Despite initiatives to monitor and reduce energy consumption, Metair noted its challenges with the electricity crisis and compliance with the Carbon Tax Act.
With specific reference to load-shedding, CEO Paul O’Flaherty noted, “This has meant that generators have been installed at many of our operations, resulting in not only higher energy costs, but also increased Scope 1 carbon emissions resulting from burning our own fuels at a rate greater than the reduced Scope 2 emissions resulting from purchasing electricity generated by Eskom.”
On the Act, he said, “Because we’d already been measuring our carbon emissions, the new [carbon] tax provided a useful new element to the investment decisions being considered throughout the group. At an initial price of R120 per tonne of CO2e, our sustainability teams could better quantify the cost of doing nothing from a Rands and Cents perspective, noting that prior modelling was limited in terms of determining an accurate payback period for specific investments and/or a more comprehensive financial model for various energy reduction projects under consideration.”
Working within the framework of the Task Force on Climate-related Financial Disclosures (TCFD), which were published in 2015 by the Financial Stability Board (FSB), Metair’s first climate change report covers the four key areas of governance, strategy, risk management and metrics and targets.
Governance
The ultimate responsibility for Metair’s climate change strategy lies with the board of directors, who have delegated some of these responsibilities to the social and ethics committee, the audit and risk committee (ARC) and the remuneration and nominations committee.
The CEO is responsible for implementing the environmental sustainability strategy and the company’s commitments to climate, water and waste efficiency improvement targets.
MDs of each subsidiary are responsible for leading the delivery of sustainability targets and for the operational aspects of reaching the company-wide performance and efficiency targets.
From 2024, they will also be responsible for reporting bi-annually to the ARC on matters pertaining to climate related physical and transition risks.
Strategy
The JSE-listed organisation integrates climate change considerations into its business strategy and financial planning. It uses a carbon price to account for the financial impact of carbon emissions and considers this cost in its capital expenditure decisions.
The company is budgeting to achieve its climate targets and has invested in projects to improve energy efficiency, reduce water consumption and adopt renewable energy solutions.
It has also begun conducting annual climate scenario analyses to assess climate risks and, based on the scenario analyses, Metair considers climate change a significant strategic risk due to both physical risks (e.g. extreme weather) and transition risks (e.g. carbon regulations). The company is managing this risk alongside other ESG risks like worker safety and environmental impact. Their actions to mitigate climate risk are monitored regularly and reviewed during audits.
Metrics and targets
As part of its commitment to becoming net zero across its entire value chain, Metair has set interim targets:
- Working on establishing Science-Based Targets initiative (SBTi) aligned targets for emissions reduction.
- Measuring progress against Scopes 1, 2 and 3 emissions (for the past 10 years).
- Subsidiaries are given annual efficiency performance improvement targets. In 2023, 60% of the targets were achieved.
Next year, the manufacturer and distributor of automotive components and manufacturer and distributor of batteries for use in non-automotive sectors, expects to align with the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB) climate change reporting guidance referred to as the International Financial Reporting Standards (IFRS) “IFRS S2”.
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