Our material issues

Imperial defines material issues as those factors most likely to influence the decisions of our stakeholders in relation to the capital inputs they provide to the group, and the outcomes they expect to derive in return.

Determining material issues

This year, we sought to test the material issues identified for the previous year in the context of shifts in Imperial's operating environment and consequent changes in its risks and opportunities (amplified by Covid-19), the development of Imperial's strategy and its business transformation. This approach included a review of select strategy documents and those submitted to the board.

These materials were chosen as they provide information that had already been selected by key executives for elevation to the board for interrogation, deliberation and approval. They were therefore likely to reflect the issues deemed most relevant, and therefore material, to group and operational leadership, and most pertinent to the group's ability to generate short-, medium- and long-term value in view of the 'triple context' (social, economic and environmental trends).

The following inputs informed the determination of the material issues for the year:

• Review of internal documents including Imperial's purpose, strategy and related initiatives.
• Interviews with and input from individual members of the group executive team.
• A review and feedback workshop held with key members of the Imperial team.
• Material matters raised by key stakeholder groups elicited from relevant relationship owners.

The group's executive committee was instrumental in determining the material issues for the year, and they were reviewed and approved by the group board. The material issues have informed the preparation of the integrated report and the ESG report, and are discussed in detail throughout the narrative.

Material issues construct

Our material issues are grouped by theme and supported by sub-aspects, with the context to each theme explaining how the related issues connect into the group's value creation story. The issues are ordered according to those expected to remain relevant over time (continuous) and those that have a more defined time horizon (one- to five-year timeframe), in which we expect to fulfil the associated management priorities.

Material issues structure

The diagram below provides an overview of the material issues grouped by theme and the pages that follow show the detailed sub-issues with priorities, and links to strategic pillars and associated risks.

	Theme		Material issue
	Strategic growth underpinned by effective capital management			1. Effectively manage, allocate and deploy capital for long-term value creation. 2. Focus, unify and transform to drive organic and acquisitive growth.
	Alignment of culture and people to our purpose-led strategy			3. Drive a purpose-led 'One Imperial' culture and accelerate investment in our people and organisational capabilities.
	Invest in and transform structure and processes to achieve our strategy			4. Invest in aligning, integrating and optimising systems and practices to support sustainable performance. 5. Implement digital and data initiatives to support strategic delivery and facilitate access to new revenue streams.
	Deliver shared value as a purpose-driven organisation			6. Deepen legitimacy and enhance organisational visibility.

THEME: Strategic growth underpinned by effective capital management

Our first material issue outlines the crucial role that optimal capital management will play in achieving our strategy, within our means and risk tolerances; creating a leaner and more efficient finance structure and operating model will enhance this critical underpin, enabling responsive and responsible capital allocation that is forward looking and aligned with our strategic direction.

Our second material issue focuses on what we need to do to unlock value, through a clear strategy and growth path that leverages our competitive advantages in Africa; positioning the group as the 'Gateway to Africa' to our multinational clients and principals, giving them access to some of the fastest growing and most challenging markets in Africa, and partnering with them in improving the quality of life of their customers across the continents
we serve.

1	Effectively manage, allocate and deploy capital for long-term value creation

Key stakeholder concerns

Employees Organisational change; income and job security; process automation.

Clients, principals and customers Continued market relevance; long-term sustainability of partnerships; working with trusted business partners; operational efficiency supporting a lower cost to serve.

Communities Employment opportunities.

Investors Return on investment; cash generation; growth; aligning capital allocatio with strategic growth plans and long-term sustainability; reduced fixed costs.

Regulators Financial compliance; adequate controls; financial integrity.

Relationship to strategy Operate as 'One Imperial' Go digital, be digital, enable digital Our people are our greatest asset		Associated risks and opportunities Maintain cash flows by managing underperforming assets, optimising capital investment and reducing cost base. Digital enablement and innovation. Socioeconomic and political instability in markets of operation.
Read more Our strategy		Read more Our risks and opportunities.

2	Focus, unify and transform to drive organic and acquisitive growth

Key stakeholder concerns

Employees Delivery in a challenging operating environment; unprecedented organisational change; income security; progressive employment practices.

Clients, principals and customers Integrated provider of high-value solutions; low risk access to African markets; customised, client-centred solutions for complex supply chains; continued market relevance; serving clients/principals as 'One Imperial'.

Investors Deliver on strategy and targets; return on investment; cash generation; growth; leveraging competitive advantage as a leading integrated market access and logistics provider in Africa.

Short to medium term (one to five years)

• Maintain our focus on strategic delivery despite the disruption and uncertainty exacerbated by Covid-19.
• Shift from a regional portfolio of businesses to a consolidated client-focused operating model delivering end-to-end solutions in our chosen industries.
• Operate as a unified group under the 'One Imperial' brand and culture, to enable cross-selling and upselling opportunities across our market access and logistics solutions.
• Enhance our client value proposition by offering differentiated, integrated, relevant and innovative solutions that deliver simplicity, flexibility and visibility to our clients and principals.
• Fully align our portfolio of businesses to our strategy and return expectations.
• Expand our Market Access and Logistics businesses into selected new markets and territories.
• Ensure that acquisitions are swiftly and successfully integrated into 'One Imperial'.
• Invest in people, systems, processes, digital and data to enable growth.
• Develop current and future leaders to drive the group's strategy, and the desired culture and the 'One Imperial' approach that is fundamental to achieving our growth potential.
• Develop relevant KPIs designed to drive behaviours that deliver on strategic objectives.

 

Relationship to strategy Operate as 'One Imperial' Extensive Africa footprint International footprint and expertise		Associated risks and opportunities Macroeconomic uncertainty and trade demand volatility in key markets. Maintain cash flows by managing underperforming assets, optimising capital investment and reducing cost base. Legacy and structural impediments to effective strategic implementation. Integrate new business acquisitions, projects and partnerships. Exposure to large principals and dynamic support channels. Brand integration and reputational awareness. Digital enablement and innovation. Socioeconomic and political instability in markets of operation.
Read more Our strategy		Read more Our risks and opportunities.

THEME: Alignment of culture and people to our purpose-led strategy

Our people are the most critical enablers of our strategy; central to the effectiveness of our business transformation and key to improving our performance. Our culture is fundamental to enabling our people to deliver on our strategic and operational objectives, as well as to achieve competitive differentiation, ethical conduct, diversity and inclusion, and innovation and disruption; it is the connective tissue that binds together an organisation and ultimately determines 'how things are done'.

Employee feedback, however, indicates that our people experience Imperial as inconsistent and uninspiring. In addition, our entrepreneurial origins and acquisitions have left us with a legacy of non-standardised HR platforms, processes and practices, along with a siloed and short-term, transaction-focused organisational culture. We have also identified a lack of fit between our people's values and the desired Imperial values, and what Imperial values are currently perceived to be.

Our third material issue focuses on how our organisational culture will be changed in the short to medium term to ensure that value is not destroyed by a culture misaligned with our people's values, and a structure that does not demonstrate how valuable our people are to us. Our priorities indicate how we will revitalise our organisation with values that inspire and unite our people, creating a sense of meaning and belonging, while transforming our leadership and investing in our people and organisational capabilities, to align these to our strategy, and ensure they support our culture journey.

3	Drive a purpose-led ‘One Imperial’ culture and accelerate investment in our people and organisational capabilities

Key stakeholder concerns

Employees Unprecedented change amplifying uncertainty, effective and integrated change management; fit between personal and Imperial values; meaningful and purposeful work; working environment supportive of personal and career growth, clear processes and communications; diversity and transformation; safe working environment; investment in training and skills development; adapting to new ways of working.

Clients, principals and customers Appropriate and future-fit skills and workforce innovation.

Communities Employment opportunities; diversity and transformation.

Investors Remuneration policy and KPIs that reward strategic delivery; organisational responsiveness to changes in operating conditions.

Regulators Human and labour rights; employment equity; occupational health and safety.

Short to medium term (one to five years)

• Prevent the further spread of Covid-19, and comprehensively manage its impact on the lives and livelihoods of our people.
• Deeply connect our people to our organisational purpose and entrench a value system that facilitates employee empowerment, shared vision and cooperation.
• Establish shared organisational values, modelled by leadership to drive a fundamental shift in organisational culture.
• Implement effective change management processes to ensure understanding of, and buy-in to, the need for deeper organisational change.
• Increase the opportunity, capacity and capability of our people to achieve operational excellence.
• Refocus our HR function on transformational work, skills development and leadership development.
• Develop an integrated framework that aligns business strategy with team and individual goals as well as performance outcomes to support business performance.
• Embed and standardise best people management practices across the group, and leverage digital systems, to underpin a competitive employee value proposition*.

Relationship to strategy Our people are our greatest asset Go digital, be digital, enable digital Operate as ‘One Imperial’		Associated risks and opportunities Legacy and structural impediments to effective strategic implementation. Brand integration and reputational awareness. Digital enablement and innovation. Attracting and retaining talent.
Read more Our strategy		Read more Our risks and opportunities.

* Indicates an item that remains similar to, or unchanged, since 2019.

THEME: Invest in and transform structure and processes to achieve our strategy

We can only create and sustain value by ensuring that our structures and processes are efficient, future-fit and support our strategic aims. Our systems, processes and practices are core enablers of our strategy and performance; however, the group's growth by acquisition, and traditionally decentralised management model, has meant that these systems are disparate and fragmented, with little coherent systems architecture. Efficient and integrated processes and systems underpin our ability to perform on every level and deliver on strategic imperatives. Particularly as we shift towards a 'One Imperial' culture and structure, the quality and connectivity of our systems and processes will play a vital role in our success or failure.

Our fourth material issue focuses on optimising and integrating current systems and practices to support operational excellence and sustainable performance, and our fifth focuses on positioning IT, digital and data initiatives at the heart of our enterprise, to deliver new growth, a step-change in efficiency and the possibility of disruptive innovation. We understand that our technological prowess will impact our ability to differentiate, remain relevant, ensure client satisfaction, and to grow our revenue. This will require significant investment over the short to medium term but will ensure that we are able to continue to generate value for our shareholders and clients into the future.

4	Invest in aligning, integrating and optimising systems and practices to support sustainable performance

Key stakeholder concerns

Clients, principals and customers Organisational resilience and flexibility; operational excellence; administrative duplication.

Investors Systems supporting long-term growth and performance; systems capabilities aligned with strategic execution.

Suppliers Administrative complexity (eg for payment).

Short to medium term (one to five years)

• Address the immediate challenges presented by the Covid-19 pandemic while anticipating and preparing for longer-term implications for ways of working.
• Integrate fragmented and non-standardised systems and processes by designing and implementing organisation-wide architectures.
• Optimise systems and invest in fit-for-purpose technology solutions to support strategy delivery.
• Invest in group-wide systems and initiatives to drive and support our growth strategy; specifically, align core processes by implementing a single finance, HR and communications system.
• Invest in digital and data initiatives to drive growth and create new revenue streams.

 

Relationship to strategy Operate as 'One Imperial' Extensive Africa footprint International footprint and expertise Go digital, be digital, enable digital Our people are our greatest asset Integrating ESG practices		Associated risks and opportunities Legacy and structural impediments to effective strategic implementation. Attracting and retaining talent. Digital enablement and innovation.
Read more Our strategy.		Read more Our risks and opportunities.

* Indicates an item that remains similar to, or unchanged, since 2019.

5	Implement digital and data initiatives to support strategic delivery and facilitate access to new revenue streams

Key stakeholder concerns

Employees Initiatives to facilitate skills and talent development; reduce duplicated efforts; improve efficiencies and data analytics.

Clients, principals and customers Improved efficiencies; data and technology driven innovation and supply chain visibility; digital capabilities ensuring continued market relevance; technologically driven changes to business models in the industry.

Investors Enhanced revenue growth; new revenue streams.

Short to medium term (one to five years)

• Become a digital enterprise able to leverage our data assets to drive our clients' relevance and competitiveness.
• Invest in high-potential start-ups in relevant supply chain and logistics technology areas to support future growth and differentiation.
• Ensure that information technology systems are structured, scalable and geared to support efficient growth.
• Translate data into meaningful and actionable insights, maximising the value gained from access to significant volumes of proprietary data.
• Target repetitive business processes for automation to improve efficiency.

Relationship to strategy Operate as 'One Imperial' Go digital, be digital, enable digital		Associated risks and opportunities Integrating new business acquisitions, projects and partnerships. Digital enablement and innovation. Attracting and retaining talent.
Read more Our strategy.		Read more Our risks and opportunities.

THEME: Deliver shared value as a purpose-driven organisation

We are deeply committed to becoming a purpose-driven organisation that creates sustainable, long-term value for all stakeholders. This includes investing in integrating ESG practices in 'business as usual' across the organisation. Being a responsible corporate citizen underpins our industry, market and country legitimacy, which is a competitive advantage for multinational clients that expect conduct that is beyond reproach, and which minimises their supply chain risk and enhances their reputation in difficult and complex markets. Our legitimacy ensures that we are recognised as a trusted partner, with the highest standards of governance and ethics.

This material issue is in essence the foundation stone of our value creation proposition, and focuses on the steps we are taking to understand and measure our positive and negative impacts, to enable us to generate shared value for all our stakeholders and enhance our reputation, the ultimate measure of the credibility of the 'One Imperial' brand.

6	Deepen legitimacy and enhance organisational visibility

Key stakeholder concerns

Employees Being part of an inspirational, responsible and caring organisation and respected brand.

Clients, principals and customers Market legitimacy across operations; trusted corporate partners; high ethical and governance standards.

Communities Environmental and social impact; climate change; social investment; good governance and corporate responsibility.

Investors Long-term economic, environmental and social sustainability; global ESG and sustainability ratings.

Regulators Environmental and social impact; adequate governance practices; meeting regulatory requirements.

Short to medium term (one to five years)

• Strengthen brand recognition and visibility through a detailed brand architecture process, transitioning all businesses to the
  Imperial brand.
• Initiate processes to help us understand the direct and indirect impacts Imperial has on society and stakeholders.
• Integrate ESG in our strategic and operational decision making and business as usual.
• Consistently demonstrate defensible safety practices.
• Consistently ensure socioeconomic value creation and environmental stewardship*.

Relationship to strategy Operate as 'One Imperial' Extensive Africa footprint International footprint and expertise Go digital, be digital, enable digital Our people are our greatest asset Integrating ESG practices		Associated risks and opportunities Legacy and structural impediments to effective strategic implementation. Brand integration and reputational awareness. ESG integration.
Read more Our strategy.		Read more Our risks and opportunities.

* Indicates an item that remains similar to, or unchanged, since 2019.