There are many sustainability issues that we could focus on.  We make decisions about priorities through a process known as ‘materiality’.  We create plans for addressing these important topics, and report on them through the Global Reporting Initiative framework.  We undertake this process annually to ensure that our plans are in line with stakeholders’ views.  It is also used to monitor if issues are becoming more, or less, important.

The materiality process is broken down into four steps.

Step One - Identification

The materiality process starts by identifying sustainability topics that are important to a wide range of external and internal stakeholders.

 

Stakeholders included non-government organisations, sustainability rating agencies, customers, media, our local communities’ government, and our own people. Inputs are also drawn from internal registers such as our risk registers, to understand potential impacts to our business from sustainability topics. This year, we gathered information from our own people through questionnaires and interviews.

 

An important part of the Identification step was to consider impacts to voiceless stakeholders, including ecosystems and future generations. By doing this we are operating in line with our sustainability policy principles, specifically that we are responsible stewards of the natural resources we touch so these shared resources can continue to provide value for future generations.

 

The identification step also defines the Boundaries of each sustainability topic. Defining boundaries identifies where an impact may occur within our gate or outside of our direct operational control.

Step Two - Prioritisation

Prioritisation is the process of determining how important the identified topics are to our stakeholders and to us. Prioritisation is undertaken in different ways, according to the stakeholder group. For example, in the media stakeholder group, importance is ranked on the number of articles published on a particular topic. For the stakeholder questionnaires, issues are ranked according to how important or impactful the individual believes the topic to be. 

 

Key issues that were identified during the process undertaken in FY17 included:

  • Water was identified as the most material sustainability issue
  • Occupational health and safety continues to be a material issue, and ranks higher for internal stakeholders than external stakeholders
  • Anti-corruption is a material risk for South32
  • Human Rights in Supply Chain escalated as an issue, with internal and external stakeholders.
  • Energy, economic performance and employment ranked highest in the media analysis
  • Ratings agencies covering environment, social and governance identified tailings, water stress and carbon emissions as most material sustainability issues for South32, with key strengths being biodiversity and corporate governance
  • Internally, local communities, diversity and inclusion, water, and occupational health and safety were identified as the highest ranking
  • In the Australia Region, our community stakeholders identified community contributions, employment and biodiversity as the highest priority issues
  • Government engagements focussed on local communities and transformation, which relates to the black empowerment programme in South Africa

Step Three - Validation

The validation step ensures our reporting provides a reasonable representation of our sustainability performance. It ensures that the reporting is accurate and balanced, which means we report on both positive and any negative sustainability performance in line with what is most material. The validation step also seeks direct input from our executives, particularly if they have noted any

additional issues that are material to our business.

 

All these topics are expanded in detail in our Annual Reporting Suite.  Data specific to each topic is included within our sustainability data tables located on our website.  This allows easy comparisons with other companies.

Step Four - Review

Each year, we will conduct and review our materiality process to ensure that the issues relevant to us, and to our stakeholders, are being continually considered and reported annually in line with our commitment to transparency.

 

Assurance

To ensure that our reporting is as balanced, accurate and as transparent as possible, we engage with an independent third party, KPMG, to provide assurance over our sustainability data and disclosures. As part of this work, KPMG verified that we followed a credible process to select and define our sustainability performance report content. This means we reported on what matters, what was most material and, in a balanced way, the positive and negative aspects of our performance.