Faculty of Commerce, Law and Management (ETDs)

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Assessing the Retrofitting of Office Buildings in the City of Johannesburg, South Africa
(University of the Witwatersrand, Johannesburg, 2023) Katumba, Bamoni Nathalie; Hildebrandt, Diane
Climate change caused by greenhouse gasses (GHG) has become a challenge to the world and South Africa (SA) alike. SA emits 450 million tons per annum (TPA) of carbon dioxide (CO2) and is the 12th largest CO2 emitter in the world. Buildings account for 50% of GHG, globally; therefore, energy use in new and existing buildings must be addressed. Retrofitting existing buildings has been identified as one of the ways to achieve sustainability in the built environment, this is done by enhancing energy efficiency (EE), the environmental performance of the property and lowering energy demand. This study, therefore, examined the challenges, benefits and critical success factors (CSF) for retrofitting offices in the City of Johannesburg (CoJ), SA. The data for this study were obtained from built environment professionals with experience in retrofitting existing office buildings. An online questionnaire was issued to the targeted sample using Google Forms and 71 responses were received. The quantitative data were analysed using the t-test function from the Statistical Package for Social Sciences (SPSS) software. This study uncovered that lack of government incentives; budget constraints; longer payback periods; technical challenges and disruption of and inconvenience to the tenant during retrofitting are the top five challenges hindering retrofitting of existing office buildings. The study also identified improved EE; enhanced marketability of the buildings; improved building climate control; reduced energy consumption and reduced operational cost of buildings as the top five benefits of retrofitting existing office buildings. Furthermore, project cost control; communication; efficient planning and regulatory approvals between the municipality and project manager; project schedule management and competency of the project manager were revealed as the top five CSF that influence retrofitting of existing office buildings. Recommendations include engagements between various stakeholders; cost benefits analysis; CSF at the beginning of retrofitting projects; changes in government regulations and policies to incentivise retrofitting projects; tenants’ inputs throughout projects, public and private sectors collaboration; availability of retrofitting information and inclusion of sustainability in the built environment tertiary curriculum
Challenges facing small, medium and micro enterprises servicing operational wind farms in the Eastern cape, South Africa
(University of the Witwatersrand, Johannesburg, 2023) Maraba, Mahlatse; Young, Bruce
Climate change has resulted in a review of how electricity is generated with the focus now being on renewable energy sources. In South Africa, this focus is facilitated by the Renewable Independent Power Producer Program (REIPPPP) which seeks to introduce an energy mix of solar, wind, biomass, and hydro into the traditional coal-dependent systems. REIPPPP promised economic benefits and some of the intended beneficiaries are Small Medium and Micro Enterprises (SMMEs). The purpose of this study is therefore to understand the challenges facing SMMEs in wind farms that are in the operational phase to understand if they are benefitting from REIPPPP. A qualitative approach, using semi-structured interviews to obtain data from respondents offering various services to operational wind farms was employed. A sample size of 9 respondents was used to obtain this data. Applying thematic analysis to the collected data it was found that the challenges facing SMMEs are mainly due to lack of support, lack of finance, human capital, lack of policies and difficulty accessing the job market in the wind farms. All these challenges are as per Isenberg’s domains of entrepreneurship framework (Isenberg, 2010). Further themes that emerged are unfair competition SMMEs face and non-compliance issues by both the SMMEs and the wind farms. Given these challenges, SMMEs were negative towards REIPPPP. There is still a large potential for more renewable energy projects to be implemented in South Africa thus, these challenges must be well understood and addressed going forward for SMMEs to fully benefit. Some of the recommendations are for policies and regulations to be implemented by the government to ensure that SMMEs operate on a level playing field. It is foreseen that by addressing policies as a root cause, the remainder of the challenges can easily be addressed.
Climate Mitigation Disclosure on Financial Performance and Market Stability: Evidence from South Africa
(University of the Witwatersrand, Johannesburg, 2023) Ramafoko, Mokate George; Alovokpinhou, Sedjro Aaron
This paper investigates the impact of climate risk disclosure in South Africa on the market stability and performance. The main proxies of climate risk used in the study are greenhouse gas emission intensity and environmental performance rating. The study uses a difference-in-difference method to isolate the effect of climate risk disclosure on a portfolio of highly exposed firms. Firstly, the results show that high greenhouse gas emitting firms have lower returns and higher volatility before and after controlling for time effects. However, the difference-in-difference coefficient from the analysis shows evidence of a weak correlation at a 10% significance level between disclosure of climate risk on the market performance of high greenhouse gas emitting firms relative to low emitters. Secondly, the study could not establish evidence that stocks of high greenhouse gas emitting firms experience higher volatility after the disclosure of their emission inventory. Results of the impact of environmental ratings on stock returns after adjusting for the time effect show that firms rated by the Climate Disclosure Project have lower returns than highly rated firms. However, the difference-in-difference coefficient is weak at a 10% significance level. The results are inconsistent with previous studies in developed countries where a strong correlation between climate risk and stock performance has been established. The findings from the study highlight that either climate risk is already factored into the stock prices, or the risk is viewed as immaterial to have an immediate impact on the equity market. The study addresses the existing literature gap on the effect of climate risk on developing countries' market stability and performance. Future work is required considering the evolving global focus on climate risk as a priority and the potential financial impact on firms’ sustainability
Corporate Entrepreneurship and Environmental Sustainability in South Africa’s Chemicals Sector
(University of the Witwatersrand, Johannesburg, 2023) Ntshani, Itukiseng; Pooe, Kagiso (TK)
Companies in the South African chemicals industry are under pressure to reduce greenhouse gas emissions from their operations while ensuring job preservation andvalue creation for all their stakeholders. Greenhouse gases primarily emanate from burning and processing fossil fuels like crude oil and natural gas. Over 90% of the feedstock for chemical production is obtained from fossil fuels (IEA, 2018), which is not environmentally sustainable. Literature suggests that applying the concept of corporate entrepreneurship can play a vital role in developing solutions to enhance a company’s economic, environmental, and social outcomes (Aparicio et al., 2020). Despite this suggestion, the amount of research done on the application of corporate entrepreneurship to address environmental sustainability challenges is limited, especially in the South African context. This study applies a qualitative research methodology, using a case study research method to investigate if corporate entrepreneurship can address environmental sustainability challenges in South Africa’s chemicals manufacturing sector. Secondary data on companies in South Africa’s chemicals manufacturing value chain was obtained from various digital platforms and triangulated with primary data from interviews to conduct this research. Interview participants included individuals from environmental conservation NGOs and government agencies. The collected data was analyzed in ATLAS.ti through coding and visualization techniques. The results indicate that companies in South Africa’s chemicals manufacturing sector are applying elements of corporate entrepreneurship theory to develop strategies to address environmental sustainability challenges. Individuals from environmental conservation NGOs and government agencies believe corporate entrepreneurship can effectively address environmental sustainability challenges in the chemical manufacturing sector. Most strategies, plans, and projects announced by the companies are yet to be implemented. Therefore, it is yet to be confirmed if these strategies will effectively address the environmental sustainability challenges
Evaluating the effectiveness of South Africa’s air quality legislation as a climate change mitigation tool
(University of the Witwatersrand, Johannesburg, 2023) Mlapisane, Simelweyinkosi; Lisa, Chamberlain
The global community is still grappling with the climate change crisis. Due to the intrinsic relationship between climate change and air quality, South Africa is addressing climate change through its air quality laws. This report demonstrates how these laws have been incorporated in a climate change context. It also evaluates whether the air quality laws have been robust enough to combat climate change. The report further argues that in practice, South Africa has fallen short, mainly due to a badly designed legal framework that has many loopholes, which has led to insufficient implementation. It goes on to make five recommendations on strengthening the legal framework to make it more effective. This report recommends that specific climate change legislation should be enacted; that South Africa should revisit and reform its current air quality laws; that the national government should strengthen the local government’s capacity to improve air quality; that there should be more cooperation between government departments; and that priority area management plans should contain penalties
Factors influencing the adoption of Green Technology by individual consumers in South Africa
(University of the Witwatersrand, Johannesburg, 2023) Jainarain, Rowenta
The effects of climate change are becoming more evident, across the world. It is imperative that humans act as a collective and start immediately, to change their modes and means of operating activities that add to greenhouse gas emissions and global warming. The United Nations (UN) developed the 17 Sustainability Development Goals (SDGs), to be achieved by the year 2030, with SDG 13, Climate Action, being one of them. Apart from companies and industries adding to greenhouse gas emissions, a substantial amount of greenhouse gases are directly and indirectly attributed to the individual consumers’ activity. SDG 17 then comes into play, being, “Partnerships for goals”, whereby this study focuses on the part that individual consumers’ have in the case against climate change. Consumers use electricity in their everyday lives and electricity generation is usually from fossil fuel powered stations, which significantly contribute to greenhouse gas emissions. An alternative would be for consumers, to adopt green technology, in the form of renewable energy, such as solar panels and solar water heaters. This study took a quantitative approach, to assess the factors that influence the adoption of green technology in South Africa. Primary data was collected from 102 respondents via a survey questionnaire, with 87 valid responses after data cleaning. Factor analysis was employed to ascertain the factors that influenced adoption. Multiple regression was used to test the hypotheses developed from the literature survey as well as to determine which factor influenced adoption most. The theory of planned behaviour was the model and framework against which, intention to adopt green technology was tested. The literature survey study found that awareness, self efficacy, ease of access, belief of benefits, cost perception, risk perception, environmental concern, aesthetics and social norms have an impact on intention to adopt. The regression analysis in the study found that awareness, belief of benefits and cost perception had an influence on the intention to adopt green technology and that awareness was the most influential factor. There is very little literature on factors that influence adoption in the South African context, hence this study aims to fill that gap and assist governments, sustainable development organisations and societies, with practical recommendations to influence vi the uptake of green technology in the form of renewable energy in South Africa as well as recommendations for future research
Forecasting revenue using time series techniques in South Africa’s commercial transactional banking industry
(University of the Witwatersrand, Johannesburg, 2022) Malepane, Benny Christian Thapedi
Budgeting and forecasting is a crucial exercise carried by finance teams in organisations to predict their future performance. The use of time series models to forecast financial data has sparked interests from many researchers around the globe. Even though time series studied were carried on financial data, they haven’t been widely applied to total Net Interest Revenue (NIR) from transactional banking. This highlighted a need to apply time series models on this data. This research studies the efficiency of four time series models (AR, ARIMA, VAR and MA) on total NIR for transactional accounts in commercial banking. Macro-economic factors for instance, inflation and prime interest rates are also studied via the cointegration test to identify their influence on model performance using the VAR model. The best performing model is chosen based on statistical metrices, forecasting errors and significance of parameters. The forecasting errors reveal that VAR is the best performing model amongst the four with MA coming second. This highlighted the need to consider inflation and interest rate movements when forecasting NIR on transactional accounts. However, the VAR models did not produce significant parameters, therefore, MA model had to be chosen as the overall best performing model as it produced better forecasting errors and significant parameters than the VAR model. As a result, this study recommends the use of MA models to forecast total NIR for transactional accounts in commercial banking. This study recommends an amendment of certain policies within the banking sector in order to benefit from the results of this dissertation. The polices include budgeting, hiring and remuneration policy. Due to the government dependency on banking forecasts, it was also recommended that government adjusts its budgeting policy to stay consistent with the way banks forecast as they do their forecasts based on the results banks produce.
Implications of environmental taxes due to climate change management in South Africa
(niversity of the Witwatersrand, Johannesburg, 2021) Kunene, Ntombizonke Nomfundo
Climate change has become topical over the years, and refers to patterns of changes in general weather conditions that result in higher average temperatures for the earth and its surface, known as global warming. This is attributable to the increased concentration of gases known as greenhouse gases (Department ofEnvironmental Affairs, 2011). The causes of climate change emanates from natural and human activities (NASA, 2019), human causes are the major contributors to climate change attributable to high industrialisation (Department of Environmental Affairs, 2011). Industrialisation requires the burning of fossil fuels that emit carbon dioxide, which affects the atmosphere (NASA, 2019). The greenhouse gases emitted far exceed capacity of the natural eco-system to reabsorb them, and the clearing of land or forest areas also affects this process (Department of Environmental Affairs, 2011). Policymakers recently gathered to put measures in place to address this predicament and to encourage ‘green energy’ or low-carbon technologies (Funke & Mattauch, 2018). This research study aims to assess the different measures implemented in order to reduce emissions
Senior decision makers’ perspectives on South Africa’s climate change response strategy
(2021) Taylor, Andrew
This research seeks to analyse the perspectives of senior decision makers of South Africa’s climate change response strategy, using Q Methodology as the principal research methodology. The research reveals 4 statistically significant perspectives and seeks to distil traits which exemplify these perspectives. These perspectives have been located within the current international commitments and domestic climate change response strategy of the Republic of South Africa. This research argues that the interdependence of the actors who are responsible for driving the climate change response strategy require a coordinated and structured approach to achieve meaningful change. This approach must be based on multi-sectoral cooperation, led by a nationally coordinated drive to implement decarbonisation strategies compatible with the undertakings made in terms of the Paris Climate Agreement. These strategies must be underpinned by a coherent response which sufficiently balances the trade-offs implicit in balancing a complex system such as climate change, more specifically, when set against the unique background of South Africa’s demographics, structural and economic inequality and natural environment
Senior Decision Makers’ Perspectives on South Africa’s Climate Change Response Strategy
(University of the Witwatersrand, Johannesburg, 2021) Taylor, Andrew
This research seeks to analyse the perspectives of senior decision makers of South Africa’s climate change response strategy, using Q Methodology as the principal research methodology. The research reveals 4 statistically significant perspectives and seeks to distil traits which exemplify these perspectives. These perspectives have been located within the current international commitments and domestic climate change response strategy of the Republic of South Africa. This research argues that the interdependence of the actors who are responsible for driving the climate change response strategy require a coordinated and structured approach to achieve meaningful change. This approach must be based on multi-sectoral cooperation, led by a nationally coordinated drive to implement decarbonisation strategies compatible with the undertakings made in terms of the Paris Climate Agreement. These strategies must be underpinned by a coherent response which sufficiently balances the trade-offs implicit in balancing a complex system such as climate change, more specifically, when set against the unique background of South Africa’s demographics, structural and economic inequality and natural environment
South African Climate Change Regulation: Towards Climate Change Mitigation
(University of the Witwatersrand, Johannesburg, 2022) Manzella, Marco John
Climate change is the change in earth’s weather and climactic conditions due to an average rise in the temperature of the earth’s surface. This temperature increase has principally resulted from an exponential increase in greenhouse gas (GHG) emissions resulting from anthropogenic activity. The consequences of climate change are experienced differently by different regions and the effects can reach across the globe ranging from minor to catastrophic proportions depending on the location of a country. The international response to this crisis has accelerated significantly since the early 1990s and the formation of the United Nations Framework Convention on Climate Change (UNFCCC). South Africa acknowledges the threat of climate change; however, the country has a strained relationship with climate change mitigation as one of earth’s highest emitters of GHGs per capita due to its dependency on coal combustion. This dependency is further complicated by the sector’s status as a primary employment and socio-economic driver domestically. These competing priorities impact upon South Africa’s climate change response. South Africa has advanced climate change mitigation to a limited extent through the slow development of a domestic regulatory framework. The mitigation effort is hampered by some shortfalls in the domestic regulatory framework. The country currently lacks climate change law. This paper seeks to determine how capable South Africa’s domestic framework is of facilitating climate change mitigation. It espouses the view that a robust and comprehensive regulatory framework is necessary for meaningful domestic mitigation action. It emphasizes the importance of regulatory certainty – where adoption and enforcement of the framework are concerned. The current regulatory framework – despite its fragmented, ad hoc nature – is already advancing limited mitigation action. This limited success can be amplified by the adoption of a better developed, more comprehensive framework
The impact of climate change on investment risk and credit risk
(University of the Witwatersrand, Johannesburg, 2023) Bell, Francesca; Van Vuuren, Gary
ESG (Environmental, Social, and Governance) factors have evolved from being a minor consid- eration in the 2000s to a major factor for many companies in 2023. Many companies are now assigned ESG grades, which are closely examined by investors. While it would be ideal for re- sponsible firms to be rewarded and culprits to be penalised, this is not always the case in a profit- driven world. Investors are likely to always prioritise profitability, so some compromise is neces- sary. Recent efforts to balance corporate responsibility with portfolio performance are promising. Using Lagrangian calculus, portfolio optimisation techniques have been developed that show re- turns and risk profiles comparable to those of unconstrained portfolios (i.e., ones which did not consider ESG scores). As expected, low ESG scores influence portfolio performance negatively (as measured by the Sharpe ratio), but very high ESG scores have the same effect. Optimal ESG scores are those which represent the turning points of these relationships, i.e., those ESG scores which result in maximal Sharpe ratios. These optimisation techniques are applied to emerging market corporates for the first time. Over time, ESG scores have improved globally, at varying rates, and have resulted in a statistically significant decrease in risk and increase in returns. As volatility increases, optimal ESG grades rise slowly, and associated Sharpe ratios decrease, and it is postulated that this could be due to the option-like relationship between underlying volatility and inherent value. With a better understanding of trends, asset managers who consider ESG met-rics can confidently assert that ESG compliant portfolios do generate healthy risk-adjusted returns (Sharpe ratios) and that these values are improving over time. ESG compliant portfolios are now viable investments that align with responsible investment principles. Firms must estimate expected credit losses (EL) to comply with accounting standards and unex-pected credit losses (UL) to determine regulatory credit risk capital. Both rely on estimates of obligor probabilities of default (PD). Changes in climate, however gradual, increase firm default rates and climate shocks such as floods or droughts exacerbate these impacts. Investors pay close attention to credit ratings which are derived from inter alia default rates, but studies investigating the impact of climate change on PDs are currently limited and data are still relatively scarce. Africa will be most severely impacted by climate change: default rates will deteriorate leading to in- creased PDs, losses given default (LGDs), provision requirements (through increased ELs) and vi regulatory credit risk capital (through increased ULs). To investigate these effects theoretically, corporate equity prices are simulated using Geometric Brownian Motion (GBM) and shocks brought about by climate events of differing frequency and severity are applied to these simulated prices. Post shock prices and return volatilities are differentially affected depending on the nature of the applied shock. These are used as inputs into a well-known Merton (1974) model of corporate default from which market-implied PDs may be extracted. A possible calibration approach is developed for climate event-based impacts on corporate default rates. A scaling factor matrix (an amount by which the unaffected default rate increases after a specified climate event type occurs) can help market participants forecast default rate changes. Climate related impacts have been quan- tified, calibrated, and used to assess credit quality degradat
Thermal conversion of waste-to-energy by incineration in Johannesburg
(2022) Sithole, Nkumbulo
The City of Johannesburg's population growth and economic activity have resulted in increased amounts of generated municipal solid waste (MSW); concerns developed about landfill airspace depletion. Environmental concerns subsist as a landfilling activity often create greenhouse gases, air pollution and water contamination, therefore, contributing to climate change. Conversely, the City requires electricity to keep its economic activity functional, while providing its citizens with electricity. This case study examined the opportunities and impediments of waste-to-energy (WtE) implementation in the City of Johannesburg. Focus was on thermal conversion by mass-burn incineration, identifying the function of decision-making frameworks in supporting the integrated solid waste management leading to development and WtE implementation. The study established that WtE will stimulate the circular economy in the City of Johannesburg, therefore, contributing to environmental preservation, waste minimisation, and additional electricity capacity for the City. To align with the legislated decision framework, the waste hierarchy, the WtE facility should incorporate the material recovery facility (MRF). The waste hierarchy and other legislated processes, such as the Municipal Finance Management Act (MFMA) and the public-private partnership (PPP) Framework, are inadequate to support WtE development. The research recommends developing a local government-based decision-making framework by the City of Johannesburg—service delivery focused; this would complement existing legislation. A multi-criteria decision making (MCDM) model is suggested. The increase in grid tariffs, cost-reflective gate fees, and introducing landfill tax could contribute to the commercial viability of WtE. The identified barriers are a lack of education and awareness, and improper stakeholder engagement with WtE. Findings indicate a lack of expedited legislation processes tailor-made for projects, such as WtE and five-year political terms, hampering service delivery plans. Findings also identified access to waste by independent power producers Thermal conversion of waste-to-energy by incineration in Johannesburg iii (IPPs) and the City of Johannesburg’s financial viability as barriers. These should be focused on to realise WtE implementation.
Thermal conversion of waste-to-energy by incineration in Johannesburg
(2022) Sithole, Nkumbulo Edwin
The City of Johannesburg's population growth and economic activity have resulted in increased amounts of generated municipal solid waste (MSW); concerns developed about landfill airspace depletion. Environmental concerns subsist as a landfilling activity often create greenhouse gases, air pollution and water contamination, therefore, contributing to climate change. Conversely, the City requires electricity to keep its economic activity functional, while providing its citizens with electricity. This case study examined the opportunities and impediments of waste-to-energy (WtE) implementation in the City of Johannesburg. Focus was on thermal conversion by mass-burn incineration, identifying the function of decision-making frameworks in supporting the integrated solid waste management leading to development and WtE implementation. The study established that WtE will stimulate the circular economy in the City of Johannesburg, therefore, contributing to environmental preservation, waste minimisation, and additional electricity capacity for the City. To align with the legislated decision framework, the waste hierarchy, the WtE facility should incorporate the material recovery facility (MRF). The waste hierarchy and other legislated processes, such as the Municipal Finance Management Act (MFMA) and the public-private partnership (PPP) Framework, are inadequate to support WtE development. The research recommendsdeveloping a local government-based decision-making framework by the City of Johannesburg—service delivery focused; this would complement existing legislation. A multi-criteria decision making (MCDM) model is suggested. Theincrease in grid tariffs, cost-reflective gate fees, and introducing landfill tax could contribute to the commercial viability of WtE. The identified barriers are a lack of education and awareness, and improper stakeholder engagement with WtE. Findings indicate a lack of expedited legislation processes tailor-made for projects, such as WtE and five-year political terms, hampering service delivery plans. Findings also identified access to waste by independent power producers (IPPs) and the City of Johannesburg’s financial viability as barriers. These should be focusedon to realise WtE implementation.
Trends in reporting on climate change, water and COVID-19 by JSE listed companies
(University of the Witwatersrand, Johannesburg, 2022) Seedat, Zakiyyah; Lange, Yvette; Maroun, Warren
Environmental, social and governance (ESG) information is increasingly demanded by stakeholders as companies face risks and opportunities due to ESG issues, such as climate change, water and COVID-19. ESG disclosure helps reduce information asymmetry for users of company reports and helps companies maintain their social licence to operate. Disclosure is voluntary and this introduces differences in the information disclosed by companies. This study analysed the annual, integrated and ESG reports of the top 40 Johannesburg Securities Exchange (JSE) listed companies. These reports were analysed following an interpretive approach to determine the extent of disclosure on climate change, water and COVID-19 in 2018, 2019 and 2020. This study also considered the change in disclosure on climate change and water over these three years. A disclosure checklist has been developed using professional literature. Content analysis has been used to codify the disclosed information with disclosures being scored using an ordinal scale. Descriptive statistics have been used to analyse and graphically present the data. Exploratory factor analysis has been used for the identification of major disclosure themes. This study contributes to existing research by considering the current state of ESG disclosure at a time when notable developments in the reporting environment have occurred. The findings indicate that companies have focused on quantitative and strategy-related disclosure, indicating the adoption of similar reporting practices by companies. The study also found that there was no significant change in climate change and water disclosure from 2018 to 2020

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