NEDBANK'S SUSTAINABILITY JOURNEY

STAKEHOLDER ENGAGEMENT

While this report represents one of the most significant means by which Nedbank Group engages with its stakeholders, we are committed to ensuring such engagement occurs throughout the year. This ongoing stakeholder engagement takes many forms and can be of a formal or informal nature.

The focus and nature of all stakeholder engagement are determined:

by our strategic focus areas;
in terms of our material reporting focus areas; and
according to business and stakeholder requirements.

All stakeholder engagement occurs on a decentralised basis within the guidelines and parameters set out by the Nedbank Group Strategy and Corporate Affairs Division. An exception to this decentralised approach is that communication with the SA Reserve Bank (SARB) is undertaken by the group’s SARB liaison officer.

The following pages outline the key Nedbank Group stakeholders with whom engagement has occurred during the course of 2009 as well as a brief description of such engagement.

NOTE: Not all engagements resulted in feedback that required specific action from Nedbank Group. Where no mention is made of any specific feedback received, it can be taken that the feedback was positive and that the expectations of the relevant Nedbank Group stakeholders were met.

Shareholders and analysts
Reasons for engagement:

To provide relevant and timeous information to current and future providers of capital.
To position Nedbank Group as a sound investment choice.

Types of engagement:

Investor relations; local and international roadshows; ad hoc communications; annual general meeting and other meetings; conferences and presentations; SENS announcements; media releases; analyst briefings; feedback via broker reports and corporate website.

Examples of engagement

Feedback/Resulting sustainability initiatives

A total of 150 investor meetings following results announcements.
11 broker conferences.
Nedbank Business Banking Investor Days.
Two investor lunches held by RMB, Morgan Stanley and Deutsche Securities in Johannesburg and Cape Town.
Presentations at: Investec Funding, Liquidity and Capital Seminar, UBS Global Financial Services Conference, Deutsche Securities Credit Teach-in, Nedgroup Securities Conference, the 12th Annual UBS Financials Conference, Merrill Lynch conference and Old Mutual plc Showcase on Nedbank.
Three annual credit rating reviews.
134 other management meetings with shareholders, analysts and rating agencies.

Some concerns were raised at the annual general meeting regarding the composition of the board and the potential impact thereof on the independence of boardmembers.
In fulfilling the requirement of independence according to King II, four long-serving non-executive directors resigned in 2009.

Government
Reasons for engagement:

Build and strengthen relationships with government, both as a partner in the development of the country and as a current or potential client.
Provide input into the legislative development process that will affect the activities of the bank.

Types of engagement:

Government and public affairs business; support and advisory services; support of government social initiatives; and input into legislative developments.

Examples of engagement

Feedback/Resulting sustainability initiatives

Ongoing interactions with government departments through our position on the Banking Association’s working committees to the Department of Housing, the Department of Agriculture, the Department of Land Affairs, the Department of Trade and Industry, and the National Treasury.
Submissions to the Public Parliamentary Sessions aimed at reviewing the role of government and the opportunities to address the political, economic, legal, gender and social impacts of climate change.
Engaged with the Department of Labour regarding progress made and challenges faced in terms of the implementation of the Employment Equity (EE) Act.

Various engagements have contributed to securing 76 new public sector tenders.
Input on policy as well as negotiations as a result of the effort to establish Financial Sector Codes to replace the now defunct Financial Sector Charter (FSC).

Regulatory bodies
Reasons for engagement:

To maintain good relationships with regulators and ensure compliance with their requirements, thereby retaining Nedbank’s licence to operate.

Types of engagement:

Ongoing meetings and interaction with regulators, including prudential visits, and statutory reporting.

Examples of engagement

Feedback/Resulting sustainability initiatives

Nedbank Group Risk maintains an excellent relationship with the Financial Intelligence Centre (FIC) and supervisors. Nedbank meets with the FIC, the South African Reserve Bank (SARB), JSE and the Financial Services Board (FSB) for bimonthly Nedbank/regulators anti-money-laundering/combating the financing of terrorism meetings.

The bimonthly meetings enable Nedbank Group to communicate with the regulator and supervisors to ensure compliance with their requirements and obtain clarification, where necessary.

Local communities/NGOs
Reasons for engagement:

Create partnerships that will best facilitate Nedbank Group’s corporate social investment activities.
Obtain input from communities and representative non-government organisations (NGOs) regarding key focus areas.
Create awareness of Nedbank Group in communities.

Types of engagement:

Nedbank Foundation – ongoing support of projects and interaction with a wide variety of non-profit and government organisations; sustainability reporting; and staff volunteerism programmes.

Examples of engagement

Feedback/Resulting sustainability initiatives

Feedback from communities and NGOs obtained via our various staff participation programmes that run throughout the year.
Ongoing engagement with the Hope Factory and other NGOs focused on job creation, to provide financial and non-financial support.
Engagement with various industry players to investigate the potential for partnering on job-creation programmes.

Feedback from the schools and participants in the Eco-schools Project was very positive. The schools were encouraged by the interest shown by the Nedbank volunteers. Through these projects the Wildlife Environment Society of South Africa has also been able to bridge the gap between the learning processes instituted and the uptake of a practical project. Please refer to the Environmental section of this report for further details regarding the Eco-schools Project, which was conducted as part of our Deep Green Day.

Suppliers and contractors
Reasons for engagement:

Maintain an ideal and timeous supply of goods and services for Nedbank Group’s operations.
Assist suppliers in ensuring their own viability through education, early-payment terms and other support.

Types of engagement:

Ongoing interaction with suppliers and contractors; and supplier education workshops.

Examples of engagement

Feedback/Resulting sustainability initiatives

Continued to meet various suppliers regarding environmental practices, focusing particularly on suppliers with the largest environmental impact.
Engaged with air carriers regarding the environmental credentials of aircraft fleets and airline activities.
Meetings held with paper suppliers and distributors to ensure the same price for recycled equivalents of traditional paper.
Engagements with printer and cartridge manufacturers regarding recycling, reuse and environmental impact of chemicals used in toners.
An investigation is underway to procure more environmentally friendly office stationery products.
The promotion of groupwide preferential procurement expenditure.

Information received has enhanced our understanding of our indirect carbon footprint-minimising initiatives, including reduction of paper usage and travel.
A recycling facility is provided for used cartridges, batteries and other electronic waste. • Positive cooperation from suppliers for phase II headoffice buildings assisted Nedbank to secure the first Green Star SA Rating.
The bank continues to move towards the use of smaller and more fuel-efficient cars for rental purposes.
The use of biological cleaning materials has been implemented in headoffice and certain branch buildings.
All furniture for phase II of the Nedbank headoffice meets environmental standards.

Business partners
Reasons for engagement:

Continue learning through interaction with industry and cross-sectoral organisations.
Establish and build strategic partnerships.
Use business associations as a forum to promote Nedbank Group’s viewpoint on key issues.

Types of engagement:

Membership of industry associations and bodies; strategic partnerships.

Examples of engagement

Feedback/Resulting sustainability initiatives

Ongoing participation in all Banking Association working groups and projects remains a key imperative.
Engagements with other corporates through the National Business Initiative (NBI) Climate Change Working Group.
The promotion of groupwide preferential procurement expenditure. Nedbank Group has engaged with various industry bodies to identify companies with whom it could form beneficial procurement relationships.

Learnings from interactions with the NBI and Banking Association have served to enhance the group’s sustainability focus in a number of business processes.

Nedbank’s Black Business Partners (Wiphold, Brimstone Consortia and Aka Capital)
Reasons for engagement:

As part of Nedbank’s BEE transaction that was executed in 2005, strategic black business partners (BBPs) were identified to guide transformation within the broader group and assist with business development.
Performance agreements consisting of HR-, Strategy-, Retail-, Corporate- and Capital-related activities are in place and deliver value in these areas. The engagement also ensures that synergies are unleashed.

Types of engagement:

Two formal and two informal quarterly performance reviews per annum; ad hoc meetings and engagement.

Examples of engagement

Feedback/Resulting sustainability initiatives

BBPs represented on relevant Nedbank committees and forums, eg the Transformation and Sustainability Board Subcommittee and BEE Forum.
Client referrals, resulting in revenue generation in the Corporate and Capital space.
Participation in the Dinokeng scenarios as well as mentorship and participation in Nedbank’s applied academic programmes.
Through a careers day project initiated by Wiphold, Nedbank Group participated in sessions aimed at equipping high-school learners with information about career choices in the banking sector.

Participation and insight provided by the BBPs enhance and enable the sustainability strategy of the bank. For example, involvement in Nedbank’s scenario-planning exercise as part of developing the group’s strategy; feedback and input provided by the Transformation and Sustainability Committee on sustainability initiatives and suggestions to optimise the group’s green positioning better.

The environment/Environmental NGOs
Reasons for engagement:

Obtain input to ensure that Nedbank Group’s operations are taking place in the most environmentally responsible manner and comply with legislation in all jurisdictions.

Types of engagement:

Environmental/Sustainability partnerships with Worldwide Fund for Nature South Africa (WWF-SA), United Nations Environment Programme Finance Initiative (UNEP FI) and the NBI, among others, ensuring that clients undertake environmental impact assessments as part of their development processes.

Examples of engagement

Feedback/Resulting sustainability initiatives

WWF-SA has a representative on the Nedbank Group Environmental Forum and the main working committee to this forum.
Representation on various UNEP FI committees and workstreams, including the role of co-chair of the UNEP FI African Task Force (ATF) and Water and Finance Workstream.
Cosponsor of the UNEP FI Global Round Table event hosted in Cape Town.
Attended a number of WWF-SA corporate partner breakfast events aimed at sharing information with peers on sustainability.
Hosted launch of the Trialogue Environmental Handbook.
Joined UNEP FI Steering Committee meetings as co-chair of the UNEP FI ATF.
Engagements with the UN Global Compact.
WWF-SA symposium on climate change.

Our various engagements with environmental NGOs have served to assist Nedbank Group in its environmental sustainability journey. Nedbank regards such NGOs as partners in this journey who help ensure continual improvement in, and enhancement of, environmental sustainability initiatives. Please refer to the Environmental section of this report for further details.

Clients
Reasons for engagement:

Understand and resolve client concerns or complaints and utilise these to improve service.
Make current and potential clients aware of Nedbank Group products and services.

Types of engagement:

Business interaction via Nedbank outlets; client education workshops; client satisfaction surveys; client complaint lines and call centres; marketing and advertising activities.

Examples of engagement

Feedback/Resulting sustainability initiatives

AskOnce service delivery campaign.
CMAT™ assessment.
Ask Afrika Orange Index.
Internal client satisfaction scores.
Client Complaints Tracker system.
Consumer education.
Managing the service experiences of our clients when things go wrong is a core measure of how the bank excels at service.

A need for client education was highlighted and addressed through, among other methods, client education workshops.
• Clients receive a newsletter, Perspectives, that regularly provides information regarding Nedbank’s sustainability initiatives.
At the Ombudsman for Banking Services Awards Function in 2009, Nedbank was voted the best bank for dispute resolution.

Media
Reasons for engagement:

Respond to questions or concerns raised in the media.
Work with the media as a communication channel to reach all stakeholders and position Nedbank Group as a bank of choice for all South Africans.

Types of engagement:

Communication and marketing (external marketing of the Nedbank Group brand, values and product offering).

Examples of engagement

Feedback/Resulting sustainability initiatives

Daily liaison with various media contacts regarding business-related issues.
An informal media entertainment event was held on
29 October to provide an opportunity, in an informal setting, for Nedbank leadership to engage with media representatives.

A formal relationship-building programme with regular interactions between the media and various Nedbank business unit spokespeople.

Staff
Reasons for engagement:

Ensure that Nedbank Group is an employer of choice by providing a safe and positive working environment.
Understand and respond to staff concerns and questions.
Provide all staff with information regarding the activities and strategic focus areas of the group.

Types of engagement:

Cultural surveys; roadshows; email, intranet, data casting and magazines; induction/onboarding with new employees; eLearning training over the intranet; and human resource management activities.

Examples of engagement

Feedback/Resulting sustainability initiatives

Surveys conducted and feedback provided.
Five formal face-to-face interactions with Group Executive Committee countrywide.
3sixty magazine (five editions) and daily online Engage updates.
An engagement on the bank’s strategic direction held with top 100 managers.
Dialogues and talks on transformation issues.
The People with Disabilities (PWD) Forum hosted a talk by
Dr Norman Kunc aimed at transformation in the workplace for PWD.
Sponsorship of the Business Women’s Association provides networking opportunities for the bank’s female employees.
Nedbank Employment Equity Forum, established in accordance with the requirements of the EE Act, 1998, serves to monitor and consult with staff across the group on EE matters.

Cluster-specific plans and numerous interventions such as Diversity Training, Learning for Deep Green cascades and an increase in Management Development Programme Role Orientation Workshops.
An equity audit to evaluate where Nedbank Group can reasonably accommodate its employees with disabilities.

Unions
Reasons for engagement:

Maintain a good relationship with the unions and obtain approval for any decisions or projects that require changes in working conditions.

Types of engagement:

Group Human Resources manages labour relations with the unions on an ongoing basis and consults on any changes in working conditions as well as performance management issues.

Examples of engagement

Feedback/Resulting sustainability initiatives

Monthly and quarterly consultations by means of Special Joint Committee meetings.
Annual salary negotiation meeting.
Workplace engagements via our EE forums.

As per the note here, none of the feedback received from the unions required additional action from Nedbank.

Holding company (Old Mutual)
Reasons for engagement:

Alignment of policies, governance and sustainability initiatives and audit methodologies.
Compliance monitoring and review of subsidiaries.
Enhance policy framework.
Capture synergistic opportunities.

Types of engagement:

Representatives of Old Mutual Group (OMG) engaged with governance, compliance and sustainability heads of Nedbank Group.

Examples of engagement

Feedback/Resulting sustainability initiatives

OMG engaged with members of the Enterprise Governance and Compliance Division and with the heads of governance and compliance within business to review the Nedbank implementation of governance, compliance and sustainability.
Electronic and telephonic communications regarding alignment of policies, frameworks and sustainability. Nedbank received a very good review from OMG.

An analysis of policy alignment was conducted.

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