The shift towards net zero is no longer a distant aspiration; it is now an urgent reality.
By Claire Bradbury, sustainability lead at Accenture, Africa
As rising global temperatures exacerbate extreme weather events, hastening the pace of the transition is critical. For South Africa, as the world’s 11th highest emitter of greenhouse gases, the transition to net zero is complex.
The country remains heavily dependent on coal, with nearly 80% of electricity still generated from carbon intensive assets, while energy insecurity, socio-economic inequality, and unemployment increase.
Beyond the country’s borders, simmering multipolarity threaten to erode the landmark consensus and associated instruments achieved by the Paris Agreement.
Yet the imperative remains for the South African business community to hold firm. Opportunities abound to capitalise on the positive-readiness trends associated with the climate transition.
Product innovation, a young-leaning population, and new opportunities for dialogue and collaboration in a changing world provide South African businesses with a unique chance to lead through reinvention, resilience and growth.
The urgency is real. Climate change and its associated risks are a daily reality for South Africans, with severe droughts, floods, and biodiversity-loss affecting food security and other vital ecosystem services, and extreme weather events disrupting supply chains, damaging infrastructure and exacerbating public health and sanitation risks.
The agricultural sector has experienced significant losses in recent years and faces ever more uncertain yields; mining sector assets are being hit by water scarcity and uncertain financing; and insurers have experienced heightened sensitivity with both assets and liabilities exposed to climate risk.
These risks emphasise that sustainability must be proactively integrated into company strategy to enable organisations to deliver value while navigating the prevailing forces.
Despite the optics of global capital markets faltering in their visible commitment to sustainable investments, climate change and nature loss will inevitably transform every industry and every business.
South African firms seeking to remain competitive internationally cannot afford to lag behind the progress already made in other regions. Export-driven industries like mining, automotive manufacturing, and agriculture are particularly exposed, as trading partners in Europe and elsewhere begin implementing carbon border adjustment mechanisms.
Without clear transition strategies, local firms risk losing market access and investor confidence.
Renewable energy lies at the heart of South Africa’s path to net zero. The country has some of the world’s best solar and wind resources, and the private sector is already stepping in to supplement the state-owned power utility’s constrained grid.
Mining companies have begun investing heavily in their own renewable plants to ensure reliable power, reduce emissions and reinvent their business model for future relevance.
Similarly, retailers and property developers are increasingly turning to rooftop solar and energy efficiency measures to both cut costs and align with sustainability targets.
These moves are not only environmentally sound but also make strong business sense in a context of frequent load-shedding and rising electricity tariffs.
The financial sector also has a pivotal role. South Africa’s banks have already started aligning lending portfolios with climate goals, with several committing to phase out direct financing of coal projects while expanding investment in renewable infrastructure and nature-based adaptation to climate change.
Development finance institutions, too, are mobilising capital towards projects that support just transition goals and participation in the digital economy, ensuring that vulnerable communities are not left behind as industries evolve.
This is particularly important in coal-dependent provinces such as Mpumalanga, where job creation and retraining will be essential to ensure social stability.
Skills development is, therefore, essential. The transition to net zero will create demand for new expertise in renewable energy, circular product- and system- design, advanced manufacturing and the digital economy.
South Africa’s education and training systems need to align quickly with this shift.
Encouragingly, partnerships are emerging between universities, multinational corporates, small and medium enterprises, and government to establish specialised programmes in future-facing green and digital skills.
But scale remains a challenge. Without coordinated investment, the skills gap could undermine the country’s ability to take full advantage of new industries.
Credible and actionable transition plans are essential, alongside an understanding of the most impactful levers for decarbonisation.
Government policy should be the glue that holds these efforts together; while South Africa has some of the frameworks in place, including the Just Energy Transition Investment Plan and international climate finance arrangements, the country’s regulatory system remains behind.
But businesses cannot afford to wait for government alone to lead. Companies that move ahead of policy – by recognising the urgency of pivoting their products and services, investing in innovation, and developing the capabilities needed to adapt to and mitigate physical risk, transition risk and reputational risk – will help shape a positive policy environment.
Technology and innovation will underpin much of this progress. Advances in new energy markets are gaining global traction, and South Africa has an opportunity to position itself as a leader given its natural resource base.
The country will also need to exhibit a timely and well-governed response to the growing digital and artificial intelligence economy.
Critically, the role of human ingenuity and local nuance continues to be essential to any attempt to reduce emissions, restore nature and unlock growth at scale.
Sectors such as healthcare, agriculture, transport, mining, real estate and tourism must be supported by investment in the green and blue infrastructure that underpins economic, human and planetary health.
Of course, the road ahead was never going to be easy, and amid the fractious multilateral landscape, South African businesses must be resolute in leaning into the Net Zero transition.
The transition involves significant upfront costs, and in a country already grappling with fiscal pressure and social inequality, businesses may be tempted to delay.
But the cost of inaction in the face of systemic risk is far greater. The World Bank has estimated that climate change could reduce South Africa’s GDP by as much as 3% by 2050 if adaptation and mitigation measures are not accelerated.
For businesses, this translates into disrupted operations, reduced productivity, and heightened exposure to global regulatory shifts.
Net Zero, therefore, still represents a strategic driver of business value, and the private sector must be on the front foot in ensuring that South Africa honours its domestic international commitments, while also reaping the economic benefits of the green transition.
This is not just about acting for the climate, nature and people; it is about securing long-term competitiveness and resilience.
For South African businesses, the opportunities to attract and retain talent, licence to operate, access to capital and end consumers are vast, but they will only be recognised through decisive action today.