5. Multi-criteria Decision Aid (MCDA)
7.3 Climate Change Response Initiatives
of a smart corporate climate change response strategy be? Without setting up a company-wide climate change response strategy informed by both top-down and bottom-up approaches (Kolk
& Levy, 2001), organisations are missing key opportunities for value-preservation or value- creation. The reason most corporations have not implemented successful climate change programmes, according to a Carbon Trust (2008) analysis is that they do not follow a holistic approach to the selection of the initiatives. For most companies there is no dedicated person responsible for climate change strategy or corporate sustainability (Setthasakko, 2009). This was true for both companies where the sustainability responsibility was one of several other roles and responsibilities within the organisation.
Most organisations, including Tongaat Hulett, have left the responsibility to either corporate social responsibility (CSR) or communications and public relations or facilities management or operations. This leaves a distinct gap because of the departmentalised, silo thinking and approach to the response. Setthasakko (2009) proposed that companies take on a holistic perspective and not a departmental time-static worldview when evaluating climate change and other environmental considerations. Communications and public relations or CSR personnel typically focus on value creation through marketing and communications (Obloj & Obloj, 2005), while operations managers are focused on manufacturing, production and engineering tasks directly related to energy, material, water or waste minimisation and efficiencies. A large number of companies rely on outside expertise, which is sometimes brought in in the form of speakers and technical experts (Kolk & Levy, 2001), who do not fully understand the corporate strategic direction of the organisation and often end up creating climate change response programmes that do not fit the strategic direction of the organisation.
Business has an opportunity to consider the full expanse of low-carbon strategies as an end-to- end process — across their operations and the supply chain and value chains for cost savings, brand building and revenue generation. This is because the motivators and drivers for climate change response are multi-faceted, covering efficiencies, emissions credit generation (through energy efficiency credits, renewable energy credits (RECs), Clean Development Mechanism (CDM) and other voluntary emissions reductions (VERs)), and diversification (for products, markets and industries).
7.3.1 Driving Efficiencies
As a member of South Africa‘s Intensive Energy User‘s Group (IEUG), energy efficiency is an important component of Tongaat Hulett‘s low-carbon strategy. Tongaat Hulett is not only experiencing bottom-line pressures driven by increasing and uncertain energy prices, but also a directive from the electricity supplier, Eskom, to actively reduce its energy consumption levels below some agreed threshold. This is also in line with Galitsky and colleagues‘ 2003 finding that energy efficiency can be a low-cost, efficient and effective strategy to work towards low-carbon objectives. Tongaat Hulett has installed adjustable/variable speed drives (ASDs/VSDs). VSDs better match speed to load requirements for motor operations yielding large energy savings.
Although they are unlikely to be retrofitted economically, paybacks for installing new ASD motors in new systems or plants have been shown to be as low as 1.1 years (Martin et al., 2000). The installation of ASDs also improves overall productivity, production cost structures, control and product quality, and reduces wear on equipment.
Carbon emissions have been lowered substantially via the replacement of coal as a fuel with gas in boilers used for steam generation. Other efficiency measures under investigation include process control; reduced heat loss and improved heat recovery; and flue gas monitors to maintain optimum flame temperature and monitor carbon monoxide (CO), oxygen and smoke.
The cost-benefit profile of these measures is being carefully evaluated as part of equipment replacement strategy, according to the Operations Director of Tongaat Hulett. This is also in line with the Galitsky‘s (2003) study which recommended that such energy efficiency initiatives be applied to large boilers only because the initial capital outlay for small boilers does not justify the benefits.
ATNS‘ energy consumption levels are much lower and are largely limited to office and control room lighting, navigation equipment and vehicles. Heating, ventilation and air conditioning (HVAC) systems, is one area of energy efficiency where the company envisages opportunities to upgrade to more energy efficient equipment, as the current equipment has almost reached the end of its life. Electronic controls in the form of automated regulation and better matching of ventilation or cooling output to demand represent another opportunity. ATNS is incorporating green building concepts in the design and construction of its planned head office.
Other initiatives directly related to adaptation and operational efficiencies include lighting, heating, ventilation and air-conditioning (HVAC) retrofits, energy management, water management, green IT, fuel alternatives, and waste management.
The scale of business benefit from energy efficiency initiatives for Tongaat Hulett far outweighs ATNS‘, which would explain the differences in emphasis on energy efficiency. This is in agreement with earlier studies which showed that where possible, and particularly in jurisdictions where climate change legislation is not sufficiently developed, companies use climate change as an opportunity to increase competitiveness (Jones & Levy, 2007; Kolk &
Pinkse, 2008; Porter & Reinhardt, 2007) through the cost savings and the development of low carbon goods and services.