Without a doubt, since the historic Paris Climate Accord adopted at COP 21 on 12 December 2015, various countries have set ambitious climate pledges to reduce their carbon emissions. However, much of these ambitious targets lack realistic detail on the scope and level of emission sources, and the technology and policy pathways best placed to either remove, reduce or offset emissions. This renders the concept of net zero emissions upon which such targets are premised questionable.
Conceptually, net zero emissions promote the belief that runaway climate change impacts could be slowed down and halted if nations simultaneously invested in carbon emission removing technologies, while equally reducing the combustion of fossil fuels. The goal of net zero is to 100% reduce carbon dioxide and other greenhouse gas emissions to zero. Any remaining greenhouse gases are removed through technology. It is still unclear how this can be achieved, especially in line with the Paris Accord’s ambitious target of limiting global warming at 1.5 °C relative to pre-industrial levels.
The lack of clarity on how net zero emission can be achieved has led some countries and companies to set unrealistic targets, which in turn brings to question the issue of fairness and ethics amongst the Paris accord signatories. Whose contribution can be considered fair or just? Who bears little or no cost for offsetting emissions? What technology pathways, natural resources and infrastructure favours one country from the other? These key questions need transparent and pragmatic answers, which many believe the forthcoming COP26 in Glasgow will address.
Despite its relatively ambitious low emissions strategy, South Africa is amongst the signatory countries walking a tightrope in terms of its net zero targets. The energy-rich minerals complex and the convergence between energy and climate policy almost render South Africa incapable of reaching its 2050 net zero targets. Added to this, a power generation system lurching from crisis to crisis lacking long-term thinking to deliver the efficiencies that can support South Africa’s 2050 net zero target.
A hybrid or mix energy system that harnesses the power of renewables and energy storage systems could help South Africa in some respects. Too much reliance on coal as the only cheap energy resource needs to stop. The detrimental effect of locking and constraining South Africa’s infrastructure ambitions and overtime delivering stranded assets can be costly for future generations. Not to mention the dynamic resource constraints faced by fuel-rich countries due to unstable supplies and price upswings.
The good outcome of these challenges is that a space has been created for companies and state entities to provide visionary leadership. In particular, the private sector in South Africa is well-positioned to accelerate its momentum towards achieving realistic and measurable climate targets. Boards and executives charged with defining and implementing sustainability metrics in their operations and reporting are well-positioned to provide such visionary leadership. There is no better area to do this than in their ESG strategies, which is an area that is fast gaining strategic importance in key boardrooms. With so many disparate tools, vendors and instruments in the market many leaders feel at a loss as to which tool is best placed to guide them on this trajectory.
GCX Can Help You Navigate Net Zero
Drawing heavily from our experience and technical capability in delivering consolidated environmental reporting through the flagship GCX analytics dashboard, as an accompaniment, we decided to develop a comprehensive ESG framework that companies can use to track company activity level data performance in order to determine the key influencers of ESG-driven investor decision making. The framework in question is underpinned by the major ESG rating providers, as it is their ratings that investors rely upon to filter ESG leaders, which is likely to align well with companies who desire to enhance their credibility in attracting debt at favourable terms.
GCX continues to assist visionary boards and executives to leverage their own activity data to drive better and more robust ESG performance reporting. What benefits can companies derive from such support;
- Consolidated sustainability reporting that is accurate and consistent with relevant ESG metrics as recognised by key rating providers i.e Sustainalytics, MSCI etc.
- Proactive board management of ESG exposure risk. Many executives and boards are inherently exposed to ESG risk now more than ever due to the sheer velocity and complexity of ESG related issues and a lack of requisite ESG tools to pre-emptively manage such dynamic risk.
- Enhanced external profile through demonstrating a framework to deal with ESG risk, resulting in a better investor perspective which inevitably leads to a better risk-to-income rating.
If you desire your company to achieve the above-listed benefits from GCX expertise, please feel free to reach out to us, GCX will be happy to guide your company through its contribution towards a realistic net zero ambition contribution.
Thabo Mthembu is the GCX Business Development Manager. Thabo previously worked for WWF South Africa as a policy researcher on low carbon energy systems with the then Living Planet Unit (LPU), doing policy outreach work on sustainable energy access. Later, Thabo worked on an initiative with WWF Sweden and WWF South Africa called ‘Climate Solver’, which is a digital clean technology platform in partnership with Sustainia that identifies and supports innovative entrepreneurs in the clean technology sector in China, India, Sweden and South Africa. Thabo holds a Masters Degree in global studies and Postgraduate Certificates in energy, climate change and renewable energy project finance fundamentals.