Corporations take responsibility for climate impact

Posted by: Saving Water SA (Cape Town, South Africa) – partnered with Water Rhapsody conservation systems – 05 August 2010

By: Andre Fourie – head of sustainable development at SAB

Corporations around the world are increasingly taking responsibility for the impact of their operations on the environment and communities within which they operate. This is both necessary and right.

SABMiller has introduced a cost-saving and environment-friendly treatment for waste water

Concerns about the future of the planet are well founded: there are physical limits to the impact of the consumption habits of nearly 7 billion people on the availability of food, water and clean air. Scientists are confirming our fears about issues such as climate change, declining biodiversity and shrinking rain forests and polar ice caps.

This reality underpins the efforts of many global and South African companies over the past decade to demonstrate more responsible corporate citizenship.

The annual reports of most leading corporations show they are concerned about their impact on local communities, are working hard to reduce the energy they consume and the carbon dioxide they emit into the atmosphere, and are taking care about environmental damage.

Further, businesses are playing a critical role in building economic growth, particularly around job creation. A well managed and growing business is good for wider economic development, leading to greater employment, more taxes paid and greater investment in local economies and communities.

A careful reading of the sustainability reports of companies and media articles over the past decade shows that the bulk of corporate actions have been based on risk management. It didn’t take much insight by corporations for them to understand the potential impact of an environmental scandal on brand reputation. But more farsighted companies appreciated the changing demands of customers and regulators. That is why many corporations took voluntary steps to measure and reduce their carbon emissions.

The reality is that major corporations simply have to take responsibility for the impact of their activities on society and the environment. But increasingly, leading corporations realise that more sustainable behaviour does not only mean reducing risk and adding cost. A more strategic approach can actually reduce cost, open opportunities and enhance competitiveness.

Globally there are five mega-trends:

  • There is a dynamic interplay between the reality of climate change and the future of energy markets. Many countries and companies realise that the only way to reduce carbon emissions will be to invest massively in renewable and alternative energy and new technologies.
  • There is a growing recognition of water shortages. The growth in world population, accelerated urbanisation and the pollution of water sources will combine to become a major threat to the quality and quantity of water available to companies and people.
  • The boundaries between what is regarded as public and private are becoming increasingly blurred. Corporations are now expected to be more transparent in their decision-making and more open with information. At the same, NGOs and the media regularly expect private companies to take responsibility for issues that were previously deemed as being in the domain of public governance.
  • There is growing recognition of the importance of agriculture and biodiversity. The increasing demands for food will place pressure on the agricultural sector to expand activity, but also to respect biodiversity. This can only be achieved through more productivity on existing land exploring the frontiers of bio-sciences.
  • Finally, the sustainability agenda is increasingly recognised as a part of the corporate radar of innovation and differentiation. By looking at communities and the environment with new lenses, companies are developing new products, reaching new customers and uncovering new market trends before their competitors.

All the above are also playing out in South Africa. Particular challenges of doing business here include how to create real and sustained value through black economic empowerment, how to contribute to a better system of schooling and skills development, and managing the impact of HIV/Aids on the workforce and communities. From an environmental point of view, all interest groups, including government, business, communities and civil society organisations, will need to work together if we are to tackle the challenges facing us.

So how does a company deal with all these challenges? South African Breweries (SAB) has a legacy of being deeply rooted in the realities of the country. It has a track record of social responsibility but is also keeping track of the rapidly evolving sustainability agenda.

SAB has made a long-standing contribution to South African society and the economy. A recent study by the Bureau for Economic Research (BER) showed that in 2006/07, the taxes derived directly from the production and sale of SAB’s products amounted to R9.6 billion, and that 378 000 full time jobs (or 3 percent of total employment in South Africa at the time), could be directly or indirectly traced back to the production and sale of SAB’s products.

The company’s products are used and enjoyed by millions of people every day. One concern of society is the abuse of the company’s products. That is why discouraging irresponsible drinking is a top global priority of the company’s sustainability agenda. A first step to being a credible partner is to educate and empower staff to aspire to responsible personal conduct.

In South Africa we are also reaching out to policy makers to become a reliable partner in promoting responsible alcohol use. The prominent and hard hitting “Reality Check” campaign demonstrated SAB’s commitment to dealing with drunk driving and foetal alcohol syndrome.

Water is just one dimension of how doing sustainable business will demonstrate the positive impact a company can have. SAB ranks highly on water efficiency during the brewing process and adheres to strict standards regarding discharging water at the end of the production cycle.

SAB aims to reduce its water consumption in the brewing process and then quantitatively offset the remaining water use by investing in projects that clear alien vegetation. This process releases similar volumes of water back into natural ecosystems. This project cleared sufficient alien vegetation to allow for the complete offset of water use at the Ibhayi Brewery in Port Elizabeth and the Newlands Brewery in Cape Town.

The Taung Barley Farmers project in the Northern Cape is another such example of how SAB invests in enterprise development. Established in the early 1990s to encourage local barley production and reduce our reliance on imports, today the project spans 1 800ha of land, and helps about 104 smallholder farmers generate an income from barley and maize.

It also helps to be part of a global group such as SABMiller, which is committed to doing business sustainably and profitably.

As a proudly South African company, SAB is working hard to demonstrate the sort of societal leadership that will ensure that the company is seen as a trusted corporate citizen. We are also aware that the country will only succeed through the efforts of all South Africans. SAB aims to be a reliable partner to the government, civil society and other corporations during this journey to a sustainable future.

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