It is critical for mining companies and other industries to engage with government on the National Climate Change Response Green Paper, which was released in November 2010, while they are still able to, reports global consulting firm Deloitte.

The National Climate Change Response Green Paper focuses on, and provides strategies for, greenhouse-gas emissions reduction by key sectors in South Africa, including energy, mining and mineral resources.

“The mining industry needs to engage government on the Green Paper, especially the introduction of a carbon tax and potential mandatory and ambitious energy efficiency targets. “The mining sector is energy intensive and, as a result, responsible for a significant portion of South Africa’s total emissions. A carbon tax and aggressive energy efficiency targets will directly impact on the bottom line of mining operations,” says Deloitte senior consultant for climate change solutions Joslin Andrews.

“Each mining company needs to understand the impact of the carbon tax and energy efficiency targets on their operations and needs to engage with government,” she says.
Companies need to start planning their energy efficiency initiatives now before it becomes mandatory. Once the legislation is in effect, com-panies and organisations that have not implemented energy efficiency projects to reduce emissions will incur huge penalties and will be hit with a carbon tax. They might also miss out on funding for these projects.

“Government has already made funding available through grants and incentives for companies to improve energy efficiency. A number of international climate change funds are also available and it is important for companies to understand the various sources of funding to build the business case for green projects,” says Andrews.

Businesses have until February 11 to submit comments on the National Climate Change Policy Green Paper.

Business Challenges

“The challenge is that, while companies have read the Green Paper, it is technically rich, which overwhelms those who do not understand the technical terminology,” says Deloitte sustainability and climate change lead director Duane Newman.

“In some companies, environmental solutions are delegated to a sustainability manager, who may or may not have the strategy knowledge required to understand the policy and, in many cases, cannot influence or change company strategy or internal business policies,” says Newman.

He adds that, for this reason, a ‘C-suite’ executive needs to take charge of these issues and ensure that the impacts on the company are understood.

Another challenge is that some com-panies in the current market are more short-term-focused, which prevents com-panies from dealing with the impact that a climate change policy will have in future.

Newman believes that government is going to become bolder and more aggres-sive in its climate action plan, as South Africa will host the seventeenth United Nations Framework Convention on Climate Change Conference of the Parties, in Durban, this year. “Government will set high targets in terms of cutting carbon emissions, with pressure on all levels of government, including local government, communities and industry, to meet these targets,” he says.

Both Andrews and Newman state that climate change is moving beyond the environmental impact factor to a core business issue.

Newman says that the terms ‘environ-ment friendly’, ‘climate change’ and ‘sus-tainability’ need to be integrated into the strategy of the business so that it can be used as a product selling point and in advertising campaigns.

“At the 2010 Climate Change Confer-ence, in Cancun, many senior business leaders stated that the green movement could be compared with the industrial revol-ution, because there was market demand for environment-friendly products from both consumers and business, and companies, which did not align themselves with those demands, would suffer financially,” explains Newman.

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