It is business, not CSI

Good news is always pleasant, particularly for those concerned with the long-term environmental questions of our modern age. The National Business Initiative (NBI) says South Africa’s major companies are now ranked among global leaders in measuring and reporting on their greenhouse gas emissions.

A significant 74 of the top 100 companies listed on the Johannesburg Stock Exchange (JSE) responded positively to the 2010 Carbon Disclosure Project and have laid down the results of their carbon emissions.

As we move into 2011, the results are warmly welcomed by several environmental groups in the international community alongside local green activists. South Africa is the biggest greenhouse gas emitter in the southern African region. Just recently, the government has conceded that the country even surpasses China and Brazil in this regard.

While the facts may get some concerned environmentalists down and despondent, recent legislative moves by the government have been welcomed by a number of civil society groups; these include motor vehicle laws aimed at reducing carbon emissions. In many respects, a large number of ordinary South Africans, businesses and civil society groups have put green energy on the agenda.

Independent environmental portal, 25degrees.net, argues that according to South Africa’s Environmental Footprint, if everyone in the world impacted the environment in a manner comparable to the average South African, one-and-a-half Earths would be needed to sustain the
global population.

The good news is that South Africa has the potential to become a world leader in the commercialisation of carbon capture and storage (CCS), according to the South African Centre for Carbon Capture and Storage, which launched in 2009.

So, what can be done?

“We know how to cost-effectively extract the wealth of the earth and make it available to the markets,” explained Minister of Minerals and Energy at the time, Buyelwa Sonjica, who was confident that South Africa could be a green world leader. “The South African Centre for Carbon Capture and Storage’s job now is to tap that expertise and apply it to the safe geological storage of carbon dioxide.

“We have other initiatives targeted at conserving energy and reducing our carbon footprint. The CCS project is but one of them.”

She hoped that the collective impact of multiple initiatives currently on the go would make significant inroads into the energy economy.

The Industrial Development Corporation has budgeted R11.7 billion for investment over the next five years in green industries, including R8.3bn for renewable energy generation and bioethanol, R1bn for manufacturing of components related to green industries, R800 million for resource and waste management, and R1.6bn for energy management, as the company’s own reports extensively detail.

In the private sector, FirstRand Bank has invested more than R1bn in its offices in Fairlands, Johannesburg, while PACE Property Group managing director David Green believes the move was part of a South African trend toward environmentally conscious commercial developments.

They have been joined by companies such as Nedbank, Woolworths and BHP Billiton, which have received accolades for similar initiatives targeted at improving sustainability measures.

Conventional wisdom suggests that sustainability and corporate social responsibility programmes can improve an organisation’s image, morale and recruitment efforts, not to mention make a positive environmental impact, according to a recent report by the Financial Post.

While many executives remain sceptical that green initiatives can deliver tangible business benefits and are the best use of scare capital and management attention, a recent study by consultancy firm, AT Kearney, suggests otherwise: Even during the immediate post-Wall Street collapse context of 2008, “sustainability-focused firms outperformed in almost every sector”, it noted.

One major challenge for South Africa remains in the transport sector. Energy-efficient means such as public road and rail transport are relatively neglected, as reflected by the preference given to privately operated mass transport in the form of minibus taxis.

As South Africa’s middle class rises, so does the use of private vehicles.

Increasingly, free enterprise solutions to the environmental issue have emerged from private business innovators using the convention of carbon emission reduction – not as a sole matter of corporate social investment or sustainability, but as an integral part of the functions of the way core business is undertaken in the South African market.

Added to that, Transport Minister Sbu Ndebele is actively working with the Cabinet for the implementation of high-speed rail – a prospect that has several states knocking on South Africa’s doors in an attempt to be part of what will become a national project if successful. High-speed rail continues to receive acclaim as a sustainable transport solution.

Though the country is not yet there, the first green-fuel mother station came into operation in December 2009, and is sized to refuel 100 buses as well as 100 vehicles a day with compressed natural gas.

“We aim to set up other stations, in and around Gauteng, so that the general public can start filling up,” explained Charles Jordão, sales and marketing manager at CNG Technologies, which is behind the innovation.

“In the long term, we would like to have a national rollout plan whereby not only piped gas – which is supplied from Mozambique – will be the source of natural gas, but other sources will be used as well, such as coal-bed natural gas.

“The mother station means that CNG will now be more accessible to everyone, and not only the select few on the pipeline network,” he added.

In South Africa, energy use in the transport sector accounts for about 50% of the country’s total energy usage, with about 25% attributed to the transport sector (Digest of South African Energy Statistics 2005). The facts have meant that Mazda has already gained coverage for the launch of its fuel-efficient vehicle due this year.

But for those looking at the long-term intergenerational context, the potential to combine environmental performance with human development is seemingly beyond doubt. “By 2050, we could get all the energy we need from renewable sources,” according to the World Wildlife Foundation, which hosted a meeting via video link at locations in Cape Town and Johannesburg earlier this year.

The organisation’s local representative Richard Worthington says that while it will take trillions of dollars and a massive shift in consumer, corporate and political mindsets, the world is able to acquire all its energy needs from wind, water, solar and geothermal sources within four decades.

He congratulated Nedbank for taking the lead as Africa’s first carbon-neutral bank, after the firm took a decision close on three decades ago to go green.

Mike Brown, the bank’s chief executive officer, explained: “We didn’t achieve it merely by going out and buying up carbon credits, but by a genuine and substantial reduction in our carbon footprint.”

Yet, as entrepreneurship and new innovation are desperately sought from a developmental perspective, what can entrepreneurs do?

“Focus on the triple bottom line,” says Worthington. It is no use simply focusing your attention on where you get short-term profit.

“If you have an enterprising idea, think how it plays out socially, economically and ecologically. Return on investment is not merely about monetary profits; it is about how you build people and – if you are an entrepreneur – how you build people who want to stay within that business.

“How you interact on the social sphere is crucial. Think about consumption patterns, and meet real needs,” he adds.

Worthington’s last word is a plea as much as a word of advice: “I urge entrepreneurs not to create demands that are devastating to the environment.”

The Heartland Institute, based in the United States, argues that entrepreneurial solutions to sectors such as wildlife conservation, aquatic habitat development and environmentally friendly housing are beneficial and have the capacity to innovate in a way better than government regulatory demands.

In their book, Enviro-Capitalists: Doing Good While Doing Well, economists Terry L. Anderson and Donald R. Leal argue that private solutions can and should be an important part of the effort to manage and conserve our natural resources.

It is a welcome message for a country urgently demanding the latent innovation of our entrepreneurial energies that have the capacity to develop solutions to environmental concerns.

Garreth Bloor