Biophilia: Nature immersion and the city

By Jason F McLennan

In part one of a series about biophilia and its relationship to the built environment, Canadian architect and founder of the Living Building Challenge, Jason F McLennan, shares some insights around the central concept and specifically how it to relates to city planning and urban environments.

Canadian architect and founder of Living Building Challenge
Jason F McLennan

E O Wilson described biophilia in his 1984 book by that name as “the innate tendency to focus on life and life-like processes.” 

I first wrote about the importance of biophilia in 2004 in my first book, The Philosophy of Sustainable Design. I included biophilia as a guiding principle in version 2.0 of the Living Building Challenge (LBC) that came out in 2009; making LBC the first green building programme in the world to focus on the subject. Since then, I have watched the field of biophilic design evolve, gaining shape, definition, and serious consideration on projects all over the globe. 

However, as easily happens, a checklist mentality around biophilic design has emerged within the design industry, while simultaneously nearly anything and everything is being described as ‘biophilic’ in order to satisfy this newfound interest. As has happened in other areas of green building, the essence and scientific basis of biophilia is being lost in point tallying – right now, a design need only include superficial applications and check the right boxes to call itself biophilic.

It is my hope that clearly naming what is essential to biophilia, will engender a more nuanced understanding and ultimately, a more successful application of biophilic patterns and attributes to design.

Frameworks and checklists will always benefit designers, but it’s time to dig in deeper to what we mean when we talk about biophilia and biophilic design. We need to focus on design strategies that actually have positive impacts and do more than merely justify a design through yet another trendy lens. 

Science is only recently corroborating the long-standing, instinctual wisdom we’ve carried as humans for millennia – that we thrive in close connection to nature. I believe nature immersion is the single most important element of biophilia; if we only allow ourselves adequate time in nature, we can reap bountiful biophilia-associated wellness benefits.

Inside out

Estimates place 70 percent of the world’s populations in urban environments by 2050. With this migration, our connection to nature has dwindled and our feelings of isolation, loneliness and depression have filled the vacancy. Harvard School of Public Health Professor John Spangler puts a number to Americans’ disconnection from nature, and it’s shocking: we now spend 95 percent of our time indoors.

At the same time, a growing body of evidence suggests that if we reconnect to nature, we will become whole again.

Therefore, a key principle to establish under the framework of nature immersion is that any design that can get people outside, for as long as possible – using porches, covered walkways, courtyards, balconies, etc. – will always greatly outdistance anything that can be done inside a building. These types of design features prolong our exposure to nature, drawing down that 95 percent. The task isn’t the architect’s alone, but also the landscape architect’s, the urban planner’s, and that of each individual that occupies a building.

Immersive experience

Given so much of us live in, or are moving to, urban environments, we must, at a city planning scale, do the work of the biophilic designer to draw people outside through design. What do our cities look like? City parks provide immense opportunities for immersive experiences to urban dwellers and we should urgently create more, even on a small, pocket park scale. How many parks do we have now and how equitably are they dispersed? One recent, powerful study showed significant decreases in self-reported feelings of depression in test groups tasked with restoring vacant lots in economically-depressed urban areas.

Green Point Park, Cape Town

This study illuminates the social justice aspect inherent in any discussion about urban planning and access to nature: “neighbourhood physical conditions, including vacant or dilapidated spaces, trash, and lack of quality infrastructures such as sidewalks and parks, are associated with depression and are factors that may explain the persistent prevalence of mental illness in resource-limited communities.”

As the populations of our cities grow, it is important that the number of public places for city-dwellers to be in nature, keep pace. It is my belief that everyone should have walking distance access to a beautiful public park.

Native ecology

Also, as the world’s population continues to move into towns and mid-size cities grow into large cities; cities should strategically plan for and conserve sizable tracts of land as highly accessible urban wildlands. Stanley Park in Vancouver, Forest Park in Portland, and Central Park in New York City provide crucial, substantive outlets for high-quality nature immersion for their urban areas and highlight what’s possible when the conditions for wildness are fostered rather than subdued by design within city limits. These conserved parks connect people with place in a powerful way, often providing them with an experience of what their place once looked like while simultaneously creating opportunities for the native ecology of that place to thrive. Living in close proximity to this kind of life has amazing potential to foster the stewardship mentality crucial to the conservation of our wild places.

Creating connections

What further opportunities can we identify to foster nature connections in cities? Do trails winding through untamed places connect us to the modern and convenient amenities that spurred our move, as a species, to cities? If not, can they? What is the state of our urban canopy and how can we revitalise it, and reap the associated biophilic benefits, alongside all the others, that make trees so essential to city landscapes? What is our relationship to water in our cities? Can we utilise design to daylight streams and stormwater, creating visual and auditory onnections with our life-source at every opportunity? Are our cities walkable and bikeable, with amenities spaced for pedestrian and biker access? 

I believe one of the reasons Americans flocked to the suburbs in the post-World War II era was for these kinds of natural connections that had been choked out of industrialised cities. As our urban populations rise, it is critical that we invite nature back into city centres, creating nature-pedestrian connections that get us walking and interacting with our surrounding natural and human communities, immersing us more often and more completely within biophilic settings.

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Celebrating a true green-fingered Kirstenbosch legend

For over 45 years, Andrew Jacobs has become well known for his warm, bubbly personality, affable smile and ability to make his enchanting tales about one of the world’s most famous garden appeal to, and inspire, any visitor, botanical boffin or otherwise.

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RMIPPP preferred bid announcement: a concerning outcome

By Paul Semple, Portfolio Manager, Futuregrowth

New infrastructure investment totaling at least R45 billion is anticipated to be made in the South African energy sector over the next eighteen months. This follows the announcement of the preferred bidders under the Risk Mitigation IPP Procurement Programme (RMIPPP) by the Minister of Mineral Resources and Energy on 18 March 2021.

The RMIPPP is the first step in the government’s plan to procure more than 13 800 megawatts (MW) of new energy over the next decade, as set out in the Integrated Resource Plan (IRP 2019) that was updated in October 2019.

Although we view the RMIPPP as positive in terms of the urgency needed to address the ongoing energy supply deficit, we are less positive about the extent of the gas-burning technology that will be used to generate this new energy, given its associated high level of CO2 emissions, which may detract from South Africa’s clean energy goals.

Two thirds of the energy procured will be from offshore “Powerships” which may not support the gross fixed-capital formation that our country desperately needs. The Powerships have also been granted exemptions from local content provisions during their project development phase, a key metric that bidders were required to comply with under the RMIPPP.

Powerships

The preferred bids include three floating power stations, or “Powerships” that will be moored at Nelson Mandela Bay, Richards Bay and Saldana Bay respectively, and will in total generate up to 1 220 MW of electricity by burning Liquified Natural Gas (LNG).

Eight projects with a combined generating capacity of 1 845 MW were selected out of twenty-eight bids totaling a potential contracted capacity of 5 117 MW. Three more projects with a combined capacity of 150 MW are being re-evaluated and could possibly be added to the list of preferred bidders in due course.

Preferred bidders announced so far:  
Project LocationEnergy typeMegawatt
ACWA Power Project DAOGroblershoop, Northern CapeCombination of solar photovoltaic (PV), onshore wind, battery storage and diesel150 MW
Karpowership SA CoegaNelson Mandela Bay,
Eastern Cape
Liquid natural gas450 MW
Karpowership SA Richards BayRichards Bay, KZNLiquid natural gas450 MW
Karpowership SA SaldanhaSaldanha Bay, Western CapeLiquid natural gas320 MW
Mulilo Total CoegaNelson Mandela Bay,
Eastern Cape
Combination of solar PV and liquid natural gas198 MW
Mulilo Total Hydra StorageDe Aar, Northern CapeCombination of solar PV battery storage and diesel75 MW
Oya Energy Hybrid FacilityMatjiesfontein, Western CapeCombination of solar PV, wind and lithium-ion battery storage128 MW
Umoyilanga EnergyNelson Mandela Bay/Upington, Eastern & Northern CapeCombination of solar PV, onshore wind, battery storage and diesel75 MW

The projects under the RMIPPP are required to meet the following criteria:

  1. They must reach financial close by the end July 2021;
  2. Construction is to be completed within 12 to 18 months;
  3. Base load energy must be dispatched to the grid between the hours of 5am and 9.30pm; and
  4. At least 51% of the shareholding must be local and at least 41% held by Black South Africans.

Electricity generated by these projects will earn tariffs ranging from R1 468/MWh to R1 885/MWh (adjusted for inflation, fuel and the ZAR price of imported gas and diesel over the next twenty years) subject to the projected fuel price assumptions bid by the projects. This is more than double the preferred bid tariffs of approximately R700/MWh under the latest Round 4 of the Renewable Energy IPP Procurement Programme (REIPPPP) and is due to the higher cost of the dispatchable energy required by the RMIPPP, which will rely on technology utilising gas, battery storage and/or diesel in the projects. The preferred bids will benefit from the same government guarantee support regime as bid windows 1 to 4 of the REIPPPP, which has written concurrence by National Treasury.

The eight projects are forecast to create 3 829 job years for local citizens during construction and 13 549 job years for local citizens during the 20 years of their operations. Furthermore, the government envisages that there may be opportunity to capitalise on the new skills and supply lines to be established by the gas technology in the projects and used to develop the potential growth of the gas industry in South Africa. This could involve the repurposing of old Eskom coal-fired power stations to operate on gas, in the areas where there are plans to decommission these plants.


Aspects of the announcement are concerning

Despite the delay in implementing the RMIPPP (since the updated IRP 2019 was released almost eighteen months ago) it is a necessary and important step in the procurement of new energy, particularly to help alleviate the current supply shortfall. However, the dominance of gas in the technology mix of the preferred bidders has raised concerns, given the negative impact of burning gas on the environment and in light of the cheaper and cleaner renewable energy alternatives.

Given the size of the Powership projects, which each have individual generating capacity between two and six times bigger than the other preferred bids, many of the smaller projects were crowded out of the selection process. The market was generally expecting a larger number of preferred bids, comprising smaller capacity projects and a larger contribution of renewables to the mix of technologies.

There is some consternation about the cost of buying electricity from the Powerships for the next twenty years, when this technology is typically used by countries as a stop-gap short-term measure, and not as a long-term source of supply. Although the average bid tariff of R1 550/MWh for each of the Powerships is at the lower end of the price range for the RMIPPP preferred bids, it is not clear to us how the environmental costs of burning gas have been incorporated into the overall cost.

We understand that environmental approvals for the Powerships remain outstanding. In addition, it has been reported by Transnet that they have not received an application for their formal consent (which is required in terms of the National Ports Act) to park the Powerships in the harbour for a 20-year period. Given the very tight timelines to financial close, we are uncertain that the appropriate signoffs will be met by the stipulated financial close deadline of 31 July 2021.

We are also concerned about the risk of the preferred bidders of the onshore projects not meeting the financial close deadline, given the challenge of concluding multiple Engineering, Procurement and Construction (EPC) contracts covering the different technologies that will operate interactively. Historically, projects that utilise a single technology, such as the preferred bidders under the REIPPPP, would strain to achieve financial close within three or four months, and with far simpler contractual requirements and far less technological complexity.

Our key considerations and next steps

Futuregrowth is in the process of formulating its investment view on the projects that have won preferred bids. Specific areas of consideration include:

  • The extent of carbon emissions that will arise from burning gas: The relative environmental impact profiles of the projects and their independent environmental assessment reports (including the impact of the Powerships on the surrounding marine life) will be carefully reviewed and we will need to be sure that the environmental costs have been appropriately included.
  • Sole reliance on LNG by the Powerships: Energy generated by the Powerships will be totally dependent on imported gas and subject to the vagaries of international commodity prices and exchange rates. Most of the other preferred bidders are anticipated to utilise gas and/or diesel only to generate a variable degree of “top-up” to baseload power generation when necessary to address the intermittency and seasonal weather patterns of renewables.
  • Job creation for South Africans: The Powerships will create a significantly lower number of jobs on average during construction (around 150 job years per project) compared to the average of each of the other preferred bidders (around 675 job years per project); however, will create a significantly higher number during the 20 years of operations (around 2 287 job years per Powership vs around 1 341 on average by each of the other projects).
  • Ability to deliver the projects under a very demanding time frame: Most of the preferred bidders of the onshore projects will contract to build energy plants using hybrid forms of technology which require significant integration and operational co-ordination. Given the stringent deadlines for financial close and switching on their power to the grid, the construction risk must be mitigated by indisputable track records by the project parties and robust security enhancements for investors.   


The Futuregrowth investment team is engaging its deal origination network on a number of RMIPPP debt syndication opportunities, with a view to concluding due diligence and reaching final investment decisions and implementation by the targeted end-July 2021 deadline for financial close of the projects.

On the face of it, and based on the information available, we believe the Powerships raise some critical questions which will require substantial explanations. Unless these concerns are addressed to our entire satisfaction, it will be very difficult to support investment in the Powership projects.

REIPPP Bid Window 5 – More renewables on the horizon

On 18 March 2021, Minister Gwede Mantashe also announced the next round of REIPPP (Bid Window 5) with the closing date for bid submissions on 4 August 2021. The market expects the preferred bidders for Bid Window 5 of the REIPPPP to be made known by fourth quarter of 2021, and financial close by mid-2022. Futuregrowth will also consider investment in these projects.

Together with the onshore projects with a dominant renewable energy contribution that were awarded preferred bids under the RMIPPP, this introduces an exciting phase in the growth of South Africa’s energy sector and new investment opportunities for our clients.


Published on www.futuregrowth.co.za/newsroom.

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Forestry and forest products sector releases global sustainability progress report

The International Council of Forest and Paper Associations (ICFPA) has released its biennial Sustainability Progress Report which demonstrates progress in seven key areas of sustainability: sustainable forest management, renewable energy, greenhouse gas, and suplhur dioxide emissions, water use, health and safety, and recycling. The 2021 report also highlights the forest products sector’s global response to the Covid-19 pandemic.

ICFPA serves as a forum of global dialogue, coordination and co-operation. Currently, the ICFPA represents 18 pulp, paper, wood and fibre-based associations that encompass 28 countries, including many of the top pulp, paper and wood producers around the world. The 2021 ICFPA Sustainability Progress Report shows progress on nearly all of the sector’s performance indicators, using the most recent data available (2018-2019).

“In the face of the biggest health and economic crisis of our lifetimes, we are reminded that the global forestry sector has the potential to address some of our most urgent social, environmental, and economic challenges,” noted ICFPA President Derek Nighbor. Nighbor is President and CEO of the Forest Products Association of Canada. “Forestry workers and forest products are in the unique position to drive our move to a lower-carbon world through sustainable forest management, advancing the forest bioeconomy, and recovering more paper and paper-based packaging for recycling.”

Key progress on ICFPA’s sustainability performance indicators include:

  • In 2019, 52.6% of procured wood fibre came from third-party certified sustainably-managed forests, a 41 percentage point increase from the 2000 baseline year.
  • Greenhouse gas emission intensity decreased 21% from the 2004/2005 baseline year.
  • The energy share of biomass and other renewable fuels increased to 64.9%, a 12 percentage point increase since 2004/2005.
  • Sulphur dioxide emission intensity from on-site combustion sources decreased 77% from the 2004/2005 baseline year and 38% from the previous report.
  • Water use intensity decreased 12.5% from the baseline year.
  • Investment in health and safety interventions yielded a 30% reduction in the global recordable incident rate from the 2006/2007 baseline with the number of recordable incidents falling to 2.88 per 100 employees annually.
  • In 2019, 59.1% of paper and paperboard consumed globally was used by mills to make new products, marking a 12.6 percentage point increase in the global recycling rate since the year 2000.

“As a sector, both globally and locally, we continue to make a positive impact and meaningful progress in areas of sustainability, society and the economy, providing citizens with a renewable resource in the form of sustainably produced wood, cellulose and paper products,” said Jane Molony, executive director of the Paper Manufacturers Association of South Africa (PAMSA) and member of the ICFPA Steering Committee. “Wood in its various forms not only meets essential daily needs, it also provides a raw material for conventional and innovative alternatives for sustainable packaging.”

The 2021 ICFPA Sustainability Progress Report also includes the 2021 International Finalists for the prestigious ICFPA Blue Sky Young Researchers and Innovation Award. The theme for the 2020-2021 Blue Sky Awards was “Boosting the Forest Bioeconomy: Nature-Based Solutions Toward a Lower Carbon Economy.”

To view or download the 2021 ICFPA Sustainability Progress Report, please visit: ICFPA 2020-2021 Sustainability Progress Report.

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Construction of R16bn Cape Town CBD precinct well on track

Cape Town’s largest and most ambitious sustainable mixed-use development, Harbour Arch, is steadily taking shape on the city’s foreshore, with construction having commenced back in January last year.  In recent months, motorists passing the site at the eastern side of the city would have noticed the development, in particular the residential towers, rising above the construction site inching skywards. 

“Construction is well on track at what is set to be an iconic landmark that will feature a world-class live, work, and play precinct within the city’s CBD,” says Nicholas Stopforth, Managing Director of Amdec Property Developments. 

The development currently sits at around 25 metres above ground level, and can be clearly seen rising above Table Bay Boulevard. Concrete and structural work on the 3-level basement, ground and first two floors have been completed and the contractor is moving ahead with brickwork and the installation of services.  Floors four to six are also moving ahead at pace. 

According to Stopforth, the transformation of what has been an uninspiring site characterised by vagrancy, warehousing and light industrial, into a safe and enjoyable community-focused environment, heralds a new era of urban living for the CBD.

“Our main contractor, WBHO, is managing the site with great efficiency, and we remain on schedule for completion of Tower One Harbour Arch in May 2023,” says Stopforth. “On any given day we have around 300 workers on site, all of whom are screened and sanitised in accordance with Covid-19 protocols.”

Once Harbour Arch is complete, these six residential towers will sit above landscaped public spaces lined with shops, restaurants, cocktail bars, two Marriott branded hotels, offices, gyms and the like. With scenic views and modern, luxurious finishes, apartments in Tower One are largely sold out, with only a few remaining for sale. 

The concept of development as a vibrant 24-hour precinct for diverse communities is in line with property trends driving urban densification developments that have a positive fiscal impact. Bringing together residential properties with work and lifestyle elements, such as shopping facilities, hotels and restaurants, means that Harbour Arch promises to become a new centre of activity in Cape Town’s CBD – so bringing new business and work opportunities to all Capetonians.  

According to Stopforth, “It is not by coincidence that we have joined forces with WBHO as our main construction partner. The fact that WBHO is a Level 1 BBBEE company reflects our commitment to creating an environment that can be beneficial to South Africans from all walks of life.” 

The building of the precinct will provide around 20 000 jobs and many thousands more will be created upon completion via retail, extensive hospitality services and the sophisticated security services.

“The Covid-19 pandemic has in many respects changed the way we live, blurring the lines between work and play, highlighting the necessity for community and connectivity. Mixed-use developments like Harbour Arch are perfectly placed to satisfy this kind of lifestyle because they are designed to offer dynamic, safe, sustainable environments that combine commercial, retail, leisure, and residential components,” says Stopforth. 

“While it’s been a buyer’s market for some time now, mixed-use developments like Harbour Arch remain in high demand. All-inclusive precincts make it easier for people to live close to where they work. The move from suburban to inner city living makes good financial sense if you factor in escalating traffic and sky-rocketing petrol costs. Less time spent commuting not only reduces traffic congestion and carbon emissions, it also allows people to live healthier, less stressful lives,” he concludes.

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A closer look at REIPPPP bid window 5

The Department of Mineral Resources and Energy (DMRE) recently launched the Request for Proposals (RFP) for the Fifth Bid Window (BW5) under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which calls for proposals from Independent Power Producers (IPPs) to develop new generation capacity of 2 600MW, including 1 600MW from onshore wind energy and 1 000MW from solar photovoltaic (solar PV) power plants, in line with the government’s intention to increase generation capacity and ensure the security of energy supply to society. Ahead of the expected DMRE Bidders’ Conference, to be hosted on an e-platform, during May 2021, which will provide more information on the qualifying criteria and bid submission expectations, the South African Wind Energy Association has shared its impression of BW5.

“There are two key aspects of BW5 that are worth unpacking, namely the local content requirements and the bid evaluation weighting, which has now shifted in line with governments standard procurement norms,” said Ntombifuthi Ntuli, CEO of SAWEA.

LOCAL CONTENT

The BW5 local content threshold has been retained at 40%, in line with previous rounds.  The difference in this round is that there is no local content target, only the threshold is prescribed. Furthermore, for the first time, the REIPPPP introduced designated local content, which, over and above the threshold, requires bidders to procure certain specified components locally. Should these components be unavailable, bidders can apply for exemption, which needs to be lodged with the Department of Trade, Industry and Competition (DTIC).

The wind industry had extensive consultation with the IPP Office and dtic prior to the issuing of the BW5 RFP, specifically on local content requirements and what the industry can achieve in the short and medium terms. To achieve a successful localisation programme with incremental local content thresholds, a consistent procurement pipeline should be established. This would be a positive development as it facilitates augmented job creation and skills development as the economy recovers from the Covid-19 pandemic and looks to accelerated economic growth.

“Consecutive bidding rounds will enable local manufacturing facilities to be re-established and the potential expansion of already operating manufacturers, which is very crucial in creating long-term sustainable jobs,” added Ntuli.

SAWEA has, however, cautioned that the stop-start nature of procurement, and the latent bid windows, severely damaged the meaningful momentum, pre-2015, which established new manufacturing capacity within the wind and solar value chains in South Africa. Significant manufacturing capacity was lost in the delay between BW4 and BW5, with many companies being forced to shut down as a result of the delays, unable to carry the cost of overheads indefinitely.                

                                 

WTG Technician in position to guide rotor into position on the nacelle.

Looking at the recovery of the manufacturing sector and the possibility of re-investment, Ntuli commented, “Whilst we wholeheartedly celebrate the new impetus, one must be mindful that regaining the investor confidence will not be an overnight process. To enable the required quantity and very importantly, quality, of components will require at least two to three years of investment and development. It is therefore crucial that further interruptions or delays are not encountered. A controlled roll-out of procurement will allow all aspects of the value chain, and not only the manufacturing sector, to expand.”

SAWEA confirms that the industry remains confident in its ability to meet local content requirements and reiterates that it has no reservations or concerns that the sector will respond positively. The Association has facilitated conversations between the DMRE, DTIC and the other key sector stakeholders, to align strategically and map the way forward to deliver on increased local content requirements.

“The wind industry has further submitted its vision to practically increase local content in the next few years and remains fully supportive of growing the local manufacturing sector,” explained Ntuli.

The Association is further heartened by the establishment of the South African Renewable Energy Masterplan (SAREM), which is set to contribute immensely to fast-tracking the establishment of local manufacturing capacity. It is intended that this framework will provide a blue-print from which government departments such as the dtic and the DMRE can provide incentives for investment into local manufacturing.

This is once again important for future bid windows and the renewable energy sector’s ability to deliver jobs and investment, in the post-Covid-19 recovery period.

“SAREM represents an opportunity to identify jobs and investment in our sector linked to the country’s resource plan, as well as to clearly outline how job creation and investment might be enhanced if impediments are removed and replaced rather with supportive policy,” added Ntuli.

BID EVALUATION WEIGHTING

A noted change in BW5 is the evaluation weighting, which has changed from a 70:30 weighting to a 90:10 weighting, indicating a distinct emphasis on tariff. Black women ownership in the project company is a new requirement and has a 5% threshold, otherwise, all other economic development requirements as per BW4 have been retained.

In previous rounds, the REIPPPP used a 70:30 (price: economic development), weighting, attaching higher priority to economic development objectives than the typical government structure of 90:10 at the time.

In closing, SAWEA has noted that the DMRE’s statement reveals that given the energy challenges the country is facing, the qualification criteria have been developed to promote the participation of projects that are fully developed and will be able to be constructed and connected to the national grid as soon as twelve months from financial close, but not later than twenty-four months post financial close.

        

                               

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Anton Hanekom, executive director at Plastics SA.

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SA could cut planned infrastructure budget by addressing billions of litres of wasted water

Water waste, leaks, and the use of drinking water for manufacturing is resulting in billions of litres of potable water going to waste, which – if addressed – could reduce the water infrastructure spend that is necessary.

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Renowned certifier launches South African organic programme

A Greener World has added Certified Organic to its portfolio of respected food labels, offering another competitively priced, rigorous certification option.

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[VIDEO] The innovations we need to avoid a climate disaster

BILL GATES | TED TALK

The single most important thing for avoiding a climate disaster is cutting carbon pollution from the current 51 billion tons per year to zero, says philanthropist and technologist Bill Gates. Introducing the concept of the “green premium” — the higher price of zero-emission products like electric cars, artificial meat or sustainable aviation fuel — Gates identifies the breakthroughs and investments we need to reduce the cost of clean tech, decarbonize the economy and create a pathway to a clean and prosperous future for all. (This virtual conversation, hosted by TED Global curator Bruno Giussani, was recorded in March 2021.)

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Are businesses ready to attract tomorrow’s investors?

Thought leadership article by Joe Keenan, Managing director, BME, a member of the Omnia Group

The world has become rapidly alive to the threats posed by climate change, and mining companies are seeing their shareholders demanding more than just a financial return. Investors – both institutional and private – want their mineral portfolios to speak to their value systems, and these values now centre increasingly on sustainability and shared value for all stakeholders.

Like the mining companies they service, mine suppliers and technology providers should be looking beyond the customer demands of today to remain relevant to the investors of tomorrow.By the same token, others in the mining ecosystem should have similar concerns about their respective futures. The question for our sector might be posed along these lines: How does a blasting and explosives company, for instance, position its brand to be relevant not only to its current customers but to future investors?

To be sure, supply companies receive business from mines because they provide valuable solutions that make mines productive and help keep them viable. That is no longer enough, however. Just as the South African mining sector is subject to the country’s Mining Charter and BEE compliance requirements, so there is a growing expectation globally that mines prioritise environmental, social and governance (ESG) concerns. The once ‘optional’ approach that businesses serve the broader good is now becoming mainstream as more businesses aspire to make a positive impact and leave behind a better world.

In mining, there are already thresholds for suppliers to clear in the field of safety. Many mining companies will not entertain tenders from suppliers whose recordable case rate (RCR) exceeds a certain maximum level. The same often applies to inclusive procurement, where mines expect suppliers to support their efforts to place business with local firms in the vicinity of the mining operation.

While some companies are already driving compelling, integrated sustainability strategies, others are exploring how best to diversify themselves. The emphasis is on going beyond their current offerings and moving further into the sustainability spectrum, with a focus on ESG and ‘green mining’ imperatives. Looking ahead 30 years, for instance, it is clear that fossil fuels will be playing a much-diminished role in energy production – and will be in considerably less demand. European countries are applying their Green Deal, through which the region aims to achieve carbon neutrality by 2050. We are already seeing major mining players extracting themselves entirely from the coal sector – for reasons related partly if not largely to the strategic recalibration of many investors and lenders in the light of climate change. Equally, responsible businesses are increasingly choosing like-minded partners, who share their vision for sustainability.

It is worth remembering that coal is still the planet’s most mined mineral – at almost 8-billion tons in 2019. The anticipated decline in this segment of the market is therefore likely to have a considerable impact on most supply companies to the mining sector; it will certainly have an effect on explosives and blasting providers – although this will depend on regional location and other factors.

The uncertainty in mining’s future might not stop there. Alternatives to coal-fired generation will have to be found, and this is already leading to greater interest in other commodities such as battery raw materials. Some of these will continue to require blasting in a hard rock environment, while others will not – being mineable by free digging. As technology develops, there is even the prospect of energy being generated or stored using materials or substances that are not mined at all; for example, research is being carried out into the electrical storage capacity of certain plant-based material.

The pace of this technological change is being spurred on by tomorrow’s generation, who see in it an epochal opportunity for a more sustainable future. Those who make up this generation are not just the pioneers of a new age but are the investors of the future. It is they who will set the preconditions for investment in coming decades, and it is clear they will prioritise sustainability.

Many – perhaps most – financial institutions have set demanding goals for their investment portfolios, and it is increasingly vital for capital-seeking firms to know what those comprise. They are certainly not ‘tick box’ requirements that can be applied when capital is needed; they are strategic elements that require considerable planning and years of dedicated implementation.

As suppliers to mines, our current commitment to creating value for customers – and to building the technology that will help us to achieve this vital goal – should not blind us to the broader, tectonic shifts underway in society. These promise to drive our economies toward greater sustainability, but they will demand fundamental changes in value systems that many businesses do not yet seem ready to embrace.

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