South Africa’s Green Sector gains critical momentum

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Opinion piece – Amanda Dinan

A decade ago, only a handful of businesses were embracing the opportunities associated with the green sector.  Most of these engaged from a compliance or marketing perspective.  Not so today.

Consumer awareness is on the rise.  Health choices contribute to rising demand for organically farmed produce, and the rocketing popularity of local markets and local outlets, offers an increasingly wider market spectrum for these formerly niched producers.   Also informing consumer choices and actions is the question of global climate change.  This issue, which has been simmering for decades, is now finally accommodated in the mainstream media, with bold headlines such as “Hottest year on record” increasingly common.  This is no longer a hesitant debate, it is unarguably the challenge of our generation and generations to come.  Many of us have made the connection: Our consumption patterns make a difference…

What does this means for business? Adjustment. And on the global scene this is very much the case.  Internationally, big players such as Tesla (electric-car industry), General Electric (wind turbines) and Evergreen Solar (solar energy) are leading the way. It is expected that the global market in low-carbon and energy efficient technologies – including renewable energy supply products – will triple to US$ 2.2 trillion by 2020.  The global market for organic food and beverages has risen by 60-70% since 20111. And ecotourism – that focus on nature-based activities – is the fastest growing sub-sector in sustainable tourism, a sector which is likely to increase to a market share of 57% in developing countries by 2030 (47% in 2011).

This is trend is not just about seeking remote and pristine destinations, but has been embraced by the urban hotel industry too.  Cape Town’s Hotel Verde, named, the world’s greenest hotel, has been influential in implementing effective ecotourism strategies, providing an eco-friendly yet trendy and comfortable environment for their guests. The hotel was built with environmentally sustainable materials, and makes use of renewable energy.

On a broad scale, the current energy crisis and imminent water crisis in South Africa have raised the perceived value of natural resources. As government revenue is declining and job opportunities decrease with the downturn, we have no option but to be more efficient with the country’s resources.

The setting is ideal for the Renewable Energy Sector. The cost of renewable energy, especially wind power, has decreased markedly in recent years.  In South Africa, wind power is now substantially cheaper than new coal power.  Internationally, the cost of solar photovoltaic cells has dropped by nearly 10% over the past decade and, according to the CSIR, by 2020 solar power should be considerably cheaper than electricity from coal-fired power stations.

Farming practices in South Africa have also changed.  Conservation tillage, previously a fringe concept, now garners support as better soil moisture management means reduced irrigation requirements (a compelling driver being the rising price of power for pumping costs and increasing water scarcity).  Improved soil management also translates to lower fertiliser costs.

But perhaps the most important opportunity for South Africa lies with small business.  SMEs play a vital role in the South African economy as an income and job creator.  In the past five years, nearly 80% of all new jobs have come from this sector alone.2  Of significance here, is a recent finding from the largest representative survey of SMEs in South Africa, which shows a total of 86% of SMEs either agreed or strongly agreed on the importance of sustainability practices to their business.  When last polled nine years ago, this issue barely registered3.

There are a number of initiatives in SA that have recognised the opportunity presented by the green economy, especially where the growth of SMEs are concerned.  Several business support incubators are getting good results, such as the Technology Innovation Agency (a merging of several agencies) and the Gauteng-based Innovation Hub.  These are complemented by a number of national offerings, many with a technology or innovation focus.  However, the continuum of growth of small enterprises in the sector is vital.  In August this year, Fetola, an award winning enterprise development agency, teamed up with J.P. Morgan for the #JustAddGreen initiative, a collaborative programme that specifically focusses on business growth and development for green-focused SMMEs and SMEs.  This growing initiative understands that we all have an interest in the environment, and seeks to support a range of value-adding SMEs that make a difference in grandest and the smallest ways.

The Green Revolution is coming, if it is not here already. Is your business adapting to the changing needs of a world under pressure?

1 United Nations Environment Programme (2013); Green Economy and Trade – Trends, Challenges and Opportunities (http://unep.org/greeneconomy/Portals/88/GETReport/pdf/FullReport.pdf)

2 Adcorp Survey 2013

3 http://www.africanenvironment.co.za/sme-survey-south-africas-smes-go-green/