GOVERNANCE AND SUSTAINABILITY

 
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Our strategic priorities in this focus area are:

Maintain inclusion in the JSE's SRI Index
Enhance environmental management and finalise
carbon footprint strategy
Improve corporate social investment,
socioeconomic development and enterprise
development initiatives
Improve stakeholder engagement
 
Governance and sustainability are fundamental to Sun International's operations and are interwoven into our strategy and decision-making processes, from board and management level to our operations. Our credible track record that underlies our corporate reputation protects our current business and supports our expansion into new territories, given the focus of governments and regulators on operators who understand and deliver on their responsibilities as responsible corporate citizens.

Sun International recognises that the development, operation and management of its hotels, resorts and gaming operations have environmental and social implications and as such, has entrenched our governance and sustainability principles within the Group's Corporate Sustainability Strategy (CSS) which aims to integrate sustainability considerations into the Group's business decisions, operations and strategy.

The Group's CSS has been crystallised into the Group's sustainability policy which reflects Sun International's commitment to sustainable development and is underpinned by the following key tenets:
  • Complying with legislation
  • Maintaining an ethical climate throughout its operations
  • Engaging with stakeholders
  • Implementing management systems that are aligned with international best practice
  • Promoting environmental and social responsibility among guests, employees, suppliers, contractors and concessionaires
  • Applying social and environmental criteria to the sourcing of goods and services wherever practical
  • Demonstrating environmentally and socially responsible behaviour
  • Demonstrating good corporate governance
 
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One of the reasons we remain at the forefront of good corporate governance in South Africa is the tireless effort put in by our Director of Corporate Services and Legal, Chantel Reddiar.

Chantel and her team continue to set the bar even higher in the constantly changing and demanding world of corporate governance. They steer me, our board and management through the complex requirements of many regulatory bodies and ensure that we do not just comply, but excel. I had much to learn in my new role and have relied heavily on her guidance.
 
CHANTEL REDDIAR
Director: Corporate services and legal
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Q: How does Sun International approach corporate responsibility?
 
imgCorporate responsibility lies at the heart of the Group's decision-making considering the highly regulated environment within which we operate. While many corporates speak of a licence to operate, ours is in essence a regulated licence to operate. Although it is imperative that we abide by legislation, we believe that corporate citizenship is about more than ticking boxes – it is about doing the right thing! Our corporate responsibility is reflective of Sun International's contribution towards social, economic and environmental sustainability. Our sound corporate reputation is based on living our values, transparency, accountability and ethical leadership within the organisation. It speaks to the responsible operator that we are, and our reputation provides assurance to the governments of countries where we seek to do business.  
 
Q: Do we prioritise responsible gaming as part of our approach?
 
imgAbsolutely. South Africa's National Responsible Gambling Programme (NRGP) is internationally acclaimed for its sound responsible practices, and Sun International, as a founding member of the NRGP, remains actively involved in the programme. It is a leading example of a collective industry approach to ensuring responsible gambling which underpins the sustainability of the industry.

Responsible gambling is at the heart of our gaming practices. We offer intensive training to our staff at multiple levels and regularly report to the board on the key aspects of responsible practices which include detail such as unattended minors on the gaming floors and crèche utilisation rates at our properties. In addition, our internal audit team performs NRGP audits at all our units in terms of their NRGP practices, and the Group standard is not to fall below 90% with the majority of our units scoring 100% in these audits.
 
Q: What about our approach to corruption and bribery – is it a potential risk when exploring new opportunities in foreign markets?
 
imgThe Group's anti-corruption policy has been approved by the board, and rolled out across the Group. We have a zero tolerance approach to any form of corruption or bribery, and we clearly set out the sanctions that would be applied should any employee be found to have engaged in prohibited practices.

The anti-corruption principles have been communicated through road shows at each unit, and are now part of our onboarding of new employees.
 
Q: What about our approach to reporting sustainability?
 
imgWe participate in the JSE's SRI Index which recognises JSE-listed companies that integrate and report on good governance practices in relation to triple bottom line performance.

As another indicator of our approach, the first Sustainability Data Transparency Index was created by IRAS this year. In this regard, IRAS reviewed the public reports of all JSE-listed companies, as well as any other entities known to produce a GRI-based annual report, integrated or otherwise, to look for quantitative data in respect of 56 different key sustainability indicators. Of the 400 companies that were measured in terms of transparency in reporting sustainability, Sun International was placed 20th – a very pleasing result.

 
We have a number of initiatives or objectives that fall into the "corporate responsibility" space. The following sections discuss those which are currently most strategically important to the Group.
 

Maintain inclusion in the JSE'S SRI Index

The JSE's SRI Index offers an aspirational benchmark and measures companies' policies, performance and reporting in relation to environmental, social and economic sustainability, as well as corporate governance practices.

Within the environmental criteria, companies are classified as high, medium or low impact based on their activities. Sun International is classified as a medium impact company. To be included in the JSE's SRI Index, companies must meet the minimum core and desirable indicators within the areas of measurement depicted below.

The Group's biggest focus in the year ahead will be on the climate change area of measurement.
 
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The board remains committed to ensuring the Company's ongoing inclusion in the JSE's SRI Index. The 2013 JSE SRI Index review has commenced and the outcome of the Group's participation will be announced in November 2013.
 

Enhance environmental management and finalise carbon footprint strategy

Sun International recognises that its operations have environmental and social implications and, as such, has entrenched its sustainability policy throughout the Group.

A new Group environmental manager was appointed in the year under review to focus on specific environmental areas and coordinate strategy and implementation across our units.

A key area of focus for the Group environmental manager will be to facilitate reporting of the Group's carbon footprint with a view to ensuring the reduction of carbon emissions. The carbon footprint initiative continues to be guided by the Greenhouse Gas Protocol. In this regard, a carbon footprint baseline was established in the 2011 financial period and the carbon footprint for 2012 and 2013 was determined based on Scope 1 and Scope 2 emissions.

Scope 3 emissions have not been included in the Group's carbon footprint this year; however, it is intended that we will incorporate these emissions for which we have data in our 2014 Integrated Annual Report.
 
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Earthglow initiative launched

In taking a coordinated and active approach to sustainability management across the Group, the EarthGlow sustainability programme has been launched and encompasses our CSS. While the Group has been strong in its environmental stewardship over the years, EarthGlow is a drive to consolidate sustainability management across the Group and promote continued improvement in our numerous programmes.

The objectives of EarthGlow are to:
Build awareness and ownership of the EarthGlow platform
Motivate employees to be Sun International sustainability ambassadors, and to live an environmental culture by engaging, educating and rewarding
Raise awareness among guests of our sustainability activities and results and involve them, as appropriate, to enhance their experience and brand affinity
Leverage our reputation and activities through relevant sustainability partnerships
Build stronger relationships by engaging and informing other key stakeholders, including contractors, suppliers, media and investors
Be innovative where we can
Monitor sustainability communication campaigns to track effectiveness and to provide content for communications and reporting
Celebrate achievements and report transparently on results.
 
While our core sustainability principles have remained the same, our focus now is to operationalise EarthGlow throughout the Group. This includes setting specific targets at unit level across the key pillars of water, energy consumption, waste management and enterprise and socioeconomic development. The rollout of the ERP system will support data generation and measurement of our progress in these areas.

We are also implementing an ISO14001 environmental management system (EMS) in all of our units. The full ISO14001 EMS system will be rolled out at our larger units that have significant data requirements, while a simplified version will be used in smaller units that have less capacity. Both versions will still capture all data relevant to reporting requirements, which will allow us to measure the tangible benefits of these initiatives. 
 

Improve socioeconomic development and corporate social investment initiatives

Our operations have a significant impact on local economies through job creation and local economic multipliers. We recognise that this is a symbiotic relationship as we depend on the goodwill and stability of the communities in which we operate.

Sun International is committed to spending 3% of after tax profits on a combination of socioeconomic development (SED) and corporate social investment (CSI) initiatives, using a ratio of a 2% contribution of SED and 1% to CSI.

Our aim is to have a positive impact on society, while making a sustainable contribution to the economy and society. Our projects are managed both centrally through the Sun International Social Community Development Trust (SISCDT) and by each property, with our properties focusing on the immediate communities within which they operate. To ensure meaningful and sustainable projects, the SISCDT commissioned CSI Solutions to evaluate the impact of these projects on the communities in which the properties operate.

Consequently, we will drive our commitments by considering the requirements of local communities in our areas of operation, focusing on projects that empower local communities through education, health and welfare, and development through sports, arts and culture.
 

Improve group enterprise development initiatives

The Group is reviewing its enterprise development (ED) initiatives to see where we can improve delivery and the impact of our ED spend. In the past we have relied on early settlement of suppliers to achieve the majority of our ED spend which has had little impact on the development of qualifying entities. In the future we will be focusing on loan funding and investment to create and develop meaningful broad-based black economic empowerment (B-BBEE) suppliers.
 

Improve stakeholder engagement

The Group has a formalised stakeholder engagement process in place and has identified its key stakeholders, having regard to those that have a material impact on the Group and those on which the Group may have a material impact.

The Group's stakeholder impact matrix is depicted below.
 
 
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A stakeholder engagement review is undertaken annually to ensure currency and relevancy of material stakeholder issues. This supports our objective to engage appropriately with all our stakeholders on identified issues such that decision-making in the Group holds benefit for affected parties, taking into account their legitimate interests and expectations.

In the year under review, the Group undertook an independent study with the Gordon Institute of Business Science which conducted a standardised ethical procurement survey. The survey was performed on procurement departments at all our units, including head office, and included anonymous feedback from suppliers drawn from our supplier database.

The supplier ratings were exceptionally high which indicates that the Group is highly regarded across its supplier base for sound and thorough ethical practices. The Group will continue to monitor this area to ensure that this pleasing result is maintained.
 

Investor relations

In an independent survey undertaken during the year, we received mixed feedback with regard to our investor relations strategy. Using input from the survey we are updating and evolving our investor relations strategy which in future will be more proactive as opposed to reactive as it was in the past. To this end, and for the first time, we produced an investor presentation which is available on our website at:
 
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The presentation was well received and clearly sets out the Group's strategic focus areas and the results for the year.

In the investor community, we are undertaking intensive one-on-one engagement with investors and shareholders to ensure that they have a comprehensive understanding of the Group, its strategy and performance. Information obtained from our interactions will inform our strategy and decisions.
 

Regulator survey

In 2014, the Group will be commissioning a survey to evaluate the perceptions of its key regulators. We will initially target gaming boards, which are the key touch points in our day-to-day operational dealings. The study will aim to identify any perception gaps or issues that should be addressed.

Although the Group maintains strong and productive relationships with its regulators, we need to ensure that we continue to actively build on these relationships and deal adequately with any issues that this stakeholder group may raise.

We have elevated the custodianship of gaming board relationships to key executive managers with a view to strengthening our relationships with the gaming boards.
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