The nebulous greenhouse gas (GHG) issue comes to the fore every now and then. Who doesn’t get uneasy about the effects of global warming and the impact it can have on our lives? Most people tend to dismiss the warnings, but luckily there are some who take it more seriously once they understand the extent of the threat.
We all have a carbon footprint. Some companies, due to the nature of their business, have a much larger print than others. The challenge is to keep it as low as possible to collectively mitigate the effects of emissions on the environment. Unfortunately the two biggest sinners in this arena – Eskom and Sasol – albeit by the nature of their mandate, have contributed towards giving this country a bad name in environmental circles.
Companies can counter their moral obligation to the environment by purchasing credits from other companies who have excess credits on their books. In this way both companies can boast carbon neutrality.
A very innovative market mechanism to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches saw the light with the Kyoto protocol in 1997. This international agreement which is linked to the United Nations Framework Convention on Climate Change (UNFCCC) sets binding targets for 37 industrialized countries and the European community to reduce greenhouse gas emissions. It also makes provision for a new type of currency called carbon credits.
Permission to emit carbon
A carbon credit is a generic term for any tradable certificate representing the right to emit one ton of carbon dioxide. This has the implication that companies in the developed world who are obliged to adhere to carbon restrictions may purchase credits from sources other than their own savings to balance their carbon credit book. Local companies with an excessive footprint may also purchase credits and can then claim to be carbon neutral.
To be able to claim carbon credits involves however an arduous process and it becomes quite an investment to be recognized and registered by the UNFCCC. They have accredited verification agencies that audit and certify emission savings and issue Voluntary Emission Reduction certificates (VER’s) that is tradable.
The pricing of VER’s vary on market demand. Sales as high as € 22 per ton was recorded, but the average price varies between € 7 and € 10. In South African terms it amounts to between R70 to R100.00 per credit. However, if you deduct this from your company’s tax at 40% (because it is a legitimate expense) it will cost you as little as R45, 00 per ton, depending on the broker who would also want his pound of flesh.
Carbon neutral sightseeing
City Sightseeing Cape Town, the red open top buses, recently decided to “go green” and purchased sufficient credits to be able to proclaim themselves carbon neutral. This environmentally responsible gesture, as advertised on the buses, is not only is a “feel good” instrument, but also says something about their Management’s approach to the longevity of the environment that they operate in. They make their living from generating a footprint, but they balance it by “repaying” their debt to the environment. And that makes a lot of marketing sense!
Claus Tworeck CEO of City Sightseeing Cape Town is quite upbeat about the fact that he managed to clinch a local deal. He believes that although carbon emissions are problematic globally, it makes more sense to buy your credits locally.
“The best of it,” he says, “is the fact that my clients actually associate with the concept of a cleaner, greener Cape Town, because they can see it!”
Tworeck purchased his carbon credits from Reliance Compost – a company responsible for reducing the need for Cape Town landfill space by more than 3.5 million m³ during the past31 months through chipping and composting 95% of Cape Town’s green garden waste.
Keeping it local is cool
Reliance is accredited through a European verification agency (TUV – Nord) with the UNFCCC. They create a savings of ± 70,000 credits (tons of CO ² emissions) annually and only use between 2500 and 3000 tons for own emissions, leaving 60,000 tons for sale to other green aspiring entities.
“We prefer to sell to local entities,” proclaims CEO Detlev Meyer. “It brings the intrinsic value of green thinking closer to home. Our clients can use the certified organic compost, made from their own garden waste, to create a better environment and thus continue the circle of giving back to the earth what it gave us.”
Eddie Redelinghuys founded Reliance 13 years ago. He is also a more outspoken organic table grape farmer:
“I’m in the Cape, I am from South Africa and insist on marketing the credits locally. We must all support efforts to not only beautify our country, but also create an awareness of our own environment. If we look after our own first we will find that others did the same for themselves.”
Collective attitude needs to change
Striving towards a more eco-friendly approach to business, will require some changes in the way we approach our collective attitude to the environment we do business in. After all, our and our children’s futures depend on it. However, it doesn’t mean that we close shop and watch the trees grow! Some innovative thinking and professional advice on carbon savings methods should do the trick. If nothing else, balance your carbon footprint by purchasing credits.
There is a growing impetus towards ecologically friendly business, organic produce, sustainable practices and a responsibility towards treating our children’s heritage. It is also good for business to embrace the new economy and show that you care.