Jun 03, 2010
SA companies seek certainty on climate change policy – E&YBack
Copenhagen|Ernst|Sustainability Services|Clean Technology|Energy|Energy Sector|Product|Products|Services|Environmental|Jayne Mammatt|Loshni Naidoo|Mammat
© Reuse this
In a report, ‘Action amid uncertainty - the South African business response to climate change', E&Y said that all survey participants stated that national policies were crucial to guiding and shaping the company's climate change strategy and policy.
The South African Department of Environmental Affairs has stated that it would release the country's draft climate change policy by July 2010, after which a White Paper would be produced by the end of the year, with the ambition of getting the White Paper ratified by Cabinet in early 2011, to make it legally binding.
There was also uncertainty regarding climate change in the international arena, with no legally binding agreement having been reached at the global negotiations in Copenhagen in December 2009.
E&Y Climate Change and Sustainability Services associate director Jayne Mammatt said that regulation and policy were required to "focus the mind", and could also assist when trying to justify an investment in clean technology or climate change strategy to the board of a company.
E&Y also recommended that business engage with government in order to understand future goals and strategy of the country, as well as engaging with other businesses to leverage cost-saving initiatives in the energy sector particularly.
Despite recent challenging economic conditions and regulatory uncertainty, the E&Y report found that global executives said that the climate change agenda would significantly affect business performance and strategy over the next few years.
The survey found that 80% of the South African companies surveyed planned on increasing spending on climate change initiatives between 2010 and 2012.
"Although corporate leaders are aware of the risks and potential opportunities that climate change may have on their organisations, only 10% are likely to spend more than 5% of revenue on climate change initiatives, indicating that there is still some uncertainty on how to mitigate climate change related risks," said Mammat.
Energy efficiency was still the key driver for many organisational activities including expenditure, as all organisations selected energy costs as the motivating factor for driving climate change activities, while 90% stated that future investment would be in energy-efficient initiatives.
SUPPLY CHAIN CONCERNS
Greening the supply chain, as well as product innovation, or redesign, were highlighted as critical areas within organisations that still needed to be effectively addressed.
"There appears to be very limited engagement with the supply chain on climate change issues, yet 80% of respondents identify the supply chain and procurement areas as key for the organisation's climate change initiatives to succeed," noted Mammatt.
She added that the lack of focus in these areas could minimise the impact of climate change initiatives, as well as see potential revenue generation opportunities arising from operational excellence or product innovation, slipping away.
In the survey, companies noted that sources of supply for cost-effective environmental products were few, or unknown.
Another challenge that was highlighted, was that supply-chain buy-in was not a simple process, particularly when considering the potential extent of the supply chain, and because the lack of control makes implementation difficult.
E&Y Climate Change and Sustainability Services manager Loshni Naidoo emphasised that effective engagement with supply-chain stakeholders would ensure results.
The survey highlighted a number of other findings and challenges and made certain recommendations on how to overcome these challenges in the South African context.
The report was informed by the responses from ten South African companies, which were extracted from an independent, third- party survey of 300 global corporate executives from 16 countries, representing companies with revenues of more than $1-billion in yearly revenue.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...