It is no longer a question of if, but when. The pressure on nations to cut their carbon emissions as climate change tightens its grip on the planet is no longer a topic only driven by environmental activists.
At the end of October, world leaders with gather for the critical COP26 climate negotiations, intended to accelerate the 2015 Paris Agreement at which it was determined that global warming needed to be limited to preferably 1.5C° compared to pre-industrial levels.
US President Joe Biden is under no illusions about what lies ahead unless the climate crisis can be arrested. Recently released climate-adaptation reports from 23 US agencies suggest every part of life will be affected, from housing to foodstuffs. Understandably, the South African government is concerned.
Accordingly, it has proposed limiting its annual greenhouse emissions to between 350 and 420 metric tonnes of carbon dioxide equivalent by 2030, though this will be easier said than done. For one, power utility Eskom has been identified as the biggest emitter of sulfur dioxide in the world. According to a new report by the Centre for Research on Energy and Clean Air, in 2019 Eskom produced 1,600 tonnes of the pollutant, which can cause everything from asthma to heart attacks.
A report in Bloomberg stated that this amount was more than any company, “and the total emission of the power sector of any country with the exception of India”.
This is not good news for the private sector. With Eskom in the spotlight, there will be greater pressure on local companies to follow suit and make significant cuts to reduce their carbon footprint. For many industries, making cuts in alignment with government’s proposals could be a bridge too far, and might severely impact profitability and lose the trust of shareholders. At least, that is what they might believe.
Failure to adhere to climate legislation presents an even bigger threat to business, as non-compliance can cost companies hundreds of millions of rand in penalties. But compliance should not be seen in a negative light.
In fact, says Muhammad Ali, managing director and lead auditor of leading South African the International Organisation for Standardisation (ISO) standards training and implementation specialist WWISE, subscribing to environmental standards can actually boost business turnover.
Each standard within the ISO range indicates the tools required – policies, process flows, procedures, work instructions, forms reports and statistical analysis, for example – to help the organisation fulfill its objectives. ISO 14001:2015 is the standard programme that assists organisations in developing an Environmental Management System (EMS).
The focus of an EMS is the utilisation of an Environmental Lifecycle Approach, where each activity in the organisation’s scope of processes is managed through an identification process of environmental aspects and impacts aligned to a risk methodology.
“The Paris Agreement can actually assist when companies are trying to get shareholder buy-in in terms of environmentally-friendly controls,” Ali says.
“Shareholder buy-in stems from the fact that legal liability costs will be reduced due to the ISO standard aligning with legal requirements. This means companies can avoid fines from the Green Scorpions in SA, for example. Legal penalties for failure to comply with the National Environmental Management Act can run into the hundreds of millions of rand, which can obviously cripple or bankrupt organisation.”
Some companies have already recognised the value of environmental compliance to their operations. Unica Iron and Steel, a well-known manufacturer of light and medium structural steel based in Hammanskraal outside Pretoria, began operating in 2007, and trades in the Southern African Customs Union (SACU) region. Its 36 000m² facility comprises a melting plant, water cooling system and billet forming plant.
Unica was acutely aware of the changing environmental compliance landscape, and as such, was determined to become ISO 14001-certified. “It has made a difference to our business,” says Unica’s Lesego Mashaba.
“[We were struggling] with development of process flows, procedures, forms and templates, training, competency evaluations, process and system implementation, continuous monitoring and improvement. But we now have standardised and put systematic processes in place, which resulted in reduced incidents, improved customer satisfaction and improved legal compliance.”
Implementation of Unica’s standardisation took about two-and-a-half years. Ali says the process was a targeted one, which yielded great results for the company.
“We spoke their languages and broke down the legal requirements into simple layman’s terms,” he explains. “We began implementing policies through awareness training and providing benefits, explaining the harm that can come from not implementing the standard. We included visuals with posters on what could happen, held daily talks on environmental responsibilities of staff members, showed videos summarising the polices, processes and procedures in different languages, and provided infographics so that employees could understand the benefits of being environmentally-friendly.
“We also looked at repercussions of non-compliance and what other African countries like Rwanda are doing to move ahead. We emphasised the importance of top management setting the example for others to follow. “
WWISE also established an environmentally-friendly, waste management and recycling culture. “We also rolled out incentives. Reporting and acting on environmental observations were rewarded. In this way, we established a proactive culture in which controls to manage waste and reduce pollution were embedded.”
Mashaba says the process was highly enlightening in terms of what businesses needed to do to become compliant. “You need to do thorough groundwork, define your company strategy, develop detailed process flows, code of practice, system procedures, standard operating procedures and work instructions, train and retrain employees.”
“You need to implement control measures to ensure buy-in and compliance from the employees. This can be done by introducing a health and safety, environment and quality clause to the contract of employment.” The ISO 14001 standard can be implemented in both smaller and larger businesses, though the costs do vary significantly.
For a business of between 15 and 30 employees, the implementation of an intricate standard can be about R350 000, increasing to about R650 000 for two such systems or standards. “Larger companies in can go to R10-million or more due to the legal obligations, capital costs to monitor environmental conditions etc,” Ali concludes.