Potential market barriers for voluntary climate change mitigation mechamisms in the South African private sector

Abstract

The challenge of the twenty first century is to enable economic growth and increase both the environmental quality and social inclusiveness, while mitigating and adapting to the impacts of climate change. The need for a transition to more sustainable consumption and production patterns is undeniable, and sustainable economic growth must be placed at the heart of future development for all citizens – private and public. The South African private sector is under enormous pressure to remain competitive within the context of the global financial crisis while balancing the interests of society, the environment and its shareholders. It has been suggested that there are discrepancies between what companies say and what they actually do, as they are challenged to move from policy to action. This study aimed to research the role and utilisation of voluntary climate change mitigation mechanisms within the South African private sector, to gain insights into the potential market barriers impeding the large-scale uptake of such mechanisms. The study was guided by three research objectives: <ul> <li> To identify thematic clusters of market barriers for voluntary climate change mitigation in the South African private sector.</li> <li> To identify potential market barriers for voluntary climate change mitigation in the South African private sector.</li> <li> To provide recommendations to increase the implementation of climate change mitigation by the corporate sector in South Africa.</li></ul> This research process involved exploring market barriers in the climate change mitigation market through a literature review, and developing a questionnaire with experts in the climate change sector. Thereafter, the Johannesburg Stock Exchange (JSE) Sustainability Reporting Investment (SRI) Index 2010 companies were surveyed using the questionnaire, followed by semi-structured interviews to provide further depth to the findings. The research findings suggest that the South African private sector has adopted a “take position, wait and see approach”. This approach places them in a position to take advantage of, and influence, the opportunities and risks associated with climate change without having a negative impact on the bottom line. The primary barrier to voluntary climate change action concerns the lack of local and international policy frameworks. Additionally, the different rules and resultant uncertainty around local and international frameworks seems to impede consistent and meaningful action. While this uncertainty does not prevent the private sector from taking voluntary action, it does appear to negatively affect the overall scale and type of climate change mitigation efforts. Furthermore, companies are continually improving the quality of sustainability reporting and public disclosure, the challenge still lies in translating these strategies into daily operations and sustainable practice beyond ad hoc actions.