Defining material items in partnership with stakeholders

More than 120 stakeholder engagements were arranged in the year to 31 March 2014 at a national level. This excludes the many engagements at an operational and provincial level. Engagements focused on sharing key information, improving existing and new relationships and creating partnerships to ensure support in addressing Eskom’s challenges

The relationships with stakeholders are managed in Eskom in terms of a governance process which is aligned to King III. This includes a stakeholder relations policy, process control manual, assessment of stakeholder relations and annual reporting of the material issues to the executive management committee, the social, ethics and sustainability committee and to the board. New developments for 2014 will include a stakeholder management data tool and the bi-annual submission of an integrated stakeholder relations issues and engagement report to the executive management committee and board.

This integrated report focuses on qualitative and quantitative items that are material to Eskom’s operations and strategic objectives. The question of what is “material” has been determined by the board and executive management through extensive consultation within Eskom as well as with Eskom’s stakeholders, while taking into consideration Eskom’s strategic objectives, risk assessments and the way in which its value chain operates.

Material items are those that are both of high concern to stakeholders and have a significant impact on the business. Eskom analysed the following to determine its material items:

Both formal and informal stakeholder feedback, including media coverage
Parliamentary questions received and the questions and feedback from government portfolio committee engagements
Reports submitted to the board and shareholder for discussion or approval
Eskom’s shareholder’s compact, corporate plan, its long-term strategic objectives and key focus areas for 2013/14
Eskom’s key risks, as identified by its integrated risk management process
Policies and initiatives relevant to Eskom’s business
Policy, legislation and regulation changes

The complete list of material items was analysed in terms of Eskom’s strategic objectives and was tabled at Eskom’s integrated report steering committee for consideration of the accuracy and completeness of the list. As part of Eskom’s governance process, the following committees also reviewed the material items that were included in this integrated report for accuracy and completeness:

Executive management committee
Social, ethics and sustainability committee
Audit and risk committee

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Stakeholder engagement

There are various avenues of communication through which stakeholders can approach Eskom with their concerns and expectations. The company takes care to ensure that all stakeholder engagements are carefully planned in terms of the scope of the engagement, the intended outcomes of the interaction and the engagement approach.

Stakeholder engagement

Eskom’s interaction with stakeholders

Method of interaction
  Government, parliament, national departments and regulators   One-on-one meetings; Presentations to parliamentary portfolio committees; Committee meetings; Eskom website; Reports; Annual general meeting; Industry associations and task teams; Site visits and public hearings; Monthly, quarterly and bi-annual meetings; Community and executive forums
  Lenders, investors and customers   Roadshows; Meetings; Results presentations; Webcasts; Site visits; Eskom website; Teleconferences; Social media; Formal presentation website; Company announcements; Reports and quarterly forums
  Suppliers and contractors   Roadshows; One-on-one meetings; Preferential procurement programmes; Open days; Contracts and service agreements; Workshops; Presentations; Training; Project steering committees
  Eskom management, employees and organised labour   Provincial employee engagements; Collective bargaining practices; Pre- and post- interim and annual results; Regular meetings; Eskom website; Social media; Development programmes; Special publications and newspapers; Open dialogues, conferences and forums; Partnerships
  Business groups, civil society and non-governmental organisations   Roadshows; Results presentations; Reports; Community forums; Stakeholder forums; Peer educators; Industry partnership; Wellness campaigns, HIV and Aids awareness; Skills development programmes; Advertising in local newspapers; Sponsorships; NGO Forum
  Industry experts, analysts, academics and media   Industry associations and task teams; Forums and committees; Emails and Eskom website; Interviews; Roadshows; Results presentations; Quarterly briefings; Company reports; Articles

The improvement in the 12-month moving average top customer KeyCare service measure for the year is attributable to Eskom meeting regularly with its top customers to share critical information on the system status and the capacity expansion programme. This was done with regular feedback from the chief executive to the key customers, quarterly liaison meetings at plant level and customer forums. The regional key account managers and their teams also regularly visit the general managers of customers and municipal managers to share important information and to enquire about service-related issues requiring attention. During the year, 56 general managers, 133 engineers and 138 accounting staff from the top customers were interviewed.

Despite the number of system emergencies, the proactive manner in which Eskom informs its customers of the system status, via twice daily reports, as well as the KeyAlert SMS messaging system, has made a difference by assisting Eskom’s top customers to plan their operational activities.

Stakeholder materiality matrix

This integrated report addresses only those items that:

Have such relevance that they could substantively influence stakeholders’ decisions
Pose a significant risk or opportunity to business operations in the short, medium and long term
May affect the achievement of strategic objectives and sustainability of value created through Eskom’s activities

Eskom’s integrated report steering committee prioritised the issues that were identified through the stakeholder engagement process, to form a stakeholder materiality matrix as outlined in the table that follows below. While Eskom considers all the items raised by stakeholders, these are not all necessarily addressed in this report.

Stakeholder material items have not been grouped together in general categories. By grouping them together the significance of some material items would have been lost for some specific stakeholders. Stakeholder concerns that are ranked as having a “high” or “medium” impact on Eskom (the last two columns) are regarded as having the potential to significantly affect the company’s achievement of its strategic objectives. As such, they have been included in this integrated report under the “Performance on strategic objectives” section.

The material items have been numbered to allow for cross-referencing with the key focus areas and associated risks table on pages 58 to 62. The numbering does not indicate the level of importance of an item.

Stakeholder materiality matrix

Stakeholder materiality matrix