Social and Ethics Committee report

Alex Maditse

CHAIRMAN

Attendance and composition

Oversight areas

The Committee, together with the Social and Ethics Working Group (made up of executives of the Group), have adopted best practices for this Committee as recommended by the IoDSA. This includes King IV, the Companies Act, the 10 Principles of the UN Global Compact and legislation related to the economy (including fraud and corruption), workplace matters, environment and society (including stakeholder relations).

At Famous Brands, we consider social and ethics matters in five major categories, namely:

• Social, health and the environment.
• Human capital and employment equity.
• Preferential procurement.
• Community development and CSI.
• Governance and compliance.

Developing a new sustainability framework

In August 2023, we commissioned a consultancy with extensive sustainability experience to review our selected five SDGs and reaffirm whether these were the most appropriate for our business. We recognised that some of the SDGs and KPIs were not fully aligned with our business.

In May 2024, the Committee approved the adoption of three additional SDGs and the removal of two SDGs. In addition, SDGs are now categorised as primary or secondary goals. The primary goals refer to those SDGs that are strongly aligned with the Group’s core business and vision, while the secondary goals are related to our skills development, socio-economic development and CSI activities.

These are important activities we embrace as a good corporate citizen, that are not related to our core business activities.

This process culminated in the development of a new sustainability framework, which will be operationalised in the 2025 financial year.

Read more about our contributions to the SDGs.

Measuring the impact of our CSI contributions

Famous Brands is active in the communities where we operate and we continue to scale our CSI activities outside of South Africa. As a Committee, we prompt management to drive regular communications regarding our CSI work, sports sponsorships, and community development. In 2024, we encouraged the organisation to start considering and measuring its CSI initiatives’ impact on beneficiaries more thoroughly.

A focus on leading indicators

As a Committee, we oversee the Group’s health and safety performance. Over the past few years, we placed increased emphasis on leading indicators rather than lagging indicators. Leading indicators play a vital role in preventing worker fatalities and injuries and strengthening other workplace safety and health outcomes.

They are proactive and preventive measures that can shed light on the effectiveness of safety and health activities and reveal potential problems. Lagging indicators, by contrast, are backward-looking and show performance against health and safety targets.

If we want the right behaviours, we need to measure the right things. In 2024, we approved a new health and safety framework to identify gaps in our health and safety programme and the leading indicators that we would like to track. This is an important step forward in improving our safety culture and making sure people follow the correct health and safety procedures and do not cut corners.

Ensuring appropriate ethics governance

Famous Brands implemented the following measures to ensure that we adequately govern and manage ethics within the Group:

• Published policies related to ethics are available on the Group’s intranet.
• Whistle-blowing Policy is in place together with channels to report unethical activity.
• Regular internal communications campaigns on topics related to values and ethics.
• Training for managers and executives.

Focus areas for 2024

The Committee and the Social and Ethics Working Group worked on the following matters:

General

• Reviewed and approved the Committee Charter and annual Committee workplan.
• Reviewed and accepted management’s feedback (based on relevant legislation and best practice) regarding the Group’s activities relating to:
  • Social and economic development.
  • Good corporate governance.
  • ESG matters.
  • Consumer relationships.
  • Labour and employment.
• Reviewed and recommended non-financial disclosures contained in the IAR to the Board for approval.

Social, health and the environment

• Monitored progress against approved targets for selected SDGs identified.
• Reviewed and approved the new sustainability framework with an amended SDG selection. The Group will report against this SDG selection in 2025.
• Ensured that the new sustainability framework is supported by an environmental framework, strategy and plan.
• Approved a new health and safety framework focused on leading indicators.
• Monitored our health and safety procedures against globally accepted best practices.
• Monitored enhanced food safety measures across the business through the new food safety effectiveness system.
• Reviewed safety reports related to injuries and fatalities and agreed on comprehensive management reports to include near-miss incidents.
• Evaluated management plans and their progress. These projects related to:
  • Measures to monitor and improve our water and electricity consumption and report this data.
  • More environmentally friendly packaging options.
  • Initiatives to reduce food waste.

Governance and compliance (Read more)

• Noted the implementation of a new GRC tool to improve compliance across the Group.
• Monitored POPIA compliance and increased POPIA awareness among employees and actions to improve consumer data protection compliance in other markets.
• Considered implications of the General Data Protection Regulation (GDPR) on Famous Brands information flow from the UK to South Africa.
• Monitored the Group’s compliance with the Extended Producer Responsibility legislation.

Human capital and employment equity (Read more)

• Reviewed and reported to the Board on the Group’s employment equity performance relative to the Group’s Employment Equity Plan, which was set out in the annual Employee Equity Report submitted to the Department of Labour.
• Reviewed and considered the employment equity targets agreed with the Department of Labour in the context of broader diversity objectives for the Group. This included the approach for recruiting people with disabilities and the process to help existing employees identify and report their disabilities.
• Considered the implications of the Employment Equity Amendment Bill, effective 1 September 2023.
• Noted the two-year wage agreement concluded with unions.
• Monitored the progress of ethics training across the Group.
• Whistle-blowing cases monitored and investigated.
• Noted results of the annual employee survey (Voice your View)

Preferential procurement (Read more)

• Oversaw implementation of the Group’s transformation strategy, including enterprise and supplier development projects and preferential procurement.
• Reviewed and reported to the Board on the Group’s detailed B-BBEE strategy, targets and budget, and progress made aligned to the scorecard.

Community development and CSI (Read more)

• Approved the Group’s CSI activities, updated the Board on existing CSI projects and progress achieved, and recommended new proposed projects.

Focus areas for 2025

Our Committee focus areas for 2025 are:

• Overseeing the social and safety aspects of proposed plans to refurbish our manufacturing plants.
• Recommending and approving CSI projects for 2025.
• Overseeing implementation of the sustainability and environmental frameworks, strategy and plan.
• Overseeing our transformation strategy to maintain our Level 2 B-BBEE status.
• Monitoring safe performance with a focus on leading indicators such as training, communications campaigns and compliance with safety protocols.

Conclusion

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the year. I will be present at the AGM to answer any questions regarding the Committee’s statutory obligations.

Alex Maditse
Chairman: Social and Ethics Committee

21 June 2024