Coca-Cola rains in local communities

To remind South Africans of the value of water and the need to protect and conserve our country’s water resources, the newly appointed Vice President of the South Africa franchise at Coca-Cola Africa, Phillipine Mtikitiki, is prioritising key sustainability issues such as water stewardship.

“Access to safe water remains a challenge in many of the communities in which we operate in South Africa and we, together with our bottling partners, have made it a priority to improve reliable access to safe water, to protect our water resources and replenish the water we use back into nature,” says Mtikit.

South Africa faces a number of challenges when it comes to water, but Mtikitiki says:

Partnerships between government, the private sector, NGOs and communities can help to improve reliable access to safe water and protect our water resources in a world affected by climate change.


“We are improving the overall water-use efficiency in our manufacturing plants as well as along our supply chain, partnering with government and communities to assess, understand and drive effective, long-term water stress solutions and replenish the water we use back to communities and nature,” she says.

When it comes to replenishing the equivalent of the water used in the making of its beverages, The Coca-Cola Foundation’s Replenish Africa Initiative (RAIN) focuses on replenishing water into nature in key watersheds by clearing alien invasive plants. These consume millions of litres of water each year, resulting in water shortages permanent loss to an already stressed water system.

Since 2019, RAIN has worked with partners such as The Nature Conservancy, World Wide Fund for Nature-South Africa (WWF-SA), Living Lands and the Endangered Wildlife Trust to clear 3 400 hectares in South Africa’s priority catchment areas, helping to replenish over an estimated 15-billion litres of water into nature over the next decade. The programme also provided employment and skills training for 389 women and young people in rural areas of South Africa.

“Access to water is inextricably linked to the economic empowerment of people.”

Vice President of the South Africa franchise at Coca-Cola Africa, Phillipine Mtikitiki

“Water is a valuable natural resource whose management requires all our commitment and collective actions.”
This is part of the motivation for local bottling partner, Coca-Cola Beverages South Africa’s (CCBSA) Coke Ville Groundwater Harvesting Project, which provides access to water in certain water-scarce, remote communities with limited economic opportunities. This has taken place in the community of Tshikota, Limpopo, with five additional community access projects planned for deployment across KwaZulu-Natal and the Eastern Cape in March.

The target is to deliver over 60-million litres per year by the end of 2021.

Relief water also plays an important part of humanitarian operations to bring relief to drought-stricken communities.
Since the beginning of the year, Coca-Cola Peninsula Beverages (CCPB) has been working with local municipalities in water-stressed regions in the Northern and Western Cape, leading relief water operations to assist communities. This has been a lifeline for people in these communities that have, at times in the past few weeks, been without water for up two days.

Expanding on its efforts in the Namakwa and Karkarms district in the Northern Cape, CCPB is now working to provide water relief to Merweville, Laingsburg and Touws River. To date, CCPB has delivered over 3-million litres of water using the tankers it invested in during the drought crisis to assist communities as well as providing specially produced Relief Water in 1L bottles.

“We’re confident that through our water stewardship efforts we will continue to make a difference and protect this most valuable resource,” concluded Mtikitiki.

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South African gas start-up, Bluedrop, receives major funding

Financial close heralds start of construction of a modern state-of-the-art Liquefied Petroleum Gas cylinder manufacturing plant.

Bluedrop expected to create 110 direct jobs

April 2021 – Johannesburg-based South African start-up Bluedrop, has secured an R300-million investment from J. Sassoon Group, a US, Washington DC-based private equity fund, for their Liquefied Petroleum Gas (LPG) cylinder manufacturing plant, in the west of Johannesburg, South Africa. The project is expected to create 110 direct jobs during construction and 35 direct jobs at full commercial operation. Using the highest standards in manufacturing processes along with the latest technology, and raw materials designed to reduce carbon footprint, Bluedrop will be setting a new standard for South Africa’s gas cylinder manufacturing.

Among the many challenges facing the project was that Bluedrop was in a pre-revenue stage in an incredibly competitive and highly regulated industry. However, J. Sassoon Group’s solution-driven management approach complements start-ups’ strengths while strengthening their weakness by utilising its own global network. In addition to assisting with sourcing global engineering firms for the construction, J. Sassoon’s external consultants and accounting service firm, PriceWaterhouseCoopers (PWC), is providing consultancy and advisory services to the project.

Upon succeeding his grandfather as the chairman of the board, David E. Sassoon has taken a keen interest in Africa, continuing the family’s historical relationship with the continent, particularly South Africa. Bluedrop is the optimum start-up to reengage the African market. David E. Sassoon personally mentored and guided Bluedrop through the complexity of the financing phase. The firm financially engineered the mezzanine finance deal to reduce borrowing costs in addition to a twelve-month payment holiday, enabling Bluedrop to accelerate growth and optimise success.

Bruce Fein, J. Sassoon Group’s CEO explained that Bluedrop is the first pre-revenue start-up in Africa that J. Sassoon Group has invested in:

“Our focus is on start-ups, entrepreneurs and midmarket companies. Bluedrop is the type of forward-facing, energetic company we are looking for. We are confident that this is a value accretive investment”

Bruce Fein, J. Sassoon Group’s CE

.

Commenting on the transaction, Bluedrop’s Chief Financial Officer Kenneth Maduna said, “As an independent 100% black-owned company, we are ecstatic with the investment made by J. Sassoon Group more so for showing their confidence in us and South Africa as an investment destination.” Construction of the manufacturing plant is expected to commence in Q4 2021 and will take 12-14 months to complete.

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REPORT | Plastic: Past and present

Plastic is a complex material that provides value across several industries, yet its strength and durability have resulted in widespread persistence in the environment, threatening human health and the health of our marine, terrestrial and freshwater ecosystems. These negative externalities, once quantified, reveal the true costs of plastic.

SOUTH AFRICA’S ENGAGEMENT

Numerous global and regional initiatives and voluntary agreements have been established with different approaches to solve the plastic pollution challenge.

INTERNATIONAL STRATEGIES, PARTNERSHIPS AND FRAMEWORKS

Since 1972, South Africa has ratified several international treaties, forged partnerships and subscribed to legal frameworks to combat plastic pollution in its terrestrial and marine environment. This is giving South Africa a firm footing to voice its concerns in global forums, on the one hand, and gaining access to the latest environmental considerations regarding the combating of plastic pollution, on the other. Various initiatives and platforms exist, and this list is not exhaustive.

2019: The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, which South Africa is party to, at its 14th Conference of the Parties, adopted a decision to incorporate certain categories of plastic under its scope. This includes giving parties the right to prohibit the import of plastic at end of life as well as requiring parties to obtain prior written informed consent for the export of plastic of this nature. To be traded, waste plastic must be clean and consist of single or clearly defined plastic polymer types that can be recycled. Mixed bales of rubbish are not acceptable.

This decision obtained great media coverage and was a statement from the 187 countries to address the plastic pollution problem. Since then, the world has seen developing countries, specifically the Philippines and Indonesia, sending back shipments of plastic scrap and waste to countries of origin, including the USA, the UK and Australia.

South Africa became a signatory in May 1994. The Basel amendments will take effect from 1 January 2021.

2017: The G20 Action Plan on Marine Litter was agreed upon by the G20 countries (akin to the G7 Action Plan of 2015). The action plan includes a commitment to “take action to prevent and reduce marine litter of all kinds, including from single-use plastics and micro-plastics”.

South Africa is one of the G20 countries.

2015: The 2030 Agenda for Sustainable Development was adopted by all UN member states. A blueprint for achieving this agenda took the form of the 17 Sustainable Development Goals (SDGs).

The SDGs that specifically relate to combating plastic pollution are:

• SDG 6: Clean water and sanitation

• SDG 8: Decent work and economic growth

• SDG 9: Industry, innovation and infrastructure

• SDG 11: Sustainable cities and communities

• SDG12: Responsible consumption and production

• SDG 13: Climate action

• SDG 14: Life below water

• SDG 15: Life on land

• SDG 17: Partnerships for the goals

2014: Several UN Environment Assembly (UNEA) resolutions have been made on marine litter and microplastics from the first UNEA meeting in 2014. These resolutions called for strengthening the UN Environment Programme’s (UNEP) role in acting on marine litter and microplastics in UNEA-1; establishing the Ad Hoc Open-Ended Expert Group on Marine Litter and Microplastics in UNEA-3; and addressing single-use plastics in UNEA-4. Resolutions also call for greater collaboration and coordination of efforts to address plastic pollution.

South Africa is part of the member states participating in the UNEA discussions.

2011: The Honolulu Strategy: Global Framework for Prevention and Management of Marine Debris is a voluntary approach to connect marine litter programmes and foster collaboration among them by sharing lessons learned and best practices. It is the recommended framework to be used for UNEP’s GPA (see 1995 below).

South Africa is part of two Regional Seas Programme Conventions, namely the Abidjan and Nairobi conventions, which places it in a unique position to coordinate initiatives through both platforms.

The Abidjan Convention is currently undergoing a regional assessment on marine litter to inform a Regional Action Plan to address marine litter in member countries. The Nairobi Convention completed a marine litter assessment in 2008 and is currently implementing its Regional Action Plan.

1995: The Global Programme of Action for the Protection of the Marine Environment from Land-based Activities (GPA) was set up in 1995 and is hosted by UNEP. The Global Programme of Action aims to foster collaboration and coordination among states to prevent marine pollution from land-based sources and encourage action at the national, regional and international level. The programme operates primarily through the Regional Seas Programme.

1982: Part XII (Articles 192–237) of the 1982 UN Convention on the Law of the Seas (UNCLOS) aims to protect and preserve the marine environment from land- and sea-based sources of marine pollution. UNCLOS is a comprehensive convention that covers virtually all matters relating to the management and use of the ocean.

South Africa ratified UNCLOS on 23 December 1997.

1978: The International Convention for the Prevention of Pollution from Ships (MARPOL) aims to prevent marine pollution from operational or accidental causes by ships.

South Africa accepted participation in MARPOL in February 1985.

1972: Convention on the Prevention of Marine Pollution by Dumping Wastes and Other Matter (the London Convention) and the 1996 Protocol to the London Convention (the London Protocol) aim to control pollution of the sea by dumping and to encourage regional agreements supplementary to the Convention.

South Africa is a party to the London Convention.

AFRICAN PARTNERSHIPS

2020: President Cyril Ramaphosa is the chairperson of the African Union (AU) in 2020, presenting another opportunity for leadership in the case where the AU has also called on African cities to commit to recycling at least 50% of the urban waste they generate by 2023 and to grow urban waste recycling industries.

2019: In 2019 the African First Ladies took the lead on the plastics front by hosting two high-level side events. The first was on Banning Plastics towards a Pollution-free Africa Campaign, which resulted in the Addis Ababa Communique to advocate the banning of plastics. The second was on Plastic Pollution Solutions for Development in Africa to initiate the implementation of the Communique.

2016: The East African Legislative Assembly passed a Bill in 2016 to ban the manufacture, sale, import and use of certain plastic bags across its six member states, with a combined population of approximately 186-million people. A total of 127 countries have put into force some type of legislation to ban the use, manufacture, free distribution and import of plastic bags as at July 2018. African countries have been seen to be leaders in this regard, with 37 countries regulating plastic bags in some way.


TOWARDS A NEW GLOBAL LEGALLY BINDING AGREEMENT ON PLASTIC POLLUTION

The African Ministerial Conference on the Environment (AMCEN) held in Durban in November 2019, saw 54 member states endorse a declaration calling for global action on plastic pollution. Among the options to be further explored was a suggestion for a new global agreement to combat plastic pollution. African governments have now joined the Caribbean Community (CARICOM), the Association of Southeast Asian Nations (ASEAN), the Pacific Island Countries and the Nordic states in their call for strong global action on plastic pollution.

The South African Minister of the Environment, Barbara Creecy, holds the AMCEN presidency for 2020/21, which is an opportunity for South Africa to take the lead on several topics, including addressing the plastic pollution challenge.


THE NEW PLASTICS ECONOMY

The New Plastics Economy is an ambitious global initiative to build momentum towards a plastics system that works. It applies the principles of the circular economy and brings together key stakeholders to rethink and redesign the future of plastics, starting with packaging. The New Plastics Economy Global Commitment is a shared vision agreed upon by businesses, governments and organisations to address plastic pollution at source. It is led by The Ellen MacArthur Foundation together with UNEP to drive engagement with governments and other key players.

The New Plastics Economy also hosts a global Plastics Pact Network, which is a platform for multiple national implementation initiatives. Each national initiative will be aligned with the common vision outlined in the Global Commitment but will set national targets and develop a roadmap to suit the local context. The South African Plastics Pact was launched by WWF South Africa in partnership with the South African Plastics Recycling Organisation (SAPRO) and the UK’s Water and Resources Action Programme (WRAP) in January 2020. It is the first national Plastics Pact in Africa and joins the global Plastics Pact Network.

THE SOUTH AFRICAN PLASTICS PACT – A FIRST IN AFRICA

The South African Plastics Pact was launched in January 2020 and joined The Ellen MacArthur Foundation’s Plastics Pact global network aligned with the New Plastics Economy vision. The first of its kind in Africa, the South African Plastics Pact joins France, the UK, the Netherlands, Chile, Australia and the Pacific and the European Union to exchange knowledge and collaborate to accelerate the transition to a circular economy for plastic.

The South African Plastics Pact is managed and implemented by GreenCape, with the founding members committed to a series of ambitious targets for 2025 to prevent plastics from becoming waste or pollution.

The South African Plastics Pact members are Berry Astrapack, the Clicks Group, Clover, Coca-Cola Africa, Danone, Distell, HomeChoice, Myplas, Pick n Pay, Polyoak, Palletplast, RCL Foods, SPAR, Spur Holdings, The Foschini Group, Tigerbrands, Tuffy, Unilever and Woolworths. Supporting member organisations include the African Circular Economy Network, African Reclaimers Organisation, the City of Cape Town, the Department of Environment, Forestry and Fisheries, Fruit South Africa, the Institute of Waste Management of Southern Africa, the Polyolefin Responsibility Organisation, the Polystyrene Association of South Africa, the PET Recycling Company, South African Bottled Water Association, SAPRO and the Southern African Vinyls Association.

By 2025, all members commit to:

• Eliminate problematic or unnecessary plastic packaging through redesign, innovation or alternative (reuse) delivery models

• 100% of plastic packaging to be reusable, recyclable or compostable*

• 70% of plastic packaging effectively recycled

• 30% average post-consumer recycled content across all plastic packaging

*In the case of compostables, this is applicable only in closed-loop and controlled systems with sufficient infrastructure available or fit-for-purpose applications.

To achieve these 2025 targets for a circular economy for plastic in South Africa, various activities are required:

• Some plastic items are problematic or unnecessary and need to be designed out.

• Reuse models can reduce the need for single-use packaging, while at the same time holding the potential for significant user and business benefits.

• All plastics need to be designed to be reusable, recyclable or compostable in practice and at scale, with a concerted effort on both the design and the after-use side.

By delivering on these targets, the South African Plastics Pact will help to boost job creation in the South African plastic collection and recycling sector, and help to create new opportunities in product design and reuse business models.

ALLIANCE TO END PLASTIC WASTE

Another global initiative is the Alliance to End Plastic Waste (AEPW), which was founded by various global petrochemical companies. The alliance aims to raise funds in order to invest in developing and scaling up solutions to manage plastic at end of life, through education, innovation, clean-ups and investment in infrastructure in Southeast Asia. The fundraising and investment target is $1,5 billion, to be provided by the member organisations over the next five years.

Sasol is currently the only African-owned company which is a member of the Alliance.

AFRICAN MARINE WASTE NETWORK

The African Marine Waste Network is a project under the Sustainable Seas Trust. It aims to prevent marine litter at source by providing a platform for collaboration and knowledge sharing through its network of government bodies, industry and civil society. Its current projects include developing and testing marine litter monitoring guidelines in collaboration with UNEP, developing educational materials for schools, promoting enterprise development and providing research expertise in ghost gear and microplastics.

CLiP

The Commonwealth Litter Programme (CLiP) aims to support four developing countries (the Solomon Islands, Vanuatu, South Africa and Belize) in preventing plastic litter from entering the marine environment. CLiP is led by the UK through the Centre for Environment Fisheries and Aquaculture Science (Cefas) and is funded by the UK Department for Environment, Food and Rural Affairs (Defra).

THE AFRICAN CIRCULAR ECONOMY ALLIANCE

The African Circular Economy Alliance is a project hosted under the Platform for Accelerating the Circular Economy by the World Resources Institute. It aims to share best practices, undertake collaborative projects and advocate for the circular economy between countries at a ministerial level. The alliance was founded by Rwanda, South Africa and Nigeria in 2016, and joined by Niger, Senegal, Malawi and the Democratic Republic of the Congo in 2018.

Read the Green Economy Journal to find more articles like the one above

READ THIS ARTICLE IN THE GREEN ECONOMY JOURNAL ISSUE 45

©Text 2020 WWF South Africa Published in 2020 by WWF – World Wide Fund for Nature (formerly World Wildlife Fund), Cape Town, South Africa.

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Deputy Minister Fikile Majola on Special Economic Zones

Special Economic Zones will play critical role in Economic Recovery Plan

16 Mar 2021

The Deputy Minister of Trade, Industry and Competition, Mr Fikile Majola says the Special Economic Zones Programme will play a critical role in the implementation of South Africa’s economic reconstruction and recovery plan.

Majola was addressing Members of Parliament belonging to the Select Committee on Trade and Industry, Small Business Development, Tourism, Employment and Labour, on the progress of the implementation of the Special Economic Zones and the Industrial Parks Revitalisation Programmes which are both driven by the Department of Trade, Industry and Competition (the dtic).

“The Special Economic Zones Programme is expected to play a very significant role in supporting the implementation of the country’s economic and recovery plan. This is due to the fact that the SEZ Programme is at the core of the reimagined industrial strategy, which is purposefully structured to stimulate local and foreign direct investments. The SEZs are also going to play an important role in the African Continental Free Trade Agreement as we position our country to become a vibrant manufacturing hub of the  African continent,” said Majola.

Majola indicated that the implementation process of the SEZ programme requires collaborative efforts from all spheres of government to ensure that the roll-out of the programme was efficient, integrated and well-coordinated.

“It is only through cooperation at national, provincial and local government levels that we can successfully build an inclusive economy.  Inter-governmental relations, both horizontally and vertically, are important in us achieving the set objectives of the reimagined industrial strategy. The efforts of pursuing a coordinated framework through the District Development Model approach has presented an opportunity for the creation of a balance ecosystem for an integrated development,” added Majola.

He expressed his delight at the fact that the implementation of the new intergrated approach of ensuring that national, provincial and local government work together and share responsibility for the implementation of the SEZ programme was bearing fruits. He said the Tshwane Automotive Special Economic Zone clearly illustrated the positive impact of the implementation of this approach.

“The success of the Tshwane Automotive SEZ has reignited the desire and the vision to turn the Gauteng city region into a single multi-tier and integrated SEZ. This is one of our recent shining examples of successful SEZs, joining the likes of Coega, Dube Trade Port and East London SEZ,” added Majola.

MPs learnt from the dtic presentation that despite the devastating impact of the pandemic on economies throughout the world, the value of private investments in the South African SEZs increased by R1.8 billion from March 2019 to March 2020 from R17.7 billion to R19.5 billion.

The number of operational investments increased from 129  to 143 in the same period.  It is expected that the number and value of operational investments will increase by almost R10 billion when the next financial year ends.

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Report shows that SA leads the way in public sector gender diversity

Kearney’s recent ‘Gender Equality Report’ provides insight into the progress of diversity in private and public sectors across nine key regions globally – South Africa, the United States, United Kingdom, Australia, India, France, Spain, Germany, and Singapore.

While South Africa has the most gender diverse parliament with a gender representation of 44% female MPs, the private sector sees South Africa fall to seventh position with only 28.5% of women represented at board level in the JSE 40.

The gap between private and public sectors is attributable to national campaigns for women’s representation in the public life at the national and provincial levels as well as voluntary party quotas, increasingly since 2006.
The gender quota system, in place in its early form since 1994, undoubtedly helped by a forward-thinking attitude towards gender diversity explains why South Africa takes the lead in the public sector.

“Seeing South Africa take the lead against other nations in the public sector with an increasing number of women elected as MPs, is a positive sign of what can be done with the right policies. However, whilst encouraging, there is still a deep parity that remains within the private sector,” says Theo Sibiya, Partner and Managing Director for Kearney Africa.


% Female government representation by country

South Africa44.0%
Spain42.0%
Australia38.0%
France37.0%
UK34.0%
Germany33.0%
Singapore30.0%
US27.0%
India14.0%

Sibiya added that despite ranking seventh out of the nine regions analysed for overall board diversity, South Africa has the highest percentage of the very top-level female board representation with 14% of its total female board members occupying senior positions e.g., Chairperson and member of the C-Suite.
The report also analysed the sectors which showed the most promising levels of gender parity in South Africa. Of the 140 female board members across the JSE 40, 35% are in the Non-Energy Materials sector. Finance is the second most representative sector in South Africa and holds 25% of the total female board members, whereas in Australia, the UK, Spain, the US, and Singapore it is the most gender diverse sector.


% Female board level representation by country

France43.8%
UK36.0%
Australia34.0%
Germany32.5%
Spain29.8%
US29.8%
South Africa28.5%
Singapore17.3%
India17.0%


This year’s annual report demonstrates modest progress compared with 2020. Female representation in the private sector has increased marginally in the United States (1.2%), United Kingdom (3%) and Australia (0.6%), as well as in the public sector in Australia (1%) and the United States (3.5%), which had a record year for female representatives elected. India remains the least gender diverse country studied with female representation under 20% across both public (14%) and private sectors (17%).

Sibiya ended by saying “Over the coming years, it’ll be important that companies are held to the same standard and encouraged to bring more women to decision making roles.”

“Research has shown time and time again the impact women have on boards, it’s not only important to be inclusive but it ultimately leads to better financial performance.”

Theo Sibiya, Partner and Managing Director for Kearney Africa

About the research: Kearney’s Gender Equality Report 2021 was based on research using publicly available data across nine markets – UK, US, France, Germany, Spain, Australia, India and Singapore – regarding female representation at board level and in their respective governments. Board information was gathered using the support of Factset. 

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AECOM ranked No. 1 by Fortune magazine as World’s Most Admired Company in its industry

Premier infrastructure consulting firm AECOM has ranked No. 1 on Fortune magazine’s list of the World’s Most Admired Companies in their industry. This is the seventh consecutive year that the company has been recognised on the list.

“Leading Fortune magazine’s World’s Most Admired Companies list in our industry highlights our employees’ ongoing dedication, resiliency and innovation in delivering transformative solutions, especially amid the uncertainties of the past year,” comments AECOM CEO Troy Rudd.

“Behind our Think and Act Globally strategy, our professionals deliver exceptional quality services and technical expertise for our clients, building on our strong financial performance and creating value for all our stakeholders.”

AECOM CEO Troy Rudd

Despite the challenges presented by the coronavirus pandemic, last year AECOM continued to deliver to their clients, employees, communities and stockholders, resulting in a strong financial performance that exceeded guidance on nearly every key financial metric. AECOM’s teams mobilised quickly and safely to lead the industry in disaster response and developed innovative digital consulting solutions that continues to increase engagement and streamline processes critical to economic and social recovery.

AECOM’s multidisciplinary approach makes them unique on the continent, ranging from cost management to quantity surveying, engineering and environmental services.

“Adding value to clients by providing them with the necessary solutions to navigate the current crisis has never been more critical.”

Darrin Green, AECOM Africa MD

Significant investment in digital innovation and remote working is enhancing AECOM’s flexibility and adaptability. This includes bespoke tools such as AECOM’s Environmental Engagement platform to streamline environmental documentation and stakeholder engagement. Their Virtual Public Consultation Tool enables virtual community engagement in an interactive online platform.

Together, these solutions provide powerful support to clients managing existing and future projects through the key planning and approval gates. “The end result is a much better understanding of what projects will go forward and where we need to relook at projects in terms of either budgetary constraints or different drivers due to the pandemic,” comments Green.

Additionally, as a leading Environmental, Social and Governance (ESG) firm, AECOM last year continued to partner with clients in advancing sustainable solutions, set their own Science-Based Targets initiative (SBTi), approved emissions reductions targets and launched the Thrive with AECOM initiative to further their commitment to equity, diversity and inclusion.

Fortune collaborated with management consulting company Korn Ferry on the survey of corporate reputations. The survey determined the best-regarded companies by asking executives, directors and analysts to rate enterprises in their own industry on nine criteria; from investment value and quality of management and products, to social responsibility and the ability to attract talent.

The complete World’s Most Admired Companies list and details on the methodology can be found on the Fortune website at: https://fortune.com/worlds-most-admired-companies/.

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New fund focusing on renewable energy answers a need in South Africa

FUND FOCUSING ON RENEWABLE ENERGY, A SOUTH AFRICAN FIRST

With the saving and retirement industry recognising the important role it can play in bringing about social change by supporting South Africa’s infrastructure needs, there is a dearth of viable options available. As listed companies with a pure or major focus on the South African economy struggle to deliver returns to investors, the managers of retirement funds and other savings are now looking for alternative asset classes to obtain sufficient returns.

Says Dr Hendrik Snyman, chief investment officer at Gaia Fund Managers: “With the local stock exchange having underperformed over the past number of years and with limited options available, it is necessary for asset managers to be innovative in obtaining returns for their investors. Globally, there has been a trend whereby asset managers are looking to alternative assets to provide resilience to negative market movements, price irrationality or a lack of returns.”

“We are proud to offer a novel investment opportunity that combines assured, solid returns with sustainable energy, infrastructure and community ownership.”

Hein Kruger, managing director of Kruger International

Through the Kruger Ci Prudential, Balanced and Equity funds, clients can now invest in the operational wind farm in a safe, regulated and tax-effective way where the impressive returns inherently adjust by inflation each year.

“Kruger’s co-investors in the wind farm near Humansdorp in the Eastern Cape include the Tsitsikamma Development Trust (9%) and Cennergi (75%), a wholly-owned subsidiary of listed company Exxaro Resources. This is a true ESG (environmental, social and governance) investment. The community trust receives investor returns for their shares. The construction has already benefitted the local community through infrastructure upgrades, a new community centre, cattle fencing and bush clearing. Since then, the wind farm contributes 2.1% of its revenue quarterly to enterprise and socio-economic development in the surrounding communities.”

The wind farm is a renewable energy project with an installed capacity of 95 MW, situated near Humansdorp in the Eastern Cape’s Koukamma Local Municipality. It became operational on 17 August 2016, offering a measurable track record in output performance. This project and its various service providers have met and exceeded expectations with the power produced since operations started, surpassing the P50 (base case) forecast. The performance of the project to date reflects the quality of the wind resource, equipment and service providers, according to Snyman.

The listing of the Company’s preference shares, with its focus on clean energy, takes place as the South African Government ramps up the supply of renewable energy to the national electricity grid. On 25 September 2020, the Minister of Mineral Resources and Energy, Gwede Mantashe, gazetted a key determination under national legislation to procure a total of 11 800 MW of electricity, of which 6 800 MW will be from renewable sources.

“This investment contributes to much-needed infrastructure in South Africa and investment diversification in an alternative asset class for us as the investors. We are proud to include Gaia Fund 1, with the wind farm as its first asset, in the Kruger funds,” says Kruger.

Collective Investment Schemes and retail investors have struggled to directly access infrastructure investments for several reasons. First, they are not readily available. Second, they are not usually listed on stock exchanges. Lastly, those options which are listed are subject to deflated prices owing to the lack of a readily traded market that understands the underlying principles of the asset class.

Snyman explains: “Infrastructure as an asset class can provide investors with stable inflation-linked cash returns while preserving their capital. However, the current means of gaining access to these projects includes a daunting and protracted process requiring, among other things, negotiating lengthy contracts. This process is far removed from investors’ ordinary means of acquiring shares on a trading platform and, therefore, acts as a significant investment barrier to entry and exit. In addition to the process, the unlisted equity available in the projects precludes certain Collective Investment Scheme portfolios from acquiring interests in the projects. A listed security removes many of the entry and exit barriers for investors and allows infrastructure to take up its rightful place as an asset class in many investor portfolios.”

As a listed entity, the Fund will enable collective investment scheme portfolios to increase their allocation to infrastructure from an unlisted instrument threshold of 5% to 10%, yet retain the benefits of being unlisted through price stability. The ability to do this will open a unique market opportunity for future collective investment scheme-compliant portfolios to invest in 4AX-listed infrastructure projects through new issuances of preference shares in the Gaia Fund 1.

“Kruger International as an innovative fund manager collaborated with Gaia Fund Managers as a pioneer in the infrastructure investment space in South Africa to come up with a solution to access infrastructure investments for their investors,” adds Snyman. “Kruger International’s funds will hold all of the preference shares, allowing them to accurately mark their value on a daily basis; meaning that as an asset manager, they are less exposed to market irrationality and/or information asymmetry.”

Gaia Fund 1’s A preference shares will be 4AX’s seventh equity listing. 4AX, as a new low-cost, fully licensed equity and debt exchange, took up the challenge with Kruger International and Gaia Fund Managers to list these industry-first preference shares. 4AX provides security for investors, giving the required financial transparency and regulatory oversight without the obstructive burden and costs associated with legacy exchanges. As such, the cost and admin associated with listing are no longer prohibitive.

According to Eugene Booysen, CEO of 4AX: “4AX brings to the market an efficient and alternative regulatory model which reduces regulatory costs and inefficiencies but promotes and adheres to the highly regarded financial regulatory standards in South Africa. 4AX focuses on being a safe and simple digital marketplace redesigning finance and access to capital and thereby enabling inclusive growth.”

Gaia Fund Managers and Kruger International Asset and Wealth Management are pleased to announce the listing of South Africa’s first preference shares with an infrastructure focus on 4 Africa Exchange (4AX).

Gaia Fund Managers, together with Kruger International, plan to list Gaia Fund 1 (the Fund), which complies with Collective Investment Scheme regulations next week Thursday (22 October). The Fund’s A preference shares will trade under the ticker 4AGF1A (ISIN: ISIN ZAE400000101) on 4AX.

The preference shares will be bought by Kruger International’s various funds. The proceeds of the listing will be used by the Company to buy a 16% indirect shareholding in the Tsitsikamma Community Wind Farm.

For more information, visit http://www.gaia.group.

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Increased infrastructure activity needed to boost economy

The decline in manufacturing production, at a time when increased industrial activity is important to revive the ailing economy, is very concerning, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

SEIFSA Chief Economist Chifipa Mhango said the decline once again highlights the negative impact Covid-19-induced lockdown regulations had on the manufacturing industry and the economy in general, and that this situation needs to reversed urgently. According to figures released by Statistics South Africa (StatsSA), total manufacturing production declined by 3,4% year on year in January, with a slight 0,5% month-on-month increase from December 2020. Total manufacturing sales increased by 1,4% year on year in January 2021 and by 0,9% from December 2020.

However, Mhango welcomed the 5,3% year-on-year increase in January 2021 in the performance of the Metals and Engineering (M&E) sector, which accounts for 29% of manufacturing production. Total sales across the sector’s 13 sub-industries increased by 10,6% to reach R68,3-billion. He said this performance would need to be sustained through the speedy implementation of the Government’s infrastructure plans if the sector and the economy as a whole are to recover.

StatsSA figures also showed that total capacity utilisation in the manufacturing sector was 72,3%, down from 81% in 2019. In the M&E sector, average total capacity utilisation for 2020 was only 68%, again demonstrating how Covid-19 has inhibited production within the sector.

Mhango noted that with the economy has contracted by 7% in 2020, it is imperative that the Government intensifies its efforts to revive the ailing economy and focuses on the implementation of its recovery plans. He said while the Government’s policies were attractive on paper, more needed to be done to speed up the implementation of critical interventions such as the Steel Master Plan in order to benefit both the upstream and downstream of the M&E sector.

Mhango said the current state of the M&E sector remains dire, with declining levels of employment and investment, as well as a weak trading position with the rest of the world. He said with the country’s unemployment rate now at 32,5%, it is important to ensure that the industrial base is not eroded any further. “Fixed investment is key to reviving the sector. To grow the country’s industrial base, the fixed investment share of GDP needs to move to levels above 40%, from the current level where it is below 20%,” he said.

Mhango said while the Government’s commitment to spend R791,2-billion in the next three years on various infrastructure projects is commendable, the slow rate of implementation and the mismanagement of funds have derailed progress towards achieving a higher ratio of fixed investment to GDP.

“The M&E sector is heavily reliant on demand from key Government infrastructure projects to boost its production and sales, especially for products such as steel and other related downstream products such as roofing material. The lack of progress towards the implementation of these projects will only serve as a hinderance to reviving the South African
economy,” Mhango said.

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SAWEA’s Gender Diversity Working Group plans to address disparities within the sector

Ntombifuthi Ntuli, CEO at SAWEA, in conversation with the publisher of GreenEconomy.Media Gordon Brown

Don’t miss this live online broadcast on International Women’s Day [Monday, 8 March 2021, 13:30]

Ntuli introduces the gender diversity initiative [below].

The purpose of Gender Diversity Working Group is to create a discussion platform for the wind energy sector to: firstly, actively develop plans to address gender diversity matters within the energy sector and to hold dialogues around areas where there is not enough representation; and secondly, to initiate programmes that will ensure that the sector gender diversity objectives are met. 

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Standard Bank OneFarm Share platform targets 30-million meals in 2021

Standard Bank’s OneFarm Share platform provides over 1-million meals for food relief, targets 30 million in 2021

Standard Bank’s OneFarm Share initiative in South Africa, which matches requests for food relief to suppliers with good quality excess fresh produce, has, since November last year, collected and distributed more than 270 tonnes of food to accredited beneficiary organisations, providing over 1-million meals to vulnerable individuals.

In 2021, Standard Bank hopes to increase OneFarm Share’s impact by ten times – delivering 7 400 tonnes of food across all nine provinces, enabling over 30-million meals.

The partnership provides a digital platform where emerging and commercial farmers can sell or donate their produce into new markets. 

 “The need for food relief is greater than ever, with over 12-million South Africans unsure of where their next meal will come from,” says Lungisa Fuzile, Standard Bank South Africa Chief Executive. “Farmers are aware of this need, but feel unable to meet it, without a clear mechanism to manage the requests for donations and an efficient, quick and transparent process to donate food. OneFarm Share brings all the role players together from producers and logistics companies to consumers and beneficiaries under a single digital platform where needs can instantly be identified and addressed.”

Agriculture has been prioritised as being one of the top five ecosystems for the Standard Bank Group. As a result, the OneFarm platform has been launched as a digital business-to-business platform to connect and provide services across the agricultural ecosystem through Lend, Protect, Grow, Trade and Share services. To date this has been piloted in Uganda since August 2019.

In South Africa, the OneFarm Platform was launched through OneFarm Share as a result of the food crisis caused by Covid-19 lockdowns and to increase the sustainability of farming operations in the country.

As Standard Bank firmly believes that co-creation is the key to acceleration, it partnered with HelloChoice, a South African AgriTech with a digital fresh produce marketplace, as well as FoodForward SA, the largest food distribution non-profit organisation in South Africa. FoodForward SA focuses on the recovery and redistribution of edible surplus food from the supply chain (including retailers, manufacturers, and farmers). By partnering with organisations with existing capabilities, the initiative was up and running within just four months.

Pidelta Potatoes – Greytown
Hillview cabbages

“By joining forces and working closely with Standard Bank to drive the OneFarm Share initiative, we can make a genuine, sustainable impact to reducing hunger and improving food security through ground-breaking online technology,” says Grant Jacobs, CEO & Co-Founder of HelloChoice.

The OneFarm Share platform aims to collate food requests from registered charity organisations and aggregates them onto an online marketplace. The requests are then matched to available produce listed by farmers and food producers. The food is made accessible to beneficiary organisations at a reduced cost or as a donation and the platform facilitates the smooth delivery of the right produce, to the right place, at the lowest possible cost.

To accelerate the launch, some of the bank’s Covid-relief funding was allocated to food and logistics procurement, which ensured that OneFarm Share’s beneficiary partner, FoodForward SA, could distribute this bulk nutritious food to various registered and vetted community feeding programmes, early childhood development centres, facilities that care for the frail and aged, centres that provide at-risk youth with skills, among others. This includes produce with high nutritional value such as cabbages, potatoes, spinach, butternut, beetroot and dried beans.

“The partnership with Standard Bank enables us greater access to a far larger network of farmers who donate into our network,” comments Andy Du Plessis, MD of FoodForward SA. “Through regular donations of fresh produce, we can provide food donations to beneficiary organisations that is more nutritious.”

Standard Bank plans to grow the platform funds by approaching corporates with CSI funds earmarked for food relief as well as the bank’s retail base and high net worth clients. It has also launched a SnapScan account and code for members of the public that wish to donate.

“Innovative technology has the potential to transform agriculture on the continent.”

Lungisa Fuzile, Standard Bank South Africa Chief Executive

“It will also enable us to create solutions for the most vulnerable members of our society. Therefore, Standard Bank is focused on creating platform solutions that can connect and provide services to multiple players across the agricultural ecosystem.”

A unique offering with scalable potential

Fuzile explains that OneFarm Share is a unique offering that has not been attempted at scale in South Africa.

“A crisis like Covid-19 requires a more intensive focus on innovation as it provides challenges that may not normally exist. OneFarm Share is our response”.

“The OneFarm Share initiative is not simply about providing hunger relief and reducing food wastage. It is also about restimulating the economy and helping to recreate markets for farmers who may have lost their traditional markets due to the impact of lockdown measures or beyond. Many have been unable to recover. The platform gives them an opportunity to sell produce in a way that they may have not had access to previously: to a structure that supports the vulnerable in our society. We are excited about the enormous potential that OneFarm Share has to ensure the sustainability of agriculture and reduce the problem of hunger on the continent,” Fuzile concludes.

Donations can be made on Snapscan or through an EFT. For more information on OneFarm Share and how you can get involved visit www.onefarmshare.co.za

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