South Africa's transport sector embraces ESG

ESG is a global thing

ESG isn’t only a hot topic here in South Africa. It’s foremost on the transport agenda the world over. In 2017, the trains of Dutch railways became the first in the world to be powered 100% by wind energy. Deutsche Bahn plans to reduce CO₂ emissions worldwide by 50% by 2030 and become climate-neutral by 2050. Furthermore, truck and bus manufacturers are launching “green” vehicles faster than you can say “ESG”.

And, according to Elvin Harris, CMILT-President of the Chartered Institute of Logistics and Transport: South Africa (CILTSA), more and more local companies in the transport sector are introducing ESG programmes, as it is nowadays seen as a business imperative.

No easy ride

However, this is not simple in South Africa – and there’s no quick fix. “It is not always easy – considering the South African operating environment. The many disruptions that the transport sector face does make it difficult to understand and implement ESG programmes,” he says.

The ever-changing regulatory environment, infrastructural limitations, and various socioeconomic factors make it more complex for companies trying to incorporate ESG practices effectively. Navigating these hurdles requires transport companies to be adaptable as well as innovative in their approach.

"Practically speaking, implementing an ESG strategy has several benefits,” says Harris. “Not only does it demonstrate a commitment to sustainability and responsible business practice, but it brings about operational efficiency, while it also goes a long way in identifying and mitigating potential risks.”

More collaboration needed

But, while the South African transport sector is doing its bit to improve its ESG performance, Harris stresses that more collaboration between stakeholders is needed to promote sustainable practices.

With this in mind, CILTSA will look at solutions and innovations in the ESG sector at its annual conference taking place on July 20 at the DP World Wanderers Stadium in Illovo, Johannesburg.

“The conversations at our conference this year will be very constructive as we focus on ways and means that companies can introduce to improve their ESG ratings,” says Harris. “The agenda has been crafted to create a powerful platform for industry pioneers, experts and professionals in logistics, transport and supply chain to come together to tackle the common challenges and share practices associated with ESG. The information provided at the conference will equip delegates with the knowledge they need to make informed decisions.”

Banks to offer support

One of the topics under discussion will be the higher expenses associated with ESG-friendly options and the cost pressure this poses for companies. A panel discussion on how banks support transport and logistics companies in attaining their environmental goals will shed some light on this. Additionally, the conference will cover various other topics, including the core principles of climate action, sustainability and circularity, exploring their implications for the industry, while speakers will also address emerging trends and prospects of ESG.

According to Harris, the energy crisis is another complex issue that significantly affects the transport sector in various ways and will be a central topic of discussion at the event. He highlights the need to look beyond the immediate impact of load-shedding and network connectivity loss and consider its broader implications on all industries, the economy, and the entire supply chain. "Load-shedding has far-reaching consequences for the transport sector, leading to disruptions in public transportation, increased traffic congestion, heightened fuel consumption, and elevated air pollution levels.

“Moreover, the energy crisis impacts all three pillars of ESG, contributing to environmental degradation, exacerbating societal vulnerabilities, and highlighting existing governance challenges within the country."

Experts to the fore!

The conference boasts an impressive line-up of speakers, including industry experts and leaders such as Bernard Vilakazi, ABSA's Sector Specialist in Transport and Logistics; Dr Lwandle Mqadi from the Office of the Chief Operations Officer for the Industrial Development Corporation; Julie Rosa, an Associate Director at PwC; Oliver Naidoo, the Managing Director of JC Auditors; and Kuda Mukova, the Head of Impact, ESG, and Sustainability at Norsad Capital. 

Tyson Sibanda, the Manager for Economic Policy at Business Unity South Africa; and Kiren Maharaj, Chairperson of the SA National Energy Association and representative of Trenex, will also share valuable perspectives. To find out more and to book a spot, go to www.ciltsa.org.za

Photo credit: ALE SAT on Unsplash