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MAR/apr 2014 • ISSUE 11

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9 772225 597009 Targeting differentiation for competitive advantage

<IR> framework

released

Using Science to

Change the way we Build

2014 Budget

and the Green Economy

R29,00 - (VAT INCL) ISSN 2225-5979 14011

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stakeholder engagement water for development Sustainable CSI initiatives as a Building Block to Reputation


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Renewable Energy Training The South African Renewable Energy Training Centre (SARETEC) at CPUT will be a national facility for the training of technicians for South Africa’s growing renewable energy sector.

EDITORIAL MANAGING EDITOR: Lloyd Macfarlane LMacfarlane@alive2green.com EDITORIAL AND PRODUCTION: Wadoeda Adams MARKETING AND EDUCATION: Cara-Dee Carlstein ADMIN MANAGER: Suraya Manuel LAYOUT AND DESIGN: Nicole Kenny DIRECTORS: Lloyd Macfarlane Gordon Brown Andrew Fehrsen DIVISIONAL SALES MANAGER: Annie Pieters SALES EXECUTIVES: Lupumlo Nika Elna Willemse PRINTING: FA Printers PUBLISHER: Alive2green PHYSICAL ADDRESS: Cape Media House 28 Main Road Ronderbosch 7700 Cape Towm TEL: 021 447 4733 FAX: 086 694 7443 Websites: www.greenbusinessjournal.co.za www.alive2green.com DISTRIBUTION AND COPY SALES ENQUIRIES: distribution@alive2green.com INTERNATIONAL FRANCHISE ENQUIRIES: info@alive2green.com ADVERTISING ENQUIRIES: sales@alive2green.com EDITORIAL PROPOSALS: lloyd@gsacampbell.com Company Registration Number: 2006/206388/23 Vat Number: 4130252432 ISSN No.: 2225-5974 Issue 7 Published: March 2014

MAR/ApR 2014

ISSN 2225-5974 07

9 772225 597009

CPUT, in collaboration with foreign investors and the South African government are embarking on one of the most exciting initiatives to hit our shores for some time to come. Focused on training wind turbine and photovoltaic technicians to begin with, this new centre will open the door to a variety of careers in renewable energy. Until then, we invite the industry to make use of our interim training programmes, which are German accredited to international standards.

To find out more about this new initiative, please contact: Dieter Sommer | sommerd@cput.ac.za Howard Fawkes | fawkesh@cput.ac.za

www.cput.ac.za

international integrated reporting council reporting framework releaSed

uSing Science to

change the way we Build Stakeholder engagement water for development

2014 Budget

and the green economy R29, - (VAT INCL)

SuStainaBle cSi initiativeS aS a Building Block to reputation

ISSN 2225-5979 14011

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Supply chain sustainability – a good thing to start working on soon The most significant recent development in corporate sustainability is arguably the increased emphasis being placed on sustainability in the supply chain. Procurement policies that encourage and even enforce certain key sustainability principles can meaningfully increase the organisation’s ability to influence stakeholders. A broad based implementation of such polices could precipitate the largest growth rates of corporate sustainability that we have seen yet. L’Oreal: “We actively seek out and favour business partners who share our values and our ethical commitments.” So how will you be guided as you contemplate your own new procurement policies? The recently launched Global Reporting Intuitive (GRI) G4 Guidelines provide much more emphasis on sustainability in the supply chain and the United Nations Global Compact (UNGC) has published a practical guide to supply chain sustainability – these are two great places to start. Nokia: “Our aim is to ensure that environmental, ethical and health and safety issues, as well as labour practices, are not separate add-on features, but are embedded within all our sourcing processes, including supplier selection and relationship development.” Looking for a little more guidance? Find out where your organisation sits on The Three Tiers of Sustainability ranking system developed by the Future Laboratory, or browse through some of the resources available on the www. sedexglobal.com website (Sedex is a not-for-profit organisation dedicated to responsibility in the supply chain). Don’t wait too long before you engage with customers and suppliers about sustainability in your value chain. The movement has started.

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All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written permission of the Publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions. The Publisher does not endorse any claims made in the publication by or on behalf of any organisations or products. Please address any concerns in this regard to the Editor. The Green Business Journal is printed on Hi-Q Titan plus paper, manufactured by Evergreen Hansol a leading afforestation member acknowledged by FOA. Hi-Q has Chain of Custody certification, is totally chlorine free, and is PEFC, ISO 14001, ISO 9001 accredited.

Sincerely Lloyd Macfarlane

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Alex Hetherington Alex is co-founder of Carbon Calculated, a company that measures and tracks resources impacting the sustainability credentials of organisations.

Gordon Brown Gordon is Chief Executive of Alive2green and publisher of multiple sustainability focused publications and convenor of Sustainability Week

Lani Botha Lani is a freelance writer specialising in technical and industry journalism. Lani’s industry experience spans agriculture, SME development, ICT, energy, retail, mining, manufacturing, academic, NGO and government spheres.

Lauren Hirst Sustainability communications consultant Lauren Hirst, has been working in the marketing and communications industry for 20 years. A UCT graduate, her most recent role was establishing and heading up Ogilvyearth.

Lloyd Macfarlane Lloyd is Chief Executive and founder of GSA Campbell Sustainability Consulting and a Non-Executive Director at Alive2green. Lloyd is also a corporate ambassador for the 49M campaign

Reana Rossouw Reana is the Managing Director of Next Generation, a consultancy specialising in Development: Sustainable Development and Reporting; Socio Economic Development; Enterprise Development; Business Development; Leadership Development.

Aramex is in South Africa

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News and updates

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2014 budget & the green economy

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Carbon Column

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<IR> Framework released The IIRC releases its integrated reporting f ramework four years since the initiation of the idea in 2009

Stakeholder engagement Identify the voices, listen before they become screams

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Targeting Differentiation for Competitive Advantage

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Sustainable CSI initiatives as a building block to reputation

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Using science to change the way we build

Winet Fourie A strategic corporate reputation consultancy which has developed a research model, the Repudometer, which measures the organisation as a whole to determine its reputation.

Water for development Part 3 on wise water use by local farmers

Stephanie von der Heyde Stephanie is UCT graduate and an independent features writer who has recently been focusing on sustainability articles and reporting with GSA Campbell Consulting.

Sustainability through the keyhole

The corporate sustainability tool that is a platform for employee and reputation development, behaviour change and competitive advantage. • Build capacity in the organisation by training key employees about the principles and practices of corporate sustainability. • Leverage differentiation in order to achieve competitive advantage. • Develop and manage reputation by building and marketing an Online Sustainability Profile. • Use the Framework process to develop a Global Reporting Initiative (GRI) Sustainability Report which can be widely used in the company’s value chain. The Good Business Framework combines an online and personal interface in order to target measurable outcomes: • Empowering key decision makers in your organisation • Identifying risks and opportunities • Marketing and media exposure www.goodbusinessframework.com/about info@gsacampbell.com


TJDR 55876

NEWS & UPDATES DESK HEALTH With the average adult spending almost 70 % of their day sitting at a desk, the health risks associated with a working lifestyle are numerous. There are, however, a few small changes one can make to lighten the stress on our bodies. When it comes to eye stain, doctors recommend that we follow the 20-20-20 rule: For every 20 minutes spent looking at your computer screen, spend 20 seconds looking away at something 20 ft (7m) in the distance. For back ache, doctors recommend improving your posture while sitting, as well as trying to stand up and walk around as often as you can. Take a walk over your lunch break or stand up and take a stroll around the office at regular intervals. Source: BizCommunity

SUSTAINABILITY WEEK This year’s Sustainability Week will take place from 17 to 19 June 2014 at the CSIR International Convention Centre in Pretoria. The event is one of the biggest on the environmental calendar and offers investors, businesses and consumers the opportunity to share, learn and improve their overall environmental and economic performance. This year the event will offer seminars on cutting-edge concepts in Green Building, Sustainable Energy, Sustainable Water, Green Business, Sustainable transport and Mobility, Food Security and Sustainable Tourism. For more info visit : www.sustainabilityweek.co.za Source: Alive2green

SOUTH AFRICAN CARBON TAX POSTPONED South African Minister of Finance Pravin Gordhan has announced that the introduction of Carbon Tax in South Africa, which was due to start on the 1st of January 2015, has been delayed to “allow for further consultation”. The implementation of Carbon Tax has been postponed to 2016, a decision which has Carbon intensive companies, such as Sasol, breathing a sigh of relief. Following consultations, several adjustments to the policy package would be proposed, including reducing energy utility Eskom’s tax liability with a credit for the renewable-energy premium and limiting the potential effect of the tax on electricity prices. Source: Timeslive

MOST PROLIFIC USERS OF RENEWABLE ENERGY The Environmental Protection Agency (EPA) has revealed its first 2014 raking of the most prolific users of renewable energy in the US. The list, which is conducted by the EPA’s Green Power Program, is based on the usage of eligible green power products. Cinching the top five spots on the latest list are: Intel, Microsoft, Kohl’s Department Stores, Whole Foods and Wal-Mart. To view the full list visit: http://www.epa.gov/ greenpower/toplists/top100.htm Source: GreenBiz

THE CAPE TOWN FILM FESTIVAL The inaugural Eco film festival will kick off in Cape Town on the 27th of March, showcasing 25 eco-films and premiering 10 never-seen-before local productions. Whether you’re interested in fracking, genetic engineering, industrial hemp production or the fate of the world’s bees, the festival will cover all the major environmental topics. The Festival will run from the 27th until the 31st of March and will be held at the Labia Theatre on Orange Street. Source: The Cape Town Eco

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VODACOM SAVES R6.5 MILLION ON ENERGY BILLS Vodacom, the local subsidiary of Vodafone, has saved itself R6.5 million by installing a PV system which provides around 75% of the Cape Town office’s peak power requirements. This impressive project is just one of many steps which the company is taking to reduce its environmental impact overall. In a recent report, the mobile communications company said that it is exploring more ways of reducing its environmental footprint and has set itself the goal of cutting carbon emissions by 50% by 2020 and a carbon reduction target of 5% per base per year.

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Source: Green Business Guide

19 YEAR OLD PRODIGY TO SAVE OUR OCEANS Millions of tonnes of waste and countless pollutants are being dumped into our seas each year, resulting staggering marine animal death statistics. Engineers and environmentalists have been working on this problem for decades, but have struggled to develop a solution which is both financially viable yet still able to yield significant results. That was, until 19 year old Boyan Slant stepped in. Slant designed an initiative which he has called The Ocean Array Plan, a clean-up strategy which includes the design of a floating device which would remove roughly 7,250,000 tonnes of plastic from the ocean in just 5 years. The project is still to undergo feasibility testing, but it has been estimated that through selling the plastic that is retrieved by Slant’s floating device, the project would not only be effective, it could actually be profitable.

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column

Sustainability Through The Keyhole GBJ examines local stories of innovation and leadership. Swartland

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nvironmental changes and factors effecting sustainability are altering the business landscape in South Africa, and indeed, the world. Businesses, particularly in the building sector, increasingly have to adjust their strategies to incorporate changing legislature and to keep up with environmental consciousness in the consumer market. Swartland, South Africa’s largest manufacturer of wooden window and door frames has had a unique advantage in this regard, as the company has embraced sustainable practices and now appears to be reaping the rewards of being ‘ahead of the curve.’ Strategy As a way to ensure long-lasting environmental responsibility, Swartland adopted the tagline ‘think long term’ and this principle has been closely adhered to over the last three decades of business. The principle has also informed the company strategy which continues to incorporate a growing number of sustainability objectives and targets. Swartland Management is involved in the reporting process and the company is embarking on an executive training programme

in sustainability to ensure that there is sufficient internal capacity to carry out the company’s sustainability objectives. Establishing long-term goals and openly discussing the strategic vision of the company with stakeholders has associated the brand with overarching long-term objectives which have become important in our societies. Resource Sustainability and Efficiency Raw materials are sourced responsibly and Swartland ensures that a chain of custody is enforced in its supply chain. Certifications like FSC (Forest Stewardship Council) are increasingly important - not only for Swartland but for the company’s large customers who are progressively insisting on sustainability in their own supply chains. Swartland employs a timber optimisation process which ensures that absolutely no wood goes to waste. Resource efficiency practices consistently reduce the relative consumption and costs of electricity and water and the company is setting aggressive targets in this regard. A newly installed ‘cold-press’ system is faster and uses co-generated heat from an exhaust to speed

up the drying process – the system significantly reduces overall energy consumption. Product Product performance is equally important to the company and energy efficiency standards for window and door frames are set extremely high. Initiatives to completely replace oil based maintenance products with an eco-friendly water based alternative have also reduced impact in the product lifecycle. By targeting and maintaining these standards, and publishing them in platforms such as the company’s GRI sustainability report, Swartland is differentiating itself strategically, for significant advantage it would seem. Reporting Swartland embarked on a sustainability reporting process in 2012 and is leading its sector in this regard. A Global Reporting Initiative (GRI) Sustainability report is produced annually for distribution to key stakeholders and the report has greatly assisted the company to develop and maintain relationships with significant channel customers.

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2014 Budget and the Green Economy

Gordon Brown

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he 2014 Budget is set forth on the following pretext: “Our plans for the period ahead are focused on the transformation imperatives that will accelerate growth, create work opportunities and build a more equal society”, and while this holds undertones of sustainability planning, language in this regard is not present. As transformation imperatives do not of themselves accelerate growth nor create work opportunities, in South Africa context transformation will result in a more equal society, it may be more accurate to state the duel intention as follows: • Accelerate economic growth to (among other things) reduce unemployment • Advance social equality through BBEEE, social grants, and lower tax for lower earners Increased Government Spending Government plans to continue using increased government spending to achieve accelerated economic growth. This policy is based on the economic theory of John Maynard Keynes, and is embraced in almost all advanced economies. Since it is our primary strategy we should note that critics of Keynes’ increased government spending theory however point out that the consequence of this policy in the long run is that efficient private sector spending is crowded out by

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inefficient government spending. Keynes famously responded to this criticism by saying that in the long run we’re all dead! Efficiency is the key Economists regard government spending to be inefficient, relative to private sector spending. ‘Efficiency’ in this context can be understood as spending the least to obtain the greatest result (quantitatively and qualitatively). So as we head down this road of ever increasing government spending, government should ensure that (a) government spending is as efficient as possible and where possible spending should trigger private sector spending (investment). A superb example of this strategy is the role out of the Renewable Energy Independent Power Producer Procurement Programme, which is funded almost entirely through the private sector. The minister addresses efficiency of spending directly under the heading of ‘Impediments and Cutting waste’, but does not adequately address the issue of corruption, which is a primary factor undermining efficiency in public spending. Corruption Corruption causes a failure in the market by circumventing the fair bidding process where the best/cheapest bid wins. In 2010, audit

firm BDO reported that company fraud in South Africa was “escalating at an alarming rate” and estimated that the “total annual leakage” from fraud, theft and corruption amounted to R100 billion. 1 Unspent budgets Another key factor undermining efficiency is the failure spend – when budgets go unspent the good intensions of spurring economic growth are lost, and in some cases the market may react negatively as an expectation is created and not fulfilled. DA spokesman Tim Harris said that the administration had failed to spend between 18 and 24 percent of its infrastructure budget, translating into some R293 billion, over six years. It is this impediment to efficiency that government hopes to overcome by passing the Infrastructure Development Bill into law recently. Transformation In South Africa government seeks to use its spending power not only to drive economic growth, but also to drive social change through BBEEE. This dilution of objectives compromises efficiency for the simple reason that tenders are not necessarily won by the best/cheapest bidder. This is of course contradictory to the pretext cited by the Minister, but is not a criticism, rather a cautionary that BBEEE is inherently inefficient, and this is simply the price the economy must pay to redress the imbalances of the past.2 The crux question: What will the money be spent on and will this spending advance South African development along a more sustainable trajectory? And what are the opportunities for the green economy? Infrastructure spending is alluded to but not detailed, however a high percentage of these funds will be used to improve the following sustainability objectives: • Transport - efficiencies in the transport sector, principally through creating the opportunity for freight to move from road to rail, reducing the impacts of key industries such as mining, manufacturing, and agriculture • Public transport – growing and improving options for personal mobility will see greater access to amenities for citizens and reduce personal motor car use

• Energy – while further spending on coal, and the inclusion of nuclear and shale gas in the energy mix are not positive environmentally, government has also been very aggressive in rolling out policies and projects to advance energy efficiency and renewable energy • Water – investment in supply side infrastructure can have a high negative impact such as dams, but there are many other investments such water purification of AMD that are very positive • Construction – of government buildings is happening along green building lines, and human settlements are seeking ways to build more sustainably • Municipalities – working closely with departments such as Water, Environment, Energy, Human Settlements, and others to achieve more sustainable cities Education, health and safety spending and social grants, as well as tax cuts for lower earners, are all policies that promote social sustainability Transition to a low carbon economy is mentioned specifically, and the carbon tax postponed for one year, and frankly this is a relief given the inflationary phase the country is in. The Green Economy has been identified as a high growth sector by the Department of Trade and Industry, and is being promoted as area of entrepreneurship and job creation. In conclusion Minister Gordhan’s budget is sound, contains no great surprises, and ticks the boxes, which of course is good, but it also lacks incisiveness. By not vocally committing South Africa to a path of sustainable development (which has been done in the past), and by not using the associated language, an opportunity has been missed to claim sustainability gains, and to capture the hearts and minds using the sound logic and ethical certainty of linking economic policies to the objectives of advancing sustainability in South Africa. The ANC government have aligned their policies at many levels, and should not shy away from claiming the moral high ground in this regard.

1.Media24 article: Corruption - SA Counting The Cost 2.MoneyWeb article: Parliament passes infrastructure bill

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carbon column

Climate change solutions

– it’s in the money, Stupid! ALEX hetherington

C

limate activists need to adopt new and innovative methods of communication if they are to succeed in their goal of reducing global and local carbon emission levels. At last year’s launch in Johannesburg of the South African chapter of the Carbon Disclosure Project (now simply called CDP), there was much bemoaning that yet again direct carbon emissions from South Africa’s JSE Top 100 companies had increased – this time from 133 million tonnes to 135 million tonnes year on year. This increase, the CDP reports, is far from adequate if South Africa is to meet its national carbon reduction targets as part of its international commitment to retain global warming below a 2 degree Celsius threshold that most scientists believe necessary to avoid “dangerous climate change.” Among the gnashing of teeth at the launch, was a vociferous attack on the local financial media for providing disproportionate column centimetres to climate denialists and sceptics. However, the climate community needs to change tack in its efforts to counter both these problems. To do so, it should focus more fervently on the straight economics of carbon reduction. In the South African CDP report there is only one reference to financial savings from carbon reductions, made by the international CEO of CDP, who cites that the US corporate sector could reduce emissions by three per cent each year between 2010 and 2020 and save US$780 billion as a result. There is no reference to potential South African savings. If we are sceptically honest, CEOs are unlikely to change their production methods just to reduce carbon emissions. They might do it, however, to save money and increase profits. Hence, the business case has to become the lead carbon reduction mantra. Reducing carbon to save the planet is simply not strong enough in the profit-seeking capitalist reality in which we live. Fortunately, there is more than enough available local and international evidence to support the viewpoint that carbon savings equate to financial savings. In 2012, Nampak implemented initiatives that saved 2 780 tonnes of carbon at a financial saving of R4,9 million. Most of these projects had a payback of less than one year. Remgro, through its subsidiaries of TSB Sugar, RCL and Wispeco, saved some 10 180 tonnes of carbon while realising R4,6 million in savings, with most projects having a 4-10 year payback period. These are impressive

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figures that will make most CEOs and Financial Directors take note – and should be consistently highlighted by CDP and others. In the United Kingdom, the Energy Savings Trust, claim that GBP200 million can be saved if just ten per cent of London’s van fleet switched to electrical modes of generation, while Scotland’s Caledonian Brewery reported saving 105 tonnes of carbon and R175 000 a year through simple power correction. The opportunities abound, and in these tough economic times who wouldn’t seriously consider this message. In South Africa, where electricity consumption accounts for anything from 60-80 per cent of most companies total carbon emissions, business should take Eskom to task (and by default through the parastatal monopoly nature of Eskom, government too) to provide cleaner and more efficient energy. The recent commissioning of renewable energy generation is to be applauded, but the continued reliance on dirty cheap coal needs to be challenged. If, as the CDP indicates, business is not reducing its emissions, then South Africa simply needs cleaner energy if it is to meet its stated carbon reduction targets. Going back to the economics, companies should also reduce their electricity consumption simply to achieve cost savings. With the cost of electricity to increase eight per cent per year up to 2018, it is becoming an expensive commodity. In cutting electricity consumption, carbon emissions will also be reduced. Internationally, there is some light at the end of the tunnel. In a recent paper, Trends in Global CO2 Emissions: 2013 Report, by the Netherlands Environmental Assessment Agency and the European Commission’s Joint Research Centre, global carbon emissions rose by 1,4 per cent in 2012, compared with an average 2,9 per cent since 2000. However, importantly, global GDP increased 3,5 per cent. This suggests a decoupling starting to take place between economic growth and carbon emissions, and is largely attributed to increased energy efficiency – the kind of behaviour that the CDP calls for in South Africa. To join this international trend, South Africa needs to cut its carbon emissions. To do so, the financial case must be made and communicated loudly. At that point decision leaders will listen and climate sceptics will naturally be muted.

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2014/02/19 8:50 PM


Water for Development Part III on Wise H2O Use by Local Farmers

Lani Botha

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ver the 20th century, demand for water has multiplied by 7. By 2020, water consumption is expected to increase by 40% to satisfy the world population’s needs – and 17% more water will be needed just to grow crops. Agricultural water is as prone to waste as is dismally prevalent in public infrastructure, consumer misuse and among industry in South Africa to this day.

PRELUDE: POLITICAL WATER WOES A four year Water Research Commission (WRC) study found pathogenic (bacterial and viral) infestation – especially downstream of informal settlements – on the surfaces of irrigated fresh produce on-farm. Luckily, adequate post-harvest cleaning procedures ensures that our food is clean once on the shop shelf. Local and provincial authorities are now seeing that proper sanitation provision and wastewater treatment are integral to the health of South Africa’s water sources. As demonstrated by the recent ‘poo wars’ in Cape Town, poor sanitation in informal settlements is a ticking time bomb and the key to start a transformation engine is political will: at local, provincial and national levels of government.

The South African government just set aside R2 billion to fix water and sanitation infrastructure in 200 townships across South Africa – no doubt to curb service delivery protests ahead of the May 7 elections. This year, Water and Environmental Affairs Minister, Edna Molewa, also blamed history for our ageing water infrastructure serving only a small number of people. On the same day, the Democratic Alliance (DA) hedged the real number of South Africans with access to clean drinking water at 64%), saying water infrastructures in the North West, Free State and Mpumalanga provinces are in crisis. INTRODUCTION To conclude my triad of reflections on wise water use in agriculture, I focus on smallholder irrigation schemes, drawn from the findings of a thought-provoking report commissioned by the Water Research Commission (WRC) in 2011. It underscored the need to pay urgent attention to rural agriculture and even home gardens, by supporting the best smallholder irrigation schemes to ensure that independent small-scale farming remains a legacy of our agricultural knowledge commons for posterity.

OVERVIEW Smallholder irrigation schemes have thus far had little impact on the wellbeing of rural communities, despite the substantial public investment to construct, maintain and revitalise them. Amid water scarcity, these schemes have nonetheless contributed positively to rural livelihoods and poverty alleviation in some of our most disadvantaged communities. Considerable scope exists to increase their contribution to local economic development. STATE OF THE SMALLHOLDER NATION A Water Research Commission (WRC) study of 302 smallholder irrigation schemes in South Africa over a 20-year period revealed that irrigated agriculture dominated over dry-land crop production, to negate low and erratic rainfall and high evaporation demand, with rivers as the main water source. The term ‘smallholder irrigation scheme’ refers to schemes involving land held by Black farmers. Through most of the 20th century, irrigated holdings of white farmers ranged between 8 and 20 ha. This is 10 times larger than the 1.5 ha plots allocated to Black farmers.

Smallholder irrigation WRC

Methods also vary broadly, with Warmbaths peppadew farmer Neels Rademan drawing water directly from Sand River in the Nylstroom region. Rademan has registered water rights to irrigate 5 hectares of crop, and uses drip irrigation– the preferred method of small commercial farmers and irrigation suppliers in the area. A 1992 WRC study of smallholder irrigation in South Africa found approximately 150 000 Black irrigators in the country farming on about 100 000 ha and comprising: • independent irrigation farmers with private access to water; • holders of allotments on irrigated community gardens; • plot-holders on smallholder irrigation schemes (about 50% of all); and • backyard or home-garden irrigators, who watered crops on parts of their residential sites. • By 2010, only 206 schemes (covering just under 50 000 ha - compared to the close-on 1.7m ha of registered irrigation land) were operational: • 81% of gravity-fed canal schemes, • 70% of pumped surface irrigation schemes, • 65% of overhead irrigation schemes, and • 56% of micro-irrigation schemes. The total population of just over 34 000 plot-holders on smallholder irrigation

schemes is also small compared to the 1.3 million Black homesteads with access to land for cultivation. Human (capacity) and social (institutional) resource problems were at the heart of the below-expected performance of all smallholder irrigation schemes. These schemes are located mostly in our poverty-stricken former homelands, where farming contributes to food security, income and employment creation, directly and downstream. SEEKING THE GOLDEN MEAN These smallholder irrigation schemes require substantial public investment (R2 billion in 2002). Both total homestead income and the proportion of income derived from irrigated farming tend to increase with plot size. Yet in 2010, there were only 2 925 plots larger than 2 ha, producing specific crops and supported by access to production loans, delivery of inputs, specialised production advice and reliable markets. Successes include the production of sugar cane on schemes in Mpumalanga, barley in Taung and raisin grapes in Eksteenkuil in the Northern Cape. THE ROLE OF COMMERCIAL AGRICULTURE Shored up by state support during much of the 20th century, commercial farming

resulted in a national food-production and -distribution system that reliably provides relatively cheap food of good quality almost anywhere in the country. This currently makes it commercially unsustainable for smallholders to compete. The disappointing performance of smallholder irrigation schemes needs to be understood in this context, even though much can be done to improve their performance. Problem-solving in irrigated agriculture requires a holistic approach that considers and integrates the full range of factors that apply to particular circumstances. Smallholder horticulture has the potential to be profitable in South Africa if small-scale producers get the same access to supply services, processing facilities and product markets as large-scale farmers. But experience shows that increasingly sophisticated value chains link large-scale producers to the 4 large supermarket chains in South Africa, which retailed about 60% of our food in 2008. Fewer farming entities are also responsible for increased production areas in the commercial sector. State-driven technically intensive smallholder schemes have typically consolidated plots into a single landholding entity ‘leased’ with infrastructure to a commercial partner farming independently. This disenfranchising model has sadly been

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Don’t take our word for it: the proof of the pudding is in the eating Smallholder irrigation WRC

imposed on several scheme communities during the RECHARGE phase of the Limpopo RESIS programme and in ‘revitalisation’ of dry-land farming in KwaZulu-Natal and the Eastern Cape. At Tshiombo Block 1A (part of the RESIS Programme), the plots of 86 individual plot-holders, irrigated using the gravity-fed short-furrow method, were consolidated in a single 100 ha unit under floppy irrigation. Farmed completely by a White strategic partner in return for substantial dividends, the profitable annual potato-maize rotation was, however, not sustainable because of growing pests and diseases. The strategic partner, Limpopo Department of Agriculture and plot-holders entered into a 3-year agreement. If and when management of Tshiombo Block 1A is transferred back to plot-holders, tenure will become a fiasco as the original land layout has been obliterated by the removal of the concrete furrows that acted as plot boundaries. LAND TENURE: BLESSING OR CURSE? Legally, tenure on irrigation schemes is ambiguous, because much of the legislation that applied when plots were first allocated, has since been revoked. Yet plot-holders are insecure about the right to rent land in or out, because the practice was historically forbidden. The development of schemebased land-administration systems is desperately needed to remove uncertainties around land rights and lease contracts. By example, at Ncora in the Eastern Cape, owners gave up their traditional tenure rights over large dry-land plots in return for smaller-sized irrigation plots and benefits, such as subsidised land preparation, farm

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Tshiombo Scheme Cape

Small-holder farming in the north-eastern Eastern Cape

inputs and an annual dividend. These benefits were dependent on profits generated by the estate farm using the bulk of the land. When the estate farm could no longer pay for the benefits, plot-holders demanded their old land rights back, leading to the virtual collapse of Ncora. SHORT ARM OF THE LAW Water user associations (WUAs), ratified by the National Water Act 36 of 1998, should develop smallholder irrigation schemes, but have yet had little impact. Of 45 smallholder irrigation schemes sampled in Limpopo Province, 28 claimed to be part of a WUA but only one participated in its activities. Payment for water on these 28 schemes, linked to WUA membership, is done by the Department of Agriculture on behalf of farmers, who cannot pay for the water themselves. EXTEND INNOVATION TO SMALLHOLDERS In different parts of the country, the production of irrigated maize to sell as green cobs is a lucrative smallholder enterprise. At Dzindi in Limpopo Province, the monetary value of a green cob is about 5 times higher than a cob harvested for grain. Yet farmers at Dzindi sell at most 25% of their maize as green cobs. For street traders (their main clients), most cobs produced by farmers are too small. Researcher-managed on-farm experiments showed that the proportion of cobs that were large enough for street traders could be raised to 75% by planting suitable cultivars, optimising planting density and applying fertilisers at recommended rates. Farmers who adopted this approach sold 40% more of their cobs to street traders.

PARTING SHOT: CANALS WORK Canal schemes (typically older than 40 years) contribute about 25% to the total smallholder irrigation scheme command area and better ensure the livelihoods of plot-holders. Low operating costs allow for farming approaches that are not driven primarily by the cash-economy. Canal schemes accommodate the full spectrum of farming objectives and permit farmers to choose between the use of local resources (manure, animal draught) and external resources (fertiliser and mechanisation) in the functioning of their farming system. They are more flexible and stable than other schemes and likely to support more individuals, albeit on smaller plots.

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ortex Knits (Pty) Ltd / Dyeco S.A. (Pty) Ltd is a textile manufacturing plant located in Hammarsdale, Kwa-Zulu Natal (KZN), trading since 1992. Increasing pressure since 2010 by eThekwini Municipality on CTFL factories in the area to set up effluent treatment facilities on site, led the manufacturer to approach the NCPC-SA through its Resource Efficiency and Cleaner Production Programme. Following an assessment in 2012 – including the compilation of a detailed water, steam, electrical and solid waste balance sheet – areas of intervention were identified that would potentially result in more than R2.5 million per annum in savings and a 20% reduction in electrical energy use. Following the recommendations of the assessment report, Mortex established its own monitoring system to track consumption and savings, formalised its energy and resource policies, and duly appointed a dedicated resource to oversee resource efficiency and cleaner production on site. The NCPC-SA then connected Mortex

with the potential funding partners, namely the dti and IDC, and acted as management image catalyst to drive home the role of RECP in saving the business real money. The project was embraced with such gusto that the R3.3 million investment in steam and condensate line insulation, fixing compressed air leakages, condensate water recovery, and other interventions, resulted in a R2.7 million annual saving for the company – beating its potential payback period of 6 - 18 months. These savings allows Mortex to maintain costs for competitive advantage, via mainly energy efficiency, by enacting just 70% of the NCPC-SA’s recommendations. Muhammud Din Mahamad, Marketing & Accounts Executive at Mortex, says: “We are happy that the successes of the RECP programme have convinced our Board of Directors to offer their full support – so that we can even go beyond this to improve our energy savings strategies, which are being monitored on a monthly basis, even further.”

CONCLUSION As the largest group of natural resource managers on Earth, agri-food producers depend on and generate a variety of ecosystem services, and their actions can enhance or degrade ecosystems. This is why it is vital to find and share best-practice water use solutions to ensure large-scale, community and home-garden food production remains sustainable

SOURCE:

VAN AVERBEKE, W; DENISON, J and MNKENI, PNS. Smallholder irrigation schemes in South Africa: a review of knowledge generated by the Water Research Commission. Water SA [online]. 2011, vol.37, n.5 [cited 2014-02-13], pp. 797-808 . Available from: <http://www.scielo.rg.za/ scielo.php?script=sci_arttext&pid=S1816-79 502011000500021&lg=en&nrm=iso>. ISSN 1816-7950

@NCPC_SA


International Integrated Reporting Council reporting framework released

The IIRC releases its integrated reporting framework, four years since the initiation of the concept in 2009. steph von der heyde

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he International Integrated Reporting Council (IIRC) has launched the much anticipated Integrated Reporting Framework, which has been in trail and development stages since early 2011. The framework, officially released in December 2013, was met with enthusiasm by various financial figureheads and has received overwhelmingly positive responses from corporate contributors around the world. The International Integrated Reporting Council is a global coalition of regulators, investors, companies, standard setters, accounting professionals and NGOs who together form the global authority on integrated and corporate reporting. The organisation was formed with the purpose of embedding integrated reporting into mainstream business practice and encouraging the process in corporate industries worldwide. While the concept if integrated reporting is not a new one, the newly developed Framework aims to improve the current system and increase the number of organisations who use it worldwide. This, according to the IIRC official statement, is important as it provides organisations with a platform to articulate their strategy, thereby driving performance internally, generating capital and informing investment decisions. In addition, the reporting process is widely acknowledged to influence behaviour and is beneficial to all of the organisation’s stakeholders, including employees, customers, suppliers, business partners, local communities, legislators, regulators and policy-makers. As a result of the growing importance of the integrated reporting process in corporate industry, the IIRC identified a need to inform the IR process by promoting a more cohesive and efficient approach

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to corporate reporting. The framework was created for this purpose and has been described as an important step toward a more financially stable economy and sustainable world. The IIRC has explained that the development of the new framework is aimed at establishing Guiding Principles and Content Elements that govern the overall content of an integrated report, as well as explaining the fundamental concepts that underpin them. In short, the introduction of the new Framework will outline the material that is to be included in corporate reports and determine how an organisation is assessed on its ability to create value. According to the IIRC official statement, the IR Framework will take a principles-based approach to doing this, while trying to find a balance between flexibility and allowing a sufficient degree of comparability. The Framework will also not prescribe specific key performance indicators, measurement methods, or the disclosure of individual matters, however it will include a small number of requirements that are to be applied before an integrated report can be said to be in accordance with the Framework. The process of creating the framework has been a long and thorough one, carried out with the participation of hundreds of companies from all over the globe. The first discussion paper on the framework in was released in 2011, followed by a prototype in 2012 and then a consulting draft in 2013. The final Framework, released in December last year, has been received positively by most corporate industries and the IIRC website boasts an impressive list of large companies and influential individuals offering their plaudits. The introduction of the framework is expected to strengthen and initiate the growth of corporate reporting, while broadcasting developments

in financial, governance, management commentary and sustainability reporting. It is also anticipated to allow the enabling of informed decision-making that leads to efficient capital allocation and the creation and preservation of value. Overall, the IIRC states that its long-term goal is to “create a world in which integrated thinking is embedded within mainstream business practice, facilitated by Integrated Reporting as the corporate reporting norm”. Most agree that the release of this framework is certainly a step in the right direction. The IIRC Framework is not the first in this field, however, and there has been much speculation and discussion around how it will co-exist with other more established frameworks, such as the GRI. The Global Reporting initiative (GRI) Reporting Guidelines are successfully being incorporated in sustainability and integrated reports around the world and the newly launched G4 version of the GRI Guidelines are in various ways similar in what they seek to achieve. There has however been some discussion amongst the reporting fraternity about certain incompatibilities in the application of the two Frameworks, particularly for example around the definition of materiality – a key principle of corporate sustainability reporting. The IIRC frames materiality in terms of what will influence assessments made by the primary intended users of integrated reports. In contrast, the GRI frames materiality as issues that will have a significant financial impact on the organization and issues that will influence the assessments of other stakeholders. This has been a cause for concern for some, who worry that internal inconsistencies may prevent the successful incorporation (and working together) of both Frameworks and their respective organisations.

Whilst these potential problems have not been specifically addressed by the organisations, they have both made it clear that they believe it is possible to co-exist, and insist that it does not have to be a case of ‘either/or’. The primary reason given for the potential for co-habitation is that the target audiences differ, with the IIRC placing most of its focus on investors of financial capital, while GRI takes a broader view and concentrates on organisations in general. The threat of competition between these two organisations is also minimal, despite the initial suggestions that the development of the <IR> Framework would cause integrated reporting rivalry. GRI is in fact a co-founder of the IIRC and has been fully involved in the process of developing the framework from the beginning. The organisation has also been publically supportive of the IIRC in its success and has indicated its intentions to work alongside IIRC, stating that the future of corporate reporting lies in integration. Additionally, the organisations have signed a memorandum of understanding (MoU) which seeks to formalise the principles for ongoing cooperation and put to bed any rumours of bad blood. The IIRC has been outspoken about the fact that its framework is not seeking to create new indicators, but rather to encourage organisations to make use of existing reporting standards, such as the GRI guidelines. The organisations’ intent to work side by side is a viewed as extremely positive for the future of integrated reporting worldwide, which will benefit from the additional input and extended reach. Both the GRI and IIRC are said to be excited about the new opportunities which will arise as a result of the introduction of the new framework and share the vision of an improved standards of Integrated Reporting.

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stakeholder engagement Identify the voices, listen before they become screams

Reana Rossouw

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nnual reports have a very distinct audience – shareholders. There is no confusion as to who the readers are, and therefore, no confusion to what the content should cover. Sustainability reports, on the other hand, are an entirely different ball game. Organisations frequently ask themselves: why do we report? If we report because we have to, the issue of writing specific content, appropriate to specific readers is irrelevant. Fortunately, the majority of organisations have moved past the compliance hurdle, and instead realise that a sustainability report is a critical window into the organisation’s future. If done well, a sustainability report should highlight the organisation’s ability to create wealth for society as a whole, and not only for financial stakeholders. The sustainability report is the vote of confidence that society needs to assure itself that a favourite brand or service is ‘good’ and ‘ethical’, respectful of the environment and considerate to people. This leads to the second question: who is ‘society’? To whom do we actually report? Often, stakeholders do not read or give feedback on sustainability reports, because organisations focus on unrelated issues and do not consider the interests and expectations of their specific stakeholder groups. In other words, they do not fully capitalise on the link between materiality and stakeholder inclusiveness, and therefore they fail to link stakeholder interests and expectations to the actual content in their reports. Furthermore, they do not link stakeholders’ expectations to internal priorities and strategies. In addition, more often than not, organisations simply ignore external voices – as listening to them may force a change in focus, products or services, and require innovation and participative management. It is extremely challenging to identify and address stakeholder expectations through thorough engagement. Translating these expectations into a user-friendly report, can be even more so. It is therefore understandable that some organisations limit their engagement to the bare minimum to prevent opening the proverbial can of worms. Identify the voices Organisations have been on the reporting journey for more than twenty years and apply extensive financial resources and human capital to develop sustainability reports. Regardless, there is still little consensus on who the primary audience is, or whether there is, or should be a primary audience for that matter – similar to the primary audience of an annual report. Thus, the crucial question remains unanswered: who reads sustainability reports, and for what purpose? Of course, reporting organisations do not have the luxury of ignoring this question altogether and they have to make some decision about whom they write for. Without this clarity it is impossible to determine the content and the depth of a sustainability report and

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which of the issues that organisations identify through stakeholder engagement, should be reflected in the report. As it stands today, many organisations tend to prioritise different audiences. In a sense, the diversity of audiences is a very natural consequence of reporting on sustainability issues. Sustainability is an inclusive concept that addresses the impacts of business on a very wide range of stakeholders. While it may be tempting to seek a priority audience because of the clarity it brings, it does not reflect the diversified nature of sustainability. Sustainability issues are just too diverse, and the social and environmental impact of an organisation just too wide. The absence of a single audience is therefore not only natural, it is preferable. Other organisations favour a sustainability report that addresses social, economic and environmental issues for a very wide integrated audience. In an attempt to still report, but without the level of detail that will result in business upheaval, these organisations opt for the “dear stakeholder” route. Because of the lack of clarity of whom organisations should report for, they tend to report as inclusive as possible for all audiences with the aim that some of the content will be meaningful and add value. This approach may lack conviction – organisations have to pin down the audiences for their sustainability reports. Not doing so, deters them from the benefits of reporting, and nullifies the long (often painful) process of engagement. Whichever approach organisations follow – diversified but targeted or broad and integrated – they all lament the fact that few people, in any cluster of readers, look closely at their reports. This once again begs the question of whether a single, interested priority audience for sustainability reports will emerge – highly unlikely! Listen with intent: It does however, not mean that organisations can simply avoid a priority audience. Organisations need to adopt tailored approaches to reach and engage material stakeholders more directly. This means that extensive engagement needs to happen at a personal, on-theground level. Organisations need to precede their sustainability reports with detailed prioritisation of their stakeholders, and these stakeholders’ specific expectations on an on-going basis. At the same time, they should embrace diversity in their reporting models and reflect content for a broader, general audience. This way they will reach multiple audiences that reflect the broad range of parties interested in the overall sustainability agenda, while addressing priority issues at a more direct level. Should any issue escalate in importance due to national or global interest or suddenly hit the mainstream media, organisations should immediately prioritise that issue and deepen their direct stakeholder

engagement. If need be, they should respond with a customised, issue-specific mini report aimed at the resulting priority audience. This highlights the fact that priority audiences are relative and subjective and will change according to micro- and macro organisational influencers. Organisations therefore need to be sufficiently sensitive and responsive to avoid being perceived as deaf to the pleas of society. One mechanism that companies have used to remain sensitive and responsive to micro- and macro stakeholder issues is a global level stakeholder panel that advises on the content of the report. Shifting key stakeholders from report audience to report co-creator is likely to bring mutual benefit. Engaging for long-term prosperity and success: Despite the acclaimed value of stakeholder engagement, it is still often dubbed the stepchild of the sustainability reporting process. Organisations approach it shallowly or, simply overlook it. This is inevitably an approach that opens the door to numerous business risks.

Sustainability reports should reflect meaningful interaction and engagement with stakeholders across all spectrums of the business. A solid, authentic sustainability report is always backed up by a solid, authentic stakeholder engagement process. Successful stakeholder engagement is the “behind the scenes” process that unlocks a wealth of business intelligence. Response to this intelligence reflects in the business strategy, and ultimately leads to better performance. Organisations that turn their heads, and keep their ears shut to the external voices of their stakeholders, especially when these escalate to priority audiences, will only hear when screams threaten their very existence. Unfortunately, it will then be too late.

Reana Rossouw Managing Director Next Generation Consultants

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Targeting Differentiation for Competitive Advantage

Lloyd Macfarlane

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ichael Porter, one of the world’s most respected management theorists, argued that there are only two ways for firms to compete: by charging a lower price, or by differentiating their products or services from those of their rivals. The modern value proposition increasingly incorporates factors that are not just related to the product or the service (such as price, quality or relevance) but to factors associated with the organisation itself, such as reputation, transparency, accountability and corporate performance against sustainability targets, for example.

The Value Proposition Customers make purchases based on the value propositions presented by suppliers. A value proposition is quite simply the perceived value the customer will receive for the price paid. A number of factors go into the assessment of value, such as relevance or usefulness, desirability, price or quality. Very often the brand behind the product or service influences our perceptions of quality, and therefore reliability or lifespan – think cars or appliances. Companies spend a lot of time trying to differentiate their offerings under these and other headings, in order to be more attractive to their target markets. Differentiation is a basic economic principal that promotes competitiveness, and one that has been focussed on

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by many of the classic theorists such as Edward Chamberlin (Theory of Monopolistic Competition, 1933) We generally find more examples of differentiation in mature (developed) markets or sectors. Products, services and companies have evolved and value propositions are more similar – there is a far greater need for differentiation, even more so with service providers that have less opportunity for innovation. Take cellular service providers for example - the call costs and network coverage of competing companies can be almost identical. These companies spend millions letting you know how different they are by building a corporate identity that you can relate to. Interestingly, when product and/or service differentiation opportunities dry up then differentiation at the brand or company level becomes important. Differentiation is also more apparent in tough economic times. When margins are tight and procurement budgets have been cut, buyers look more closely at the value proposition and sellers tend to innovate and differentiate more. The world has been on a tough economic treadmill since the collapse of the financial markets in 2008/9 and this has seen the emergence of new ideas and not surprisingly corporate sustainability has enjoyed prominence in this regard. Conversely, in new markets or new sectors (and in good economic times) less differentiation is apparent - there is less of a need

for differentiation when markets and budgets are healthy. However, this is when differentiation can produce even greater rewards as there is generally less innovation taking place. Supply Chain as the new Opportunity for Differentiation The real power of the economy lies in procurement. The quantity and availability of products and services is directly affected by demand and because demand is affected by supply chain/procurement policies, the supply chain can be a most powerful agent of change. The most significant recent step up in corporate sustainability is the increased emphasis being placed on sustainability in the supply chain. Procurement policies that encourage and even enforce certain key sustainability principles can meaningfully affect markets and should be noted by suppliers looking for opportunities to differentiate. Importantly, supply chain policies take a closer look at indicators relating to supplier companies and not simply their products or services. This is placing more emphasis on environmental, social and governance issues in the supply chain and represents an exciting new opportunity for differentiation for those companies that’s are first to move. Supply Chain Sustainability Companies are introducing sustainability into their supply chains not only because it’s the right things to do, or because they are under pressure to do so, but because they see the value of doing so in the context of their medium to long term strategies. The United Nations Global Compact (UNGC) is encouraging corporate leadership in this regard and many businesses use the ten UNGC principles to inform their supply chain policies. Similarly, the recently launched Global Reporting Initiative (GRI) G4 Guidelines contain much emphasis on supply chain sustainability, traceability and chain of custody. Government can use incentives to speed up change and perhaps the best example of this is carbon tax which will be introduced in South Africa in January 2016. Carbon tax will see the need for more measurement and management of carbon across value chains and this will bring about procurement policies that require suppliers to possess a carbon footprint for example. This may further evolve to include an acceptable range of carbon emissions per unit of output or per square metre of operations, for example. Making Sustainability Work in your Value Chain

Understand the principle of materiality Materiality refers to the processes by which companies identify the issues that are the most relevant (or material) to their operations, activities and structures. Companies can have very different materiality profiles and the sustainability strategy should be directed at the most material issues in each instance. This is also important because large customers are likely to understand the supplier’s materiality profile and will incorporate indicators in procurement policy accordingly. Understand the reporting context Companies are increasing the degree to which they report on sustainability in their supply chains. They are reporting on the sustainability impacts of their suppliers and on the influence that they have had in changing the sustainability performance of their suppliers. This means that an opportunity exists for suppliers to: • Target (or report on) internal interventions that will be acknowledged by customers as meaningful for them to report on. • Package sustainability information for large customers and other stakeholders. • Strategically target key customers/prospects using this information. Risk, Reputation and Leadership Large customers are auditing suppliers using various criteria, but generally these audits will seek to establish: • Whether there are any risks in an association, based on how business is conducted. • Whether the supplier has a reputation that could cause any harm. • Whether the supplier’s reputation could add value . • Whether there are any examples of leadership that could be amplified for mutual advantage. Talk about it Finally, don’t ‘bury your talents’. Talk humbly and accurately about your achievements and do this because you may be influencing others to begin their own journeys. Do it also because you will be developing a reputation that in time may provide you with a number of new customers and partners.

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his multifaceted, integrated event, traverses sectors emphasising oppor tunities for investors, policy makers, business people, and consumers to improve environmental and economic per formance be it through achieving ef ficiencies, introducing alternative approaches, and by unlocking value.

17 JUNE

• Green Building Conference • Vision Zero Waste Seminar

18 JUNE

• Green Building Conference • Sustainable Energy Seminar

19 JUNE

• Transpor t and Mobilit y Seminar and Exhibition • Water Resource Seminar and Exhibition • Green Business • Responsible Tourism Dialogue

20 JUNE

• Youth in the Green Economy

21-22 JUNE • Green Home Fair

Featured Speakers

Featuring:

Dr. Elizabeth Farrelly- Sydney, Australia

Elizabeth Farrelly is a Sydney-based columnist and author who trained in architecture and philosophy, practiced in Auckland, London and Bristol, holds a PhD in urbanism from the Universit y of Sydney and is currently Associate Professor (Practice) at the Universit y of NSW Graduate School of Urbanism. As a longtime advocate of conscious urbanism, she was a keynote speaker at the 2011 Ecobuild in London and in 2012 delivered the Margaret Hendr y lecture to the Australian Institute of Landscape Architects on links bet ween feminism, urbanism and eco-consciousness.

Alberto Kalach- Mexico City, Mexico

Alber to Kalach was born in Mexico Cit y, studied architecture at the Universidad Iberoamericana, Mexico Cit y, and completed graduate studies later at Cornell Universit y in Ithaca. In 1981 he founded the firm “Taller de Arquitectura X” with Daniel Álvarez. While he continues to direct TA X, in 2002 his interests also turned to the urban planning problems of his home town, and founded the communit y “México: future cit y” (Spanish: México: ciudad futura). His lake concepts were significant in solving existing water supply problems in Mexico Cit y.

Gaetan Siew- Port Louis, Mauritius

Sustainable CSI initiatives as a Building Block to Reputation

World citizen, Gaetan Siew’s leadership and his vision of a world of sharing allows him to mobilize and inspire world leaders around a creative consensus unleashing the full potential of our resources. Past President of the International Union of Architects UIA, he travelled the world to meet international institutions and governments promoting greater solidarit y. With his in-depth understanding of men, cities and global issues, he continues his mission as CEO of the Global Creative Leadership Initiative focusing on transforming traditional knowledge into new technology.

By Winet Fourie

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ompanies are incorporating corporate social investment (CSI) initiatives in their business models to support social development in communities and also to help build on their reputation. But are these projects sustainable and really helping communities? The King Report on Governance in South Africa says stakeholder perceptions of an organisation and its brand will ultimately affect a company’s reputation. There are different elements that impact an organisation’s overall reputation; a key influencer being the organisation’s sustainability as well as its CSI initiatives. By doing extensive research, organisations can determine what is building or negatively impacting a reputation. One element that needs to be taken into consideration is the social and business impacts of an organisation. In other words, how the organisation is giving back to the community. Organisations try to build on their reputation by incorporating CSI in the company strategy. However, are organisations investing correctly and does it ultimately sustain the community afterwards? Companies are opting for the ‘giving approach’ with most of their CSI activities, for example handing over cheques to fund the work of charities. An important factor to consider is whether these projects are really equipping communities with the necessary tools and skills to make a lasting improvement in their lives. The problem with CSI initiatives arises when there is no

sustainability factor in these strategies, leaving the community worse off as there will be an expectation that others will provide for them, thus fuelling a state of dependency with little hope of providing dignity for those in need. In order to help communities in the long-term, organisations should avoid just handing out cheques as support. Businesses need to invest in projects that will give communities tools and skills so they can provide for themselves, for example projects whereby the community provides a service like cleaning up refuse on the street in exchange for food and clothing. Companies can build on their corporate reputation through careful and sustainable practices. Investing in the right CSI initiative is an important element when it comes to building an organisation’s reputation; it does however need to be managed very carefully and be done for the right reasons. CSI should be an on-going effort and form part of the company brand and not be done just for the sake of marketing. It is important that companies understand their sphere of influence and the responsibility associated with it. ArcelorMittal South Africa and Nampak are fantastic examples of companies doing it right. These two organisations are the shareholders of Collect-a-Can, a southern Africa recycling organisation. Collect-aCan buys used cans back for recycling and through this initiative numerous individuals and households are making a living.

Collect-a-Can encourages the unemployed and in particular unemployed youth, to see the Cash for Cans initiative as an opportunity to earn an income until they can find permanent employment. “We encourage people to collect all types of cans to sell to Collect-a-Can for cash, including beverage, aerosol, food, oil and paint cans,” says Zimasa Velaphi, Public Relations and Marketing Manager of Collecta-Can. “We have seen time and time again the positive impact that this work can have on people’s livelihood.” By collecting used cans and receiving money for it, communities can make a living without being dependent on the giving nature of corporates and individuals. Through this, ArcelorMittal South Africa and Nampak are equipping communities while also building on their reputation and minimising the impact of metal packaging on the environment. Different elements impact an organisation’s overall reputation including Corporate Management, Corporate Dialogue, Corporate Operational Capital, Corporate Marketing and Corporate Performance. There needs to be alignment within the organisation with each of these elements; if there is too much focus on one area, the others will be neglected and then have a negative impact on how the organisation is perceived which in return will lead to a positive or negative perception. Winet Fourie is an Account Coordinator with Reputation Matters.

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Using Science to Change the way we Build Lauren Hirst

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hilst the fracking debate rages on and the threat of load-shedding looms yet again, some interesting and provoking research into the energy efficiency of buildings, has emerged from a joint performance research project conducted by chemical company BASF and The Council for Scientific and Industrial Research (CSIR). BASF, a leading chemical company, has been investing in, amongst other things, energy efficient technology and have developed some new energy efficient products for the building industry. In 2011 they asked Llewellyn van Wyk, Principal Researcher at CSIR Built Environment Unit (Building Science & Technology),to design and conduct experimental research to establish just how energy efficient their latest insulation material, called Neopor®, actually is.

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Llewellyn van Wyk, an architect and founder (and past chair) of the Cape Town Heritage Trust, is passionate about sustainable building and how efficient building and design can contribute to energy efficiency. Van Wyk and his team built a standard low-income demo house on the CSIR Innovation site in Pretoria and monitored it from December 2011 to April 2013. Temperature readings were taken every 30 minutes inside the house and external readings for rain, temperature and humidity were taken from a mini localised weather station on the CSIR site. During the research period, the outside air temperature varied across a 23°C range but the indoor temperature only varied by 13°C over the same period, with the average low temperature in Winter being 9°C more indoors than the external temperature. A highly insulated building does require

cooling, particularly in Summer, but this can be achieved by openings the doors and windows to allow natural ventilation. These results are extremely positive and show that a properly insulated house will require minimal additional heating during Winter to maintain a comfortable indoor temperature, which will have a positive impact on a household’s budget. Using a conversion rate of 1Gigajoule (Gj) equalling 277.77 kilowatt hours(kWh) and a kWh rate of R1,20, the Demo House will have an annual heating cost of R567. Compare this to the R4,082 annual heating cost for a standard low-income house (also constructed on the CSIR Innovation Site) and the energy usage and financial implications are clear. BASF and van Wyk are excited by the results as they have a number of benefits for the country as a whole. By building housing that is properly insulated, energy usage, and particularly electricity demand, will be reduced and this will have a positive impact by reducing power usage on a national scale. Individual households will benefit by the average 7-times reduced annual energy consumption, which means that they will have additional income to spend on other household items, such as school shoes, food and clothing. In addition, lower income groups especially, will not need to use paraffin stoves as much and this will reduce illnesses caused by excessive smoke inhalation. Trips to the hospital for burns should also be reduced as the paraffin stove usage is reduced. The annual savings on energy also mean that the payback period for the typical citizen is becoming much more reasonable and it thus makes more financial sense to add insulation to one’s house.

The research study also showed the placement of insulation and effective ventilation is critical in terms of maximizing these efficiencies as shown in figure 1. The Demo house was built at approximately a 30% premium to the current RDP housing allowance, but this was a once off-cost, so no economies of scale were realised. The house did include insulation under the floor slab and double-glazed doors and windows, the cost of which is reducing all the time. Van Wyk would omit the under floor insulation and double-glazed doors (as no additional insulation benefit arose from the underfloor insulation and for practicality purposes respectively), for future tests and with the learnings gained, he estimates that RDP houses could be built with proper insulation for a reduced premium of approximately 15%, but that could be reduced even further as larger economies of scale are achieved. At the same time as the research was being conducted, BASF and CSIR were also using theEcotectThermal Model and comparing the actual readings against the simulations provided by the model. The EcotectModel simulates thermal performance of buildings. The team found that the EcotectModel accurately predicted the measured indoor temperature trends and that the peaks and troughs for the measured indoor temperature occurred at the same time as the ones predicted by the model. There was a slight difference in temperature readings but this was not significant, so the team concluded that the EcotectModel can be used to simulate performance for other parts of the country and make predictions - something that will support architects and specifiers when they are determining their insulation requirements and placement.

Optimal thermal performance can be achieved through • Installing a cool (white) roof • Placing 100mm insulation on top of the ceiling (and not directly under the roof sheet) • Ensurinwg that the insulation is tightly fit ted to avoid thermal bridging • Ensuring ef fective ventilation to the rooms for the Summer period • Ventilating the at tic • Omit ting under ground floor slab insulation

Figure 1

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We create chemistry that makes compost love plastic. Another possible project would be to conduct tests around Phase Change materials e.g. ‘intelligent’ plaster that assists in managing heat transfer and which could play a positive role in contributing to managing indoor temperatures. Whilst it’s been known for many years that a well-insulated house will conserve heat and energy better than a poorly-insulated house, this study and its results, and any planned future studies, will be immensely useful to planners, specifiers, builders and architects to help in managing a house’s energy demand and so contribute towards a more energy-efficient South Africa.

A08444

So where to next? Whilst the results are encouraging and could have positive benefits for South Africa, Van Wyk and the BASF team are in discussions about possible new projects. One project would be to re-run the project, with various amendments based on their findings, which would include the correct application of cool paint, roof insulation on top of the ceiling (and not directly under the roof sheet), attic space ventilation and no insulation under the floor slab. They’d also like to research how optimal ventilation, and thus a cooling effect, could be achieved without mechanical aids. Van Wyk would also like to conduct a similar research study in humid climates, such as KZN, to test additional interventions that could reduce the indoor heating effect.

1. http://www.unitjuggler.com/convert-energy-from-Gj-to-kWh.html

Most plastics don’t biodegrade, but ecovio® plastics from BASF disappear completely when composted in a controlled environment. Using compostable bags for collection of organic waste makes disposal more hygienic and convenient. Rather than ending up in landfills, the waste is turned into valuable compost. When the plasticbag you use today can mean a cleaner future for the environment, it’s because at BASF, we create chemistry. The demo house constructed on the CSIR Innovation Site in Pretoria.

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www.wecreatechemistry.com


Green Business Journal Issue 11 - Alive2green  

www.alive2green.com

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