Governments must set up changes to halt global warming

Businesses are looking to government for leadership in establishing the necessary behavioural changes to halt global warming.

This was one of the findings of PricewaterhouseCoopers’ report released on Thursday entitled “Appetite for Change: The global business perspective on tax and regulation for a low carbon economy.

In the South African supplement to this report, the global results were compared to the SA results from interviews with 30 of this country’s leading companies.

The report showed that 90 percent of SA businesses believed government exerted a strong influence on environmental practices through legislation and regulation, while the majority of SA businesses contended that potential cost savings and managing corporate reputation were the next most influential measures which impacted on decision making when it came to responsible environmental behaviour.

The report found that 84 percent of respondents agreed that climate change would alter the way they did business over the next two to three years.

In France the figure rose to 100 percent while in the UK, Canada and Australia it sat at 90 percent.

Many executives believed that current policies were not sufficiently coherent or effective but remained ready to support policies that were consistent, linked to saving the environment and which were developed in consultation with the private sector.
The report said 73 percent of businesses in SA concurred with global business sentiment on the clarity of policies while 62 percent of businesses internationally held the belief that existing environmental taxes, regulations and incentives were ineffective, inconsistent and unclear.

In addition, 77 percent of South African businesses (compared to 57 percent of businesses globally), did not believe that government had a consistent long-term environmental tax and regulation policy.

“A further concern is that half of local businesses feel that the meeting criteria required by tax incentives are too onerous.”

Only 20 percent of South African businesses deemed that government was effective at providing signals to business on the need to assess the environmental impact and energy use (as opposed to 44 percent effective globally).

Only 27 percent felt that government efforts were effective at encouraging businesses to significantly change environmental behaviour.

“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,” Kyle Mandy, head of National Tax Technical and leader of the sustainability and climate change tax practice for PwC said.

However, businesses wanted to be involved and wanted to play a role in developing those policies.

Globally, 44 percent of executives felt it was primarily up to government to take the lead in bringing about a shift in behaviour regarding climate change.

This proportion fell to 33 percent in the case of South African businesses where 37 percent believed that business should take the leading roll, more than double the global average.

When it came to the most effective way of getting businesses to reduce their impact on the environment, businesses clearly saw the answer to lie in a mixture of ‘carrot and stick’ — with 86 percent opting for tax incentives and 83 percent for regulation.

The leading factors instrumental in influencing an organisation’s environmental behaviour were compliance with legislation and regulation (85 percent), corporate reputation (74 percent), cost savings (73 percent) and competitive advantage (67 percent).

“Interestingly, business people are saying that done in the right way, regulation can be welcomed rather than seen as a constraint,” the report said.

Source: www.thestar.co.za, also in Sapa online

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