Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Redefining for ab e tt er fu t ure SUSTAINABILITY REPORT FOR THE YEAR ENDED 31 MARCH 2024 Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Navigating our report OUR SUITE OF REPORTS As part of our comprehensive Our suite of reports 1 integrated and financial reporting, our reporting suite for 2024 consists Our ESG material matters 2 of the following 1 The year in review A review of our ESG performance for the 3 5 Climate Change Our climate change performance 23 23 Who we are and how we create value Leadership reports Our strategic and risk landscape Governance and ethics Re d e f n i n g f Performance review or ab et Supplementary information te IR rf u tu 2024 financial year 3 re Adapting to the changing climate 24 2 Integrated Carbon footprint 2023 27 report 6 INTEGRATED REPORT FOR THE YEAR ENDED 31 MARCH 2024 ESKOM HOLDINGS SOC LTD Integrated report 2024 Introduction 4 Statement by the Chairman of the Social, Ethics and Sustainability Committee 5 Just Energy Transition 29 Redefning for ab e tt AFS er fu t ure Statement by the Group Chief Executive 6 Annual financial Lessons learnt at Komati 32 statements 3 7 ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 Governance 7 Social 33 Redefning for ab e tt Our leadership 9 er SR fu t ure Stakeholder management 12 Social Performance 34 Sustainability Conducting business in an ethical manner 13 Our people 35 report Quality management 14 Occupational health and safety 40 SUSTAINABILITY REPORT FOR THE YEAR ENDED 31 MARCH 2024 Integrated Risk Management 15 Eskom Development Foundation Impact 41 Our socio-economic performance 44 Resilience 17 4 A list of abbreviations is available on page 47 Please use the tabs at the top of this report as well as the To complete a short Environment 18 buttons to navigate survey on our reports, please click here Environmental Management 19 Return to contents page   Previous page   Reducing our environmental footprint 19 Environmental performance 19 Next page   Return to previous view Managing water consumption 21 Biodiversity 22 Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Our suite of reports Our 2024 reporting suite covers the financial year ended 31 March 2024. The reports were approved on 18 December 2024 and can be accessed at www.eskom.co.za/investors/integrated-results/ Our suite of reports comprises the integrated report, annual financial statements and sustainability report. Each of these reports is prepared for a specific audience and serves a particular purpose. Various frameworks and regulations are applied in the preparation of these reports, and each is subject to certain materiality considerations. Finally, the reports are subject to various levels of assurance. The particulars of each report is set out below. What it covers Frameworks applied Materiality Assurance INTEGRATED REPORT The integrated report is prepared in accordance with the Integrated In accordance with the Integrated Reporting We apply combined assurance to the content in the Our integrated report aims to provide a holistic account of how we create Reporting Framework, issued in January 2021 by the International Framework, we believe in providing a balanced, integrated report. and preserve value, our strategy, risks and opportunities, performance and Integrated Reporting Council, which later merged with the transparent and complete account of our performance, outlook, as well as governance of these areas. Supplementary information is Sustainability Accounting Standards Board to form the Value Reporting by focusing on matters material to our ability to create Eskom’s Internal Audit Department provided included at the back of the report. Foundation, which was then consolidated into the IFRS Foundation. or preserve value, or to limit the erosion of value reasonable assurance of quantitative information over the short, medium and long term. We apply the (other than financial information subject to external It is a holistic report to stakeholders covering all our areas of our value The content is further guided by legal and regulatory requirements, concept of double materiality in the integrated report, audit) in the report. creation journey and is aimed predominantly at providers of financial capital such as the Companies Act, 2008 and the King IV Report on in other words, by considering both those external – lenders, bondholders and other investors, as well as the shareholder, Corporate GovernanceTM for South Africa, 20161 (King IV) as well as matters that may have an impact on our financial The group’s independent external auditors, Deloitte representing the people of South Africa. Nevertheless, the report aims to global best practice. Certain disclosures required under regulations results (financial materiality), as well as those internal & Touche, were engaged to provide reasonable provide information to a wide range of stakeholders. issued by National Treasury relating to the disclosure of information matters that have an impact on the outside world assurance on selected key performance indictors under the Public Finance Management Act, 1999 (PFMA), are also (impact materiality). We also consider qualitative (KPIs) disclosed in the integrated report. All but one of The report considers our performance in the context of our internal covered in the report. and quantitative matters material to our operations the 40 KPIs scoped for reasonable assurance received framework that covers environmental, social and governance (ESG) and our turnaround and strategic objectives, as well an unqualified opinion. practices. In June 2023, the International Sustainability Standards Board (ISSB) as strategic risks and opportunities. issued IFRS® Sustainability Disclosure Standards S1 and S2 which The list of KPIs subject to reasonable assurance by the cover the general requirements for sustainability-related disclosures external auditors are set out from page 123 of the and climate-related disclosures respectively. These standards may be integrated report. Deloitte & Touche’s independent implemented for financial years beginning on or after 1 January 2024, sustainability assurance report is included from subject to certain transitional provisions and adoption by local regulators. page 126 of the integrated report. We are in the process of assessing the impact of these standards on our future reporting. ANNUAL FINANCIAL STATEMENTS The consolidated and separate financial statements have been The financial statements have been prepared with The consolidated and separate financial statements The consolidated and separate annual financial statements set out the prepared in accordance with IFRS® Accounting Standards as issued reference to financial materiality. Information is have been audited by Deloitte & Touche, who issued financial performance of the Eskom group and company. It includes the by the International Accounting Standards Board (IASB) as well as the material if omitting, misstating or obscuring it could a qualified opinion relating to the quantification and directors’ report and a report by the Audit and Risk Committee, as well as requirements of the PFMA and the Companies Act. reasonably be expected to influence the decisions disclosure of information required in terms of the statements covering the financial position at year end, and the profit and that the primary users of general purpose financial PFMA. Except for this qualification, the financial loss, changes in equity and cash flows for the year ended 31 March 2024, statements make on the basis of the entity’s financial statements are considered to be fairly presented in together with detailed notes. Events subsequent to the reporting date are statements. terms of IFRS Accounting Standards. Furthermore, also covered, together with an assessment of the impact of new standards the independent auditors have emphasised a number and interpretations affecting financial reporting requirements. of matters in their report, including a material uncertainty relating to Eskom’s ability to continue as a It is aimed at a broad range of stakeholders, including the shareholder and going concern. However, these matters do not affect other investors, creditors, regulators, analysts, employees and the general their opinion. public. The financial statements intend to provide a fair and comprehensive view of the group and company’s financial position, performance and cash The independent auditor’s report is included in the flows, to provide decision-useful information to users and ensure transparency financial statements. and comparability across different reporting periods and entities SUSTAINABILITY REPORT The sustainability report is guided by the reporting principles of the Matters dealt with in the sustainability report are The Internal Audit Department provided reasonable Eskom’s sustainability report supplements and provides more detailed Global Reporting Initiative (GRI) and also considers our contribution based on impact materiality, being those matters that assurance on quantitative information and certain information than the integrated report on our sustainable development impacts. to the United Nations’ Sustainable Development Goals (SDGs). It represent the organisation’s most significant impacts qualitative aspects of the report. includes disclosures based on the recommendations by the Task Force on the economy, environment and people. The report is aimed at a wide range of stakeholders with an interest in on Climate-related Financial Disclosures (TCFD), which have now been Eskom’s sustainability impacts. incorporated into IFRS S2 Climate-related Disclosures. We have established an internal framework that covers our ESG practices by setting out the material ESG risks and opportunities we face and the governance structures that provide oversight on the plans in places to address these. We measure our performance through targeted metrics. 1. Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved. 1 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Our Environmental, Social and Governance (ESG) material matters ESKOM’S ESG MATERIAL MATTERS We recognise the relationship between environmental, social and governance issues (integrated approach) due to the interconnectivity between them. We classify material matters as those of high-likelihood, high-consequence factors that significantly impact the creation, preservation or erosion of enterprise value over the short, medium and long term. By their very nature, these include both positive and negative matters. We apply the concept of double materiality, in other words, by considering both those external matters that may have an impact on our financial results (financial materiality), as well as those internal matters that have an impact on the outside world (impact materiality). Our approach to determining our ESG impact is aligned to the United Nations’ Sustainable Development Goals (SDGs). E Environmental S Social G Governance Transitional risk and Social capital: Governance structures: physical climate: • Energy security, • Leadership, Governance, • Climate Change affordability/access and compliance and ethics mitigation and adaptation sustainability • Unbundling and legal • Loadshedding separation of Eskom Natural Capital: • Just energy transition • Water use, reduction, • Electricity theft, low Risk management, culture security of supply and and non-payment by and oversight: pollution customers • Values • Biodiversity – land use • Supplier development, • Culture and impact on wildlife industrialisation and • Enterprise risk localisation management Waste management and air • Corporate social • Resilience quality: responsibility • Cyber-security • Air pollution, health and Transparency and air quality management. Health and safety: • Safety to the public, reporting: • Waste reduction and contractors and • Integrated and beneficiation employees sustainability reporting • Fraud, corruption, and Human capital: criminality • Diversity and inclusivity • High performance culture • Skills development and retention 2 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance The year in review Our role, as a state-owned company (SOC) with both a commercial L E NTA and social mandate, is to supply electricity in an efficient and sustainable NM L manner, to contribute to lowering the cost of doing business in South RO IA Africa, and to enable economic growth. Our operations are executed VI C SO EN in a manner aimed at minimising any negative effects/impacts we may potentially pose to our people, the environment, and the South African economy. As an organisation embarking on an energy transition that PCBs phased-out target is achieved as per DFFE approval; CSI investment increased to R93.1 million FY2024 will be undertaken in a just manner and ensuring social inclusivity, we (FY2023: R63 million); have a vision to drive economic growth by being a financially sustainable Legal contraventions decreased (FY2024: 68; FY2023: 105); provider of energy solutions across Africa. Ash sales declining over the years; LTIR was 0.29 against target of 0.30 (FY2023: 0.26); Globally, there has been a move by stakeholders, most notably investors, Red data bird mortality exceeded the previous year (FY2024: 258; 2.96% of our employees live with disabilities, this is above the national towards weighing the sustainability and ethical impact of an organisation FY2023: 170); target of 2% and even the general market; by assessing how it approaches environmental, social and governance Air quality offsets programme 75% complete; Awarded 1 309 contracts worth R107.7 billion; (ESG) matters. Our stakeholders, and particularly our lenders, base their relationship decisions with us on their insight into our risks and Water usage targets not met; Eskom-wide local content contracted of R97.7 billion (90.72%) opportunities, i.e., the sustainability of Eskom. These stakeholders 203 contracts contributed 100% natural local content and local Relative particulate emissions target not met; have consistently gained valuable insights into our financial risks and manufacturing in designated sectors; opportunities through the financial and integrated reports, enabling Divisional climate change adaptation plans in place. R1.4 billion spent on skills development. them to make well-informed decisions. However, it is important that these stakeholders have a better understanding of the non-financial opportunities and risks, particularly those associated with the United Nations’ Sustainable Development Goals (SDGs) linked to ESG matters. This Sustainability Report focuses on our ESG performance. As a business with a country and continent-wide footprint, our reputation is affected by material ESG matters, amongst them being that CE of balancing of the energy trilemma, i.e., how to simultaneously ensure N A (i) energy security, (ii) affordability and access, and (iii) sustainability of RN our business. Our ESG framework and resulting plan ensures a collective VE approach in addressing material ESG risks and opportunities. The focus GO being on: (1) the material ESG matters; (2) the governance framework to address the risks and/or capitalise on the opportunities; (3) the strategy/ Continued PFMA training and awareness to all employees; plan/initiative(s) to treat the risks and/or pursue the opportunities; and 330 confirmed cases of fraud and corruption registered (4) the key performance indicators (KPIs) to measure the outcomes and with SAPS (FY2023: 158); respond accordingly. These documents are the guiding pillars of how, as different parts of a large complex business, we can consolidate our Quality certified for ISO 9001:2015 standard; sustainability risks, performance, and impact across all our operations. Priority Risks reduced from 21 (Q1 FY2024) to 13 (Q4 FY2024); SR Further details on these material ESG matters and how we are effectively Group Chief Executive appointed; managing them, are found in the body of this Sustainability Report. Loadshedding was suspended on 26 March 2024. 3 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Introduction REPORTING SCOPE The information in this report refers to the performance of the Eskom Group, which includes the business of Eskom Holdings SOC Ltd, operating in South Africa, and our main operating subsidiaries, unless otherwise stated. The operations of Eskom outside the South African borders have not been considered in the accounting and reporting contained in this document. DATA AND ASSURANCE Some of the information included in this report has been sourced from the 2024 Eskom integrated report. Our Internal Audit department has provided reasonable assurance on the quantitative information and, to a lesser extent, certain qualitative aspects of the report. Furthermore, Deloitte & Touche (“Deloitte”) has provided reasonable assurance on the sustainability KPIs narrated in the integrated report. APPROVAL Eskom’s Executive Management Committee (Exco) and the Social, Ethics and Sustainability Committee (SES) of the Board of Directors have approved the contents of this report. OUR REPORTING SUITE Our 2024 reporting suite is available online at https://www.eskom.co.za/investors/integrated-results/ INTEGRATED REPORTING AND ADDITIONAL INFORMATION The integrated report is prepared in accordance with the integrated reporting framework. It considers our value creation model, strategy, risks and opportunities, performance, and outlook, as well as governance of these areas. Certain disclosures required under regulations issued by National Treasury relating to the disclosure of information under the Public Finance Management Act (PFMA), 1999, are also covered in this report. Supplementary information of interest to a variety of stakeholders is included at the back of the Integrated report. ABOUT THIS REPORT REPORTING FRAMEWORKS ANNUAL FINANCIAL STATEMENTS PURPOSE OF THE REPORT The Global Reporting Initiative (GRI) and the United Nations SDGs The consolidated annual financial statements of Eskom Holdings SOC Ltd This report is a transparent account to our stakeholders of our agenda provide a reporting framework that guides this Sustainability have been prepared in accordance with International Financial Reporting sustainability contribution and performance. These stakeholders include, Report. The report is also influenced by the United Nations’ Guiding Standards (IFRS) as well as the requirements of the Companies Act, but are not limited to, the South African government, our employees, Principles, the recommendations of the Task Force on Climate-Related 2008 and the PFMA, 1999. unions, investors, market regulators, suppliers, civil society, and Financial Disclosures (TCFD) and the Carbon Disclosure Project (CDP). customers. We reflect on our FY2024 ESG performance and provide an The independent auditor’s report is incorporated in the annual financial outlook of our future initiatives. The reporting period is from 1 April 2023 to 31 March 2024, against statements. material ESG topics. We use the GRI materiality methodology to The sustainability report 2024 complements our integrated report determine the significant environmental, social, and economic/ 2024. It is a non-financial account of the progress we have made on governance impacts of our organisation or those that materially influence sustainability matters and reflects on the risks and impacts we face as a the assessments and decisions of our stakeholders. In addition, the business. To ensure full context, this report must be read in conjunction report discusses our future aspirations in these areas in the context of with our 2024 suite of reports, particularly the integrated report. national and international priorities for sustainable development and the United Nations Global Compact (UNGC) principles. 4 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Statement by the Chairman of the SES Committee As a Social, Ethics and Sustainability (SES) Committee, our role is to are addressing the three legs of the energy trilemma – energy security, assist the Eskom Board in fulfilling its statutory obligations by making equity, and sustainability, with the aim of achieving a resilient net zero recommendations on social, ethics and sustainability matters for its electricity sector by 2050. consideration and approval. Our appeal to the Minimum Emission Standards (MES) resulted in a This report is a transparent account to our stakeholders of our favourable decision by the Minister of DFFE for the continued operation company’s sustainability contribution and performance, giving insight into of our coal fired power stations while we prepare detailed submissions our ESG impacts for the 2024 financial year. for emissions management and compliance to the MES. This decision contributes to the country's energy security whilst we transition to less The safety and health of our people is our first priority. Through our non carbon intensive technologies. negotiable value of "Zero harm", we prioritise safety and health of our employees, contractors and members of the public through effective We have made headway towards enabling growth of the business measures and robust initiatives to eliminate fatalities and injuries. through implementation of our business strategies including that of our Just Energy Transition (JET) plan. Given the multifaceted benefits of Despite our disappointing safety performance, with five fatalities and the JET Strategy, we believe that through its implementation, some of an increase in occupational diseases and lost-time incidents, we remain our environmental and economic challenges will be alleviated, while we committed to our value of Zero Harm by continuing to promote safety continue to contribute positively to socio-economic development (SED). excellence in all areas. We have commenced with the implementation of our repowering and Our sincere condolences go out to all families, friends and colleagues that repurposing plan by undertaking developmental work at Grootvlei, have been impacted by these tragedies, the loss of any life in Eskom is Camden and Hendrina power stations. The focus being on ensuring that one too many. our communities and affected parties are not left behind. We continue to contribute to the National Development Plan (NDP), With Eskom being a vital engine to South Africa’s economy, it is the challenges and continuously improving our environmental supporting socio-economic and transformation imperatives as part of important to communicate and engage with our stakeholders. The performance and stewardship for a greener future. Overall, Eskom our agreements with the shareholder. role of business in society and the expectations that our stakeholders continues to progress in its holistic approach to sustainability, moving have of us have never been more prominent or relevant as it is now, beyond a predominant focus on addressing just environmental challenges Considering the current geopolitical and economic turbulence, the the experiences at Komati being a prime example. It is important but also focusing largely on climate change, social matters and a just significance of sustainable electricity solutions for the modern economy that our stakeholders get a better understanding of the non-financial transition. becomes increasingly apparent. As a key player in the electricity sector, opportunities and risks, particularly those associated with ESG matters. we are committed to driving the energy transition in a manner that is fair The unbundling of Eskom into three legal entities is a critical step in We are making strides in restoring our reputation and role in society, and advantageous to all members of society. ensuring Eskom's sustainability by focusing on improving operational by implementing specific initiatives to address stakeholder concerns and efficiency and providing greater transparency and accountability. During a year characterised by intense weather events, an unpredictable enhance collaboration. macroeconomic climate, and exceptional disasters, we have made Integrity is a core value for Eskom, demonstrated through transparent We remain committed to the diversity dividend by creating a multi- significant progress in promoting adaptability and enhancing resilience governance, ethical practices, and accountability. We have initiatives gender, ethno-cultural, multi-generational and racially diverse workforce within the organisation. promoting integrity, such as compliance training, anti-corruption in a responsible and sustainable manner, aligned to shareholder targets measures, and whistle blower protection. Leaders demonstrate integrity, Globally, rapidly evolving operating contexts are impacting strategies through our human resource processes. This year, we have progressed promoting a culture of trust and accountability among employees, with increased necessity for unparalleled agility. The evolution of the significantly in implementing our Diversity, Equity, and Inclusion (DEI) stakeholders, and communities. electricity supply industry requires us to adapt our business model to strategy. To achieve our diversity objectives, our women empowerment participate optimally within the new energy market rules and to take programmes through the Eskom Women Advancement Programme I am confident that the Board SES have effectively discharged their advantage of opportunities associated with clean energy generation. (EWAP) and organisational effectiveness initiatives, support efforts to responsibilities on oversight of all environmental and sustainability ensure equity, inclusion and belonging. We are strongly committed to matters within Eskom and am delighted to present our sustainability The update of the IRP 2023 provides much needed certainty in planning providing equal opportunity to all in Eskom including people living with report for the financial year 2024. for the electricity industry and allows us to update our long-term disabilities. We have also ensured our recruitment processes are inclusive planning outlook. The draft Integrated Resource Plan (IRP) has been and promote diversity. evaluated considering both global advancements and Eskom’s 2035 strategy, which aims to achieve an optimal balance between prioritising Reflecting on progress made this past year, the company’s sustainability operational, financial, and structural recovery from the challenges that journey is continually maturing. We acknowledge the challenges we have threaten our business sustainability and responding effectively to the faced in environmental performance. Despite these, we remain steadfast Mr Bheki Ntshalintshali in our commitment to sustainability. We are dedicated to overcoming Chairman: Social, Ethics and Sustainability Committee global and local transformation shaping the electricity sector. All of which 5 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Statement by the Group Chief Executive As part of our continued drive for ESG disclosure and transparency pace and scale that our country can afford and in a manner that ensures to our stakeholders, it gives me great pleasure to present the Eskom energy security. sustainability report for the 2023/2024 period. The enactment of the Electricity Regulation Act Amendment Bill by Eskom has a critical role to play in South Africa’s economy and the National Assembly indicates the imminent transformation of the energy transition, as the dominant player in electricity generation electricity supply industry by enabling more players in the generation and the operator of our transmission and distribution networks. Our sector and allowing consumers to choose from which energy supplier environmental, climate change and Just Energy Transition (JET) strategies they want to buy power. This will enable competition and efficiency from enable us to manage and reduce this contribution in a drive towards net- multiple electricity generators. Through the unbundling of Eskom and zero emission by 2050. as the National Transmission Company of South Africa (NTCSA) starts trading, the TSO which will be in place in due course will enable equal However, we continue to grapple with the competing objectives of access and greater participation. balancing energy security, equity, and sustainability – commonly referred to as the energy trilemma. Our reliance on coal accounting for about Poor generation plant performance and system-wide capacity constraints 80% of electricity generation results in us contributing around 40% of remain a significant risk for both Eskom and the country but the the country's emissions. Generation Recovery Plan (GRP) and interventions through NECOM are being successfully executed within the expected timeframes. Although The energy challenges experienced in FY2024 negatively impacted this risk had become a reality, resulting in sustained high levels of GDP growth with cascading effects on unemployment and inequality loadshedding over the past years, we are progressively turning the corner and access to, and affordability of electricity. However, through the and achieving our milestones and as I write this, we have had over 250 commitment and dedication of our employees, we have reached an days of no loadshedding, and we look forward to many more. important turning point in driving operational excellence and high performance culture in the organisation. Our Generation Recovery Since taking the helm in March 2024, I acknowledge we have not In our continuous efforts to drive a holistic sustainability approach, Plan has improved the performance of our fleet and achieved significant had the easiest of roads to traverse. Our revenue continues to be Eskom has initiated the Eskom Factor, a project that will culminate in a reduction in loadshedding and associated costs. undermined by increasing non-payment and growing electricity theft report to highlight Eskom’s footprint in South Africa, quantified through (non-technical losses). Environmental compliance risks remain significant a comprehensive assessment of the company’s economic, governance, To address the energy trilemma, the South African electricity industry in the generation business. Our Emission Reduction Plan underpins our social and environmental impact on the country, both from a positive and saw several key developments in the last year. The implementation of commitment to the Minimum Emission Standards (MES) decision taken negative perspective. This report will help our stakeholders understand the Energy Action Plan, the formalisation of the role of the Ministry of by DFFE in May 2024 and we continue to implement strict operational our ESG footprint over the past six years and the vision we have for the Electricity (MoE) and the associated memorandum of understanding controls to meet regulatory requirement and minimise environmental organisation and its impact on the country. (MoU) with the Department of Public Enterprises (DPE), have all had impacts to ensure a sustainable future. a direct impact on our operating environment. Specific to electricity We note that the business community plays an integral role in the policy and direction, the National Energy Crisis Committee (NECOM), By leveraging our capabilities and through collaborations and partnerships implementation of our ESG objectives and as a result, we are working led by the Minister in the presidency responsible for electricity, has with a multitude of stakeholders, our goal of creating an electricity closely with industry bodies and other stakeholders to ensure alignment. been implementing the Energy Action Plan to address energy security. dispensation that is underpinned by the Sustainable Development Goals NECOM has five priorities; fixing Eskom and improving the availability (SDGs) and our pledge to meet our climate change mitigation and During this financial year, we will focus on reviewing our business strategy of existing supply, fast-tracking the addition of new power, encouraging adaptation goals is steadily coming to fruition. We are finding opportunities to ensure that our strategic direction remains on addressing our most residents and businesses to install solar panels, enabling private sector and innovative ways to maximise our socio-economic contribution significant challenges and that our objectives and pace of execution are investment in generation, and transforming the electricity sector. Several and alleviate unemployment whilst remaining committed to resolving adjusted to ensure success in delivering the desired outcomes to set the milestones have been achieved against the Energy Action Plan. our financial sustainability, constrained energy supply and making a just organisation on a path to sustainability. This path will be unpinned by transition to a low carbon future. good governance and executed with integrity. The Executive Committee In terms of energy sustainability, our JET Strategy continues to deliver and I remain committed to advancing and elevating our ESG matters on reductions in emissions and water consumption. The establishment Our human resource is our greatest asset, their safety and wellbeing are throughout all Eskom businesses. of the Komati Training Facility and partnership with the South African of paramount importance to us. In recognising their limitless potential, Renewable Energy Technology Centre will contribute to employment the Minister of Electricity, the Board, Exco and myself are continually through new renewable energy diversified jobs and equity through engaging with staff on matters of safety, business expectations and ensuring reskilling of staff and communities. The strategy will drive a positive we are all aligned to the same vision to derive the greatest value of each impact on the economy through, clean energy generation and a catalysis other and in particular support our values of Zero Harm and Sinobuntu. Mr Dan Marokane of new renewable energy-based industries. The JET is being done at a Group Chief Executive 6 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Governance 7 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Governance The Government of the Republic of South Africa is our sole shareholder. As a public entity, we are governed by the provisions of the PFMA, which requires us to conclude a shareholder compact with the shareholder representative. Our sustainability performance as reported in our shareholder compact has been reasonably assured by Deloitte and Touche for the year ending 31 March 2024. The governance framework, which regulates our relationship with the shareholder and informs the way we conduct our business, is reflected in the figure below: HOW WE ARE REGULATED AND GOVERNED ESKOM HOLDINGS SOC LTD Board of Directors Exco and Committees REGULATORS Audit and Risk Capital 3 NERSA Business Operations Performance Information and Technology SUBSIDIARIES National Nuclear Regulator Governance and Strategy Nuclear Management Human Capital and Remuneration Operating National Transmission Company South Africa SOC Ltd Investment and Finance Regulation, Policy and Economics Divisional (trading since 1 July 2024) Social, Ethics and Sustainability Risk and Sustainability boards Tender Eskom Enterprises SOC Ltd SHAREHOLDER AND POLICY Turnaround MINISTRY Eskom Rotek Industries SOC Ltd Department of Electricity and Energy Line divisions Escap SOC Ltd Generation Distribution Transmission Eskom Finance Company SOC Ltd Eskom Development Foundation NPC OVERSIGHT MINISTRIES Strategic functions Strategy & Planning Risk and Sustainability RT&D Internal Audit National Electricity Distribution Company South Africa National Treasury Group Investigation & Security Company Secretariat SOC Ltd (not trading) Department of Forestry, Fisheries and the Environment Department of Water and Sanitation Support functions Finance Human Resources Procurement Legal & Compliance Group Information Technology Government & Regulatory Affairs 8 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Our leadership Our governance framework has clear role delineation for our shareholder, the Board, the Board committees, and management of the Eskom group. BOARD OF DIRECTORS Our Board of Directors (the Board) fulfil the primary roles and responsibilities of a governing body outlined in King IV Report on Corporate Governance for South Africa, 2016 (King IV™) by: Setting the strategic direction of the organisation; Providing oversight through effective governance frameworks and approving policies and plans that enable the execution of the company’s strategy while promoting a high-performance culture aligned with Eskom’s values. DR MTETO NYATI (59) MR DAN MAROKANE (52) MR CALIB CASSIM (52) MS FATHIMA GANY (48) MR LWAZI GOQWANA (48) Chairman Group Chief Executive Group Chief Financial Officer Independent non-executive director Independent non-executive director MR CLIVE LE ROUX (72) MS AYANDA MAFULEKA (44) MR LESLIE MKHABELA (51) DR TSAKANI MTHOMBENI (44) MR BHEKI NTSHALINTSHALI (70) Independent non-executive director Independent non-executive director Independent non-executive director Independent non-executive director Independent non-executive director MS TRYPHOSA RAMANO (52) DR BUSISIWE VILAKAZI (40) DR CLAUDELLE VON ECK (53) Independent non-executive director Independent non-executive director Independent non-executive director Ages are shown at 31 March 2024. 9 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Our leadership continued SOCIAL, ETHICS AND SUSTAINABILITY COMMITTEE The Social, Ethics and Sustainability (SES) Committee reports to the Board on a quarterly basis. This committee provides oversight of SED; good corporate citizenship; environmental; climate change; health; and safety programmes, and the assurance of select KPIs through the sustainability audit. The Board SES committee also serves as the statutory social and ethics committee for Eskom’s wholly owned subsidiaries. It is the responsibility of this committee to ensure that our sustainability reporting is in line with the Global Reporting principles. MR BHEKI NTSHALINTSHALI (70) MS FATHIMA GANY (48) MR CLIVE LE ROUX (72) MR LESLIE MKHABELA (51) Independent non-executive director Independent non-executive director Independent non-executive director Independent non-executive director DR TSAKANI MTHOMBENI (44) DR BUSISIWE VILAKAZI (40) DR CLAUDELLE VON ECK (53) Independent non-executive director Independent non-executive director Independent non-executive director Ages are shown at 31 March 2024. 10 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Our leadership continued ESKOM’S EXECUTIVE COMMITTEE Exco (the Committee) has been established to assist the GCE to manage the business for the benefit of Eskom. It is accountable for exercising executive control over day-to-day operations to deliver on the strategy set out by the Board. MR DAN MAROKANE (52) MR CALIB CASSIM (52) MR MONDE BALA (50) MS FAITH BURN (55) Group Chief Executive Group Chief Financial Officer Group Executive: Distribution Chief Information Officer MR BHEKI NXUMALO (55) MS ELSIE PULE (56) MS JAINTHREE SANKAR (52) MR SEGOMOCO SCHEPPERS (60) Group Executive: Generation Group Executive: Human Resources Chief Procurement Officer Group Executive: Transmission MS NATASHA SITHOLE (61) MR VUYOLWETHU TUKU (48) MR STHEMBISO VEZI (50) Acting Group Executive: Government and Group Executive: Transformation Acting Group Executive: Legal and Regulatory Affairs Management Office Compliance Ages are shown at 31 March 2024. 11 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Stakeholder management Our stakeholders are those impacted by our business and who The Stakeholder Management department develops and implements engagement, thought leadership, and fact-based narratives in our contribute to our ability to deliver our strategic objectives. Our stakeholder engagement strategies and plans to drive advocacy and messaging. The aim is to enhance the quality and outcomes of material ESG risks and opportunities impact on our stakeholders and partnership, unlock decisions, and exercise external levers required to stakeholder engagement and track and monitor issues emanating from as such we have an obligation to report transparently and to account implement our strategic intent codified in the annual Eskom Corporate engagements. to them on our strategies and plans to treat the risks and pursue the Plan and 2035 Plan. They manage stakeholder issues and report to Exco opportunities. Through identifying, analysing, planning, and implementing and the Board for stakeholder oversight in line with King IV report. Through effective engagement, we aim to foster meaningful dialogue, processes of engagement, we manage and improve relationships with build trust, and align our operations with stakeholder needs and our stakeholders with an aim of positioning our business and leadership Our aspiration is to improve stakeholders’ perception of Eskom and interests; ultimately working towards a sustainable and mutually positively. These stakeholder engagements enable us to mitigate grow business value to protect the brand. This requires proactive beneficial relationship. reputational risks. Our stakeholder engagements align to our recovery plan, the JET vision and principles, and our corporate social investments initiatives. Key stakeholders engaged in Q2 – Q4: FY2024 The Board SES provides oversight on the effectiveness of our 14 engagements and delegates the management of these stakeholder 13 relationships to Exco. The Exco members are responsible for monitoring 12 12 12 and overseeing the performance of our engagements through weekly 11 11 briefings and quarterly reports, measuring the impact of our short, 10 10 medium, and long-term engagements using a six-monthly pulse check 9 8 8 survey, and monitoring and responding to non-technical risks. The key 7 7 7 areas of improvement become action items for further stakeholder 6 6 6 6 engagement planning. 5 5 4 4 Successful implementation of our stakeholder engagement plan is 3 3 3 3 3 3 underpinned by ten key factors: 2 2 2 1 1 1 1 1. Anticipate the outcomes of significant policies and regulations. 0 0 0 2. Assess the impact of likely outcomes and value at risk. DPE DMRE DFFE DTIC DWS NT President Parliament NERSA Business Industry Foreign Unions 3. Identify, monitor, profile our stakeholders. Q2 Q3 Q4 4. Prioritise stakeholders according to their capacity to influence outcomes. 5. Develop a factual narrative on Eskom’s stance on key issues. 6. Sustain the relationship with influential stakeholders. 7. Communicate about social contributions and nation development. 8. Integrate and align plans with a key focus on JET activities. 9. Embed data in engagement input and deliver outcomes in real time. 10. Align leadership on primary issues and approval of implementation and execution of outputs. 12 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Conducting business in an ethical manner FRAUD AND CORRUPTION An updated Fraud Prevention Plan has been developed for the 2025 Eskom is committed to enhancing systems, controls, resources, policies financial year and was included in our Corporate Plan for financial years and procedures as well as reporting structures to address any fraud, 2025 to 2029. crime and corruption. Energy losses on our networks, have increased slightly from 11.76% in An assessment of our crime risk management landscape was concluded FY2023 to 11.94% in FY2024, continue to be a challenge. These are both by an independent service provider. The assessment focused on technical and non-technical losses. We continue to reduce our technical identifying risks related to bribery and corruption, financial crime, energy losses but are challenged through the non-technical losses that physical asset crime, cyber-crime and money laundering and provided include electricity theft, illegal connections, tampering and bypassing of recommended remedial actions. Findings and recommendations are electricity meters, as well as ghost vending. The conversion to smart being considered. They will inform the nature and extent of the second prepaid meters is assisting us to combat non-technical losses and the use phase of the project, being the design, improvement and implementation of illegal tokens. of appropriate and sustainable control frameworks. We acknowledge that fraud and corruption detection, prevention and Eskom’s Fraud Prevention Plan was implemented for the 2024 financial control is not a separate function and needs to be an integral part of year in accordance with the PFMA, 1999. The plan incorporated activities managing our business. This involves the adoption of a holistic approach carried over from the prior year as well as new activities identified for to prevent, detect, and respond to the incidents of fraud and corruption the 2024 financial year. The key activities of the plan include: through proactive risk identification and the management thereof. We have adopted an integrated approach to the management of fraud and • Establishing an ethical culture, through the ‘Tone at the Top’ and corruption with a comprehensive risk treatment plan were actions are legislative compliance. Criminal cases have been referred to law implemented by the responsible areas. Progress and control measures enforcement agencies in compliance with applicable legislation. A on treatment actions are monitored on a quarterly basis. total of 330 cases are registered with the South African Police Service (SAPS). During the financial year, 139 matters were reported to the We have developed a business-wide fraud and anti-corruption risk Directorate for Priority Crime Investigation (the Hawks), in terms of register. The register was a culmination of a process to identify the risk section 34 of the Prevention and Combatting of Corrupt Activities and the controls which is regularly monitored. These controls include Act, 2004 (PRECCA) fraud awareness for employees and suppliers, the enhancements of • In terms of awareness and training, we have revised our online the management of conflict of interests, consequence management training material for fraud awareness, which has been rolled out and and stakeholder management, particularly with the law enforcement participation is being monitored. Fraud awareness for suppliers was agencies. A comprehensive review of the crime risk management conducted during an engagement session with Eskom’s suppliers landscape has been completed, and recommendations implemented within the Generation and Transmission Divisions during the quarter where applicable. • Training and awareness support was offered during a workshop on procurement process with law enforcement agencies, including the National Prosecuting Authority and the Hawks. The establishment of a single investigation unit in our business, to manage all investigative matters, has been approved and implementation of the unit is in progress • We continue to maintain an independently managed whistle-blowing hotline and other reporting mechanisms. Complaints or requests for protection are being investigated and attended to Eskom’s Process Control and Assurance Department continues to conduct data analysis and issue exception reports related to possible conflicts of interest. The report is being assessed by the Forensic and Anti- Corruption Department for further investigation. The Fraud Risk Register is being monitored and updated regularly. 13 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Quality management Business strategy and objectives Getting basics Implementing the quality value chain right Achieving and Best practice, lessons learnt etc. maintaining compliance and Being effective, Implementing ISO 9004 certification efficient and productive Attaining Continual improvement operationa Quality way excellence of live Eskom Steps to making Quality a way of life! Quality Management constitutes the cornerstone of Eskom’s The overarching goal of Quality Management is to foster a shift in corporate ethos, fostering a culture of continuous enhancement attitude and behaviour among all Eskom Guardians, encouraging a dedicated commitment to quality in their day-to-day activities. This aimed at achieving efficient and effective business operations. cultural transformation of ‘doing things right, first time, every time’ is Our Quality Management strategy spans the entirety of the pivotal to Eskom attaining operational excellence. Embrace integrated business Quality value chain, to increase ensuring conformance productivity to business The future QM focus includes a review of the Eskom Holdings Quality management system requirements while striving for operational Management Strategy, QM operational plan and engaging relevant excellence. business areas through roundtables and quality circles to ensure alignment with Eskom’s overarching strategy. This alignment aims to Key achievements in Quality Management include the revision of support key priorities and goals crucial for effective strategy execution. the Eskom Quality Health Index (EQHI) to align with Eskom’s key QM will enhance the EQHI to incorporate both leading and lagging performance metrics such as Customer Management, Documentation indicators, alongside robust systems for tracking, reporting progress, and Management, Supplier Quality Management, Non-conformity managing non-conformities. Management and, Technical Performance. Ongoing initiatives encompass Training, Stakeholder Management, Communication, and quality Addressing ongoing challenges in Documentation and Records awareness programmes, all directed towards cultivating a culture of Management (DRM), Eskom’s Group IT is exploring ways to accelerate operational excellence and improving overall business performance. the migration of its systems. This effort includes completing pending Noteworthy events include the annual Quality Management virtual project scopes such as the critical Disaster Management plan and conference held on World Quality Day 2023, attended by over 2000 capability. Eskom employees, and upcoming events such as the Eskom Quality Month and the Eskom Quality Conference in November 2024, themed To emphasise Eskom’s commitment to Quality Management, QM “From Compliance to Performance”. From a functional leadership will intensify focus on professionalising quality, driving certification/ perspective, Corporate Quality Management oversees the certification conformance to ISO 9001 including directing business to implement of Eskom’s line divisions to the ISO 9001 (2015) QMS standard, the Quality Value Chain. This shift towards a strategic, goal-oriented ensuring compliance across all support functions and extending these approach to Quality Management leverages QM as a catalyst for requirements to the Eskom service providers. promoting a high-performance, ethical culture within Eskom. 14 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Integrated Risk Management We are committed to the effective management of risk, which is This complies with (i) the recommendations on good governance in King These priority 1 risks necessitate focused attention from the Executive central to Eskom's governance and management processes, and IV, which includes the oversight of risk and resilience as a Board-level Committee (Exco) and the Board. priority, and (ii) the requirements of Risk and Integrity Management essential for achieving the organisation's vision and mandate. Framework (RIMF) from Department of Public Enterprises (DPE). As an The Quarterly Risk and Resilience reports for Quarter 2 and Quarter 4 It is therefore imperative that risk and resilience management organ of state, we are also required to comply with disaster management of the financial year are tabled at the Board Audit and Risk Committee, be embedded into all business processes to identify and manage legislation. after review by the Exco Risk and Sustainability Committee with support from Exco. The Quarterly Risk and Resilience reports for Quarter 1 risks consistently and proactively. ERR is responsible for shaping and safeguarding an integrated approach and Quarter 3 of the financial year are tabled at Exco, after review We have established an integrated approach to managing risk and to risk and resilience management. The transition from centralised by the Exco Risk and Sustainability Committee. Our risk landscape is resilience, using a robust approach to the assessment, treatment, support functions to a functional leader model, in an unbundled monitored, tracked, and reported across risk categories approved by the monitoring, and reporting of all types of risk, at all levels and for all Eskom, is a key consideration for our approach to risk and resilience Board. The risk appetite statements are approved by the Board, namely activities across the business. It is therefore imperative that there be one management. ERR has formalised a functional support role to the finance, operations, information technology (IT), legal and compliance, standard for the management of all types of risks that will be consistently business through various interventions such as the Integrated Risk climate change, environmental, stakeholder management, fraud, people applied across Eskom Holdings SOC Ltd. The objective of managing risk Management (IRM) Operations committee, functional lead allocation, safety, and people culture. The risk landscape for quarter 4 for financial is to ensure that we can formulate and execute our strategy effectively, and regular engagements. year 2024 and the aggregated strategic risks are provided below. enabling us to operate our business efficiently within the risk appetite Risks affecting organisational and business continuity objectives are YEAR END (2024FY) RISK LANDSCAPE set by the Eskom Board of Directors. It is vital that risks that impact identified, robust treatment plans are developed, and implementation Thirteen Priority 1 (P1) risks were reported as at 31 March 2024. A focus on our objectives are identified, effectively managed, and continuously is tracked and monitored through embedded governance structures on continual improvement of the quality of risks reported, i.e., “scrubbing monitored and reviewed. (in line with King IV). Risks are assessed and rated using Eskom’s of the risks and attacking the causes” and increasing management focus Our Enterprise Risk and Resilience (ERR) Policy, Risk and Resilience consequence and likelihood matrix. Risks categorised as having both high on the risks, resulted in the reduction of Priority 1 (P1) risks from Management Plan, and Appetite and Tolerance framework, make up the consequence and high likelihood are classified as Priority 1. 21 (Q1 FY2024) to 13 (Q4 FY2024). key governing documents approved by our Board of Directors. Risk description for Priority 1 heatmap (impacted objective) 1 Energy losses (financial and operational sustainability objective) – Risk rating improved from 6E FY2023 to 5D FY2024. Unacceptable risks 2 Loss of licence to operate due to environmental performance and regulation/legislation non-compliance (striving for net zero emissions by 2050 with an 7 8 2 3 increase in sustainable jobs objective) – Risk rating improved from 6E FY2023 to 6D FY2024. 6 12 13 3 Unfavourable minimum emission standards (MES) decision from Minister of Department of Forestry, Fisheries and the Environment (DFFE) (striving for 1 4 net zero emissions by 2050 with an increase in sustainable jobs objective) – Risk rating unchanged at 6D from FY2023 to FY2024. 6 5 5 10 4 Fraud, corruption and unethical procurement and supply chain management practices (financial and operational sustainability objective) – New risk at 5D in FY2024. Consequences 5 Kendal inability to manage Usuthu and Vaal water (financial and operational sustainability objective) – New risk at 5D in FY2024. 4 Inability to arrest the increase and severity of security incidents (financial and operational sustainability objective) – Risk rating unchanged at 5E from 6 FY2023 to FY2024. Tolerable risks 3 7 Cybersecurity attack on Transmission OT systems infrastructure (financial and operational sustainability objective) – New risk that deteriorated from 6B to a 6C in FY2024. 2 Acceptable risks 8 Eskom's inability to fulfil or meet societal and moral duty to protect the health and wellbeing of those affected (members of the public) (financial and operational sustainability objective) – Risk rating unchanged at 6C from FY2023 to FY2024. 1 9 Fraud and corruption in Eskom is not brought under control and could further deteriorate (financial and operational sustainability objective) – Risk rating improved from 6E in FY2023 to 4D in FY2024. A B C D E 10 Legal separation further delayed (Facilitating a competitive future energy industry objective) – Risk rating improved from 6D in FY2023 to 5D in FY2024. Likelihood 11 Potential regional server rooms interruptions (financial and operational sustainability objective) – New risk at 4D in FY2024. 12 Misstatement of irregular expenditure and fruitless and wasteful expenditure (financial and operational sustainability objective) – New risk at 6C in FY2024. 13 Security's inability to respond and secure its assets during a disaster (financial and operational sustainability objective) – New risk that deteriorated from 6B to a 6C in FY2024. 15 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Integrated risk management continued Unacceptable (P1) risk movement % P1 risks linked to strategic objectives 15% 30 8% 21 19 14 13 77% Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Pursue financial and operational sustainability (FY23) (FY24) (FY24) (FY24) (FY24) Facilitate a competitive future energy industry Decrease in the number of P1 risks Modernise our power system Strive for net zero emissions by 2050 with an increase in sustainable jobs Priority 1 risks movement and % P1 risks linked to strategic objectives. AGGREGATED STRATEGIC RISKS We may lose our social license to operate due to While we continue our efforts to legally separate our divisions as per Risk aggregation is the process of combining individual risks to get a environmental performance and non-compliance with above, the implementation of a competitive market is dependent upon holistic view of the overall risk an organisation or project faces. The regulations/legislation, leading to plant shutdown and/or litigation. enabling policy and legislation, (e.g., DMRE to finalise ERA and EPP, aggregated risks directly impact Eskom’s strategic objectives, and their NERSA to put in place the relevant tariff/pricing frameworks finalise management is imperative to improve Eskom’s overall performance. Our failure to transition from a coal-based power system to a and publish the pricing principles document). During drafting this report Below are the five aggregated risks as at 31 March 2024. lower carbon and climate-resilient company due to the obstacles NTCSA commenced operation on 1 July 2024. on the net zero pathway, limitation in capital and National The financial sustainability, liquidity and going concern status Treasury conditions in the short-term leading to low investment Continued fraud and corruption in our business, if not brought under has strengthened due to the government support package. This in an optimal combination of clean technologies to achieve carbon control, could further impact on our operations, finances, and reputation. package is characterised by a set of stringent conditions and dioxide (CO2) reductions. This is compounded by the competing Unethical behaviour, undue influence on procurement practices, human non-compliance with these conditions will require us to repay objectives of ensuring security of supply, electricity affordability intervention to circumvent controls and inadequate oversight to prevent, the subordinated loan to the National Revenue Fund at market and technological limitations which limit the rate at which we can detect and correct criminal behaviour leading to continued financial rates. We however continue to be subjected to declining sales, transition as an organisation and country. losses, operational and reputational damage and our business’s moral illegal connections, an increase in the non-payment of municipal fibre being further eroded. bulk accounts, and the tariff determinations by the National Legal separation has been delayed further, caused by the lack of alignment and stakeholder engagement, leading to further Eskom leadership continues to implement systems and controls Energy Regulator of South Africa (NERSA) not being cost to manage the fraud and corruption risk, including consequence reflective. Given the above, our draft projections are that the reputational damage and declining investor confidence. In specific, the DPE has announced more aggressive dates to complete the management and a fraud awareness programme. We have had an company will run at a loss for the medium term. incredibly positive response to the programme with over 15 000 legal separation (business unbundling process). As legal separation Our operational performance is below expectation due is a government driven intervention, the commitment across the employees having participated. Forensic continues to monitor progress to poor plant performance, the quality of outage execution, various government departments to enable such is critical to the on the programme and encourage more employees to participate. In unreliability of new generating units, inability to provide accomplishment of any agreed timelines. The legal separation addition to internal awareness, external awareness programmes are also adequate transmission infrastructure to integrate new of Distribution (Dx) and Generation (Gx) are dependent upon being facilitated by officials from various law enforcement agencies. generation sources, and intolerable levels of theft and vandalism various enablers such as government departments committing to to Transmission and Distribution network equipment. dates for concluding on their deliverables, government policy and legislative amendments. Distribution's sustainability as a separate legal entity is highly dependent on the success of Eskom resolving the municipal debt crisis. 16 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Resilience The Global Resilience Partnership defines resilience as the capacity anticipating, adapting, testing, and transforming, but these capacities are DISASTER MANAGEMENT to live and develop amidst change and uncertainty. We refer to not as mature as emergency management. We continue to make steady progress in disaster management readiness. Disaster Management is aimed at coordinating preparedness, planning, the required resilience capabilities as the ART of resilience – to RESILIENCE NECESSITATES INTEGRATION ACROSS and response to major incidents and disasters, and ensuring compliance Anticipate and adapt to change, Respond and recover from SCALES AND BOUNDARIES to the National Disaster Management Act. Our disaster management disruption, and Transform amidst changes in context. Integrated response structures ensure coordination across boundaries efforts are focused on developing plans to address each of the 11 at national and provincial levels and with external joint responders. The approved disaster priorities. Dedicated working groups have been In practice organisational resilience requires preparedness and following table summarises institutional arrangements that give effect established for each disaster priority. The working groups focus on plans response capabilities to navigate major disruptions that integrate to integrated preparedness and response capabilities across scales and for the following events. across geographic, functional, and sector boundaries. Preparedness boundaries. To illustrate, national blackout disaster planning requires 1. Nuclear Incident is established through Business Continuity Management (BCM) and cross-functional integrated preparedness and response capabilities Disaster Management and response through an incident command between line divisions and support functions within our business 2. National Blackout system. Our Enterprise Resilience programme has made great strides to sustain us during a blackout. Additionally, integration of external 3. Solar/Geomagnetic Storm and High-altitude Electromagnetic Pulse on integrated emergency management of our response to major threats sectors (e.g., fuel, telecommunication, and banking) and across national, 4. Severe Supply and Demand Constraints: and disruptions, such as the pandemic, and ensuring compliance with provincial, and local government are also required for Eskom and the the Disaster Management Act, 2002. We continue to make progress in a. Stages 1–8 country’s survival through a blackout. b. Stages 9–16 5. Financial and Economic Collapse Planning level National Provincial Divisional 6. National Industrial action Preparedness focus Disaster Management for identified Oversight of strategic/cross-cutting risks Business Continuity Management (BCM) 7. Pandemic national priorities Disaster Management for identified Disaster Management for site level 8. Water-related Disasters and Drought provincial priorities priorities (e.g., Gx breach of ash dam wall) 9. Climate Change and Environmental Disasters Scope of Integration Nationally across all of Eskom Holdings Across all Eskom’s operations within a Within an operating division, strategic or 10. Terrorism/Sabotage/Political Instability and integrate with Provincial Resilience province service function Teams (PRTs) 11. Cyberattack/Catastrophic IT System Failure Preparedness National Disaster Management Working PRTs and subcommittees Assigned to Divisional Resilience Programme The progress of national working groups varies among the national structure and Groups (DM WG) Dx GMs disaster priorities. Substantial progress and more consistent delivery Head of the division allocated Priorities are assigned to members of Exco of plans for all identified disasters has been accomplished through the accountability establishment of a dedicated forum focused on addressing gaps and External Integration National Disaster Management Centre Provincial Premier (led by Dx GM) Own stakeholders based on divisional improving maturity levels. (NDMC) and National Disaster mandate Management Advisory Forum (NDMAF) Provincial Disaster Management Centre Our integration and joint planning with provincial government and (led by Enterprise Resilience team) (PDMC) and Provincial Disaster response structures takes place through PRTs. PRTs are integrated Management Advisory Forum (PDMAF) structures including Dx, Tx and other divisions active within the National sectors and key response (led by PRT DM lead) provinces. As Tx Grids and Dx Clusters do not align with each other it partners (led by respective DM WGs) was decided to keep PRTs provincially based, ensuring alignment with the Provincial sectors and key response partners (led by PRT DM lead) government, municipal and customer relationships within the provinces. The performance of the PRTs is assessed using a compact that considers Performance measure Quarterly reported by assigned division Quarterly PRT dashboard Quarterly divisional resilience report and provincial governance, risks, subcommittees, emergency preparedness, and reporting in resilience compact compact scores disaster management plans, integrated response structures and external Response structure Emergency Response Command Centre Provincial Joint Command Centres Tactical Command Centre (TCC) disaster structures. (ERCC) (PJCCs) Divisions employ BCM to ensure that the organisation can continue operating in case of serious incidents or disasters and can recover to an Integrated emergency response is coordinated nationally by our ERCC and provincially by PJCCs. The ERCC was not required during the previous operational state within a tolerable period of disruption. This has been financial year. The divisional Tactical Command Centres (TCCs), however, were used by many divisions to manage sudden and potentially damaging embedded at the corporate level for some time; recent efforts to embed incidents. The Resilience team conducts national and provincial level exercises to test emergency response structures and plans. A national exercise was this at the operational level have begun to bear fruit and are ongoing. not held but six provincial exercises were executed, testing the PJCCs, Grids and Clusters operational response. 17 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Environment 18 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Environmental Management mortalities (number). We manage these KPIs through interventions which include water management implementation plans, emission reduction plans and air quality improvement plans at our facilities, including implementing reactive and proactive red data and bird mitigation projects on our infrastructure. In addition, we are focusing on increasing the use of clean energy, such as solar and wind power, to reduce reliance on fossil fuels and lower our carbon emissions. We are implementing energy-saving initiatives, pursuing efficient technologies, and implementing circularity strategies in waste management to reduce our environmental impact and improve resource efficiency. By prioritising sustainability and innovation (through Research, Testing & Development, RT&D), we are committed to drive towards a greener future and reduce our overall environmental footprint. ENVIRONMENTAL PERFORMANCE Despite facing challenges and acknowledging that our environmental performance is not at the desired level, we are still above the Eskom set targets for specific water consumption and relative particulate emissions. However, we continue to implement measures to improve the performance. Additionally, we recognise that our legal contraventions We remain steadfast in our commitment to environmental i.e., how to simultaneously ensure (i) energy security, (ii) affordability and in these areas remained high at 68, although they still show an stewardship, driving sustainable practices and minimising access, and (iii) sustainability. improvement from the previous year. our ecological footprint. Our commitment to sustainability We have considered the related technologies being implemented, PARTICULATE AND GASEOUS EMISSIONS and environmental management makes us focus on effective the waste and emissions that we discharge, and the impact of our The combustion of fossil fuels results in the emission of numerous environmental management practices that lead to environmental operations on the communities affected by our infrastructure. To atmospheric pollutants that include, but are not limited to, Particulate curb the impacts of our operations, in Gx, we have implemented a duty of care and compliance. We consider sustainability to refer Matter (PM), Nitrogen dioxide (NO2), and Sulphur dioxide (SO2). Generation Recovery Plan (GRP) which has shown material gains, as not only to reduction of environmental impacts, reduction of Atmospheric pollutants have numerous negative effects on human health reflected in the improvement in the energy availability factor (EAF) and and have been demonstrated to increase the risk of premature mortality. emissions and greenhouse gases (GHG), but also to management of the unplanned capability loss factor (UCLF). These mitigation measures scarce natural resources, including water usage, land, biodiversity continue to be monitored to reduce the impact of environmental risks The technological solutions we currently employ to reduce emissions and thereby improve performance and reduce the negative impact on and manage air quality include bag filters and electrostatic precipitators and waste management; including effective upgrades of the grid the environment. This is to ensure we live our value of Zero Harm and (ESPs) that deal with particulate matter, flue gas desulphurisation (FGD) to enable alternative capacity, management of social issues and achieve environmental duty of care. that deals with SOx emissions, and low NOx burners that deal with leveraging on opportunities from identified risks. We recognise NOx emissions. We have an emission reduction plan which focuses on REDUCING OUR ENVIRONMENTAL FOOTPRINT three areas: first to ensure that power stations operate and maintain the importance of diversifying our energy mix, considering We are reducing our environmental footprint through a multifaceted the technologies installed to reduce pollution, second to retrofit older the resources we utilise, and the environmental impacts and approach that includes investing in renewable energy sources, plants with technologies mentioned above to reduce emissions and dependencies involved in meeting supply needs. implementing energy efficiency measures, and optimising our operations lastly to implement air quality offset projects/initiatives at strategic local to minimise emissions and water consumption. The material impacts communities. Environmental matters and the management thereof are well integrated our operations have on the environment are addressed through into our business processes and management systems. Over the implementation of risk-responsive plans with proper governance In addition to emissions from the coal-fired power station stacks, we last five years, we have seen a decline in performance against the oversight, and the effectiveness of these plans is measured through create fugitive (low level) dust from facilities and activities on ash disposal environmental KPIs of relative particulate emissions, specific water-use various environmental metrices (KPIs), which include relative particulate facilities, coal stockyards and site roads. Power stations implement fugitive and environmental incidents, resulting in us not meeting our compliance emissions (kg/MWh sent out), specific water consumption (ℓ/kWh dust management controls, which include vegetation, water spraying and obligations at some of the coal-fired power stations. To a large degree, sent out), environmental legal contraventions reported as a result of spraying of environmentally friendly chemical bonding agents. the decline in environmental performance is an outcome of the energy significant failure of business systems (FBS) (number), and red data bird crisis and the continual challenge of the balancing of the energy trilemma, 19 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Environmental Management continued RELATIVE PARTICULATE EMISSIONS Our power generating stations have Atmospheric Emissions Licences the DFFE Minister, which included an extensive consultation process Despite our generating facilities having been subjected to focused (AELs) that stipulate emissions limits and conditions under which the with a wide representation of stakeholders has culminated in the DFFE maintenance, our relative particulate emissions did not meet the targets stations should be operated. Failure to comply with limits of AELs Minister announcing a favourable decision on 22 May 2024. set for Eskom. The extremely high emissions at Kriel and Kendal are the places us at a risk of censure by authorities. Operations of coal-fired primary cause of the year end poor performance of 0.79kg/MWh sent out. stations are focused on meeting the limits; however, authorities are We are committed to compliance with the MES decision by conducting notified when non-compliance to these limits occurs. During plant regular monitoring and reporting and implementing strict operational Kriel, Matla, Lethabo and Matimba performance deteriorated in the past operations, abnormal conditions occur, e.g., a fire resulting in burning protocols. We will continuously work on the power plants to meet financial year. Kendal’s performance improved since the previous financial of ESP transformers; during these incidents, emergency reporting regulatory requirements, conduct emissions testing, and collaborate year but remained above target, nonetheless. These stations emitted (referred to as NEMA section 30 incidents) is done to the authorities with regulatory bodies and relevant stakeholders to ensure adherence more than half of the ash that Eskom released into the atmosphere. as per requirements of our AELs. In several cases, authorities have to environmental standards. Our proactive approach to emissions Reasons for worsened performance include ash and dust handling plant rejected incidents as not meeting emergency incident requirements management will minimise environmental impact and ensure a issues; poorly performing and damaged electrostatic precipitators (ESPs) due to differences in interpretation of the law between Eskom and the sustainable future. which limit particulate emissions; and poor flue gas performance. There authorities. were also occasions when our power stations continued operating with AMBIENT AIR QUALITY MONITORING high emissions during periods of electricity supply constraints. By year end, 16 power station units were operating in non-compliance Ambient air quality monitoring provides a means of comparing the of their average monthly emission limits (FY2023: 13), placing 9 045MW impacts of emissions from sources including tall stack emitters, other To address the decline in performance, the Gx division continues to drive at risk of censure or closure by the authorities (FY2023: 7 691MW). industrial activities and low-level sources, to National Ambient Air a culture of achieving environmental compliance, with a renewed focus on The main contributors were Kendal, Matla, Lethabo, Matimba and Kriel. Quality Standards (NAAQS) set by DFFE. the importance of compliance for sustainable asset management. Operating in non-compliance was attributed to deficiencies at the dust As a significant atmospheric emitter, and through our Research Testing handling plant which affected the ESP and SO3 plants, as well as excessive AIR QUALITY OFFSET PROGRAMME and Development (RT&D) department, we run the most comprehensive emission exceedances during unit start-ups. The Gx division continues to Eskom continues with executing the air quality offset (AQO) programme ambient air quality monitoring network in the country. Over the last execute plans to mitigate the causes of such non-compliances with the which aims to reduce particulate matter emissions in strategic 30 years the network has grown to 22 monitoring stations strategically average monthly emission limits. communities affected by our coal-fired power stations. It is anticipated placed to monitor ambient air quality in the vicinity of power stations. that through insulating houses with ceilings, transitioning households South Africa promulgated the MES that prescribe limits from gaseous This is in alignment with the requirement of the power stations’ from coal use to liquid petroleum gas and addressing waste burning, that emissions of sulphur dioxide (SO2) and nitrogen oxides (NOx), as well Atmospheric Emission Licence (AEL). Some of these stations have also ambient air quality will be enhanced. Significant progress is being made as particulate matter (PM) for existing plant standards and new plant been commissioned to monitor the impact of the interventions of our air on the various projects underway, in implementing this programme. standards, including dates for compliance thereto. The objective of the quality off sets programme and for research purposes. MES is in line with the Bill of Rights, as enshrined in the Constitution Since the inception of the programme, Phase 1 focused on three projects Pollution parameters monitored at the sites include nitrogen oxide of South Africa. The MES seek to protect people and the environment are being executed, at KwaZamokuhle (near Hendrina power station), (NO), nitrogen dioxide (NO2), oxides of nitrogen (NOx), sulphur by providing reasonable measures for the prevention of pollution Ezamokuhle (near Majuba power station) and at Sharpeville (in the Vaal dioxide (SO2), ozone (O3) and fine particulate matter of size < 10µm and and ecological degradation, and to ensure ecologically sustainable Triangle airshed). To date, as at March 2024, 83% (2 650) out of planned 2.5µm in diameter (PM10 and PM2.5). development while promoting justifiable economic and social 3 500 in Kwa-Zamokuhle near Hendrina, and 88% (1 440) out of development. Since the promulgation of the MES, we determined that Ambient fine particulate matter concentrations still pose a threat planned 2 100 houses at Ezamokuhle near Majuba have been completed. full compliance with the new plant standards would cost R340 billion to to human health and environment, and therefore needs control and The focus in Sharpeville is through addressing waste clean-up and several retrofit pollution control technologies. This cost was unaffordable due mitigation interventions. During FY2024, NO2 concentrations were clean-up campaigns have been conducted to date. to our unfavourable financial performance, existing debt burden and found to be low at all the sites. Although exceedances of the SO2 hourly Implementation of phase 2 of the project has been initiated, initially reliance on governmen support, together with the lack of appetite for and 10-minute limit were recorded at some sites, they were well below focusing on two settlements near Tutuka and Kendal power stations. funding of coal-based technologies. their allowed number of exceedances per year. Exceedances of the O3 A contract to complete 1 160 houses in Sivukile, near Tutuka by 2025 eight-hourly limit of 61 ppb moving average were recorded at all the Acknowledging operational and sustainability risks associated with has been initiated. The objective for Phola near Kendal which is to monitoring sites and were in non-compliance with the national ambient requirements of the MES, in August 2020, we applied to the Department complete 6 073 houses by August 2027 and the project is undergoing standard. of Forestry, Fisheries and the Environment (DFFE) for suspension, the contracting process. alternative limits and/or postponement under the MES, based on an The monitoring results from these stations are used to inform emission COMPLIANCE AND GOVERNANCE internally approved Emission Reduction Plan (ERP). The ERP identified management strategies, research road maps, and contribute to modelling Eskom upholds rigorous environmental legislation, guided by robust stations that would be retrofitted with emission reduction technology studies. governance structures and transparent oversight to ensure accountability and the associated planned retrofit dates. Following the submission of and compliance. Eskom’s MES postponement applications, a decision-making process by 20 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Environmental Management continued EMISSION REDUCTION PROJECTS disciplined execution of the plans, we have established power station Since the promulgation of the MES, we applied for and were granted level committees and the Gx Environmental Compliance Steering postponement approvals by the then Department of Environmental Committee (GECS) focusing on monitoring effective implementation of Affairs (DEA), to reduce emissions by retrofitting several power stations the water management action plans. These interventions have resulted in with emission reduction technologies, such as fabric filter plant (FFP), low some improvements in water management being observed compared to NOx burners and/or FGD. the previous financial year. Challenges were experienced in implementing the original Emission SPECIFIC WATER USAGE AND COMPLIANCE Reduction Plan (ERP), and the plan was revised. Under the revised ERP, We have experienced challenges with meeting our water usage focus is on particulate matter reduction projects at seven power stations targets, over the years. Several factors have negative impacts on water (Kendal, Matimba, Lethabo, Tutuka, Duvha, Matla and Kriel); nitrogen performance across the coal-fired power stations, including low load oxide reduction projects at three stations (Majuba, Lethabo and Tutuka); factors and poor water management practices linked to operational and sulphur dioxide reduction projects at Medupi and Kusile. Execution challenges. Operational challenges include water leaks, high raw and of these projects, in parallel with execution of the AQO programme will demineralised water usage and dam overflows. We have also experienced assist in reducing emissions and consequently improve the quality of air challenges with implementing corrective measures due to system capacity in the different airsheds. constraints, which present limited opportunities to schedule outages for implementing the corrective measures. At the end of our financial year It is noted that good progress can be reported in executing the revised 2024, water performance was at 1.43ℓ/kWh sent out which is a slight incidents were escalated as being a result of significant FBS (FY2023: 10). ERP however, several stations are at risk of not completing the planned deterioration from the previous year (FY2023: 1.39ℓ/kWh sent out). Three of these were related to particulate matter emission exceedances, retrofit projects by the legal deadline of April 2025, and we are engaging while the rest were due to release of contaminated water from coal- DFFE in this regard. Our stations have acquired Water Use Licences (WULs), issued under fired power stations. the National Water Act, 1998. Several challenges have been experienced The Eskom of tomorrow will be one with lower atmospheric emissions in compliance with the WULs. At the end of the reporting year, a total WASTE MANAGEMENT and with less impact on the health of the South African people, and of 30 water-related legal contravention incidents were registered due We support the government’s commitment to waste management to the general environment. To achieve this, we continually implement to non-compliance with the WULs (FY2023: 58). Although this is an protect human health and the environment as defined in the NEMA measures to reduce atmospheric emissions from our coal-fired power improvement when we still regard this as high and are committed to full and the national waste management strategy, which is a legislative stations to comply with South African air quality legislation. compliance with licences. requirement of the National Environmental Management: Waste Act, 2008. In our environmental management strategy, we are committed to MANAGING WATER CONSUMPTION DRIVING TO MEET OUR ENVIRONMENTAL LEGAL improving waste management efficiency by prioritising reduction, reuse, Our power generation is predominantly coal based and relies on raw OBLIGATIONS recovery, and recycling while actively implementing principles of circular water from rivers and dams for the power station processes, including We address legal contraventions by prioritising compliance, implementing economy. Towards this commitment, we have established recycling cooling at the wet-cooled power stations. Our water footprint will be robust governance structures, and conducting regular audits to identify initiatives for some of our waste and continue to sell ash produced from reduced with the closing down of the older coal-fired power stations and rectify non-compliance issues. We continuously engage with our coal-station operations. In addition to the known uses of ash, we and diversification of our energy mix towards renewable energy. We regulatory authorities, implement corrective actions, and invest in continue through our RT&D department to research innovative ways have also invested in dry cooling technologies due to the water scarcity training to ensure adherence to environmental legislation. By promoting and applications (such as mine back filling) to assist in increasing ash in South Africa. Dry cooling uses approximately a tenth of the water a culture of compliance and accountability, we aim to prevent legal circularity. consumption of a wet-cooled power station. contraventions and improve our reputation as a responsible corporate citizen. Identifying legal contraventions and implementing corrective PHASE OUT OF POLYCHLORINATED BIPHENYLS (PCBS) As a strategic water user consuming significant quantities of water, actions to prevent repeat contraventions is important to improving An independent audit of our PCB phase-out plan was conducted during our water supply is assured in the short to medium term. Due to our business systems and ensuring sustainable operations. Managing Q4 FY2024. The report concluded that we have met the December our environmental and sustainability commitments and given that a legal contraventions is also a means we adopt to address the legal 2023 deadline, as all PCB containing, and PCB contaminated material sustainable supply of water is central to our generation operations, we contraventions in terms of FBS. was phased out from all our operational divisions. In FY2025, we will developed a Water Efficiency Plan, to drive several priorities: securing undertake an external verification audit and a report will be submitted water supply for electricity generation, maintaining high water-use A total of 68 environmental legal contravention incidents occurred to the DFFE. This report will be in compliance with regulation 9 of efficiency across all power stations, achieving our intent of zero liquid at our coal-fired power stations during FY2024 (FY2023: 105). the Regulations to phase out the use of PCBs materials and PCB effluent discharge, and ensuring legal compliance with water legislation. Although a significant improvement from 2023, is still considered high, contaminated materials, which states, “A holder must at own cost, Since the Water Efficiency Plan is a strategic programme, each power and we continue to pursue plans to improve on it. We also manage submit to the Director-General a biennial audit report prepared by station has responded by developing their individual water management environmental incidents and investigate whether they constitute a an auditor, on or before the anniversary of the date of approval of the action plans to realise the objectives of the efficiency plan. To expedite significant FBS. Seven (7) of the environmental legal contravention phase-out plan”. 21 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Environmental Management continued ASH FACILITIES AND ASH UTILISATION (BENEFICIATION) The advancements in ash beneficiation research signify a promising In pursuit of driving ash beneficiation, we applied to exclude ash and shift towards sustainable construction and mining practices. The gypsum produced at our sites, from the definition of waste when successful development and implementation of high-quality ash content extracted for beneficial use. This application was approved by the Minister materials not only offer an innovative solution to road construction of the DFFE, and the exclusion provides opportunities for beneficiation of but also present a viable alternative to traditional materials, reducing these wastes – such as the use of ash in bricks, cement, soil amelioration, environmental impact. road construction and mine-backfilling; and gypsum for the manufacture of wallboards, cement, plaster of paris and soil conditioning. Ash is currently The collaborative efforts at Kusile, ERI’s Rosherville complex, and sold from seven coal-fired power stations where the ash sales are the Tutuka Power Station area are testaments to the potential of ash contracted to commercial partners. Over the past 10 years, ash sales have utilisation. The proactive approach in exploring mine backfill applications increased steadily by volume, although we have seen a decrease over the and the investigation into rare earth elements extraction further last three years. Reasons for this include unavailability of units, inconsistent demonstrate a commitment to environmental stewardship and resource performance due to some commercial contracts expiring, fluctuations in recovery. These initiatives are paving the way for a future where industrial the quality of the ash, and low and varying market demand. by-products become valuable resources (“waste to resource” principles), contributing to economic development while preserving our planet. During the 2024 financial period, ash sales totalled 2.5 million tonnes, a reduction of 20% compared to the previous year’s 3.1 million tonnes. BIODIVERSITY Biodiversity is a material impact that we focus on; and it refers to Ash beneficiation from 2024 Financial year ecosystem impacts from our infrastructure. Our activities in the generation, transmission and distribution of electricity can have 10.0% 0.4% an adverse impact on biodiversity and therefore the controls and practices that are put in place in our business. With the recognition that biodiversity is the complex web of life which sustains us all, we our operational areas. Collaborating with conservation organisations 9.3% acknowledge that our contribution to protecting biodiversity is not just and local communities, we implement measures to mitigate threats to about saving animals or habitats, it is also about helping us cope with the red data species, such as habitat loss and pollution; and we facilitate Ash dump construction worst effects of climate change. The status of biodiversity continues to habitat restoration, invasive species control, and environmental be threatened by the increasing impact of uncontrolled human activities education to promote biodiversity protection. By integrating land Fly ash and therefore the critical role we play in this matter in South Africa. management with conservation efforts and prioritising biodiversity Coarse ash conservation, we continually strive to protect endangered flora and fauna One of the significant biodiversity challenges we continue to face is in our operational areas; as well as demonstrate our commitment to Clinker that of red data (threatened) bird species mortalities that occur on our responsible stewardship of natural resources and ecosystems. extensive power line network across the country. Towards tracking how the infrastructure interacts with biodiversity, we actively monitor the We contribute to multiple biodiversity initiatives in South Africa through red data bird species mortalities. In FY2024, red data mortalities were consultation with national and provincial authorities, and formally at 258 (FY2023: 170). To reduce the impacts on biodiversity, we are declared three nature reserves, the Ingula Nature Reserve, the Majuba 80.3% continuously involved in research for more effective mitigation measures. Nature Reserve, and the Koeberg Nature Reserve. In doing so, these We address red data mortalities, or species at risk of extinction, nature reserves play a role in the protection of South Africa’s biodiversity The decline in ash beneficiation can be attributed to several factors: through proactive mitigation plans. The key initiatives undertaken to and ensure the long-term security of South Africa’s natural heritage. • The demand for ash products has diminished, primarily due to a address this environmental impact include implementing proactive bird The Ingula Nature Reserve is South Africa’s 27th “Ramsar Site” added scarcity of infrastructure projects within the construction sector. This mitigation programmes on high-risk power lines; implementing the to the List of Wetlands of International Importance and was declared to has rendered the achievement of sales targets more challenging. recommendations that emanate from investigations undertaken on red protect the Drakensberg’s high altitude grassland ecosystem, wetlands • The load shedding has further compounded these challenges by data bird mortalities; and research work through Eskom’s Research, and escarpment forest which hosts several threatened species, including hindering operational capacity, leading to delays in product delivery. Testing and Development (RT&D) department. In addition, we perform the critically endangered White-winged Flufftail, Wattled Crane, Bearded environmental impact assessments, habitat restoration, and conservation Vulture and White-backed Vulture. • Specific maintenance issues at ash plants, particularly at Lethabo, initiatives to protect vulnerable species. Matla, and Kendal, have posed additional hurdles. Notably, Kusile By embracing innovative solutions and industry best practices, we resumed ash offtake activities in November following the resolution of Our organisation manages nature reserves and land by implementing continuously improve environmental performance and sustainability the chimney collapse incident. sustainable biodiversity conservation initiatives. We prioritise the outcomes ensuring a path towards a greener future, driving continuous • The lack of adequate infrastructure for the export market has also protection of natural habitats, wildlife species, and ecosystems within improvement and sustainable practices. impeded our ability to meet sales objectives. 22 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Climate Change Climate change is one of the most significant challenges of our comprehensive JET Strategy that includes decarbonising the energy mix decisions. In response, we have substantially expanded renewable energy time, with far-reaching impacts on the environment, society, and by deploying renewable energy technologies such as wind, solar, and capacity in our grid by partnering with IPPs, promoting a cleaner energy hydroelectric power, and phasing out coal power plants. Additionally, mix, and decreasing dependence on fossil fuels. economies worldwide. The energy sector, being a major source we are retrofitting and upgrading existing power stations to enhance of GHG emissions, plays a pivotal role in this global issue. As efficiency and reduce emissions. The implementation of smart grid By leveraging REIPPPP, we are making significant strides towards our net South Africa’s primary electricity supplier, we recognise our technologies to optimise energy distribution and consumption remains a zero emissions goal, aligning with both national and international climate priority as part of our approach to business sustainability and achieving commitments, and ensuring a sustainable energy future for South Africa. crucial responsibility in addressing climate change and having a net zero emissions. more intensive focus on integrating sustainable practices into our South Africa has, since 2019 imposed a carbon tax alongside the operations. Our net zero emissions by 2050 aspiration is ambitious and multifaceted, environmental levy in the electricity sector, we must adhere to the requiring significant effort and collaboration across various sectors. Carbon Tax Act by precisely measuring and reporting our GHG According to the findings of the Intergovernmental Panel on Climate The transition to mitigate climate change and ensuring long-term emissions and paying the necessary carbon tax on emissions that surpass Change (IPCC) Sixth Assessment report, there is no debating the fact energy security includes overcoming technological, financial, and social established thresholds, considering specific tax-free allowances and that human activities, through emissions, have resulted in global warming challenges. The JET Strategy is integrated into our overall business deductions. increasing global surface temperatures by 1.1°C in 2011 – 2020 relative strategy, reflecting our commitment to sustainability and environmental to 1850–1900. As GHG emissions increase, the extreme weather events Emissions under the IPCC activity code 1A1a currently benefit from stewardship. This JET Strategy underscores our dedication to reducing associated with climate change are likely to negatively impact efficiency certain deductions, which are scheduled to expire on 31 December our environmental impact while ensuring that the transition to a low- and reliability and reduce the design lifetime of power system assets 2025. After this date, the carbon tax is expected to be passed on to carbon economy is fair and inclusive. Through these concerted efforts, that are temperature or precipitation sensitive. The Paris Agreement electricity consumers due to regulated electricity pricing. The projections we aim to lead South Africa towards a sustainable future, balancing also calls for a continuous evaluation of possible impacts and climate currently estimate that the carbon tax liability will increase the allowable environmental, social, and economic considerations. Our Komati project vulnerabilities arising at 1.5 and 2.0°C to inform the development of revenue requirement by approximately R20 billion annually. marks a significant step in our commitment to transitioning towards a appropriate resilience strategies. sustainable energy future. The initiatives at Komati focused on replacing We remain committed to compliance with national laws and regulations the coal-fired power plant with renewable energy sources and innovative related to climate change, including mandatory GHG reporting, pollution Globally, the energy sector is one of the largest contributors to GHG technologies. For an in-depth analysis of the project and our JET emissions. In South Africa, electricity generation alone has accounted prevention plan regulations, and the Carbon Tax Act. We have actively initiatives, please refer to the JET chapter. engaged with the DFFE regarding the new Climate Change Bill during for approximately 40% of national GHG emissions in recent years. This substantial contribution underscores the critical need for the energy development. The Bill introduces sectoral emissions targets, mandatory We are currently reviewing our Climate Change Strategy, which sector to transition towards more sustainable and environmentally carbon budgets, and the integration of adaptation planning. demonstrates our commitment to addressing climate change through friendly practices. proactive and responsible measures to align to changing legislation, We are dedicated to aligning our operations and strategies with national and international commitments, and expectations. international climate change commitments. This alignment includes OUR CLIMATE CHANGE PERFORMANCE supporting South Africa’s commitments under the Paris Agreement Our reliance on coal-fired power stations for electricity production leads Our Research, Testing and Development department is actively and contributing to the global effort to limit temperature rise to well to significant CO2 emissions and other pollutants. As a significant emitter exploring the potential of Carbon Capture, Utilisation and Storage below 2 degrees Celsius above pre-industrial levels, while pursuing of GHGs, we acknowledge our role in the climate change challenge and (CCUS) technologies for application at our existing coal plants. This efforts to limit the increase to 1.5 degrees Celsius. By investing in are committed to reducing our carbon footprint. initiative is part of our broader efforts to address climate change and renewable energy, enhancing energy efficiency, and exploring innovative mitigate the environmental impact of coal-based electricity production. In our business, we recognise our responsibility in this global challenge technologies such as CCUS, we work to reduce our carbon footprint and CCUS technology has the potential to significantly reduce GHG and have integrated climate change into our overall business strategies, support global climate goals. Additionally, we participate in international emissions, contributing to global climate goals. Our commitment to reflecting our commitment to sustainability and environmental climate forums and collaborate with global partners to share best investigating and potentially implementing CCUS is a crucial component stewardship. These strategies are vital for minimising GHG emissions and practices and advance sustainable energy solutions. of our strategy to transition towards a low carbon future while ensuring ensuring the resilience of our operations in the face of climate-related energy security for South Africa. In addition to mitigation efforts, we have integrated adaptation measures impacts. We are tackling climate change through a comprehensive dual into our climate change approach, to enhance the resilience of our approach of mitigation and adaptation. Our approach to addressing The integration of the Renewable Energy Independent Power Producer infrastructure and operations to the impacts of climate change. This also climate change involves a comprehensive strategy that integrates policies, Procurement Programme (REIPPPP) is a critical component in our involves assessing risks, implementing adaptive strategies, and ensuring strategies, and initiatives. strategy to achieve net zero emissions by 2050. We structure our the continuity of our services. Over the next few years, we will be investment and operational plans in accordance with the IRP, which Our goal of achieving net zero emissions by 2050 emphasises our focusing on ensuring that our business adapts to climate change through defines the future electricity generation mix for the country. The recent commitment to reducing environmental impact and aligning with global a proactive and economically efficient approach. draft IRP (2023) includes targets for renewable energy deployment climate goals. To reach this ambitious target, we have developed a and a reduction in coal’s share of the energy mix, guiding our strategic 23 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Climate Change continued ADAPTING TO THE CHANGING CLIMATE Our geographic footprint spans the entire country, which increases South Africa has seen an increase in the frequency and severity of our exposure to a wide range of climate hazards. The impact of these extreme climate-related events and experienced a high degree of risk hazards is already being felt. We therefore recognise the importance and from, natural hazards and disasters, to droughts, floods, and storm- urgency of enhancing our current operational resilience and increasing related events. These hazards have far-reaching consequences for the our adaptive capacity to withstand both the slow onset of a changing electricity sector in terms of physical and operational impacts, security climate, as well as the increase of extreme weather and climate events. of supply, demand to meet end user requirements and associated costs When we look at these changing climate hazards and severity and from damage caused by these extreme events. frequency of extreme weather and climate events, we need to consider how they will affect and impact our business in terms of our assets and infrastructure, systems and operations, supply chain as well as our workforce. Why we need to adapt and build resilience/drivers of adaptation Extreme climate and weather Damage infrastructure events Disruption of electricity supply Changing environmental Risks to water availability conditions Increased temperatures affecting plant efficiency Increased energy demand Cooling during heatwaves and changing consumption patterns Supply chain disruptions Impact on resources Transitioning to low carbon Building resilience in infrastructure to support the JET future Economic impacts Businesses, industries, communities, local and global carbon pricing initiatives Public health and safety Reliable supply of electricity for emergency services, health care facilities and vulnerable populations Climate change adaptation and resilience building in the electricity sector are essential for ensuring energy security, mitigating economic risks, protecting public health and safety, and facilitating the transition to a low-carbon future. 24 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Climate Change continued RISKS RELATED TO THE CHANGING CLIMATE There are two risk categories we consider which may affect our operations particularly as we transition to a low carbon economy and the JET. Operational risk Physical risks description Financial impact How are we responding • Acute climate • Inability of the • Increased direct costs • Continual review of risks events such as line divisions to • Associated costs to • Integration of treatment sudden extreme implement divisional manage and monitor tasks and response events adaptation plans the adverse impacts measures into exiting • Chronic slow to ensure the of climate change operational processes onset climate resilience of assets • Damage to • Alignment to emergency events such as and operations to infrastructure, with and disaster management gradual increases extreme weather supply interruptions and response plans in temperature and climate events resulting in increased • Awareness and capacity (Priority II risk rating) cost building Through the development of our adaptation plans we have identified the various physical climate risks that we need to take note of across our operations. Many of these risks have already been experienced, for example the KZN floods in 2022 where transmission towers were damaged or were washed away and the extreme storm incident in the Karoo in Feb 2024 which resulted in Dx tower damage and power disruption to the town lasting 12 days. We recognise that these extreme weather/climates are likely to increase in frequency and severity as climate change progresses. Climate risks and vulnerability Rising temperatures and extreme heat: Loss of cooling capacity; reduced output and/or forced plant outages, conductor sag, line trips, increased raw water temperature, exceedance of equipment design thresholds, increased fire risk, evaporation, logistics and supply chain management impacts, workforce exposure and impacts, increasing energy demand Extreme cold snaps: Contraction of lines and ice loading, contraction oil in transformers, decreased efficiency of cooling towers due to freezing, mist/moisture affecting network insulation especially in polluted environments, snow and ice affect conductors and insulators Extreme precipitation events/wet spells: Flooding, overflow of water storage dams, impact on ash dam design integrity, access to sites, interruption to water supply, intermittent supply of coal, erosion impacts on tower foundations, water pump houses, towers washed away Drought: Water availability, impact on operations and plant, vegetation management plans Increased wind speeds: Impact building, towers, lines, tripping of wind turbines (load reduction), increased dust generation and erosion (Ash dams), loose debris, containerised buildings Wildfires: impacts on transmission and distribution lines, damage to infrastructure, insulator flash overs, coal conveyers 25 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Climate Change continued MAINSTREAMING CLIMATE ADAPTATION INTO OUR These plans provide a high-level overview of the climate risks and approaches to building increased resilience and adaptive capacity across the divisions and are OPERATIONS AND DECISION-MAKING PROCESSES complemented by more detailed actions and initiatives at local site level to identify exposure of assets and infrastructure, vulnerabilities, and the risks posed to the sustainability of operations, and to ensure mitigation measures are implemented to manage these risks. Climate adaptation plans FLOODS IN KWAZULU-NATAL – KLAARWATER High volumes of flood water, waterlogged soil, erosion, and unfavourable DURBAN SOUTH local sandmining practices were identified as contributing factors to the Generation Approved During the second week of April in 2022 a cut-off low pressure system impacts that were observed. developed south of Durban. Its intensity grew to the point where Various measures were implemented to restore operations and build 300mm of rainfall (30% of the region’s annual rainfall) fell within 24hrs. resilience to cater for future weather events. These included changing The extreme rainfall resulted in floods of the coastal plains including and strengthening foundations designs for towers in the flood plains, parts of Durban Souths’ industrial area. Finalised but not approved raising foundations, improving drainage systems to manage water Transmission within FY2024 flow and minimise erosion, relocation of towers, soil compaction and Eskom Transmission also experienced major disruption to its Durban South Klaarwater 275kV Line and substation. Response was hampered stabilisation measures, and strengthening and reinforcing support by limited access during line patrol and several towers could not be structures. reached. Damage to the lines included, twisted jumpers, damage to bracing members and leg extensions, exposed foundations, gabion Distribution In progress retaining wall and several towers completely washed away due to force of debris and weakened foundations. Landslides within the Klaarwater substation was also noted. As a result power interruption to the communities was also experienced. Eskom Rotek Approved Industries We continue to ensure that physical climate and weather risks are addressed through the development, implementation and monitoring of our divisional climate adaptation plans. The Gx division has a mature plan in place covering all coal-fired power stations, nuclear and peaking stations, Primary Energy, Group Capital, and Clean Energy business units (BU). All risks have been assessed, classified, and rated, and fully integrated through Eskom’s Integrated Risk Management process into emergency and disaster management plans and business continuity plans. Eskom Rotek Industries (ERI) is undergoing a review of their current approved adaptation plan. Due to ERI’s footprint overlapping with Gx division, most risks are covered through the Gx adaptation plan. Flooding risks and associated treatment plans are in place at operational level depending on site conditions. Transmission Division (now the National Transmission Company of South Africa) finalised their climate change plan during FY2024 covering three pillars of i) addressing GHG emissions, ii) anticipating and adaptation to climate change and iii) transforming operations in support the JET and contribution to Mudslide and tower damage Foundation failure on the Durban South – Klaarwater 275kV Line sustainable development. The Tx plan was formally approved in May 2024. The Dx division has a draft plan, and this is expected to be finalised and signed off for implementation in FY2025. 26 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Climate Change continued Scope 1 emissions (tCO2e) CLIMATE CHANGE RESEARCH It was imperative for our line divisions and subsidiaries to develop climate Scope 1 emissions (tCO2e) We continue to support climate change adaptation research and the change adaptation plans in support of the Global Goal on Adaptation. integration of climate change impacts to support climate resilient operations and long-term planning initiatives. We are committed to Funds pledged at COP28 include the UAE’s Alterra – a $30 billion partner with research institutions in South Africa and internationally catalytic fund emphasising on unlocking climate finance in the Global 2023 184 134 349 with the aim of developing capacity and contributing to the scientific South. The World Bank committed to increasing funds for climate- knowledge in the field of climate change science, climate impacts, and related projects by $9 billion annually and will function as the trustee of overall adaptation research and initiatives. the Fund for Loss and Damage for four years, with a board making the funding decisions. Climate finance support for countries transitioning to 2022 14 193 386 382 OUTCOMES OF COP28 cleaner energy was still considered insufficient amidst the pledges made. We participated in the 28th Conference of Parties (COP) in November 2023 of the United Nations Framework Convention “While COP28 successfully mobilised over $85 billion in financing, there on Climate Change. Our specific engagements through the National is a clear acknowledgment that this falls short of rebuilding trust and translating the first GST into tangible actions that can effectively bend the 2021 207 364 669 Business Initiative’s South African pavilion centred around: emissions curve.” Scope 2 emissions (tCO2e) • Lessons on JET in South Africa • Funding & financing mechanisms and transmission investments We are dedicated to continuously improving our climate change • The revised Eskom JET strategies and integrating innovative solutions to meet future Scope 2 emissions (tCO2e) • Partnerships for Carbon Capture Utilisation and Storage challenges and will continue to participate at future COP meetings. Our commitment to sustainability and environmental stewardship is • Integrating AI and Smart Technologies to community energy schemes reflected in our ongoing efforts to reduce emissions, enhance operational COP28 had critical outcomes for the JET. The current energy trilemma resilience, and contribute to global climate goals. By addressing 2023 131 899 informs the decision for our transition to occur at a pace and scale our both mitigation and adaptation, we aim to ensure a sustainable and country can afford, as our focus is building an energy system that is secure, reliable energy future for South Africa, supporting economic growth accessible, and sustainable for all South Africans. In addressing South Africa’s and social development while minimising environmental impact. current energy crisis, President Cyril Ramaphosa expanded on South Africa’s Our comprehensive approach to climate change demonstrates our just energy investment plan and the increase in investment commitments commitment to a resilient and sustainable future. of the deal struck with various countries at COP26 from $8.5 billion to 2022 85 171 CARBON FOOTPRINT FOR THE 2023 CALENDAR YEAR $11.6 billion – showcasing an increase in international support. A carbon footprint is the total GHG emissions from scope 1, 2 and 3 The technical report of the first Global Stocktake (GST) noted that caused by an organisations operational activity; expressed in tons of carbon dioxide equivalent (tCO2e). This provides insights into the sources Scope 3 emissions (tCO2e) collectively the world is not on track to meet its commitments under the Paris Agreement. In the political talks on the first GST, which concluded and magnitude of our GHG emissions, which enables us to improve the at COP28, for the first time there was collective agreement from nearly management of our GHG emissions and set targets accordingly. Scope 3 emissions (tCO2e) 200 countries to move away from fossil fuels, “done in a just, orderly, Our carbon footprint is calculated in accordance with the globally and equitable manner,” This is an important political signal about the recognised GHG Protocol: A Corporate Accounting and Reporting significant transition that lies ahead, with explicit fossil fuel transition 2023 4 505 188 Standard. This calculation incorporates various scopes and assumptions language never before included in a COP outcome. The GST called distinct from the regulated reporting requirements of the DFFE. This for tripling the global capacity of RE and doubling the annual rate of means that while our results provide valuable insights, direct comparison energy efficiency improvements before 2030 and phasing out inefficient with regulated data is not be possible. subsidies for fossil fuels that do not address energy poverty or facilitate 2022 14 5 407 896 just transitions, as soon as feasible. South Africa emphasised that climate Our carbon footprint is calculated on a calendar year basis to align with ambition must be balanced across mitigation, adaptation and means of the DFFE greenhouse gas reporting protocols. The results of our carbon implementation. Thus, a Global Goal on Adaptation was adopted in footprint for the 2023 calendar year, compared with 2022 and 2021, are which measurable, time-bound targets and thematic areas for adaptation presented in the graphs per scope. The scope 2 emissions were only 2021 260 929 are included to encourage countries to accelerate their adaptation plans. included in our Carbon Footprint reporting from 2022. 27 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Climate Change continued In 2023, the total GHG emissions were 188 771 436tCO2e. Stationary combustion accounted for over 97% of the overall emissions, primarily due to the heavy reliance on coal, diesel, fuel oil at our power stations for electricity production. Even though most of our emissions come from stationary combustion, it is to be noted that the emissions for this activity have steadily decreased over the years. Additionally, we noted a significant increase in emissions from waste generation and non-combustion product use, due to improvement in reporting and data collation. In 2023, we incorporated GHG emissions produced by our subsidiary ERI from scope 1 and scope 3 sources, as ERI has no scope 2 sources. This follows the GHG Protocol’s recommendation that subsidiaries should report their emissions with the parent company, to prevent double counting. We have been monitoring and reporting our scope 1 emissions for stationary combustion annually to DFFE. This emissions reporting is a regulatory requirement, calculated in accordance with the IPCC methodology and the DFFE methodological guidelines for the calendar year. In the 2024 financial year, we emitted 190.4Mt of CO2, accounting for over 97% of the organisation’s overall emissions. As the highest emitter of CO2 on the African continent, we acknowledge our carbon footprint and are developing strategies to ensure a JET. Part of the JET is to decarbonise, onboard renewables and leverage the shutting down of old coal power stations, which will result in reduced emissions. The current GHG emission monitoring enables us to set attainable targets to achieve net zero emissions by 2050 and to remain a sustainable business. Although this approach is an ambitious goal for us, it will benefit the country and the continent at large. 28 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Just Energy Transition South Africa is grappling with the energy trilemma: how to simultaneously ensure energy security, Security affordability and access, and sustainability. At the same time, South Africa’s national context of high Energy crisis management Generation strategy unemployment and inequality, unreliable performance • State seeking to problem- • Running existing generation efficiently and effectively commissioning of the current generation fleet, and reliance on coal- solve crisis through NECOM1 • Assessing potential to • Improving maintenance and schedule fired generation in the electricity sector make the continue running plants availability De- energy trilemma uniquely complex. We have a Board- • Demand side management • Prepare for shutdown approved JET Strategy that is focused on resolving all • Source additional generation, at end of economic or e.g. from IPPs2 Low technical life components of the energy trilemma, by delivering on carbon future R the five Es: Energy, Economy, Employment, Equity, ion li &R iss stafe fo and tio r p 2n and Environment. r ansms ns ow d T cces er a We view our decarbonisation efforts as catalytic to transforming the Affordability/ JET Strategy Sustainability local energy landscape and recognise that South Africa has a role to play access • Second life for station and in the global effort to reduce anthropogenic GHG emissions, which are communities dependent on existing the primary driver of climate change. This context is especially challenging generation as South Africa is vulnerable to the impacts of climate change which • Least-cost pathway for adding require urgent and appropriate adaptation response. Our objectives are capacity supported by three interdependent pillars of the strategy: Just, Energy, • Just transition through socio- and Transition, which rely on the key enablers of the JET in turn. economic interventions • Lowest cost financing Just: The first pillar of our JET is ensuring the transition is just from a social perspective. We seek to offer power stations a second life through R&R and socio-economic initiatives, starting in our historic operational locations in Mpumalanga. This will include initiatives at power stations managers. New skills will be required to close the gap between current that continue to operate, independent of station operations and roles and future roles required. As a result, different human resource plans decommissioning schedules. These initiatives will unleash the potential to accommodate individuals affected within Eskom, such as reskilling and of local people and skills, grid capacity, and world-class renewable upskilling, have been integrated into the JET Strategy. resources. As a result, new jobs and SED opportunities will be created in power station communities. Energy: Our JET Strategy is focused on ensuring equitable access to clean, sustainable energy for South Africa. We have historically relied on coal as a Achieving a truly JET will require that the South African government, source of energy, resulting in a large value chain in the coal sector, especially other stakeholders, and Eskom actively collaborate and play a prominent in Mpumalanga. Energy security has been particularly salient as Eskom’s role in creating and implementing relevant social programmes. We existing power stations approach end of life and experience low energy recognise that action from various stakeholders is required and is availability factors, coupled with a lack of new generating capacity. The contributing to these efforts with R&R and other socio-economic combination of these trends has contributed to a persistent supply deficit initiatives to catalyse positive social impact. that needs to be addressed. Given that parts of the current coal fleet are JET has the potential to create many new jobs, including through local gradually reaching the end of their useful life, and life extension interventions manufacturing which will need to be enabled across various dimensions, would be costly and would compromise our climate and emissions particularly financial investments, and access to manufacturing components commitments, new and clean generation capacity is needed to supplement and technology, to expand the industrial base. Additionally, jobs created South Africa’s insufficient power supply to end load shedding. The energy will integrate diverse skill levels, with new jobs created including labourers, component of the JET Strategy is focused on building new capacity plant operators, artisans, and technicians, while a significant portion of the to satisfy South Africa’s energy needs in an affordable and sustainable new jobs would require engineers, artisans, business administrators and manner. The direction of travel for this new capacity is shaped by South 29 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Just Energy Transition continued Africa’s Integrated Resources Plan and aligns with the country’s Nationally repowering and repurposing initiatives from R&R is that it provides CONTAINERISED MICROGRIDS Determined Contributions (NDC), and the Climate Change Bill amongst an opportunity to sequence activities and implement initiatives for We have recently completed the establishment of two assembly lines others. This pathway sees a continuing, but gradually reducing, role for coal economic diversification to reduce reliance on the coal value chain. The to fabricate and assemble Containerised Microgrids (CMG). This facility generation and a steady increase in production from clean energy sources. JET Strategy is part of the broader national energy policy environment, will employ 30 people from Komati. These microgrids fit in a standard In this regard, Eskom remains technology agnostic provided new generation which recognises that, while the specific timing of power station shipping container that allows for the rapid electrification of rural areas sources are low emitting and will align with the policy direction of the shutdown is being re-assessed, additional clean generation will need to previously deemed too costly and technically challenging to connect to country as we seek to balance the three elements of the energy trilemma. be sourced at least-cost to add supply capacity. the national grid. These CMGs can be transported to any part of Africa where a shipping container could be transported to, and communities Transition: our JET Strategy plans to move gradually, but decisively, to Enablers: Implementing our JET will be complex and will require key would be provided with electricity within two days of reaching site. a sustainable generation fleet for the future. This is underpinned by the enablers to be successful. In particular, the JET relies on the mobilisation We have plans to manufacture 25 units in FY25, having produced five principles of JET. Critically, the strategy does not call for premature of sufficient affordable financing, collaboration with stakeholders 17 units in FY2024. closure of any power stations, considering the energy crisis and the outside of Eskom to accelerate execution, and a rapid expansion and devastating socio-economic impact of power station shutdown on strengthening of the national grid to support the future energy system. the very communities established to support the operations of those stations. Instead, it ensures that power stations and their communities The financing challenge is compounded by the budget speech delivered are offered a second life through R&R initiatives. These R&R initiatives on 23 February 2023, setting out specific debt-relief conditions for us. are focused on our existing stations that are nearing end of life, especially Debt-relief conditions restrict our capital expenditure and disallows in Mpumalanga, and are implemented independent of station shutdown new borrowing unless written permission is granted by the Minister of schedules and station operations. The added benefit of decoupling Finance. This encourages collaboration agreements (e.g., partnerships) with stakeholders outside of Eskom to unlock additional resources and implementation support. The JET office has compiled a partnership strategy to support the roll out of such partnerships. Decoupling repurposing and repowering initiatives from Training and skills development are crucial for a successful energy decommissioning schedules transition, and we place a lot of emphasis on reskilling and upskilling communities and staff alike. As part of our R&R initiatives, Komati power station has been partially repurposed into a training centre to facilitate reskilling and upskilling and ensure the benefit of local communities. Aligning with both national Embodying principles of The South African Renewable Energy Technology Centre (SARETEC) and Eskom priorities to Distributive, Restorative together with the Eskom Academy of Learning (EAL) have established ensure success and Procedural Justice a training centre to provide training on soft skills (Business Plan writing, Financial Literacy, Leadership skills, Critical thinking skills, Communication skills, Negotiation skills and Personal Management skills); Entrepreneurial 5 Principles skills (Financial Literacy, Business Plan writing, Report writing, Negotiation skills, Communication skills); Battery Energy Storage Systems; Renewable of Eskom's Energy workshop assistant for microgrids; Aquaponics; Solar Photovoltaic WELDING FACILITY Just Energy (PV) 5 day course; Solar PV mounter course; Wind Turbine Service A mill maintenance workshop was converted into a welding Technician; Introduction to Renewables; and Welding. As of July 2024, training centre. Eight community members have completed Transition a total of 296 Eskom employees and 72 community members have training on welding theory with practical training underway. been trained through various training programmes delivered through They will feed into the CMG manufacturing process. Additional the EAL and partnership agreements. However, construction of the machinery is in the process of being purchased. Engagements are community training facility at Komati has not been completed due to underway with the South African Institute of Welding to use the legal interventions required by SARETEC, as the appointed contractor facility as part of their curriculum. Furthering all of the 5 Es Balancing all elements of energy has failed to comply with contractual requirements. of Eskom's Just Transition trilemma: energy security, access and sustainability 30 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Just Energy Transition continued AGRIVOLTAICS The 500kW Agrivoltaics facility project is in progress. It will be used to train community members and incubate new businesses centred around agricultural activities under PV panels including aquaponics and mushroom farming. Given Mpumalanga’s vast agricultural landscape Agrivoltaics represents a viable opportunity to balance the water, food, and energy nexus. Training of at least ALIEN VEGETATION REMOVAL 30 community members will commence in the short term. This Agrivoltaics at Komati power station Two hundred community members have been onboarded onto the Alien Vegetation Removal Programme. Some attrition has occurred as individuals – now with access facility will be used as a test facility and to training and funds – have registered for other training and or found permanent will not only inform our subsequent employment elsewhere. The remaining 166 trainees have been trained in the following expansion utilising Agrivoltaics but will skills: Invasive alien plants control, out graft use, first aid, safety, health and environment also feed into the provincial technical (SHE), hazard identification risk assessment (HIRA), chainsaw and finance. and vocational training programmes and curriculums. The Alien Vegetation removal programme has expanded to include beneficiation activities that include pelletisation, chipping and debarking – making materials available for other manufacturing activities. Phase 2 of the programme will involve setting up several SMMEs to formalise activities and existing training will be complemented with other skills such as marketing to ensure the various businesses are supported. The programme illustrates the JET in action as the temporary work becomes permanent and a key input into other processes – thereby establishing a circular economy in the Komati area and sustaining the community socially, economically and commercially. 31 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Just Energy Transition continued ADDITIONAL INITIATIVES IN ADVANCED DEVELOPMENT AT KOMATI • Personal Protective Equipment manufacture at Komati • Transmission localisation support on TDP • Biogas • Industrial Hemp • Green Steel Smelter • Special Economic Zone (SEZ) establishment • Pellet Stove manufacture • Palletisation from removal of alien vegetation • Controlled Environmental Agriculture • Inverter and Battery Manufacture/Assembly • Massive Battery Energy Storage (100MW) • Recycling of PV Panels • Recycled Plastic PV Panels • Recycling (DFFE) LESSONS LEARNT AT KOMATI EARLY START/PLANNING AND IMPLEMENTATION IS CRUCIAL Upfront preparatory work is critical in identifying impacts and supporting project design and implementation strategy. Since Komati shutdown, we took a decision to decouple stations operations from R&R and implement R&R independent of station operations. Technical studies for Camden, Grootvlei and Hendrina are completed with solar PV, Wind, and Battery Energy Storage System (BESS) identified for development. One of the lessons learnt from Komati was to ensure that the socio-economic study is done well in advance prior to station Social dialogue. It is critical that communities are taken along the shutdown. journey with us. We have already begun, in close collaboration with the Repowering provides construction jobs, but repurposing has the provincial government, key stakeholder engagements with communities potential to contribute to SED. We have already begun developing around Grootvlei, engaging on JET opportunities and the impact of repurposing initiatives at Hendrina, Camden and Grootvlei for economic station shutdown. We are expanding this to Hendrina, Camden, Kriel diversification, including establishment of a horticulture centre at and Arnot. Grootvlei in partnership with the Dutch Development Finance Institute Funding. Komati funding agreement was only concluded after the station (DFI), establishment of ash beneficiation centres at the three stations was shut down. We have already begun engagements with various for brick making and road filling, PPE manufacture, steel manufacture, Multilateral Development Banks for front loading and upfront R&R at copper recycling etc. Camden, Grootvlei and Hendrina. Training of staff and communities. Community, staff and contractor upskilling and reskilling has been identified as key to deliver a just transition. Lessons learnt from the implementation of the training centre at Komati are being applied at Grootvlei and Hendrina. Engagements are also underway with TVETs to expand the training centres’ reach and scope, and to incorporate their curricula into our training centres. 32 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social 33 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance HUMAN RESOURCE HIGHLIGHTS Employment We help create jobs and lower unemployment – our group headcount (including fixed-term contractors) was 40 625 on 31 March 2024 (FY2023: 39 601). Salaries Our salaries are competitive, and market related with a guaranteed benefit package for managerial staff including medical aid, pension, dread disease cover, and group life benefits. Bargaining unit employees receive a basic salary, split to include a thirteenth cheque and benefits, such as pension, medical aid, death benefits, housing, cell phone, and car allowances, subject to qualifying criteria. An employee value proposition (EVP) scheme is available to enable retention of workers. Skills The growth and development of staff is supported development with R1.4 billion spent on skills development Quality (FY2023: R1.1 billion). education CSI initiatives on education are provided through the Eskom Foundation, Gx, Tx and Dx operational divisions Timbali Technology Incubator supporting emerging farmers and Group Capital Division (GCD). We have a social commitment to our customers, workers, investors, inequalities, promoting inclusivity, and fostering economic Gender Gender representation and inclusivity is driven across and all our stakeholders. Our operations cover the entirety of empowerment. These programmes promote sustainable development quality the business at senior and middle management levels. and foster a more just society in addition to helping to achieve national South Africa including extending to neighbouring nations. It is The Eskom Women Advancement Program has development goals. advanced women in operations programmes and therefore important to make sure that not only are our workers We unpack our approach and performance against our social created women mentoring circles. working in safe environments, but also that the people we affect commitments in this chapter and outline how we pursue sustainable We actively promote employment of people with are not adversely impacted. impact. disabilities. We strive to be a good corporate citizen, providing fair salaries, safe Reduce The Employee relations department facilitates dialogues OUR 2024 SOCIAL SPEND HIGHLIGHTS working conditions, and policies that protect employee rights as well as inequalities between our leadership, employees, and organised committing to open and honest communication with all stakeholders. Items Amount labour to achieve good workplace relations. We prioritise customer and community safety, health, and sustainability Skills development R1.4 billion We have agreements and formalised systems in place through our environmental, health, and safety policies. We also have a that govern our engagement with organised labour. responsibility to recognise and protect the lives and livelihoods of the Salaries and benefits R37.1 billion communities linked to our operations, which we are doing through our Our leaders play a crucial role in fostering meaningful Awarded 1 309 procurement contracts R107.7 billion public safety initiatives and the JET. participation through the Eskom Employee Engagement Eskom-wide local content contracted in designated sectors R65 billion Programme. We periodically review and adjust our policies and processes as part of Procurement spend to broad-based black economic R206.2 billion Feedback is annually received from employees through our impact monitoring and evaluation, particularly in situations where we empowerment (B-BBEE) compliant suppliers an OE survey. adversely affect people. Local content contracted R97. 7 billion We make a meaningful contribution to South Africa’s development Corporate social investment (CSI) and SED R93.1 million through supporting government's developmental and transformation objectives by promoting job creation, employment equity, skills Number of employees 40 625 development, enterprise and supplier development, and Corporate Social Responsibility (CSR) initiatives aimed at addressing historical 34 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued OUR PEOPLE EMPLOYMENT AND BENEFITS Our workforce plan is aimed at ensuring that current and future staffing levels are aligned to our strategic objectives. The plan was developed and KEY HIGHLIGHTS implemented during the previous financial year and focuses on retaining We are a proud contributor to government's Youth Employment core and critical skills, driving employment equity transformation targets Service (YES) programme, which provides work experience to and meeting training and development needs. previously unemployed black youth in entry-level and non- professional roles. At year end, 519 YES learners were receiving We are one of the largest employers in the country, our current staff work experience in various roles across the organisation. complement is 40 625 employees as of 31 March 2024. Our staff complement has increased by 1 024 for the year, mainly due to the recruitment of core and critical skills in Gx and ERI. We recorded an attrition rate of 5.7% (FY2023: 6.7%), with 2 280 employee exits during Our human capital covers our employees and contractors and their the year. Gross employee benefit costs amounted to R37.1 billion competencies, capabilities and experience. Our people are our greatest (FY2023: R34.3 billion), a notable increase of 8%, when compared to the asset and are critical to successfully achieving our mandate and strategic previous year; largely due to a 3% increase in headcount. objectives. Our overarching people strategy guides our employee Decisions around remuneration and benefits consider our financial engagement approach, supported by our focus on: challenges and sustainability in compliance with the conditions attached 1. Training and skills development to the Eskom Debt Relief Act, 2023. 2. Diversity, equity, and inclusion (DEI) 3. OE and a rich EVP – fostering a high-performance ethical culture and engaging with employees. 4. Occupational health and safety (OHS) 5. Health and wellness We monitor and measure our performance against safety, health, skills, employment equity and procurement KPIs. 35 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued TRAINING AND SKILLS DEVELOPMENT EMPLOYMENT EQUITY Skills development remains a priority in our business. We have been one of the industry leaders in skills development since the dawn of KEY HIGHLIGHTS GROUP EQUITY PERFORMANCE: democracy to fulfil the needs for the national future pipeline. Our We commemorated 10 years since the establishment of the • 90.1% of our employees were black. programmes are targeted at increasing access to high-quality and Eskom Women Advancement Programme, which aims to • 36.2% were female, and 31.11% black females. pertinent education, training, and development opportunities through advance the development of women in leadership, ensure that • 2.96% of our Eskom group employees live with disabilities, this technical and non-technical bursaries, apprenticeships, learnerships, women and girl children take up positions in technical roles and is above the national employee assistance programme (EAP) and workplace integration learning (WIL), thereby enabling equitable create a gender-sensitive organisation. target of 2% and even the general market. economic participation and lowering disparities. • We remain committed to implementing our Employment equity plan 2023–2025, which enables us to comply with APPROACH We made a significant contribution in achieving employment equity in legislation, allowing our employees to benefit and providing • MOU with funders, to host youth on Workplace Integrated South Africa throughout the years, both in terms of representation at all equal opportunities for growth. Learning (WIL) in artisans, technicians, and engineering occupational levels and overall employment. disciplines, with a particular focus on the previously disadvantaged sectors of our society. As an organisation we promote valuable commitment and active • Development and growth of our staff through numerous participation in all areas of work. Our initiatives are aligned to the NDP objectives, which are reflected in our employee equity plan which MANAGEMENT EQUITY PERFORMANCE skill-development programmes, internal and external training outlines specific initiatives to stimulate diversity, equity, and inclusion (2023 VS 2024) interventions, additional education, and on-the-job training. (DEI) through dedicated programmes for all demographics and various • Senior Management racial equity increased from 76.92% • Numerous and readily available online training programmes. to 78.89% abilities. • Enrolment in more advanced study programmes, enabling • Middle management/professionally qualified increased from employees to earn credentials in their field of work and As signatories of the United Nations Women Empowerment Principles 83.59% to 85.11% increase in workforce’s skill base, with the potential for (WEP), we remain actively engaged in developments and aligning to • Gender equity for senior management/professionals qualified development of leadership among staff members. outcomes, for the successful implementation of this programme. improved from 42.01% to 42.52% • Gender equity for middle management increased from Employment equity 40.92% to 42.03% PERFORMANCE • Invested R1.4 billion in training and skills development 3% 7% (FY2023: R1.1 billion) a notable increase of 25,45%. • 930 employees enrolled for further studies (FY2023: 795), of which 59% are women and 3.9% are persons with disabilities. 10% • Employees pursuing a bachelor’s degree or higher qualifications is 43%. African (32 322) • 2086 learners (FY2023: 1 568) learners in our pipeline, White (4 015) comprising 1665 in technical disciplines (of whom 39% are Coloured (2 945) artisans) and 421 in non-technical disciplines (representing 5.93% of our headcount). Indian (1 343) 80% 36 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued HEALTH AND WELLNESS EAP – The top 6 presenting problems Between 1 April 2023 and 31 March 2024, a total of 5 672 employees and dependents were reached through external EAP services (FY2023: 5.37% 4 248). Of the 5 672 participants who utilised the service, 3 449 were KEY HIGHLIGHTS 5.70% individual cases, and 1 529 were participants reached through group Held awareness campaigns and initiatives to address health risks. 29.26% interventions, such as trauma interventions, family counselling, couples Implemented health and risk hazard surveillance programme to counselling, and child counselling. Segregation of the individual cases is monitor the public health diseases outbreaks and their impact in as presented by Employee utilisation (number) and Individual Employee business operations. Alert notifications for outbreaks of cholera, 9.27% Mental health utilisation rate (%) figures. The overall (employees and dependents) malaria, and diphtheria have been detected and managed engagement rate during the reporting period 1 April 2023 to through the outbreak epidemic and pandemic plan. Relationship issues 31 March 2024 was 11.50% which is close to the public sector benchmark FY2024 Organisational and of 11.60%. The individual overall engagement rate was 7.97% which is less Mental health, relational issue and organisational and managerial issues than the sector benchmark. management issues are the top three of the six presenting problems identified through EAP 9.81% Personal development Employee utilisation (number) 3 066 Trauma We place a high priority on the health and happiness of our employees. Child and family care Health and wellness build resilient employees by enhancing quality of life, 17.46% 2 223 boosting morale, improving productivity, and ensuring safety. Our robust health and wellness initiatives strive to equip employees 1 529 to make sound, healthy choices through prevention, treatment, care, support, education and collaboration. Our suite of initiatives covers the following five programmes: 1. The early detection and prevention of occupational and lifestyle diseases and injuries is managed through routine medical monitoring, 253 130 fitness-for-duty evaluations, and other wellness programmes. 2. An employee assistance programme (EAP) of psychosocial services Self Assisted Formal Group Dependent including counselling, financial wellness, and trauma assistance. referrals referrals referrals interventions utilisation 3. Our response to the COVID-19 pandemic has been integrated Individual Employee utilisation rate (%) into normal business operations, following the relaxation of South 15 Africa’s lockdown measures in June 2022. 4. Mental health and stress-related problems, which increased during 12 the COVID-19 pandemic, are receiving attention through awareness and education programmes. Our approach to mental health is informed by World Health Organisation principles. 9 5. The EmpowerU initiative launched in 2023 was also implemented to support employees with the stresses and pressures related to the 6 changes taking place in the organisation, especially as the workforce gears up for the constrained winter months. 3 • Our EmpowerU initiative focuses on three levers; leadership support and coaching, enhanced EAP and strengthening 0 workplace relations to resolve matters that had reached an Apr 23 May 23 Jun 23 Jul 23 Aug 23 Sep 23 Oct 23 Nov 23 Dec 23 Jan 24 Feb 24 Mar 24 Annual 23/24 impasse earlier this year. Positive changes have been observed since the programme’s launch, especially regarding workplace Individual employees Sector benchmark relations with unions. 37 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued ORGANISATIONAL EFFECTIVENESS (OE) We aim to drive OE and a sense of belonging and connectedness to SUCCESSES HUMAN CAPITAL OE SURVEY RESULTS Eskom by fostering a high-performance ethical culture, engaging with • 14 Eskom Executive Committee members approved their • 36.5% (previous 20.51%) response rate, i.e., 14 875 Guardians employees, and offering a rich EVP. Divisional Culture Commitments/KPIs. participated. ESKOM ORGANISATIONAL CULTURE AND CHANGE • The Eskom Change Agent Network (We CAN!) established • An overall index of 3.87 (previous 3.57) was attained. MANAGEMENT in FY22/23 now includes over 180 divisional change • Score of 3.85 for Organisational Culture, 3.91 for Employee Our Eskom 1:1:6:10 Culture Transformation Programme conveys that, we champions. Engagement and 3.86 for EVP. have one purpose, one aspirational culture, six culture cornerstones and • 11 Eskom Change Agent Network executive lead 10 culture levers. Our culture cornerstones of accountability, operational engagements were conducted in FY2024, EMPLOYEES PERCEPTIONS excellence, people prioritisation, financial prudency, a values-driven • 138 leadership engagement sessions and 14 culture • Satisfied and have a strong emotional connection to their culture, and customer-centricity are supported by ten key levers of workshops were held to drive greater awareness, company, job, and colleagues. organisational culture. accountability, and alignment across the organisation HR OE • Content with the benefits provided by the organisation in CoE supporting more than 10 Eskom-wide Strategic Projects exchange for their skills, capabilities, and experiences. on change management and communication and delivered • Aligned with the organisation’s shared assumptions, values, • Our 1:1:6:10 Eskom Culture Transformation Programme is a key over 1102 related activities. and beliefs, which influence their behaviour and performance enabler for delivering a high-performance ethical culture. • 313 GCE Internal Communication messages on the 1.1.6.10 within the company. • Eskom’s Turnaround Programme tracks key activities and culture held to drive greater awareness, accountability, and milestones and are currently being used by line divisions to alignment on a high performance and ethical culture. improve productivity and efficiencies. • 50 Culture-changes articles published to date in the GCE • Divisions are implementing their divisional culture dashboards, Internal Eskom-wide publication – The Guardian these include culture KPIs, and action plans. celebrating leaders who are living the Eskom brand pillars and • Divisional leadership teams actively engage, establish driving a high-performance culture. commitment, drive performance, and obtain buy-in from their employees. • Our Eskom Change Management Strategy focuses on three objectives, alignment, engagement, and buy-in and behaviour ESKOM EMPLOYEE ENGAGEMENT PROGRAMME modification among key stakeholder groups. Employee engagement is the heartbeat of our value proposition. The engagements are delivered through multiple platforms, including leadership site visits, executive interviews, and communiqués, together ESKOM EMPLOYEE VALUE PROPOSITION (EVP) with employee events. These engagements aim to promote recognition Our all-inclusive EVP focuses on retention strategies that go beyond and celebrate success across the organisation, leadership employee rewards and recognition, such as offering market-related compensation engagements to establish commitment, fostering performance, packages and competitive benefits in terms of leave, health, and death addressing non-conformance, and gaining employee buy-in. Our robust benefits, learning and development opportunities both domestically and multi-channel integrated internal communication function uses diverse internationally, a variety of career opportunities, and exposure to big- platforms, such as electronic publications and other digital media to scale initiatives and cutting-edge technology. ensure that employees are informed about business updates and have opportunities to interact with our leadership. As we continue with We have implemented flexible work practices to improve employee our operations, these engagement efforts all play a significant role in wellbeing and allow qualified workers to work remotely with restoring morale by improving the sense of employees’ connection to the intermittent on-site obligations (Hybrid), depending on operational business and one another. The annual Eskom Human Capital OE Survey requirements and the type of work performed. EVP offers services and and other pulse surveys are designed to assess employee views on psychosocial programmes designed to support employees and their several key dimensions and inform management on areas of focus. family in prioritising their physical and emotional health. Employees have access to a loyalty and rewards programme (Nkanyezi) to access financial savings with affiliated businesses. 38 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued 1:1:6:10 Eskom Culture Transformation Programme 1 Purpose, 1 Aspirational Culture, 6 Culture Cornerstones, 10 Culture Levers The aspirational Eskom 1 Purpose: Powering 1 To-be culture: High 6 high level culture 10 key culture organisational culture is growth sustainably performance culture cornerstones: levers a high-performance Accountability Empowerment Operational Excellence Governance & Ethics culture that can enable People Prioritisation Teamwork Financial Prudency Engagement Eskom to power Values driven culture Wellness Technology growth sustainably. Customer Centricity Change Agility EMPOWERMENT GOVERNANCE & In doing so, 6 culture Celebration ETHICS Leadership cornerstones Strategy (characteristics of a WELLNESS A high high-performance performance organisational culture is characterised by culture) are supported these 6 culture by 10 culture levers cornerstones that will drive and enable a high –performance culture across the business over the next 3 -5 years. 39 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued OCCUPATIONAL HEALTH AND SAFETY We recognise the importance of fostering a collective approach with OUR COMMUNITIES external stakeholders to ensure the public’s wellbeing. With this emphasis, We support and develop rural and local communities and enhance KEY HIGHLIGHTS Eskom has instituted the Public Safety External Stakeholder Forum. This access to social and economic opportunities in our host communities During the year, we launched a safety culture survey across the forum convenes quarterly to deliberate on potential opportunities and by improving the lives of community members. Our SED programmes organisation. A Safety leadership for supervisors’ workshop was launched initiatives, exchange knowledge, and pinpoint risks for joint intervention contribute to achieving broader economic development imperatives, in March 2024 to offer practical safety leadership strategies, enabling and collaboration. Presently, the membership encompasses representatives such as poverty reduction, improved infrastructure and a more equitable supervisors to mitigate risks, foster a culture of safety and create a safer from all fundamental Eskom divisions alongside delegates from Sasol, the distribution of wealth and opportunities within the society and ultimately working environment. Multidisciplinary team collaborations through Railway Safety Regulator, SANRAL, Transnet, PRASA, and SARS. leaving a positive footprint. We partner with our contractors delivering roundtable table discussions to engage in learnings and seek solutions to innovative CSI and SED initiatives to create positive social change and to current OHS operational challenges. To spread the footprint of public safety awareness, our electricity safety develop the local community, thus building positive relationship with our content is available on the E-classroom website which is supported by stakeholders. We have community development programmes to support the Department of Basic Education, where more than 300 000 teachers and just transition and improve livelihoods as we transition away from coal. Occupational health and safety (OHS) play a critical role in business and parents are reached. operations by safeguarding the wellbeing of all individuals, thereby enhancing productivity, and fostering employee morale. Through LOST-TIME INJURY RATE (LTIR) implementing comprehensive OHS measures which are encapsulated We measure our safety performance by the rate of lost-time accidents, in the Eskom OHS Strategy, Eskom is dedicated to mitigating workplace as well as the number of fatalities among employees and contractors. The injuries, illnesses, and public incidents, resulting in decreased workplace progressive LTIR is a proportional representation of the occurrence of disruptions, and cultivating a more efficient and safe work environment. lost-time injuries over 12 months per 200 000 working hours and includes We have five strategic OHS objectives for the business that guide us occupational diseases and fatalities (a lower score is more desirable). across the whole business. (1) Reduce the impact of workplace injuries and ill health from a lost- The table below reflects Eskom’s tolerance level with respect to LTIR. In time injury rate (LTIR) tolerance level of 0.30 to 0.24. accordance with Eskom’s value of Zero Harm, the true target is zero. (2) Improve communication, consultation, and involvement by 10% on LTIR performance for the period ended 31 March 2024 OHS processes throughout all levels in the organisation. (3) Ensure that 90% of the workforce understand and proactively and Tolerance/ Actual Actual KPI – Focus on safety target March 2024 March 2023 effectively control OHS risks, thereby building a good safety culture in the organisation. LTIR index for employees – (4) Improve internal and external stakeholder collaboration by reducing excluding contractors (including occupational diseases) 0.30 0.29 0.26 all public incidents by 15% from current performance. (5) Reduce contractor-related incidents by 30% with more focus on Fatalities (including contractors) 0.0 5 5 minimising the level of risk exposure from the current performance. The major causes of employee LTIs are incidents due to falls on the same We are further committed to sharing learnings with all stakeholders, including level, confirmed occupational diseases and motor vehicle accidents. The contractors, and evaluating enhancement strategies to integrate these insights. major causes of contractor LTIs are incidents due to being struck by moving objects, falls on the same level and caught between or under (crushed/ Our Occupational Health Approved Inspection Authority amputation) incidents. A total of 37 occupational diseases were confirmed (OH-AIA) submitted its report to the Department of Employment during the year (FY2023: 23). As in the past, these relate mainly to noise- and Labour (DoEL), to provide the Department with a summary of induced hearing loss incidents, which account for more than 70% of cases. all the occupational hygiene activities that were executed by the AIA during the past six-months (October 2023 to March 2024). Six-monthly Although the lost time injury rate of 0.29 was below the shareholder reporting is a compulsory requirement to maintain the DoEL’s approval compact target and tolerance level, there were recorded five fatalities during for Occupational Hygiene. This information is used by the Department the year, the loss of any life in Eskom's service is unacceptable and we strive to monitor compliance to the occupational exposure limits, generate to prevent it at all costs. statistics and intervene where necessary. 40 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued ELECTRIFICATION ESKOM DEVELOPMENT FOUNDATION IMPACT We make a meaningful contribution to South Africa’s development by providing access to electricity through government's electrification KEY HIGHLIGHTS programme. We have connected around 5.9 million previously A CSI investment of R93.1 million was made by the Eskom disadvantaged households and farm dweller houses in our licensed areas Foundation, affecting 272 217 beneficiaries (FY2023: of supply through DMRE’s Integrated National Electrification Programme R63.1 million and 438 094 beneficiaries). Our CSR (INEP) since early 1991. This programme enables us to provide a direct programmes are to ensure that the development initiatives are contribution to delivering universal access to electricity in South Africa. re-directed internally to be part of the core business function, thereby de-risking the business. Electrification programme connections increased to 114 800. Several challenges prevent the electrification of rural parts of the country, including the high cost of extending the electricity network to remote The Eskom Development Foundation is a non-profit company and is areas, mostly due to difficult terrain and the low density of rural a wholly owned subsidiary of, and receives its mandate from, Eskom. populations. The Foundation is committed to enhancing the value, impact and sustainability of its programmes considering the financial constraints. Based on the success of our containerised microgrid pilot project in Ficksburg, Free State, which has been operating since November 2018, The Foundation supports a broad spectrum of projects in all nine we are planning the use of microgrids to provide electricity to rural and provinces. The programmes that make up the Foundation’s CSI portfolio remote areas. A total of 216 microgrid installations are targeted over the are run according to the themes of: education, health, environment, next five years. enterprise development, food security, rural education infrastructure development, and social and community development. Over the years, CAPITAL EXPANSION PROGRAMME the Foundation’s continued and consistent commitment to touching Our capital expansion programme, which includes the Medupi and the lives of the people in the communities where they operate has Kusile new build sites, and large Transmission projects is one of our positioned them as one of the leaders in CSI. biggest contributors to SED. In the next five years we will be executing major capital investments throughout the value chain through our Unfortunately, inadequate technical oversight on infrastructure-related Generation Capital Plan (GCP), Transmission Development Plan (TDP) initiatives and insufficient resources continue to prevent us from and the Dx Development Plan (DDP). These projects support the NDP executing all our planned initiatives on time. objectives in delivering real and meaningful transformation through procurement, job creation, skills development, and CSI which offers economic opportunities and advances community development. Further they enable the development of people and contribute to the national skills plan, and drive industrialisation and localisation to support the re- industrialisation plan and economic growth. Demobilisation has a negative impact on the economy, the life, and people in the area. Demobilised contractors are offered life skills training to assist them with getting new opportunities. We mitigate the impact of job losses by collaborating with local and provincial government structures to address some of the challenges faced by local communities surrounding our new build projects. 41 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued ESKOM EXPO FOR YOUNG SCIENTISTS (EEYS) SA YOUNG SCIENTISTS TO SHOWCASE INNOVATIVE The Eskom Expo for Young Scientists (EEYS) is Eskom’s flagship RESEARCH AT TUNISIA SCIENCE FESTIVAL sponsorship aligned to Eskom’s strategic objective of supporting the Innovative South African research which includes a cost-effective triage government's NDP 2030 with an emphasis of developing previously test for real-time detection of Tuberculosis (TB) and a nature-based disadvantaged individuals (PDI) and female learners in the scarce skills of technology that brings about environmental remediation, was showcased science, technology, engineering and mathematics (STEM). at this year’s International Festival of Engineering, Science and Technology in Tunisia (I-FEST 2). EEYS provides a unique platform and academic support to school learners with an interest in STEMI from grade 6 to grade 12. Learners The research project by Nair, a Gold medal recipient at last year’s conduct scientific research and present their findings as a project in Eskom Expo ISF, does not only detect Pulmonary TB, but it also different internationally benchmarked categories. The EEYS currently generates instantaneous results, which makes it more efficient than operates in 35 regions in all nine provinces of South Africa and has an traditional TB detection methods. This research effectively overcomes international presence. the time constraints of the standard TB tests, which can take several days to produce results. With Nair’s method, doctors and healthcare professionals can receive results almost immediately, allowing for prompt treatment of patients. Smedmor, a Silver medal recipient at last year’s Eskom Expo ISF, utilised four different fuel cells as a nature-based technology to bring about environmental remediation while producing energy. The Spekboom Microbial Fuel Cells generated enough current for low-voltage remote monitoring devices. Monitoring plays a crucial role in environmental management activities. In this regard, Microbial Fuel Cells can be effectively used to self-power sensors and electronic systems. The Chief Executive Officer of the Eskom Development Foundation (Acting), Ms Mologadi Motshele, said “Eskom Expo empowers learners to address pressing local and global issues, demonstrating a profound sense of social responsibility. These young scientists are driven by first- hand experiences, seeking answers to challenges that directly affect their lives. This grassroots approach to problem-solving underscores the importance of Eskom Expo as a flagship event, driving sustainability initiatives and inspiring future generations of innovators in our country”. ESDEF support of a community radio station mobile broadcasting vehicle, Maputaland in Northern KZN Eskom Expo Executive Director, Parthy Chetty, said: “I am reassured by our STEM education initiatives in South Africa when I see two young girls, Keerthana and Alexia, representing our country at this international event. One of our focus areas in Eskom Expo is promoting girl participation in the sciences, and these girls have already achieved excellence in scientific research. I am sure these learners will do us proud, and more importantly, immerse themselves in the North African culture and the idyllic Mediterranean experience.” This year’s I-FEST 2 was held in Mahdia, Tunisia, and is organised by the Tunisian Association for the Future of Science and Technology. The programme is designed to offer a one-of-a-kind, educational, and enjoyable experience, featuring a range of activities and opportunities for new discoveries. It will also include various excursions to explore the rich Tunisian culture. 42 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued ESKOM ROLLS OUT MICROGRID AS PART “The deployment of the microgrids at Swartkopdam OF EFFORTS IN ACHIEVING UNIVERSAL serves as a proof of concept in installing microgrids in remote areas which are difficult to reach or expensive ACCESS TO ELECTRICITY USING CLEAN to electrify through the conventional means of AND RELIABLE TECHNOLOGIES electrification. Eskom plans to roll out about 100 In an effort to help South Africa move closer to the microgrids across the country by the end March 2024 goal of universal access to electricity, Eskom Dx as part of the Dx business strategy,” said Dx Group launched one of its first microgrid technology at Executive, Monde Bala. Swartkopdam, about 150km from Upington, in the Northern Cape on Saturday, 22 July 2023. “We will continue to close the gap of energy poverty by giving everyone a life changing experience of Microgrids provide an effective, reliable, and easily having electricity” added Bala deployable solution for electrifying geographically challenging areas that are either difficult to access or Apart from the microgrids being cheaper, they also contribute to reducing carbon emissions because they require extensive capital expenditure. The microgrid use renewable energy sources. KWA-ZULU NATAL STORM AND The geographic extent and the quantities technology at Swartkopdam will provide electricity to FLOODING DISASTER RELIEF of the donated items to be distributed, 39 households who did not have access to electricity “Through innovation and collaborative partnerships, Ngaqa Primary School in northern KwaZulu required careful co-ordination and efficient prior to this project. The electricity networks around Eskom is able to provide clean and reliable electricity -Natal, that suffered severe storm and project management to be executed. This the area are constrained and practically impossible to to the people of Swartkopdam,” said former Eskom flooding damage (2023/2024). was done with co-ordination between the extend and connect the area. Board Chairman, Mpho Makwana. donor and the implementing NPO whilst The installation of the microgrid at Swartkopdam “This project serves as reassurance of Eskom’s There were severe storms and flooding maintaining close liaison with the KZN follows successful installations of two pilot microgrid commitment to assisting the South African government events experienced in Kwa-Zulu Natal in Disaster Management, Municipalities, KZN projects at Lynedoch in the Western Cape and in achieving its objective of ensuring that every South December 2023 and January 2024. This Department of Education and community Ficksburg in the Free State. African has access to electricity,” added Makwana. resulted in extensive infrastructural damage, representatives. community displacements and tragically, the Swartkopdam was identified by Eskom Dx as one of In addition to the installation of the microgrid and deaths of community members. The handover of the goods and the the high priority needs of the community and due as part of ploughing back to the Swartkopdam classrooms were emotional events with the community, Eskom has donated two mobile Eskom, in partnership with a Non-Profit communities, as well as the government and to the remoteness of Swartkopdam, which also has containers and recreational equipment to the Organisation (NPO) provided funding for the education representatives, expressing critical facilities embedded in the grid, the microgrid Swartkopdam Primary School. This is central to with battery energy storage capability developed by the construction and commissioning of their sincere appreciation for the critical relief Eskom’s Corporate Social Responsibility (CSR) twenty-six mobile classrooms, in five schools that was provided. RT&D was considered the most suitable solution. strategy, which is designed around touching the lives in the province. In addition, the affected of South Africans. Seven newly commissioned mobile communities were provided with groceries, kitchen utensils, hygiene packs, blankets and classrooms were donated to Ngaqa Primary matrasses. School by Eskom Development Foundation. 43 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued OUR SOCIO-ECONOMIC PERFORMANCE PROCUREMENT We leverage our procurement spend and infrastructure development Our Enterprise development was impacted by a lack of funding to pipeline to support the growth of local manufacturing and implement meaningful interventions, such as incubations for small industrialisation including economic growth and reduce inequality and medium-sized enterprises (SMEs). Our Supplier development in South Africa. We focus on developing local suppliers in line with performance was negatively affected by limited subcontracting South Africa’s transformation goals, with specific emphasis on local opportunities as we rely on main contractors to implement this. supply sectors important to our industry. We also contribute towards government’s commitment to local development programmes, including Total measured procurement spend (TMPS) for the group at the end of development of local industries thereby enhancing local production and March 2024 on all active contracts amounted to R240.4 billion, 74.35% was manufacturing as prescribed in the Shareholder Compact and Eskom’s spent on B-BBEE-compliant suppliers (FY2023: R206.2 billion and 72.89%). Transformation Plan. We play a major role in the coal industry due to LOCAL CONTENT our large offtake. Our coal purchases provide economic opportunities and jobs across the value chain. Awarded 1 309 contracts worth R107.7 billion Eskom-wide local content contracted of R97.7 billion (90.72%) Major capital investments will be made through our Group Capital, Transmission Development Plan (TDP) and the Dx Development Plan 203 contracts contributed local content and local manufacturing in designated sectors. (DDP). A total of R307.1bn will be allocated over the next five years to Local content for designated sectors of R65 billion (60.34%) deliver on the capital investment plans in line with the Corporate Plan. Eskom will enable the development of people and contribute to the As part of the mandate of Supplier Development Localisation & national skills plan, develop 845 suppliers, and drive industrialisation and Industrialisation (SDL&I) drive to supplier development and local localisation to support the re-industrialisation plan and economic growth. KEY HIGHLIGHTS community surrounding Eskom Gx Stations. Approximately 108 million tons of coal were bought and We support economic development and supplier transformation to delivered to the power plants during the 2024 financial year. We Tutuka Power Station hosted the small, micro and medium enterprises foster the creation of a sustainable economy, advancing the NDP goals purchased the majority (39%) of the coal through short- and (SMMEs) as part of its Enterprise Development (ED) in a detailed through our supplier programme. medium-term contracts, with 3% coming from long-term cost- classroom supplier workshop attended by +/- 25 Suppliers per day for plus contracts, and 27% from fixed-price agreements. We are nine days. The workshop content included how to fill in the Eskom tender transforming the mining industry by purchasing from companies documents including Technical , SHEQ and Commercial requirements. that meet the 26% mining charter criteria. KEY HIGHLIGHTS Matimba Power Station also hosted the small, micro and medium We have developed an enterprise and supplier development enterprises (SMMEs) as part of its Enterprise Development (ED) in a plan to progress our performance going forward. Eskom’s detailed classroom supplier workshop attended by +/-100 Suppliers. B-BBEE status has improved from level 4 to level 3 due to participation in government's Youth Employment Service (YES) COAL SALES AND ITS CONTRIBUTION TO SOCIO- programme, which is an affirmation of our commitment to South ECONOMIC DEVELOPMENT Africa’s transformation agenda. We achieved the procurement The supplier development and localisation (SD&L) requirements in equity target for black youth-owned spend for the year. We these contracts have generated a number of jobs and several CSI and spent R6.1 million on enterprise development against a target skills development programmes in the regions where they do business. of R5 million (FY2023: R0.1 million) and R8.3 billion on supplier We purchased our limestone from Idwala Lime in Danielskuil from the development against a target of R6 billion (FY2023: R3.7 billion). Northern Cape during the year for the operation of the Kusile FGD plant. To transform its value chain and boost economic activity in the Northern Cape, Idwala must subcontract with or purchase goods and services from black-owned businesses in the nearby neighbourhood. Additionally, it supports employees’ skill development. According to our long-term coal procurement policy, Eskom will require roughly 650Mt of coal until 2050 for our power plants. This will lead to economic opportunities in the area and stimulate the regional economy. In some situations, contracts were won after we put requests for ThyssenKrupp’s sub constructor, a company started by using a sister’s proposals (RFPs) to the market for supplies to Arnot, Camden, Kriel, child social grant Matla and Tutuka. 44 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Social Performance continued MUNICIPAL ARREAR DEBT Of recent concern is the growth experienced in arrear debt from 71 Municipalities were accepted onto the program during the year. Non-payment of accounts is a systemic challenge to the electricity metros, particularly in Gauteng. Whilst 23 of the 71 Municipalities at year end were starting to honour industry as a whole. We have pursued a multi-pronged strategy aimed their monthly current accounts, the remaining Municipalities have not at recovering the outstanding arrear debt owed to us. This includes Municipal debt relief programme been honouring the payment of current accounts and have resulted in negotiating payment arrangements with defaulting municipalities, National Treasury implemented its municipal debt relief programme further growth since being accepted into the program. pursuing our legal rights through the courts, assisting struggling from 1 June 2023, through which any municipality with arrear debt municipalities through active partnering agreements, as well as working outstanding at 31 March 2023 may apply for relief of its balance at this Active partnering agreements are also in place, with Phumelela, with various intergovernmental platforms to resolve the culture of non- date, subject to certain conditions. The conditions aim to restore a set of Msunduzi, Raymond Mhlaba and Bela-Bela municipalities. However, most payment by municipalities. minimum financial management best practices in municipalities, including of these active partnering agreements relate to the provision of technical enforcing the settlement of current accounts. services, including maintenance of infrastructure, with limited impact on Regrettably, the problem has continued to escalate over the years, with revenue collection. arrear municipal debt amounting to R74.4 billion at year end (FY2023: While implementation of the municipal debt relief programme means R58.5 billion). Resolving the historic arrear debt, collecting the revenue we will not be able to recover the historic arrear debt owed to us, the Eskom remains concerned about the overall lack of compliance, given owed to us and preventing future growth in arrears are critical to objective of the programme is to resolve the poor payment levels and that the conditions of the municipal debt relief programme prohibit improving operating cashflows and the financial sustainability of the improve the settlement of current accounts by municipalities over time, Eskom from pursuing action against non-compliant municipalities for the organisation. thereby leading to improved operating cash flows going forward. duration of the programme. We have requested National Treasury to engage with non-compliant municipalities to implement remedial action. SALES AND REVENUE Over the past year, we have seen sales volumes contract further, both due to the impact of loadshedding, but also due to customers installing behind-the-meter embedded generation, mostly in the form of solar PV. Distributor (3TWh ) and residential (0.6TWh ) customer segments showed the largest decline in sales volumes. Sales were negatively affected by generation supply constraints, caused by poor Eskom generation plant performance, delays in IPP programmes and lower than budgeted imports, as well as an increase in embedded self-generation capabilities across many sectors. Distribution Revenue increased year-on-year by 14%, attributable to a 18.65% standard tariff increase for the year, partially offset by a 4TWh (2%) decline in sales volumes. 45 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Glossary 46 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Abbreviations AEL Atmospheric Emissions Licence GRP Generation Recovery Plan SED Socio-Economic Development AQO Air Quality Offset INEP Integrated National Electrification Programme SEIA Socio-Economic Impact Assessment B-BBEE Broad-based Black Economic Empowerment IPCC Intergovernmental Panel on Climate Change SES Social, Ethics and Sustainability Committee BCM Business Continuity Management IPP Independent Power Producer/s SME Small and Medium Enterprise BESS Battery Energy Storage System IRP Integrated Resource Plan SOC State-owned company CDP Carbon Disclosure Project IT Information Technology TCFD Task Force on Climate-Related Financial Disclosures CMG Containerised Micro Grids JET Just Energy Transition TMPS Total Measured Procurement Spend CO2 /e Carbon Dioxide and Carbon Dioxide equivalent King IV King IV Report on Corporate Governance for South Africa, Tx Transmission – one of Eskom’s three operational divisions 2016 (As of 1 July 2024, the National Transmission Company COP Conference of Parties South Africa (NTCSA)) KPI Key Performance Indicator CSI Corporate Social Investment UNGC United Nations Global Compact KRN Key Revision Number CSR Corporate Social Responsibility WEP Women Empowerment Principles LTIR Lost-time Injury Rate DFFE Department of Forestry, Fisheries and the Environment MES Minimum Emission Standards DMRE Department of Mineral Resources and Energy NDC Nationally Determined Contribution DPE Department of Public Enterprises NDP National Development Plan DoEL Department of Employment and Labour NDMAF National Disaster Management Advisory Forum Dx Distribution – one of Eskom’s three operational divisions NDMC National Disaster Management Centre EAL Eskom Academy of Learning NECOM National Energy Crisis committee EAP Employee Assistance Programme NO Nitrogen Oxide ERR Enterprise Risk and Resilience NO2 Nitrogen Dioxide ESG Environmental, Social, and Governance OE Organisational Effectiveness ESP Electrostatic Precipitator OH-AIA Occupational Health Approved Inspection Authority ERCC Emergency Response Command Centre OHS Occupational Health and Safety ERI Eskom Rotek Industries PCB Polychlorinated Biphenyl EVP Employee value proposition PDMAF Provincial Disaster Management Advisory Forum Exco Executive Management Committee PFMA Public Finance Management Act FBS Failure of Business Systems PRT Provincial Resilience Teams FGD Flue Gas Desulphurisation PV Photovoltaic GCE Group Chief Executive RE Renewable energy GHG Greenhouse Gas REIPPPP Renewable Energy IPP Procurement Programme Eskom’s Internal Audit Department provided reasonable assurance of quantitative GRI Global Reporting Initiative information (other than financial information subject to external audit) and certain RT&D Research, Testing and Development GST Global Stocktake qualitative aspects of the report. The group’s independent external auditors, R&R Repowering and Repurposing Deloitte & Touche, were engaged to provide reasonable assurance on selected key Gx Generation – one of Eskom’s three operational divisions performance indicators (KPIs) disclosed in the integrated report. All but one of the SDGs United Nations’ Sustainable Development Goals 40 KPIs scoped for reasonable assurance received an unqualified opinion 47 ESKOM HOLDINGS SOC LTD SUSTAINABILITY REPORT Our ESG material matters The year in review Introduction Governance Environmental Management Climate Change Just Energy Transition Social Performance Company information ESKOM HOLDINGS SOC LTD Incorporated in the Republic of South Africa Registration number 2002/015527/30 REGISTERED OFFICE Eskom Megawatt Park 2 Maxwell Drive Sunninghill Sandton 2157 PO Box 1091 Johannesburg 2000 Switchboard +27 11 800 8111 Customer call centre 08600 ESKOM or 08600 37566 DEBT SPONSOR Nedbank Corporate and Investment Banking, a division of Nedbank Limited JSE alpha code BIESKM FOR MORE INFORMATION INVESTOR RELATIONS Lerato Mashinini InvestorRelations@eskom.co.za MEDIA ENQUIRIES Daphne Mokwena MediaDesk@eskom.co.za GROUP CHIEF FINANCIAL OFFICER Calib Cassim OfficeoftheCFO@eskom.co.za QUERIES OR FEEDBACK ON OUR REPORTS IRfeedback@eskom.co.za Our suite of reports covering our integrated results for 2024 is available at www.eskom.co.za/investors/integrated-results/ www.eskom.co.za