Management of sustainability
The diverse nature of Altron’s businesses means that the Altron group has a wide range of impacts in various areas of sustainability. These include: the business environment which affects shareholders, customers, suppliers, partners and employees; the South African transformation environment which relates to the dti Codes of Good Practice (dti CoGP); and the natural environment.
The purpose of this report is to examine more closely the impacts which the Altron group has on the environment and the stakeholder groups with which it interacts. It seeks to provide balanced and transparent reporting on the most material sustainability issues affecting the long-term survival and success of the business.
Altron establishes its most material sustainability issues through a number of avenues. The risk management committee identifies strategic risks, reviews their impact, assesses the probability of occurrence and monitors the effectiveness of existing controls. Further to this process, each Altron group company interacts with customers, suppliers, government and regulators, community and environmental interest groups and other stakeholders both during the normal course of business, as well as in the ways described in the treatment of each material issue in this report. Information qualifying the materiality of issues is fed to responsible line management, HR management and environmental officers for the appropriate assessment and response. In October 2008, managers from across the Altron group met to discuss the relative importance of sustainability issues to the group in a process facilitated by sustainability specialists, Trialogue. These form the basis of this report.
Altron risk management Altron categorises sustainability issues into those that affect the entire Altron group and those that affect specific operations. Issues of group-wide relevance are dealt with centrally at group level, while other issues are managed by the operations to which they pertain.
The Altron risk management committee conducts regular appraisals with the relevant parties, providing a link between the operational management and board responsibility of sustainability issues, and ensuring that steps are implemented to identify, evaluate the financial implications of and mitigate the risks associated with these issues. Detailed legal reports are tabled at Altron risk management committee meetings, to which the head of Altron legal is an invitee. The transformation committee chairman reports into the risk management committee, providing information on the group’s compliance with B-BBEE requirements. The risk management committee chairman sits on and is a member of the Altron audit committee and provides feedback on any material risks and potential liabilities which may require the making of provisions or the tabling of contingent liabilities in the balance sheet.
The chairmen of the audit and risk management committees table their findings at board meetings, bringing to the attention of the Altron board all material sustainability risks and issues, and highlighting the relevant remedial plans that need to be put into place, as necessary.
Applying this methodology, we have arrived at a range of stakeholder-related issues that include issues that are not strictly sustainability issues as defined by the triple bottom line (social, environmental, or economic) but are nonetheless critical to the sustainability of the business. This report represents therefore an attempt at integrating sustainability reporting into the mainstream consciousness of the business, whereby sustainability issues can stand alongside traditional business issues in terms of importance and management attention.
Guidelines and standards
The following guidelines and standards were consulted in compiling this report:- The King Report on Corporate Governance for South Africa – 2002 (King II), forming the basis of Altron’s self-evaluation independently verified by Corporate Governance Accreditation (Pty) Limited (CGA), in association with the Institute of Directors (IOD)
- The JSE SRI (JSE Limited Social Responsibility Investment) Index
- The Global Reporting Initiative’s (GRI) guidelines and indicators (G3 edition), against which Altron declares itself at a C application level
- The dti CoGP, independently assessed and certified by the rating agency, Empowerdex