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8/4/2019 R2S National Sustainability Screen 0211 v0.6
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South Africas Johannesburg Stock Exchange [JSE]
National Sustainability Screen
General Interest | March 2010
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Contents:- Overview- Economy Lens- Theme Lens- Sector Lens- Finance Sector Review: Banks- Solutions Requirements- Methods & Data
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Overview
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National Sustainability Screens
Principal Objectives
Private & Confidential
Localization of Route2s (Sustained Value Management TM) measurement tool- US Input-Output model employed as economic baseline and refined with RSA energy technologyprofiles and sector wide emission intensities
- Comprehend the research implications to fully localize
Extension of Route2s (Sustained Value Management TM) measurement tool- Inclusion of human and social capital functional flows
- Comprehend the research implications to extend
Generate high level insights of sustainability issues within RSA- JSE is the largest exchange in Africa (16th largest globally), giving a strong indication of current
sustainability issues / opportunities within RSA
Employ findings as indicators of the sustainability challenges Route2 will facewithin RSAs corporate world (and begin the search for solutions)
Provide initial screen and focus for our future investment activities
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National Sustainability Screens
RSA Universe
Private & Confidential
Sectors Representation(# Companies in Sector)
Scale (Reported revenue /Estimated employment*)
Agriculture 10 R217bn / 479k
Construction 20 R129bn / 650k
Finance 99 R1,183bn / 1,404k
Manufacturing 55 R659bn / 1,652k
Mining 52 R829bn / 407k
Transport & Communications 32 R394bn / 531k
Wholesale & Retail 40 R438bn / 2,089k
TOTAL 308 R3,848bn / 7,212k
NOTES: The screen excluded the contributions of Households and the Public Sector; *Estimated employment numbers
for the entire industry NOT the listed entities included within the screen
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National Sustainability Screens
RSA Sustainability Themes
Private & Confidential
Capital Theme Driver(s)
Natural Climate Change (-ve) Greenhouse Gas Emissions
Water Scarcity (-ve) Fresh Water Consumption
Waste (-ve) Solid Waste Releases:landfilled, incinerated andradioactive
Pollution (-ve) Toxic Releases: to Land, Air and Water (asclassified by the US EPA Toxic Release Inventory)
Biodiversity (+ve) Ecosystem Service Provisions: derived fromland use (and non use)
Human Health (-ve) / (+ve) Disease: economic cots of AIDS; abatementthrough education and treatment
Knowhow (+ve) Employment: economic benefits of employment(beyond wage)
Social Social Cohesion (-ve) / (+ve) Crime: economic cost of crime (impact on growth);abatement through policing
NOTE: (-ve) refers to negative themes / external costs; (+ve) refers to positive themes / external benefits
NOTE: Themes are not definitive, rather a representative sample. Please take the following analysis as a demonstration of the potential of
the Route2 Sustainability model.
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RSA Headline Insights
Part 1
Private & Confidential
Total net externalities (upstream supply chains included)estimated to be R -750 bn on a revenue base of R 3,800 bn &profit base of R 311 bn1
Estimated external costs of R -1,040 bn Estimated external benefits of R 290 bn
4 significant sustainability themes revealed Pollution 72% of total net externalities Unemployment - 36% of total net externalities Water Scarcity 27% of total net externalities Waste - 26% of total net externalities
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RSA Headline Insights
Part 2
Private & Confidential
Pollution, the costliest theme, largely manifests in the early stages of supplychains, requiring deep supply chain engagement by corporations
The first tier of supply chains is the source of the majority relative costs,suggesting corporations need to (and can) engage more actively with theirdirect suppliers
Water Scarcity, Waste and Unemployment, are the themes whichcorporations appear to have the most direct control over (and thus the
associated issues / opportunities)
The total profit erosion of the 8 core themes is estimated to be -241 % ofthe 308 listed entities 2009 reported net income
The estimated Sustained Profit (Profit net of net externalities) for the 308listed entities is R -440 bn. All sectors except for Finance and Wholesale /Retail generated negative Sustained Profit in 2009
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RSA Headline Insights
Part 3
Private & Confidential
Sector insights (distilled from exposure matrix)The Exposure Matrix positions the sectors quantified exposure to the core themes against the sectors current
economic importance to identify current and future risks / opportunities for government, investors, debt providers
and insurers
Finance is the star sector Finance has a relatively low exposure to natural capital themes, high exposure to
human capital benefits (derived from its large employee base) and significant
(relatively) contribution to the economy (revenue, tax receipts and employment)
Manufacturing carries the highest risk Manufacturing has the largest exposure to the natural capital themes (not offsetby the benefit of its significant employee base) Agriculture is heavily exposed to the natural capital themes but contributes less
(relatively) to the RSA economy (and therefore sits in the bottom left quadrant)
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RSA Headline Insights
Theme Summary
Private & Confidential
Theme Externality (Benefit or Cost) Top 3 Sectors
Human Capital:Unemployment
R 271 bn(benefit)
Manufacturing (27%) Wholesale / Retail (20%) Finance (19%)
Natural Capital:Biodiversity
R 9 bn(benefit)
Agriculture (49%) Manufacturing (39%) Mining (5%)
Human Capital:Disease (AIDS) R -4 bn(cost)
Manufacturing (23%) Wholesale & Retail (16%) Finance (16%)
Social Capital:Crime
R -23 bn(cost)
Finance (27%) Mining (22%) Manufacturing (22%)
Natural Capital:ClimateChange
R -56 bn(cost)
Mining (51%) Manufacturing (22%) Transport & Communications (9%)
Natural Capital:Waste
R -197 bn(cost)
Transport & Communications (26%) Manufacturing (26%) Waste(15%)
Natural Capital:Water
R -206 bn(cost)
Agriculture (45%) Manufacturing (28%) Mining (21%)
Natural Capital:Pollution
R -544 bn(cost)
Manufacturing (55%) Mining (21%) Agriculture (7%)
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RSA Headline Insights
Sector Summary
Private & Confidential
Sector Net Externalities / % of profit Top 3 Themes / % of profit
Finance R -10 bn / -13 % Unemployment / 69% Waste / (41)% Pollutants / (24)%
Wholesale & Retail R -10 bn / - 65 % Unemployment / 340% Pollutants / (195)% Waste / (145)%
Construction R -11 bn / -176 %
Pollutants / (330)% Unemployment / 328% Waste / (103)%
Transport & Communications R -66 bn / -145 % Waste / (113)% Pollutants / (58)% Unemployment / 50%
Agriculture R -121 bn / -392 % Water Scarcity / (298)% Pollutants / (128)% Unemployment / 54%
Mining R -185 bn / -175 % Pollutants / (108)% Water Scarcity / (42)% Unemployment / 34%
Manufacturing R -349 bn / -999% Pollutants / (852)% Unemployment / 208% Water Scarcity / (167)%
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RSA Headline Insights
Value Chain Summary
Private & Confidential
Sector Net Externalities / % of profit Top 2 Tiers / % of profit
Finance R -10 bn / -13 % Direct / 27% Other Tiers / (23)%
Wholesale & Retail R -10 bn / - 65 % Direct / 193% Other Tiers / (125)%
Construction R -11 bn / -176 % Other Tiers / (199)% Direct / 160%
Transport & Communications R -66 bn / -145 % Direct / (63)% Other Tiers / (33)%
Agriculture R -121 bn / -392 % Direct / (193)% First / (116)x%
Mining R -185 bn / -175 % First / (64)% Other / (51)%
Manufacturing R -349 bn / -999% Other Tiers / (351)% Direct / (230)%
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Economy Lens
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Economy Lens
Overview
Private & Confidential
This section is the consolidation of all 308 entities rolled up to drawinsights at a national level (excluding the direct impact of Governmentand Private Households)
As with the entire SA Screen output, the focus is on the 8 majorsustainability themes (ranked by estimated financial impact within
each capital good stock)
The analysis is performed across the supply chain from the directactions of the relevant corporate to the actions of their suppliers (1sttier), their suppliers suppliers (2nd tier) and further up the chain (Othertiers)
The implications of the listed entities actions (both their externalbenefits and external costs net externalities) is measured in Randimpact and often in the analysis made relative to the profit of thatsector or corporate entity.
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Economy Lens
Direct Impacts
Private & Confidential
-R102 590
-R16 116
-R74 223
-R87 380
R2 705
-R2 116
R148 732
-R12 779
WATER
CLIMATE
WASTE
POLLUTANTS
BIODIVERSITY
AIDS
UNEMPLOYMENT
CRIME
Net Direct
Externalities
R -144 bn
Direct External
Benefits
R 154 bn
Direct External
Costs
R -297bn
Million Rand
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-R205 841
-R56 892
-R196 558
-R543 556
R8 596
-R3 751
R271 030
-R23 369
WATER
CLIMATE
WASTE
POLLUTANTS
BIODIVERSITY
AIDS
UNEMPLOYMENT
CRIME
Economy Lens
Total Supply Chain Impact
Private & Confidential
Net Indirect
ExternalitiesR -750 bn
Indirect External
BenefitsR 290 bn
Indirect External
Costs
R -1040 bn
Million Rand
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Economy Lens
Theme Total Impact by Value Chain Origin [%]
Private & Confidential
-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100%
Bio-diversity
Climate Change
Crime
Disease
Pollutants
Unemployment
Waste
Water Scarcity
Direct First Tier Second Tier Other Tiers
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Economy Lens
Theme Total Impact by Value Chain Origin [%]
Private & Confidential
-100% -80% -60% -40% -20% 0% 20% 40%
Direct
First Tier
Second Tier
Other Tiers
Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Economy Lens
Net Externalities as % of Profit
Private & Confidential
-250% -200% -150% -100% -50% 0% 50%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
- 241 %
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Economy Lens
Sustained Profit Waterfall [Million R]
Private & Confidential
-R500 000
-R400 000
-R300 000
-R200 000
-R100 000
R0
R100 000
R200 000
R300 000
R400 000
FI
NA
N
CE
MI
NI
N
G
WH
OL
E
SA
LE
&R
E
TA
I
L
TR
AN
S
PO
RT
&C
O
MM
S
MA
NU
F
AC
TU
RI
N
G
CO
NS
T
RU
CT
IO
N
AG
RI
C
UL
TU
RE
TOTALR -440 bn
FI
NA
N
CE
MI
NI
N
G
WH
OL
E
SA
LE
&R
E
TA
I
L
MA
NU
F
AC
TU
R
IN
G
CO
NS
T
RU
CT
IO
N
AG
RI
C
UL
T
URE
TR
AN
S
PO
RT
&C
O
MM
S
TOTALR311bn
NetExternalities
SustainedProfit
NetIncome
Million Rand
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Economy Lens
Sustained Profit Waterfall - Notes
Private & Confidential
Sustained Profit is a measure of the corporates profit / loss afteraccounting for its net externalities The chart shows how the corporates that make up the listed entity
screen (bucketed by sector) build to the sum of traditional profit(reported annual operating income)
and then how that traditional profit pictures falls to a sum sustainedprofit / loss number (again bucketed by sector) This analysis can be taken to a higher resolution i.e. corporates within a
sector or business units within a corporate or products within a business
unit
This lens should be used as a high level indication of sustainability of theeconomy, a sector within that economy, a corporate within thatsector, a business unit within that corporate etc. or for benchmarkingpurposes (i.e. corporates within a sector)
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Economy Lens
Exposure Matrix
Private & Confidential
AGRICULTURERev: R217bn
Tax: R8bnEmply: 479k
Ext Costs: R121bn
MANUFACTURINGRev: R659bn
Tax: R9bnEmply: 1,652k
Ext Costs: R349bn
CONSTRUCTIONRev: R129bn
Tax: R2bnEmply: 650k
Ext Costs: R11bn
TRANSPORT/COMMS
Rev: R394bnTax: R12bn
Emply: 531k
Ext Costs: R66bn
MININGRev: R829bn
Tax: R34bnEmply: 407k
Ext Costs: R185bn
FINANCERev: R1,183bn
Tax: R19bnEmply: 1,404k
Ext Costs: R10bn
WHOLESALE/RETAIL
Rev: R438bnTax: R5bn
Emply: 2,089k
Ext Costs: R10bn
Size of thebubbledenotes
total netexternalities
INCREASINGE
XPOS
URETOM
AJOR
THEME
S
INCREASING ECONOMIC IMPORTANCE(CONTRIBUTION TO GNP, TAX RECEIPTS, EMPLOYMENT)
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Economy Lens
Exposure Matrix - Notes
Private & Confidential
The matrix is used to identify issues / opportunities by showing the relativeimportance of a sector to RSA as measured by revenue, tax payments andemployment against the relative exposure of that sector to the 8 majorsustainability themes
This lens can be used as a high level indicator of where the risks /opportunities lie (in this case for the economy) as external costs becomeinternalised or as a high level screen investment tool to identify sectors over /under exposed to certain themes (with the relevant x axis metric)
Higher resolution can easily be applied revealing corporates within sectors,business units within corporates and products within business units
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Theme Lens
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Theme Lens
Overview
Private & Confidential
This section reviews the 8 major sustainability themes (ranked by estimatedfinancial impact within each capital good stock) 5 themes emerge and charts each major industry sectors exposure level to the themes (in
Rand and relative terms by sectors)
The themes are ranked from the most beneficial theme to the mostdamaging theme
A higher resolution lens can be applied to corporates within sectors,business units within corporates and products within business units
and helps to identify where the largest exposures are an initial screen totarget more detailed analysis
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Theme Lens
Unemployment By Sector: R 271 bn
Private & Confidential
Manufacturing
Wholesale &
Retail
Finance
Mining
Transport &
Comms
Construction
Agriculture
- 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000
Manufacturing27%
Wholesale &Retail
20%
Finance19%
Mining13%
Transport &Comms
8%
Construction7%
Agriculture6%
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Theme Lens
Biodiversity By Sector: R 9 bn
Private & Confidential
Agriculture
Manufacturing
Mining
Wholesale &
Retail
Construction
Finance
Transport &
Comms
- 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500
Agriculture
49%
Manuing
39%
Mining
5%
Wholesale &
Retail
2%
Construction2% Finance
2%
Transport &
Comms
1%
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Theme Lens
Disease (AIDS) By Sector: R -4 bn
Private & Confidential
Agriculture
Construction
Transport &
Comms
Mining
Finance
Wholesale &
Retail
Manufacturing
-1 000 - 800 - 600 - 400 - 200 -
Agriculture
-5%
Construction
-12%
Transport &
Comms
-12%
Mining
-16%
Finance
-16%
Wholesale &
Retail
-16%
Manufacturing
-23%
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Theme Lens
Crime By Sector: R -23bn
Private & Confidential
Construction
Agriculture
Transport &
Comms
Wholesale &
Retail
Manufacturing
Mining
Finance
-7 000 -6 000 -5 000 -4 000 -3 000 -2 000 -1 000 -
Construction
-4% Agriculture
-5%
Transport &
Comms
-10%
Wholesale &
Retail
-12%
Manufacturing-22%Mining-22%
Finance
-27%
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Theme Lens
Climate Change By Sector: R -56 bn
Private & Confidential
Construction
Finance
Wholesale &
Retail
Agriculture
Transport &
Comms
Manufacturing
Mining
-35 000 -30 000 -25 000 -20 000 -15 000 -10 000 -5 000 -
Construction
-1%
Finance
-4%Wholesale &
Retail
-5%
Agriculture
-6%
Transport &
Comms
-9%
Manufacturing
-22%
Mining
-51%
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Theme Lens
Waste By Sector: R -197 bn
Private & Confidential
Agriculture
Construction
Wholesale &
Retail
Mining
Finance
Manufacturing
Transport &
Comms
-60 000 -50 000 -40 000 -30 000 -20 000 -10 000 -
Agriculture-3%
Construction
-3%
Wholesale &
Retail
-12%
Mining
-15%
Finance
-15%
Manufacturin
g-26%
Transport &
Comms
-26%
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Theme Lens
Water (Scarcity) By Sector: R -206 bn
Private & Confidential
Construction
Finance
Transport &
Comms
Wholesale &
Retail
Mining
Manufacturing
Agriculture
-100 000 -80 000 -60 000 -40 000 -20 000 -
Construction
-1%Finance
-3%
Transport& Comms
-2% Wholesale &
Retail
-2%
Mining
-21%
Manufacturing-28%
Agriculture
-45%
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Theme Lens
Pollution By Sector: R -206 bn
Private & Confidential
Finance
Construction
Transport &
Comms
Wholesale &
Retail
Agriculture
Mining
Manufacturing
-350 000 -300 000 -250 000 -200 000 -150 000 -100 000 -50 000 -
Finance
-3%
Construction-4%
Transport &
Comms
-5%
Wholesale
& Retail
-7%
Agriculture
-7%
Mining
-21%
Manufacturing
-55%
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Sector Lens
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Sector Lens
Overview
Private & Confidential
This section takes a look at the 7 macro industry sectors and charts exposure levels according to supply chain origin (from
direct to the final tier) and to each of the 8 major sustainability themes
Each sector also has the net externalities in Rbn and net externalities asa % of the relevant sectors net income
The macro industry sectors are ranked from the sector with the lowestlevel of net external costs to the sector with the highest level of netexternal costs
A higher resolution lens can be applied to corporates within sectors,business units within corporates and products within business units
and helps to identify where the issues / opportunities lie within thesupply chain and the relative importance of the issues / opportunitiesboth to one another and relative to the traditional financial measure
(profit) this initial screen can then be used to target more detailed
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Sector Lens
Finance: R -10 bn / -13%
Private & Confidential
-100% -80% -60% -40% -20% 0% 20% 40% 60% 80%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Sector Lens
Wholesale / Retail: R -10 bn / -65%
Private & Confidential
-500% -400% -300% -200% -100% 0% 100% 200% 300% 400%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Sector Lens
Construction: R -11 bn / -176%
Private & Confidential
-600% -500% -400% -300% -200% -100% 0% 100% 200% 300% 400%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Sector Lens
Transport & Communications: R -66 bn / -145%
Private & Confidential
-250% -200% -150% -100% -50% 0% 50% 100%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Sector Lens
Agriculture: R -121 bn / -392%
Private & Confidential
-500% -400% -300% -200% -100% 0% 100%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Sector Lens
Mining: R -185 bn / -178%
Private & Confidential
-250% -200% -150% -100% -50% 0% 50%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Sector Lens
Manufacturing: R -349 bn / -999%
Private & Confidential
-1400% -1200% -1000% -800% -600% -400% -200% 0% 200% 400%
Direct
First Tier
Second Tier
Other Tiers
Grand Total
Bio-diversity Climate Change Crime Disease Pollutants Unemployment Waste Water Scarcity
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Finance Sector Review: Loan Books
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Finance Sector Review
RSAs Big 4 Loan Books
Private & Confidential
This section takes a look at the loan books of the big 4 RSA banks toevaluate, at the highest level, the impact of their advances with respect to
the 8 major sustainability themes
The analysis is based on the reported advances to the relevant sectors. Wehave then assumed that 1 rand advanced, generates 1 rand of revenue
within that sector and used that to calculate the net externalities of bankadvances in 2009
Clearly, the assumption of a 1 rand advanced to 1 rand revenue generationis crude and further employing average sector net externalities is also crude,but as throughout this analysis, more granular disclosure and / or access to
the loan books is required to refine the outputs
There are a number of usages of this lens risk management (to assess a corporates ability to service loans) loan pricing (which accounts for the different risk profile) understand sustainability
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Finance Sector Review
Total Loan Books
Private & Confidential
-1000 000
-800 000
-600 000
-400 000
-200 000
-ABSA FIRST NED STANDARD
Corporate
ConsumerMillion Rand
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Finance Sector Review
Consumer Loan Books: Net Externalities [R m]
Private & Confidential
Million Rand
-200 000
-150 000
-100 000
-50 000
-ABSA GROUP FIRST BANK NEDBANK STANDARD BANK
Food & Beverage
Agricultural products
Fuel
Water
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Finance Sector Review
Corporate Loan Books: Net Externalities [R m]
Private & Confidential
Million Rand
Transport
Agricultural products
Construction
Manufacturing
-700 000
-600 000
-500 000
-400 000
-300 000
-200 000
-100 000
-ABSA FIRST NED STANDARD
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AgricultureManufacturing
TransportElectricity
ConstructionGovernment
MiningOther
ServicesRetailers
FinanceBanks
Wholesale
Finance Sector Review
Retail Bank Exposure Analysis
Private & Confidential
Standard
Bank
Ned
Bank
ABSA
Bank
First
Bank
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Finance Sector Review
Normalized Corporate Loan Book
[Net Externalities per Rand Advanced]
Private & Confidential
-3,10
-4,84
-1,76
-1,41
ABSA FIRST NED STANDARD
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Solutions Requirement Table
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Solutions Requirement Table
Overview
Private & Confidential
Given that Route2 is focused on helping corporates address theirsustainability issues and realize their sustainability opportunities, it is vital we
are in position to identify, propose and help implement solutions. Thestarting point is identifying the significant issues / opportunities and
subsequently cost effective solutions
The following tables sets out the economic value of the sector / themecombination together with the exposure level as measured by netexternalities
The table is sorted by exposure levels
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Solutions Requirement Table
Corporate Level Solutions
Private & Confidential
SECTOR / THEME Exposure (Rm Net Extern.) Economic Score
POLLUTANTS_Manufacturing 297 419 940 650
POLLUTANTS_Mining 112 466 929 541
WATER SCARCITY_Agriculture 91 750 303 876
WATER SCARCITY_Manufacturing 58 246 940 650
WASTE_Transport & Comms 51 442 493 833
WASTE_Manufacturing 50 589 940 650WATER SCARCITY_Mining 43 550 929 541
POLLUTANTS_Agriculture 39 395 303 876
POLLUTANTS_Wholesale & Retail 30 510 787 813
WASTE_Finance 30 380 1 433 864
WASTE_Mining 29 766 929 541
CLIMATE CHANGE_Mining 29 158 929 541
POLLUTANTS_Transport & Comms 26 372 493 833
WASTE_Wholesale & Retail 22 790 787 813POLLUTANTS_Construction 19 740 238 242
POLLUTANTS_Finance 17 654 1 433 864
CLIMATE CHANGE_Manufacturing 12 528 940 650
CRIME_Finance 6 304 1 433 864
WASTE_Construction 6 185 238 242
WASTE_Agriculture 5 407 303 876
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Methods & Data
M h d & D
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Methods & Data
Overview
Private & Confidential
Figure 1 illustrates the concepts of indirect upstream (supply chain)and indirect downstream (product use and disposal) impacts
(negative and positive). Increasingly companies need to understandand help manage the risks beyond their immediate boundaries ofoperation (e.g. EU legislation holding electrical product manufacturersresponsible for final disposal)
Figure 2 depicts the architecture of the integrated models employedto quantify the 4 capital direct and indirect functional flows ofcompany activities, at both process and product levels
Figure 3 details the various valuation techniques employed tomonetize the functional flows emanating from the 4 capitals.Monetization enables relative weighting of functional flows andimportantly allows integration with finance data)
Table 4 lists the data and sources employed in the preceding analysis
1 V l Ch i & Lif C l
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1. Value Chains & Life Cycles
Private & Confidential
e.g.,Sainsburys
Suppliers Customers
e.g. indirectupstream
sustainability
exposures of
supplied inputs
e.g. Indirectdownstream
sustainability
exposures of
product use & disposal
e.g. directsustainability
exposures of
retail operations
Mixed Input-OutputAnalysis
[MIOA]
Life-CycleAnalysis
[LCA]
ChingfordsLonaRiverside
Material & Energy FlowsAnalysis
[MEFA]
Integrated Hybrid Models
2 I t t d H b id M d l
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2. Integrated Hybrid Model
Private & Confidential
National
Economic
Input-Output[IO] Table
Product LifeCycle
Inventory[LCI] Tables
Company
Data
OtherRegions
EconomicInput-OutputTables (e.g.
China)
Product
System
DownstreamCut Offs
National
Exports / OtherRegion Imports
Product
System
Upstream Cut
Offs
NationalImports / Other
Region Exports
Non Market Factor Inputs (e.g. Greenhouse Gas Assimilation)
Non Market Factor Weightings (e.g. Monetary Values)
NonMarketFactorOu
tputs(e.g.SoilRestoration)
NonMarketFactorWeig
htings(e.g.MonetaryValues)
Inputs
Model Components
IO Table: National mixed
(financial and physical)
commodity by commodity,
mitigation technology explicit,input-output model
Product LCI Tables: Life
Cycle Inventory [LCI] data
sets (e.g. EcoInvent, US
DoE LCI databases).
Ecosystem
Dynamics
Company Data: Company
disclosures - concerning
supplier expenditures,
product recipes and
environmental flows
IO Table: Other national
mixed (Financial and
Physical) IO models (toenable true multi regional
modeling)
Environmental (in) flows of
commodity groups and specific
process (made explicit by the LCI
tables)
Monetary values for
environmental flows
Environmental
(out) flows of
commodity groups
and specific
process (madeexplicit by the LCI
tables)
Monetary
values for
environmental
flows
3 V l ti T h i
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3. Valuation Techniques
Private & Confidential
Hedonic Pricing
Labor Property
Avertive Behavior
Cost of Illness /Cost to Production
Travel Cost
Abatement Cost
Remediation Cost
Replacement Cost
Contingent Valuation
Conjoint Analysis
(Choice Modeling)
Willingness to Pay(WTP)
Willingness toAccept (WTA)
ChoiceExperiment
ContingentRanking
Contingent Rating
PairedComparisons
Revea
ledPreferenceMet
hods(IndirectMetho
ds)
DoseResponseF
unctions(DRF)
Stat
edPreferenceMeth
ods(DirectMethods)
Value Transfer
4 D t & I f ti S
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4. Data & Information Sources
Data Source
1. JSE listed entities (#308) / 5 year financial data Bloomberg
2. Annual financial & sustainability reports Company websites
3. South African Macro Statistics Statistics South Africa
4. External Cost & Benefit Values Synthesis of publishedresearch
5. 4 Capital Flow Measurement Route2 proprietary integratedhybrid models
6. Exposure Analysis Combination of 1-5 / Route2Sustained Value ManagementTM framework
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Thank you
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