Macro Forum: The Street View
The Street View: South Africa
Our private equity business spans a diverse range of sectors. In each area, we strive to mitigate the risks posed by climate change and identify the value creation opportunities that it presents. We are investors in supermarket chains, where the potential for resource savings is significant. For example, Food Lovers Market in South Africa, and also Companhia Sulamericana de Distribuição in Brazil, have both committed to resource efficiency, waste reduction and recycling programs. These programs have already delivered tangible benefits, such as a 60% reduction in energy consumption.
What is happening
Public awareness of the devastating environmental impact of plastic waste has reached heightened levels across the globe. High profile television and social media initiatives on the impact of plastic waste on sea life and sustainable seas are increasingly becoming mainstream media conversations.
Perhaps less awareness exists around the impact that this ever growing plastic demand has on global warming and climate change. However, a growing number of recent studies highlight the high energy intensive process of creating plastics from fossil fuels as a contributing factor to climate change.
What Actis is doing
Actis portfolio investment Food Lover’s Market, South Africa’s leading fresh produce retailer, is becoming a plastic-free future shop with the announcement that, as of December 2019, it is the first national retailer in South Africa to ban plastic bags in all corporate stores and now only offers paper bags, boxes and Food Lover’s Market canvas bags. This is after the successful implementation of paper straws in 2018 and the positive response to the implementation of a ban on plastic bags in Western Cape stores during 2019.
The response from consumers has been overwhelmingly positive - the paper bag itself is very strong and can be used seven times on average, carrying weight of about 10kg.
Further to the ban on plastic bags, Food Lover’s Market is also introducing reduced plastics on bakery range items and the trialling of biodegradable trays with fully recyclable cling film in the butchery range.
These plastic reduction efforts were borne out of Food Lover’s Market’s Earth Lovers program, a Board led initiative to increase the group’s sustainable practices. From energy to waste, packaging to water, Food Lovers Market embraces the responsibility of running a business in the most sustainable way possible and introducing plastic-free options is part of this journey.