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Integrating sustainable methods into business practicesWhile it seemed the world was still hopefully preparing for Copenhagen, South Africa’s National Parliament kicked off public hearings into climate change in November, where a variety of stakeholders from government, non-governmental organisations, the private sector and academia gathered to discuss South Africa’s role in one of the most talked about global issues.
And while much debate continues following what many activists called a “failed summit”, many of our own civil society and business leaders increasingly are demonstrating both a determination and innovative response to the task of going green.
The Parliamentary Monitoring Group (PMG) notes that “people of South Africa possess a huge amount of talent, ideas and goodwill”, in its report detailing a summation of the country’s recent public hearings on climate change. The conclusion notes sternly that such potential needs to be acted upon.
Building partnerships between Parliament and stakeholders emerged as one of the core objectives during local talks. A range of civil society and business groupings have addressed the South African government directly on a variety of matters related to its own particular recommendations as to how South Africa can go green, by integrating sustainability into crucial developmental needs. These included the Renewable Energy Centre and South African Climate Change Network, to name but two.
Deloitte’s Paul Devine stated that the international consulting giant would lend its support to help ensure South Africa attracted international investment that met sustainable development needs.
He noted that by using the Clean Development Mechanism (CDM) of the Kyoto Protocol, a country could “earn carbon credits” by implementing projects that reduced carbon emissions.
Deloitte was firmly in favour of a regulatory framework for South Africa, which would enable it to register any such project that reduced carbon emissions, according to the PMG.
Devine added that once this was in place, “a significant portion of the US$105 billion traded in this year alone would be available to South African business”.
He further explained that with the right legislative framework in place, countries in Europe, for example, would be willing to invest in local projects with the funds they would generate. “The regulatory framework would have to comply with a number of objectives.”
Besides this, there was work in progress on a ‘carbon tax’ – a system whereby tax incentives were offered for reduction and higher payments extracted for
high emissions.
While proposed frameworks and incentive structures at legislative level still are being debated, South Africa’s innovators are already designing what increasingly are been referred to as “market solutions to environmental challenges”.
Masimo-a-badimo Magerman is a local businessperson who is taking on business-based solutions to the issue of carbon emissions through his investment practice as co-founder of Mergence Africa.
The company abstains votes against any given company’s financials when the latter fails to disclose its carbon emissions.
As a signatory of the Carbon Disclosure Project (CDP), the company requires those in which it invests to comply with specific standards of environmental sustainability.
Mergence tracks the carbon emissions of the country’s top 100 companies and evaluates each according to changes in their carbon efficiency, usually with reference to how many tonnes of carbon are used to produce R1 000 of revenue.
Green business is getting bigger. At present, large firms are setting aside positions on their boards for expertise in sustainability, whereas previously green matters were filed under a social responsiveness portfolio.
According to a news report by Bloomberg.com, some companies are struggling to find the right combination of experience and expertise to fill these posts. Fortunately, South Africa’s own innovators are not acting in isolation from the larger economic players holding global financial clout.
At present, our JSE is one of the first stock exchanges worldwide to become a signatory to the United Nations Principles of Responsible Investment (UNPRI), which will guide investors in taking environmental, social and corporate governance issues into account when investing.
“We believe that stock exchanges have a role to play in stimulating debate between listed entities and investors about these issues,” explained deputy chief executive officer, Nicky Newton-King.
“Signing the UNPRI further demonstrates our commitment. It also highlights our role as a pioneer in the sustainability field globally, particularly among stock exchanges.”
So while local firms innovate and global business awakes to integrating sustainability into the core of its operations, is there a particular framework that government policy can create which will best facilitate in innovations in green business practice and compliance with basic standards in environmental sustainability?
Experience abroad has demonstrated private sector innovation in environmental protection through tying together private sector and environmental interests, maintaining on one hand the efficiency of private sector enterprise, while at the same time using it to advance environmental protection.
The Property and Environment Research Center in the United States, by way of example, applies economic thinking to the environmental problem, arguing that such an approach best incorporates growth while meeting environmental needs.
Yet, despite a range of economic and political measures that have produced various positive effects, the South African Human Rights Commission sought to remind the country’s leaders that climate change remains “a human rights issue”.
Project 90x2030 recently launched its inaugural annual WILLIS Seminar in conjunction with the centres at the University of Cape Town and Cambridge University in the United Kingdom. At the launch, speaker Peter Willis echoed the words of a prominent US activist when considering the challenges ahead: “If you want the future, live in it now.”
With business, civil society and academic increasingly focused on climate change, we are perhaps reminded that while the environment is a worldwide concern at present, it is perhaps important to track the innovators in the SMME and corporate sectors that are going green. They provide a model and reminder that one does not have to wait for others before taking action to go green.
Garreth Bloor
