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
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.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
While Ekurhuleni-based transformer manufacturer Reliable Transformers currently designs, manufactures and tests its products according to the SANS 780 specifications for distribution transformers and other applicable transformer specifications, it is working towards...
Global endpoint security solutions company Kaspersky Lab has introduced new measures to prevent cyber criminals from accessing sensitive data, alongside its malware-signature and heuristic device analysis detection methods. Threats to mobile devices have increased...
To ensure uptake and a positive impact, Wireless Fidelity (Wi-Fi) networks in cities must be provided at schools, community centres and commercial centres to enable citizens and government to access information that will improve access to and delivery of services....
Eco-estate Monaghan Farm, located near Lanseria airport, north-west of Johannesburg, has taken a new approach to modern living and sustainability with its 517 ha development, dedicated to farm living.
Forklift and lift-truck distributor Goscor Lift Hi-Reach launched the Genie SX-180, the tallest self-propelled super boom in Africa, in Johannesburg last month. “As the official distributor of the well-known Genie range of equipment in Southern Africa, we are pleased...