NBI’s Steve Nicholls: The importance of climate action in South Africa

NBI’s Steve Nicholls: The importance of climate action in South Africa
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As Africa develops and transitions to similar standards of living as elsewhere in the world, the potential for additional carbon emissions is enormous. This is at a time when it’s vital to reduce global carbon emissions; that’s the dichotomy that has to be solved.

The companies that comprise The National Business Initiative (NBI) in South Africa are operating in over 75 countries* around the world, with a huge footprint right across Africa. Working with these companies means we are also working with the greater region.

As such, it’s hugely important for forward-looking South African companies to engage and take action on climate change.

The programmes that NBI runs, with its partners in the We Mean Business coalition, help companies to understand what issues they need to be engaging on, how they reduce their climate impact and also start to ask questions about strategy and risk.

The challenge is helping companies to move from a traditional business mindset, where they do their thing, governments do their thing and never the twain shall meet. We start to build relationships and start conversations, highlighting businesses that are doing truly exceptional things.

For example, at Sasol they understand that coal has a limited time horizon and they have taken the strategic decision to no longer invest in new coal developments and are starting to think about alternative feedstocks. As a consequence the company is continuously looking for opportunities to increase the availability of natural gas for its processes and has recently started investigating the possibility to integrate renewable energy into its processes.

Some companies, like Woolworths, are looking at the impact of climate change on food security and adaptation and starting to provide a range of outreach services to farmers around better management of crops, irrigation and soil fertility.

The government doesn’t have the budget and resource to do that now so it’s the perfect opportunity for a public-private partnership to say: climate change is happening, adaptation is required, let’s start doing it now through outreach programs.

Meanwhile, the banks have the same kind of challenges; they are assessing their climate change risk and the risk faced by their clients. FirstRand and Nedbank are working with other sectors to understand what the mitigation requirements are and how that’s going to impact profitability and competitiveness.

On the flip side, companies need the banks to understand the transformation that they are undergoing, because that’s where they are drawing their finance. It’s difficult for companies to do this work on their own; there needs to be information sharing.

The role of the NBI is facilitating these conversations and helping companies along a change curve. We know companies at a similar stage, we know which government departments are already open to a conversation and we get people talking to each other.

Putting together a public-private partnership doesn’t happen overnight, it takes a long time and background work, but the synergies between all of the partners are enormous.

Governments tend to have a more nuanced understanding of the challenges of these projects, particularly when you start to factor in some of the social issues, like employment. Whereas business has a core set of skills that involves innovation, fundraising and implementation at speed and scale.

It's these skills that business brings to a global partnership of business, civil society, governments and labour. Together we can make the difference that's needed.

At the NBI we are enabling our member companies to participate in that transition by building their capacity in four main climate change related areas: carbon pricing, science-based targets, water security and energy productivity. If we get these four areas right as a community, we will make a significant impact.

NBI is a voluntary coalition of South African and multinational companies, working towards sustainable growth and development in South Africa.

*NBI analysis of CDP data in South Africa from 2009 to 2015, available here.

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