A NEW LOOK AT SUSTAINABILITY

SUSTAINABILITY STRATEGY

Companies that recognise the value of relationships are companies whose sustainability is safeguarded. The relationships between Barloworld and its stakeholders are sustained through in-depth planning and the development of rigorous relationship management programmes and processes. Barloworld’s sustainability strategy ensures that stakeholder relationships are factored into all aspects of the company’s business operations.

Value Based Management.

VBM was adopted in 1999 as a philosophy for the way we conduct our business. While the principles contained in the VBM doctrine were already well entrenched in the way that Barloworld operates, the VBM framework allowed us to formalise what has essentially always been the “Barloworld Way” of doing business.

Value Based Management Structure

Barloworld’s direct stakeholder groups are represented by the four points of a pyramid (see above). At its apex are our shareholders. At its base are our customers, our employees, our principals and suppliers. The pyramid is founded on the social and physical environment in which we operate.

VBM is fundamentally different because it requires that we move beyond the traditional approach of tradeoffs between stakeholders, and search for solutions which add value for all over time.

The 10 Pillar concept – a platform for VBM.

During 2006 we have identified ten key areas – the 10 Pillars of Sustainability – that capture the essence of the VBM philosophy. Experience has taught us that if we apply all pillars successfully to any business it will generally be able to produce sufficient returns to satisfy all stakeholders.

The use of the 10 Pillar concept ensures that the organisation’s ambitions to be a good corporate citizen and deliver value are met.

The pillars focus on:

sustainable growth of the company and its earnings; and
sustainable relationships with all stakeholders, including the environment.

Non-financial risks and opportunities.

Environmental and social issues pose strategic risks and opportunities for businesses. Through our VBM philosophy, we are committed to integrating financial and non-financial aspects of business to create sustainable value, for the organisation and all stakeholders.

Through our formalised risk management process, we identify potential non-financial risks and opportunities, and manage these on an ongoing basis.

GLOBAL REPORTING INITIATIVE (GRI) INDEX

Through the improved G3 framework we believe that our reporting practices promote transparency, enhance the clarity and credibility of our communication with our stakeholders, facilitate comparisons across various organisations throughout the world and address issues that concern stakeholders.

Part of creating value involves having adequate measurement and reporting processes. This is imperative in terms of measuring and monitoring the performance of the organisation. The G3, which guides the company’s reporting, addresses measurement of both financial and non-financial aspects of business.

At a strategic level, the board, through its risk and sustainability committee, is responsible for governing non-financial performance and approving all policies relating to sustainability. These structures are guided by our VBM model. Economic reporting, including cash value added, is integrated into our global reporting system using standardised monthly processes undertaken across all business units and consolidated centrally.

Quality and environmental performance is managed across the group by way of the ISO 9001 and ISO 14001 management systems. The backbone of our environmental approach is the group’s environmental policy, while formalised health and safety management systems are in place at all operations.

Employee issues are monitored through communication forums, and influenced by staff climate surveys, skills development, retention and productivity ratios and other relevant statistics, which are reviewed internally, and also against external benchmarks and standards.

Across our business units, a balanced scorecard approach to employee performance measurement is generally used. Its implementation is tailored to the requirements of differing geographies and businesses.

Community issues include the management of country-specific issues such as employment equity and Broad-Based Black Economic Empowerment (BBBEE) in South Africa, as well as a focused corporate social investment (CSI) programme.

Barloworld is beginning a process of re-evaluating its non-financial systems. This includes initiating monthly data collection processes which support the G3 reporting framework. For some years the company has committed to providing data that reflects the key non-financial aspects of its business, and reporting on these in a meaningful and responsible way.

Barloworld distributes a G3-compatible questionnaire to each of its divisions on an annual basis.

The quantitative and qualitative data collected in this process is a key ingredient in determining the report content.

For this report, key social, environmental and economic aspects were determined through consultation at divisional and head office levels. Barloworld recognises that, as a result of its diverse holdings, the suite of non-financial issues faced will be different across the group. The company believes that these issues should be determined through a process of consultation internally and externally. Furthermore, this report contains key non-financial data from each of the divisions thereby permitting the reader to understand these issues at a divisional, as well as at a group level.

The first column contains the GRI indicator number; the second contains the associated text; the third column contains the page numbers where the indicators are discussed in our 2007 annual report. The G3 guidelines which were released in October 2006 in Amsterdam, Netherlands has been used as the reporting platform for this report.

GRI Ref		Pages
1.1	Strategy and analysis Statement from the most senior decision maker of the organisation	7 – 19
1.2	Description of key impacts, risks, and opportunities.	97, 98, 108
2.1	Organisational profile Name of reporting organisation	back cover
2.2	Primary brands, products, and/or services.	3
2.3	Operational structure of the organisation, including main divisions, operating companies, subsidiaries, and joint ventures.	2, trace
2.4	Location of organisation’s headquarters.	inside back cover
2.5	Number of countries where the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.	5
2.6	Nature of ownership, legal form	3, 78
2.7	Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).	5
2.8	Scale of organisation	1, 2, 3, 4, 5
	Number of employees; Net sales (for private sector organisations) or Net revenues (for public sector organisations); Total capitalisation broken down in terms of debt and equity (for private sector organisations); and Quantity of products or services provided. Total assets; Beneficial ownership (including identity and percentage of ownership of largest shareholders); and Breakdowns by country/region of the following: Sales/revenues by countries/regions that make up 5% or more of total revenues; Costs by countries/regions that make up 5% or more of total revenues; and Employees.










2.9	Significant changes during the reporting period regarding size, structure, or ownership including:
	The location of, or changes in operations, including facility openings, closings, and expansions; and Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organisations).	8, 16, 106
2.10	Awards received in the reporting period.	79
3.1	REPORT PARAMETERS Report profile Reporting period	inside back cover
3.2	Date of most recent previous report (if any)	inside back cover
3.3	Reporting cycle (annual, biennial, etc.)	inside back cover
3.4	Contact point for questions regarding the report or its contents.	inside back cover

3.5	Report scope and boundary Process for defining report content, including: Determining materiality; Prioritising topics within the report; and Identifying stakeholders the organisation expects to use the report. Include an explanation of how the organisation has applied the ‘Guidance on Defining Report Content’ and the associated principles.	106
3.6	Boundaries of report	106, inside back cover
3.7	State any specific limitations on the scope or boundary of the report	106
3.8	Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations.	106
3.9	Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols.	137
3.10	Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (eg, mergers/ acquisitions, change of base years/periods, nature of business, measurement methods).	137
3.11	Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.	N/A
3.12	GRI content index Table identifying the location of the Standard Disclosures in the report. Identify the page numbers or web links where the following can be found: Strategy and analysis 1.1 – 1.2; Organisational profile 2.1 – 2.10; Report parameters 3.1 – 3.13; Governance, commitments, and engagement 4.1 – 4.17; Disclosure of management approach, per category; Core Performance Indicators; Any GRI additional indicators that were included; and Any GRI sector supplement Indicators included in the report.
3.13	Assurance Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain the relationship between the reporting organisation and the assurance provider(s).	141
4.1.	Governance, commitments, and engagement Governance Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight.
	Describe the mandate and composition (including number of independent members and/or non-executive members) of such committees and indicate any direct responsibility for economic, social, and environmental performance.	78, 104

4.2	Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organisation’s management and the reasons for this arrangement).	79, 82, 83
4.3	For organisations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.	79 – 83
	State how the organisation defines ‘independent ‘and ‘non-executive’. This element applies only for organisations that have unitary board structures. See the glossary for a definition of ‘independent’.
4.4	Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Include reference to processes regarding: The use of shareholder resolutions or other mechanisms for enabling minority shareholders to express opinions to the highest governance body; and Informing and consulting employees about the working relationships with formal representation bodies such as organisation level ‘work councils’, and representation of employees in the highest governance body. Identify topics related to economic, environmental, and social performance raised through these mechanisms during the reporting period.	101, 119
4.5	Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organisation’s performance (including social and environmental performance).	92 – 96
4.6	Processes in place for the highest governance body to ensure conflicts of interest are avoided.	71, 82, 83
4.7	Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organisation’s strategy on economic, environmental, and social topics.	84, 86, 97, 98
4.8	Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation. Explain the degree to which these: Are applied across the organisation in different regions and department/ units; and Relate to internationally agreed standards.	100, 107, 116
4.9	Procedures of the highest governance body for overseeing the organisation’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Include frequency with which the highest governance body assesses sustainability performance.	97, 98, 108
4.10	Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.	97, 98
4.11	Commitments to external initiatives Explanation of whether and how the precautionary approach or principle is addressed by the organisation.
	Article 15 of the Rio Principles introduced the precautionary approach. A response to 4.11 could address the organisation’s approach to risk management in operational planning or the development and introduction of new products.	N/D

4.12	Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or endorses.
	Include date of adoption, countries/operations where applied, and the range of stakeholders involved in the development and governance of these initiatives (eg, multi-stakeholder, etc). Differentiate between non-binding, voluntary initiatives and those with which the organisation has an obligation to comply.	78, 127, 129
4.13	Memberships in associations (such as industry associations) and/or national/ international advocacy organisations in which the organisation: Has positions in governance bodies; Participates in projects or committees; Provides substantive funding beyond routine membership dues; or Views membership as strategic.
	This refers primarily to memberships maintained at the organisational level.	130
4.14	Stakeholder engagement List of stakeholder groups engaged by the organisation. Examples of stakeholder groups are: Communities; Civil society; Customers; Shareholders and providers of capital; Suppliers; and Employees, other workers, and their trade unions.	101, 106, 112 119, 128, 130, 132
4.15	Basis for identification and selection of stakeholders with whom to engage. This includes the organisation’s process for defining its stakeholder groups, and for determining the groups with which to engage and not to engage.	112, 128
4.16	Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. This could include surveys, focus groups, community panels, corporate advisory panels, written communication, management/union structures, and other vehicles. The organisation should indicate whether any of the engagement was undertaken specifically as part of the report preparation process.	101, 112, 119, 128
4.17	Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting.	128, 130
	Management approach and performance indicators Economic performance indicators
EC1	Aspect: Economic performance Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.
EC2	Financial implications and other risks and opportunities for the organisation’s activities due to climate change.	N/D
EC3	Coverage of the organisation’s defined benefit plan obligations.	95, 142
EC4	Significant financial assistance received from government.	N/A

	Aspect: Market presence
EC5	Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.	N/D
EC6	Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.	129
EC7	Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation	N/D
	Aspect: Indirect economic impacts
EC8	Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.	129, 132
EC9	Understanding and describing significant indirect economic impacts, including the extent of impacts.	129, 132, 142
	Environmental performance indicators
EN1	Aspect: Materials Materials used by weight or volume.	135
EN2	Percentage of materials used that are recycled input materials.	135, 139
EN3	Aspect: Energy Direct energy consumption by primary energy source	135, 136
EN4	Indirect energy consumption by primary source	N/D
EN5	Energy saved due to conservation and efficiency improvements.	N/D
EN6	Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.	136
EN7	Initiatives to reduce indirect energy consumption and reductions achieved.	N/D
EN8	Aspect: Water Total water withdrawal by source.	136, 137
EN9	Water sources significantly affected by withdrawal of water.
EN10	Percentage and total volume of water recycled and reused.	137
EN11	Aspect: Biodiversity Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.	140
EN12	Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.	140
EN13	Habitats protected or restored.	N/A
EN14	Strategies, current actions, and future plans for managing impacts on biodiversity.	N/D
EN15	Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.	N/D
EN16	Aspect: Emissions, effluents, and waste Total direct and indirect greenhouse gas emissions by weight.	137, 139
EN17	Other relevant indirect greenhouse gas emissions by weight.	N/D
EN18	Initiatives to reduce greenhouse gas emissions and reductions achieved.	N/D
EN19	Emissions of ozone-depleting substances by weight.	137, 139
EN20	NO, SO, and other significant air emissions by type and weight.	137, 139

EN21	Total water discharge by quality and destination.	137
EN22	Total weight of waste by type and disposal method.	139
EN23	Total number and volume of significant spills.	N/D
EN24	Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.	N/D
EN25	Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting	140
EN26	Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation	134, 140
EN27	Percentage of products sold and their packaging materials that are reclaimed by category	N/D
EN28	Aspect: Compliance Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.	140
EN29	Aspect: Transport Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce.	N/D
EN30	Aspect: Overall Total environmental protection expenditures and investments by type.	N/D
	Social performance indicators
	Labour practices and decent work performance indicators
LA1	Aspect: Employment Total workforce by employment type, employment contract, and region.	112, 113
LA2	Total number and rate of employee turnover by age group, gender, and region.	113, 115
LA3	Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.	116
LA4	Aspect: Labor/management relations Percentage of employees covered by collective bargaining agreements	N/D
LA5	Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements.	N/D
LA6	Aspect: Occupational health and safety Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes	126
LA7	Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related fatalities by region.	124 – 126
LA8	Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases.	126 – 127
LA9	Health and safety topics covered in formal agreements with trade unions.	N/D
LA10	Aspect: Training and education Average hours of training per year per employee by employee category.	N/D
LA11	Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.	116

LA12	Percentage of employees receiving regular performance and career development reviews	116, 118
LA13	Aspect: Diversity and equal opportunity Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.	119
LA14	Ratio of basic salary of men to women by employee category.	N/D
	Human rights performance indicators
HR1	Aspect: Investment and procurement practices Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.	N/D
HR2	Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.	N/D
HR3	Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained	N/D
HR4	Aspect: Non-discrimination Total number of incidents of discrimination and actions taken	127
HR5	Aspect: Freedom of association and collective bargaining Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.	127
HR6	Aspect: Child labour Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour.	127
HR7	Aspect: Forced and compulsory labour Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour.	127
HR8	Aspect: Security practices Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations.	N/D
HR9	Aspect: Indigenous rights Total number of incidents of violations involving rights of indigenous people and actions taken.	N/D
	Society performance indicators
SO1	Aspect: Community Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.	132
SO2	Aspect: Corruption Percentage and total number of business units analysed for risks related to corruption.	N/D
SO3	Percentage of employees trained in organisation’s anti-corruption policies and procedures.	N/D
SO4	Actions taken in response to incidents of corruption	100

SO5	Aspect: Public policy Public policy positions and participation in public policy development and lobbying.	132
SO6	Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.	132
SO7	Aspect: Anti-competitive behaviour Total number of legal actions for anticompetitive behaviour, anti-trust, and monopoly practices and their outcomes.	N/D
SO8	Aspect: Compliance Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.	N/D
	Product responsibility performance indicators
PR1	Aspect: Customer health and safety Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.	N/D
PR2	Total number of incidents of non-compliance with regulations and voluntar codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.	N/A
PR3	Aspect: Product and service labeling Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.	134
PR4	Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes.	134
PR5	Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.	131
PR6	Aspect: Marketing communications Programmes for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.	131
PR7	Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.	131
PR8	Aspect: Customer privacy Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.	N/D
PR9	Aspect: Compliance Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.	N/D

Click here to download PDF of the complete Annual Report 2007.

This page was updated on 13 February, 2008

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