According to Hendrik du Toit, CEO of Ninety One, products from carbon-intensive economies such as South Africa face punitive measures in large markets like the EU. However, moving to net zero also offers opportunities.

“South Africa is facing the challenge of climate change. We could lead on climate change and access capital [to deal with it]. If we don’t, we could be excluded from capital markets and capital flows to South Africa could be penalized. As a result, the cost of capital will increase and economic growth will slow down further, ”he added during a webinar.


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Ninety One advocates that South Africa use this unique opportunity to reposition its economy for long-term growth, Du Toit said.

IPCC report

The latest report from the Intergovernmental Panel on Climate Change (IPCC), which scientists from 195 countries gathered, highlighted the environmental challenge facing South Africa and many emerging markets.

“It is unequivocal that human influence has warmed the atmosphere, the oceans and the land,” the report says.

“It’s a consensus report,” said Jeremy Gardiner, marketing director for Ninety One. “It is not a few fear-mongering scientists or professors who are making these statements. They agreed that human-induced climate change is leading to more frequent and extreme weather conditions and fires.

“So let there be no doubt that this affects our planet. The proof is all around us. We just had the hottest July in 146 years.

According to The Washington Post, the report, released earlier this month, is nearly 4,000 pages long and includes 234 authors and around 14,000 citations from existing scientific studies.

Given this information, Gardiner said South Africa needs to act quickly.

“There is a huge threat or a huge opportunity. We have to make sure it’s an opportunity, ”he added.

Penalties and carbon scores

Du Toit said the trend to net zero was leading to larger markets imposing punitive measures. The EU has introduced border taxes for imported carbon-intensive products, for example penalizing countries like South Africa.

Gardiner said that from 2023, Europe will have carbon scores on every imported product.

“You will see the sugar, carbohydrate and carbon content of each product,” he added.

Such carbon scores could hurt South African exports, as the country is one of the biggest carbon emitters in the world.

“It’s getting worse,” Gardiner said. “Every citizen will also be under pressure to reduce their personal carbon footprint. So, are you going on vacation to a place with a high carbon footprint, or are you going to Sweden? Do you buy your oranges from South Africa or Spain?

Huge pressure

Gardiner added that countries were going to be under enormous pressure to reduce carbon emissions. South Africa has faced particular pressure as it has the twelfth highest emissions in the world.

“We are one of the most carbon intensive economies in the world,” said Du Toit. “But there is an opportunity. If South Africa seizes the opportunity to be one of the first major emerging markets to strike the right deal, we could access the financing. It could give us the right injection of capital.

Disclosure: Justin Brown owns five shares of Ninety One Ltd.

This article first appeared on Citywire South Africa here, and republished with permission.