Ke nako! Shifting to a green economy

South Africa's shift towards a green economy is gaining momentum with key drivers igniting the move and steadily pushing it forward. Evan Rice, CEO of GreenCape, and Justin Smith, Head of the Woolworths Good Business Journey, recently shared the business case for sustainability and viable opportunities within this space at the Rapidly Emerging Green Economy breakfast hosted by Accelerate Cape Town.

Energy supply opportunities

"We're really struggling over the next five years to add any new capacity to the grid; Eskom's build has announced that it's been further delayed, and while the demand-side interventions like energy efficiency are the really big opportunities, the other exciting thing, from GreenCape's perspective and from the green economy's perspective, is that the supply opportunities that are available on short notice are all renewable or low-carbon, or more energy efficient," said Rice.

Solar plant installation at Black River Park

With ambitions of becoming the green economic hub in Africa, the Western Cape is leading on this front. The City of Cape Town recently signed a ground-breaking embedded electricity-generation contract with Black River Park Investments. The deal means that the Black River Park in Observatory will be able to feed surplus energy from its rooftop solar plant into the city's grid, offsetting its own monthly electricity accounts.

"The city, to their enormous credit, have not stuck their heads in the sand and said: 'We don't want to allow this, we just want to carry on selling power.' It is, of course, a massive threat to municipal finance - it's from where a lot of municipalities derive their revenues and cross-subsidise a lot of other services. They realise that if they don't do something and create a structure and tariff that allows for this to happen in a sustainable way, it's going to happen anyway," said Rice.

While it's not viable for everyone to rush out to buy solar panels at the moment, Rice sees a revolution starting in this space - from job creation to exporting expertise and technology to the rest of Africa: "Those businesses that are establishing themselves locally, building up credibility, getting finance mechanisms in place, they're putting themselves at the forefront of a huge opportunity that we can really become the epicentre of for the region," said Rice.

Woolies energy savings at R220m

Woolworths has made quite a leap forward over the last 10 years in terms of energy efficiency. According to Smith, the company has reduced its energy use by 40% during the last decade with energy savings over the last four years amounting to R220m. It's accomplished this, firstly, through implementing measurement infrastructure and then investing in new technologies and opportunities like low-energy-consumption lighting, clean energy refrigeration through to green building models.

Woolworths' exercise in implementing sustainability and low-carbon practises isn't just about brand differentiation or concern for the environment, there's also a strong business case for it, illustrated Smith.

"We're a diversified retailer so that immediately means, from a supply chain perspective and from a business perspective, a whole range of complex risks, both in South Africa and globally, from a sourcing perspective. Trying to understand how that can influence our future ability to do business has become incredibly difficult but incredibly crucial as well," he explained.

Utilising lifecycle assessments, Woolworths has a clearer indication of where their biggest impacts lie. In the case of water consumption, almost 100% of its impacts are at a farm level, said Smith. "The amount of embedded water in product is a massive challenge for us - it's something that we need to understand properly and then work to try to reduce across the board as well."

Woolworths water consumption assessment

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Water stewardship programme

To this end, Woolworths have been working on a water stewardship programme in the Breede River catchment area. The project came about after a water risk assessment the retailer carried out in conjunction with Marks & Spencer (M&S). The Western Cape, it turned out, is M&S' single biggest global water risk from a food sourcing perspective.

"The feeling was we've got a massive water risk, we've got scarcity issues, we've got water quality issues, so as M&S in particular, should they be looking elsewhere to source fruit? We don't want that, we want to continue to support the sector in South Africa so we needed to do the technical analysis behind this as a result," explained Smith.

With the technical expertise of WWF-SA, it was found that it took 33l of water to produce a nectarine in the Western Cape, whereas the global average is 120l. In a bid to help support and sustain these more efficient farmers, the project identified a more than 20% saving that could be achieved from a bit of fine-tuning on a farm level. However, it was determined that in order to secure this area of supply better, they would need to contribute to the management of the entire Breede River catchment.

Need for investment

"The key thing here is sharing information across the whole catchment. There is a low-income area there called Prince Alfred Hamlet where the sewage functionality and infrastructure is in a really bad state, so that's going to affect water quality across the whole agricultural space, so do we as a business invest in managing the water infrastructure, which we shouldn't ideally be doing? Realistically, if we want our agricultural space to continue, we need to," explained Smith.

Woolworths is also working in the area with WWF on its Water Balance Programme clearing alien invasive vegetation in the catchment - the invasive species are estimated to be taking up between 10% and 15% of the water. This has, in turn, created jobs through the government's Working for Water Programme.

"We source about 95% of our food, currently, from within South Africa and our dependence on the agriculture sector and its functioning in this country is enormous. We need to do as much as possible to keep that sector operating efficiently if we want to sell food going forward as well," said Smith.

Lifecycle assessments

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Untapped opportunities in waste

Another opportunity in the market that has the potential to impact on a business' bottom line positively is seeing waste as a resource rather than an expense. According to Rice, this requires taking a circular economy principle and looking at each step in the economic chain and discovering what can be cycled back into the economy rather than be thrown into a landfill. With landfill costs going up, GreenCape is running a programme called the Western Cape Industrial Symbiosis Programme (WISP) to help businesses identify untapped revenue opportunities in waste. WISP currently hosts free facilitated workshops with businesses.

© kanvag – za.fotolia.com

A similar programme has been running in the UK over the last seven to eight years, said Rice, and has resulted in nett tax gains for the UK fiscus of £9 for every £1 that was invested from increased profitability, business cost savings, additional revenue, job creation, and the tonnes of saved CO2 emissions.

Through the WISP workshops, GreenCape has enabled 12 collaborations so far; the value over five years to those businesses involved is around R20m, of which over R7.5m has already been captured in 18 months, over 114 tonnes of waste has been diverted from landfill, and 3500 tonnes of CO2 has been saved.

"This is something we really plan on scaling up massively; we're working with national departments to look at how this can be rolled out nationally under a programme under the National Cleaner Production Centre," said Rice.

For more info on the WISP workshops, email az.oc.epac-neerg@psiw. The next workshop will take place on 22 October in Stellenbosch from 9am to 2pm.

The Rapidly Emerging Green Economy breakfast took place at the KPMG offices in Cape Town on Friday, 3 October.