Global Reporting Initiative (GRI) G4

Transcription

1 01 Global Reporting Initiative (GRI) G4 The GRI s G4 guidelines have been applied to our sustainability reporting for the first time in 2017, meeting the GRI G4 core level. This document includes Netcare s GRI G4 index table, as well as the management approaches and detailed indicators not covered in the 2017 Annual Integrated Report. Acronyms and reference icons used in this report: > > SA: South Africa > > UK: United Kingdom Information in the 2017 Annual Integrated Report Information available on our investor relations website at All page numbers in the GRI G4 table reference the 2017 Annual Integrated Report, unless otherwise indicated. INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators Strategy and analysis G4-1 Statement from the most senior decision-maker of the organisation on the relevance of sustainability to the organisation and the organisation's strategy for addressing sustainability. G4-2 Key impacts, risks, and opportunities. Chairman's review: page 17 Chief Executive Officer's review: page 71 Chairman s review: page 17 Chief Executive Officer s review: page 71 How we manage risk: page 34 Our strategy: page 66 Our material matters: page 48 Organisational profile G4-3 Name of the organisation. Netcare Limited. G4-4 Primary brands, products, and services. Our business model: page 4 UK operations review: page 100 G4-5 Location of the organisation s headquarters. Netcare Limited 76 Maude Street (corner West Street) Sandton 2196 South Africa G4-6 Number of countries of operation. South Africa, the United Kingdom, Lesotho and Mozambique. Profile: inside front cover

2 02 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators continued Organisational profile G4-7 Nature of ownership and legal form. G4-8 Markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries). Public company listed on JSE Limited. Full annual financial statements Analysis of shareholders: page 114 Profile: inside front cover Our business model: page 4 UK operations review: page 100 G4-9 Scale of the organisation (including number of operations, net sales/ revenues, total capitalisation and quantity of products or services provided). Profile: inside front cover Our business model: page 4 UK operations review: page 100 Chief Financial Officer s review: page 110 G4-10 Total number of employees by: a. Employment contract and gender b Employment type and gender c. Employees and supervised workers and gender d. Region and gender e. Reliance on selfemployed workers or contractors f. Seasonal or other variations in employee numbers. G4-11 Percentage of total employees covered by collective bargaining agreements. G4-12 Description of the organisation's supply chain. Human capital indicators: page 16 51% of our employees in SA are covered by collective bargaining agreements. 65% of Netcare s procurement spend is for medicine, medical devices and medical equipment. The majority of these suppliers are multinational organisations. The balance of 35% of spend is for services, indirect supplies, technical maintenance and utilities. Total number of suppliers: over Preferential procurement: page 27 Permanent employees are reported by occupational level, gender and race for the workforce based in SA, which makes up 70% of the total workforce. There are no material seasonal variations in employee numbers, and reliance on self-employed workers or contractors is not considered material. SA makes up 70% of the total workforce and is considered our most significant operation. G4-13 Significant changes during the reporting period regarding the organisation's size, structure, ownership or supply chain. There were no significant changes to the organisation in FY2017. G4-14 Precautionary approach or principle. Environmental management approach: page 19

3 03 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators continued Organisational profile G4-15 Externally developed economic, environmental and social charters, principles, or other initiatives. SA operations Review: page 76 Full corporate governance report Compliance: page 12 Sustainability: page 15 Broad-based Black Economic Empowerment (B-BBEE) verification > > Netcare has made progress towards multi-divisional ISO9001 quality certification in 2017 and this will be completed in > > Department of Trade and Industry s generic B-BBEE Codes of Good Practice in SA. > > United Nations (UN) Global Compact. > > Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises. > > Carbon Disclosure Project. G4-16 Memberships of associations. > > Hospital Association of South Africa (HASA)(SA). > > NHS Partners Network (UK). > > Association of Independent Healthcare Organisations (UK). > > Independent Sector Reference Group (UK). > > Private Healthcare Information Network (UK). > > Global Green and Healthy Hospital Network. Netcare s Group Company Secretary and Director of Strategy and Health Policy hold directorship positions at HASA and are members of the various operational sub-committees. Identified material aspects and boundaries G4-17 Entities included in financial statements and the sustainable development report. Full annual financial statements G4-18 Process for defining the report boundaries and content. Our report: page 1 G4-19 to G4-21 Netcare's material issues and the boundary within the organisation, as well as outside the organisation. Our material matters: page 48 G4-22 Restatements of information. G4-23 Significant changes from previous reporting in terms of scope and boundaries. The 2016 Group Statement of Profit or Loss was restated to account for a discontinued operation. Restatements for non-financial information are clearly denoted in the footnotes to the tables. There were no significant changes to Netcare's reporting in FY2017. Our report: page 1

4 04 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators continued Stakeholder engagement G4-24 to G4-27 > > Stakeholder groups. > > Basis for selection of stakeholders with whom to engage. > > Approach to stakeholder engagement and whether engagement took place specific to the reporting preparation process. > > Key topics and concerns raised through stakeholder engagement, and the organisation s response. Creating value for our stakeholders: page 14 Our material matters: page 48 Full stakeholder engagement report King IV Application Register Page 6 Stakeholder engagement is undertaken on an ongoing basis and not specifically as part of the report preparation process. Stakeholder concerns and Netcare s responses are disclosed in the material matters section of the annual integrated report. Report profile G4-28 Reporting period. Financial year end: 30 September 2017 G4-29 Date of most recent previous report. Financial year end: 30 September 2016 G4-30 Reporting cycle. Annual G4-31 Contact point for questions regarding the report. G4-32 GRI content index. ir@netcare.co.za Core option. G4-33 Assurance report. About this report: page 1 Governance G4-34 Governance structure including committees responsible for decisionmaking on economic, environmental and social impacts. Full corporate governance report Governance and Delegation of Authority Framework: page 2 King IV Application Register Our governance framework provides the roadmap for us to achieve our strategic objectives within compliance requirements and by balancing the interests of our stakeholders, minimising and avoiding conflicts of interest, and practising good corporate behaviour. The framework has been enhanced by the delegation of authority framework in which principle 8 and 10 of King IV recommends that the governing body should ensure that it arranges for the delegation within its own structures and with management to promote independent judgement, and assist with balance of power and the effective discharge of its duties.

5 05 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators continued Governance G4-35 Process for delegating authority for economic, environmental and social topics. G4-36 Executive-level position responsible for economic, environmental and social topics. G4-37 Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics. Full corporate governance report Governance and Delegation of Authority Framework: page 2 Governance and operating committees: pages 5 and 11 King IV Application Register Page 3 Full corporate governance report Governance and operating committees: pages 5 and 11 The Board has delegated its authority to various Board committees and, in some instances, management in accordance with clearly agreed reporting procedures and a written scope of authority to address stakeholder relationships. This is reviewed on a periodic basis by the Social and Ethics Committee and in supporting operational committees. Full corporate governance report Operating committee: page 11 King IV Application Register Page 1 The board has delegated authority to executive management to lead the implementation and execution of approved strategy, policy and operational planning. The Chief Executive Officer is the Chairman of the Sustainability and Procurement Committees. G4-38 to G4-39 Composition of the board and its committees, and chairman and chief executive officer positions. Our Board of directors: page 22 Governance overview: page 24 Full corporate governance report Board of directors: Page 3 King IV Application Register Page 3 G4-40 Nomination and selection processes for the board and its committees. G4-41 Processes for managing conflicts of interest. Full corporate governance report Director appointment and rotation: page 9 King IV Application Register Page 3 Our Board of directors: page 22 Full corporate governance report Conflict of interest: page 10 G4-42 Highest governance body s role in setting purpose, values, and strategy related to economic, environmental and social impacts. Full corporate governance report Netcare Board: page 22 King IV Application Register Page 3 G4-43 Measures taken to develop and enhance the highest governance body s collective knowledge of economic, environmental and social topics. G4-44 Processes for evaluation of the highest governance body s performance with respect to governance of economic, environmental and social topics. New directors are suitably trained through formal induction. Directors are kept abreast of key topics at Board meetings through detailed reports and the tabling of minutes of Board sub-committees. Full corporate governance report Performance and independence: page 9 King IV Application Register Page 4

6 06 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators continued Governance G4-45 to G4-47 The board's role in risk management and its role in reviewing the effectiveness of the organisation s risk management processes for economic, environmental and social topics, as well as the frequency of review. How we manage risk: page 34 Full corporate governance report Internal control and internal audit: page 16 King IV Application Register Page 4 How we manage risk is discussed in the annual integrated report. Environmental risks are also overseen by the Sustainability Committee, which meets four times a year, and the Operational Transformation Committee, which meets four times a year, to drive transformation and diversity initiatives. Both committees report to the Social and Ethics Committee, a subcommittee of the Board. The sub-committee is chaired by an independent nonexecutive director and meets twice a year. It also has oversight of legislative compliance, social and economic development, and good corporate citizenship. G4-48 The committee that formally reviews and approves the sustainability report. G4-49 Process for communicating critical concerns to the highest governance body. G4-50 Nature and total number of critical concerns that were communicated to the highest governance body and the mechanisms used to address and resolve them. G4-51 a. Remuneration policies for the board and senior executives. b. Performance criteria in the remuneration policy that relate to economic, environmental and social objectives. G4-52 Process for determining remuneration. G4-53 How stakeholders views are sought and taken into account regarding remuneration. The Audit Committee reviews and recommends Netcare's annual integrated report to the Board for approval. Material matters and progress towards achievement of the Group's strategy are monitored at executive level and championed by the Director of Strategy, who makes recommendations to the Board in terms of critical concerns. Critical concerns are managed in Board meetings and are reported to the Board through sub-committee minutes. If required, special Board meetings are held. Our material matters: page 48 Remuneration report: page 146 Remuneration report: page 146 Remuneration report: page 146 King IV Application Register Page 5

7 07 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES General standards indicators continued Ethics and integrity G4-56 Description of the organisation s values, principles, standards and norms of behaviour. Our strategy: page 66 King IV Application Register Page 1 The behaviours of the Netcare Way are included in the balanced scorecard of all employees. G4-57 Internal and external mechanisms for seeking advice on ethical and lawful behaviour. We have Group-wide policies on corruption and sanctions, gifts, insider trading and conflict of interests, and a zero-tolerance policy towards fraud, theft, corruption or any similar illegal behaviour. These policies are available to all employees on the Group Intranet. Employees can engage directly with their line management, the Group Human Resources department, the Group Risk, Audit and Forensic Services department or the Group Company Secretarial and Legal department to obtain advice and guidance on ethical and lawful behaviour. If required, the Group will engage external legal advisors for appropriate guidance. G4-58 Internal and external mechanisms for reporting concerns about ethical and lawful behaviour. Full corporate governance report Ethics: pages 19 and 22 King IV Application Register Page 1 Specific standards indicators Management approaches Our strategy: page 66 UK operations review: page 100 Full corporate governance report Ethics: pages 19 and 22 Compliance: page 12 Environmental management approach: page 19 Human capital management approach: page 14 Supply chain management: page 27 Approach to transformation in SA: page 27 Economic performance G4-EC1 Direct economic value generated and distributed. Value-added statement: page 127 G4-EC2 Financial implications and other risks and opportunities for the organisation's activities due to climate change. How we manage risk: page 34 Environmental management approach: page 19 G4-EC4 Financial assistance received from the government. Netcare did not receive any significant financial assistance from government in FY2017. Market presence G4-EC6 Proportion of senior management hired from the local community at significant locations of operation. Human capital indicators: page 16 Indirect economic impact G4-EC8 Significant indirect economic impacts, including the extent of impacts. Our business model: page 4

8 08 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES Specific standards indicators continued Procurement practices G4-EC9 Proportion of spending on local suppliers at significant locations of operation. Supply chain indicators: page 27 Energy G4-EN3 Energy consumption within the organisation. Environmental indicators: page 25 Independently assured limited level of assurance. A tenant billing system was implemented in FY2016. During FY2017, costs of 17.8 MWh were recovered from tenants. G4-EN5 Energy intensity. Environmental indicators: page 25 Converted to Scope 3 emissions are reported under G4-EN17. G4-EN6 Reduction of energy consumption. UK operations review: page 100 Environmental indicators: page 25 Our focus is on electricity purchased and reduction is calculated against the 2013 baseline, which is adjusted year-on-year to accommodate for patient growth activity and floor space expansion. Initiatives include solar photovoltaic systems, and lighting, HVAC and domestic hot water upgrades. Water G4-EN8 Total water withdrawal by source. Environmental indicators: page 25 Independently assured limited level of assurance (excludes re-use and borehole water). We use municipal water, except for Netcare Margate and Netcare Alberlito hospitals where borehole water supplements the municipal supply. Emissions G4-EN15 and EN16 G4-EN17 Direct and indirect greenhouse gas (GHG) emissions (Scopes 1 and 2). Other indirect GHG emissions (Scope 3). Environmental indicators: page 25 Environmental indicators: page 25 Independently assured limited level of assurance. Scope 1 gases: N 2 O, CO 2, Nitro NOx, SF6 and HFC s. Consolidation approach: operational control. G4-EN18 GHG emissions intensity. Environmental indicators: page 25 G4-EN19 Reduction of GHG emissions. Environmental indicators: page 25 Independently assured limited level of assurance. Waste G4-EN23 Total weight of waste by type and disposal method. Environmental indicators: page 25 G4-EN24 Total number and volume of significant spills. There were no significant spills in FY2017. G4-EN25 Weight of transported imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. Environmental indicators: page 25 Healthcare risk waste is treated as hazardous waste.

9 09 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES Specific standards indicators continued Environmental compliance G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations. There were no fines incurred for non-compliance with environmental laws and regulations in FY2017. Transport G4-EN30 Significant environmental impacts of transporting products and other goods and materials for the organisation s operations, and transporting members of the workforce. Environmental indicators: page 25 Staff subsidised travelling of km included under Scope 3 emissions. Environmental overall G4-EN31 Total environmental protection expenditures and investments by type. Environmental indicators: page 25 Supplier assessment G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken. As part of our central procurement vendor listing process, each new supplier needs to complete a compliance questionnaire. If this is not confirmed it is assessed in terms of the type of supply, the relevance thereof and the availability of alternative suppliers. No suppliers have been identified as having significant actual and potential negative environmental impact. Our top suppliers in the device arena participate in a bi-annual questionnaire and are requested to supply data regarding the various emissions. No supplier contracts were terminated in FY2017. Grievance mechanisms G4-EN34 Number of grievances about environmental impacts filed, addressed and resolved through formal grievance mechanisms. No grievances concerning environmental impacts were received in FY2017. Employment G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region. Human capital indicators: page 16 G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation. Human capital indicators: page 16 G4-LA3 Return to work and retention rates after parental leave, by gender. Human capital indicators: page 16 All employees are entitled to take parental leave.

10 10 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES Specific standards indicators continued Labour management relations G4-LA4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements. In SA, the minimum notice period in terms of the Basic Conditions of Employment Act (BCEA) 75, of 1997 as amended; section 36 of the BCEA is as follows: Collective agreements with unions do not specify the minimum notice period; however, it has been standard practice to comply with the provisions of the Labour Relations Act. During the first six months of employment, one week written notice of termination of employment is required, for the remainder of the first year, two weeks written notice is to be given. After the first year, the notice period is four weeks. We are fully compliant with this legislative requirement. In the UK, notice periods regarding operational changes is 30 days as per UK legislation and guidance from the Advisory, Conciliation and Arbitration Service. Occupational health and safety G4-LA7 Workers with high incidence or high risk of diseases related to their occupation. G4-LA8 Health and safety topics covered in formal agreements with trade unions. Human capital management approach: page 14 Training and education G4-LA10 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. UK operations review: page 100 Human capital indicators: page 16 G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category. Human capital indicators: page 16 Diversity and equal employment G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity. Governance overview: page 24 Full corporate governance report Our Board of directors: page 22 Human capital indicators: page 16 Equal remuneration for women and men G4-LA13 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation. These metrics are tracked but are not disclosed publicly given their sensitive nature.

11 11 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES Specific standards indicators continued Supplier assessment G4-LA15 Significant actual and potential negative impacts for labour practices in the supply chain and actions taken. No supplier contracts were terminated in FY2017 regarding negative impacts relating to labour practices. When suppliers are assessed, risks regarding any supplier with potential negative impacts are mitigated by listing alternative suppliers for the same commodity, as well as ensuring contractual terms that allow for contract termination. Customer health and safety G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement. G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes. There were no incidents of noncompliance with regulations and voluntary codes concerning patient safety in FY2017. Product service labeling G4-PR5 Results of surveys measuring customer satisfaction. UK operations review: page 100 The balanced scorecard used for internal measurement of patient satisfaction has been revised and will be reported on in FY2018. Marketing communications G4-PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes. No incidents of non-compliance with regulations and voluntary codes concerning marketing communications in FY2017. Customer privacy G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. No complaints for breach of personal information were received in FY2017. Human rights investment G4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. Human capital indicators: page 16

12 12 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES Specific standards indicators continued Human rights risks G4-HR4 to HR6 Operations and suppliers identified as having significant risk for: > > Violation of the right to exercise freedom of association and collective bargaining and measures taken to support these rights > > Incidents of child labour and measures taken to contribute to the effective abolition of child labour > > Incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour. Human capital management approach: page 14 Supply chain management: page 27 Human rights security practices G4-HR7 Percentage of security personnel trained in the organisation's human rights policies or procedures that are relevant to operations. Human capital management approach: page 16 Supply chain management: page 27 Supplier assessment G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken. No supplier contracts were terminated in FY2017 regarding negative impacts relating to human rights. Local communities G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programmes. UK operations review: page 100 For more information on our corporate social investment initiatives: CSI Anti-corruption G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified. Corruption risk is assessed across the Group and no significant risks relating to corruption have been identified other than minor exposure to bribes, kickbacks and gratuities. G4-SO4 Communication and training on anti-corruption policies and procedures. All employees receive training on anti-corruption during orientation, and the Company Secretary performs road shows every second year to raise awareness. G4-SO5 Confirmed incidents of corruption and actions taken. No known instances of corruption in FY2017. Anticompetitive behaviour G4-SO7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes. There were no pending actions for anti-competitive behaviour, anti-trust, and monopoly practices in SA or the UK for FY2017.

13 13 INDICATORS (blue blocks indicate core indicators) DISCLOSURE ASSURANCE EXPLANATORY NOTES Specific standards indicators continued Compliance G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations. No significant fines or non-monetary sanctions for non-compliance with laws and regulations recorded in FY2017. Supplier screening G4- EN32, G4-LA14, G4-HR10 Percentage of new suppliers that were screened for: > > Environmental criteria > > Labour practices > > Human rights. All new suppliers complete a compliance declaration confirming compliance to environmental, labour and human rights criteria. Grievance mechanisms and human rights G4-LA16, G4-HR3, G4-HR8, G4-HR12 > > Number of grievances relating to labour practices > > Number of incidents of discrimination > > Number of incidents or violations involving rights of indigenous people and actions taken > > Number of grievances relating to human rights. Four cases of discrimination were reported through the toll-free line in FY2017. All four cases have been appropriately addressed. Mechanisms are in place for reporting unethical behaviour, and in FY2018 we will continue to focus on improving our reporting on employee grievances and incidents of discrimination, including how each matter is addressed and resolved.

14 14 HUMAN CAPITAL MANAGEMENT APPROACH (SA ONLY) We operate in a highly regulated, constantly changing and fast-paced environment. Through our engagement with employees, we aim to create a transparent and interactive platform that encourages our people to drive our systems leadership initiatives in line with our strategic priorities, as well as openly engage on issues that affect them in the workplace (including racism) and assist them to manage change. Taking care of our staff directly impacts on their ability to provide the highest quality of care to our patients. Our material focus areas are to: > > Attract and retain the best skills. > > Position Netcare with a unique employee value proposition. > > Provide employee wellness services. > > Accelerate transformation and encourage diversity. > > Provide opportunities for continuous professional learning and development, and career progression. Our performance management system, core values and the Netcare Way behaviours are entrenched practices that build Netcare s culture of being and doing. Employee relations Netcare aims to provide a fair and productive environment and we are committed to effectively dealing with issues that impact the employer and employee relationship. Our internal disciplinary procedures are governed by the workplace relations policy, standard operating procedures and guidelines. Mechanisms are in place for employees to report any grievances, disputes and complaints. The Employment Relations department, together with executive and senior management, is the custodian of the policy in line with the compliance framework and applicable labour legislation. Industrial relations training is provided to our managers and focuses on managing workplace discipline and poor performance, and how to chair a disciplinary hearing. The training is relevant to the healthcare environment and includes updates on any changes in legislation. We adhere to the collective bargaining provisions set out in the Employment Equity Act and the Labour Relations Act. We promote ongoing interaction with our representative trade unions, which includes annual collective bargaining and quarterly national consultative forums. We also fund three full-time shop stewards who assist with employee relations. At times, our focus on operational excellence requires necessary operational changes to drive efficiencies. We maintain positive and transparent relationships with our representative trade unions through: > > Disclosing all relevant information related to our proposals. > > Providing unions with the opportunity to respond to these proposals and make alternative suggestions. > > Responding to alternative proposals presented by employees and unions. Occupational health and safety Our recognition agreements with trade unions cover occupational health and safety. This ensures that our health and safety measures in the workplace comply with the requirements of the Occupational Health and Safety Act. In line with these agreements, our onsite shop stewards act as union representatives in our health and safety committees. In addition, they report monthly to the Shop Steward Committee on health and safety issues in the workplace. Training and education Employee growth and development is an integral part of our people strategy, and programmes such as Caring the Netcare Way and Leading the Netcare Way aim to enhance behaviours that support a culture of care. Caring the Netcare Way is targeted at all new employees as part of our induction programme, while Leading the Netcare Way supports the tangible growth in emotional intelligence, equipping our managers with the skills to effectively guide employees through change initiatives and drive quality and care. Our leadership programmes assist our employees to transition into new roles and are critical in building a pipeline of talent to support succession planning. Meaningful and continuous engagement between line management and employees is facilitated through performance and development appraisals. Given the shortage of suitably qualified healthcare professionals in SA, we direct most of our training spend to developing healthcare professionals with a focus on registered nurses, paramedics and pharmacist practitioners. Beneficiaries include our employees and unemployed South Africans who aspire to a career in the healthcare sector. Our nursing qualifications are accredited by the South African Nursing Council (SANC) and registered on the National Qualifications Framework (NQF).

15 15 Diversity management We are committed to promoting diversity and social cohesion within our workforce, and aspire to be a fully inclusive employer. We focus on: > > Aligning our workforce with SA s national and regional economically active population demographics. > > Gender parity. > > Creating an environment that supports people with disabilities. Diversity workshops and training, attended by management teams and employment equity committees, promote a culture of inclusiveness and facilitate dialogues on race, diversity and social cohesion. When required, training on disability awareness is also provided to our employees, including training that equips our employees with skills to communicate with people who have hearing impairments. We also encourage robust and transparent engagement on these issues through our transformation committees. We take a zero-tolerance approach to discrimination and racism. Our stance against racism applies to each person in our facilities, irrespective of whether they are employees, contractors, healthcare providers and partners, or patients and their families. The seventh Netcare Way behaviour ( I always embrace diversity, to show that I am not a racist ) supports this stance. An anonymous toll-free line enables employees to report alleged or perceived discriminatory or racist action or behaviour. Through this reporting mechanism we identify discriminatory attitudes, behaviours and practices within our organisation. Each case reported is investigated (provided the employee has given their consent) and appropriate corrective action is taken. Employee wellness Through our Employee Wellbeing Programme, employees and their immediate family members have access to a range of support services. Telephonic and face-to-face counselling is available to employees on issues such as financial, legal, and family and relationship matters, as well as stress, trauma, health and work-related issues. The programme also offers managerial training workshops that assist our managers to effectively engage with their teams and deal with conflict. Human rights Our operations and strategies align to the human rights principles encapsulated in SA s Constitution. This covers child, forced or compulsory labour and the right to freedom of association and collective bargaining. Our adherence to these principles is further strengthened through our human resources policies that emphasise our commitment to respect human rights. We are also a member of the United Nations Global Compact and support its 10 principles on human rights, labour, environment and anti-corruption. Progress made during United Kingdom As 70% of our workforce is based in SA, this is considered our most significant location of operation in terms of our approach to human capital management. Information on our workforce in the UK can be found in the 2017 Annual Integrated Report. UK operations review: page 100.

16 16 SA: Human capital indicators Employment data Permanent employee breakdown Male Female Total Hospital division and pharmacy Oncology Netcare Head office Primary Care Total number of permanent employees Permanent employees by employment level Executive Management Professional Enrolled nursing and support Total number of permanent employees Permanent employee by race Black 1 White Total Black White Executive Management Professional Enrolled nursing and support Total number of permanent employees African, Coloured and Indian. Employee by employment contract Male Female Total Male Female Total Permanent: Full-time Permanent: Part-time (reduced hours) Fixed-term Total workforce Employees belonging to a union Full-time 51.30% 51.20% 51.40% Local hiring Proportion of senior management who are South African citizens 95.56% 93.30% Calculated for employees on Grade D upper and above in terms of the Patterson grading system. Turnover data New hires Male Female Male Female Under 30 years of age Between 30 and 50 years of age years of age and above Total number of new employees

17 17 Rates of new hire Male 2.44% 2.49% Female 11.58% 11.50% Under 30 years of age 4.90% 5.21% Between 30 and 50 years of age 7.83% 7.63% 51 years of age and above 1.29% 1.15% Overall turnover rates Overall turnover 13.29% 15.67% Male 2.89% 3.00% Female 10.39% 12.67% Under 30 years of age 2.31% 2.67% Between 30 and 50 years of age 8.33% 9.82% 51 years of age and above 2.65% 3.18% Benefits Full time Part time Fixed term/ temporary Employees Full time Part time Fixed term/ temporary Employees Life insurance Yes Yes Yes 1 Yes Yes No Health care (Medical aid) Yes Yes Yes Yes Yes Yes 2 Disability coverage Yes Yes Yes 1 Yes Yes No Maternity pay Yes Yes No Yes Yes No Parental leave Yes Yes Yes Yes Yes Yes Retirement provision Yes Yes No Yes Yes No Stock ownership Yes Yes No Yes Yes No Funeral cover Yes Yes No Yes Yes No 13th cheque Yes Yes No Yes Yes No Allowances Yes Yes Yes Yes Yes Yes 1 Employees recruited on fixed-term contracts for longer than a year are entitled to receive life insurance benefits and disability coverage. 2 From 2016, employees recruited on fixed-term contracts for longer than a year were entitled to join the Netcare Medical Aid. % of employees who are members of Netcare s medical aid Full-time Parental leave data Number of employees Male Female Total Male Female Total Entitled to parental leave That took parental leave Who returned to work after parental leave ended Who returned to work and are still employed 12 months after their return Return and retention rates Return to work 100% 75.5% 100% 85.80% Retention¹ 81.3% 63.3% 1 Reported from 2017.

18 18 Performance management % of employees receiving performance appraisals Overall Male Female Training and development data Skills period April 2016 to March 2017 Number of employees trained Paramedic courses (BAA, AEA & CCA) Nursing programmes Six month in-service programmes Other programmes Total employees trained ¹ % of employees trained that are women Number of training interventions Amount spent on training interventions² R R R Total number of students currently registered at Netcare Education (nursing, emergency and critical care, and management development) Number of people trained who are not Netcare employees (fee-for-service and private funding students) Paramedic courses Nursing programmes Total restated due to reporting error. 2 These amounts only include the direct costs of training as submitted to the Health and Welfare Sector Education and Training Authority (HWSETA). Skills period April 2016 to March 2017 Formal nursing qualifications (number of nurses) 2016/ / /15 Enrolled Completed Enrolled Completed Enrolled Completed Enrolled 2nd Year (2 year exit as an Enrolled Nurse) Auxiliary (1 year exit as an Auxiliary Nurse) Diploma in General Nursing Bridging 2nd Year (2 year exit as a Registered Nurse) Post Basic Diploma in Medical or Surgical Nursing (1 year post basic Registration) Total Six-month in-service nursing programmes The numbers reported for Nursing programmes include those enrolled and qualified as Auxiliary Nurses, Enrolled Nurses, Registered Nurses and Registered Nurses with area of specialisations (excludes Certificate in General Nursing Enrolled 1st year). Training on human rights Number of hours of training % of the workforce trained

19 19 Employment equity Black (African, Coloured and Indian) representation overall: 75% (2016: 73%) 1 Women representation overall: 83% (2016: 82%) Black women representation overall: 62% (2016: 60%) 1 People with disabilities: 613 (2016: 537) restated. % of the workforce Employment equity plan (% of workforce) Employee categories Target 2017 Target 2020 Senior Management Black Black women Middle Black Management Black women Junior Management Black and Skilled Workers Black women Employees with Overall Disabilities 1 Black Black women restated. ENVIRONMENTAL MANAGEMENT APPROACH (SA ONLY) Environmental optimisation is an important contributor to Netcare s quality improvement efforts. Securing the supply of electricity and water required for our high-acuity operations is critical in delivering the best clinical outcomes and best patient experience. Actively managing our dependency on national utilities also provides cost savings, reduces our environmental impact and enables us to better manage our environmental risks. Environmental performance is managed and monitored by the Environmental Sustainability Manager who is supported by an energy engineer. The Environmental Sustainability Manager reports directly to the Chief Executive Officer (CEO) and the Sustainability Committee. The committee is chaired by the CEO and reports into the Social and Ethics Committee, a subcommittee of the Netcare Board. Our material focus areas include: > > Carbon emissions and energy supply and consumption. > > Water supply and consumption. > > Effluent and waste management. The management of water and waste, and biodiversity is predominantly at an operational level. During the course of FY2018, waste management will be centralised and an integrated waste management approach will be introduced to focus on the cost of waste and processes to identify value streams in waste. These value creating projects will generate income against which to offset costs, and support our goal to reach zero waste to landfill. The Property division oversees building projects and where required, environmental impact assessments are undertaken by specialists. The Facilities division is responsible for day-to-day operations and service providers are responsible for collecting waste and managing the safe disposal of hazardous waste on behalf of Netcare. The Procurement division is responsible for service level agreements and managing service providers. During FY2017, a Procurement committee was constituted to enhance procurement processes and review the supplier base, including ethics in the supply chain. It is chaired by the CEO. Project implementations are managed from a central point and in close collaboration with each facility. Environmental risks are managed through a robust governance and risk framework and facility management structures at operational level.

20 20 Remuneration and performance bonuses are linked to the environmental programme for employees who are accountable for environmental performance within these divisions. Netcare has the following environmental sustainability policies in place: > > An overarching environmental sustainability policy. > > Energy policy. > > Water management policy. > > Hazardous substances policy. > > General waste policy. > > Green procurement policy. > > Emissions policy. > > Base year and baseline recalculation policy. > > Health care risk waste policy. An environmental sustainability green construction policy, as well as a consultant and business design guideline will be published in FY2018. We were not able to develop a science-based target for emissions reduction through the We Mean Business initiative in FY2017 due to the specific generation trajectory in SA. This will receive further attention in FY2018. In supporting this, we will develop the Grid Isolated Energy Transfer (GIET) programme where electricity is generated through renewable sources and will be net metered. This will allow for the export of energy into the SA grid during high generation periods and for grid electricity to be imported during low renewable generation periods. This will lower the cost of electricity and also assist in meeting sciencebased targets. Our Enterprise Sustainability Platform generates daily and monthly dashboards of utility usage and environmental impact across our facilities. The data collected through the platform informs our reporting to sustainability indices and the Carbon Disclosure Project (CDP), and assists us in identifying initiatives that support our strategic objectives and targets. Training Environmental training and information sessions take place at all levels of the business, covering the actions to be taken should an adverse event occur and the behaviours required to mitigate long-term environmental risk. Scope of reporting Our environmental data for SA covers all Netcare hospitals, Medicross family medical and dental centres and Prime Cure clinics, including laundry and hospital vehicle transport. For energy and water consumption, as well as waste generation, the following are included in the scope: > > Lesotho and the Public Private Partnerships (PPP) in SA. > > Joint venture facilities in SA, including National Renal Care. > > Netcare 911 facilities located at Netcare hospitals. Carbon emissions and energy In 2013, we implemented a five-year strategy to achieve a targeted 35% reduction in energy intensity over 10 years for the SA operation. Our focus on electricity purchased is due to it being the largest utility expense, which accounts for around 80% of our total energy consumption and is the largest contributor to our carbon emissions. Since 2013, the Sustainability Committee has approved energy efficient, renewable energy and water projects valued at R507 million. Of this, R473 million has been invested in energy-related projects. Our target is to reduce our energy use to 224 GWh by 2018 and 183 GWh by 2023, based on zero growth in patient day activity or floor space (2017: 233 GWh). Electricity meters are installed on an ongoing basis at Netcare hospitals and more recently at Medicross facilities. Meters are critical for establishing accurate baselines against which to measure, verify and report energy reductions. Audits are undertaken nationally; together with our online monitoring of facilities, we are able to identify opportunities to reduce our electricity consumption and additional projects for implementation.

21 21 We measure energy consumption against our performance in 2013, which is set as our base year. The baseline was calculated using energy audits undertaken across our hospital and Medicross networks, as well as some other facilities, and a baseline and targets were established for each facility. Our baselines and targets are reviewed annually and the baseline is used to declare the savings that reflect directly in the financial statements. Our energy, carbon footprint and water usage have been independently assured by Global Carbon Exchange SA (Pty) Ltd (GCX). The assurance is undertaken as part of our disclosure to the CDP and verification was undertaken at a limited level of assurance. Assurance in accordance with: > > The principles of the WBCSD/WRI Greenhouse Gas Protocol Corporate Accounting Standard, 2nd Edition, > > The International Standard ISO (2006) Specification with guidance for the validation and verification of greenhouse gas (GHG) assertions. Water A water strategy was developed in FY2016 based on audit findings, and detailed risk assessments, and mitigation measures were undertaken in FY2017. The outcome will be the development of a waste water treatment project that has the potential to eliminate half of Netcare SA operations impact on this scarce resource. This will not only optimise risk mitigation, but will also support excellent water stewardship. We are installing water meters at our hospitals and planned to complete this project in FY2017; however some infrastructure risks and consideration for patient safety impacted the roll out negatively, and it is anticipated that the project will now be completed in FY2018. On completion, targets will be set for each facility with a list of interventions and associated implementation plans. Our aim is to implement a stakeholder inclusive water stewardship programme that is socially equitable and environmentally sustainable, but also delivers an economic benefit. Our objective is to reduce our reliance on water service providers by around kilolitres per annum. Waste management A waste strategy is in place and our approach to optimise waste management is based on the most preferred option of avoidance or prevention through reducing, re-using, recycling and disposal (the last being the least preferred option). Our audits of waste service providers cover compliance with waste management regulation, training, competency of staff, waste information systems, control and security, transportation, monitoring, environmental impact, and health and safety. We have gone to tender to develop and implement an integrated waste management solution. The focus will be to convert waste streams to value streams to mitigate cost and support a zero-to-landfill waste management outcome. The tenders closed at the end of FY2017. A comprehensive action plan is in place to address healthcare risk waste, which is the most expensive operational cost associated with waste. This provided improved results in FY2017. We focus on the correct segregation of waste using clearly marked colour-coded bins and provide training to our employees. A set of baseline metrics has been established to measure performance, with the measure of hazardous waste volume per patient day distributed monthly to leadership to track progress. Where required, we will engage with and assign targets to facilities that are above average levels of waste production. Progress made during United Kingdom Our environmental agenda in the UK covers energy and water consumption, as well as waste management. It is governed and managed by the Health and Safety Committee, which constantly evaluates opportunities to reduce our environmental impact and increase cost savings. The UK s carbon emissions are reported as part of the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. Progress made during 2017 UK operations review: page 100.