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Business and sustainability performance review  

At Eskom, we ensure that sustainable development issues are fully integrated into all our activities and business practices. Our sustainability strategy was first developed in 2004 and is periodically reviewed. Our broader definition of sustainability includes issues such as technology development and deployment, quality, risk, safety and skills development. This allows us to take a long-term view and ensure that the scope of our work covers all relevant elements and assesses the practicality of implementation.

Eskom has integrated sustainable development issues into decision-making for many years. Given that our sector is long term in nature and that many decisions have implications for decades, it is vital that we take robust and responsible decisions. As the new build programme progresses and decisions are taken on key operational practices and programmes, many of the critical issues are identified and factored into decisions. These include diversification of the energy mix, climate change considerations, financial aspects, improvements in environmental performance and social issues such as job creation.

Eskom’s sustainable development philosophy and practice form a vital and integral part of our business which guides our vision. It ensures that we strive to continually improve our performance in consultation with our stakeholders in a transparent manner. Our performance is continually benchmarked against international practice, as we strive to go beyond what is required of us in terms of legislation.

Sustainability performance

Our sustainability performance index provides an overarching view of our long-term sustainability status through the use of 20 appropriate indicators drawn from different indices in the organisation. The index addresses economic, environmental, social and technical aspects of the organisation and provides a score from a holistic perspective. It is used to determine our long-term sustainability status.

The overall performance is considered sustainable if the score is equal to or greater than three on a five-point scale. Eskom’s overall performance for the reporting period was 2,5 (2007: 3,0) with sector scores as follows:
  • technical
  • economic
  • environmental
  • social
(2007: 3,5)
(2007: 3,2)
(2007: 2,6)
(2007: 2,6)

With the decline in the reserve margin the load factor increased, resulting in a drop in plant availability. Performance also declined as a result of the unacceptably high number of fatalities, an important element of the social sector of the index. Further areas that declined were productivity, interest and return on capital employed, as well as contraventions of environmental legislation. Areas that performed well included the reduction in electricity demand through demand-side management, race and gender equity, electrification and black economic empowerment.

To ensure continual improvement, Eskom was benchmarked by Ethical Investment Research Services Limited (London) (EIRIS) against the JSE SRI index using 2007 financial year performance data, which assessed non-financial risk policies, management systems and performance including environmental, social and governance issues. We performed particularly well for the 2006/7 period and achieved the required standard to qualify for the JSE SRI index. We also stood out in the HIV/Aids section, meeting all the criteria.

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