Green economy journal issue 19 by GreenEconomyMedia

Economy G

journal

ENVIRONMENTAL MANAGEMENT IN SMALL BUSINESSES

TRENDS HUMAN RESOURCES

Issue 19

R29.00 incl VAT

SOCIAL

CAPITAL PART FOUR OF THE SIX CAPITALS SERIES

MANUFACTURING GROWTH AND RESOURCE EFFICIENCY

RENEWABLE ENERGY THE GOOD NEWS

Johanna Baleng – Depot Manager, Mossel Bay

Pieter Buckle – Recycler, PTA

Midrand Depot

Megan Rosseau – Transporter, PE

Lebogang Selepe – Transporter, JHB

CREATING OPPORTUNITIES BY TURNING WASTE INTO WORTH

Vissershok Durban Depot

We’re in the business of positively changing lives and creating opportunities via an award-winning Waste Tyre Management Plan. By efficiently managing the process of turning waste into worth, we can aid employment, businesses, communities and the environment. Our ‘win-win’ approach has already made a difference and we look forward to the tremendous potential it has to create a sustainable future for all. For a look at our latest achievements, statistics and positive stories worth celebrating, please visit our website.

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

/wasteintoworth |

@wasteintoworth

Contents ISSUE 19, 2015

5 15

15 19 25

NEWS AND UPDATES ENVIRONMENTAL MANAGEMENT How small businesses impact value chains

HUMAN CAPITAL

SOCIAL CAPITAL

SUSTAINABILITY SPOTLIGHT

ENERGY

Managing people in the 21st Century

Networking creates value

Ohlthaver & List

Expansion and Acceleration of the Independent Power Producers Procurement Programme

ENERGY Renewable energy for Africa

28 www.alive2green.com/publications/green-economy-journal/

ADVERTORIAL

Science and Technology Driving Innovation for a Sustainable Future SAASTA AND PARTNERS AT SUSTAINABILITY WEEK 2015 Alistair Schorn The South African Agency for Science and Technology Advancement participated in the Sustainability Week 2015 as a sponsor. SAASTA is a business unit of the National Research Foundation (NRF), and is mandated to advance public awareness, appreciation and engagement of science, engineering and technology in South Africa. In responding to its mandate, SAASTA also contributes to increasing the pool of quality learners, who will become the scientists and innovators of the future. All of the NRF’s science promotion and awareness programmes, including those undertaken by SAASTA, reside under three key strategic areas, namely education, communication and awareness. These three areas operate in a highly interdependent fashion, with each enhancing the effectiveness of the other two. At Sustainbility Week 2015, the focus of SAASTA’s activities was on two particular areas – nanotechnology and hydrogen and fuel cell technologies. These technologies are considered as critical to the future development of the mining and energy sectors in South Africa. In order to showcase its efforts and current collaborations in these areas, and in line with its mandate as an educational organisation, SAASTA participated in the Sustainability Week exhibition, and in several of the event’s conferences. The objective of this participation was to provide all exhibition visitors and conference participants with insight into the advantages, benefits and challenges associated with

these emerging technologies. In addition, SAASTA’s aim was to improve public awareness of the cutting edge research and development activities taking place in South Africa, as well as to promote knowledge transfer within academic and professional circles. In its awareness initiatives in the fields of nanotechnology and hydrogen fuel cells, SAASTA collaborates extensively with research organisations, and other relevant industry bodies. Nanotechnology and Mining The specific focus of SAASTA’s activities at Sustainability Week in the field of nanotechnology was its application in the mining industry. Accordingly, the organisation facilitated a presentation to the Sustainability in Mining Seminar held on Tuesday 23 June 2015. Dr. Richard Harris of Mintek, on behalf of the national Nanotechnology Innovation Centre (NIC), made the presentation. Mintek is South Africa’s national mineral research organisation, with an established reputation as one of the world’s leading mining technology research organisations, specialising in mineral processing, extractive metallurgy and related areas. The organisation is a state-owned science council and reports to the Minister of Mineral Resources. The NIC is a national facility, established by the Department of Science and Technology (DST) at Mintek in 2007. Its activities are aimed at addressing national

priorities in the field of nanotechnology. These include transforming the South African economy from a resource-based focus to a knowledge-based. Since its inception, the NIC has established several collaborative partnerships with South African tertiary institutions, including the University of Western Cape, Rhodes University and the University of Johannesburg. Under these partnerships, current areas of research focus on the development of various nanostructured materials and nano-minerals, for application in the fields of health and mine safety. Dr. Harris’ presentation revealed a number of fascinating insights into the world of nanotechnology. The most striking of these was the fact that the global nanotechnology market is expected to grow at annual rate of 30-60% over the next five years. Another interesting aspect of the NIC’s research activities is that many of the most promising nanotechnology developments depend to a significant degree on mineral inputs such as gold, platinum group metals (PGMs) and other strategic minerals. For a number of these minerals, South Africa’s reserves are among the highest in the world (In fact, South Africa holds the world’s largest reserves of gold and the PGMs). Key areas of research Dr. Harris identified in the field of mining nanotechnology include gas conversion technology in which carbon monoxide, a gas that can be lethal in mining environments, can be converted through

www.alive2green.com/publications/green-economy-journal/

ADVERTORIAL

the application of nanotechnology alloys into carbon dioxide. The latter presents a far lower risk to miners in underground environments. Another area of research involves the use of PGM-based alloys to improve the micro-structural properties and lifespan of components used in aviation turbine engines and terrestrial gas turbines. This would result in significant reduction in fossil fuel consumption and associated greenhouse emissions. Finally, nanotechnology products hold significant potential for application in the field of biosensors and cancer theranostics (theranostics being defined as products that offer both therapeutic and diagnostic properties). This field involves the use of gold-coated iron oxide particles, which can be applied in highly targeted cancer treatments, without the negative side effects of traditional radiation therapies. Hydrogen Fuel Cells Dr. Mkhulu Mathe of the materials science and manufacturing division of the Council for Scientific and Industrial Research (CSIR) made a presentation about hydrogen fuel cells to the Sustainable Energy Seminar held on Wednesday, 24 June 2015. The CSIR is South Africa’s national research council, responsible for the promotion and execution of specific and multidisciplinary research, technological innovation and scientific and industrial development. These activities aim to improve South Africa’s international competitiveness and the quality of life for its citizens. The materials science and manufacturing division undertakes specialised research and innovation in the field of materials science. It places South Africa in a highly favourable position to add value and develop human capital in the materials manufacturing industry. A significant competitive advantage of the division arises from its comprehensive coverage of materials and manufacturing disciplines within one operating unit. This enables the CSIR to conduct effective

multi-disciplinary research and development in these fields. The division’s strategy focuses on six specific sectors – aerospace, automotive, bio-based buildings, energy, health and micro-manufacturing. It also houses a number of emerging science initiatives and industry, including the Aerospace Industry Support Initiative, Light Metals Development Network, Fibres and Textiles Industry Support Centre and the National Foundry Technology Network. Dr. Mathe’s presentation started with a quotation from the Jules Verne’s novel, The Mysterious Island. Published in 1874, this novel contains one of the first recorded suggestions for the use of water as a replacement for fossil fuels. The presentation then described the global energy transition that has taken place over the past 150 years and that is likely to take place in the future from low energy-intensity solid fuels (wood and hay) to higher energy-intensity solid fuels (coal and nuclear materials), to liquid fuels such as oil, and increasingly in the future, on to gaseous fuels such as methane and

hydrogen. Another interesting aspect of the presentation covered the levels of spending on research and development, in the area of hydrogen fuel cell technology. In this regard, and in terms of the relative size the national economy, South Africa appears to punch well above its weight. The presentation also described the role of Hydrogen South Africa, a joint initiative of the DST, CSIR, Mintek and several South African universities. The mandate of the initiative is to deliver technologies to support hydrogen production, storage and distribution infrastructure. Based on the two presentations at Sustainability Week, it is clear that in both of these fields the role of South Africa’s research institutions in developing and maintaining the country’s competitive advantage is critical. It is therefore important that ongoing public and private support be provided to SAASTA and its partner organisations, so as to maintain their world-class endeavours in these rapidly evolving technologies.

Dr. Mkhulu Mathe of the materials science and manufacturing division,CSIR at the Sustainable Energy Seminar as a speaker.

Dr. Richard Harris of Mintek, speaking in the Sustainability in Mining Seminar on behalf of the national Nanotechnology Information Centre and SAASTA.

www.alive2green.com/publications/green-economy-journal/

“S” is for sensational, seamless and stylish.

It’s not just a letter, because to Samsung, “S” signiﬁes a true leap forward in technology. Welcome to a world of a sensational SUHDTV, where you will experience a spectacular, cinema-quality viewing experience in the comfort of your home. Now, you can take home-viewing to a whole new level, with premium, Ultra High Deﬁ nition (UHD) content and a completely superior viewing experience because Samsung has made it a reality with its new SUHDTV offering. UHD TV already represents an extremely high standard of television viewing, but premium UHD takes the experience

even further and it’s sure to excite all the senses. Sensational picture, seamless interaction and stylish design are what you can expect from the all new Samsung SUHDTV. You’ll experience 64 times more colour, enhanced contrast and elevated brightness. To complement the visual experience you’ll enjoy with your SUHDTV, the curved Soundbar is a must-have. With omni-directional, crystal clear audio, you’ll really feel like your favourite superhero or rom-com queen just whispered in your ear. To get the best from your SUHDTV and curved Soundbar experience, you will need quality content to keep you on the edge of your seat! By collaborating with 20th Century Fox, Samsung has optimised content to meet premium quality SUHD standards and give you an unrivalled SUHD entertainment experience. The more time we spend at home, the more important design features become. Details like a grand Chamfer bezel add more depth to the screen, while the elegant frame makes the SUHDTV look like a piece of art when it’s wall mounted.

112662L_HLE

With the SUHDTV, curved Soundbar, top-notch entertainment and timeless design, all you have to do is stock up on popcorn, sit back and invite your friends to enjoy the magic – all in the comfort of your home.

Economy Editor’s Note G

journal

EDITOR: Lloyd Macfarlane MANAGING EDITOR: Melissa Baird LAYOUT AND DESIGN: Charlie Kershaw CLIENT LIAISON MANAGER: Eunice Visagie CLIENT LIAISON OFFICER: Lizel Olivier MARKETING MANAGER: Nabilah Hassen-Bardien PROOF READER: Diane de Kok DIRECTORS: Lloyd Macfarlane Gordon Brown Andrew Fehrsen DIVISIONAL SALES MANAGER: Annie Pieters PROJECT MANAGER: Elna Willemse PRINTING: FA Print DISTRIBUTION MANAGER: Edward Macdonald PUBLISHER: Alive2Green PHYSICAL ADDRESS: Cape Media House 28 Main Road Rondebosch 7700 Cape Town TEL: 021 447 4733 FAX: 086 694 7443 Websites: www. alive2green.com/publications/ green-economy-journal/ DISTRIBUTION AND COPY SALES ENQUIRIES: distribution@alive2green.com INTERNATIONAL FRANCHISE ENQUIRIES: info@alive2green.com ADVERTISING ENQUIRIES: sales@alive2green.com EDITORIAL PROPOSALS: melissa.baird@alive2green.com Company Registration Number: 2006/206388/23 Vat Number: 4130252432 ISSN No.: 2410-6453 Published: October 2015

Green Economy Journal is audited by ABC

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.

Goals and the new guard Goal setting is important for progress. Goals provide us with reminders and focus and they generally connect us with reality. Goals have inherent ‘drivers’ such as a sense of accomplishment when they are achieved, or a sense of duty and responsibility because we feel more accountable. A goal is, of course, only effective if it is realistically achievable. If it is not realistic or not perceived to be achievable, a goal can end up being be a negative force. So our planet has a brand spanking new set of goals – seventeen of them in fact. Global leaders (via the UN) have committed to these seventeen Sustainable Development Goals (SDGs), which are aimed at the achievement of three primary objectives, namely: to end extreme poverty; to fight inequality and injustice and to fix climate change. Laudable as these are, they are effectively a new and/ or updated set of goals that we have because we did not achieve the Millennium Development Goals (MDGs) by 2015. I’m excited about these new goals and I really like the way that they are being packaged and promoted. I am, however, frustrated that we didn’t come close to achieving our previous goals and I’d like to know more about why we (and in this context the UN) fell so short, what we did to assist and intervene in those 15 years, and whether participating countries really did feel that the goals were realistically achievable. These are questions that I am seeking answers to, and I hope that others with more influence are too. One of my personal goals while building the Green Economy Journal has been to relinquish the editorship to a more experienced successor, when the time is right. The time does feel right and I am proud to announce that Melissa Baird will be taking over as editor in the next cycle – a goal achieved! Melissa has worked extensively in media and communications, with a particular focus on environmental sustainability in the consumer and B2B sectors. She played a key role in the development of Ogilvy Earth and is the current editor for our sister publication Green Home Magazine. I am certain that she will bring a fresh and exciting approach to the Journal and I wish her every success.

Sincerely Lloyd Macfarlane

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.

www.alive2green.com/publications/green-economy-journal/

Water doesnâ&#x20AC;&#x2122;t come from a tap. Water goes on a long and complicated journey to get to you.

Visit journeyofwater.co.Za to learn more about where your water comes from. Photo ÂŠ Hougaard Malan

NEWS AND UPDATES

An R8-million, roof-mounted solar photovoltaic (PV) energy harvesting system initiative of BKBs is to supply clean energy and reduce the South African wool and mohair industry’s carbon footprint in Nelson Mandela Bay. BKB processes and exports two thirds of South Africa’s wool clip and more than 35% of the country’s mohair clip. They say the installation will harvest and then introduce solar energy into its handling and shipping facility in Port Elizabeth. The solar PV system, which covers a total surface area of 3 400 m², is located on the roof of BKB warehouse buildings which house classing, handling and pressing facilities. The rooftop solar PV installation system is another stage of a four-phase clean energy strategy. BKB’s head of corporate marketing and public relations, Jacobus le Roux, says that they “are deeply committed to becoming the country’s leading low-carbon agribusiness. BKB will systematically introduce other initiatives to introduce cleaner energy over the next fifteen years”.

Source: Media Release

The Zero Energy Table sucks, but that’s a good thing Most buildings use HVAC systems to control the temperature, but two designers from Paris have come up with an alternative. Designer Jean Sébastien Lagrange and architect engineer Raphaël Ménard wanted to see if it would be possible to “address climate and energy issues on a furniture scale”. The Zero Energy Table behaves like a thermal sponge, soaking up and releasing heat as the temperature of the room changes. The phase-changing material component of the table softens if the room is at a temperature over 21°C, absorbing heat from its surroundings. Below 21°, the material hardens and releases its heat back into the room. According to the designers, the table can reduce the energy consumed by air conditioning a small conference room by around 30%. Instead of leaving the heat on after office hours, a building could, potentially, use heat stored during the day to maintain its temperature at night.

Source: www.wired.com. Liz Stinson

China’s CO2 emissions appear to be falling According to the Greenpeace Energy Desk, from reports based on official data from China, carbon emissions may have fallen by 5% for the first four months of this year. Critics suggest the data should be viewed with scepticism and the drop may not be an indicator of long-term change. They also point out that the drop in emissions could be attributed to the slowing of the Chinese economy. However, China has taken a rather swift response to climate change, reducing its coal output by 7% since last year and committing to the China US climate pact that will see the development of clean technology and a lower carbon future. Greenpeace suggests that a 5% drop for China would be equivalent to the UK’s entire emissions output so hopefully the world’s largest carbon emitter is heading towards low carbon economic growth and long lasting environmental protection.

Source: www.treehugger.com, Sami Grover

www.alive2green.com/publications/green-economy-journal/

VW emissions test ‘defeat device’ As early as 2011 a VW employee raises alarms that software supplied by Bosch and being installed in VW cars might infringe legislation. The software in question deactivates pollution controls during normal driving, and reactivates them when it detects that the vehicle is on rollers - the conditions under which emissions tests are performed. Independent tests conducted by the University of West Virginia indicate that cars fitted with the software emit as much as 40 times more nitrogen oxide than the legal limit. In September this year, after initially attempting to explain away the issue by alluding to technical differences, Volkswagen admits to deliberately installing the software in its cars. VW issued a statement and the CEO said he was “deeply sorry” for having “broken the trust of our customers and the public”. He vowed that VW will “cooperate fully” with the authorities and “will do everything to re-establish” that trust. Now VW is back in the hot seat for failing to disclosing its auxiliary emissions control device designed into 2016 vehicles that would also potentially help defeat government tests by enabling exhaust systems run cleaner under test conditions. This software accelerates the heating up of a pollutioncontrol catalyst thus artificially improving the performance of the device that separates smog-causing nitrogen oxide into nitrogen and oxygen gases. Volkswagen confirmed that this device operates differently from the ‘defeat’ software included in the company’s 2009 to 2015 models and revealed last month. Meanwhile VW sales of 2016 vehicles has been placed on hold pending further investigation by US authorities. VW already faces criminal charges in the EU and the US and up to $18bn in potential fines over affected cars sold to date in the US alone.

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 NEWSAND ANDUPDATES UPDATES

Better Barley, Better Beer in the North West

South Africa’s first socio-economic impact certification

The South African Breweries (SAB) has launched a sustainable agriculture programme in the North West province city of Taung, assisting emerging barley farmers to run economically viable entities. At least 102 emerging farmers, over a total of 1 115 hectares of irrigated land, will participate in the Better Barley, Better Beer programme which, in partnership with the World Wildlife Fund for Nature of South Africa (WWF-SA), encourages and supports sustainable farming practices among South African barley farmers. Taung farmers provide SAB with around 7% of the total irrigated barley crop produced. In addition, they provide SAB with 10 000 tons of maize or 6% of the company’s maize requirement. SAB has had a close working relationship with Taung farmers since the establishment of the Taung Barley Farmers programme in 1994. The programme is aimed at encouraging local barley production, creating a broad-based supply chain for SAB and a reliable source of income for smallholder farmers. The initiative has grown to support more than 102 smallholding barley farmers.

The Karl Bremer office block in Bellville, Cape Town, is the first project to achieve a Socio-Economic Category (SEC) Pilot rating in Africa, from the Green Building Council of South Africa (GBCSA), as part of its 5-Star Green Star SA rating that was awarded at the same time. The office block is a project of the Western Cape Department of Transport and Public Works. The socio-economic category pilot is a world-first for rating tools. The GBCSA has taken the lead in developing a set of socio-economic criteria for green building rating tools. Simultaneously it has developed an international socio-economic framework for the World Green Building Council, which can be used by other green building councils to apply to their rating tools. Brian Wilkinson, CEO of GBCSA, said: “Our property sector is truly becoming a growing force for good in South Africa, not only for the environment but also for people and business too. Societal challenges such as poverty, unemployment, lack of education and skills, and health can all be addressed, at least to some degree, through the way we design, build and operate buildings.”

Source: www.mediaupdate.co.za

Source: www.eprop.co.za

Landmark ruling orders Dutch government to cut carbon emissions A court in The Hague has ordered the Dutch government to cut its carbon emissions by at least 25% within five years. In what was the first climate liability suit brought under human rights and tort law (a civil wrong that unfairly causes someone else to suffer loss or harm) Judge Hans Hofhuis told the court that the threat posed by global warming was severe and acknowledged by the Dutch government in international pacts. “The state should not hide behind the argument that the solution to the global climate problem does not depend solely on Dutch efforts,” the judge’s ruling said. “Any reduction of emissions contributes to the prevention of dangerous climate change and as a developed country the ”Netherlands should take the lead in this.” This has set a precedent for other class action suits and activists in Pakistan plan a similar action against their government.

Source: www.theguardian.com. Arthur Nelson

College community challenge into Africa keeps growing The Ford Motor Company Fund is expanding the Ford College Community Challenge (C3) to Africa, offering universities in Ghana, Kenya, Morocco and South Africa the innovative global programme that empowers students to improve their communities through sustainability projects. Over the past eight years, the fund has provided more than $1.7 million to student teams awarded Ford C3 grants. In 2014, the C3 programme expanded internationally for the first time, partnering with global NGO, Enactus, to include communities in Brazil and China. Ford Fund invests more than $8 million a year in education initiatives, one-third of its annual financial support. As part of the C3 programme, university students are required to take the leadership role in all aspects of their project, from design to implementation. Project scope is virtually unlimited, and innovation and creativity are actively encouraged. Potential areas of focus include alternative energy, environmental sustainability, agriculture, mobility, water conservation or economic development.

Source: www.businesswire.com

www.alive2green.com/publications/green-economy-journal/

ADVERTORIAL

EWSETA and SANACO address South Africa’s skilled artisan shortage LEARNING THE SKILLS THEY NEED TO SUCCEED Electrical Engineering graduates are taking their first steps towards addressing the critical shortage of artisans across South Africa. Successful completion of an Electrical Engineering learnership programme, made possible by a partnership between the Energy and Water Sector Education and Training Authority (EWSETA) and the South African National Apex Cooperatives (SANACO), has learners primed to learn some serious skills in the electrical trade. In 2012, the EWSETA entered into a training agreement with SANACO, starting a learning programme that saw

175 cooperative beneficiaries from across the country being trained on a NQF Level 1 Basic Electrical Engineering learnership (General Education Training Certificate or GETC). This programme aimed to address the skills shortage in the sector by: • Driving skills delivery in the energy sector • Facilitating the increase of artisan skills capacity within the energy sector • Capacitation of beneficiaries with basic knowledge and skills in electrical trade thus enabling them to continue towards qualifying as artisans

• Support of National Skills Development Strategy (NSDS) III Goal 4.2: Increasing access to occupationally-directed programmes • Support of NSDS III Goal 4.6: Encouraging and supporting cooperatives, small enterprises, workerinitiated, NGO and community training initiatives On the successful completion of this programme in 2014, EWSETA and SANACO acknowledged the importance of developing the skills of this cohort of learners beyond just an entry level qualification, thus, a

Errol Gradwell, CEO of EWSETA

www.alive2green.com/publications/green-economy-journal/

ADVERTORIAL

second phase project was approved and funded by EWSETA, which sees these very same learners enrolled on a NQF Level 2 Electrical Engineering learnership. This project provides an acceptable exit plan for learners who might be struggling with traditional schooling for a variety of reasons, but also addresses the career advancement of these beneficiaries in electrical trade; providing them with greater employment opportunities. “This project highlights the potential of the role of cooperative support in the building of the economy and is closely aligned to the sector skills plan of the EWSETA, assisting in meeting the national government’s imperatives and contributing to the call of government to strengthen support towards the informal sector and in particular cooperatives” – Errol Gradwell, CEO of EWSETA The EWSETA is one of 21 relicensed SETAs mandated to balance demand and supply with education and training that acknowledges and enhances the skills of the current workforce and ensures that new labour market entrants are adequately trained. The EWSETA is responsible for identifying skills needs, including scarce and critical skills in the energy and water services sector, and is committed to developing education and training programmes to address those needs. The training programme addresses two of the eight goals of the National Skills Development Strategy III (NSDS III). Goal 4.2: Increasing access to occupationally-directed programmes This Goal specifically addresses the fact that the pool of intermediate skills, especially artisans, in SA is just too low to achieve the economic growth envisioned by Government. In addition, DHET’s “Decade of the Artisan” was launched in direct response to The National Development Plan which now requires that that by 2026 the country should be producing 30 000 qualified artisans per year. Currently, South Africa is producing approximately 13 000 qualified artisans per year, which means that the number has to drastically increase over the next eleven years. Goal 4.6: Encouraging and supporting cooperatives, small enterprises, workerinitiated, NGO and community training initiatives For South Africa to address past inequities and to reform the socio-economic landscape of this country, it is imperative for the informal sector of the economy to be supported to create opportunities for the communities they serve. On 3 August 2015, at the Birchwood Hotel & OR Tambo Conference Centre in Gauteng, programme learners graduated from the

GETC and began their journey to the next level of their career advancement towards the National Certificate. There were many in attendance to support the development of individuals for the benefit of the nation. “In addition to the benefits to the community, this is a very important initiative for EWSETA towards responding

www.alive2green.com/publications/green-economy-journal/

to our sustainable socio-economic development plan for the informal sector, which includes support for cooperatives, SMMEs, trade unions, NGOs and community-based organisations active in the energy and water services sector with a focus on rural and township areas.” – Errol Gradwell

ENVIRONMENTAL RESPONSIBILITY

Environmental Management in Small Business VALUE CHAINS NEED ALL PLAYERS TO UNDERSTAND THEIR ROLE IN DRIVING A TRULY GREEN ECONOMY

By Carla Higgs

www.alive2green.com/publications/green-economy-journal/

ENVIRONMENTAL RESPONSIBILITY

The existing research on environmental management and the impact of small business on their resources is largely unknown. This is particularly evident and problematic in the South African context where a mere handful of studies have found that environmental awareness levels among small businesses are low, and that there is a general problem of non-compliance with environmental legislation. These South African businesses require particular scrutiny, due to their economic and job creation significance and potential role in sustainable development. Indeed, government are actively promoting the emerging business sector as its development is critical for job creation, equity and access to markets. The green economy too, heralds job creation through small business development in the fields of renewable energy, energy efficiency, waste management and biofuel (to name a few). The waste sector presents a noteworthy case in this regard. The Waste Act provides for the introduction of extended producer responsibility (EPR) as a regulatory mechanism to bring about waste reduction through the minimisation, reuse and recycling of waste. In principle EPR assigns the manufacturer of the product the responsibility for its product through the productâ&#x20AC;&#x2122;s lifecycle, to the post-consumer stage. Concomitantly, it is envisaged that the waste sector will contribute to the green economy through the creation and participation of small enterprises in waste beneficiation and management activities such as the recycling of post-consumer plastic and the extraction of re-usable resources from industrial waste streams. In a green economy that promotes the development of small business for the provision of sustainable services and products, there is a need to identify the potential environmental consequences of them and understand how environmental responsibility is practised on a day-to-day level. In the waste sector (one that has been identified for development) such information could lead to greater understanding of the role that these businesses play in waste management and recycling and from a

www.alive2green.com/publications/green-economy-journal/

broader perspective how this can, in turn, contribute to the environmental responsibility of the waste sector value chains. With this in mind a study was undertaken to explore these impacts. The study found that there is a trend of outsourcing waste management and recycling activities among organisations. Typically larger waste management companies outsources their recycling function to sub-contractors and these are largely informal in nature. This reliance on numerous contractors, with no code of engagement, has implications for environmental responsibility within the waste value chain and it cannot be discounted. The cumulative impact of these arrangements can either improve or harm environmental performance of the waste sector overall. The study sampled a number of small businesses in the waste value chain, of which 26% were ISO 14001 certified and exhibited a commitment to, understanding of, and practiced environmental management. However, the majority of the small businesses sampled (73%) demonstrated a lack of environmental awareness (particularly in relation to environmental legislation) and had not considered the impact of their activities on the environment and did not have any plans to engage in environmentally responsible activities. Their understanding of environmental responsibility was rudimentary and there was a trend of associating their business activities, the collection and/or recycling of waste, or the manufacture of products produced from recycled waste, as environmentally preferable to sending waste to landfill or using virgin materials, to mean they are environmentally responsible. Environmental impacts such as pollution control and air emissions, employee health and safety, the handling of hazardous material and compliance with environmental and waste management legislation had not been considered (and were poorly understood). The formerly mentioned â&#x20AC;&#x2DC;environmentally responsibleâ&#x20AC;&#x2122; businesses were responsible

ENVIRONMENTAL RESPONSIBILITY

for hazardous waste recovery and noted that their operations are required to comply with waste management legislation and that this was an important driver for their uptake of environmentally responsible practices. Indeed, these small businesses are subject to more stringent legal requirements than their non-environmentally certified counterparts. The key influence, however, was external pressure being asserted by customers, in this case the waste management companies to whom they contract, to make environmental improvements suggesting that in addition to legislative pressure, an important a driver for the uptake of environmental responsibility is supply chain pressure. A notable finding of the study is the uptake of social responsibility by small businesses. They are familiar with term ‘social responsibility’ and generally understood the concept to mean

• • • • • • • •

supporting non-profit organisations, which all (100%) of the businesses surveyed did. This was attributed to supply chain pressure to comply with Broad Based Black Economic Empowerment (B-BBEE) requirements. These businesses can improve their score through monetary and non-monetary contributions to charitable organisations which may explain the predominance of donations to non-profit organisations. Contradictory evidence from this study suggests that small businesses are not responding to legislative or supply chain pressure to practice environmental responsibility and are not responding to environmental legislative requirements; 73% of the small businesses sampled did participate in environmentally responsible activities. However, small businesses do in fact respond to legislative and supply chain

pressure, as they are responding to B-BBEE requirements within the supply chain (100% of small businesses participated in social responsibility activities) however, pressure relating to environmental responsibility is generally not translating down the supply chain. This implies that larger businesses play a key role in the environmental responsibility of their supply chain. It also suggests that from a legislative perspective, if environmental legislation were structured in such a manner as to have a ‘knock-on’ effect throughout the business supply chain, this could be an effective means of driving behaviour change. Fundamentally, this study highlights the role that larger businesses must play in the environmental and social responsibility of their supply chains to enable the swifter transition to a truly green economy supported by all business – no matter their size.

References: Blignaut JN, Demana T. Does it Profit SMEs to Care about the Environment? Trade and Industrial Policy Strategies (TIPS) 2002 Annual Forum at Glenburn Lodge, Muldersdrift. Coleman A. Small Business Management. A case study from the Western Cape automotive sector. 1997. Chapter 6, Pp 145-175. In: Bethlehem, L and Goldblatt M (editors). The Bottom Line. Industry and the Environment in South Africa. University of Cape Town Press, Rondebosch. Dzansi DY. Social responsibility of small businesses in a typical rural African setting: Some insights from a South African study. African Journal of Business Management. 2011;5(14):5710-5723. Dzansi DY, Pretorius M. The development and structural confirmation of an instrument for measuring the social responsibility of small and micro businesses in the African context. Social Responsibility Journal. 2009b;5(4):450-463. Ladzani MW, Seeletse SM. 2012. Business social responsibility: How are SMEs doing in Gauteng, South Africa? Social Responsibility Journal. 2012;8(1):87-99. Viviers S. Going green: An SME perspective. South African Journal of Entrepreneurship and Small Business Management. 2009;2(1):30-49. The National Environmental Management: Waste Act 2008 (Act 59 of 2008)

www.alive2green.com/publications/green-economy-journal/

ADVERTORIAL

Bringing the economy full circle By: Hermann Erdmann, CEO REDISA (Recycling and Economic Development Initiative of South Africa)

The world faces many major challenges including climate change, slow economic growth and a disproportionate reliance on mineral resources, but recent research shows that adopting circular economies could provide answers for many of these global problems. The Obama administration revealed in June that the failure to act on climate change could cause an estimated 57 000 deaths a year in the United States from poor air quality by 2100. According to the European Union the air quality in Witbank is among the worlds dirtiest – even when compared to the likes of Beijing, where people wear facemasks to protect themselves from air pollution. It is no coincidence that the Witbank region is also home to 11 coal-fired power stations. A twelfth one is currently being built and when completed, will be one of the world’s largest, burning 17-million tonnes of coal a year. We are creating an environmental debt that our children, and grandchildren, will need to pay. In the same way you wouldn’t buy a car and expect your children, or grandchildren, to finance it – this debt isn’t fair. But the question remains, what can we do about it? The recently released international study developed by the Ellen MacArthur Foundation, the McKinsey Center for Business and Environment, and SUN (Stiftungsfonds für Umweltökonomie und Nachhaltigkeit) has shown: “Europe’s economy remains very resource-dependent proponents of a circular economy argue

that it offers Europe a major opportunity to increase resource productivity, decrease resource dependence and waste and increase employment and growth”. This situation is not dissimilar to the challenges facing the South African (SA) market, but what’s interesting is that the European market has something to learn from us. Positively, to reduce the pressure on our resources, SA has already implemented a circular economy within the tyre industry – which has become an internationally recognised case study as to how successful this approach can be. As a result of the implementation of the ‘Waste into Worth’ concept for tyre waste, the European Union has appointed REDISA to serve on the advisory committee on Circular Economies to the EU parliament. Moving away from resource-dependency For example, in cement kilns waste tyres can be substituted for up to 20% of current coal usage. This equals reduced reliance on coal, less demand for mining coal, fewer carbon emissions (in a correct, controlled environment tyres burn cleaner than coal) and ultimately cost savings for the cement companies, that are passed onto the consumer. PPC De Hoek, Natal Portland Cement, AfriSam and La Farge are already doing this and realising the benefits. But what about increasing employment and growth? The report reveals that in Europe, the circular economy could create between 200 000 - 500 000 jobs; reduce unemployment by 50 000

www.alive2green.com/publications/green-economy-journal/

- 100 000 and offset 7 - 22% of the expected decline in skilled employment by 2022. In SA, the tyre industry was selected as a pilot project for circular economy development since the mapping of collection points are known – this is because tyres are exchanged at dealerships and not at homes. The Integrated Industry Waste Tyre Management Plan was developed to fulfil a mandate of job creation and to bring order to SA’s recycling of tyres, a market that only processed 10 000 tonnes of tyres each year of the 240 000 tonnes sold. In two years, this project has resulted in more than 2 000 new jobs being developed, and over 190 SMME’s developed and supported – tangible proof that where some see waste, others see opportunity. The way forward True sustainability means balancing economic growth, infrastructure development and creating small business and job opportunities – while lowering our emissions and overall impact on the environment. The challenge is that generally, big business struggles to find a balance between reducing carbon emissions and protecting the environment, while driving a positive impact on the bottom line of the business. While interest in the circular economy approach is growing, it is happening at a slow pace. If it is to become more widespread, we must consider all industries to see how, through innovation and cooperation, we can double our efforts.

HUMAN CAPITAL

Managing people in the 21st Century By Christine King

business strategies to drive growth, where HR is considered the developer of talent and leadership across the business, and where business leaders respect and admire the HR professionals as co-leaders of the business.”

Human capital is everything to do with people. The skills, knowledge, personality and habits of a person all contribute to how they do their work and provide clues as to how their performance can be enhanced through knowledgeable management. The Deloitte University Press regularly assess human capital management methodology from around the world in order to get a sense of how human value is being managed and what it means for business. In their recent study about human capital trends they found some interesting trends emerging. Deloitte identified four major themes for 2015 and ten issues of importance:

to build a corporate learning experience that touches every employee in a significant way.”

Workforce on demand “It is time for HR to take ownership and share the management responsibilities for on-demand workers – and not to leave it to the procurement department alone.”

People data everywhere “This year, organisations should upgrade their focus on the use of external data within HR, as it has become a fast-growing part of the HR analytics strategy.”

Leadership “Companies that fail to invest continuously in the leaders of tomorrow may find themselves falling behind their competitors.”

Performance management “The days of traditional appraisals and forced ranking are coming to an end; performance management is now a tool for greater employee engagement.”

Reimagining - Simplification of work “Business and HR leaders should put ‘simplification’ on the agenda for 2015 and focus on individual, organisational, and workspecific programmes that reduce complexity and help people focus on what really matters.”

Learning and development “As the corporate learning market undergoes a digital transformation, this is the year to assess your current learning environment and implement a new vision

Engaging Culture and engagement “By focusing on driving engagement through the right corporate culture, companies can improve execution, retention, and financial performance.”

Reinventing Reinventing HR “Imagine an organisation where business leaders look to HR for advice as they develop

www.alive2green.com/publications/green-economy-journal/

HR and people analytics “Companies that excel in talent and HR analytics can be positioned to out-compete and outperform their peers in the coming years.”

Machines as talent “Business and HR leaders should look beyond the alarmist hype of predictions

HUMAN CAPITAL

that employees are doomed to be replaced by thinking machines and advanced robotics. HR’s role is to focus on the opportunities cognitive technologies offer through collaboration between people and machines to make companies more efficient, productive and profitable, and jobs more meaningful and engaging.” According to Deloitte, the number one issue for South African companies in 2015 is leadership, followed closely by culture and engagement with learning and development coming in a close third in the order of importance. Globally, the top two are swapped with culture and engagement taking the lead. This means that, around the world, business and HR leaders understand the importance of gaining insight into their organisation’s culture; recognising the benefit of re-examining every HR and talent programme as a way to better engage and empower people. Building leadership also remains part of management’s goals. However, according to Deloitte, recognising an issue and making changes to address it are two very different things. Despite this level of recognition, Deloitte found that organisations have made little or no progress since last year. Combating the capability gap Leadership This issue comes up every year at the top of Deloitte’s Human Capital surveys; 2015 is the third year in a row that it has been featured as the most important human capital issue for business. Deloitte suggests three problems that may be holding organisations back from effective leadership capability: Employees from top to bottom do not feel that they are being provided with quality

development options with some higher up executives feeling they received no development at all. Development is being viewed by many organisations as short-term, episodic events, not occurring regularly from one year to the next. Many treat development as a luxury expense for when the business is doing well. Many organisations do not have a strategic succession plan for their leaders and, therefore, the identification and development of future leaders is severely lacking. Close the gap Deloitte suggests that new, data-driven tools may be the answer, offering innovative approaches to accelerating leadership in an organisation. Leadership qualities can now be better assessed by understanding the career patterns of successful leaders and figuring out what kind of development works best. Through the use of talent movement data and people analytics, companies can now figure out which job experiences and backgrounds produce the most effective leaders; helping them to identify people in their own organisations that would be the most appropriate for leadership development. According to Deloitte, long-term commitment depends on having those at the top involved and engaging the CEO will make success at leadership development more likely. Leadership should also be developed at all levels of the business; those mid- and firstlevel leaders are the company’s future of leadership and strategy, so it makes sense to invest in their potential. Culture and engagement In this digital era of social media and sharing, the culture of organisations is becoming increasingly visible to the world. With the world watching, the work

culture of an organisation can be used to create competitive value or cause a PR headache. With nowhere to hide, culture and engagement has become a priority issue for business, doubling in importance since last year’s Deloitte survey. The 2015 data suggests four reasons why culture and engagement has come to the fore so suddenly: With new technologies and improvements in the job market, employees now have more power in deciding where they want to work, and social media sites allow potential employees to do work-culture reconnaissance before deciding to join an organisation. Many organisations cannot define their culture or don’t know how to spread it through the company. With developments in technology, employees are often continuously connected to their jobs and able to work at all hours and with many teams around the world simultaneously. Because of this, flexibility, empowerment, development and mobility all play a role in defining a company’s culture. Today’s employees are motivated by work passion and require work-life integration rather than fulfilment of career goals. This means workers, in general, require a compelling and enjoyable work environment in order to do their best at their job. Close the gap Deloitte suggests new tools can provide organisations with real-time employee sentiment feedback through pulse surveys, employee sentiment management, culture assessment and employee monitoring. The need to treat employees as if they were customers requires that their sentiment be monitored with the same level of interest. Competition and pressure used to work for business but this method of employee

www.alive2green.com/publications/green-economy-journal/

HUMAN CAPITAL

management is only leading to higher employee turnover and poorer business results. Modern employees work well when the impact of performance management, work-life balance and flexibility on engagement are acknowledged. This means making employee engagement a top priority. Monitoring how employees feel, in real time, about the company is also important to understanding where the business is strong and where it is weak. Meaningful work makes employees happier and improves retention. This can be addressed through leadership, coaching and performance management, but organisations need to be sure to teach their leaders how to provide authentic and transparent feedback. The 24/7, always at work, phenomenon also needs to be addressed by reducing the burden of work; increased connection to the job tends to result in burnt-out employees. Lastly, Deloitte suggests listening to the wants and needs of the ‘millennials’, people born between the 1980s and early 2000s, as it is their values that will be shaping the organisation’s culture over the coming decade. Key outcomes for human capital in 2015 “’Softer areas such as culture and engagement, leadership, and development have become urgent priorities.” Skills are becoming more specialised as the economy grows, increasing the competition for talent. This is what has driven culture and engagement, leadership, and development to the top of the human capital agenda. According to the report this is the first time culture and engagement has been viewed as the most important challenge overall. The proportion of respondents citing culture and engagement as a “very important” issue almost doubled this year, from 26% to 50%. This means almost two-thirds of HR respondents are looking at ways to update or revamp their entire strategy to measure, manage, and improve employee engagement. “Every programme in HR must address issues of culture and engagement: how we lead, how we manage, how we develop, and how we inspire people. Without strong engagement and a positive, meaningful work

• • • •

environment, people will disengage and look elsewhere for work.” “Leadership and learning have dramatically increased in importance, but the capability gap is widening.” Deloitte sees companies accelerating demand for leadership at all levels, especially among ‘millennials’, as the economy recovers. This may be one reason that the proportion of respondents rating leadership as “very important” rose by 32% over last year. However, improvements are not coming fast enough as the capability gap in this area is widening. Learning and development showed a similar pattern. According to the report, on average, respondents’ ratings of the importance of this issue quadrupled this year over last year’s ratings as “companies are struggling to redesign the training environment,

“THE CAPABILITY GAP FOR BUILDING GREAT LEADERS HAS WIDENED IN EVERY REGION OF THE WORLD” incorporate new learning technologies, and utilise the incredible array of digital learning tools now available”. “HR organisations and HR skills are not keeping up with business needs.” Human Resource organisations rated their teams the equivalent of a C-minus (an average of 1.65 on a five-point scale), showing almost no improvement over last year’s ratings. Business leaders rated HR even lower. According to the report only 5% of the HR leaders surveyed this year believe their organisation’s talent and HR programmes are “excellent” and only 34% rate them as “good”. The rest, nearly two out of three, believe their HR solutions are barely adequate or falling behind. “The silver lining is that, while the average HR scorecard has barely improved in the past year, organisations whose HR functions have made strides are reaping significant benefits across the spectrum of talent issues.” “HR technology systems are a growing market, but their promise may be largely unfulfilled.”

According to Deloitte, HR spending grew by 4% in 2014 over 2013, with much of this growth dedicated to technology. However, they suggest this is not resulting in improved outcomes. The report shows widening capability gaps in areas such as learning and development, engagement and culture, and leadership, suggesting that the heavy increase in spending on technology has not been accompanied by similar investments in process and people. “The lesson is not to stop spending on technology, but to make sure complementary investments are made in programmes that redesign processes, develop new learning content and programmes, and train both leaders and the HR team.” “Talent and people analytics are a high priority and a tremendous opportunity, but progress is slow.” Analytics was on the agenda of almost every HR team Deloitte’s surveyed, with three in four respondents rating it as “important” or “very important”. But, despite this interest, the report shows only a small improvement in analytics capabilities. These findings suggest that new vendor tools have hit the market, but teams are still not fully enabled, trained, or organised to succeed. Companies that take the time and make the investment to build human analytics capabilities will likely outperform their competitors significantly in the coming years. “Simplification is an emerging theme; HR is part of the problem.” There is a potential revolution in the way companies organise and operate, built around the imperative to radically simplify work environments, practices, and processes. According to this year’s survey, 71% of companies rated work simplification as an “important” or “very important” issue, and 74% believe their work environment is “very complex” or “complex”. More than half have programmes to simplify work to drive productivity gains and relieve unnecessary and counterproductive pressures on employees. “Companies are starting to phase out traditional performance management processes, notorious for their burdensome nature, in favour of more streamlined approaches.”

References: Deloitte University Press, 2015. Global Human Capital Trends 2015: Leading in the new world of work. Retrieved from: http://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html This article is a summary of the report. Data from South Africa made up 5% of the survey, with 11% coming from Africa in general.

www.alive2green.com/publications/green-economy-journal/

SOCIAL CAPITAL

Networks, trust and cooperation in action For many companies (and other reporting entities), the practice of considering and reporting on various forms of capital applied in their activities, can prove particularly valuable in defining and quantifying the value that they attempt to create for their owners or shareholders, as well as for other stakeholders such as employees, customers, suppliers and society in general. Following investigations into the nature of financial, manufactured and natural capital, the concept of social capital bears further examination. The term ‘social capital’ is first thought to have come into occasional use from approximately 1890, but it became more commonly used from the late 1990s. In a 1916 work on the value of community engagement in the oversight of schools, author LJ Hanifan referred to social capital as “those tangible assets [that] count for most in the daily lives of people: namely goodwill, fellowship, sympathy, and social intercourse among the individuals and families who make up a social unit”. The central premise of the concept of social capital is that social networks have value. Accordingly, a further definition of social capital refers to the collective value of all “social networks” [who people know] and the inclinations that arise from these networks to do things for each other [“norms of reciprocity”]. The term, of course, emphasises not only feelings of cooperation and mutual support, but also a variety of specific benefits arising from the trust, reciprocity, information flow and cooperation associated with social networks. Commonly cited examples of social capital include informal neighbourhood watch activities, or trading activities conducted within particular communities, based on high levels of mutual trust. A further definition of social capital is that of the Organisation for Economic Cooperation and Development (OECD), which defines the concept as “networks together with shared norms, values and

understandings that facilitate co-operation within or among groups”. In this definition, networks can be considered as real-world links between groups or individuals, while shared norms, values and understandings might describe society’s unspoken and largely unquestioned rules. According to the OECD, social capital can be considered as occurring in three principal forms: • Bonds: Links between individuals based on a sense of common identity – including family, close friends and people who share common cultural characteristics; • Bridges: Links that stretch beyond a shared sense of identity, for example between distant friends, colleagues and associates; • Linkages: Links to individuals or groups that are further removed, based on common interest; examples include associations on the basis of political affiliation, or membership of social or sporting clubs. At a regional or national level, social capital might be considered as the institutions and infrastructure that support communities and societies in their interactions. These might include

By Alistair Schorn

voluntary institutions (such as industry associations) or regulatory bodies (Chapter Nine bodies created by the South African Constitution come to mind) and publicly funded infrastructure that operates for the common benefit of all members of society. One of the most seminal publications on the subject of social capital is Robert Putnam’s bestseller, Bowling Alone: The Collapse and Revival of American Community. Published in 2000, the book argues that while societies have become wealthier, their sense of community has withered. Because individuals spend more time working, commuting and engaging in social media activities, their participation in community activities and organisations as well as their levels of personal engagement with neighbours, friends and even family members, declines accordingly. To illustrate this decline, Putnam examines the American phenomenon of 10-pin bowling. He finds that although bowling continues to grow in terms of participation, individuals no longer compete against each other in once-popular local leagues; instead they are literally bowling

www.alive2green.com/publications/green-economy-journal/

SOCIAL CAPITAL

alone. Putnam argues that the decline of the community networks that once led Americans to bowl together represents a loss of social capital. Over the past 15 years, this view of social capital and its decline has naturally attracted a significant degree of criticism. One opposing view that is commonly expressed, is that in an age of rapidly increasing access to digital communication and the widespread use of social media platforms, social capital and social engagement is evolving rather than eroding: rather than joining neighbourhood bowling leagues, individuals make use of social media to join groups corresponding with their own beliefs regarding more global issues such as climate change, environmental protection or poverty alleviation. Interestingly, it appears to be increasingly common that the organisations involved in addressing these issues, as well as the networks of individuals that support them, to a large extent exist virtually rather than physically, as has traditionally been the case. As is the case for almost any form of capital, social capital can be applied in a manner that is harmful rather than beneficial to certain individuals. Examples include the links, trust relationships and codes of behaviour that govern certain criminal enterprises. Similarly, event legitimate organisations such as companies can fall victim to negative forms of social capital – for example, relationships between colleagues that are overly inwardly focused, and that fail to consider real-world issues and developments, might well lead to unethical behaviour or a disregard for corporate governance norms and standards. Conversely of course, social capital can also prove particularly beneficial to businesses – in Bowling Alone, Putnam speculates that the successes achieved by various companies located in Silicon Valley in California, arose in no small measure as a result of formal and informal co-operation between these companies, particularly in the early years of their existence. Returning to a reporting context, the International <IR> Framework defines social

• • • • • • •

and relationship capital as “the institutions and the relationships within and between communities, groups of stakeholders and other networks, and the ability to share information to enhance individual and collective well-being”. As part of this definition, social and relationship capital includes: • shared norms, and common values and behaviours; • key stakeholder relationships, and the trust and willingness to engage that an organisation has developed and strives to build and protect with external stakeholders; • intangibles associated with the brand and reputation that an organisation has developed, and • an organisation’s social license to operate. In a South African context, one of the most relevant and widely discussed elements of this definition is that of an organisation’s social license to operate. The concept of a social license to operate is one that is extremely familiar to South African companies, particularly in light of the country’s socio-political history. It is also particularly relevant to those companies and industries that hold significant potential for negative social (and environmental) impacts, such as mining. The term ‘social license to operate’ appears to have been initially coined by Canadian mining executive Jim Cooney. It refers to the level of acceptance or approval on the part of local communities and other stakeholders regarding the activities and operations of companies (or other legal entities). Its basis stems from the fact that increasingly, companies require not only regulatory approval for their activities, but also support from local communities and other stakeholders in areas in which they operate. In this regard, the ongoing challenge for companies is that unlike regulatory approval, a social licence is a subjective concept, with no issuing agency and with widely differing

conditions and implications, even for companies operating in the same industry. Its existence is ultimately dependent on the perceptions held of an organisation by its key stakeholders. Since a social license cannot be selfawarded, it implies that a company should invest sufficient time and resources in gaining the trust and, where possible, collaboration of its stakeholders. It is also impossible for companies to determine for themselves the optimal levels of social or environmental risk mitigation activities in which they should engage – this process requires the in-depth involvement, and by extension the trust of, various stakeholder groups. By its nature, a social license to operate can be lost far more easily than it can be gained. Globally, a number of instances exist in which social licenses have been lost, including the operations of Shell in the Niger Delta in Nigeria and BP in the Gulf of Mexico following the Deepwater Horizon oil spill in 2010. In South Africa, various events that have occurred in the platinum industry over the past several years can offer meaningful insights into the establishment, retention and threats to a company’s social license to operate. An in-depth discussion of this issue could occupy several pages, but suffice to say that the industry can be considered as possessing both highly positive and highly negative examples of company actions related to their social license to operate. Given the continued growth of integrated reporting and integrated thinking, and the increased level of sophistication with which this process is undertaken, it appears likely that both the understanding of, and value attached to the concepts of social capital and the social license to operate, will continue to increase. It is also to be hoped that this process will result in increased levels of social awareness, and of socially and environmentally responsible behaviour on the part of companies and other reporting entities.

The article above covers the fourth of six forms of capital identified by the Six Capitals Model of the Integrated Reporting Framework (IR Framework) as promoted by the International Integrated Reporting Council (IIRC). Hanifan, L J (1916) The rural school community center. Annals of the American Academy of Political and Social Science 67:130-138. Harvard Kennedy School. (2015). About Social Capital. Retrieved from “http://www.hks.harvard.edu/programs/saguaro/about-social-capital”http://www.hks.harvard.edu/programs/ saguaro/about-social-capital Organisation for Economic Cooperation and Development. (2007). OECD Insights: Human Capital. Retrieved from : “http://www.oecd.org/insights/humancapital”www.oecd.org/ insights/humancapital Putnam, Robert. (2000). Bowling Alone: The Collapse and Revival of American Community. Simon and Schuster International Integrated Reporting Council. (2013). The International <IR> Framework. Retrieved from “http://integratedreporting.org/resource/international-ir-framework/”http:// integratedreporting.org/resource/international-ir-framework/ Prno, J. (2013) An analysis of factors leading to the establishment of a social licence to operate in the mining industry. Resources Policy. Vol 38.Iss 4: 577-590. Retrieved from “http://www.miningfacts.org/Communities/What-is-the-social-licence-to-operate/”http://www.miningfacts.org/Communities/What-is-the-social-licence-to-operate/

www.alive2green.com/publications/green-economy-journal/

First in South Africa Solar-to-Hydrogen Pilot Plant in Operation by HySA

Renewable energy sources (RES) are able to sustain a carbon-neutral society with sufficient energy if a viable method of transferring and storing energy is found. Hydrogen-based technologies hold the future of the carbon-free clean energy storage systems. The mission of the HySA Infrastructure is to deliver cost-efficient technologies for hydrogen production, linked to renewable energy, storage and distribution of hydrogen. HySA Infrastructure Center at NWU Potchefstroom campus has been successfully operating the first of its kind Solar-to-Hydrogen system in South Africa since 2013. The project started with pilot system capable of producing 0.5 kg Hydrogen per day. Due to its success the pilot plant was upgraded to a commercial scale plant capable of producing 2.5 kg ultra-high pure hydrogen per day with the added capability to compress to 200 barg required for commercial use. A separate solar-to-hydrogen system adding an additional capacity of 0.5 kg per day has now been added making the total combined production of ultra-pure hydrogen from photovoltaic solar energy of 3 kg per day. The two systems combined forming the commercial plant. It consists of 21 kWp solar panels, related power electronics, 120 kWh energy storage in lead-acid batteries, 7 kW and 2.2 kW PEM electrolysers, 14 bar intermediate hydrogen storage, and 200 bar high pressure final hydrogen storage. Hydrogen produced is used for Fuel Cell applications.

www.hysainfrastructure.org

SUSTAINABILITY

Spotlight on Ohlthaver & List By Christine King Ohlthaver & List (O&L) is Namibia’s largest privately held group of companies with business interests in food production, fishing, beverages, farming, retail trade, information technology, property leasing and development, marine engineering, steelworks and the leisure and hospitality industry. The Group currently employs over 5 000 people in various sectors. It was awarded the overall winner in the large business category in the 2014 Deloitte Best Company To Work For (BCTWF) survey in the SADC Region; for the fourth year in a row. The Group embraces its obligation as a corporate citizen towards the society within which it operates, as well as towards its shareholders, employees, stakeholders and the environment, while at the same time aiming to build and sustain a corporate reputation and conditions conducive to profitable businesses. Naturally today for tomorrow O&L embraces a multi-stakeholder approach in promoting sustainable environmental practices in and beyond their business. The Group has embarked on a journey to implement a formalised environmental management system based on the requirements of ISO 14001. The environmental policy and system documentation have been completed and partially implemented to date. In order to raise awareness, an environmental week has been introduced and employees are encouraged to partake in environmentally friendly initiatives. O&L has reduced consumption of all energy sources and potable water by using less fuel for fishing vessels, as a result of decreased quotas and better catch rates, decreasing production volumes at Namibia Breweries Limited, installing a solar energy plant at Namibia Breweries, desalinated

www.alive2green.com/publications/green-economy-journal/

SUSTAINABILITY

water at Hangana Seafood, and general operational energy and water saving measures. Major energy savings initiatives completed or in progress include: • The installation of a 1.2 Megawatt peak solar energy plant for Namibia Breweries during November 2013 which already yielded approximately 1-million kWh by the end of 2014. • The replacement, or retro fitting, of lights at 10 Pick n Pay retail outlets with more energy efficient lighting types. • A wood chip burning project for heating purposes to be commissioned at Namibia Breweries Ltd. • A biogas plant at the Mariental Superfarm. An Energy Forum has been established within the Group and a strategic plan has been developed to further curb the increase in electricity, energy consumption and costs. The total carbon footprint (scope 1 and 2 elements of the Greenhouse Gas Protocol) for the Group is approximately 97 000 tonnes of carbon dioxide equivalent units per annum. This is approximately 10% lower than 2013, mainly due to the significant decrease in fuel consumption in the fishing industry as a result of improved catch rates and decreased quotas, electricity savings initiatives (including the solar power plant at Namibia Breweries Ltd) as well as significantly less HFO for heating purposes, consumed at Namibia Breweries Ltd, due to increased efficiencies and decreased production volumes. The majority of solid waste at all major operating units of O&L are recycled. Reputable waste management contractors have been appointed to handle solid waste, mostly packaging material in the soft drink and beer, fresh produce and fishing segments. Most of the solid waste, such as glass, cans, carton and plastics are collected for recycling purposes. Efforts are also made to utilise organic waste. Spent grain at Namibia Breweries Ltd is used as cattle fodder at the !Aimab Superfarm, for example, and organic dairy waste is utilised as pig fodder. At Hangana Seafood, fish offal is processed into fishmeal. As a founding member of the Recycle Namibia Forum (RNF) established in 2009, Namibia Breweries Ltd is involved in campaigns to promote the three R’s being: Reduce, Reuse and Recycle. During 2014, Namibia Breweries Ltd also played a significant role in the RNF study; Paving the Way for Recycling in Namibia funded by the Environmental Investment Fund. The Schools Recycling Competition, which is also an RNF-led initiative, saw participating schools

collect just over 108 tons of recyclables, which consisted of 29 tons of glass, 9 tons of cans, 16.5 tons of plastic and 15 tons of paper. The Group’s depots also support recycling initiatives by regularly transporting recyclables from remote areas to Windhoek where they can be recycled. Project Shine, currently in its eighth year, is a joint environmental programme initiated by Namibia Breweries Ltd. This project empowers community groups to earn revenue through their voluntary clean-up work in the coastal region of Erongo. Creating a future, enhancing life Kraatz Marine annually takes in 12 students from the Namibian Institute of Mining and Technology (NIMT) as job attachment trainees. The apprenticeship programme takes in students in the fields of boiler-making (steel fabrication), fitting and turning (machining and mechanical fitting) and welding and fabrication for a period of three years to ensure that they

are ready for the national job market in their various trades as qualified artisans. Pick ‘n Pay took in 12 retail trainees as part of their talent acquisition initiatives. Eight are Pick ‘n Pay employees (internal candidates) and four are graduates from Polytechnic. The programme runs over an 18-month period and is a combination of practical skills training and theory; practical training in-store and classes at Polytechnic. After 18 months, these trainees have the skills required to take up assistant store manager or department manager positions at Pick ‘n Pay. During F14, Namibia Breweries Ltd awarded seven apprentice bursaries in the different technical fields of study: four electrical and three fitter and turner. These students are enrolled with the Namibian Institute of Mining and Technology. In addition to the above, Namibia Breweries Ltd has provided 10 job attachment opportunities to students studying towards obtaining their artisan qualifications.

www.alive2green.com/publications/green-economy-journal/

ENERGY

Expansion and Acceleration of the Independent Power Producers Procurement Programme AN UPDATE ON SOUTH AFRICA’S ENERGY PROGRAMME PROGRESS By Christine King

“BioTherm Energy”

outh Africa has been struggling with electricity supply for a number of years with infrastructure being unable to keep up with the nation’s demand. This has resulted in a need for rolling blackouts, or load-shedding, of varying degrees of severity since 2008. As this crisis is set to continue for another two to three years, the Department of Energy (DoE), National Treasury (NT) and the Development Bank of Southern Africa (DBSA) established the Independent Power Producers Procurement Programme (IPPPP) Unit. The IPP programme is being conducted in five phases or tender rounds termed Windows, Bids or Rounds. The programme is currently in round four. With South Africa’s high level of renewable energy potential, the Independent Power Producers Programme currently has a target of 10 000 GWh of renewable energy in place. The Minister of Energy, Ms Tina Joemat-Pettersson, has determined that 3 725 megawatts (MW), generated from renewable energy sources, would be required to ensure the continued uninterrupted supply of electricity. This 3 725 MW is broadly in accordance with the capacity allocated to Renewable Energy generation in IRP 2010-2030. This programme was designed to contribute towards the target of 3 725 megawatts

www.alive2green.com/publications/green-economy-journal/

ENERGY

(MW) and towards socio-economic and environmentally sustainable growth, and to start and stimulate the renewable industry in South Africa. The programme considers sources from onshore wind, concentrated solar thermal, solar photovoltaic, biomass solid, biogas, landfill gas, and small hydro technologies. Allocated generation capacity: Onshore wind 1850MW Concentrated solar thermal 200MW Solar Photovoltaic 1450MW Biomass 12.5MW Biogas 12.5MW Landfill Gas 25MW Small hydro (up to 40MW) 75MW Small Projects 100MW According to the DoE, “the Bidders will be required to bid on tariff and the identified socio-economic development objectives of the Department. The tariff will be payable by the Buyer pursuant to the PPA to be entered into between the Buyer and the Project Company of a Preferred Bidder.” The preferred bidders enter into standard 20 year, locally denominated, Power Purchase Agreement with Eskom and Implementation Agreements with the Department of Energy, where the IPP is obliged to deliver on economic development promises. This contract also makes the DoE liable to the IPP for any default on the part of the buyer (Eskom). The Renewable Energy IPP programme has been a flagship programme of the DoE with a total of 4322MW being procured in less than four years. Acceleration and Expansion In April this year, the Energy Minister stated that “a combination of energy supply and demand options will increase the participation of the independent power producers to electricity supply grid as well as private participation in energy efficiency and demand side initiatives.” These energy supply options will be derived from renewable resources such as gas, coal and cogeneration. On the 11th of April 2015, another 13 Preferred Bidders for the fourth bid submission phase of the RE IPP programme were confirmed. Once completed, these projects will contribute an additional 1121MW to the national grid. A total of 79 projects have been approved by the DoE with a capacity of 5243MW across all Renewable Energy Bid Windows. According to the DoE, this represents an investment in the economic infrastructure of South Africa of R168 billion.

The 13 Preferred bidders for Window 4: Biomass: •Ngodwana Energy Project – 25MW Onshore Wind: •Roggeveld Wind Farm •The Karusa Wind Farm •The Nxuba Wind Farm •Golden Valley Wind •Oyster Bay Wind Farm

– 140MW – 140MW – 139MW – 117MW – 140MW

Solar PV: • Sirius Solar PV Project One – 75MW • Droogfontein 2 Solar – 75MW • Dyason’s Kilp 1 – 75MW • Dyason’s Klip 2 – 75MW • Konkoonsies II Solar Facility – 75MW • Aggeneys Solar Project – 40MW

www.alive2green.com/publications/green-economy-journal/

Hydro: • Kruisvallei Hydro – 5MW Commissioning of these projects with begin from November 2016. Expansion of the programme The enabling provisions in the current Request for Proposals (RFP) will be used to allocate additional megawatts from the Bid Window 4 procurement process. According to the Energy Minister, “this Bid Window has been extremely successful with regards to price and economic development proposals.” According to the Energy Minister, the DoE will be issuing a Request for Further Proposals for an expedited procurement process of 1800MW from all technologies. She has “directed the IPP

ENERGY

Office to follow a diligent, but shortened and simplified, competitive procurement process.” This bidding process would be open to inter alia all unsuccessful Bidders from previous Bid Windows (1-4) which are ready for re-submission. The Request for Further Proposals for this expedited procurement process will be issued by June 2015. The Energy Minister has also requested a redesign of the current RFP for the Fifth Bid Submission phase, to be ready for release in the second quarter of 2016. The redesign will: • Include the definition of local community, • include the mechanisms to ensure early, • define efficient and equitable benefits to the communities and the local content/ industrialisation regime, • and will take into account the constrained distribution and transmission systems the country is dealing with. The Minister also intends to submit to the National Energy Regulator of South Africa (NERSA) for their agreement to a new determination for an additional 6300MW for the Renewable Energy IPP Procurement Programme. According to the Minister “this would be done in accordance with the IRP 2010-2030 and to maintain the momentum of the programme, especially for future Bid Submission phases.” Small Projects Programme According to the Energy Minister, the DoE has developed a Small Projects Programme which seeks to procure renewable energy from small-scale Independent Power Producers. Projects that are between 1 and 5MW in size are considered to be small-scale. The DoE is currently seeking to procure 50MW of the 200MW determined for small projects. 29 bids have already been received, totalling 139MW, and evaluations of these projects were finalised in April 2015. In the future, the bidding process for Small Projects will be simplified to make it less complicated and expensive for smallscale suppliers. To assist with funding, the

• • • • •

DoE and National Treasury have encouraged Development Finance Institutions and the private sector to develop a Small Projects Funding Mechanism. According to the Minister, “this Fund Mechanism will operate independently from Government and is intended to provide funding to Small Local new Developers (who otherwise may not have received funding from commercial banks).” (Budget Vote Address May 2015) Gas to Power, Coal and Cogeneration According to the Energy Minister, the DoE has been engaged in a process to design a Gas and Power procurement programme for a combined 3126MW allocation. A Gas to Power Request for Information (RFI) was released to the market at the end of April 2015. Responses to the request will be used in designing the Gas to Power Procurement Programme. The Minister says that “this programme is expected to stimulate the gas sector to contribute to the growth of the economy.” The Coal Baseload IPP Programme will procure 2500MW of electricity from coal fired power stations with Bidders limited to bidding a maximum of 600MW per project. The coal IPP Procurement Programme is designed to encourage meaningful local participation. The RFP requires 51% South African entity participation. The hope, according to the Minister, is that more South Africans will capitalise on the opportunity. The DoE is also designing an approach to cogeneration, combined heat and power, that will expedite the approval process and financial close. The Cogeneration RFP was released into the market in April 2015. Currently, 800MW has been determined for cogeneration, and depending on the responses from the market, the Minister suggests that this determination may be increased in future. Hydro According to the DoE, the Treaty between the Democratic Republic of Congo (DRC) and South Africa, on importing hydroelectricity from Inga, came into force

on 20 March 2015. The Treaty obliges South Africa to negotiate an off-take agreement for the purchase of 2500MW of electricity from the Inga phase three Low Head project, with a right of first refusal for up to 30% of generated capacity from all future phases. The Minister suggests that “implementation of the project will have transformation impact on the DRC, as well as the entire Southern African region. This project remains a critical element of our future electricity supply and is important in the strategic plans of both the New Partnership for Africa’s Development (NEPAD) and the African Union.” The Department has also been gathering information on the potential for more and innovative demand reduction, load shifting and energy efficiency initiative. And RFI was issued in December 2014, with 150 responses received by February 2015. 27 of these responses were classified as quick wins and 42 were identified as medium-term opportunities. All the responses will be considered during the development of the procurement framework including medium to long-term initiatives related to energy efficiency and any other initiative with sustainable impact. The procurement programme is to be launched in the second half of 2015. In order to address the changing nature of the country’s electricity supply requirements, expansion and development of the existing programmes is required. The contribution to economic growth and job creation as well as increase the security of the electricity supply will be a great benefit to a nation under significant stress due to an unstable power supply. South Africa’s Department of Energy is seeking to fill the energy supply gaps through its IPPP programme, acknowledging that the sheer scale of the demand for energy requires region-wide institutional and financial solutions. It is encouraging to see the emphasis on renewable energy as a significant resource to take up the slack that traditional energy sources have provided.

References: Media Release, RSA Department of Energy RSA Department of Energy, 2015. IPP Projects. Retrieved from: www.ipp-projects.co.za Eberhard, A. Kolker, J. and Leigland, J. 2014. SA’s renewable energy IPP procurement programme: Success factors and lessons. Retrieved from: http://www.ee.co.za/article/ south-africas-reippp-programme-success-factors-lessons.html Leadership Online, 2014, An Update On The Renewable Energy Independent Power Producer Procurement Programme. Retrieved from: http://www.leadershiponline.co.za/ articles/an-update-on-the-renewable-energy-independent-power-producer-procurement-programme-10254.html

www.alive2green.com/publications/green-economy-journal/

SAIREC 2015 courtesy of Department of Energy – Republic of South Africa, SANEDI and REN21

ENERGY

Renewable energy for Africa By Gordon Brown

South Africa became the sixth country, and the first in Africa to host the International Renewable Energy Conference (IREC) in October 2015. This top level political conference is hosted by a national government and the event in South Africa (SA) built on the success and outcomes of the previous events in Bonn, Germany (2004), Beijing, China (2005), Washington, USA (2008), Delhi, India (2010) and Abu Dhabi, UAE (2013). SAIREC 2015 provided a global platform for government ministers, high-level decision makers, experts, specialists and thought leaders, as well as private sector players and civil society, to discuss and exchange their vision, experiences and solutions to accelerate the global scale-up of renewable energy.

Hosted by the South African Department of Energy together with the South African National Energy Development Institute (SANEDI), under the theme RE-energising Africa, SAIREC sought to demonstrate why Africa should be the leading business destination for the renewable energy sector, given its current growth trajectory and need for investment in clean energy to underpin sustainable economic growth. SAIREC was therefore the first international conference in Africa dedicated to renewable energy (RE), with some 3 600 participants from 82 countries, engaging with 150 speakers across 24 conference sessions. The event was a contribution to the UN Decade on Sustainable Energy for All, 2014-2024, and will take its findings,

www.alive2green.com/publications/green-economy-journal/

recommendations and declaration to COP21 in Paris, as a continuation of an international interconnected process. Key elements of the Energy-for-All programme included the prioritising and transitioning to renewable energy globally, transport procurement, the building of finance knowledge and capacity and making available financial resources, skills development, research and development, within the context of sound regulatory frameworks. In her summary speech when concluding the event the Minister of Energy, Hon Tina Joemat-Peterson emphasised that while renewable energy is a recent development in this country it has nonetheless emerged as a major source of energy generation

SAIREC 2015 courtesy of Department of Energy – Republic of South Africa, SANEDI and REN21

ENERGY

within the past five years. Within this context the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has exceeded expectations. The REIPPPP has demonstrated that Africa has the technology, ability, and political will to be a global leader in Renewable Energy, and will become an African programme in due course. With this as a back drop, the minister stated that SA will commit to new targets to be announced at COP21. Highlights at SAIREC included the publication of the Market Report pointing to the inherent and comparatively low cost and rapid deployment opportunity RE offers the energy sector. In addition partner organisations IRENA and REN21 published reports, and the Status of RE in South Africa was also published and distributed to delegates. On the softer side the IPP Office ran a children’s art expo, encouraging children to illustrate their perceptions of renewable energy. This was a highlight within the broader trade exhibition, as it was situated alongside the alternative, somewhat bizarre, powered car exhibition which included

solar racing cars as well as electric and hydrogen powered cars. The event included a gala dinner, a memorable event which, according to the Minister, demonstrated SA’s hospitality. The event also brought the rubber to the tar by announcing Small Bidders under the REIPPPP and SANEDI’s CTI PFAN Innovator Forum led to a string of elevator deals being struck in short succession. Also announced was the advent of a further 1500MW of CSP + PV projects for the Northern Cape, with the IPP Office set to play a key role. The advent of a new green climate fund was also announced. The culmination of the event was the SAIREC Declaration. The consultation process on the document, designed to follow on from declarations made at conferences in previous years, began before the conference to create a draft declaration. The draft declaration was circulated to delegates for comment, and the final draft was written up during the conference, bringing through all comments received from delegates. The final declaration was presented to the delegates and called on

them adopt the declaration by acclimation which was duly offered, and then adopted (http://www.sairec.org.za for the full declaration). Minister Joemat-Peterson hailed this as a significant achievement for SAIREC, and called on delegates to acknowledge the success of the REIPPPP, its role of decentralisation, and the strengthening of human and institutional capacity with a focus on localisation. Further aspects of the SAIREC agreement, which the minister sought to acknowledge, included the role of integrated planning to connect the dots within the water/food/energy nexus; highlight advancement of national and regional market designs and to emphasise, and facilitate, the role of women in RE by promoting actions such as low-energy cooking. In conclusion the Minister stated that energy was the future, capable of eradicating poverty, that the SAIREC conference has left SA a better place, emphasising partnerships to enable the SA energy sector to play a crucial role, and thanking the RE pioneers. “Impatience is the new virtue” so “let targets not remain on paper”.

www.alive2green.com/publications/green-economy-journal/

• Save up to 14% on service costs • Lower your Total Cost of Ownership • For best results, use Telligent® Maintenance in conjunction with FleetBoard®

Call 0800 133 355, visit www.mercedes-benz.co.za/telligent or contact your nearest Mercedes-Benz Commercial Vehicles dealer for more information. Applicable to all Actros models with CharterWay® BestBasic® or CharterWay® Complete.

MBSA/2532/TEL

CharterWay® powered by Telligent® Maintenance. A ﬁrst from Mercedes-Benz Trucks.

A Daimler Brand

Only service what you have to, when you have to.