Green financing: rewarding those who measure

The race to Net Zero has increased the burden of compliance for farmers, as in addition to administrative tasks, carbon footprints need to be tracked and reported.

- MARLENE LOUW

There is however a silver lining for those who can prove due diligence. Lindi Botha spoke to Marlene Louw, senior economist at Absa AgriBusiness.

What is green financing?

Key policy measures around the globe are being implemented to reach Net Zero, where the amount of carbon emitted is equal to that being sequestrated, so that global warming will slow down. Countries around the world have committed to time frames and reduction rates for carbon emissions, with the EU having of the most stringent targets. This is important because the EU is a vital market for South African agricultural products, and the carbon footprint of farmers in South Africa will play a role in how their produce is accepted in the EU.

South Africa too has committed to reaching Net Zero by 2050. Local and international pressure to align all business practices to this goal is therefore increasing.

THE CARBON FOOTPRINT OF FARMERS IN SOUTH AFRICA WILL PLAY A ROLE IN HOW THEIR PRODUCE IS ACCEPTED IN THE EU

All companies will need to start accounting for their own emissions, and those created by companies with which they do business. Banks for example, therefore need to take into account the emissions of their clients and potential clients as it impacts their sustainability.