Natural ecosystems are in global decline, with industrial food production playing a significant role in land conversion, climate change, topsoil-loss, biodiversity-loss, water extraction and pollution, food waste and loss, and the proliferation of waste plastic-packaging and micro-plastic pollution. Our business depends on healthy ecosystems and productive agriculture for the natural resources, commodities, and ingredients that go into producing our food products.

We are aware of the global environmental crisis, and the role that the industrial food system plays in current patterns of environmental decline. We are also aware of the positive regional environmental impact we could potentially leverage through the scale and presence of our organisation, but we must acknowledge that first we need to establish a strong base in foundational environmental practices before we are in a position to significantly scale our impact through environmental opportunities. This is what we are driving through the work of our SSHE team see safety, security, health and environment (SSHE).

Climate change is a strategic risk for Tiger Brands, with the potential to significantly impact our business and value chain. We are starting to unpack the implications of climate change for our business, and take steps towards better mitigation of our impacts and better management of the risks. Our current climate change activities are focused on ensuring compliance with relevant legislation, optimising our energy-use and reducing our GHG-emissions through more efficient systems and technologies, and building stronger and cleaner energy self-sufficiency through onsite renewable energy installations.

In recent years, the civil unrest in 2021 on the back of Covid-19, followed by the disastrous floods in KwaZulu-Natal earlier this year, and not to mention other climate-related natural disasters around the world, have brought home the real potential and significance of compound risks and business impacts that relate to climate change. The commitment and understanding of our board and Exco is growing, and external factors are part of driving this, including legislative and cost pressures. Our approach is informed by compliance requirements, emerging climate change disclosure guidance (including guidance from the TCFD, ISSB, and JSE), and our support of the We Mean Business coalition and the National Business Initiative’s (NBI) Just Transition Initiative

Management

We continue with our mandatory reporting to the Department of Environment, Forestry and Fisheries (DEFF), and monitor relevant legislative developments with interest. We have set an internal price for carbon in response to the South African carbon tax, and paid R4 297 107 in carbon tax in 2022 for the 2021 operating year. We have explored the potential financial impact of the tax on our business, and are monitoring the situation with regard to a planned increase in the tax, as well as the development of a new Climate Change Act in South Africa.

We are committed to working towards the achievement of net zero emissions by 2050, and have set a science-based emissions reduction target of 45% by 2030 (from a 2021 baseline) to help us achieve this net zero commitment. With loadshedding a constant challenge in South Africa, and the financial impact of the South African carbon tax looking significant over the medium term, science-based targets provide a credible mechanism for holding us to account on decarbonisation, while simultaneously supporting us to reduce energy costs, strengthen energy self-reliance and build climate resilience. We also set annual performance targets at the start of each financial year. These annual targets drive incremental year-on-year improvements, and are based on our 2030 goals, current performance and any initiatives planned. Our annual targets for 2022 were to achieve a 6% reduction in electrical energy intensity, water intensity and GHG emissions, which we have achieved.

Performance

We have also launched a clean energy plan which will see the installation of onsite solar power and other renewable-energy solutions at 35 of our manufacturing plants by 2030. We signed a power purchase agreement this year with an independent power producer to introduce solar power at four of our sites – Hennenman Mill in the Free State, King Foods in the North West as well as Beverages Roodekop and Home and Personal Care (HPC) in Gauteng.

In 2022, we recorded a 7,2% decrease in absolute electrical energy consumption, and a 7,9% decrease in electrical energy intensity (kWh/tonne) from the previous year. Closer monitoring of energy consumption through more frequent measurements has enabled quicker response to energy-use inefficiencies and deviations.

Our electrical energy intensities are highest at our S&T plants, and although we make year-on-year improvements, these sites are still inefficient. We have identified actions for some of our sites, but improved metering is required to accurately address this issue. We plan to install more meters in the coming year. Our thermal energy intensities are highest at Musina and our S&T plants. Opportunities have been identified at the S&T sites largely related to inefficiencies in steam usage.

In 2022, we recorded a 12,2% decrease in our total GHG emissions, and a 12,9% decrease in GHG emissions intensity (CO₂/tonne) from the previous year. The significant reduction in GHG emissions recorded between 2020 and 2021 is attributable to our sale of the Value Added Meat Products (VAMP) business (see food safety and quality).

Our emissions calculations include both stationary and mobile combustion (including use of generators and emissions from owned vehicles), and our figures have been externally verified by a third party. Our highest emitting facilities, based on direct emissions from onsite coal boilers, include LAF, King Foods, and Culinary Boksburg. Looking forward, we need to improve our coal boiler efficiencies, increase condensate return and explore fuel replacement options.