liberty holdings limited · experience digitisation integral part of sbg market cap r31,5 billion...

Liberty Holdings Limited

Report to societyOur journey to shared value 2018

We will...

Remember the humanity in

what we do

Help people leave a legacy for

their families

Make Liberty not just our

name, but what we do

For every moment of your journey.Some days pass by like whispers, and are soon forgotten. Others leave scars, worn like badges of honour. Some days herald a new chapter in a life story. Others, simply the start of a new sentence.

When you partner with us, we make a promise: To be the catalysts of your peace of mind, from that day on. For the days you wish would never end.

And the ones you’d rather forget, but never will. For the days that catch you by surprise.

And the ones you’ve been planning all your life For every moment, for every day.

Sometimes that means we need to be your adviser.

Other times, all we can do is listen. Sometimes we need to be pioneers.

Other times, we follow your lead. When times call for a tough mind, we always answer with a tender heart and humanity.

Your trust is more valuable to us than anything else. That’s why we go out of our way to truly understand you: • To imagine what your future challenges

will look like • To make things simpler for you • To keep our promise

For every moment of your journey.

Understand our clients and their

unique responses to life events

Empower our employees,

advisers and partners to deliver exceptional and intuitive human

experiences

Use smart technology

as a seamless and intuitive

enabler

Build partnerships to the

benefit of our clients in pursuit of making their

financial freedom possible

Contents

R39,8m invested in

education and financial literacy

B-BBEE

level 2 contributor

R7,2bn annuity payments

R9,6bn paid in death and disability claims

R34,7m invested in employee

development

2018 achievements

Who we are 4What we do and where we work 5Combined group chief executive and chairman's review 6How we're governed 8Strategy 10Material matters 11

About Liberty

Our approach 12Stakeholder engagement 14Alignment with the UN Sustainable Development Goals

15Liberty's SEE strategy

Independent auditor's assurance report 44Definitions 46GRI Standards content index 48Abbreviations 50

Supplementary information

R175m in unpaid benefits paid to > 23 000

beneficiaries

Our reporting suite 2About our 2018 report to society 3

Introduction

Feedback We welcome your feedback. Please send your comments and questions to [email protected]

Our approach 36Energy consumption and carbon footprint 37Reducing our water use 39Managing our waste responsibly 39

Responsible consumption and production

Our approach 40Innovation that creates value for clients and financial advisers

41

Responsible investing 43

Industry, innovation and infrastructure

Our approach 27A focus on Maths, Science and English 28Training at Liberty 30

Quality education

Our approach 16Working at Liberty 17Contributing to economic growth 19

Decent work and economic growth

Our approach 31Diversity and transformation 32

Reduced inequalities

Liberty Holdings Limited Report to society for the year ended 31 December 2018 1

Our reporting suite

Further content online: Application of the King IV™ principles

Financial results presentation Six-year review Notice of annual general

meeting and proxy form

We produce a full suite of reports to cater for the diverse needs of our stakeholders. The associated icons refer readers to information elsewhere in this report or in other reports which are available online: www.libertyholdings.co.za/investor

RS Report to society Frameworks applied Assurance

An account of the group’s social, economic and environmental impacts and how these contribute to the group’s sustainability and its ability to achieve its purpose.

• Global Reporting Initiative (GRI) Standards

• King IV™• The Carbon Disclosure

Project (CDP)• FTSE/JSE Responsible

Investment index TM Copyright and trademarks are owned by the Institute

of Directors in Southern Africa NPC and all of its rights are reserved.

Selected financial information in this report has been extracted from the group’s audited annual financial statements. PwC, the group's external auditor, has provided limited assurance on selected non-financial indicators. The impact of Liberty’s combined assurance opinion has been considered for certain information. The group’s B-BBEE information has been verified by Empowerdex.

Intended readers: The group’s broad base of stakeholders, particularly clients, employees, business partners, regulators, government and civil society organisations.

Rem Remuneration reportA detailed review of the group’s remuneration practices, including the group’s remuneration policy and remuneration implementation report.

• JSE Listings Requirements • Companies Act, 71 of 2008• King IV™

Selected information in the remuneration report has been extracted from the group’s audited annual financial statements.

Intended readers: Shareholders, debtholders and regulators.

Gov Governance at LibertyA detailed review of the group’s governance practices and policies.

• J SE Listings Requirements • Companies Act, 71 of 2008• King IV™

Selected information in the governance report has been extracted from the group’s audited annual financial statements.

Intended readers: Shareholders, debtholders and regulators.

AFS Annual financial statements, incorporating risk management Sets out the group’s full audited annual financial statements, including the report of the group audit and actuarial committee. Provides detailed commentary on Liberty’s risk management.

• International Financial Reporting Standards

• Companies Act, 71 of 2008• Solvency Assessment and

Management (SAM)• JSE Listings Requirements • King IV™

Unmodified audit opinion expressed by PwC.

Intended readers: Primarily providers of financial capital, being shareholders and debtholders, and regulators.

IR Integrated reportProvides a holistic assessment of the group’s approach to value creation. The report considers the issues that are material to our commercial viability and legitimacy to enable us to deliver on our purpose in the short, medium and longer term. Where applicable, information in this report has been extracted from other publications in our reporting suite.

• The International <IR> Framework of the International Integrated Reporting Council (the <IR> Framework)

• JSE Listings Requirements• King IV™

Selected financial information in this report has been extracted from the group’s audited annual financial statements. PwC has provided limited assurance on selected non-financial indicators. The impact of Liberty’s combined assurance opinion has been considered for certain information. The group’s B-BBEE information has been verified by Empowerdex.

Intended readers: Primarily providers of financial capital, being shareholders and debtholders, but information relevant to other stakeholders is also included.

2

INTRODUCTION ABOUT LIBERTY

LIBERTY'S SEE STRATEGY

DECENT WORK AND ECONOMIC GROWTH

QUALITY EDUCATION

REDUCED INEQUALITIES

RESPONSIBLE CONSUMPTION AND PRODUCTION

INDUSTRY, INNOVATION AND INFRASTRUCTURE

SUPPLEMENTARY INFORMATION

Frameworks and other reports This report has been prepared with reference to the GRI Standards. A list of specific GRI disclosures can be found in our GRI Standards content index on pages 48 and 49. .

Our management reporting processes and our suite of reports are aligned with the reporting principles of the King IV™ report on corporate governance for South Africa 2016 (King IV™). Our integrated report is our primary report for our investors and provides a holistic assessment of how Liberty creates value over time.

Other international principles, standards and guidelines also inform our sustainability strategies and reporting, including the United Nations (UN) Global Compact, the associated UN Sustainable Development Goals (SDGs), the UN Principles for Responsible Investment (PRI) and the CDP. STANLIB publishes an annual PRI transparency report ( www.reporting.unpri.org) and Liberty submits annual disclosures to the CDP Climate Change Questionnaire ( www.cdp.net).

Through transparent disclosure of clearly defined environmental social and governance (ESG) criteria, Liberty strives to benchmark its sustainability performance against other market participants and is a constituent of both the FTSE/JSE Responsible Investment index and the FTSE4Good Emerging Index Series. This disclosure is made throughout our reporting suite and on our website.

About our 2018 report to societyWe seek to balance the needs of all our stakeholders with regulatory requirements by preparing a suite of reports (as detailed on page 2). Our report to society is prepared for a broad set of stakeholders and seeks to communicate our social, environmental and economic impacts in a concise and accessible manner. The report is structured around five of the UN Sustainable Development Goals most relevant to Liberty.

Scope and boundary Our report to society is published annually. This report to society covers the sustainability performance of Liberty Holdings Limited (Liberty or the group) and its subsidiaries for the year ended 31 December 2018. Any material events up to the date of issue (10 May 2019) are also included. Prior year period comparatives are provided where available. No restatement of comparative information has been made.

Liberty is a South African company with a presence in sub-Saharan Africa. It is listed on the Johannesburg Stock Exchange (JSE) and is a subsidiary of the Standard Bank Group, which owns 53,6% of the issued share capital. STANLIB is the group’s wholly owned asset manager and its information is consolidated in this report. Liberty Two Degrees (L2D) is a corporate Real Estate Investment Trust (REIT) listed on the JSE which manages a significant portion of Liberty’s property portfolio. Liberty held 58,9% of the REIT at 31 December 2018. We do not discuss the individual performance or operations of L2D in this report, but do include consolidated environmental information concerning L2D and Liberty managed properties. L2D produces its own integrated report, available at

www.liberty2degrees.co.za.

MaterialityOur focus is on material matters that affect our ability to deliver on our purpose for the benefit of all our stakeholders. Our integrated report presents an analysis of our performance in relation to our material matters. This report provides more information concerning our material social, environmental and economic (SEE) impacts. Materiality is assessed against risks, challenges and opportunities. We undertook a materiality assessment, considering the group strategy, stakeholder concerns, matters of ethics and governance, and risks and opportunities. Once determined, our material matters anchor our reporting and thought processes, as well as our governance and strategy development.

Assurance

The board, in conjunction with the group audit and actuarial committee, is ultimately responsible for Liberty’s system of internal control. Liberty applies a combined assurance approach, ensuring that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision making and its external reports.

PwC issued an unmodified audit opinion on the group’s annual financial statements. PwC provided a limited assurance report on other selected information in this report. Our broad-based black economic empowerment (B-BBEE) information is verified by economic empowerment ratings agency, Empowerdex. The various levels of assurance received on reported information have been indicated throughout this report as follows:

A Full assurance provided by PwC.

L Limited assurance expressed over selected key performance indicators provided by PwC. RS refer to pages 44 to 45 for PwC's assurance report.

V Verified by Empowerdex (South African operations only).

Material Matters

Performed a high-level review of board and committee meeting packs and minutes

Determined a detailed list of material matters

Prioritised the material matters according to their impact

on the organisation and their relevance to key stakeholders

Engaged with key stakeholders

to validate the material matters

Consulted with exco members

to confirm and prioritise


Who we areLiberty is a JSE listed financial services group that offers an extensive, market-leading range of products and services to help clients build and protect their wealth and lifestyle. Liberty is part of the Standard Bank Group which owns 53,6% of the issued ordinary shared capital.

Strategic focus areas CLIENT AND FINANCIAL

ADVISER EXPERIENCE

DIGITISATION INTEGRAL PART OF SBG

MARKET CAP

R31,5 billionASSETS UNDER MANAGEMENT

R718 billion

DEATH AND DISABILITY CLAIMS PAID

R9,6 billionFULL-TIME EMPLOYEES

> 5 700TIED FINANCIAL ADVISERS

> 3 500RETAIL POLICIES IN-FORCE

2,5 million

LEADING PROVIDER OF LONG-TERM INSURANCE

SOLUTIONS TO SOUTH AFRICA’S RETAIL AFFLUENT MARKET

> 60 years OF SUSTAINED

DIVIDENDS

> 500 000INDIVIDUAL

AND INSTITUTIONAL INVESTMENT CLIENTS

Liberty, through both tied and independent financial advisers, offers clients a range of insurance and savings products, allowing them to plan for the worst but prepare for the best in their life journeys. With a strong trusted brand for over 60 years, Liberty is one of the largest providers of long- term insurance solutions to South Africa’s retail affluent market.

At STANLIB, our investment professionals are focused on the future and cover a wide range of asset classes, both locally and offshore, from active to passive asset management to single and multi-manager solutions. Our insights and experience help us make better-informed decisions for the future that enable our clients to achieve financial freedom.

Liberty Two Degrees (L2D) is a precinct and predominantly retail-focused South African REIT, and a sector benchmark in innovative property asset management capabilities. L2D is focused on delivering sustainable growth, derived from quality property income, to our institutional and retail unitholders. Liberty held 58,9% of the REIT at 31 December 2018.

Our purpose and visionLiberty is committed to supporting Standard Bank Group's (SBG) vision to become the leading financial services organisation in, for and across Africa, delivering exceptional client experiences and superior value.

Our purpose Improving people's lives by making their financial freedom possible

Our vision Transforming Liberty to be the trusted leader in South Africa and chosen markets by delivering superior value through exceptional client and adviser experiences

at 31 December 2018 at 31 December 2018 in 2018

4




QUALITY EDUCATION





What we do and where we work

INSURE

ADVICE

INVESTCertainty in uncertain times. Products that provide clients

and their dependants with peace of mind and protection

from the financial impact of life’s unexpected events such

as death, disability, critical illness and redundancy.

An advice philosophy that places the client at the heart

and delivers a human, living and outcomes-oriented experience, via the best advisers with smart

enablement and an advice culture.

Investment solutions that allow our clients to reach

investment goals, provide for retirement or leave a

legacy.

FINANCI

AL

AD

VISERS

LIBER

TY

Employees

Investors

Regulators

Society

CLIENTS

RISKS MAN

AGED

BY LIBERTY

Strategic and

business

Insurance

Market

Credit

Liquidity

Operational

TRANSFERRED

CLIENT RISKS

We provide advice, insurance and investment products that improve people’s lives by making their financial freedom possible. Our ability to create value is determined by our ability to establish, build and sustain relationships and manage a variety of risks for both clients and ourselves.

Liberty is represented in 31 African countries, providing long- and short-term insurance, asset management and health insurance

is one of Nigeria’s leading health management organisations

provides a wide range of insurance products in the East Africa region

South Africa contributes approximately 95% of total income before reporting adjustments

for more details of Liberty's business model.IR

Our head office is in Braamfontein, Johannesburg South Africa


Combined group chief executive and chairman's leadership review

David Munro Group chief executive

A message from our leadershipDuring 2018, Liberty made meaningful progress towards its financial transformation. While the tough economic conditions impacted the recovery of our South African business, we achieved significant strategic shifts to support our financial advisers and deliver excellent client experiences. During the year, Liberty continued to fulfil its promises to clients and supported them through their life journeys. We paid R9,6 billion in death and disability claims, R7,2 billion in annuity payments, provided advice through approximately 3 500 tied financial advisers and insured over six million lives. These statistics reflect Liberty’s contribution to economic growth and the outcomes of our business for our clients.

In this, our report to society, we seek to provide insights into Liberty’s social, environmental and economic impacts, to identify risks and opportunities for our sustainability and report on how Liberty impacts and contributes to a broader range of stakeholders.

At the start of the 21st century, the world faces enormous challenges including hunger and poverty, inequality across race, gender and nations, poor education, slow economic growth and unemployment, and climate change. Internationally, the United Nations has set targets for individuals, corporates and nations to achieve by 2030 – the 17 Sustainable Development Goals. In South Africa, our primary area of operation, the National Development Plan 2030 provides local guidance for all sectors of society to eliminate poverty and reduce inequality.

In 2018 we identified five Sustainable Development Goals which are most relevant to our business and the societies in which we operate. These are the areas where we already have an impact, either positive or negative, and where we look to build on the positive and eliminate or reduce the negative. In 2019 we will conduct an exercise that sees us align our activities more closely with the National Development Plan, allowing us even greater focus.

This report to society accordingly articulates our performance in relation to the matters we consider most material to our business, believing that exceptional performance in these areas will contribute to our long-term sustainability.

Our employees remain central to Liberty’s success. Providing an enabling environment for our people to thrive, to grow and develop is the goal for those who manage our human capital. Providing equal opportunities, eliminating prejudice and enhancing our employees’ skills will qualify Liberty as an employer of choice. Employees in such an environment will provide excellent client service and be committed promoters of Liberty.

Our financial advisers assist our clients to achieve their hopes, dreams and aspirations, partnering with them through their life journeys. Our ambition is for our humanity to differentiate Liberty in the provision of advice, insurance and investments.

Liberty maintained its level-2 B-BBEE contributor status through increased points for skills development and socio-economic development, including consumer education. The tough employment environment in 2018 and focus on the organisational redesign process conducted during the year resulted in little meaningful progress being made from an employment equity perspective. This will receive greater focus in 2019.

6




QUALITY EDUCATION





Jacko Maree Chairman

As part of our transformation journey, we support small and emerging Black owned suppliers and in 2018 onboarded 12 new suppliers to our Blue Skies supplier development programme.

Promoting greater inclusion and participation in the economy is a goal for Liberty and something that will enhance our sustainability. Our corporate social investment activities are directed at educating young people and providing financial literacy to all ages. Our employee volunteerism portal allows us to encourage and track involvement of employees with NGOs and other deserving causes.

The speed of technological development generates challenges as well as opportunities for Liberty. We have continued to embrace the digitisation of our systems and operations to further enhance the experiences of our clients and financial advisers. It is imperative that we continue to protect personal data and uphold this principle in the design of new initiatives or systems.

Liberty strives to improve our understanding and responsiveness to our stakeholders’ legitimate needs. Our engagement this year with Unclaimed Benefit Fund members was productive and demonstrates our commitment to the principles of shared value. Liberty continues to trace beneficiaries who are unaware of their potential benefits, through organised public awareness campaigns.

Finally, while Liberty has a small environmental footprint, we are committed to measuring and managing our resource consumption, reducing it wherever possible. In 2018 we installed solar PV panels on the roofs of our head office and parkade in Braamfontein, introduced a grey water and rainwater capture project, and successfully recycled 35% of all our waste.

In 2018, management and the board identified areas that will fast-track our transformation to a financial services provider of the future. We embarked on, and completed, a comprehensive redesign of our organisation, reconnecting value chains that had become disconnected and focusing on the needs and requirements of our clients and financial advisers. This was a complex but necessary exercise which triggered high levels of anxiety and stress in our teams in South Africa but created the critical foundation for an aligned and successful business going forward. In 2019 our focus will be on delivering on our strategy by implementation of our plans and on strengthening our organisational culture to deliver our turnaround.

We would like to express our sincere gratitude to our employees, investors, clients, advisers, suppliers and the communities in which we operate for their support during this year. By working together, we can harness our collective efforts and move towards achieving our broader societal goals and responsibilities.

David Munro Jacko Maree Group chief executive Chairman

10 May 2019 10 May 2019


How we’re governed

Liberty’s governance structures and processes

create value for all our stakeholders by

Enhancing our understanding of

risks

Building legitimacy

through ethical leadership

Balancing upside return

opportunities with the cost of risk

Enhancing the Liberty brand and

reputation through responsible behaviour

Allocating the six capitals to

value-creating activities

Adopting an inclusive approach

to business

In 2018 the Liberty board approved an enhanced governance framework, setting out the governance principles, practices and guidance to facilitate effective and efficient management of the business. The adoption and implementation of this framework ensures sound and prudent management and oversight of Liberty’s business, adequately recognising and protecting the interests of all its stakeholders.

Leadership, ethics and corporate citizenshipThe board subscribes to the highest levels of professionalism and integrity in conducting Liberty’s business and in dealing with stakeholders. The board members hold one another accountable for decision-making and acting in an ethical manner, thus providing effective leadership.

Liberty has a board-approved code of ethics which has been communicated to all internal stakeholders.

Our code of ethics is available at www.liberty.co.za/ Documents/code-of-ethics.pdf

Strategy, performance and reportingThe board and management are responsible for providing the overall strategic direction to the group and are required to oversee the implementation of Liberty’s business objectives and strategies, including its risk strategy and appetite, in line with its long-term interests.

Annual performance targets are set. Business performance measurement involves the calculation of the key performance metrics used by stakeholders to determine whether management has successfully implemented the strategy. Performance is assessed against performance targets, which incorporate assessments of risk, established through the strategic planning process.

Governance functional areasThe governance framework is supplemented by frameworks for risk management and financial capital management.

Risk managementEffective risk management is critical to Liberty’s sustainability. It supports the board and senior management in discharging their respective duties in relation to the sustainable operation of the business.

Liberty has adopted an enterprise risk management (ERM) approach which enables the group to consider the potential impact of risks on stakeholders. Liberty’s risk framework is substantially based on the ERM principles embodied in the SAM framework.

AFS A full risk report is included in Liberty's annual financial statements

IT governanceThe group information and technology committee has been specifically established to discharge the board’s accountability for the governance of technology and information.

ComplianceThe board delegates responsibility for compliance to management and monitors this through the compliance control function.

Monitoring and controlLiberty has adopted best practice monitoring and control mechanisms by implementing the three lines of defence governance and combined assurance model.

Financial capital managementThe financial capital management strategy ensures that financial capital is deployed to initiatives that maximise value for the group while remaining within risk appetite. The group ensures that available capital is of suitable quality and is accessible when required. The capital buffer is the amount by which available capital exceeds the statutory capital requirement for the group.

Human capitalLiberty drives a culture where each employee takes accountability and responsibility for ensuring that the right business is done in the right way and that financial resources are managed responsibly. This is purposefully influenced by setting the tone at the top and having values, ethics and practices to assist in the achievement of our purpose and vision.

Executives, managers and employees are remunerated in proportion to the value they contribute to the organisation and the value they create for its stakeholders. Liberty’s approach to remuneration is to promote the achievement of its strategic objectives and encourage individual performance through fair, responsible and transparent remuneration.

Rem A full remuneration report is available at

www.libertyholdings.co.za/investor

8




QUALITY EDUCATION





It is the responsibility of the board to ensure that clearly defined roles and responsibilities are in place, thereby ensuring that its responsibilities are delegated to the appropriate individuals, functions or committees. The day-to-day management of Liberty is allocated to key executives and senior management.

Liberty’s responsible persons should be and remain fit and proper, having the necessary competence and integrity to fulfil their respective roles. A responsible person is deemed to be someone whose conduct is most likely to have a significant impact on Liberty’s sound and prudent management. A fit and proper policy is in place and is reviewed annually.

Exco supports the group chief executive who is ultimately responsible for formulating the group’s overall strategy and targets that are approved by the board. Exco assists the group chief executive in monitoring the operational performance of Liberty and ensures the group has adequate financial and operational systems for the management of risk and internal control.

Exco delegates responsibility for overseeing the implementation effectiveness of the governance, risk management and financial capital management frameworks to various management and oversight committees.

Ultimate accountability for the effective governance of Liberty resides with the board.

The company secretary provides the directors of the company, collectively and individually, with guidance in respect of their duties, responsibilities and powers.

Group executive committee (exco)

Management and oversight

committees

Board committees

Group chief executive

Board

Company secretary

Governing structures and delegationOur governance framework assists in ensuring that Liberty has an adequately transparent organisational structure in place with clear allocation and appropriate segregation of responsibilities that sets the high-level direction and measures performance against that direction.

Our governance structures

The duties of individual

board members include

Acting in good faith, honestly and

reasonably

Exercising independent

judgement and objectivity in

decision making

Exercising due care and diligence

Acting in the best interests of the group, its clients and shareholders

Appropriately mandated committees are required to enable the board to oversee the effectiveness of the governance framework.

Gov Full details of the governance of Liberty is provided in our Governance at Liberty report.


StrategyOur long-term strategy is to deliver our purpose of "Improving people's lives by making their financial freedom possible". To guide the achievement of this strategy we adopted the following strategic value driver model during 2018 and the strategic focus areas on page 4.

These strategic value drivers form the basis of how we approach our business and how we connect with stakeholders and society and allow us to measure progress against our strategy. We aim to drive efficiency by simplifying our operations, managing risk appropriately, deploying capital effectively and pursuing profitable growth opportunities over the long term.

Executing our strategy involves transforming knowledge into action to bring value to our clients, employees, shareholders and business. We created a modular approach to strategy, feeding input into the group strategy from connected workstreams across business units. These workstreams focus on guiding and supporting delivery of initiatives across the group, and report to the strategic oversight committee which, in turn, reports to the exco and the board.

=+ + FINANCIAL OUTCOME

SEE IMPACT

CLIENT AND FINANCIAL

ADVISER EXPERIENCE

RISK AND CONDUCT

EMPLOYEE ENGAGEMENT

Placing the client at the heart of our business

and understanding the critical role that our

financial advisers play

Providing an environment for our

people to thrive

Enhancing our reputation and building trust

Creating societal value and preserving our

natural capital

Delivering sustainable returns

Client and financial adviser experience – placing the client at the heart of our business and understanding the critical role that our financial advisers play

Metrics and planning – ensuring that we are measuring what is important to us and that

we are making progress in our business and delivering on our promises

Architecture – changing our operating model and structure to ensure we deliver exceptional experiences by “putting the value chain back together” and removing complexity from our business

Digital and data – to harness the power of the digital world and

the data resources in Liberty and Standard Bank Group

People and culture – the most important driver of our success – changing our collective behaviour to place the client at the heart of our business will drive our success

Standard Bank Group – focused on ensuring that we systematically connect

every part of our organisation with Standard Bank Group where there is an

opportunity for leverage

Brand and reputation – communication, both within Liberty and outside, of the change in Liberty and the promises to both clients and financial advisers

Strategy cascade – communicating the strategy to everyone in the organisation

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QUALITY EDUCATION





Material matters

Client and financial adviser experience

Key stakeholders

Material matters

Response

Clients

Financial advisers (tied and independent)

Claims and underwriting processes

Client administration service

Competitive product set

Utilisation of technology for clients and financial advisers

Retention of tied financial advisers

Productivity of distribution channels

Impact of retail distribution review (RDR)

Connected experience programme

Product and pricing initiatives

Digitisation focus

Alignment of targets, recognition and reward

Activity tracker for lower tenure advisers and individual pledges from E-advisers

RDR preparedness programme

Restore brand consideration

Risk and conduct

Key stakeholders

Material matters

Response

Regulators

Civil society

Clients

Investors

Employees

Volume and pace of new regulation

Risk management and internal control

Conducting our business in a responsible manner

Cyber security threats and Protection of Personal Information

Stability, security and speed of IT systems

Data integrity and ownership

Legacy funds and unclaimed benefits resolution

Risk and compliance enhancement programme workstream

IT and cyber security frameworks and policies

Modernisation and rationalisation of IT architecture

Ethics programme

Risk and compliance self assessments

Re-registration and unclaimed benefits task team

Employee engagement

Key stakeholders

Material matters

Response

Employees

Financial advisers

Appropriate organisational design

Skills, talent management and leadership development

Diversity and inclusion

Redesigned organisational structure effective 1 January 2019

Transformation strategy

Employee engagement

Financial outcome

Key stakeholders

Material matters

Response

Shareholders

Debtholders

Analysts

Challenging sales environment impacting both volumes and margins

Cost increases above margin growth due to inflation and low productivity

Historic growth increased business complexities and inherent risks

Investment performance below client expectations

Redesign and reprice products

Strengthen expense management

Reduce complexity to reduce controls

Improve distribution channel productivity

Headcount freeze

Improve investment performance at STANLIB

Greater collaboration with SBG in building a universal financial services organisation

Optimise the outcomes of the group’s growth initiatives

We consider a matter to be material if it has, or may have, a significant impact on our ability to create value in the short, medium and longer term for our shareholders and key stakeholders and is specific to Liberty’s operations. Our material matters were informed by those matters discussed by the board and its committees during the year, matters arising from the strategy setting process, and the legitimate concerns of our key

stakeholders. The material matters associated with four of our strategic value drivers are listed below, and our response to and performance against these material matters are more fully discussed in the integrated report. This report focuses on our social, environmental and economic (SEE) impact material matters. Details of these, together with their link to the SDGs are provided on page 15.


At Liberty, we appreciate the meaningful role businesses can play in society. We strive to understand and manage our social and environmental impacts and view our impacts primarily through two lenses – where our company has a direct impact, or where, indirectly, we can be catalysts for positive change.

Our approachCreating societal value and preserving our natural capital.

In delivering on our purpose of improving people’s lives by making their financial freedom possible, Liberty looks to maximise our positive SEE impacts while mitigating and managing potential negative impacts. Ultimately, we strive to deliver shared value.

Liberty understands shared value as a means to achieving social, economic and environmental success. By creating value for our company we enable financial freedom for others.

Respect and support internationally

recognised human rights in our area of

influence

1 2 3 4 5

Ensure that Liberty does not participate in

any way in the violation of human rights

Support freedom of association and

recognise the right to collective

bargaining

Eliminate all forms of forced or

compulsory labour

Eradicate all forms of child labour in our

value chain

Global Compact

Principles

Social needs

Corporate assets and expertise

Business opportunities

and challenges

Shared value isPolicies and practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates

Shared value is not• Sharing the value already created (philanthropy)

• Personal values

• Balancing stakeholder interests

• Compliance with local regulations

www.sharedvalue.org.au/

Liberty’s success is inherently linked to the prosperity and wellbeing of the societies in which we operate. Through active risk management and sound relationships, Liberty’s advisers and products enable clients to mitigate against life’s traumatic events and grow their wealth for retirement. The value created for our clients must also translate into value for other stakeholders, including investors, employees and civil society. To this end, our shared value strategy views social, economic and environmental issues as opportunities for growth, innovation and differentiation.

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QUALITY EDUCATION





• Development is people driven

• Good governance, democracy, human rights, justice and rule of law

• Political unity and an integrated continent

• Prosperous Africa

• Peaceful and secure Africa

• Strong cultural identity, values and ethics

• A strong and influential global player and partner

• Citizens active in their own development

• Faster and more inclusive economic growth

• Uniting South Africans around a common programme

• A capable and developmental state

• Leadership and responsibility throughout society

• Building capabilities

If achieved, it is estimated that the SDGs can unlock US$12 trillion in market opportunities globally.

Liberty is also aligned with the objectives of Africa Agenda 2063. This is a strategic framework that outlines the socio-economic transformation of the African continent over the next 50 years and builds on, and seeks to accelerate, the implementation of past and existing continental initiatives for growth and sustainable development. The framework identified seven African aspirations that drive its vision for an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the international arena.

6 7 8 9 10

Stimulate all practices that

eliminate any form of discrimination in the

workplace

Assume a responsible, preventative and proactive posture

towards environmental challenges

Develop initiatives and practices to

promote and divulge socio-environmental

responsibility

Promote the development and dissemination of environmentally

responsible technologies

Fight corruption in all of its forms,

including extortion and bribery

Liberty supports the principles of the United Nations Global Compact. By incorporating these principles into our strategies, policies and procedures, and establishing a culture of integrity, we aim to uphold our responsibilities to people and the planet.

Our SEE strategy is focused on the value we create for civil society and is guided by the United Nations 2030 Sustainable Development Goals (SDGs) which provide “a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 SDGs, which are an urgent call for action by all countries - developed and developing - in a global partnership. They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.”1 Governments, the private sector and civil society have been tasked with translating the 2030 agenda into a shared vision that can be implemented through national development plans and strategies.

Both the SDGs and the Africa Agenda 2063 require citizens and corporations to contribute to individual, national development plans. As such, Liberty supports the South African government’s National Development Plan 2030 (NDP). The NDP is a broad strategic framework setting out a coherent and holistic approach to confronting poverty and inequality based on six focused priorities:

1 About the Sustainable Development Goals: www.un.org/sustainable development/sustainable-development-goals/


Stakeholder engagementIn 2018 an enhanced stakeholder engagement strategy was adopted. This strategy defines our key stakeholders and the stake they hold in Liberty. The nature and frequency of engagement varies according to each stakeholder group and the issue at hand.

Commercial stakeholdersPrimarily managed within

the businesses

Clients

Financial advisers

Employees

Business partners and suppliers

Shareholders and debtholders

Non-commercial stakeholders

Managed at the centre

Government

Media

Civil society

Regulators, policy and law makers

Organised business and professional bodies

Each PEA has been designed with context in mind, as well as the specific objectives, stakeholder groups and action plans with timelines and performance measures.

To facilitate proactive engagement in each of the areas, we identified and established a three-point priority plan. Firstly, we must be proactive in our engagements to ensure that we can drive our strategic intent. Secondly, we must be deliberate in how we build core capabilities for stakeholder engagement across the business to nurture stakeholder inclusiveness and responsiveness to emergent issues. Thirdly, we must be sophisticated in how we measure the impact and effectiveness of our engagements with stakeholders, benchmarked against global best practice.

PEAs

Public policy and advocacy

Material SEE impacts

Education (financial literacy and inclusion)

Current issues (e.g. unclaimed benefits)

Inclusive economic growth and participation (transformation)

Market relevance

Clients and financial advisersOur financial advisers (both tied agents and independent financial advisers) are often the face of Liberty to our clients. While delivering value to clients by applying their knowledge and expertise to provide responsible and objective financial advice, they also learn clients’ needs, wants and expectations.

Liberty’s businesses also engage directly with clients and potential clients and identify client needs and concerns. Within the South African operations, there are numerous touchpoints where clients can communicate with Liberty to convey their needs, wants and expectations. In addition to their one-on-one adviser relationships, clients have access to a variety of channels to communicate with us directly, including an extensive call centre which deals with complaints, service issues, claims, product sales and advice, social media and web-based platforms.

Following extensive engagement with advisers, we launched Liberty Advisory Partners (a repositioning of the previous “tied channel”) in 2018. Proactive engagement resulted in significant progress being made regarding the Standard Bank Financial Consultant support model and the independent financial adviser value proposition and segmentation approach.

EmployeesWe engage with our employees through a variety of mechanisms, both formal and informal, to gain insight into their needs and ensure they understand their roles.

We conduct employee roadshows aimed at communicating our vision and strategy across the entire group. Most employees have access to Liberty’s intranet platform and our Liberty Live platform cascades information from senior leadership throughout the company. Scheduled broadcasts provide an audio-visual channel for internal communication. Leadership forums are aimed at identifying top talent and setting work practice examples for the broader workforce.

All entry-level staff attend a two-day workshop focusing on self-awareness and employee career management. The programme provides information

to employees about business practices such as performance and talent management.

In 2018 we conducted an employee engagement survey to which approximately 49% of our employees responded. IR .more details of the results of this survey are available in the

RegulatorsIn 2018 we continued to engage extensively with South Africa’s main industry regulators, the Financial Sector Conduct Authority (FSCA) and the Prudential Authority. Senior group executives represented Liberty at all the quarterly update meetings. At these meetings we ensured that the group’s financial position, strategy and concerns were communicated to the senior management of the regulator. We participated in various regulator-driven forums, with considerable time dedicated to the new prudential regulatory regime. We also engage with other South African regulators where appropriate and frequently partner with SBG when interacting with regulatory and industry stakeholders.

In the balance of our African markets, Liberty continues to focus on initiating and improving engagement with all relevant regulators.

InvestorsProviding a detailed analysis of our financial results enables investors and analysts to compare us with our competitors on a like-for-like basis. Consistent and effective engagement with shareholders and potential investors to align their return expectations with our strategy and targets helps ensure a fair reflection of our value creation opportunities in the share price. Investors and potential investors require regular interaction and continuous information to assist in achieving their investment goals.

Civil societyWe identified six proactive engagement areas (PEAs) that represent the chosen fields within which we will engage our stakeholders.

14




QUALITY EDUCATION





During 2018, Liberty prioritised five SDGs in line with our SEE impact material matters.

Alignment with the UN Sustainable Development Goals

Key stakeholders Material matters Response

Civil society

Clients

Regulators

Analysts

Promoting financial freedom and inclusion

Promoting quality education

Responding to stakeholder expectations

Responsible management of our physical environment

Funding national infrastructure development

Contributing to the Green Economy through responsible (ESG) investment

Financial advice and product offerings

Financial literacy programmes

Maths, Science and English education programmes

STANLIB responsible (ESG) investment

Stakeholder engagement programme

Resource management programmes (water, energy and waste)

Metric

Transformation (B-BBEE)

CSI expenditure

Carbon and water footprint

Taxes collected and paid

SEE impact Creating societal value and preserving our natural capital

Promoting financial freedom and inclusionLiving with dignity is a fundamental human right• Financial advice and product offering• Financial literacy programmes

> 5 700 full time employees

> R35 million invested in employee training and development

> 6 million lives insured

R9,6 billion paid in death and disability claims

R718 billion assets under management

> 41 000 participants attended financial literacy training

Promoting greater economic inclusion through transformationAddressing historic inequalities amongst our workforce and society• Recognition of human rights• Embracing diversity• Promoting gender equality

Level 2 B-BBEE contributor

R49,1 million invested in CSI projects

86% of all employees trained were Black

Promoting quality educationEnabling freedom through understanding• CSI (Corporate Social Investment)• Mathematics, Science and English programmes

R22,1 million invested in Maths, Science and English programmes

> 20 000 students benefited from our CSI programmes

22% of employees participated in leadership or management programmes

Contributing to the green economyA responsible approach to our environment• Managing and reporting our carbon emissions• Investing in renewable energy

35% of all waste recycledSolar PV project installed at head office

Innovative products and funding national infrastructure Laying the foundations for a better future• STANLIB responsible (ESG) investment• Investing in infrastructure and renewable energy• Innovation that creates value

R3,4 billion invested in road infrastructure developments in South Africa

R3,2 million invested in hospitals

R4,3 billion invested in renewable wind and solar energy


UN context: Roughly half the world’s population still lives on the equivalent of about US$2 a day with global unemployment rates of 5,7% and having a job does not guarantee the ability to escape from poverty in many places.

South African context: South Africa continues to experience high levels of unemployment, inequality and poverty. Strong economic growth remains elusive but is required to address these challenges.

Liberty contributes to this SDG through the conduct of its core business – providing advice, and insurance and investment solutions to its clients.

Liberty is committed to creating sustainable economic value. Maximising the financial value we create is key to our sustainability and ability to deliver value to all our stakeholders. Our shareholders entrust us with their capital and expect competitive returns and capital appreciation on their investment. We consistently and effectively engage with our shareholders and potential investors to align their expectations with our strategy and targets.

We encourage economic inclusion in the economy by delivering financial literacy programmes in communities that historically have been excluded.

Liberty’s contribution to decent work and economic growth in 2018

Our approachWe seek to develop a work environment where our people feel connected with our organisational purpose and the needs of our clients. This involves creating a culture of empowerment, where our employees reach their full potential and receive recognition for their performance. We are committed to investing in the growth and development of our people which, in turn, increases confidence in our brand.

Doing the right business the right way underpins trust in Liberty and the financial services sector.

> 6 millionLIVES INSURED BY LIBERTY

3,2 million CREDIT LIFE POLICIES IN FORCE IN

SOUTH AFRICA AND THE REST OF AFRICA

R9,6 billionPAID IN DEATH AND DISABILITY CLAIMS

ANNUITY PAYMENTS OF

R7,2 billion

5 762 FULL TIME EMPLOYEES

3 559 COMMISSION-REMUNERATED AGENTS WHO DISTRIBUTE LIBERTY’S

PRODUCTS AND ADVISE OUR CLIENTS

R4,1 billion PAID IN EMPLOYEE COSTS

TAXES COLLECTED AND PAID BY LIBERTY

R6,8 billion

> R35 million INVESTED IN EMPLOYEE TRAINING

AND DEVELOPMENT

> 41 000 PARTICIPANTS ATTENDED FINANCIAL

LITERACY PROGRAMMES

> R175 million PAID IN UNCLAIMED BENEFITS TO

>23,000 BENEFICIARIES

R718 billion OF ASSETS UNDER MANAGEMENT

16




QUALITY EDUCATION





Our people are critical to our success and investing in our human capital is vital to the sustainability of our business. We employ more than 5 700 full-time employees and partner with over 3 500 tied financial advisers. Liberty aims to attract and retain people who find alignment between their personal aspirations and Liberty’s purpose.

Working at Liberty

Promoting employee wellbeing and financial freedom

Our employee wellbeing offerings

CAREER BODY EMOTIONAL SOCIAL FINANCIAL

Career assessments

Training programmes

Technical and behavioural training

Leadership programmes

Development plans

Learnerships and internships

Bursaries

Advanced development programme

Fitness centre

Wellness practitioners

Medical aid and chronic disease management

Health risk assessments

Stress management

Sports clubs

Crèche

Exercise programmes with fitness trackers

Health awareness programmes

Mental wellness programmes

Trauma counselling

Wellbeing workshops and training

Awareness programmes

Diversity workshops

Employee volunteerism

Team building

Team effectiveness workshops

Celebration days

Financial needs analysis

Benefits assessments

Mind My Money

Debt counselling

Financial freedom workshops

Staff Financial Advice Centre

Tax consulting

We aim to provide an environment where people feel inspired and engaged. In 2018 we articulated the principles of humanity we want to embed across every interaction we engage in, whether it is the employee, adviser or client experience. Our employee engagement is driven through a variety of formal and informal mechanisms to gain insight into their needs and ensure they understand the contributions they can make in achieving our strategic goals.

We work closely with a variety of service providers who deliver quality care to our employees through the programmes and services they offer. The Liberty Wellness Centre, located at our Braamfontein head office, provides access to a variety of medical practitioners including a medical

Our people philosophyOur employees are unique individuals with dreams, aspirations, and a desire to develop their careers for a better tomorrow. We understand the significance of attracting, retaining and growing talent to deliver the right solutions for our clients, effectively and efficiently.

We insist on competitive pay and benefits, aligned to the market for different functions and skills. Our culture unifies us to achieve excellence. We are committed to creating a place where people feel deeply connected with our purpose, our clients and financial advisers. Our people are empowered

and recognised for delivering against our strategic objectives and have every opportunity to achieve their full potential.

We seek to provide a place to work where we embrace diversity while promoting performance through clear goals, encouraging feedback and swift action. We develop dynamic and engaged leadership teams who live the Liberty values each day and hold themselves accountable and responsible for the business – celebrating successes and learning from their mistakes.

physician, occupational nurse, dental services, optometrist, dietitian, reflexologist, physiotherapist, chiropractor and a pharmacy. Our offices in Century City, Melrose Arch and Umhlanga Ridge have access to medical facilities onsite or in the vicinity.

We recognise the overall wellbeing of our employees as a critical aspect of a high-performance culture. During 2018 we defined our approach to employee wellbeing as enabling employees to identify and reach their own wellness goals in a manner that also benefits employee engagement and productivity. This approach, called betterME, outlines five core pillars for managing wellbeing more holistically.


Working at Liberty continued

The Liberty Fitness Centre conducts free health risk assessments for employees, which includes comprehensive assessment reports and recommendations. Our employees have access to Libcare, a comprehensive medical aid for Liberty employees. Additionally, as part of our ICAS membership, we offer counselling and advisory services to employees. In October 2018, we hosted an employee wellness day at our head office, attended by over 1 500 employees, where they could engage with medical practitioners and financial advisers, and participate in several health-related activities.

Liberty’s purpose is to enable financial freedom. Our Mind My Money programme is offered to all our employees, both in person and online. The programme aims to increase financial capability through the acquisition of knowledge and skills, applying this knowledge to personal expenditure, tracking current and future income, and choosing the right financial products to enable financial freedom. We also offer employees retirement contribution matching and hosted education programmes on annuity product development and guarding against fraud and scams.

Occupational health and safetyWhen employees, clients and tenants are in our buildings, we are responsible for their safety and security. Our occupational health and safety (OHS) department leads our awareness and training initiatives and ensures that the correct processes and procedures are in place. These initiatives are conducted throughout the year and include emergency response procedures. Our branch managers are appointed in accordance with section 16.2 of the OHS Act, 85 of 1993. During 2018, there were 41 trained health and safety representatives across the group.

In 2018 we implemented human capital technology, MyAccess, that enables employee access to individual key performance indicators, promoting regular engagement on career goals and individual performance. We also completed substantive work to ensure our focus areas and key deliverables are visible at all levels in the group, and that individual employee performance measures are aligned to the group’s strategic objectives. This facilitates a thorough conceptual understanding of how individuals contribute to the company’s objectives and performance.

Our talent management framework seeks to encourage our employees to be positive, enthusiastic, bold and courageous, and to develop the capability to deliver on our core strategic objectives. By understanding talent capabilities, we appropriately match critical roles in the organisation, thereby amplifying employee potential.

Our focus on talent retention remained front-of-mind in 2018 by identifying potential successors for critical leadership roles across the group. Our programmes focus on leadership development using technology to engage people on platforms that are relevant and convenient.

In addition to the academic knowledge, these programmes are designed to transform the perspectives of the participants, often resulting in changing their viewpoints.

RS refer to page 30 for more detail on liberty's training and development programmes.

Occupational, Health and Safety 2018 2017

Injuries

Total number of incidents reported to workmen’s compensation commissioner 15 17

Medical treatment cases 9 8

Lost-time incidents 6 9

Injury frequency rate

Lost-time injury frequency rate (LTIFR) (per 200 000 hours) 0,14 0,20

LTIFR (per 1 000 000 hours) 0,71 1,01

Number of fatalities 0 0

Absenteeism

Total number of sick leave days taken 19 676 19 955

Average sick days per employee 3,9 3,8

Absenteeism rate (%) 1,5 1,5

Empowering our people through learning and developmentLiberty recognises the value of investing in skills development. As a market leader in the financial services industry, we offer a variety of development programmes to our employees that aim to strengthen technical, leadership, product and compliance capabilities. We appreciate the need to keep our training programmes relevant to develop the capability that responds to current and emerging market trends, and seek opportunities to reskill our employees as we implement new technology solutions. Liberty strives to create and maintain a learning function that facilitates collaboration, efficiency, agility and the development of the capabilities required to deliver on our purpose.

In 2018, Liberty increased its external salaried training spend in South Africa to R34,7 million (2017: R15,2 million), representing 0,84% of total staff costs. This increased investment lead to an increase in the average number of hours of training each employee received, from 19 in 2017 to 31 hours in 2018. Liberty is currently transitioning to a new digital platform, which will enable us to record our investment in training with greater accuracy and insight.

Training spend Salaried employees

Commission- remunerated

agents

2018 2017 2018 2017Total training spend (R million) 35,3 28,5 110,5 65,7

Average training hours per employee 31 19 20 3

Black employees as a % of employees trained

86 84 25 55

Females as a % of employees trained 59 50 35 36

Financial FreedomProgramme

18




QUALITY EDUCATION





Value created for Liberty and its stakeholders, as fully described in our 2018 IR , is the source of our contribution to economic growth in the countries in which we operate. Here we describe Liberty's impact on economic growth using our strategic value drivers as the basis.

Clients and financial advisers – placing the client at the heart of our business and understanding the critical role our financial advisers play

Clients purchase our risk and investment products through financial advisers who empower their decision making through relevant and responsible advice. Our products are designed to respond to life’s uncertainties and deliver risk and investment solutions for each stage of a client’s life. We secure an understanding of our clients' needs through research and in-depth engagements with both clients and financial advisers. We strive to provide service excellence.

Liberty's risk clients can continue with their day-to-day lives in the secure knowledge that, should “the unthinkable” occur, they or their loved ones will be provided for. Life insurance products provide for the families of clients in the event of their death, allowing their beneficiaries to continue to settle outstanding debt, to pay for a child’s education or to be financially secure in retirement. Clients who suffer from disability, a dread disease or redundancy are positioned to meet continuing obligations as well as the increased costs associated with illness or disability. Risk products remove potential burdens from the state and contribute to a continuing level of consumer spending.

Investment clients not only save for themselves but also contribute to the capital required to power the economy. Saving for a personal goal or retirement, clients will contribute to the country’s economy through consumer spending, meeting their obligations and reducing the burden on the state.

Most of our emerging consumer market (ECM) risk products are funeral plans provided through both Liberty and Standard Bank advisers. We offer savings plans to ECM participants to promote personal saving at any level of income.

Our credit life products allow clients to raise capital, knowing that their debt will be settled in the event of their death or permanent disability. Credit life facilitates lending by financial institutions, contributing to a growing economy.

Liberty's primary focus is to deliver on the promises we make to our clients. We achieve this through innovative solutions, supported by an extensive and diverse distribution capability, and servicing.

Our more than 3 500 tied financial advisers provide tailored advice to individuals, families and employers in South Africa and the rest of Africa. These advisers have been trained by Liberty and undergo rigorous annual development, familiarising themselves with new regulations and products. In 2018, Liberty invested over R110 million in the training of our tied distribution network.

The advice provided by our advisers, whether it results in a sale or not, contributes to a client’s or potential client’s understanding of his or her financial position and the risks he or she may face. Increasing a person’s understanding of financial markets, economies and risk management contributes to their greater participation in the economy.

Employees – providing an environment for our people to thrive

Contributing to economic growth

Headcount

Indicator 2018 2017 2016 2015 2014

Salaried employees – South Africa 4 869 5 237 5 307 5 636 5 838

Salaried employees – rest of Africa 893 859 832 767 779

Commission-remunerated agents – South Africa 2 952 3 094 3 198 3 147 3 367

Commission-remunerated agents – rest of Africa 607 537 455 892 579

Total 9 321 9 727 9 792 10 442 10 563

As at 31 December 2018, the average age of our employees was 39 years (2017: 38 years), with approximately 52% of our permanent salaried South African employees below this age (2017: 51%). The average tenure of our employees in South Africa was nine years (2017: eight years). The voluntary turnover rate of our South African workforce decreased to 11,29% (2017: 14,06%) and the non-voluntary turnover for 2018 was 2,27% including retrenchments, dismissals, inter-group transfers and mutually agreed separations.


Liberty commits to paying fair, performance-related remuneration, providing career and skills development opportunities and value-added benefits in a non-discriminatory work environment.

In 2018 Liberty incurred employee costs totalling R4,1 billion (2017: R4,1 billion) on a reduced permanent salaried workforce of 5 762 people (2017: 6 096 people). Average remuneration per employee increased by 4,5% to over R700 000 per annum.

Remuneration packages are geared to each employee’s level of influence and role complexity. The balance between guaranteed and variable pay is appropriately structured and all employees have some level of variable pay as part of their remuneration package.

Employee cost analysis

67

69

5

14

2

6

4

%

Salaries and wages

Medical aid contributions

Sta� and management incentive schemes

Share-based payment expense

Other retirement contributions

Other

14

5

6 4

69

2

A well-regulated and trusted financial services industry contributes to economic growth. We aim to enhance our own and the industry’s reputation and build trust by doing the right business the right way.

ComplianceManaging business risk and behaving in an ethical manner that ensures compliance with the form and substance of laws, regulations, codes and standards applicable to our business builds trust, enhances our reputation, reinforces our licence to operate and ultimately leads to value creation.

Material matters associated with our risk and conduct arise from all our stakeholder groups. Our capital risk measures are those regulatory requirements applicable to our industry. Managing our capital levels promotes regulatory compliance and facilitates business growth, encourages client confidence, and creates value for our shareholders and other stakeholders.

Compliance with laws and regulations is non-negotiable. Any contravention comes at a cost in financial losses, fines or diminished reputation.

We regularly host compliance management forums to identify and analyse emerging regulatory trends and to ensure Liberty remains agile and responsive. Our combined risk and assurance functions enable robust internal controls, while we engage our external assurance providers for independent oversight. We regularly engage regulators directly and through industry forums to inform our strategy development and identify risks and opportunities that may arise.

Liberty was within its risk appetite on all dimensions as at 31 December 2018 and sufficient work has been done to provide comfort that there are no material unreported risks. The risk management system is functioning effectively, and the business continues to be managed within group risk appetite.

IR .More details regarding our management of risk and our risk appetite is provided in the integrated report

Regulators – enhancing reputation and building trust

Contributing to economic growth continued

Employee cost analysis

67

69

5

14

2

6

4

%

Salaries and wages

Medical aid contributions

Sta� and management incentive schemes

Share-based payment expense

Other retirement contributions

Other

14

5

6 4

69

2

The following benefits are standard for South African full-time employees

SOLVENCY CAPITAL REQUIREMENT COVER

1,87 times

20181

1 2017 comparative not applicable due to the new prudential regulatory regime

Retirement provision

Medical aid

Parental leave Disability cover

Life insurance Healthcare

20 days of annual leave

20




QUALITY EDUCATION





Maintaining an ethical culture is fundamental in upholding our reputation as a trusted financial services provider. To secure and preserve our social and legal licences to operate, we continuously embed and enforce ethical behaviours in all areas of our business. Our current, King IVTM aligned code of ethics outlines our expectations. It requires employees and representatives to act in a manner that inspires trust and confidence in our brand. We hold ourselves accountable to the highest standards of ethical behaviour, as well as compliance with the standards of our industry. We also continue our involvement with industry and thought leaders through the University of Pretoria’s Gordon Institute of Business Science Ethics and Governance Think Tank.

STANLIB – technical breach of CISCAThrough engagement with the FSCA during 2018, it became clear that STANLIB was in technical breach of the Collective Investment Schemes Control Act (CISCA), in that certain STANLIB Multi-Manager (SMM) unit trusts' levy performance fees (paid to underlying managers) without this being explicitly allowed for in the supplemental deeds of the respective funds.

The FSCA decided in August 2018 that since the supplemental deeds didn’t explicitly allow for performance fees to be levied from the unit prices of the funds, this constituted a breach of CISCA and STANLIB had to correct the position. The FSCA imposed a fine of R500 000 and STANLIB refunded all performance-related fees to the clients. SMM removed performance fees from all retail fee classes with effect from 10 December 2018.

IR refer to the integrated report for more information.

Our whistle-blowing channels encourage anonymous reporting of fraud, corruption, ethics breaches or misconduct, and include the Liberty app, reporting via online platforms, and independent hotlines.

VUVUZELA – THE HOTLINESMS: 30916

Email: [email protected]

Telephone: 0800 63 67 25

Web: www.thehotline.co.za

Mobi: www.thehotlineapp.co.za

Our sophisticated forensics and risk departments are a critical component of safeguarding our clients and Liberty’s business through the prevention of financial crime, fraud and corruption. We are members of the Association of Certified Fraud Examiners, an international body that provides guidelines and training in fraud prevention, and we also work closely with the Association for Savings and Investment South Africa to combat financial crime. Our financial crime, whistle-blowing, and conflicts of interest policies articulate our approach to preventing, monitoring and reporting fraud and corruption.

Liberty has a zero-tolerance stance to fraud and all instances detected lead to disciplinary action or other measures, including criminal and civil proceedings.

2018 FINANCIAL LOSSES AS A RESULT OF FRAUD

ACTUALLOSSES

PREVENTEDLOSSES

RECOVERIES

R7,2 MILLION

R85,83 MILLION

R0,54 MILLION

Cyber securityLiberty faces an increasingly hostile cyber environment with hacking attempts ranging from opportunistic criminals to organised syndicates. We have made material progress on our cyber security programme and achieved enhancements at an elevated pace.

We regularly test our processes and systems to measure the risk and recalibrate where necessary and in 2018 increased our investment in technology to strengthen our ability to detect and respond to cyber threats.

We value the privacy of our clients, and continuously maintain and improve our systems to enhance data security, acting in compliance with the Protection of Personal Information Act, 4 of 2013 (PoPI). The purpose of PoPI is to ensure that all South African institutions conduct themselves in a responsible manner when collecting, processing, storing and sharing another entity’s personal information, by holding them accountable should they abuse or compromise personal information. Liberty views data as an asset and uphold the rights of protection over critical areas such as choice, consent, purpose, notification and safeguard protection.

COLLABORATION

CAPABILITYGOVERNANCE

CULTURE

CYBER SECURITY

STRATEGY AND EXECUTION

Our code of ethics is available at www.liberty.co.za/ Documents/code-of-ethics.pdf



Communication timeline

Looking forwardTo maintain progress towards best practice security maturity, three capabilities are needed

1 Continue the process of simplifying IT legacy systems

2 Security governance should be structured as an adviser to IT and business

3 Security maintenance activities should be consolidated and extended

Thu

14Sun

17Wed

20Fri

22

Sat

16Mon

18Wed

20Thu

6

Hackers gain unauthorised

access to Liberty IT system.

Group chief executive

town hall with employees.

Group chief executive David Munro

addresses press conference, carried

live on SABC and CNBC-Africa channels. Update to employees

and clients.

Information regulator meets

with Liberty, and is reportedly satisfied with the manner in which Liberty dealt with the IT breach.

Liberty issues media statement confirming

IT system breach; contacts clients

by SMS; responds on social media to

client enquiries; and provides information

on the website.

CIO Benjamin Marais speaks

to ITWeb news portal, providing minor updates. Anti-phishing

communication sent out to clients.

Group chief executive David Munro appears

on numerous radio stations and responds to questions. He also addresses financial

advisers via livestream.

Johan Minnie engages with industry bodies.

Client update sent out to

clients.JUNE JULY

Cyber security (continued)Illegal and unauthorised access to Liberty IT infrastructure

On 14 June 2018, Liberty received an anonymous email stating that hackers had found a path into Liberty's IT environment. The hackers claimed to have stolen copies of data and demanded payment and that the authorities not be informed.

Liberty refused to make any concession and no payment was made to the hackers. Law enforcement agencies were engaged, and the services of a global specialist advisory service secured. In summary, an internal-facing web application hosted at Liberty was exploited and internal emails and attachments compromised. The last contact by the hackers was on 17 June 2018.

Immediate

1Liberty is prepared for a cyber attack and maintains a cyber incident management process. This was activated at 11pm on 14 June, 96 minutes after receiving the hackers’ email

2 Liberty IT staff, external partners and SBG representatives convened and our crisis management process was activated

3All vulnerabilities that had been exploited were identified and further impact mitigated. All malware and inappropriate materials were removed from Liberty’s systems

4 The systems were returned to an operationally ready state

5 Additional ongoing monitoring was implemented to detect similar events

Post incident

An international expert in cyber security conducted an independent maturity assessment of Liberty’s information security.

The assessment’s key findings were:• Liberty faces an increasingly hostile cyber environment

• Liberty’s information security team is closing security issues at good speed

• Best practice gaps were identified in six of eight relevant security maturity areas

• Progress has been made in the improvement journey, although more work remains

• The maturity journey relies on continued management attention, the implementation of planned transformational architectural improvements, simplification of the IT environment, and the availability of additional expert resources

Our response

22




QUALITY EDUCATION





The FSCA published amendments to the Policyholder Protection Rules prescribed under section 62 of the Long-Term Insurance Act, 52 of 1998. The amendments took effect on 1 October 2018 and in response Liberty established a complaints management framework. This framework ensures fair treatment of all complainants in a manner proportionate to the nature, scale and complexity of our business, and is appropriate to our business model, policies, services, policyholders and beneficiaries.

The framework requires us to take reasonable steps to gather and investigate all relevant and appropriate information and the circumstances surrounding a complaint. This must be done with due regard to the fair treatment of the complainant. The framework does not impose unreasonable barriers to complainants.

We complied with the categorisations of reportable complaints in accordance with the FSCA minimum categories for complaints relating to:

• the design of a policy or related service, including the premiums or other fees or charges related to that policy or service

Customer complaints

Group financial performanceNormalised operating earnings were up 42% on 2017. Strong cost discipline together with product and margin enhancements resulted in a 59% improvement in group value of new business (VoNB) to R371 million, with margin improvement to 0,9%. STANLIB South Africa reflected improved investment performance in its core retail equity and balanced funds, achieving top quartile performance over the 12 months ended 31 December 2018.

Normalised operating earnings for the year ended 31 December 2018 of R2 006 million, reflect an improved operational performance in the South African Insurance Operations and STANLIB South Africa businesses. LibFin Investments – Shareholder Investment Portfolio (SIP) earnings of R250 million were impacted by volatile market conditions and lower market returns which resulted in normalised headline earnings of R2 256 million for the year (31 December 2017: R2 719 million). This resulted in a return on equity of 10,1% (31 December 2017: 12,3%).

Continued focus on sales efforts and volumes resulted in an improved second-half sales performance, with the group long-term insurance indexed new business of R8 051 million at similar levels to 2017 despite a slow start to the year.

Headline earnings for 2018 amounted to R2 645 million compared to R3 252 million in 2017. Liberty's headline earnings include the positive earnings impact of R397 million (31 December 2017: R543 million) arising from the accounting mismatch on the consolidation of the Liberty Two Degrees listed REIT.

Group net external third-party client cash inflows amounted to R10,2 billion, up 57% on 2017 inflows of R6,5 billion, supported mainly by good STANLIB South Africa net external third-party client inflows as well as lower policy maturities and withdrawals in the South African Insurance Operations. Total group assets under management amounted to R718 billion (31 December 2017: R720 billion).

The group's capital position remains strong, with the solvency capital requirement cover of Liberty Group Limited, the group's main long-term insurance licence, at 1,87 times at 31 December 2018 which is at the upper end of the target range and underpins our commitment to fulfil our promises to policyholders and other stakeholders.

Group equity value per share was R139 (31 December 2017: R140), with the small reduction attributable to lower investment returns in line with investment markets.

• information provided to policyholders

• advice

• policy performance

• service to policyholders, including complaints relating to premium collection or lapsing of policies

• policy accessibility, changes or switches

• complaints handling

• insurance risk claims, including non-payment of claims and

• other complaints

Escalation procedures are in place for complaints that are time sensitive, unresolved and potentially complex. This enables us to improve our complaints handling and dispute resolution processes to resolve client complaints before they are referred to the ombudsman.

IR More details concerning the number and outcome of complaints received by Liberty are provided in the integrated report.

In 2018, we made good progress on our key strategic objectives to better support our clients, with improvements in the investment performance of STANLIB and the South African Retail insurance business. The organisational redesign exercise to reconnect the value chains in our business helped deliver these results and certain operations identified as no longer central to Liberty’s revised strategy are under ownership review.

Investors – delivering sustainable returns


Enterprise and supplier developmentEnterprise and supplier development strengthen and empower our supply chain, enabling us to meet our procurement requirements. Given the historical context in South Africa, we support preferential procurement, which aims to ensure that Black-owned businesses have access to markets to grow into sustainable businesses.

RS for more information, see page 34.

Employee retirement and post-retirement medical schemesThe group operates a variety of retirement and post-retirement medical schemes for the benefit of employees.

Fraud and corruptionThe financial services sector remains vulnerable to fraud and corruption. To mitigate this risk, we use various mechanisms to prevent, detect, investigate, and remediate instances of fraud, corruption, and misconduct. We actively identify and repudiate false claims before they are paid, recognising fraudulent policy applications at the onset and recovering fraudulent payments.


Infrastructure investmentsLiberty is committed to supporting infrastructure development across the continent. We recognise that power generation and energy sector projects are key to creating sustainable economic growth.



Earnings by business unit

Rm (Unaudited) 2018 2017 % change

South African operations South African Insurance Operations 2 009 1 665 20,7

SA Retail 1 581 1 208 30,9Liberty Corporate 52 81 (35,8)LibFin Markets – credit portfolio 302 330 (8,5)LibFin Markets – asset/liability matching portfolio 74 46 60,9

South African Asset Management STANLIB South Africa 355 252 40,9

Africa regions 8 7 14,3

Liberty Africa Insurance (19) 41 (>100)STANLIB Africa 27 22 22,7Business development support (56) 100

Operations under ownership review (166) (322) 48,4Central costs and sundry income (200) (190) (5,3)

Normalised operating earnings 2 006 1 412 42,1LibFin Investments – SIP 250 1 307 (80,9)

Normalised headline earnings 2 256 2 719 (17,0)

For more information on our financial performance please refer to the following resources:

Our 2018 integrated annual report

Our 2018 annual results presentation

Our 2018 annual financial statements and supporting information, including risk management

Our SENS announcements

Indirect economic value created

Direct economic value created

Rand

mill

ion

In addition to the direct financial value created, Liberty also has significant indirect economic impacts. In 2018 we contributed to indirect economic value in a variety of ways.

Direct economic value indicators

Death and disability claims paid Annuities paid Distributions paid Employee costs

0

2 000

4 000

6 000

8 000

10 000

2018 2017 2016

24




QUALITY EDUCATION





Civil society – creating societal value and preserving our natural capital

Transformation and community investmentsEnterprise and supplier development (ESD) are critical enablers for a transformed and inclusive society. Enterprise development promotes economic growth and reduces poverty by building small, medium and micro enterprises. Supplier development is focused on working with selected suppliers on a more personal basis to improve their performance.

RS more details regarding Liberty’s contribution to transforming South African society are provided on pages 32 and 33.

Our CSI initiatives are focused on improving numeracy, Maths, Science, and English, to unlock opportunities for youth employment.

RS more details regarding Liberty’s contribution to quality education are provided on page 28.

Financial literacy

To promote financial literacy, we established and implemented the Mind My Money programme in our communities. Members of the community are employed as trainers and subsequently equipped to ensure that their knowledge is relevant and can be delivered in a manner that is understood. We conduct training in a variety of environments including businesses, community forums and schools. We also launched a teacher’s toolkit, which involved training 300 teachers with standard materials that enable them to pass on financial literacy knowledge to scholars.

We set a target of 20 000 consumers to be trained by the end of 2018. We exceeded our target by training 41 755 consumers, compared with 17 441 consumers in 2017.

Unclaimed benefitsUnclaimed benefits are an industry-wide issue in South Africa. An unclaimed benefit occurs when a member or former member of a fund, or that member’s beneficiary, has not been paid for at least 24 months from the date when payment should have occurred. Across retirement funds in South Africa, an estimated R43 billion in unclaimed benefits was identified, of which Liberty administered approximately R1,8 billion (4%).

In response, the FSCA established the Unclaimed Benefit Funds in 2011 to address the issue. In these unclaimed benefit fund (UBF) entities, members’ interests are overseen by competent trustees, and tracing can be performed. Across the industry, most unclaimed benefits reside in active occupational retirement funds with boards of trustees in place. However, the assets, liabilities and members in orphaned funds may represent unclaimed benefits and be transferred to a UBF.

Liberty, through various audits, identified approximately 130 funds that were erroneously deregistered. Twenty-five of these funds were successfully reinstated by Liberty via a High Court application during 2018. Liberty is in the process of engaging the FSCA regarding further fund reinstatements.

Many of the funds subject to the cancellation project were acquired by Liberty through historic acquisitions of other industry players and presented numerous unresolved legacy issues dating back to the 1980s and 1990s. Investment returns have, however, been earned by these funds and have accumulated in the funds over the years. At the end of 2018, Liberty’s UBF had 97 697 members, with an asset base of approximately R900 million. Liberty paid more than R175 million to over 23 000 beneficiaries in 2018.

We aim to pay out unclaimed benefits as swiftly as possible, and our objective is to ensure we improve the tracing of beneficiaries, both through process and technology. In 2018 we increased the number of claims paid per month from the UBF to 5 000 from 500 in 2017. We aim to pay out a claim within five working days of receiving completed documentation, and clearance from the South African Revenue Service, as claims are subject to tax. Unclaimed benefits also present a high risk of fraud and precautions are taken to safeguard the company and the UBF assets. Liberty waives its administration fees on claims below R800, to preserve the benefit, and funds the cost associated with tracing beneficiaries.

We also participated in the community outreach programme initiated by the FSCA, called "Money Smart Week", to create awareness surrounding the issue of unclaimed benefits. The programme operated in malls and community centres, where we assisted potential beneficiaries and hosted forums for financial education. We run awareness and educational campaigns with employers to provide information on employee exit processes and benefit claims processes. Since initiating these awareness campaigns, we have seen an increase in the number of people who come forward to claim. We regularly engage the media in creating awareness.

To check if you have unclaimed benefits, you can visit the FSCA website at

www.fsca.co.za/customers/pages/unclaimed-benefits.aspx

and click on "unclaimed benefits search",

or contact liberty on +27 11 408 2999.

or email [email protected]



The power of our business

When 28-year-old Lebogang Moyo found out she was pregnant with her first child, she couldn't wait to start her new family. As a business analyst for a large bank, she was secure in the knowledge that she had a good job that would provide the income required to raise a little one. However, seven months into her pregnancy, she was forced to deal with devastating news.

On a routine visit to her gynaecologist, Lebogang's doctor discovered a lump in her breast. After a battery of tests, she was diagnosed with stage three breast cancer. Lebogang placed her medical care in the capable hands of her doctors and started looking at the financial implications. Fortunately for Lebogang, as part of the purchase of her house some years earlier, she had life cover. When the cancer diagnosis was made, she contacted Liberty who told her that her life cover policy included dread disease cover.

Lebogang initially processed her claim directly with Liberty. However, she quickly realised that she was too preoccupied with her pregnancy and medical condition, so she contacted her broker who took over the claims process. Liberty and her broker kept Lebogang updated with the

claims process by sending emails and SMS notifications every step of the way. The claim was paid out shortly after the application was made, bringing much needed financial relief.

"You never truly understand the value of Liberty's life cover and a broker until the need to claim arises. Cancer treatment takes a toll on your body. The side effects are severe. Add the fact that I was pregnant, I needed to keep my immune system as strong as possible. The immune booster supplements alone are quite expensive, and this policy allowed me to get the best treatment available in the market today."

Lebogang’s story demonstrates how Liberty gives expression to our purpose of enabling financial freedom. While we cannot predict or change the impact of major life events such as the health crisis Lebogang experienced, we can provide financial protection and support in the moment clients need us most. Giving clients

peace of mind that their loved ones are not

financially burdened when they are gone. Life cover assists dependants to be more financially secure in

the event of a client's death.

LIFE PROTECTION

Liberty offers comprehensive cover

for critical illnesses and traumatic events. We cover unknown and rare illnesses.

The lump sum payment can be used for costs and to assist

clients make lifestyle adjustments.

CRITICAL ILLNESS COVER

Our dread disease benefit offers comprehensive cover for critical illnesses.

26




QUALITY EDUCATION





Our approach The National Development Plan requires progress on a broad front. Three priorities stand out:

• Raising employment through faster economic growth

• Improving the quality of education, skills development and innovation

• Partnering to build capabilities.

The country requires better nutrition and healthcare, improved educational standards, increased access to further and higher education, easier entry into the labour market and greater labour mobility to maximise the benefits of the forecast “demographic dividend”.

UN context: Obtaining a quality education is the foundation to creating sustainable development. In addition to improving quality of life, access to inclusive education can help equip locals with the tools required to develop innovative solutions to the world’s greatest problems.

South African context: In South Africa, the quality of school education for most black learners is poor. The apartheid spatial divide continues to dominate the landscape. A large proportion of young people feel that the odds are stacked against them.

Our ability to determine and quantify risk is critical to Liberty’s long-term business sustainability. To navigate the complex mathematical and statistical concepts that define our operational parameters, we require specialist business skills in the areas of actuarial science, accounting, investment, management, financial planning, sales and distribution, technology and digital capabilities, among others. We offer our employees a range of opportunities to improve their knowledge and skills.

Liberty has intellectual capital which we can leverage to foster financial and economic inclusion. We invest in education as a cornerstone of economic development and a means of empowering communities. Our CSI initiatives are focused on improving Maths, Science, and English, to unlock opportunities for youth employment.

Liberty’s contribution to quality education in 2018

R35,3 million INVESTED IN DEVELOPING SALARIED

EMPLOYEES

R22,1 million INVESTED IN MATHS, SCIENCE AND

ENGLISH PROGRAMMES IN SOUTH AFRICAN COMMUNITIES

1 122 employees PARTICIPATED IN LEADERSHIP OR

MANAGEMENT DEVELOPMENT PROGRAMMES

585 conditional bursaries AWARDED TO EMPLOYEES

>20,000 learners PARTICIPATED IN OUR CSI EDUCATIONAL

PROGRAMMES

R110,5 million INVESTED IN

ADVISER DEVELOPMENT

86% OF ALL EMPLOYEES TRAINED

WERE BLACK

59% OF ALL EMPLOYEES TRAINED

WERE WOMEN


A focus on Maths, Science and EnglishLiberty’s long-term, sustainable value growth can only be achieved through the growth and success of the communities in which we operate. We are committed to contributing to the long-term sustainability of these communities.

Total spend R45,6 million Total spend R34,4 million

Investing in our communities – 2018

67

48

39

6

2

5

% spend

Education (primary, secondary and tertiary)

Financial literacy

Employee matching

Employee volunteering

Other48

39

2

65

Investing in our communities – 2017

67

56

42

2

% spend

Education (primary, secondary and tertiary)

Financial literacy

Employee volunteering

56

42

2

> 200 000LEARNERS REACHED

THROUGH THE LIBERTY-FUNDED SOUTH AFRICA

OLYMPIAD

> 16 000LEARNERS REACHED

THROUGH SECONDARY SCHOOL FINANCIAL LITERACY PROGRAMME FACILITATED BY

PRIME STARS

> 900LEARNERS REACHED

THROUGH LIBERTY-FUNDED MATHS AND SCIENCE TUITION PROGRAMME FACILITATED BY

KUTLWANONG

Liberty contributes to the development of literacy

In line with Liberty’s long tradition of supporting the development of education in South Africa, Liberty partnered with School Aid, a non-profit organisation, which collects and distributes books to previously disadvantaged schools to contribute towards the promotion of literacy in South Africa. Our partnership with School Aid is aligned to our CSI strategy, which focuses on the development of education and financial literacy with a view to changeing people’s realities by making their financial freedom possible.

Books are an essential tool for bridging the gap and transferring knowledge. Libraries not only inspire and entertain; they also contribute to the development of a child’s character.

To date, group CSI has refurbished four school libraries in Gauteng, with Rondebult Secondary School in Germiston being the latest recipient of a newly refurbished library. More than 160 learners at Rondebult Secondary will now enjoy a newly refurbished library.

Liberty launches financial literacy programme targeted at youth

Liberty continued its partnership with Prime Stars to deliver a financial literacy programme aimed at the youth, called “Mind Your Moolah”, to address the current low financial literacy rate in South Africa.

The programme teaches learners from grades 10 to 12 about financial concepts such as managing debt, looking after one’s savings and spending wisely.

It is our long-standing belief that in order to create an inclusive economy, financial literacy and financial education are key to unlocking the potential of young South Africans. It is through partnerships like these that we seek to make financial education a key factor in ensuring sustainable and effective financial inclusion for all.

The “Mind Your Moolah” financial literacy programme was delivered through a movie, which ran over five consecutive Sundays between May and June at 14 Ster-Kinekor cinemas across South Africa.

ABSIP Financial Literacy – engaging communities

Group stakeholder engagement and group HR (transformation and inclusion) collaborated with the Association of Black Securities Investments Professionals (ABSIP) student development portfolio to host

a financial literacy workshop for their Gauteng-based student chapters. Over 50 students attended the workshop, representing well-known tertiary institutions such as Monash University, Milpark Business School and Wits University.The purpose of the workshop was to equip the students as future leaders with basic money management skills including income and expenditure, budgeting, understanding debt and credit profile, savings and investment as well as financial security and wealth management.

28




QUALITY EDUCATION





The Liberty Community Trust was established to improve the learning outcomes of young people in South Africa by investing in education initiatives that enable sustainable economic inclusion. Its three strategic priorities are: career development; foundation phase literacy; and enhanced school leadership and governance at primary schools. By following the guiding principles of visual, measurable impact, additionality, scalability, pioneering, innovation and knowledge in action, the trust invests in projects and initiatives that enable impactful, sustainable transformation of the education sector. To date, the trust has funded R12,6 million through donations. Some of the projects include a values-based leadership programme that aims to nurture socially and environmentally conscious citizens and a training programme for unemployed post-matriculants to develop skills for in-demand digital jobs.

Impact of our financial literacy programme

Since attending the training almost all of the participants indicated that they have made financial decisions related to the training; 43% of participants had opened a savings account of which 75% had started saving


Delayed gratification

Teach your kids that they may have to wait to buy or have something they want. The demand for instant gratification

can result in them being unprepared for the real world where you don’t always get what you want immediately. It's also a good skill to create a sound financial mindset.

Teach them that wants and needs are different.

The three most important money lessons to teach kids

Money is finite

Children need to understand that money is not like air and mud. If you give it away or spend it, there is no more. Teach your kids – using spending jars and money boxes – to save

up and make decisions about when to spend money or when they have to wait.

Teach them about compound interest

For older children in their pre-teens and teens, use a small amount of money (R10) to teach them how compound interest works. Tell them that the same R10 can grow to

R100 for example. Over time, if left in a compounding account, money earns interest on top of interest during the

period it is saved.


Training at LibertyTraining at LibertyOur skills development programmes are driven by the need to transform our workforce. As such, training spend is disproportionally applied to Black employees, with a further focus on Black females. Liberty offers a variety of development programmes that aim to strengthen technical, leadership, product and compliance capabilities. We endeavour to keep our training programmes relevant to develop capabilities that respond to current and emerging market trends. As we implement new technologies, we reskill our employees. We strive to create and maintain a learning function that facilitates collaboration, efficiency, agility and the development of the capabilities required to deliver on our purpose.

Conditional bursariesOur bursary programme is designed to enable employees to acquire formal knowledge across a variety of relevant fields. By making bursary opportunities available to a variety of participants, we aim to nurture a more inclusive society within our organisation. During 2018, Liberty spent R11,6 million (2017: R8,4 million) on conditional bursaries for employees.

Actuarial developmentActuarial talent is a critical skill for Liberty. We are committed to the transformation of the actuarial profession and work with the Association of South African Black Actuarial Professionals (ASABA) to mentor and support members. The actuarial development programme (ADP) attracts and develops actuarial talent, providing support to build careers across the Liberty group in both traditional and non-traditional actuarial roles. Each actuarial graduate receives input from a dedicated mentor, and this programme is to be extended to actuarial students with more than four years’ experience. The ADP also hosts vacation work for students during December and January to identify talent.

Learnerships and internshipsOur learnership programme for matriculants, as well as our internship programmes for undergraduates, aim to expose developing talent

to a career in the financial services sector and includes workplace experience of between eight and 12 months. Learners work towards a National Qualifications Framework (NQF) level 4 and NQF level 5 qualification in programmes supported by the Insurance Sector Education and Training Authority (INSETA). In 2018, Liberty enrolled 57 (2017: 76) black learners in the INSETA learnership programme. From the 133 learners, 55 were absorbed into the business. We also continued to roll out our internship programme, with a focus on our contact centres, system development, long-term insurance, long-term underwriting and wealth management. From the 73 interns, Liberty employed 24 as permanent employees by the end of 2018.

LeadershipA significant proportion of our skills development spend is targeted towards the development of leaders at all levels of the organisation. Through partnering with Catalyst, Duke University and Henley Business School, Liberty has developed four management development programmes that cater for staff at all levels of the business and four key talent programmes that cater for staff at junior management level up to executive management level.

We focus our talent retention by identifying potential successors for critical leadership roles across the group. Our programmes focus on leadership development, using technology to engage with participants. In addition to gaining academic knowledge, we look to these programmes to transform participants’ perspectives, making them more present and aware. As a business of knowledge workers, this outcome is beneficial to Liberty in the way we position ourselves among our competitors.

Conditional bursary participants

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

Gender/Race Black Coloured Indian White Total

Female 203 160 51 22 42 37 30 15 326 234

Male 135 112 51 8 46 47 27 33 259 200

Total 338 272 102 30 88 84 57 48 585 434

Key talent and management programmes participation in 2018

Race Gender

Programme Employee level Black Coloured Indian White Male Female Total

I am Talent Non-managers 100 14 8 8 40 90 130

Leadership in action Junior managers 6 2 5 4 4 13 17

Leading from the Centre Middle managers 7 2 2 1 3 9 12

Development programme Junior manager 16 1 6 1 8 16 24

Development programme Middle manager 9 4 6 3 12 10 22

Development programme Senior manager 10 3 6 1 10 10 20

30




QUALITY EDUCATION





UN context: The international community has made significant strides towards lifting people out of poverty. The most vulnerable nations continue to make inroads into poverty reduction. However, inequality persists and large disparities remain regarding access to health and education services.

South African context: In South Africa, where significant inequality persists despite post-apartheid policies, addressing these imbalances is equally as important as addressing poverty.

Our approach As a responsible financial services firm Liberty supports the protection, promotion, preservation and sanctity of human rights across the group. Human rights are enshrined in the United Nations Universal Declaration of Human Rights, which gives recognition to the inherent dignity, equality and absolute rights of all humans.

Our respect for human rights is fundamental to and informs our business. It guides us in how we treat our employees, clients, suppliers, business partners and communities. Our commitment to respecting human rights is embedded in our values, principles and code of ethics.

Our code of ethics is available at www.liberty.co.za/Documents/code-of-ethics.pdf

Our group statement on human rights is available at www.libertyholdings.co.za/sustainability/Pages/our-group-human-rights-statement.aspx

We embrace diversity and actively develop a culture of inclusion. Our South African employment equity and skills development forum met ten times during the year. We comply with the Employment Equity Act, 55 of 1998, and the amended Financial Sector Code (FSC), which was gazetted on 1 December 2017. Liberty supports the principles of the FSC, which commits all participants to actively promote a transformed, vibrant and globally competitive financial sector that reflects the demographics of South Africa.

We are also part of the 30% Club – an organisation that promotes gender balance on boards and senior management teams. From a gender pay gap perspective, we continually monitor and evaluate potential pay gap issues and feel confident to take a leading stance and disclose that we have adequately addressed this issue throughout the group.

Liberty’s contribution to reducing inequality

Level 2 B-BBEE contributor

R49,1 million INVESTED IN CORPORATE SOCIAL

INVESTMENT PROJECTS

9,95% BLACK WOMEN OWNERSHIP

22,9% BLACK OWNERSHIP

58% OF SOUTH AFRICAN EMPLOYEES

ARE WOMEN

79% OF SOUTH AFRICAN EMPLOYEES

ARE BLACK

R426 million INVESTED IN ENTERPRISE AND SUPPLIER DEVELOPMENT


Liberty sees B-BBEE as a business fundamental based on the following:

• A growth imperative – the low employment rate in South Africa can only be dealt with in a high-growth environment

• A social imperative – wealth needs to be distributed more evenly in order to create an equitable society and

• A moral imperative – the legacy of the past wherein the majority of the country’s citizens were excluded from the economy based on race must be addressed.

FSC aims to promote and sustain transformation within the financial services industry. Liberty was extensively involved in the development of the code. Liberty executives participated in industry task groups during the code’s formative stages and this involvement continued as the terms of the code were redefined and clarified.

Diversity and transformation

Our transformation storyboardManagement control Skills development

Liberty’s transformation strategy in 2018 was focused on maintaining its Level 2 B-BBEE contributor status. The revised FSC has seven elements which influence an organisation’s score and contributor status. Liberty performs well in several of these elements.

Liberty acknowledges that it must improve its transformation performance in two key areas associated with employees: management control and skills development. Black (a generic term for African, Coloured and Indian citizens of South Africa) representation across Liberty’s total South African workforce is 79%. However, at the senior (48% Black) and middle (62% Black) management levels we need to accelerate employment equity by focusing on the appointment of African females and persons with disabilities.

The graphic below reflects Liberty’s 2017 and 2018 performance against the seven elements of the B-BBEE scorecard.

Employment equity comparison

SENIOR MANAGMENT MIDDLE MANAGMENTPercentage Percentage

FSC Targets Liberty at 31 December 2018

0

20

40

60

80

100


0

20

40

60

80

100

Black Black women African




0

20

40

60

80

100


0

20

40

60

80

100





0

20

40

60

80

100


0

20

40

60

80

100


FSC Target 20,0

2018 Actual 13,3

2017 Actual 14,0

FSC Target 20,0

2018 Actual 15,0

2017 Actual 10,4

Develop and recruit African females and persons with disabilities as a priority

Skills programmes

Management development

Leadership development

Learner absorption

32




QUALITY EDUCATION





Procurement

Empowerment financing and ESD

Socio-economic development and consumer education

Ownership Access to financial services

FSC Target 15,0

2018 Actual 13,6

2017 Actual 14,1

FSC Target 25,0

2018 Actual 24,9

2017 Actual 27,0

FSC Target 5,0

2018 Actual 6,7

2017 Actual 5,0

FSC Target 23,0

2018 Actual 22,2

2017 Actual 24,3

FSC Target 12,0

2018 Actual 12,0

2017 Actual 11,9

Increase the economic interest of Black people

Liberty Blue Skies Enterprise and supplier development programme

R20,9 million Socio Economic

Development spend

300 teachers trained during 2018

Consumer education > 41 000 trained during 2018

Intermediaries development Spend on skills development of financial advisers contributes toward scorecard

Work with strategic vendors to broaden

their transformational contribution

6 SMMEsAdvanced to the

empower phase

5 SMMEsAdvanced to the enhance phase

Intermediary development

programme

Continued Standard Bank collaboration

ECM assessed product offering gaps to full points

contribution

Minimise international

spend

Diversify Increase EME and QSE spend

Focus on 51% Black owned and

30% Black women owned suppliers

Liberty Community Trust Deed in process of being changed

2018 B-BBEE Level 2 MAINTAINED

22.9% Black ownership


Liberty’s reward philosophy allows for differentiation where it is fair, rational and explainable. Liberty pays for performance and this remuneration must be externally competitive and internally equitable, and is assessed with the principle of equal pay for work of equal value, to identify and address any unjustifiable remuneration disparities.

Investing in people initiatives through talent mapping, employee development and training courses creates a work environment and work culture conducive to an employee’s growth, to progress their careers and therefore their earning potential. Since 2010, the earnings potential of lower level employees has been aligned to settlement percentages of collective bargaining councils, even though Liberty staff are not members of these councils. These percentages have been higher than those granted

Diversity and transformation continued

to management and executives, thereby narrowing pay gaps between the highest and lowest paid employees.

In 2019, Liberty’s remuneration committee will focus on the following:

• Validation of remuneration levels will be conducted across the business in line with the new structures and capabilities created in terms of the revised business strategy.

• The reward philosophy will be aligned to an employee experience programme to be rolled out as part of the revised strategy.

Rem A full remuneration report is available at

www.libertyholdings.co.za/investor.

Promoting transformation through ESDEnterprise and supplier development (ESD) are critical enablers for a transformed and inclusive society. While enterprise development promotes economic growth and reduces poverty by building small, medium and micro enterprises, supplier development is focused on working with selected suppliers on a more personal basis to improve their performance.

Liberty recognises ESD as a business imperative that not only promotes transformation but also enables job creation and promotes the long-term sustainability of our business.

In South Africa, the NDP and the FSC are focused on improving financial inclusion and financial literacy initiatives seek to enable financial freedom for individuals who have not previously had exposure to the financial services industry, and we achieve this by making knowledge, tools, support and expertise available to the participants of our programmes. We also partner with the Association for Savings and Investment South Africa on their ESD programmes.

The Liberty Blue Skies programme aims to eliminate barriers to growth by providing financial and non-financial business development support to

black businesses. The intention is to increase the development capacity of suppliers to manage their businesses more efficiently and effectively. Development support includes mentorship, growth project support, grant funding and enabling access to the market. Suppliers are selected based on set criteria, including the potential to create value for Liberty. The programme was first initiated in 2014 with four suppliers. To date the programme has provided personal business development support to 38 suppliers.

In 2018, we launched the Liberty Blue Skies intermediary development programme, focused on developing brokerages in the financial services industry who are contracted to multiple insurers and represent a variety of clients. The aim of the programme is to support their strategic growth and development and to create value for Liberty, the industry and South Africa. The initial intake for the pilot programme comprised eight brokers who will be developed over a three-year period. They will receive tailored support, designed to make an impact in their businesses where it is most needed.

Closing pay gaps and increasing earning potential

Socio-economic development and consumer educationLiberty’s CSI strategy aims to maximise our impact by consolidating and aligning a variety of initiatives in a coherent manner. We focus our efforts on secondary and tertiary education, with a specific focus on Maths and Science. We introduced English to augment the programme, acknowledging it as both the global and local language of business.

The programmes we run are relevant to the communities in which we operate. The Liberty group invested R49,1 million (2017: R44,3 million) in CSI programmes. We invested R22 million (2017: R19,6 million) in Maths, Science, and English educational programmes and R17,7 million (2017: R15,9 million) in financial literacy programmes, with a focus on adults who are income-earning or who have income-earning potential.

We offer training on critical financial literacy skills that drive financial inclusion. More details about Liberty’s educational programmes are provided on page 30.

Employee volunteeringEmployees are entitled to two additional days leave annually to volunteer for in-house initiatives or legitimate NGOs. We encourage active employee volunteerism and launched an employee portal in 2018, called 'RolledUpSleeves', connecting our employees with charitable organisations.

Our employees can use this portal to select organisations to volunteer at. Liberty also participated in International Mandela Day and focused on SDG 2: contributing to ending hunger and improving nutrition. On the day, over 1 000 employees packed meals to feed children from disadvantaged communities. The packed meals were distributed to early childhood development centres, and we further contributed to feeding approximately 800 children for five days per week for a year.

34




QUALITY EDUCATION





SINCE 2014 38 SMES HAVE RECEIVED SUPPORT FROM

BLUE SKIES

LIBERTY SPENT R83 MILLION ON PROCUREMENT

CREATING AND MAINTAINING JOBS

29 FULL-TIME JOBS SUSTAINED

43 FULL-TIME JOBS CREATED

66 PART-TIME JOBS CREATED

Through the Liberty Blue Skies Programme, the group accommodates businesses in different stages of growth across its value chain. Four incubation models are matched to the unique needs of the small and medium enterprises – determined by business maturity, management skills and level of experience.

PM Skillshouse is one such SME in the Blue Skies programme, offering consumer financial education and skills facilitation. CEO, Portia Malatji, believes that training is a force for good, and that by empowering individuals with practical knowledge and understanding they will have the tools – and inspiration – they need to succeed in life and create a legacy of their own. This is the foundation on which she has built PM Skillshouse.

The vision of the vibrant and enthusiastic team at PM Skillshouse is to fundamentally touch and change the minds, hearts and lives of others in a real and practical way – helping them to deal wisely and well with their money. Portia and her 40-strong team are determined to impact a million people by the end of 2020 through their financial education programmes.

The business model is unique in that facilitators are empowered to start their own training businesses in their local areas – with PM Skillshouse as one of their employers. Portia’s goal is to create a hundred training and development SMEs over the next three years.

Liberty, Absa and Alexander Forbes are among the current clients, but PM Skillshouse is not stopping there. Portia Malatji has a marketing strategy to take new solutions to market in response to some of the many challenges facing the communities in which the company operates.

This remarkable entrepreneur’s own inspiration came from her hard-working mother, who taught her the value of excellent customer service, as well as the importance of remaining teachable throughout life. Portia Malatji started this business with R30, and has grown it with the support of Liberty. She is a true ambassador of Blue Skies.

The Blue Skies Enterprise and Supplier Development Programme.

Building Small Business For Big Impact.

CREATING LEGACIESBlue Skies, Liberty’s Enterprise and Supplier Development programme.

Investing in the strategic growth of value-chain aligned small businesses.


UN context: Sustainable consumption and production is about promoting resource and energy efficiency, sustainable infrastructure, and providing access to basic services, green and decent jobs and a better quality of life for all. Its implementation helps to achieve overall development plans, reduce future economic, environmental and social costs, strengthen economic competitiveness and reduce poverty.

South African context: With a predominantly fossil fuel intensive energy supply and an abundance of sunshine, solar power should be a given in South Africa but cost and policy uncertainty hamper development. As a water-scarce country, the management of this critical resource must be a priority.

Our approach Although Liberty is not a significant consumer of natural resources, we are cognisant of the role we play as a responsible corporate citizen.

We focus on reducing our contribution to climate change and water conservation and efficiency. Our environmental impact is greatest in our property portfolio. Managing efficiencies in these buildings is in the best interest of our business, our tenants and third-parties. While we manage the general supply of electricity and water, and waste management on behalf of our tenants, they are responsible for their consumption and in certain instances provide for their own backup of electricity through the use of generators

From an environmental perspective, we focus on reducing our electricity consumption primarily through efficiency initiatives and solar photovoltaic (PV) solutions, reducing operating costs over the long term. We also strive to lower our water consumption – specifically in South Africa, a water-scarce country. We achieve this through the implementation of our water strategy, which includes components of broader societal water awareness, acknowledging that water is a shared resource and that we need to work together to increase our resilience to water shortages.

Liberty’s contribution to responsible consumption and production

CDP climate change participation (B SCORE)

Grey water system

NightWatchman (ENERGY SAVING) SOFTWARE

Rainwater harvesting

Solar energy projects

Water storage tanks

Monitored recycling project

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In our 2017 report to society we reported on several projects that were in progress. The table below provides details of our progress in 2018.

Our promise Our progress

Introduction of night-watchmen software (energy-saving tool) The project saves R700 000 annually in electricity costs just by shutting down 2 500 desktop computers after hours (evenings and weekends).

Water resilience and efficiency storage tanks Implemented at Eastgate Shopping Centre, Liberty Promenade Mall and Liberty Centre Century City. We received the Cornet Global Innovation Award and Eco-Logic Award for the Liberty Centre Braamfontein project

Green Building Council Existing Building Performance (EBP) ratings

GBCSA EBP 4-star green rating certification received for Liberty Centre Century City and Umhlanga Ridge regional offices. Sandton City and Nelson Mandela Square were registered in December 2018.

Solar PV panels at our Braamfontein head office The project was completed six weeks ahead of schedule. The project’s return on investment period will be four to five years and aims to take Liberty parkade off the grid entirely.

Solar PV panels at Midlands Mall phase 3 The project is on schedule and all solar PV panels have been installed

Implementation of findings from our building water balances Water balancing was used in our water conservation work, such as water storage tanks, and informs our water strategy

Energy consumption and carbon footprintOur electricity is sourced from the national grid, of which the majority is generated from non-renewable carbon intensive resources. Increases in the cost of electricity in recent years, with further increases anticipated, present a cost increase concern. During 2018, we invested in solar PV panels at our head office in Braamfontein and Midlands Mall phase 3. The Braamfontien panels reduced electricity consumption by 234MWh in just three months. The Midland Mall project will go live in 2019

We participated in the CDP Climate Change questionnaire and achieved an improved B score (2017: C). There are challenging areas in reducing our carbon footprint but we continue to work towards our goal of alignment with the SDGs. Formal carbon reduction targets are necessary to improve our score and we are currently investigating adopting science-based targets in the absence of a formal methodology for the financial sector.

Liberty consumed 34 299 MWh (2017: 27 435MWh) of electricity at the properties we occupied, both owned and leased. The increase in electricity consumption is attributed to enhanced data collection from online metering systems.

Liberty’s electricity consumption

Megawatt hours (MWh) 2018 2017 2016 2015 2014

Liberty’s electricity consumption in owned and occupied properties (1) 30 741 23 776 28 949 22 580 31 038

Liberty’s electricity consumption in leased properties (2) 3 558 3 659 3 925 9 969 2 015

Tenants' electricity consumption in shopping centres (3) 191 567 190 949 193 289 195 096 259 197

Tenants' electricity consumption in offices (4) 12 314 13 155 16 356 28 181 22 033

(1) 171 Katherine Street, Liberty Centre Braamfontein, Liberty Centre Century City, Liberty Parkade, Libridge, Umhlanga Ridge, Eastgate Shopping Centre, STANLIB Melrose Arch. .(2) We currently report electricity consumption for 40 of our 48 leased buildings. We do not have access to electricity consumption information at the other eight buildings.(3) Botshabelo Mall, Eastgate Shopping Centre, Liberty Midlands Mall, Liberty Promenade Mitchell’s Plain, Nelson Mandela Square, Sandton City.(4) 171 Katherine Street, Liberty Centre Century City, Liberty Gardens, Liberty 2 Degrees in STANLIB Melrose Arch.


Energy consumption and carbon footprint continued

We report our carbon footprint for the group’s South African operations, which represent approximately 95% (2017: 95%) of our operations in terms of revenue.

Liberty’s emissions - 2018

67

1 730

32 584

in tonnes of CO2e by scope for 2018

Scope 1

Scope 2

15 214Scope 3

Liberty’s South African carbon footprint

Tonnes Carbon Dioxide equivalent (tCO2e (1) ) 2018 2017 2016 2015 2014

Scope 1 direct CO2 emissions (2) 1 730 1 825 2 270 2 772 2 510Stationary fuel used in equipment owned or controlled (e.g. generators) 196 252 397 1 080 886Fugitive emissions from air-conditioning and refrigeration gas refills 81 - 226 0,35 -Mobile combustion from vehicle fleet consumption 1 453 1 574 1 647 1 692 1 624

Scope 2 indirect CO2 emissions (3) 32 584 26 886 32 874 32 875 40 224Purchased electricity in Liberty-owned and occupied buildings 29 204 23 300 28 949 22 805 31 038Purchased electricity in leased and occupied buildings 3 380 3 585 3 925 10 069 9 186

Scope 3 total indirect C02 emissions, including tenants' electricity 203 793 215 212 227 578Scope 3 total indirect CO2 emissions, excluding tenants' electricity (4) 15 214 15 188 17 933 14 303 14 312Business travel in commercial airlines 3 880 4 173 4 725 5 373 4 350Business travel in rental cars and transfers 70 101 117 134 99Hotel accommodation 566 185 175 167 176Employee travel claims 1 131 1 236 1 293 1 301 1 759Paper consumption 203 294 251 220 239Waste to landfill (5) 6 352 6 778 8 119 7 052 7 568Recycled waste 57 59 58 54 121Losses from transmission and distribution of purchased electricity for Liberty-occupied buildings 2 955 2 364 3 196Electricity consumed by tenants 188 579 200 022 209 645

Total combined Liberty scope 1 and 2 emissions 34 314 28 711 34 980 35 646 42 735Total combined Liberty scope 1, 2 and 3 tenant emissions (Kyoto Protocol), including tenants' electricity emissions 238 107 243 923 262 722Total combined Liberty scope 1, 2 and 3 emissions (Kyoto Protocol), excluding tenants' electricity emissions (4) 49 528 43 899 53 077 49 949 57 046Total scope 1 and 2 emissions per full-time equivalent employee in South Africa (tonnes per employee) (6) 4,39 3,45 4,13 4,06 4,64Total scope 1 and 2 emissions per square metre of space (tonnes per square metre) (6) 0,24 0,19 0,24 0,34

Non-Kyoto Protocol fugitive greenhouse gas emissions (R22) 2 358 - 306 436

(1) Carbon emission factors used: The Department for Environment, Food, and Rural Affairs in the United Kingdom has published guidelines for greenhouse gas conversion factors to help businesses convert existing data sources into equivalent CO2e emissions. These conversion factors have been used as a basis to calculate Liberty’s 2011-2018 carbon emissions. The Eskom conversion factor of 0,95 was used for electricity in South Africa during 2018.

(2) Scope 1 emissions include all properties owned and operationally controlled by Liberty and excludes Liberty-leased branches controlled by third-party landlords.(3) The increase in scope 2 emissions is attributed to enhanced data collection from online metering systems.(4) Total scope 3 was verified as 15 214tCO2e by PwC and total scope 1, 2 and 3 emissions as 49 528tCO2e with the exclusion of 188 579tCO2e of tenants' electricity.(5) Excludes emissions from compostable (3tCO2e) and hazardous waste (198tCO2e). (6) Total square metre of space used: 144 954m2 in 2018 (2017: 146 926m2). Number of full-time equivalent employees in South Africa for 2018 used was 7 821, which includes

permanent and commission-remunerated agents sitting in our buildings.

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Reducing our water use

Managing our waste responsibly

South Africa is a water-scarce country, and it is the responsibility of government, business and individuals alike to ensure we treat this precious resource with the respect it deserves. Water infrastructure requires significant investment, skills and maintenance to provide a constant supply and to avoid an impact on business and the economy. In response, Liberty embarked on a water conservation project at its head office in Braamfontein. The project involved collecting grey water in the building and harvesting rainwater from the roof, which is then treated to ensure it is safe for human use. It also included a water storage facility in the building.

We strive to minimise our consumption and are committed to increasing the amount we recycle. Our head office in Braamfontein has been recycling waste since 2010 and recycling bins are located in pause areas throughout the building and we only appoint waste removal companies that are registered in accordance with local municipality regulations. These companies ensure that all waste is brought to registered landfill

To date, the project achieved a 44% saving for Liberty in water consumption at its Braamfontein office. Liberty received the Gold Water Conservation Award for the project in April 2018 at the Eco-Logic Awards and the Cornet Global Innovation Award. The awards promote the best of South Africa’s eco-champions.

sites and is recycled where possible. The sorting and weighing of recyclable waste are carried out on Liberty’s premises. In addition to the waste recorded in the table below we accumulated 198 tonnes of hazardous waste and 255 tonnes of wet waste during the year.

We encourage our employees to recycle at home.

Liberty’s water consumption (1)

Kiloliters (kL) 2018 2017 2016 2015 2014

Water consumption at owned and occupied properties (2) 125 154 117 102 149 545 134 296 174 347

Tenants’ water consumption in shopping centres and offices (3) 845 431 848 705 872 984 1 005 624 1 009 165

Total water consumption 970 585 965 807 1 022 529 1 139 920 1 183 512

(1) Currently, Liberty is in the process of collecting consumption information for its leased branches.(2) 171 Katherine Street, Liberty Centre Braamfontein, Liberty Centre Century City, Liberty Parkade, Libridge, Umhlanga Ridge, Eastgate Shopping Centre, STANLIB Melrose Arch.(3) 171 Katherine Street, Liberty Centre Century City, Liberty Gardens, Libridge, Liberty two Degrees in STANlB Melrose Arch, Botshabelo Mall, Eastgate Shopping Centre,

Liberty Midlands Mall, Liberty Promenade Mitchell's Plain, Nelson Mandela Square, Sandton City.

Liberty among SA’s GreenestLiberty Centre in Braamfontein was named among the top “Greenest” buildings in South Africa at the 2018 Eco-Logic Awards and the Cornet Global Innovation Award. A water storage tank was designed to ensure that our Liberty Centre head office in Braamfontein would have at least three days of operations, in the case of severe water shortages. A grey water collection and treatment plant was designed to collect lightly used water from our hand basins, treat it safely and use it to supplement ablution flushing water. A rainwater collection system was designed to collect 70% of the rainwater from the roof of the building.

Waste

Tonnes 2018 2017 2016 2015

Waste to landfill (t)(1) 4 916 5 247 6 284 5 459

Total recycled waste 2 662 (35%) 2 689 (34%) 2 738 (30%) 2 593 (32%)

Glass 342 371 357 206

Metal 39 57 49 41

Paper 1 979 1 946 1 965 2 083

Plastic 294 307 309 259

Tetrapak 8 9 121 4

(1) 171 Katherine Street, Liberty Centre Braamfontein, Liberty Centre Century City, Liberty Gardens, Liberty Parkade, Libridge, Botshabelo Mall, Umhlanga Ridge, Eastgate Shopping Centre, Liberty Midlands Mall, Liberty Promenade Mitchell's Plain, Nelson Mandela Square, Sandton City, STANLIB Melrose Arch.


UN context: Investments in infrastructure – transport, irrigation, energy and information and communication technology – are crucial to achieving sustainable development and empowering communities in many countries.

South African context: Investment in infrastructure, including public, private and public/private partnerships, supported by skills development, will create jobs, improve competitiveness and allow the economy to grow faster and become more productive.

Our approach In today’s challenging world, with an ever-accelerating pace of change in several aspects of our chosen markets, innovation in how we conduct our business is fundamental to our long-term sustainability and delivering on our purpose of improving people’s lives by making their financial freedom possible.

Our centre for innovation and cross-collaboration is focused on nurturing a sustainable culture of innovation at Liberty by driving internal and front-line solutions. We use advances in technology and processes to develop creative solutions to address business challenges and opportunities. Our strategically positioned "innovation catalysts" comprise actuaries, accountants, legal advisers and technology experts, tasked to facilitate innovation in their respective business units.

STANLIB, Liberty’s asset manager manages R718 billion of client assets in a wide range of investment funds ranging from South African and global equities to fixed income and property funds. Liberty’s shareholder investment portfolio approximates a balanced fund with a value of more than R27 billion (at 31 December 2018). Liberty is committed to responsible corporate citizenship and we recognise the importance of building a responsible investment sector for sustainable economic growth. Our investment decisions consider a company’s environmental, social and governance (ESG) performance, and in cases where we find sound financial investment opportunities, but ESG performance is lacking, we prefer to engage with companies to address these issues.

We actively seek ESG investment opportunities that offer positive yields and infrastructure investments that contribute to growing the South African economy.

Innovation at Liberty and how we fund infrastructure

R4,3 billion invested IN RENEWABLE WIND AND SOLAR ENERGY PROJECTS

R3,4 billion investedIN ROAD INFRASTRUCTURE DEVELOPMENTS IN SOUTH AFRICA

THROUGH LIBERTY TWO DEGREES, 17 INVESTMENT PROPERTIES WITH ALMOST

1 000 000m2 in gross letting area

Our latest UNPRI transparency report can be found under STANLIB Asset Management Ltd on the UN PRI website at https://www.unpri.org/.

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Innovation that creates value for clients and financial advisersOur innovation process focuses on three main areas:

• Determining client needs

• Developing solutions to meet client needs

• Creating value share for the client and Liberty

We acknowledge that the needs of our clients change rapidly, both as they move through their life stages and as technology evolves. By anticipating these needs, both now and in the future, and investing in the necessary innovation, we can offer advice and develop solutions that are attractive and deliver on our purpose of enabling financial freedom.

By enhancing our understanding and committing to treating clients fairly, we become increasingly aware of the appetite for more efficient servicing channels. Internally, we seek to improve employee experiences and enhance our information systems, focused on replacing legacy systems and delivering a financial services organisation that operates efficiently and seamlessly. We achieve this through secure, personalised, relevant and digitally enhanced connected experiences to our clients, financial advisers and employees.

During the reporting year, we drew on client, employee and adviser experience feedback to enhance our digital transformation. This also involved taking stock of our digital assets and rationalising our digital tools and platforms to reduce redundancy. The next stage involved setting direction by establishing a roadmap for our digital strategy. In doing this, we defined our digital objectives and principles. Considering that the organisation was undergoing an organisational redesign, we elected to complete projects that were deemed essential. This included creating and implementing user experience standards across platforms, as well as the launch of a design system which will help to maintain these standards going forward.

Listening to bad advice

Everyone - family and friends – is a financial expert. Except they are not. Educate yourself and stick with a tried and

trusted financial planner.

Being too conservative

Careful you don’t put all your eggs in one basket. When you retire, the temptation is to focus on not losing your money instead of making more. But, with credit and inflation risk and the possibility that you may outlive your money, it is

possible to be too conservative.


The four biggest financial mistakes retirees make

Paying too much tax on your retirement strategy

Depending how and when you take cash out of your investment annuity, different tax percentages apply. Your financial adviser must guide you to make smart

decisions here.

Focusing on returns when you need income

You are not earning a salary now so your hard-earned investments and savings must work for you. Balance investment returns with your need for money to live

every month.

A further development for 2018 involved improving Liberty’s connection with the adviser and client. Our MyLiberty platform provides our clients with a simple way to view and manage policies. MyLiberty is a self-service website that currently enables our clients to:

• View policy information

• Update contact details

• Alter payment details

• Download tax certificates

• Download policy correspondence

This platform will be enhanced periodically to provide our clients with more servicing options.


How digitisation supports our financial advisers – complex made simple

It is often said that “insurance is always sold, it’s never bought”. As a predominantly intermediated business, the success of our tied and independent financial advisers is also our success. Providing tools that support advisers creates value for clients, advisers and Liberty

For decades the South African insurance industry has used a “rule of thumb” to measure the success of financial advisers entering the world of selling insurance products.

A six percent success rate (lead to sale) is frequently cited as an industry benchmark – that’s six sales for every 100 leads. To fulfil on a lead, an adviser will need to call the prospect, schedule an appointment, conduct the client meeting, prepare a financial needs analysis and finally recommend a solution.

Managing leads is simplified through our InTouch application Originally developed as a propensity model to identify and match potential clients with a solution through an analysis of the solution’s current owners, the application has been enhanced to provide end-to-end traceability of all incoming leads received at Liberty’s call centre. Leads are recorded, sent to a financial adviser and subsequent actions and outcomes monitored.

In 2018 the propensity model was redesigned to identify further cross-selling opportunities through an analysis of common benefits and automatically scheduling annual FAIS reviews. Opportunities to expand the application’s reach to SBG and Liberty Corporate clients are being pursued. Liberty’s InTouch application is available to all our advisers, both tied and independent.

Helping new advisers manage their productivity and build their businessEstablishing good habits often requires discipline and guidance. Our new advisers, those with less than two years’ experience, have access to the Liberty Practice Manager application. The application allows users to set targets for the six sales activities and monitor their progress against these targets.

In 2018, tied advisers that used the application diligently reported a closure rate between 1,9 and 6,7 times better than those financial advisers that did not use the application. More experienced

advisers (with more than one year with Liberty) extracted the most value from the application.

In 2018 Liberty’s advisers prepared and presented thousands of financial needs analyses – guiding people to financial freedom with or without a Liberty solution

As the industry’s focus evolves from sales to advice, enhanced management of client relationships through smart solutions is becoming a fundamental expectation. Liberty aims to be at the forefront of this developing trend.

Additional featuresFinancial Needs CalculatorDeath, Disability and Retirement indicator for quick reference, uses existing prospect details to get a very quick illustration

LeaderboardDrive challengesAdvisers compete with one another as to who tops the leaderboard

Dashboard – Adviser's trendDashboard to measure key indicators by adviser phone calls, fact find, FNA, closing, case capture and submitted

DashboardDashboard on entry to the systemPrevious week added to Dashboard to align to app

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Responsible investing

Through our credit investment activities at LibFin, we evaluate a comprehensive list of investment considerations including developmental opportunities. Liberty delegates investment management to appointed managers, and mandates that they adopt the principles and practices of CRISA.

Liberty is committed to supporting infrastructure development across the continent. We recognise that power generation and energy sector projects are key to creating sustainable economic growth.

To date, we have invested R4,3 billion (2017: R3,8 billion) in renewable energy projects.

Liberty is committed to responsible corporate citizenship and we recognise the importance of building a responsible investment sector for sustainable economic growth. Our investment decisions consider a company’s ESG performance, and in cases where we find sound financial investment opportunities, but ESG performance is lacking, we prefer to engage with companies to address these issues.

CRISA ConsiderationsSTANLIB has incorporated ESG thinking into its research process for all shares that it analyses. We have a 25 question questionnaire that needs to be answered with most of the questions dealing with governance issues such as transparency, board independence, remuneration, ownership and accountability, and strategy and execution of the strategy.

More recently we have started evaluating companies in terms of their commitment to environmental and social issues and questions such as the following need to be answered.

1. Does the company have an integrated report on the social and environmental impact of its operations and how it plans to mitigate any negative future impact?

2. Does the company have suitable health, safety and welfare arrangements for employees to provide them with sufficient protection?

3. Does the company consider the impact on the environment from its existing operations and when considering new projects, products or services? Is it actively engaged in practices in order to reduce its impact on the environment?

4. Does the company give regular financial support to local community activities and projects?

5. Does the company have a clearly defined set of values and rules of conduct which it follows and communicates to employees, customers, suppliers etc?

We are committed to supporting the efforts of the private sector in the provision of bulk infrastructure for social and economic development in South Africa and the rest of Africa. Recognising the importance of creating an alternative investment sector, we have invested in various infrastructure projects, including power generation and energy sector projects with the aim of supporting the growth and development of these areas for sustainable economic growth.

As one of the investors in renewable energy funds, Liberty invested in four solar PV projects in the Northern and Eastern Cape of South Africa, and one windfarm project in the Eastern Cape. Liberty’s other investments in infrastructure include toll roads and rail development projects.

Proxy voting history (%)

8

2

90

2018

1

4

95

2017

Abstain Against In favour No action

The investment team at STANLIB expresses its views via proxy voting. Should STANLIB intend to vote against a resolution, the investee’s management teams are engaged. During the year, STANLIB engaged with listed entities on the independence of certain board members, CEO remuneration, long-serving directors and their independence and the reappointment of auditors. Proxy voting is tracked and is available to clients for review. Our 2018 proxy voting records appear below:

STANLIB is a voluntary signatory to the United Nations Principles for Responsible Investment. We believe in the principles as a tool to promote awareness of the implications of ESG issues for investors, and to incorporate these issues into decision-making and ownership practices. The principles were established to be compatible with the investment styles of large, diversified, institutional investors that operate within the traditional fiduciary framework.


To the Directors of Liberty Holdings LimitedWe have undertaken a limited assurance engagement in respect of the selected sustainability information, as described below, and presented in the report to society 2018 of Liberty Holdings Limited (the ‘Company’, “Liberty” or “ you”) for the year ended 31 December 2018 (the Report). This engagement was conducted by a multidisciplinary team including environmental and assurance specialists with relevant experience in sustainability reporting.

Subject MatterWe have been engaged to provide a limited assurance conclusion in our report on the following selected sustainability information, marked with a on the relevant pages in the Report. The selected sustainability information described below have been prepared in accordance with the Company’s reporting criteria that accompanies the sustainability information on the relevant pages of the Report (the accompanying reporting criteria).

Selected Sustainability Information Unit of measurement BoundaryTotal electricity consumption MWh South Africa (Liberty owned and leased properties)

Scope 1 direct CO2 emissions - petrol, diesel, refrigerant tCO2e South Africa (Liberty owned properties)

Scope 2 indirect CO2 emissions - electricity consumption tCO2e South Africa (Liberty owned and leased properties)

Scope 3 indirect CO2 emissions

• Business travel in commercial airlines• Business travel in rental cars and transfers• Hotel accommodation• Employee travel claims• Waste to landfill• Recycled waste• Paper consumption• Losses from transmission and distribution of purchased

electricity for Liberty-occupied buildings

tCO2e South Africa

Total CO2 emissions tCO2e South Africa

Total water consumption kL South Africa (Liberty owned and occupied properties)

We refer to this information as the "selected sustainability information for limited assurance".

Your responsibilitiesThe directors are responsible for the selection, preparation and presentation of the selected sustainability information in accordance with the accompanying reporting criteria as set out on pages 46 and 47 of the Report (the “Reporting Criteria”).

This responsibility includes:

• the identification of stakeholders and stakeholder requirements, material issues, commitments with respect to sustainability performance, and

• the design, implementation and maintenance of internal control relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or error.

The directors are also responsible for determining the appropriateness of the measurement and reporting criteria in view of the intended users of the selected sustainability information and for ensuring that those criteria are publicly available to the report users.

Inherent limitationsNon-financial performance information is subject to more inherent limitations than financial information, given the characteristics of the subject matter and the methods used for determining, calculating, sampling and estimating such information. The absence of a significant body of established practices on which to draw allows for the selection of different but acceptable measurement techniques which can result in materially different measurements and can impact comparability. Qualitative interpretations of relevance, materiality and the accuracy of data are subject to individual assumptions and judgements. The precision of different measurement techniques may also vary. Furthermore, the nature and methods used to determine such information, as well as the measurement criteria and the precision thereof, may change over time.

In particular, where the information relies on carbon and other emissions conversion factors derived by independent third parties, or internal laboratory results, our assurance work has not included examination of the derivation of those factors and other third party or laboratory information.

Our Independence and Quality ControlWe have complied with the independence and other ethical requirements of the Code of Professional Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors (IRBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Part A and B).

The firm applies the International Standard on Quality Control 1, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Independent Auditor’s Assurance Report on the Selected Sustainability Information in Liberty Holdings Limited’s Report to Society 2018

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Our responsibilityOur responsibility is to express a limited assurance conclusion on the selected sustainability information based on the procedures we have performed and the evidence we have obtained. We conducted our assurance engagement in accordance with the International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000 (Revised)), and, in respect of greenhouse gas emissions, International Standard on Assurance Engagements 3410, Assurance Engagements on Greenhouse Gas Statements (ISAE 3410) issued by the International Auditing and Assurance Standards Board. These Standards require that we plan and perform our engagement to obtain limited assurance about whether the selected sustainability information are free from material misstatement.

A limited assurance engagement undertaken in accordance with ISAE 3000 (Revised), and ISAE 3410, involves assessing the suitability in the circumstances of the Company’s use of its reporting criteria as the basis of preparation for the selected KPIs, assessing the risks of material misstatement of the selected sustainability information whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the selected sustainability information. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. The procedures we performed were based on our professional judgement and included inquiries, observation of processes followed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records.

Given the circumstances of the engagement, in performing the procedures listed above we:

• interviewed management and senior executives to obtain an understanding of the internal control environment, risk assessment process and information systems relevant to the sustainability reporting process;

• inspected documentation to corroborate the statements of management and senior executives in our interviews;

• tested the processes and systems to generate, collate, aggregate, monitor and report the selected sustainability information;

• performed a controls walkthrough of identified key controls;

• inspected supporting documentation on a sample basis and performed analytical procedures to evaluate the data generation and reporting processes against the reporting criteria;

• evaluated the reasonableness and appropriateness of significant estimates and judgements made by the directors in the preparation of the selected sustainability information; and

• evaluated whether the selected sustainability information presented in the Report are consistent with our overall knowledge and experience of sustainability management and performance at the Company.

The procedures performed in a limited assurance engagement vary in nature and timing, and are less in extent than for a reasonable assurance engagement. As a result the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about whether the Company’s selected sustainability information have been prepared, in all material respects, in accordance with the accompanying the Company’s reporting criteria.

Limited Assurance ConclusionBased on the procedures we have performed and the evidence we have obtained, and subject to the inherent limitations outlined elsewhere in this report, nothing has come to our attention that causes us to believe that the selected sustainability information as set out in the Subject Matter paragraph above for the year ended 31 December 2018 are not prepared, in all material respects, in accordance with the reporting criteria.

Other MattersOur report includes the provision of limited assurance on total electricity consumption (MWh). We were previously not required to provide assurance on this selected sustainability information.

The maintenance and integrity of Liberty’s website is the responsibility of Liberty’s directors. Our procedures did not involve consideration of these matters and, accordingly we accept no responsibility for any changes to either the information in the Report or our independent assurance report that may have occurred since the initial date of presentation on Liberty’s website.

Restriction of liabilityOur work has been undertaken to enable us to express a limited assurance conclusion on the selected sustainability information to the directors of the Company in accordance with the terms of our engagement, and for no other purpose. We do not accept or assume liability to any party other than the Company, for our work, for this report, or for the conclusion we have reached.

PricewaterhouseCoopers Inc.Director: Jayne MammattRegistered AuditorJohannesburg10 May 2019


DefinitionsKPI Definition Boundary

Total electricity consumption (MWh) Electricity consumption is measured through municipal invoicesThe electricity consumption can be divided into two reporting categories being:

• Liberty-owned properties – being those properties which Liberty owns portions through policies. This amount refers to the total consumption; and

• Liberty-owned and occupied properties – these are properties where Liberty occupies the property either wholly or a portion thereof. This would be a portion of the total where Liberty actually occupies.

South Africa (Liberty-owned and leased properties)

Scope 1 direct CO2 emissions (tCO2e) Stationary fuel used in owned and controlled equipment:Diesel – litres

• The diesel from generators is made up of many different properties, however, it excludes properties managed by other organisations. Both STANLIB and Liberty have inputs for diesel generators.

Mobile combustion from vehicle fleet fuel consumption:Petrol – litres

• This information is made up of the STANLIB and the Liberty fleets.Diesel – litres

• The fleet diesel only applies to Liberty and it is similar to how petrol is managed at Liberty.

Fugitive emissions from air-conditioning and refrigeration:Air-conditioning only

• Kilograms as per invoiced amount: information limited to R22, R410 and R134A refrigerants.

South Africa (Liberty-owned properties)

Scope 2 indirect CO2 emissions (tCO2e)

Total electricity consumption in owned and leased properties (as defined above) converted to tCO2e emissions by applying the country-specific emission factor.

South Africa (Liberty-owned and leased properties)

The properties dealt with are as follows:• 171 Katherine Street

• Liberty Life Centre Braamfontein

• Liberty Life Centre Century City

• Liberty Parkade

• Libridge

• Umhlanga Ridge

• Eastgate Shopping Centre,

• Liberty Midlands Mall

• Liberty Promenade Mitchell’s Plain

• Nelson Mandela Square, Sandton City Complex/Sandton Sun, Sandton Game/Garden

Court/Sandton Towers/Parkade

• STANLIB Melrose Arch

• All leased buildings, excluding the below buildings:

• 21 Dr Nelson Mandela Street

• Absa Building

• Green Village

• KP Maluleke Complex

• Stand 2446 Houghton

• Standard Bank Centre

• Wie-Cla Sentrum

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KPI Definition Boundary

Scope 3 indirect CO2 emissions (tCO2e)

• Travel in commercial airlines• Hotel accommodation• Rental cars and transfers• Employee travel claims• Waste to landfill• Recycled waste• Paper consumption• Losses from transmission and

distribution of purchased electricity

TravelTravel is made up of four different sectors being:

• Flights – km• Hotel accommodation – nights• Rental cars and transfers – km• Employee travel claims – kmAll these parts of travel are reduced to kilometers travelled or nights and then converted into carbon emissions.Air travel, accommodation and rental cars are made up of both Travel Management Companies’ (TMC’s) transactions.

• Air travel: booked but not tracked, excluded accommodation

• Hotel accommodation: only hotel nights included travel claims

• Rental cars: car hire for LibertyBusiness-related travel information is obtained from the TMC’s and car hire vendors via their MIS systems.

• Additionally, travel-related claim forms received for reimbursement via Accounts Payable – the copy documentation is supplied for emission factors to be applied to calculate the CO2e

• The travel claims information received from the HR department and a report drawn from payroll processing

Waste to landfill and waste to recycling:Waste generated at the following locations/properties:1. Liberty-owned buildings (currently account for all waste to landfill and

recycling, including tenants):

• 171 Katherine Street• Liberty Life Centre Braamfontein• Liberty Life Centre Century City • Libridge• Umhlanga Ridge• STANLIB Melrose Arch2. Owned shopping centres (currently account for all waste, including

tenants):

• Eastgate Shopping Centre (including Liberty Gardens)• Liberty Midlands Mall• Liberty Promenade Mitchell’s Plain• Sandton City / Nelson Mandela SquarePaper

• Tonnes of paper procured through the Liberty SRM system.Transmission and distribution losses:

• Kilowatt hours (kWh) of electricity consumption from the national Eskom grid in South Africa for leased and owned buildings multiplied by the emission factor, which is country specific.

South Africa

Total CO2 emissions (tCO2e) Refer to addition of scopes 1, 2 and 3 South Africa

Total water consumption (kl)

Liberty consumption includes:

• The Liberty portion of owned and occupied based on the total percentage of the building occupied (including STANLIB).

South Africa (Liberty-owned and occupied properties)


Universal standards

Indicator Disclosure Page

ORGANISATIONAL PROFILE 102

102-1 Name of the organisation Front cover

102-2 Activities, brands, products and services

4, 5

102-3 Location of headquarters 5

102-4 Location of operations 5

102-5 Ownership and legal form 4

102-6 Markets served 4, 5

102-7 Scale of the organisation 5, 16, 19

102-8 Information on employees and other workers

16 - 20

102-9 Supply chain 19, 25, 34

102-10 Significant changes to the organisation and its supply chain

None

102-11 Precautionary principle or approach

3, 43, 54 of IR

102-12 External initiatives 2, 12, 13, 25, 32, 33, 37, 43

102-13 Membership of associations 3, 12, 13, 21, 37, 43

STRATEGY AND ANALYSIS 102

102-14 Statement from senior decision maker

6, 7

ETHICS AND INTEGRITY 102

102-16 Values, principles, standards and norms of behaviour

8, 31

102-17 Ethics, fraud and corruption reporting mechanisms

20, 21

GOVERNANCE 102

102-18 Governance structure 9

STAKEHOLDER ENGAGEMENT 102

102-40 List of stakeholder groups 11, 14

The Global Reporting Initiative’s (GRI) Standards are voluntary best practice sustainability reporting standards developed to assist organisations with reporting on their social, environmental, and economic impacts. This report references specific disclosures from the GRI Standards. A list of the disclosures used can be found in the below content index.

GRI Standards content index

Universal standards


STAKEHOLDER ENGAGEMENT (continued) 102

102-42 Identifying and selecting stake-holders

14

102-43 Approach to stakeholder engage-ment

14

102-44 Key topics and concerns raised 14

REPORTING PRACTICE 102

102-45 Entities included in the consolidated financial statements

122, 125 of AFS

102-46 Defining report content and topic boundary

3

102-47 List of material topics 11, 15

102-48 Restatements of information 3

102-49 Changes in reporting 1, 11 - 15

102-50 Reporting period 3

102-51 Date of most recent report 3

102-52 Reporting cycle 3

102-53 Contact point for questions regard-ing the report

1

102-54 Claims of reporting in accordance with the GRI Standards

3

102-55 GRI content index 48, 49

102-56 External assurance 44, 45

MANAGEMENT APPROACH 103

103-1 Explanation of the material topic and its boundary

3, 11

103-2 The management approach and its components

11

103-3 Evaluation of the management approach

4, 5, 8 - 15

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Topic specific disclosures


ECONOMIC PERFORMANCE 201

Management approach disclosures 16

201-1 Direct economic value generated and distributed

23 - 25

INDIRECT ECONOMIC IMPACTS 203


203-1 Infrastructure investments and services supported

43

203-2 Significant indirect economic impacts

24, 25, 43

ANTI-CORRUPTION 205


205-1 Operations assessed for risks related to corruption

20 - 22

205-2 Communication and training about anti-corruption policies and procedures

20 - 22

EMISSIONS 305


305-1 Direct (scope 1) GHG emissions 38

Topic specific disclosures


EMISSIONS (continued) 305

305-2 Energy indirect (scope 2) GHG emissions

38

305-3 Other indirect (scope 3) GHG emissions

38

305-4 GHG emissions intensity 38

305-5 Reduction of GHG emissions 37 - 39

305-6 Emissions of ozone-depleting substances

38

305-7 Nitrogen oxides (NOx), sulfur oxides (SOx) and other significant air emissions

NA

EMPLOYMENT 401


401-1 New employee hires and employee turnover

19

401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees

17 - 20, 34

TRAINING AND EDUCATION 404


404-1 Average hours of training per year per employee

18

404-2 Programmes for upgrading employ-ee skills and transition assistance programmes

30


B-BBEE Broad-based black economic empowerment

CDP Carbon Disclosure Project

CRISA Code for Responsible Investing in SA

CSI Corporate Social Investment

ECM Emerging consumer market

EME Exempt Micro Enterprise

ESD Enterprise and Supplier Development

ESG Environmental, Social and Governance

Exco Executive committee

FSC Financial Sector Code

FSCA Financial Services Conduct Authority

GBCSA Green Building Council of South Africa

GRI Global Reporting Initiative

IT Information technology

JSE Johannesburg Stock Exchange

NDP National Development Plan

PoPI Protection of Personal Information Act, 4 of 2013

PV Photovoltaic

PwC PricewaterhouseCoopers Inc.

QSE Qualifying Small Enterprise

REIT Real Estate Investment Trust

SA South Africa

SAM Solvency Assessment and Management

SBG Standard Bank Group

SDGs Sustainable Development Goals

SEE Social, environmental and economic

SME Small and medium and enterprises

UN United Nations

UN PRI United Nations Principles for Responsible Investment

Abbreviations

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Notes


Notes

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