Aligning 's Climate-Related Financial Disclosure with Global Best Practice Climate-Related Financial Disclosure Fact Sheets

Discovery Limited

Compiled March 20211

Purpose

Driving the Green Agenda through Aligning South Africa’s Climate-related Financial Disclosure with Global Best Practice is a project addressing barriers to financial sector analysis and reporting of climate-related financial risks and opportunities. It is funded by UK PACT (Partnering for Accelerated Climate Transitions) and is a £60m flagship programme under the UK’s International Climate Finance (ICF) portfolio A detailed introduction to the project is available here.2

The purpose of these fact sheets is to provide an overview of climate-related practices and disclosures from the largest companies on the Johannesburg Stock Exchange (JSE) using publicly available data. All the fact sheet are available here.

Please see Climate-Related Financial Disclosure Fact Sheets – Overview (available here) for an introduction to the fact sheets, the methodology used to develop them, and a disclaimer that should be read in conjunction with this document.

1 Based on 30 June 2019 Annual Report and Financial Statements released 3 months post financial year-end. 2 Also accessible from http://www.dnaeconomics.com/pages/SAclimatedisclosure

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1. COMPANY PROFILE

Discovery Limited

JSE Industry: Financials

JSE Sector: Life

Reporting Year-End: 30 June

2021 Total Market Value of Equity: R86 billion3

Size Category: Large Cap4

Other Stock Exchange Listings: None

Company Operations Summary: Discovery is a group offering short term insurance, life insurance, health insurance and long-term saving and investments5.

% South African operations by revenue6 % South African operations by assets7

64% Assets not disclosed by region

Significant region/country Major activity

South Africa Health insurance, life insurance, long-term savings and investments, short-term and commercial insurance, banking, behavior-change programs

United Kingdom Private medical insurance (PMI), protection products, savings and investment products

Other Global Markets Insurance products, Shared-value Insurance offering, Health insurance, corporate wellness initiatives

3 At 31 January 2021 as per IRESS. 4 The companies in the Top40 index are considered Large caps; MidCap index comprises stocks ranked 41 to 100 on the market; and Small caps are the companies with values smaller than the top 100 listed companies. See: JSE. “Small, medium and large caps”. [Online]. Available: https://www.jse.co.za/grow-my-wealth/small- medium-and-large-caps. 5 Annual Reports and company website 6 This is not a valuation, but an indicator of the value of South African operations (revenue) from the segmental geographic analysis in the Annual Financial Statements 30 June 2019. 7 This is not a valuation, but an indicator of the value of South African operations (assets) from the segmental geographic analysis in the Annual Financial Statements 30 June 2019.

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2. CLIMATE-RELATED FINANCIAL DISCLOSURE (CFD) SOURCES

For the purpose of analysing the quality of a company’s climate-related financial disclosure, analysts relied extensively on publicly available documentation produced by the company. A list of sources consulted can be found in the table below.

Sources consulted Yes/No Note Link to source(s) Company website ✓ Date accessed: March 2021 www.discovery.co.za Annual integrated ✓ Annual Integrated Report 2020 report Annual financial ✓ Date: 30 June 2020 Annual financial statements statements ESG information ✓ Supplementary ESG Information Booklet booklet Climate-related ✘ Not applicable Not applicable standalone report TCFD report Discovery’s annual integrated report states that they have ✘ set out to adopt and implement the recommendations of Not applicable the Task Force on Climate-related Financial Disclosures. Publicly available ✓ Not applicable Not applicable climate policies CDP ✓ Date accessed: March 2021 Online CDP Submission

Other ✘ Not applicable Not applicable

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3. CFD DASHBOARD8

Findings Theme Area Recommended Disclosure Result (Disclosed/Not disclosed)

Governance • Group Chief Executive: Oversight of climate change-related strategy, developments and risks9. Disclose the organization’s • The Board provides oversight and approves Company describes the board’s governance around Yes No policies that are relevant to our management of oversight of climate-related climate-related risks and energy, waste, water and climate change risks and opportunities. opportunities. (environmental) issues through Social and Ethics Committee, Risk and Compliance Committee and Audit Committee10.

• Group Executive Committee has a Climate and Company describes Environment Steering Committee at Group level management’s role in assessing Yes No that are responsible for implementing the and managing climate-related recommendations of the Task Force on Climate risks and opportunities. Related Disclosures (TCFD) and who drive climate- related transformation within the business11.

8 The dashboard was informed by the four pillars of the Task Force on Climate-related Financial Disclosures (TCFD) Framework. A full copy of the publication is available here: Recommendations of the Task Force on Climate-related Financial Disclosures Final Report. The dashboard covers additional issues considered of relevance in South Africa. 9 Discovery Limited, Supplementary ESG information booklet 2020, page 2 10 Discovery Limited, Supplementary ESG information booklet 2020, page 2 11 Discovery Limited, Supplementary ESG information booklet 2020, page 2 4 | P a g e

Company describes long-term and short-term incentives for company management to drive • ESG performance linked to some Executive performance on Yes No Director scorecards, but not all12. general/climate-related indicators Strategy Company describes the climate- • Discovery has identified both climate-related related risks and opportunities Yes No physical and transitional risks impact the short-, Disclose the actual and company has identified over the medium- and long-term horizon for various parts potential impacts of climate- short, medium, and long term. of their business13. related risks and Company describes the impact • The materiality of these impacts is considered in opportunities on the of climate-related risks and the Group strategy, which considers climate- company’s businesses, opportunities on the company’s Yes No related opportunities across our various sectors, strategy, and financial businesses, strategy, and products and geographies14. planning where such financial planning. information is material. Impact of climate-related risks and opportunities on the • Material impact is considered, across various

company’s businesses, strategy, Yes No sectors, products and geographies, however there and financial planning is is no disclosure on this by region currently15. disclosed by region Company describes the • Discovery indicates that it does have a Scenario Yes No resilience of the company’s and Stress Testing Framework in place, however, strategy, taking into there is currently no disclosure on climate-related

12 Discovery Limited, Integrated Annual Report 2020, page 107 13 Discovery Limited, Supplementary ESG information booklet 2020, page 3 14 Discovery Limited, Supplementary ESG information booklet 2020, page 3 15 Discovery Limited, Supplementary ESG information booklet 2020, page 3 5 | P a g e

consideration different climate- scenarios as these scenarios will continue to be related scenarios, including a refined over time, as the data and science are 2°C or lower scenario. better understood16. Risk Management Company describes its • A high-level overview is provided on how

processes for identifying and Yes No Discovery identifies and assesses climate-related 17 Disclose how the assessing climate-related risks. risks . organization identifies, • Discovery has an Enterprise Risk Management assesses, and manages framework which details the appropriate climate-related risks. Company describes its principles and processes to manage risk within the

processes for managing climate- Yes No business. Environmental, social and governance related risks. risks are included in the Group’s universe of risks – this ensures climate-related matters are considered within the risk management process18. • Business risk profiles are reported to each business executive committee and the Group. Company describes how Furthermore, business risks and scenario results processes for identifying, are included in Discovery’s Own Risk and assessing, and managing Yes No Solvency Assessment (ORSA) reporting which climate-related risks are includes business risks and scenario results and integrated into the company’s provides a holistic view of the risk exposures in overall risk management. the Group and how these risks affect capital, solvency and the business strategy19.

16 Discovery Limited, Supplementary ESG information booklet 2020, page 4 17 Discovery Limited, Supplementary ESG information booklet 2020, page 4 18 Discovery Limited, Supplementary ESG information booklet 2020, page 3 19 Discovery Limited, Supplementary ESG information booklet 2020, page 4 6 | P a g e

• Detailed description of process set out in Discovery’s CDP Climate Change 2020 response20. Metrics and Targets Company discloses the metrics used to assess climate-related • Metrics are disclosed in Discovery’s CDP Climate

Disclose the metrics and risks and opportunities in line Yes No Change 2020 response21. targets used to assess and with its strategy and risk • More infomration is provided in the table below. manage relevant climate- management process. related risks and • Only scope 1, 2 and 3 emissions related to opportunities where such Company discloses Scope 1, operations disclosed in Discovery’s CDP Climate information is material. Scope 2, and, if appropriate, Change 2020 response22. Yes No Scope 3 greenhouse gas (GHG) • No additional emissions data disclosed related to emissions, and the related risks. Discovery’s climate risk at a portfolio level or their financed emissions. Company describes the targets used to manage climate-related • Targets are being investigated and will be Yes No risks and opportunities and published in due course23. performance against targets. Targets and performance are • Targets are being investigated and will be Yes No disclosed by geographic location published in due course24.

Social & Environmental Evidence that the company • No evidence of Discovery considering a just Yes No Integration have integrated addressing transition.

20 Discovery Limited, CDP Climate Response 2020, question C2.2 21 Discovery Limited ,CDP Climate Response 2020, question C6.10 22 Discovery Limited, CDP Climate Response 2020, question C6 23 Discovery Limited, Supplementary ESG information booklet 2020, page 3 24 Discovery Limited, Supplementary ESG information booklet 2020, page 3 7 | P a g e

social and environmental risk factors

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Reporting CDP Carbon CDP Carbon CDP Carbon CDP Water CDP Water CDP Water UNPRI TCFD Other Framework/Principles Report Report – Report – Report Report – Report – Base year of Most recent Base year of Most recent reporting score (2020) reporting score (2020) score score

Signatories/Adopted Submitted. Submitted. Not Not ✓ ✘ ✓ ✘ ✘ Score: C Score: B submitted submitted

Notes Not formal United signatories, Nations but starting 2010 Global process of Compact aligning with (UNGC) TCFD.

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Region/country Emissions Figures (Tonnes Future targets Target date Notes CO₂)25 Scope 1 2 376 Total Scope 2 33 451 Scope 3 19 230 Scope 1 1 853

Scope 2 32 712 Discovery is planning to introduce a South Africa Discovery is in the process of Scope 3 19 230 target in the next two years27. setting Scope 1 and Scope 2 Not disclosed Scope 1 523 Discovery has their emissions verified by targets26. Scope 2 515 an independent party28. Scope 3 Not disclosed Scope 1 0 United States Scope 2 225

Scope 3 Not disclosed

25 Discovery Limited, Independent Verification Statement of GHG Emission for 2020 FYE 26 Discovery Limited CDP Climate Response 2020, question C2.3a 27 Discovery Limited CDP Climate Response 2020, question C4.1c 28 Discovery Limited, Independent Verification Statement of GHG Emission for 2020 FYE 10 | P a g e