Managing our material issues

Murray & Roberts defines material issues as factors that substantively affect our ability to sustain strategic, operational and financial performance. These factors and the way we respond to them are likely to influence a stakeholder’s assessment of the Group’s ability to enhance enterprise value over time.

Our Purpose and Vision frame the Group’s definition of value. Our Purpose centres on Murray & Roberts’ role in enabling the advancement of sustainable human development, which defines both the scope of the Group’s market opportunities and our approach to governing and managing the business. Our Vision commits us to optimising fixed capital investment in human progress to generate positive value outcomes for our clients, employees, shareholders and partners, and the host countries and local communities from whom – alongside our clients – we collectively derive our licence to operate and whose benefit we ultimately serve.

Within this framework, our New Strategic Future plan defines the primary drivers of stakeholder value creation for the Group:

These aspirations depend on the inculcation of the Group’s culture (guided by our Values and operationalised by our philosophy of Engineered Excellence).

The Group’s material themes, and associated material issues, have remained broadly stable, reflecting the consistency of our strategy over the last decade, with some necessary adjustments. The shifts in nuance show greater emphasis on the Group’s Purpose and Values-led culture, and the progress made in implementing our strategy as we see meaningfully better prospects for the Group. The material themes are contextualised by an overview of the material shifts in our operating environment and the expectations of our stakeholders. This includes an indication of the associated risks, constraints and opportunities that affect our ability to create and protect value, and which may erode value, if not mitigated and managed effectively. The related management priorities at Group and platform level show how we intend to deal with these factors.

Insights drawn from the Group’s annual strategic planning cycle, for FY2022 to FY2024, correlate to the pertinent value drivers and strategic responses of the Group and those of our platforms. These insights were the primary input in determining our material issues and were subject to independent analysis. The outputs of this analysis were workshopped by a forum that included the Group chief executive officer, Group financial director, and the Group executives in charge of risk, sustainability, and investor relations and communication. The material issues were also tested against interviews with Group leadership, including the chairman for Board insight, and the platform chief executive officers’ reports for platform insight.

The material themes and associated issues (set out alongside) were used to prepare the Group’s integrated report and sustainability report, which provide thorough discussion of and pertinent performance data for the issues.

STRATEGIC MATURITY 01

CONTEXT

Short- to medium-term trends

• Global economic recovery gaining pace in step with vaccine penetration, particularly in developed markets, although COVID-19 variants pose ongoing risk.
• Significant stimulus and capital commitments for infrastructure-led socioeconomic recovery and decarbonisation of the global economy provide immediate opportunities for the Group.
• Economic recovery in Australia and North America relies heavily on investment in public and private infrastructure with massive programmes earmarked for road, rail, terminals and near shore marine.
• Australia's resource exports forecast to hit record levels in 2021 with sustained growth in volumes.
• Strong medium-term pipeline of opportunities in multinational energy, resources, infrastructure and mining sectors, although global gas opportunities are expected to remain limited due to oil price weakness in the near term.
• Energy, mining and industrial majors seeking more environmentally benign options to fuel their operations and reduce their emissions footprint.
• Capital investment in the mining sector remains tentative, but confidence is growing in commodity demand and pricing upturn, albeit favouring 'future-facing' commodity types and disfavouring 'dirty' commodities, especially coal.
• Underinvestment over the past five years has eroded ore reserve positions of many mining companies; higher commodity prices should drive substantial growth in capital investment over the next few years.
• Commodities upcycle is expected to support the appetite of majors for expansion projects and emerging mining companies for smaller greenfield developments.
• Uncertainty remains on timing and accuracy of capital investment forecasts given the competing priorities of mining companies including increased dividend payments and ESG commitments.
• Weak macroeconomic conditions in South Africa related to socio-political factors, corruption and COVID-19, but gathering vaccination rollout and structural reform provides potential for recovery.

• Should economic growth gain pace in South Africa, the concomitant increase in revenue collection will ease public sector funding constraints, supporting infrastructure-led fixed capital formation and energy demand.
• Major investment in the power sector expected in the short to medium term in South Africa; alongside mounting necessity and public pressure to invest in ageing and dysfunctional water infrastructure.
• High growth potential in transmission and distribution in sub-Saharan Africa (including South Africa) in the short to medium term.
• National power utility, Eskom's restructure and unbundling is progressing, and significant investment is earmarked for repair and maintenance of national grid and power stations, and for transmission and distribution, and renewable energy.
• Reduction in financing for thermal energy, but baseload energy in South Africa will still be drawn from available resources (gas and coal).
• Commercial PV solar roof installations gaining momentum in South Africa driven by ongoing power outages and rising electricity tariffs, with legislation relaxed to allow self-generation up to 100MW.
• Refining production in South Africa being reconsidered in favour of import storage terminals – with projects expected in the short to medium term.
• Evidence of increasing PPP activity in the water sector in South Africa, with implementation of municipal drought resilience and wastewater treatment strategies commencing in major metropoles.
• Hardening stance and tight criteria of debt providers and insurers in providing finance facilities, project bonding and underwriting of project risk is a potential growth constraint.
• Security situation in northern Mozambique precludes any current opportunities in the country's massive gas developments.

Longer-term trends

• Long-term demand fundamentals remain strong, as the global population increases and urbanises.
• Accelerated energy transition from fossil fuels to renewable sources of energy due to COVID-19 and its resultant impact on oil prices, supported by a strong societal push towards a sustainable future.
• Commodity prices are forecast to steadily increase over the next decade; global uptake of new and its low emissions technologies to accelerate, with exports of commodities central to these technologies to surge.
• Renewables currently inadequate on their own, requiring a combination of renewables, storage and traditional generation; longer-term transition will be enabled by advances in technology (such as green hydrogen) and transmission.

• Low electrification rates of less than 25% in sub- Saharan Africa provide significant transmission and distribution opportunities; but typical model requires EPC contractors to partner with funders.
• Significant drive and investment for carbon reduction and diversified energy mix (including renewables) in Africa through to 2040.
• Protection of domestic economies likely to drive government policies, investment decisions and shorter supply chains - regional strength adds resilience.
• COVID-19 has raised the importance of holistic risk assessment and disaster management for future systemic risk events.

MATERIAL ISSUE

SUSTAIN GROWTH AND
QUALITY OF ORDER BOOK

GROUP

• Leverage market positions of multinational platforms in high-growth regions and market sectors to maximise earnings potential and return value to shareholders.
• Continue to align platforms with the Group's Purpose, strategy and culture, to underpin significant and sustainable earnings growth in the years ahead.
  • Leverage the Group's reputation and ability to optimise capital investment for clients, countries and communities by delivering fixed assets with improved ESG outcomes.
  • Leverage service offering across the engineering and construction value chain to optimise capital investment in both the design and execution of projects.
  • Balance Group oversight and control with regional accountability and autonomy, according to the Group's business model, to ensure disciplined and profitable growth.

• Support our platforms in securing the capacity (project finance, specialist and technical skills, and strategic partnerships) to drive order book growth and deliver project excellence.
• Ensure rigorous oversight of commercial and project management systems, to mitigate compounding risk of mega projects and higher proportion of lump sum contracts in order book (specifically in the Energy, Resources & Industrial platform).
• Support the Power, Industrial & Water platform in implementing its focused turnaround strategy to achieve sustainability and annually reassess risk/return of capital committed.
• Develop service offerings by leveraging Group relationships and geographic footprint.
• Continue to anticipate and respond to longer-term market shifts to position platforms for resilient and sustainable growth.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Leverage established governance and leadership structures to manage execution risk inherent in a record order book.
• Leverage credible positions in Australian power, infrastructure and resources sectors to secure further orders from a significant pipeline of opportunities.
• Harness EPC capabilities in the USA to secure work and longer-term opportunities including specialised infrastructure.

• Develop workforce, brownfield EPC and operations & maintenance services in APAC and North America.
• Ensure the ability to attract the necessary specialised and technical skills to resolve this potential constraint to growth.

 

 MINING

• Leverage leading positions in major regional underground mining markets to consolidate and rebuild the order book.
• Secure orders from strong near-term project pipeline.

• Grow proportion of ‘future-facing’ commodities in the order book.
• Optimise and innovate to grow market share and margins.

 

 POWER, INDUSTRIAL & WATER

• Leverage competitive position to respond to urgent need for industrial and water infrastructure and for participation in South Africa’s renewable energy drive.
• Optimise OptiPower Projects’ track record to win work in transmission, distribution and substation sectors.
• Secure further opportunities in power plant repair and maintenance.

• Secure further opportunities in renewable energy, considering the increase in the self-generation cap from 1MW to 100MW. Explore small-scale solar PV installations.
• Develop market share in resources and industrial market sectors.
• Establish scale in water business by securing wastewater and industrial water treatment opportunities.

 

 

MATERIAL ISSUE

DIVERSIFY EARNINGS POTENTIAL AND RISK EXPOSURE
THROUGH ORGANIC AND ACQUISITIVE MEANS

GROUP

• Ensure a well-diversified order book over time, region, sector, margin and contract type from a significant pipeline of opportunities.
• Pursue targeted geographic and service offering diversification, where opportunities are presented.
• Optimise value potential from exposure to all phases of project life cycle phases, in particular operations and maintenance.

• Leverage strategic partnerships, based on best capacity, specialism, local understanding, as well as value system, safety and commercial alignment, according to specific project scope and requirements.
• Identify acquisitions in multinational platforms to sustain and diversify earnings growth, deepen capacity and specialism, and expand regionally.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Target acquisition in North America to expand capabilities and capacity and to diversify service offering to include specialised infrastructure.

• Expand service offering and market presence by leveraging synergies across the platform’s geographic footprint.
• Target opportunities in the international LNG market with global clients.

 

 MINING

• Pursue regional expansion, specifically into South American and West African mining markets with trusted clients and partners.

• Secure a greater proportion of total income from contract mining to counter market cyclicality.
• Pursue acquisitions to add new service offerings and sustain earnings growth.

 

 POWER, INDUSTRIAL & WATER

• Grow operations and maintenance service offering.
• Focus on renewable energy project development and take minor equity stake in a portfolio of solar projects under development.

• Secure annuity-type income through operation and maintenance of wastewater treatment plants.
• Build funder relationships as a preferred contractor to unlock EPC project opportunities in sub-Saharan Africa.

 

 

MATERIAL ISSUE

MANAGE LIQUIDITY AND ALLOCATE CAPITAL FACILITIES
EFFECTIVELY TO SUPPORT HIGHER GROWTH

GROUP

• Manage the short-term impact on capital availability and project risk cover of tighter debt capital and insurance markets.
  • Carefully allocate short-term liquidity facilities to manage escalating project funding requirements linked to growth in order book.
  • Secure client funding through upfront and milestone payments, different asset ownership models and centralised procurement to manage cashflow constraints in project finance.
• Settle longstanding claims and unwind uncertified revenue to improve liquidity.
• Conclude closure of business in the Middle East to reduce capital risk and ongoing costs.

• Preserve liquidity by closely managing impact on working capital at platform level due to:
  • Project underperformance.
  • Project delays and deferrals due to regional market conditions.
  • Upswings in activity as markets recover.
• Retain the discipline in managing capital and costs, and preserving financial stability, demonstrated in managing the COVID-19 crisis.
• Continue efforts to achieve targeted overhead costs through the cycle.
• Manage short-term capital constraints, while continuing to invest in long-term strategic direction, particularly through carefully selected, value-accretive acquisitions.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Recover uncertified revenues through settlement of claims.

• Manage overhead costs to achieve a sustainable cost base.

 

 MINING

• Improve asset utilisation through real-time tracking of equipment and operating data.
• Implement platform-wide procurement initiatives to achieve savings through economies of scale.

• Minimise the risk of idle assets by alternative ownership models.

 

 POWER, INDUSTRIAL & WATER

• Recover uncertified revenues through settlement of claims.

• Manage overhead costs.

 

CONTRACTOR OF CHOICE 02

CONTEXT

Short- to medium-term trends

• Increasing risk aversion and greater risk allocation to contractors from clients, elevating risk to value recognition of large projects.
• Supply chain and resourcing constraints due to COVID-19 restrictions, supply/demand imbalances and bottlenecks, geopolitical tensions or extreme weather events may continue to impact project delivery schedules and drive up costs.

• Intensifying scrutiny and obligations related to HSE from funders, clients and regulators; and escalating socioeconomic development expectations from local communities.
• Cost competitiveness, in tandem with increased ESG commitments, require the application of innovative digital solutions for productivity, control and oversight.

Longer-term trends

• Sustained excellence in all areas of project delivery, especially HSE, supports our competitiveness beyond pricing and builds strong client partnerships.
• Delivering world-class projects safely and efficiently, is contingent on our ability to attract and retain the best management and technical expertise in highly contested markets.

• Strategic joint-venture partners are essential to secure large and complex projects and to meet local contracting requirements, making it critical to align values, principles and standards.
• Digital acceleration (digitisation, automation, analytics and other innovative technologies) to improve value creation is critical to long-term differentiation.

MATERIAL ISSUE

DEEPEN ENGINEERED EXCELLENCE TO DRIVE DIFFERENTIATION,
MITIGATE PROJECT RISK AND MAXIMISE VALUE RECOGNITION

GROUP

• Ensure consistently high standard of Engineered Excellence through leadership commitment, strong oversight and continuous improvement.
• Ensure stable and sustainable earnings growth and mitigate escalated project risk with the potential to undermine value recognition, by ensuring our platforms consistently deliver safe, well executed and profitable projects.
• Ensure strict adherence to systems, principles and practices of Engineered Excellence in commercial, project and ethics management, and hold management accountable for any deviations.
  • Mature project governance and management systems in place to manage the risks of commercial and operational challenges on large and complex projects.
  • Minimise integration risk associated with acquisitions by ensuring swift alignment with Group policies and standards.
  • Manage complexity of systems and culture among large joint-venture consortia and local contractors to ensure alignment in culture, values and management systems to manage execution risk.
• Strive for Zero Harm.
  • Increase projects across our portfolio delivered with Zero Harm.
  • Continue to focus on lead indicators to prevent safety incidents and break through plateau in safety improvement gains.
  • Continue to focus on high-impact interventions and programmes relevant for regional application, to manage critical and change risks (including those associated with demobilisation) and cultural factors affecting safety performance.
  • Continue to develop, enhance and share interventions to maintain world-class safety performance.

• Minimise project losses through adherence to the Group’s project management systems and standards and respond swiftly to lessons learnt.
• Ensure discipline in:
  • Competitive and accurate pricing of projects, considering project specific risks and applying lessons learnt.
  • Concluding contracts on reasonable commercial terms, considering Group contracting principles.
  • Effective resourcing of projects.
  • Effective project and risk management to achieve outcomes in line with tender expectations.
• Leverage local capabilities and supply chain resilience of strong regional operations and ensure thorough contingency planning to manage constraints to project resourcing and skills mobility.
• Ensure responsiveness to client demands to differentiate service offerings, through measurable ESG credentials at project and corporate level, and the ability to manage local conditions, constraints and expectations.
  • Ensure the Group’s projects meet and exceed expectations for safety and health; local contracting partnerships, employment and procurement; training and skills development; socioeconomic development of local communities; environmental mitigation of project delivery and long-term impact of plant through design engineering.
• Revise management KPIs to ensure adherence to Group commercial and ESG principles and standards.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Maintain world-class safety performance through effective safety leadership, personal accountability and developing employees.
• Continue to drive real-time reporting and innovative approaches to HSE leadership training.
• Maintain safety management system accreditation to retain access to federal government funded work in Australia.
• Continue to apply the MAP programme to drive improvements in safety.

• Deepen management teams and focus on project execution to ensure consistent project performances.
• Improve project delivery by aligning commercial and project management with project-specific tender plans.
• Ensure application of HSE standards and adoption of management systems in newly acquired businesses and joint ventures.

 

 MINING

• Implement focused strategy to deepen Engineered Excellence in safety and risk management, productivity levels of the workforce and assets, and strategic procurement that leverages global purchasing power.
• Drive safety improvement through increased management involvement in safety and risk management on project sites.
• Embed the CRM and MAP programmes to improve critical risk management and proactive responses to safety challenges.

• Further reduce workface risk exposure to employees through mechanisation, automation and remote control.
• Leverage proven resilience of regional operating model to shield against the vulnerability of project team mobility and supply chain constraints.

 

 POWER, INDUSTRIAL & WATER

• Improve safety performance and deepen safety culture maturity.
• Embed lead indicators such as near-miss reporting and hazard observations, with requirements incorporated into employee performance contracts.

• Ensure compliance with all Group contracting standards.
• Maintain operational and commercial discipline throughout tendering process and project delivery.
• Ensure effective resourcing of projects.

 

MATERIAL ISSUE

ACCELERATE DIGITAL STRATEGY TO DRIVE
ENTERPRISE AND PROJECT VALUE

GROUP

• Stay ahead of the technology curve to remain a contractor and employer of choice, and drive digital adoption among leaders, managers and employees.
• Allocate resources to accelerate implementation of digital strategies at platform level to enable better project design, safety, execution and reporting, to improve margins and market share.
• Accelerate Group-led digital strategy, including data protection and privacy controls and assurance processes; and maintain strong oversight of IT investment and cyber risk management.
  • Focus on efficient and integrated systems, digital matching, risk management and other administrative processes.
  • Collaborate with credible technology owners to provide innovative solutions for clients.
  • Implement mechanisms to keep abreast of technological developments within the industry.

• Accelerate technologically enabled operations by investing in and commercialising innovative and relevant technology.
  • Develop and implement specific digital applications for visibility and control, enterprise data, productivity of workforce and assets, and HSE management in project delivery.
  • Establish appropriate technology partnerships.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Accelerate digital strategy to ensure profitable project delivery outcomes.
• Adopt global technology standards, scalable applications and a management framework to meet the demands of a global EPC business.

• Continue to implement the digital strategy, including an integrated global technology and data platform, employing predictive analytics and robotic process automation.

 

 MINING

• Accelerate digital strategy with focus on asset maintenance, operational effectiveness, and autonomous and remote operations.
• Support majority owned InSig Technologies in developing a digital platform for mining to improve efficiencies and margins and create competitive advantage.

• Progress applications for improved project control, and more accurate and efficient tendering (the mining equivalent of Building Information Modelling).
• Expand the use of virtual and augmented reality in training, constructability reviews and onsite troubleshooting.

 

 POWER, INDUSTRIAL & WATER

• Implement digital applications to improve quality of safety reporting, and real-time recording of data to support a more proactive approach to safety management.
• Leverage breakthrough in commercialising Organica Water wastewater treatment technology to secure further PPP greenfield wastewater treatment plant opportunities.

• Accelerate digitalisation in core and project support systems.

 

EMPLOYER OF CHOICE 03

CONTEXT

Short- to medium-term trends

• COVID-19 has increased workforce health risk, with global indications of exacerbated mental health deterioration across various industries.
• Higher expectation from employees on health, safety and wellness (including mental health) support, long-term career paths and progression, and flexible workplace models.
• Critical supervisory and specialised skills in growth markets for our multinational platforms are a constraint to growth and excellent project delivery.

• Leadership team quality and depth is critical for strategic continuity and resilience requiring intense focus on leadership development and succession planning.
• Changing workplace models forcing companies to rethink ways of working and the role of the office, and to resolve work-from-home challenges to cybersecurity, engagement, learning and morale.

Longer-term trends

• Escalating expectations from a younger generation of leaders and skilled professionals of purposeful and sustainability-minded organisations.
• Digital enablement is fundamental to remaining an employer of choice as an expectation of a younger generation of leaders and professionals.

• Step-change in skills requirements – companies need to assess how to upskill and reskill and explore alternative talent sourcing options to meet the needs of the future organisation.

MATERIAL ISSUE

INTENSIFY LEADERSHIP DEVELOPMENT TO ENSURE
SUCCESSION DEPTH AND CONTINUITY

GROUP

• Continue to realise our aspiration to be an employer of choice in all our markets to retain and attract key skills.
  • The Group’s value proposition to employees centres on our Values of Integrity, Respect, Care, Accountability and Commitment.
• Place strong focus on leadership development and succession planning, diversity and inclusion to support the depth, calibre and commitment of Group and platform leadership teams.
  • Continue to align leadership succession to diversity objectives in all platforms and accelerate and support career progression of high-performing talent identified for future leadership roles.
  • Accelerate leadership development programmes, equipping potential successors with the competencies needed.
  • Align performance contracts with Group strategic objectives across platforms for middle management and above.

• Continue to deepen our value proposition and employee practices to attract, develop, support and reward competent and high-performing individuals from diverse backgrounds and to fully engage their innovation and creativity.
• Position the Group for a new generation of culturally diverse leaders and professionals who prioritise sustainability commitment, digital enablement, meaningful career opportunities and flexible workplace models, and where everyone feels valued and included.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Leverage EXECONNECT leadership programme for improved talent and career development of future leaders, and enhanced communication between executives and employees.

• Coach and mentor high-potential employees for future leadership roles.

 

 MINING

• Deliver training and coaching programmes for individuals in leadership positions.

• Develop and mentor high-performing employees identified for succession through the performance management process and Talent Management programme.

 

 POWER, INDUSTRIAL & WATER

• Align business processes to revised management structure, to better suit a smaller and more streamlined organisation.
• Embed performance management system, with KPIs aligned to the platform’s business objectives and personal development plans, to support the new business model.

• Implement findings of talent review across senior and middle management which confirmed high-potential employees for participation in mentorship, leadership and management development programmes.

 

MATERIAL ISSUE

MAINTAIN COMPETITIVE EMPLOYEE VALUE PROPOSITION TO RETAIN AND
ATTRACT CRITICAL SKILLS AND ENSURE FLEXIBLE PROJECT CAPACITY

GROUP

• Continue to prioritise the health and safety of our employees and their families and minimise the impact of COVID-19 on their livelihoods.
  • Assist employees to access vaccines.
  • Expand existing employee mental health and wellness support.
• Continue to implement best people practices across the Group.
  • Embrace international standards of social justice, decent work and human rights, while also aligning policies and procedures to the legislation and basic conditions of employment of the counties we operate in.
  • Provide career advancement through work experience, skills development and training, and coaching opportunities.
  • Offer structured performance management and development linked to market-related remuneration and incentive schemes.
  • Ensure good labour relations and constructive relationships with employee representatives to support fair wage agreements and minimise disruption to work schedules.

• Ensure responsible resourcing despite market and project cycles.
  • Retain core skills through continuous engagement.
  • Attract required skills timeously through effective people planning to mobilise projects on time and within budget.
  • Maintain a responsible approach to retrenchments when rightsizing operations during cyclical downturns and demobilising.
• Implement appropriate workplace models to support learning, motivation and culture in relation to operational structure and business needs.
• Manage the impact of digital change on productivity and skills redundancy.
  • Cybersecurity framework improved by strengthening security governance processes and technical defences.
  • Reskilling and upskilling initiatives forming part of the digitalisation strategy.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Continue to monitor feedback from wellbeing surveys to address physical and mental health concerns linked to COVID-19.
• Provide training and education to project supervisors and workforce on mental health education and suicide prevention.
• Embed global solution for workforce planning, recruitment and onboarding, performance management, learning and development, and career progression.

• Embed remote working and flexible working arrangements.
• Adopt a new approach in our graduate programme, offering local and international development opportunities, and covering disciplines key to successful project execution.

 

 MINING

• Improve performance management through consultative performance contracting and development plans.
• Facilitate skills development and training at the platform’s industry-leading training facilities.

• Minimise the risk of strikes and work stoppages by maintaining effective relationships with employees and union representatives.

 

 POWER, INDUSTRIAL & WATER

• Continue to adjust shift systems and workforce arrangements as necessary on project operations to support COVID-19 social distancing and health protocols.

• Roll out peer educator training to wellness champions to equip them to engage effectively with project staff on wellness.
• Provide training and development interventions to maintain a high-performing core group of artisans.

 

CORPORATE CULTURE 04

CONTEXT

Short- to medium-term trends

• Relevance of ESG starkly illuminated as COVID-19 magnifies the fragility of socioeconomic and natural ecosystems, cementing the understanding that ESG has business value.
• Escalation in expectations from all stakeholders, particularly funders and clients, across all dimensions of ESG including safety, local socioeconomic development, ethical business, project and corporate governance, and climate change.
• ESG performance and reporting is expected to be transparent, measurable, standardised and aligned to international frameworks and associated commitments.
• Funding of fossil fuels projects increasingly a challenge, and exposure to reputational risks of ‘dirty’ commodities, especially coal, affecting ability to access equity and debt capital and insurance as finance flows are redirected to ‘greener’ commodities; although the Australian and South African economies still depend on coal, pressure will escalate to limit exposure.

• Emphasis on purpose-led organisations and escalating social expectations of the role of business in society not only in terms of ESG but also filling in where government is failing in dealing with systemic risk and solutions.
• Community expectations of companies leading to unrest in certain regions, exacerbated by impact of climate change on vulnerable communities.
• Intense competition for shareholder attention and funds requires competitive returns and ESG profile among a strong peer group of potential investments.

Longer-term trends

• Maintaining stakeholder trust given intensifying activism, public scrutiny and expectations of greater transparency and reporting is critical to the Group’s long-term relevance.
• Values-driven culture, operationalised by Engineered Excellence, underpins our aspiration to maintain quality relationships with and relevance to all our stakeholders.
• All businesses and partners are expected to align to the Group’s frameworks, standards and Values as minimum best practice, in tandem with local laws, regulations and contracting norms.

• Managing the impact of local dynamics on project delivery is imperative for the Group’s reputation as a credible local operator and respected multinational.
• Being a responsible corporate citizen that responds to social needs is critical to the Group’s social licence to operate in host countries and local communities.
• The Group Sustainability Framework sets clear expectations for our employees, business platforms and partners, and its application is well governed throughout the Group.

MATERIAL ISSUE

CONSISTENT APPLICATION OF THE GROUP SUSTAINABILITY
FRAMEWORK AND ASSOCIATED REPORTING STANDARDS

GROUP

• Independent assessments confirm the effectiveness of the Board as strong, independent, diverse and well-functioning, with a balance of tenure for stability and continuity.
  • Ensure that strategic decision-making is bound by clear, transparent and publicly available policy positions related to ESG.
  • Focus areas for improvement include ESG training.
  • Continued application of the Group’s diversity policy in leadership appointments at Board and corporate office level.
• Continue to harmonise ESG imperatives with commercial opportunities through the systems, standards and practices defined in the Group Sustainability Framework.
  • Continue to align to the relevant international accountability frameworks and drive ESG performance to meet and exceed global peers and major multinational clients.
  • Continue to deliver improvements in ESG reporting in targeted areas, including supply chain, environmental and climate change, diversity and inclusion, communities and labour.
  • Ensure that our ESG performance is transparent, detailed, measurable and standardised; and improve measurement and disclosure of specific ESG imperatives in line with stakeholder expectations and global accountability frameworks, including enterprise value reporting, and TCFD, as well as alignment to the SDGs.

• Understand the impact of higher stakeholder requirements for ESG in terms of the Group’s funding and insurance requirements.
• Uphold reputation for responsible and ethical conduct and ensure that platforms subscribe to ethical business principles, supported by policies, standards and procedures.
  • Ensure leadership and management lead by example, maintaining an ethical culture through open and ethical decision-making.
  • Comply with laws, standards and codes in all operations.
  • Senior management declaration on ethical behaviour every six months.
  • Conduct ongoing compliance and ethics training.
  • Maintain toll-free call line for the anonymous reporting of fraud, corruption or unethical behaviour.
• Instil Group culture frameworks, including Values, Code of Conduct and Group Sustainability Framework in acquired businesses.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Continue to develop senior management and key employees on ethical business practices.
• Explore more collaborative forms of contracting and alliances through industry forums, to meet public infrastructure delivery agency requirements.

• Gain differentiation through sustainability in design as a standard offering for significantly better asset, project and stakeholder outcomes.
• Leverage capabilities to play a meaningful role in emerging technologies such as waste-to-energy and green and blue hydrogen in APAC and the UK.

 

 MINING

• Support clients in reducing their carbon footprints through digital technology that improves energy efficiency of fixed and mobile plant in underground use.

• Offer the use of battery powered equipment to clients.
• Actively engage suppliers to identify opportunities to reduce the carbon footprint of our supply chain.

 

 POWER, INDUSTRIAL & WATER

• The market scope of the platform aligns with the global imperative to transition to a more sustainable environment.

• Assist clients in implementing their climate change response plans including solutions in renewable energy and water.

 

 

MATERIAL ISSUE

REMAIN RESPONSIVE TO LOCAL CIRCUMSTANCES
AND SOCIOECONOMIC NEEDS

GROUP

• Accelerate diversity and localisation to remain competitive and relevant.
• Establish local partnerships that contribute to the socioeconomic development of host communities.
• Respond to local requirements and norms within the context of Group ambitions and ensure that initiatives are supportive of the needs and expectations of host communities.

• Effectively manage local factors pertinent to safety, work culture, labour and community relations, local procurement and community development.
• Invest in local communities through corporate social responsibility programmes.

 

 ENERGY, RESOURCES & INFRASTRUCTURE

• Continue to implement the Gender Equality Plan with measurable targets.
• Further embed the Innovate Reconciliation Action Plan to create meaningful opportunities for Aboriginal and Torres Strait Islander peoples.
• Continue to review procurement and supply chain practices to ensure diversity and local participation.

• Develop community engagement plans for new projects to support project delivery and benefit local communities.
• Support organisations, communities and causes that improve the lives of host communities through the Clough Foundation.

 

 MINING

• Continue to implement diversity policies appropriate to regions of operation.
• Maintain Level 1 BBBEE score, including local employment and supplier development targets required by clients in South Africa.
• Develop further opportunities for the Boipelo joint venture with Amandla, a 51% black-owned mining contracting company in South Africa.

• Progress joint ventures with First Nations groupings in Canada, and other local partners in Australia, Indonesia, Mongolia, Peru and Chile in executing projects in those countries.
• Promote inclusivity through the diversity work group in the North American and Australian operations.

 

 POWER, INDUSTRIAL & WATER

• Rebuild BBBEE credentials and meet diversity aspirations in line with the restructuring of the platform, to access opportunities in South Africa.
• Establish BBBEE partnerships in power maintenance, transmission and distribution and water in South Africa.

• Continue to work closely with clients, local community forums and leaders to manage economic and employment expectations.
• Develop local partnerships in East and West Africa to access new markets and sectors.