Governance of sustainability

Blu Label continues to build on our ESG and sustainability reporting and oversight framework developed in 2023 that will assist the Board in exercising oversight of sustainability-related impacts, risks and opportunities and the process for integrating sustainability issues into the strategy development, overall governance, as well as reporting processes of Blu Label.

Several of continuing initiatives have been undertaken in recent years, including:

• a review of sustainability reporting impacts, risks and opportunities, with a view to incorporating these into Blu Label’s risk management systems;
• a gap analysis against the JSE Sustainability Disclosure Guidance issued in June 2022 that has informed some of the enhanced content of the integrated report and future planned disclosure improvements;
• enhancing our disclosures on our social and environmental impacts; and
• continue and refine ESG metrics and targets included in our long-term incentive plan.

A proposed structure of Board Committees responsible for oversight of sustainability matters has been presented below:

	Audit, Risk and Compliance Committee	Remuneration and Nomination Committee	Social Ethics and Transformation Committee	Executive Committee
				Human Capital	Risk and Compliance	Company Secretary Office
Environmental			✓
Climate change			✓
Water security			✓
Pollution and waste			✓
Biodiversity and land use			✓
Supply chain and materials			✓
Social
Labour standards			✓	✓
Human rights and community development			✓	✓
Health and safety			✓	✓
Customer responsibility			✓
Supply chain (Social)			✓
Governance
Board composition		✓				✓
Ethical behaviour			✓	✓	✓
Remuneration		✓
Compliance and risk management	✓				✓
Tax transparency	✓				✓
Sustainability reporting
Reporting standards	✓		✓		✓
Assurance	✓		✓		✓
Materiality	✓		✓		✓

Ongoing initiatives to integrate and embed sustainability in our governance, strategy, reporting, business and management processes include:

• enhancing the work plans and terms of reference for Board subcommittees to create focus and integration on sustainability-related issues and to align with the requirements of the Companies Act amendments;
• formalisation of sustainability-related issues in the risk management system, strategy and policy development as well as internal and external reporting;
• continued alignment of external reporting with the JSE Sustainability Disclosure Guidance as well as future adoption of global reporting standards and frameworks;
• consideration of training and specialist input on material sustainability matters; and
• reviewing the draft King V requirements.

As part of integrating sustainability into the Board’s mandate and structures, we are reviewing the subcommittees’ terms of reference to align with sustainability-related best practices and Companies Act amendments.

Some of the proposed key updates for each Committee include:

Audit, Risk and Compliance Committee	Formalising the Committee’s role in overseeing the application of integrated and sustainability-related reporting standards and regulations. Ensuring that the Group has implemented an effective policy and plan for risk management of sustainability risks and opportunities that will enhance the Group’s ability to achieve its strategic long-term objectives.
Investment Committee	To be formally mandated to incorporate sustainability considerations into the investment decision-making process. This will involve evaluating governance practices, sustainability-related risks and opportunities, related strategies, policies, and potential investment performance.
Remuneration and Nomination Committee	To include achieving strategic sustainability objectives and the related performance metrics into agreed targets and timelines in short and long-term incentive plans. To ensure the skills and competence of the Group at Board and management levels are appropriate to oversee strategy development that anticipates and addresses key sustainability-related risks, opportunities and objectives, including ongoing training and support of Board members and management.
Social and Ethics Committee	Oversee the development of the appropriate strategy and policies in response to material sustainability-related risks, opportunities and impacts, including identifying metrics and setting plans and targets over identified time horizons to monitor and manage performance. To ensure the independence requirements of the Companies Act amendments are met.
Executive Committee	Ensure that sustainability risks, opportunities and impacts are considered in the implementation of strategy development and policies of the Group. Oversee the appropriate setting and planning of performance measures and targets to execute and monitor the effective implementation of strategies and policies.