Companies, non-profits organisation and entrepreneurs can play a crucial role in transitioning South Africa to a green economy through implementing innovative solutions, contributing to job creation and developing local expertise.
Trialogue, in partnership with Nedbank Private Wealth, hosted the second webinar in the Green Webinar Series, Growing the green economy, in October.
Framing the discussion drew on multiple definitions of the term ‘green economy’. The World Wide Fund for Nature describes the green economy as a system of economic activities that result in improved human well-being over the long term, while not exposing future generations to significant environmental risks or ecological scarcities. South Africa’s industrial policy framework green economy policy review defines an inclusive green economy as not only an environmental matter, but primarily a socioeconomic question with core implications for economic development that demands a new model of development to shape a more sustainable economy and society.
At the heart of the issue is that economies are reliant on healthy natural systems. Consequently, the green economy should not be viewed as discreet from, or a subset of, the economy, but as the economy itself.
In South Africa the green economy supports two interlinked developmental outcomes. The first is growing economic activity and working with nature to harness opportunities. The second is shifting the broader economy towards cleaner industries and sectors.
Framing the green economy transition imperative
Indalo Inclusive CEO Rest Kanju spoke to the current and real effects of climate change as the motivation for business to contribute to the shift to a green economy.
“The effects of climate change are upon us. We can argue about the technicalities and modalities and the sources of energy, but the fact remains that global market forces are dictating that we have to transition whether we like it or not. Our manner of consumption has become unsustainable.”
He highlighted the job losses that come with the transition to a low carbon economy as one of the primary challenges Africa faces and commented on how business can respond to this crisis. Society, corporate citizens, intermediate organisations and entrepreneurs have an important role to play in building the resources for alternative, green economies. This will take collaborative effort as well as long term commitment and investment.
Building a CSI paradigm for transformative change
Nedbank Executive Head Grant Kelly explained how Nedbank’s new circular green economy corporate social investment (CSI) strategy reflects this approach.
The company’s strategy is driven by a desire to achieve more systemic change that transforms the economy by building self-reliant, sustainable communities. Achieving this fundamental mindset shift requires a transformational approach to CSI that invests in creating the leadership paradigms required to achieve social justice (as it relates to equity of economic opportunities) in society and uses CSI to build a more socially representative, financially inclusive and ecologically sustainable economic system.
Kelly described how Nedbank’s focus is on the latter, financial hypothesis.
“Our goal is to prove the commercial potential of creating a socially just economic system by making the circular green economy a catalyst for sustainable economic development in rural and peri-urban communities with an emphasis on women, youth and people with disabilities. Our approach is to use our CSI investments as the catalyst to prove our hypothesis, focusing on our four priority areas of water and sanitation, waste and recycling, renewable energy and agriculture.”
Grant funding is the initial catalyst to unlocking opportunities, concessionary funding proves their commercial business case and commercial funding enables business scalability.
Nedbank’s CSI strategy aligns with the unique power of banks to shape the future economy of a society by choosing who they provide capital to and for what purpose. Employing the proverb ‘if you give a man a fish you feed him for a day, but if you teach a man to fish, you feed him for a lifetime’, Kelly explains how Nedbank’s philanthropic paradigm employs a broader approach that, in the framework of the metaphor, seeks to create new and sustainable fishing ecosystems.
Webinar panellist and Tlotlogolo Business Enterprise leader Thuso Motau is one of the beneficiaries of Nedbank’s CSI strategy through the bank’s strategic partnership with Indalo Inclusive. Her business, which recycles used cooking oil and animal fats into cleaning products is an example of a green economy initiative that also raises awareness of and advocates for environmental issues.
Motau explained how the combination of financial and non-financial support she received from Nedbank and Indalo Inclusive has enabled the initiative to extend its collection range to more remote areas, purchase machinery to produce quality products and adopt sustainable sourcing and production practices that promote a more eco-friendly supply chain. It has also allowed the operation to employ eight permanent and two temporary positions.
“We promote responsible land use and land management through the creation of our green product and are looking into creating job opportunities that stimulate economic growth in the used cooking oil, recycling and circular economy.”
Addressing the issue of green economy job creation
It is widely acknowledged that the green economy transition will bring with it a shift in employment opportunities, with job losses anticipated in certain sectors and employment opportunities created in others. Kanju qualified that realising the green economy’s job creation potential will need to be accompanied by strategies to expedite the re-skilling, upskilling and training of people for these new job opportunities. He highlighted the agriculture, water, energy and waste sectors as the four sectors most likely to experience significant changes in employment trends.
Since agriculture is seriously affected by climate change, adaptation measures will demand changes to planting and other agricultural technologies. Increased temperatures are likely to trigger more extreme heat and drought conditions, demanding new strategies to produce crops with less water. New energy technologies, such as solar, wind and hydro, will require different skills sets, as will the waste sector, with its opportunities to repurpose waste.
Kanju drew attention the need for investment and resources to upskill and introduce these new skills sets to society while supporting the entrepreneurial innovations taking place.
Driving the green economy from policy to implementation
Kanju noted that South African policy may support the green economy transition, but that implementation to effect this change is lacking. Strong policies that arise from the Presidential Climate Commission and the National Development Plan do not necessarily trickle down to municipal level, particularly in the rural areas where officials often lack the knowledge of the policies and regulations governing their portfolios, are resistant to implementing them or lack the resources and capacity to do so.
Companies have the potential to help drive policy implementation through public-private partnerships, collaborating with other corporates on similar programmes and working alongside entrepreneurs to meet community needs.
How to build the green economy
Nedbank has taken up the challenge highlighted by the Competition Commission to the traditional banking sector to accelerate access to capital for small, medium and microenterprises (SMMEs). Kelly said the bank is investing heavily in proven incubator partners such as Indalo Inclusive to identify viable, scaleable enterprise opportunities and partners in the green economy space.
Kanju added that intermediary organisations need to challenge themselves to identify the special entrepreneurs and projects that increase inclusivity opportunities for those at the base of the pyramid. In addition to appreciating and supporting the changing needs of small businesses at different stages of their enterprise development, intermediary organisations need to find ways to showcase these enterprise innovations and help them build entrepreneurial innovations, opportunities and support systems, particularly in rural and peri-urban areas.
Motau identified several areas of support that would assist entrepreneurs towards creating greener businesses and a more inclusive and diversified economic system. These include:
- Education and training in the form of workshops, webinars or online courses to educate small businesses on sustainable practices, waste reduction and eco-friendly product development.
- Financial assistance such as grants or access to green investment funds.
- Collaboration towards the development and implementation of sustainability strategies.
- Partnerships to tackle environmental challenges.
- Mentorship.
- Access to supply chain sustainability.
- Assistance with certification and compliance
Recommendations for CSI practitioners
Panellists shared some practical recommendations for CSI practitioners looking to accelerate the green economy transition.
- Seek out and grow collaborative partnerships that build on existing initiatives.
- Identify opportunities that stimulate entrepreneurial innovation in different sectors.
- Provide the financial support entrepreneurs and SMMES need to develop commercial opportunities, create jobs and ultimately improve the economy.
- Fund research and invest in building new leadership paradigms and beliefs that will deliver social justice.
- Invest in sustainable initiatives and green innovation.
