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Jeffrey Gogo Climate Story
THERE is considerable uncertainty about how Zimbabwean companies are responding to the threat of climate change and whether they are doing enough to combat future climatic changes. The science is redefining human settlements, livelihoods, energy, agriculture, infrastructure, food and water supply among others. It is influencing the direction in which private and public sector capital flows.

Climate change will, and is, affecting all sectors of the economy and is important for investors, Government and corporate to be always awake to the physical impacts of climate change on assets and investment.

Decisions made by Zimbabwean companies, both public and private, will have a significant influence on how society responds to climate change and how the country transforms towards low-carbon development.

To fulfil the concept of the green economy and help control global greenhouse gas emissions to within safe levels, patterns of corporate investments and attitudes will need to change considerably.

Now, as climate impacts deepen, companies are increasingly being called on to design and implement strategies that are inclusive, yielding sustainable environmental, financial and social benefits.

So, we ask, how green are Zimbabwean companies, particularly those listed on the Zimbabwe Stock Exchange?
What are they doing, as part of sustainable, transformative measures to an environmentally viable and socially inclusive economy?

Below is an excerpt from an interview I had with Carla Simleit, an equity analyst with Harare brokerage firm, IH Securities, which provides some insight into corporate attitude towards the environment. Carla is represented by the initials “CS”.

JG: How much of an influence is a company’s “greenness” on investors’ choice for buying a particular stock on the Zimbabwe Stock Exchange? Do investors consider a company’s environmental implications at all?

CS: Investors looking to invest in a company in resources tend to pay particular attention to the “greenness” of the company. Some companies (for example mining operations) are required by law to undertake rehabilitation works as part of their on-going operations.

As part of their due diligence on a company, investors will often contact the regulatory body responsible for monitoring or enforcing the environmental/rehabilitation regulations, for example the Environmental Management Agency (EMA), to ensure that the company is compliant.

It would be very risky to invest in a company that is non-compliant or whose operations are unsustainable on an ongoing basis, which is why such investors would tend to take precautions in this regard.

Some international investors (particularly unit trusts) may be prevented by their mandates from investing in companies which do not practise ethically, socially and environmentally responsible operations which would also prompt such an investor to enquire into the “greenness” of a company.

Generally though, profitability and corporate responsibility take centre stage in an investment decision (ie take precedence over environmental responsibility) since by nature an investor will be return-seeking.

JG: Of the companies listed on the ZSE, which ones would you pick out as the most environmental and profit conscious?
CS: Rainbow Tourism Group (RTG) – The group in conjunction with Net One and Environment Africa have set up and annual awards scheme aimed at not only promoting greater awareness of environmental issues but also honours journalists who work within this sector.

The awards are presented quarterly and are a valuable tool in raising awareness of the work being done in conserving our natural habitat. RTG presently has several initiatives in place which promote environmental awareness and conservation:

1.) The RTG’s Environmental Policy, launched in March 2009, gives practical solutions to the adoption of sustainable business practises that impact positively on the environment
2.) Partnering with ZOPPA – for organic farm produce. This promotes organic foods through the Rainbow Towers Hotel and infiltrated to all the other hotels under the group’s portfolio.
3.) Waste management through the Reduce, Reuse and Recycle strategy policy being implemented through partnering with Mapepa, a community based waste management company, and Environment Africa.

4.) Engaging in a national cleanup campaign by the group’s hotels in Victoria Falls; RTG’s eco-tourism strategy was put into practice in the following units: Victoria Falls Rainbow Hotel, A’Zambezi River Lodge and Tourism Services Zimbabwe. RTG has won the following awards: A.) First Runner up – Best Environmentally friendly lodge for the Annual Tourism Awards (Zimbabwe) 2008, presented to Lodge at Ancient City. B.) Corporate Environmental Champion for 2009 Award by Environment Africa, which is the most recognised environmental group in Zimbabwe.

Lafarge – the company was awarded the 2013 Environment Africa Corporate Environmental Champion Award. Lafarge is certified by the Standards Association of Zimbabwe for ISO14001:2004, Environmental Management System.

Programmes to reduce carbon dioxide emissions to mitigate global warming threats are also pursued and to this end the company uses 25 percent of waste from other industries as raw materials and champions the cause for resource recovery and waste recycling.

To protect the environment, the company has diversified its sources of raw materials and types of mineral deposits.
Lafarge has also improved effluent quality for the plant discharge points to green class. The regular cleaning of oil traps and discharge points and timely repairs on equipment has made this possible.

ART Corporation Ltd – The group is committed to addressing environmental risks through developing effective management systems and employing the critical principles of forward planning, efficiency and wise resource utilisation.

ART adheres to very high standards of environmental management in all of its operations via both prudent and certified management systems as well as extensive recycling operations which have become an important part of the business. Through National Waste Collections, the company ensures not only reclamation of paper waste, but also takes steps to clean up the environment.

Their battery business has set up an extensive collection network for the purpose of recycling lead at the furnace located at Chloride, and for re-use in the production of new batteries.
Padenga Holdings Ltd – As part of the company’s commitment to environmental sustainability, the technical department has constructed oil separators at both the oil waste site and the fuels distribution site to collect and store waste (old) oil and spilt diesel.

These separators allow the residual oil or diesel in the waste to be separately contained and then collected by a specialist company for disposal.
A drainage system leading from the salt drying racks into newly constructed evaporation ponds was also implemented to contain the salt water runoff and prevent any environmental degradation.

There are ongoing initiatives to further reduce the company’s coal and electricity usages, with unit volumes in 2013 being reduced against prior year.
Investigations into a waste disposal system have continued in an effort to minimise the impact of effluent from the pens on the environment and to ensure better compliance with the EMA regulations. In 2013, the quality of waste disposed as measured by the Environmental Management Agency improved from the red category to yellow in most cases and green in some cases. Padenga Holdings Ltd is making significant progress towards identifying long term strategies for dealing with the pens effluent in a manner that is both environmentally sustainable and cost effective.

BAT Ltd – In response to deforestation issues associated with tobacco flue-curing process, BAT started an afforestation programme in 2009, an initiative that seeks to achieve self-sufficiency in sustainable tobacco curing wood-fuel.

In the 2012 annual report, BAT reported continued success of the programme, with a total of 1,3 million eucalyptus tree seedlings being planted by tobacco farmers, with a total tree survival rate of 86 percent.

In 2012, BAT launched a rocket barn trial project in partnership with the Tobacco Research Board in a bid to slow deforestation down.
JG: What is your general assessment of ZSE firms towards environmental/climate change responsibility? What can be done to change the existing status quo?

CS: It seems that most listed companies’ approach to environmental awareness/responsibility is aimed at achieving sustainability: for example BAT’s afforestation programme, Hippo Valley’s cane re-plantation programme and Border Timber’s re-plantation programme. These programmes are run largely out of necessity for the on-going operations of the respective companies.
As such, companies in the tourism, agriculture and resources sectors tend to pay the most attention to environmental matters and run efficient environmental rehabilitation programmes. As aforementioned, Zimbabwean mining companies are required by law to undertake rehabilitation works.

The Environmental Management Act (Chapter 20:27) of 2004 requires developers to take all reasonable measures to prevent or, if prevention is not possible to mitigate, reduce any undesirable effects on the environment and augment any positive impacts.
In this vein, the ZSE mining counters create “rehabilitation” provisions, calculated by estimating the costs and timing of the future activities necessary to meet currently legislated standards.

The nature of these restoration activities includes dismantling and removing structures; rehabilitating mines and tailings dams; dismantling operating facilities; closing plant and waste sites; and restoring, reclaiming and re-vegetating affected areas.

From this, it is apparent that profitability comes first, and environmental responsibility often comes as a means of ensuring and enhancing future operations and profit streams.
This said, it does appear that listed companies are evolving towards a more environmentally-friendly and “green” future, with a lot more attention given to environmental matters and sustainability that you would have perhaps not found a decade ago.

God is faithful.
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