The road to green

The United Kingdom (UK) is taking the business of emissions very seriously – with massive implications for transport operators. I cannot help but wonder if this is a taste of things to come for South African operators …

From next month (April 2013), all businesses listed on the main market of the London Stock Exchange will be required to report their levels of greenhouse gas (GHG) emissions. The UK has committed to cutting carbon emissions to 50 percent of 1990 levels by 2025.

The UK is the first country to make it compulsory for companies to include emissions data in their annual reports. The reason for the legislation is clear: what gets measured gets managed; we all know that the first step to reducing a carbon footprint is measuring it.

Environmental consultancy Ricardo-AEA, says the legislation has considerable transport implications. “Companies are required to report ‘scope 1’ GHG emissions that relate to the direct outputs of the business, as well as ‘scope 2’ emissions that are the consequence of the activities of the business but which occur at other sources (such as the consumption of purchased electricity),” explains Christine St John Cox, Ricardo-AEA’s carbon management knowledge leader.

Naturally transport-related emissions are included – especially if the company owns the vehicles. St John Cox says this can be a good thing. “Monitoring and reporting in this way helps to identify opportunities to cut emissions. And, as transport accounts for a significant proportion of operational costs for many organisations, there is the potential to make significant financial savings, alongside the reductions in carbon,” she notes.

I imagine that the new legislation will work wonders for the sale of “green” vehicles …

But what is the situation in South Africa? Is similar legislation likely here? It could be around the corner. The Department of Environmental Affairs (DEA) wants to make reporting of emissions data mandatory for “entities” (this is how the DEA refers to companies and organisations) that emit more than 0,1 Mt of GHGs annually, or that consume electricity which results in more than 0,1 Mt of emissions from the electricity sector.

Furthermore, the DEA wants to establish a web-based GHG Emission Reporting System – an online emissions inventory. According to the 2011 National Climate Change White Paper, this was meant to happen within two years (so, by 2013).

It will be interesting to see if this does come to pass – if it does, it will be easy to name and shame those companies that are destroying our planet. Emissions reporting could even impact on share prices in South Africa. According to the UK Secretary of State for the Environment, Caroline Spelman, “investors are now looking hard at the green credentials of businesses, and the reporting of green house gas emissions will give them vital information as they decide where to invest their money”. There is no reason why the same situation should not apply here.

Emissions reporting could also impact on the sale of “green” vehicles. Who knows? Maybe we will finally see lots of hybrid trucks trawling our roads … ?

* This column was penned prior to delivery of the 2013 Budget Speech by Minister of Finance, Pravin Gordhan. During this speech, Gordhan announced the introduction of a carbon tax in South Africa, effective January 1, 2015.