Faculty of Commerce, Law and Management (ETDs)

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    Hydroponic farming for saffron cultivation in South Africa
    (University of the Witwatersrand, Johannesburg, 2024) Smit, Johan
    In South Africa, saffron has exclusively been cultivated using traditional farming methods. Although farmers face an increasing range of challenges and uncertainties, hydroponic farming offers an opportunity to alleviate many of these challenges, while simultaneously increasing output and reducing input expenses. The primary objective of the planned business venture was to investigate the possibility for hydroponic saffron farming in South Africa. The study focused on the development of a hydroponic system to cultivate saffron, aiming to mitigate the daily difficulties and risks faced by conventional farmers. The study adopted a qualitative exploratory research approach. The study gathered substantial information through interviews with farmers in both the traditional saffron and non-saffron hydroponic industries. Interviewing farmers provided insights into the perspectives of persons involved in both the traditional saffron industry and the non-saffron hydroponic growing sector. Three hydroponic cultivators and one saffron farmer were interviewed face-face. Another Saffron farmer was interviewed telephonically. The study examined the necessary requirements for hydroponic saffron cultivation in South Africa, covering technical factors for saffron cultivation, operational prerequisites, financials, market analysis, and challenges. The research findings highlighted the significance of hydroponic systems within an overall context. The main driving force for the transition from traditional farming to hydroponics was climate change among the participants. An essential challenge in hydroponic saffron growing is its relatively lower profitability compared to other crops like herbs, lettuce, and tomatoes. Including the concept of opportunity cost into the breakeven analysis will lead to a reduced repayment period, hence justifying the concept of saffron cultivation with a hydroponic system. In conclusion, cultivating saffron with hydroponics is a sustainable solution when considering opportunity costs due to the value of the spice, and the increasing uncertainty of climate change affecting output.
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    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
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    Perceptions of energy efficiency consequences of implementation of ISO 50001 in South Africa’s pulp and paper industry
    (University of the Witwatersrand, Johannesburg, 2023) Kapp, Juanita; Hildebrandt, Diane
    With loadshedding taking place daily, often more than once a day, businesses suffer financial losses (Maphumulo, 2021). Research findings revealed that SA is only 38% transition ready towards energy efficiency (World Economic Forum, 2020). Adopting and implementing the energy efficiency option holds various benefits and might even create economies of scale for businesses if understood and implemented correctly. Environmental strategies ensuring an increase in efficiency and a decrease in risks to the environment are known characteristics of resource efficiency and cleaner production. The United Nations introduced 17 sustainable development goals (SDGs). Goal 7 refers to affordable and clean energy, which is a topic directly impacted by this research. Other SDGs included in this research are Goal 6 clean water and sanitation; Goal 8 economic growth; Goal 9 industry, innovation, and infrastructure; Goal 12 responsible consumption and production; and Goal 13 climate change. The implementation and maintenance of ISO 50001 serves as a central focus point, although other frameworks and models that could be used for an EES will also be referenced. Benefits and motivators for the transition towards energy efficiency will also be discussed. Another factor highlighted is the geopolitical implications that SA faces and how to better position the country to become more transition ready.
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    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
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    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
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    The introduction of renewable energy into the South African energy mix without affecting the socio-economic environment of the country
    (University of the Witwatersrand, Johannesburg, 2022-12) Baepi, Marvin; Mondi, L.
    There is no doubt that climate change is a reality, even though there is a huge disagreement on what course it. In response to this reality, in 2011 South Africa introduced the National Climate Change Response Policy White Paper (NCCR. 2011; Lukey, 2020). The policy was a mitigation response to address Greenhouse gases (GHG) emissions. It had short, medium and long term goals to stop the increasing GHG emission by latest 2025 and stabilisestabilize it by 2035 and start reducing from 2035 – 2050 respectively. These policies among other things, aim to eradicate or reduce dependency on electricity generation using coal. They also aim to encourage businesses to reduce CO2 emissions. However, instead of businesses reducing CO2 emissions , they pass through the penalties that the government impose on them for emitting CO2 during their production processes to their customers. South African has high unemployment rate and low skilled labour contingent, especially in the coal mining industry. The government cannot afford a fast pace eradication of coal fired power generation as this will deepen unemployment in the coal industry, especially in the Witbank area. The deployment of renewable energy requires highly skilled individuals for construction, operation and maintenance. The introduction of renewable energy at its current form, where Eskom is a single buyer is very expensive for South Africans at large. This is because Eskom applies a pass through method for buying electricity that is more expensive than their current fleet of electricity generation plants. The industry needs to be deregulated in order to achieve a fair and workable plan for South Africans
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    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
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    Carbon Footprint Inequality in South Africa
    (University of the Witwatersrand, Johannesburg, 2023) Krinsky, Jezri; Isaacs, Gilad
    As the effects of climate change and other ecological crises worsen, numerous attempts have been made to apportion individual responsibility, or ecological footprints, to find effective and just ways to reduce ecological damage. Massive inequalities exist in the responsibility for, and consequence of, ecological damage. So, a just transition must identify how ecologically damaging consumption patterns may be reduced, in ways which do not adversely affect lower-income and other marginalised groups. However, although a significant proportion of carbon emissions may be accounted for in terms of household consumption, these patterns of household consumption are deeply influenced by wider social, political, and economic forces, in larger systems of provisioning. This study estimates and examines the patterns of household carbon footprints within South Africa and explores the link between carbon footprint inequality and income inequality and energy poverty; and how these patterns and links are shaped by systems of provision for carbon intensive consumer good
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    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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    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