Environment

20. Energy

How responsibly is the company managing its energy use, towards the ideal of the zero carbon footprint? How well does the company understand its energy sources and its reliance of fossil fuels, versus renewable energy options?

Guidance: Nearly every component of the economy emits GHGs (measured as CO2e) into the atmosphere faster than it can be sequestered, contributing to global warming. Measuring the organisation’s carbon footprint intensity (per employee, per unit of product) measures this contribution. Scope 1 emission are those the organisation is directly responsible for, Scope 2 are those relating to energy generated outside the organisation, but used by the organisation, and Scope 3 are indirect emissions that occur in the value chain, both upstream and downstream.

Energy is a major constraint in the economy. The use of fossil fuels burns carbon faster than can be sequestered, prompting responsible companies to either reduce energy usage, recapture energy from processes, or seek alternative ‘renewable’ fuels.

Red flags for companies with significant impact: Not recognising or addressing core contributors to GHG emissions within the business; non-compliance to Eskom/Nersa/Government energy reduction schemes; not having a backup plan to deal with electricity shortages (long term) and blackouts (short term).

Expected behaviour: GHG emissions reporting (Carbon Disclosure Project); intensity measures; ISO14001 certification; emission reduction strategies; energy consumption intensity measurements; energy usage reduction; improved routing of distribution network; change to renewable energy sources; carbon off-set measures (e.g. planting trees).

Best practice: Green buildings; roadmap with set targets toward zero carbon; conducting product lifecycle assessments; carbon recapture; lobbying for more responsible behaviour in the industry, fairer and tighter legislation and walking the talk.

GHG emissions are also bio impacts and closely associated with other aerial emissions such as SO2, NO2 and particulate emissions.

21. Water

How responsibly is the company responding to the environmental impacts of its use of water and how well prepared is it for shortages of water?

Red flags: Not recognising how water scarity could impact operations (long term); not analysing the impact of grey water discharge on linked water sources/bodies.

Expected behaviour: Water consumption intensity measurements; reduce, reuse, recycle of water; treatment of grey water before it is discharged (ensure it is non-toxic and within safety standards.

Best practice: Conducting product lifecycle assessment; drawing up a plan towards zero water footprint; showing progress through good reporting of journey.

22. Bio-resources

How well does the company manage the availability and usage of its most critical natural resources and how responsibly does the company manage the extraction /harvesting of its natural resources?

Examples of bio-resources include fish stocks, natural forests, sensitive land habitats utilised for agriculture and industry. Responsible management of such bio-resources includes management to ensure sustainable regeneration, either naturally, or through cultivation.

23. Bio impacts

How responsibly and effectively does the organisation manage the impacts of solid waste (including packaging),  waterborne waste effluent, and its airborne emissions and particulates on the environment and on biodiversity?

There are three sub-issues relating to bio-impacts:

• Direct impacts on the environment – Pollution or spoilage of the natural environment from solid waste (including packaging), effluent, waste and emissions, including carbon, dust, SO2, NO2, etc. as a result of the company’s direct operations
• Life-cycle impacts on the environment – As above, but referring to impacts on the environment from products and services during and beyond their life (post production)
• Supply chain impacts on the environment – As above, but referring to impacts of suppliers on the environment (or even downstream partners if the company is a major brand relying on partners in the distribution chain)

Direct impacts
Guidance:

• Recognition of impact on water bodies & habitats affected by discharge, dumping, litter, dust, SO2, NOx, potential for accidents and spills;
• Compliance in terms of fines or charges from municipal authorities, DWAF, green scorpions for illegal dumping or spills;
• Response in terms of effluent management, bio-digesting, reducing packaging; setting and monitoring of targets and milestones towards a zero waste environment;
• Quality of performance reporting.

Aspects to consider:

• Impact recognition – Poisoning of rivers, Impact on nearby areas of high biodiversity importance (wetlands, cape floral region, etc), Protection and restoration of biodiversity (habitats and species) inside and beyond org’s own border of operation.
• Conservation – Species extinction, pollinator decline, coral bleaching, invasive species, poaching.
• Environmental degradation and rehabilitation- Eutrophication, habitat destruction, invasive species, desertification, soil erosion, contamination, salination.
• Compliance – Self regulation (eg: BWI (wine industry)), compliance with DWAF, green scorpions, etc.
• Performance reporting quality – location, size and importance of biodiversity areas (both protected areas and others of high biodiversity importance outside protected areas). Description of significant impacts of activities, products, and services on biodiversity (in protected areas and others of high biodiversity importance outside protected areas).

Red flags:

• Potential for accidents and spills;
• Illegal dumping or spills; monetary and non-monetary fines,
• Sactions for non-compliance to regulations (DWAF, Green scorpions)

Expected behaviour:

• Reporting on waste and pollution generation intensity measurements (e.g. waste to landfill);
• Reuse, reduce, recycle of waste, such as packaging;
• Safe transport of hazardous waste;
• Disposal of hazardous waste in compliance with local regulations and international lead practices;
• Precautionary and disaster management plans in place;
• Impact assessments done on water bodies & habitats affected by discharge, dumping, litter, dust, SO2, NOx, etc.

Best practice:

• Roadmap with set targets toward zero waste generation;
• Use of biodigesters;
• Closed loop systems where the ‘waste’ of one process is the input to another.

Life-cycle impacts
Guidance: Property developments, buildings, cars, household goods, etc; all have an impact on the environment throughout their lifetime, beyond the point of sale. Life-cycle impacts (from cradle to grave) need to be understood, environmental risks declared and reported on, innovative solutions found to reduce or mitigate these impacts. Responsible organisations will apply the precautionary principle in their approach.

Red flags: Not complying with the Dept of Environment and planning regulations.

24. External environmental risks

How does the firm understand, mitigate, measure and report on environmental risks beyond the company’s control? These include risks related to climate change and extreme weather events, such as:

• Droughts and floods
• Collapse of ecosystems
• Major natural or made-made environmental disasters
• Indirect impacts that might arise through the economy, such as water and food shortages, disease epidemics (e.g. cholera) that related to these external environmental risks