Climate solutionsAt the end of 2015, representatives and leaders from over 190 countries traversed the globe to meet in Paris and discuss climate change at the 21st Conference of Parties (COP21). Read our article What is COP21? if you would like to know more about the conference, but in a nutshell this was the largest international gathering to address climate change and goals to reduce climate change.


Over the course of the conference, many climate change issues were addressed and many commitments made to speed up climate action and slow down the ever-increasing global temperatures. In addition to the promise for more action, countries have committed to lowering carbon emissions by using more renewable energy and/or penalising emitters more, working toward keeping global temperatures below the 1.5-degree threshold, using more transparent and accountable emissions systems and making efforts to remedy the damages caused by global warming. Each country will of course strive toward these goals in their own way, using the mechanisms that they deem most efficient for their particular economies or cultures. Below is a brief summary of how South Africa’s commitments to the environment will impact local businesses and how these changes should be handled, as well as how local business can play a vital role in working toward climate change.

  1. Understand how you are affected

It’s rather obvious that the first step one takes should be to understand how South Africa’s commitments to climate change affect one’s business. However, bear in mind that a company is affected not only by what occurs within the organisation, but also the carbon emissions or processes in it’s supply chain. The more complex and extensive the supply chain, the larger the net that needs to be cast. Therefore, make sure that you fully understand your carbon footprint as a first step.


  1. Adjust

New commitments to climate change will bring with them stricter reporting systems, and stricter carbon caps, pricing and penalties. All of which will increase the costs of operating a business and ultimately affect the bottom line. Therefore, one needs to understand just how much these costs will affect one’s business, as well as how to start pricing carbon internally in order to better survive the long term implications of carbon activity pricing. So we recommend that you prepare for this eventuality sooner rather than later. Furthermore, if it’s possible to reduce one’s dependency on fossil fuels this will not only reduce costs, but will assist in climate change goals. Thus, moving toward renewable energies or low carbon alternatives could be very beneficial in the long term.


  1. Divest in carbon

Many companies and individuals have interests in carbon intensive industries such as oil or coal, which have traditionally been relatively safe investments. However, these are now high risk investments, given the global commitment to climate change and carbon emission reduction. As such, we recommend divesting in such industries and rather investing in low carbon alternatives. Consider also that some industries or companies that aren’t necessarily carbon intensive may be dependant on carbon intensive industry.


  1. Adapt and evolve

Have you considered how extreme weather conditions (as a result of global warming), such as droughts, water shortages, heat waves and so on, will affect your business activities? This is a very important aspect of long-term viability and profitability, and companies should start considering how they can start making themselves more resilient to such occurrences. As with adjusting, above, one needs to consider the entire supply chain. Having a forward strategy to tackle such impacts is of vital importance.


  1. Innovate

 On a more positive note, a global commitment to climate change will open up many opportunities for investment and innovation. As South Africa, as well as many countries around the world, looks to make the transition to a low-carbon economy, businesses are presented with an opportunity to leverage and benefit from this change. Innovating toward said change and taking advantage of opportunities is now up to business owners, who can choose to move toward renewable and low-carbon industries, which the outcomes of COP21 clearly show will be supported, or stick with the industries of old and hope for the best. If the results of COP21 are for countries to commit to invest more in renewable energies, surely it’s a no-brainer?


Whilst many are daunted by the disruption caused as a result of COP21, we look forward and are excited by the prospect of positive change. These new worldwide commitments will not only sustain the life of our planet, but will provide exciting opportunities for those savvy enough to seize them. To learn more about how the local business environment will change in the wake of COP21, as well as how to prepare one’s self and one’s company for said change, get in touch with us.

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