustainable development-related issues managed by functional departments within Sasol are reported in a newly-introduced review for Sasol Group Services, and not in a summarised sustainable development chapter as in the past. For 60 years, Sasol has demonstrated its innovative spirit in the energy and chemicals sectors in South Africa. Sasol has grown to become the country s leading fuel provider. has grown become the country’ leading country’s provider provider. Today we are an international player in the energy and chemicals are international pla ener chemicals Today international player energy sectors, sectors and a preferred technology partner Sasol’s liquid fuels preferred technology partner. Sasol liquid technology partner. Sasol’s and chemicals products are used i almost every sphere of life. d chemicals h i l d d h f used in l sphere f lif Sasol is also a major contributor to the development of people and the improvement of socioeconomic conditions in the countries in which we operate. In the last ten years, we have made significant strides in our commitment to significant and technology leadership. PROFILE Anglo Platinum Limited is the world’s leading primary producer of platinum group metals (PGMs) and accounts for approximately 40% of the world’s newly mined platinum. The company is listed on the Johannesburg Stock Exchange. Anglo Platinum Limited’s wholly owned South African mining operations include the Bathopele, Dishaba, Khomanani, Khuseleka, Mogalakwena, Siphumelele, Thembelani and Tumela mines. Twickenham Mine remained under development during 2010. and to exceed targeted rates of return in a sustainable manner. The company has also produced a more detailed sustainable development report that contains additional detail and case studies. This is available in Adobe pdf format on the company’s website, at www.angloplatinum.com. This sustainable development report has been compiled in accordance with the GRI’s G3 guidelines. It is independently assured by PricewaterhouseCoopers, to an application level of A+. We have self -declared our report to GRI Application level A+ which has been third party checked by PwC. Overview 02 2010 highlights 04 Group overview 06 ChairmanÕ statement s 09 Chief ExecutiveÕ report s Strategy 18 Market overview 21 Competitive environment 24 How we create value 26 Strategy 28 Growth pipeline 36 Key performance indicators 42 Principal risks and uncertainties Performance 50 Financial review 56 Operating review 56 Xstrata Alloys 62 Xstrata Coal 70 Xstrata Copper 80 Xstrata Nickel 86 Xstrata Zinc 94 Xstrata Technology Services 96 Operations data Governance 102 Board of directors 104 Executive management 105 DirectorsÕ eport r 110 Corporate Governance report 119 Remuneration report 30 33 36 39 42 45 48 51 54 57 63 66 69 Through our commitment to integrated sustainability reporting, Sasol aims to provide stakeholders with a balanced view of the performance of our business through a suite of reporting publications, indicated below. The 2010 Sasol annual report consists of two books: AR As an integrated energy and chemicals company Sasol aims to meet stakeholders’on our innovation environmental sustainability, premised expectations y SCOPE AND BOUNDARIES OF OUR REPORT Anglo Platinum Limited’s financial year runs from January to December and this report covers results for 2010. The previous report was released in February 2009. The scope of the 2010 report has changed. The manner in which data and information for both BRPM and Bokoni mines is included in the annual report has changed as these operations are now accounted for as associates. Therefore certain key metrics have been restated for comparability, where it makes sense to do so. Annual review Including business overview, chairman’s statement, chief executive’s report and operating reviews. our integrated business model emerge from the economic turmoil of the last 18 months, As we we are focused and energised.We have scrutinised our assets energised. We and interrogated our plans for the future. We are leaner and Exploration and production to do to more flexible, through its coal-mining activities, Sasol obtains itsexible, and we understand what we have raw materials oil and gas exploration, and purchasesprofitably market.sustainably. transform and grow, profitably and w from the open l Some raw materials are sold directly to external markets. We have the people and the technology, the experience y and the innovative spirit to reach new frontiers,, to meet the challenges of the future, and to grow our business significantly beyond where it is today. significantly Innovation In downstream chemical process technology, we have developed several proprietary processes for recovering and processing a range of solvents, waxes and phenolics for the world market, as well as 1-pentene, 1-hexene, 1-heptene, 1-octene and higher alpha olefins, the last of which we convert into Safol™ H(C12,13) alcohols. We have developed and patented several base-metal catalysts for our FT synthesis processes. We have also been innovative in coal exploration and mining, where Sasol Mining (sometimes in partnership with technology suppliers) has developed high-extraction mining methods, advanced directional drilling techniques, roof-bolting systems, continuousminer systems and a virtual-reality training system for continuousminer operators, among other cost-saving innovations. FIN Annual financial statements Including a full analysis of the group’s results by the chief financial officer. Research Besides the research and development and new-product formulation and testing work we do at Sasolburg through Sasol Technology’s fuel research group, we conduct further fundamental research at the Sasol Advanced Fuels Laboratory (SAFL), in collaboration with the University of Cape Town, and the Sasol Fuels Application Centre (SFAC). SFAC enables us to conduct sea-level engine and fuel research and tests in line with international trends. Other related publications: 20F Form 20-F Our annual report under the Securities Exchange Act of 1934 on Form 20-F was filed with the United States Securities and Exchange Commission on 28 September 2010. The Form 20-F is available on our website (www.sasol.com). 71 75 82 84 85 86 86 SD 0Sustainable development report This separate report provides more detail of particular interest to certain of our stakeholder groups, such as sustainable development analysts and professionals. In the interests of shortening the printed report and making for easier and more focused reading, we have included additional detail on our website (www.sasolsdr.com). These reports provide a complete view of the group’s strategy, businesses, performance against objectives, and prospects. 88 90 91 ibc www.sasol.com Through Sasol Petroleum International (SPI) and Sasol Gas, we obtain natural gas through the cross-border pipeline linking the Pande and Temane fields in Mozambique to our Secunda complex. We use this gas as our sole hydrocarbon feedstock at Sasolburg and as a supplementary feedstock to coal at Secunda. Sasol Mining supplies most of the feedstock coal we need for our Sasol petrochemical plants. Our GTL diesel has a higher quality than diesels derived from crude oil. GTL diesel has a high cetane number (70+ versus the conventional 45 – 55), low sulphur (less than five parts per million), low aromatics (less than 1%) and excellent cold-flow characteristics. Our GTL diesel, therefore, is ideal as a low-emissions, premium grade fuel and as a blend stock for upgrading conventional diesels. Markets Sasol markets products directly to the consumer, as well as to commercial and industrial customers, thereby integrating its upstream and downstream activities. In addition, the group has a number of joint ventures, as follows: with Anooraq Resources Corporation over the Bokoni mine; ARM Mining Consortium Limited over the Modikwa Platinum Mine; Royal Bafokeng Resources over the combined BafokengRasimone Platinum Mine (BRPM) and Styldrift properties; the Bakgatla-Ba-Kgafela traditional community, which holds a 15% share in Union Mine; Eastern Platinum Limited (a subsidiary of Lonmin Plc) and its partner, the Bapo-Ba-Mogale traditional community and Mvelaphanda Resources, over the Pandora Joint Venture; and Xstrata Kagiso Platinum Partnership, to operate the Mototolo Mine. Anglo Platinum Limited also has pooling-andsharing arrangements with Aquarius Platinum (South Africa), covering the shallow reserves of the Kroondal and Marikana mines that are contiguous with its own Rustenburg mines. The group’s smelting and refining operations are wholly owned through Rustenburg Platinum Mines Limited and are situated in South Africa. These operations treat concentrates, not only from the wholly owned operations, but also from joint ventures and third parties. Elsewhere in the world, the group successfully completed the development of Unki Platinum Mine in Zimbabwe during 2010 and is actively exploring in Brazil. It has exploration partners in Russia. Financial statements 132 Statement of directorsÕ esponsibilities r 133 Independent AuditorsÕ eport r 134 Consolidated income statement 135 Statement of comprehensive income 136 Consolidated statement of financial position 138 Consolidated cash flow statement 139 Statement of changes in equity 140 Notes to the financial statements 219 Independent AuditorsÕ eport r 220 Balance sheet 221 Notes to the financial statements 228 Cautionary note regarding forward-looking statements IBC Shareholder information Overview Strategy Performance Governance o o CONTACT DETAILS AND FURTHER INFORMATION For further information, please e-mail us at kmphahlele@angloplat.com, or complete the fax reply form at the back of this report. The address of the Anglo Platinum Limited website is http://www.angloplatinum.com. Financials Mission statement We will grow and manage a diversified portfolio of metals and mining businesses with the single aim of delivering industry leading returns for our shareholders. We can achieve this only through genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which are based on integrity, co-operation, transparency and mutual value-creation. Contact person Kgapu Mphahlele Investor Relations E-mail: kmphahlele@angloplat.com Telephone: 011 373 6239 Anglo Platinum Limited 55 Marshall Street, Johannesburg, 2001 PO Box 62179, Marshalltown, 2107, South Africa Our proprietary Fischer-Tropsch technology cobalt, lead and silver. The Group also comprises a growing platinum group metals business, iron ore projects, recycling facilities and a suite of global technology products, many of which are industry leaders. XstrataÕ s operations and projects span 20 countries. Sustainable development For the second year, we have combined information about our non-financial and financial policies and performance to provide a comprehensive overview of the Group’s business and activities. We recognise that excellence in safety, environmental, ethical and social performance is a source of competitive advantage and is critical if we are to achieve our primary aim of delivering industry-leading returns to our shareholders over the long term. Integrated reporting reflects our ongoing efforts to embed our sustainable development policy and principles into our decision-making and the way we operate at every level of the organisation. Key information about sustainable development within this report is available in the following areas: Page numbers Governance and framework Approach and policies Employees Health and safety Environment Community Key performance indicators 7-8, 24-25, 112, 115-118 7, 10-11, 24-25, 26-27 25, 27, 41, 47 10-11, 25, 27, 40, 45-46 25, 39-40, 44-46 25, 27, 41, 45 38-41 For more information Visit our corporate website: www.xstrata.com Cross-reference within this document for related information. o How we operate We believe that operating to leading standards of health, safety and environmental management, contributing to the development of sustainable communities and engaging with our stakeholders in two-way dialogue, regardless of our location, enhances our corporate reputation and is a source of competitive advantage. We balance social, environmental, ethical and economic considerations in how we manage our businesses. annual review 2010 i 1 OUR APPROACH TO REPORTING Water Various technological advancements in effluent recycling, cooling, pre-treatment of water for steam generation and solids handling are paving the way for significantly improved zero liquid effluent discharge designs, which are being developed irrespective of water availability or pricing. Who we are Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. The Report should offer the reader an overview of the business activities and performance and should provide a brief discussion of all material issues which have, or potentially could have, an impact on the Group and divisions. pp IFC-1 and pp 4-5 Greenhouse gas (GHG) emissions Coal is an important part of the world’s energy mix, and Sasol will continue to produce transportation fuels from coal and gas. However, we are committed to substantially reducing our carbon emissions by, among others, developing more efficient production processes and investigating carbon capture and storage (CSS) solutions. We have set several targets to reduce our greenhouse gas emissions intensity by 15% (on the 2005 baseline) in all our operations by 2020, and we have spent R100 million (US$11,1 million) in 2009 on energy efficiency-related projects, which should achieve a reduction of around 760 000 tons of GHG emissions a year. Our global emissions of GHG, which have been independently verified, increased from 71,3 million tons (Mt) in 2009 to 75,8 Mt in 2010, mainly due to the inclusion of Oryx GTL emissions data. However, our emissions intensity improved to 3,05 (measured as carbon dioxide equivalent per ton of production) in 2010. This compares with 3,24 in 2009 and 3,02 (restated) in 2008. The improved overall GHG intensity is a result of the inclusion of Oryx GTL, and Sasol Polymers and Sasol Synfuels significantly increasing production volumes, which offset the emissions increase. The targets we have set for all our operations reflect not only our desire to be a responsible company, but also our awareness that a strong business case exists for sustainable development. New energy Sasol New Energy Holdings (SNE) was created to focus on new technologies that can be integrated with our core technologies to reduce our GHG footprint. As part of our commitment to reduce production of carbon dioxide in our operations and integrate new technology into our FT processes, SNE will look into renewable and lower-carbon energy options such as solar, biofuels and biomass, as well as nuclear, hydro and natural gas. 4 annual review 2010 • our business • our integrated business model 5 Anglo Platinum Limited’s 2010 Annual Report is the company’s second fully integrated annual report to shareholders. As such, the report offers a complete overview of the company’s financial, social and environmental performance in a single, consolidated report. Much of the information and data on the group’s performance in terms of sustainability is integrated into the relevant sections of this report, including the chairman’s statement, the CEO’s review, and the sections on the business environment, performance highlights and business results. A complete set of environmental, social and governance statements has been included, starting on page 125. What we do Our businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with additional exposure to gold, How we create value We create sustainable value for our shareholders by delivering transformational growth and by applying operational excellence to our portfolio. We also produce a detailed Sustainability Report which is published in April 2011. This provides additional discussion on our policies, activities and performance, and is available on our website: www.xstrata.com/sustainability Siphelo Mbabane using a prop extension arm jack to install support. ANGLO PLATINUM LIMITED 2010 13 Sasol introduce their Report by providing a brief outline of what information is contained within the Report as well as sign-posting the reader to other related publications. To provide information of the business actions, processes and outcomes, Sasol demonstrate their integrated business model. Issues which arise as a result of the business activities, including greenhouse gas emissions, water, and new energy, are discussed in this spread showing that these issues are regarded as central to the Company. pp 12-13 Anglo Platinum provide a general overview of the Company profile, its activities and its approach to reporting. It also clearly defines the scope and boundaries of the Report, how it has changed and gives clear contact details for further information. This spread is interestingly presented as the set up to a ‘Who we are’ section which includes the Board of Directors and Executive Committee introductions and a map displaying the locations of all the Company’s operations. pp IFC-1 The front cover has a clear statement of the Company mission and a brief overview of who they are, what they do and how they operate. The reader is informed that the sustainable development information has been integrated throughout the Report and is directed to relevant areas of the report for specific information. www.blacksunplc.com 6 Integrated thinking in reporting www.blacksunplc.com © Black Sun Plc 2011 7 10 Integrated thinking in reporting www.blacksunplc.com © Black Sun Plc 2011 11 ‘Integrated Thinking in Reporting’ Showcases examples of reporting approaches used by companies to demonstrate integrated reporting. www.blacksunplc.com © Black Sun Plc 2011 1
