1B – Business and Government

Supporting article B: Does business really care about the environment?

Source: http://www.businessday.co.za/

Johannesburg — MOST South African companies do not feel that efforts by the government are effective in encouraging them to significantly change their environmental behaviour, according to a report issued recently by PricewaterhouseCoopers (PwC).

Companies do not believe the government has a consistent long- term environmental tax and regulation policy.

Businesses believe that existing environmental taxes, regulations and incentives are ineffective, inconsistent and unclear.

Kyle Mandy, head of national tax technical and leader of the sustainability and climate change tax practice for PwC, said: “Business leaders believe that stable, properly enforced policies protect fair competition and facilitate long-term planning, which is vital for transition to a low-carbon economy. However, businesses want to be involved and play a roll in developing those policies.”

The study was recently carried out in 15 jurisdictions among 700 executives, including SA, the US, the UK and France. The South African results were obtained through interviews with 30 JSE-listed companies across a broad spectrum of industries.

Most companies in SA see climate change as an issue, with most of them expecting further changes to the way they do business in the next two to three years.

Most businesses believed that the government exerted a strong influence on environmental practices through legislation and regulation.

Companies also contended that potential cost savings and managing corporate reputation were the next most influential measures on decision-making when it came to responsible environmental behaviour.

Few companies (20%) felt that the government was effective in providing signals to business on the need to assess the environmental impact and energy use (as opposed to 44% globally). Most South African businesses (63%) believed that a tax system should include incentives for companies to become carbon-neutral. Businesses in SA and globally tended to prefer emission trading schemes to a carbon tax.

Mark Schofield, PwC global sustainability and climate change tax leader, said that executives felt it was important that money raised from environmental taxes or regulation be ploughed back directly into green projects.

“Corporates tended to view monies raised on environment taxes as a means of raising revenue for the coffers, particularly when times were tight,” Schofield said. However, the sentiment by most governments was that they did not want to be constrained and say where they were actually putting the revenue back.

He said fewer than a third of executives were confident that reinvestment in environmental projects would become a reality.

Source: http://www.businessday.co.za/