South African ICT companies see significant opportunities to reduce their own environmental impact and assist other businesses in tackling challenges related to climate change.
This follows the unveiling of the SA Carbon Disclosure Project (CDP) report, in Johannesburg, last night. The CDP in SA annually requests the JSE's top 100 companies to disclose their carbon emissions and climate change data.
Altron, Dimension Data, MTN Group and Vodacom Group all made the Carbon Disclosure Leadership Index, representing companies which have demonstrated particular transparency in their disclosure practices.
Feroz Koor, executive head of sustainability for Vodacom, says the company is looking to reduce its carbon footprint and implement programmes around energy efficiency across the business. This was the first year the group disclosed its emissions, and Koor says it can now use the data gathered as a baseline for reduction targets and strategies.
In addition, he notes, there are huge opportunities for telecoms companies in SA to offer solutions to organisations facing climate change related risks. “Besides looking at our own corporate responsibilities, there's potential to offer products and services to the broader industry.”
Zakhiya Rehman, MTN Group sustainability manager, says strategies related to emissions reporting and reduction are critical for the company. ”Our largest operations are spread all over Africa and the Middle East, and these areas will be heavily affected by climate change.
“As we draw our business from these consumers, it's crucial that we support them in these challenges.”
She says MTN's mitigation and adaptation strategies focus on energy usage in its base stations, as well as investing in renewable energy initiatives. “In future, if you look at moving beyond just mobile to other ICT services, we're definitely looking beyond our own boundaries. At what solutions we could offer as an ICT operator to the energy, transport, and property sectors.”
Local leadership
Now in its fourth year, the local arm of the CDP is a partnership between the London-based CDP office and the National Business Initiative (NBI). This year, 74 of the JSE's top 100 companies responded to the CDP, giving SA the fourth highest response rate among 20 countries in which 4 500 of the world's largest corporations were surveyed.
“This suggests that, notwithstanding short-term concerns and the pressures associated with the economic downturn, climate change remains sufficiently high on the South African corporate agenda,” says Jonathon Hanks, managing partner at Incite Sustainability, which authors the South African CDP report.
Speaking at the event last night, CDP head of global operations Sue Howells said the project started 10 years ago and is now backed by 534 investors representing more than $64 trillion in assets. Howells said global findings show companies are paying particular attention to how they can capitalise on commercial opportunities.
She noted that business as usual is now a recipe for losing competitive advantage. “A new industrial revolution is beginning and businesses which make investments in solutions and technology now will be at the forefront of this change.
“The technologies are available, the task is to deploy them and that's why the CDP reports and data are crucial.”
According to Howells, 86% of the global 500 respondents see significant opportunities from climate change. “Climate change is becoming a mainstream strategic priority and has moved up to boardroom level.”
Hanks added that business is operating in a context of uncertainty and that recent ecological and economic turbulence have made climate change core to companies' strategy.
He said there's been a radical shift from four years ago, with 31 companies having specific performance targets relating to GHG emissions reduction while 22 have committed to developing such targets.
DiData is the only company among those in the IT and telecoms group to have set greenhouse gas emissions reduction targets. However, it reported an increase in absolute emissions of 18% from financial year 2008 to 2009. It attributes this to the expansion of its energy-intensive Internet Solutions data centre in combination with other increases in energy consumption.
The report says climate change issues appear to be increasingly integrated in companies' governance activities. Of the 74 respondent companies, 68 report having board committees or executive bodies with responsibility for climate change, and 36 provide incentives to management for achieving climate change goals.
However, the 2010 CDP report cautions that most companies “are insufficiently advanced in their adaptation initiatives”. It urges companies to adopt a more structured focus on adaptation opportunities.
Barney Kgope, NBI climate change programme manager, said the data gathered in the CDP report enables businesses to identify opportunities for green economy and open up new markets to become more globally competitive.
New water and environmental affairs minister Edna Molewa said climate change remains one of the biggest risks to sustainable development in SA.
“As the world's 12th largest emitter, the country has a responsibility to demonstrate leadership on the continent.” Such leadership must be accompanied by measuring and target-setting, she added, noting that disclosure would soon be mandatory and non-complying companies would face penalties.
“For the business sector, climate change is a risk management issue whether it acknowledges it or not. The sooner positive action is taken, the greater the economic benefits.”
Molewa said government has committed to moving with the rest of the world to drive changes and policies aimed at combating climate change. “In addition to adaptation and mitigation measures, there's a need to discuss the technology needs for a low-carbon economy and the mechanisms to finance these at local level,” she added.
This year, the CDP introduced a service for responding companies called Reporter Services, developed with Accenture, Microsoft and SAP. It enables them to report through an upgraded system using online analysis tools to improve their carbon management strategies through better quality data and tools.
The CDP in SA widened its scope this year by rating the JSE's top 100 companies not only on disclosure of their GHG emissions and climate change response strategies, but also on their performance in reducing emissions and in adopting climate change mitigation and adaptation actions.
Banking group FirstRand and mining company Gold Fields emerged with the highest rating for the level of their GHG emissions disclosures. They were followed by Anglo Platinum and Medi-Clinic.
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