Chairman of the social, ethics and transformation (SET) committee review

The social ethics and transformation (SET) committee that I chair is the primary mechanism for ensuring independent oversight and monitoring of Tiger Brands’ social and ethical performance.

Maya Makanjee

Chairman of the social, ethics and transformation committee

Maya Makanjee

Chairman of the social, ethics and transformation committee

   

In accordance with the expectations of the King IV Code on Corporate Governance, issues under our remit include organisational ethics and whistleblowing, responsible corporate citizenship and sustainable development, broad-based black economic empowerment, stakeholder relations, and monitoring relevant regulatory developments to ensure compliance. Although most of the company’s corporate social investment (CSI) activities are managed independently through the Tiger Brands Foundation, and no Tiger Brands director sits on the Foundation’s board, we monitor its activities and have direct oversight of those CSI activities that fall within Tiger Brands itself.

The SET committee also receives and considers reports from the risk and sustainability committee relating to the environmental, health and safety issues under its remit. Between us, we review the material environmental, social and governance (ESG) risks and opportunities impacting the business, give guidance to the CEO and executive team on managing these issues, and review and report on performance progress to the board.

Recently we have seen ESG issues gaining increasing prominence in boardrooms globally, moving beyond the traditional focus on compliance with governance requirements, to a more nuanced consideration of a company’s roles and responsibilities in addressing social and environmental challenges. This shift is being driven by an increase in investor interest, and growing consumer awareness and stakeholder activism, as well as by a deepening appreciation within boards on the materiality of ESG risks and opportunities. Effective ESG management is no longer simply about doing the “right” or ethical thing, it’s about recognising that these issues can have a significant bearing on the company’s ability to protect and create value. It is becoming increasingly clear that managing these issues proactively and effectively is directly aligned with the best interests of the company and its shareholders.

It is this understanding of the strategic value of ESG issues that has informed Tiger Brands’ commitment to promoting sustainable development as one of the four pillars of its overall growth strategy. The Sustainable Future pillar that was substantially revised and approved by the board last year, includes commitments in three focus areas: health and nutrition, enhanced livelihoods and environmental stewardship. These are the three areas where Tiger Brands believes it can harness its core activities, as Africa’s largest food company, to most effectively contribute to the UN Sustainable Development Goals. These commitments are not only about minimising impacts, managing risk, or protecting reputation, they’re also about delivering profitable opportunities through the development of innovative business solutions, such as nutritious and affordable food products.

In this report, Tiger Brands’ third annual sustainable development report, we review the company’s progress on these commitments. While it is pleasing to see the initial progress that has been made this year, despite the significant disruptions associated with the Covid-19 pandemic, there is much that still needs to be done to ensure that all these commitments are fully realised.

The company’s response to the Covid-19 pandemic understandably occupied a significant amount of our focus and effort this year. It has been incredibly encouraging to see the leadership and dedication shown by the CEO and his executive team in rallying behind government’s call to promote stability and safety during the pandemic. I believe that the team has done commendable work in its three-pronged response: protecting the health and wellbeing of the company’s employees, ensuring a reliable supply of product during the lockdown, and increasing community food support for those most in need.

In addition to introducing strict hygiene protocols and employee safety measures, the company was proactive during the lockdown period in providing essential workers with support such as private transport and additional income through a special incentive provision. The response of employees has been incredible and played a key role in ensuring that Tiger Brands played its part in maintaining food security during the lockdown. In this context, it is deeply regrettable to report that 11 employees died as a result of contracting the virus. My heartfelt sympathies are extended to all of the affected families.

In its response to the pandemic’s profound impact on livelihoods, the company substantially augmented its existing food and nutrition programmes for families, scholars and university students, and also extended these to include nutritional support for frontline healthcare workers and hospitals.

Beyond these Covid-19 relief initiatives, and as part of its commitment to improving livelihoods and driving economic transformation in South Africa, Tiger Brands has continued to leverage the substantial influence that it has through procuring roughly 1,7 million tons of agricultural commodities this year, with approximately 63% from local suppliers.

An important development this year was the launch of the Dipuno ESD Fund, with an initial capital investment of R45 million to provide loans and technical support to black-owned and black women-owned small enterprises and smallholder farmers, complemented by the establishment of a business incubator to support emerging black farmers and agri-processing enterprises. It is through the company’s core activities as a food producer that it has the greatest capacity to effect meaningful change, and it is encouraging to see how Tiger Brands is using its influence to promote inclusive economic participation.

We have seen some similarly positive signs this year in the initial delivery of its other key sustainability commitments. On health and nutrition, for example, Tiger Brands has updated its nutritional standards against global guidelines and begun to assess its product range against these standards. It has launched several new nutritious and affordable products and taken steps to prioritise its innovation pipeline to align with the health and nutrition strategy. In addition to ensuring full compliance with the sodium and sugar tax regulation, it has achieved significant sugar reduction across products in the bakery, cereals and beverages portfolios. On environmental stewardship, while there were some delays due to the pandemic, there has been some reassuring continued progress in improving energy and water efficiency, reducing greenhouse gas emissions, and minimising waste.

I have been particularly encouraged by the collaborative work that is being done to address both plastic packaging and food waste, and I look forward to seeing some concrete outcome to these recently established partnerships soon.

An area of ongoing concern relates to the high number of violent route-to-market incidents, as well as the opportunities to further improve occupational safety. It saddens me to report that there were three work-related fatalities this year: two Albany employees were killed in separate incidents while delivering bread, one in a motor vehicle accident and the other in a fatal shooting, and a contractor to Davita Trading suffered fatal injuries when a machine he was installing fell on him. My sincere condolences go out to the families. The company is taking steps to minimise the potential for future incidents of such nature and is continuing its activities more broadly on occupational health and safety.

Delivering on Tiger Brands’ Sustainable Future strategy, and its targets for driving positive social and environmental change as well as create long-term value, is going to take time. Given the hugely challenging economic outlook over the short to medium term, and the understandable pressure that the company is facing to deliver a step change in financial performance, this will require strong leadership. We will need to show the humility to acknowledge and learn from past mistakes, be willing to be fully transparent in disclosure, and embed an authentic purpose-led culture across the organisation. I am confident that under our new leadership team we are going to make valuable progress in the years ahead.

Maya Makanjee

Chairman of the social, ethics and transformation committee

30 November 2020