Issuu

Green Economy

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Note from the Publisher Going green is really about investing in the future.

THOUGHT LEADERSHIP ARTICLES 09 100 SECONDS TO MIDNIGHT 17 C hemical Recycling Technology and its benefits 19 BME invites more partnerships for its safe oil disposal

For too long, Africa has been a spectator on the global stage. But thanks to our thriving agricultural sector and vast natural resources, one could argue that we’ve always been green. The challenge is finding and maintaining a link to skills development, so that the environment’s gain is also our economic gain. At long last, we’ve realised that these don’t need to be at odds. If we take care of our land and water, our crops and soil, our livestock and exports, we’re really ensuring our own future. Above all, a green economy means more jobs, a better standard of living and a chance at creating a level playing field for all South Africans. It’s about time. The Cold Press Media team and I are thrilled to play our small part in this initiative. We look forward to a green future.

21 A circular-economy solution for South Africa 27 T he role of the forestry sector in achieving Sustainable Development Goals 30 A close shave or too close to call? 32 T owards a zero-carbon mining sector 36 C hallenging our capitalist ideals 40 T he role of plastic packaging recycling in the Green Economy 50 T he making of a successful greentech special economic zone (SEZ) in uncertain times 53 A circular economy ensures longterm sustainability 55 A ccelerating the transition towards a lower-carbon future 56 A lternative Fuels Crucial for Sustainable Electricity Generation 59 Why Companies Need a 360° Sustainability Approach 60 Giving the green light to green deals

Jennifer Potter

63 A lasting legacy starts with you(th)

Copyright © ABC of BEE is published by Cold Press Media (Pty) Ltd for Arena Holdings (Pty) Ltd. Copyright: Cold Press Media. All rights reserved. Reproduction in whole or part is prohibited without prior permission of the publisher. Opinions expressed do not necessarily reflect those of the Board of Management of Arena Holdings (Pty) Ltd. All correspondence about ABC of BEE should be directed to Cold Press Media. FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

CONTENTS 4

AECI AST Recycling Atlantis Eco Zone Auto X / Willard BiobiN BMW Bowmans Chep Clariter Fibre Circle Ford Wildlife Forestry SA Futuregrowth GreenCape Growthpoint Heineken Howden Africa Implats Interwaste Kansai Plascon Nedbank Old Mutual Omnia Polyco Safripol Sani-touch Sappi Siemens Solar Africa Toyota SA Motors Ukwazi Yes4Youth Zutari

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Cover, 9-15, OBC 28 48, 49, 50, 51 24 45 IFC 60, 61 21, 22, 23 16, 17 25 41 26, 27 46, 47 43 44 58, 59 56, 57 32, 33 34 6, 7 5 35, 36, 37 18, 19 38, 39, 40 64, IBC 52, 53 29 54, 55 42 8 30, 31 62, 63 20

29569

Making green the heart of our economy. Nedbank’s purpose is to use our ﬁnancial expertise to do good for individuals, families, businesses and society. We believe that championing a green economy will lead to sustainable economic growth and ultimately, make a difference to the well-being of all, now and in the future. To bank with Nedbank call 0860 555 111, visit your nearest branch or go to nedbank.co.za

see money differently Nedbank Ltd Reg No 1951/000009/06. Licensed ﬁ nancial services and registered credit provider (NCRCP16).

A DV ER T ORI A L

REINVENTED, REJUVENATED AND RELAUNCHED

Plascon looks to a green future as it develops innovative environmentally friendly products

lascon has remained one of South Africa’s preferred coatings manufacturer for over 130 years as a result of its ability to continuously reinvent its brand. Furthering its commitment to environmental conservation has been a mandate for the brand, which continues to take meaningful steps to reduce its impact on the environment with leaps and bounds in green technology.

NO MORE APEO CHEMICALS The first of these innovations is the introduction of APEO-free formulations. Plascon TradePro Roof & More is Africa’s first roof paint that is entirely free of harmful APEO chemicals. APEO compounds are

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

GREEN

A DV ER T ORI A L

bioaccumulative compounds that when released into the environment can be toxic to human and wildlife, especially marine life. Conventional roof paints contain APEOs that over time leach into waterways through rain and drainage, eventually contaminating the soil, water tables, rivers and, ultimately, oceans. Dr Kevin Winter from the University of Cape Town’s Future Water Organisation says: “APEOs found in freshwater systems are toxic to aquatic organisms. In large doses, APEOs even have the potential to disrupt human hormonal systems. APEOs are discharged into freshwater systems from stormwater runoff and sewage works. They are found in a variety of products including paints, packaging and cleaning agents.” By choosing to use APEO-free products, you are contributing to a safer, healthier and more sustainable planet. Water, although a reusable resource, needs to be treated responsibly and conserved to avoid pollution and shortages. South Africa is among some of the most water-scarce countries in the world and one way to use water more responsibly – and save money on your monthly municipal bill – is to harvest rainwater from roofs. Since Plascon TradePro Roof & More is APEO-free it is safe for the harvesting of rainwater for nonpotable use.

IMAGES: SUPPLIED

REDUCING PLASTIC WASTE The plastic pandemic is another large threat to environmental conservation. The mass production of plastics began six decades ago and since then, 8.3 billion tonnes of plastic have been produced – an estimated 90 per cent of this is not recycled – with approximately 8 million tonnes ending up in oceans annually. Given the excessive life expectancy of plastic products, almost every piece of plastic created and sent to a landfill or dumped in the environment is still in existence. This puts an immense strain on the environment and its inhabitants, increasing the urgency to reduce plastic consumption and wastes, as well as to find sustainable ways to recycle existing plastic products. To honour this call, Plascon has introduced black buckets to its premium range, which are made of up to 70 per cent upcycled material. Upcycling is a means by which we can reduce the amount of solid waste entering landfills and polluting the environment. The materials of old paint buckets are harvested to produce new ones of equal quality with a lower manufacturing impact. Through this process, carbon emissions are reduced by extending the shelf life of used materials, thereby reducing the energy and natural resources

The materials of old paint buckets are harvested to produce new ones of equal quality with a lower manufacturing impact. Through this process, carbon emissions are reduced by extending the shelf life of used materials. needed for the manufacture of new materials. By upcycling, we not only stop more longwearing pollutants from going to landfills, but also reduce environmental footprint by saving the cost of manufacturing, packaging and transporting new materials. These upcycled buckets provide the same structural integrity with new distinction to the Plascon premium range, including Plascon Micatex, Double Velvet Pure, Cashmere, Velvaglo Water-Based, Nuroof Cool and Wall & All, bringing consumers the renowned and trusted quality of these brands with peace of mind knowing that they’re making the most responsible choice for the environment.

A MOVE TO WATER-BASED PRODUCTS Much of environmental conservation and ethical practice involves correcting ingrained perceptions and innovating so that the same quality can be provided while reducing environmental impact. Solvent-based paints used to be the preferred choice in coatings, favoured for their perceived durability, especially in enamel paints. But these solvents can be more demanding in terms of application, cleaning, disposal and, most importantly, are harmful to the environment. There has been a global shift toward water-based products, which offer equal, if not better, quality with added benefits including faster drying times, lower associated costs and minimal impact to the environment and the health and wellbeing of consumers. Plascon Velvaglo Water-Based Enamel is just one of the extensive water-based range of products offered by Plascon. Leading the field in water-based alternatives, Plascon Velvaglo is prized for its superior strength, satin finish and versatility. Formulated with a unique water-based acrylic hybrid called AquatoughTM, Plascon Velvaglo Water-Based offers all the toughness of a solvent-based enamel including UV, flaking and stain resistance, with nondrip properties while remaining environmentally friendly and nontoxic. Also of particular concern with solvent-based products is the associated risk of VOC (volatile organic compounds) emission, which has become a major societal concern with VOC pollution on the rise. VOCs are chemicals emitted from production processes and common household items. These chemicals accumulate in the air and can have

By choosing to use APEO-free products, you are contributing to a safer, healthier and more sustainable planet.

short- and long-term adverse health effects. Concentrations of many VOCs are consistently higher indoors (up to 10 times higher) than outdoors. To combat this threat, Plascon optimised the formulations of its premium brands, which now all boast zero VOC recipes. This means that when using these products there are no VOC emissions, thereby protecting the environment as well as your home and family. But Plascon didn’t stop there. Not only has it removed VOCs from its premium products, but it has also further engineered them to remove VOCs from the air too. A noteworthy VOC, known as formaldehyde, also presents a growing cause for concern. Emitted from common household items, such as upholstery, carpeting and household cleaning agents, formaldehyde has the potential to pollute the air and compromise our health.

PAINT THAT PURIFIES In 2020, Plascon pioneered a first for the South African market: a paint with air purifying technology. Plascon Double Velvet Pure has the ability to actively improve the quality of indoor air by removing formaldehyde from the air that you breathe, making your home and workplace a safer environment for you, your co-workers and family. A special compound in the formula removes and permanently transforms the formaldehyde in the air into undetectable, harmless water vapour that is safe to breathe. The re-engineered product retains all of its premium quality, strength and elegance as well as its existing leading technologies such as the Stain BarrierTM to make cleaning away life’s messier moments a breeze, Silver ProtectTM to inhibit mould and bacterial growth and BreatheasyTM to minimise odour and ensure cleaner, breathable air. Plascon continues to innovate with a focus on developing pioneering products while being conscious of their environmental impact. These changes affirm Plascon’s re-orientation and refreshed commitment to focus on people and purpose.

For more information: www.plascon.com

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

GREEN

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THOUGHT LEADERSHIP ARTICLE

100 SECONDS TO MIDNIGHT By Mark Dytor, AECI’s Chief Executive

AECI and climate change are the same age.

he history of AECI goes back to 1896; to the opening of the world’s largest “dynamite factory” in Modderfontein, 19,3 kilometres from the 10-year-old corrugated-iron town of Johannesburg, with its burgeoning population of 102 078 people! In the same year, a Swedish scientist by the name of Svante Arrhenius was the first to use the basic principles of physical chemistry to calculate the extent to which increases in atmospheric carbon dioxide (CO 2) increase earth’s surface temperature through the greenhouse gas effect. These calculations led him to conclude that human-caused CO 2 emissions are large enough to cause global warming. 76 years later, the 1972 United Nations (UN) Conference on the Human Environment in Stockholm was the first global conference that made the environment a major issue. Despite the early warning signs (and there were plenty), climate change barely featured on the agenda. Atomic bomb testing, chemical pollution and whaling were the priority. Fast forward to the 2021 UN Climate Change Conference (commonly referred to as COP26) in Glasgow, and the tables are turned. COP26 is described as “the world’s best last chance to get runaway climate change under control” with

Mark Dytor, AECI’s Chief Executive

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UN Secretary-General, António Guterres, warning that it’s “make or break” time. In the nearly 50 years since Stockholm, there’ve been too many accords, pledges, protocols, reports and summits; and too little progress. All the while, atmospheric CO 2 is growing higher and higher. In 1972, it was 327,46 parts per million (ppm); and in 2021, it was 416,45 ppm, the highest level ever. The excess heat trapped by that CO 2 has already raised global temperatures by approximately 1°C and the Intergovernmental Panel on Climate Change has declared code red for humanity. The 2022 Doomsday Clock is ticking at 100 seconds to midnight. And South Africa is in the thick of it. The country is the 12th largest CO2 emitter in the world and local science shows that some regions are expected to warm at twice the rate of the global average. Temperature increases of up to 4°C in the east increase the risk of heavy rains and tropical cyclones, and temperature increases of up to 6°C in the west increase the risk of droughts and heat waves. The consequences are dire: decrease in productivity and well-being, economic slowdown, food and water insecurity and more inequality, poverty and unemployment (already at a staggering 46,6%). At the same time, some of South Africa’s top exports are severely vulnerable to transition risk: • O ne-third of the demand for Platinum Group Metals (PGMs) comes from the component parts of the internal combustion engine. The last internal combustion engine will probably be manufactured before 2035, 13 years from

Are we ready? Under the auspices of Business Unity South Africa and the National Business Initiative (NBI), the South African business community is committed to pathways to net-zero by 2050 and is supportive of initiatives like the Just Energy Transition announced at COP26. In this regard, the country is set to receive US$8,5 billion to help end its reliance on coal” now. This will effect PGMs and vehicle/ vehicle parts manufacturers • Coal is unlikely to have a major role in the global economy post-2050 and will no doubt phaseout around 2040, 18 years from now. This is a significant export commodity currently • According to the Department of Trade, Industry and Competition, South Africa is the second-most vulnerable country by trade-weighted distance, and tourism makes up 10% of gross domestic product (GDP)

Mark Dytor, AECI’s Chief Executive, says that the days of ignoring reality belong completely in the past. “It’s time to stand up and be counted.”

The Department of Forestry, Fisheries and the Environment defines the green economy as: • G rowing economic activity in green industry • Shifting the economy as a whole towards cleaner industry

To have a chance of limiting global warming to 1,5°C, COP26 agreed that CO2 emissions must reduce by 45% by 2030 (vis-á-vis 2010) and reach net-zero by 2050. In response, governments and private sector entities are considering a range of options, which could result in disruptive changes across economic sectors and geographic regions.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Welcome to the age of the green economy where green industry and greening industry are the new “new normal”!

New York Times bestselling author, blogger and internet entrepreneur, Mark Manson, writes that life is essentially an endless series of problems; the solution to one problem is merely the creation of another. “When you solve your problem of not

THOUGHT LEADERSHIP ARTICLE

spending enough time with your partner by designating Wednesday night “date night”, you generate new problems, such as figuring out what to do every Wednesday and making sure you have enough money for nice dinners. Problems never stop; they merely get exchanged and/or upgraded.” The same can be said for transitioning AECI to the green economy and net-zero. “Deeprooted, well-established companies with long histories and legacies – like ours – must approach the green economy on two fronts: we must invest in green industry while greening existing infrastructure and operations. In many ways, we’re modifying the plane while we’re flying it! A level of ambidexterity is required,” claims Mark. Businesses that are establishing themselves now have an inherently green mindset. Off the starting blocks, they’re designing processes, products, services and systems that are supportive of the transition. Think carbon capture, clean energy, energy efficiency, green buildings, sustainable transport, waste and water management. “This is why we’ve invested in startups like Clariter, Khula and Origin Materials. We’re able to draw on their cutting-edge knowledge and state-of-

the-art technology as we transition AECI.” Mark is deeply pragmatic and recognises that there’s no quick fix or silver bullet. “We have a commodity-driven economy, high unemployment and subdued growth. Going green is great; managing it in the current reality is greater. Like the slow recovery from the COVID-19 pandemic, it’s another steep learning curve and there’s no business school programme, TED Talk or textbook on how to do it. “Strategic arbitration” is the leadership imperative of our age.” He explains that while electric vehicles and renewable energy are inevitable in their absolute necessity, so is managing the risk to the mining industry and the country’s economy. “In 2020, the mining industry accounted for 8,2% of GDP (there are plans in place to get it to 12%) and employed 451 427 people. At AECI, it was 46% of Group revenue. We can’t just “flick a switch”; we have to be empathetic, responsible, visionary, and work together to find a way to net-zero. Groups like the NBI are playing a key role in this regard, engaging business, facilitating dialogue and mapping pathways to a low carbon economy. One of the NBI’s aims, for example, is to open

Achieving the global goals could create 380 million jobs and unlock at least US$12 trillion in opportunities for business.”

and channel local and international support for high-impact areas while mobilising coordinated cross-industry collaboration.” Among the high-impact areas that are being discussed are: • Carbon-neutral aviation and shipping • Carbon-neutral ferro alloys, gold and iron ores as well as hydrogen fuels and liquid fuels • Electric vehicles • Hydrogen and fuel cell technologies A report by the Business and Sustainable Development Commission outlines the scale of the opportunity for business. Achieving the global goals could create 380 million jobs and unlock at least US$12 trillion in opportunities for business. It also identifies six actions that business can take to inspire commitment and purpose. 1. Support for the global goals is the right growth strategy As more business leaders grasp the business case for the global goals, there will be more progress towards better business in a better world. 2. Incorporate the global goals into company strategy - Aim innovation and planning at sustainable solutions - Appoint board members and senior executives to take charge of implementation - M ake use of the global goals to guide capital allocation, leadership development and women’s empowerment - Market products and services that inspire sustainable choices

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3. Drive the transformation to sustainable markets with sector peers -D evelop new jobs and skills profiles - I dentify tipping points - M ap pathways to a competitive and sustainable playing field - Prioritise key levers (policy, technology, etc.) - Quantify new financing requirements - Specify elements of a just transition 4. Work with policy-makers to pay the true cost of resources - Shape fiscal and regulatory policies in line with the global goals - Work openly with business, civil society and regulators 5. Push for a financial system orientated towards longer-term sustainable investment - Champion consistent, transparent league tables of sustainability performance - Endorse blended finance instruments that attract private investment and share risk - S upport the alignment of regulatory reforms for long-term sustainable investment 6. Rebuild the social contract - Adopt open, responsible advocacy - W ork with civil society, consumers, governments and workers to achieve the global goals

This approach is consistent with the findings of the 2022 EY US CEO Survey, which shows that CEOs in the US are growing their businesses while pivoting deliberately towards ESG and sustainability initiatives. 82% see ESG as a value driver and nearly all of them have a sustainability strategy in place. Encouragingly, 73% have adopted ESG for strategic reasons – such as competitive advantage and lower cost of capital – rather than in response to pressure from regulators. This is aligned with the call by Larry Fink, CEO of the world’s largest asset manager, BlackRock, for businesses to “find a purpose” and “take account of issues like climate change”. The US SIF Foundation’s 2020 Report on US Sustainable and Impact Investing Trends says that one out of every three dollars under professional management in the US – US$17,1 trillion – was managed in line with sustainable investing strategies. T h e M o rg a n S t a n l ey I n s t i t u t e f o r Sustainable Investing indicates that sustainable funds outperformed traditional peer funds and reduced investment risk in 2020. For a listed entity such as AECI, the Task Force on Climate-Related Financial Disclosure and the recent disclosure guidance on sustainability and climate

“The business case for sustainability is strong, It opens up new opportunities and significant efficiency gains; it secures more resilient supply chains and stability; it drives innovation; and it enhances reputation”

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change issued by the Johannesburg Stock Exchange (JSE) are important steps in establishing a universal reporting benchmark that will guide investment decision-making in the future. AECI will begin adopting the new guidelines in its relevant suite of reports from 2023. High-quality ESG disclosure is a win-win situation. Through transparent disclosure, companies are able to reap the benefits of attracting capital that’s increasingly being directed to the top ESG performers. Equally important is that the reporting process becomes a catalyst for action. “By analysing historical information and emerging trends for the future, climaterelated issues can make a material difference to investments, plans, strategies and – in some cases – core businesses. From a societal perspective, how we address climate change in South Africa and the rest of the world can also have a positive effect on tackling the realities of inequality, poverty and unemployment,” maintains Mark. “The business case for sustainability is strong,” he reiterates. “It opens up new opportunities and significant efficiency gains; it secures more resilient supply chains and stability; it drives innovation; and it enhances reputation. With a solid reputation in the sustainability arena, companies attract and retain highperforming employees and loyal customers; and grab the attention of socially conscious consumers and investors. All of this translates into superior business growth and returns – responsibly.”

Clean Tech Innovation

Recycling

Clariter’s technology tackles the plastic waste epidemic head-on

lariter’s technology provides an alternative to mechanical recycling and offers a large-scale solution to the world’s plastic waste epidemic. While the industry turns plastic into other forms of plastic, fuels, or intermediates requiring further processing and blending, Clariter’s unique process transforms most plastic waste into high-value, pure, ready-to-use industrial products. These are used as ingredients in over 1000 consumer end-products that clean the planet and create profitable business opportunities. With a unique technology that transforms most plastic waste streams into new, crude oil-free products, Clariter is the next generation in chemical recycling. Clariter’s patented process consists of three stages. After the thermal cracking first phase, hydro-refining removes all double bonds and produces a sulphur-free and odourless material. Lastly, distillation and purification create three product families: aliphatic solvents, white mineral oils, and paraffinic snow-white waxes. These are the first of their kind.

(Biaxially oriented polypropylene) laminates, and feedstock made from ultra-high molecular weight polymers used for bulletproof vests and helmets. These materials cannot be mechanically recycled due to their structure. Moreover, since they are relatively minor in the overall stream of used plastics, they are incinerated or landfilled, often ending in the oceans. Clariter is not a typical recycler but rather an “upcycler” that ends the life of plastic. The company produces highly advanced, pure, highvalue products that are green, sustainable, and clean. They offer the industry ingredients made from 100% recycled plastic waste that do not require them to change formulations. For Clariter, plastic waste is no longer a problem but a valuable resource. This is a fundamental paradigm shift and a resource-efficient solution driving the worldwide Circular Economy.

This process is preferable to landfill, incineration, and other pyrolysis-based solutions. Moreover, its net carbon footprint is negative, which indicates a net environmental benefit compared to the carbon footprint of similar products made from crude oil. Clariter’s technology is exceptional for accepting a wide range of plastic waste streams, including the most problematic and those with the lowest value. Clariter has already successfully upcycled plastics such as marine waste such as fishnets and ropes, BOPP

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www.clariter.com

THOUGHT LEADERSHIP ARTICLE

Chemical Recycling Technology and its benefits by Barbara Ciesielska, PR Specialist at Clariter

hen thinking about plastic recycling, most people think about mechanical recycling, the most well-known and established recycling technology. This technology recycles an old plastic product into a new plastic product.

The ISO 15270 Standard limits chemical recycling to cracking, gasification, and depolymerisation, excluding dissolution processes, while the American Chemistry Council includes plastic to fuel processes in its definition of advanced recycling. Chemical recycling allows overcoming the limitations of traditional mechanical recycling and helps the industry push the boundaries of how and where recycled plastics can be used.

Advanced or chemical recycling is a newer technology that complements mechanical recycling since it can recycle a wider range of plastics, often not accepted by mechanical technology. There are several ongoing projects in the plastics and recycling industries, attempting to make advanced recycling more common. According to Yariv Eldar, VP Business Development at Clariter, advanced recycling comprises processes that turn plastic polymers into shorter chain (smaller) molecules. This allows for materials to be reprocessed in various ways that are not limited to new plastics production, as is the case in mechanical recycling. This transformation can be achieved with pyrolysis, depolymerization, or gasification, all of which avoid the burning of plastics. Dr Daria Frączak, Scientific Director at Clariter, explains that different bodies and regulations offer differing definitions of recycling, with some considering fuel production from waste as recycling, while

Barbara Ciesielska, PR Specialist at Clariter

others don’t. Some exclude dissolution, and others don’t. European regulations do not define chemical recycling. The Waste Framework Directive defines recycling as any operation that takes waste and makes products, materials, and substances. By this definition, plastic to fuels is not recycling but energy recovery, which is on the same level as incineration – just above landfilling.

Its benefits include: • Production of high-value consumer and industrial products that are alternatives for fossil-based product • Decreased dependency on crude oil • Lower carbon footprint of products • R eduction in plastic waste, landfilling, and incineration • A n accelerated circular economy that utilises a wider range of waste plastics and higher recycling rates • Job creation that stimulates the global economy All this can be achieved while enjoying higher profits due to factors such as long-term fixed costs of raw materials (rather than volatile oil prices), turning valueless waste into valuable raw material, and charging premium prices for sustainable products.

Chemical recycling allows overcoming the limitations of traditional mechanical recycling and helps the industry push the boundaries of how and where recycled plastics can be used”

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Protecting Life | Sustaining Livelihoods | Creating a Better World

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BME invites more partnerships for its safe oil disposal

afely disposing of millions of tonnes of used oil each year is one important way that explosives leader BME fulfils the vision of its holding company Omnia – to protect life, sustain livelihoods and create a better world. Used oil holds many risks for the environment and society if it is not disposed of responsibly, warns Ramesh Dhoorgapersadh, BME’s General Manager for Safety, Health, Environment and Quality (SHEQ). Just one litre of oil can contaminate over a million litres of water, for example, and can also undermine food security and human health if it contaminates soil. “As the leading consumer of used oil in the explosives sector, BME has been a significant contributor to a cleaner environment for decades,” said Dhoorgapersadh. “We do this by incorporating used oil as a base product for our emulsion explosives, thereby removing the risk of this oil contaminating water or soil.” This contribution was recognised recently by the Chemical and Allied Industries’ Association (CAIA), which gave BME the CAIA Responsible Care® initiative of the year award in the Category A segment. The collection, testing, treatment, and utilisation of used oil is a complex and demanding process which reflects BME’s innovative approach as well as its meticulous standards of operation. “We have over the years developed considerable technology and know-how in this field and are looking forward to rolling out this initiative further in South Africa and globally,” said Dirk Voogt, BME’s General Manager for Production and Logistics. “Consuming almost 15 million litres of used oil annually in South Africa alone, we now have plans to increase our processing capacity even beyond that.” BME’s used oil collection network includes

Infographic showing the basic flow of used oil from generator to customer. Oil can damage the environment if not disposed properly. BME assists to promote good environmental practices by disposing of the oil responsibly,by processing it and using it as a base product for our emulision.

Customer Innovex emulsion is used during blasting process at mining sites

Generator

Waste oil generated from service /repairs to vehicles,machinery and equipment.

BME production

Processed oil used in the production of innovex emulsions. Approximately 90% of used oil collected in BMEs network is used directly in the manufacturing of our emulsion. 1litres of used oil can contaminate up to 1million litres of water.Through our opereation it is estimated that 22trillion litres of oil contamination is prevented annually.

BME consumes over 25million litres of used oil per year of which about 15 million litres is collected by BME’s own collection network.

Collector Waste oil is collected by licenced waste collectors.

BME’s collection network provides about 110 direct jobs.

Bulking

BME collection Approved waste oil is collected in bulk by BME.

Licenced bulking point store and test waste oil in large volumes.

its mining customers, some of whom have all the used oil from their mining machinery collected regularly by BME for use in their world-leading emulsion formulations. It also includes a network of 11 approved suppliers – or bulking points – for whom BME has created valuable business opportunities through its consistent demand for used oil. Voogt highlighted that BME’s success in this initiative is based on its ISO-certified systems and best practice approach. The company is registered as an approved collector and processor with the Recycling Oil Saves the Environment (ROSE) Foundation and conducts laboratory tests on each batch sample before approval and collection. “From a technology perspective, we

BME processing Waste oil is processed at BME Dryden processing facilitiy

constantly push the boundaries to incorporate as much of this waste resource as possible into our formulations,” he said. “In this field, we are well ahead of others in our sector, based on our continuously investment in research and development.” Sachin Govender, Used Oil Manager at BME, noted that the initiative benefited used oil contributors by ensuring environmental compliance and best practice, but also by contributing to the local community. “Our initiative currently creates over 120 jobs for small businesses,” said Govender. “Our demand for used oil is growing each year, so we encourage companies to partner with us in disposing of their oil in this way – and at the same time playing their role in creating a more sustainable planet.”

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Engineering

Zutari – meeting today’s needs without compromising tomorrow’s

ustainability is at the heart of what we do at Zutari. We recognise the need to balance economic growth with social development and the protection of the environment, while allowing our clients and the communities we operate in to thrive. Our access to multidisciplinary teams within our business allows us to create a host of sustainable solutions. We offer clients access to strategic advice, technical expertise, and advanced data analytics, and ensure project delivery, regulatory compliance and community acceptance. Our robust advisory offerings of strategic advice, community and stakeholder engagement, and environmental and climate change expertise helps us to make a continuous positive impact for a sustainable future. It’s why we can appreciate the full spectrum of developmental challenges involved when providing reliable water, energy, transportation, housing, health and education services.

ABOUT US Zutari is an infrastructure advisory, design and engineering consultancy. Our multidisciplinary collective of in-house, industry-recognised consultants and advisors has provided clients with seamless delivery for 90 years.

Today’s plans for assets and communities impact the economic, environmental and social benefits of the future. Achieving a balance between economic goals, social development objectives and environmental sustainability remains a challenge. In addition, the ever-changing regulatory frameworks add to the complexity when projects are planned and executed. Whether we are planning strategies to prioritise investment decisions, navigating complex approvals, or re-imagining the

At Zutari we understand that impact, the kind the world needs today, does not just happen. Impact must be engineered – deliberately, skilfully, artfully. Engineered impact improves the quality of people’s lives; it grows economies; it does not compromise our planet.

transformation of existing assets, our focus remains on providing a safer and more sustainable future. Zutari is a member of the Global Reporting Initiative (GRI) community and our reporting is aligned to GRI standards. We support the precautionary approach as envisaged by Principle 15 of the Rio Declaration on Environment and Development. We proactively drive the United Nations Sustainable Development Goals through many of our projects and initiatives.

River walk Off ice Park , 41 Matroosberg Road, Ashlea Gardens, Extension 6, Pretoria, 0081 012 427 2000

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THOUGHT LEADERSHIP ARTICLE

A circular-economy solution for South Africa Building an economy where resources are shared, reused, and recycled offers hope for growth without environmental harm. By Hermann Haupt, Vice President, CHEP Sub-Saharan Africa

hile business is a core part of our modern way of life, it can no longer afford to take a linear approach, where we exploit resources to create products and then dispose of them as waste.

To build a ‘Zero Waste World’ with a circular economy – takes collaboration!”

Fortunately, it is possible to build a viable circular economy. CHEP – one of the world’s most sustainable logistics businesses – has already built a business model that is not just sustainable but well on the way to being regenerative – putting back more than is taken from nature.

Perhaps the greatest learning of CHEP’s campaign to build a ‘Zero Waste World’ with a circular economy is that no organisation can do it alone. It takes collaboration. As a logistics organisation with partners across sectors, we’ve facilitated the share and re-use of our platforms and helped to reduce the environmental impact of several customer industries.

Reuse, repurpose and regeneration are effective solutions to the massive challenges facing the world. And we see them as fundamental to building a greener economy. These principles are clearly outlined in Sustainability Review 2021 – Pioneering Regenerative Supply Chains, published by CHEP parent company Brambles. The review reports on CHEP’s regenerative strategy and shares the organisation’s sustainability targets for the next five years. The CHEP programme has already shown several tangible achievements based on a ‘Planet Positive, Business Positive and Communities Positive’ strategy. The global company is now a carbonneutral business, with CO2 emissions down to zero across Scope 1 (direct emissions from fuel) and Scope 2 (indirect emissions from electricity). To offset the remaining emissions, CHEP has invested in different reforestation projects. CHEP has acquired and certified several South African timber farms, and now 100%

Hermann Haupt, Vice President, CHEP SubSaharan Africa

of its timber is from sources certified by the Forestry Stewardship Council (FSC). CHEP also produced in Europe the first closed-loop, upcycled plastic platform – the wheeled Q+ display pallet, made from 100% post-consumer plastic waste. While a circular economic model benefits the planet, the ultimate beneficiaries are the people who live on it. CHEP’s Communities Positive targets ensure CHEP consistently delivers a net-positive contribution to society. Business Positive targets have led to a global management complement of 32% women, and more than 17 million people globally received meals through CHEP’s partnership with food rescue organisations.

Globally, the environmental savings in the customers’ supply chains in comparison to single-use alternatives include 2,4 million tonnes of CO2, 3 160 megalitres of water, 3,2 million trees, and 1,4 million tonnes of waste. Today, ever more businesses and consumer products are being designed using circular principles, deploying a reuse, repair, recovery, and repeat model, repurposing materials, and avoiding waste. For South Africa, which already ranks 12th in the world for carbon emissions, it is becoming critical to improve and actively protect our environment. It is also time to start building new economic models that sustain our environment and allow for growth without harmful impacts. The circular-economy model is proven. We are proud to be on this journey and look forward to building more partnerships to spread its benefits across our economy.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Manufacturing

Consumer / Retail

Green innovation for sustainable business growth With our planet and its resources under more pressure than ever, ‘business as usual’ will not lead to a sustainable future. The carbon emissions generated by the current legacy business model have the earth set to exceed the 1.5-degree global warming limit set in the Paris Agreement on Climate Change in 2015.

or businesses to achieve sustainable growth, innovation is required – in products, in processes, and in partnerships. In every sector, the opportunities for innovation will differ, but the most impact will come from green innovation that straddles industries. This allows businesses to form partnerships based on shared benefits for themselves, their stakeholders, and the planet itself. Conscious of the urgency of the problem, global supply chain organisation CHEP has committed itself to green innovation in its operations – and its customer relationships. The CHEP sustainability

vision is about pioneering regenerative supply chains that put back more into the environment than they take out. CHEP prides itself as a company that moves more goods to more people in more places than any other organisation globally and it intends to do this in a nature-positive way. The approach is expressed in the Sustainability Review 2021 recently published by CHEP’s parent company,

Brambles, which outlines the company’s vision for regenerative supply chains in ways that are Communities Positive, Planet Positive and Business Positive. Fundamental to all of this is the ongoing refinement of the CHEP circular business model of share and reuse, with platforms and containers being pooled and shared between customers to minimise wasted journeys and materials. “Today, companies’ supply-chain emissions are more than 5,5 times greater than their emissions in direct operations,” says Hermann Haupt, Vice President for CHEP Sub-Saharan Africa. “This means they can make a massive impact by partnering to

For us, green innovation is about forming innovative partnerships and processes that are sustainable for the planet and sustainable for businesses.”

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Consumer / Retail

Manufacturing

Haupt says balancing Business Positive and Planet Positive strategies is the essence of true sustainability – partnering with customers on new solutions that benefit the planet as well as the organisation. Recent initiatives include CHEP’s wheeled Q+ display pallet, which was launched in Europe and is made from 100% upcycled plastic waste; CHEP’s acquisition of forests and sawmills to supply its South African timber needs; and collaborations with food rescue organisations to serve meals to more than 17-million people globally. “For us, green innovation is about forming innovative partnerships and processes that are sustainable for the planet and sustainable for businesses,” says Haupt. build sustainable and regenerative supply chains.” CHEP’s active role in thousands of supply chains puts the organisation in a unique position to enable this. Globally, CHEP’s Business Positive approach of striking innovative partnerships with customers has already saved 2.4m tonnes of CO2 in the past year, 3 160 megalitres of water, 3,2m trees, and 1,4m tonnes of waste. There has also been an eight percent improvement in the number of customer sustainability collaborations and a total of 1 392 collaboration initiatives. Planet Positive initiatives have seen CHEP getting 100% of its global wood requirements for its pallets from sustainable sources and achieving carbon neutrality for Scope 1 (direct emissions from fuel) and Scope 2 (indirect emissions from electricity). CHEP SA Tel: +27(31) 267 9300 For more information on CHEP, visit www.chep.com For information on the Brambles Group, visit www.brambles.com 7 Westville Road, Westville, Durban, South Af rica

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

FAMILY TREE

Willard has partnered with Food & Trees for Africa to bring trees and hope to communities around South Africa, resulting in thousands of trees being planted.

www.willard.co.za

Paper and Packaging Sector

Industry collaboration critical to success of Extended Producer Responsibility Common problems need shared solutions

n 5 May 2021, the Department of Forestry, Fisheries and Environment promulgated the amended extended producer responsibility (EPR) regulations under Section 18 of the National Environmental Management: Waste Act. EPR requires producers and impor ters to take practical and financial responsibility for the end-of-life of a range of identified products in the electrical, lighting, and paper and packaging sectors. EPR will change how producers, brand owners, retailers and importers design, make, sell their products to keep them in a circular production and recycling loop as long as practically possible.

PRODUCER RESPONSIBILITY ORGANISATION

Francois Marais

However, the regulations aim to provide the framework for the development, implementation, monitoring and evaluation of EPR schemes in terms of Section 18 of the Act. They will also ensure the effective management of the identified product at its end-of-life and enable the implementation of the circular economy initiatives. In terms of the paper sector, any South African company or brand that makes or imports paper or paper packaging for distribution in South Africa is required to pay an EPR fee per sales tonne of product. The regulations also make the producer or group of producers responsible for the establishment of an EPR scheme, the development and implementation of an EPR plan and compliance against each product’s annual targets for recovery and recycling. While the new EPR legislation allows for producers to establish their own EPR

scheme, it is more sensible to join an existing scheme that has been established by a registered PRO. We advise companies against going it alone as this could become onerous and costly. By joining an EPR scheme under a PRO such as Fibre Circle, your interests can be collectively represented by identifying shared constraints and opportunities for collaboration and optimisation among member companies, municipalities, other PROs and the informal sector. EPR will see an investment in collection infrastructure, not only providing consumers with more convenient recycling facilities, but also a concerted recovery effort at the pre-consumer or post-industrial phase. Intensive consumer awareness campaigns will also help to drive behaviour change. “We are making our circle bigger to reduce the burden on the environment, take responsibility for our products and support a thriving circular economy.

ABOUT US: Fibre Circle is the producer responsibility organisation (PRO) for the paper and paper packaging sector. It facilitates EPR programmes for paper p ro d u c e r s , w h i c h c o u l d encompass manufacturers and importers of paper and paper packaging as well as brand owners and retailers. In collaboration with its members, Fibre Circle will establish and manage the EPR schemes for the following identified paper products: newspapers; magazines; office, graphic, mixed and other papers; corrugated cases and kraft paper; liquid board packaging; labels and paper sacks.

Contact Francois Marais • +27 11 803 5063 • info@f ibrecircle.co.za www.f ibrecircle.co.za

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

The role of the forestry sector in achieving Sustainable Development Goals By Louise van Wyk, Chairperson of Forestry South Africa’s Environmental Management Committee

he Global Goals for Sustainable Development, officially known as the Sustainable Development Goals (SDGs) comprise 17 goals agreed to by world leaders in 2015 that every country, industry or person needs to work towards. In doing so, it is believed we will achieve success in sustaining life on earth and meeting our needs now without compromising the needs of future generations. But is it so simple, and how can our actions as the forestry industry make a difference in achieving these global goals? The forestry industry in South Africa is uniquely positioned to contribute to SDGs. It is an industry that utilises a renewable, natural resource present within the rural communities where job creation and poverty alleviation are vital and intervention is most needed. Through group schemes and community farming, the industry presents oppor tunities for smaller enterprises and rural communities to access markets and generate an income. In doing so, communities become part of the land-use decision-making and value-sharing process, further contributing to sustainable forest management. In addition, the patchwork nature of the forestry landscape ensures natural areas co-exist with the commercially developed forest areas. Many of these contain keystone, threatened or protected species that contribute to the conservation of biodiversity and ensure that ecosystem services can continue, on

of Forest Certification (PEFC). Upwards of 80% of the South African Forestry Industry are FSC-certified. By implementing the certification standards, they uphold the three spheres of sustainability and are aligned to SDGs.

Louise van Wyk, Chairperson of Forestry South Africa’s Environmental Management Committee

which communities and forestry operations depend. The forestry industry is ideally positioned to contribute to all three spheres of sustainability: economic upliftment, social development and environment. T h e i n d u s t r y ’s s u s t a i n a b l e f o re s t management is supported and evaluated by international certifications schemes such as the Forest Stewardship Council (FSC)) and the Programme for the Endorsement

The forestry industry is ideally positioned to contribute to all three spheres of sustainability: economic upliftment, social development and environment.

It’s not just how sustainable forestry can contribute to SDGs but also about what contributing to SDGs brings to the industry. Alignment to SDGs presents a business opportunity whereby a company or industry can show its commitment to a sustainable future worth investing in. This is something markets, stakeholders and clients across the world are seeking when they call for SDG accountability from the private sector. For countries to achieve their SDG obligations, they need to forge stronger ties between public and private entities, to align SDG objectives across different industries and land uses. Initiatives like the Presidency-led Private Public Growth Initiative (PPGI) illustrate the benefits these partnerships bring the industry, the public sector and the country. SDG’s present an opportunity to facilitate more of these partnerships. The South African Forestry Industry can help our country and the world meet their SDG commitments. Based on the difference these goals can make and the opportunities they can present, there is no reason why the industry would not want to be part of the solution. By scrutinising our own actions and looking at where the industry can bring about positive change, we can facilitate the transition towards a sustainable future that reaches beyond the boundaries of our operations. As we focus on the industry’s role in reaching SDG targets, let’s not forget the role we as individuals can play in modifying our consumer behaviour.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

TRANSITIONING AFRICA INTO THE CIRCULAR ECONOMY IT Asset Management • IT Refurbishment IT Asset Disposal • E-Waste Recycling AST Recycling is one of the only ISO 9001, 14001, 27001 and 45001 certiﬁed one-stop solution providers for IT Asset Management, IT Refurbishment, IT Asset Disposal and E-Waste Recycling in South Africa.

2,9 MILLION TONS OF E-WASTE GENERATED PER ANNUM

2,9mil

0,9% RECYCLED FORMALLY $3,2 BILLION OF VALUE IN RAW MATERIALS IN E-WASTE

0,9%

$3,2

www.astrecycling.co.za

Recycling

Sappi has implemented ambitious action for sustainable development

appi is a leading global provider of robust everyday materials made from woodfibre-based renewable resources. As a diversified, innovative and trusted leader focused on sustainable processes and products, we are building a more circular economy by making what we should, not just what we can. Our raw material offerings such as dissolving pulp, biomaterials and paper products (packaging, specialty and graphic papers) casting and release papers and forestry products are manufactured from sustainably-sourced woodfibre in production facilities powered with bio-energy. Together with our partners, Sappi will continue to build a thriving world by acting boldly to support the planet, people and prosperity. We’ve made the United Nations Sustainable Development Goals (SDGs) an integral part of our business and aim to achieve ambitious action for sustainable development together with our partners. Globally, Sappi has identified seven priority SDGs where we believe we can make the biggest impact, with an additional two that we focus on in our operations in Southern Africa.

In South Africa, it all starts with the wood we use in our products. All wood grown on Sappi-owned land and a large proportion grown on plantations managed by us are Forest Stewardship Council™ (FSC™)certified. Our South African division was also recently awarded the first-ever Programme for the Endorsement of Forest Certification (PEFC) forest management certificate in South Africa, as set out in the PEFC-endorsed SAFAS (Sustainable African Forest Assurance Scheme). And in keeping with our commitment to SDG15 (Life on Land), we set aside approximately 135,000 hectares of Sappi’s land to conserve the natural habitat and biodiversity found there, including indigenous forests and wetlands. Our Sappi Khulisa enterprise development programme plays an important role in alleviating poverty in rural areas (SDG 1 – No Poverty). The programme does this by promoting sustainable livelihoods for over 3,644 growers and about 103 small,

medium and micro enterprises SMMEs) who supply Sappi with timber at market-related prices. What began as a corporate social investment project is now part of our core business and is a replicable framework for creating economic value and social impact. Since 1995, 4 505 979 tons to the value of R2.7 billion has been purchased from small growers under this programme. New developments in wood processing support the move to a biobased economy that utilises renewable and biodegradable materials that do not compete with food sources. With energy being a key input for our industry, we aggressively manage our energy use to reduce our carbon emissions and improve our cost efficiency. Part of acting more sustainably is using the full potential of the trees we harvest and leveraging new revenue opportunities in our continued drive for innovation and sustainability.

108 Oxford Road, Rosebank, Johannesburg, Gauteng Zelda Schwalbach | External Communications | Sappi Southern Af rica Zelda.Schwalbach@sappi.com Tel +27 (0) 31 001 7300

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

A close shave or too close to call? Mine closure and climate change By Spencer Eckstein

he United Nations Intergovernmental Panel on Climate Change’s Sixth Assessment Repor t, Climate Change 2021, reveals that the earth’s surface and ocean temperatures are the highest they’ve been since 1850, with the most radical increases occurring after the year 2000. The report goes on further to say that the only solution is drastically reducing CO2 and achieving net-zero emissions by 2050, and is unequivocal about the fact that human influence has led to this dire, and urgent, situation currently confronting the planet and humanity. South Africa is the world’s 12th largest emitter of greenhouse gases, largely due to our fleet of coal-fired powered stations. As a result, policy documents have been created and stakeholder consultations held to discuss a just transition from coal. Furthermore, Cabinet approved South Africa’s National Determined Contributions to reducing greenhouse gasses and keeping emissions to a range of 350-420 million tonnes of carbon dioxide equivalent (Mt CO2e) by 2030, as part of the country’s submission to the 2021 United Nations Climate Change Conference (COP26), held from 31 October to 12 November 2021. South Africa’s Cabinet also recently adopted the National Climate Change Bill. Climate change can be regarded as a threat and as an opportunity, opening up varying avenues for the mining industry to respond.

Industry impacts and protecting value • Increased rainfall and flooding as well as other adverse weather events can interrupt production, damage assets, disrupt transport and supply chains, result in excess soil erosion (affecting slope stability) and compromise employee safety. • Drought will impact water availability and costs for activities such as refining and processing, amongst others. • A rise in temperatures means increased pressure on energy sources and capacity to run operations and cool underground mines and surface facilities, leading to increased energy costs and possible energy rationing or load shedding. Industry actions and creating value • I n v e s t m e n t i n re n e w a b l e e n e rg y technologies such as solar or wind and alternative fuels such as hydrogen, as both solutions and additional revenue streams.

Ukwazi – Sustainable Mining Utilising unique sector capabilities, our natural scientists and mining engineers are able to provide: • Liability management • Mine closure

Spencer Eckstein, Director Business Development at Ukwazi

• Technical innovations such as joint water reclamation projects with other industry players and regional water schemes between mining operations. • E nsuring that mine closure planning becomes an intrinsic element of the entire project life cycle from study, design, build and operation, to closure and post-closure phases. Ultimately, mines need to find a sustainability partner that can execute both strategy and compliance, underpinned by value engineering, clear objectives, measurable outcomes and solutionist thinking.

• Reprocessing water treatment and waste management • Project management of environmental activities and compliance • Environmental Management Information Systems (EMIS) • Rehabilitative mining

South Africa is the world’s 12th largest emitter of greenhouse gases, largely due to our fleet of coal-fired powered stations.”

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Mine closure and climate change

A close shave... or too close to call?

The United Nation’s Intergovernmental Panel on Climate Change’s Sixth Assessment Report, entitled Climate Change 2021, states that the earth’s surface and ocean temperatures are the highest they’ve been since 1850, with the most radical increases occurring after the year 2000. The report goes on to further to say that the only solution is drastically reducing CO2 and achieving net-zero emissions by 2050, and is unequivocal about the fact that human influence has led to this dire, and urgent, situation currently confronting the planet and humanity. South Africa is the world’s 12th largest emitter of greenhouse gases, largely due to our fleet of coal fired powered stations and as such, policy documents and stakeholder consultations have been held regarding a just transition from coal. Further to this, the Cabinet approved South Africa’s national determined contribution to reduce greenhouse gasses and keep emissions to a range of 350-420 million tonnes of carbon dioxide equivalent (Mt CO2e) by 2030, as part of the country’s submission at the recently held COP26 conference. South Africa has also recently introduced the National Climate Change Bill to Parliament. There are a number of ways in which climate change can be regarded as a threat and as an opportunity, opening varying avenues for the mining industry to respond.

RENEWABLE ENERGY

Industry impacts and protecting value

REGIONAL WATER SCHEMES

MINE CLOSURE PLANNING

SUSTAINABILITY PARTNER

•

Increased rainfall and ﬂooding as well as other adverse weather events can interrupt production, damage assets, disrupt transport and supply chains, result in excess soil erosion (aﬀecting slope stability) and compromise employee safety.

•

On the other end of the spectrum, drought will impact water availability and costs for activities such as reﬁning and processing, amongst others.

•

A rise in temperatures also means increased pressure on energy sources and capacity to run operations and cool underground mines and surface facilities, also leading to increasing energy costs and possible energy rationing or load shedding.

Industry actions and creating value •

Investment in renewable energy technologies such as solar or wind and alternative fuels such as hydrogen, as both solutions and additional revenue streams

•

Technical innovations such as joint water reclamation projects with other industry players, and the creation of regional water schemes between mining operations.

•

Ensuring that mine closure planning becomes an intrinsic element of the entire project life cycle from study, design, build, operation, closure, and post-closure phases.

•

Ultimately, mines need to ﬁnd a sustainability partner that can execute on both strategy and compliance, underpinned by value engineering, clear objectives, measurable outcomes and solutionist thinking.

Ukwazi - Sustainable Mining

For more information please contact Spencer Eskstein info@ukwazi.com Tel: +27 (0)12 665 2154 or vist us at www.ukwazi.com

•

Utilising unique sector capabilities, our natural scientists and mining engineers are able to provide:

•

Liability management

•

Mine closure

•

Reprocessing water treatment and waste management

•

Project management of environmental activities and compliance

•

Environmental Management Information Systems (EMIS)

•

Rehabilitative mining

THOUGHT LEADERSHIP ARTICLE

Towards a zero-carbon mining sector By Tsakani Mthombeni, Implats Group Executive for Sustainable Development

limate change will present a fundamental challenge in coming decades. with the global focus on reducing greenhouse gas emissions to net-zero in a bid to preserve a liveable climate. There is now global consensus that the consumption of fossil fuels has led to an increase in the accumulation of greenhouse gases. Mining and its associated processing and refining activities are energy-intensive. However, the mining sector is capable of progressive decarbonisation in a bid to reach carbon neutrality. Many of the largest mining houses have committed to carbon neutrality between 2040 and 2050, with ambitious emissions cuts by 2030. Now is the time for the mining sector to act by accelerating efforts to decarbonise. Emissions from mining comprise, broadly, Scope 1 (emissions from diesel and gas), Scope 2 (emissions from purchased electricity), and Scope 3 (emissions from transport and supply chains). Research from McKinsey shows that 40% to 50% of CO2 emissions in the mining sector are from the diesel used in mobile equipment, with another 30% to 35% from non-renewable electricity. A switch to renewable electricity and increased energy efficiency would thus address a large proportion of current Scope 2 emissions from miners still reliant on carbon-intensive power supply. Largescale renewable energy plants – wind and solar - are a viable and cost-effective solution for decarbonisation in emerging markets, ensuring emission reductions. While they might be variable in nature, they offer an alternate, secure electricity supply. They present an opportunity for mining companies to save on electricity input costs and, importantly, leave a

Tsakani Mthombeni, Implats Group Executive for Sustainable Development

positive legacy for mine communities. There is a near-perfect storm when it comes to the application of renewable energy in mining, driven by reductions in renewable energy and storage technology costs and the increasing ability to recoup these costs, given the rising fossil-based energy prices. For example, lithium-ion battery costs reduced 97% between 1991 and 2018, and solar and wind are now among the cheapest sources of new energy generation in much of the world. In most cases, mining operations are on vast open pieces of land, which offers prime space for renewable energy development while contributing to job creation and positive social impacts in mine communities. Large-scale solar plants also offer the exciting potential to produce green hydrogen as an energy storage medium and, by

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

extension, drive the use of platinum group metals (PGMs) in electrolysers for hydrogen generation and in fuel cells for storage. This is essential to addressing Scope 1 emissions. To go fully carbon neutral, a shift to sustainable drivetrains is imperative. The focus in the mining sector should be on replacing diesel with clean energy technology options. Hydrogen fuel cells and battery electric vehicles are long-term options, with several mining companies already investing in research and development and trialling prototypes of alternative drivetrains. In the transition to a low-carbon economy, PGMs are critical to enabling associated technologies. Decarbonisation presents a significant opportunity for competitive players to differentiate themselves and lead the way toward zero-carbon mining. We are excited to be at the forefront of these developments.

Creating a better future ...through the metals we produce Going green Fuel cells, autocatalysts, clean water technologies, fertiliser

Connecting people Hard drives, smart phones, computer screens, petrol

Celebrating life Jewellery, paints, food preservation, polyester clothing, lipstick

Our metals touch lives

Growing wealth Investment

Saving lives Air bags, dental, pacemakers, hearing aids, cancer treatment

Committed to supplying the metals needed to develop, sustain and improve our world

Coole Adv 18781

INVESTMENT

About AIIM African Infrastructure Investment Managers (AIIM), a member of Old Mutual Alternative Investments* (OMAI), is one of the most experienced infrastructure equity investment managers on the continent, with a proven track record across seven African infrastructure funds over the last 21 years. AIIM’s team of 41 investment professionals across financial structuring, technical, asset management and ESG capabilities can be found in five locally staffed offices across the African continent (Cape Town, Johannesburg, Nairobi, Lagos and Abidjan) providing direct on-the-ground coverage of our key markets. AIIM is committed to Africa’s long-term development. Since 2000, the AIIM team has jointly executed more than 65 transactions and 29 exits across 19 countries throughout sub-Saharan Africa. AIIM currently manages an aggregate AUM of US$2.6-billion (R30.9-billion) in assets across the power, renewable energy, digital infrastructure, midstream energy and transport sectors in East, West and southern Africa. AIIM is one of the largest private investors in the power sector. Its power portfolio extends across renewable energy and thermal power assets with a combined generation capacity of more than 2600 MW, of which 70% is renewable energy providing clean power to more than 1.1 million households a year.

Everything that has made a difference in someone’s life, begins with an idea

he Infrastructural, Developmental and Environmental Assets Managed Fund (IDEAS Fund) is one of South Africa’s largest domestic infrastructure equity funds. It invests in economic infrastructure (roads and railways), social infrastructure (housing and public-private partnerships) and renewable energy infrastructure (solar and wind projects) in the SADC region. While infrastructure investments are vital for economic growth and have tangible social and environmental impacts, the fund targets investments with the potential to deliver strong long-term returns and simultaneously seeks to meet social and environmental objectives. Founded in 1999, the IDEAS Fund is a linked investment policy-based, pooled portfolio product of the Old Mutual Life Assurance Company (South Africa) (OML ACSA), managed by African Infrastructure Investment Managers (AIIM).

Vuyo Ntoi, Co-Managing Director (AIIM) and Co-Portfolio Manager (IDEAS Managed Fund)

*Old Mutual Alternative Investments (OMAI) is one of the largest private alternative investment managers in Africa, with more than US$4.6-billion (R65.5-billion) under management in infrastructure, private equity, hybrid equity and impact funds. It is a member of Old Mutual Investments, the investment management arm of Old Mutual. All figures quoted as at 30 June 2021.

+27 21 670 1234 | info@aiimaf rica.com www.aiimaf rica.com Ground Floor, Colinton House, The Oval, 1 Oakdale Road, Newlands, Cape Town Contact person: Vuyo Ntoi

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

Challenging our capitalist ideals By Jon Duncan, Head of Responsible Investment, Old Mutual Investment Group

ooking around the world today, it’s clear that we are currently in the midst of a major transformation of our capitalist system - one driven by deep recognition of the interconnectivity between the markets, society and the biophysical systems. The need for this shift is well-motivated on a scientific basis. Think, for example, of climate science or the latest thinking about Covid-19 mutation rates and vaccine deployment. At the same time, there are clear signs of human behavioural change, some of which challenge foundational capitalist ideals: • Venture philanthropy, which questions the profit motive • Open Source, which redefines and challenges competition • Sharing economy, which challenges ownership rights • Shared value, which places stakeholder primacy over shareholder primacy This transformation is also evidenced in the investment industry’s shift to an approach that seeks to balance not only risk and return but also impact. The risk-return trade-off is an investment principle that links high risk with high reward. Investors demand a higher reward from investments where the chance of permanently impairing capital is high. Balancing this trade-off is determined by differing investor risk tolerance levels, retirement ages, liquidity requirements and earning potential, among others. For the most part, this is how markets have operated since inception and it is the basis of free-market capitalism. In 1952, Nobel Laureate Harry Markowitz introduced the theory of the Efficient Frontier, the curved line that most efficiently connects the risk and return axes on a graph. The efficient frontier theory is a cornerstone of modern portfolio theory (MPT) and is used by asset allocators and investors alike.

Jon Duncan, Head of Responsible Investment, Old Mutual Investment Group

Markowitz’s work is an important example of how capitalism and its operations can and do, evolve. History shows that capitalism has shifted over time and across continents in ways that are

Targeting low-carbon, resource-efficient and socially inclusive outcomes, these strategies balance both the quantity of growth and the quality of growth.”

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

We are in the early stages of this transition to an economy where every asset, company and investment can and will be assessed through the lens of risk-return-impact.”

neither uniform nor complete. In fact, capitalist structures have morphed according to the times, from the emergence of the 19th-century debtors’ prison to the limited liability company, through to the protection of intellectual property rights. Alongside this, so have the methods through which we contract and trade. From the barter systems through to the evolution of money and the shift from open outcry markets to electronic exchanges. To view capitalism as a static thing fundamentally misses the point. IMPACT ON CAPITALISM Ideas around a green economic growth path are not new and are evidenced in the growing number of national green growth strategies. Intentionally targeting low-carbon, resource-efficient and socially inclusive outcomes, these strategies balance both the quantity of growth and the quality of growth. In this evolving form of capitalism, investors choose to balance out risk, return and impact. By introducing impact into the investment framework, the paradigm shifts from a two-dimensional risk and return line into a three-dimensional space that provides an array of new growth vectors for capital allocators and investors. Theoretically speaking, the intentional consideration of ‘impact’ should result in different decisions regarding capital allocation. The challenge, as the industry well knows, is that standardised impact metrics don’t yet exist at the level necessary to drive change in the main listed markets around the world. The challenge of impact reporting is being tackled on many fronts. With the deployment of artificial intelligence (AI) and big data solutions, we should anticipate a gradual standardisation of this approach to investing across all asset classes and geographies in the coming years. In the past 12 months alone, there have been several important innovations and progress steps. These include: • HYBRID METRICS Connecting shared value to shareholder value was the title of a joint working paper from the Shared Value Initiative, ENEL Foundation and Harvard Business School. The paper introduced an approach that explicitly combines companies’ social and environmental impacts with standard measures of financial performance. This work included input from Prof Mark Kramer, regarded as one of the founding thinkers by the Global Shared Value movement. The work is grounded in systems thinking and aims to support investors to identify “companies doing the most good the most profitably”. Such companies sit at the ‘new’ efficient frontier of capital allocation.

• IMPACT-WEIGHTED ACCOUNTS PROJECT This project, also from Harvard Business School, aims to drive the creation of financial accounts that reflect a company’s financial, social and environmental performance. The aim is a standardised accounting approach that transparently captures external impacts in a way that drives investor and managerial decision-making. The project uses publicly disclosed data and industry-wide assumptions to derive monetary estimates of a company’s product reach, accessibility, quality, optionality, environmental use emissions and end-of-life recyclability. • IMPACT TOKENISATION The International Institute for Sustainable Development (IISD) released a report in 2019 on ‘impact tokens’, which set out the use of blockchainbased solutions for impact investing. In the two years since, several use-case applications for impact reporting have been demonstrated in areas of access to healthcare and medicines, small-scale agriculture, micro-insurance and micro-grids. Innovations in AI, robotics, machine learning and the Internet of Things (IoT) present opportunities to cost-efficiently evidence and scale impact. • HARMONISING ACCOUNTING STANDARDS Over the past three decades, International Financial Reporting Standards (IFRS) have been central to increased global comparability and unification of accounting standards. In March 2021, IFRS formed a working group to focus on harmonising global sustainability reporting standards in preparation for a potential international sustainability standards board. This initiative is supported by all the prevailing industry sustainability standards bodies and there now genuinely appears to be global support for harmonising frameworks and standards. THE ROLE OF CAPITALISM IN SOLVING FOR LONG-TERM SYSTEM RISK We are in the early stages of this transition to an economy where every asset, company and investment can and will be assessed through the lens of risk-return-impact. While capitalism has contributed to many of the environmental and social problems we face today, the shift towards the consideration of impact now means that capitalism can begin to play an active role in solving for long-term system risk. We need to keep asking ourselves: Are the long-term stewards of capital, asset owners, consultants and managers playing their part to balance both the quantity and quality of growth? For more investment-related insights such as these, visit www.oldmutualinvest.com.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

The role of plastic packaging recycling in the Green Economy By Quinton Williams

Quinton Williams, Polyco Business Manager

s a pro -active response to the growing concern around waste and i ts impac t o n society and the environment, the Department of Forestry, Fisheries and Environment (DFFE) published the final section 18 Extended Producer Responsibility (EPR) Regulations for the paper and packaging industry, electrical and electronic industry and lighting industry in Government Gazette 44539 on the 5th May 2021. This new legislation officially came in to effect on the 5th November 2021 and legally mandates producers to demonstrate their Extended Producer Responsibility by achieving published legislated targets. This can be done by either joining an existing Producer Responsibility Organisation (PRO) or forming a new, independent PRO or EPR scheme that will manage products at end of life.

Instead of supporting the out-dated linear approach of producing, using and discarding valuable materials such as plastic, paper, glass and metals, the focus is now on developing circular economies within South Africa – where the value of used packaging is never lost, but is kept within the economy by ensuring that these materials are diverted from landfill to be reused and recycled into many new and useful materials. The EPR Regulations seek to extend the responsibility of Producers of packaging (Identified Products as per the Regulations), both financially and physically, to the management of their packaging at the end of its life. All producers, converters (packaging manufactures) and brand owners that manufacture or generate plastic packaging materials and place more than 10 tonnes on the market are required to be members of an EPR Scheme. PRO’s within the sector therefore developed EPR Schemes that focus on the diversion of plastic packaging from landfill by increasing collection rates and growing recycling volumes. PRO’s who manage these schemes are funded directly by the producers via the implementation of the mandatory EPR fee.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

The most challenging aspect, in rolling out mandatory EPR and achieving the legislated targets, is the change that is required to take place across the value chain, from packaging design to consumer behaviour change. For this to occur, EPR schemes need to have an overall positive outcome for the South African economy, by stimulating growth in the recycling sector and inducing job creation. These impacts are required to occur throughout South Africa, focusing on both urban and rural areas of South Africa and include transformation in their investment strategy. It will require the participation of the full value chain, including brand owners, packaging converters, retailers, informal and formal collectors, recyclers and consumers. In order to grow the collection and recycling of plastic packaging in South Africa and to promote the responsible use and reuse of this plastic packaging the industry needs to collaborate with multiple stakeholders across the value chain, invest in recycling innovation and recycling infrastructure in South Africa, and educate both the industry and the consumer about recycling. We need to focus on: – Information (Education and Awareness): Promoting consumer education and awareness programmes. – Infrastructure: Supporting existing and encouraging new plastic collection and recycling networks, by investing in infrastructure development. – Innovation and End-use development: Undertaking research and developing value chain projected to stimulate end use demand. – Collaboration: Understanding, working with and advocating with all stakeholders along the value chain. Polyco is a producer responsibility organisation (PRO) that has implemented and operated a voluntary scheme responsible for polyolefins since 2011. In 2021, Polyco merged with Polystyrene Association of South Africa and Vinyl Loop and developed a mandatory EPR Scheme for all plastic packaging materials and we look forward to growing the recycling industry in South Africa.

For making a difference

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As the Ford Wildlife Foundation we are proud to assist, support and celebrate those who protect South Africa’s rich biodiversity. From enabling our partners to reach remote locations with our Ford Rangers to supplying them with protective face shields, we’ll continue to help those who make a positive contribution to this beautiful country.

#ForSouthAfrica

Renewable Energy

SOLAR ENERGY

Achieve your sustainability goals with SolarAfrica Energy

olarAfrica is the industry leader in providing solar finance solutions to the commercial and industrial sectors. The company’s Capex-free solar solutions encourage businesses to go green without having to pay any upfront capital. Their dynamic workforce is passionate about providing simple, sustainable savings to their customers. Founded in 2011, SolarAfrica is one of the only companies in South Africa specialising in solar as a service through Power Purchase Agreements (PPA). Through these agreements, business owners have a stress-free solar alternative that enables them to become sustainable with the advantage of reducing their electricity costs from day one. A PPA is an agreement signed between a business owner and the solar services provider that includes installing and maintaining a solar system at no cost to the business. Instead, businesses are billed monthly based on a solar tariff and the amount of energy they consume. This tariff

increases annually at a fixed rate, enabling companies to predict future energy costs accurately. “This tariff is up to 40% cheaper than that of the national grid, providing significant savings each month and over the lifetime of the agreement,” says Charl Alheit, SolarAfrica’s Chief Investment Officer. To date, SolarAfrica has signed more than 125 PPAs with local and multinational businesses. Since delivering the first grid-tied PPA in Kenya in 2014, SolarAfrica has achieved many milestones, including the construction of one of the largest solar carports in the world for the Ford Motor Company. These milestones highlight the company’s culture of innovation. SolarAfrica’s solutions extend far beyond its finance agreements. As solar finance experts, the company plays a significant

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Charl Alheit, SolarAfrica Chief Investment Officer

role in the design and development of each project. Its in-house engineering team oversees the complete design, modelling and procurement process, ensuring that every solar system is customised to suit the specific energy requirements of each client, delivering the highest possible energy savings. With the adoption of solar energy by South African businesses now mainstream, solaras-a-service has become the next soughtafter solution. SolarAfrica is committed to providing sustainable savings through solar energy and assisting organisations along their green energy journey to achieve their sustainability goals.

Irene Corporate Corner, 49 Via Salara Cres, Irene, Pretoria 087 095 0553

NPO

Co-designing solutions through green economy partnerships

he premise that underpins most definitions for “green economy” is that economic progress can happen without depleting natural resources. Environmental sustainability makes business sense. Partnerships and collaborations enable the removal of barriers to green economy growth. Barriers could be anything from outdated legislation, or new standards and approaches, to skills for future green jobs. Over the past 10 years GreenCape, a PBO, has focussed on growing the green economy in South Africa, leveraging an eco-system of partners to unblock systems and barriers, contributed to attracting more than R42 billion worth of investment, creating more than 19 000 jobs in the green economy. The sectors that GreenCape works in include energy, water, sustainable agriculture and circular economy (including industrial symbiosis), with cross-cutting projects that also focus on green finance and alternative service delivery. Being at the nexus of academia, business and government provides the opportunity to share insights that benefit the business of green. Insights are shared through the publishing of in-depth annual market

intelligence reports per sector, industry briefs and case studies, as well as through direct sector support engagements with tens of thousands of government and business stakeholders every year. SMMEs are often the catalysts driving the development and adoption of cleantech innovation that can solve some of the challenges faced by the country, like energy insecurity, water scarcity and struggling municipal waste management services. Through initiatives like the Green Outcomes Fund, NBI’s Climate Finance Accelerator and the Solar Impulse Foundation’s 1 000 efficient solutions label, GreenCape is working closely with national and international partners to support local green SMMEs so that cleantech innovation can scale both in SA and Internationally. The Empire building challenge is a good example of this, where South African companies can participate in a 50m USD challenge

to retrofit 10 high-rise building in New York. The Friedrich Naumann Foundation for Freedom supported the development of the Green Business Support Services Directory. This portal is dedicated to the open-source digital directory of green business support services in South Africa. The digital directory is a free public resource and consists of information on services, programmes and opportunities available to entrepreneurs in the green economy. South Africa is rich in ingenuity, and the country has an abundance of natural resources that can be harnessed to grow the economy in a manner that is socially inclusive and environmentally sustainable This article is published in partnership with FNF Africa.

2nd Floor, North Wharf, 42 Hans Strijdom Ave, Foreshore, Cape Town, 8001 info@green-cape.co.za www.green-cape.co.za

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Big steps to a smaller footprint Growthpoint Properties remains committed to reducing our carbon footprint, as it is a critical component of our environmental strategy that we have been implementing for the last decade. By leveraging crucial data and setting clear targets, we will continue to create spaces where people and the environmental thrive.

Food Waste

INNOVATIVE SOLUTION FOR THE DIVERTING OF FOOD WASTE

iobiN South Africa is a waste management system that brings an easy solution for diverting food and organic waste away from landfill sites through composting. And not to worry, the BiobiN has been carefully designed to reduce odours, flies, and rodents. By having a BiobiN on your premises, you can produce high-quality compost while supporting a solution that seeks to alleviate the pressure on landfill sites due to the biodegradation of organic waste. BiobiN is a capture and containment vessel used for food and organic waste, where the waste is transformed into high-grade compost. One cannot underestimate the importance of compost. It adds carbon to the soil, reducing water usage and improved yields, vital in a country with a limited water supply. The unit has been designed with on-site waste management in mind. It provides an easy and innovative solution for businesses such as corporate offices, food outlets, supermarkets, hotels, chicken producers, and any other operation that produces a lot of food and organic waste and is looking to reduce their waste footprint.

There is a growing need for an organic waste solution such as BiobiN. Food and organic waste in landfill sites rapidly break down to produce methane, an atmospheric pollutant 22 times more potent than carbon dioxide. The team at BiobiN see organic waste as a resource, that when captured and processed correctly, produces a highquality soil conditioning product. With increasing pressure from the government, corporates need to adapt their waste management practices quickly. It is also a great opportunity to show their

commitment to reducing their contribution to global warming. A well-implemented recycling system and a BiobiN on their premises shows well thought out corporate social and environmental responsibility initiative. BiobiN was successfully launched and piloted in Australia 20 years ago and has been widely adopted as a green alternative waste disposal solution worldwide. It operates on a rental model, which includes trained agents on site, unit management, waste reporting, and maintenance.

Contact details Brian Küsel • brian@biobin.co.za • +27 82 578 1934

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Infrastructure investing

Energy sector

The power to transform the energy sector – and much more By Paul Semple, Head: Unlisted Credit @ Futuregrowth

or almost half a century, the supply of cheap and abundant electricity drove the growth of South Africa’s industrial heavy economy. The consumer price of our electricity was amongst the lowest in the world and many countries envied Eskom as a highly successful and efficient utility. However, complacency set in and the need to refurbish our energy sector was overlooked for many years.

innovation and increased scale of battery storage rollout is expected to drive costs down further. Used together, battery storage and renewables will be relied on more and more to provide baseload energy. Thus, the world’s historical reliance on fossil fuel energy, maintained and controlled by centralised power authorities, is set to be replaced by dramatically different architecture, boundaries and capabilities.

Increased urgency The key concern for the country and its investors is the glacial slowness of government to implement these promising plans, while Eskom’s generation capacity continues to deteriorate. On top of this, the catastrophic setback to our economy from the onslaught of COVID-19 has emphasised the utmost urgency for new, clean and additional energy to:

Dramatic disruption of global energy While we have been lamenting the downward spiral in Eskom’s ability to keep the lights on - and the attendant blow to our economic growth - the global energy sector has started to witness a rapid transition from centrally planned, monopolistic power utilities that rely on fossil fuels to decentralised power markets that embrace alternative forms of energy. Many countries are now supporting the generation of electricity closer to the end-user, including self-generation and the presence of many competing buyers and sellers.

Steps in the right direction Despite South Africa’s dismal energy situation over the past decade, significant steps have been taken to catch up with the global trend. Following the release of the updated Integrated Resource Plan (IRP 2019) and the Roadmap for Eskom in a Reformed Electricity Supply Industry (Roadmap for Eskom) in late 2019, the government reaffirmed its intention to procure much more alternative electricity in future. This will include multiple energy sources in place of coal, an unbundling of Eskom, and an increasingly decentralised energy sector.

• S upport the revitalisation of South Africa’s growth and development, which is expected to be underpinned by government’s plan for a massive roll-out of new infrastructure and the re-industrialisation of our economy;

The world’s historical reliance on fossil fuel energy, maintained and controlled by centralised power authorities, is set to be replaced by dramatically different architecture, boundaries and capabilities. Over the past decade, the cost of renewable energy has fallen dramatically and is already the cheapest and cleanest form of generation on the planet. And the ongoing

In line with the government’s Roadmap for Eskom, the utility has a vital role in managing one of our crucial national assets, the 33 000km of transmission lines comprising the country’s electricity grid the most extensive power line system on the continent. The plan sets out Eskom’s transformative function as an unbiased electricity market broker, facilitating the contracting of many different independent power producers and off-takers and managing the balance of electricity demand and supply across the national grid.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

• Keep the lights on and ensure that investors have the confidence to commit new capital to South Africa with the assurance of uninterrupted electricity supply - this being one of the fundamental needs of any business; and • Affirm the country’s commitment to reduce its carbon emissions and status as one of the world’s biggest fossil fuel energy polluters. This is critical ahead of the COP26 conference in November 2021 and government’s plans to seek loan funding from international development finance institutions. Looming drop in supply Compounding Eskom’s dire financial position is the average age of almost 40 years of its fleet of coal power stations, with many closer to 50 years. As it stands, the utility does not have the capacity to meet government’s forecast of additional electricity demand totalling at least

Energy sector

16GW over the next 10 years. Eskom has scheduled the decommissioning of at least 13GW from its end-of-life coal-fired plants over this time frame, 28GW by 2040 and 35GW by 2050, equating to more than 80% of its existing coal plant capacity. This leaves no option but to establish new (and renewable) forms of electricity supply.

Reform of South Af rica’s energy sector has the potential to reverse the deindustrialisation of our economy. In our favour On the other hand, South Africa has massive advantages in capitalising on the global trend towards renewable energy. It has: • One of the most resource-rich climates in the world for generating renewable energy; • An extensive national transmission and

distribution network, able to connect large numbers and diversified sources of alternative energy; and • An established track record of independent power procurement under the Renewable Energy Independent Power Producer Procurement (REIPPP) Programme that boasts a highly robust legal framework and is trusted by investors globally. Opportunity abounds Reform of South Africa’s energy sector has the potential to reverse the deindustrialisation of our economy if given the impetus of local manufacture of equipment for new project investments. Investor confidence will grow on the back of the government’s actual delivery on its commitment to decentralise the energy sector and increase energy procurement from private producers. This will help catalyse economic growth and development, attract investment in new skills and training for South Africans, greatly

Infrastructure investing

assist with the reduction in unemployment, and facilitate the research and development of renewable energy technology for export to Africa, where massive growth opportunities await. We must keep up The disruption of energy is likely to resemble the digital disruption of data use. The permeation of the internet slashed the cost of information. It opened the door to hundreds of new business models that collectively have had a transformative effect on the global economy. The power to transform the South African energy sector and restore our economy is in our hands. We cannot afford to be left behind.

About Futuregrowth Futuregrowth Asset Management is a licensed discretionary financial services provider.

Futuregrowth Asset Management Switchboard: 021 659 5300 Email: info@futuregrowth.co.za Paul Semple | Head: Unlisted Credit Email: pauls@futuregrowth.co.za

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

TECHNOLOGY

Solar Energy

Harnessing the green economy for growth and increased job Caring opportunities Hands / Community

T Efficient Energy

Alternative Building Materials

Sustainability

Wind Energy

he Atlantis Special Economic Zone for local TVET education institution. Learners green technologies aims to harness from five local schools took campus tours the green economy for growth and and attended the expo to learn from local increased job opportunities by driving achievers working in the green economy. They sustainable development and job creation. got to learn about the skills needed to get It has positioned itself as a world-class into various occupations, explore different eco-industrial park and Living Lab. The Caring career foroptions the and got to understand the responsibility of operating the park and lab environment kind of support that is available for careers as a resource-efficient, carbon-neutral and that require mathematics and science – be it socially inclusive industrial hub lies with, tutoring or digital and technical training. Many amongst others, the infrastructure and learners shy away from occupations requiring Integrated Ecosystem (IES) team. mathematics and science, so learning that they can get support could prove a gameThe eco-industrial park seeks to attract changer for them. Many learners did not know greentech investors who embody the what options were out there. elements and ethos of green technology manufacturing. The Atlantis SEZ is run on Hydro They now have insight into what careers they Energy green-economy principles. can pursue and gained a lot of knowledge. Thanks for being local and easily accessible,” Green skills development and growing commented Gail Kortge, Deputy Principal of technical capabilities within the Atlantis Protea Park Primary School. community are part of the ASEZCo’s strategic objectives, aligned to the legislative A young female student in the electrical workshop shared her powerful story of requirement of the Special Economic Zones Act to grow the regional economy and drive determination and achievement. She spoke socio-economic impact. of how she landed a career in the electrical field while studying at West Coast College The IES team supports the Atlantis community Caring and for the the challenges she faces in raising a through skills and enterprise development, environment child while doing her practical training. Her coupled with community integration. The story provided rich insight for the primary aim is to enable the Atlantis community, and school learners, while allowing them to see particularly its youth, to tap into growing job what grit and dedication can achieve along opportunities, particularly opportunities in the self-improvement journey. Seeing women the buoyant green economy. A recent skills learning and working in a typically maledevelopment initiative was the annual Career dominated industry was an eye-opener for Expo held at the end of September 2021, many young attendees. The IES team is very collaborating with West Coast College, a focused on the empowerment of women and

Cleaner Oceans

The aim is to enable the Atlantis community, and particularly its youth, to tap into growing job opportunities, particularly opportunities in the buoyant green economy.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Z CI

TECHNOLOGY

Caring Hands / Community

Solar Energy

Caring for the environment

Efficient Energy

Hydro Energy Alternative Building Materials The geysers are made from recycled encouraging women to aspire and achieve in technical careers. The team comprises 80% women from diverse backgrounds who are experienced professionals. The communities of Atlantis were hard-hit by the COVID-19 pandemic and have been grappling with the impact it has had on their livelihoods. To assist and support these communities, the IES team is implementing various programmes that make a difference. ASEZCo is funding the installation of solar-powered geysers to provide warm water and sanitation solutions for 100 households in the Witsand and Pella informal settlements. This is a direct drive to improve access to warm water and sanitation. People in underresourced communities often struggle to meet the basic hygiene recommendations of the World Health Organization on hand washing and sanitising, which is particularly pertinent during this time of COVID-19.

bottles, providing an innovative solution to plastic pollution. ASEZCo has partnered with Lulalab on this project, which will create employment opportunities for those assembling, installing, and maintaining these geysers, and practical skills training.

Sustainability

Driving growth through green economy innovation and sustainable job opportunities remains at the heart of what the ASEZCo does and what the IES team brings to life in collaboration with the Atlantis community. Collectively they will continue to grow the regional economy in a meaningful and impactful way, enabling Wind the regeneration of Atlantis and a leader Energy in green economy manufacturing in an eco-industrial park that puts sustainability, and social inclusion at the top of its agenda.

Caring for the environment

Cleaner Oceans

Atlantis Special Economic Zone Tel: 087 183 7000 7th Floor, South African Reserve Bank Building, 60 St Georges Mall, Cape Town, 8000 Email: hlumela@atlantissez.co.za (Events) | kerryn@atlantissez.co.za (Marketing) jarrod@atlantissez.co.za (Business Development) Website: www.atlantissez.com

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

The Atlantis Greentech Special Economic Zone gives answers to how green industrialization will look, feel and work

The making of a successful greentech special economic zone (SEZ) in uncertain times By Matt Cullinan

NCTAD’s World Investment Report in 2019 highlighted that SEZs, whilst needing to get the basics right (including their strategic focus, governance/management and investment promotion), have to step up to the challenges brought about by the sustainable development imperative, the new industrial revolution and changing patterns of international production. This is backed by growing awareness of the sustainability imperative amongst consumers and voters. Check any general news site and you will come across something related to the climate and the growing pressure to act on greenhouse gas emissions and ensure sustainable development. The Covid 19 pandemic has also emphasised the fragility of supply chains and also the fragile existence of the majority of the world’s population. It is not enough to just grow the economy, this must be done in an inclusive and just manner. This is often referred to as the “just transition” to a green economy. Quite a challenge. On the other hand there is a growing, sometime bewildering, array of new technologies and processes which promise and usually deliver sustainable solutions. These (often niche) green technologies, or greentech as they are also known, are key focus areas for the growing green economy. UNEP defines the green economy as, “low-carbon, resource-efficient and sociallyinclusive”. Resource efficiency refers to the

limitations the larger the application). One thing is clear, whilst the past compromised single big solutions (big coal and nuclear for example), the future will almost certainly see a growing array of different technologies and solutions, with bespoke solutions tailored to specific situations and applications. From a technology perspective, a sustainable future is likely to see smaller and geographically distributed utility solutions, connected but individually managed at smaller scale (e.g. municipal or site vs national), diverse in technology, varied in application and (probably) technologically resilient and adaptable as result. Matt Cullinan, Infrastructure Development Executive ways in which resources are used to deliver value to society and aims to reduce the amount of resources needed, and emissions and waste generated, per unit of product or service. Green technologies that support sustainable development and resource efficiency impact four main areas. Namely, energy, water, waste and natural systems. Some of these technologies, like solar and wind energy, have reached a point of being well understood. Solar and wind energy utilities and their suppliers are increasingly included in conventional investment portfolios. Others, like utility scale battery storage, are still open to competing technologies (Lithium batteries work well at small scale, but face challenges and

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

It is an exciting time, but also challenging if certainty and predictability is what you need. For special economic zones, such as the Atlantis SEZ which is specifically positioning itself to support greentech investors, it requires a flexible and adaptable approach. A willingness to get going, to learn and test is key as one evolves an approach that speaks to investor tenant demands and that grows an exciting and compelling locational proposition. Tom Farole, a World Bank economist, who has researched and written extensively on SEZs suggests that there are three points to consider to approaching a SEZ and its associated strategy. The first is to be clear on the problem you are trying to solve. The second is to ask if an SEZ is indeed the correct tool to solve the problem. Then third, and assuming it is the right strategy, then be bold and push the boundaries of what is

THOUGHT LEADERSHIP ARTICLE

The need for green skills is steadily growing globally, resulting in future-proof career opportunities.” special economic zone

possible. Design the zone and its strategy based on the problem to be solved. Make it special. As an example, for the Atlantis Greentech SEZ the greentech focus is a key defining feature in terms of the tenants and investors we attract, but also how we run and operate the park. In addition to the core principles of good governance, good location and good promotion, the greentech offers the differentiator. The term ‘living lab’ is specifically used in addition to the Eco-Industrial Park (EIP) terminology as it embodies the idea of the SEZ testing and showing greentech. It is about testing how industrial development, and industrial development zones, can be low carbon, resource efficient and socially inclusive. Lessons learned can be shared and hopefully lead to adoption of low carbon, resource efficient and socially inclusive industrial development elsewhere. The whole Eco-Industrial Park model has been developed by UNIDO and in South Africa is actively championed by the DTIC’s Regional Industrial Development unit and run by the National Cleaner Production Centre (with various international and local support agencies). Interestingly there are considerable benefits for investors. For example, improved energy security through

local generation of electricity via rooftop solar. Another example is through utilising waste as a resource through an actively managed industrial symbiosis programme. Building on this, the Atlantis SEZ is now exploring green star rating for the precinct and its buildings. All this contributes positively to what an Eco-Industrial park can offer tenants. This is especially the case when marketing products to consumers who are increasingly demanding that companies and corporations act responsibly and sustainability. What started out as a process of showcasing emerging greentech utilities for running a sustainable industrial zone, has quickly become a major asset and selling point for the SEZ. This is something the Eco-Industrial Park ‘label’ clearly signifies. No person is an island is the saying, but this is equally true of an SEZ. Just as we are made and defined by other people, so too is an SEZ made and defined by its relationship to its neighbours and community. In fact the benefits and impacts of an SEZ can be greatly enhanced by actively encouraging companies in the SEZ to connect to regional value chains and to support skills and enterprises located in close proximity. This is about focusing on the so-called “spillover” benefits of SEZs. It is still early days, but we can already see

some key advantages of this focus emerging. These include growing collaborative efforts to grow skills and enterprises in the local economy and community. The ability to draw in, and connect with, various project partners, most notably across the three spheres of government is a huge asset. This structure is represented in the collaborative efforts shown in programmes that are being implemented in Atlantis. There is a focus on building skill sets relevant for the green economy, not just in the SEZ, but also for the regional and national economy. The need for green skills is steadily growing globally, resulting in future-proof career opportunities for suitably skilled citizens. In all this we continually emphasise, as part of the company culture, the role and value of active investment facilitation in ensuring that investors looking to get into the exciting greentech market are supported and given a solid and secure base from which to operate. At the Atlantis SEZ we are working the challenge of the just transition to a green economy everyday. This means trying out, testing, learning and doing in a constant cycle of learning. It is part of being an innovation laboratory for the green economy. It is also a key part of what makes us a compelling and attractive investment destination. That is true of any SEZ.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

A circular economy ensures long-term sustainability By Annette Devenish, Marketing manager, Sani-touch

here is consensus that single-use plastics are bad for the environment. The pandemic has resulted in greater utilisation of single-use plastics and put the spotlight on potential solutions.

viable. By working closely with recyclers and upcyclers, we created a viable system that has the added benefit of creating jobs. We faced numerous challenges along the way. These included motivating customers and recyclers and getting support from environmentalists, albeit a difficult task to try to convert some environmentalists from banning products to finding sustainable solutions.

Is the answer to ban all single-use plastic items, including plastic straws, water bottles, hand wipes and disposable masks? The answer is clear-cut as far as plastic straws and water bottles are concerned but less clear cut when it comes to wipes and disposable masks. In the case of the latter, a more effective solution than a blanket ban is to find simple and effective practices that will result in sustainable circular economies and job creation. That’s precisely what Infection Protection Products set out to do during the pandemic, given the rapid increase in the use of its pre-saturated wipes. When pre-saturated wipes were first introduced into the South African market about 15 years ago, they were produced using, biodegradable paper. However, this special wet-strength paper is imported and expensive, and it soon became necessary to look for more cost-effective solutions. Polypropylene is the preferred material used internationally for pre-saturated wipes. The availability of polypropylene locally is an advantage, as is the fact that it’s recyclable. However, getting polypropylene into a circular economy at that stage was easier said than done given that the volumes were too small and collecting, gathering and sorting used wipes from other refuse is a messy and timeconsuming job. Fast-forward to the Covid-19 pandemic and a massive increase in the use of pre-saturated

Annette Devenish, Marketing manager, Sani-touch

wipes. We realised the volume issue had been addressed and all we now needed was a sustainable solution that benefited everybody along the recycling chain. The only way that a circular economy will work is if it is simple and economically

In the latter half of 2021, we converted all our 100% polypropylene wipes to an easily identifiable green colour to distinguish them from those of our competitors, which may not be recyclable. We also converted the Sani-touch Saniwipe buckets, their catches and stickers, to 100% polypropylene so even the buckets can be recycled. With the support of one of our larger retail clients, we put the system in place. Recycling companies are now recycling the used wipes into pallets which are then returned to Infection Protection Products for use in our factories and warehouses, replacing traditional wooden pallets. The polypropylene pellets - small plastic chips - on the other hand, are used for various products such as in carpet, furniture and container production.

Our sustainability journey is about taking one product at a time and finding sustainable solutions, constantly innovating along the way. It’s about making incremental changes to ensure that our solutions are cost-effective and fit-forpurpose. Ultimately, it’s about ensuring a better future for our planet.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Grid Edge – Accelerating the transition towards a zero-carbon future www.siemens.co.za

THOUGHT LEADERSHIP ARTICLE

Accelerating the transition towards a lower-carbon future By Sabine Dall’Omo – Siemens CEO for Southern and Eastern Africa

commitment to be carbon neutral by 2030.

he world is pursuing a green economy agenda; one which promotes the transition to economies that are low carbon, resource efficient, sustainable and socially inclusive. These economies can reduce and possibly eradicate activities that harm human and environmental health. In the South African context, the green economy is viewed as a sustainable development goal focused on addressing the interdependence between economic growth, social protection, and the natural ecosystem. South Africa’s approach is to ensure that the green economy programmes are practical and implementable through existing best programmes, initiatives, processes and indigenous knowledge in key sectors; and that collaborations between governments, the private sector and civil society will play a crucial role towards the achievement of this goal. A key partnership worth mentioning is one between South Africa, the US and European Union at the COP 26 UN Climate Change Conference, hosted in Glasgow, Scotland late last year. These developed nations pledged to support South Africa’s climate action goals by helping finance the move from its heavy reliance on coal to cleaner and renewable energy sources. This green funding is aimed at establishing renewable energy sources in the country, repurposing coal power stations, investing in new sustainable energy sectors including green hydrogen and electric vehicles, and making the country’s economy less reliant on fossil fuels. The transition towards realizing a green economy in South Africa requires strategic planning, improved governance and the development and translation of policies into actions, for various industries including transport, water, waste, agriculture, and energy. South Africa still has a great deal to prioritize in order to achieve the green economy status. A major challenge the country continues to grapple is the ongoing power supply shortage

We have taken leadership towards decarbonization, also helping our customers meet their individual decarbonization goals. It is our firm belief that companies play a pioneering role in the fight against climate change. Our goal is clear: All Siemens production facilities and buildings worldwide are to achieve a net zero-carbon footprint by 2030. This program not only benefits humanity and the environment, but also comes with sustainable economic advantages for our company.

Sabine Dall’Omo, Siemens CEO for Southern and Eastern Africa which results in power-cuts that ultimately affect daily life and business continuity. Alternative, more sustainable ways to generate power have become urgent. Grid edge technologies are crucial to support the energy transition. The grid edge is where the grid meets the end consumer, but it is also where smart technologies are introduced to guide energy flows and balance supply with the demands of buildings, industry and private consumers. These technologies not only include local consumption and production systems, but also the smart meters, energy management systems and battery storage. They are the systems that provide the data and analytics to enable Electric Vehicles, heat pumps, solar panels, building controls and smart appliances to be fully integrated into a more sustainable energy matrix. These innovations create new ways to increase the resilience of people, communities and the system itself without increasing greenhouse gas emissions. Companies, like Siemens are leading the way towards carbon neutrality. Siemens has a firm

At our headquarters in Midrand – South Africa, we’ve implemented a Distributed Energy System (DES) that utilizes about 50% less energy from the national grid. The project provides a showcase on a proven Siemens solution that will help save energy, cut costs, lower carbon emissions and ensure uninterrupted power. Everything from installation to operating costs has been tracked to present a realistic case study for the South African context. This DES solution installed at our office park serves as an active example of our belief in the solution and the sustained benefits it creates. The system can be replicated and adapted to provide reliable and more efficient power to businesses, office parks, manufacturing plants, institutions and even small communities that do not have access to the national grid. While South Africa’s energy sector is still highly dependent on fossil fuels for the generation of power, the goal of a green economy for the country is not far-fetched. With the collaboration of the right stakeholders and industry experts, a low-carbon future where even consumers and customers can take responsibility for their energy future can be achieved. Grid edge solutions are therefore accelerating the transition towards a lowercarbon future and transforming today’s energy landscape to create a more caring environment.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

Alternative Fuels Crucial for Sustainable Electricity Generation By Shane Janse van Vuuren, General Manager: Compressors and Turbines at Howden.

Biomass from sawmills Biomass waste from sawmills can, for instance, be used as fuel to produce steam that drives a turbine and generator to produce electricity at any time of the day or night.

he Government’s move to raise the licensing threshold for privately generated electricity to 100MW has created financially attractive generation opportunities for companies with access to previously wasted yet environmentally sustainable energy sources.

The generated electricity can be sold to customers during peak power demand times at night or in the morning or used at the sawmill itself during off-peak times.

The renewables debate on electricity tends to emphasise the benefits of wind and solar generation, which, while being environmentally friendly, are by nature intermittent owing to their dependence on sunshine and prevailing wind. It is worth considering that cheap, readilyavailable fuels can be used to generate electricity to supplement solar and wind renewables in peak demand evening and morning periods, especially during the winter season. Electricity can be generated from biomass, bagasse or biogas, from Combined Heat and Power (CHP) boilers at refineries and industrial plants, or by using waste materials, all used as fuel to drive steam turbines. Alternative fuels for electricity generation have high dispatchability Generation plants using these fuels have the advantage of high dispatchability where power output can be quickly increased or decreased, depending on demand during peak times. Dispatchability is usually the preserve of

The sawmill owner benefits from cost savings and additional income while reducing CO2 emissions and plant waste.

Shane Janse van Vuuren traditional coal plants, Open Circuit Gas Turbines (OCGT) or Concentrated Solar Plants (CSPs) using thermal storage. The advantage of using sustainable fuels for dispatchable peaking power is that the fuel is essentially free and environmentally sustainable. Coal and OCGT plants emit harmful gases such as Carbon Dioxide (CO2), Sulfur Dioxide and nitrous oxides. The fuel is expensive, particularly with OCGTs that burn imported diesel or gas. The drawback of thermal storage CSP plants is that the technology limits them primarily to evening peak times.

Electricity can be generated using bagasse as a fuel.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Similarly, biogas, an environmentally friendly, renewable energy source produced from readily available organic matter such as food or animal waste, can be burned to generate electricity in a CHP plant. CHP boilers can also be incorporated into scrubbers used to control oil refineries and industrial furnaces emissions. Environmental emissions regulations already require gas cleaning plants for these industries. Instead of flaring the collected harmful gas contaminants at the stack, captured gases such as carbon monoxide and hydrocarbons can be burned in a CHP plant to generate electricity, for use by the owner or for sale to customers. About Howden Howden is a leading provider of missioncritical air and gas handling products, providing service and support to customers in highly-diversified end markets and geographies globally. Howden’s products help customers increase the efficiency and effectiveness of their processes by enabling them to make sustainable improvements in their environmental impact and transition to net-zero carbon emissions goals.

Sustainable environmental solutions

For IPPs, hydrogen fuels and industrial plant gas cleaning. Howden has the solution for you. Howden technology is at the core of the worldwide drive to sustainability, supporting electricity generation with alternative fuels, decarbonising transportation with hydrogen and controlling industrial plant emissions. Through the acquisition of KK&K Turbomachinery and Peter Brotherhood, Howden is able to offer multi-stage steam turbine technologies with outputs of up to 40MW, backed with its specialist application engineering expertise. Independent Power Producer (IPP) customers have access to Howden alternative fuel generation options that are well-suited to peaking power output, with improved efficiencies and reduced carbon footprint. Howden turbines can be installed with Combined Heat and Power (CHP) or cogeneration boilers using waste heat for electricity generation, or incorporated in thermal power plants fed with alternative fuels such as biomass, biogas or waste materials such as bagasse.

Compressors for hydrogen FCEVs Howden is a major role player in the unfolding transition to zero emission fuels for transportation, made possible through its world-leading compressor technology for hydrogen. Diaphragm compressors invented by Howden Burton Corblin are integral to the complete hydrogen value

chain, from production to storage and distribution, and especially at refuelling stations for Hydrogen Fuel Cell Electric Vehicles (FCEVs). Howden compressors offer an affordable source of uncontaminated hydrogen for FCEVs through reduced levelised costs and the capability of refuelling an empty vehicle hydrogen cylinder in less than three minutes. The hydrogen compressors are also made super safe with the company’s proprietary HIDS system which has real-time system monitoring, a fail-safe stop procedure, and the containment of process gas in the event of a breach.

They are supplied on a turnkey basis, and include design and detail engineering, supply and manufacture, civil design and construction, electrical control and instrumentation systems, plant erection, commissioning and handover to the customer.

Customised steam turbine solutions.

Gas cleaning solutions Howden dust collection and scrubber technologies have been proven at South African power generation and industrial sites for 25 years. These low maintenance gas cleaning systems meet the most stringent industrial atmospheric emissions regulations requirements, cost effectively and efficiently.

H series compressors offering pressure increases of up to 450 bar are ideal for hydrogen applications.

Howden technical innovation and service excellence supporting customer success!

For further information contact: Howden 1a Booysens Road, Johannesburg, 2091, South Africa Tel: +27 11 240 4090 | Email: marketing@howden.co.za | Web: www.howden.com ©Howden Group Limited. All rights reserved. 2022. Howden and the flying H logo are registered trade marks belonging to Howden Group Limited.

www.howden.com

THOUGHT LEADERSHIP ARTICLE

Why Companies Need a 360° Sustainability Approach How SA companies can evolve and utilise global best practice By Millicent Maroga, Corporate Affairs Director, HEINEKEN South Africa

ith another eventful year concluded, South African companies are presented with an opportunity to rewrite their corporate strategies and start the New Year with a clean slate, particularly when it comes to effectively delivering on their corporate sustainability agenda.

Globally, organisations have a responsibility to educate their consumers regarding their products’ safe and responsible use. Consumers have a right to know to what extent your product is good for their health and the environment. Marketing campaigns and labelling should address this and display appropriate product usage for maximum enjoyment and health.

This is an opportune time for corporates to interrogate their sustainability approaches, identify where room for improvement lies, and establish whether their goals address societal and environmental problems at an advanced level. Global best practice remains a good benchmark for acing corporate citizenship to ensure that this is the case. Admittedly, this is not overlooking the reality that South Africa’s societal challenges are unique and need to be tackled accordingly. It is not implausible to think that locally and abroad consumers share similar worldviews and traits. Consumers worldwide have very high expectations of corporate companies and brands and expect the highest levels of responsible business practice and sustainability to be at the heart of operations. Thus, a holistic sustainability approach that resembles global best practices and integrates international standards will improve corporates’ sustainability performance. With that in mind, these key points can sum up a company’s sustainability agenda and yield great results for a business and its stakeholders: Cater for society holistically or inclusively More than ever, the communities affected by one’s business activities need to be at the core of decision making. Supporting the communities in which we operate has

Reduce your carbon footprint Organisations concerned with their carbon footprint must evaluate how to reduce the impact of their actions and have goals and timelines in place to eliminate their carbon emissions through concerted efforts.

Millicent Maroga, Corporate Affairs Director, HEINEKEN South Africa

thankfully been in our HEINEKEN corporate DNA for several years. However, this should never be forgotten in our unequal society. Businesses must support communities that are directly and indirectly affected by their business operations. We are becoming more aware of how diverse our world is, and we cannot passively tout inclusivity and diversity without action. Consumers and employees need to feel that they are being spoken to and included, while differently-abled colleagues, women and individuals with different sexual orientations should feel seen. Advocate for responsible product use or consumption Most products, if not used or consumed in moderation, can lead to health issues.

Make water protection a priority Water is a scarce commodity. Protecting our water resources and saving water must be a priority, particularly in the manufacturing sector, where water consumption is significant. A sustainability strategy is not a luxury. It is your organisation’s lifeline. At HEINEKEN, we recently refreshed our global sustainability programme, Brew a Better World. Our HEINEKEN growth strategy, EverGreen, is putting sustainability and responsibility front and centre as we write our next growth chapter. Our new 2030 commitments are woven into the fabric of our new balanced growth strategy, which takes into account the enormous societal and environmental challenges the world faces that require decisive and collective action.

A sustainability strategy is not a luxury. It is your organisation’s lifeline”

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

THOUGHT LEADERSHIP ARTICLE

Giving the green light to green deals in Africa By Jason Wilkinson, Partner, Bowmans South Africa

investment strategies, was published in November 2020. It sets out various principles and practice recommendations with an emphasis on ESG and broader sustainable development issues. It also proposes a shift from an ‘apply or explain’ to an outcomesbased, ‘apply and explain’ application regime.

nvironmental, social and governance (ESG) initiatives are key market drivers for governments and corporate leaders, given the overwhelming need to advance sustainable investing. Regulatory regime Regulatory requirements are a driving force behind sustainability in the lending market. Key to this is the Paris Agreement, and one of its critical parameters: to reduce greenhouse gas emissions by 40% by 2030 to levels in the 1990s.

The majority of investors and asset managers support CRISA and apply its principles. Many institutional investors will regularly publish ESG policies and sustainability reports dealing with ESG issues. There is also a growing number of ESG-related products being provided by the various asset managers.

From a South African perspective, several foundational documents inform the domestic regulatory framework to achieve the country’s ESG goals, including the Paris Agreement on Climate Change and the UN’s 2030 Sustainable Development Goals. In May 2020, National Treasury released a paper that aimed at increasing access to sustainable finance and stimulating capital investment in a developmentfocused and climate-resilient economy. It also recommended the enactment of a taxonomy similar to the EU Sustainable Finance Taxonomy (EU Taxonomy), in force since July 12, 2020.

Jason Wilkinson, Partner, Bowmans South Africa

In June 2021, National Treasury published the Draft Green Finance Taxonomy (Draft Taxonomy), an official classification document that defines a minimum set of assets, projects, and sectors that are eligible to be defined as ‘green’ in line with international best practice and national priorities.

Investor appetite Due to its role in capital distribution, the financial services sector is integral to achieving sustainable development. Generally speaking, institutional investors and asset managers in South Africa recognise the importance of ESG and are taking steps to improve the integration of ESG into their operations.

South Africa’s green economy should be viewed from two perspectives: • economic activities that are intrinsically aligned to and/or are expected to make a substantial contribution to the future South African green economy; and

• economic activities that presently have a significant detrimental environmental impact but are needed as part of the future South African green economy and for which there are currently no known alternatives.

A revised draft Code for Responsible Investing in South Africa (CRISA) 2.0, a voluntary initiative that seeks to guide institutional investors in developing and implementing sustainable, responsible and long-term

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Consumer considerations International lending markets have embraced green loans and sustainability linked loans (SLLs). Over the past four years alone, the volume of sustainable finance has grown 15 times. In South Africa, green and ESG initiatives and related financings are no longer a theoretical aspiration. Ultimately, sustainable finance transactions depend on the nature of (and how measurable is) each key performance indicator or sustainable performance target. Finance providers will likely look at several factors when assessing potential financings, with reporting and verification being of primary importance. The younger generation is prioritising ESG initiatives. The next few decades will see the largest generational wealth transfer in history, from the baby boomers to millennials. With this will come newly prioritised investment criteria. ESG is likely to become a core strategic concern for corporates, driven by exogenous and endogenous factors and pressures, including a shift towards a more stakeholderinclusive capitalism.

INVESTMENT

Impact investing is the way of the future

lobally, the market for impact investing, sustainable business and environmental, social and governance (ESG) investing exceeds US$100 trillion. More than half of institutional investors across the world have integrated responsible investment principles into their investment approaches. In South Africa, there has been marked growth in impact, sustainability and ESG transactions in the past five years. This trend is expected to gain momentum across the continent. Legislation and regulation are beginning to change accordingly. Simultaneously, rising activism from both shareholders and civil society is driving heightened public awareness of the value of responsible investment. B o w m a n s m u l t i d i s c i p l i n a r y, multijurisdictional teams of specialists advise clients across Sub-Saharan Africa on the legal aspects of impact, sustainability and ESG matters. They have facilitated some of the first transactions of their kind in the region. In the mergers and acquisitions (M&A) space, the firm advises asset managers, fund managers, lenders and borrowers on transactions across asset classes and sectors, at every stage of the investment process, from design and formation to

measurement and exit. The firm also advises industry bodies, regulators and governments on partnering for impact, which has significant potential to drive sustainable development on the African continent. Bowmans lawyers have contributed towards frameworks such as the Principles for Responsible Investment, t h e U n i t e d N a t i o n s E n v i ro n m e n t Programme Finance Initiative and The Generation Foundation’s research on legal frameworks for investing. Its lawyers work closely with the Grunin Center for Law and Social Entrepreneurship at the New York University School of Law and the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town. The firm’s impact, sustainability and ESG

service offering includes: • Bank financing • Debt capital markets • Due diligence • Governance • Impact investment structuring and fund formation • Impact measurement and management • Impact M&A • Organisational form • Regulatory • Sector-specific expertise • Stewardship Please see Bowmans website (www. bowmanslaw.com/africa-insights/) for a range of reports on economic, social and business issues that affect the markets it serves - produced through a research collaboration with the University of Stellenbosch’s Centre for Sustainability Transitions.

About Bowmans Bowmans is a leading African law firm with offices in Kenya, Mauritius, South Africa, Tanzania, Uganda and Zambia, Alliance firms in Ethiopia and Nigeria, special

relationships with leading firms in Malawi and Mozambique, and a non-exclusive co-operation agreement with French international law firm Gide Loyrette Nouel.

Candice de Bruin, +27 11 669 9150 | candice.debruin@bowmanslaw.com www.bowmanslaw.com

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

Legacy starts with you(th). Tackle youth unemployment. Create green jobs for young South Africans and gain up to two levels on your B-BBEE scorecard

Say YES to growing a future that works for all. Preserve our planet. Grow our economy. Leave a lasting legacy. Join the movement of over 1,800 corporate partners that have already signed on to YES to build an inclusive and sustainable economy. It’s a win-win-win for country, company and youth!

THOUGHT LEADERSHIP ARTICLE

A lasting legacy starts with you(th) In the context of climate change, what is the collective legacy that we will leave behind for the next generation, our youth? By Ravi Naidoo, chief executive officer at the Youth Employment Service (YES)

limate change is moving faster than we are, according to the United Nations. The world will most likely breach the 1,5 degree Celsius warming threshold. The implications of this will be profound for southern Africa and, especially, for the younger generations. Measures to mitigate and adapt to these climate changes (activities that require so-called green jobs) are therefore more important than ever. The latest official data reflect two out of every three young people (under 35 years) in South Africa are unemployed, and this rises to three out of four of the under-25s. Is it possible that we can create a green jobs pathway to employment for today’s unemployed youth, thereby creating hope for themselves, their families, and the future? There is much work to be done. Our young people – those who are supposed to be filled with passion and limitless energy – the ones who can do this work – are locked out. However, there are innovative tools being used to begin to include young people in the economy. Use the tools available There is increasing importance being placed on environmental, social and governance (ESG) strategies and the United Nations’ Sustainable Development Goals (SDGs) by investors and consumers. Many are choosing where, and what to buy, based on an organisation’s transformation, socioeconomic and environmental impact.

Similarly, it is becoming evident that consumers and investors are beginning to see transformation as a catalyst to help solve the country’s socio-economic problems. Broad-based black economic empowerment (B-BBEE), ESG and SDGs are holistic tools that can help address some of South Africa’s problems in the short, medium and long term. Many corporates are also realising the associated benefits these strategies can have on their businesses and in helping to build a lasting legacy. Create meaningful youth jobs that integrate with ESG/SDG Businesses are beginning to think of clever ways to integrate their ESG and SDG strategies with job creation for youth. They’ve begun using the creation of youth jobs to also impact social, environmental and economic issues that align with their holistic transformation strategy. These are sectors that are historically underfunded and under-resourced, but together, Business SA and our unemployed youth can begin to capacitate them to co-create a future that works for all. This has become an effective way to systemically and holistically begin redesigning our collective legacy and rewriting our heritage. Green jobs that are targeted at young people, for example, will preserve South Africa’s abundant natural resources for much needed macro-economic gain. More than that, we would be creating meaningful jobs for

They’ve begun using the creation of youth jobs to also impact social, environmental and economic issues that align with their holistic transformation strategy.”

Ravi Naidoo, Chief executive officer, Youth Employment Service (YES)

our youth (jobs that youth can get excited about) that contribute directly to the social, environmental and economic wellbeing of their communities and South Africa as a whole. Creating more green jobs for youth can contribute to looking after our planet, our economy, our country, and ultimately, will preserve a legacy we can be proud of for generations to come. A shift in how we view unemployed youth, from “burden” to “valuable potential”, can change the trajectory of South Africa’s future. There’s work to be done, and there are people who can do it.

FINANCIAL MAIL ESSENTIALS • GREEN ECONOMY 2022

WE CAN LIVE WITH IT. It’s not waste if you’re not wasting it. Re-purpose your plastic.

safripol.com

SAFRIPOL. GETTING PLASTIC OFF THE GROUND.

RE-THINK AT SAFRIPOL, WE CREATE PLASTICS THAT RESPONSIBLY SHAPE OUR WORLD, AND CREATE A POSITIVE IMPACT. Born in 1972, we are a forward-looking leading polymer producer and marketer in South Africa, who creates polymers for multi-purpose and recyclable products that support our strategic partners in their efforts to become more sustainable. At Safripol, we have made it our mission to work towards a thriving circular economy. We use the terms ‘responsible plastic’ and ‘irresponsible plastic’. ‘Responsible plastic’ is any plastic that is used, handled, and managed responsibly leading to re-using, re-purposing, recycling, or disposing of safely. ‘Irresponsible plastic’, by contrast, we define as the plastic that is not used, handled, or managed responsibly, leading to over-packaging, dumping, and pollution.

RECYCLE

RE-PURPOSE

By leading the charge to ‘plastic responsibly’, we take part in and fund projects to educate the public about plastic, recycling and create employment by uplifting communities through various initiatives. By being at the centre of these efforts to prevent plastic waste from going into our environment, we believe that people will take responsibility in the way in which waste is handled and that there will be a reduction in litter, pollution, and dumping. All of which is critical to the environment, and to our survival.

www.safripol.com | info@safripol.com | +27 (0)11 575 4549 | The Campus Business Park, 57 Sloane Street, Bryanston, South Africa, 2021

Financial Mail Green Economy 2022