Sustainability website / Community engagement / Corporate social involvement

We contribute a minimum of 1% of Group profit before tax each year to fund initiatives that benefit the communities associated with our operations, particularly those located in remote areas or in regions with a lower level of social and economic development and infrastructure. Every managed operation and project is required to develop a corporate social involvement plan that aims to enhance the socio-economic capacity and wellbeing of the communities associated with the Group’s activities, avoiding dependency and contributing to the development of sustainable livelihoods. Plans are established through engagement with communities and relevant organisations and are co-ordinated between the different levels of the organisation and with external governmental or development organisations. As set out in our Sustainable Development policy, we manage our funding so that community initiatives receive stable and continuing financial support throughout the commodity cycle. Performance is monitored on an ongoing basis, community strategies and social involvement plans are reviewed at least annually in consultation with local communities and plans are amended taken where objectives and targets are not met.

We develop and support corporate social involvement programmes in the areas of community health, education, environment, social and community development and culture and art. In 2007 Xstrata set aside a total of $102 million, or 1.2% of Group profit before tax. We prioritise communities in remote areas or in regions with a lower level of social and economic development and infrastructure for corporate social involvement support. In 2007 the majority of corporate social involvement funds were spent in South America and South Africa for community development initiatives, education and enterprise development.

Monitoring and assessment

Key performance indicators have been established at a number of Xstrata’s projects and operations to measure the effectiveness of our corporate social involvement funding.

The impacts and outcomes of CSI programmes are measured using progress reports from partner organisations, key performance indicators and feedback from community members and other stakeholders (e.g. community attitude or perception surveys). Community baseline studies are also used to track changes in socio-economic indicators within the communities, for example measuring the improvement in income per family, nutrition levels or measuring improvements in children’s performance in school examinations. Independent programme evaluations by organisations such as universities and NGOs are typically commissioned when programmes become more established.

Our businesses have also developed a range of tools and processes to assist in the prioritisation of projects according to joint assessments of community needs, business drivers and to ensure that partner organisations have the capacity to meet agreed project outcomes.

A focus for 2008 will be to further develop and refine key performance indicators for community programmes to incorporate a broader range of performance data and feedback to the design and implementation of community initiatives, using ICMM’s Community Development Toolkit and other examples of leading practice.