SA's Top 100 listed companies have kept climate change high on their agendas, despite facing more immediate pressures caused by the international economic downturn.
Their response rate to critical questions posed on behalf of institutional investors is among the highest internationally, and suggests they are "largely willing to engage climate change issues".
These are among key findings of the third Carbon Disclosure Project (CDP) survey undertaken in SA as part of an international initiative supported by 475 institutional investors representing more than US$55 trillion of funds under management.
The CDP sent questionnaires to about 3 700 of the world's largest corporations requesting information on their greenhouse gas (GHG) emissions, on the potential climate-related risks and opportunities in their businesses, and on their strategies for managing these.
The 2009 SA survey was undertaken by the Carbon Disclosure Project through the National Business Initiative (NBI), which is the lead partner of the London-based CDP. The project has accounting firm KPMG as its lead sponsor and is co-sponsored by Webber Wentzel and Element Asset Management.
The report, based on analysis of companies' responses to CDP questionnaires by Incite Sustainability, draws attention to a recent gathering of 2 500 climate researchers from 80 countries. That meeting concluded that carbon emissions have risen faster than predicted and that climate impacts could be more significant and more rapid than anticipated.
Climate change expert Sir Nicholas Stern suggested that policymakers should be preparing for possible temperature increases of between 3°C and 6°C. Among the effects of this would be a 30%-50% reduction in water availability in Southern Africa and a 15%-35% reduction in agricultural yields throughout the continent.
SA's third CDP survey has generated an improved response rate of 68% compared with last year's 59%, making the country the fifth-highest CDP respondent internationally. "The response of SA's leading companies to the CDP 2009 report suggests that, notwithstanding short-term concerns and the pressures associated with the economic downturn, climate change remains sufficiently high on the agenda," says the report.
NBI CE Andre Fourie says: "The steady increase in the number of companies responding as well as the improved quality of reporting and improvement in performance is to be commended.
"Inevitably, the question must be addressed as to whether the SA private sector is moving fast and far enough in identifying the significance of climate change to their businesses."
WHAT IT MEANS
 Reporting quality of SA firms has improved
Their performance is commendable
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He says the environmental driver for addressing climate change is substantive "given its impact on air quality, land use, changing temperatures and rainfall patterns". However, he says economic and social pressures for addressing climate change are increasing substantially as world leaders prepare to meet in Copenhagen in December to set new targets for combating it.
Among key findings of the report are:
- Disclosure levels have improved across all key issues: risks and opportunities presented by climate change; GHG emissions and energy use; GHG reduction targets and activities; and climate governance practices.
- 87% of responding companies disclosed their GHG emissions, compared with 77% last year. The number of companies verifying their data also rose, from 13 to 24, and the number that have reported on their emissions in annual or sustainability reports increased from 34 to 50.
- Growing awareness among SA companies of the risks and opportunities of climate change, though much of this remains at a general level. Most responding companies, says the report, recognise that climate change will entail potentially significant regulatory, physical and general risks and opportunities for their operations. However, few show evidence of being rigorous in quantifying the potential financial implications of climate change.
- An increase in the number of companies with GHG emissions and/or energy reduction targets: 21 companies have GHG emissions targets against 12 last year, while 11 are defining targets. However, the report suggests most targets could be more ambitious.
- Coal-based electricity use dominates most firms' emissions. Their strongest focus is on energy efficiency as a means of reducing emissions, but investment in renewable energy initiatives is still low.
- Climate change issues are being increasingly integrated in companies' governance activities. Fifty-four companies report having a board committee or executive body with responsibility for climate change, and 19 companies provide incentives to management on achievement of climate change goals.
- SA's estimated total GHG emissions level from all sources is about 440 Mt /year, of which coal-based electricity generation utility Eskom contributes about half. Other high emitters are coal-to-liquid fuels producer Sasol (61 Mt); steel maker ArcelorMittal (12,4 Mt); and miners BHP Billiton (4,5 Mt) and Anglo American (3,4 Mt).
To view international CDP reports, visit www.cdproject.net. The full SA report will soon be available at www.nbi.org.za.
