By Delia Ndlovu and Simon Schaefer
Long before the devastating floods in Libya that claimed thousands of lives in early September and the floods in Mozambique, KwaZulu Natal or most recently in the Western Cape, the impact of climate change had been very visible in Africa.
While all the Sustainable Development Goals are critical, these recent natural disasters are a stark reminder that SDG7 (Affordable and Clean Energy) and SDG13 (Climate Action) are our collective responsibility which need to be addressed with urgency.
Findings of a recent Deloitte survey interviewing African Board Chairs and business leaders confirm that business leaders are paying increased attention to climate change, are intentional about addressing the risks associated with climate change and (acknowledge) they have an important role to play in driving Africa towards a low carbon economy.
This survey is part of Deloitte’s global Chair of the Future report focusing on climate action (through) interviewing hundreds of chairs across the globe.
In our interviews with African business leaders, they cautioned that in Africa, climate action including the Just Transition cannot be divorced from other pressing socio-economic challenges.
Most of the 49 Chairs we interviewed, agree that mitigating climate change by decarbonising electricity generation is important. However, their general sentiment is that Africa should follow its own pathway and pace for Just Transition.
While there seems to be disagreement among the Chairs over the exact timing of the phasing out of coal as a source of electricity, there is a widely held view that the transition from fossil fuels to renewable energy cannot happen overnight in Africa.
In the continent, the private and public sectors must work together pragmatically and alongside local communities to craft sustainable energy solutions that combine various energy sources, and embrace rapidly evolving technologies.
It was evident from the findings, that investors are increasingly basing their investment decisions on a company’s commitment and actions to address climate change, their engagements with broader societal issues and focus on governance matters - these are commonly referred to as ESG factors.
Many business leaders see sustainability as a critical success factor for the long-term prosperity and longevity of their businesses; therefore, most boards in Africa through the Social and Ethics Board Committees are prioritising among other business issues, the integration of climate action into their strategies as well as sustainability reporting and disclosure.
Consequently, raising the level of climate competence among board members and business leaders becomes critical. Boards are starting to collaborate with global organisations such as Climate Governance Initiatives (CGIs) Chapter Zero to heighten the awareness of climate change in line with SDG13.
Based on our conversations, it is clear, that Africa’s process of decarbonising and transitioning to renewable energy must be just, responsible, and measured, determined at the continent’s own pace so as not to exacerbate poverty and inequality.
In addition to the abundance of sun, wind and hydro resource, Africa holds considerable endowments and is already a significant producer of commodities such as cobalt, copper, graphite, lithium, nickel, platinum group metals, rare earth elements, and vanadium.
These minerals and metals are vital for a clean energy future and allow Africa to position itself as a critical player in the low carbon economy.
It is encouraging to see pockets of excellences gradually emerging in parts of Africa where research and manufacturing hubs are created that develop the next generation of clean technologies, harnessing the continent’s natural wealth and creativity.
To fully unlock the continent’s potential in the low carbon economy, African governments need to strengthen their collaboration with each other and the private sector.
Africa needs to make a concerted effort to continuously improve regulatory frameworks, create regional strategies, invest in enabling infrastructure, and mobilise domestic and international funding.
Delia Ndlovu is chair of the Deloitte Africa Board, and Simon Schaefer is Senior Insights Manager, Deloitte Africa.
BUSINESS REPORT