You are in : Education > Business Schools

UCT Graduate School of Business

Risks and opportunities of climate change in new course

Sat, 29 Mar 2008 20:29

Climate change needs to be recognised by South African business as a critical economic and social issue, and not simply an environmental concern. This is according to Jonathon Hanks, Director of a pioneering new course - Reducing the Carbon Footprint - to be offered by UCT Graduate School of Business (GSB).

Hanks, Founding Director of Cape Town-based consultancy Incite Sustainability, maintains that South African business has, for the most part, been slow to react to the impacts that climate change will have on the way it operates.

“With no regulatory policies or targets yet in place to reduce carbon emissions in this country, there is reduced incentive for companies to act on the issue,” said Hanks.

“But climate change has serious implications and will present significant risks and opportunities to businesses across all sectors – being short-sighted today may cost dearly in the future.”

It is with these business risks and opportunities in mind that the UCT GSB is offering the Reducing the Carbon Footprint course as part of its Executive Education suite of short courses. The course is breaking new ground in business education in South Africa and aims to give delegates a thorough understanding of the science behind climate changes as well as its implications for business and government.

The course will provide decision-makers in both the private and public sector with the information and advice they need to address the issue on a strategic level by examining examples of international best practice and ensuring a thorough appreciation of the significant physical and policy impacts associated with a changing climate.

Delegates will also leave with practical skills such as how to calculate, report on and minimise an organisation’s carbon footprint.

Hanks describes the business-related risks of climate change as threefold.

“Firstly, there are the policy implications of climate change, with carbon taxes, emissions reduction policies and incentives all likely to come into being at some stage in the future,” said Hanks. “Businesses that plan ahead and implement strategies to lower their carbon emissions now will be a step ahead of the rest when these policies become law.”

“Secondly, there are the physical impacts of climate change that will affect many sectors – including, perhaps most significantly, the agricultural sector. While the effects are difficult to predict, many scientists warn of the increasing intensity and frequency of extreme weather events, as well as significant changes to current rainfall patterns. The damage to infrastructure from severe weather, or a scarcity of water in some regions such as the Western Cape, will disrupt business operations. The insurance industry globally has already felt the impact in recent years as claims from fierce weather events continue to escalate.

“Lastly, the market-related risks of ignoring climate change will increase, as investors continue to interrogate the carbon emissions of companies and as consumers move towards buying carbon neutral and more environmentally-friendly products.

“Companies with a “green” reputation stand to win over a growing market share of conscious consumers, and businesses in the supply chain will be expected to clean up their acts to retain access to foreign markets. Tesco, the supermarket giant, has already begun asking local South African farmers to consider the carbon footprint of their produce, and it is anticipated this trend of supply chain interrogation will continue to spread throughout all sectors,” he added.

This year the Carbon Disclosure Project, a not-for-profit organisation that facilitates dialogue between companies and investors by requesting information from 3000 global companies, will survey the JSE Top 100 companies regarding their strategies for dealing with the climate change challenge.

Hanks believes this type of interrogation is set to escalate in the years ahead with business analysts, investors, government and the media increasingly seeking carbon footprint disclosure from companies.

“South African companies need to realise that we all face a carbon-constrained future and therefore need to find new, sustainable business models today. Tomorrow’s Bill Gates will be the entrepreneur that understands the implications of this future and finds innovative energy or transport solutions.

“The change will be difficult, but innovative companies can use this changing environment to their benefit as well,” he concluded.

Reducing the Carbon Footprint runs at the UCT Graduate School of Business from 12-14 May 2008. Contact Junita Abrahams on 021 406 1323 or abrahams@gsb.uct.ac.za.