Beware of Covid fatigue and complacency in the workplace

South Africans were all relieved when President Cyril Ramaphosa announced recently that the first two batches of Covid-19 vaccines had safely arrived in the country, followed by Health Minister Zwheli Mkhize’s announced that the vaccination programme is rapidly gaining momentum.

“After months of suffering through lockdowns, social distancing, isolation and sanitising, it is easy to suffer from Covid-fatigue. The temptation exists to become lax when it comes to implementing health and safety protocols in the workplace. However, it is vital to remain vigilant. Until the majority of South Africans have been vaccinated, we cannot afford to think that life and business can resume to the way it was before the virus,” warns Robert Palmer, Head of the Occupational Health Department at Afroteq Advisory – a multi-disciplinary integrated company providing advisory and training services to the built environment sector since 2000.

According to Palmer, typical short-cuts taken in the corporate environment include only sanitising or disinfecting obvious “high traffic” areas such as boardroom tables and chairs, but neglecting door handles, lift buttons, staircase bannisters, telephones etc. The improper wearing of masks, forgetting to sanitise hands, the absence of visible sanitisers and failure to enforce adequate social distancing are also frequently encountered when the company conducts their workplace audits.

Even though we have moved through the second wave, South Africa still records on average 1500 new cases more than 200 deaths per day, with almost fifty thousand people who have already succumbed to the virus.

Health experts have warned that we could see the third wave at the end of April and predict that a fourth wave could hit the country when Winter arrives.

“Finally seeing a light at the end of the tunnel makes companies believe that we are out of danger. Decision-makers think they can save money by appointing unaccredited, uncertified service providers to deep-clean and sanitise the building or by purchasing inferior quality cleaning materials and other PPE. There should be zero-tolerance for this kind of behaviour that puts profit over the well-being of people. The reality is that Covid-19 is still with us and that it will take several months for the vaccine programme to be rolled out and until the majority of our workforce can be considered safe,” he says.

A specific area concern to facility managers working in the built environment is the health and safety of construction workers. OHS officers agree that labourers not wearing their masks on-site, working in too close proximity to each other or being transported in large numbers are cause for grave concern. 

“Construction companies face harsh penalties and high fines when their projects run late. They put pressure on their teams and workers fear that they might lose their jobs should they call in ill.  By failing to disclose their symptoms to their supervisors and adhering to safety protocols, everybody on-site is put at risk,” Palmer says.

Confirming this warning, the World Health Organisation (WHO) listed occupations where workers performing mostly routine tasks, such as construction workers and cleaners that have to contend with low wages, job insecurity and a rushed return to work, as medium risk.

“As health and safety experts, we urge employers to ensure that they continue implementing the correct protocols and pay attention to potential problem areas.

Paradoxically, it tends to be the companies that have until now been largely unaffected by Covid-19 that are at the greatest risk of succumbing to complacency.

We all want to rebuild our economy, but we cannot ignore the fact that many employees are dealing with emotional battles after having lost family, friends or loved ones due to the pandemic. The world has paid a high price already, and we owe it to each other to be responsible and make the right decisions to the end. That is what true leadership is all about,” Palmer concludes.

For more information, visit www.afroteqadvisory.co.za

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Oxygen shortage amid Covid-19 second wave has affected industrial production

Covid-19 has had a significant negative impact on businesses across all sectors and taken a toll on healthcare systems and facilities in South Africa. In recent weeks, there have been news reports of a high demand of medical oxygen, putting immense pressure on oxygen suppliers and affecting industrial supply.

In an attempt to assess the scale of the oxygen shortage, the Steel and Engineering Federation of South Africa (SEIFSA) surveyed its member companies to establish their experiences around oxygen shortage within the metals and engineering (M&E) sector and to understand the impact of the shortage on their production levels and whether alternative measures were being sought regarding input supply chains.

According to the survey results, which was sent to all 1 600 companies that are members of SEIFSA through its affiliated Associations, 76.92% of the respondents said they had experienced oxygen shortages and had considered alternative supplies in the process. Several companies whose analytical instruments use oxygen had to alter their inspection regularly to reduce consumption and find alternative supply, in one case at a cost of R4 000 per bottle versus the standard cost of R140 per bottle.

Some of the respondents mentioned that they were at risk of running out of oxygen within 14 days. Others said the impact had been so severe that they had to apply for extensions on their projects or stop production altogether.
“Based on the views of the respondents, SEIFSA is of the view that the oxygen shortage has, indeed, disrupted industrial production. However, we concur with our respondents who believe that lives need to be saved, hence the supply of medical oxygen should be prioritised,” said SEIFSA Chief Economist Chifipa Mhango.

He said, however, the SEIFSA survey indicated that the issue of oxygen supply is a concern as the Covid-19 pandemic persists. He said it is clear that the second wave had placed a strain on sectors heavily reliant on oxygen as a result of the high rate of daily hospital admissions. He said that going forward, strategic interventions and engagements will be required with oxygen suppliers to salvage the crisis.

“However, with the Covid-19 vaccine rollout soon to be implemented in the country and a managed approach by Government to reduce Covid-19 infections, we expect a return to normality in oxygen supplies in the coming weeks and months as hospitalisation rates decline,” Mhango concluded.

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Environmental risk, Trump, Covid as priority for top SA companies

Leading companies are taking crucial steps towards financially quantifying their exposure to climate risks by identifying and measuring the value of the economic, social, and environmental context opportunities available to them.

This year seven South African companies have made it onto the CDP A-list 2020. CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. The world’s economy looks to CDP as the gold standard of environmental reporting with the richest and most comprehensive dataset on corporate and city action.

CDP’s annual environmental disclosure and scoring process is widely recognised as the gold standard of corporate environmental transparency.

In 2020, over 515 investors with over US$106-trillion in assets and 150+ major purchasers with US$4-trillion in procurement spend, requested companies to disclose data on environmental impacts, risks, and opportunities through CDP’s platform. Over 9 600 responded – the highest ever. South African companies taking the lead are demonstrating not only good governance but are taking transparent action to mitigate these risks, realise the opportunities, and building climate-resilient and sustainable companies going forward.

South Africa’s A list companies include:

1.       Anglo American Platinum (Double A-lister: CDP Climate and CDP Water Security)

2.       Clicks Group ltd. (A-list for CDP Climate)

3.       Gold Fields Limited (A-list for CDP Water Security)

4.       Impala Platinum Holdings (A-list for CDP Water Security)

5.       Mondi PLC (Triple A-lister for CDP Climate, CDP Water Security and CDP Forests)

6.       Nedbank (A-list for CDP Climate)

The National Business Initiative (NBI), the local partner to CDP, has assisted companies with their disclosures through CDP since 2008. Steve Nicholls (Head: Environmental Sustainability) says: “It is exceptional to see so many A-listers emerge in a time when business competitiveness is increasingly driven by international and local climate policy.”

A detailed and independent methodology is used by CDP to assess these companies, allocating a score of A to D based on the comprehensiveness of disclosure, awareness, and management of environmental risks and demonstration of best practices associated with environmental leadership, such as setting ambitious and meaningful targets. Those that do not disclose or provided insufficient information are marked with an F.

Paul Simpson, CEO of CDP, says: “We extend our congratulations to all the companies on this year’s A-List. Taking the lead on environmental transparency and action is one of the most important steps businesses can make and is even more impressive in this challenging year marked by Covid-19. The scale of the risk to businesses from climate change, deforestation, and water insecurity is enormous, and we know the opportunities of action far outweigh the risks of inaction. Leadership from the private sector will create an ‘ambition loop’ for greater government action and ensure that global ambitions for a net-zero sustainable economy become a reality. Our A List celebrates those companies who are preparing themselves to excel in the economy of the future by taking action today.”

The full list of companies that made this year’s CDP A-List is available here, along with other publicly available company scores: https://www.cdp.net/en/companies/companies-scores

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Taking stock of Covid-19 through a sustainability lens

If you are reading this, you are well on your way towards surviving one of the most cataclysmic events of our lifetime; one that is forever going to reshape the way we view the world and drive home the importance of prioritising sustainability and all it entails during the years ahead.

The coronavirus, which originated in a wet market in Wuhan, China, in December 2019, has since been declared a global pandemic that has spread across the planet through international travel and global supply chains. At the time of writing, the number of cases worldwide was inching towards the 54-million mark. Additionally, the effects of the virus have reverberated through global financial markets and economies, resulting in the greatest recession since World War II.

The pandemic has also brought to bear the severity of socio-economic inequalities, risks introduced by our unsustainable systems as well as the materiality of fat-tail events. In so doing, it has provided us with an opportunity to redefine a new normal and introduce structural shifts that will help us work towards a sustainable future for all.

Many countries instituted national lockdowns at an early stage in the pandemic, which is a classic example of a suppression approach to pandemic management. The logic underpinning this methodology is to introduce social distancing to entire populations and minimise the number of additional infections reproduced by each confirmed case, thereby slowing the spread. This, ceteris paribus, is a highly effective public health risk management plan. However, in reality all other things are not, in fact, equal. Thus, the coronavirus has brought crucial attention to the social element of environmental, social and governance (ESG) issues.

National lockdowns entail the suspension of economic activity, which results in loss of income and employment, pushing the vulnerable segments of society, already on the precipice of poverty, into a state of destitution. Also, countries encumbered by acute socio-economic inequalities, like South Africa, have had to face the reality that large segments of their populations living in high population density areas and with inadequate access to clean water and sanitation would face a higher risk of exposure to Covid-19. The reality of the plethora of social risks has since powered the rollout of unprecedented global fiscal stimulus packages to soften the adverse economic effects of the pandemic.

Although these packages have provided the buoyancy required to see us through the immediate challenges, a fundamental shift in the discourse surrounding the risks fragile economic structures pose is translating into the development of a far more robust and well-defined path towards a sustainable future.

Consequently, sustainable investing will be a vital component of a post-pandemic recovery. For instance, there has been an increase in the global issuance of social and sustainability bonds over the past five years. New issuances in response to Covid-19 are also coming to market. A guidance note has been published by the International Capital Markets Association (ICMA) to provide a benchmark for the structuring and reporting standards associated with the new Covid-19 social bonds.

Domestically, the South African Minister of Finance announced plans to amend Regulation 28 of the Pension Funds Act to improve the ease with which retirement funds can finance infrastructure projects to help kickstart economic development.

The establishment of a robust regulatory framework and the dramatic increase in the need for social intervention worldwide will dramatically improve the level of interest in sustainability bonds and help reshape the economy of the future.

Companies adapting to change

Specific sectors and individual firms have been impacted in varying ways by the pandemic. When governments instituted lockdown laws, the spotlight turned to company governance practices and how executives would navigate the crisis.

Corporate boards faced scrutiny from various stakeholder groups that challenged the shareholder-centric model of governance, thereby making the board decision-making process much more multi-faceted. Companies became more cognisant of the central role they play in maintaining the socio-economic well-being of society through sustained value-creation. They also recognised how a well-functioning society puts them in a better position to meet their key performance indicator targets.

As a result, many boards decided to suspend or reduce their dividends and bonuses due to uncertainty regarding the scope and duration of the crisis. From an environmental perspective, working from home policies shed light on the environmental impact of commuting workforces. According to the International Energy Agency, a record drop in emissions is expected for 2020, with a projected 7% decline in energy-related CO2 emissions relative to 2019. Cities across the world have experienced lower smog levels, reduced water pollution and restored biodiversity highlighting the benefits of working remotely.

As such, many companies, like Microsoft, have implemented these policies permanently. Research also shows that infectious disease transmission is precipitated by rising temperatures, loss of biodiversity and other elements of climate change. By acknowledging this interconnectedness, global corporations are now playing a pivotal role in mitigating climate change risks.

Another equally crucial indirect consequence of the pandemic is the shift in focus to the social component of the traditional business model. Corporate culture measures such as employee health and safety and labour practices, including paid sick leave, have become priority areas and subject to intense public scrutiny.

Furthermore, severe supply challenges have also highlighted the risks of globalisation, and many companies have since amended their supply chain management processes to better diversify suppliers and reshore production. These social developments will not only improve working conditions but foster job creation and enterprise development.

Investor awareness on the rise

In light of the pandemic and growing public awareness of the climate crisis, investors across the world are shifting from a morally agnostic investment approach to one that aligns with their ethical concerns. This is evidenced in budding investor appetite for sustainable products, which has resulted in record-breaking flows into ESG funds in 2020.

Companies with strong ESG profiles have shown resilience in this time of crisis by staging a strong recovery post the March market lows.

This has prompted investors to rethink the impact ESG considerations may have on their investment returns. As supporting evidence, the MSCI World ESG Leaders Index has delivered returns in line with the MSCI World Index within a tight tracking error, other than its marginal outperformance in the wake of the March 2020 crash. This is a comforting return profile for the passive but ethically driven, investor.

Sustainable practices, such as strong incident risk management, fair labour practices, stakeholder-conscious boards, and clear decarbonisation pathways, have proven to be factors that drive long-term sustainable returns. To this end, we should witness an acceleration in the incorporation of ESG considerations into traditional valuation and risk models.

Forging a path forward

The turbulence caused by the pandemic and its indirect consequences has emphasised the need for global social change, multi-stakeholder centric business models, and international cooperation on public health and climate change considerations. This provides us with the carte blanche to rebuild a sustainable future for all and a resilient global financial ecosystem. The question is, which side of history do you, as an investor, want to be on?

Jessica Phalafala, Fixed Income Quantitative Analyst, Prescient Investment Management
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UNIDO in cooperation with Japan provide PPE to waste reclaimers

The United Nations Industrial Development Organization (UNIDO), under the project “Support for transitioning from conventional plastics to more environmentally sustainable alternatives“, funded by the Government of Japan, addressed the safety of waste reclaimers in South Africa and their protection from the threats of Covid-19 pandemic.

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