South Africa’s Blyde River Canyon (Anthony Wnuk photo)
Seeking Sustainability in South Africa
In a progressive, Black-owned winery, a Foster MBA discovers a potential path to a clean energy future for a nation still coping with its troubled colonial past
While a few members of our South Africa study tour had previously traveled to Africa’s “Rainbow Nation,” none were prepared for the diversity of perspectives and lessons the country and our hosts frankly and graciously conferred to us during the two weeks we spent visiting their beautiful home.
Our group consisted of 20 MBA students and two faculty leaders, a collection of women and men with assorted ethnicities, cultural origins and professional backgrounds. We were joined together through an MBA Study Tour offered and organized by the Global Business Center at the University of Washington Foster School of Business. These tours are designed to diversify students’ educations and enhance global business acumen through international experience.
Many of our hosts were indigenous Africans: sage cicerones, incisive entrepreneurs and ambitious business students. And they welcomed us candidly, eager to share their stories and explain the complexities and nuances of South African life.
As we traveled north to south from the shared border with Mozambique to Table Mountain National Park at the Cape of Good Hope, our hearts and minds were opened and altered by the warmth and generosity of the individuals we had the privilege to share time with; the tragic accounts of apartheid crimes and their lingering effects at the historical sites, museums and monuments we solemnly explored; and the stark majesty of the sweeping vistas and endangered wildlife habitats we encountered along the way.
The effect of adding multidimensionality to a subject or area of interest can only be achieved by living it, breathing it and experiencing it completely in day-to-day existence. Whereas South Africa had existed for me before as a place, a story and a linear space on a map, I now see the stunning spectacle of Blyde River Canyon, envision the hopes and dreams of the citizens of Soweto, and empathize with the collective frustration towards existing government corruption and ineffective empowerment policies.
Unique challenges of decarbonizing
This was my first visit to the African continent. Identifying as a white man and raised in a predominantly white, Midwestern farm town, I have always been eager to explore a diversity of perspectives, societies and locales as I grew and my perception expanded.
At Foster, specializing in both finance and ESG (environmental, social and governance), my dual ambitions have been to build knowledge in all aspects of sustainability and structure a vision for my future professional career bridging environmentalism and social impact. I am also a firm believer in the necessity of clean energy transformation and the increasing importance of adopting sustainable practices in all aspects of business.
Coalescing these motivations, I departed for South Africa with the expectation of learning about the nation’s history, culture and future clean energy goals. And though I certainly wasn’t disappointed, I didn’t have the capacity to grasp the depth and intricate connectedness of those three seemingly independent motifs before our journey began.
The sinister shadow of colonization and the resulting dominion over native resources shrouds the shimmering potential of still-developing African nations and directly influences the prospects of all current and future sustainability efforts. Through this collection of experiences and contemplations, I share my glimpse into the deeply imbedded challenges facing this vibrant country’s plans for decarbonization and the impalpable, yet lingering, opportunity for success.
Negotiating “just transitions”
Every musical piece is enhanced by a refrain, so as the rhythmic pulses and thumps of African djembe drums echo through my mind, I will relate each vignette from our trip to the resonant chord of climate sustainability and specifically the future decarbonization of South Africa’s economy, businesses and industrial processes.
To begin, sufficient background and a brief depiction of pertinent recent events is required. On November 7, 2022, President Cyril Ramaphosa joined the U.S. Department of the Treasury and Presidential Envoy for Climate John Kerry in endorsing the $8.5 billion South Africa Just Energy Transition Partnership (JetP) Investment Plan to minimize and reduce impending greenhouse gas emissions.
JetPs are funding programs facilitating transfer of capital between governments for the purpose of financing decarbonization efforts while delivering a “just transition” for citizens. While nuances abound and any forthcoming beneficial effects have yet to be realized, JetPs will continue to play a significant role in future international climate negotiations as assorted constellations of G7 countries are in various stages of developing agreements with the governments of India, Senegal, Vietnam and Indonesia, with potential for future additions.
Specifically, South Africa’s JetP is a set of transition targets the country has outlined for the coming five years (2023-2027) and through to 2050, a comprehensive strategy for building clean energy infrastructure, and a delineation of the future investments necessary for complete attainment of the plan (an additional $90 billion).
In support of their JetP agreement, the South African government has released their Low Emission Development Strategy (LEDS) plan for 2050 with the stated goal of “follow(ing) a low-carbon growth trajectory while making a fair contribution to the global effort to limit the average temperature increase, while ensuring a just transition and building of the country’s resilience to climate change.”
The purpose of JetPs
Although these publications are each separately deserving of many pages of analysis outside the scope of this commentary, their relation to several additional, crucial realities must be illuminated to fully set the stage:
- First, the capital investment required for the realization of these decarbonization goals is entirely incomplete. The purpose of the JetPs is to structure blueprints and encourage flow of private investment into the countries most impacted by climate change. While planning is the first step, execution and complete funding will be another leap entirely.
- Second, these documents must be viewed through the contextual prism of South Africa’s present political reality. Our trip occurred just a month before the 29th anniversary of the date on which citizens of all races were allowed to exercise their democratic rights and chose to elect Nelson Mandela as their first president. Apartheid’s haunting specter still looms over all aspects of daily life. Past and present inequality and disenfranchisement can be witnessed by observing the ethnicities of both the employees and clientele at high-end hotels or restaurants, perusing the striking racial divide in censual data (the average white household earns nearly five times as much their Black counterparts), or listening to the challenges and realities faced by business owners of all races.
- Finally, South Africa’s elected leaders since Mandela have been continuously plagued by corruption allegations. Former president Jacob Zuma is facing charges for fraud, racketeering, and money laundering stemming from alleged bribes related to a 1999 arms deal, and Ramaphosa was only recently preliminarily cleared from a U.S. currency theft scandal of his own. South Africa ranks just below average on Transparency International’s Corruption Perceptions Index with a score of 43 (100 is most clean, and for comparison’s sake, the U.S. ranks 24th with a score of 69). The distrust residents hold for the current regime was evident throughout conversations with our hosts. Sadly, strategic empowerment programs intended to rectify a portion of the damage wrought by apartheid, such as the Black Economic Empowerment (BEE) policy, drew particular criticism. Originally heralded as a means to redistribute economic power and profits from wealthy businesses to Black citizens, the BEE has fundamentally failed to reduce the country’s wealth inequality statistics (as calculated by the World Bank’s Gini Index). Of the 20+ South Africans with whom we broached the topic, our group failed to encounter a single resident who thought the policy had benefited more than a handful of the elite. Clearly, much work is required to restore the people’s faith in their government.
Each of these three effects, evaluated on their own, serve as a daunting barrier to South Africa’s decarbonization goals; considered as a whole, the insurmountable nature of the great challenges facing future environmental progress begins to fully take shape. Even if comprehensive funding were ascertained, public support for both the necessity and specific application of clean energy policies is far from guaranteed in a country with evident income disparity and racial division, and soberingly, the nation’s trust in their elected officials is at the lowest point since its steady decline began in 2011.
Just as the peaks of the Great Escarpment wall off scenic Cape Town from the rest of the country, these problematic realities will mark the horizons of any path chosen by South Africa’s leaders.
The problem with load-shedding
Our group’s journey began in Johannesburg, the most populous city in South Africa and Africa’s only alpha city, as ranked by the Globalization and World Cities Research Network think tank in their comparison of primary nodes throughout the global economic network.
We quickly learned that while Johannesburg dominates the region’s economy, the sprawling metropolis has no shortage of issues roiling just beneath its iridescent surface. Our hotel was located in Sandton, an upscale district home to several elegant rooftop restaurants, an elaborate shopping mall reminiscent of the Vegas strip, and a luxury car dealership featuring a selection of Bentleys, Ferraris and Rolls Royces.
Despite these extravagant accoutrements, the traffic lights on the blocks surrounding the area functioned only intermittently for the duration of our stay, resulting in a series of adventures each time any segment of our ensemble would attempt to cross a street.
Load-shedding, we learned, is a tactic used to relieve stress on primary energy providers when demand for electricity exceeds the existing supply capacity of that source. Across South Africa, this term was frequently uttered with contempt by our drivers, tour guides and proprietor hosts when referencing the shortcomings and failures of the current administration.
Worsening rapidly in recent years, load-shedding has become a quotidian aspect of life as a South African. It manifests itself primarily in two ways. First, power is only provided to superfluous services, which apparently include traffic lights in “non-essential” areas, when it is readily available and under-supply is not occurring elsewhere.
More importantly, this problem is now so ubiquitous that Eskom, South Africa’s beleaguered and debt-ridden state-owned electricity public utility, publishes load-shedding schedules on their website and Twitter so businesses and residents can plan their electricity needs around the times they are scheduled to receive power during the day.
Wealthy businesses, such as our hotel, combat the scourge by employing massive diesel generators to ensure a constant supply of power for their employees and affluent patrons. Less prosperous businesses must close shop during load-shedding, employ smaller, cheaper generators if they can afford them, or turn to alternative energy sources.
Most South African residents fall in the same category as the latter. In fact, we noticed a series of solar panel arrays located on the rooftops of nearby small businesses and residential areas during our day trip to Soweto, the largest township (borough or neighborhood) in South Africa and home to over one million citizens.
The end of coal?
Currently, coal-generated electricity accounts for nearly 80% of the country’s primary energy production mix with the remainder coming from a combination of hydro, thermal, wind and solar. With over 35 billion tons, South Africa ranks eighth in the world among total coal reserves by country. Despite this fact, the majority (13) of the existing 15 coal-fired power plants are scheduled to be permanently shuttered by 2050 as they reach the end of their useful lives. And while there are pending discussions around building two additional plants in the next five years, the government appears to be willfully driving toward the end of South Africa’s coal-powered era.
Simply a fossilized form of carbon produced by photosynthesis and extensive underground heat and pressurization, coal reacts with airborne oxygen to emit more than two pounds of CO₂ gas for every pound burned. The combustion process occurring in coal-fired thermal power stations is the principal source for electricity generation, the largest single contributor to current greenhouse gas emissions and the primary target of decarbonization efforts worldwide.
Clean energy generation efforts in South Africa would seem poised to deliver an easy win, perfectly dovetailing need and opportunity. With local electricity demand exceeding supply, stated commitments from government leaders and indications of consumer interest from the solar arrays around Soweto, the headwinds for future investment in renewables appeared to be strong.
I expected to find enthusiasm and additional positive signals during our trip to the Gordon Institute of Business Science (GIBS) campus later in the week. Instead, I was greeted with an illuminating and humbling discovery.
A concern of “wealthy countries”
Ant Wilson-Prangley, an associate professor and senior lecturer at GIBS, served as our ensemble’s guide and host during our visit to the school. A tall, energetic, quick-witted white man, Ant surprised us with his eagerness to dive honestly into potentially thorny DEI topics while discussing both his school’s progress and shortcomings in those areas.
Graduate education in South Africa has a long history of existing primarily for white men, but GIBS has worked hard over the past few decades to match their students’ racial demographics to those of the country as a whole. While women are still clearly a minority, Ant was hopeful for future improvements in gender equality as well.
Encouraged by his affability, I took the first opportunity to pull him aside and express my interest in South Africa’s environmental goals and curiosity about how GIBS was implementing sustainability and climate topics into the curriculum. Taking my query in stride, Ant wryly shook his head. He explained that the school administration appreciates the importance of climate change dynamics on a global scale and there is some integration of these issues across the MBA. Despite this, his experience was that many students see these issues as a concern for “wealthy” countries, and not directly applying to their own lives or careers.
Confused and a little dismayed, I resolved to take my questions directly to the source. What else might be discouraging the students from pursuing sustainability issues? We had continuously seen the ramifications of load-shedding during our short stay and spoken with business owners about the negative impacts electricity loss had on their work. Wasn’t there an abundance of evidence that renewable energy investment could work to solve the load-shedding affliction while simultaneously easing South Africa’s emissions?
Sipho’s impossible argument
At the networking gathering later that afternoon, I met Sipho Mabaso, a product manager at Standard Bank, Africa’s largest asset lender and employer of more than 50,000. A young Black man, fluent in three languages, Sipho lives in Swaziland, a four-hour commute to the east, and plans to graduate with an MBA from GIBS at year-end.
After introductions, I pursued my line of questioning, intent on grasping the perceived disconnect between observable reality and student engagement. Initially friendly and gregarious, Sipho agreed with me that load-shedding and its resolution needed to be a focus for South Africans. He referenced seeping government corruption leaching inefficiencies throughout the energy supply chain.
Sharing stories of displaced coal shipments, intended for delivery at power stations only to be auctioned off to higher bidders, Sipho bemoaned the government’s lack of accountability in response to these issues.
For years, the people haven’t had control over their natural resources, the gifts of the land. They have been taken from us, mined and controlled by foreign companies and investors. Finally, we are gaining power and access to the wealth of our lands and now they will tell us we can’t use them? That is an impossible argument to make.”
When I asked about the opportunity for investment in renewables, South Africa’s JetP, and rising worldwide pressure from G7 countries to mitigate global emission rates, his oval face clouded, and with a frown he replied: “Michael, you have to understand. This is true not just here in South Africa, but across all emerging markets as well. For years, the people haven’t had control over their natural resources, the gifts of the land. They have been taken from us, mined and controlled by foreign companies and investors. Finally, we are gaining power and access to the wealth of our lands and now they will tell us we can’t use them? That is an impossible argument to make.”
Stunned, my mind swirled as resolution for the false paradox thudded into place with decisiveness. Now I saw. A simple explanation from my new friend had forever shifted my understanding and brought much needed perspective to my naïve perception.
Autonomy and choice
While I understood that environmental studies indicate the earth’s ozone layer is particularly thin in the Southern Hemisphere, with an “ozone hole” likely responsible for outsized warming effects in Africa relative to the rest of the planet, the future outcomes of impendent climate change in emerging markets such as South Africa remain to be seen.
Clearly visible, however, to the citizens of these oppressed locales, is the iniquity of former colonizing nations mandating future allocation of their local resources and appropriating their right to choose. The cruel contradiction comes into sharper focus when considering the fact that these same resources have powered centuries of carbon-fueled industrialization in wealthy countries across the globe.
Any fleeting progress in emerging markets towards economic freedom and its liberating effects can swiftly come undone without meticulous care to establish true inclusivity in the decision-making process for renewable energy source adoption.
While partnership and investment come with debts and strings attached, these strings must not restrict the effective ownership of resources, decisions and consequences in colonized nations. Manipulations by neocolonialists and displaced oppressors have engendered the systemic corruption seen today, blemishing any objective evaluations of fledgling democratic regimes.
Autonomy and choice are the ringing bells of freedom echoing steadily and intensely in the ears and hearts of the people of South Africa.
These considerations percolated through my thoughts and discussions with my tour-mates as our band’s progress wound south to Cape Town.
The “Mother City” fittingly draws its nickname from its status as the first “Afrikaner” colony established by Dutch traders sailing the Spice Route in the 17th century. Exquisitely tucked between mountainous nature reserves and nestled up against the yawning South Atlantic, Cape Town is the premier tourist destination on the continent, offering surfing and paragliding for the adventurists, fine-dining and a lively waterfront shopping district for the revelers and nearly 900 elegant wine estates in the breathtaking Cape Winelands for the oenophiles.
To the city’s east, Franschhoek is home to Klein Goederust, the only fully Black-owned estate in the valley. The owner, Paul Siguqa, shared his powerful story with our group as we sipped his exquisite version of South Africa’s MCC, a sparkling bubbly produced using the same methodology as champagne but with local grapes.
Wine has defined Paul’s life. Raised in nearby vineyards by his mother, a life-long wine farm laborer, Paul wove for us a rich tapestry from stories of his youth. He grew up watching white farm owners coerce their African vineyard workers into accepting alcohol as payment for labor instead of money.
Pressed by his mother to complete his schooling, Paul started his first business at a young age, selling local fruits and vegetables on the roadside to tourists visiting the estates. His business, knowledge, and ambition grew rapidly and he eventually saved enough to purchase the most run-down and decrepit farm in the area: Klein Goederust.
Just four years later, buoyed by a community of support, Paul has applied his business savvy to transform the boutique wine estate into one of the jewels of the Cape Winelands, South Africa’s Napa.
New South African ideal
As the sleek wooden beams of the farmhouse style tasting room gleamed in the setting sun slowly fading below the surrounding mountain peaks, elegant Edison bulbs danced sparkles of light on the collection of wineglasses amassed at our group’s table.
Paul’s five-year-old daughter played nearby on the grass, her laughter echoing off the alabaster-toned walls of the open-aired buildings that constitute the winery. His Black South African wife, a flourishing editor for a beauty magazine based in Johannesburg, chatted and joked with members of our entourage.
This family, in many ways, represents the new South African ideal. Flushed with confidence, the gratifying return on arduous years spent in struggle and perseverance, the Siguqas give us hope that paths exist for native Africans to exercise their sovereignty to reclaim land and the economic profits that come with it.
The bounties of these strikingly beautiful vineyards have previously been controlled by colonizing settlers and transformed through native labor and foreign investment. By beating the entrenched Afrikaners at their own game, Paul and his family blaze a defined path. They are utilizing the gifts of the land to their benefit, and reaping the rewards.
Illumination in the vineyard
Later this year, Paul plans to install a solar array on his property to ensure consistent, clean energy to satisfy the farm’s power demands. He is already practicing sustainable farming methodologies of pest control and nitrogen addition to the soil to feed his nutrient thirsty grapes. With room to breathe, enabled by his economic success, he can now turn his focus to caring for the land that produces these bounties.
South Africans and the other peoples of colonized nations deserve the same space and grace to first transform their lives and then their countries to meet the tightening emissions standards our planet desperately requires. Freedom of choice is integral to the “just transition” designated in both the JetP and LEDS documents. Decarbonization must come, but so too empowerment and self-sovereignty.
Economically enabled, with access to the newest climate technology and intelligence, the rising citizens of South Africa can be empowered to make Sipho’s “impossible argument” for themselves and choose to forgo their coal reserves.
As evolving climate science disperses environmental knowledge and technological advancements, these gains must be shared globally. Only widespread education will allow Earth’s inhabitants to collectively develop the critical mass of climate conscientiousness necessary to achieve large scale emissions reductions.
Economically enabled, with access to the newest climate technology and intelligence, the rising citizens of South Africa can be empowered to make Sipho’s “impossible argument” for themselves and choose to forgo their coal reserves.
This liminal space between the nocuous fuels of the past and the sustainably minded future represents a remarkable opportunity for the wealthy countries of the world to learn from emerging markets. The keys to unlocking the wicked problems facing decarbonization may well be unearthed by people previously unable to dedicate their careers and lives to these puzzles.
A lesson for global sustainability goals
In Franschoek, I learned that in order to produce the most flavorful grapes, winemakers prefer arid climates and must carefully limit the water and nutrients their crops receive during the veraison and maturation stages of the vine’s annual cycle.
The constant struggle for life between sustenance and starvation yields the largest, most vibrant grapes necessary for the production of exceptional wine. South Africa’s challenging soil and relentlessly beating sun provide an ideal environment for this exacting process.
The native citizens, too, have fought for survival for centuries. Through colonization, disenfranchisement and apartheid, their mettle has been continuously stretched to its limits. Finally, the opportunity has come for them to harvest the fruit; the planet herself may be the ultimate beneficiary of their ripening vintages.
Obscured by the formidable challenges represented by deep wounds from the past and uncertain consequences of the present, the flickering luminance outlining this potential conduit, the pathway to drastically reduced carbon emissions in both emerging markets and our world as a whole, is scarcely visible to my eye, yet the glow persists.
As I contemplate potential avenues for my sustainability-focused career after graduation, the knowledge and insights imparted by South Africa and its residents serve as waypoints for my visualizations, informing both my cognizant pragmatism and persistent optimism.
Wherever my next steps will lead, I now see a clearer illustration of the impending trials confronting clean energy adoption on a global scale and can better appreciate the grave importance of empowering the people from emerging markets to elect their own path.
Principal photography by Foster MBA Anthony Wnuk.
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