Brambles commits to net-zero emissions by 2040
SA wind industry joins global push for net zero ahead of COP26 and climate change bill
Ahead of this year’s United Nations Climate Change Conference, COP26, taking place 31 October to 12 November 2021, and the imminent parliamentary tabling of South Africa’s Climate Change Bill, the South African Wind Energy Association (SAWEA) has reiterated its commitment to ensure the country’s wind industry aligns with global plans.Continue reading View more
Are net-zero goals realistic for South Africa?
By Vanessa Mathebula – Quantitative Analyst at Prescient Investment Management
The much-anticipated COP26 is fast approaching. This is the 2021 United Nation’s Climate Change Conference, where each participating country, including South Africa, is expected to set more deliberate and ambitious climate change goals.
With the introduction of the Asset Manager’s Net Zero Agreement, fund managers globally are also now able to join the movement. Interested parties can pledge their commitment to playing an active role in supporting similar climate change goals to those of the respective countries by 2050 or earlier. Globally, there are already great initiatives in place, such as green financing solutions (e.g., green bonds), but, given our many macro-economic challenges, where do we stand as a country? Can we realistically move to the same rhythm as the global players?
Committing to advancing the goals of the Paris Agreement shows our willingness to collaborate and play an active role in achieving climate-related goals. However, we might have bitten more than we can chew, especially given the expectations of upping the ante in the upcoming COP26.
Fossil fuels are still a crucial driver of the SA economy
As a country, we rely on fossil fuels. For instance, coal continues to be the primary energy source as it caters for about 77% of South Africa’s energy needs, according to the Department of Mineral Resources and Energy. Furthermore, no material changes in this trend are expected in at least the next two decades. Unfortunately, the coal dilemma stretches wider than the obvious coal mining industry. As per the ripple effect theory, many other industries are, in fact, reliant on fossil fuels.
Aside from the obvious coal mining and electricity-generating companies, transportation (e.g. Transnet as it transports coal) and financial sectors can also be indirectly linked to the coal industry. This, therefore, means that the majority of South Africa’s productive economy can directly or indirectly be linked to fossil fuels.
Admittedly, there are initiatives in place that are meant to shift the country to ‘greener pastures’. However, the transition to these alternative forms of climate-friendly options is relatively slow. For instance, PWC’s Net Zero Economy Index shows South Africa is making minimal progress in decoupling emissions from GDP.
The country’s fundamental developmental challenges remain the main culprit. Not only do we lack the necessary infrastructure to enable such a transition, but the cost implications, especially for an overly indebted country like South Africa, coupled with the politics associated with such decisions, are other hurdles that cannot be ignored. We are, therefore, forced to acknowledge our shortcomings as a country and find ways to engage and promote realistic change.
In line with the Net-Zero goals, if asset managers were to restrict exposure to fossil fuel-linked companies and instruments materially, diversification and bottom-line investment performance would be materially affected. For instance, buying South African government bonds would be a questionable exercise as some of the proceeds are channeled towards assisting state-owned entities closely linked to the coal industry – e.g. Eskom. Bank paper would be questionable, too, as the average investor has no insight into the portion of the bank’s lending activities that are linked to the fossil-fuel industry.
This highlights the challenges we face as a country that still relies heavily on fossil fuels. Therefore, we are left with the question of whether we can materially limit exposure to the affected sectors without introducing any major adverse implications to the bottom line? Probably not! At least not any time soon, given the country’s sluggish progress towards introducing greener alternatives. However, this does not imply that we cannot take smaller strides each day towards having an overall positive impact from a sustainability standpoint.
A net positive contributor approach is a good start
One of the ways we can realistically advance towards achieving our sustainability goals, given the challenges we face, is to adopt a net positive contributor approach to overall Environmental, Social and Governance (ESG) factors. Not only does this enable us to factor climate-related factors into decisions in a less restrictive manner, but it also enables us to consider other sustainability factors, such as the social aspect, which is crucial for a country with a history of inequality like South Africa.
For instance, if we consider Eskom through a purely Net-Zero lens, no investor would touch it. However, once we accept that it is currently the primary producer of electricity, and thus supports economic activity countrywide and employs a notable portion of the country’s workforce, the scale would probably tilt to the positive for such a counter, keeping everything else constant.
At Prescient, we continuously seek to invest in net-positive counters. We assess the overall contribution of a given counter from an ESG risk and opportunity perspective based on our in-house developed ESG risk scoring tool, the Prescient ESG Scorecard. The scorecard is quantitative and free from human biases. The derived scores are based on over 60 metrics and are free from sector and size biases as we also factor sector materiality and adjust certain metrics by the market cap of the given counter. The scorecard output is integrated across investment teams enabling us to play an active role in moving towards sustainability as we tilt our investments towards net positive contributors. Of course, this is nowhere close to where we want to be from an overall sustainability perspective. We, therefore, continue assessing how viable it is for the local market to transition to a comprehensive Net-Zero approach. Until we reach a point where this is possible, we will continue the search for greener alternatives that don’t undermine the economy at the expense of South African society.View more
Crème de la crème: Nestlé’s first net-zero dairy farm
Nestlé’s First Net Zero Carbon Emissions Dairy Farm is on track to reach targets. 11% increase in milk production per cow, 40% reduction in energy by using solar and 45% increase in active carbon in soil
Nestlé’s first dairy farm that is earmarked to reach net-zero carbon emissions in 2023, is on track to achieving its targets. The Skimmelkrans farm, located in George in the Western Cape, produces some of the company’s nutritious products such as Nestlé MILO and Nestlé NESPRAY.
“Producing quality milk is crucial to increase the nutritional value of our products without compromising on taste and health. It is for this reason that we invested innovative and environmentally-friendly practices to improve care and nutrition for the cows on the farm, which means better nutrition in the milk products produced,” says Hoven Meyer Agricultural Services Group Manager at Nestlé East and Southern Africa Region (ESAR).
“We have worked very hard to ensure that the Skimmelkrans project is not only successful in achieving net-zero carbon emissions but becomes a model that farms operated by Nestlé can effectively implement. In just over a year, we are beginning to see some positive results through this project: we have seen an 11% increase in milk production per cow, achieved a 40% reduction in energy by using solar and a 45% increase in active carbon in soil,” added Meyer.
The results were validated by independent soil experts through testing, screening, and analysing of the soil; which confirmed that the Skimmelkrans farm is past the halfway mark to reaching the net-zero carbon emissions goal. Further validation pointed out that if the farm keeps the momentum, it could achieve net-zero carbon emissions before 2023.
The Skimmelkrans farm has set itself apart through prudent soil work, water conservation, feed management and manure processing, where the most significant reductions of greenhouse gases occur. During milking, cow manure is collected and separated into liquids and solids using a manure press. The separated liquids go back to the pastures as irrigation, while the solids are released into the soil as compost. The farm has used about 4000 tons of chicken manure as organic fertilizer – replacing some chemical fertilizer with a high carbon footprint.
“We are proud of the progress to date and are motivated to work even harder in realising our goal of being carbon net-zero at this farm by 2023. This project is really pioneering regenerative agriculture practices that are key in our response to ensuring sustainable production and job creation. In South Africa, through our farmer support and partnerships, we procure our milk from around 140 local dairy farmers, therefore creating over 4000 permanent jobs,” says Saint-Francis Tohlang, Corporate Communications and Public Affairs Director at Nestlé East and Southern Africa Region.View more
Developing countries need to chart their own course to net-zero emissions
Translating complex climate science into language people understand has always been difficult. At various times, the aim of different climate policies has been holding average global temperature rise to 2°C or 1.5°C or ensuring emissions peak by a particular year. Net-zero targets are the most recent attempt to simplify the climate crisis in order to make it manageable.
The Paris Agreement called on countries to balance greenhouse gas sources, such as cars and factories, with ways of removing emissions from the atmosphere, such as forests and carbon capture technology, in the second half of this century. A report by the Intergovernmental Panel on Climate Change, released in 2018, examined how temperature rise could be limited to 1.5°C and urged the global community to reach net-zero emissions of carbon dioxide by 2050.
Framing the effort to tackle climate change this way has proved useful. More than 30 countries have net-zero targets set or proposed in law and existing policies, while more than 120 countries are discussing their own net-zero targets. Some of these targets concern all greenhouse gas emissions, others just carbon dioxide, and most set 2050 as the deadline.
Same goal, different paths
There is a risk that the call for global emissions to reach net zero by 2050 is seamlessly translated into a call for each country to announce net zero by 2050 targets. In recent months, leaders from the US and the UK and the UN Secretary-General have suggested that a net-zero emission target consistent with reaching global net-zero carbon by 2050 is an important yardstick by which climate pledges by major economies are to be judged.
Yet how much each country has to do depends on how fast other countries reach net zero. So how should the international community decide the relative pace of change? Here, the hard-won agreement at Paris provides some guidance. It recognises that emissions will take longer to peak in developing countries because addressing poverty is an overriding challenge. For the whole world to reach carbon neutrality in 2050, developed countries have to reach net-zero carbon emissions earlier.
The Paris Agreement formulation makes sense. It would hardly be fair to ask a country like India to reach net zero at the same time as the UK. India has yet to peak its emissions and currently emits less than half of global average emissions per capita, while the UK peaked its emissions two decades ago at a much higher GDP and its emissions remain above the global average.
The Paris Agreement also requires that developing countries receive support – in the form of money or green technology – to speed up their transition. Net-zero targets are a powerful way to signal common cause between nations. But retaining that sense of solidarity requires these targets to be consistent with demands for climate justice.
This is not only fairer, but also makes for smarter politics and so increases the chances of real action. The Paris Agreement broke a long-standing political deadlock by allowing each country to develop its own nationally determined contribution to cutting global emissions. This let national governments tailor climate policy in order to maximise its appeal to people at home. In countries such as the UK, the idea of reaching net zero emissions as soon as possible has considerable support. In other countries, winning political support may require climate action to be embedded in other goals.
In South Africa, there is crippling inequality and unemployment stood at 43% in late 2020. Emissions cuts can only proceed if jobs are created during a transition from a coal-based economy to a low-emissions one, particularly for young people.
In India, too, job creation is paramount. So are environmental concerns like air pollution and unequal access to reliable energy. This may require action in the electricity sector to address these development challenges and prevent the future economy becoming locked in to high-carbon energy sources.
Both South Africa and India’s domestic priorities can be translated over time into a clear formulation for reaching net zero emissions. But that translation between domestic development narratives and global obligations has to be undertaken, not presumed. Instead of a single net zero transition, there must be space for multiple transitions, consistent with climate justice and tailored to different national contexts.
Net zero targets have to be credible to be meaningful – long-term statements of intent are not enough. Doing more, earlier, is necessary. Recent pledges by leaders for action by 2030 are a step in the right direction. These declarations should be embedded in Paris Agreement processes to ensure countries are accountable. Equally important is addressing the often ignored “net” in net zero. National plans should not be over-reliant on the future existence of technology to remove emissions. Any pledges based on purchasing emissions credits from other countries must be credible.
Net zero can be an important focus for climate action. But it must not become a set of blinkers that seeks to compel all countries down a single path. Instead, we need credible, just transitions to net zero.
Courtesy: The ConversationView more
Guide to developing net zero carbon buildings in SA launched
A guide to developing net zero carbon buildings in South Africa gives a thorough overview on net zero carbon buildings in South Africa. It provides guidance to professional teams considering developing a net zero carbon building and shows those shaping the built environment in South Africa that it is possible.
While it may be considered ambitious, it is certainly achievable.
Sparked by engagement between the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) and the eThekwini Energy Office, the guide is a collaborative production, led by the ASHRAE South Africa Chapter with input from the C40 South Africa Buildings Programme, Sustainable Energy Africa (SEA), and the Green Building Council South Africa (GBCSA).
When it comes to getting a building to net zero carbon status, the basic idea is to reduce energy consumption as much as possible, and then to provide the building’s minimal energy needs through renewable energy. Exactly how this can be done, is explained in this guide.
For those keen to take the sustainability of their property to the next level ahead of regulatory changes that will make higher efficiencies in buildings mandatory, this guide can assist.
GETTING TO ZERO gives practical tips on how net zero carbon can be achieved. From identifying the right people to have on your project team, to the actual energy use intensity of lighting and mechanical equipment that should be targeted in a commercial building. Furthermore, it highlights renewable energy considerations to bear in mind on your project.
The guide features numerous case studies, showcasing projects that have already achieved net zero carbon status. These projects provide inspiration and share learning to motivate those seeking to make net zero carbon a reality.
GETTING TO ZERO emphasises that building energy use intensity should be about one-third of current standard practice in South Africa. It advises of ways to reduce the energy use intensity, through passive design, building simulation and highly efficient active design/mechanical equipment and appliances.
It details the most effective passive design strategies to use in the South African context. And when implementing active systems such as air conditioning, it gives the pros and cons of different systems and guidance on choosing the most effective systems for particular regions in South Africa. The guide also highlights some of the intricacies of the renewable energy landscape in South Africa.
Reliance on fossil fuels to power buildings and cities damages the health of our people and our environment. The building sector has the potential for significant greenhouse gas emissions reduction at a lower cost than many other sectors.
The motivation for net zero carbon buildings is driven by South Africa’s national and local climate change commitments, including the C40 Global Net Zero Carbon Buildings Declaration. Johannesburg, Tshwane, Cape Town and eThekwini are C40 cities and signatories to the 2018 declaration, alongside 24 other global cities. These cities have committed to developing regulations and/or planning policy to ensure new buildings operate at net zero carbon by 2030 and all buildings reach net zero carbon status by 2050.
Meeting these commitments will require a step change in building energy efficiency policies and regulations in most cities.
The biggest challenges facing the uptake of net zero buildings are challenges of perception (when people think it’s more difficult than it is), technical challenges and financial challenges. All of these are being rapidly overcome.
Technically, it is absolutely possible to achieve net zero carbon buildings. It requires determination and enabling building standards, bylaws and policies to make it happen at scale. Critical mass of net zero carbon buildings is required to meet political and planetary climate goals.
GETTING TO ZERO: A guide to developing net zero carbon buildings in South Africa is freely available and can be downloaded here.View more