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

MATERIAL ASPECTS IMPACTING OUR STRATEGY

Levels of accountability for determining material aspects
Scope and boundary of our materiality determination process
Changes in material aspects
Reasons for material aspect change in 2017
Our 10th highest risk for 2017 – “Environmental risk – energy supply, water shortage and adverse weather patterns” – considers multiple levels of environmental impacts. The risk relates both to impacts from the Company’s activities on the environment, and extends to external environmental impacts on the Company’s activities.
Through our engagements with communities residing in and around our operational areas, we are increasingly aware of the social and also economic value inherent in creating positive, mutually beneficial long-term partnerships with communities. This ethos moves beyond an essentially one-sided perspective of the Company creating value for and on behalf of communities, to one where communities themselves become collaborative partners in the value-creation process. Transnet has identified more than 20 emerging opportunities for collaboration with communities.
While research and development remains a major strategic focus for the Company, Transnet 4.0 emphasises the future dependence on ‘digital’ innovation. This new paradigm is characterised by a fusion of technologies that are poised to disrupt almost all industries and transform systems of production, management and governance. Transnet’s research and development going forward will be increasingly geared towards new digital service platforms and commercial solutions.
Transnet 4.0 – the Company’s strategic drive gearing the MDS to meet challenges and opportunities of the 4th Industrial Revolution – calls for a move beyond ‘satisfying’ customers to fostering lasting customer relationships through authentic understanding of customer needs, sincere commitment to meeting those needs and the insight to harness the value of long-term customer loyalty and partnerships to build resilient, sustained market presence.
Reworded to reflect the emphasis on ‘sustaining’ jobs in the economy, which goes beyond simply creating jobs and developing skills.

Transnet currently competes in the local job market for scarce technical skills which are in high demand from other engineering firms and SOCs such as Eskom and Telkom. Our fourth highest risk for 2017 is “People management – inadequately skilled staff in operations, not skilled for future operations”. Moving into the 4th Industrial Revolution, Transnet will operate as a manufacture-driven, service-led organisation. It is reasonable to assume that some of our existing, already scarce, competencies may become obsolete in this new paradigm, while other, as yet unknown, competencies will be required.
Business continuity in Transnet’s materiality context relates to multiple scenarios: a) having the correct ICT infrastructure in place to meet future digital demands of the 4th Industrial Revolution, b) having appropriate cybersecurity and data protection mechanisms in place, and responding appropriately in terms of disaster management.
Transnet 4.0 calls for a greater emphasis on private-sector partnerships to provide collaborative, end-to-end business solutions throughout the supply chain. These partnerships will become increasingly critical as Transnet moves from its current status as a third-party logistics (3PL) service provider to fourth-party logistics (4PL) service provider. The new Group Business Development function within Transnet’s new operating model will be responsible for leveraging private-sector collaboration and PSPs to enhance and increase Transnet’s logistics service offerings.

Energy security is at the core of current and future industrial and technological advancement. The secure supply of energy is encapsulated in Transnet’s ‘Environmental risk’ and therefore still top of mind for the organisation. However, as a material aspect, it is also encapsulated in the material aspects of ‘Managing our environmental impact’ and that of ‘Business continuity’. The National Development Plan (NDP) envisages that by 2030 South Africa will have an energy sector that promotes economic growth and development through adequate investment in energy infrastructure. The plan envisages that by 2030 South Africa will have an adequate supply of electricity and liquid fuels to ensure that economic activity and welfare are not disrupted, and that at least 95% of the population will have access to grid or off-grid electricity. Other renewable resources, like wind, solar and hydro-electricity, will be viable alternatives to coal and could supply at least 20 000 MW of the additional 29 000 MW of electricity needed by 2030.
Materiality universe aligned with strategy

MATERIAL ASPECTS IMPACTING OUR STRATEGY

MATERIAL ASPECTS IMPACTING OUR STRATEGY