SUSTAINABILITY REPORT FOR THE YEAR ENDED 31 MARCH 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Navigating our report The year in review Eskom’s key roles are to assist in lowering the cost of doing business in South Africa, enable economic growth, and provide stability of 1 The year in review 27 Our environmental electricity supply through the provision of electricity in an efficient and sustainable manner. Eskom will achieve this through an electricity network that includes Generation, Transmission, and Distribution, while ensuring that acceptable benchmark standards are met. performance On the 1st of March 2023 we celebrated 100 years of being in the business of generating, transmitting, and distributing electricity across South Africa and the Southern African Development Community (SADC) region. Over the years, as a company, we have Our approach to environmental management 28 prevailed through many challenges, we have also had opportunities of sustaining our operations as well as minimising any possible Eskom’s environmental management strategy 29 negative effects we may have potentially posed to our people, the environment, and the South African economy. As we celebrate this 2 Introduction Environmental functional leader role Governance and reporting 29 29 centenary milestone, while remaining committed to providing sustainable electricity, we look forward to more years in operation, and especially embarking on an energy transition that will be undertaken in a just manner and ensure social inclusivity by contributing to Our Environmental 100 years journey 29 job creation. Air quality 31 About this report 2 Water 33 Statement by the Chairman of the Social, L Biodiversity 35 TA Ethics and Sustainability Committee 3 Waste management 35 EN AL N M CI Statement by the Group Chief Executive 5 Environmental management systems 36 SO EMS certification retained RO Our commitment to sustainable development 8 Our climate change performance 37 Alignment to the Task Force on Achieved 3.57% against a target training VI Water consumption lower than 2022 Our commitment to the National EN Climate-Related Financial Disclosures (TCFD) 38 spend of 3.75% Development Plan 8 Red data bird mortalities improved vs 2022 Our carbon footprint 42 Employee and contractor fatalities reduced to Sustainable Development Goals 8 Outcomes of COP27 43 Powerline mitigation 2.70 faults per 100km 4 (2022: 6) (2022: 2.56) Our contribution and impact against the seventeen SDGS 10 Gaseous emissions (SOx: 1 449kt (2022: 1 671kt) Lost time injury rate increased to 0.26 (2022: 0.24) and NO x: 743kt (2022: 822kt)) Headcount reduced by 820 employees Our alignment with the United Nations Global Compact (UNGC) principles 15 44 Our Just Energy Transition Particulate matter emissions 129.32kt (2022: 66.65kt) Waste management (Ash beneficiation) Broad-based black economic empowerment (B-BBEE) spend = R150.1 billion 2.6Mt (2022: 2.8Mt) Eskom's 5 Es of Jet 45 87.02% of contract spend was Progress at Komati 47 CO2 emissions lower than 2022 local content 16 Our governance Repurposing and repowering at other sites Progress made on other Jet activities 47 48 Approach to the SEIA 49 Our leadership 18 Komati power station 50 Board of Directors 18 Social, Ethics and Sustainability Committee 19 Executive Management Committee (Exco) Risk and Sustainability Management Committee 20 21 54 Our social performance Conducting business in an ethical manner 22 CE Crime and fraud 22 Employment and benefits 56 AN Training and skills development 56 N R Integrated risk management 23 Employment equity 56 VE Health and wellness 57 GO Eskom Holdings Board oversight 23 Eskom Employee Value Proposition (EVP) 59 Appointed new board Resilience 25 Eskom Employee Engagement Programme 59 GCE resignation Quality management 26 Occupational health and safety 60 Our communities 60 GCOO retired Creating a circular economy – ash beneficiation 65 Continued PFMA training and awareness Our socio-economic performance 66 for all employees Crime and fraud 158 (South African Police Services registered cases) Quality – certified to ISO9001:2015 standard 70 Appendices Abbreviations 71 Contact details IBC 1 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Introduction ABOUT THIS REPORT PURPOSE OF THE REPORT DATA AND ASSURANCE Some of the information contained in this report is sourced Statement by the Chairman of the This report is our cornerstone in ensuring we provide our from the 2023 Eskom integrated report. For this information, stakeholders with a transparent account of our company's our Internal Audit Department has provided reasonable sustainability contribution and performance. These assurance on the quantitative information and, to a lesser stakeholders include, but are not limited to, our government, our employees, unions, investors, market regulators, suppliers, extent, certain qualitative aspects of the report. In addition, Internal Audit provided assurance to ensure alignment of Social, Ethics and Sustainability civil society, and customers. In this report, we reflect on our information across the 2023 suite of reports. FY2023 performance and provide an outlook of our future environmental, social and governance (ESG) initiatives. APPROVAL Committee Eskom's Executive Management Committee (Exco) and the The Sustainability Report complements the integrated report Social, Ethics and Sustainability Committee (SES) of the Board and provides more detailed information about our sustainability of Directors have approved the contents of this report. impact as a business. It is not only a non-financial account of the progress we have made on sustainability matters, but also looks OUR REPORTING SUITE at the risks and impacts we face as a business and highlights our environmental, social and governance performance. To ensure Our 2023 reporting suite is available online at We are confronted by challenges on the cusp of our 100 years lifeblood of the economy. Long-outstanding, rapidly increasing full context, this report must be read in conjunction with our www.eskom.co.za/SR2023 in existence; the continued need to load-shed to compensate municipal debt and declining revenue continue to erode Eskom’s 2023 suite of reports, and the integrated report in particular. for our deteriorating fleet performance, exacerbated by the cash flow position further, which has a negative impact on lack of new electricity capacity, is inflicting great strain on South its financial sustainability. We are grateful that the debt relief INTEGRATED REPORTING AND ADDITIONAL REPORTING FRAMEWORKS Africa’s already fragile economy and our people. package from the National Treasury serves as a lifeline to shore The Global Reporting Initiative (GRI) and the United Nations INFORMATION up Eskom’s financial position. However, the debt relief package Sustainable Development Goals (SDG) agenda provide the The integrated report is prepared in accordance with the The challenges that we must overcome have been long in is accompanied by stringent conditions that aim to manage the reporting framework that guides this Sustainability Report. It Integrated Reporting Framework. It considers our value the making, exacerbated by developments in the policy and risk to Eskom’s financial sustainability. One of the key conditions is also influenced by the United Nations Guiding Principles, creation model, strategy, risks and opportunities, performance, operating environment that have had a multiplier impact on is that we cannot borrow capital over the period of the relief the recommendations of the Task Force on Climate-related and outlook, as well as governance of these areas. Certain deteriorating fleet performance. package. This has an impact on the pace at which Eskom can Financial Disclosures (TCFD) and the Carbon Disclosure disclosures required under regulations issued by National drive the transition in terms of pursuing renewable new build Project (CDP). Treasury relating to the disclosure of information under the Eskom’s 2035 Strategy was developed to drive recovery and determinations and driving R&R. We are, however, seeking Public Finance Management Act (PFMA), 1999, are also covered growth and to extricate us from what can best be described as alternative funding mechanisms that will enable us to leverage The focus is on our performance from beginning of April 2022, in this report. Supplementary information of interest to a “a perfect storm”. As we embrace our centennial year, Eskom our capabilities to drive the transition. This includes pursuing to 31 March 2023, against material environmental, social, and variety of stakeholders is included at the back of the integrated must also factor in the global shifts that are reshaping the power public and private partnerships, where feasible. economic topics. We use the GRI materiality assessment report. sector, notably digitisation, democratisation, decentralisation, methodology to determine the significant environmental, and decarbonisation. These shifts have also shaped the policy Sustainable development remains a key strategic prerogative social, and economic impacts of our organisation or those ANNUAL FINANCIAL STATEMENTS direction for the evolving South African electricity sector as well of the Shareholder, and our purpose (Powering growth … that materially influence the assessments and decisions of The consolidated annual financial statements of Eskom Holdings as for our business and operating models. sustainably) and vision (Sustainable power for a better future) our stakeholders. In addition, the report discusses our future SOC Ltd have been prepared in accordance with International create the platform for us to ensure that we cultivate an ethical, aspirations in these areas in the context of national and Financial Reporting Standards as well as the requirements of The Just Energy Transition (JET) has created opportunities for high-performance environmental, social, and governance (ESG) international priorities for sustainable development. the Companies Act, 2008 and the PFMA, 1999. levering South Africa’s fleet of aging fossil fuel power stations culture as we strive to deliver on our mandate and the Strategic as they approach the end of their economic life. To catalyse Intent Statement through the Shareholder Compact and the REPORTING SCOPE The consolidated annual financial statements have been audited government’s JET strategy, Eskom has developed a Repurposing Eskom Holdings Corporate Plan. In line with our 2023 integrated report, the information in this by the group’s independent auditors, Deloitte & Touche, who and Repowering (R&R) plan, through our Eskom JET Strategy, report refers to the performance of the Eskom Group, which issued a qualified opinion relating to information disclosed which will rejuvenate the value-creating capability of aging In recent times, we have amplified our efforts to address includes the business of Eskom Holdings SOC Ltd, operating in terms of the PFMA, 1999. Except for this qualification, the power stations to enable the transition to a low-carbon internal challenges and performance in the short term in in South Africa, and our main operating subsidiaries, unless consolidated annual financial statements are fairly presented dispensation for South Africa’s future electricity sector. Eskom’s order to allow for growth and sustainability in the longer term, otherwise stated. The operations of Eskom outside the South in terms of IFRS. Furthermore, the independent auditors have JET plan embodies the ongoing deep commitment of the factoring in government’s policy direction for a sustainable, African borders, like Eskom Uganda, although mentioned, have emphasised several matters in their report, including a material organisation to sustainable development. low-carbon electricity supply industry that serves as a catalyst not been considered in the accounting and reporting contained uncertainty relating to Eskom’s ability to continue as a going for socio-economic development (SED). As the Board Social, in this document. concern. However, this does not affect their opinion. Eskom’s ongoing financial sustainability is further supported Ethics, and Sustainability (SES) Committee, our role is to by the National Energy Regulator of South Africa’s tariff mobilise the Eskom Group to embrace a future embedded in The independent auditor’s report is incorporated in the annual determination awarded to Eskom for FY2024 and FY2025. We sustainable development principles that are chartered in the financial statements. recognise that this was a difficult decision for the Regulator, as it National Development Plan (NDP), the 10 principles of the also had to weigh the prolonged economic downturn that South United Nations Global Compact (UNGC), and the United Africans have been enduring. The decision, although not entirely Nations Sustainable Development Goals (SDGs). optimal for Eskom, does place us in a better position to drive recovery of the integrated power system, which remains the 2 3 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices At the same time, Eskom continues to support and drive critical priorities of national government’s Electricity Action localisation, community outreach projects, manufacturing, and industrialisation). Concerning occupational health and safety Statement by the Acting Group Chief Plan through our participation in the National Energy Crisis (OHS), the well-being of our employees, contractors and the Committee (NECOM). These include, among others: communities in which we operate, and the public at large are of paramount importance, and we are committed to their Executive • improving the performance of Eskom’s power stations through disciplined execution of the Generation Recovery sustainability and ensuring that Zero Harm befalls them. Plan; Our governance performance has tainted Eskom’s reputation. • adding as much new generation capacity to the grid as Redressing governance and compliance challenges, specifically quickly as possible; implementation of the plan to address the recommendations of • increasing private investment in generation capacity; and the State Capture Commission into fraud and corruption within • enabling businesses and households to invest in rooftop Eskom, is a priority. Through the Board and its committees, solar. we ensure a focused commitment to eradicating fraud and corruption using the Audit function, Forensic, Anti-corruption, A key role of the Board SES Committee is to assist the Eskom and Group Security as enablers in this regard. Board in fulfilling its statutory obligations by providing oversight, assurance, and recommendations centred around social and As the chairman of the SES Committee, which has been economic development, good corporate citizenship, the delegated by the Eskom Board to perform the oversight role environment and climate change, health and safety, consumer over all sustainability matters in Eskom, including the honour of The 2022/2023 financial year was characterised by heightened At the same time, Eskom must also adapt and factor in the relations, stakeholder relationships, labour, employment, people sharing the good and the bad of our sustainability impact, it is levels of load shedding, which had debilitating impacts on every changes that are reshaping the electricity industry, including issues, ethics management, and sustainable development. my great pleasure to present this Sustainability report for the facet of our society, not least on our healthcare sector, the avoiding investments that may lead to stranded assets. We will 2022/23 financial year. agricultural sector, small businesses, our water infrastructure, prioritise repurposing and repowering in line with our plan From an environmental perspective, we continue to advocate for the effective management of our operational impact on air our transport networks, and, greatly so, our employees, who to support national government’s JET framework, including quality, water consumption, and biodiversity, both for life on not only faced load shedding themselves, but also experienced the required transmission grid expansion and connections. land and life below water. Our response to climate change is backlash from their communities. Significant infrastructure investment is required to enable the being catalysed through the JET and adaptation plans for the future energy supply industry. Mr Bheki Ntshalintshali This continued downward performance prompted operating divisions. Chairman: Social, Ethics and Sustainability Committee intervention by President Cyril Ramaphosa, who announced Our challenges require systemic solutions. Eskom, like many From a social perspective, given our dual mandate, the the establishment of the NECOM in July 2022. The NECOM other utilities, has to navigate the competing demands magnitude of our operations, and the people on whom our provides an integrated co-ordinating platform for responding associated with the energy trilemma, that is, energy operations have an impact, we play a pivotal role of not only to the energy crisis to address load shedding and enable the security, energy equity (access and affordability), and energy providing electricity but also of growing the economy, in reforms necessary for the long-term sustainability of the sustainability, including its impact on everyday lives. Current supporting South Africa’s SED imperatives. Eskom is pursuing electricity supply industry. The NECOM, through the Energy indications show that at least R1.2 trillion in investment is an enhanced approach to corporate social responsibility Action Plan, deals with all aspects of the electricity ecosystem required up to 2030 if we are to adequately lay the foundation (CSR) and transformation (focusing, inter alia, on skills and and enables faster decision-making, unlocking bottlenecks, and of a transitioned electricity supply industry (ESI). capability building, enterprise and supplier development, enables faster deployment of interventions to recover from the electricity crisis. This was followed by the appointment of the Eskom’s 2035 Strategy pursues the optimal balance between Honourable Dr Kgosietsile Ramokgoba as Minister of Electricity prioritising operational, financial, and structural recovery in the Presidency in March 2023 to assume full responsibility for from the challenges that are threatening our ongoing business overseeing all aspects of the electricity crisis response, including sustainability and responding effectively to the global and the work of the NECOM. local transformation that is shaping the electricity sector. Our strategy presents a significant opportunity to address As Eskom, we are grateful for these interventions, as we South Africa’s triple challenge of inequality, poverty, and continue to emphasise that Eskom alone cannot address the unemployment. By leveraging our capabilities and through electricity crisis. As Eskom, we will work and collaborate with collaboration, including partnerships with a multitude of all the relevant stakeholders to ensure that the Electricity stakeholders, our goal is to create an electricity dispensation Action Plan is implemented expeditiously so that we can that is underpinned by the SDGs. This, in turn, must serve pursue our mandate based on an ethos of sustainable as the stimulus for powering growth and prosperity for the development. Southern African region. The future electricity market will be driven by increasing levels of competition, the harnessing of Tackling the electricity crisis remains our foremost priority, rapidly maturing low-carbon technologies, digitalisation, and the given that reliable and sustainable electricity remains a leveraging of Eskom power station sites for repurposing and fundamental precursor for stimulating economic growth, which, repowering to support the transition. in turn, serves as a catalyst for enabling SED. Through a number of programmes and initiatives, Eskom, in collaboration with government, is facilitating the increasing participation of the private sector in new generating capacity. 4 5 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices South Africa has an opportunity to boost the manufacturing The Eskom (Exco) ensures that we are continuously striving to sector by optimising the localisation of specific components improve our ESG performance to enhance our value offering for cleaner energy systems. There is also great opportunity across our commercial and SED mandates. We are in the in the construction sector, given the significant transmission process of reviewing our sustainable development framework grid expansion requirements required over the next 10 years. to effectively enable the SDGs, as relevant, and ensure Policy reform and amendments, including, but not limited to, entrenchment in our business approach and operations. This the updating of energy, fiscal, trade, and economic policy will will manifest in our Corporate Plan as an ESG chapter that enable these opportunities to be further developed. integrates and synthesises the Eskom Group priorities towards embedding sustainable development principles as the way we Addressing the impact of decisions on workers in the coal do business. industry and communities invested in the coal value chain and associated economies is a critical and an inherent underpinning We will also leverage our revised CSR Strategy, which of the transition. Eskom, by virtue of its legacy and the scale incorporates a shared value approach, to partner with key of its operations, plays a central role in facilitating such a stakeholders to create business value, de-risk operations, and transition, while also ensuring equitable access to affordable ensure the sustainability of Eskom’s transformation initiatives electricity for all South Africans. that support and enable the SDGs. Our success hinges on collaborating with all relevant We are cognisant of the fact that our performance has created stakeholders, most significantly our people. Our transformation a trust deficit with the country. The Exco has prioritised journey requires a skilled, motivated, and socially cohesive restoring the integrity of Eskom, both internally and externally. workforce that is prepared to embrace the opportunities that Adherence to our Code of Ethics, known as “The Way”, is unfold in the evolving electricity and related sectors. The recent defined by Eskom’s six core values. “The Way” defines the establishment of the training facility at Komati Power Station, principles we must embrace as we conduct business, including in partnership with the Global Energy Alliance for People and the way we must interact with one another as well as with our Planet (GEAPP) and the South African Renewable Energy Shareholder, customers, suppliers, the public, communities Technology Centre (SARETEC), demonstrates the first step of in the vicinity of our infrastructure, stakeholders, and the our commitment to collaborate and work towards ensuring a environment. In building a sustainable development-oriented, sustainable future for our employees, the key stakeholders, and high-performance culture, “The Way” ensures that we not only the communities that support our operations and contribute to do things right, but also do the right things. the South African economy. The FY2023 Sustainability Report reflects our progress As a state-owned company, Eskom is committed to supporting towards integrating ESG in the way we do business. It reflects the South African government in achieving the objectives the commitment of our Shareholder, key stakeholders, and, of the NDP 2030, within the context of committing to the most significantly, our nearly 40 000 Eskom Guardians who 10 principles of the UNGC relating to human rights, labour, are supporting the Board and Exco to work in synergy with environment, and anti-corruption, as well as embracing the a multitude of stakeholders to create an effective electricity United Nations’ SDGs towards leveraging the electricity dispensation for South Africa that is grounded in the principles infrastructure of the country to achieve a more sustainable of sustainable development and that serves as a stimulus for future for all. Decisive and bold steps that embrace the powering growth and prosperity for the region. principles of sustainable development need to be taken by both the South African government and Eskom to leverage the opportunities that are unfolding to enable a lower-carbon electricity supply industry. Calib Cassim Group Chief Executive (Acting) 6 7 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our commitment to sustainable development Our commitment to sustainable development is guided by the NDP and the SDGs, together with other related frameworks and programmes such as the UNGC, TCFD and CDP. We continuously strive to improve our sustainability performance and ensure we integrate it into our business. We are committed to lowering greenhouse gas (GHG) emissions, protecting biodiversity and the integrity of ecosystems, increasing climate change resilience, abiding to the principles of the UNGC, and contributing to the achievement of the SDG's. We have a Sustainable Development Framework which guides Eskom on sustainable development matters and is currently being reviewed to factor in, amongst others, our JET, environmental, social, governance (ESG) and SED. OUR COMMITMENT TO THE NATIONAL The goals call for building peaceful, inclusive, and well-governed Overall, ESG can assist us to improve our financial performance, DEVELOPMENT PLAN societies with responsive institutions as the basis for shared reduce risk, enhance brand reputation, and attract customers, The NDP sets out ambitious goals for poverty reduction, prosperity. The goals are people-centred and planet-sensitive, investors, and employees who value governance, sustainability, and economic growth, economic transformation, and job creation. they are universal, applying to all countries, while recognising social responsibility. We continually measure and report on our ESG The Department of Public Enterprises (DPE) is our shareholder the different realities and capabilities of each country. We performance through our environmental reporting (biodiversity, ambient ministry and defines our mandate. The DPE has defined a have entrenched the SDGs in all aspects of our business and air quality, emissions, raw water use and water quality), climate change transformational framework that guides the involvement and track them through the sustainability reporting. As part of our reporting (carbon footprint, CDP and TCFD) and sustainable development requirements of SOCs, including Eskom, in achieving the NDP company's performance assurance, sustainability KPIs, as agreed reporting (Sustainability and Eskom Factor reports). objectives. We are mandated to play a central role in achieving in the shareholder's compact, are audited on an annual basis. national SED goals. In line with this mandate, we are a critical catalyst for economic growth and development, including In recent years, investors have been placing an increased stimulating the creation and development of black industrialists emphasis on a range of ESG issues resulting in ESG reporting and entrepreneurs. becoming more crucial for companies. These issues are garnering more attention from legislators and regulators from In the 2022/23 financial year, we continued to contribute around the world. Consequently, there is increased demand on meaningfully to the following areas: companies to report on their activities and practices and how they adhere to their governance policies and how they manage • electrification their impact on environmental and social sustainability. • social equity and upliftment • employment creation and job opportunities Environmental and sustainability metrics are arguably the most • skills development, incubation, and training high-profile of all ESG indicators, ESG reporting is therefore • innovation, research, and specialised testing moving away from being a “nice-to-have” and becoming a business imperative that has become crucial for business • improved environmental performance sustainability. ESG reporting ensures companies can fully • Just Energy Transition understand their risks and opportunities and to demonstrate • contribution to national educational focus on Science, the link between their financial and non-financial performance. Technology, Engineering, Mathematics and Innovation (STEMI) By implementing strong ESG practices, companies can have significant benefits, including: SUSTAINABLE DEVELOPMENT GOALS • improved risk management, by identifying and mitigating The SDGs are a collection of 17 interlinked global goals potential risks related to ESG designed to be a “blueprint to achieve a better and more • enhanced brand reputation, by demonstrating their sustainable future for all”. The revised deadline for SDGs is commitment to sustainability, social responsibility, and good 2030. We are less than 10 years away from the ambitious goal governance of ending poverty, and there is already concern that we will not meet all the targets, especially with the added global challenges • improved access to capital and reduced cost of capital posed by COVID-19, amongst others. But that doesn’t mean • improved employee engagement, retention, and attraction there isn’t hope for work to be done. Behind the 17 goals of top talent is a more detailed list of 169 targets and 248 indicators that • drive innovation by finding new and more sustainable ways determine whether those goals are met. of doing business. 8 9 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices OUR CONTRIBUTION AND IMPACT AGAINST THE SEVENTEEN SDGs: We take an integrated and indivisible approach in our contribution to the Sustainable Development Goals and incorporate them in our plans, projects and programmes across the business. Our strategic Our SDG NDP objective objectives Summary of our impact and management impact Positive impact Neutral Chapter 9: Improving Facilitate a Renewables training centre to be opened at Komati education, training, and competitive future power station in conjunction with South African Negative impact innovation energy industry Renewable Energy Technology Centre (SARATEC) and Cape Peninsula University of Technology (CPUT). Our strategic Our SDG NDP objective objectives Summary of our impact and management impact Funding has been provided by Eskom for previously disadvantaged learners particularly in maths and Chapter 3: Economy Strive for net-zero Eskom is involved in communities by supporting science. and employment emissions by 2050 economic growth and improving the quality of life of with an increase in South Africans and the region through our The Eskom Academy of learning (EAL) also provides Chapter 6: An sustainable jobs electrification programme and enabling the Integrated classroom and vocational learning for employees. integrated and inclusive Resource Plan (IRP) and Renewable Energy IPP rural economy Pursue financial and The further studies programme, Energy Partnership Procurement Programme. operational Programme between South Africa and Denmark and Chapter 7: Positioning sustainability We provide reliable electricity at an optimal price to the Japan International Cooperation Agency (JICA) South Africa in the achieve affordability while also ensuring our business partnership with Eskom are examples of education world financial sustainability initiatives aimed at providing quality education to Chapter 8: Eskom employees. As a result of loadshedding, particularly at higher Transforming human stages, small businesses and enterprises have been Chapter 2: Pursuing financial We adhere to and align to the country’s employment settlement and the affected negatively and, in some instances, had to shut Demographic trends and operational equity targets as set out by the Department of Labour. national space economy down; resulting in many bread winners not being able sustainability Recruitment processes with division specific equity Chapter 11: Social to adequately provide for their families. targets are aimed at enabling us to have equitable protection numbers for race and gender at all position levels. Chapter 11: Social Strive for net-zero Rural development through electrification – for Chapter 5: Pursue financial and Our transition towards cleaner and greener electricity protection emissions by 2050 example, electrification enables water to be pumped Environmental operational production offers an opportunity to significantly reduce with an increase in for farming. sustainability and sustainability carbon emissions while also addressing raw water sustainable jobs transition to a consumption. All new plants have been designed with As part of our repurposing initiatives at Komati power Strive for net-zero low-carbon economy air cooled condensers in recognition of the water station aimed at economic growth through emissions by 2050 constraints. diversification, projects like the agrivoltaic plant will not with an increase in only provide skills to the communities but the sustainable jobs Our water consumption for electricity generation agricultural produce will feed many families in the remains a challenge. We have many initiatives with communities. regard to using less water for our operations by Chapter 10: Promoting Strive for net-zero We focus on ensuring our emissions do not have a re-using and recycling process water through approved health emissions by 2050 detrimental effect on the communities in the range of water implementation plans. with an increase in dispersal from our power stations by monitoring the Increased incidences of continuous and sporadic sustainable jobs quality of air and introducing initiatives that will discharge of polluted water into the environment improve air quality. We have successfully piloted an air persists. We struggle to operate our pollution control Pursue financial and quality offsets programme in two areas of impact. Our operational dams at several sites within adequate buffers permitted emissions continue to potentially pose risk to on the water use licences. This continues to put us at sustainability communities surrounding our power stations. risk of criminal sanction due to unauthorised overflow In fixing our operational performance we are also incidents which is in contravention with station water investing in projects to address air quality and water use licences. consumption as part of our objectives to fix our Our Research, Testing and Development (RT&D) operations. department also provides water testing and Through Eskom’s wellness programmes, employee biomonitoring services through its laboratory facilities health and well-being are encouraged for both physical for potable, surface, and ground water to ensure that and mental wellbeing. Employees are advised on how not only is the water we use and consume safe, but to make better and healthier life choices, ensure good also that our operations are not negatively impacting health and screening and preventative checks are waterbodies downstream from our operations. conducted. 10 11 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our strategic Our Our strategic Our SDG NDP objective objectives Summary of our impact and management impact SDG NDP objective objectives Summary of our impact and management impact Chapter 5: Facilitate a Electrification has reached approximately 5.9 million Chapter 5: Facilitate a RT&D department continues to investigate solutions in Environmental competitive future households since project inception in 1991. Environmental competitive future preparing us for the transition to cleaner and greener sustainability – An energy sustainability energy industry energy production and while also looking at futuristic equitable transition to a Eskom will be rolling out ~14 000km of Transmission research and product development. low-carbon economy Strive for net-zero lines and around 8 000km of distribution network to Chapter 8: Modernise the emissions by 2050 enable connection of new capacity addressing security Transforming human power system Under the Komati project, the workers, suppliers, and with an increase in of supply leveraging clean energy with a potential to settlement and the communities will be supported through a five-year sustainable jobs stimulate job creation through the significant capex. national space economy Strive for net-zero comprehensive transition plan that details projects and emissions by 2050 programmes to develop the area. The objectives of the Modernise the RE through the renewable Independent power with an increase in plan are to enhance the opportunities from the power system producer (IPP) generation project produced sustainable jobs positive impacts of the transition while minimising the 16 859GWh. social and economic risks and impacts associated with We are implementing cleaner technologies into our decommissioning and repurposing of Komati power existing fleet to reduce air emissions. station. This includes programmes to support diversification of the economic and skills base of local Microgrid expansion project helps rural communities communities to reduce coal dependency and create to access electricity in areas where grid connection is alternate livelihoods option. not immediately viable. Chapter 5: Pursue financial and Responsible consumption of raw water from the finite Chapter 3: Economy Pursue financial and We employ 39 601 employees with market related Environmental operational scarce water resources is key. The importance of and employment operational benefits and salaries. sustainability and sustainability recycling of process water in our operations in support sustainability transition to a of the Eskom Z-LED (zero liquid effluent discharge) Chapter 4: Economic We funded and supported small and medium The other strategic low-carbon economy Policy. infrastructure Strive for net-zero enterprise resourcing, capacitation, mentoring and skills objectives also talk emissions by 2050 development through the Business incubator to SDG 12 Our Ash beneficiation strategy promotes the re-use of with an increase in programme in collaboration with relevant government ash, a by-product of our Generation operations, in the sustainable jobs departments and other developmental agencies. manufacture of bricks, cement, soil amelioration, road construction and mine backfilling. 2.6Mt of ash was In partnership with our procurement and supply chain sold this past financial year. management we ensure Supplier Development Localisation and Industrialisation (SDL&I) integration Clean coal technologies: the utilisation of coal fines into all aspects of Eskom’s supply chain. (discarded waste products) in briquetted form for co- Modernise the Through our electrification programme, smart meters, combustion in coal-fired industrial activity is at an Chapter 4: Economic power system research, and development, we support economic advanced stage of research and has been proven to be infrastructure growth, innovation, technology advancement and a viable option for our circular economy. Chapter 9: Improving industrialisation. We have environmental management policies and education, training, and Our focus in the near future will be around developing strategies to guide us in our duty of care responsibility innovation systems and processes that monitor how our R&D towards doing no harm and producing electricity in a contributes to the SDGs. responsible manner. Chapter 2: Strive for net-zero We support upcoming business through our The electricity we use can be an environmentally Demographic trends emissions by 2050 preferential procurement and local content friendly product that is also necessary to assist other with an increase in requirements. A department dedicated to this; SDL&I economic sectors to improve their environmental Chapter 3: Economy sustainable jobs ensures all our procurement is aligned to this. performance and employment Chapter 5: Strive for net-zero We continue to contribute to shifting the country Chapter 11: Social Environmental emissions by 2050 towards a low carbon pathway guided by our Climate protection sustainability and with an increase in Change policy, JET strategy and Adaptation procedure. transition to a sustainable jobs low-carbon economy We continue to try and scientifically understand and prepare for the potential impacts of increasing extreme weather events on our operations and communities. 12 13 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our strategic Our OUR ALIGNMENT WITH THE UNITED NATIONS GLOBAL COMPACT (UNGC) PRINCIPLES Eskom is a member of the UNGC, and we continue to be committed not only to the UNGC but also its principles relating to human SDG NDP objective objectives Summary of our impact and management impact rights, the environment, and the fight against corruption. The sustainable development performance of a company is a key factor Chapter 5: Strive for net-zero We have undertaken to reduce freshwater usage, influencing investment decisions. Therefore, improved performance in sustainable development and transparency about ESG matters Environmental emissions by 2050 increase the recovery of process water for re-use, and is important for our reputation with our various stakeholders. The UN Global Compact is globally recognised for driving and shaping sustainability and with an increase in avoid adversely impacting water resources, including the sustainable development agenda. We submit our annual communication on progress (CoP) on our sustainability achievement transition to a sustainable jobs sea and groundwater through effective water to the UNGC, which enables us to show our commitment to the ten principles and the SDGs, and thus building our credibility and low-carbon economy management processes, and groundwater monitoring. brand value, measure and demonstrate our progress and to compare our progress against other peers through comparable corporate sustainability data. Our commitments are also reflected in compliance with the Organisation for Economic Co-operation and We have implemented the Z-LED policy for several Development recommendations on anti-corruption. years on all our operational dams. Our coastal management, including monitoring and reporting linked to our nuclear power generation THE TEN PRINCIPLES OF THE UNITED NATIONS GLOBAL COMPACT activities remains priority for us. PRINCIPLE 10 PRINCIPLE 1 Chapter 5: Strive for net-zero We endeavour to minimise the negative impact of our Businesses should work against corruption in all its forms, Businesses should support and respect the protection of Environmental emissions by 2050 activities on ecosystems and enhance ecosystem including extortion and bribery internationally proclaimed human rights, within the scope sustainability and with an increase in services through responsible land management of their influence transition to a sustainable jobs practices, while seeking opportunities to enhance low-carbon economy biodiversity on Eskom properties. Pursue financial and PRINCIPLE 9 Chapter 6: An operational Our environmental management strategy provides the Businesses should encourage the PRINCIPLE 2 integrated and inclusive sustainability compass to managing our biodiversity. development and diffusion of Businesses should make sure that they are not rural economy environmentally friendly technologies Facilitate a We have formed partnerships for the last 26 years on complicit in human rights abuses competitive future wildlife management to mitigate impacts on our energy operations and infrastructure by wildlife and our general operations impact on birdlife. Chapter 1: Policy Pursue financial and Our governance processes and policies are aligned to PRINCIPLE 8 PRINCIPLE 3 making in a complex operational the first rule of law of South Africa (The Constitution). Businesses should undertake Uphold the freedom of association environment sustainability initiatives to promote greater and the effective recognition of the We relentlessly work at reducing and eliminating environmental responsibility right to collective bargaining corruption of all forms in our business. Our policies and procedures enable us to be an effective, accountable, and transparent company. Chapter 7: Positioning Pursue financial and Work is being done through various platforms to South Africa in the operational partner with government and business to achieve a world sustainability sustainable ESI. Alignment in energy, environmental, fiscal, and industrial policy have been identified as key Chapter 15: Facilitate a focus areas in these engagements. Transforming society competitive future and uniting the country energy industry We have various partnerships across the world, continent, locally, and with other business spheres Strive for net-zero which strengthen our means for implementation for emissions by 2050 sustainable development, including our JET. with an increase in sustainable jobs PRINCIPLE 7 PRINCIPLE 4 Businesses should support a Businesses should uphold the precautionary approach to elimination of all forms of forced environmental challenges and compulsory labour PRINCIPLE 6 PRINCIPLE 5 Businesses should uphold the elimination of Businesses should uphold the abolition of child discrimination in respect of employment and labour occupation 14 15 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our Governance Our sole shareholder is the Government of the Republic of South Africa, with DPE being our shareholder representative. As a public entity, we are governed by the provisions of the Public Finance Management Act 1 of 1999 (PFMA). The PFMA requires us to conclude a shareholder compact with the shareholder representative. Our shareholder compact contains shareholder expectations in the form of predetermined objectives and key performance indicators (KPI) and ensures alignment between the Board and the shareholder representative. In addition, the PFMA requires that we submit a strategic corporate plan to the shareholder on an annual basis, setting out our strategic objectives, with plans and targets to achieve those objectives. Our performance as reported in our shareholder compact has been audited by Deloitte and Touche for the year ending 31 March 2023. The governance framework, which regulates our relationship with the Shareholder (the Government of the Republic of South Africa) and guides the way we business, is reflected in the figure below: DEPARTMENT OF PUBLIC ENTERPRISES Eskom’s mandate is based on the shareholder’s Strategic Intent Statement Our annual performance is measured against the shareholder compact ESKOM HOLDINGS SOC LTD King IV TM and our Code of Ethics, “The Way”, guide the way we do business Board of Directors Executive Management Committee Audit and Risk Capital (oversight of internal and Information and Technology external audit) Divisional boards Nuclear Management Business Operations Performance Generation Operating Governance and Strategy Regulation, Policy and Economics Transmission Human Capital and Remuneration Risk and Sustainability Investment and Finance Distribution Social, Ethics and Sustainability Tender Turnaround It is expected of organisations to have strong corporate The Governance and Strategy Committee is a committee governance policies and frameworks and we are no exception. of the Board of Directors (Board) established to assist the Matters such as legal violations, corruption, negligence and Board in dealing with oversight pertaining to the development, fraud can have financial and reputation consequences that may implementation and review of Eskom’s corporate strategy affect not only us and the shareholder but our employees, and related documents, including the divisional strategies, their families, our customers and communities at large. Good turnaround strategy, legal separation (unbundling), Corporate Our Governance governance is the compass that provides direction not only to Plan and the Shareholder Compact. The Committee is also our employees and contractors but all who do business with responsible for corporate governance related matters which us as well, it sets the tone for how we value business processes include the nomination of members as well as the annual that are ethically, fair, and just. evaluation of the Board and its Committees. 16 17 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our leadership Our governance framework has clear role delineation for our shareholder, the Board, the Board committees, and SOCIAL, ETHICS AND SUSTAINABILITY assurance of select KPIs through the sustainability audit. The management of the Eskom group. COMMITTEE SES committee also serves as the statutory social and ethics The Social, Ethics and Sustainability (SES) Committee reports committee for Eskom’s wholly owned subsidiaries. It is the to the Board on a quarterly basis at a minimum. They provide responsibility of this committee to ensure that our Sustainability oversight of SED; good corporate citizenship; environmental; reporting is in line with the Global Reporting principles. Divisional boards for Generation, Transmission and Transmission, Generation and Distribution, starting with the climate change; health; and safety programmes, and the Distribution were established to drive separate accountability National Transmission Company South Africa SOC Ltd. The for each division, as a transitional structure and a first step boards of the wholly owned subsidiaries will still be accountable towards Eskom’s legal separation. The divisional boards do to the Board of Eskom Holdings SOC Ltd, in line with good THE SOCIAL, ETHICS AND SUSTAINABILITY (SES) COMMITTEE not constitute a board of directors in accordance with the governance practices. At 31 MARCH 2023 Companies Act, 2008, but function as operational boards until the legal separation is concluded. Although the divisional BOARD OF DIRECTORS boards function relatively independently, they report to Exco Our Board fulfils the primary roles and responsibilities of a on a regular basis to ensure that decision-making is aligned with governing body outlined in King IV™ by: Setting the strategic Eskom’s overall strategy. direction of the organisation; Providing oversight through effective governance frameworks and approving policies and Eskom’s legal separation will ultimately result in the formation plans that enable the company’s strategy and by promoting a of wholly owned subsidiaries with independent boards for high-performance culture aligned with Eskom’s values. THE BOARD OF DIRECTORS At 31 MARCH 2023 Mr Bheki Mr Leslie Dr Tsakani Dr Rod Ntshalintshali (69) Mkhabela (50) Mthombeni (43) Crompton (70) Independent Independent Independent Independent non-executive director non-executive director non-executive director non-executive director Mr Mpho Mr Calib Mr Martin Dr Rod Ms Fathima Mr Lwazi Mr Clive Ms Ayanda Makwana (52) Cassim (51) Buys (65) Crompton (70) Gany (47) Goqwana (47) Le Roux (71) Mafuleka (43) Chairman Acting Group Acting Group Independent Independent Independent Independent Independent Chief Executive Chief Financial non-executive non-executive non-executive non-executive non-executive Ms Fathima Mr Clive Dr Claudelle Dr Busisiwe Officer director director director director director Gany-Ahmed (47) Le Roux (71) von Eck (52) Vilakazi (39) Independent Independent Independent Independent non-executive director non-executive director non-executive director non-executive director Mr Leslie Dr Tsakani Mr Bheki Mr Mteto Ms Tryphosa Dr Busisiwe Dr Claudelle Mkhabela (50) Mthombeni (43) Ntshalintshali (69) Nyati (58) Ramano (51) Vilakazi (39) von Eck (52) Independent Independent Independent Independent Independent Independent Independent non-executive non-executive non-executive non-executive non-executive non-executive non-executive director director director director director director director For further details on our overall governance matters, refer to the governance, leadership, and ethics section in the 2023 integrated report. 18 19 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices EXECUTIVE MANAGEMENT COMMITTEE • providing feedback and accountability for transformation and RISK AND SUSTAINABILITY MANAGEMENT COMMITTEE (EXCO) turnaround initiatives The Risk and Sustainability (R&S) Division reports to the Board SES and is mandated to drive sustainable business performance The Exco has been established to assist the Group Chief • exercising responsibility for the information and technology through functional leadership, assurance, and oversight in the areas of integrated risk, resilience management, OHS, quality Executive (GCE) in managing the business for the benefit of governance framework management, environment and climate change, and sustainable development (CCSD). The R&S Division provides a shaping, Eskom. It is accountable for exercising executive control over • ensuring implementation of an effective compliance safeguarding, and strategic servicing role to the operations of our business. R&S is also responsible for sustainability reporting. day-to-day operations to deliver on the strategy set out by the framework and process Board. • proactively managing stakeholder relationships • ensuring effective financial management and control The Committees responsibilities include • maintaining effective Human resource management by • ensuring good governance and controls assisting the GCE • developing and implementing the overall Eskom strategy • entering into indemnities, guarantees and suretyships and including strategic objectives securing payments • procurement THE EXECUTIVE MANAGEMENT COMMITTEE EXCO At 31 MARCH 2023 Mr Calib Cassim (51) Mr Martin Buys (65) Mr Jan Oberholzer (64) Ms Faith Burn (54) Ms Mel Govender (41) Acting Group Chief Acting Group Chief Group Chief Chief Information Group Executive: Executive Financial Officer Operating Officer Officer Legal and Compliance Ms Nthato Minyuku (44) Ms Elsie Pule (55) Ms Jainthree Sankar (51) Mr Vuyolwethu Tuku (47) Group Executive: Group Executive: Chief Procurement Group Executive: Government and Human Resources Officer Transformation Regulatory Affairs Management Office * Jan Oberholzer retired as Chief Operations Officer in April 2023. Martin Buys was appointed in March 2023 as Acting Chief Financial Officer. * Nthato Minyuku and Mel Govender resigned in April 2023. * Refer to the IR for further details of the Board and Exco. 20 21 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Conducting business in an ethical manner Integrated risk management The Board, through its SES Committee, is responsible for the governance of ethics in Eskom, by establishing an We are committed to the effective management of risk which is central to Eskom’s governance and management ethical culture and providing oversight of ethics strategies and policies in accordance with King IV. Adherence to our processes, and essential for achieving the organisation’s vision and mandate. It is therefore imperative that risk Code of Ethics, known as “The Way”, is not optional. It is the way we do business in Eskom, guiding the way in which and resilience management be embedded into all business processes to identify and manage risks consistently the Board and employees interact with one another as well as with our shareholder, customers, suppliers, the public, and proactively. other stakeholders, and the environment. “The Way” is defined by six core values, which form the foundation of our values-driven organisation and reflect our commitment to the highest standards of governance and ethical behaviour. We have established an integrated approach to managing risk management. Enterprise Risk has formalised a functional and resilience, using consistent approaches to the assessment, support role to the business through various interventions A dedicated Ethics Office is responsible for developing ethics CRIME AND FRAUD treatment, monitoring, and reporting of all types of risk, at all such as the Integrated Risk Management (IRM) Operations policies and procedures and monitoring the effectiveness An effective response to corruption promotes transparency and levels and for all activities across the business. It is therefore committee and service level agreements, which have been of their implementation. The Ethics Office also facilitates accountability and fosters a conducive environment for sustainable imperative that there be one standard for the management of signed with Generation, Transmission and Distribution annual ethics training, which is mandatory for all employees, development and equitable benefits to our nation. Eskom is all types of risks that will be consistently applied across Eskom respectively and the services provided are in accordance with and provides guidance on ethical issues in the workplace. no exception, by virtue of its significant influence over crucial Holdings SOC Ltd. The objective of managing risk is to ensure the Functional Leader Model. Any potential breaches of ethics that may involve fraud and sectors that affect the economy and the well-being of South that Eskom can formulate and execute its strategy effectively, corruption are referred to Internal Audit and Forensic and Africans. Apart from hampering fair competition, corruption stifles enabling it to operate its business efficiently within the risk ESKOM HOLDINGS BOARD OVERSIGHT Anti-Corruption for further investigation. Our conflict- innovation and economic growth. appetite set by the Eskom Board of Directors. It is vital that The Quarterly Risk and Resilience Report is tabled at the of-interest policy and declaration of interest procedure risks that impact Eskom’s objectives are identified, effectively Board Assurance and Risk Committee, after review by the complement our Code of Ethics by setting out the obligations We have our own Forensics Department which provides managed, continuously monitored and reviewed. R&S Committee and supported by Exco. Our risk landscape is of directors and employees in dealing with ethical issues, such an independent and objective forensic service into fraud, currently being monitored, tracked, and reported in the seven as potential conflicts of interest, performing private work, corruption, and general and financial irregularities in our Our Enterprise Risk and Resilience Policy, Risk and Resilience risk categories. The risk appetite statements are approved by relationships with suppliers as well as receiving or offering business. Eskom’s internal capacity is augmented by a Management Plan, and appetite and tolerance framework, the Board, namely finance, operations, information technology, business courtesies. Directors and employees from Task panel of external investigators. In cases where our forensic make up the key governing documents approved by the Eskom compliance, environment/climate change, people, and grade 09 are required to complete an annual declaration of investigations uncover criminal conduct, these are referred to Holdings Board. This complies with (i) the recommendations stakeholder management. interest, irrespective of whether a conflict exists, or as soon law enforcement agencies for further investigation. on good governance in King IV, which includes the oversight as circumstances that may affect their declaration change. of risk and resilience as a Board-level priority, and (ii) the Risks affecting organisational and business continuity objectives Where a conflict exists, it must be declared and managed. Any We also have other capabilities and functions to investigate requirements of Risk and Integrity Management Framework are identified, robust treatment plans are developed, and interests declared by directors and Exco members in meetings physical-, energy-, and cybercrimes. To embed and increase (RIMF) from DPE. As an organ of state, Eskom is also required implementation is tracked and monitored through embedded are minuted for the record and should recuse themselves. our effectiveness to respond to physical crime and fraud and to comply with disaster management legislation. governance structures (in line with King IV). Risks are rated corruption prevention, we have embarked on a programme according to Eskom’s consequence and likelihood table. High To improve the current governance systems, Eskom to consolidate our multiple investigative functions into a single Enterprise Risk and Resilience is responsible for shaping and consequence and likelihood are referred to as priority 1 risks commissioned The Ethics Institute to perform an independent investigative unit. This unit is envisaged to be implemented safeguarding an integrated approach to risk and resilience which require the focus of Exco and the Board. ethics risk assessment to determine potential ethics during the 2024 financial year. management. The transition from centralised support functions opportunities, as well as unethical behaviours and practices that to a functional leader model, in an unbundled Eskom, is a The risk landscape for quarter 4 2022/23YE and the aggregated place Eskom at risk. The results will be used to better manage During the 2023 financial year, Eskom appointed an external key consideration for our approach in risk and resilience strategic risks is reflected below. ethics-related risks and inform the review of Eskom’s ethics entity to conduct a comprehensive review of our crime risk management strategy. High-risk areas will be subject to greater management landscape. This comprises reviewing the existing focus for ethics training and consequence management. control frameworks, and providing for a gap analysis thereof, Year end (2023FY) risk landscape as well as recommendations for improvements based on legal 30 Priority 1 (P1) risks were reported as at 30 March 2023. requirements and international best practice. Zero Harm means protecting the Eskom Way Unacceptable risks Eskom’s Anti-Fraud & Corruption Integration Committee Integrity means acting the Eskom Way (AFCIC) is now fully established. This Committee, which 6 5 6 6 5 have members representing all line functions in Eskom, aims to improve corporate governance by providing a holistic 5 2 1 Innovation means thinking the Eskom Way assessment of our approach to fraud and corruption risks Consequences and to integrate, monitor and report on internal and external 4 4 1 Sinobuntu means caring the Eskom Way investigations into fraud, monitoring the Fraud Prevention Plan, corruption and unethical conduct. 3 Tolerable risks Customer satisfaction means serving the Eskom Way 2 Acceptable risks Excellence means working the Eskom Way 1 A B C D E Likelihood Risk matrix focusing on the 30 Priority 1 risks in the red area 22 23 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Resilience Allocation of 30 priority 1 risks for quarter 4 Generation 7 The Global Resilience Partnership defines resilience as the capacity to live and develop amidst change and uncertainty. We refer to the required resilience capabilities as the ART of resilience – to anticipate and adapt to Transmission 4 change, Respond, and recover from disruption, and Transform amidst changes in context. Group capital division 3 Risk and sustainability 3 In practice organisational resilience requires preparedness RESILIENCE NECESSITATES INTEGRATION 2 Finance and response capabilities to navigate major disruptions that ACROSS SCALES AND BOUNDARIES. Legal and compliance 2 integrates across geographic, functional, and sector boundaries. Integrated response structures ensure coordination across Preparedness is established through Business Continuity boundaries at national and provincial level and with external Distribution 2 Management (BCM) and Disaster Management and response joint responders. The following table summarises institutional through an Incident Command System. arrangements that give effect to integrated preparedness and Eskom Rotek Industries 1 response capabilities across scales and boundaries. To illustrate, Our Enterprise Resilience programme has made great strides national blackout disaster planning requires cross-functional Human resources 1 on integrated emergency management of our response to integrated preparedness and response capabilities among line major threats and disruptions, such as the pandemic, and divisions and with support functions within Eskom. Externally Audit and forensic 1 ensuring compliance with the Disaster Management Act, across various sectors (e.g., fuel, telecommunication, and Just energy transition 1 2002. However, we have a long way to go to strengthen the banking), and across national, provincial, and local government. capacities of anticipating, adapting, and transforming. Group security 1 Transformation management office 1 Planning level National Provincial Divisional 0 1 2 3 4 5 6 7 8 Preparedness focus Disaster Management for Oversight of strategic/cross-cutting Business Continuity Existing risks identified national priorities risks Management (BCM) New risks Disaster Management for identified Disaster Management for site Eskom Holdings distribution of risk provincial priorities level priorities (e.g., Gx breach • Inability to meet regulatory and statutory requirements. The of ash dam wall) AGGREGATED STRATEGIC RISKS loss of Eskom’s licence to operate due to its environmental Scope of Integration Nationally across all of Eskom Across all Eskom’s operations within Within an operating division, The aggregated strategic risks are a consolidation of the various performance and non-compliance with regulations/ Holdings and integrate with a province strategic or service function divisional and subsidiary priority 1 risks grouped under the legislation, leading to plant shutdown and/or litigation. Provincial Resilience Teams various risk consequence categories. The aggregated strategic • Eskom’s failure to transition from coal-based power system (PRTs) risks are consolidated and aligned to the Board approved Risk to a lower carbon and climate-resilient company due to Appetite statements and Key Risks Indicators (KRI). Preparedness National Disaster PRTs and subcommittees Divisional Resilience the obstacles on the net zero pathway, not receiving a • The financial sustainability of Eskom being compromised Structure Management Working Groups Programme sufficient low carbon technology (renewables) allocation by due to declining sales, an increase in the non-payment of and allocated (DM WG) Assigned to Dx GMs the Department of Mineral Resources and Energy (DMRE) municipal bulk accounts, and the tariff determinations of the accountability Head of the division leading to a failure to determine an optimal combination of National Energy Regulator of South Africa (NERSA) not Priorities are assigned to clean technologies to achieve CO2 reductions. being cost-reflective. This situation leads to Eskom being members of Exco • Breakdown in relations with recognised Organised Labour unable to meet its financial obligations and maintain its and employees. External Integration National Disaster Provincial Premier (led by Dx GM) Own stakeholders based on going-concern status. • OHS performance and public safety if compromised will Management Centre (NDMC) divisional mandate • The financial risk linked to fraud and corruption in Eskom if lead to harm (injuries, fatalities, damaged property), lack of and National Disaster Provincial Disaster Management not brought under control, they could further compromise productivity and reputational damage. Management Advisory Forum Centre (PDMC) and Provincial our business and reputation. This financial risk caused by • Legal separation being delayed further, due to tardiness in (NDMAF) (led by Resilience Disaster Management Advisory Forum unethical behaviour and ineffective controls to prevent, the allocation of licences to the NTCSA entity, themselves team) (PDMAF) (led by PRT DM lead) detect, and correct such criminal behaviour leading to caused by the lack of internal alignment and stakeholder continued financial losses, operational and reputational engagement, leading to further reputational damage, National sectors and key Provincial sectors and key response damage and Eskom’s moral fibre being further eroded. declining investor confidence, and special Appropriation Act response partners (led by partners (led by PRT DM lead) • Eskom’s operational performance deteriorating due to a loss implications. respective DM WGs) of critical skills, poor plant performance/quality of outage • The failure to manage non-technical risks, that is, risks execution, coal-related challenges, capex reduction, inability Performance measure Quarterly reported by Quarterly PRT dashboard Quarterly divisional resilience and opportunities that arise from Eskom’s interaction to sustain and maintain transmission network reliability, and reporting assigned division in resilience report and compact scores with a broad range of external stakeholders (includes and intolerable levels of theft and vandalism to, network compact regulatory bodies, the public and socio-economic challenges, equipment (deteriorating socio-economic conditions). government departments and policy makers, environmental Response structure Emergency Response Provincial Joint Command Centres Tactical Command Centre This leads to a system constraint/blackout and a decline in organisations etc.) will impact the organisation on multiple Command Centre (ERCC) (PJCCs) (TCC) stakeholder confidence. levels putting the Corporate Plan, and Strategy 2035 at risk. • A major cybersecurity attack against Eskom’s IT network infrastructure/business systems will affect critical business The treatment plan for the aggregated risks is included in the systems and lead to reputational damage, legal, operational, Corporate Plan, Strategy 2035, and Divisional Risk Treatment and financial implications. Plans (incl. JET). 24 25 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices The progress of national working groups varies among the considering Transmission Grid Managers. The performance of national disaster priorities, and a forum was established in the the PRTs is assessed using a compact that considers provincial financial year to address gaps and improve maturity levels. We governance, risks, subcommittees, emergency preparedness, are encouraged by recent key appointments in the NDMC, disaster management plans, integrated response structures, and that is, Head of Centre and Capacity Building and Provincial external disaster structures. Integration Director, as we pursue country-level co-ordination for electricity-related disasters. Divisions employ BCM to ensure that the organisation can continue operating in case of serious incidents or disasters and In the previous financial year, government declared three can recover to an operational state within a tolerable period of national states of disasters: two were in response to the impact disruption. of floods and one to the impact of severe electricity supply constraints. Since the scope of the national disaster on the Integrated emergency response is coordinated nationally by impact of severe electricity supply constraints is intertwined Eskom’s ERCC and provincially by PJCCs. In the financial year with work that is undertaken by the NECOM the Eskom the ERCC was activated several times to coordinate Eskom’s emergency response structures were expanded to include the response to the industrial action, critical IT system failure work of the NECOM/Energy National Joint Operational and and severe supply constraints. The Resilience team conduct Intelligence Structure (Nat JOINTS). national and provincial level exercises to test emergency response structures and plans. An internal national simulation Eskom’s integration and joint planning with provincial exercise was undertaken on 17 March 2023 to test response government and response structures takes place through preparedness to cyber-attacks and terrorism disasters. PRTs. As network boundaries do not comply with provincial Over 500 people participated in the online seminar-style boundaries it is a challenge to ensure meetings are streamlined simulation exercise. to benefit Distribution Cluster General Managers while Quality management Our approach to quality management is to instil a culture of continuous improvement towards achieving business excellence. Quality Management therefore provides strategic direction and assurance through the quality management value chain (i.e., quality planning, quality assurance, quality control and quality improvement) including Eskom’s document and records management. Eskom is certified to the ISO 9001: 2015 Standard for the line Quality Management aspires to change attitude and behaviour divisions and compliant for support functions. The external of each Eskom Guardian to embrace quality in everyday audits are conducted by the South African Bureau of Standards outputs for continual improvement and the achievement of (SABS) for the line divisions, overall deviations relate to operational excellence. documentation management issues also the everchanging context of the organisation which has an impact on resources. One of the quality strategic initiatives is to conduct conformity Our Environmental Performance assessment which includes all the activities to demonstrate that the quality management system will function optimally to entrench the Eskom Quality Value Chain within the Eskom Divisions/BU/Clusters for the lifecycle of processes, product and service during the design, manufacturing, installation, maintenance or repair, projects etc. 26 27 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our Environmental Performance Our environmental performance is monitored and measured against several KPI, prioritising relative particulate ESKOM’S ENVIRONMENTAL MANAGEMENT GOVERNANCE AND REPORTING STRATEGY The implementation of the environmental management emissions, specific water consumption, and air emission licence compliance, biodiversity red data bird mortalities on The Environmental Strategy will drive Eskom and ultimately practices is ensured through the governance structure of the Eskom’s infrastructure and the number of reported legal contravention incidents and those as a result of significant South Africa forward in terms of a greener country and Eskom Environmental Steering Committee. This governance failure of business systems (FBS). committee is chaired by Eskom’s Environmental Manager and economy and facilitate a JET, resulting in environmental improvements (compliance and performance). The represented by the respective environmental managers of the environmental criteria forming part of Eskom’s JET initiatives line divisions and Eskom Rotek Industries (ERI). In addition, the include reducing Eskom’s contribution to local air pollution and committee has representation from Eskom’s Climate Change OUR APPROACH TO ENVIRONMENTAL its environmental footprint and considers environmental and Sustainable Development (CCSD), RT&D and the Eskom having a positive effect on water conservation and biodiversity. MANAGEMENT performance a key strategic thrust that will enable Eskom to Internal Audit Departments. The livelihood of all South Africans is dependent on the retain its licence to operate and achieve its values, specifically Eskom’s overarching strategic environmental objectives, as environment in which they live, and they have a right to live in the value of Zero Harm to people and our environment. Our set out in the Environmental Strategy, are to (i) reduce the This allows for the oversight of environmental assurance, a healthy and safe environment. Eskom’s operations affect the six Eskom-values directly link to our approach to environmental environmental footprint of Eskom’s activities; and (ii) position performance, and compliance. Through this committee working environment both positively and negatively, and all its activities duty of care and how we address environmental matters. Eskom as an environmentally sustainable utility. groups are set up to develop the required approaches to the rely heavily on the provision of non-renewable resources, These values are also directly associated with the environment areas of environmental management, including air, waste, water, including land, water, coal, and air. Eskom strives to reduce and climate change focus we have in the business: The strategy principles aim to reduce the environmental and biodiversity. constraints and challenges faced by Eskom in optimally generating, transmitting, and supplying electricity and enhancing OUR ENVIRONMENTAL 100 YEARS JOURNEY its positive environmental contributions. Eskom has a proud history of being a leader in industrial environmental management practices. From commitment Zero harm: We will strive to ensure that zero harm befalls our employees, contractors, the public and the natural Eskom will continue to contribute to the improvement of the through policy setting in the 70’s, to research and development environment. Our environmental duty of care in pursuit of zero harm and our JET for net zero emissions by 2050. state of the South African natural environment and the health in air quality management and dry cooling technology, to one of This duty of care speaks to our responsibility to ensure that our future generations have a safe planet on which of communities through: the first companies to sign up to the UNGC in 2000. We have Zero Harm to live. • responsible and improved water management practices. proactively undertaken environmental impact assessment to ensure informed decision making long before it became a legal • management of air quality. requirement in South Africa in the late 90s. Eskom published its Integrity: Honesty of purpose, exemplary conduct, and discipline in all our actions, ensuring respect for people. Our • management of specific Eskom land as nature reserves. first Annual Environmental Report in 1994 and today is proud conduct and disciplined actions are what leads to environmental duty of care. Integrity means the respect we • phase-out of polychlorinated biphenyls (PCBs). of a high standard of Sustainability reporting aligned with the have for the environment, a constitutional right that all South African citizens have to an environment that is not • reduction in bird mortalities through the implementation of GRI, which has been recognised through the accomplishment Integrity harmful to their health and wellbeing. It speaks to doing the right thing every time, even when no one is watching. bird proactive mitigation plans. of various awards for excellence. • improved and inclusive biodiversity management within Innovation: Value-adding creativity that is results-oriented. We will lead through excellence in innovation. This is what Eskom’s control and influence. is needed to address the multitude of environmental and climate change challenges we have in Eskom. Many of • implementation of SHEQ management systems in the challenges we have, especially to be resilient to the effects of climate change, cannot be met through our accordance with the ISO 9001, 14001, and 45001 standards. past practices and approaches, but through innovative new solutions and practices that will see us transition and • renewables – support in acquiring environmental Innovation participate in an industrially revolutionised world. authorisations and updating of existing allocations due to retrofits. • support the R&R of stations that have reached the end of Sinobuntu: Caring, acknowledging that we are one with the planet and its inhabitants. This is probably the key value their economic life, in support of the JET. we embrace and aim to demonstrate in all that we say and do – this is what environmental duty of care is all • development of an Eskom’s culture transformation about. programme to deliver a high-performance ethical culture. Sinobuntu ENVIRONMENTAL FUNCTIONAL LEADER ROLE The Eskom Risk and Sustainability Division’s Environmental Customer satisfaction: A commitment to meet and strive to exceed the needs of the receivers of our products and Management functional leader role provides the organisation services. While we associate that with our direct electricity customers, it is applicable to the expectation that the with strategic direction and oversight, which includes environmental authorities, our lenders, and most importantly all South Africa citizens have for us to carry out our developing level one policies and procedures that align the Customer business in meeting their need for us to do this with due care for the environment. organisation with legislation and responsible/best-practice Satisfaction environmental management to achieve a reduced negative environmental footprint in support of the value of Zero Harm. Excellence: Acknowledged by all for exceptional standards, performance and professionalism. This value means that, in all we do, we do with excellence, which will lead to environmental duty of care. It is about what we do Environmental assurance is provided to the Eskom Board and today and every day as we undertake our tasks with excellence. This will ensure that we comply with all our Exco by monitoring and reporting environmental key risks Excellence environmental legal obligations and that we do not find excuses but find solutions. and KPI. 28 29 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Although records show that the first formalised Eskom BIODIVERSITY AIR QUALITY environmental policy was in place in 1980, which was based on During the years of expansion (1980-89) and before the EMISSIONS AND PERFORMANCE the Electricity Act, Act No. 40 of 1958, the organisation was era of having legislative environmental impact assessments, Atmospheric emissions include any emission that results in committed to environmental management practices way before Eskom planned for Matimba power station in the Lephalale air pollution and includes particulate and gaseous emissions. then. These were predominately in the areas of air pollution area included measures to preserve the indigenous bushveld Atmospheric emission licences (AELs) issued by the (particulate matter) and water use. before construction started. It was also during this time authorities allow Eskom only to emit atmospheric pollutants that there was strong cooperation between Eskom and the within certain limits. Today we see the concept of environmental management provincial environmental authorities in the conservation of the in Eskom being broad and including socio-economic issues, sun gazer lizard (cordylus giganteus) at the site of the Majuba The coal-fired power stations operate in general compliance concept of ecosystem services, CCSD. power station. with emission limits set in terms of their respective AELs. However, occasional non-compliance with these limits occurs Although the legislative requirements for carrying out One significant learning from Eskom’s strategic partnership and is subsequently reported to the authorities as required. environmental impact assessments were only legislated in 1998, with EWT from the 70s it has been the success of working in Power station AELs require the reporting of emergency Eskom was undertaking these back in the 80s for projects such partnerships with environmental conservation NGOs. The incidents referred to as National Environmental Management as Tutuka, Lethabo and Matimba coal-fired power stations Ingula Partnership with BirdLife South Africa and Middelpunt Act (NEMA) section 30 incidents. as well as that for Koeberg nuclear power station, Palmiet Wetlands Trust has proved invaluable towards the conservation and Drakensberg pumped storage facilities. Such proactive of a very important biome ensuring the protection of the Our coal-fired power stations’ relative particulate emissions environmental assessments were also undertaken on power critically endangered White-winged Flufftail, Southern Bald ibis, performance improved since March 2022 due to the line projects such as the Ariadne Venus and the Palmiet other endangered species, and the habitat in which they exist. completion of the focused maintenance of generating plant. Stikland Transmission power line in the early 90s. The Ingula Partnership has also resulted in Eskom leadership However, performance has not shown a turnaround by the end endorsing research funding to the Birdlife International Species of the year as system constraints increased. When compared While environmental management practices were in place Champion Programme, whereby Eskom will fulfil the Species Koeberg Nature Reserve to the previous year’s performance we find that the emissions before the 1990s, it was at this stage that Eskom appointed Champion role for both the White-winged Flufftail and deteriorated. its first Environmental Manager. Since the 90s we have seen the Southern Bald Ibis. This initiative promotes the overall the following as Eskom’s Environmental Managers: Mr Otto protection and conservation of these two bird species. Relative particulate emission performance (kg/MWh sent Graupner, Mr Zola Tsotsi (later to become Eskom’s Chairman), out) for the 2021, 2022 and 2023 financial years Mr Paul de Kock, Ms Vanida Govender, Ms Wendy Poulton, Ms Deidre Herbst and to the present Ms Fiona Havenga. 0.8 BIRDS AND POWER LINES 0.7 Dr John Ledger and Peter Mundy founded the Vulture Study kg/MWh sent out 0.6 Group in 1973 to provide scientific direction for the study and conservation of these misunderstood and threatened 0.5 birds. The Vulture Study Group was dissolved in 2007 and amalgamated into the Birds of Prey Working Group of the 0.4 Endangered Wildlife Trust in 2007 At this same time the 0.3 Endangered Wildlife Trust (EWT) was established. In 1977, Dr Ledger as a Trustee on the EWT started to engage with 0.2 Apr May Jun Jul Aug Sep Oct Nov Des Jan Feb Mar Eskom about the impacts of birds and power lines. This resulted in the formation of a strategic partnership between the EWT and Eskom which endures to this day. Eskom and the FY2022/23 FY2021/22 FY2020/21 Tolerance level EWT formally entered a strategic partnership in 1996. The aim of the partnership was to systematically address the problem and to establish an integrated management system to minimise KUSILE POWER STATION STACK FAILURE these negative interactions. Today, other partnerships are also On 23 October 2022, Kusile Power Station experienced a in place with organisations such as Birdlife South Africa. Ingula Nature Reserve failure on the west stack, which limited the power station’s ability to operate three already commissioned generating The “Eskom Red Data Book of Birds of South Africa, Lesotho units: Units 1, 2 and 3. These units can each provide around and Swaziland” was one of the most significant scientific Eskom’s approach to the management of its land as 720MW to the national grid, their loss effectively increased publications in the field of Biodiversity that Eskom is associated conservation areas reached a highlight in 1991 when the the pressure to implement loadshedding of approximately two with. This publication is well known by all those involved in Koeberg Nature Reserve was promulgated. In consultation levels in isolation. We have implemented several measures to avian studies, science, protection, and conservation. It shapes with both national and provincial authorities, Eskom formally reduce the impact of this loss of capacity. Key to these efforts is government policy on species protection, used in EIA studies declared three nature reserves (Ingula Nature Reserve, Majuba the construction of three temporary stacks which will operate and determining areas for protection. Nature Reserve and Koeberg Nature Reserve) through the without the already constructed Flue Gas Desulphurisation National Environmental Management: Protected Areas Act, (FGD) plants causing a predicted increase in SO2 emissions in 2003. The declaration of the nature reserves enables Eskom the area around the station. to have its licence to operate power generation activities within these natural environmental areas where the power stations have been constructed, while protecting South Africa’s biodiversity and ensuring the long-term security of the country’s natural heritage. 30 31 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices We applied for approval from the Department of Forestry, Eskom remains at risk of not meeting commitments made in • Fabric filter plant at Arnot, Camden, Duvha, Grootvlei, by insulating homes with ceilings, switching households from Fisheries and the Environment (DFFE) and the Nkangala district previous minimum emission postponement applications due Hendrina, Kusile, Majuba and Medupi coal to electricity and liquid petroleum gas, and addressing the to erect and operate temporary stacks at Kusile whilst the to project delays and constraints on available funding. The • Boilers with low NO x design at Kendal and Matimba burning of waste. permanent repairs to the west stack are underway. Permanent consequences of non-compliance could be the withdrawal of • Low NO x burners at Camden, Kusile and Medupi repairs to the west stack are planned to be completed by end licences to operate, DFFE not granting further legal indulgences, There has been substantial progress on the air quality offsets • FGD at Kusile December 2024. On the 18th of March 2023 Eskom received or not meeting specific loan agreement conditions. programme during 2022/23, with the start of the stove swap approval to commence the construction of the temporary implementation in Kwazamokuhle and continuation of work in In line with commitments made, additional emission reduction stacks, however approval to operate the temporary stacks was EMISSION STANDARDS Ezamokuhle. projects to reduce particulate matter emissions (PM), as well dependent on a favourable outcome of the Minimum Emission The MES for South Africa were published in 2013 and amended as sulphur and nitrogen oxides continue. The following air Standards (MES) postponement and Atmospheric Emission in 2018. These stipulated emission limits, which require Eskom improvement projects have now been completed: License (AEL) variation process. DFFE’s decision to grant the to reduce gaseous emissions of sulphur dioxide and nitrogen postponement of MES was issued to Eskom by the DFFE oxides, as well as particulate matter. It aims to protect the • High-Frequency Power Supply (HFPS) Project units National Air Quality Officer. This pertains to the sulphur dioxide environment by providing reasonable measures for the commissioned: Kendal 1, 5, and 6, Lethabo 2 and 3, Matla 2, (SO2) emission levels at Kusile Power Station. An updated AEL prevention of pollution and ecological degradation and to and Tutuka 4. to Kusile Power Station was issued to reflect this postponement secure ecologically sustainable development while promoting • Electrostatic Precipitator (ESP) Project units commissioned: decision by the Nkangala District Municipality. justifiable economic and social development. Kendal 5 and 6. • Contract placed for HFPS at Lethabo, Kendal, Matla and The postponement granted and the licences issued in June In 2014 and again in 2019, Eskom committed to retrofitting Kriel, Matla Unit 4 ESP, Tutuka ESP (4 units), Lethabo ESPs 2023 mean that Eskom will be able to operate the three units several power stations to reduce emissions under and flue gas conditioning, and flue gas conditioning at Tutuka. without the use of the FGD plant, which is equipped with postponement applications granted by the then Department of emission-abatement technology for SO2, for a period of up to Environmental Affairs (DEA), now called DFFE. Full compliance AMBIENT AIR QUALITY MONITORING 31 March 2025 while the flue gas ducts in the permanent stack with the new plant standards requires all coal-fired power Eskom has established a network of ambient air quality are being repaired. The postponement and licence are subject stations to implement emission reduction technologies, such as monitoring stations to monitor the air quality in communities to several conditions, including the implementation of measures fabric filter plant (FFP), low NO x burners and/or FGD. potentially impacted by our operations. The measurements to mitigate the impact of SO2 emissions on air quality. Eskom are used to identify the main sources of pollution in the will comply with the conditions of the MES postponement and Eskom submitted postponement applications in terms of the communities and to determine the improvement in air the AEL. The temporary stacks have been completed, with the MES to DFFE during August 2020, with additional information quality as the interventions are implemented. The following FGD bypassed. This allows us to return the units to the grid submitted early in January 2021. Eskom received a decision parameters are monitored continuously: Particulate Matter in line with the approved national environmental exemptions on the application from DFFE in November 2021. A positive (PM10 and PM2.5), sulphur dioxide (SO2), nitrogen oxides and conditions. During this time, the necessary steps will be postponement decision was issued for power stations shutting (NO x), ozone (O3), temperature, wind speed and direction, implemented to mitigate the impact of SO2 emissions on air down by 2030, namely Grootvlei, Arnot, Hendrina, Camden, rainfall, pressure and relative humidity. quality. Two of the units have been returned to service, with Komati, Acacia and Port Rex. However, Eskom’s request for the last expected to return in November 2023. postponements at Matla, Duvha, Matimba, Medupi and Lethabo The ambient air quality monitoring station in Kwazamokuhle were all declined in their entirety by the National Air Quality was established in September 2014, and the monitoring station AIR QUALITY MANAGEMENT PLAN Officer (NAQO). Postponement applications for Majuba, in Ezamokuhle was established in July 2017. The sites are An updated Eskom 2022 emission reduction plan was approved Tutuka, Kendal and Kriel were partially approved. operated by the Ambient Air Quality Monitoring Team at our by the Eskom Board on 29 July 2022. The plan is based on RT&D Department. Both monitoring stations have received Eskom 2035, JET, ambient air quality, broad environmental The decision requires funding of approximately R340 billion and accreditation from the South African National Accreditation impact and affordability and focuses on PM reduction, limited would affect the operating licence of 16 000MW immediately Society (SANAS). nitrogen oxide reduction projects and sulphur dioxide and a further 10 000MW post-2025 leading to further load reduction projects only at Medupi and Kusile power stations. shedding. An appeal of the decision was submitted to the AIR QUALITY OFFSET PROGRAMME Eskom’s strategy is to facilitate the development of a future Minister of DFFE on December 13, 2021. This suspends the Air quality refers to the degree to which the air is suitable or electricity sector that is competitive and enabled by modern decision and allows continued operation. clean enough for humans or the environment. Good air quality power system technologies as South Africa strives to achieve means the air is free of harmful substances. net-zero emissions by 2050. Eskom’s proposed JET would The Minister of DFFE established a Consultative Forum in 2022 make it possible to simultaneously spur economic growth, to advise her in respect of the MES appeals. The Forum has a Air quality in various areas of the country is affected by create sustainable jobs and put emissions into structural broad term of reference requiring it to consider environmental, pollutants emitted by numerous sources. These sources decline, thereby ensuring an electricity supply that does not climate change, health, security of supply and legal requirements. include power generation activities, industrial processes, waste WATER compromise economic growth. In November 2022, the Forum held a series of public disposal, transportation (private and public vehicles), biomass MANAGEMENT PLAN consultations in respect of the MES appeals to obtain stakeholder burning, domestic fuel burning, landfill sites, wastewater South Africa is water-scarce country due to low average Eskom has adopted a phased approach to its air quality and public input in respect of the MES appeals. The forum is treatment and agricultural activities. Air pollution can therefore rainfall and Eskom accounts for about 2% of the country’s improvement programme that considers the remaining lifespan required to provide a recommendation to the Minister in 2024. impact human health and lead to environmental degradation. total freshwater consumption annually. Eskom is classified as a of the power stations and their impact on the ambient air quality. strategic water user and has a responsibility to manage water ABATEMENT The power station AELs for our coal-fired power plants require efficiently in the generation and distribution of electricity. We continue to drive the implementation of the previously Various emission abatement technologies have been installed at us to implement an offset programme to reduce particulate committed MES projects. Good progress has been made on Eskom’s coal-fired power stations. matter pollution in the receiving environment adjacent to the As a strategic water user, we are assured of water supply particulate matter (PM) projects, and it is foreseen that all of power stations. The offset is carried out on specific low-income in the short to medium term. Nevertheless, given the these projects will be completed by 2025. There is a risk that These include: houses and includes the installation of ceilings to improve vast amounts of water we consume, we continue to some units at Tutuka Power Station with PM upgrades may be • Electrostatic precipitators (ESPs) at Duvha, Kendal, Komati, insulation as well as electric and gas stoves to replace coal stoves. implement comprehensive strategic water implementation completed after the legal requirement of 31 March 2025, but Kriel, Lethabo, Matimba, Matla and Tutuka and management plans at all coal-fired power stations to work to minimise this risk is ongoing, and alternatives are also Our air quality offset programme aims to reduce particulate reduce water use and ensure compliance. Disappointingly, • SO3 flue gas conditioning plants to improve the efficacy of ESPs being considered. matter emissions and thereby improve ambient air quality in implementation of the water strategy has not yet resulted in a at the power stations mentioned before, except at Tutuka communities adjacent to Eskom’s coal-fired power stations material reduction in water usage at coal-fired power stations. 32 33 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices ACTIONS TO ADDRESS THE WATER CHALLENGES • implementing the recommendations that emanated from More focus is still required at power stations to address the investigations undertaken on red data bird mortalities; and root causes of high inflows and prevent contamination of • research work through Eskom’s RT&D function in water to improve water recovery and water management partnership with the Endangered Wildlife Trust. practices. Regrettably, focused interventions have not yet led to a significant decrease in such water events when compared to We have contributed to biodiversity initiatives in South Africa the previous financial year. such as through consultation with both national and provincial authorities, we have formally declared three nature reserves, being We continue with the implementation of comprehensive water the Ingula Nature Reserve, the Majuba Nature Reserve, and the improvement management plans across all coal-fired power Koeberg Nature Reserve. In doing so, these nature reserves play a stations to reduce water consumption, ensure compliance with role in the protection of South Africa’s biodiversity and ensure the water use licences and maintain its assurance of water supply. long-term security of South Africa’s natural heritage. The Ingula Nature Reserve, which is South Africa’s 27th “Ramsar Site” that Specific water performance is dependent on several variables, was added to the List of Wetlands of International Importance, including load factor, energy mix, rainfall and overall water was declared to protect the Drakensberg’s high altitude grassland management efficiencies at power stations, all of which ecosystem, wetlands and escarpment forest that plays host to are being addressed through the power stations’ water several threatened species, including the critically endangered management action plans. White-winged Flufftail, Wattled Crane, Bearded Vulture and White-backed Vulture. BIODIVERSITY Our activities in the generation, transmission and distribution WASTE MANAGEMENT of electricity can have an adverse impact on biodiversity and Eskom supports the government’s commitment to waste therefore the controls and practices that are put in place in management to protect human health and the environment Eskom. With the recognition that biodiversity is the complex as defined in the NEMA and the national waste management web of life which sustains us all, we acknowledge that our strategy which is a legislative requirement of the National contribution to protecting biodiversity is not just about saving Environmental Management: Waste Act, 2008. animals or habitats, it’s also about helping us cope with the worst effects of climate change. The status of biodiversity ASH continues to be threatened by the increasing impact of The Minister of the DFFE approved our application to exclude uncontrolled human activities and therefore the critical role we ash and gypsum at our sites from the definition of waste acknowledge we play in this matter is South Africa. when extracted for beneficial use. The exclusion by DFFE of ash and gypsum from waste requiring a waste management One of the significant biodiversity challenges we continue to face licence, when extracted for beneficial use at our sites, provides is that of red data bird mortalities that occur on our extensive additional opportunities for ash beneficiation – such as the use power line network across the country. At the end of the last of ash in bricks, cement, soil amelioration, road construction financial year the red data bird mortalities had improved from and mine backfilling. Camden Power Station had portions of its 224 to 170 mortalities. Improvements in the implementation of ash utilised for mine backfilling during 2020/21, demonstrating mitigation that have been seen, can be attributed to the work of the beneficial use of ash in the mining environment the Eskom field staff in identifying risk areas and implementation of mitigation measures. Our ash is sold from six of our coal-fired power stations. These PERFORMANCE MONITORING AND REPORTING Specific water consumption performance (ℓ/kWh sent Water performance (measured as specific water consumption per out) for the 2022 and 2023 financial years (please take ash sales are contracted to commercial partners. Over the past The key initiatives undertaken to address this environmental 10 years, ash sales by volume have increased steadily, these unit of electricity sent out) met the target for the year. However, note that the water target has been revised from impact include: specific water usage in the generation of electricity deteriorated 1.31ℓ/kWh sent out to 1.39ℓ/kWh sent out due to the have decreased over the last two years. over the year. The deterioration is attributed to poor water lower energy availability factor at the stations) • implementing proactive bird mitigation programmes on high- management practices at power stations, including leaks and risk power lines; overflows at units; less recovery from on-site dams for reuse 1.55 due to poor water quality, due to contamination with ash and oil; ashing with cooling water to control cooling water chemistry; 1.50 Ash sold from six of Eskom’s coal-fired power station from the 2009/10 to 2022/23 financial years as well as losses through discharge of polluted water into the 3.5 1.45 environment, as the pollution control dams on these sites have more water flowing into the dams than can be contained. 1.40 3.0 2.5 Focused monitoring of the effective implementation of water 1.35 management action plans, has not yet led to a significant 2.0 decrease compared to the previous financial year, although 1.30 1.5 some improvement has been recorded. 1.25 1.0 Apr May Jun Jul Aug Sep Oct Nov Des Jan Feb Mar While higher rainfall during 2022/23 contributed to improved 0.5 performance from financial year 2021/22 to financial year FY2021/22 FY2020/21 Tolerance level 2022/23, the reduced energy availability (EAF) and water 0.0 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 management challenges resulted in a deterioration of specific water use. 34 35 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices PHASE OUT OF POLYCHLORINATED BIPHENYL’S A total of 105 environmental legal contravention incidents were We measure our environmental performance through various KPIs including relative particulate emissions, specific water consumption (PCB) recorded (2022: 65). Most of these incidents are contaminated and the number of reported legal contravention incidents. South Africa is a member of several international conventions, water releases and exceedances of emission limits at coal-fired such as the Stockholm, Basel, and Rotterdam Conventions. The power stations. Target Target Target Target Actual Actual Actual Stockholm Convention requires that each member develop Measure and unit 2026 2024 2023 met? 2023 2022 2021 and implement a National Implementation Plan (NIP) to meet 3 its obligations (included in the NIP was the ban of PCB oil and Relative particulate emissions, kg/MWh sent out 0.26 0.30 0.30 0.70 0.34 0.38 containing materials). Specific water consumption, ℓ/kWh sent out SC, 1 1.36 1.38 1.39 1.39 1.45 1.42 Net raw water consumption, Mℓ n/a n/a n/a n/a 256 430 283 610 270 736 The DFFE published regulations in 2014 under section 44 of Environmental legal contraventions reported as a result the NEMA: 1998 to phase out the use of PCB materials and 44 of significant FBS, number2 1 1 1 10 7 7 contaminated materials (>49ppm) by 2023. 2023 58 An independent audit of Eskom’s PCB phase-out plan was Target Target Target Target Actual Actual Actual conducted during this reporting period. The report concludes Measure and unit 2026 2024 2023 met? 2023 2022 2021 that: Eskom has a DFFE approved PCB phase-out plan with specific milestones to achieve phase-out of the listed PCB Carbon dioxide (CO2), Mt3 n/a n/a n/a n/a 187.5 207.2 206.8 contaminated equipment by 2023. The milestones in the Water Carbon dioxide equivalent (CO2e), Mt3 n/a n/a n/a n/a 187.9 207.7 207.3 approved phase-out plan indicates that all the identified PCB Air quality Sulphur dioxide (SO2), kt3 n/a n/a n/a n/a 1 449 1 671 1 604 contaminated equipment will be phased out by 2022, however, Environmental impact assessment this plan has since been updated and all equipment will be Nitrous oxide (N2O), t4 n/a n/a n/a n/a 1 438 1 561 1 527 phased out by 2023. Eskom continues to make use of “windows 5 Nitrogen oxide (NO x as NO2), kt4 n/a n/a n/a n/a 743 822 804 of opportunity” to phase out PCB contaminated equipment, 5 Methane (CH4), t n/a n/a n/a n/a 1 483 1 466 1 442 resulting in some operating units achieving their phase out Particulate emissions, kt n/a n/a n/a n/a 129.32 66.65 71.35 milestones earlier than scheduled. We have implemented a plan to achieve the objective of phasing out all identified 7 1. Relative particulate emissions values and specific water consumption include Medupi Units 2, 3, 4, 5, and 6, and Kusile Units 1 to 3, but PCB contaminated equipment by 2023, with Transmission exclude units synchronised but not yet in commercial operation. Units are only included one year after achieving commercial operation and ERI having successfully phased out PCB – containing 2022 ,therefore Kusile Unit 4 is still excluded. Kusile Unit 3 has been included since 1 April 2022 and Medupi Unit 1 since 1 August 2022 when equipment and materials ahead of the global phase-out date of the units became official. 31 December 2023. 2. Particulate emissions reported at certain coal-fired power stations, specifically Kendal and Kriel, exceeded the range of the station’s particulate emission monitors for periods during the year. This may have resulted in an understatement of particulate matter emissions. However, the extent of the understatement and its impact on the materiality of final figures cannot be quantified. ENVIRONMENTAL MANAGEMENT SYSTEMS 3. Specific cases of environmental legal contravention incidents that are of very high significance in terms of their impact on the environment 48 (EMS) and/or on Eskom in that they have a material business impact and illustrate a significant FBS are recorded as incidents as a result of a Eskom’s operational divisions (Generation, Transmission, Water significant FBS. Distribution and Group Capital) and subsidiary (ERI) have Air quality 4. Emission figures are calculated based on coal characteristics and power station design parameters using coal analysis and coal burnt Environmental impact assessment maintained certification in accordance with ISO 14001:2015 tonnages. Figures include coal-fired and gas turbine power stations and oil consumed during power station start-ups. For carbon dioxide Waste EMS standard. emissions, it also includes the underground coal gasification plant. 5. N2O and NO x reported as NO2 are calculated using average station-specific emission factors (measured intermittently) and tonnages of The assessment of Eskom’s environmental performance using coal burnt. several KPIs is an integral part of its EMS to drive continual 6. No target is set for net raw water consumption or emission volumes. Therefore, the target for these measures is shown as not applicable. improvement. The KPIs include air, water, waste, compliance, and biodiversity management. Red data bird mortalities are OUR CLIMATE CHANGE PERFORMANCE monitored, together with proactive and reactive mitigation Eskom is committed to continually improving our understanding of the financial impacts associated with climate change. This report programmes as part of the measurements of biodiversity. highlights our company's efforts to effectively communicate our climate change risks and opportunities, as well as our ongoing plans to respond to the global crisis within the context of our country's developing socio-economic environment. Our long-term objective is to strive for net-zero emissions by 2050 through participation in the JET, which will position our company at the forefront of the global effort to combat climate change. This information is relevant to our investors, shareholders, and stakeholders who are impacted by the company's long-term sustainability. 36 37 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Task Force on Climate-related Financial Disclosures' (TCFD's) key disclosure themes Recommended disclosure Strategy Governance Describe the climate-related risks and opportunities the organisation has identified over the short, The actual and potential impacts of climate-related risks and opportunities on the medium, and long term. organisation’s business, strategy and financial planning Strategy Describe management’s role in assessing and managing climate-related risks and opportunities. Strategy Describe the climate-related risks and opportunities the organisation has identified over the short, Governance medium, and long term. Governance Describe the impact of climate-related risks and opportunities on the organisation’s businesses, Risk management The organisation's governance around climate-related risks and opportunities strategy, and financial planning. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Metrics and targets Risk management Describe the organisation’s processes for identifying and assessing climate-related risks. Risk management The process used by the organisation to identify, assess and manage climate-related Describe the organisation’s processes for managing climate-related risks. risks Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. Metrics and targets Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. Metrics and targets The metrics and targets used to assess and manage relevant climate-related risks Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks. and opportunities Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. * The information provided is structured according to the TCFD's key disclosure themes, providing a holistic overview of Eskom's approach to climate change. We recognise the critical importance of our role in At Exco level, management plays a critical role in governing, managed at the highest level of our organisation, through MANAGEMENT’S ROLE IN ASSESSING AND implementing the United Nations' SDGs. Our focus on the supporting, and regularly engaging in discussions surrounding the the Exco. The Exco is responsible for using the appropriate MANAGING CLIMATE-RELATED RISKS AND long-term sustainability of the company addresses the climate management of the JET initiatives and climate change-related management and governance tools and systems to ensure that OPPORTUNITIES change risks, opportunities, and constraints facing the business, matters. The progress and implementation of these initiatives are this target is on track to be achieved. We have established specific management positions and and our commitment to the UNGC further strengthens our regularly assessed through the monthly JET Steering Committee, committees to assess and manage climate-related risks and dedication to sustainable and socially responsible practices. Exco, and Board meetings, ensuring that the company remains IThe JET office is accountable for driving development opportunities. The GCE and Exco members play a key role Through these efforts, we aim to enhance transparency and on track towards its climate goals. and implementation of the JET strategy. The JET Steering in approving, implementing, and executing risk and resilience provide our stakeholders with com- prehensive information Committee provides strategic guidance and advice to the JET management across the business. To ensure effective regarding our governance practices, strategic approach, risk The Board and its committees, in particular Board SES, are office activities and JET strategy implementation. All decisions management of climate-related issues, several sub-committees management strategies, and the metrics and targets we employ responsible for considering the impact of climate-related are approved by the Exco. have been established, including the Risk Sub-committee, in addressing climate-related challenges and opportunities. issues when evaluating and guiding the organisation's which provides feedback to Exco and the Risk and Resilience overall strategy, key initiatives, risk management policies, Additional Governance structures to manage climate change Governance Committee. ALIGNMENT TO THE TASK FORCE ON annual budgets, business plans, and major investments, risks include: CLIMATE-RELATED FINANCIAL DISCLOSURES and acquisitions. This includes ensuring that performance • Sustainable Development Advisory Committee, The CCSD department, overseen by a senior manager, objectives are aligned with the organisation's goal of is responsible for not only identifying and communicating (TCFD) • Environmental Steering Committee and the achieving net-zero emissions by 2050 and monitoring climate-related issues but also reviewing and reporting on Aligning with the TCFD framework, we recognise the • Research Steering Committees the implementation and progress towards meeting these climate change risks, opportunities, and treatment plans. This importance of integrating climate change disclosures into our objectives, including those related to reducing emissions. main-stream filings. The TCFD emphasises four key thematic There are also Divisional Governance structures to identify, department provides guidance and ensures that Eskom adheres areas: governance, strategy, risk management, and metrics assess and manage climate change risks particularly around to best practices for climate change compliance and sustainable Building upon the governance structures and committees in development. They are also responsible for developing and and targets, with up to three recommended disclosures climate change adaptation. place, we are committed to achieving our ambitious target facilitating the execution of Eskom’s climate change strategies per theme. In this section, we will outline our progress and of net-zero carbon emissions by 2050, while also creating alignment with the TCFD recommendations, focusing on and policies, including the Climate Change Policy and the sustainable job opportunities. This long-term goal is integrated Eskom Integrated Risk and Resilience Management Procedure disclosures within the Energy sector. into our overarching business strategy and is monitored and for Climate Change Adaptation. 38 39 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices The Board and its sub-committees play a crucial role and overall performance. Through climate-related scenario To balance immediate and long-term risks and opportunities, we consider these relevant time horizons when making strategic in monitoring and managing climate-related risks and analyses, we assess the impact of climate change on our decisions that benefit the organisation, our stakeholders, and the environment over the long term. opportunities. These issues are regularly discussed at Board financial position, including revenues, costs, assets, and sub-committee meetings and Exco meetings. An organised liabilities. This information helps us identify strategic impacts We recognise that climate change is not just an environmental issue but a business issue with far-reaching effects on the electricity grid. agenda is followed at each meeting, with updates made to and necessary management actions, as well as informing our Our operations, from generation, transmission, and distribution to end-user demand, are at risk of incurring significant financial losses reflect the progression of climate-related discussions. The long-term strategy and financial planning. due to climate-related risks. The impacts of these risks are location and sector dependent. highest levels of management actively track and monitor priority climate-related risks to ensure they are being Two scenarios that we have considered include the ‘soft We are exposed to a range of physical climate risks, which include extreme weather events, an example of which is shown below. effectively addressed. decarbonisation’ scenario, which is based on South Africa's domestic policy considerations such as South Africa’s Physical risk Risk description Risk types considered Financial impact In this financial year there were various training initiatives like Nationally Determined Contribution under the Paris Inability to safeguard Inability of the respective Physical risks-acute Increased direct costs: workshops focusing on environmental attributes ownership, Agreement and the DMRE's 2019 IRP. The ‘ambitious Eskom assets and divisions to implement divisional Risk drivers Associated costs to manage and grid emissions factors, carbon tax, TCFD and the broader decarbonisation’ scenario requires more ambitious action operations against adaptation plans to ensure Increased severity and frequency monitor the adverse impacts of implications of climate change to our business as we strive to beyond what has been specified in 2019 IRP and is envisaged extreme weather resilience of assets and of extreme weather, cyclones, climate change. entrench an understanding of climate change and a pro climate to 2050. These scenarios were considered with a view events. operations to extreme weather and floods. Damage to infrastructure and culture within the business. Additionally, we have prioritised to better understanding how climate-related risks and events. supply interruptions resulting in an compliance with the requirements set forth by the TCFD opportunities may impact our business over time and to test Priority II risk rating increased cost. companies. These training programs reflect our commitment the resilience of our strategy to different futures. to staying informed about emerging environmental issues and aligning our practices with industry standards. By equipping our In 2021, our Energy Planning and Market Development To mitigate the physical risks associated with climate change, we have developed a strategic approach; The Integrated Risk and teams with the necessary knowledge and skills, we are better Department developed an energy pathway up to 2050 within Resilience Management Procedure for Adaptation to Climate Change Planning, which guides the development of adaptation plans positioned to address climate-related challenges and contribute a set of technical constraints. This pathway outlines the optimal for our divisions (Distribution, Transmission, and Generation) and subsidiary (ERI) to ensure resilience and adaptation to projected to a sustainable energy future. coal shutdown plan to reduce GHG emissions and local air changes in climate. These adaptation plans are closely monitored and integrated into the daily operations of each division and pollutants. We presented the Eskom 2035 plan and preferred subsidiary to ensure that they remain effective. We recognise the potential short-, medium-, and long-term pathway to the board for consideration. impacts of climate-related risks on our business, strategy, We recognise numerous climate opportunities and have integrated those into our business strategy. It is critical that we manage and financial planning. In response, we have developed a To benchmark our pathways and scenarios, we refer to the four these opportunities to address long-term sustainability risks. comprehensive 2035 strategy that guides us through the World Energy Outlook 2021 modelled scenarios developed changing energy landscape and ensures our position as a by the International Energy Agency. At Eskom, we remain We recognise the importance of understanding the potential implications of climate change on our business operations. To assist us in this sustainable power utility. committed to using scenario analyses to inform our decision- task, we utilise climate-related scenario analyses, which help us identify strategic impacts and required management actions. This information making and ensure we are prepared to navigate the challenges is also valuable in identifying long-term indicators for our strategy and financial planning. To seize the opportunities that come with transitioning to a and opportunities presented by climate change. low-carbon economy, Eskom is actively pursuing the connection Scenario Detail between electrification and decarbonisation. We have identified Our sustainability dimensions serve as a driving force to ensure various short- and medium-term climate-related opportunities that we achieve our mandate and key role in accordance with Announced Pledges Scenario Defines a set of starting conditions, such as policies and targets (including NDCs) and then that we can tap into. These opportunities and their potential national requirements. sees where they lead, based on energy system modelling, including market dynamics and financial impact on our business are further detailed in the table technological progress below. Our aim is to thoroughly assess the financial impact that Our management of risks and opportunities related to climate Stated Policies Scenario This scenario reflects current policies. The goal of this scenario is to assess what the world these opportunities may have on our organisation. change considers the relevant timeframes, considering the may look like in the future based on policies that have been announced useful life of the organisation's assets and infrastructure, as well We are actively quantifying the financial implications of climate- as the fact that climate-related issues often manifest themselves Sustainable Development Scenario This scenario maps out a pathway consistent with the “well below 2ºC” goal of the Paris related risks and opportunities on our long-term sustainability over the medium and longer terms. Our approach is aligned Agreement and aims to meet stricter SDGs related to universal energy access (SDG 7), and performance while expanding our understanding of with Eskom's corporate strategy and focuses on short, medium, cleaner air (SDG 3 and 9) and effective climate change action (SDG 13) how these factors will affect our financial planning processes and long-term horizons. Net Zero Emissions by 2050 Extension of the Sustainable Development Scenario, to target net zero emissions. Responds Scenario to increasing numbers of countries and companies that have committed to reaching net zero emissions, with the aim of limiting the rise in global temperatures to 1.5ºC by 2050 (with a 50% probability) This horizon focuses on current situation and immediate future scenarios. Immediate Short-term 1–3 years actions and decisions that need to be taken to address the most pressing risks and opportunities in the short-term are prioritised during this time frame. Periodic scenario analyses are important to assess resilience to climate-related risks and opportunities. Such assessments can provide new perspectives on potential financial im- plications. We will consider scenarios consistent with increased physical climate-related risks, including: The medium-term includes the scenarios that may materialise by 2030, which includes • How strategies may be affected by climate-related risks and opportunities the assessment of the JET. During this period, Eskom focuses on medium-term • How strategies might change to address potential risks and opportunities Medium-term 3–7 years investments and strategic initiatives that will shape its future and address the risks and • Potential impacts on financial performance and position, such as revenues, costs, and risks related to assets and liabilities. opportunities that are likely to emerge in the next decade. The long-term horizon refers to the long-term goals of the JET strategy Long-term 7–30 years (2030–2050) and the lifetime of Eskom's assets. 40 41 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices OUR CARBON FOOTPRINT This provides insights into the sources and magnitude of our The total GHG emissions for 2022 were 198 879 448 tCO2e, The carbon footprint study for 2022 covered purchased Aligned with the goals of the Paris Agreement, we have GHG emissions and allows us to improve the management of which is favourable compared to 2019 (base year). This electricity from third party Independent Power Producers intensified our efforts to mitigate and adapt to climate our GHG emissions. indicates a decrease in Eskom’s overall carbon footprint lower (IPP). Purchased electricity is accounted for as a Scope 3 change, utilising metrics and targets as indicators of progress. production and the shutting down of one of our power stations emissions, because as an organisation we do not consume Performance is measured through various metrics, including The 2022 Carbon footprint was calculated in line with the due to it reaching end of life. The majority of these emissions it. However, the purchased electricity being transmitted and GHG emissions data, legislative compliance, and Eskom Factors globally recognised GHG Protocol: A Corporate Accounting were caused by the burning of fossil fuels at our power stations distributed along our infrastructure, incurs some losses before 1 and 2, which track energy sold and generated respectively. and Reporting Standard. Since the calculation of our carbon for the generation of electricity. Coal, diesel and kerosene reaching the end user. These losses are therefore reported as Water consumption and ash utilisation are also important footprint covers a different scope and may utilise different consumption contributed 97% of our GHG emissions. Scope 2 emissions. metrics reflecting waste management efforts. assumptions to the regulated reporting requirements, the results are not directly comparable. In 2022 we incorporated delivery to site by rail, is the second Previously the carbon footprint was reported for our CARBON FOOTPRINT 2022 highest source of emissions and purchased electricity, is the third organisation as a whole, in 2022 we have sub-divided the A carbon footprint estimates the total greenhouse gas (GHG) The results of the carbon footprint study for the 2022 calendar highest source of emissions. We have noted a significant increase reporting into the specific divisional sources, to assist with emissions in scope 1, 2 and 3 caused by an organisation, year, compared to the 2021 results, are presented in the table in emissions from waste disposal and non-combustion product better management of emissions and enable divisions to expressed in tons of carbon dioxide equivalent (tCO2e). below: use, due to improvement in reporting and data collation. monitor their divisional footprint going forward. Divisional carbon footprint for 2022: 2022 2021 Scope 1 Scope 1 2022 Emissions (tCO2e) Generation Transmission Distribution Corporate Services emissions emissions Emission source (tCO2e) (tCO2e) Scope 1 Stationary Combustion 193 157 057 0 47 282 Stationary combustion 193 157 386 207 230 321 Eskom Fleet 8 771 5 138 57 714 0 Eskom fleet 71 623 78 138 Fugitive Emissions 0 52 064 13 648 0 Fugitive emissions 65 712 52 841 Waste Disposal 81 972 0 0 0 Waste disposal 81 972 3 366 Non-combustion product use 9 689 0 0 0 Non-combustion product use 9 689 3 Scope 2 Total 193 386 382 207 364 669 Purchased Electricity (Transmission and * Wastewater data is only for three power stations Distribution grid losses) 0 17 034 68 137 0 Scope 3 Purchased Electricity – Avon and Dedisa 494 263 0 0 0 2022 2021 Scope 2 Scope 2 Delivery to Site – Road 264 993 0 0 0 emissions emissions Delivery to Site – Rail 4 635 759 0 0 0 Emission source (tCO2e) (tCO2e) Waste Generation 35 0 0 0 Business Travel – Air 1 237 976 785 622 Purchased electricity (Transmission and Distribution grid losses) 85 171 – Business Travel – Land (employee vehicle) 1 304 1 881 5 166 247 Total 85 171 – Business Travel – Land (vehicle rental) 95 137 377 18 Total 198 655 175 77 230 145 874 1 169 2022 2021 * Stationary combustion for Distribution and Corporate divisions accounts for standby generators, in future Transmission will be included. Emissions Emissions Scope 3 categories Emission source (tCO2e) (tCO2e) We recognise the significant impact of climate change on the In line with this, the Just Energy Transition Partnership (JETP) Purchased electricity Purchases – Avon and Dedisa 494 263 – energy sector and are committed to driving decarbonisation has been formulated as an investment plan to guide the Delivery to site Road 264 993 252 743 and facilitating transformation. As a key player, we align our allocation of funds provided by partner countries such as the Rail 4 635 759 – aspirations with international and national frameworks such as United Kingdom, the United States, Germany, and France. Waste generation Waste disposal and treatment by third party 35 – the Paris Agreement and the SDGs, while fulfilling its mandate These funds are intended to facilitate South Africa's transition Business travel Air 3 621 937 as a state-owned entity. Efforts are underway to improve GHG away from coal and towards cleaner energy sources. Land – employee vehicle 8 598 6 003 data integrity, identify feasible mitigation measures, and enhance Land – vehicle rental 627 1 216 disclosure of the financial impact of climate-related risks. For Eskom, a key aspect of the JETP is the allocation of 70% of the funds to commissioning RE projects, upgrading Total 5 407 896 260 899 OUTCOMES OF COP27 the country's transmission grid, and improving municipal The outcomes of the 2022 United Nations Climate Change distribution systems. This allocation is crucial as it supports the Conference (COP27) have significant implications for South planned decommissioning of 15 coal-fired power stations by Africa, particularly in terms of transitioning away from coal- 2034. By prioritising RE and investing in infrastructure upgrades, dependent electricity generation. One notable decision from Eskom can facilitate a smoother and more sustainable energy COP27 is the establishment of a fund aimed at supporting transition. developing countries in addressing Loss and Damage caused by climate change. This provides an opportunity for South Africa to access funding for its own mitigation and adaptation efforts. 42 43 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Eskom Just Energy Transition The JET Framework guides the development of a renewables-dominant power system towards 2050. Our objective is to gradually, but decisively, increase the scale of RE generation to support five key objectives, the 5 Es of the JET. Economy Contribute to the Equity reindustrialisation of South Employment Catalyse re-skilling of staff Africa by providing sufficient Create new high-quality jobs and communities to ensure an clean generation and catalysing through repowering and repurposing equitable transition through new RE-based industries initiatives with focus on Mpumalanga training centres and repurposing projects tailored to each community 3 4 2 Energy Environment Ensure equitable access to Reduce GHG emissions clean, sustainable energy and water consumption, by unlocking new energy contributing to South sources and strengthening Africa's sustainability the national grid goals 1 5 ESKOM'S 5 ES OF JET EQUITY The transition must not unduly burden vulnerable South ENERGY Africans, such as the workers and communities currently reliant The JET strategy contributes to greater energy security and on coal for their livelihoods, and the benefits of the transition reliability, while ensuring equitable access to more sustainable must be felt equitably by all South Africans. Accordingly, Eskom energy by making significant new investments to expand will accelerate R&R projects at decommissioning power plants, renewable generation and strengthen the national grid. such as the training centres and other repurposing projects at Komati and Grootvlei power stations already underway. These ECONOMY projects will provide re- and upskilling of staff and communities The development of a renewables-dominant power system alike, ensuring an equitable transition. will contribute to industrial development in South Africa, not only by providing sufficient, clean generation, but by catalysing ENVIRONMENT new RE-based industries, such as the manufacture, installation, The proposed JET strategy will also contribute to South maintenance and operation of renewable power plants and Africa’s, and Eskom’s, sustainability and environmental goals. power storage facilities. Increasing RE generation will reduce carbon dioxide emissions, but also reduce other harmful pollutants, such as sulphur and Our Just Energy Transition EMPLOYMENT nitrogen oxides. Additionally, Eskom’s water consumption The JET strategy will create new, high-quality jobs in the can be substantially reduced, unlocking water to be used in energy value chain through the construction and operation productive economic sectors such as agriculture. of new RE generation sites and in the broader industrial value chain enabled be RE investments. Eskom is also committed A key factor in achieving these outcomes is our limited financial to just repurposing and repowering initiatives to give its capacity, and it is acknowledged that the overall national power stations a second life and create jobs and economic power pathway and ambitions for the power sector will not be development with a focus on Mpumalanga. implemented entirely by Eskom, but in partnership with other actors in the public and private sector. We acknowledge the value of a reindustrialised and reinvigorated South African economy, catalysed by JET, and aspire to play a leading role in this transition well into the future. 44 45 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Making this transition is not without its challenges. The shift coal value chain are given new life through the transition. The Our JET is driven and managed by the JET office within PROGRESS AT KOMATI to renewable technology will require extensive upgrade and associated reductions in carbon emissions will contribute Generation Division. This office has made some strides since • Repowering projects underway are at various stages of modernisation of South Africa’s transmission and distribution towards South Africa’s sustainability goals, which are aligned its inception, numerous projects have been undertaken to implementation, these are mainly Photovoltaic (PV) and grid. It will also be essential that the transition is just, in that to other emerging economies, such as India and Indonesia. realise JET aspirations of a lower carbon future. These projects Battery Energy Storage System (BESS) focused. the costs and benefits of the transition accrue to South were presented at COP27. This international platform gave us • Several repurposing projects are currently underway, the Africans equitably, and that communities linked to existing an opportunity to engage and partner with various potential construction of the PV component of an agrivoltaics plant is funders and form much needed partnerships. Since COP, we complete. have continued our work to ensure that the energy transition, • Commissioning of the aquaponics system is planned for is implemented in a just manner. One of the levers utilised is completion by the end of 2023. the Socio-Economic Impact Assessment (SEIA) studies, which have been successfully completed for various power stations • As mentioned, the business case for large scale rollout of AMBITION: Deliver on the 5Es required for a Just Energy Transition – Energy, Economy, Employment, microgrids is in progress, five Containerised Micro Grids Equity and Environment marked for shutdown in the future. From these studies, the relevance and applicability of these SEIA studies can be (CMG) have been manufactured at Komati. seen in the Komati Wind Energy Facility (WEF) which is one • The Eskom Academy of Learning (EAL) commenced example that has resulted in work having commenced for the community soft skills training in August 2023. repurposing the Komati power station. JUST ENERGY TRANSITION Attract green COMMUNITY DEVELOPMENT AND ECONOMIC Do better for people, creating jobs and Secure sufficient clean, sustainable finance, develop new partnerships Energy transition relies heavily on stakeholder engagement. DIVERSIFICATION: reindustrialising energy Numerous key stakeholders, including Government, have been Eskom’s repurposing and repowering initiative at Komati does engaged via various platforms and at various forums to enable not only focus on the employees and contractors. Communities • Ensure equitable access to collaboration and just transition. established during the running of the power stations should • Create new high-quality • Move gradually, jobs and contribute to new energy by unlocking new but decisively, to a not be left behind during the transition and are key to the The energy transition of the national power sector from being success of the Komati project. Economic diversification is key industrial development sources of energy sustainable generation heavily heavy coal reliant to a renewables-dominant pathway • Balance supply and fleet for the future to economic growth, which will benefit the local community, • Drive coal power will create jobs and stimulate economic growth. To ensure that demand with technology • Execute JET initiatives beginning with facilitating community engagement and other stations 2nd life through communities currently reliant on coal power plants benefit initiatives. socio-economic impact agnostic, least cost, low independently of station from this transition specifically, we have further identified R&R projets carbon energy portfolio shutdown dates projects to create economic opportunities in the affected • Reduce water usage and • Address energy security • Communicate progress communities. These projects will be a key component of JET GHG emissions and quality of supply on JET initiatives publicly as we seek to repower and repurpose existing coal plants to through additional energy preserve jobs and utilise existing grid capacity across South measures where required Africa. These projects will prioritise Mpumalanga’s oldest coal plants. Coal plants will be repowered by leveraging the existing infrastructure to build new generation capacity including solar, wind, batteries and/or synchronous condensers. The ENABLERS: plants may also be repurposed into centres of new economic Enabling a Just Energy Transition activity such as training centres, water treatment facilities, manufacturing plants, microgrid assemblies and modern farms. • Obtain and mobilise affordable • Leverage collaboration to • Expand and strengthen Transmission and Distribution capacity will be unblocked by finance to enable investments in JET accelerate execution, catalyse growth the national grid to investing in substations and transformers in provinces where projects and secure offtake agreements support a clean energy solar resources are high when benchmarked against global based power system standards. Therefore, a Just transition can be guaranteed for local communities through these repurposing and repowering activities which will help to retain economic activity, create Komati power station jobs, and create new economic opportunities. We have commenced the implementation of the R&R project REPURPOSING AND REPOWERING AT OTHER in emerging markets at the Komati Power Station. The Komati SITES R&R projects are expected to have a significant impact by 2030 In the short term, we have substantial capital constraints in including the following: financing JET. We also currently have energy constraints which • ~660 direct, sustainable jobs and ~8 700 additional necessitate a revision of the rate at which we can shutdown/ temporary jobs created repurpose the identified power stations. The National Treasury • ~300MW of renewable generation capacity, replacing debt relief conditions include an independent assessment remaining ~100MW of operational capacity at Komati when of the stations, which will influence how we proceed with decomissioned the R&R approach. Funding for new generation projects has • ~200 people are expected to be trained in different effectively been disallowed between 2023 and 2026 apart from vocations annually. the Komati R&R projects. We will continue to explore R&R projects in Mpumalanga specifically at Hendrina, Camden and $497 million dollars has been secured in funding from the Grootvlei. These projects will be site specific and may include World Bank for this project. options for partnerships. We are also progressing with the land Agrivoltaic and Aquaponics demo plants Aquaponics demo plant lease initiative. Opportunities to repurpose decommissioned units at Komati where possible (e.g., through recycling and beneficiation of copper, steel, cement) are being explored. 46 47 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices For Grootvlei, Hendrina and Camden, we are continuing with DISTRIBUTED PV AND BESS APPROACH TO THE SEIA new jobs in the community. The next pillar is to develop the planning and focusing on mitigating the socioeconomic Phase 1: Eskom’s flagship BESS project is well underway The general approach to the study and identifying R&R through reskilling, upskilling, and developing new skills among impact of the shutdown. with construction at Pongola and Elandskop having started mitigation actions was as follows: (i) a baseline assessment power station employees and the local community workforce. in October 2022. Additionally, Eskom and Hyosung Heavy (this is the worst case scenario (i.e. shutdown with no The third pillar strengthens the communities by addressing the PROGRESS MADE ON OTHER JET ACTIVITIES Industries marked the beginning of the first storage facility mitigation) to determine socioeconomic conditions and the existing gaps and challenges in the community. The fourth pillar MICROGRIDS (8MW, ~32MWh) under the BESS project. impact of shutdown in the absence of mitigation measures); communicates plans and engages with stakeholders throughout Over and above the 5 Microgrids built at Komati site, Eskom • The forecasted completion dates for Pongola, Elandskop and (ii) repowering options were considered to build as much the project life cycle. The final pillar facilitates the Growth of has built and commissioned and additional 15 CMG. A roll-out Hex are between August and October 2023 respectively. capacity on Eskom owned land in the vicinity of the power SMMEs and the economy through the localisation of supply plan for 100 CMGs in the 2023/24 financial year is underway • Skaapvlei, Graafwater and Paleisheuwel The forecasted station and assessed using an option assessment framework chains and other business opportunities. and we are in the process of compiling a business case for completion date for Skaapvlei is 31 March 2024. Graafwater (iii) repurposing (assessed based on their ability to maximise Eskom’s subsequent large scale roll out of CMGs. value chain opportunities; and their feasibility for co-location There are multiple stakeholders with varying levels of and Paleisheuwel completion date cannot be confirmed. with the repowering options that were identified); and (iv) interests and influence that are associated with the power • The forecasted completion date for both Melkhout and stations ranging from international bodies, DFI’s, to national MPUMALANGA LAND alternative projects (options for other interventions that Rietfontein is August 2024. government, Mpumalanga province, district and local We have made land available in Mpumalanga, on a lease basis, can help to mitigate the loss of economic activity from the for project developers to build additional capacity. Phase 1 saw power station R&R were identified). The repowering options municipalities, NGOs, advocacy groups, private sector, civic Phase 2 of the BESS project includes the installation of a five leases signed on eighteen (18) parcels of land, aggregating were assessed against five categories of criteria through organisations, CBO’s community members. Our analysis further 144MW of storage capacity, equivalent to 616MWh approximately 6000 hectares with a combined capacity of a multi-criteria decision-making process. The five criteria points to competing demands, interests, and needs among at four Eskom Distribution sites and one Transmission site. 2 153MW. Phases 2 and 3 are on hold pending the outcome were: (i) align with Eskom JET objectives; (ii) operationally various stakeholders, some with entrenched vested interests. The solar PV capacity in this phase will be 58MW. The BESS of phase 1. feasible and sustainable; (iii) financially feasible and sustainable; Extensive stakeholder engagement and periodic consultations project will use large-scale utility batteries with the capacity of (iv) regulatory barriers; and (v) a feasible market strategy. The with different stakeholders has been undertaken as part of 1 440MWh/d and a 60MW of PV capacity. While the current study identified repowering options, repurposing options, and the studies. This was aimed at promoting local community conditions associated with the Eskom Debt Relief do not alternative projects, as well as enabling initiatives. involvement, and empowerment using a collective and allow for Eskom to initiate construction on this phase, project participative approaches to solving the problem. The principles cultivation effort will continue to ensure that once allowed, A comprehensive mitigation strategy aimed at enhancing of the just transition process also make it clear that social ground can be broken soon thereafter. opportunities for affected workers and communities has been dialogue is an important pre-condition for appropriately developed, this comprises five pillars, all coalescing to drive supporting workers and communities to manage the transition SOCIO-ECONOMIC IMPACT STUDIES FOR THE in a way that does not exacerbate existing socio-economic repurposing and repowering initiatives. As indicated in the SHUTDOWN AND REPURPOSING OF ESKOM graph below, the foundational pillar is to stabilise the local fragilities. Media advertising including radio and newspaper POWER STATIONS economy by setting up new economic activities and creating advertisements and interviews on air. To support a JET, we are undertaking various repowering, repurposing, and impact assessment studies to determine the impacts of shutting down coal-fired power stations that have been identified in Eskom’s Road Map to 2035. Stabilise We have completed socio-economic impact studies to understand the impact and opportunities associated with station shutdown and have begun development of new Stabilise the local economy by setting up new economic activities and creating new jobs in the community through renewables in the form of solar PV, Wind and battery energy Focus storage to be built at power stations while they remain • Repurposing and repowering (R&R) projects focus operational and without impacting the operations of those stations. We plan to go to market soon for a 75MW PV plant • Economic opportunities in the community at Lethabo and for the 100MW PV plant at Komati. The aim is to proactively to assess the prevailing socio-economic Enable, support and realise conditions within the immediate and greater Mpumalanga area, and identify impacts, risks, and opportunities to mitigate the economic and societal impacts of the station shutdown and Develop Strengthen Communicate Grow create a basis for continued, sustainable livelihoods for the Microgrid at Komati power station affected communities through a JET. Reskill, upskill and develop Strengthen the Communicate plans and Facilitate growth of SMMEs new skills among power communities by engage with stakeholders and economy through station employees and local addressing the existing throughout project localisation of supply community workforce gaps and challenges in the life cycle chains and other business Focus community opportunities created by • PS's permanent Focus R&R employees • Basic services • ERI employees infrastructure • Contractors • Health and education • PSA workforce • Communication • Sports and leisure facilities 48 49 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices KOMATI POWER STATION SOCIAL RISKS FROM THE SHUT DOWN AND Social risk for a business includes actions that affect the communities around the power station. Social risk is found within a The Komati Power Station SEIA study was completed and the REPURPOSING OF POWER STATIONS population’s underlying tensions and its struggle to acquire basic needs. report can be accessed online We have identified the social and economic risks associated with the shutdown of the power plants including mitigation KOMATI REPOWERING AND REPURPOSING measures. Risks associated with the shutdown of power plants Social identities of communities Community development and With the shutdown of Komati Power Station’s last coal-fired fall into three major categories- social, economic, and built and vulnerabilities stakeholder engagement unit in October 2022, the station is serving as a pilot for and environment risks. The World Bank defines risks as the the R&R of a power station on Eskom land using existing possibility that something of environmental or social value will be infrastructure. The pilot includes the installation of agrivoltaic lost or damaged as a result of a Project action.” (World Bank) Interventions for improving the plant, to demonstrate the simultaneous use of land for power Decline in community health health of community generation and agriculture, a microgrid assembly plant, as well Social and economic risks are due to the adverse impacts as a RE training facility. In total, 370MW of RE – including wind of the shut down and repurposing on: (i) employment and and solar – and battery storage is planned to be deployed. livelihood systems; (ii) displacement and out-migration of Social ills increase – crime, Human capital development, Commissioning of the plant is expected in the second quarter workers and communities; (iii) impact on social identities of alcohol and drug abuse employment of the coming year. coal-dependent communities and heightened vulnerabilities of excluded groups, including women, historically disadvantaged The R&R of Komati will be funded through a concessional groups, migrant workers, and youth; (iv) exclusion of Economic project stakeholder loan facility from the World Bank. World Bank granted Eskom communities and disadvantaged groups from decision-making, Social unrest engagement a R9 billion loan in 2022 to repurpose the Komati Power including those that are directly impacted from the closure Station. The Komati Training Facility is being established in of the power station; (v) decrease in land value, business partnership with the SARATEC to facilitate the skilling of growth/opportunities, and increase in informal settlements; Local economic development Eskom workers and the local community in the Komati area. and (vi) risks associated with temporary labour influx, labour Family ties are broken strengthen the community It is also envisaged to provide upstream skilling of workers at and working conditions during the R&R. Settlements around other power stations. The establishment of community-based the power station may experience a decrease in land value, agricultural small, medium, and micro enterprises is under businesses may become less viable and informal settlements Household confidence and Opportunities, communication way, with up to 100 community members being screened to may increase. This is particularly likely if no alternate economic future prospects engagement participate in the pilot. The community will undergo training activities and jobs are created in the local area. on enterprise development, ethics, basic finance, and small business operations. Economic and community Decline in standard of living development Komati village – Mpumalanga Community behind Komati power station 50 51 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Economic risk refers to the possibility that changes in macroeconomic conditions will negatively impact a company or investment. For Built and environment risk refers to actions that affect the surrounding environments whether manmade or natural. instance, political instability or exchange rate fluctuations can impact losses or gains. Its surrounding properties could Decrease in property and land be reused for other industrial value Impact on National Gross Economic and community activities Domestic (GDP) development Economic growth formal and Economic development and Invest in the local economies Informal settlements increase informal growth of PSA slows down Growing an economic base Decrease business growth/ opportunities Alternative uses of water to be Water availability explored Employment and business Household wealth (and opportunities expenditure) is decreased Hiring of locals Reduced CO2, SO x, NO x Air quality is improved Temporary labour influx and particulates emissions Reduced climate change impact Commercial projects aimed at Households/poverty escalates stabilising the economic base Displacement and outmigration of workers and communities Investing in the local economies Direct impacts on employment Maintaining a vibrant economy and livelihood systems – job losses including business opportunities We have identified mitigation measures to address these base, and identify training and development needs. Despite potential risks as part of the SED implementations plans. The experiencing initial delays due to low participation, the skills implementation of the various projects proposed to mitigate audit was concluded in October 2022, with participation from the impact of the power station shutdown is dependent over 50% of the workforce. The results of the skills audit will on the provision of support and partnerships with various aid the development of a fit-for-purpose skills strategy that stakeholders and entities, community buy-in, and social drives the development of current and future-fit career paths. dialogue, which stems from the nature of the JET. A broader integrated plan for the local area and region is required In September 2022, the EAL launched an accredited RE to support the shutdown of coal-fired power stations in training facility at Komati Power Station, in partnership with the Mpumalanga. SARATEC. The facility aims to develop skills and capabilities in the RE sector in South Africa and support the implementation SKILLS DEVELOPMENT TO SUPPORT A JUST of the JET strategy. The upskilling and reskilling of employees at TRANSITION ageing power stations, together with the training of beneficiaries Our workforce must be upskilled and reskilled in response from the surrounding communities, is critical for enabling a just to the changing nature of work, JET, and evolving energy transition in line with Eskom’s R&R plans. landscape. In July 2021, we commenced with a skills audit to determine skills requirements, assess our current skills 52 53 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Our climate change performance continued Our Social Performance Our social commitment is to our employees, our investors and customers and communities at large. Considering that our operational footprint spans the whole of South Africa and even extends to our neighbouring countries, it becomes imperative to ensure that not only are our contractors, employees operating under safe working conditions but that the communities we impact are not impacted negatively. We pride ourselves in being a good corporate citizen and demonstrate this by being a good employer, providing fair and competitive salaries, safe working conditions and ensuring we have policies and procedures in place that protect the employees’ rights and are underpinned by the country’s labour laws. Being a conscious service provider by ensuring that our customers and communities safety and health remains paramount in the way we conduct business. Our environmental, health, safety and sustainability policies not only protect our employees but the communities they live in as well. When necessary, as we monitor and measure our impact, especially where we negatively impact people, we review and realign our policies and procedures accordingly. We make a significant contribution to national transformation imperatives, although there are areas for improvement. In terms of aspects of SED, our positive contributions relate to employment creation, employment equity, training and skills development, investment in local communities, enterprise, and supplier development, and being a good employer. Our 2023 social spend highlights Items Amount Skills development R1.1 billion Salaries and benefits R32.3 billion Placed 1 424 procurement contracts R70.1 billion Total measured procurement spend R206.2 billion Local content contracted amounted R70.1 billion Corporate social investment (CSI) and SED R63 million impacting 438 094 people (2021/22: R75.1 million benefitting 785 085 people) Number of employees 39 601 Human resource benefits Employment • We help create jobs and lower unemployment – our group headcount (including fixed-term contractors) was 39 601 on 31 March 2023 (2022: 40 421). Salaries • Competitive salaries. • Guaranteed benefit package for managerial staff including medical aid, pension, dread disease cover, and group life and death benefits. • Basic salary for bargaining unit employees, 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. • Our employee value proposition (EVP) to enable retention of workers. Skills development • Support the growth and development of staff R1.1 billion in skills development (2022: R0.86 billion). Quality education • CSI initiatives on education through the Eskom Foundation, Generation, Transmission and Distribution operational divisions and Group Capital Division (GCD). Gender quality • Driving gender representation and inclusivity across the business at senior and middle management levels. Our Social Performance • The Eskom Women Advancement Program has advanced Women in Operations Programs and created Women Mentoring Circles. • We also promote employment of people with disabilities. Reduce inequalities • The Employee Relations Department facilitates dialogues between our leadership, employees, and organised labour to achieve good workplace relations. • We have agreements and formalised systems in place that govern our engagement with organised labour. • Our leaders play a crucial role in fostering meaningful participation through the Eskom Employee Engagement Programme. 54 55 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices EMPLOYMENT AND BENEFITS As a result of the COVID-19 pandemic, numerous training At the end of March 2023, 88.4% of Eskom employees were interventions, family counselling, couples counselling, and child We are one of the largest employers in the country. programs have switched to online platforms, which has black, 37% of the total were female, and 32% black females. counselling. Of the 3 473 participants (Individual cases) who We employed 39 601 people as at 31 March 2023, with a reduced costs. Employees are enrolling in more advanced study In total, 3% were employees with disabilities, which is above accessed the service, 3 066 cases were self-referrals, 264 were decrease of 820 from our March 2022 numbers. We have programs and earning credentials in their field of work, our the market average and national EAP target of 2%. Our assisted referrals and 143 were formal referrals. The overall reduced our staff over the past few years, primarily through workforce's skill base has grown increasing the potential for Employment Equity Plan 2023-2025 demonstrates Eskom’s engagement rate during the reporting period 1 April 2022 to natural attrition resulting in a gross staff turnover rate of leadership among staff members. commitment to comply with legislative requirements, including 31 March 2023 was 9.3%. around 6.7% for the past financial year and 7.9% in 2022. developing persons from designated groups and driving equitable Employee costs have declined by R0.7 billion, or 2%, when Eskom invested R1.1 billion in training and skills development representation across all occupational levels. Mental health and stress-related problems, which increased compared to the prior year largely due to a 2% decline in (2022: R0.9 billion). This represents an increase of 28%. There during the COVID-19 pandemic, are receiving attention headcount, although this was largely offset by the annual are 795 employees enrolled for further studies (2022: 843), of HEALTH AND WELLNESS through awareness and education programmes. increases implemented. which 55% are women and 2% are persons with disabilities. We place a high priority on the health and happiness of Over two-thirds pursuing a bachelor’s degree or higher our employees. Our robust health and wellness initiatives The EmpowerU initiative has also been implemented to Employee benefit costs amounted to R32.3 billion qualifications. We support a healthy and leaner pipeline of strive to equip employees to make sound, healthy choices support employees with the stresses and pressures related (2022: R33 billion). Employee benefit costs have remained technical disciplines. In total, 1 568 learners (2022: 1 238) through prevention, treatment, care, support, education, to the changes taking place in the organisation, especially as relatively stable over the last five years, at approximately learners were in our pipeline, comprising 1 345 in technical and collaboration. The early detection and prevention of the workforce gears up for the constrained winter months. R33 billion, despite the increase in Eskom’s operating costs. disciplines (of whom 41% are artisans) and 223 in non-technical occupational and lifestyle diseases and injuries is managed Our EmpowerU initiative focuses on three levers; leadership We have contained employee benefit costs by aligning disciplines (representing 4% of our headcount). through routine medical monitoring, fitness-for-duty support and coaching, enhanced EAPs and strengthening decisions around remuneration and benefits with the reality evaluations, and other wellness programmes. We run an workplace relations to resolve matters that had reached an of our financial challenges in compliance with the conditions EMPLOYMENT EQUITY employee assistance programme (EAP) of psychosocial services impasse earlier this year. Positive changes have been observed attached to the Government support. We have also achieved We made a significantly contribution in achieving employment including counselling, financial wellness, and trauma assistance. since the program's launch in April, especially regarding an overall reduction in headcount over the past few years. equity in South Africa throughout the years, both in terms workplace relations with unions. However, overtime costs remain a concern, increasing to of representation at all occupational levels and overall Our health and risk hazard surveillance programme was launched R2.5 billion during the year due to the exceptionally high levels employment. Through our employment equity plan, we in January 2023 to monitor the public health diseases outbreaks ORGANISATIONAL EFFECTIVENESS (OE) of unplanned maintenance arising from plant performance support the NDP's objective of improving society and and their impact in business operations. Since the program was We aim to drive OE and a sense of belonging and challenges (2022: R2.1 billion). promoting diversity, equity, and inclusion (DEI) in terms established, alert notifications for outbreaks of cholera, malaria, connectedness to Eskom by fostering a high-performance of race, gender, culture, and disability. We have specialised and diphtheria have been detected and managed through the ethical culture, engaging with employees, and offering a An increase of 7% was implemented for bargaining unit programs aimed at raising our DEI standing. The Eskom outbreak epidemic and pandemic plan. rich EVP. employees from 1 July 2022, based on the outcome of Women Advancement Programme is one of these initiatives, the negotiations from the 2022 Central Bargaining Forum. which promotes the participation of women in technical and Our response to the COVID-19 pandemic has been integrated ESKOM ORGANISATIONAL CULTURE AND Furthermore, a 7% increase was implemented for professional management positions. into normal business operations, following the relaxation of CHANGE MANAGEMENT and middle management employees from 1 October 2022, South Africa’s lockdown measures in June 2022. The Eskom 1:1:6:10 Culture Transformation Programme and subsequently for senior management at E-band level. Eskom is a signatory to the United Nations Women conveys that, we have one purpose, one aspirational culture, An additional 1.5% salary adjustment was awarded to bargaining Empowerment Principles in South Africa and continues to Between 1 April 2022 to 31 March 2023, a total of 4 248 six culture cornerstones and ten culture levers. Our culture unit employees by the Commission for Conciliation, Mediation have engagements with UN Women to address Women employees and dependents were reached through external cornerstones, being accountability, operational excellence, and Arbitration (CCMA), and backdated to 1 July 2021, Empowerment Principle (WEP) analysis outcomes. Racial equity EAP services. Of the 4 248 participants who utilised the people prioritisation, financial prudency, a values-driven culture, in respect of the outcome of the 2021 wage negotiations. (Eskom company level not Eskom group) at senior management service, 3 473 were individual cases, and 775 were participants and customer-centricity are supported by ten key levers of saw a slight decline from 76.6% to 76.3%, monitoring continues reached through group interventions, such as trauma organisational culture. TRAINING AND SKILLS DEVELOPMENT to ensure no further negative growth in line with the Eskom EE Skills development remains priority in our business. We have Plan and at middle management/professionally qualified levels been one of the industry leaders in skills development since the improved from 81.7% to 83.6% over 2022/23. Gender equity at dawn of democracy to fulfil the needs for the national future senior and middle management/professionally qualified levels saw pipeline. Our programs are targeted at increasing access to a slight drop sitting at 42.3% this year. Gender equity target for high-quality and pertinent education, training, and development middle management was achieved at 41.6%. opportunities through technical and non-technical bursaries, apprenticeships, learnerships, and workplace integration 11.6% learning (WIL), thereby enabling equitable economic participation for all South Africans and lowering disparities. We have availed and concluded memoranda of understanding with external funders to host youth across all demographics Employment on WIL in the artisans, technicians, and engineering disciplines, equity with a particular focus on the previously disadvantaged sectors of our society. We collaborated with the Energy and Water Sector Education and Training Authority (EWSETA) in the implementation of an instrumental, life changing artisan 88.4% program that has given many young people opportunities. We drive the development and growth of our staff through Black numerous skill-development programs that include internal Other races and external training interventions, additional education, and on-the-job training for our personnel. 56 57 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices ESKOM EMPLOYEE VALUE PROPOSITION (EVP) Our all-inclusive EVP focuses on retention strategies that go ACHIEVEMENTS beyond rewards and recognition, such as offering market-related In June 2022, the Eskom Exco were tasked to compensation packages and competitive benefits in terms of design and develop their Divisional Culture leave, health, and death, learning and development opportunities Commitments/KPIs to support business both domestically and internationally, a variety of career turnaround and culture transformation. These opportunities, and exposure to big-scale initiatives and cutting- Divisional Culture Dashboards have since been edge technology. tracked and reported on monthly basis by the Flexible work practices have been put in place to improve 1:1:6:10 Eskom culture Divisional Change Champions and the HR OE employee wellbeing and allow qualified workers to work Centre of Excellence (CoE). transformation programme remotely with intermittent on-site obligations, depending on Powering growth sustainably Over the past year, the majority of divisions have operational requirements and the type of work performed. EVP made significant progress in adopting the 1:1:6:10 offers services and psychosocial programs to support employees culture transformation through the Eskom change and their family as they prioritise their physical and emotional agent network, which includes over 170 divisional health and adjust to the new working environment. Employees change champions who are actively driving change can now access loyalty and reward programs to access financial management processes in each division. savings with affiliated businesses. 1:1:6:10 The 1:1:6:10 culture transformation has also been embedded into our learning and ESKOM EMPLOYEE ENGAGEMENT PROGRAMME Employee engagement is the heartbeat of our value development (Eskom Leadership Development 1 1 6 10 proposition, delivered through multiple platforms, including Programmes) programmes and strategic leadership site visits, executive interviews, and communiqués, initiatives, including Eskom’s 2035 strategy, together with employee events to promote recognition and turnaround plan and the JET. Purpose Aspirational/ Culture Culture enablers/levers celebrate success across the organisation. To ensure we thrive "to-be" culture cornerstones Strategic Communication and engagement on in the everchanging energy landscape, our leadership team is the 1.1.6.10 culture; through 268 GCE Internal also expected to continue actively engaging their workforce, Powering growth High-performance Accountability Empowerment Technology Communication, a total of 87 leadership establishing commitment, fostering performance, addressing sustainably culture Operational excellence Governance and ethics Change agility engagement sessions and 14 culture workshops non-conformance, and gaining employee buy-in. The Eskom People prioritisation Teamwork Celebration to drive greater awareness, accountability, and line divisions are also actively driving various customer- Financial prudency Engagement Wellness Leadership alignment across the organisation. focused programmes and initiatives to improve stakeholder Values-driven culture Strategy relationships and manage electricity supply and demand. Customer-centricity HR OE CoE has been supporting more than 20 Eskom-wide Strategic Projects with change Our robust Internal communication, leverages platforms such as management and communication activities, digital publications, allow staff members to stay informed about "When you're green, you're growing" – Ray Kroc We are developing an integrated system of company developments and interact with our leadership. The incentives and consequence management, linked opinions and perceptions of the workforce are important for to KPIs, to foster a high-performance ethical guiding our people management strategies as we implement culture. our turnaround plan. By strengthening employees' sense of Our 1.1.6.10 Eskom Culture Transformation Programme is a key Our Eskom Change Management Strategy focuses on three connection to the company and one another, these engagement enabler for delivering a high-performance ethical culture as we objectives, alignment, engagement, and buy-in and behaviour efforts all play a significant part in restoring morale by improving drive the turnaround plan and power growth sustainably. Key modification among key stakeholder groups, supported by five the sense of employees’ connection to the business and one initiatives and milestones are also being tracked as part of the distinct focus areas (change pillars) around which the relevant another. Eskom Turnaround Programme and are currently being used change management initiatives are built as we drive successful by line divisions as they build their optimal “future-fit” culture, completion of numerous strategic projects. The annual Eskom Human Capital OE Survey and other pulse improve productivity, and drive business efficiencies. Divisions surveys are designed to assess employee views on several are implementing their divisional culture dashboards, culture key dimensions. Our Human Capital OE Survey achieved a KPIs, and action plans to address the HC OE survey divisional 20.51% response rate, i.e., 8 009 Guardians participated across gaps. Divisional leadership teams are also expected to actively the Eskom business areas. The survey had an overall index of engage, establish commitment, drive performance, and obtain 3.57, this being made up of a score of 3.59 for Organisational buy-in from their employees as we thrive in an ever-changing Culture, 3.61 for Employee Engagement and 3.50 for EVP. energy landscape. There was an overall increase in the participation in this survey. 58 59 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices OCCUPATIONAL HEALTH AND SAFETY LOST-TIME INJURY RATE (LTIR) Our safety matters are managed by the OHS Department. Its The progressive LTIR is a proportional representation of the mandate is to promote compliance and continuous improvement occurrence of lost-time injuries over 12 months per 200 000 to entrench a culture of Zero Harm, as well as zero defects, to working hours and includes occupational diseases and fatalities people, assets, and the environment, thereby enabling Eskom’s (a lower score is more desirable). The table below reflects licence to operate and maintain its reputation. The future focus Eskom’s tolerance level with respect to LTIR. In accordance will be on re-evaluating and addressing gaps on the identified areas with Eskom’s value of Zero Harm, the true target is zero. in the operational plans to strengthen and sustain Eskom’s OHS strategic objectives. LTIR performance for the period ended 31 March 2023 KPI – Focus on safety Tolerance/target Actual March 2023 Actual March 2022 Lost-time injury rate, index (including occupational diseases) 0.30 0.26 0.24 Fatalities 0.0 4 6 The major causes of employee LTIs are incidents due to falls on conducted at the different business units and highlighted the same level, confirmed occupational diseases and motor vehicle compliance/non-compliance with the occupational exposure accidents. The major causes of contractor LTIs are incidents due limits. to being struck by moving objects, falls on the same level and caught between or under (crushed/amputation) incidents. Eskom OUR COMMUNITIES Several challenges prevent the electrification of rural parts of ESKOM DEVELOPMENT FOUNDATION IMPACT group recorded 23 confirmed employee occupational diseases for Eskom's social license to operate is reflected in the the country, including the high cost of extending the electricity The Eskom Development Foundation is a non-profit company the period: 18 due to noise-induced hearing loss, three chronic socioeconomic advancement of the communities in which network to remote areas, mostly due to difficult terrain and and is a wholly owned subsidiary of, and receives its mandate obstructive pulmonary disease, one work-exacerbated asthma, it operates. We believe in supporting the development of the low density of rural populations. from, Eskom. A CSI investment of R63 million was made and one severe allergic sinusitis. communities wherein we operate by improving the lives of by the Eskom Foundation, affecting 438 094 beneficiaries community members and ultimately leaving a positive footprint. Based on the success of our containerised microgrid pilot (2022: R75.1 million and 785 085 beneficiaries). The reduction We facilitated two workshops, comprising representatives from We have forged strategic partnerships with our contractors project in Ficksburg, Free State, which has been operating of beneficiaries was due to the planned and co-ordinated the business, to influence the draft Department of Employment delivering innovative CSI and SED initiatives to create positive since November 2018, we are planning the use of microgrids change in strategy from a focus on CSI to that of CSR. This and Labour (DoEL) regulations that were published for social change and to develop the local community, thus to provide electricity to rural and remote areas. A total of 216 was done to ensure that the development intent is re-directed comment, covering regulations on noise-induced hearing loss strengthening our relationship with our stakeholders. microgrid installations are targeted over the next five years. internally to the core business function, thereby de-risking the and physical agents. All inputs were consolidated and reviewed business. by the Legal Department, and feedback submitted to the DoEL ELECTRIFICATION CAPITAL EXPANSION PROGRAMME for their consideration. Since 1991, we have connected around 5.9 million previously One of our biggest contributions to SED is our capital We also provide essential services to some of the communities disadvantaged households and farm dweller houses in our expansion program, which includes the Medupi and Kusile new near our power stations, including electricity, potable water, To reduce the number of lives lost on the roads, the business licensed areas of supply through DMRE’s Integrated National build sites, and large Transmission projects. These projects and waste removal. These basic amenities support livelihoods was encouraged to focus on current and emerging vehicle Electrification Programme (INEP). This programme enables us support the NDP objectives through procurement – local in these neighbourhoods. and driver safety risks during the school holidays and Easter to provide a direct contribution to delivering universal access content and subcontracting, job creation, skills development, weekend. to electricity in South Africa. and CSI which has offered opportunities and enable community Unfortunately, inadequate technical oversight on infrastructure- development. related initiatives and insufficient resources continue to prevent Our electricity safety content is available on the E-classroom Over the years, Eskom has been a keystone of the country’s us from executing all our planned initiatives on time. The website which is supported by the Department of Basic Education economic and democratic transitions. We have been NEW BUILD Foundation remains committed to optimising the value, impact and where more than 300 000 teachers and parents are reached. instrumental in South Africa’s expansion of energy and and sustainability of its programmes given financial constraints. A small competition launched the content asking pupils the In 2022/23, we awarded 129 contracts worth R7.6 billion electrification to most of our citizens. This has contributed following question: Is it safe to touch damaged electricity cords? A Local content of R4.4 billion to around 86% of electricity coverage in South Africa, as we total of 4 058 competition entries were received, with Gauteng (2 remain on course to achieve universal access through new In 2021/22, we awarded 83 contracts worth R6.9 billion OUR 2022/23 COMMUNITY 277 entrants), Western Cape (807 entrants), and KwaZulu-Natal decentralised innovations such as microgrids for hard-to-reach (640 entrants) contributing the most entrants. communities. Local content of R3.9 billion DEVELOPMENT FLAGSHIP PROJECTS Eskom Foundation CSI programmes Our Occupational Health Approved Inspection Authority The growth in customer numbers has been steadily slowing in submitted its report to the DoEL, to provide the Department Demobilisation has a negative impact on the economy, the life, recent years. The number of residential customers increased and people in the area. Demobilised contractors are offered Contractor Mkhulu Electronic Distribution with a summary of all the occupational hygiene activities during the year due to Eskom’s electrification programme, Project restores hope in rural communities that were executed by the AIA during the past six-months life skills training to assist them with getting new opportunities. together with other new connections, although every other We mitigate the impact of job losses by collaborating with local (October 2022 to March 2023). Six-monthly reporting is a local customer category has experienced a decline year-on- Siemens Energy donates science kits to a local compulsory requirement to maintain the DoEL's approval and provincial government structures to address some of the year given the poor economic conditions being experienced. technical school – Lephalale for Occupational Hygiene. This information is used by the challenges faced by local communities surrounding our new Department to monitor compliance to the occupational build projects. Generation CSI and SED projects exposure limits, generate statistics and intervene where necessary. The report listed occupational hygiene surveys 60 61 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices MATHS AND SCIENCE PROGRAMME One of our key priorities to support the country’s developmental agendas, where Eskom aims to find long-term sustainable solutions to South Africa’s many challenges by supporting government’s focus on skills development, training and education in order to provide young people with the skills to help South Africa prosper. The Free-State Maths and Science high school competition is one of the Eskom’s Maths and Science programmes. It focuses on promoting the maths and science to the youths to close the scarce skills gap in South Africa. Eskom has initiated a similar program in partnership with Nkomazi Mathematics & Science centre. The programme is currently being implemented in Mpumalanga. Eskom has approved funding of R1.6 million that will impact 8 554 beneficiaries. ESKOM EXPO FOR YOUNG SCIENTISTS (EEYS) The Eskom Expo for Young Scientists (EEYS) is Eskom’s flagship sponsorship aligned to Eskom’s strategic objective of supporting Expo young scientist participants Gold medal winners the Government’s NDP 2030 with an emphasis of developing previously disadvantaged individuals (PDI) and female learners EEYS provides a unique platform and academic support to The EEYS currently operates in 35 regions in all nine provinces Moses Kotane Local Municipality in North-West. The material in the scarce skills of science, technology, engineering and school learners with an interest in STEMI from grade 6 to grade of South Africa and has an international presence. Expenditure and equipment include blankets, walking stick for the virtually mathematics (STEM). 12. Learners conduct scientific research and present their finding for 2022/23 financial year was R25.6 million. impaired, school chairs, teacher’s chairs, printer, fixing of toilets as a project in different internationally benchmarked categories. and fixing broken windows and doors at the community hall. SCIMATHUS SciMathUS is a university preparation program in the Education The benefitting schools are in the Northam and Thabazimbi Faculty, managed by SUNCEP, offering National Senior area being Groenvlei Secondary School, Krause Primary School, Certificate upgrades in Mathematics, Physical Science, and Northam Comprehensive Secondary School, and Ysterburg Accounting, and foundational skills for higher education access. Primary School. The SciMaths programme currently takes 100 students a year. Funding is sourced from various philanthropic donors on an Mkhulu EDP was appointed by Eskom to build the Masa- annual basis to support the programme. Eskom development Ngwedi 400kV section C&D line project running through the foundation donates R3 million per year that benefits two local municipalities in Limpopo and North West. This 157 previously disadvantaged learners including educators. project is part of the transmission capital expansion projects in line with Transmission’s Investment Strategy. ENERGY AND SUSTAINABILITY TRAINING Education is critical to sustainability, both in terms of raising Mkhulu EDP, Ms Cindy Masuku stated that “We believe in awareness of the magnitude of the problem and determining supporting the development of communities wherein we the best solutions. Eskom Development Foundation launched operate by improving the lives of community members an Energy and Sustainability Training program in 2022, targeting who are less fortunate and ultimately leaving a sustainable Grade 11 students in Geography and Life Sciences, focusing on footprint. As we strive to improve the living conditions of these marginalised communities. The program is being implemented communities, we also create a sense of customer satisfaction in five provinces, with 10 schools selected per province, with and loyalty to our client, Eskom.” 25–30 participants attending a one-day session. Mr Andries Ramasobana from Ysterberg Primary School thanked Eskom and Mkhulu EDP for remembering the CONTRACTOR MKHULU ELECTRONIC rural schools in their local municipality as this donation is DISTRIBUTION PROJECT RESTORES HOPE IN an investment on the learners bound to yield permanent RURAL COMMUNITIES and positive returns. Ms Nontuthuko Matumba of Eskom Mkhulu Electronic Distribution Project (EDP), a contractor of appreciated the fruitful partnership with Mkhulu stating that Eskom’s Power Delivery Projects (PDP), donated R0.4milliom “Strategic partnerships with our contractors are key in ensuring worth of material and equipment to four schools in the that the PDP accomplishes its mandate of building sustainable Thabazimbi Local Municipality in Limpopo as well as equipment projects. This initiative will make a great difference to the to assist the elderly and those living with disability to the community and the learners will have an opportunity for a better education.”Matumba also emphasised the importance of education in alleviating poverty in rural communities. Junior Environmental Category winner 62 63 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices CREATING A CIRCULAR ECONOMY – ASH BENEFICIATION Eskom power plants generated 33 million tons of ash during the 2022–2023 fiscal year, of which 70% was used for effluent treatment. In heartfelt gratitude Cllr Nketu Nkotswe, the Mayor of The remaining ash was made available for beneficiation. Our ash beneficiation activities involve the processing of bottom ash, fly ash, Mr Molekoa from Siemens, who hails from the Waterberg Moses Kotane Local Municipality, was thankful for the support, and clinker ash. The fly ash is mostly used for cement manufacture and cement blending, while the coarse ash is used for brick making. district in Limpopo, urged learners to take their schoolwork saying that “The blankets will keep the elderly warm in winter, A total of 3.2 million tons of ash including dump construction were recycled in the financial year (2022: 3.6 million tons). seriously so that they can be pioneers of the future as the whereas the wheelchairs will go a long way in capacitating the world of work today needs people who are creators of work physically challenged. Furthermore, the visually impaired will as opposed to job seekers. “Take this opportunity to come Majuba and walk confidently using their new walking sticks.” with science experiments to help find solutions for the future,” Ash sold Kendal said Molekoa. Mr Molekoa also pointed out that the donation CONTRACTOR SIEMENS ENERGY DONATES Ash dump Total ash is not about Siemens but about their belief of empowering SCIENCE KITS TO A LOCAL TECHNICAL SCHOOL Month Fly ash Coarse ash Clinker Cenospheres construction beneficiated and re-energising the society. “It is within our philosophy and – LEPHALALE DNA to do more than just business; this has been reinforced Apr 166 656.80 28 449.30 24 072.35 60.00 1 840.00 221 078.45 An Eskom contractor, Siemens Energy, donated portable over 160 years in South Africa. Personally, I have experienced modern science kits and related laboratory equipment May 208 132.85 33 307.44 31 903.84 8.00 5 689.68 279 041.81 what education can do to a person; hence I believe that a worth R711 000.00 to Mabalane Seleka Technical School in child without education is like a bird without feathers,” he Jun 212 421.54 30 683.97 30 715.85 30.75 3 246.00 277 098.11 the Ellisras Circuit, Lephalale on Tuesday, 26 July 2022. The expounded. Molekoa indicated that it is Siemens hope that this donated science portable kits are inclusive of thermodynamics, donation ignites the love of science within the learners. Jul 227 278.00 25 011.87 25 925.31 38.00 8 956.19 287 209.37 hydraulics, technology and chemical equipment and Aug 224 288.17 30 383.46 21 287.96 36.75 20 457.22 296 453.56 consumables. In his closing remarks, the principal of the school, Mr Patrick Makotla emphasised that “Siemens Energy is our rock as it Sep 213 196.41 33 951.79 30 748.33 33.60 7 808.38 285 738.51 Siemens Energy has contracts for boiler protection system supports and recognises the needs of the communities it Oct 219 869.99 30 405.68 23 146.22 42.00 3 047.40 276 511.29 maintenance, generator transformers, laboratory, and on-line operates in. This donation is highly appreciated and will be analyses, as well as control and instrumentation at Medupi utilised for the benefit of the learners,” Nov 190 390.00 22 753.03 43 164.70 28.95 159 380.00 415 716.68 Power Station. Dec 140 362.89 17 092.50 18 148.90 – – 175 604.29 Representative of the learners, Ms Mmahae Kopano praised This event was graced by the Siemens Energy Chief Executive Siemens for their kind contributions to the school. Jan 163 759.80 20 494.72 18 014.93 16.75 1 473.00 203 759.20 Officer, Mr Thabo Molekoa, Department of Education, Ms Ledwaba and Eskom was represented by the General Manager Feb 141 499.66 12 566.88 25 100.29 15.75 1 079.25 180 261.83 KRIEL AND MATLA POWER STATION DONATE for Matimba Power Station, Ms Obakeng Mabotja and the 11 CLASSROOMS TO EASE OVERCROWDING AT Mar 201 408.11 18 414.70 21 997.00 95.75 1 329.04 243 244.60 Project engineering manager for Medupi Power Station Project, BONGINHLANHLA PRIMARY SCHOOL 2 309 264.22 303 515.34 314 225.68 406.3 214 306.16 3 141 717.70 Mr Rofhiwa Nemutandani amongst others. Kriel and Matla power stations in partnership with their contractors GE Steam Power, Steinmüller, Seriti – Kriel Colliery, Ash Sales Volumes from 2022/23 financial year Mabalane Seleka was started in 2012 and currently has and Exxaro joined forces to respond to the dire needs of 472 enrolled learners but has for years lacked resources as Bonginhlanhla Primary School in Thubelihle, Mpumalanga most learners did not have access to laboratory equipment. province. Ash beneficiation 2022 figure CHALLENGES “Siemens Energy is a great example of the ‘it takes a village The year under review was challenging due to several The school had a challenge of dilapidating infrastructure, 6.82% factors. Load shedding and ash plant breakdowns impacted to raise a child’ narrative; and learners must take care of the 0.01% inadequate classrooms which led to overcrowding, and a our beneficiation activities. The construction industry saw a kits so that generations to come can also benefit,” said the problem of substandard ablution facilities. 10.00% decline, and the South African economy performed weakly. Chairperson of the school governing body, Ms WT Modise. Additionally, our ash beneficiation is still limited to the Kriel power station led the team in mobilising resources to cementitious industry, emphasising the need to diversify our According to Ms Ledwaba from the Department of Education- respond to the needs. The effort managed to raise more than 9.66% markets in the future. Ellisras Circuit, the school must come up with plans to R60 million. The money was used to build 11 state-of-the-art ensure that the laboratory facilities are also benefitting school classrooms which can accommodates more than 1200 Ash sales for the 2022/23 financial year decreased from the other learners in Lephalale. She further stated that “We are learners. The new structure is also equipped with modern previous year due to a number of factors including: grateful because teaching of chemical science theory will technology apparatus, ablution facilities and a guard house. now be supplemented by a practical experience. You have a • Reduced demand: Lack of infrastructure projects in the responsibility to protect and preserve this precious donation 73.50% construction industry hinders demand for ash products, The project is being executed in phases, phase 1 is completed, because Mabalane is the only school chosen in the area out making sales targets difficult. To overcome this, efforts must phase 2 is expected to resume shortly and it will include of six others within the circuit,” she continued. Speaking on Fly ash be made to find new markets and identify new uses. Eskom removal harmful asbestos infrastructure in old buildings, behalf of Eskom, Ms Mabotja echoed that Siemens Energy has Coarse ash load shedding: Load shedding impacts ash sales by making construction of an administration building, school hall, kitchen, Clinker always been responsive to the needs of the local communities it difficult for companies to operate at full capacity causing garden store, sports facilities, and security fences. Cenospheres which is demonstrated through the donations they made to Ash dump construction delays in product delivery. Effective communication with Lephalale TVET College and Mananye Secondary School. clients and collaboration are crucial to minimise delays. The project started in 2017 and it was officially handed over to Mr Nemutandani in his message of support highlighted that • Lack of Infrastructure for Export Market: Lack of the Mpumalanga Department of Education on 1 June 2023. “Through this donation, Siemens Energy has planted a seed infrastructure impacts export markets, which impacts which must be watered and nurtured by the learners and our sales targets. Collaboration with authorities, port educators.” improvements, and exploring alternative logistics solutions and exploring new markets are crucial for achieving sales targets. 64 65 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices • Market Development: We recognise the need to The following table summarises the status of some of the PROCUREMENT COAL SALES AND ITS CONTRIBUTION TO develop additional markets for our ash to increase sales. research projects: Our contribution to nation building includes enterprise and SOCIOECONOMIC DEVELOPMENT Opportunities exist to expand ash markets for soil supplier development initiatives agreed with the shareholder. Due to our substantial offtake, which accounts for over 50% of amelioration, road construction, and mine backfilling, while Project Description and progress We leverage our procurement spend to promote sustainable the total national coal production, we play a significant role in upgrading rail infrastructure for export markets. supplier development, localisation, and industrialisation thereby the coal business. In 2023 financial year about 98.4 million tons Geohydrology To develop a model for the prediction of • Ash Off-takers face performance challenges; companies advancing the government’s policies and transformation of coal was purchased and transported to the power stations. in mine possible contamination when using must collaborate to find new markets, find new uses, and objectives. Targets for enterprise and supplier development We purchased the majority (35%) of the coal through short- backfilling unstabilised coal ash for mine backfilling. explore alternative transport options. and the NIPP were achieved for the year. and medium-term contracts, with 34% coming from long-term Project to be completed in March 2024. cost-plus contracts, 31% from fixed-price agreements. Geopolymer To produce a coal ash geopolymer pole to We held supplier workshops, the majority of which took place poles replace wooden poles utilised in online. Our Enterprise development was impacted by a lack Our large coal purchases, which make up more than half of our SUCCESSES Transmission and Distribution. To protect of funding to implement meaningful interventions, such as operational expenses, present opportunities to support the In the 2022/23 financial year against moisture, pests, and fire damage. incubations for small and medium-sized enterprises (SMEs). NDP's goals of inclusive economic growth and employment Despite these difficulties, contracted companies- Our Supplier development performance was negatively through a shareholding of suppliers, supplier development Project to be completed August 2024. affected by limited subcontracting opportunities as we rely and localisation, transportation contracts with B-BBEE maintained job retention in first quarter, Ash in road The use of coal ash for the formation of on main contractors to implement this. We have developed suppliers, and CSI interventions. These opportunities exist but reduced CSI investment in communities, construction the base and subbase structures in road an enterprise and supplier development plan to progress our across the value chain, including sourcing, transport (haulage), employing a total of 250 ash disposal employees performance going forward. construction. and disposal. (34% women and 22% youth). Two ash extraction plants were erected at Kusile Project report and Guidelines to be Total measured procurement spend (TMPS) for the group We are transforming the mining industry by purchasing from completed by March 2024. at the end of March 2023 on all active contracts amounted companies that meet the 26% mining charter criteria. The power station despite financial challenges due to to R206.2 billion (72.8% was spent on B-BBEE-compliant supplier development and localisation (SD&L) requirements in the economic climate in South Africa. This will Geopolymer The use of coal ash for the production suppliers (2022: R176.8 billion and 75.9%). Procurement spend these contracts have generated a number of jobs. Additionally, promote more ash uptake by local businesses. applications and application of ash geopolymer (alkali with black-owned and black youth-owned suppliers achieved these businesses operate several CSI programs in the regions and rare earth activation) concrete development and the Three extraction plant engineering change at 42.48% (2022: 47.08%) and 4.26% (2022: 5.4%) of TMPS, where they do business, such as constructing homes and elements development of new applications for management applications were approved by the respectively, exceeding their targets of 40% and 2%. schools for the poor and providing bursaries. Eskom business. engineering departments at Medupi, Matimba, and Arnot power stations each. Project to be completed March 2024. LOCAL CONTENT A negative impact is the damage to the road infrastructure in Mpumalanga because of the high number of trucks delivering Ash research: Our ash beneficiation research and Awarded 1 424 contracts worth R70.1 billion coal to the power stations. Due to the large number of trucks proof of concept projects successfully developed Our Ash beneficiation activities faced obstacles in 2022/23, Eskom-wide local content contracted of R61 billion bringing coal to the power plants, Mpumalanga's road system but we remain committed to expanding markets, upgrading (87.02%) high-ash content materials for road construction, has been damaged. We are implementing our coal haulage and rail infrastructure, and innovation to service the huge export geopolymer electric poles. We also investigated 217 contracts contributed 100% natural local content road-to-rail migration plans to lessen and manage this impact, market. Our successful research and proof of concept projects mine drainage at the Eyethu mine and extraction and local manufacturing in designated sectors but the recent difficulties TFR has encountered have hindered demonstrate our ongoing commitment to innovation and of rare earth elements. Total and local content R41.4 billion (59.09%) the development of these plans. sustainable development. Eskom and ERI must collaborate to develop new markets, ash product uses, and achieving our strategic objectives of cost avoidance, commercialisation, and IMPLEMENTING COAL HAULAGE AND THE By 31 March 2023, we awarded 1 424 contracts (2022: 1 971) job creation. to the value of R70.1 billion (2022: R77.6 billion), with local ROAD-TO-RAIL MIGRATION PLAN ASH BENEFICIATION RESEARCH content accounting for R61 billion (2022: R61.7 billion). Local Our rail delivery of coal to Majuba is through Transnet Freight Several beneficiation technologies are being researched by OUR SOCIOECONOMIC PERFORMANCE content for designated sectors amounted to R41.4 billion. Rail, utilising B-BBEE-compliant loading, and offloading sidings. Eskom to support off-takers with technical direction on the We support economic development and supplier The objective is to provide all the coal for Majuba Power various applications that can be commercialised. Eskom RT&D transformation to foster the creation of a sustainable Eskom’s B-BBEE certificate was renewed in January 2023 and Station through rail once the Majuba Coal Transportation explores ash usage in road construction, serving as filler and economy advancing the NDP goals through our supplier is valid for one year. We maintained a B-BBEE recognition System (CTS) from Ermelo to Majuba is operational. for use as structural support. Guidelines for coal ash use will programme. We place particular emphasis on developing level of 100% and a B-BBEE status of level 4 at year end, be developed, intended for SANRAL and civil engineers. which is an affirmation of our commitment to South Africa’s Less coal was delivered by rail in FY22 and FY23, mostly due local suppliers in line with South Africa’s transformation goals, Ash application in acid mine drainage treatment (AMD) and transformation agenda. to the Majuba Power Station's rail dumping facility's ongoing with specific emphasis on local supply sectors important to backfilling research aims to assess environmental impact of ash unavailability as a result of a fire event in December 2019. Rail our industry. We also support Government’s commitment mine backfilling. Regrettably, procurement spend targets in the remaining operations at Majuba resumed in October 2021 but remain to local development programmes, including development categories were not met because of previously compliant limited. Cable theft, vandalism of rail infrastructure, and of local industries thereby enhancing local production and suppliers not renewing their B-BBEE certificates and IPP availability of operational resources, including locomotives manufacturing as prescribed in the Shareholder Compact and contracts negotiated by DMRE. If IPP expenditure were negatively affect rail operations. Eskom Security Services are Eskom’s Transformation Plan. We play a major role in the coal excluded from TMPS, preferential procurement would have engaging with Transnet Freight Rail on opportunities to co- industry due to our large offtake. Our coal purchases provide improved to approximately 92%, against a target of 75%. We operate to reduce the instances of cable theft (feedback). economic opportunities and jobs across the value chain. continue to seek to resolve the classification of IPP expenditure with DMRE and the Department of Trade, Industry and Competition, given the planned growth of the RE-IPP Programme and the long-term nature of these contracts. 66 67 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices According to our long-term coal procurement policy Eskom MUNICIPAL DEBT FINANCIAL RECOVERY AND SUSTAINABILITY Also noteworthy to mention is that the sale of Eskom Finance will require roughly 650Mt of coal for a few of our power We continue to execute the municipal debt management Since inception of the turnaround programme in 2020, our Company (EFC) is at an advanced stage in the process and the plants. This will lead to economic opportunities in the area and strategy to ensure maximum collections from non-paying financial recovery has centred on (1) improving the income disposal of non-core properties is well underway with Eskom stimulate the regional economy. In some situations, contracts municipalities. Eskom has aligned its collection processes with statement and (2) strengthening our balance sheet with the Real Estate (ERE) committing to deliver R2.3 billion in disposal were won after we put requests for proposals (RFPs) to the the Intergovernmental Relations Framework Act, 2005 and focus on (a) revenue security, (b) debt reduction, (c) municipal over the next five years. market for supplies to Arnot, Camden, Kriel, Matla, and Tutuka. discussions are ongoing to reinforce National Treasury’s role in debt reduction and (d) cost containment. The business was We purchased about 267kt of limestone from Idwala Lime in providing financial oversight in terms of the Municipal Financial beginning to see the first fruits of financial recovery in FY22 While we have made significant progress in improving our Danielskuil from the Northern Cape during the year for the Management Act. with improvements noted in all key financial indicators. The income statement and strengthening our balance sheet, our operation of the Kusile FGD plant. To transform its value chain gains made in FY22 have been partially eroded by the decline operational performance and non-payment by municipalities and boost economic activity in the Northern Cape, Idwala must Regrettably, Eskom has been interdicted from interrupting in operational performance experienced in FY23 – this remain key risks to our financial position and path to financial subcontract with or purchase goods and services from black- supply to various defaulting municipalities, with court coupled with lower-than-expected tariffs and non-payment sustainability. It is essential that we recover generation owned businesses in the nearby neighbourhood. Additionally, it applications brought by municipalities, third parties – such as from municipalities placed significant strain on Eskom’s income performance and reach a conclusion on the municipal debt supports employees' skill development. municipal customers – or provincial government departments. statement and balance sheet in FY23. Despite these challenges, recovery. This is not only important within the context of During litigation, arrear debt continues to escalate as some we have made significant strides in our financial recovery and financial sustainability but is also necessary to enable the SALES municipalities take a payment holiday (no payment) or make achieved notable wins in FY23. business to allocate financial resources to areas that require Over the past five years, Eskom has experienced a compound small payments. much needed investment, i.e., maintenance, refurbishment and annual reduction in sales volumes of around 2.5% per year. IMPROVE THE INCOME STATEMENT strengthening of the existing generation fleet and networks, We saw a partial recovery of sales volumes in 2022, although The actual growth for FY23 was R13.8 billion, taking the While the tariff increases granted for FY24 (18.65%) and FY25 and expansion of the networks to integrate additional this was off the back of an unprecedented 6.7% decline in sales cumulative outstanding debt to R58.5 billion. Payment levels for (12.74%) were still below expectations, this marks an important capacity. This is critical to Eskom’s path to achieving financial in 2021 due to the impact of the Covid-19 lockdown. Sales municipalities including metros averaged at 89.9% for FY23. step towards achieving cost reflective tariffs and revenue sustainability and resolving loadshedding. volumes have continued to decline in 2023, decreasing to security going forward. The business was able to maintain its 188.4TWh (2022: 198.3TWh). We are advocating an active partnering solution whereby cost savings of >R20 billion p.a. with R27.8 billion in savings Eskom supports municipalities with distribution, reticulation, and reported for FY23. Local sales volumes were 5.6TWh (3.1%) lower than budget revenue collection services. We continue to work closely with and declined by 8TWh (4.3%) when compared to the prior year, the Department of Co-operative Governance and Traditional STRENGTHENING THE BALANCE SHEET although sales volumes would have declined significantly further Affairs, National Treasury, and other government departments The Minister of Finance announced a significant debt relief without the increased use of OCGTs to minimise loadshedding. as well as relevant stakeholders to resolve the systemic package of R254 billion for Eskom to be implemented from Every sector has experienced a decline in sales volumes when challenges which have given rise to municipal arrear debt. FY24–FY27 – this relief is expected to strengthen Eskom’s compared to the prior year, although the industrial sector was balance sheet, reduce the burden of unsustainable debt less impacted due to the recovery of the global commodity In the National Budget Speech on 22 February 2023, the servicing costs and is a milestone in the path to financial markets, leading to increased production and electricity demand Minister of Finance announced Government’s municipal debt sustainability. Based on the conditions associated with the debt at times. Eskom’s sales volumes were impacted by generation relief plans to address the arrear debt, subject to certain relief, careful management of costs and capital expenditure will supply constraints, leading to load curtailment and loadshedding, conditions. National Treasury published Budget Circular No. be needed going forward to manage our liquidity and ensure a as well as prevailing economic conditions. Large industrial and 123 on 3 March 2023 and Budget Circular No. 124 on 31 March sustainable impact of the debt relief on the balance sheet. mining customers remain exposed to volatile commodity prices 2023, which provide further detail on the municipal debt relief and external economic factors. plan, the application process for municipalities and the related conditions. Eskom is engaging with National Treasury on the debt relief process and conditions included in the circulars. 68 69 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices Abbreviations AEL Atmospheric emission licence B-BBEE Broad-based black economic empowerment BCM Business Continuity Management BESS Battery Energy Storage System CCMA Commission for Conciliation, Mediation and Arbitration CCSD Climate Change and Sustainable Development CDP Carbon Disclosure Project CMG Containerised Micro Grids CoE Centre of Excellence COP Conference of Parties COPD Chronic Obstructive Pulmonary Disease CPUT Cape Peninsula University of Technology CSI Corporate social investment CSR Corporate social responsibility DFFE Department of Forestry, Fisheries, and the Environment DMRE Department of Mineral Resources and Energy DPE Department of Public Enterprises DoEL Department of Employment and Labour Dx Distribution – one of Eskom’s three operational divisions EAL Eskom Academy of Learning EAP Employee Assistance Programme EMS Environmental Management System ESG Environmental, Social, and Governance ERCC Emergency Response Command Centre ERI Eskom Rotek Industries EVP Employee value proposition Exco Executive Management Committee FBS Failure of Business Systems FGD Flue Gas Desulphurisation GCE Group Chief Executive Appendices GHG Greenhouse gas GRI Global Reporting Initiative Gx Generation – one of Eskom’s three operational divisions INEP Integrated National Electrification Programme IPP Independent power producer IRP Integrated Resource Plan JET Just Energy Transition JETP Just Energy Transition Partnership JICA Japan International Cooperation Agency 70 71 ESKOM HOLDINGS SOC LTD Sustainability report 2023 Introduction Our governance Our environmental performance Our just energy transition Our social performance Appendices King IV TM KPI King IV Report on Corporate Governance for South Africa, 2016 Key performance indicator Contact details LTIR Lost-time injury rate MES Minimum Emission Standards Telephone numbers Websites and email addresses Nat JOINTS National Joint Operational and Intelligence Structure Eskom head office +27 11 800 8111 Eskom website www.eskom.co.za Contact@eskom.co.za NDP National Development Plan Eskom Media Desk +27 11 800 3343 Eskom Media Desk MediaDesk@eskom.co.za NDMAF National Disaster Management Advisory Forum +27 11 800 3378 +27 11 800 6103 NDMC National Disaster Management Centre Investor Relations +27 11 800 2775 Investor Relations InvestorRelations@eskom.co.za NECOM National Energy Crisis Committee Eskom whistle-blowing hotline 0800 112 722 Forensic investigations Investigate@eskom.co.za OE Organisational Effectiveness DPE whistle-blowing hotline 0800 111 628 DPE whistle-blowing website www.thehotlineapp.co.za OHS Occupational Health and Safety DPE@thehotline.co.za PCB Polychlorinated Biphenyl Eskom Development +27 11 800 8111 Eskom Development www.eskom.co.za/csi PDMAF Provincial Disaster Management Advisory Forum Foundation Foundation CSI@eskom.co.za PFMA Public Finance Management Act National call centre 08600 ESKOM or Promotion of Access to PAIA@eskom.co.za 08600 37566 Information Act requests PRT Provincial Resilience Teams Customer SMS line 35328 Customer Service CustomerServices@eskom.co.za PV Photovoltaic Facebook EskomSouthAfrica YouTube EskomOfficialSite RE Renewable energy Twitter Eskom_SA MyEskom Customer app RT&D Research, Testing and Development R&R Repowering and Repurposing SADC Southern African Development Community Physical address Postal address SDGs Sustainable Development Goals Eskom Megawatt Park PO Box 1091 2 Maxwell Drive Johannesburg SARATEC South African Renewable Energy Technology Centre Sunninghill 2000 SED Socio-economic development Sandton 2157 SEIA Socio Economic Impact Assessment Group Company Secretary Company registration number SES Social, Ethics and Sustainability Committee Office of the Company Secretary Eskom Holdings SOC Ltd SME Small and medium enterprise PO Box 1091 2002/015527/30 Johannesburg TCFD Task Force on Climate-Related Financial Disclosures 2000 TMPS Total Measured Procurement Spend Tx Transmission – one of Eskom’s three operational divisions Feedback on or queries relating to our report may be directed to IRfeedback@eskom.co.za UNGC United Nations Global Compact Our suite of reports covering our integrated results for 2023 is available at https://www.eskom.co.za/investors/integrated-results/ WEP Women Empowerment Principle Z-LED Zero liquid effluent discharge 72