2016, the Group included Santam in the calculation of its scope 1, 2 and 3 emissions for the rst time. As such, Sanlam’s emissions include the Group’s six main buildings (Sanlam Head Office, Houghton, Sanlam Investments, Alice Lane, Glacier and Sanlynn), as well as Santam’s five main buildings (Santam Head Office, Auckland Park, Garsfontein, Alice Lane and Glacier). The scope for these buildings includes all common areas but excludes consumption by external tenants.
While Santam is included in the carbon emissions data for the first time in 2016, they are excluded in the rest of the environmental data (paper, waste and water).
The Sanlam Board, the Board Sustainability committee and Sanlam’s Group Chief Executive endorse the Group Environmental Policy. Responsibility for overseeing the implementation of and the adherence to the policy resides with Sanlam Group Sustainability. The Group’s Energy Management Forum also plays an important role in improving the Group’s environmental performance. Clusters participate in quarterly forum discussions to grow awareness, engage employees and maximise involvement across the Group.
Sanlam Head Office houses over 40% of the Group’s full-time office-staff component in South Africa. In most instances, Sanlam Head Office is responsible for more than 50% of total consumption (electricity). Therefore, of Sanlam’s and Santam’s buildings, Sanlam Head Office has the largest environmental footprint and warrants the focus of the Group’s environmentally protective initiatives. Initiatives that are successful at Sanlam Head Office are rolled out to smaller offices.
The biggest contributor to Sanlam’s carbon emissions is electricity consumed from the national grid. Therefore, the rising cost of energy and its unsustainable derivation from coal necessitates that Sanlam reduce its consumption and implement projects to achieve e ciency gains before committing to capital outlay. This is particularly important for Sanlam Head Office, which contributes 58% toward the Group’s total electricity consumption.
Sanlam has been a signatory of the Carbon Disclosure Project (CDP) since 2007. This year, the Group achieved a score of A–, an improvement from last year. This is an excellent result indicating that Sanlam implements a range of actions to manage climate change, both in its own operations, and beyond.
Together with Santam’s buildings, Sanlam Group achieved a reduction in electricity consumption of 554 124 kWh against the 2014 baseline year.
Sanlam minimises and offsets its carbon emissions by hosting two premier, carbon neutral events, namely the Sanlam Benchmark Symposium and Sanlam Cape Town Marathon (SCTM). This is achieved through the use of carbon credits, which are purchased and traded on the JSE. Carbon credits are a financial tool representing a tonne of CO2 or CO2e that is removed or reduced from the environment through an emission reduction project.
This approach is facilitated by Sanlam’s partnership with the Climate Neutral Group.
Based in the Netherlands, the Climate Neutral Group is the market leader in the field of emission reduction and carbon off setting, and provides guidance on sustainable business practice. Sanlam has signed a contract with the Climate Neutral Group to offset the Group’s 2015 emissions.
Sanlam is also committed to raising awareness of the impact of carbon emissions among participants and delegates. The Group incorporated an off setting App designed by Green Pop – a South African-based social venture – as part of the application process for key events it hosts. The App encourages participants and delegates to make a voluntary contribution to off setting carbon emissions associated with travelling to and from the event.
Off setting of the 2014, 2015 and 2016 SCTM ensured, for example:
The other projects that form part of Sanlam’s off setting initiative include Basa Magogo Standerton, a rural fire education project, as well as the Johannesburg Waste to Energy Project. 512 households benefited from Basa Magogo.
The calculated greenhouse emissions for the 2016 SCTM were estimated to be 3 331 tCO2e – an increase from 1 292 tCO2e in 2015. This increase was mostly attributed to the increase in transport emissions due to the growing popularity of the event.
Sanlam is a non-water-intensive business. However, the Group recognises its responsibility to preserve water and reduce consumption in light of the systematic risks associated with water crises and the resultant impact on the economies in which the Group functions.
Sanlam continues to investigate opportunities to further reduce its water consumption. Ongoing initiatives include water-saving taps at Sanlam Head Office and in Sanlam Sky, and an investigation into methods to improve the e ciency of water consumption from cooling towers. The Group currently uses four, 2 500 litre water reservoirs to harvest rain water at Sanlam Head Office. This water is used to irrigate the gardens at Sanlam Head Office, and provides a saving of at least 35 000 litres from municipal water sources. Sanlam is further committed to ensuring that water consumption will be properly managed and tracked going forward to ensure accurate representation against its saving targets.
Sanlam has also committed to a water balance programme through its partnership with WWF-SA. The Water Balance Project aims to rehabilitate critical water catchment areas in South Africa to improve the healthy functional rivers and ecosystems.
The water balance project aims to rehabilitate 70 hectares, including the removal of alien plants in order to achieve a total of 145 320 kilolitres of potential water savings. Key milestones achieved in 2016 include:
In partnership with the WWF-SA, the Group has launched a tool to assess water-related risks within companies. The WWF Water Risk Filter provides companies with a structured set of risk indicators. The tool is designed for non-water experts, and requires limited information from the user. The goal is to generate awareness of the importance of water conservation, with a focus on monitoring misuse or abuse of water.
The South African version of the WWF Water Risk Filter provides an option to use local data for a more accurate assessment. The tool then interprets the best available scientific data for users, and translates it into risk numbers based on a questionnaire. This indicates where organisations face their highest risk, and whether risks present as physical, reputational or governance based. Users can then map the assessed facilities or investments on water-related map overlays.
A structured set of responses and up-to-date case studies further enable users to mitigate risk and develop water stewardship strategies. With the ever increasing demands on our country’s water resources and especially with regard to the drought currently being experienced, Sanlam encourages the uptake and use of the WWF WRF in facilitating greater collaboration between different sectors and industries to enhance an understanding of water-related risks, and promote a collective response to water stewardship.
In line with the Group’s environmental performance targets, Sanlam aims to reduce its paper consumption per full time employee by 10%, by 2020.
Other waste produced by the Group includes printer ink cartridges, packaging waste and food. Unless consciously managed, this waste ends up in land lls and contributes to pollution levels.
To assist with waste targets for all six of Sanlam’s measured buildings, the development of an Integrated Waste Management Plan was nalised in 2016.
However, the current focus remains on Sanlam Head Office, with the Group’s other buildings challenged to separate from source and implement waste education and training initiatives to encourage change behaviour across the Group.
Currently, 63% of Sanlam Head Office waste is recycled. This is a 7% increase in comparison to the Group’s 2014 base year.
This decrease is due to a number of ongoing initiatives, which include:
As WealthsmithsTM, it is Sanlam’s vision to be the leader in wealth creation and protection. This includes protecting natural wealth, such as water.
To this end, Sanlam has committed a total of R50 million to its partnership with WWF-SA. Sanlam’s investment goes toward securing South Africa’s water source areas, promoting water stewardship, and empowering local government to integrate freshwater protection into its policies and plans.
In addition to the water balance project and launch of the WWF Water Risk Filter, Sanlam has invested in a collaborative project with the Table Mountain Fund (TMF). This project involves the clearing of 95,2 hectares of alien invasive vegetation to control the spread of invasive woody alien species, reduce risk of fires, as well as contribute to local economic development and job creation.
Since 2012, the partnership also included a focus on influencing greater awareness of water issues in the Group’s business practices. This has led to a deeper understanding of water risks to drive better insurance and investment practices. As one of the 30 most water-stressed countries in the world, this is particularly relevant in South Africa.
Morgan Stanley Institute for Sustainable Investing, 2015
There is a growing interest in environmental, social and governance (ESG) issues among investors. This is accompanied by a greater awareness of the role of the investment management community in promoting sustainable and socially responsible development.
Sanlam is a signatory to the UNPRI, and subscribes to the Code for Responsible Investing in South Africa (CRISA). This reflects the Group’s commitment to uphold international best practice in its relationship with stakeholders and in its stewardship of natural resources.
Billions of dollars are owing into Africa to meet the growing infrastructure needs of the continent. However, with this massive investment comes the responsibility to create and build sustainably. This raises the question as to whether the stakeholders involved in individual projects are mindful of the broader risks and impacts, especially over the longer term. This entails the eventual asset management once the project is completed and handed over to asset owners.
The port city of Dar es Salaam in Tanzania faces two problems. The first is that, as one of the fastest growing economies in Africa with limited nancial resources, the city has to invest in public infrastructure, which carry a number of risks, not least of which is flooding on a near-annual basis. The second problem is that global nancial institutions providing capital for large infrastructure projects typically only seek insurance cover towards the end of the process. Unfortunately, often at a late stage in the process, some unavoidable risks are typically already embedded in the project.
Building on lessons learned from the United Nations Environment Programme’s PSI Global Resilience project, it was felt that there would be bene t in considering risk management proactively – before projects are contracted and in a non-competitive space, where city managers could engage with insurance professionals.
Santam initiated a process in 2014 to explore how the general insurance industry in the region might best engage with infrastructure decision-makers in Africa, for example city engineers and planners, given that sustainable city infrastructure is a critical element to enhance protection and readiness against possible disaster events such as fires and floods. Under the banner of ‘African Infrastructure Risk and Resilience’ a series of conversations and workshops took place through 2015 and 2016. These involved representatives from Santam and Sanlam, including various experts in sustainable infrastructure, finance and investment.
The research included a two-day intensive workshop in Dar es Salaam in October 2016 between members of the insurance sector and Dar es Salaam city officials. The workshop was declared a breakthrough in mutual understanding, opening up a range of opportunities for future learning and collaboration for both sides. What emerged, aside from a lengthy list of collaborative actions various participants committed to, was a mutually agreed ‘decision pathway’ describing the logical necessary steps a city government must take if it is to end up with genuinely resilient, sustainable infrastructure. The city officials said they found this – and the discussions leading up to the workshop– exceptionally helpful, as they had never considered decision-making from a proactive risk management perspective before.
A key outcome of the intervention was the request for insurers to demonstrate the cost/ bene t at city level for risk protection and sensible regulation. The initiative pioneered a methodology of getting city management to engage with the insurance sector, which will be shared globally. It was founded in a partnership approach and included Marsh, Munich Re, Sanlam, Global Infrastructure Basel, ClimateWise and PSI representatives.
A research paper, documenting learnings, will be published via ClimateWise early in 2017 to share important proactive risk management insights with other cities and insurance sector players.
Sanlam Emerging Markets will continue to play a role in this partnership.