Corporate Sustainability in South Africa

22 May 2024

Market Insights :: Energy Market Commentary :: South Africa

With a reliance on coal for energy, South Arica is the 15th biggest emitter of CO₂ globally (as reported by World Population Review). Targets have been put in place by the government with specific reduction targets for both 2025 and 2030 with aims to reach net-zero by 2050. However, these targets have been deemed (by Climate Action Tracker) to not be enough to limit global warming to 2°C. The targets are also not currently legally binding, although steps are being made to change this. Due to current socio-economic conditions in South Africa, including regular energy blackouts, any changes towards environmental sustainability must assess just transitions to not negatively affect local communities and industry.

This article highlights sustainability initiatives being carried out by some of South Africa’s largest companies across different industries – based on publicly available information.

Sustainability Issues in South Africa

The impacts of climate change are currently being felt across the country, with changing temperatures and rainfall patterns affecting a significant number of communities. South African companies have, in line with patterns across the Global South, been found to prioritise social rather than environmental aspects of corporate responsibility. Many companies are introducing sustainability initiatives, in part to meet national reduction targets but also to optimise corporate benefits including improvements to reputation, new business opportunities and reduced energy costs.

Targets and actions from across South Africa industry:

Standard Bank

Standard Bank has created multiple decarbonisation milestones in reference to the Paris Agreement target to restrict warming to 1.5°C, aiming for net-zero by 2030 for new facilities, by 2040 for existing facilities and by 2050 for lending and investments.

Since 2011, the bank has contributed a significant amount of money towards renewable energy infrastructure and climate smart agriculture, and financing of coal-fired power generation and thermal coal mining has been restricted since 2019. Additionally, Standard Bank supports households and small businesses to access energy-efficient and renewable energy through their programmes LookSee (home efficiency advice and solar power) and Power Plus (solar power for businesses).

Vodacom

The mobile phone and communications company Vodacom aims to reduce corporate emissions by 50% by 2050 in comparison to a 2017 baseline. They plan to achieve this through increasing energy efficiency, investing in renewable energy and using Power Purchase Agreements (PPAs). Projects already invested in include solar panels, connecting to the grid instead of a diesel generator and adding energy saving features to radio equipment. Energy efficiency measures, including LED lighting and optimised cooling, have been applied to the buildings across the commercial portfolio.

As with Standard Bank, Vodacom are working to help their customers reduce their carbon emissions through introducing technological services to support corporations and households monitor water and energy consumption, particularly through smart-metering.

Naspers

Naspers, a global consumer internet group and technology investment company based in Cape Town, is SBTi verified for its emissions reduction targets. The company aims to reduce 100% of scope 1 and 2 emissions by 2028 (see breakdown of scopes here), 30% of business travel emissions by 2030 and for at least 50% of the companies across their portfolio to have set science-based reduction targets by 2030.

The company is working to reduce their own emissions, with 90% of their energy use coming from renewable sources, 100% in certain offices, and a plan to either remove company cars or swap to electric vehicles by the end of this year.

Naspers are also creating a sustainable supply chain, only working with suppliers who comply with their ethical and sustainable code of conduct, expecting suppliers to reduce their emissions and investing in low-carbon innovations and digital services supporting carbon transformation. The company have also created a strategy for decarbonisation, mapping the impact of portfolio companies and helping find opportunities and technology for emissions reductions.

Sibanye-Stillwater

The gold mining company, Sibanye-Stillwater, are committed to reducing emissions by 42% by 2030 from a 2021 baseline, becoming carbon neutral by 2040, and net-zero for scope 1 and 2 emissions by 2050, aligned with SBTi guidance (see here difference between carbon neutral and net-zero).

Sustainability is particularly important for the mining industry as certain sustainable management standards are required to be licenced to operate, and operations and facilities could be put at risk due to changing weather patterns.

The company completed their first batch of carbon credits in 2014 under the Clean Development Mechanism (CDM) and since 2016 have created a large renewable energy projects portfolio, including wind farms and solar projects. Wider efforts include advocating for decarbonisation, increasing energy efficiency and using low carbon technologies.

Woolworths Holdings

Limited The luxury retailer, Woolworths Holdings Limited, consisting of the South African department store of the same name and the retailer Country Road Group in Australia, has created SBTi-approved carbon reduction targets, aiming to reduce emissions 50% by 2030 from 2019 and to reach net-zero by 2040. The company also work with their top suppliers to set their own targets to reduce emissions across the supply-chain.

Woolworth’s main actions towards emissions reductions include energy-efficiency measures across operations, increasing the use of renewable energy (aiming for 100% by 2030), and switching to either electric or fuel-efficient delivery vehicles. The company y started implementing energy efficiency measures in 2007, introducing LED lighting, fridge doors and online metering.

Further plans include installing solar panels on their head office and distribution centres and using renewable energy contracts where possible (particularly in overseas operations).

How NUS can Help

NUS have a specialist Energy and Sustainability Services (ESS) team currently working with a number of clients on decarbonisation strategies for global portfolios. They are able to support with colleting emissions data, producing greenhouse gas (GHG) assessments, setting SBTi-aligned targets and developing decarbonisation roadmaps. For more information contact us online or find your local NUS office.

More: Energy Market Commentary, Decarbonization, Science-Based Targets initiative (SBTi), Sustainability