ESG
A regenerative approach to business that focuses on creating both social and economic value.
OUR APPROACH TO SUSTAINABILITY
At KAP, sustainability means ensuring that we are able to deliver on our purpose of creating long-term economic and social value. We therefore consider commercial, social and environmental dimensions in our decision-making, which is underpinned by our foundation of being a responsible business. These
three dimensions are interlinked and often positively impact each other.
R75 million invested in enterprise and supplier development (FY24)
R32 million contributed
to social development
projects (FY24)
Disposed of 13 202 tonnes of waste (FY24)
205 772 tCO2e
absorbed for 2023
calendar year
R122 million invested in training and development (FY24)
INTEGRATING SUSTAINABILITY WITH OUR STRATEGY
Sustainability principles are integrated with the commercial strategies of our divisions through the application of our business principles of value-add/differentiation, operational excellence, best people and strategic stakeholder relationships. Our business principles enable our divisions to deliver fit-for-purpose products and services that are differentiated from competitors and enhance their competitiveness, to support the execution of our strategy. A practical example of this integration is operational excellence; to achieve low-cost positions, our divisions need to be as efficient as possible in their use of raw materials, and thus natural resources, to minimise waste.
MATERIAL SUSTAINABILITY MATTERS
Our material sustainability matters guide our sustainability reporting and represent those matters that we consider as material to either the group or our stakeholders, as identified through a materiality assessment, which is both qualitative and quantitative in nature. Material matters are considered and approved by our board. From our material sustainability matters, we prioritise six which represent those matters we consider as material to both the group and our stakeholders (‘priority matters’). We believe that by focusing on these matters, we have the greatest potential to drive positive change through our business activities.
The below sustainability framework summarises our material and priority matters and alignment with the objectives of the UN SDGs. As a signatory to the United Nations Global Compact (‘UNGC’), we support the creation of an inclusive, prosperous and sustainable society for all. Although our group activities are aligned with most of the SDGs, nine resonate with our priority matters.
SUSTAINABILITY GOVERNANCE
Our board is ultimately responsible for sustainability governance in the group and delegates the oversight and monitoring of sustainability matters to specific board committees namely the sustainability, social and ethics committee, the human capital and remuneration committee and the audit and risk committee. The following group committees and teams have accountability for various areas of sustainability: the KAP executive committee, the divisional executive committees and the relevant operational management teams within our divisions. Where necessary, experts on specific areas of sustainability are consulted, for example, on climate change.
KAP corporate services executives regularly update the board on sustainability matters and external stakeholder views, bearing in mind the diverse nature of sustainability within the group.
The relevant focus areas, policies and frameworks pertaining to sustainability matters are set at a KAP level, with guidance and approval thereof by our board, and are adopted by our divisions. Read more in our corporate governance report.
MANAGING SUSTAINABILITY RISKS AND OPPORTUNITIES
Our group enterprise risk management framework addresses all material risks that could influence the group’s ability to create value for its stakeholders. These risks include strategic, financial, operational, compliance and sustainability risks.
Our risk management approach is precautionary in nature, identifying potential material risks and ensuring we have the necessary plans in place to mitigate those risks. In considering our potential risks, including those related to sustainability, we also evaluate whether these risks could present opportunities for value creation. For example, by increasing renewable energy capacity to mitigate the risks of electricity interruptions and non-supply, we can also earn attractive financial returns and reduce our Scope 2 GHG emissions.
SUSTAINABILITY PERFORMANCE AND REPORTING
We are on a journey to improve not only our sustainability performance, but also how we report on sustainability matters to our stakeholders.
Our sustainability reporting is guided by materiality; we apply our material sustainability matters, as outlined in our sustainability framework, to the following voluntary frameworks in consideration of our sustainability reporting: JSE Sustainability Disclosure Guidance, SASB and the IFRS S1 and S2 sustainability disclosures.
We use the FTSE4Good assessment as our ESG benchmark. Our 2024 score was 3/5 (unchanged from 2023), based on information that was in the public domain as of December 2023. We scored 3.6/5 for governance, 2.4/5 for environment and 3.3/5 for social, resulting in a total score of 3/5.
Considering the complexity of sustainability reporting and the vast data requirements, we are not yet fully aligned to the above voluntary frameworks. However, we endeavour to improve our reporting disclosures over time.
Read more about our foundation and being a responsible business.
Read more on our sustainability themes:
Having an engaged workforce
Delivering social value
Driving resource efficiency
We discuss our remaining sustainability theme, creating economic value, throughout our integrated report and in our 2024 AFS.