SA CDP 2013: Companies are not meeting emission reduction targets despite improvement in reporting

Submitted by: Kathryn Kasavel, Friday, December 13, 2013

<p>With the inclusion of Eskom, the JSE 100 account for 60% of South Africa’s total GHG emissions. Image credit: <a href='http://www.123rf.com/photo_23411370_a-retro-style-photo-of-a-polluting-factory.html'>Spectral / 123RF Stock Photo</a></p>

With the inclusion of Eskom, the JSE 100 account for 60% of South Africa’s total GHG emissions. Image credit: Spectral / 123RF Stock Photo

This year’s CDP South Africa 100 Climate Change report 2013 shows an upward trend in participation, disclosure rates and voluntary emissions reporting of the JSE top 100 largest companies. However the emission reductions achieved by the group do not meet required global and national reduction targets. Furthermore, the report states that most companies have not reported adequately on their significant Scope 3 emissions. Joanne Yawitch CEO of the National Business Initiative (NBI) states in the report that South African businesses have a genuine interest in reducing emissions and adapting to climate change however more needs to be done to reduce their emissions to the required targets set at a national and global level and that businesses need to focus more on the reporting of their Scope 3 emissions.

Transparency and response rates

The report states that South Africa’s 2013 CDP report achieved a response rate of 83% compared to the Global 500 sample response rate of 81%. This response rate is ranked second highest internationally next to Europe who have a higher response rate of 90%. In 2012, the SA CDP response rate was 78% and the report attributes this year’s increase to the high response rate of new participants to the sample this year.  The Health sector showed the highest response rate of 100% while the Financials sector had the lowest response rate with only 20 out of the 30 companies responding to the CDP. Consumer Staples, Energy and Materials and Industrials had response rates of 90% or more. The report also revealed that 13 new volunteering South African companies, not in the JSE 100, participated in the 2013 South Africa 100 CDP which, according to the report, is reflective of the increasing trend of South African businesses engaging with and responding to climate change issues. An increasing amount of companies (96%) have also taken to voluntarily reporting on climate change issues and greenhouse gas (GHG) information in their annual reports. The report points out that 99% of companies report having a board committee or executive body that is solely responsible for addressing climate change issues, which is an increase from last year’s 78%. In addition, the report shows that 10 more companies provide financial incentives to the management of actions linked to accomplishing climate change targets.

South African company disclosure scores

South African average disclosure scores have improved continually from 62% in 2009 to 83% in 2013 as shown in the graph below.  The Energy & Materials sector boasted the highest average disclosure score in 2013 followed by the Financials and Industrials sectors. This year there was only one company that did not report their Scope 1 emissions along with their Scope 2 emissions. This is an improvement from 2008 when only 71% of companies measured and disclosed both Scope 1 and 2 emissions.  The 2013 report also points out that this year there have been improvements in the number of companies undertaking verification studies for their emissions. There has been a 20% increase in companies undertaking verification studies for their Scope 1 and 2 emissions and a 40% increase in the number of companies completing or undertaking verification studies of their Scope 3 emissions.

South African companies not achieving emissions reductions required

The reports states that “the improvements in disclosure and performance are not matched by an equivalent improvement in emissions reductions”. There has been a slight decrease in the total Scope 1 and 2 emissions from the JSE 100 reporting companies in the last year but the report states that this reduction is not enough to meet the national and global policy targets. In addition, the reductions were mainly made in the Minerals and Energy sector with most other sectors showing increases in Scope 1 and 2 emissions. The South African CDP reporting companies have reported a slight increase in their direct Scope 1 carbon dioxide emissions (CO?e) from 132.9 million metric tons in 2012 to 134.6 million metric tons in 2013. The largest increase in Scope 1 emissions was in the Energy subsector (Sasol Ltd) who increased their emissions by 1.4 million metric tons CO?e. The largest reduction in Scope 1 emissions was seen in the Material sub-sector with a decrease of 490,390 metric tons CO?e. Eskom has also seen a reduction of 4 million metric tons of CO?e however Eskom still remains the largest contributor to South Africa’s GHG emissions at 227.9 million tons CO?e. Eskom contributes 40.7% of South Africa’s total GHG emissions of 559.65 million metric tons CO?e as shown in the graph below

The graph below illustrates South Africa’s top direct emitters for 2013. GHG Scope 1 emissions are still dominated by a few companies, and with the inclusion of the contribution of Eskom, account for 60% of all South Africa’s total GHG emissions. The other top JSE 100 emitters were Sasol Ltd (59.9 million metric tons CO?e), followed by ArcelorMittal South Africa Ltd (11.3 million metric tons CO?e), Pretoria Portland Cement Co Ltd (4.4 million metric tons CO?e), BHP Billiton (2.9 million metric tons CO?e) and Sappi (2.6 million metric tons CO?e).

Scope 3 emissions still not reported on

Companies are still not reporting on their Scope 3 emissions across their value chains which is often where the highest source of emissions are located. The report however states that the introduction of final guidelines on reporting on Scope 3 emissions from the Greenhouse Gas Protocol might help to improve reporting on Scope 3 emissions in the future.  The report highlights that this year there was an 11% decrease in the number of companies reporting on their Scope 3 emissions with only 82% doing so as opposed to last year’s 93%.

To keep updated with sustainability news subscribe to the fortnightly Urban Earth Newsletter.

Kathryn Kasavel