Environmental performance

2010 Highlights

•	Improved group policy
•	Unicorn Shipping achieves ISO 14001 certification
•	Zero significant oil spills for fifth consecutive year
•	Solid waste recycling target exceeded

The development and board approval of a revised Grindrod group environmental and climate change policy early in 2010 provided the springboard for stepped-up divisional activity in this important area of the business during the year. This policy can be found on the company website.

The group environmental and climate change committee functioned for its first full year since inception in 2009. This committee, which brings together divisional-level senior management with responsibilities in this area, held two meetings during the year, with ongoing communications among its members in between meetings. This year “environmental management and climate change” was also introduced by the chief executive officer as a regular agenda item to the Grindrod executive meetings.

The Shipping division achieved, for the fifth year in a row, its target of zero significant oil spills (more than one barrel of oil) for all ships under Grindrod control. Grindrod is particularly proud of this achievement.

Significant progress was made during the year on the implementation of ISO 14001 environmental management systems (EMS) throughout the group. Details can be found in the review below.

Towards the end of 2010, Freight Services completed a divisional climate change strategy and implementation plan, which will serve as a working model for other divisions. The plan focuses on practical steps that the division is to take to drive improvements in understanding and reducing its carbon footprint. Similar plans will be developed during 2011 for the other divisions, with a particular focus on shipping.

The Trading division cautiously started investigating opportunities related to trading carbon during the year, seen as a growth market globally and will continue to do so into 2011.

The company has taken note of the release (in November 2010) of the draft South African National Climate Change Response Green Paper. Potential market changes that may flow from this national initiative could impact on the business significantly and include proposed new carbon taxes (e.g. vehicle carbon emissions taxes) and incentives (e.g. lower fuel taxes “to encourage cleaner fuels, e.g. cleaner diesel”).

The company will follow developments in this dynamic area closely in 2011 and the company’s response to the climate change imperative in terms of reducing risks and seizing market opportunities will form a key focus of the group’s environmental and climate change programme in 2011.

The reporting year ended with external auditors, Deloitte & Touche conducting a limited assurance report, focusing particularly on selected environmental indicators within Freight Services and Shipping, the two divisions with the largest environmental footprint within the group. Refer to the limited assurance statement. The auditor’s recommendations will be incorporated into the work programme for 2011.

Scope and methodology

This environmental and climate change report covers Grindrod’s global footprint. In setting its organisation boundaries for reporting greenhouse gas (GHG) or carbon emissions and by implication its other environmental KPI’s, Grindrod has from this year, adopted the operational control approach, as defined by the international GHG Protocol. The company previously reported emissions using an equity-share approach.

The company has moved to this approach which includes clear objectives and targets for operational improvement in terms of climate change performance.

Grindrod has used the GHG Protocol definition for operational control which states that “A company has operational control over an operation if the former or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation.” To this end, Grindrod has excluded data from assets which are partly owned by the company, but operated by another company unless the company has the ability to influence management decisions (such as ships within the Lauritzen pool).

In terms of determining whether the company has operational control or not, key criteria include whether Grindrod has the ability to impose or directly implement the development of ISO 14001 environmental management systems (EMSs) and contractual and staffing arrangements on ships.

In line with the GHG Protocol’s definition of operational control, Grindrod has disclosed 100% of emissions from entities it does have operational control over and 0% of emissions for entities where, regardless of equity shareholding, Grindrod does not have “full authority to introduce and implement its operating policies”.

Implications, in terms of marine-based operations of the reporting scope change are discussed in the Shipping division section and that of land-based operations in the Freight Services section, of the report below.

Measurement of and reporting on, environmental KPI within Grindrod is also guided by:

•	The Global Reporting Initiative’s (GRI) environmental indicator guidelines (including the pilot sector supplement for the logistics and transportation industry);
•	The JSE’s Social Responsibility Index (SRI) environmental reporting requirements; and
•	Best practice within the global shipping and transport industries. Grindrod conducts an annual benchmarking exercise of applicable peer group companies.

In terms of Grindrod’s Carbon Disclosure Project (CDP) disclosure, 2010 will now serve as the new base year, following the adoption of an operational control approach to reporting GHG emissions.

Progress in 2010 with achieving environmental objectives and targets

IMPROVING ENVIRONMENTAL AND CLIMATE CHANGE DATA MANAGEMENT AND REPORTING

Improvement on the completeness and accuracy of environmental data collection from the diverse group of companies that comprises Grindrod.

Grindrod moved closer to its objective and target of reporting on 100% of its global operational footprint. Omissions, in terms of business units covered were a few (less than 10) smaller office-based operations around the world with small (less than 10) staff members. These have been identified and will be included from 2012. Completeness of data (in terms of sites reporting) is estimated to be 95% – 98%, close to the 100% target. Grindrod reported on 100% of ships that it has operational control over.

Credibility was improved this year as a result of the assurance report compiled by Deloitte. Data extrapolations were only made where measured data could be applied to incomplete data points. 95+% of fuel and electricity data was measured. Accuracy was also improved this year as a result of the audit conducted by Deloitte.

EXCEEDING LEGAL COMPLIANCE

Grindrod will at all times and in all jurisdictions meet and, where feasible, exceed environmental regulatory requirements, as well as all other industry requirements to which the company subscribes.

All companies and sites are required to comply in full with all applicable environmental legislation and local by-laws. There were no material incidents of and fines (exceeding R1 million) or non-monetary sanctions for, non-compliance with applicable environmental regulations in any jurisdiction that the company operated in during the year in review.

As verified by internal audits, all vessels operated by the Shipping division were once again fully compliant with MARPOL (International Convention for the Prevention of Pollution from Ships) – both with respect to solid and liquid waste, as well as Annex VI that deals with air pollution from ships and hold Documents of Compliance issued by the relevant maritime authorities in terms of International Maritime Organisation (IMO) legislation.

Routine audits during the year ensured that all Grindrod ships were fully compliant with low sulphur fuel requirements for designated shipping areas (e.g. parts of the EU).

Land and ship-based ISO 14001 environmental management systems (see next section) require ongoing review of legal compliance and include relevant legal registers that detail compliance requirements with relevant acts, regulations and bylaws.

ADOPT A SYSTEMATIC APPROACH

Environmental management will be conducted following a systematic approach, based on, or where appropriate compliant with, ISO 14001. Where feasible, companies and vessels will develop integrated safety, health, environmental and quality management systems, that include regular audits.

The group moved closer to achieving the stated objective of having formalised EMS’s based on ISO 14001 at all major land-based sites within the Freight Services division and on all ships over which the company has operational control within the Shipping division, by 2012.

Of the 39 sites where Freight Services has operational control, two are ISO 14001 certified and 30 are on track to be certification ready by mid-2011, with a target of 100% sites’ certified by the end of 2012.

Unicorn Shipping was pleased to receive ISO 14001 certification in December 2010. The scope includes the seven ships under Unicorn management as well as shore-based crewing services. The five bulk carriers that IVS has operational control of maintained their ISO 14001 certification status.

In addition, all ships are subject to regular safety health environment and quality (SHEQ) audits by the company’s major oil customers, underwriters, certification and other bodies. Fleet Managers within the group also conduct stringent internal SHEQ audits on a half yearly basis.

MARINE BIODIVERSITY IMPACTS: OBJECTIVE AND TARGET – ZERO MATERIAL POLLUTION OF THE WORLD’S MARINE ECOSYSTEMS

Minimise impacts on marine ecosystems through rigorous onboard management systems, ongoing training and awareness and audits against international marine pollution prevention standards.

Measures that Grindrod continues to have in place to prevent marine pollution and impact on marine biodiversity include:

•	Continued non-use of Tributyltin (TBT) or lead containing anti-fouling paint;
•	All vessels under Grindrod’s control have Ballast Management Plans that comply with IMO requirements, to minimise the potential impacts related to ballast water (spreading invasive marine organisms between ecosystems);
•	A growing number of vessels under Grindrod’s control are being certified to the “Cleanship” standard (see http://www.cleanship.info/). These vessels are not allowed to dispose of any waste (solid or liquid) whilst at sea. Two vessels (Berg and Breede) received Bureau Veritas “Cleanship” notation in 2009 and retained this status in 2010. The Kowie, which will be in full commission in 2011, will also carry this certification.
•	Grindrod maintained its policy of not transporting any hazardous waste;
•	A range of other measures are being undertaken on an ongoing basis to ensure full compliance with MARPOL (see “Exceeding Legal Compliance” section above and Shipping section below).

Continuous improvements to on-board management systems (driven by ISO 14001 now in place on all company operated vessels), ongoing training, investment in safer ships and other measures being implemented will assist in keeping Grindrod’s excellent record of minimising impacts on marine ecosystems.

To minimise potential impacts to marine ecosystems as a result of collisions and groundings, 100% of oil and chemical tankers owned by Grindrod will have double hull constructions and/or to be constructed with materials designed to minimise corrosion and to promote robustness and longevity and to have onboard navigation and safety equipment that is the best available.

All of Grindrod operated tankers are double-hulled. In addition, fuel tanks are located away from the side of the ship, to provide extra protection (known as double hull effect). Tensile steel has been minimised on all tankers to reduce the chance of metal fatigue associated with high tensile steel.

Grindrod’s ships’ cargo tanks are divided into sections and bund containment is fitted on all deck areas. All future vessel builds will be in compliance with this policy.

Ships wastewater discharge and solid waste disposal whilst at sea to be strict compliance with MARPOL.

Ship’s wastewater (galley wastewater, domestic/toilet and bilge water) is discharged directly into the sea while vessels are under way in strict compliance with MARPOL.

Biodegradable waste generated in all ships is disposed of at sea or incinerated onboard in strict compliance with MARPOL.

Solid waste and waste oils are separated on board and where possible incinerated, in strict compliance with the relevant provisions of MARPOL. Any waste that may contain heavy metals is not incinerated onboard.

All company-run ships maintain garbage logs (for solid waste) and safe disposal receipts for any solid waste landed.

Improving on-board management systems (driven by introduction of ISO 14001 on all vessels) and regular audits will ensure ongoing compliance with MARPOL.

Zero significant oil spills (more than one barrel of oil) for all ships under Grindrod’s control.

The Shipping division achieved this target, for the fifth year in a row.

LAND-BASED BIODIVERSITY IMPACTS: OBJECTIVE AND TARGET – ZERO MATERIAL POLLUTION OF TERRESTRIAL ECOSYSTEMS

Minimise impacts on terrestrial ecosystems through rigorous management systems, ongoing training and awareness and environmental risk audits of sites. All new land-based developments to comply in full with environmental impact assessment (EIA) regulations and approval conditions.

Grindrod’s land-based operations store and transport materials which pose a pollution risk. The following environmental pollution incidents occurred within the Freight Services division. In all cases appropriate remediation action was taken:

•	In July, 6 900 litres of diesel were spilled when a driver did not follow safe work procedures and overfilled a vehicle tank at a customer site;
•	At terminal operations in Walvis Bay, approximately 4 tonnes of copper concentrate was spilled on the ground during loading of a vessel;
•	At the Coal Terminal in the port of Matola in Mozambique, a bulk fuel line operated by the site’s landlord ruptured, resulting in an unknown volume of diesel being spilled onto the site;
•	Terminal operations in Durban experienced two pollution incidents: An unknown volume of fertilizer dye (agrotain) was not sufficiently contained and spilled out onto the road adjacent to the site. In October, a truck spilled approximately 3 tonnes of molasses on the road on route to the terminal;
•	One of the Auto Carrier trucks leaked 150 litres of diesel at a truck stop in East London.

Continuous improvements to site-level environmental management, driven by the development of ISO 14001 EMSs within the Freight Services division, which comprises more than 98% of land-based environmental risks to the group, were made during the year, to reduce the likelihood, frequency and severity of incidents.

Freight Services received an environmental authorisation during 2010 from the KwaZulu-Natal Department of Agriculture, Environmental Affairs and Rural Development for the proposed expansion of three terminal bulk material facilities in Richards Bay, following the completion of an EIA in 2009. The EIA found that if mitigation measures are implemented the proposed development would have minimal impacts on biodiversity and traffic. All approval conditions will be complied with as the development goes ahead and mitigation measures will be included in site management plans.

USING NATURAL RESOURCES EFFICIENTLY AND MINIMISING WASTE – WATER AND WASTEWATER REDUCTION

Reduce normalised water consumption and the resulting wastewater effluent, within the group by 10% by 2012.

Absolute water usage in 2010, at 199 315 kilolitres, was marginally (2%) higher than 2009 (195 555 kilolitres). The vast majority – 94% (93% in 2009) of this water footprint was generated by the Freight Services division, which uses large amounts of water to wash machinery, conveyor belts, containers and vehicles at some sites.

Normalised water consumption for the year was 0.01 litres of water per ZAR of revenue (Grindrod group) and 47,72 kilolitres per full time equivalent (FTE) for the year (where water could be matched with FTE). The target is to reduce these measures by 10% within the next two years and to maintain this level thereafter. Efforts will be focused within Freight Services, where water and wastewater reduction programmes now form a key element of the ISO 14001 environmental management plans being implemented.

Water conservation efforts concluded in the year under review included:

•	repairing leaks and replacing old pipes at the Maydon Wharf terminals, resulting in a significant decrease in water consumption at this site compared to 2009;
•	the development by Grindrod Intermodal of a new container wash machine which utilises 70% less water than normal washbays.

Water conservation efforts concluded in the year under review included:

Most ships under Grindrod’s control have onboard systems that generate their own water – up to 20 kilolitres per day (only approximately 8 kilolitres is required per day). The majority of Grindrod ships and all new generation ships purchased, have non-water-based vacuum-operated sewerage treatment plants, minimising discharge of effluent at sea.

USING NATURAL RESOURCES EFFICIENTLY AND MINIMISING WASTE – SOLID WASTE REDUCTION

Improve material recycling to 10% of total solid waste by 2012

Total solid waste generated for the year (7 564 tonnes) was 6% up from 2009 (7 156 tonnes), with the increase partially attributable to improved completeness in reporting. However, recycling efforts during the year increased the proportion of waste being recycled from 1,33% in 2009 to 20% (a total of 1 522 tonnes of solid waste was recycled in 2010) and in so doing exceeding the above goal set in 2009. The improvement target has now been revised to maintaining a 20% average recycling effort as a minimum, to continue to explore recycling opportunities (particularly within Freight Services) and to strive for 30% recycling of solid waste by 2015.

USING NATURAL RESOURCES EFFICIENTLY AND MINIMISING WASTE – TRANSPORT-RELATED AIR EMISSIONS – POLLUTION REDUCTION

Reduce ship-based sulphur oxide (SOx) and nitrous oxide (NOx) emissions per NM (nautical miles) travelled by 5% by 2015.

Similarly, reduce land-based SOx and NOx emissions per km travelled by 5% by 2015.

Sulphur oxide (SOx) and nitrogen oxide (NOx) emissions are the two key pollutants resulting from the burning of fossil fuels and are used as the KPI for air pollution by Grindrod.

Efforts to date have focused on improving the reporting of ship and vehicle fuel usage within the group, being the source of 95+% of air pollution for the group. Grindrod does not have any significant stationary/site-based sources of air pollution. While options are limited as the “cleanness” of fuels used both on land and at sea is out of the company’s control, Grindrod has committed to reducing normalised air pollution from these sources (using SOx and NOx as the KPI and 2010 as the baseline).

SOx and NOx emissions from land-based vehicles has dropped significantly as a result of the introduction of new fuel specifications in South Africa in recent years. Since 2002 sulphur content in diesel has dropped from 5 500 ppm to 500 ppm (and 50 ppm for premium-grade diesel) and from 2005 sulphur content in ULP petrol has dropped from 1 000 ppm to 500 ppm. From 2006, lead was phased out completely from South African petrol. The expected launch in early 2011 by the South African Minister of Energy of the “Cleaner Fuels Two (CF2)” initiative, aimed to further tighten fuel specifications and standards in an effort to align them with improved vehicle technology and the regulation of emissions that emanate from vehicles, will drive through further improvements in emissions.

Reporting exact SOx and NOx from land-based vehicle use remains a challenge as these emissions depend on vehicle-specific criteria (e.g. the relative efficacy of individual catalytic converters to remove these pollutants). This will be looked at closer in 2011.

Likewise the Shipping division is starting to benefit from the introduction of clean air legislation in a number of shipping jurisdictions (e.g. increasing parts of EU waters) and the resulting market availability of cleaner fuel in and around these jurisdictions. A total of 8% of all marine fuel combusted in 2010 was low sulphur fuel oil (LSFO).

Besides market-driven trends towards cleaner fuel availability, measures that the two divisions are undertaking and will undertake to meet these targets are outlined below.

The Shipping division will look to the following initiatives in the future:

•	Optimising vessels’ main engines for the most efficient fuel consumption at 90% maximum continuous rating (implemented);
•	Fitting diesel tune systems to ships engines to optimise main engine performance so as to reduce fuel consumption and emissions (two ships were fitted in 2009);
•	Fitting vessels with power management systems that automatically match the electrical output to the demand in order to save energy, fuel and produce fewer emissions (underway);
•	Fitting dedicated low-sulphur fuel oil tanks to vessels (four ships have been fitted to date).

The Freight Services division will meet this objective and target by:

•	Ensuring all vehicles are maintained and serviced regularly to optimise engine efficiency and reduce unnecessary exhaust emissions (underway and ongoing);
•	Regulating driver speed and routing to reduce consumption and maximise fuel efficiency (underway and ongoing);
•	Ensuring payload on carriers is optimised to reduce the number of trips needed to deliver required volume (underway and ongoing);
•	Purchasing more fuel-efficient vehicles and retrofitting existing vehicles to improve fuel efficiency;
•	Conducting a review of the company’s transport fleet in terms of the status of exhaust catalytic converters and implement a retrofit programme to replace any older catalytic converters; and
•	Setting a policy that all new diesel trucks purchased from 2010 are of the Euro 4 standard.

REDUCING CLIMATE CHANGE IMPACTS

Reduce ship-based GHG emissions (CO₂-e) per tonne/NM by an average (across the fleet) of 5% by 2015.

Reduce land-based GHG emissions per km by an average (across the transport fleet) by 5% by 2015.

Mobile combustion of petroleum-based fuels in ships, vehicles, locomotives and sitebased equipment such as front-end loaders and forklifts and the resulting CO₂ emissions, comprises 86% of Grindrod’s total estimated carbon footprint (see breakdown below). Fuel is a major cost item for both marine and land-based operations within Grindrod. For this reason all staff are incentivised to look for and implement fuel (and therefore cost) savings and efficiencies. These efforts go hand in hand with reducing normalised GHG emissions and air pollution.

Using 2010 as the baseline, Grindrod has committed to reducing normalised GHG emissions from both its ships and its transport fleet by 5% over the next five years. Initial performance figures are presented in the table below.

The same initiatives aimed at reducing air pollution (previous objective and target) will assist in reducing normalised GHG emissions from shipping and land-based transport.

Reduce normalised land-based Scope 2 electricity usage by 5% by 2015.

As per the revised group policy, this year serves as the base year for this objective and target. Normalisation of this KPI is proving challenging, given the wide range of businesses within the group (from large area port operations with relatively few staff and large energy demand to small area office based operations with low energy demand per staff member).

Normalised GHG emissions (in CO₂-e) from Scope 2 electricity usage for 2010 was 0,62 grams CO₂-e per Rand Revenue. Within Freight Services it was also possible to provide normalisation per full time equivalent (FTE). The average tonnes CO₂-e per FTE for this division was 5.18. Further development of this sub-indicator (looking to match Scope 2 electricity consumption footprint with FTE) will be undertaken in 2011.

Energy efficiency management plans, that form part of business unit-level ISO 14001 EMSs, are identifying and implementing energy saving opportunities within the group and will assist in the achievement of this goal.

Developing a long-term carbon reductions strategy

As indicated, the overwhelming majority of Grindrod’s GHG emissions come from the burning of fossil fuels (petrol, diesel and marine fuels) in our transport vehicles and ships. This will therefore dictate where improvement efforts are focussed, both over the short to medium-term (covered above), as well as the longer term (10 – 20 years+).

While the short to medium-term objectives and targets focus on driving operational efficiencies, we believe that longer-term reductions in GHG emissions related to transport activities will come more from technological and market changes.

Over the next 10 – 20 years Freight Services therefore plans to phase out inefficient petrol and diesel burning vehicles as and when new and alternative (including hybrid) engine technologies become available. Likewise Grindrod Shipping will favour new ship builds that incorporate innovative design and new engine technologies as and when they become available. These could include the use of modern sails, alternative fuels (e.g. LPG and LNG) and super-efficient ship designs.

Grindrod’s longer-term reductions strategy is to reduce normalised land-based and ship-based GHG emissions by 20% by 2030 from the 2010 baseline.

ESTABLISHING A CULTURE OF ENVIRONMENTAL RESPONSIBILITY

In recognition that Grindrod’s environmental efforts are only as good as the commitment of the company’s people, Grindrod will promote environmental awareness and responsibility among employees and develop a culture of eco-efficiency and ecological responsibility.

Grindrod’s chief executive officer assumes overall responsibility for the group’s environmental performance and the group environmental and climate change committee reports to him. Environmental and climate change risk forms part of the mandate of the board-level risk committee.

The group appointed a group-level environmental and climate change advisor, who is assisting in coordinating best practices throughout the group, establishing improved monitoring and reporting systems and engaged in capacity building of senior managers and executives throughout the group. Both Shipping and Freight Services have full-time senior level Safety, Health and Environment (SHE) Managers.

Environmental training and awareness at all levels of the organisation continued throughout 2010.

The incorporation of environmental management performance indicators as part of senior executive performance assessments has been formalised for 2011.

CARRY ADEQUATE ENVIRONMENTAL RISK INSURANCE

All of the above efforts significantly lower Grindrod’s environmental risks. However, the company is also adequately covered in the event of a major shipping accident.

Protection and Indemnity Club cover of US$1 billion is maintained for each ship, accident or collision for oil pollution and resultant environmental liabilities imposed by international convention, national legislation or common law.

Environmental footprint summary – consolidated group key performance indicators and three-year trends

Due to the change in reporting approach (from equity share to operational control), year on year comparisons of performance for some indicators are not accurate/valid.

Key performance indicators	2010	2009	2008
Water and wastewater (kilolitres)
Water usage	199 315	195 555	125 000
Land-based water utilisation (kilolitres)
Domestic office use discharged to municipal sewer	75 994 (39,5%)	–	–
Domestic/office use – not to municipal sewer (e.g. soak away)	183 (0,1%)	–	–
Washing vehicles and equipment discharged to municipal sewer	61 152 (31,8%)	–	–
Washing vehicles and equipment – discharged to ground/ stormwater	28 146 (14,6%)	–	–
Dust suppression – to atmosphere or stormwater system	20 409 (10,6%)	–	–
Other	6 464 (3,4%)	NR	NR
Solid waste
Total solid waste generated (tonnes)	7 564	7 156	151 (incomplete reporting)
General and hazardous waste – to landfill (tonnes)	5 971 (79%)	7 050	478
MARPOL Category 1 – 6 waste – disposed of at sea or incinerated at sea in accordance with MARPOL (tonnes)	71 (1%)	10	37
Total solid waste recycled (tonnes)	1 522 (20%)	96 (1,3% of total)	NR
Energy, fuel and air emissions
Total electricity usage (kWh)	23 483 422	16 248 260	15 093 464
Diesel usage in land-based vehicles (kilolitres)	27 909	20 063	18 671
Petrol usage in land-based vehicles (kilolitres)	533	250	497
LPG in land-based vehicles (tonnes)	1,8	NR	NR
Heavy oil usage in land-based vehicles (kilolitres)	16	NR	NR
Air pollution – SOx emitted (tonnes)	2 778	234	183
Air pollution – NOx emitted (tonnes)	3 618	41	38
Scope 1 and 2 GHG emissions (tonnes CO₂-e)*	280 731	363 394	450 000
GHG emissions including Scope 3 emissions (tonnes CO₂-e) *	294 446	335 331	450 000
GHG emissions intensity (gCO₂-e per Rand revenue)	9,75	12,11	13
Total energy consumption Scope 1 and 2 (GJ)	3 539 194	NR	NR
Energy intensity (MJ per Rand revenue)	0,12	NR	NR

* See breakdown in table below.
NR – not reported

Grindrod group GHG emissions – breakdown by GHG protocol scope

			Group totals		2010 Divisional analysis
			2010	2009	Freight Services	Shipping	Trading	Financial Services and head office
SCOPE 1	Combustion of fuel in ships where company has operational control		145 879	265 969		142 956	2 922
	Company owned and/or operated vehicles		105 307	75 048	105 561	55	46
	Combustion in stationary fuel-burning equipment (generators and boilers)		589	34	588			1
	HFC refrigerant gases		9 787	331	8 606	1 180
	Scope 1 subtotal		261 561	341 382	114 755	144 192	2 968	1
SCOPE 2	Purchased electricity		19 170	13 963	16 242	2	427	2 498
SCOPE 3 and other	Purchased electricity – rented out to third parties		712	NR				712
	Business air travel		6 323	NR		513		5 810
	Business travel – car rental		16	NR				16
	HCFCs and other non-Kyoto gases		289	NR	272			17
	Waste sent to landfill		6 375	NR	6 188	171	16
	Scope 3 and other subtotal		13 715	8 049	6 460	683	16	6 555
TOTALS	Metric tonnes of CO₂-e		294 446	363 394	137 457	144 878	3 411	9 054
	Percentage contribution	(%)	100		45,56	49,20	1,16	3,08
	GHG emissions intensity (gCO₂-e per Rand revenue)		9,75		51,87	33,98	0,15	46,47

(All figures in metric tonnes CO₂-e; NR – not reported)
Notes:

1.	The change in approach to reporting GHG emissions from an equity share approach to an operational control approach, as outlined in the Scope and Methodology section, meant that shipping emissions were reduced in 2010 compared to 2009.
2.	As can be seen, the 2010 inventory was more complete in terms of covering indirect, scope 3 emissions.
3.	2009 scope 1 emissions from ships and vehicles have been restated, using the new IMO conversion factors for ships emissions and the more accurate calorific value conversion factors used for land-based fuel combustion in 2010.
4.	2009 electricity was previously reported as scope 2 and 3. These have now been combined as scope 2 in terms of the new operational control approach.

Divisional environmental performance

SHIPPING

Key environmental inputs and outputs for Shipping division’s marine activities

This division comprises fleets of modern dry cargo vessels, product and chemical tankers and bunker tankers trading globally, with small office-based land-side operations.

Emissions from ship-based fuel combustion (consisting of Marine Diesel Oil (MDO), Heavy Fuel Oil – now split into Heavy Sulphur Fuel Oil (HSFO) and Low Sulphur Fuel Oil (LSFO)) on ships operated by Unicorn, Island View Shipping, Unical, as well as contributions from two bunker barges owned by Cockett Marine Oil (Trading division) comprised 49% of Grindrod’s total carbon footprint. Fuel emissions from Cockett Marine Oil are included under Trading.

Marine operations where Grindrod or Grindrod-owned subsidiaries have joint financial control over operations, but not operational control as defined in the Scope and Methodology section above, include ship’s owned and operated by OACL (Grindrod, through Freight Services has a 49% stake in this company), Unicorn’s participation in the Dorado Tanker pool (operated by managed by Heidenreich Marine Inc.) and the Stolt Tankers Joint Service Pool (operated by Stolt-Nielsen Ltd). Emissions and other environmental KPI from these ships have been excluded.

Also excluded are emissions from vessels owned by Grindrod but chartered out to other third parties and chartered in vessels, where similarly Grindrod has no operational control over where these vessels go, how they are operated or how much fuel they use (even if the company, as in some cases, pays for fuel). These include vessels owned by IVS and Unicorn that are chartered out with no operational control and chartered-in vessels not operated by IVS but from which this subsidiary derives income.

Vessels that are chartered out but where Grindrod has sufficient operational control include five tankers owned by Unicorn (which received ISO 14001 EMS certification in December 2010) and chartered out to oil majors. Emissions (and other environmental KPI) from these vessels have been included despite the fact that Grindrod does not have full control over fuel consumption or efficiency.

Entities where Grindrod has limited financial control or minority equity shareholding but does have sufficient operational control to influence emissions reductions strategies, include Lauritzen pooled vessels (currently five vessels) owned by IVS. All of these vessels are certified to ISO 14001. 100% of the emissions (and other environmental KPI) from these ships have been included.

Grindrod controlled vessels have a range of adaptations and management systems in place to ensure full compliance with MARPOL (International Convention for the Prevention of Pollution from Ships) requirements, Grindrod keeps records of water consumption, solid waste and NOx and SOx emissions from vessels that it has operational control over. All vessels can generate potable water from sea water and consumption is therefore kept to a minimum.

Onboard pollution prevention measures not discussed in the marine pollution prevention introductory section of the environmental report above, include:

•	Onboard biological sewage plants that break down, neutralise and sterilise waste effluent before disposal at sea;
•	A range of ship design features (onboard sumps, drains, contained areas, slop tanks etc.) and people management measures (operational procedures, management plans and audits) that collectively minimise the potential for discharge of any onboard spills and/or leaks;
•	Investments in modern navigation and communications technologies to assist with passage planning and storm avoidance.

In December 2010, seven Unicorn vessels received ISO 14001 certification status and the five IVS vessels that Grindrod has operational control over maintained their ISO 14001 status.

As a result of having these measures in place, the Shipping Division achieved, for the fifth year in a row, their target of zero significant oil spills (more than one barrel of oil) for all ships under Grindrod’s control.

New initiatives, besides the ISO 14001 EMS programme, that are being planned to include:

•	The development of a Grindrod shipping climate change strategy and implementation plan;
•	The improvement of onboard reporting systems so as to track CO₂-e efficiency (CO₂-e per tonne-NM as per IMO guidelines) more effectively.

Environmental footprint – Shipping

Key performance indicators	2010	2009	2008
Water and wastewater (kilolitres)
Water usage (kilolitres) not including water generated onboard at sea	6 967	NR	NR
Untreated effluent (domestic) – disposed of at sea in accordance with MARPOL (kilolitres)	7 193	1 390	NR
Treated effluent – disposed of at sea in accordance with MARPOL (kilolitres)	3 572	4 799	2 277
Land-based wastewater – reported as part of group figures
Solid waste (tonnes)
Total solid waste generated (tonnes)	226	296	390
MARPOL category 1 – 6 waste – disposed of to licensed landfill sites (tonnes)	155	269	84
MARPOL category 1 – 6 waste – disposed of at sea or incinerated at sea in accordance with MARPOL (tonnes)	71	10	37
Total solid waste recycled (tonnes)	–	17	–
Energy, fuel and air emissions
Total electricity usage (kWh)	Included in group total figures
Total marine diesel oil (MDO) consumed (tonnes)	3 173	3 214	6 718
Heavy sulphur fuel oil (HSFO) consumed (tonnes) – previously reported as heavy fuel oil (HFO)	41 205	–	101 784
Intermediate fuel oil consumed (tonnes)	–	61 035	Included in above figure
Low sulphur fuel oil (LSFO) consumed (tonnes)	3 778	–	–
Diesel usage in land-based vehicles (kilolitres)	7,1	As part of group total	As part of group total
Petrol usage in land-based vehicles (kilolitres)	8,7	As part of group total	As part of group total
Air pollution – SOx emitted (tonnes)	2 750	214	164
Air pollution – NOx emitted (tonnes)	2 538	41	38
SOx (tonnes) per 1 000 NM	7,79	NR	NR
NOx (tonnes) per 1 000 NM	5,72	NR	NR
Average per-ship CO₂ emissions efficiency (as per IMO guidelines) (gCO₂-e per tonne-NM)	10,44	9,09	12
Range per-ship CO₂ emissions efficiency (gCO₂ per tonne-NM)	3,12 – 27,52	5,48 – 30,86	2 – 33

NR – not reported

FREIGHT SERVICES

Key environmental inputs and outputs for Freight Services division

This division comprises business units undertaking freight transport and business units supporting the freight transport industry in southern Africa. Grindrod Logistics undertakes road freight transport. There is also joint venture involvement in rail and sea freight transport. The other business units in the division provide the interface between sea and land freight transportation such as terminals, stevedoring and intermodal. The Freight Services division owns and operates over 1 100 road vehicles throughout southern Africa.

In terms of land-based operations and holdings held within Freight Services, the adoption of an operational approach has resulted in 100% of the emissions emanating from the following companies being included for the first time (with Grindrod shareholding shown): RRL (50%), Vanguard (50%) and Röhlig-Grindrod (50%). Land-based emissions from OACL, as with ships’ emissions mentioned above, have been excluded. Emissions from MPDC, a non-incorporated joint venture where Grindrod does have joint financial control, but does not have operational control as defined, have been excluded.

The business units providing a service to the freight industry (including terminals, stevedoring, Intermodal) are the greatest water users. As a division, Freight Services consumes 92% of the group’s total water consumption.

The combustion of land-based fuel (diesel and petrol) within Freight Services was a major contributor to the group’s total C footprint, comprising 50% of the group total C footprint.

Use of electricity, use and storage of oil, fuel, cleaning agents and generation of industrial waste and effluent, are the other key environmental aspects associated with these business units.

During the year, the Freight Services division made significant progress towards expanding and deepening its environmental and climate change management strategy. The senior-level Health, Safety and Environment (HSE) Manager appointed in 2009 functioned in conjunction with the divisional-level environmental and climate change committee (which convened several times during 2010) to drive risk reduction and eco-efficiency programmes within the division. Highlights include:

•	The completion of the environmental risk audit programme covering key business units and the actioning of recommendations stemming from this audit (incorporated into EMS management plans);
•	Progress with the roll out of the ISO 14001 EMS programme. As indicated earlier in the introduction section, the division is on track to have all designated sites certified by 2012;
•	The new divisional climate change strategy and implementation plan, which was finalised towards the end of 2010, will be implemented from 2011 and used in conjunction with the business-unit level ISO 14001 EMS’s to drive the changes required for the division to meet its obligations in terms of the objectives and targets contained in the group Environmental Policy.

Other specific new initiatives that are being planned for 2011 include:

•	The initiation of a project at Freight Services’ Fleet Management Centre to investigate the feasibility of using 5% biodiesel in the fuel mix;
•	The development of a green policy for all procurement (covering plant, equipment, materials and services);
•	The introduction of a divisional-wide intranet-based environmental health and safety reporting tool that will assist in collating and managing environmental and safety KPI on a monthly basis from 2011 onwards.

Environmental footprint – Freight Services

Key performance indicators	2010	2009	2008
Water and wastewater (kilolitres)
Water usage (kilolitres)	184 272	182 589	111 187
Where this water was utilised (and where it ended up) (figures in kilolitres):
Domestic office use discharged to municipal sewer	67 918 (37%)	NR	NR
Domestic/office use – not to municipal sewer (e.g. soak away)	183 (0,1%)	NR	NR
Washing vehicles and equipment discharged to municipal sewer	61 152 (33%)	NR	NR
Washing vehicles and equipment – discharged to ground/stormwater	28 146 (15%)	NR	NR
Dust suppression – to atmosphere or stormwater system	20 409 (11%)	NR	NR
Other	6 464 (4%)	NR	NR
Solid waste (tonnes)
Total solid waste generated (tonnes)	7 318	6 810	592
General and hazardous waste – to landfill (tonnes)	5 800	6 734	592
Total solid waste recycled (tonnes)	1 518 (21% of total)	76	NR
Energy, fuel and air emissions
Total electricity usage (kilowatts)	20 553 196	14 869 673	14 538 700
Diesel usage in land-based vehicles (kilolitres)	27 900	20 062	18 653
Petrol usage in land-based vehicles (kilolitres)	511	196	448
LPG in land-based vehicles (tonnes)	1,79	NR	NR
Heavy oil usage in land-based vehicles (kilolitres)	15,6	NR	NR
Air pollution – SOx emitted (tonnes) (estimated)	28,41	20,26	19,10
Air pollution – NOx emitted (tonnes) (estimated)	906	NR	NR
SOx (tonnes) per 1 000 km	0,45	NR	NR
NOx (tonnes) per 1 000 km	17,05	NR	NR
Fleet fuel efficiency (kilogram CO₂ per kilometre)	Fleet Services fleet average: Diesel – 1,68 Petrol – 0,30 Rest of Freight Services: Diesel – 0,94 Petrol – 0,28	Auto carriers – 1,18 Logistics furniture – 0,89 Bulk transport – 1,36	NR

NR – not reported

TRADING

The Trading division (comprising Oreport, Cockett and Atlas Trading and Shipping) has offices in South Africa, the United Kingdom, France, Brazil, Hong Kong, Singapore, Korea and China.

The main direct environmental impacts are office based, such as electricity use, paper use, waste generation and greenhouse gas emissions from company cars. Office activities also result in generation of hazardous waste, including fluorescent light bulbs and redundant electronic equipment (e-waste).

The Trading division generated 20 tonnes of office waste, of which 4,36 tonnes (22%) was recycled. The aim is to improve this to 50% by 2015.

Electricity consumption for 2010 was 502 491 kWh, with the majority of this coming from the Oreport offices in Johannesburg (62% of the total).

Emissions from the consumption of fuel in Cockett Marine’s new UK-based bunker operation are reported on for the first time (see group GHG emissions summary table).

The Trading division is currently investigating activities that aim to both reduce the Grindrod group footprint and include carbon credits in the portfolio of traded commodities.

HEAD OFFICE AND FINANCIAL SERVICES

Head office’s buildings and Financial Services combined KPIs comprise the smallest environmental footprint for the group, consisting of office-based operations in South Africa (mostly in Durban). As with the Trading division, the main direct environmental impacts are office based. Environmental KPIs for 2010 have been included in the group analysis of this report.

Management changes to improve eco-efficiency of operations within these buildings include plans for an improved solid waste handling facility, the inclusion of power management attributes prior to acquiring new IT equipment and the switch to a single data centre (historically individual data centres were employed).