Water sustainability disclosure in the integrated reports of JSE listed companies in South Africa.

Abstract

South Africa is in a crisis relating to the quality of available water. South Africa is a country that is considered as one of the top 30 driest countries in the world and this is principally based on climate conditions, as well as an escalation of water demands. The primary users of water are companies; therefore, companies must have measures in place to protect this scarce resource. This study examined the extent of the interventions by selected Johannesburg Stock Exchange (JSE) listed South African companies in relation to water sustainability disclosures. An assessment of whether the importance of water is recognised and a commitment to alleviate water shortage, as shown by JSE listed companies, was performed. Integrated reports were analysed according to the Disclosure Assessment and Performance Tool. The population was grouped according to four water-intensive sectors: The construction sector, the food production sector, the mining sector and the oil and gas sector. The total population of JSE listed South African companies for all four sectors is 62 companies for this study. The data in these reports was selected and evaluated in accordance with a set of questions reflected under three categories in the Disclosure Assessment and Performance tool. The companies were rated according to a rating scheme from D to A for each question. The categories are linked to each of the three research questions pertinent to this study. It was established, through the content analysis of the integrated reports, that the companies grasp the seriousness of the water crisis that South Africa is experiencing and are making an effort to reduce the water risk; however, various areas require improvement. These areas include the lack of integration between water sustainability information and their financial reports, setting of performance standards and goals in terms of wastewater discharge and a major concern that affected the majority of companies in all four sectors was their engagement with their respective suppliers in the supply chain process. Based on the findings of all four sectors it was revealed that the industrial metal and mining sector was the best overall performing sector in the study; however, this sector, together with other sectors, has also struggled in its performance in a few areas. Increased pressure now needs to be placed on these JSE listed companies to ensure continuous improvement in their performance relating to water sustainability. This, in turn, will result in a reduction of environmental issues, which include water scarcity, faced in South Africa and across the globe.