This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Based on information reviewed by IFC, the proposed project will have limited adverse environmental and social (E&S) impacts that are few, site specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP).

Key environmental and social (E&S) risks and issues related to this project include: (a) the company’s corporate, country and facility level E&S management systems to ensure alignment of operations with the Performance Standards (PSs) inclusive of ensuring adequate due diligence of acquisitions; (b) E&S capacity at the corporate, country and facility level to support effective implementation of the management systems; (c) assurance of fair, safe and healthy working conditions for employees and contract workers in line with IFC PS2 in all areas of operation; (d) approach to road safety and management of hazardous goods and sensitive materials e.g., vaccines, in storage / transit and in compliance with legal requirements and good international industry practice; (e) stakeholder engagement and community grievance mechanisms.

Environmental and Social Assessment and Management System

Imperial identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements. The company has formally outlined the business principles and commitments through the Imperial code of conduct, which serves to align decision making and activities across the business. Imperial has an overarching health, safety and environmental policy statement that sets out group-wide commitments and actions to ensure a safe and healthy workplace and to protect the environment. The company also maintains an environmental management policy and framework that describes the company’s approach to sustainable environmental management. The environmental policy is supported by a set of management standards documents. E&S management system is generally in line with IFC PS requirements.

Numerous Imperial facilities are ISO accredited for management systems including ISO 45001, ISO 9001, ISO 50001 and ISO 14001. The company also has certification through the Road Transport Management System (RTMS), the Safety & Quality Assessment for Sustainability (SQAS), EcoVadis and various other product related standards including food and pharmaceuticals.

Identification of Risks and Impacts

The group identifies risk based on the ISO 31000:2009 risk management principles. There is a corporate due diligence process where mergers and new acquisitions practices are formally reviewed, compliance is also prioritized and the potential facility is required to provide applicable permits and licenses, monitoring regimes, and warehouses are assessed for the suitability in storing intended products. If the company needs to establish new warehouses, an environmental impact assessment is conducted, and all new buildings are developed in line with regulatory requirements.

Management Programs

The Company has developed a new environmental, social & governance (ESG) strategy that was formally approved by the board in May 2021. The strategy provides the overarching umbrella under which all E&S activities, and applicable governance activities, are framed, advanced and reported. These include environmental strategies such as reduction of greenhouse gas (GHG) emissions, improving energy efficiency measures and increasing waste recycling. Social strategies include development of talent in the workforce, improving diversity and inclusion, enhancing supply chain performance and strengthening community partnerships to leverage and increase impact. Governance strategies including integration of ESG into risk management processes, ensure high supply chain standards are upheld and implementation of information and data security policies.

Organizational Capacity and Competency

The group has a social, ethics, and sustainability (SES) committee that monitors ESG performance and reports to the board. There is also the ESG/Corporate Social Investment committee that reports to the SES on the ESG strategy implementation and performance. Each operating business unit has a designated safety health & environment (SHE) manager responsible for implementation of health, safety and environmental programs. In South Africa and Kenya, there are SHE committees that are attended by safety champions, managing directors and the occupational health & safety (OHS) officer. Their duties are to implement the SHE policies, manage E&S compliance, report SHE performance, review SHE audits, address incidents, implement action plans and raise E&S awareness.

Emergency Preparedness and Response

Imperial has an emergency response protocol that is applicable to its operations. The company conducts frequent training for the drivers and product handlers to ensure safe handling of hazardous substances in line with safety data sheets. The group also conducts simulated training as part of its disaster preparedness. The emergency protocol also includes engagement with emergency responders, local authorities and surrounding communities, and detailed procedures to be followed during scene clean-up in the event of road accident or storage incidents. Imperial warehouses have documented emergency response procedures as well as installed fire suppression systems.

Monitoring and Review

The company monitors key performance indicators (KPIs) monthly and have internal audits to assess its compliance with OHS regulation. Imperial has a license with an external provider for the Imperial Sustainability Management System (ISMS) software, which SHE managers complete monthly to report on all group-determined environmental metrics covering E&S performance indicators. Reported KPIs include road accidents and fatalities, near misses, employee working hours statistics, energy consumption and associated greenhouse gas emissions, kilometers travelled and water consumption.                                                 

Human Resources Policies and Procedures

Imperial has over 20,000 employees including temporary employees globally. The company has various corporate level human resources policies and procedures such as those governing performance management, learning & development, training, talent management, disciplinary processes, grievances, anti-sexual harassment, the right to associate and COVID-19. In F2020, the company had 20% of employees in South Africa belong to the National Bargaining Council for Road Freight and Logistics Industry (NBCRFLI). Imperial has a three-year wage settlement that ends in 2022 with NBCRFLI, which provides some security against labor disruptions for most South African operations. The policies are disseminated from the Group and localized at each operational business unit across the company. At each operating site the policies and procedures are contained in the employee induction manual.

Grievance Mechanism

Imperial has developed and rolled out an anti-discrimination and anti-harassment policy (including sexual and racial harassment) and training on its implementation has been conducted. The group encourages all employees to express their concerns in an open and direct manner, and to point out any circumstances that might indicate an infringement of internal directives, including allegations of harassment and discrimination. An independent whistle-blowing hotline, services most of the operating countries, enabling employees and stakeholders to report concerns anonymously, with the option to report concerns in a language local to their country.

Occupational Health and Safety

The company has detailed OHS policies and standards that are implemented by a network of skilled health and safety professionals who ensure that, adherence is monitored and opportunities for improvement are identified. Employees are engaged through monthly SHE committee meetings, toolbox talks and SHE awareness and training sessions, as well as through union interventions. The group’s ISMS and other reporting systems records incidents and fatalities across all operating companies and regions. Data is collected monthly. Accident trends and non-conformances to SHE requirements are closely monitored with remedial action implemented for all non-conformances. Internal audits are done to assesses the operating business units on their compliance with OHS regulations and standards, and to ensure that effective health and safety practices are implemented.

COVID-19

The company has developed and implemented COVID-19 pandemic protocols and guidelines that set the stringent safety and strict access controls needed to prevent the spread of the virus on company buildings and warehouses. With the different pandemic waves experienced and lockdowns, many employees were encouraged to work from home, essential employees work on different shift systems and in separate offices to allow for increased social distancing and to ensure continuity when a member of a team tests positive for the virus. Virtual meetings are encouraged. Protective measures include daily temperature and health screening, hand sanitization dispensers, PPE and rigorous hygiene, cleaning and disinfectant programmes for high-risk areas, including trucks used across shifts. Workplaces are continuously monitored using risk assessments and documented compliance inspections.

Management of Third-Party Contractors

Imperial make use of several contractors providing various services for the company including on freight and transportation, non-permanent employees labor contractors, heating, ventilation and air-conditioning maintenance, waste management, warehouse cleaning & hygiene, security and pest control. All contractors (on site) are required to have a safety file defining their various OHS policies and procedures. High risk contractors / service providers and all transport sub-contractors are audited on at least an annual basis, with a three-month follow up audit if performance is unsatisfactory. Imperial has developed a SHE contractor specification defining the minimum requirements of their contractors. All contractors are required to have a letter of good standing and third-party insurance. Imperial policies and procedures apply to on site contractors, as well as the dedicated freight and transport contractors.

Supply Chain

The Group’s procurement policy guides the supply chain approach, with consideration of supplier governance, financial and social considerations. Where appropriate, preference is given to suppliers who are in compliance with an internationally recognized quality management system.                                                  

Resource Efficiency

Imperial has implemented fuel efficiency initiatives to achieve the Group’s fuel consumption targets. This has been done by use of a digital data-driven approach to optimize fuel consumption through driver behavior, load optimization, scheduling improvements and the replacement of old trucks with efficient trucks. The Group has also piloted alternative energy truck fleet using compressed natural gas, liquified natural gas (LNG), and electric trucks. Imperial Logistics International currently has a fleet of LNG trucks.

The company does have solar systems installed at a number of its warehouses and plans to expand this initiative in the next 3 years. Most of its operations get electricity from the grid and some have also installed fuel generators that are monitored for emissions.

Water and Wastewater

The Group has decreased its total water consumption in F2021 to 469 940 kiloliters, due to the closure of some facilities, reduced business activity, and more accurate water reporting. Most of the facilities get their water from the municipal supply, however, have implemented other water conservation methods. The South African operations draw water from boreholes, third party suppliers and rain harvesting. The company recycles water and has effluent reduction projects in place. Microbiological agents have been used to improve effluent treatment, to replace hazardous chemicals. In cases where warehouses are leased, the landlord has contracts in place for the treatment of wastewater in accordance with water use licenses, where applicable.

Air and GHG Emissions

According to the Imperial ESG F2021 report, the total emissions recorded for Logistics Africa and Logistics International (group companies) were 320 341 tCO2e and 91 318 tCO2e, respectively. Solar energy generated 1 359 559 kilowatt hours during F2021.

Solid and Hazardous Waste Management

The company outsources waste management services to accredited service providers, who furnish safe disposal certificates, and used tyres are returned to original equipment manufacturers who similarly provide a safe disposal certificate. All waste oil is collected and disposed by ISO 14001 certified third parties. Imperial trains staff to have specialized capabilities to handle, move and store hazardous products in line with SHE protocols and regulatory requirements.

The company undertakes emergency response planning as a feature of driver training and helps drivers to respond appropriately to different types of incidents, including accidents and security issues such as protests. Emergency simulations are conducted annually within some operating companies, involving the police, fire department and communities, to help to improve emergency response plans and procedures. Furthermore, all businesses review and update their business continuity plans on a bi-annual basis, which consider community-related health and safety risks.

Security services are engaged at business level. Service providers, and their personnel, are screened by the group risk function as well as the operations employing their services, to ensure Imperial is dealing with credible parties. Security safety training that relates to defensive use of force and communication is provided to all guards. According to Imperial management, no complaints were raised from the community, visitors and/or truck drivers that relate to security arrangements. Physical security is a key consideration for Imperial warehouses, as well as their truck fleet. For the warehouses, business continuity plans cover security incidents including protest action. Community Policing Forums are in place in areas with higher incidence of crime, where business units collaborate to strengthen security and thereby improve safety outcomes for all people working in the policing forum area. An internal Imperial security team conducts periodic security audits of priority depots. The company co-ordinates with call in armed escort for high-risk products as needed.