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315 Emerging trends and learning points Godwell Nhamo 17 INTRODUCTION For the reader, the greatest value of this book can be drawn from its contribution in terms of analysing emerging trends and learning points from the companies that are drawn from various sectors. Among the key sectors covered in the book are: mining, energy, banking, insurance, forestry and paper, industrial, retailing, and aviation. This chapter, therefore, profiles generic aspects concerning the drivers and enablers, and offers a recap on major breakthroughs as well as insights on what needs to be done to move corporate South Africa and other business entities into green and low carbon mode today and into the future. All this should be viewed in the context of sustainable development and, especially for Africa and other developing regions, poverty eradication and job creation. DRIVERS TOWARDS GREEN AND LOW CARBON COMPANIES A number of generic drivers (business case) for South African companies to embrace the green and low carbon economy emerged under the following thematic areas: regulation , changing consumer priorities, energy security, financial costs, physical impacts, and reputation. The drivers highlighted herein will be briefly considered in the following paragraphs with relevant examples cited from the case studies. More and more regulations are emerging requiring companies to be compliant and address the negative impacts of climate change and engage with the green and low carbon economy in the context of sustainable development and poverty eradication. Among these regulations are those crafted and passed at national level (domestically) and those from the international platform that come in the form of treaties, protocols, and agreements. Greenhouse gas emissions (GHG) caps and carbon taxation are a reality. Among the Chapter 17 316 international drivers for the green and low carbon economy are: the Vienna Convention for the Protection of the Ozone Layer; Montreal Protocol on Substances that Deplete the Ozone Layer (as adjusted and amended in 1990); the United Nations Framework Convention on Climate Change (UNFCCC), Kyoto Protocol; Greenhouse Gas Protocol; the ISO14064; Copenhagen Accord; Green Stimulus Packages; United Nations Environment Programmes (UNEP’s) Green Economy Initiative; Cancun Agreements; United Nations (UN) International Year of sustainable Development; the COP17/CMP7 Decisions; and Rio+20’s Future We Want outcomes. The Kyoto Protocol and its successor (Kyoto Protocol II) stand out as a landmark, as these compel industrialised countries to adhere to certain levels of GHG emissions as discussed in chapter 1. In turn, governments pass this responsibility to local companies through a number of international and domestic regulatory mechanisms. Many countries have now passed regulations on carbon trading and carbon taxation. Typical domestic regulations for South Africa include the National Climate Change Response Strategy, Draft Carbon Tax Option, and the 2c/Kwh which was implemented in 2009 in South Africa. Mondi also identified the Carbon Disclosure Project (CDP), CDP Water, the United Nations Global Compact, and the Johannesburg Stock Exchange Socially Responsible Investment JSE SRI Index as additional self-regulatory mechanisms of importance in the country that impact the group’s operations. These issues were raised in almost every company. Financial risks are also closely linked to regulatory frameworks. For example, Gold Fields assessed the announced Eskom tariff increases of 2010 and associated emission reduction impacts from the power utility in terms of financial impacts on the mining company. With an increase in energy cost and emission reduction requirements, this translated directly into an increase of the real cost of producing an ounce of gold – or what is referred to as the Notional Cash Expenditure (NCE) per ounce of gold. The 2c/ kWh tax on non-renewable electricity already equates to R20/tonne of Carbon dioxide equivalent (CO2 e), and taking into account the carbon tax on vehicles proposed in the LTMS, the cost was projected to reach R80/tonne of CO2 e in 2012. Such would increase the company’s NCE by around 3,5 per cent under the worst-case scenario options. This brought home the message that climate change and its impacts can no longer be viewed as purely an environmental risk, but has moved to an issue of commercial significance. Climate change also brings along various physical impacts. The likely impacts range from changes in rainfall patterns and temperature, and in the mining sector these translate into infrastructure impacts that include, for example, underground cooling requirements , tailings dams design, and costs. These, therefore, explain an additional driver for the business to consider lower carbon alternatives within their sphere of influence so as to...

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