5. Multi-criteria Decision Aid (MCDA)
6.4 Similarities in Climate Change Response Initiatives
6.4.4 Fully Integrated into Corporate Strategy
The pursuit of diversification as a business strategy, the need to enter into new business, or the need to shift away from low margin, low growth or mature industries, is a key driver in the pursuit of integrating climate change as a core aspect of a business‘ corporate strategy.
Diversification decisions present unique challenges, particularly the requirement for a business to break away from past traditions, norms and cultures and enter into new, unchartered territories. Because of these changes in mind-sets and modus operandi, not enough businesses have jumped onto the bandwagon to a position where climate change response could be considered a new growth sector.
A proactive management of systemic climate risks is defining a new level of environmental stewardship and business competitiveness. New industries that were non-existent a decade ago have been born and are thriving. Sub-sectors in financial markets such as carbon asset trading, brokerage services, clean energy venture capitalism, climate exchanges and carbon trading markets are a new phenomenon. Long-term investors, asset managers and analysts are also beginning to integrate climate change considerations into investment analysis and decision- making. New technologies in energy generation, such as wind turbines, concentrated solar panels, combined heat and energy technologies, as well as host of other low-carbon technologies like electric and hybrid vehicles, carbon capture and storage, to name a few, are being proven and successfully progressing through commercialisation stages.
Climate-smart companies are adapting quickly to operating within networks of collaborative relationships, linking local capacities with the most advanced thinking from around the world and participating in global conversations about the responsibilities of sustainable business in the 21st century. Venture capitalists and corporate R & D divisions are investing in ―clean technology‖ of all types. The amount of capital needed is immense, signalling vast opportunities for business.
Both Tongaat Hulett and ATNS are seeing opportunities to leverage technologically advances to offer green products and services. Tongaat Hulett, for example, is planning to produce electricity from bagasse and ethanol from sugarcane as a substitute for petroleum-based fuels:
―From a TH perspective we have the capability and we have the raw materials. But if we ever get to a point where prices and other nuances are agreed, there is massive potential of creating lots of green jobs. Very green jobs, because we would be allocated land and we can plant tonnes and tonnes of sugar cane. The bagasse coming from that would be utilised to generate electricity and if ever there is excess sugar it can be converted to ethanol which can be blended for fuels which would replace certain parts of fuel oils‖
However, a lack of policy direction and clarity from the National Energy Regulator of South Africa (NERSA) has stalled progress in electricity generation:
―One of the initiatives as an organisation is for us to generate electricity. For us to be able to generate electricity we need streamlined policies coming from NERSA. If we are going to generate electricity, what are the policies in terms of agreements, how do we sell and deploy it?
... I think we have made some progress, but those PPAs and policies must be very clear...‖
Raw material supplies are also hampering progress in the generation of electricity:
―We were actually ready post-2008 to start generating part of our own electricity using Sasol gas and we put a bid in to Eskom … When we negotiated with Sasol they were really keen to let us utilise some of the allocation of their gas… But overtime I think their priorities also changed.
They want all the gas to themselves now… The limitation is just the amount of gas that we have in the country.‖
Tongaat is also looking at waste and water treatment technologies:
―For us, it is it would be one thing if we can put up the effluent plant because we would end up getting potable water… But when you look at it and really look at it, it is not cost-effective for now. Putting up an effluent treatment plant for one to do potable water and perhaps methane recovery is big. Those plants are not small… The negative or the challenging part is that those plants utilise lots and lots of electricity. So for the technologies we looked at; ‗you can go through and treat the effluent but for you to go to the next phase to extract potable water you need reverse osmosis processes which utilises tons of electricity.‖
ATNS is working collaboratively with suppliers, customers and competitors and is collaborating across industries into the telecommunications sector. One of the collaboration efforts is:
―We are working with SADC. I will give you an example of one big initiative which is known as the UASCC, the Upper Air Space Control Centre, where in Southern Africa we have one Control Centre and with that the message we are trying to send is that let‘s work together as a region.
Not ATNS or not Namibia Civil Aviation but working together as a team. So in the near future you will see that aviation will be done at a more regional level… Yes championing this climate change response at a regional level.‖
―V-SAT is a satellite communication system which initially we thought would help only us because geographically speaking, South Africa is right at the bottom. But later on it has become the best communication system in the continent. Almost everybody is using our V-SAT to communicate information from one airport to the other airport. It‘s actually a success story to me.‖
ATNS has also discussed possibilities of solar panels for some of their facilities:
‖…there has been discussions about looking into solar stuff, solar panelling for the smaller sites…Some of the technicians have mentioned about putting some solar panels in lower consumption sites. Solar panels are expensive, the capital outlay and everything. So it‘s a process to get that going, but the talks are on-going.‖
Advocacy and Industry Leadership
Monitoring pending regulations and understanding how climate change regulations could impact business objectives are the goals forward-thinking organisations are pursing. Botzen and van den Bergh (2009) concurred that any company that foresees business opportunities in influencing carbon-emissions regulation is practicing what is expected of business – capitalism.
Climate-smart companies are seizing the opportunities to influence the direction of the regulation to their advantage, by asking the right questions such as: What are the regulatory issues at stake? What new requirements will businesses face in creating low-carbon business models and corporate strategies? What new rules and practices are emerging which are changing the way business is conducted? Who is setting or influencing those rules and practices? What are the emerging institutions and technologies that are shaping the low-carbon business of the future?
Both companies in this study see opportunities to drive the green agenda in their respective companies and industries. These are largely driven by the structure of their respective industries:
―… You look at it as an industry-wide initiative, but it‘s global. Other companies within the industry, within industries, whether they are manufacturing, aviation, are directly linked. Directly linked because our carbon footprint, for us at the end of the day we will be talking about the environment in legal terms. We fall under the Department of Transport so now we have got ACSA, we have got ATNS, and we have got Civil Aviation. Now ATNS will be concentrating on efficiencies in the airspace, ACSA which is the Airport‘s Company of South Africa will be looking at better runways, baggage handling, and no delay taxing to the runway and so on. And Civil Aviation will be talking about regulation, imposing of fines; managing the airspace regulations.
We are managing the airspace operations as an ASNP…―I think we cannot ignore collaboration.
Whoever tries to go their way, will come back to the same spot.‖
ATNS is looking to influence and play the ―Big Brother‖ role for aviation climate change response in Africa by providing infrastructure, skills and expertise. Two statements worth quoting are:
―Besides positioning the brand ATNS just as an ANSP we want to infuse the element because we want to be the leader in this issue in South Africa and be the champions of it throughout the continent.‖
―… So even in issues of climate change and sustainability, we want ATNS to take that leading role, not in a boastful way, but in a win-win kind of situation. We don‘t want Africa to be lagging when we are seeing the rest of other continents far ahead. This is why ATNS felt that we want to embrace climate change and drive the rest of our brothers and sisters in the ANSP.‖
Tongaat Hulett has also embarked on initiatives that are driving towards greater adoption of climate-friendly organisational practices with cross industry collaborations and joint ventures.
One example is:
―The Municipal JVs … it‘s about advocacy trying to push for this green thing, it is industry leadership.‖
―I think in terms of the things that we could have done better, I think having proper partnerships with our municipalities. During Apartheid days; as business people we knew who to speak to in the Council. In terms of moving from that time to the current, we don‘t have any relationships with people who are in the position of power. For us to be able to have quite a positive impact in terms of issues around climate change, those relationships must start, for example, people knowing each other, and proper networking. Because we can only be able to influence politicians when we are able to really have proper relationships.‖
―… What Dr Khosa says is that ‗they don‘t understand the needs of the 21st century‘. We have bureaucrats that do not really understand and are not exposed to business needs. At the same time we have a responsibility in terms of influencing and also for us to be able to understand what their strategy is. What are their drivers? What are they are trying to achieve? So that we can be able to influence them.‖
There are more opportunities to work with different government departments so as to bring down the barriers to their planned projects:
―…So we need to form better relationships with government agencies. The partnerships are very crucial. As an organisation as we partner with government agencies, for instance when we speak of generation of electricity using bagasse, creating employment, producing ethanol, those things can only be done when we have a government that is very streamlined in its thinking in terms of what must be achieved from a strategic point of view. But when we are dealing with the Department of Agriculture on this issue, then you discuss with the Department of Trade and Industry, then you go to the Energy Department separately, it becomes a big issue.‖
6.5 Differences in Climate Change Response Drivers and Motivations