Transnet Online Integrated Report 2017
Market Demand Strategy (MDS) themes
  • Financial sustainability
  • Capacity creation and maintenance
  • Market segment competitiveness
  • Operational excellence
  • Human capital
  • Organisational readiness
  • Sound governance and ethics
  • Constructive stakeholder relations
  • Sustainable developmental outcomes
Sustainable Developmental Outcomes (SDOs)
  • Employment
  • Skills development
  • Industrial capability building
  • Investment leveraged
  • Regional integration
  • Transformation
  • Health and safety
  • Community development
  • Environmental stewardship
The Capitals
  • Financial Capital
  • Manufactured Capital
  • Intellectual Capital
  • Human Capital
  • Social and Relationship Capital

Creating value through the six capitals

Natural Capital
Our business is conducted across diverse ecosystems, where we build and maintain infrastructure, operate equipment and handle large volumes of cargo. Our employees, contractors, suppliers and customers have an impact on the natural environment and depend on it for their livelihoods. The ‘natural capitals’ in the context of our commercial activities include air, water, land, minerals and forests, as well as biodiversity and ecosystems’ health. Our operations generate waste, including greenhouse gases, which in turn contribute to global warming. Transnet embraces its responsibility to institute activities that enhance the natural environment’s capacity to meet the resource needs of future generations.
Protecting natural capital value

The Company generates waste, including greenhouse gases, which in turn contribute to global warming. As one of South Africa’s largest industrial consumers of national electricity, energy and carbon management is Transnet’s primary focus in its environmental stewardship. The Company has realised significant gains in energy efficiency and reduced carbon emissions in recent years.

Accelerating the modal shift from road to rail is included in the SSI. Government’s National Climate Change Response White Paper (2011) identifies such a modal shift as a flagship carbon mitigation programme for South Africa. As owner and operator of the country’s rail freight network, Transnet commits to increasing rail market share to 35% by 2019, and to demonstrate the carbon emissions savings achieved annually through its growing market share.

Transnet recognises the potential impacts of its operations on the biodiversity of areas where it operates. Accordingly, we seek to mitigate impacts arising from our operations and, where possible, restore the environment and natural habitats.

Structured water stewardship initiatives form part of the value we create to safeguard the natural environment’s capacity to meet the resource needs of future generations.

Key factors impacting our natural capital
Biodiversity

We mitigate, as far as possible, the adverse impacts of our operations on surrounding biodiversity. Where viable, we seek to restore the environment and natural habitats.

Air

Extreme weather conditions such as flash floods lead to washaways and mudslides on major routes, which can increase the severity of rail safety-related incidents, resulting in derailments, asset losses and even employee fatalities.

Key natural capital inputs at 1 April 2016

Air, water, land, minerals and forests, as well as biodiversity and ecosystems health.

Key natural capital outputs at 31 March 2017
  • ISO 14001: Environmental Management System certification process 95% of business operations now certified1
  • Electricity consumption Decreased by 1,7% from 2016
  • Energy efficiency Increased by 1,2% from 2016
  • Freight rail traction (constitutes >70% of total Company power consumption) Electrical traction energy efficiency decreased by 4,3%. Diesel traction achieved 7,9% energy-efficiency gain from 2016
  • Energy generated by new locomotives 242 788 MWh
  • Waste management Freight Rail Hydrocarbon Elimination Programme 2 16 sites sampled and assessed for historical contamination
  • Asbestos Remediation and Rehabilitation 35 tons of asbestos removed
  • Used Oil Reclamation 1 200 litres used oil sold
  • Waste Recycling (Inyanda Precinct) 118,7 tons waste recycled
  • National Ports Authority Asbestos Remediation and Rehabilitation 2,3 tons of asbestos removed
  • Galley Waste Management (Port of Durban) 149 tons galley waste removed
  • Industrial Waste Management (Port of Durban) 1 647,4 tons industrial waste generated
  • Ports Terminals Asbestos Remediation and Rehabilitation 17 283,5 tons waste generated and 662 766,6 tons waste recycled
  • Environmental legal compliance Recorded 13 significant incidents2 – a 13% improvement from 2016

1 The Port of Cape Town lost its certification, two of Freight Rail’s business units are awaiting re-certification, while the Port of Mossel Bay is not certified.
2 Already being tracked under the bilateral agreement. These incidents include spills from our pipeline and incidents occurring due to derailments.

Key natural capital impacts on the other capitals

Erratic weather patterns due to climate change, such as coastal storm surges and
rising sea levels, could affect port infrastructure while inland floods could impact rail infrastructure.
Infrastructure impacts

Severe drought adversely affects bulk export commodities, such as grain, which negatively impacted volume performance and associated revenue. Volume and revenue impacts

We transport mineral commodities for key customers, thereby growing revenue. Revenue growth

Approaches to managing natural capital outcomes

Transnet established a bilateral relationship with the Department of Environmental Affairs to facilitate environmental authorisations and closure of significant environmental incidents.

We are considering mechanisms to further ‘mainstream’ biodiversity management into the business through policies, processes and procedures in our long-term planning.

Trade-offs in our use of natural capital

Trade-offs relating to natural capital relate mainly to those areas where our operations compete for shared natural resources in common-use areas and, by extension, the impacts on the communities who share those resources with our operations, placing pressures on the critical biodiversity and environmental services which underpin and support South Africa’s social and economic development.

Our development and economic activities are essential for economic growth. However, under ‘Business as Usual’ practices, this can result in the loss of biodiversity, such as wetlands; displacement of communities and businesses on land where we expand infrastructure; and competition for natural resources such as water and clean air.

We acknowledge the trade-offs in transporting large quantities of commodity volumes for customers and, by extension, the impacts of our customers’ operations on natural capital in producing those commodities on which we depend for our business. This includes the conversion of natural vegetation for land use (e.g. cultivation, mining and urban expansion).

By reducing energy costs through more efficient energy consumption, we positively impact financial sustainability

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