Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Growth
• Deliver to our stakeholders
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources

Environmental Achievements

• Electricity consumption at South African-owned properties decreased by 3% to 252 million kWh
• Municipal water consumption at South African-owned properties decreased by 3% to 2.3 million kilolitres
• Riverside Sun Resort won the overall 2012 Imvelo Award and several Tsogo Sun properties were finalists in various Imvelo Award categories (Energy, Water, Waste Management)

Social Achievements

• BBBEE rating reaffirmed at level 2
• SunCares Sports Academy supported 1,570 South African youths
• SunCares Arts Academy supported 480 learners
• Tsogo Sun won the ‘Best Employer Award’ in the hospitality sector
• Book a Guesthouse initiative created over 250 jobs and supported more than 2,000 jobs in the value chain
• R190 million in combined social investment in community development

Governance Achievements

• Implementation of a combined assurance model is underway
• Robust compliance procedures in place
• Active participation in industry bodies (CASA, Fedhasa, BLSA, etc.)

Climate Goals & Targets

Environmental Challenges

• Difficult macro-economic environment
• Regulatory challenges (proposed amendments to smoking legislation and BBBEE Codes of Good Practice)
• Unreliable and costly utilities
• Capacity issues (casino capacity constraints)
• Crime and security
• Human resources (employment equity challenges, lifestyle diseases, limited pool of qualified staff)

Mitigation Strategies

• Focus on cost reduction
• Renewed and focused marketing
• Reward programmes
• Demand-side management programmes to reduce utility consumption
• Water handling/storage capacity for emergency supply
• Self-reliance on generators for emergency electricity supply
• Retention of staff through appropriate remuneration structures
• Employee engagement programmes
• Fast track and develop talented staff
• Focused employment equity strategy
• Physical security and surveillance procedures
• Good coordination with the South African Police Service
• Internal control frameworks
• Project teams assembled to exploit opportunities
• Proper and robust evaluation of all new opportunities

Supply Chain Management

Responsible Procurement

• Preferential procurement opportunities to black-owned businesses
• Consideration of environmental performance of suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, South African Companies Act 2008, JSE Listings Requirements, King III, GRI G3 guidelines

Third-party Assurance: PricewaterhouseCoopers Inc.

Awards & Recognition

• Imvelo Awards for Responsible Tourism
• Best Employer Award

Environmental Metrics

ESG Focus Areas

• Sustainability
• Growth
• Deliver to our beneficiaries
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources

Environmental Achievements

• Reduced scope 3 emissions from tenants at group properties by 9%
• Reduced scope 3 emissions from properties managed by the group by 23%

Social Achievements

• Tsogo Sun Sports, Arts and Learning Academies supported 39,751 learners
• R154 million spent on CSI initiatives
• R122 million spent on enterprise development (7.1% of net profit after tax)
• 98 guesthouses registered on Book-a-Guesthouse programme (all black-owned, 92% by women)
• BBBEE rating reaffirmed at Level 2

Governance Achievements

• No gaming regulation breaches
• No fines imposed for regulatory breaches
• Implementation of internal control procedures and compliance policies

Climate Goals & Targets

Environmental Challenges

• Tough macro-economic environment and poor consumer sentiment
• Reduced government spend on travel
• Impact of Ebola pandemic on travel to African markets
• Closure of Southern Sun Maputo for renovations
• Amendments to BBBEE Codes of Good Practice
• Potential amendments to National Liquor Act and Financial Intelligence Centre Act
• Unreliable and costly utilities
• Crime and security
• Cyber, IT and information management risks

Mitigation Strategies

• Revised strategic priorities
• Review of organisational structures
• Focus on cost reduction
• Renewed and focused marketing
• Reward programmes
• Robust compliance procedures
• Engagement with authorities and law makers
• Lobbying government
• Demand-side management programmes to reduce consumption
• Water handling/storage capacity for emergency supply
• Self-reliance on generators for emergency electricity supply
• Physical security and surveillance procedures
• Coordination with the South African Police Service
• Internal control frameworks
• IT security
• Payment card industry standard compliance
• Website rewrite

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Focus on procuring products from vendors located in the areas where they are situated
• Encouraging diversity within commercial associations, particularly through the involvement of previously disadvantaged persons and local businesses
• Focused procurement strategy supporting black businesses in South Africa
• Considering environmental performance of suppliers as part of procurement criteria

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS, South African Companies Act 2008, JSE Listings Requirements, King III, International framework, GRI guidelines

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers Inc.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Deliver to our beneficiaries
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources

Environmental Achievements

• Water consumption at the group’s owned properties decreased during the year by 3% to 2.7 million kilolitres mainly due to ongoing conservation and reduction measures at all properties, offset by two additional hotels being acquired in October 2016.
• Scope 2 emissions from electricity consumption at the group’s owned properties were flat on the prior year at 216 516 tCO2e despite two additional hotels being acquired in October 2016 and an increased electricity consumption due to reduced load shedding due to savings from ongoing energy-saving initiatives.

Social Achievements

• Staff resignations decreased to 9.8% (2016: 10.1%)
• Tsogo Sun Sports, Arts and Learning Academies support 46 398 learners
• Tsogo Sun Entrepreneurs programme supports 200 beneficiaries
• BBBEE level 1 achieved

Governance Achievements

• No significant gaming regulation breaches
• No significant fines imposed for other regulatory breaches
• No significant fines imposed for breaches of law

Climate Goals & Targets

Environmental Challenges

• Difficult macro-economic environment and poor business confidence and consumer sentiment
• Tough trading conditions in offshore hotels due to low commodity prices and currency fluctuations
• Severe water shortages in the Western Cape
• Rising utility costs and uncertainty of future energy and water supply
• Employment equity challenges at senior levels
• Potential increased national and provincial gaming taxes
• Additional casino licences or relocation of existing casino licences
• Policy uncertainty
• Changes in casino licensing conditions
• Changing BBBEE requirements
• Increased complexity of compliance

Mitigation Strategies

• Vigilant cost containment without impacting customer experience
• Ongoing refurbishment programme
• Contingency plans for water supply interruptions (reverse osmosis)
• Demand-side management programmes to reduce consumption
• Water handling/storage capacity for emergency supply
• Self-reliance on generators for emergency electricity supply
• Focused employment equity strategy
• Robust compliance procedures
• Engagement with authorities and lobbying efforts
• Comprehensive BBBEE programme

Supply Chain Management

Responsible Procurement

• Focus on supporting local small businesses and suppliers
• Encouraging diversity among commercial associations
• Supporting black businesses in South Africa through a focused procurement strategy

Climate-Related Risks & Opportunities

Physical Risks

• Severe water shortages

Reporting Standards

Frameworks Used: IFRS, King III, International framework

Environmental Metrics

ESG Focus Areas

• Deliver to our beneficiaries
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources

Environmental Achievements

• Reduced water consumption by 2% to 2.5 million kilolitres
• Reduced scope 3 emissions from tenants by 4%
• Reduced scope 3 emissions from managed properties by 11%

Social Achievements

• Retained a level 1 BBBEE rating
• Spent R64 million on CSI initiatives
• Tsogo Sun Entrepreneurs programme supports 259 beneficiaries
• Reduced staff resignations to 8.9%

Governance Achievements

• Substantially applied King IV principles
• No significant gaming regulation breaches
• No significant fines imposed for regulatory breaches

Climate Goals & Targets

Environmental Challenges

• Weak economic environment impacting consumer spending
• Regulatory challenges in the gaming industry (potential gambling levies, smoking legislation, illegal gambling)
• Water shortages in the Western Cape
• Unreliable electrical supply
• Crime and security risks

Mitigation Strategies

• Focus on cost containment
• Constructive engagement with decision-makers
• Contingency plans for water supply interruptions
• Demand-side management programmes to reduce consumption
• Physical security and surveillance procedures

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement from vendors located in the areas where Tsogo Sun operates
• Support for black-owned businesses

Climate-Related Risks & Opportunities

Physical Risks

• Severe drought and water shortages

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS, South African Companies Act 2008, JSE Listings Requirements, King IV™, International framework

Certifications: Null

Third-party Assurance: Combination of external and internal sources

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• Deliver to our beneficiaries
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources
• Growth

Environmental Achievements

• Reduced total emissions by 1% compared to the restated 2019 figures (171,937 tCO2e vs 165,179 tCO2e)

Social Achievements

• Achieved Level 1 B-BBEE status
• Community investment of R53 million (R48 million in 2019)
• Enterprise and supplier development spend of R56 million
• Educational support reached 22,124 learners
• Employee volunteer program with thousands of participants

Governance Achievements

• Substantial application of King IV principles
• No significant breaches of gaming regulations or other laws
• Implemented cost-saving initiatives, streamlining operations

Climate Goals & Targets

Environmental Challenges

• Illegal gambling impacting revenue and government tax collection
• Potential changes to smoking legislation
• Potential increase in provincial taxes
• Covid-19 pandemic and related government restrictions
• High debt levels

Mitigation Strategies

• Cost-saving initiatives and focus on efficiency
• Debt reduction strategies
• Enhanced hygiene and social distancing measures
• Engagement with government and regulatory bodies
• Litigation where required

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Focused procurement strategy supporting black-owned businesses
• Consultations with suppliers during Covid-19 lockdown

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS, South African Companies Act 2008, JSE Listings Requirements, King IV, International framework

Certifications: Null

Third-party Assurance: Combination of external and internal sources; no formal third-party assurance.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Deliver to our beneficiaries
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources
• Growth

Environmental Achievements

• Reduced Scope 1 emissions by 44%, Scope 2 emissions by 29%, and Scope 3 emissions by 47% compared to 2020. Reduced water consumption by 51%.

Social Achievements

• Achieved a level 2 B-BBEE status (2020: level 1). Black ownership was 62% (2020: 59%). Community development investment of R24 million (2020: R53 million). Enterprise and supplier development investment of R27 million (2020: R56 million). Maintained an average lost-time injury frequency rate of 0.40.
• Employee volunteer program participation in various community initiatives.

Governance Achievements

• Substantial application of all 16 King IV principles. No significant breaches of gaming regulations or other significant legal breaches. Implemented measures to comply with POPIA.

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic and related restrictions (lockdowns, curfews, alcohol bans, capacity limitations) significantly impacting operations and financial performance.
• Low economic growth and declining consumer discretionary spending.
• Proliferation of illegal gambling.
• Unreliable and costly utilities (electricity and water).
• Crime, safety, and security concerns.
• Cybersecurity risks.
• Numerous legal challenges relating to bingo licenses in KwaZulu-Natal, the Eastern Cape, and the North West.
• Rising utility costs and uncertainty of the current supply of energy and the future supply of water.

Mitigation Strategies

• Revised strategic priorities, optimized organizational structures, and focused on cost reduction.
• Stringent evaluation of capital projects and preservation of liquidity.
• Renewed marketing and promotions, reward programs.
• Demand-side management programs to reduce energy and water consumption.
• Self-reliance on generators for emergency electricity supply.
• Implementation of extensive hygiene and safety protocols.
• Robust compliance procedures, engagement with authorities.
• Investment in facilities and maintenance capex to ensure product relevance.
• IT Cybersecurity Framework, Payment card industry standard compliance, Social media policies.
• Negotiations with lenders to waive covenant breaches and reset covenants.
• Cost reductions and operational efficiencies.

Supply Chain Management

Responsible Procurement

• Focused procurement strategy supporting black-owned businesses.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, King IV, International framework

Environmental Metrics

ESG Focus Areas

• Deliver to our beneficiaries
• Financial strength and durability
• Product relevance to customer experience
• Regulatory compliance
• Human resources
• Transformation
• Responsible gambling
• Climate change

Environmental Achievements

• Installed solar energy at Silverstar and Garden Route casinos. Planning to roll out solar panels to more casinos in the near future.

Social Achievements

• Achieved a level 1 B-BBEE contributor status.
• Community development spend totalled R34 million (2021: R24 million).
• Value of investment in enterprise and supplier development totalled R35 million (2021: R27 million).
• Continued Tsogo Sun Gaming volunteers programme.

Governance Achievements

• No breaches of any legislation and no fines imposed during the year.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and various regulatory restrictions.
• Rising interest rates, high unemployment levels, KwaZulu-Natal floods and Eskom’s load shedding.
• Illegal land-based gambling sites impacting revenue.
• Unreliable electrical supply, municipal infrastructure degradation, and unreliable water supplies.
• Crime, safety and security issues.
• Cyber crime and POPIA compliance.
• Changes in consumer preferences and technology trends.

Mitigation Strategies

• Revised strategic priorities, optimised organisational structures, and focused on cost reduction.
• Engaged authorities, implemented robust compliance procedures, and developed a comprehensive B-BBEE programme.
• Communicated with government, lodged appeals, and implemented robust compliance procedures.
• Invested in facilities and maintenance, conducted market research, and developed a mobile app.
• Reviewed organisational structures, focused on cost containment, and engaged with gambling boards and government.
• Installed off-grid power supply alternatives, increased standby water supply, and increased surge protection.
• Maintained hygiene and safety protocols, implemented physical security measures, and implemented internal control frameworks.
• Implemented an IT Cybersecurity Framework, ensured payment card industry standard compliance, and increased IT auditing and assurance.

Supply Chain Management

Responsible Procurement

• Procurement strategy designed to support transformation strategic objectives and support local businesses.

Climate-Related Risks & Opportunities

Physical Risks

• Adverse and severe weather conditions
• Storm and lightning damage, flooding
• Services disruption, electrical and water supply
• Customer access disruption due to road infrastructure damage

Opportunities

• Reduced cost base due to off-grid power generation installations
• Increased resilience to national grid power outages, load shedding and water supply disruptions
• Reduction in carbon emissions

Reporting Standards

Frameworks Used: IFRS, International Framework, King IV Report on Corporate GovernanceTM for South Africa, 2016, JSE Limited Listings Requirements, JSE Limited Debt Listings Requirements, Companies Act of South Africa, 71 of 2008

Third-party Assurance: PricewaterhouseCoopers Inc. (financial statements), Empowerdex Proprietary Limited (B-BBEE), GRiPP Advisory Proprietary Limited (internal controls)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Montecasino's 4.3MW rooftop solar installation (to be completed by August 2023)
• Expansion of solar plants at Silverstar Casino and Garden Route Casino (to be completed by September 2023)
• Planned 1.5MW solar installation at Gold Reef City Casino (to be completed by November 2023)
• Recycling of glass, paper, metal, and plastic, diverting a significant portion of waste from landfills.

Social Achievements

• 8,303 direct jobs created (2022: 7,013)
• R44 million spent on community development (2022: R34 million)
• R41 million invested in enterprise and supplier development (2022: R35 million)
• Achieved Level 1 B-BBEE contributor status

Governance Achievements

• Substantial application of all 16 King IV principles
• Established anti-corruption training and whistleblower hotline
• Annual declarations of compliance with laws and regulations by directors and senior employees
• Regular board and committee meetings with high attendance rates

Climate Goals & Targets

Environmental Challenges

• Loadshedding negatively impacted operations across all sites.
• High unemployment rate, high fuel prices, and rising interest rates negatively impacted customer disposable income.
• Proliferation of illegal gambling.
• Unreliable electrical and water supply.
• Adverse and severe weather conditions.
• Rise in electricity and water costs.
• Proposed legislation on banning smoking in enclosed public areas.

Mitigation Strategies

• Installation of off-grid power supply alternatives.
• Increased standby water supply and groundwater usage.
• Increased surge protection for sensitive electronic equipment.
• Increased focus on stormwater flow management.
• Preventative maintenance stepped up and new generators ordered for casinos.
• Implementation of green energy solutions.
• Demand-side management programmes to reduce consumption.
• Water handling/storage capacity for emergency supply.
• Self-reliance on generators for emergency electricity supply.
• Installation of solar systems to manage costs over the long-term and reduce pressure on generators.
• Engagement with gambling boards and government to curtail illegal gambling.
• Reconfiguration of gaming floors.
• Robust compliance procedures.
• Engagement with lawmakers through employer and industry bodies.
• Litigation where required.
• Comprehensive B-BBEE programme.
• Industry lobby groups.

Supply Chain Management

Responsible Procurement

• Procurement strategy designed to support transformation strategic objectives and support local businesses, particularly previously disadvantaged businesses.

Climate-Related Risks & Opportunities

Physical Risks

• Adverse and severe weather conditions
• Storm and lightning damage, flooding
• Services disruption, electrical and water supply
• Customer access disruption due to road infrastructure damage

Transition Risks

• Regulatory change and compliance
• Increased complexity of compliance
• Changes in casino licensing conditions
• Bingo legislative issues and legal challenges
• Changing B-BBEE requirements

Opportunities

• Reduced cost base due to off-grid power generation installations
• Increased resilience to national grid power outages, loadshedding and water supply disruptions
• Reduction in carbon emissions

Reporting Standards

Frameworks Used: IFRS, International Framework, King IV Report on Corporate Governance for South Africa, 2016, JSE Sustainability Disclosure Guidance, JSE Listings Requirements, JSE Debt Listings Requirements, Companies Act of South Africa, 71 of 2008

Third-party Assurance: PricewaterhouseCoopers Inc. (financial statements), Empowerdex Proprietary Limited (B-BBEE)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Completed solar plant installations at Montecasino, Silverstar, Garden Route, and Gold Reef City Casinos.
• Recycling efforts diverted glass, paper, metal, and plastic from landfills.

Social Achievements

• Tsogo Sun Academy provided 637 unemployed people with learnership opportunities, resulting in 372 jobs created.
• Achieved a level 1 B-BBEE contributor status.

Governance Achievements

• Substantially applied all 16 principles of King IVTM.
• Established an independently operated whistle-blower tip-off system.

Climate Goals & Targets

Environmental Challenges

• Loadshedding negatively impacting income and increasing diesel costs.
• High inflation impacting costs.
• Illegal gambling impacting revenue.
• Erratic municipal water supply.
• Rising utility costs and uncertainty of energy and water supply.

Mitigation Strategies

• Investing in solar power generation.
• Implementing water consumption saving initiatives.
• Engaging with gambling boards and government to curtail illegal gambling.
• Using ground water and cleaned mine water as alternative water sources.
• Demand-side management programmes to reduce electricity consumption.

Supply Chain Management

Responsible Procurement

• Procurement strategy designed to support transformation strategic objectives and support local businesses.

Climate-Related Risks & Opportunities

Physical Risks

• Adverse and severe weather conditions
• Storm and lightning damage, flooding
• Services disruption, electricity and water supply

Opportunities

• Alternative power and water supply options
• Long-term cost benefits
• Reduction of the group’s carbon footprint

Reporting Standards

Frameworks Used: IFRS, International Framework, King IVTM

Third-party Assurance: Deloitte (financial statements), Empowerdex (B-BBEE)