Integrated sustainability overview

Sustainability in business is no longer an option, it is an imperative that makes sound business and moral sense. It must permeate every aspect of a business and inform the way it thinks, behaves, strategises and operates. This will ensure it optimises returns for its shareholders over the long term, while remaining a relevant business for its staff, clients, suppliers and the communities in which it operates.

Nedbank Group recognises this reality and the impact it has, not just on the realisation of its long-term vision, but also on the day-to-day actions it takes.

The group also recognises that the only effective approach to sustainability is one in which sustainable practices and philosophies are at the core of every aspect of the organisation – impacting positively on people, philosophies, economics, the environment and the country as a whole.

For this reason Nedbank Group’s approach to sustainability is a holistic and integrated one that brings together economic, environmental, social and cultural elements to ensure that sustainability is inextricably woven into the fabric of the organisation and enables it to realise its vision of becoming a leader in sustainability.

SUSTAINABILITY TARGETS: 2010 AND 2011

ENVIRONMENTAL SUSTAINABILITY


2010 target	Status	Performance	2011 target

Minimising our environmental footprint	Achieved	Reduction efforts continued during 2010, with good progress being made against the electricity, travel and overall carbon reduction targets. Paper reduction targets were not met. (See commentary on page 106 for details.) The group remains committed to reducing its carbon emissions further and achieving the target of 12% emissions reduction by 2015, from its 2007 baseline.	Continued carbon reduction, with the overall target being emissions reduction of 12% by 2015, from its 2007 baseline.
Achieving carbon neutrality	Achieved	By offsetting its 2009 carbon footprint (of approximately 213 000 tonnes) Nedbank Group was the first financial services company in Africa to achieve carbon neutrality. Importantly, this was via a ‘reduce first and offset only where necessary’ approach. Please refer to the carbon neutrality case study on page 104 for details of the process and resulting benefits for the group and its stakeholders.	Maintaining carbon neutrality.
Increased focus on water efficiency	Achieved	The group’s 2010 water intensity reduction target of 5% per fulltime employee (FTE) from the 2005 baseline was met at the end of 2009. As such, a new target of reducing water usage by 10% per FTE (from 2009 levels) by the end of 2011 has been set. As part of the ongoing water reduction commitment the group has undertaken a number of focused water reduction initiatives (see page 106 for further details).	Continued focus on water efficiency.
Centralised electronic carbon database	Not achieved	The group set out to develop a centralised electronic carbon database to improve the accuracy of the reporting and monitoring of natural resources usage and carbon emissions. Complications in terms of integrating the various data flows from across the organisation meant that this objective was not achieved in 2010. It remains a high priority for 2011.	Centralised electronic carbon database.

SOCIAL AND CULTURAL SUSTAINABILITY


2010 target	Status	Performance	2011 target

Remaining a level 2 Department of Trade and Industry (dti) contributor	Achieved	Nedbank Group has been able to strengthen its position by scoring a total of 89,50%. Employment equity and skills development, however, remain under pressure, as natural staff attrition has slowed. Preferential procurement is an area of strength with the overall group operating at levels above 2016 targets. The only challenge in this area is the growth in the black women-owned (BWO) subcategory. Please refer to the dti summary scorecard on page 94.	To maintain level 2 contributor status with improving scores.
Beyond compliance – enhancing access for all to financial services	Mostly achieved	While this is not a requirement under the dti Codes, Nedbank Group remains committed to providing ready access to financial services as part of its vision of becoming a bank for all South Africans. The recovery from the financial crisis and availability of suitable land for property development are some of the factors that inhibited delivery of all internal targets. Despite this, its efforts have gone a long way to furthering access to financial services. Please refer to the ‘Non-scoring performance’ section of the scorecard on page 94.	Continue to enhance access for all to financial services.
Empowerment financing	Achieved	Despite the challenging economic backdrop, and this target not forming part of the dti Codes, the group has continued to focus on empowerment and transformation financing as a means of realising its commitment to corporate development in South Africa. Please refer to the ‘Non-scoring performance’ section of the scorecard on page 94.	Continue to grow our involvement in financing.

DEPARTMENT OF TRADE AND INDUSTRY SUMMARY SCORECARD

	Voting rights		Economic interest		Designated groups	Employee schemes/ broad-based schemes, etc	Net equity value	Total score	Weighting
Ownership	Black people	Black women	Black people	Black women
	30,71%	3,25%	28,05%	3,84%	10,84%	12,26%	30,71%	20,11%	20%

Management	Black board	Black executive directors	Black senior top management*	Black top other management	Black independent directors	Total score	Weighting
	47,06%	41,67%	25,00%	n/a	50,00%	8,62%	10%

Employment equity	Black senior management	Black middle management	Black junior management	Black disabled as % of total	Total score	Weighting
	26,15%	50,85%	72,40%	1,15%	11,42%	15%

Skills development	Black skills spend	Black disabled skills spend	Category b, c, d black learners	Total score	Weighting
	2,78%	0,04%	3,02%	9,60%	15%

Preferential procurement	% spend	% spend on QSEs¹ and EMEs²	% spend on blackowned	% spend on BWO	Total score	Weighting
	85,12%	27,13%	12,56%	5,24%	19,75%	20%

Enterprise development	Contributions	Total score	Weighting
	6,98%	15,00%	15%

Socioeconomic development	Contributions	Total score	Weighting
	1,46%	5,00%	5%

Non-scoring performance

Product/Area	Mzanzi (accounts)	FSC⁴ (branches)	Black SMMEs⁵ (R million)	Black agriculture (R million)	Affordable housing (R million)	Trans- formational infrastructure (R million)	BEE⁶ transaction financing (R million)	Consumer education (% of retail NPAT⁷)	Weighting
Achieved	315 024	8	R1 772	R70	R2 099	R5 681	R6 570	0,27%
Growth vs 2009	(0,72%)	0,00%	52,54%	71,43%	63,84%	59,18%	79,27%	(7,4%)

Total BEE score

dti level 2

89,50%

100%

* Nedbank does not distinguish between senior top and other top management and has elected to measure top management as a single indicator as prescribed by paragraph 4.4 of Code Series 200 of the dti Codes.

¹ Qualifying small entities.
² Exempt microenterprises.
³ Black-women-owned.
⁴ Financial Sector Charter.
⁵ Small, medium and microenterprises.
⁶ Black economic empowerment.
⁷ Net profit after tax.

SUSTAINABILITY GOVERNANCE STRUCTURES AND POLICY FRAMEWORK

SUSTAINABILITY FOCUS AREAS	Nedbank Group strategic focus, Deep Green aspirations* and material issues	Relevant risks	Board and executive committee risk management committees	Policies and forums	Guiding principles

ECONOMIC	Strategic focus Increase share of economic profit Become client-driven Manage risk as an enabler Enhance productivity and business execution	Compliance risk Social and environmental risk Investment risk Strategic risk New-business risk Credit risk	Directors’ Affairs Committee Group Credit Committee Executive Credit Committee Business Risk Management Forum Group Risk and Capital Management Committee (focus of this committee includes physical risks for staff and clients) Group Audit Committee	Credit Policy Compliance Policy Investment Risk Policy Strategic Risk Principles Policy Reputational-risk Policy	Code of Banking Practice Sector Guidelines King III
	Deep Green aspirations Great place to bank Great place to invest Worldclass at managing risk Most respected and aspirational brand Great at collaboration
	Key material issue Deliver lasting stakeholder value

ENVIRONMENTAL	Strategic focus Lead as a green and caring bank	Reputational risk Social and environmental risk Strategic risk	Group Transformation and Sustainability Committee	Environmental Policy supported by the Social and Environmental Management System	UN Global Compact Equator Principles Sector Guidelines Screening Tool King III
	Deep Green aspirations Highly involved in the community and environment
	Key material issue Minimise usage of, and impact on, natural resources

SOCIAL	Strategic focus Lead as a green and caring bank	Reputational risk Strategic risk Environmental and social risk	Group Transformation and Sustainability Committee	Corporate Responsibility Policy	UN Global Compact Equator Principles Sector Guidelines King III
	Deep Green aspirations Highly involved in the community and environment
	Key material issue Build societal capacity in southern Africa

CULTURAL	Strategic focus Evaluate people practices Build a unique culture Accelerate transformation	People risk Transformation risk	Transformation and Human Resources Committee Group Transformation and Sustainability Committee Group Remuneration Committee	Strategic Learning and Growth Policy Remuneration, Rewards and Recognition Policy People transformation Policy Code of Ethics Principles Policy Nedbank Employment Equity Forum (NEEF)	UN Global Compact King III
	Deep Green aspirations Great place to work Living its values Leading transformation Community of leaders Great at collaboration
	Key material issue Develop a resilient corporate culture

Note: In addition, all relevant legislation is complied with.

2010 Highlights

	HEADLINE EARNINGS		DILUTED HEADLINE EARNINGS PER SHARE



	NET ASSET VALUE PER SHARE		NON-INTEREST REVENUE

» Continued new product development as part of commitment to leading through
innovation.

» Cost discipline maintained while creating frontline jobs.

» Ongoing enhancement of capital management and risk processes.

Approval by South African Reserve Bank of Advanced Measurement Approach for operational risk (effective 2010) and Internal Model Approach for market risk (effective 2011).
Strong capital and liquidity positions.
Capital adequacy further strengthened (core Tier 1: 10,1%).

» Maintained and enhanced level 2 broad-based black economic empowerment ranking
in terms of Department of trade and industry codes.

» High level of staff morale maintained despite difficult operating conditions.

» Retained and strengthened position as South Africa’s ‘green and caring’ bank.

Carbon neutral – Africa’s first carbon-neutral financial organisation.
Listed for the sixth year on the Dow Jones World Sustainability Index – the world’s premier performance benchmark for companies in terms of corporate sustainability.



This page was updated on 4 April, 2011	Return to top