Based in the UK, the Carbon Disclosure Project collates the environmental and climate change concerns of over 6,000 international corporations. By accessing the submissions of 16 major South African conglomerates across the sectors of food retail, mining, financial services and healthcare (among others), Our Burning Planet stumbled into an incredibly grim near-future landscape — one where current business models would struggle to co-exist with food, water and basic services for the majority. What we need, it seems, is a Hail Mary much larger than the 2019 Rugby World Cup.
First, some context.
In May 2019, the United States military acknowledged the possibility that it might not survive the next 20 years. A report, prepared by the US Army War College and Nasa, had advised the Pentagon to prepare for “mission failure” — that is, the loss of the capacity to contain threats at home and abroad. According to the report’s authors (mostly active colonels), a combination of diminishing global water supplies, collapsing energy grids, runaway civil conflicts, mass migrations, unrecoverable crop failures, as-yet-unknown disease vectors and rising oceans would render the US military useless as a “peacekeeping force” unless it stared climate collapse square in the face.
The first two lines of the executive summary were a bracing example of how little the truth cared for lobby groups and vested interests:
“Current conversations about climate change and its impacts are often rancorous and politically charged,” the assessment of the career officers began. “As an organisation that is, by law, non-partisan, the Department of Defense (DoD) is precariously unprepared for the national security implications of climate change-induced global security challenges.”
In other words, the opinions of the nation’s 45th president, a noted climate change-denier, did not matter — a detail rendered doubly poignant by the fact that the report had been commissioned by General Mark Milley, a highly-decorated special forces veteran who on 30 September 2019 would be sworn in as chairman of the Joint Chiefs of Staff.
As a bellwether of the new status quo, the relevance of General Milley’s report for South Africa seemed obvious. For one thing, assuming they paid it close attention, it would have given our own military brass (upon whom taxpayers had lavished around R52-billion in 2018) some invaluable pointers for the future. Because, while supreme commander Cyril Ramaphosa had rightfully flagged “disaster relief” and “humanitarian assistance” as gifts that the South African National Defence Force had bestowed on the wider region, climate breakdown was an also-ran in his Armed Forces Day speech of February 2019.
Back at the beginning of the year, enumerating the SANDF’s successes, the president had placed the following items ahead of the planetary crisis:
- bolstering health services in Gauteng and North West;
- containing sewage spills on the Vaal River;
- battling wildfires in the southern Cape;
- maintaining peace in the DRC;
- patrolling for pirates in the Mozambique Channel; and
- fixing crumbling infrastructure, pretty much anywhere it could.
What hadn’t yet dawned on our military chiefs, it seemed, was that most of these operations were inextricable from the fragmenting climate. The sewage disaster in the Vaal River catchment, according toProfessor Johann Tempelhoff of the South African Water History Archival Repository, was a clear “extension of climate change”. Same for the southern Cape wildfires, according to Professor Francois Engelbrecht, formerly of the CSIR. As for the links to health, civil conflict and general infrastructure breakdown, while perhaps not the primary cause in each instance that the SANDF intervened, the operations weren’t unconnected either.
Which, on the global scale, was the US military’s point. With water scarcity and crop failure affecting large swathes of South Africa by spring 2019, we were already looking as “precariously unprepared” as the Western superpower in its future-facing report. And if our organs of state weren’t yet ready to concede this fact, many of our private sector entities were.
Daily Maverick collated the précised submissions of 16 South African conglomerates to the Carbon Disclosure Project (CDP), a UK-based NGO that was established “to make environmental reporting and risk management a business norm”. The companies, comprised of five food producers or retailers, four mining houses, three financial service providers, an industrial brand manager, a brewing and beverage concern, a clothing retailer and a hospital group were all household names — mainstays of the economy that, taken together, accounted for a sizeable chunk of South Africa’s tax revenues, GDP contributions and formally employed individuals.
Like the “Implications of Climate Change for the US Army” report, the CDP submissions of these 16 companies were a bellwether. In the opinion of Daily Maverick and the “Our Burning Planet” series, they represented the most candid appraisal yet of the severity of the existential challenge.
II. Food, money & minerals
“The Eastern Cape region of South Africa is currently experiencing higher average temperatures,” noted Africa’s largest food retailer in its 2019 submission to the CDP. “Since Shoprite sources some fresh produce lines from these areas, it had to diversify its supply from this region to mitigate this risk.”
Put another way, the farmers of the Eastern Cape, already buckling under the physical pressures of climate collapse, were now up against a cascade of attendant and inevitable commercial pressures. Although Shoprite had deemed food security a “fundamental component” of its mission, which reportedly was the reason it sought “long-term relationships” with suppliers, ultimately it chose to abandon those farmers. And given that it was preparing for “an increased frequency of drought-like conditions,” a near-term scenario that would have a predictable impact on supply lines of milk, sugar and wheat, the customer would not be spared — in this fast-approaching future, Shoprite stated, price increases would be “unavoidable”.
Tiger Brands, Pioneer Foods and the Spar Group were all in agreement on the last point, with the latter adding that extreme weather events could result in the company “not having certain products on shelves”. Massmart Holdings, whose food and beverage chains include Makro, Fruitspot and Game, echoed the general sentiment about supply lines and price hikes, observing that ocean acidification would likely deplete fish stocks too. In its 2018 submission (the latest one available), the company stated the following:
“Should ocean conditions impact pilchard stock biomass this would significantly reduce an important protein source for a large number of South Africans.”
For the Standard Bank Group, the consequences of the above were obvious — a potential “destabilisation” of business, and society. More specifically, the bank registered its concern that its agricultural and home loan book would be exposed to bad debt, leading its own insurance premiums against such loans to “dramatically” increase. Meanwhile, Firstrand Limited was offering a more nuanced take on the intersection between agricultural finance and extreme weather.
“[Climate change] could lead to a decrease in lending into specific geographical areas due to an inability of farmers to obtain insurance on their crops,” the bank stated. “Without the insurance cover, the financing might become unavailable.”
Implying, of course, that the bank wouldn’t give it to them. But if there was any company in the financial services sector whose submissions to the CDP exposed the vulnerabilities in its business model, it was Liberty Holdings.
“Malnutrition and water shortages could increase the spread of vector-borne diseases, the occurrence of malnutrition, cardio-respiratory diseases and diarrhoea,” the group declared. “Liberty’s medical aid customers, including employees, may be affected, causing an increase in payouts related to the overall decline in health.”
From there it was onto the mining houses, whose common complaint was water supply. Anglo American Platinum (Amplats), a conglomerate that once achieved second place in the CDP Global 500 rankings, referred to the drought as “both a concern and a challenge” — without water, it stated, the company could not run its mining, processing or refining operations. Aside from the cost associated with investment in “re-use and post-use water treatment technology,” Amplats expressed a particular concern for the communities that lived alongside its operations.
Daily Maverick has written at length about the relationship between Amplats and the former chief of the Bakgatla Ba Kgafela, Nyalala Pilane, who was accused by the Baloyi Commission of criminally mishandling the financial affairs of 32 communities in the platinum-rich North West. As we pointed out, Amplats had entered into a deal with Pilane that saddled these 350,000 mostly unemployed South Africans with R750-million in debt.
(In a detailed internal report, the company refuted each of Daily Maverick’s allegations, suggesting that it cared deeply about the fate of the Bakgatla.)
Similarly, in its CDP submission, Amplats claimed to care deeply about the fate of the communities that surrounded its Mogalakwena Complex, an operation whose expansion would be “potentially hindered by regional water scarcity due to increased demand and low water assurance associated with drought conditions”. Whether this meant Amplats had since abandoned its plans for the mine’s expansion, leaving the remaining water to the locals themselves, Daily Maverick was unable to ascertain.
The CDP submission of Harmony Gold was equally vague on the issue, given the up-front acknowledgement that the majority of its consumption was supplied by “bulk water service providers”. Harmony noted that it was “restricted by legislation” from directly abstracting water from nearby rivers, and yet went on to state that although its own production had not been disrupted by the drought, “domestic water consumption was compromised in areas surrounding [its] operations”.
The subtext, unwitting or not, was that water security was about to become (if it wasn’t already) a zero-sum game: either the communities could have it, or the mines could. As Rand Water’s only resource was the Vaal River catchment, Harmony was apparently “planning for contingency”. The company was looking ahead to 2020, it stated, when phase 2 of the Lesotho Highlands Water Project would bolster the Rand Water supply. But there was a looming problem on that front too:
“Harmony is also cognisant of the fact that current climate modelling indicates that Lesotho will be experiencing droughts in the medium to longer term, further jeopardising [our] water supply.”
Then there was Sibanye-Stillwater, a conglomerate for which climate mitigation and adaptation represented “increased operating costs”. As a price taker, the mining house declared, it could not adjust the price of its product “to compensate for increases emanating from the supply chain”. The result, it added, could be “marginal operations becoming unprofitable with possible premature closure”.
The final mining house assessed by Daily Maverick was Impala Platinum Holdings (Implats), where the CDP submission read like the above-mentioned doomsday report of the US Army War College and Nasa.
For Implats, climate change would bring with it an increased risk of respiratory, infectious and skin disease; the possible contamination of water supplies and the spread of water-borne diseases; and the increased territorial range of certain vector diseases, including malaria, dengue fever, cholera and meningitis.
“Food scarcity and unstable communities brought about through the movement of people may have an impact on Implats’ workforce and the communities surrounding its area of operations,” the company noted.
“Production disruptions due to escalation of resource-related conflicts could result in considerable mine related losses, particularly in regions already characterised by significant social stress.”
III. Hospitals, wine & hope
If a breather was what Daily Maverick was now after, some sort of beacon that gestured to the light ahead, it wasn’t to be found — from its establishment in 2004, the nature of the CDP had been contained in its name: it was all about “disclosure,” so that reflected through its major corporations the citizens of a country could come to terms with the scale of the task.
On this score, for South Africa, by far the most devastating submission came from Mediclinic International, which runs over 50 hospitals and day clinics in the country. The pertinent submission was worth quoting in full:
“Water plays a critical role in the effective functioning of any hospital — without continuous water supply, hospitals cannot ensure hygiene with an increase in infection control risk. Water shortages, no or limited supply, could cause the shutdown of strategic equipment resulting in limited services in the kitchen and laundry at hospitals in southern Africa. Without water, there can be no hospital.”
The devastating thing was, as a private hospital group, Mediclinic was articulating a possible scenario that happened to be playing out in real-time in the country’s public hospitals. On 6 November 2019, both ENCA and 702 were reporting on the crisis in Hammanskraal in northern Gauteng, a former apartheid “location” that had been without water for three weeks. At Jubilee Hospital in Hammanskraal, the surgery theatres had been shut down due to hygiene concerns. A doctor at the facility had tweeted that the wards were “stinking,” and that Jubilee was “no longer a healthcare centre” but a “harbour for deadly diseases”.
Relative to class-based discrimination of this type, a situation that was the very definition of “climate apartheid,” the worries of the remaining three corporations seemed paltry.
Industrial brand manager Barloworld, although it was admirably blunt on the likelihood that climate adaptation would require a shift in its business model, mentioned that “tourism volumes could also be negatively impacted by the drought conditions,” which could result in a reduced demand for the company’s products and services, “example car hire”.
Truworths International, the clothing conglomerate, was fretting over the long-term damage that could be wrought on cotton crops and wool production, while Distell Group Holdings, the brewing and beverage giant, was lamenting the link between drought and the “shortage of grapes as a raw material for wine production”.
Still, having run through all 16 corporations, it was apparent that wine — or probably one of the stronger alcohols in Distell’s bouquet — would provide the only leg-up to the next part.
The CDP notwithstanding, what of hope?
As a fallback position, “Our Burning Planet” had quoted Derrick Jensen a few times before, and given that we had an interview lined up with him for mid-November 2019 (details to follow), we thought it apposite to quote the man again: “When hope dies, action begins.”
In South Africa, action had indeed begun. The climate justice movement was gaining steam, institutional investors were taking the fight to our most egregious carbon criminals, and the presidency was working on a Hail Mary climate mitigation-cum-Eskom-rescue plan that promised a slightly more enduring upside than the win at the 2019 Rugby World Cup.
Yup, the $11-billion climate finance fund, the proposal to turn the Mpumalanga coalfields into a renewable energy hub that would be the envy of the world — which Daily Maverick had it on good authority wasn’t dead. The plan had its problems, not least the vested interests that were gumming up the works in the economic transformation committee of the ANC, but then the vested interests weren’t confined to politics alone; as the CDP had demonstrated, they extended across every sector of our privately held economy.
Also, like the US Army War College report, the CDP had shown how horrible things were likely to get if contingencies weren’t put in place. Meaning, the South African government, the SANDF and big business would need to pool their resources and come up with a set of adaptation measures that acknowledged the seriousness of the threat.
How fast could they pivot in that direction? This late in the game, there really was no other question.
About Daily Maverick
Daily Maverick www.dailymaverick.co.za is a wholly independent and always entertaining online source for all the news and insight South Africans need, a unique blend of global and local news, analysis and opinion. Founded in 2009, Daily Maverick is edited by Branko Brkic and published by Styli Charalambous.
Daily Maverick loves to beat conventional wisdom with a stick. To readers, they offer the world in a nutshell. Their journalists and contributors are some of the brightest and most experienced around.
Daily Maverick is on a mission to help Rebuild South Africa. This motive extends beyond just continuing with journalism; they want to increase the search for workable solutions, hold events that encourage and inspire their readers and the country as a whole to do what they can to contribute to this mission.
The Village NEWS is pleased to be associated with Daily Maverick and that we have received permission to be able to re-publish their stories to a wider audience.