/ 28 November 2013

Local companies doing little to lower carbon emissions

Local Companies Doing Little To Lower Carbon Emissions
South Africa is still heading in the wrong direction. We are one of the world’s most carbon-intensive economies and the biggest polluter in Africa.

The top 100 companies on the Johannesburg Stock Exchange in this year's Carbon Disclosure Project were lauded for having the world's second-highest disclosure rate. Seventy-nine companies responded to questionnaires about their greenhouse gas emissions. But the report also found that their total emissions had gone up in 2013.

This is despite many having taken part in the last six years of the project with voluntary targets in place to reduce their energy intensity and emissions.

The global project sends questionnaires to the top companies on each stock exchange, so leaves out the public sector. At first it was a small project, but has grown rapidly with the increasing awareness of climate change and its impacts on the way business will be done in the future.

Paul Simpson, head of the global project, said this awareness had grown with recent natural disasters. This had resulted in a "seismic shift in corporate awareness of the need to asses physical risk from climate change". Companies were now worried about building resilience into their operations to avoid the potential fallout of climate change, he said.

Research by the project in the United States showed that a 3% reduction per year of emissions by each company would lead to R7.8-billion in savings in things like energy and water.

High response rate
Joanne Yawitch, head of the National Business Initiative, which runs the project locally, said South Africa had the second-highest response rate in the world. But while companies were good at disclosing their emissions, there had only been a slight dip in the country's total emissions this year. This was mostly down to efficiency in the minerals and energy sector, while the rest had actually increased their emissions.

"We are not doing enough to meet the reductions required by science. It must be said that business can do more," she said. The targets that companies had set to reduce their own emissions also had variable ambitions and were timeless. Their work needed to be accelerated, she said.

Only 52 out of the 79 companies who responded to the questionnaire had their emissions reduction targets in place. But, 78 were dealing with the impact of climate change at a senior or board level.

The best companies on the list, ranked by things like their plans to reduce emissions and transparency, were GoldFields and Nedbank. Both got 100% on the report's index. Eight companies qualified for the Carbon Performance Leadership Index.

But this had not stemmed emissions from the companies. In 2013 there was an increase in the total reported Scope 1 emissions (direct greenhouse gas emissions) from 132.9-million metric tonnes to 134.6-million metric tonnes. Sasol contributed the most to this increase, with its emissions increasing by 1.4-million tonnes to 59.9-million tonnes.

Eskom excluded
Eskom is not included in the list because it is a parastatal. Its annual emissions were 228-million metric tonnes, nearly 400 times more than Sasol and 2 000 times more than the next highest emitter. Along with Eskom, the 79 companies account for 60% of South Africa's 559-million metric tonnes of greenhouse gases emitted each year.  

Scope 2 emissions for the disclosing companies (emissions from using energy) decreased by 1.6-million metric tonnes to 85-million tonnes. Most of this change was achieved in the energy and materials sector with its 4-million tonne reduction. All the other sectors increased their emissions.

The largest polluters on the list were Sasol (59.9-million tonnes), ArcelorMittal (11.3-million tonnes), Pretoria Portland Cement (4.4-million tonnes), BHP Blliton (2.9-million tonnes), and Sappi (2.6-million tonnes).

The increase in emissions by most companies is at odds with South Africa's commitment at the 2009 climate change conference in Copenhagen to lower its emissions. It said greenhouse gases would have dropped by 42% below business as usual levels by 2025. That is in 12 years. 

The report said this target was hard to achieve because companies were constantly struggling to balance the needs of reducing emissions with those of driving economic growth. "The drive to reduce emissions for companies is often, albeit not always, at odds with growth strategies," it said. 

Temperature increase
Professor Guy Midgley and Petra DeAbreu, researchers working with the department of environmental affairs on long-term mitigation scenarios, said in the report that there would be at least a 3°C increase in temperatures in Southern Africa by 2050. By the end of the century this could be more than 5°C. 

Some of this change was already happening, with the increases in local temperatures in the last fifty years being at double the rate of the global rate. With slow progress at global climate change negotiations, it was "virtually certain that we face a period of changing climate over the next few decades". 

This meant that the risks posed by climate change would be an "ever-present backdrop" to any future development in the region. For the most vulnerable this would mean they would have a constant struggle with water and food security, and a vast array of other socioeconomic problems, they said.