1998 Survey of Environmental Reporting in SA

Fifth Edition

Based on 1997 Annual Reports

The “KPMG –University of Pretoria 1998 Survey of Environmental Reporting in SA” was prev i o u s ly published with the title

E n v i r onmenta l Serv ices

Green reporting in South A f r i c a

KPMG world-wide and the Social Accounting Unit of the D e p a rtment of Accounting at the University of Pretoria have both been invo l ved in the areas of environmental accounting and reporting research and practice for many years.

In an era of gr owing concern by society over the quality of the natural environment, our two organisations have resolved to collaborate in ensuring that this important work receives the exposure it deserve s .

Co-authors of this report are Charl de Villiers and Wayne Vi s s e r.

Charl de Villiers is a Chartered Accountant (SA) and holds an M BA and a D Com in Environmental Accounting. He is a Professor in the Department of Accounting at the Unive r s i t y of Pretoria. For more information, visit our website at: h t t p : / / w w w. u p . a c . z a / a c a d e m i c / e c o n o m i c / a c c o u n t / gr e e n h i . h t m l

Wayne Visser is a manager in KPMG’s Env i o rnmental Unit and holds a B Bus Sc (Hons) and M Sc in Human Ecolog y.

KPMG is the sponsor of this report. KPMG’s Env i r o n m e n t a l Unit offers business advisory and assurance services in the field of environmental reporting and accounting. For more i n f o rmation, visit our website at: http://www. k p m g . c o . z a .

E xe c u t i ve summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Trends in env i ronmental report i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The need for env i ronmental report i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 S u rvey methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 S u rvey fi n d i n g s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 General environmental report i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Detailed environmental report i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 E nvironmental gov e r n a n c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 E nvironmental management systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Separate environmental report s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 International bench m a r k i n g. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SA Environmental Re p o rting Awa r d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Guidelines for env i ronmental report i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 C o n c l u s i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 A n n exure A: Top 50 Ranking of Companies by Env i ronmental Reporting Pe r fo r m a n c e . . . . . . . 13 A n n exure B: Survey Checklist for Assessing Env i ronmental Reporting Pe r fo r m a n c e . . . . . . . . 14 A n n exure C: About the Unive rsity of Pretoria Social Accounting Unit . . . . . . . . . . . . . . . . . . . 15 A n n exure D: About the KPMG Env i ronmental Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Executive summary

E

nvironmental reporting shows every sign of becoming a powerful global trend, and the indications are that South African companies are steadily catching up.

The general improvement in environmental reporting in South Africa is reflected most clearly in the increased proportion of o rganisations which disclose information on the natural e nvironment in their annual reports, up from 23% in 1996 to 34% in 1997. For the Top 50 companies in 1997, 52% report e d on the natural environment, rising sharp ly to 92% for those in p e r c e ived high environmental impact sectors (i.e. mining, steel and oil and chemicals).

This is as a result of increasing pressure on business to credibly demonstrate social responsibility and accountability to all of its s t a keholders. In part i c u l a r, the 1994 King Report on Corp o r a t e G ove rnance, the South African Constitution, the South A f r i c a n Institute of Chartered A c c o u n t a n t s ’ (SAICA) Corp o r a t e G ove rnance Series and Exposure Draft 113 (1997) and the r e c e n t ly tabled Environmental Management Act of 1998, h ave all added their voice to those advocating transparent communication with all stakeholders on material issues, such as environmental perform a n c e .

N o t a ble exceptions to the trend of increasing disclosure we r e
r e p o rting on measurable environmental targets and nega t ive
p e r f o rmance, although the Top 50 companies showed an
encouraging deviation from the general sample on these aspects.

The strategic importance of environment issues is reflected in a strengthening of environmental gove rnance structures within companies, especially among the large corporates. Fo r example, the Top 50 companies reported that 28% (45% for high impact companies) and 60% (85% for high impact companies) have assigned environmental responsibilities to exe c u t ive and senior management respective ly.

The survey, comprising an analysis of the 1997 annual report s of 514 or 97% of JSE listed companies and 10 public entities, c o n c l u s ive ly demonstrates a steady improvement in the quantity and quality of environmental reporting by organisations in South Africa, with the Top 50 companies leading the way.

On the whole, an increased commitment to implementing e nvironment management systems is evident in disclosure on e nvironmental objectives, environmental accounting policies, e nvironmental audits and the ISO 14 000 international env i r o nmental management standard. The latter is part i c u l a r ly n o t i c e a ble among the Top 50 companies, where 26% mention ISO 14000, or 62% if one isolates those companies from sectors with perceived high environmental impacts.

The winners of the KPMG–University of Pretoria 1998 Awa r d for Environmental Reporting in SA are: Gold Award – Tr a n s - Natal Coal; Silver Award – We s t e rn Deep Levels; Bronze Award – Ingwe Coal. The ranking of the top 50 companies in t e rms of environmental reporting shows the mining sector setting the pace (Annexure A ) .

While South African companies still lag signifi c a n t ly behind their international counterp a rts, we predict that more than 70% of the top 50 companies in South Africa will disclose e nvironmental information in their annual reports within the n ext 5 years.

Introduction

E nvironmental reporting and accounting is a comparative ly recent development in corporate disclosure practice, and has evo l ved from the notion that business entities have a social responsibility and accountability to all their stake h o l d e r s . S t a keholders include inter alia civil society, employe e s , suppliers, customers, gove rnment authorities, fi n a n c i e r s —and future generations.

Companies should be accountable to society at large—transparent e nv i ronmental reporting is one way Acceptance of this principle has important implications for the environmental conduct and disclosure practices of o rganisations. It implies that, while shareholders have i n f o rmation rights based on the “financial capital” which they c o n t r i bute, members of society also have information rights d e r ived from their dependence on the “natural capital” wh i c h sustains them, for example clean air and wa t e r, and the impacts which organisations may have on the quality of these resources. of demonstrating that they are.

In a South African context, the 1994 King Report on Corp o r a t e G ove rnance, the South African Constitution, the South A f r i c a n Institute of Chartered A c c o u n t a n t s ’ (SAICA) Corp o r a t e G ove rnance Series and Exposure Draft 113 (1997) and the r e c e n t ly tabled Environmental Management Act of 1998, h ave all added their voice to those advocating transparent communication with all stakeholders on material issues, such as environmental performance.

More specifi c a l ly, the Environmental Management Po l i cy for South Africa describes its principle of Open Information as follow s :

“ To give effect to their constitutional rights, everyone must have access to information to enable them to: n n n n

p rotect their health and we l l - b e i n g
p rotect the env i ro n m e n t
participate effe c t i v e ly in env i ronmental gov e r n a n c e
c o m p ly with env i ronmental policy, legislation
and reg u l a t i o n .”

Trends in environmental reporting

E nvironmental reporting is showing eve ry sign of becoming a powerful global trend. In the KPMG I n t e rnational Survey of Environmental Reporting 1996,

71% of approx i m a t e ly 900 companies surveyed from 13 countries mentioned the environment in their annual reports,

It is clear that the days of glossy up from 58% in a similar 1993 study, while 24% produced “ g r e e nwash” are ove r, as some form of separate environmental report, an increase non-credible env i ro n m e n t a l on the 15% of 1993. i n formation can give an enterprise a

S i m i l a r ly, the KPMG Survey of Environmental Reporting 1997 n e g a t i ve image. which analyzed the Financial Times Top 100 UK companies found evidence of environmental reporting in annual reports by 78% of the sample, with 30% producing separate env i r o nmental reports, up from 66% and 20% respective ly in 1993.

The 1997 UNEP/SustainAbility Benchmark Survey, which is their third international progress study on env i r o n m e n t a l r e p o rting, ranks 100 of the latest corporate env i r o n m e n t a l r e p o rts from 16 sectors and 18 countries. According to this research, three trends stand out: n

An increasing number of companies report on the “triple bottom line” of sustainable development, that is their e nvironmental, financial and social performance. n

The proportion of reports ex t e rn a l ly ve r i fied has jumped from 4% to 28%, a 7-fold increase since 1994. n

And this is now becoming a board-level agenda. T h e p r o p o rtion of reports with top management statements has d o u bl e d, from 45% in 1994 to 89% today.

The practices of South A f r i c a ’s major corporates, according to the KPMG Top Companies Environmental Survey 1997, show s a lagging behind international trends. Only 40% of this sample include environmental disclosure in their annual fi n a n c i a l r e p o rt, 13% have produced a separate environmental report and 11% have obtained third party ve r i fication of their report i n g .

F u rt h e rmore, only 14 South African companies submitted entries to the WWF Environmental Reporting Awards for separate environmental reports in 1997.

The need for environmental reporting

T here is a gr owing perceived need for env i r o n m e n t a l i n f o rmation by the key users of South African annual r e p o rts. This was confi rmed in a 1996 University of

Pretoria study by Prof. Charl de Villiers, which found that most

The thirst for corporate managers, auditors of financial statements and users of financial statements agreed that more corporate env i r o n m e n t a l e nv i ronmental perfo r m a n c e r e p o rting was needed and should even be made obl i ga t o ry. T h e i n formation by regulators and “managers” surveyed were directors of companies listed on the s t a ke h o l d e rs will only be qu e n ch e d J o h a n n e s bu rg Stock Exchange. by establishing ongoing credible

A useful summary of reasons why companies might vo l u n t a r i ly e nv i ronmental reporting practices. practice environmental reporting is provided by leading UK academic in this fi e l d, Prof. Rob Gray, as follow s : n To legitimise current activ i t y ; n To distract attention from other areas; n To enhance the corporate image; n To build up ex p e rtise in advance of reg u l a t i o n ; n To improve the price of shares; n To reduce perceived company or information risk; n To benefit politically ; n To explain expenditure pattern s ; n To tell people what the company has done or achieve d ; n

To forestall disclosure by other parties; and n If it is not done vo l u n t a r i ly it may become mandatory.

In addition, KPMG’s experience has demonstrated that e nvironmental reporting is a good indicator of commitment to environmental management, as well as a vehicle to i m p r ove companies’ i n t e rnal environmental management and reporting systems. Both of these in turn drive enhanced e nvironmental perform a n c e .

Survey methodology

T he purpose of the research is to determine the report i n g and accounting practices of companies with regard to e nvironmental issues in South Africa, as well as to suggest achieva ble environmental reporting standards and t h e r e by foster improved disclosure. The research is done on an ongoing basis, monitoring trends in environmental report i n g , with a research report published annually.

The 1998 survey sample excluded consideration of any separate corporate environmental reports, although these m ay be included in future surveys. The current focus on annual reports is justified by the fact that these remain the p r i m a ry information source for stakeholders concerned with c o m p a n i e s ’p e r f o rm a n c e .

The annual reports were analysed using a detailed 30-point
checklist, which was originally based on the env i r o n m e n t a l
disclosure framework of the Institute of Chartered A c c o u n t a n t s
in England and Wales, and modified as appropriate. Each
c o m p a ny ’s annual report was assessed against the checklist and
s y s t e m a t i c a l ly scored in terms of compliance with the question-
statements. The aggr egated scores from this analysis are the
basis for the KPMG–University of Pretoria 1998 Award for
E nvironmental Reporting in SA, the Top 50 performers of
which are ranked in A n n exure A. The checklist is included in
A n n exure B.

The 1998 survey sample included: n

The 1997 annual reports of 514 or 97% of JSE listed companies. The residual 3% of companies did not produce r e p o rts due to ye a r-end changes. The 1996 survey sample included 606 JSE listed companies.

The 1997 annual reports of 10 or 28% of public entities, as listed in the Public Entities Act. Outstanding report s were those which were not submitted on request within the given time constraints of the research. No publ i c entities were included in the 1996 survey sample.

The survey findings section of this report highlights the responses to only 10 of the most indicative of these questions. A more comprehensive report analysing the fi n d i n g s for all 30 questions will be ava i l a ble on our websites (see inside c over page).

P r evious studies have shown that the size of organisations and the nature of their business are important factors in determ i n i n g the appropriate level of environmental reporting. Therefore, the results have also been computed for the top 50 companies only, as well as a subset of these (13 in number) which fall within sectors typically associated with significant env i r o n m e n t a l impacts (i.e. the mining, steel and chemicals and oils industries). The Financial Mail of 4 July 1997 was used to obtain market capitalisation figures (as an indicator of size) and sector classifications.

Survey findings

T he survey conclusive ly demonstrates a steady i m p r ovement in the quantity and quality of env i r o nmental reporting by South African companies, with the Top 50 companies by size leading the way. The predictably higher levels of environmental reporting by the larger orga n isations are based on their higher public profile and perceive d e nvironmental impacts. Ty p i c a l ly, they bear the brunt of more stringent legislation, public criticism and pressure from e nvironmentalists. Disclosure of environmental inform a t i o n becomes one way to help legitimise their activities in the broader societal contex t .

Figure 1:

Does the annual report disclose any inf o r m a t i o n rega rding the natural en v i ro n m e n t ?

General environmental reporting

The general improvement in environmental reporting in South Africa is reflected most clearly by the increased proportion of o rganisations which disclose information regarding the natural e nvironment in their annual reports, up from 23% in 1996 to 34% in 1997 (Figure 1). For the Top 50 companies in 1997, 52% reported on the natural environment, compared with 92% for those in high environmental impact sectors.

Figure 2:

Does the annual report disclose the en v i ro n m e n t a l impacts and risks of the orga n i s a t i o n ?

A similar picture is painted by identifying those orga n i s a t i o n s which declared their environmental impacts and risks in their annual report in 1997, ranging from 16% for all companies in the sample up to 77% for high impact Top 50 companies (Figure 2).

Detailed environmental reporting

Most of the specific categories of environmental inform a t i o n also show trends of increasing disclosure (Figures 5 to 10 ), with the notable exceptions of reporting on measurable targ e t s (Figure 3) and nega t ive perform a n c e (Figure 4), wh i c h h ave declined since 1996. One reason for this may be increasing fears of how the public, environmental activists and g ove rnment authorities will use such information. Interestingly enough, howeve r, these are also among the categories wh i c h most distinguish the large companies. The disclosure by the Top 50 on these items are up to a factor of 3 times higher than the general sample.

Figure 3:

A re measurable targets set against w h i ch
e nv i ronmental performance can be compar e d ?

Figure 4:

Figure 6:

Is mention made of any negative aspects of e nv i ronmental activities?

Does the annual report disclose w h e t h e r t h e re is a member of senior manage m e n t entrusted with social/env i ro n m e n t a l re s p o n s i b i l i t y ?

Environmental governance

Figure 5:

The strategic importance of environment issues is reflected in a strengthening of environmental gove rnance structures within companies. For example, the proportion of orga n i s a t i o n s disclosing that they have an exe c u t ive director responsible for s o c i a l / e nvironmental matters has increased from 6% to 13% b e t ween 1996 and 1997 (Figure 5).

Does the annual report disclose w h e t h e r t h e re is an executive director entrusted with social/env i ronmental re s p o n s i b i l i t y ?

S i m i l a r ly, senior management with reported env i r o n m e n t a l responsibility in 1997 was up from 1996 to 32% for all companies in the sample, while 60% of the Top 50 companies, and 85% of the high impact companies within the top 50 r e p o rted the same (Figure 6).

The Top 50 companies showed roughly double the incidence of r e p o rting on exe c u t ive and senior management gove rn a n c e (28% and 60% respective ly) compared to the general sample, with even higher levels for the companies in sectors with s i g n i ficant environmental impacts.

Environmental management systems

Figure 7:

On the whole, an increased commitment to implementing
e nvironment management systems is evident by the fact
that 29% (23% in 1996) of organisations now disclose
e nvironmental objectives (Figure 7); 11% (9% in 1996)
disclose their environmental accounting policy (Figure 8);
6% (5% in 1996) report on environmental audits (Figure 9);
and 6% (4% in 1996) mention the ISO 14 000 intern a t i o n a l
e nvironmental management standard (Figure 10 ).

A re the orga n i s a t i o n ’s env i ro n m e n t a l objectives discl o s e d ?

E nvironmental management systems are another area wh i c h sets the large companies apart, with disclosure by 26% of the Top 50 companies on ISO 14 000 (62% for high impact companies) and 16% on environmental audits (38% for high impact companies), showing the greatest differentials in ex c e s s of the general sample.

Figure 8:

Figure 9:

Figure 10:

Do the accounting policy notes include info r m a t i o n rega rding env i ro n m e n t a l a c c o u n t i n g ?

Is mention made of an e nv i ronmental audit?

Does the orga n i s a t i o n d i s close any info r m a t i o n rega rding ISO14 000?

These high levels of environmental reporting can best be compared with the 52% of the top 50 companies in this survey that disclosed any information in their annual report. We have noticed that the trend in environmental reporting in South A f r i c a appears to be approx i m a t e ly 5 years behind a similar trend in the UK. We therefore expect South African env i r o n m e n t a l r e p o rting by the top 50 companies to increase from its curr e n t l evels to 70% within the next 5 ye a r s .

Separate environmental reports

An increasing number of South African orga n i s a t i o n s , f o l l owing international trends, are publishing env i r o n m e n t a l i n f o rmation in the form of separate public reports. There we r e 14 annual environmental reports published in South Africa in 1997. We intend to include a section on separate env i r o n m e n t a l r e p o rts in future editions of this research, wh e r e by these documents will be subjected to a similar level of analysis to the c u rrent annual reports in this survey.

SA Environmental Reporting Award

Each company ’s annual report was assessed against the detailed checklist in A n n exure B and systematically scored in terms of compliance with the question-statements. T h e a g gr egated scores from this analysis declare the winners of the K P M G – U n iversity of Pretoria 1998 Award for Env i r o n m e n t a l R e p o rting in SA as follow s :

International benchmarking

As prev i o u s ly mentioned, the international study conducted by KPMG in 1997 found that 71% of a sample of approx i m a t e ly 900 top companies from 13 countries included env i r o n m e n t a l i n f o rmation in their 1995 annual reports. Similarly, the UK s u rvey done by KPMG in 1996 found that 77% of the FT To p 100 companies reported on the environment in their 1995 annual report s . n Gold Award: Trans-Natal Coal Corporation Ltd. n S i l ver Award: We s t e rn Deep Levels Ltd. n Bronze Award: Ingwe Coal Corporation Ltd.

The top 50 ranking of companies in terms of env i r o n m e n t a l r e p o rting performance is listed in A n n exure A. It is notable that the mining industry is setting the pace for the other sectors in South A f r i c a .

Guidelines for environmental reporting

T here are no statutory requirements for env i r o n m e n t a l r e p o rting in South Africa, other than the items required by generally accepted accounting practice. Many i n t e rnational bodies have, howeve r, made recommendations on the environmental information which should be disclosed by c o rporations, and what accounting treatment it should receive . These bodies include the United Nations, Intern a t i o n a l Federation of Accountants, United States Env i r o n m e n t a l Protection A g e n cy, American Institute of Cert i fied Publ i c Accountants, Canadian Institute of Chartered Accountants and Institute of Chartered Accountants in England and Wales.

In South Africa, although the recently tabled Env i r o n m e n t a l
Management Po l i cy for South Africa has included “Full Cost
Accounting” and “Open Information” as one of its key Principles,
the only guidance documents ava i l a ble are those of the South
African Institute of Chartered Accountants as prev i o u s ly
mentioned. More specifi c a l ly, these include S t a k e h o l d e r
Communication in the Annual Report (1997) and T h e
C o n s i d e ration of Env i ronmental Matters in the Audit of Fi n a n c i a l
S t a t e m e n t s (Exposure Draft 113, August 1997), both of wh i c h
contain only implied advice on environmental report i n g .

Since all the diverse recommendations on env i r o n m e n t a l i n f o rmation disclosure can be somewhat perp l exing, a synthesis of suggested reporting items is included in Ta ble 1 below.

Table 1: Recommended environmental reporting items q A descriptive ove rv i ew of the major environmental risks and impacts of the orga n i s a t i o n . q The environmental policy of the orga n i s a t i o n . q

M e a s u r a ble targets in physical units and Rand amounts, where applicable, based on the environmental policy, e.g. on resource use, emissions, wa s t e .

Pe r f o rmance relative to environmental targets, legal, industry or international standards and comparative figures ove r time (current versus previous ye a r / s ) .

q Accounting policies for recording liabilities, provisions, contingent liabilities and catastrophe reserve s . q

E nvironmental costs by categ o ry charged to operating expenses during the period (e.g. energy; waste handling, treatment and disposal; legal compliance; packaging; fines; rehabilitation; recycling; etc.).

q Rand amounts of environmental liabilities, contingent liabilities and reserves established in the current period. q G ove rnment or other environmental grants receive d . q L i ke ly effect of the environmental policy on future capital investment and earn i n g s . q E nvironmental litigation in which the organisation is curr e n t ly invo l ve d . q Independent third party attestation (ve r i fication) of all environmental report i n g .

SOURCE: Prof. Charl de Villiers, University of Pretoria, 1996.

Conclusions

T

he survey indicated that the trend of env i r o n m e n t a l r e p o rting is continuing to climb steadily among South African businesses. This is signifi c a n t ly influenced by the size and nature of the business concern e d, with larg e r o rganisations in perceived "high-impact" industry sectors being more like ly to report environmental information to their stake h o l d e r s .

In the final analysis, env i ro n m e n t a l r e p o rting is critical—an organisation can only manage eff e c t i ve ly what it

While South African companies still lag signifi c a n t ly behind their international counterp a rts, we predict that more than 70% of the top 50 companies in South Africa will disclose environmental information in their annual report s within the next 5 years.

measures and is eff e c t i ve ly measured on what it report s .

We congratulate the top performers of 1998 and wish all companies good luck for the KPMG–University of Pretoria 1999 Award for Environmental Reporting in SA.

Annexure A

Ranking of the top 50 companies by environmental reporting performance

Rank Name of organisation

Trans-Natal Coal Corporation Ltd

2 6

Anglo American Industrial Corporation Ltd

We s t e rn Deep Levels Ltd

2 7

E s kom Ltd

I n g we Coal Corporation Ltd

2 8

JCI Ltd

Samancor Ltd

2 9

Gencor Ltd

East Rand Gold & Uranium Company Ltd

3 0

Lonrho plc

Free State Consolidated Gold Mines Ltd

3 1

Wankie Colliery Co Ltd

Gold Fields Coal Ltd

3 2

East Rand Proprietary Mines, Ltd

Anglo American Coal Corporation Ltd

3 3

O ryx Gold Holdings Ltd

Kloof Gold Mining Company Ltd

3 4

Griqualand Exploration and Finance Company Ltd

1 0

AECI Ltd

3 5

H i g h veld Steel & Vanadium Corporation Ltd

1 1

Sappi Ltd

3 6

L e b owa Platinum Mines Ltd

1 2

Vaal Reefs Exploration and Mining Co Ltd

3 7

N o rtham Platinum Ltd

1 3

Anglo American Corporation of South Africa Ltd 3 8

Village Main Reef Gold Mining Company (1934) Ltd

1 4

Palabora Mining Company Ltd

3 9

Associated Ore & Metal Corporation Ltd

1 5

St Helena Gold Mines Ltd

4 0

We s t e rn Areas Gold Mining Co Ltd

1 6

Elandsrand Gold Mining Company Ltd

4 1

D u i ker Mining Ltd

1 7

Anglo American Platinum Corporation Ltd

4 2

Po t g i e t e r s rus Platinums Ltd

1 8

ISCOR Ltd

4 3

The Associated Manganese Mines of South Africa Ltd

1 9

RMP Properties Ltd

4 4

Pretoria Po rtland Cement Company Ltd

2 0

Alpha Ltd

4 5

The Randfontein Estates Gold Mining Co Wi t watersrand Ltd

2 1

Beatrix Mines Ltd

4 6

Kohler Ltd

2 2

Sasol Ltd

4 7

B ly vo o ruitzicht Gold Mining Company Ltd

2 3

Impala Platinum Holdings Ltd

4 8

Consolidated Metallurgical Industries Ltd

2 4

Stilfontein Gold Mining Co Ltd

4 9

Knights Gold Mining Co Ltd

2 5

H a rm o ny Gold Mining Co Ltd

5 0

Po l i fin Ltd

Note: This ranking is based on the companies as listed or constituted in 1997.

Annexure B

Survey checklist for assessing environmental reporting policy

The annual reports were analysed and scored relative to the f o l l owing environmental reporting checklist items. The scoring system allocated graded points for the existence and the quality of disclosure for each item.

1 7

Does the annual report disclose anything about ISO 14 000?

1 8

Does the annual report disclose whether the company has been cert i fied under ISO 14 000?

1 9

Are the accounting policy notes regarding env i r o n m e n t a l accounting disclosed?

2 0

If accounting policy notes are disclosed, specify in respect of which item(s) it is done?

Mission/policy statement

1

Does the corporate mission/policy statement mention a m i s s i o n / p o l i cy regarding the environment?

Activities—quantitative non-financial disclosure

Objectives

2 1

Is there any quantitative non-monetary env i r o n m e n t a l disclosure in the annual report ?

Are the company ’s environmental objectives disclosed?

Does the company disclose any environmental objective s in respect of emission levels, energy consumption, noise l evels, waste production, recycling or any others?

2 2

If the environmental objectives are disclosed, do they set ( m e a s u r a ble) targets so that the environmental perform a n c e a c h i eved can be compared with the objective s ?

If financial information is provided in respect of e nvironmental expenditure, are details given of operating expenditure and/or capital ex p e n d i t u r e ?

2 3

If details of operating expenditure are disclosed, which of the following classifications are used? (Liquid Eff l u e n t Treatment; Waste Gas and Air Treatment; Solid Wa s t e Treatment; A n a lysis Control and Compliance; Remediation; R e c y cling; Research and Development; or any other . )

2 4

If details of capital expenditure are disclosed, which of the f o l l owing classifications are used? (Liquid Eff l u e n t Treatment; Waste Gas and Air Treatment; Solid Wa s t e Treatment; A n a lysis Control and Compliance; Remediation; R e c y cling; Research and Development; or any other. )

2 5

When financial information is disclosed, are comparative figures give n ?

Activities—quantitative financial disclosure

Has the company disclosed whether it has achieved its o b j e c t ives in respect of the env i r o n m e n t ?

Activities—narrative disclosure

6

Is mention made of the environmental impacts and risks of the bu s i n e s s ?

7

If the impacts and risks of the business are disclosed, is the information given on a site by site basis as opposed to a company-wide basis?

Is mention made of specific projects undert a ke n ?

Is mention made of any nega t ive aspects of env i r o n m e n t a l a c t iv i t i e s ?

2 6

1 0

If mention is made of compliance with a standard, wh a t standard is mentioned? ( L egal, industry, company or a ny other. )

H ave any transfers been made to a reserve for future e nvironmental ex p e n d i t u r e ?

2 7

Is any mention made of a contingency in respect of an e nvironmental liability?

1 1

Does the company disclose any information rega r d i n g c u rrent or pending inve s t i gations or proceedings?

1 2

Is mention made of an environmental audit?

1 3

If an environmental audit is conducted, is it attested i n d e p e n d e n t ly (ex t e rn a l ly ) ?

1 4

If an environmental audit is conducted, is there an indication of how often the audit will be undert a ke n ?

1 5

Is any mention made of ex t e rnal awards received for e nvironmental activ i t i e s ?

1 6

Does the environmental information disclosed encompass the core business activities of the company ?

Additional items—not scored for assessment

2 8

Does the annual report disclose anything regarding the natural env i r o n m e n t ?

2 9

Does the annual report disclose whether there is an E xe c u t ive Director entrusted with social/env i r o n m e n t a l r e s p o n s i b i l i t y ?

3 0

Does the annual report disclose whether there is a member of senior management entrusted with social/env i r o n m e n t a l r e s p o n s i b i l i t y ?

Annexure C

The Social Accounting Unit of the Department of Accounting of the University of Pretoria

Professor Quintus Vo r s t e r, who is curr e n t ly the head of the

D e p a rtment of Accounting at the University of Pretoria, created the Social Accounting Unit in 1993. Social Accounting wa s r egarded as an important gr owth area in Accounting, wh i c h needed tracking to highlight its emergence as a vital part of the l egitimisation of organisations in a changing social e nv i r o n m e n t .

The goals of the unit are to: n track changes in social reporting over time; n track changes in stakeholder perceptions of social report i n g ; n d evelop and highlight new methods of social accounting; n raise general awareness of social issues in business; and n create, develop and maintain a research database that facilitates continued research outputs and confi rms the position of the Department as the leader in this import a n t research area.

The exceptional research output from the Department in this field has assisted in it becoming the leader in terms of total research output by South African university accounting depart m e n t s .

Members of the business community often consult the Unit and papers are presented annually at various local and intern a t i o n a l c o n f e r e n c e s .

Should you require further information, please contact:

Charl de Vi l l i e r s

D e p a rtment of Accounting, University of Pretoria

Pretoria 0002

Te l :

(012) 420 3818 Fa x :

(012) 362 5142 E m a i l : c d ev i l l e @ h a k u n a . u p . a c . z a We b e s i t e :

h t t p : / / w w w. u p . a c . z a / a c a d e m i c / e c o n o m i c / a c c o u n t / gr e e n h i . h t ml

Annexure D

The Environmental Unit of KPMG

C o n s u l t i n g : assisting with the design and implementation of organisational systems for environmental management (ISO 14 001), environmental accounting and env i r o n m e n t a l r e p o rt i n g .

O ne of the largest global advisory fi rms in the wo r l d, KPMG employs over 73 000 partners and professional s t a ff in more than 130 countries. KPMG in South A f r i c a has built its reputation on being credible auditors and bu s i n e s s advisors, and today performs critical services for many blue-chip fi rms, including 125 companies listed on the J o h a n n e s bu rg Stock Exchange.

Assurance: p r oviding independent third party rev i ew s , audits or ve r i fications of environmental management systems, e nvironmental impact assessments and environmental report s .

An international environmental network

I nvestigation: conducting strategic or operational
e nvironmental rev i ews, environmental risk or liability
assessments, and environmental due diligence inve s t i ga t i o n s .

KPMG has environmental practices in 27 countries on 4 continents employing 170 environmental professionals of d iverse skills. The experience of all these practices is r eg u l a r ly shared through electronic, telephonic and other means, including an annual International Env i r o n m e n t a l N e t work conference.

Tr a i n i n g: delivering generic or tailored in-house training in e nvironmental management systems, environmental auditing, e nvironmental accounting, and environmental (stake h o l d e r ) p e r f o rmance report i n g .

Services in environmental management

The Environmental Unit in South Africa

KPMG draws on its organisational and specialised professional strengths to offer a wide range of environmental management s e rvices, including:

K P M G ’s Environmental Unit in South Africa has offered env i r o nmental services in line with the KPMG Intern a t i o n a l E nvironmental Network since 1991. The consulting professionals in Cape Town and Johannesbu rg combine qualifications and experience in a broad range of health, safety and env i r o n m e n t a l management applications, including env i r o n m e n t a l management systems (ISO 14 001), assessments, auditing, accounting, reporting, economics and training. Clients include m a ny top South African and international companies. The Unit is reg u l a r ly called to address conferences and publish art i c l e s on tools for more eff e c t ive environmental management.

Should you require further information, please contact:
Wayne Vi s s e r
B ox 5564
Cape Town 8000
Te l :
(021) 423 8940
Fa x :
(021) 423 8937/8
E m a i l : K p m g e nv i r o @ g l o b a l . c o . z a
We b s i t e : h t t p : / / w w w. k p m g . c o . z a