By Lehlohonolo Lehana.
PwC South Africa’s eleventh and final Economic Outlook report for the year, coming in the wake of the twenty-seventh Conference of the Parties (COP27), focuses on opportunities and actions to improve power supply and energy sustainability in the country.
Earlier this month, some PwC African leaders attended COP27 in Egypt and observed that providing clear evidence of decarbonisation is a powerful differentiator for organisations in an enviroment where having such targets is merely a licence to operate.
Moreover, the firm posits that climate resilience, which cannot be achieved without decarbonisation efforts, is a powerful source of protection against disruption and value loss.
According to the report, South Africa’s local governments have an important role to play in decarbonisation efforts alongside helping to reduce the electricity supply deficit.
There are several options that could address both issues, including self-generation using microgrids and the enabling of more private small-scale embedded generation. In turn, private sector entities need to think differently about their impact on society and the enviroment, alongside actions taken to achieve net-zero carbon emissions, the report outlines.
From a public sector perspective, South African cities ‘energy strategies will play a key role in achieving sustainability and energy stability in the long term, the report indicates.
It posits that the ideal scenario would be for municipalities to buy electricity from different suppliers in a competitive market at competitive prices, allowing resale at a surplus and transmission to households and businesses at lower cost to consumers.
Efforts are underway to achieve this through the unbundling of State-owned utility Eskom and opening up of theenergy market to competition from the private sector.
South Africa reduced its carbon density (grams of carbon dioxide-equivalent emitted per kilowatt-hour of electricity generated) by 4.6% during 2021.
However, this was largely owing to a decline in coal use associated with loadshedding, and not necessarily owing to the country actively trying to use less of this resource.
PwC emphasises its belief that decarbonisation needs to be front-of-mind for local businesses.
Prior to COP27, PwC highlighted four net-zero priorities that private sector businesses should pursue, namely, decarbonisation of operations and the supply chain; understanding climate risk and building resilience; mobilisation of sustainable capital; and robust audit and enviromental, social and governance (ESG) reporting.
PwC emphasises that, before supply chains can be decarbonised, it is critical to have the necessary data to understand a company’s enviromental impact.
This requires a baselining process that includes benchmarking against peers and against ESG metrics, according to the firm.
Read the full document here:PWC Economic Outlook.