By Telly Chauke, Coega’s Chief Sustainability Officer 

Coega’s Chief Sustainability Officer, Ms. Telly Chauke writes, theoretically, that the country appears to be on the right path in terms of contributing its fair share to the global goals of the Paris Agreement, to which the country acceded in 2015. South Africa’s ‘fair share’ contribution to emissions reductions and climate resilience is articulated in its Nationally Determined Contribution (NDC), deposited to the United Nations Framework Convention on Climate Change (UNFCCC). In practice though, progress in achieving ambitious emissions reduction goals is tempered by the reality of a country that remains reliant on coal-fired power stations for most of its electricity needs, that is amid an energy supply crisis, and increasingly experiences the adverse impacts of climate change manifested by destructive storm events and protracted droughts. 

In fact, to paint a helicopter picture of the progress made by South Africa in terms of its Paris Agreement commitments, it has been, to date, over seven years since the country agreed to the Paris Agreement. In those seven years, the country has seen the submission of first NDC in 2016, and the second reviewed submission to the UNFCCC in 2021. Also, during in this period (2018 – 2021) South Africa, under the stewardship of the National Department of Environment, Forestry and Fisheries (DFFE), developed the Climate Change Bill, defined Sectoral Emissions Targets, and crafted the National Adaptation Strategy. These climate response policy measures, developed alongside numerous other instruments developed by several state departments across various sectors (i.e., transport, water, energy, disaster), have culminated in the establishment of the Presidential Climate Commission (PCC) and the adoption of the Just Energy Transition Framework and Investment Plan. 

The Paris Agreement is a global agreement adopted by world leaders at the UN Climate Change Conference (COP21) in Paris on 12 December 2015. The Agreement is a legally binding international treaty, which came into effect on 4 November 2016 and includes commitments from UN member states to reduce their emissions and work together to adapt to the impacts of climate change. Core elements of the Agreement include the pledge by developing states to mobilise funding up to $100 Billion USD per annum and to support the transfer of technology and capacity to developing and least developed states. Whilst ambitious and much needed, implementation of these commitments has progressed at a slow pace, with major economies such as the United States and China not fulfilling their pledges, whilst the European block has progressively scaled back on funding commitments. 

For South Africa, the depositing of a nationally determined contribution has been a catalyst for accelerated policy review and development. A deposit of a nationally determined contribution is an obligation by a country which seeks to respond to the challenge of climate change. This is a two-way approach, one is in an approach on climate change mitigation, which is focused on net zero and carbon neutrality, including emissions reductions activities or decarbonisation efforts. The other approach is centred around climate change adaptation, which takes a deep dive into how society copes with the impacts of climate change. Of the greatest importance though, particularly for developing, least developed and island states – all of which have significant development challenges and are inherently more exposed and vulnerable to climate change impacts – is the issue of climate resilience. Climate resilience is commonly understood as the capacity of affected countries, populations, and their economies to adapt to climate impacts and yet remain on upward development trajectories, whilst ensuring minimal negative impacts to economic, social, and environmental systems. 

In South Africa, for example, extreme floods in some parts of KwaZulu-Natal, Gauteng, and the Eastern Cape, as well as severe droughts in the Eastern Cape and central regions of the Northwest and Free State provinces are increasing in magnitude. These effects, amongst other knock-on and secondary impacts of climate change, have had dire impacts on agricultural productivity and the security and functioning of both social and economic infrastructure. The net effect is that of prolonged economic downturn, inflation, and residual disaster recovery costs. South Africa’s climate adaptation response, as outlined in the NDC and National Adaption Strategy, aims to improve the country’s level of preparedness to deal with extreme climate-related events as well as slow-onset climatic hazards and their net socio-economic effects. Absorbing the shocks of climate change, i.e., extreme weather, and becoming resilient to their damaging effects requires not only a suite of policy instruments; but a systemic approach that includes funding for both disaster mitigation and relief, knowledge-based decision- making, and capital resources for extension of basic services; but also, the imbedding of ‘climate proofing’ technologies and systems in the design, development, operation, and maintenance of infrastructure. 

As South Africa prepares the economy and society to absorb and cope with the impact of climate change; it is also critical that it be prepared for the unintended maladaptation of a rapid transition to a net zero carbon state. One of the primary commitments that South Africa made to the Paris Agreement – to develop a set of commitments and targets around those action areas has been realised through a number of policies and strategies. The second commitment, that of securing means of implementation to fund the activities that the country would action either directly through its own fiscal arrangements or indirectly through resources that are gained and accessed through the global community to strengthen their commitments over time, has increasingly begun to gain traction. The Agreement provides a pathway for developed nations to assist developing nations in their climate mitigation and adaptation efforts while creating a framework for the transparent monitoring and reporting of countries’ climate goals. However, current trends indicate that the portion of development assistance from the global West has contracted, whilst proportionately the portion of support rendered through debt instruments has increased. Whilst there is an urgent need for resourcing South Africa’s transition and climate adaptation agenda, its is increasingly concerning that the forms that funding aid have adopted may expose the country to a debt crisis and threat to its sovereignty. 

Imperatives for environmental sustainability and climate response rest on both states and companies alike.  As most consumer trends shift towards millennial and Gen-Z dominance, companies are increasingly held accountable for sustainability initiatives. More than one consumer survey in different market segments indicates that climate-conscious and pro-planet consumers, investors, and stakeholders are increasingly influential in supporting businesses that actively support sustainability. Similarly, corporate environments have become more open to the influence of product consumers in shaping product and service offerings; with investments in Environment, Social and Governance (ESG) practices increasingly influencing investment choices of financiers and funding institutions. 

Cognisant of the sustainability-linked market and corporate landscapes shifts,  in November 2022, Coega took a significant leap towards entrenching sustainability and its commitment to contributing to the national and climate change response change agenda by adopting its first Sustainability Framework for the organisation. This framework was adopted by the Corporation to help guide its projects, investments, and operations. The Framework is a policy statement of its commitments to sustainability, which will be measured against ESG outcomes.

In this Framework, Coega commits to being a good corporate citizen and responsible investor, aims to bring along its investors on the corporate sustainability journey by supporting investors to make equal commitments to sustainability practices and disclosures. Further, the framework commits Coega to driving a just energy transition, combatting climate change and supporting climate resilience within its own operations, those of its tenants and stakeholders, such as local communities. Another aspect of the framework is to build a knowledge base that assists Coega to infuse its decision-making and investment processes with climate science, and to support greater flows of funding to investments in low-carbon technologies.

The domestication of the Paris Agreement to a country level is implemented at a sub-national level by several actors. As a key actor in the development arena, Coega has already taken early measure to contribute to emissions reductions. In so doing, Coega has reduced the volumes of waste generated in its Special Economic Zone (SEZ) and has taken significant measures to reduce the amount of energy consumed throughout its portfolio of buildings and facilities in the SEZ.  Coega has observed an increase in water consumption over the past two years, attributable predominantly to a growing investor portfolio as well as increased demand for water in observance of COVID-19 hygiene protocols. Overall, lessons drawn from Coega’s steps towards achieving sustainability and climate resilience indicate that efforts to encourage good environmental practices are vital. As such, Coega continues to invest in awareness raising initiatives aimed at promoting energy and water efficiency, encourage limiting the use of unnecessary packaging, and promoting recycling. 

Through Coega’s sustainability programmes, the Corporation aims to influence its partners, stakeholders, and investors to commit to dematerialisation and decarbonisation goals, and to join Coega in gradually transitioning to a low-carbon and low residual environmental impact form of industrialisation.

This year, Coega intends to develop a co-disposal facility that will manage hazardous and general waste, in addition to offering alternative ways to treat waste. Part of the waste management approach includes ascertaining the feasibility of offering these services to the broader [Nelson Mandela Bay] area. 

Additionally,  Coega is working towards the financial closure of its plan to install 4.5 MW of solar photovoltaic systems on SEZ rooftops: starting with five buildings with an ensuing expansion of the project to a further 20 buildings over the next few years. The primary aim of this solar rooftop project is to improve security of electricity supply and drive Coega’s contribution to the country's broader just energy transition. Coega is also assessing the potential of gas-to-power power generation, utilising gas as a transition fuel to address current generation capacity constraints. In promoting the SEZ as a preferred investment location and gateway to African markets, securing the supply of utilities such as energy and water is essential; and prioritised at Coega through investments in water reuse systems to improve the security of water supply for tenants and own use.

Coega’s plan is in support of the Government’s Paris Agreement obligations, which were adopted in 2015 and enforced in 2016 to reduce global warming to 1.5°C by 2030.

Coega’s Sustainability Framework makes high level policy commitments to going green and reducing our carbon footprint, making sure that in its operations, the Corporation contributes to the country’s emissions reduction trajectory. Furthermore, these commitments also yield positive results in Coega’s function as an SEZ operator and a trusted infrastructure implementing agent of choice. Ultimately, Coega aims to invest in projects that have the lowest possible carbon footprint and do no environmental and societal harm. This means the development of infrastructure that is resilient to the impacts of climate change and promotes the just transition to a climate resilient and low emission economy.