The Carbon Trust, Accelerate to Net Zero Africa event, highlighted some of the key concerns among communities, the strategies corporates are undertaking to decarbonise and the funding opportunities for a corporate transition.
Although Africa is responsible for only 4% of global carbon emissions, the continent remains one of the most vulnerable to the effects of climate change, such as increased water scarcity, pest infestations, and increased frequency and intensity of droughts.
In his welcome remarks, Tom Delay, Chief Executive at the Carbon Trust, emphasised the need to accelerate to Net Zero. He highlighted that accelerate is first and foremost about action. "It is not just about doing what is required. It is about really pushing ahead and accelerating this transition," Delay added.
Globally, but also specifically for Africa, putting climate change at the centre of economic development will enable the delivery of a just and equitable transition.
The dilemma to Net Zero for Africa
A keynote address by Dr Crispian Olver, Executive Director of South Africa’s Presidential Climate Commission, noted South Africa’s dilemma in its Net Zero strategy where success hinges on the country’s plan to diversify its energy mix.
South Africa’s energy crisis, where utility company Eskom has over the past months failed to generate sufficient power, has triggered the debate around alternative energy sources in one of Africa’s biggest economies.
Olver admitted that South Africa had become more vulnerable to climate change, with downstream shocks felt across the country, including a 50% loss in export value, more than 1 million jobs cut and a 15% reduction of the Gross Domestic Product (GDP).
“We are in danger of having our products penalised and even shut out from the world market due to the highly carbonised components in products,” Olver warned delegates. He added that South Africa is one of most carbon intensive economies in the world, almost double that of China, and two thirds higher than India. “We need to transition our economy to Net Zero to avoid catastrophic climate change and maintain jobs and competitiveness.”
Olver suggested immediate priority should be given to decarbonisation through system reforms. Ramping up wind and solar power generation, for example, would help complete South Africa’s power transition. “The best growth impact is steady decarbonisation,” Olver said, citing that delivering Net Zero would translate to 1.4 million jobs by 2040.
Integrating a just transition to Net Zero
While achieving Net Zero remains a critical component to dealing with the adverse effects of climate change, activities must benefit communities, Anneke Lund, Executive Sustainable Finance at Standard Bank, noted in a panel discussion.
“Everyone needs to benefit from the transition, and I think you can achieve this through creating job opportunities in the green economy,” said Lund, stating that communities are at the centre of the Paris Agreement on climate change. She added: “I think Net Zero strategies could be designed to ensure that they benefit the local communities.”
Amal-Lee Amin, Managing Director and Head of Climate Change at UK BII lauded the South African government for prioritising a just transition to Net Zero in policy making. Through the Presidential Committee, South Africa has made progressive steps towards inculcating Net Zero issues into the corporate, government and communities’ cultures. “South Africa has a lot to share in terms of leading the challenge around a just transition. We want to make sure that the content of the plan and the context of the execution is resulting in just and equitable transition,” explained Amin.
Although corporate South Africa is playing catch up to Net Zero, a survey of 270 companies revealed the discrepancy between company strategies on Net Zero and the concrete steps towards achieving this feat, noted Vicky Sins, Decarbonisation and Energy Transformation Lead at World Benchmarking Alliance.
Corporates should treat a just transition to Net Zero as part of their social responsibility, argued Martens. “We need to look at real world impact. Instead of looking at it as an obligation, or a compliance burden, some sort of grudge purchase. [We need to] really think about how the decisions that we are making are affecting sustainability.”
Implementing and financing corporate transition
Corporates remain at the core of the Net Zero and decarbonisation debate, with financing models playing a critical role in the transition.
In a panel discussion, top companies like mining conglomerate De Beers echoed its commitment to achieving Net Zero. Sharing its corporate transition, it was clear that the long and arduous journey to achieving Net Zero can be implemented without working in silos.
“It is a continuous and very steep learning curve. To get a company to Net Zero, you need everyone on board. This is not something we can do as an afterthought. It is about changing systems and processes and bringing everyone on board,” explained Kirsten Hund, Head of Carbon Neutrality at De Beers Group.
De Beers has committed to be carbon neutral by 2030 and part of the company’s imminent transition strategy includes diesel replacement with renewable energy across all its mining processes.
Merging green ambition and developing green energy remains Vodacom Group’s thrust, said the company’s Executive Head ESG and Sustainable Business, Nola Richards. “What we are trying as a Telco is to merge our green ambition, develop green energy and create a platform for digital society.”
International Finance Corporation's Decarbonisation Lead for Sustainable Infrastructure Advisory, Christelle Van Vuuren pointed out that there is need for a blended approach in financing technologies, while Arvana Singh, Nedbank Head of Sustainable Finance Solutions highlighted that companies should be able to demonstrate how the technology will generate income.
Panellists emphasised the need for credible financial plans to enable transition funding.
Corporates’ willingness to ensure decarbonisation and work towards accelerating Net Zero should be applauded. Nonetheless, the journey to Net Zero still requires a significant amount of work and collaboration . The protection of communities remains critical for companies seeking to transition.
In her concluding remarks, Senior Manager at the Carbon Trust Africa, Jarredine Morris, highlighted that the journey to Net Zero is one that requires “commitment, collaboration and innovation across all the role players.”