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Playing Our Part to Reduce Environmental-Related Risk

We understand a sustainable business requires a sustainable environment.

We acknowledge our responsibility to ensure that Sanlam, its solutions, support structures and business practices incorporate responsible environmental principles. We further recognise that climate change presents an important business and global risk that could impact the stability and quality of human society, thereby eroding the financial resilience and prosperity of our clients and the societies we operate in.

Environmental-related risks – notably extreme weather events, failure of climate change mitigation and adaption, as well as water crises – have emerged as a central feature of the global risk landscape. Because of the combined effects of climate change and poor maintenance of infrastructure, risk insurance companies are expected to cover a wider range of risks. Insurance premiums are likely to increase as insurers and reinsurers carry the burden of claims arising from severe weather events.

We understand climate change will affect our business through liability claims, impacts on certain investment portfolios and changing market dynamics. We also understand that with these risks are opportunities for new products and services. To help us understand these risks better, Sanlam joined Climatewise so that we are able to be part of the solution to the risks that affect us all.

However, low insurance penetration, especially in developing markets, has seen the protection gap widening over time. Insurers will have to look at ways of addressing penetration proactively, including raising awareness around the role they can play in risk transfer and risk management. Another area where insurers can play a bigger role is in resilient investing, e.g. infrastructure and green energy.

What We Do as an Insurer

We therefore continuously investigate how best to bring socio-economic and environmental factors into our investment decisions, while increasing our share of investments in environmentally-responsible markets where feasible. We are also working hard to strengthen our performance against the six principles of ClimateWise – the global insurance industry’s leadership group that drives action on climate change risk. In addition, we look at:

Governance and oversight of environmental-related risk

The Sanlam Board mandates the Social, Ethics and Sustainability committee to monitor and advise on all SES matters – this includes monitoring our impact on the environment.

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Responsible investments through the Sanlam Investment Group

The Sanlam Investment Group considers the responsible stewardship of natural resources as part of its investment philosophy.

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Understanding our strategic risks and opportunities

We recognise severe weather and climate change as one of our key strategic risks, which are addressed at an executive and senior management level.

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How We Are Managing Our Environmental-Impact at Group Level

As a company, we have set specific targets to reduce electricity and paper usage, increase water conservation and manage our waste stream responsibly:

We have been a signatory of the Carbon Disclosure Project since 2007. This year, we achieved a score of B indicating that we implement a range of actions to manage climate change in our own operations and beyond.

Our carbon report shows the scope of data we monitor. We report on Greenhouse gases on a carbon dioxide equivalent basis, as required under the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.

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LA Limited assurance (download EY’s independent assurance report (Limited Assurance))
* Basis of measurement: Water usage in kilolitres for six buildings – Sanlam Head Office (fresh water), Houghton,
Sanlam Investment Management, Sanlam Alice Lane, Sanlam Glacier and Sanlynn for the period 1 January 2018 to 31 December 2018.

Managing our water consumption remains a challenge and our facilities teams continue to find ways to manage our water use and metering effectively. We participated in the Carbon Disclosure Project Water Programme and achieved a score of C in 2018.

We remain committed to addressing South Africa’s water security issues through our continued involvement in the World Wildlife Fund South Africa’s water balance programme. This programme urges South African business to take ownership of the country’s common water challenge by going beyond reducing their own water demand to making an investment back into water provisioning ecosystems in relation to the size of their water use.

Compared to 2017, we have seen a decrease in the percentage of waste diverted from landfills. Typically, general waste disposed of at landfills is made up of tissue paper and single-use packaging from canteen and restaurants. In previous years, paper towels from our bathrooms and kitchens were recycled. However, as these paper towels are now being made from a recycled product and require additional processing, it has become a challenge to find a suitable recycler. As such, paper towels are contributing in an increase to our landfill waste. We are working hard to implement alternative solutions in 2019 that could include, for example, composting paper towels.

Despite this increase, we are on target to achieve zero-waste-to-landfill by 2020: our goal to achieve zero-waste-to-landfill was initially set in 2014 and related only to Head Office as this was where most of our employees were situated. As we are on track to achieve our 2020 target, we will stretch our new waste target to include other significant buildings.

Sanlam Is in the Top 30 of the FTSE/JSE Responsible Investment Index

Investors are increasingly incorporating environmental, social and governance (ESG) considerations into core benchmarks and passive investments. The FTSE/JSE Responsible Investment Index, launched in 2015, advances corporate sustainability practices and offers an objective way of assessing how corporates integrate ESG considerations into strategy. Our inclusion in the Top 30 of the FTSE/JSE Responsible Investment Index is affirmation of the high quality of our ESG practices and reporting.

Our Ongoing and Pioneering Partnership with WWF-SA

We have worked alongside World Wildlife Fund South Africa (WWF-SA) since 2006 and, in 2018, Sanlam signed a further three-year partnership with the foundation.

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