Climate Change Data

Environmental Metrics

ESG Focus Areas

• Financial and operational
• Governance and ethics
• Employees
• Social
• Environmental

Environmental Achievements

• Zero major environmental incidents for the eighth consecutive year
• No fines for environmental transgressions or non-compliance with host country legislation for the seventh consecutive year
• Zero significant environmental incidents for the third consecutive year
• Positive results achieved through the implementation of our bioremediation pilot project

Social Achievements

• Letšeng Diamond Discovery Centre officially opened
• Letšeng provided accommodation and food to approximately 250 local people experiencing life-threatening conditions during severe weather
• US$141.2 million spent on local procurement

Governance Achievements

• Zero cases of bribery, corruption or anti-competitive behaviour
• Zero incidents of potential breach of client confidentiality
• Ten cases of whistleblowing

Climate Goals & Targets

Environmental Challenges

• Decline in the number of diamonds larger than 100 carats recovered
• Depressed market for smaller-sized diamonds impacting Ghaghoo operation
• Allegations of racism at Letšeng mine
• Ensuring social commitments are met sustainably despite economic fluctuations
• Ongoing water management challenges, particularly nitrate levels at Letšeng
• Waste management challenges due to remote locations

Mitigation Strategies

• Decision to place Ghaghoo mine on care and maintenance
• Investigation into allegations of racism at Letšeng
• Focus on improving stakeholder grievance management mechanisms
• Continued compliance with operation-specific social and environmental management plans (SEMPs)
• Development and implementation of initiatives focusing on water and waste management

Supply Chain Management

Responsible Procurement

• Rigorous vetting processes for suppliers
• Suppliers required to adhere to ethical policies

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (heavy snowfall, severe winds)

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines, IFC EH&S Guidelines, Equator Principles

Certifications: ISO 14001, ISO 18001

Environmental Metrics

ESG Focus Areas

• Workplace safety
• Environmental responsibility
• Community investment
• Sustainable development
• UN Sustainable Development Goals (SDGs)
• Climate change
• Water management
• Tailings management
• Business Transformation (BT)
• Continuous Improvement (CI)

Environmental Achievements

• Zero major or significant environmental incidents
• Total carbon footprint decreased by 19% to 140,040 tCO2e
• Total water withdrawal decreased by 8% to 5,213,064 m3
• Group-wide energy consumption decreased by 12% to 336,814,167 kWh

Social Achievements

• Improved safety performance: one LTI (2019: seven), lowest AIFR in a decade (0.76)
• US$0.3 million invested in social initiatives, including COVID-19 relief efforts
• No major or significant stakeholder incidents
• Letšeng in-country procurement: US$126.2 million

Governance Achievements

• Successful implementation of Business Transformation (BT) program, delivering US$79.2 million in savings
• Improved cash position: net cash of US$34.6 million (2019: net debt of US$10.2 million)
• Dividend of 2.5 US cents recommended

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and resulting 30-day shutdown at Letšeng mine
• COVID-19 disruptions affecting equipment and spare parts availability
• Processing at Letšeng plants below budget due to maintenance and power interruptions
• Reduced diamond market demand and prices
• Exchange rate volatility

Mitigation Strategies

• Implemented cost reduction and deferment measures
• Flexible tender processes introduced to ensure sales
• Increased proportion of ore treated from high-value Satellite pipe
• Focus on cash preservation and improved liquidity
• Renegotiated contracts with contractors and suppliers
• Implemented COVID-19 protocols to protect workforce and communities

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Focus on local procurement to support Lesotho economy
• Transparent and fair engagement with contractors and suppliers during COVID-19

Climate-Related Risks & Opportunities

Physical Risks

• Regional drought

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines, UN Global Compact

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 1: No poverty
• SDG 3: Good health and well-being
• SDG 6: Clean water and sanitation
• SDG 8: Decent work and economic growth
• SDG 10: Reduced inequalities
• SDG 12: Responsible consumption and production

Initiatives aligned with these goals to promote prosperity while protecting the planet.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• FTSE4Good index inclusion

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Zero major or significant environmental incidents for the 13th consecutive year
• Zero significant environmental incidents for the 8th consecutive year
• US$0.9 million invested in environmental protection during 2021
• 8.9 million m3 of water recycled
• Total carbon footprint of 153 864 tCo2e
• No fines for environmental transgressions

Social Achievements

• US$0.8 million invested in social projects
• US$164.9 million spent on local procurement
• Zero major or significant community incidents
• 98% of Letšeng’s workforce comprises Lesotho nationals
• COVID-19-related aid and assistance provided to PACs
• 20 000 vaccines donated to the Government of Lesotho

Governance Achievements

• Zero cases of bribery, corruption and anti-competitive behaviour
• Zero breaches of confidentiality and customer privacy
• Adopted TCFD recommendations
• Appointed new non-Executive Director with deep ESG experience
• Gem Diamonds is a constituent of the FTSE4 Good Index

Climate Goals & Targets

Environmental Challenges

• COVID-19 disruptions to operations and supply chains
• Deterioration in safety performance in the first half of the year
• Climate change risks (extreme weather, energy intensity)
• Tailings dam safety
• Grid instability affecting electricity supply
• Water shortages

Mitigation Strategies

• Refined COVID-19 response protocols, successful vaccination program
• 24-hour mine stoppage to investigate safety performance, implemented safety interventions
• Adopted TCFD framework, conducted scenario analysis, energy efficiency study
• Implemented ICMM Global Industry Standard for Tailings Management, supplemented existing control systems
• Improved generator-based power supply system
• Water recycling and reuse, catchment and freshwater supply opportunities, bioremediation pilot plant

Supply Chain Management

Responsible Procurement

• In-country procurement
• Supplier assessment aligned with best practice
• Supplier contracts include governance policies

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, droughts)
• Increased frost days
• Reduced precipitation

Transition Risks

• Regulations relating to climate change and carbon pricing

Opportunities

• Renewable energy solutions
• Improved energy efficiency

Reporting Standards

Frameworks Used: GRI Standards, TCFD, IFC EHS Guidelines, Equator Principles

Certifications: ISO 14001, ISO 45001

UN Sustainable Development Goals

• No Poverty
• Good Health and Well-being
• Clean Water and Sanitation
• Decent Work and Economic Growth
• Reduced Inequalities
• Responsible Consumption and Production

Material UN SDGs embedded in systems, processes, and decision-making

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Decarbonization
• Water Stewardship
• ESG Governance

Environmental Achievements

• Achieved 41,036 tonnes of carbon dioxide equivalent (tCO2e) annual reduction in Scope 1, 2, and 3 emissions.
• Reduced energy consumption by 100.8 million kWh in 2022 compared to 2021.
• Reduced net water usage by 54% and water withdrawal by 61%.
• Recycled 6.4 million m3 of water.

Social Achievements

• Improved water and sanitation infrastructure for project-affected communities.
• Implemented a focused behavior-based training program to raise awareness of energy consumption impact.

Governance Achievements

• Established the TCFD Adoption Steering Committee and the Energy and Decarbonisation Committee.
• Adopted the TCFD framework and a decarbonisation strategy.
• Adopted an internal carbon-pricing model.
• Became a member of the United Nations Global Compact (UNGC).

Climate Goals & Targets

Environmental Challenges

• Increasing shortage and rising cost of grid and diesel energy.
• Unreliable and unstable South African electricity grid.
• Low temperatures at Letšeng mine limiting biodiesel use.
• Frequent load shedding impacting operations.
• Location-specific constraints limiting renewable energy options (e.g., vulture nesting zone).

Mitigation Strategies

• Implemented shorter haulage routes, reduced mineral waste volumes, and improved blasting practices to improve energy consumption efficiencies.
• Piloting an energy usage prioritisation schedule.
• Installing technology to manage energy demand peaks.
• Assessing alternative energy sources for mining fleet and equipment.
• Integrating load shedding schedules into production planning.
• Assessing lower-carbon energy for generators.
• Commissioning studies to assess hybrid power solutions and bird-friendly wind power technology.
• Commissioning a study to assess the viability of solar power as part of a hybrid model.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Increase in occurrence and severity of precipitation
• Rising mean temperature
• Strong winds
• Increased frequency and duration of droughts

Transition Risks

• Failure of electricity providers to move to a low-carbon economy
• Substitution of technology with lower-emission alternatives
• Evolving regulatory context regarding carbon tax
• Increased costs of carbon-intensive products

Opportunities

• Increased resource efficiencies and reducing reliance on fossil fuels
• Enhanced water use strategies
• Waste reduction and recycling initiatives
• Transition to renewable energy sources

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 50001 (Letšeng operation)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Gem Diamonds is a member of the UNGC and has integrated six UN Sustainable Development Goals into its business planning and strategy.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Best Climate-Related Reporting (Small Cap) award at the ESG Investing Awards 2022

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Total carbon footprint reduced to 110,198 tCO2e (2022: 112,827 tCO2e)
• Won the Water award at the Investing in African Mining Indaba 2023 (Junior ESG Awards)
• Zero major or significant environmental incidents for the 15th and 10th consecutive year, respectively
• US$2.3 million invested in environmental protection and bioremediation infrastructure during 2023 (2022: US$0.8 million)
• Ghaghoo operation transitioned from fossil-fuel electricity to solar energy.

Social Achievements

• Lowest all injury frequency rate to date
• US$0.4 million invested in social projects (2022: US$0.5 million)
• Zero major or significant community incidents
• Letšeng awarded 55 scholarships to young Basotho citizens
• Zero incidents of compromised dam integrity

Governance Achievements

• Completed implementation of Task Force on Climate-related Financial Disclosures (TCFD) recommendations
• Retained ISO 45001 and 14001 certifications
• Zero cases of bribery, corruption or anti-competitive behaviour
• Gem Diamonds is a constituent of the FTSE4Good Index Series

Climate Goals & Targets

Environmental Challenges

• Lack of consistent power supply and disruption caused by load shedding in South Africa
• Tailings dam risk due to global incidents
• Global macroeconomic conditions and geopolitical instability

Mitigation Strategies

• Implemented numerous mitigation factors to reduce tailings dam risk
• Implemented initiatives to reduce energy consumption and improve efficiencies
• Insourcing of mining contract to enhance governance and control
• New management team at Letšeng to drive operational efficiencies and cost reductions

Supply Chain Management

Responsible Procurement

• Code of Conduct
• Supplier sustainability requirements

Climate-Related Risks & Opportunities

Physical Risks

• Snowstorms
• Extreme temperatures
• Excessive rainfall/flash floods
• Drought

Transition Risks

• Future regulatory requirements
• Carbon tax
• Global fossil fuel based energy trends

Opportunities

• Transition to renewable energy sources

Reporting Standards

Frameworks Used: GRI Standards, IFC Performance Standards, Equator Principles, ISO Standards, TCFD

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Not independently verified, endorsed by internal quality control and external audits

UN Sustainable Development Goals

• No poverty
• Zero hunger
• Good health and well-being
• Clean water and sanitation
• Decent work and economic growth
• Reduced inequalities
• Responsible consumption and production
• Climate action

Embedded in Group’s strategy, systems and processes.

Awards & Recognition

• Water award at the Investing in African Mining Indaba 2023

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Corporate Social Responsibility
• Decarbonization
• Residue Storage Facility Management

Environmental Achievements

• 3.4% reduction in total carbon footprint (Scope 1, 2, and 3) compared to H1 2023 (52,283 tCO2e vs 54,138 tCO2e). Scope 1 emissions decreased by 27%, while Scope 3 emissions decreased by 26%.
• Implemented Group Residue Storage Facility (RSF) management policy and standard aligned with GISTM.
• Reduced load shedding at Letšeng by 73.5% compared to H1 2023, leading to increased grid electricity use and decreased diesel consumption.

Social Achievements

• Zero fatalities and three lost-time injuries (LTIs) at Letšeng.
• Zero significant or major environmental or social incidents.
• Continued execution of CSRI strategy and initiatives to support communities.
• No major stakeholder complaints received.

Governance Achievements

• Insourcing of mining activities at Letšeng, delivering operational efficiencies and cost savings.
• Review of all operational contracts to ensure efficiencies and cost management.
• Right-sizing program to align workforce with operational requirements.

Climate Goals & Targets

Environmental Challenges

• Challenging global economic environment impacting the diamond market.
• Pressure on rough and polished diamond prices due to increased Russian diamond supply and lab-grown diamond production.
• Volatile global economic environment and inflationary pressures impacting operating expenses.

Mitigation Strategies

• Focused cost and operational efficiency initiatives at Letšeng (insourcing, contract review, right-sizing).
• Review of Letšeng's long-term mine plan to reduce waste mining.
• Close management of costs and preservation of cash resources.
• Implementation of a solar power plant at Ghaghoo to reduce costs.

Climate-Related Risks & Opportunities