Green Economy Journal Issue 16

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CREATION

02016

UNDERSTANDING THE CONCEPT OF FINANCIAL CAPITAL FOR CORPORATE REPORTING

OUR RESULTS

Our target is to create a total of 10 000 jobs by the end of 2017.

SPEAK FOR THEMSELVES

JOBS CREATED

61897 TOF TYRESNNES COLLECTED

149 CREATED SMALL

BUSINESSES

EDUCATION

26 DEPOTS

& AWARENESS

way in creating a sustainable waste management system.

CAMPAIGNS TO

9.5 PEOPLE

AWARDED

14 POSTGRADUATE STUDENT

MILLION

REDISA is leading the

REDISA turns waste into worth through a circular economy that connects all stakeholders to empower communities and solve environmental problems.

BURSARIES

the objectives set out in our We’re on track to meet all our first year targets and we will meet all diverting waste from landfills 5-year roll-out plan. We have succeeded in reducing carbon emissions, has made on the many people and connecting businesses. We are also proud of the impact the plan journey and see how we plan on and communities both employed and supported by REDISA. Join the continuing our road to success.

Note: All the above stats are as at October 2014.

A UNIQUELY SOUTH AFRICAN SOLUTION IS TURNING TYRE WASTE INTO WORTH REDISA (Recycling and Economic Development Initiative of South Africa), as gazetted by the Department of Environmental Affairs to clean the environment of tyre waste, is committed to new business development and job creation which is essential to help combat the escalating unemployment rate in the country.

According to REDISA director, Stacey Davidson, the value of small businesses cannot be underestimated, as many are seen as the ‘lifeblood’ of the economy and generate millions of revenue for South Africans annually.

“It is our firm belief that by promoting a new recycling industry and developing sustainable SMMEs, we will have a direct impact in the economy through job creation.”

There are millions of waste tyres littering the South African landscape, and the problem is expected to be compounded by an additional 10 million per year. This challenge has left the country with no other option than to seek measures to divert waste away from landfills to other waste management options (including: reusing, recycling and the recovery of waste into products as well as energy generation).

This is what REDISA is achieving through the development of a new tyre recycling industry and as it gains momentum, used tyres will grow in value.

No longer seen as waste, they will vanish from our landfills and instead re­enter the economy as recovered raw materials, fuel, waste bins, paving, industrial and domestic furniture, artworks, corporate gifts, industrial materials and even fashion accessories.

RESEARCH AND DEVELOPMENT Research and Development is critical for the successful development of the new waste tyre recycling industry and as per the REDISA Plan, 2.5% of the R2.30 per kg of tyre levy is allocated towards this activity.

With this in mind REDISA is supporting South African tertiary institutions to create and design processes for South African conditions, while building the required knowledge and expertise in the country.

To develop resourceful and more efficient recycling processes, partnerships have been developed with the University of Stellenbosch and the Nelson Mandela Metropolitan University (NMMU).

REDISA signed a research agreement with Stellenbosch University in July 2013, the purpose of which is to investigate how value can be generated by recycling waste tyres. For the programme, REDISA will be providing the University with funding of R10 million over four years and has to date awarded eight post­graduate student bursaries as part of the research.

With regards to NMMU, the research focus is on extending the lifecycle of tyres through the development of an environmental rating system.

To achieve this, REDISA will provide the institution with funding of R50 million over five years. The partnership’s resulting tyre testing facility will be a first in Africa, and the largest of its kind in the Southern Hemisphere.

From 1 December 2013 to the end of October 2014, REDISA has created 1532 jobs. REDISA is currently collecting tyres from 1453 dealers, and as the Plan continues in its five year roll­out, more dealers and collection points will be collected nationwide. In addition, 149 SMME business operations have been established as per the REDISA Plan and roll­out.

JOIN THE JOURNEY | www.redisa.org.za |

/wasteintoworth |

@wasteintoworth

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MANAGING EDITOR: Lloyd Macfarlane lloyd@gsacampbell.com

LAYOUT AND DESIGN: Nicole Kenny

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ISSN No.: 2225-5974 Issue 7

Published: Jan 2015

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CHANGING OUR NAME AND CHANGING GEAR The Green Business Journal was launched approximately three years ago at COP17 to provide a platform for the discourse that was emerging around corporate sustainability in South Africa. It was intended to be a source of information and guidance for executives who were contemplating the incorporation of environmental, social and governance policies and practices into their businesses. The publication has since grown its subscriber base, its frequency and has broadened its appeal—so why the name change, you may ask?

The sustainability discourse has evolved in the last few years, particularly as government and industry put weight behind the green agenda. There are more role players and they are more united around common issues and objectives; leadership in both the public and the private sectors is influencing change. There is a belief that a green economy approach to sustainable development in South Africa is the answer—an approach that supports labour intensive and low-carbon growth and development whilst also promoting the principles of efficiency and corporate responsibility.

The Green Economy Journal therefore is a more appropriate title because it reflects the inclusive nature of this very subject matter whilst also incorporating an increasingly familiar and relevant term.

South Africa has put in place various strategies and policies that are aimed at the development of an environmentally sustainable, climate-change resilient, low-carbon economy and just society:

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All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written permission of the Publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions. The Publisher does not endorse any claims made in the publication by or on behalf of any organisations or products. Please address any concerns in this regard to the Editor.

The Green Economy Journal is printed on Hi-Q Titan plus paper, manufactured by Evergreen Hansol a leading afforestation member acknowledged by FOA. Hi-Q has Chain of Custody certification, is totally chlorine free, and is PEFC, ISO 14001, ISO 9001 accredited. This paper is FSC certified.

• • • • • • • •

National Development Plan (2030) New Growth Path (2020) National Strategy for Sustainable Development and Action plan (2014) Integrated Resource Plan Industrial Policy Action Plan Environment Sector Green Economy Implementation Plan National Biodiversity Strategy and Action Plan National Climate Change Response White Paper

Collectively these are a framework within which business and society can create change and they represent an opportunity for first-mover advantage and leadership in various sectors.

We look forward to this next chapter of the journey, and to playing a meaningful role in the development of knowledge and understanding of the green economy and the issues that surround it.

Sincerely

Lloyd Macfarlane

“DUBE TRADEPORT

LITERALLY MEANS ACCESS TO THE WORLD. WE CAN PICK AND SHIP FRESH STRAWBERRIES WITHIN 24 HOURS - PHENOMENAL FOR A HIGHLY PERISHABLE CROP.” Xolani Gumede: Founder and CEO, Cappeny Estates www.cappenyestates.com

Cappeny Estates is more than just a strawberry farm, it’s a destination, a holistic experience involving growing, processing and packing, a commercial node and a learnership facility, but as an export-orientated business, close proximity to Dube TradePort is key. Although more expensive to purchase the land, we purposely located our farm just 20km from Dube TradePort because transport costs are perpetual and with a perishable product, we cannot afford to be too far away from the point of export. We use the Cargo Terminal for receiving plant stock and Farmwise, in the AgriZone, for our daily labelling requirements.

Breeder concerns about propagation have been allayed because Dube AgriLab is world-class, and we intend using these services for propagation from imported tissue culture. The bottom line...

Dube TradePort offers vital access to export markets, top-class services, time and cost efficiencies.

For further endorsements, go to www.dubetradeport.co.za/stories To experience what Dube TradePort has to offer, email: info@dubetradeport.co.za

ONE GOAL: TO MOVE YOUR BUSINESS FORWARD www.dubetradeport.co.za

Contents JANUARY / FEBRUARY 2015

7 11

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The case for sustainability in the flooring industry, and one company that is leading the way

14 17

ENVIRONMENTAL RESPONSIBILITY

20 22 25 27

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SUSTAINABILITY SPOTLIGHT

FACILITATING VALUE CREATION

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NEWS AND UPDATES

Understanding the concept of financial capital for corporate reporting

Making a big impact in the small business sector

RENEWABLE ENERGY FEED-IN TARIFF Customers to feed the solar energy they generate into Cape Town’s grid

SOCIAL INVESTMENT IN MINING How mining organisations can better manage their CSI

CAN MINING GO GREEN? UNIDO Leading the way for women in sustainability

INDUSTRY-LEADING FUEL EFFICIENCY Mercedes-Benz achieves industry-leading fuel efficiency with new hypoid axles

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NEWS AND UPDATES

ANNUAL REPORT ANALYSIS Deloitte’s latest annual report insight analysis, Providing a Clear Steer, saw their team analyse the annual reports of 100 UK-listed companies to determine the state of annual reporting. It provides some illuminating revelations, notably an inability to cut the clutter, with reports increasing in length to 132 from 122 pages during the last year. Despite repeated calls to cut down, some companies still included voluntary disclosures.

Almost half (44%) included net debt reconciliations and 10% included insight on tax governance and strategy. Even with the growing length and increased regulatory emphasis on producing cohesive reports, nearly three-quarters of companies (71%) failed to show up-front how they link areas such as company strategy, KPIs, business model, remuneration and financial statements. Companies are, however, making some progress, in appointing women to the board, with 73% having a woman in the boardroom.

Source: www.financialdirector.co.uk

CAPE TOWN’S BLACK RIVER PARK GETS FIRST “EXISTING BUILDING” GREEN RATING The 18 675-sqm North Park in the Black River Park office park in Observatory, Cape Town, has become the first building in the country to be awarded an “existing building” certification from the Green Building Council of SA (GBCSA), under the council’s newly launched Green Star SA Existing Building Performance (EBP) pilot tool, sponsored by Nedbank. Black River Park, owned by Leaf Capital and Joubert Rabie, has made it their mission to secure green certification for the entire 75 000-sqm office park—one of the largest business parks in the Western Cape. The park is home to more than 110 companies, including the GBCSA’s head office and SAPOA’s Western Cape offices. As part of the GBCSA’s first-ever “existing building” rating, the North Park was recognised with a 5 Star GBCSA EBP certification.

Source: www.biznews.com

Anglo American

and the Enterprise Development Conference

Leak-less valve a winner Paseka Lesolang is the young founder and managing director of WHC (Water, Hygiene, Convenience), a company that is focusing on products and services in the Green Economy. Paseka has collected multinational awards on behalf of WHC, most recently an award from the Global Cleantech Innovation Program (GCIP). Paseka believes that water is the most precious commodity, and preservation thereof is his priority. WHC’s innovation is a control mechanism that prevents 70% of the water loss in toilets due to toilet leaks, when the toilet is not in use. This is proportional to the money saved as well. According to South Africa’s Council for Scientific and Industrial Research (CSIR), leaks in the average toilet waste approximately 60 000 litres of water every year, which is equivalent to 2 400 bathtubs full of water. Fixing these leaks can save homeowners more than 10% on their water bills.

Source: www.whcpty.com

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The Enterprise Development Conference was hosted at Gallagher Estate in Midrand this year. Khanyisile Kweyama, executive director of Anglo American in South Africa, said over the years the platform has grown to include other partners in driving SMME development; among them is the Department of Trade and Industry.

Kweyama said this year the conference saw the entrance and participation by the new ministry of Small Business Development.

“Our initiatives on small, medium and micro enterprise (SMME) development are driven through the Zimele Enterprise Development Fund,” said Kweyama. “The fund was started 25 years ago with the aim of creating SMME in non-mining related businesses and has since grown to include a mining fund which has helped develop junior miners.”

In 2011 the mining group also launched the Green Fund that seeks to help make a real difference to South Africa’s environmental sustainability and green economic growth.

Source: www.cnbcafrica.com

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27 Kingfisher Park Nobel Street Somerset West 7130

E: equire@delphiseco.co.za T: 021 801 2493 C: 082 962 9539

Manufactured in South Africa

NEWS AND UPDATES

Businesses should adopt and implement the

International Integrated Reporting Framework

And investors and stock exchanges should require companies to disclose this information, according to a report by the Global Commission on the Economy and Climate. Integrated reporting combines sustainability and financial data to provide a holistic view of the company and its ability to sustain value over the short, medium and long term. The Global Commission on the Economy and Climate report also states that investors and stock exchanges should include an assessment of climate risk and risk reduction strategies in their reporting.

The report notes that there are two routes through which integrated reporting could become the new internationally agreed-upon norm. The first would be investor demand, and the second through national stock exchanges. The report cites the Johannesburg and Brazilian stock exchanges as examples, and concludes there is clearly significant scope for other stock exchanges to follow suit. The report also calls for cooperation between stock exchanges in different countries and global investors to enable momentum to be accelerated towards integrated reporting.

Source: www.environmentalleader.com

What investors look for in CSR disclosure Companies’ sustainability disclosures are being subjected to increasing scrutiny by regulators, boards and investors. After all, these stakeholders – all aware of how critical risk management is – are pressing for more information about the factors that present business risks and therefore could affect future profitability.

Don’t just to report with stories: include metrics about what the company has done, whether on diversity, supply chain management or reducing greenhouse gas emissions. If your company is not making any progress, be honest and let stakeholders know why you ran into problems or couldn’t meet your goals.

Use a checklist: it’s more than likely that your investors are using GRI-aligned checklists to evaluate your company’s CSR efforts. So should you. These include such issues as: governance practices, board diversity, efforts to deal with climate change and what you’re doing with your supply chain. And companies could benefit from better awareness of just how carefully investors are looking at their CSR disclosures and make an effort to be as specific and substantive in what they report as possible.

Source: www.irmagazine.com

INCREASING DEMAND FOR

SUSTAINABILITY

A study by DNV GL and research institute GFK Eurisko has found that 96% of companies now consider sustainability practices when deciding on a supplier or making a purchasing choice. “Low environmental impact” was considered the most important sustainable aspect to take into account, closely followed by health and safety of workers, economic aspects and ethics. According to the report, 42% of those surveyed said their firms had already taken on formal supply chain strategies that integrate sustainable practices. This percentage increased to 57% for larger businesses and 81% for leaders. In addition to this, over 80% of companies are being pressured by customers to demonstrate the sustainability of their supply chain. Customers are also the stakeholders that are most interested in sustainability. More so than authorities and other external stakeholders, like local communities or NGOs. Overall, the research found that the benefits of a sustainable supply chain outweighed the costs. Adopting sustainable practices allowed companies to meet customer needs, improve market performance and enhance a brand’s reputation.

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New EWSETA regional office launch in Cape Town As part of its commitment to facilitate better communication between the SETA and its member employers and stakeholders, the Energy and Water Sector Education and Training Authority (EWSETA) opened its first regional office at the premises of False Bay College (FBC) at the Westlake Campus on the 20th of November. This was part of a regional strategy set to spread across the country. According to Errol Gradwell, CEO of EWSETA, “key to this regional strategy is the need to build a national workforce that is skilled and competent to deliver sustainability in the energy and water sectors”. The renewable energy progress in the Western Cape drew the EWSETA’s attention and the province was the most eager of the nine to host this driving force for much-needed skills creation in the renewable energy sector.

Source: EWSETA launch and press release

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SUSTAINABILITY

Sustainability Spotlight BELGOTEX FLOORCOVERINGS

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he manufacturing of floorcoverings (such as carpets) can have a big impact on human health and the environment due to the use of certain materials and the energy required in operations. Floorcoverings are also potentially harmful to the environment if not disposed of correctly or recycled.

In this feature, we examine how a giant in the South African floorcovering industry has identified the business case for sustainability and the opportunities to establish reputational advantage in the sector by decreasing and managing environmental impacts.

Belgotex Floorcovering’s entire carpet manufacturing operation is located under a single roof at their 100 000m2 facility in Pietermaritzburg, KwaZulu-Natal. They are currently the largest carpet mill in operation in the Southern Hemisphere and are a market leader in floor covering innovations and technologies.

Floorcoverings, their “main goal is to operate a ‘green’ factory through responsible techniques, extending the life of products and recycling whenever it is economically and environmentally feasible.” Belgotex became officially ISO 9001 certified in 1996 and attained the international environmental standard of ISO 14001 in 2009.

Belgotex designs and develops floor coverings under the following sustainable guidelines: • Extending the life of an existing product through responsible manufacturing techniques and processes • Developing products that can be reworked in their existing form

• Using raw materials that can be recycled at the end of their useful aesthetic life • Using recycled content whenever it is both economically and environmentally feasible Recycling Belgotex installed an INTEREMA® recycling system, at a R5-million outlay cost, that allows it to manage the recycling of production scrap entirely in-house. The Erema machine recycles both polypropylene and production waste back into recycled pellets for conversion into black Eco Fibre.

“Instead of buying in virgin polymer, the new machine will allow us to process

Sustainability Sustainability has been a big influence on the company’s development. Once Belgotex made the decision to become a committed, environmentally friendly organisation, it drew up a list of goals, in conjunction with stakeholders, to take the first steps in what has become known as its “Green Journey”.

According to Kevin Walsh, Chief Operations Officer of Belgotex

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SUSTAINABILITY

recycled car tyres and Grimebuster Ultra which is a rubber crumb backing made from 100% recycled car tyres. In addition, all NexBac Eco tiles contain 70% recycled content in the backing. “Our products are at the heart of people’s homes and businesses and our sustainable vision allows them to make the ‘green’ choices they want to make”, says Walsh.

Kevin Walsh, COO Belgotex flooring. excess polypropylene fibre left over from production of needlepunch carpeting into high quality pellets that can be converted into fibre. In the past, we’ve only used our waste for underfelt. Now we have the option to produce both,” says Walsh.

Effectively reducing Belgotex’s PP waste from its carpet production processes to close to zero, the Erema line is already processing about 200kg of material per hour. This provides a recycled content of 10–90%, depending on the colour of the carpet. It also allows for a higher recycled content of the total weighted area and earns higher points on the Flooring Calculator for the Green Star Office Interiors v1.1 rating tool. In addition, the inclusion of ecoSAVE® motors makes it the only recycling machine on the market to offer up to 20% energy savings, resulting in lower production costs and reduced CO2 emissions. According to Walsh, “the payback for these initiatives goes beyond financial value. They allow future generations to live without being held back by the decisions we are making right now.”

Belgotex puts this and other recycled waste to good use. Several flooring products with recycled content in either, or both, the top-cloth and backing are now available from Belgotex Floors. The increased demand for greener materials resulted in the expansion of their “Eco Collection”. This includes three new tile ranges with recycled face-fibre called BerberPoint 920, BerberPoint 650 , BerberPoint Fusion, Diagonals, Induna, Metro and Advantage—Green Underlay made from 100% recycled yarn, Sportec Colour rubber flooring made with 85%

Water efficiency South Africa currently consumes 98% of its allocated water resources. With this in mind, the implementation and adaptation of a comprehensive water management system is part of Belgotex’s efforts to promote the conservation, treatment and recycling of water in its operations.

Belgotex will be embarking on a rain water harvesting project in early 2015 that aims to reduce its total municipal water consumption with the intent to gain selfsufficiency in water requirements. Initially, the harvested rain water will be used to supply the boilers and cooling towers.

The company projects a 15% reduction in municipal water consumption to their production plant, with a future aim to ultimately achieve 100% self-sufficiency.

Energy efficiency The latest step in Belgotex Floorcoverings’ green journey has been the installation of 10 000m2 (1.2ha) of photovoltaic (PV) solar panels at the KwaZulu-Natal factory. Over four thousand solar modules—equivalent to one-and-a-half rugby fields—have been installed at a cost of R17 million, providing about 5% of the company’s annual energy requirement. The daily energy generated is estimated to be sufficient to power 700 average households, with an expected fiveto seven-year payback.

Belgotex has enough north-facing roof surface to cover 50 000m2, and plans to roll out a second and possibly third phase of PV solar panels over the next five years to meet its own requirements. This would eventually enable to the company to feed power back into the national grid by selling its excess electricity back to Eskom during weekends, shutdown periods or power outages. The move to renewable energy is also expected to reduce the company’s future carbon footprint by 5% due to the 1 295 tonnes of CO2 emissions saved each year from not having to rely on coalproduced electricity. “The installation of solar panels at our factory reduces our reliance on coal-based energy and lowers our carbon footprint. Finding and using sources of renewable energy guarantees our continued success long into the future”, says Walsh.

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SUSTAINABILITY SPOTLIGHT

Are you leveraging your sustainability profile for competitive advantage?

Supply chain forces are providing a platform for differentiation in the value chain, as companies look to appoint suppliers with sustainability credentials.

Are you packaging and presenting sustainability data credibly and effectively?

Has your business embraced the benefits of a holistic approach to reporting and marketing?

GSA Campbell specialises in strategic sustainability and marketing services and is able to provide large companies and SMEs with a simple framework that looks beyond compliance towards the realm of opportunity in a fast changing procurement landscape.

Sustainability and Integrated reporting services (GRI and <IR>) Stakeholder marketing services Social media Specialised SME reporting and marketing The Good Business Framework

www.gsacampbell.com info@gsacampbell.com 0861 777 669

STRATEGY | SUSTAINABILITY | MARKETING

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ADVERTORIAL

TAPPING INTO THE NEED FOR SUSTAINABLE, CLEAN WATER DELIVERY. How an indigenous South African company - The Mega Water Corporation - is helping to assure our water security.

Background: Water in Africa and South Africa Few if any natural resources are as central to any region’s well-being and development as is water. This is true for both the health of its citizens, livestock and wildlife, and for the sustainable development of its economy as a whole. For the citizenry, naturally, the most pressing need is for the reliable access to clean, treated drinking (or potable) water on a day-today basis. This right to access is enshrined in the South African Constitution. The issue of drinking water of course, cannot be separated from the water usage by industry, which also requires and consumes vast quantities of this valuable asset, especially because of the environmental impact of activities such as mining and agriculture. As with all things, water affairs must be looked at in a holistic manner.

As matters stand, of Africa’s circa 1 billion people, roughly 380 million (38%) lack access to clean water, while 560 million (56%) require sanitation facilities. Accessing water requires on average a 6 km walk carrying murky, unsanitary water, a task that’s usually performed by women or children. Whilst some regions of our African continent can be said to be water-rich, this is not the case in South

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established in SA. Three years in the planning, The Mega Water Corporation was formed primarily as an emerging industrial water enterprise. The directors’ vision for Mega Water is to deliver integrated, sustainable solutions to all stakeholders in the water supply chain, both public and private. As such, The Mega Water Corporation is set to serve as an “indigenous lever” to aid in the South African Government’s strategic infrastructure roll-out and its National Development Plan.

Africa and in Sub-Saharan Africa in general. Here, the water sector faces numerous related challenges, both in terms of climate and infrastructure. These include historical scarcity (exacerbated by periodic droughts), an aging and rapidly deteriorating infrastructure, constrained Government expenditure, pollution, and a lack of expertise and skilled labour. That said, South Africa’s remains by far the largest and most advanced and comprehensive water infrastructure in Sub-Saharan Africa, boasting 179 dams with a capacity of 37 billion cubic metres. It is also the major market in financial terms, worth some US$ 9.9 billion. At the moment however, this market is fairly fragmented, and when combined with the aging infrastructure, therein lies

a growing threat in terms of water security.

Rudy Roberts, Chief Executive: The Mega Water Corporation

The Mega Water Corporation’s directors at their recent launch in Pretoria.

The Mega Water Corporation – an ambition to deliver All of these challenges risk limiting South Africa’s otherwise boundless potential and development plans, both for Government and for the private sector. Considering the severe difficulties that have plagued the electrical grid, for instance, South Africans need few reminders of the critical need for forward planning of resource management. It was to forestall such crippling eventualities in the water treatment and delivery arena that a new industrial and water services and utilities company, The Mega Water Corporation, came to be

Lessons from the wider world Chief Executive, Mr Rudy Roberts, further expands on modern water management trends: “As company founders, we came to recognize the

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ADVERTORIAL

“

THE RIGHT TO WATER FOR ALL SOUTH AFRICANS IS ENSHRINED IN THE SOUTH AFRICAN CONSTITUTION, UNDER SECTION 27 (1)(B)

“

The priceless value of partnerships A sound platform for the company’s future plans resides in strategic partnerships, in particular with Grundfos, the highly regarded Danish water utility and industrial group.

Grundfos’s global presence and experience in the field provide invaluable advantages for Mega Water, including technology solutions, expertise and research, enterprise funding, and products and services support. Beyond these benefits

however, it is both the European and African companies’ guiding philosophies of sustainability and environmental awareness that makes their partnership so natural and opportune. With the late-2014 100% acquisition of an established water engineering and services company in a deal worth R100 million, the corporation is squarely on course to realize its R1.2 billion deal pipeline ambitions within South Africa’s water sector.

This deal bodes extremely well for the partnership’s commitment to meeting South Africa’s water challenges, but has been preceded by a host of initiatives in various stages, from completion to long-term existing contracts, and planning. In fact, The Mega Water Corporation and Grundfos had already successfully delivered on a number of water projects and secured further maintenance contracts through their Water Services Division. Says Jonathan Hamp-Adams, MD of Grundfos Sub-Saharan region: “We are blessed to be part of one of the greatest causes, in which lies one of the greatest potentials, on a foundation of the greatest values. We will deliver a positive impact on our environment – clean water and energy savings.”

Projects and delivery: making a difference from the beginning By way of illustration, perhaps one project most emblematic of the company’s ambitions involves the provision of water to the Naledi Trust in Free State Province through the management of rural groundwater. This was achieved by the innovative approach of rehabilitating the existing groundwater supply utilizing a renewable energy source. From having no access to potable water for more than 4 years, the community at Naledi Trust now has clean water piped to their homes. As part of their on-going rural groundwater schemes, the Mega Water Corporation has planned for an initial 40 boreholes to go into operation into 2015, and to sustain

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The Mega Water Corporation

INFRASTRUCTURE PRESENTS AN ACCRETIVE OPPORTUNITY TO PARTICIPATE IN THE WATER AND WASTEWATER SECTOR.

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astonishing growth in sustainable water projects worldwide.

Global Water Intelligence estimates that since 2011, and up to 2014, companies have spent more than US$84 billion on such schemes around the world. These schemes hold lessons for how water is managed, conserved and obtained.

We have taken cognisance of best practice wherever it may occur, but of course many of our challenges are unique to our markets, and we need bespoke solutions. This is where South African ingenuity really comes into play, and this is where opportunities for all stakeholders reside.” Against the backdrop of past and present challenges set out above, The Mega Water Corporation will act as a pivot between Government and business in marshalling skills, technologies, and investment to address SA’s water requirements. With Government budgeting R12.49 billion for the Sanitation and Water Department through 2015, Mega Water sees enormous potential for private participation in this area, and for investment to bridge the funding gap.

up to 180 boreholes by year six of operations. In terms of larger strategic water projects, the corporation has secured the right to supply innovative chlorine gas dosing systems to the many municipal water treatment plants around South Africa. In parallel to this, the company will also provide the supply chain with chlorine gas replenishment for water plants around the country. To date, more than 30 of these plants have been deployed in and around Greater Gauteng and its surrounding districts. It is expected that at least 10 rehabilitation and 10 chlorine gas disinfection plants will be completed by the end of year one, ramping up to 100 plants by year six. Together with Grundfos, The Mega Water Corporation has to date

completed three comprehensive Water Utility Audits on major hospitals for the Free State Department of Health. These audits cover security of water supply, chilling plants, disinfection, energy savings and the management and removal of wastewater from the facilities in a manner that ensures maximum hygiene.

Sustainability: a watchword, not a buzzword Although still a relatively young company, as demonstrated above, The Mega Water Corporation already has a host of initiatives under its collective belt, with many more in the planning stages and in the pipeline. The company will continue to grow in a structured, scrupulously planned manner, supported by appropriate risk, control and governance structures. In essence, the company’s sustainability must mirror its activities on the ground. Concludes Mr Roberts: “Sustainably is our watchword and guiding principle. Indeed, all of our activities, present and future, flow from there.”

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REPORTING

Facilitating Value Creation

UNDERSTANDING THE CONCEPT OF FINANCIAL CAPITAL FOR CORPORATE REPORTING Lloyd Macfarlane

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raditional accounting practices place large emphasis on the extent to which good financial capital management is responsible for the economic success of the business â&#x20AC;&#x201C; traditionally the main issue of concern for shareholders and investors. However, companies are increasingly required to take a more holistic approach to the many forms of capital in the business, and to do so with key stakeholders in mind. The corporate sustainability

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agenda is changing the way that companies contemplate and report on financial capital, so what is financial capital in the context of value creation and sustainability?

Financial capital is used by people, organizations, corporations, and governments, to build and maintain their livelihoods. This includes all financial assets, instruments, and resources (including loans, bonds, stock, expenses, assets, equity, and cash flows) used throughout

the organisationâ&#x20AC;&#x2122;s activities. It could be said that financial capital reflects the productive power of all other types of capital in the business, although technically there may be exceptions to this Financial capital plays an important role in our economy, enabling the other types of capital to be owned or traded.

Proper management of financial capital is crucial to maintaining effectiveness, efficiency and economic sustainability in the

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on investments in employees or local communities for example can be difficult to quantify, however the risks of ignoring these investments can be meaningful and even critical for the business.

Although the way an organisation applies other forms of capital may be in stark contrast to the way it deals with financial capital, all these components are often connected to expenditure - investing in any other form of capital usually requires good management of financial capital.

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THIS MEANS THAT AN INVESTMENT IN RELATIONSHIPS WITH THE COMMUNITY OR OTHERS MAY BE GOOD FOR REPUTATION AND IMPROVED SALES, BUT ONLY UP TO A CERTAIN LEVEL,

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organisation. Generally speaking financial capital has no value of its own (except if the company’s business is a holding company or a bank). It is not productive, for instance, in the sense that a manufactured product produces value. Instead, the value of financial capital lies in the facilitation of economic production. Financial capital controls ownership of physical capital and is a representation of the value of the other four capitals. In other words, money has to go out before more can be brought in.

Companies may have access to many forms of financial capital but little can happen without expendable cash as a resource (particularly in terms of operations).

Financial capital can be obtained through earnings, banks (in the form of short or long term loans), private equity (and venture capital transactions) and grants.

The integration and management of all types of capital is essential if a company is to target sustainability, and so any discussion about financial capital should reference this integration. The IIRC’s Integrated Reporting Framework <IR> tackles the concept of integrated thinking and sustainability performance by focusing on the ‘six capitals’: financial, manufactured, human, intellectual, natural and social.

There is mounting evidence that companies with strong sustainability performance deliver improved long-term financial returns. For example, a July 2013 Harvard Business School study found that “High Sustainability” companies significantly outperform their peers over the long-term, in both stock market and accounting terms (Eccles, Ioannou and Serafeim, 2013). Whilst there is still some discussion about what in fact causes this performance, these companies are generally managing risk more effectively and positioning themselves advantageously in their respective value chains – objectives that are ultimately linked to the corporate sustainability agenda.

If the primary objective of business is value creation then financial capital is the tool with which this takes place.

Sustainable businesses create value for all key stakeholder groups and not just shareholders - this is where the direction of financial capital is becoming increasingly important. The returns

says Pieter Conradie, Programme Director for Integrated Reporting at the Albert Luthuli Centre for Responsible Leadership (University of Pretoria). There is risk in expending too much financial capital in order to fund corporate social investment projects for example.

“This is of course a very pragmatic or instrumental way to look at investments, but in my mind this is also the way that most executives look at things, because proving a positive ROI from investments in social projects can be very tenuous because of all the extraneous variables at play,” says Conradie.

All of the <IR> capitals are connected to financial capital in some way. Conradie suggests that “the obvious challenge is to determine the causality between the other capitals and financial capital, especially in determining how an investment in other capitals may lead to returns in financial capital.” This is the holistic aspect of integrated reporting and the relationship between financial and non-financial information.

Everything about a company’s performance is intrinsically linked.

A company’s annual report has traditionally been enough for investors and shareholders who until recently

haven’t been that interested in sustainability reporting. This is changing as shareholders realise the extent to which their investments are impacted by the stability and value created by the business for other key stakeholder groups.

Recently appointed Chief Executive of the Global Reporting Initiative (GRI), Michael Meehan says that one of the reasons that organisations report is to understand their commitment to sustainability. “Over the years, for better or worse, GRI has become synonymous with the report. To me, that is not what’s important. What’s important is the process by which you understand the information, collect the information and communicate it,” says Meehan Corporate reports have historically been comprehensive but cumbersome and now the integrated reporting process aims to change this, by providing more focus and more relevance in a format that has more application. Even if the report is not written for, or read by other key stakeholder groups, it should at least deal with financial capital in terms of how it relates to the other capitals of the business.

Pieter Conradie, Programme Director for Integrated Reporting at the Albert Luthuli Centre for Responsible Leadership (University of Pretoria)

Forum for the Future, Keele University et al. The Five Capitals. Retrieved from: http://www.forumforthefuture.org/project/five-capitals/overview Goodwin, N. R, September 2003, Global Development and Environment Institute Working Paper No. 03-07, Five Kinds of Capital: Useful Concepts for Sustainable Development. Retrieved from: http://www.ase.tufts.edu/gdae/publications/working_papers/03-07sustainabledevelopment.pdf Waygood, Dr. S. Aviva White Paper, A Roadmap for Sustainable Capital Markets: How can the UN Sustainable Development harness the global capital markets. Retrieved from: http:// sustainabledevelopment.un.org/content/documents/10574avivabooklet.pdf [edited extracts] Makower, J: Two Steps Forward. Retrieved from https://www.greenbiz.com/article/michael-meehan-and-future-sustainability-reporting

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SMALL BUSINESS

Small Business, Big Impact

ENVIRONMENTAL RESPONSIBILITY AND THE SMALL BUSINESS SECTOR Carla Higgs

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ne powerful group of stakeholders affecting the environmental performance of corporate enterprises are Small, Medium and Micro-sized Enterprises (SMMEs) who are often the main contractors in industrial supply chains. Though small, SMEs have an enormous impact on social and environmental issues and play an important role in sustainable development, SMMES drive economic development, job creation and skills development opportunities.

Their impact on the environment however, particularly on local ecosystems, can be calamitous. The National Small Business Act1 describes Small, Medium and Microsized Enterprises (SMMEs) as separate and distinct business entities of any sector of the economy that are classified as either micro, very small, small or medium by their number of employees, annual turnover and asset value. SMMEs are not restricted to formally registered enterprises, but include informal enterprises, such as survivalist street traders and informal manufacturing, services and home-based enterprises.

SMMEs are commonly recognised as the most important sector of an economy. It is estimated that, in South Africa, 2.8-million SMEs make up approximately 91% of formal enterprises, contribute between 52% and 57% to the national GDP, and constitute 61% of formal employment. Their role in the financial economy and employment creation has heralded SMMEs as key to driving South Africa’s economic growth, equity acceleration and social development.

Small business contributes significantly to the provision of productive employment opportunities as the providers of the majority of jobs, and the creators of a large number of new jobs that generate income and ultimately result in the reduction poverty.

This, coupled with their role in encouraging entrepreneurship, stimulating local and regional development and creating resilient economic systems, means that SMMEs are important contributors to sustainable development. In contrast to their economic and social contribution, the environmental impact of SMMEs has not been quantified, is poorly understood and is presumed to be

substantial. When compared to their larger counterparts, smaller firms in their individual capacity may have a lesser environmental impact. However, since they represent such a large percentage of economic activity, collectively, the large number of SMMEs means that their environmental impacts are substantial. SMMEs, especially those in developing countries, are characterised by the use of older technologies which are generally less energy efficient and contribute to pollution. Some studies have indicated that SMMEs’ contribution to local pollution levels can be as much as 70%, generating as much as 60% of commercial waste and contributing between 40 and 45% to industrial water and energy consumption. The agricultural, manufacturing and service sectors have been identified as having the largest environmental impacts.

The agricultural sector is a source of water pollution and land contamination.

Manufacturing SMMEs consume energy and natural resources, and generate waste and pollution. The service sector, particularly petrol stations and repair shops, pose a risk of routine pollution or accidental releases. Further, it has been found that environmental management among small business is in its infancy and there is a general problem of non-compliance with environmental legislation. Characterised by resource constraints, SMMEs lack awareness of environmental responsibility, environmental legislation and their own environmental impacts. In the absence of relations with stakeholders, SMMEs are also less susceptible to reputational risks.

Under the banner of corporate social/ environmental responsibility, many large corporate enterprises are implementing pollution prevention measures, material and energy efficiency initiatives, waste management, and product stewardship (to name a few) in an effort to mitigate their environmental harm and improve their environmental performance. While mitigating one’s own environmental harm is indeed noble, and can result in many positive spin-offs such as reputational benefits and cost savings, it would be erroneous to set operational efficiencies

as the boundaries for an enterprise’s environmental responsibility. From a regulatory perspective, The Waste Act2 establishes Extended Producer Responsibility—an important policy approach for environmental protection as a regulatory mechanism to ensure that corporate enterprises focus on whole product systems rather than individual production facilities. This means that the responsibility for the product is broadened to include the management of the product through its entire life cycle, through all downstream levels of its supply chain and to the point of end-of-life management.

From a non-regulatory perspective, corporate enterprises, although large and well-resourced, are not autonomous; they rely significantly on outsourcing for numerous products and services.

Corporate enterprises essentially function at a supply-chain level and there is an obligation for enterprises to assume responsibility for the environmental and social performance of their suppliers and partners; both suppliers’ upstream in their product chain and for their products downstream in the supply chain. SMMEs are the main contractors in industrial value chains and, therefore, can help improve or harm environmental performance within the supply chain and, ultimately, the corporate enterprise contracting the SMME. Given that extant research indicates that SMMEs are generally not engaging in environmental responsibility, this has noteworthy implications for corporate enterprises operating in the corporate social/environmental responsibility arena. Overlooking SMME suppliers and contractors could potentially damage the environmental performance of an enterprise, with further reaching consequences particularly in relation to reputational risks. On the other hand, integrating environmental thinking into supply-chain management can potentially change the corporate social responsibility landscape.

Particularly, when considered collectively, their prevalence means that SMMEs could make a significant positive contribution to environmentally sustainable development.

1 The National Small Business Act of 1996, and later revised by the National Small Business Amendment Act of 2003 2 The National Environmental Management: Waste Act 2008 (Act 59 of 2008).

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Giving Back The Power THE CITY OF CAPE TOWN’S ENERGY FEED-IN TARIFF Christine King

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ccording to the International Energy Agency (IEA), solar power could be the world’s largest source of electricity by 2050, outpacing fossil fuels, wind, hydro and nuclear power, and supplying an estimated 16% of the world’s energy needs. This would prevent the emission of billions of tonnes of CO2 per year into the atmosphere.

Ever rising electricity costs and a rapid decrease in the cost of photovoltaic (PV) panels have led to an interesting opportunity for customers to feed the renewable energy they generate back into City of Cape Town’s electricity grid. This is in line with the Department of Energy’s strategy to see approximately 17.8GW of renewable energy capacity installed by 2030.

With consent from the Director of the Electricity Services Department (ESD), residences and businesses with small-scale energy generator (SSEG) technologies such as solar PV panels and mini wind turbines can now link these generators to the City’s grid. Eskom purchases that electricity from the City for a pre-determined tariff, lightening the load on the electricity grid and reducing the possibility of rolling blackouts while producing savings for the supplier of the renewable energy.

The tariff is meant for small-scale embedded energy generators with a generation capacity of less than 1MVA. However, the generators must be net consumers, consuming more from the grid than they put back into it. The tariff is not for those who make a sole business out of renewable energy generation. Those on the SSEG tariff will also not be allowed to sell or supply energy to another user. The energy produced must be consumed on site or exported to the City of Cape Town’s energy grid.

Any SSEG that wants to connect to the City of Cape Town’s grid is required to complete a detailed application form, which can be found on the City’s website, and gain written approval from the City before connecting to the grid. The approval process includes getting permission from different City Departments, testing of the installation

ENERGY

and ensuring that the equipment aligns with technical standards. Requirements are different for commercial and residential energy suppliers.

In order take part in the feed-in system, SSEGs must install an industrial bi-directional AMI credit meter on the premises. SSEGs can also choose not to be compensated for the energy they are exporting to the City’s grid, but will be required to install a blocking device that does not allow reverse energy flow.

The Residential small-scale embedded generation tariff comprises of the following charges, which will be updated annually: • A daily service charge of R13.03 for the use of the grid • An electricity consumption charge per kWh consumed. This is currently 109.17c per kWh. • The rate per kWh at which the City will purchase excess generation. This is currently 49.72c per kWh and is exclusive of VAT. The City of Cape Town will credit the consumer’s electricity account in Rands (not kWhs).

Commercial and industrial prepayment customers will be required to be on a tariff that has a daily service charge and they will be credited at the same rate that residential consumers will be credited. The energy credit tariff is based on an estimation of what the City would have on average paid Eskom for the energy. VAT will only be paid out to registered VAT vendors.

CEO of GreenCape, Evan Rice, gives credit to the City for embracing the shift towards a green economy. The Western aims to become the green economic hub of Africa.

According to Rice, embedded generation poses a major threat to municipal finances in South Africa since electricity sales are typically the main generator of revenue for municipalities. However, “they realised that if they don’t do something and create a structure and tariff that allows for this to happen in a financially sustainable way, it’s going to happen anyway,” said Rice. On 23 September 2014, the 1.2MW Black

Evan Rice, CEO GreenCape River Park Solar Project became the first organisation to put electricity back into the City of Cape Town’s energy distribution network on the feed-in tariff system. The project has one of the world’s largest roofmounted solar PV systems, and the largest in Africa, able to generate just under two million kWh per year from approximately 5 500 modules.

The buy-back rate for the Black River Park Project has been proposed at 49.72c/kWh, approximately the same as that at which the City buys electricity from Eskom, but still lower than the rate at which the office park buys electricity from the municipality. This encourages most of the energy generated to be used on site, but caters for situations where the local demand is less than what is produced by the solar system. Peak demand savings are noticeable, especially on hot summer days when the air conditioning is active, but the solar panels are operating at capacity.

The use of renewable energy has resulted in substantial financial savings for the office park and is attracting tenants who are increasingly placing more importance on sustainable business practices due to the high value they hold for shareholders.

City of Cape Town, 31 October 2014, Guidelines for Embedded Generation. Retrieved from: http://www.capetown.gov.za/en/ electricity/Application%20Forms/CTGuidelinesforEmbeddedGeneration_V26_2014_10_31.pdf Green Building Council News, 28 July 2014, First Solar Plant to Feed into Cape Town’s Electricity Grid. Retrieved from: https:// www.gbcsa.org.za/news_post/first-private-solar-plant-to-feed-into-cape-towns-electricity-grid/ Botes, A. 29 September 2014, City of Cape Town launches Small Scale Embedded Energy Generation Guidelines and Tariff.

Retrieved from: http://urbanearth.co.za/articles/city-cape-town-launches-small-scale-embedded-energy-generation-guidelinesand-tariff Retrieved from: http://www.iea.org/newsroomandevents/pressreleases/2014/september/how-solar-energy-could-be-the-largest-source-of-electricity-by-mid-century.html GreenCape, 3 October 2014, The Rapidly Emerging Green Economy: Opportunities That Can Improve Your Bottom Line [PowerPoint Slides]

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MINING

Social Investment in Mining DIGGING FOR VALUE

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ohitesh Dhawan suggests, in the report “Getting more out of social investment in the mining sector”, that mining companies are finding it difficult to quantify their mandated social investments. Vast sums of money are being put into infrastructure, education and training, healthcare, sports and recreation, but the mining companies are struggling to demonstrate the effectiveness of their expenditure.

Social investment plans are integral to being granted mining rights, but are they achieving what they set out to? Quantity over quality could be to blame. With 52 different types of investment programmes available to the mining industry, there could be a lack of focus on priority sectors.

A recent KPMG survey suggests that many organisations struggle to demonstrate the effectiveness of their social investment expenditure. In 2013, the 10 metals, mining and engineering companies in the study had combined social investments of 1.2-billion US dollars. Although they all quantified the inputs and outputs, these were primarily in terms of volume, namely the financial contributions made and the number of participants in a programme. But only one of the 10 reported any quantified outcomes, suggesting a lack of debate over the true impact of programmes, both internally and with the communities they are serving.

The strategy in social investment Despite growing pressure for better reporting, few mining companies publish a detailed social investment strategy. In South Africa, businesses must have a Social and Ethics Board sub-committee to govern their social investments.

For operational managers, the task of choosing a programme can be daunting.

Mines are incredibly complex operations, spread across wide geographical areas.

Unless a detailed business plan is in place,

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Edited by Lulama Afrika their money is at risk of disappearing into the black hole of “charitable donations” under the broad categories of health and safety, social welfare, education and sustainability.

These investments are valuable, but rarely take into account the specific needs of the community and so it can be difficult to quantify what is actually being achieved by the investment.

Mining companies need to find a balance between the glamour events, such as school, hospital and road openings, and the practical options, such as teacher training or safe sex education. Cutting ribbons can make a big impression on the community, but doesn’t always bring the best return on capital. Training and education can potentially have a greater, long term, positive effect, but are a less obvious boost to the company’s short-term reputation than an event.

Those responsible for allocating social investment budgets need to exert a stronger influence over the organisations involved in prioritising programmes, by engaging earlier with local economic development forums and other groups, and resisting demands for vanity projects. This closer working relationship will also ensure that authorities are aware of the value being added by the social investments of the business, without them having to create awareness around this through active PR activities.

According to Dhawan, once programmes have begun, they tend to suffer from a lack of professional performance management, with ill-defined outcomes and measurements, and inadequate data reporting. The personnel assigned to run the initiatives may not always have the technical skills and capacity to carry out the required level of financial and operational analysis and monitoring commensurate with a major project.

With rewards often linked to activity rather than outcomes, project teams lose sight of the true project goals.

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MINING

Reference: Edited from a working paper: Dhawan, R. (2014, Sept 23). Getting more out of social investment in the mining sector. Retrieved from: http://www.kpmg.com/ZA/en/ IssuesAndInsights/ArticlesPublications/General-IndustriesPublications/Pages/Valuing-Social-Investment-in-Mining.aspx

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Unlocking value Beginning at board level, the social investment strategy has to be aligned with local development plans as well as wider business goals, and designed to produce the maximum benefit to the target groups and the mining organisation.

Considerable research and discussions are required to uncover the optimum choices for social investment. For example, investment in local farm sourcing can cut the cost of food, resulting in a healthier, more energetic workforce, while education and counselling on alcohol and drug abuse could reduce absenteeism. It is equally important to play a long game, avoiding quick wins in favour of deeper partnerships with the community, local businesses, non-governmental organisations (NGOs) and government.

But how do you measure something like employee self-esteem? Sophisticated tools are available to quantify and monitor the economic and business value of social, behavioural, health, environmental and infrastructure improvements. Sometimes it comes down to a manager’s assessment of an employee on a scale of one to 10.

Patience is also needed, as some benefits can take years to materialise. An early years’ education programme will not lead to overnight change. Over time it could produce an increase in literacy, which in turn generates a long-term increase in employment rates and reduced poverty. This is why it is so important to manage the expectations of all stakeholders, including local authorities, effectively, in order to create a realistic idea of timeframes and outcomes.

Finally, it is important to communicate the concept and the results of shared value to the board, investors and stakeholders, including project partners, using a combination of quantitative and qualitative information to tell the story. At a macro level, all parties will want to see how any achievements are improving the local economy and environment. By treating social investment like any other commercial initiative, companies can demonstrate the return for every rand spent, identify under-performing programmes and reinforce relationships with community stakeholders and partner organisations.

For mining and other industries, creating value for society must be a top strategic priority—whether it is seen as simply a cost of doing business or by looking at it as an opportunity for growth. Simply investing more money, or outsourcing it to someone else, is not the answer. Leaders need to be personally invested in seeing the business create value for communities and apply the same rigour to these investments as one would to “mainstream” investments.

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Can mining go green?

Andreas Wilson-Späth

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et’s not beat about the bush: the global mining industry, one of the most financially profitable sectors of the world economy for centuries, has an appalling record when it comes to taking care of people and the environment. Can it be rehabilitated?

A toxic legacy For most people the idea of mining conjures up images of landscapes scarred by gigantic open pits and streams polluted by noxious run-off threatening the health of neighbouring communities and ecosystems. This popular perception is anything but unfounded.

Mining operations routinely feature in lists of the planet’s most despoiled places.

From Kabwe in Zambia and La Oroya in Peru to Norilsk in Russia and Tianying, China, children growing up in the fallout zones of lead mines and their associated smelters register concentrations of lead in their bloodstream that are way above levels considered safe. From the Amazon basin to Kalimantan in Indonesia, millions of artisanal gold miners eradicate vast stretches of forest and pour thousands of kilograms of poisonous mercury and cyanide into rivers every year. West Africa’s densely populated Niger River Delta has become a de facto sacrifice zone for multinational oil giants with over 240 000 barrels of crude oil spilled into the region annually for over half a century.

But destructive mining practices aren’t just confined to under-regulated developing countries. Canada’s tar sand mines, described as the most environmentally damaging project on the planet, are devastating thousands of square kilometres of boreal forest and wetlands in northern Alberta and making massive contributions to global greenhouse gas emissions. In the US, coal miners in Appalachia are busy flattening entire landscapes and the natural habitats they host via the aptly named technique of mountaintop removal, while a recent study indicates that mines located in the headwaters of streams damage fish populations kilometres downstream by altering flow regimes and adding sediment and chemicals to the water.

In Norway, a titanium mining company contends that its proposal to dump some six million tonnes of waste into the Førde Fjord, an important cod and salmon spawning ground, every year for the next 50 years, would have negligible ecological effects.

Resource-rich South Africa has seen its fair share of mining-related damage. Years after the mineral was banned for industrial use, many of the country’s asbestos mine dumps remain un-rehabilitated and continue to poison local inhabitants who are plagued by elevated incidences of mesothelioma, a deadly variety of lung cancer. Rising levels

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MINING

of acid mine drainage from the area’s many gold mines threaten to inundate parts of Johannesburg and are thought to be responsible for increased seismic activity. Uranium leached from gold mine tailings has contaminated local streams like the Wonderfonteinspruit with radioactive sediment putting at risk the health of those living along their course. The Mapungubwe National Park in Limpopo, an important site of biodiversity, ecotourism and a World Heritage Site with tremendous cultural significance, continues to be under pressure from encroaching coal mining activities.

A necessary evil?

With such a poor track record, is it any wonder that environmentalists and mining companies don’t see eye to eye? However, regardless of how reluctant eco activists might be to engage with the idea, they need to come to grips with the fact that mining non-renewable natural resources will remain a necessity even in a green economy. You can’t make wind turbines or solar panels without minerals and metals.

That doesn’t mean that we need to simply grin and bear the excesses of a dirty industry, but that ways must be found to extract the necessary raw materials in ways that minimise the damage done. There are a number of ways in which the mining industry can help to improve matters: 1. Engage in honest self-assessment Mining companies need to take a long, hard look at their past and present behaviour if they are truly interested in becoming part of the solution to the problem for which they are jointly responsible.

It’s crucial to understand that this is not simply an issue of image management.

Greenwashing through slick marketing campaigns is not the answer.

However you try to spin it, “sustainable mining”, a term increasingly bandied about by industry leaders, will always be an oxymoron from an environmental perspective. Mining, by definition, involves the extraction and depletion of non-renewable natural resources on a finite planet. “Green mining” is a fantasy, but greener mining is possible.

2. Stop ignoring the environment Miners can no longer disregard the very real and significant impacts their activities and products are having on the natural environment.

3. Stop ignoring people The long-term health of those working in and living near mines has to be a top

priority. In addition, the people who inhabit mining areas, many of them impoverished indigenous populations in developing countries who have inhabited the land for generations, have developed a close, non-commercial, cultural relationship with it and rely on it for their livelihood and survival, must have a real say in decisions around whether and how mineral resources are to be exploited.

4. Stop ignoring the law While governments have a responsibility to enact and enforce legislation that protects nature and people, mining companies must stop breaking the rules.

A new boom of mineral exploration and extraction in Africa is being led by international corporations from China, South Africa, Russia, India, Canada, Australia and elsewhere, often in regions where mineral wealth, fragile biodiversity and poor industry monitoring overlap. In countries like Cameroon, Gabon and the DRC, for instance, regulations are routinely ignored and permit conditions exceeded to the detriment of the local ecology and human population. In a worrying trend of so-called protected area downgrading, downsizing and degazettement (PADDD), powerful mining interests lean on governments and officials to redefine and reduce the boundaries and protection status of national parks and other conservation areas to allow companies easier access to the resources in the ground.

Such practices must stop. While industry-sponsored schemes like the Mining, Minerals and Sustainable Development initiative, the Extractive Industries Transparency Initiative and the Canadian Green Mining Initiative are steps in the right direction, self-regulation is only part of the answer and has to fall under rigorous independent and government monitoring.

5. Implement real change There are numerous ways in which mining can be conducted in a more eco-friendly manner, for example by: • researching, developing and implementing greener mining processes; • reducing water consumption (currently, mining activities use almost 20% of the world’s available water supply); • reducing energy consumption and cutting greenhouse gas emissions, for instance by prioritising energy efficiency measures and using renewable sources of energy such as wind and solar power; • reducing the physical footprint of mining infrastructure, including access roads, on the landscape;

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• protecting local ecosystems; • reducing pollution and waste through the use of fewer dangerous chemicals, cleaner production methods and environmental control technologies; • changing supply chains to accommodate sustainable practices and incorporate former waste streams as useful raw materials; and • developing and using effective methods to clean up and rehabilitate mining sites after the end of their operational lifetime.

A major test The biggest challenge facing the mining industry in the 21st century is one that goes counter to its most fundamental driving force: the idea that financial considerations can no longer define the bottom line. That just because a mineral deposit exists and can be mined at a profit, it should be.

Some natural resources should be out of bounds. Similarly, some areas should never be mined because they are more valuable to us in their undisturbed state.

Fossil fuels represent the most obvious example. There is overwhelming scientific evidence dictating that the vast majority of known coal, oil and natural gas reserves have to remain underground and unburned if we are to avoid the devastating, worldwide consequences of run-away climate change.

Companies who own these reserves need to come to grips with the fact that there is a moral imperative not to exploit most of them. Companies actively engaged in exploring for new deposits need to stop doing so. Another, no less contentious, example is gold, a metal on which we have built the financial foundations of our entire civilisation. We need to question the wisdom of valuing so highly a substance which has relatively few real-world uses.

Is a metal the main attribute of which is its shininess really worth the largescale pollution and the damage to the biosphere and human health that are required to extract it from the ground?

If the mining industry is to become a part of a green economy, which it surely must, it needs to undergo a major shift in philosophy and practice. As a global community that is increasingly dependent on the actions of all its members for its long-term survival, we need to reach a point where we recognise natural resources, both finite and renewable, as common goods. A time when decisions about whether and how these resources should be used are made by prioritising the needs of those affected, whether they are local human, plant or animal communities or encompass the biosphere as a whole, over the prerogative to make money.

23

ENERGY

Responding to South Africa’s Energy Crisis LEADING THE WAY FOR WOMEN IN SUSTAINABILITY

economically viable. The computer can be plugged into a solar panel, has WiFi capability, a 500GB hard drive and up to 4GB of RAM (random-access memory). The company chose to use Android as the operating system because “it is less intimidating, since most young people in Africa are using Android-powered smartphones”. While the IMPI Mk1 isn’t pretty, lacking the sleek lines of more expensive hardware, it is robust and durable enough to be able to withstand whatever Africa’s dusty terrain can throw at it. After all, the device was made to survive in communities without power and other infrastructural benefits.

Capsule Technologies is only five months old and has 10 staff members focusing on research and development. The company hopes to expand into Africa, and is in talks about taking its product to other countries on the continent. Verkuil said the company was committed to creating more jobs, and would be hiring more people over the course of the coming months.

According to Verkuil, their learning from the GCIP Programme has been “phenomenal”. Through the customer discovery and validation process, the company was able to address issues they had with identifying their target market and whether their product was fit for purpose. Through augmenting and pivoting their business model, Capsule Technologies was able to identify which market would be able to afford their desktop device and other technologies in development. They discovered a need to alter their

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ENABLING DYNAMIC SMEs IN DEVELOPING COUNTRIES AND EMERGING ECONOMIES TO FULLY ACCESS NATIONAL AND GLOBAL MARKETS IS CRUCIAL FOR JOB CREATION, WOMEN’S EMPOWERMENT, INNOVATION, AND OVERALL ECONOMIC DEVELOPMENT.

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outh Africa is in the grip of an energy crisis. Rolling blackouts and loadshedding are causing frustration across the country and ever-increasing electricity tariffs are tightening everyone’s belts to the point where the South African economy is being throttled. A number of factors are responsible, including aging infrastructure, our reliance on coal and a slow response to the looming threat.

However, this has provided a fertile environment for innovation in clean technology and local entrepreneurs are tapping in to it with great enthusiasm.

This year, Megan Verkuil won at the 2014 GCIP Awards in the Most Promising Woman-led Business category as co-founder of Capsule Technologies. The Cape Townbased, open source solution expert builds hardware and software to address specific needs and they have designed Africa’s first solar-powered desktop computer running on the Android operating system.

Capsule Technologies entered the GCIP Programme with their project known as the Desktop Energy Efficient Platform, or DEEP. The desktop computing device, called the IMPI Mk1, is highly energy-efficient and can operate on 20W of electricity, compared with other desktop computers which can easily burn an average of 200W to 400W. Running on open-source software means it is also cheaper to run, retailing for R3 300.

According to Verkuil, a computer of equivalent power would cost closer to R6 000, making the IMPI Mk1 both energy efficient and

business model and target market for each type of technology offering from multi-functional work stations to set-top boxes for entertainment purposes. In this way they can provide a sustainable IT solution while also making a profit.

Participating in the GCIP Programme gave the company a better business outlook for their product. “Through identifying the customers, we’ve also had to change the product and technology and validate what peoples’ wants and needs are. Because it’s one thing having a need, but do people actually want it as well? We’ve had to ask ourselves,” says Verkuil. “The programme, the GCIP, has been extremely invaluable, because there were certain markets that we never thought about or identified before.”

– Ms Claudia Giacovelli, International UNIDO Coordinator for Energy and Low Carbon Programmes The GCIP programme is jointly implemented by the TIA and the United Nations Industrial Development Organization (UNIDO) and is funded by the Global Environment facility (GEF). UNIDO co-ordinates the programme in five other developing countries simultaneously: Armenia, India, Malaysia, Pakistan and Turkey.

The Global Cleantech Innovation Programme for SMEs in South Africa (GCIP-SA) is a national programme that aims to identify and foster small and medium-size enterprises that can address South Africa’s urgent energy, environmental and economic challenges. The 2014 Global Cleantech Innovation Programme for SMEs in South Africa Awards were held in Johannesburg in October this year.

Phakathi, B, 28 July 2014, Solar computer is a product of Africa. Retrieved from: http://www.bdlive.co.za/business/technology/2014/07/28/solar-computer-is-a-product-of-africa Sapa, 18 January 2014, Energy crisis saps power from South African economy - experts. Retrieved from: http://citizen.co.za/129481/energy-crisis-saps-power-south-african-economy-experts/ southafrica.cleantechopen.org

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Mercedes-Benz Trucks introduces hypoid axles on Actros MERCEDES-BENZ ACHIEVES INDUSTRY-LEADING FUEL EFFICIENCY WITH NEW HYPOID AXLES AND OFFERS TRUCKS THAT THINK FOR THEMSELVES

T

wo Mercedes-Benz Actros 6x4 truck-tractors, fitted with the latest Mercedes-Benz RT440 hypoid rear axles as standard, have achieved significant fuel savings of more than 5% in test runs in the Eastern Cape. Fuel economy in vehicles can be improved in many ways, including increasing engine efficiency, reducing aerodynamic drag, rolling friction and improving the fuel quality among other factors. Mercedes-Benz engineers have developed a new hypoid rear axle for the current Actros 2644LS/33 and Actros 2654LS/33 6x4 truck-tractors that were tested under everyday conditions along Mercedes-Benz South Africa’s (MBSA) wellknown trial routes in the Eastern Cape.

Mercedes-Benz trucks combined the OM 502LA engine with its 540hp with the RT440 hypoid rear axle in the Actros 2654LS/33 which replaces the other airsuspended 2650LS/33. It now has a 3.583 rear axle ratio.

Christo Kleynhans, Mercedes-Benz Trucks Product Manager, says: “The new RT440 hypoid rear axles make for the most fuel efficient Mercedes-Benz 6x4 truck tractors. In fact, the fuel saving achieved on the 2644LS/33 was 5.67% and on the 2654LS/33 was 5.37%.” It is an ongoing quest in which Mercedes-Benz Trucks—the first manufacturer to complete the launch of a full range of Euro VI-compliant trucks in Europe—continues to reduce fuel consumption and emissions in South Africa.

Kleynhans points out that South Africa is well-known for its unique operating conditions and the trucking environment which is spread across fleets ranging from first to third world and makes for a testing ground

suitable for a wide spectrum of applications.

“Due to the outstanding track record of the Mercedes-Benz Testing Department, it was an obvious choice to call on their expertise to perform the comparative test between the new hypoid axles and the existing hub reduction rear axles,” elaborates Kleynhans.

Independent testing along with thorough research also played a significant part in Mercedes-Benz introducing yet another innovative offering in the form of Telligent® Maintenance system, which makes it possible for the trucks to inform operators and drivers when it is time for a service.

The first truck manufacturer to introduce this product in South Africa, Mercedes-Benz Trucks is changing the maintenance and servicing mentality in the country. Moving away from pre-set service intervals, this product makes individualised service intervals possible by taking its cue from the actual wear and tear on the vehicle.

The truck is designed to monitor the condition of the engine oil, transmission oil, axle oil and other general service components such as air filters, fuel filters and brake pads, based on the operating conditions of the vehicle. This ensures optimum utilisation of operating fluids and service parts without risk to the service life or reliability of the engine and driveline. In addition, the Telligent® Maintenance system stores information about faults, but only alerts drivers if they need to take action.

Telligent® Maintenance lowers total cost of ownership The 2013 State of Logistics Survey for South Africa, published by the (Council for Scientific and Industry Research (CSIR),

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attributes increased logistics costs in the economy to be a factor of “a disproportionate growth in cost drivers—especially fuel.” Logistics costs of R393 billion in 2012 escalated to R423 billion in 2013, and were reported at R456 billion in 2014. Telligent® Maintenance tells the driver or truck owner exactly what needs to be serviced, and when. This leads to less time spent in the workshop, and more time in which the truck and driver are productive. Effective usage of the system can realise a saving of up to 14% in service costs.

Optimal results will be realised if the Telligent® Maintenance system is used in conjunction with FleetBoard, the benchmark vehicle management and tracking system provided by Mercedes-Benz South Africa.

Over an 18-month period from 2011 to 2013, FleetBoard registered a combined savings of over R6 million and uptime savings of 2 658 hours, in 658 cases.

FleetBoard provides impartial, comparable data from all vehicles of a customer’s fleet. The system provides an overview of the mileage, operational status, consumption, and deployment profiles of the drivers at one glance, including an evaluation of the overall driving styles. This enables the fleet manager to determine the causes of high consumption and promptly address them to ensure correct deployment of the trucks, thus increasing the economic efficiency of the fleet.

From an environmental point of view, the Telligent® Maintenance system also scores brownie points for the manufacturer and the truck owner. Less frequent oil and filter changes equate to less of these items contributing to pollution.

27

ADVERTORIAL

ADVERTORIAL

DAIMLER TRUCKS ENJOYS HIGHER MARKET SHARE

Mercedes-Benz Future Truck 2025 is first autonomous truck

EEV (Enhanced Environmentally Friendly Vehicle) is a classification used for engines which comply with an even more stringent exhaust emission standard than Euro V. The EEV standard reduces particulate emissions by roughly a further one-third compared to the already stringent Euro V limits. In extending its truck range in certain markets, Mercedes-Benz has gradually introduced EEV versions in certain output classes of the Mercedes-Benz Actros, Axor and Atego.

The Actros is now available in a BlueTec EEV version for the variants with 235kW (320hp) and 265 kW (360hp), thereby extending the BlueTec EEV range in the OM 501 LA engine series. As a significant product enhancement and to improve value retention even further, BlueTec EEV is included in the extended standard equipment

of the Mercedes-Benz Econic, which is frequently in service as a municipal or distribution vehicle in environmentally sensitive innercity areas.

The technology for compliance with the voluntary EEV emission standard is based on the new BlueTec 5 diesel -technology from MercedesBenz, which involves the installation of additional technological features.

In the EEV version of the OM 501 LA engine, a change to the engine’s characteristic map has led to a reduction in particulate emissions by more than 30%.

Daimler Trucks is delivering trucks with best-in-class consumption to customers around the world and is penetrating new markets in Asia and Africa. The division increased its market share in almost all of the key regions. At this year’s IAA, the Mercedes-Benz Future Truck

2025 took centre stage and put the autonomously driving truck of the future on the road today. The Future Truck 2025 will be a key element of tomorrow’s transportation system, because it will make freight transport safer and more efficient.

Daimler continues to present pioneering new safety systems such as Blind Spot Assist, which assist to significantly reduce accident figures.

In addition to the Future Truck, Daimler’s presentation at the IAA 2014 concentrated on the company’s technological leadership with regard to trucks, buses, and vans. The focus was on maximum customer dedication. In the commercial vehicle business this dedication is primarily expressed by the three letters “TCO,” which stand for “total cost of ownership.”

Whether a vehicle is from MercedesBenz trucks and buses, FUSO,

Western Star, Freightliner, or Mercedes-Benz vans, what they have in common is that they focus on minimising costs by combining the highest levels of efficiency with maximum performance.

In addition to being the efficiency champion in Europe as a result of Mercedes-Benz, Daimler Trucks also offers the new Western Star 5700 as another example of outstanding efficiency. This spectacular North American truck from one of the Daimler brands was recently presented in the US. The Western Star 5700XE consumes only slightly more fuel than the Freightliner Cascadia Evolution, which offers best-in-class fuel efficiency in North America.

As a result, in the future Daimler Trucks will be offering the two most fuel-efficient trucks on the North American market.