PPC task force aims for net zero emissions by 2050, says the company
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PPC’s first Task Force on Climate-Related Financial Disclosures report (TCFD), released yesterday, is likely to be the precursor of many more JSE-listed companies producing similar reports in the future.
Investors and financial institutions are becoming increasingly vigilant about the environmental, social and governance (ESG) aspects of the companies they invest in. As an example, Coronation Fund Managers noted last week in its results for the year to September 30, that it had written 89 letters to listed companies requesting their boards apply the TCFD reporting framework.
PPC chief executive Roland van Wijnen and chairperson Jabulani Moleketi said in their TCFD report yesterday that, to date, they had faced relatively little pressure to reduce emissions from investors and shareholders.
“We expect this to change in coming years. Therefore, up until now, our net-zero ambition has been largely driven from within the company. We believe this forward-looking approach will place PPC further ahead of our regional peers as the challenges of climate change intensify,” the two directors said.
They said PPC’s ambition was to achieve net-zero emissions by 2050, while the medium-term target was 27 percent by the end of financial 2030, while the short term target was a 10 reduction by the end of the 2025 year.
The board and executive had developed a climate change strategy over the past 12 months, despite the challenges of the Covid-19 pandemic and the capital restructure at the group.
They said the carbon dioxide challenges for cement were significant.
In sub-Saharan Africa, the industry’s ability to decarbonise was inhibited by the lack of viable options to reduce emissions, lack of consumer willingness to pay for greener products, a lack of standards, testing and track records of new products, as well as country-specific construction methods and codes.
The cement industry currently generates some 7 percent of the world’s carbon dioxide emissions. Although these are partially offset by the carbon sink that concrete as a building material provides, reducing the industry’s overall emissions is crucial for reaching global net-zero ambitions.
They said South Africa’s regulatory framework was not conducive for the deployment of certain emission-reduction strategies, such as the use of waste as a fuel source, to the same extent as was possible in Europe.
However, directors said PPC intended to forge ahead amid this uncertainty, and where possible, it would take a leadership role in the use of waste as a fuel source, as evident in its recent introduction of tyres at its De Hoek factory in the Western Cape and the use of biomass fuels in Rwanda.
The directors said they would also formulate cement-alternative building practices. As most construction in sub-Saharan Africa was not constrained by space, it need not mimic the cement-intensive building styles of other parts of the world, they said.
“We are exploring how to combine traditional African building methods with emerging global methodologies. As we investigate these alternatives, we will explore options for directing resources from our current business model into an adjacent, low-carbon model that is not directly linked to cement, and that can ultimately become our core revenue stream. We will set targets for this business transition in future reports,” the directors said.
They said that overall, the global net-zero ambitions would boost demand for concrete as renewable and low carbon energy infrastructure was expanded to support high levels of urbanisation, enable widespread electricity access, and achieve global decarbonisation objectives.
They said that if South Africa successfully positioned itself as a green hydrogen producer, the increased investment in solar and wind generation capacity that would be required could significantly increase demand for concrete.
BUSINESS REPORT ONLINE