Is SA business taking climate change seriously?

On Wednesday 30 May, Just Share convened a Climate Change Dialogue with Fiona Wild, Vice President of Climate Change and Sustainability at BHP, and member of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD).

Climate change poses unprecedented and urgent environmental, social and financial risks to our society, but these risks are insufficiently acknowledged or understood in South Africa. Just Share convened the dialogue to build awareness of these risks, and to provide a platform for SA business to engage around its readiness for the challenges and opportunities that climate change will bring, including the just transition to a low-carbon economy.

The TCFD describes climate change as “one of the most significant, and perhaps the most misunderstood, risks that organisations face today” [fn1]. The Task Force, formed by the Financial Stability Board (FSB), and spearheaded by FSB Chairman and Bank of England Governor Mark Carney and chaired by Michael Bloomberg, set out to define an overarching set of recommendations for voluntary reporting that reflect what the financial markets need to evaluate when it comes to the financial impacts of climate change.

Fiona Wild provided attendees with a comprehensive overview of the TCFD’s recommendations, including how businesses and investors can use the voluntary framework to facilitate both the preparation and use of climate-related financial disclosures.

Wild highlighted BHP’s strategies to address climate risk, founded on the company’s clear, public acceptance of the IPCC’s assessment of climate change science (something that is still a rarity in the South African corporate sector).

South African business panellists included representatives from Sasol, Exarro, EY (which also hosted the event), Business Leadership SA and AgriSA.

The disparity between BHP’s grasp of the challenges and opportunities posed by climate change, and the readiness of the South African corporate sector to deal with the issue, was stark.

Just Share highlighted three examples which illustrate that SA business is not taking climate change seriously:

1. The prevalence in the business media of published opinion pieces by climate change-denialists, and the failure of our corporate leaders to challenge them;
2. The fact that our financial sector is still funding new coal-fired power station projects [fn2] which the country does not need, and which will make it impossible for South Africa to meet its climate change commitments under the Paris Agreement [fn3]; and
3. The silence of asset owners and asset managers on climate change risks, and their failure to challenge listed companies on their contribution to climate change, and their plans for mitigation and adaptation.

Just Share will continue to work to build awareness of climate change risks, and to stimulate and support responsible investment and shareholder activism to address them.

1. https://www.fsb-tcfd.org/publications/final-recommendations-report (Executive Summary)
2. https://cer.org.za/news/why-is-standard-bank-still-funding-coal-questions-shareholders-should-ask-at-the-banks-agm-on-24-may-2018
3. https://cer.org.za/news/new-report-shows-that-two-coal-ipps-would-cost-sa-an-additional-r20-billion