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14. Ensuring sustainability through strategy at Barloworld
- Africa Institute of South Africa
- Chapter
- Additional Information
265 Ensuring sustainability through strategy at Barloworld Godwell Nhamo 14 ABSTRACT The drivers for Barloworld to take the route of ensuring sustainability through strategy as a vehicle of transition to greener economy fall under three categories, namely: organisational reputation; internal cost savings; and the need to open up new business opportunities. Barloworld’s defining characteristic in terms of enablers towards transition to a low carbon and green company is its integrated approach that addresses environmental (including climate change), social, and financial needs. To this end, the group has a longstanding Value Based Management (VBM) approach. The VBM approach addresses long term value creation for all the group’s stakeholders, and the goal of being a responsible corporate citizen. Barloworld has entrenched a sustainable development culture into its strategy by identifying it as one of the six Strategic Focus Areas. The identification of sustainable development as a strategic issue, therefore, stands out as the major breakthrough. Linked to this breakthrough are divisional initiatives including: energy and resulting emission efficiency improvements; products including supply chain optimisation tools (Combined Inventory and Network Optimisation, CAST-CO2 ); external and internal communication; rebuilding machines and components; green trailer; green buildings; The Carbon Offsetting Programme at Avis Rent a Car; water recycling and harvesting; and alternative fuel sponsorship. These are low carbon and green economy issues that this case study profiles. The conclusion is that Barloworld has operationalised its transition to low carbon and green economy and the results testify to this narrative. INTRODUCTION Barloworld has entrenched a sustainable development culture into its strategy by identifying it as one of the six Strategic Focus Areas. The identification of sustainable development Chapter 14 266 as a strategic issue, therefore, stands out as the major breakthrough. Barloworld was founded in 1902 and as of the 2010 financial reporting period, the group had operations in 38 countries with approximately 60 per cent of the 18 000 employees based in South Africa and total assets valued at $3,683 billion.1 The group is a distributor of brands that provide rental, fleet management, product support, and logistics solutions. The key divisions of the group include Equipment, Automotive, Handling, and Logistics. Barloworld represent brands that include Caterpillar, Hyster, Avis, Audi, BMW, Ford, General Motors, Mercedes-Benz, Toyota, Volkswagen, and others. Although the Barloworld group is not a major consumer of energy and/or natural resources, nor is it a major emitter of greenhouse gases (GHGs), its products are; and it takes environmental concerns seriously since this will impact on its operations. In this context, Barloworld strives to be a responsible corporate by reducing its own environmental footprint as well as the environmental impact of its customer solutions. ‘Climate change and environmental considerations are core components of the group’s ethos of responsible corporate citizenship’.2 Informed by the environment3 and climate change4 policies, the group strives to measure and report the aspects of its business that contribute to climate change.5 The group also strives to reduce, minimise and offset carbon emissions from its operations. The 2009 Climate Change Policy laid the basis upon which Barloworld would set appropriate targets and implement initiatives, once reliable base-lines were set for applicable indicators. In 2009 Barloworld agreed to a target of a 12 per cent non-renewable energy and carbon emissions efficiency improvement by the 2014 financial year end, off the 2009 baseline year.6 The GHG emissions measured 201 733 tonnes of carbon dioxide equivalent (CO2 e) in 2010, 199 053 tonnes CO2 e in 2009, and 208 043 tonnes CO2 e in 2008.7 From an international compliance perspective, Barloworld adopted the GHG Protocol Corporate Accounting and Reporting Standard8 and delineated CO2 as the only GHG with material significance.9 Each division discloses the list of their operations included in the GHG emissions inventory according to the GHG Protocol. In as much as Barloworld acknowledges the wider context of its carbon footprint, the group has been focusing on the mandatory Scope 1 and Scope 2 emissions in its reporting. However, limited Scope 3 emission sources were integrated into the group’s accounting from 2010. Details regarding the categories spelt out for the group are shown in Table 14.1. Table 14.1 Barloworld GHG Emissions Measured and Reported Scope Nature Sources 1 %JSFDUFNJTTJPOTPDDVSSJOHGSPNTPVSDFT DPOUSPMMFECZ#BSMPXPSMEPQFSBUJPOT5IJTJODMVEFT TUBUJPOBSZBOENPCJMFDPNCVTUJPOPGGPTTJMGVFMT 'SPNIFBUJOHBOEDPPMJOHPGGBDJMJUJFT BOEPOTJUFFMFDUSJDJUZHFOFSBUJPO .PCJMFDPNCVTUJPOGSPNBVUPNPCJMFT USVDLTBOEBVUPNPUJWF...