South African firms 'cutting emissions'
26 November 2012
South Africa's top 100 listed companies have materially reduced their reported greenhouse gas emissions, according to the 2012 Carbon Disclosure Project's sixth annual report for the South African business sector.
"Total reported direct (scope one) emissions for 2012 decreased from 137-million tons of carbon dioxide equivalent (tCO2e) in 2011 to 132-million tCO2e in 2012," the London-based organisation said in a statement on Thursday.
The CDP surveys more than 5 000 companies worldwide on behalf of 655 institutional investors (CDP signatories), representing US$78-trillion in assets.
Indirect (scope two) emissions reduced from 98.4-million tCO2e in 2011 to 86.6- million tCO2e in 2012.
South Africa's direct greenhouse gas emissions were still dominated by a few carbon-intensive companies, including Sasol with reported annual direct emissions of 61.4-million tons of carbon dioxide-equivalent gases (CO2e).
Arcelor Mittal South Africa recorded emissions of 10.9-million tons of CO2e, BHP Billiton 3.2-million tons, Anglo American 3-million tons, and Sappi 2.8-million tons.
Eskom's carbon dioxide emissions for the year ending March 2012 reached 231.9- million tons of CO2e, while Transnet's total greenhouse gas emissions for 2011/12 were reported at 4.3-million tons.
Together with Eskom, CDP respondents accounted for two thirds of South Africa's total emissions, estimated at 521-million tons of CO2e.
The CDP in South Africa is a long-standing partnership between the London- based non-profit organisation and the National Business Initiative (NBI).
It is supported by auditing firm KPMG as the lead sponsor, Element Investment Management, the Industrial Development Corporation and the SA Post Office.
Companies are ranked on two levels.
A Carbon Disclosure Leadership Index (CDLI) rated companies in terms of the levels of transparency and quality of disclosure of their greenhouse gas emissions and a Carbon Performance Leadership Index ranked the companies in terms of their emission reduction targets and progress in meeting them.
Twelve companies qualified for the 2012 CDLI. Exxaro Resources was the local leader, with 100 normalised points, followed by Gold Fields with 99 and Harmony Gold with 98.
Gold Fields was the winner the previous year, with 98 points.
Corporates leading on climate change
The energy and materials sector achieved the highest average disclosure score, followed closely by industrials and health care.
The number of companies qualifying for the CPLI had increased, with six qualifying in 2012. They were: Anglo American, Barloworld, FirstRand, Gold Fields, Mondi, and Woolworths.
Last year, only two companies qualified - British American Tobacco and Gold Fields.
The number of companies with greenhouse gas emissions reduction targets continued to increase, with 43 companies this year compared to 40 in 2011.
KPMG director Neil Morris said corporates were leading the way on climate change.
"Whilst a global deal on climate change at the upcoming COP18 at Doha remains worth fighting for, the real momentum for action on climate change comes from the increasing groundswell of corporate initiatives reflected in this year's CDP results," he said.
"In the context of challenging economic conditions and weak political resolve in international negotiations, we can take a lot of heart from the leadership shown by South African companies in driving positive action on climate change."
Anticipating, responding to climate change issues
South Africa's CDP results showed a trend of increasing engagement by the business sector in anticipating and responding to climate change issues, the CDP said.
The average carbon disclosure score of all publicly responding companies was 82, up from 76 in 2011, 74 in 2010, and 62 in 2009. This compared favourably with the average disclosure score of 77 for the Global 500, which is the CDP survey of the world's 500 largest companies.
This acknowledgement of climate change as a genuine business risk reflected positively on South African companies, said the report.
NBI head Joanne Yawitch said South African transparency and performance in an investor-led initiative was a shining light.
"It would appear that South African businesses have also entered an implementation phase and have been focusing on practical steps to improve disclosure and are also addressing performance."
Climate change was also only one aspect of sustainability, she said. "We need a holistic, participative approach as we consider how to transition to a green and sustainable economy."
"The South African CDP response rate of 78 percent is the second highest internationally by geographic region reaffirming local business as a global leader in terms of their participation," the CDP said.
This compared positively to other developing countries such as Brazil with a 65% response rate, China 23% response rate, India 26%, and Russia 8%.
"The comparative leadership being demonstrated by South African business parallels the leading role that it is seen to be playing internationally on issues such as corporate governance standards, sustainability and integrated reporting," the CDP said.