The concept of sustainability in its broadest sense underpins Sibanye’s strategy. Sibanye was established as a separate entity so that it could withstand the vagaries of the market and the constraints of its orebodies at least for several decades to come. Under the auspices of Gold Fields, operations now owned by Sibanye were being ‘harvested’, had relatively short lives and would have closed within a decade.
Turning specifically to the concept of sustainable development, Sibanye has embraced the concept of Strong Sustainability, encompassing – as defined by the Brundtland Commission – ‘development that meets the needs of the present without compromising the ability of future generations to meet their own determining sustainability needs’ but noting that there can be no trade-offs between the different forms of capital.
The report that follows is based on the Five Capitals Model, discussing the financial, human, social, natural and manufactured capitals in the business. However, there is much overlap, and these distinctions have been made for convenience.
THE FIVE CAPITALS MODEL
The Five Capitals Model, developed by Forum for the Future (an independent non-profit organisation working globally with business, governments and other organisations to solve complex sustainability challenges), is used as a framework for sustainability.
The Five Capitals Model (see diagram below) provides a basis for understanding sustainability in terms of the economic concept of wealth creation or ‘capital’. The model affords a broader understanding of financial sustainability by enabling business to consider the effect of wider environmental and social issues on long-term profitability.
Any organisation would use five types of capital to deliver its products or services: natural, human, social, manufactured and financial. A sustainable organisation will maintain and, where possible, enhance stocks of capital assets rather than deplete or degrade them.
The model helps the business develop a vision of its own sustainability by considering its requirements to maximise the value of each capital. However, an organisation needs to consider the impact of its activities on each of the capitals in an integrated way in order to avoid ‘trade-offs’. Using the model in this way for decision-making can lead to more sustainable outcomes.
THE FIVE CAPITALS MODEL (AS ADJUSTED BY SIBANYE)
The assets of an organisation that exist in a form of currency that can be owned or traded. This is the traditional primary measure of business performance and success (the single bottom line) in terms of reporting performance to shareholders, investors, regulators and government. Sustainable organisations understand that the creation of financial value is dependent on other forms of capital.
The health, knowledge, skills, intellectual outputs, motivation and capacity for relationships of the individual are important as organisations depend on individuals to function – a healthy, motivated and skilled workforce is necessary. Damage to human capital by abuse of human or labour rights, or compromising health and safety, has direct as well as reputational costs.
Organisations rely on social relationships and interactions to achieve their objectives. Value added to the activities and economic outputs of an organisation by human relationships, partnerships and co-operation are, therefore, important. Internally, social capital takes the form of shared values, trust, communications and shared cultural norms, which enable people to work cohesively and thus enable the organisation to operate effectively. Externally, social structures help create a climate of consent, or a social licence to operate, in which trade and the wider functions of society are possible. Organisations also rely on wider socio-political structures to create a stable society in which to operate (such as government and public services, effective legal systems, trade unions and other organisations).
Natural resources (energy and matter) and processes are needed to produce products and deliver services, including sinks that absorb, neutralise or recycle waste (such as forests), resources (some renewable, others not) and processes (such as climate regulation and the carbon cycle) that enable life to continue in a balanced way. All organisations rely on natural capital to some degree and have an environmental impact; consuming energy and creating waste. Organisations need to be aware of the limits in the use of the natural environment, and operate accordingly.
Material goods and infrastructure owned, leased or controlled by an organisation that contribute to production or service provision but do not become part of its output, mainly include buildings, infrastructure (transport networks, communications and waste-disposal systems) and technologies – from tools and machines to information technology (IT) and engineering. Manufactured capital is important for a sustainable organisation in two ways: firstly, the efficient use of manufactured capital enables an organisation to be flexible, innovative and increase the speed to market of its products and services; secondly, manufactured capital and technology can be used to reduce resource use and enhance efficiency and sustainability.