Sustainability framework
We recognise that the challenges our businesses and the Group face in rolling out their sustainability strategies will be significant, and it will be necessary to integrate an effective response to the climate, social and other risks they face into both their enterprise risk management approach and their wider strategy. In effect, sustainability needs to become a core part of how we do business and intrinsically linked to strategy and business planning.
With this in mind, we have adopted a Sustainability Framework, which will both guide and underpin our sustainability efforts, integrating sustainability across all facets of our businesses and all levels of decision-making.
Strong governance is a key element of an effective sustainability approach and we are putting in place an implementation structure which starts with the sustainability approach taken by each of our businesses and creates the opportunities for collaboration between them. It also provides support and oversight from the Group to ensure that our businesses stay focused on implementing their respective sustainability strategies.
The implementation structure is summarised in this diagram:
The role of each of the businesses is to:
- develop and adopt a sustainable business model;
- develop and implement a sustainability strategy, which is aligned with the Group’s strategy;
- set sustainability metrics and targets to address material issues and to support improved sustainability ratings;
- disclose performance to the Group and to external stakeholders;
- include a sustainability budget in the annual business budget;
- regularly report on sustainability progress to their respective Boards; and
- encourage collaboration with other businesses and provide relevant support and expertise to the Sustainability Working Groups
Sustainability Working Groups (‘SWGs’) are being established to support each of the three pillars of the sustainability strategy. They will drive activity across the Group in each of the three pillar areas and will also provide support to our businesses in developing and implementing their sustainability agendas.
The first of these working groups, the Climate Action Working Group, started to operate in early March 2021.
The members of the SWGs are colleagues from each of our businesses who are responsible for driving the related sustainability topics within their organisation. There is also representation from the centre of the Group. The primary objectives of each SWG are:
( i ) to shape the agenda in their respective pillar area, in order to help improve the performance of our businesses and the Group. This will include providing support to businesses in setting appropriate metrics, gathering data to measure performance against those metrics and reporting against that performance;
( ii ) to develop and drive Group-wide initiatives that will strengthen collaboration between businesses; and
( iii ) to share knowledge and experience across businesses. The chairs of the SWGs will provide regular updates to the SLC.
The role of the SLC is to support and coordinate sustainability efforts across our Group businesses, by:
- facilitating the sharing of knowledge and experience between businesses and the upskilling of businesses on relevant issues;
- helping our businesses mobilise activities in order to achieve their sustainability strategies;
- reviewing and approving Group sustainability policies and Group-wide initiatives;
- reviewing and discussing Group-wide sustainability risks and opportunities;
- reviewing and discussing the Group’s sustainability performance; and
- keeping the Jardine Matheson Board updated on all relevant sustainability-related matters.
The Group Sustainability Capability is responsible for developing and managing the Group’s sustainability agenda. The team coordinates with representatives from individual businesses to facilitate cross-Group activity and works with Group functions to offer support and advice on sustainability matters such as metrics, budgets and reporting.
The team also monitors and identifies sustainability-related financial risks and opportunities, engages stakeholders on sustainability-related matters and coordinates the provision of sustainability expertise (either internal or external) and support to businesses.
Given the material nature of sustainability issues, the Group intends to integrate sustainability considerations and analyses into future capital allocation decisions. Our businesses are also encouraged to integrate material sustainability considerations into their capital allocation decisions.
Sustainability issues are increasingly a material risk to our businesses and will therefore be integrated into risk management processes. We will aim to understand and report on current and emerging sustainability-related risks and articulate how the risks are being mitigated.
Sustainability was for the first time this year an explicit focus of the budgeting and strategy process for each of our Group businesses. Each business included in its budget submissions an overview of how it intended to incorporate sustainability into its wider strategy plans and how those plans would drive sustainable growth. They also identified new business opportunities which were supporting or driven by sustainability.
Each business now brings regular updates to their board on the progress they are making in delivering their sustainability agenda.
ESG factors are becoming increasingly important in how the commercial success of businesses is measured. Climate and resource use are becoming key focus areas, while societal impact affects the ability of companies to win customers, recruit employees and retain their licence to operate. Good governance is essential to ensuring that businesses make good decisions around these issues and maintain trust. These transformational shifts mean that corporate reporting must demonstrate value beyond the financial accounts.
This will require Jardines and our Group companies to identify measurable metrics relating to ESG performance and to collect necessary information to show performance against those targets. We will also need to report those results in an effective and transparent manner.
In this year’s annual report we are focusing on showing the direction of travel and demonstrating the progress that has been made in shaping and implementing our sustainability approach. In subsequent years, starting with next year’s annual report, our sustainability disclosure will focus in increasing detail on performance against appropriate metrics.
We also plan to expand the disclosure on our corporate website to provide more information about what is being done on sustainability across the Group.