ECIC AR 2024 9TH

E

D

H

S

I

L I

N

B

2

0

A

0

T

S

1

E

Integrated Report 2024

E X P O R T C R E

L T D

O C

A S

C

R I

D I

F

T

A

I

N

H

S

T

U

U

R

O

A

S

N

F

C

O

E

N

C

O

O

I

R

T

P

A

O

R

Continued ESG Performance Monitoring

Guidelines; G-20 Financial Stability Board’s Task Force on Climate-Related Financial Disclosures Recommendations; International Labour Organiza tion’s Core Conventions; United Nations Environ ment Programme Finance Initiative; United Nations Global Compact; United Nations Guiding Princi ples on Business and Human Rights, United Nations Principles for Responsible Investment; OECD Recommendation of the Council on Common Approaches; Integrated Resource Plan; and Code for Responsible Investing in South Africa. ECIC is a member of the United Nations Principles for Responsible Investment (UNPRI), of which the Corporation benefits from being part of an international network of financial institutions who share expertise and best practice, enjoying access to successful policies and practices from around the globe. These international benchmarks, together with South African environmental, health, safety and governance legislation and guidelines, form the basis of the compliance standards set by the ECIC. Internally, ECIC has raised awareness of the importance of ESG issues and fostered a sustainability culture within the organisation, including the ECIC board. Furthermore, ECIC is tracking the development of the Stichting Global Reporting Initiative (GRI) which will eventually lead to a universal reporting standard. ESG Risk Management • Through an ESG Specialist, ECIC conducts ESG risk assessments on its underwriting activities to determine the impacts of the ESG risks and mitigation that are put in place to manage such risks. Depending on the level of ESG risks, transactions are classified as follows: • Category A (High Impact); • Category B (Medium Impact); and • Category C (Low Impact). The ESG screening and risk assessment is conducted during the due diligence phase, including review of Environmental and Social Impact Assessment reports, Environmental and Social Management Plans, Environmental and Social Due Diligence and the Environmental and Social Action Plans.

ECIC monitors the implementation of the Environmental and Social Management Plans underwritten projects, including performance reports on a periodical basis. Non-compliance or new ESG risks emanating from the implementation and operation of the project are dependent on the reporting cycles on an ad hoc basis. Climate Change ECIC notes South Africa’s commitment to tackle climate change, which entails supporting the just transition to low-carbon activities. Furthermore, South Africa is committed to the Paris Agreement, whose goal is to limit global warming to below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. This is further guided by South Africa’s Integrated Resource Plan (IRP) of 2019, which entails the use of an energy mix for its power supply and contributing to the growth of the economy, including the OECD agreement for coal fired power plants. The ESG risks inherent in those projects are evaluated based on more efficient coal technologies of high efficiency low emissions (HELE) technology, including power plants with carbon capture, utilisation and storage (CCUS) to comply with climate and environmental requirements. ECIC received various inquiries on green metals projects. Engagements on those projects included a requirement of a comprehensive climate change assessment, technologies that are being implemented, and the capacity of the project owner/sponsor to identify the ESG risks, and the mitigation and management of those risks. Global Reporting Initiative Framework Although ECIC has reported ESG impacts in its Integrated Report, there has not been detailed ESG impact reporting on the insured transactions. The comprehensive ESG reporting encourages transparency and accountability and includes reporting on both negative and positive ESG impacts. ECIC has been reporting the ESG impact of its operations following the GRI framework to a limited extent. As such, ECIC is considering the GRI framework with the aim to report the ESG impacts of its operations, including on its insured transactions.

YOUR EXPORT RISK PARTNER

20