14 June 2021
By David Wingfield, Absa Group Marketing Managing Executive
It’s become hard to ignore the siren call to protect our planet. As a result, many consumers are trying to be responsible citizens of the world, and they expect the same from corporations.
At a business level, companies have an important role to play in mitigating global warming and in ensuring a just global transition to net-zero emissions. Real economic players and governments are working with a common purpose in the pursuit of a global sustainable market, and this trend is being reinforced by investors.
One notable recent example is Larry Fink, Chief Executive of the world’s largest asset manager, Black Rock, who has appealed to his counterparts in the business world: “Society increasingly is turning to the private sector and asking that companies respond to broader societal challenges,” he wrote. “Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
Already in 2015, polling group, Nielsen, surveyed 30 000 people in 60 countries around the world, wanting to know what influences the way consumers feel about brands – and how those feelings impact buying behaviour.
The survey found that two-thirds of respondents would happily pay more for sustainable goods. Interestingly, however, the results showed that in developed markets where consumers face an abundance of choice, the percentage of people willing to pay more, was lower.
It follows then that there is much more scope, and demand, for stimulating public debate and promoting sustainable principles to consumers in emerging and developing economies such as Africa, the continent that we call home.
Africa: A continent of opportunities
Africa is a big continent of stark contrasts. Despite this, the continent’s economic potential remains full of possibility – thanks to a significant youth population, fast-growing cities and flourishing domestic markets.
In addition, the Fourth Industrial Revolution (4IR) and the outbreak of the COVID-19 pandemic presented unique opportunities to speed up change on the continent. It signals a new era for regional partnerships, requiring agile leadership with an entrepreneurial mindset to create pathways for shared prosperity and a sustainable future.
Our ambition is to become a leading, purpose-led African bank, and we are acutely aware that climate change presents a material and urgent global challenge with significant socio-economic consequences.
We have shown our commitment to a just global transition to net-zero emissions, and a number of milestones in our sustainability journey reflects our ongoing commitment.
- We were the first South African company to voluntarily include a climate change resolution on our AGM agenda last year, and secure support from shareholders for that.
- We were a founding signatory to the UN Principles for Responsible Banking.
- We signed an agreement with the Multilateral Investment Guarantee Agency (MIGA) covering seven of our subsidiaries outside South Africa, which includes setting up environment and social management systems, caps on specific loans and green loan commitments.
- We established the dedicated Sustainable Finance team in our Corporate and Investment Banking business.
- We elevated Sustainability Risk to Principal Risk in our Risk Management Framework.
- We published our first Task Force on Climate-related Financial Disclosures report in March.
- We were the first South African bank to announce sustainable finance targets.
- We have financed 33 deals, or 46% of South Africa’s renewables projects to date, making us one of the leading financiers for the country’s extensive renewable energy programme.
- We are one of the lead arrangers and a senior lender in South Africa’s largest concentrated solar power tower plant, with an estimated cost of R12 billion.
- We announced Africa’s first certified green loan from the IFC, of $150 million.
- We completed a pilot with the Council for Scientific and Industrial Research (CSIR) on climate change scenarios that we will extend to cover our real estate and agriculture book, which jointly comprise 40% of our South African loans.
- Finally, we have committed to publish standards for the oil and gas and mining sectors this year.
With our pledge to implement the United Nations Principles for Responsible Banking, we affirm and express our willingness to assume an active leadership role to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
Playing a shaping role in the societies where we operate
Our Group strategy identifies playing a shaping role in Africa’s growth and sustainability as a key strategic enabler, and the growth we want to achieve is inextricably linked to our firm commitment to be an active force for good in the communities where we serve.
We currently impact the lives of tens of thousands of people on the continent who live and work in the diverse communities where we operate, and akin to Fink’s appeal, we acknowledge that we have to show how we make a positive contribution to society.
One of our top priorities is to put the basic building blocks in place to ensure that young Africans can reimagine their futures and bring their possibility to life. Our young generation face a rapidly changing world and it’s with this in mind that we have made a very clear strategic commitment to bolstering the education, skills development and employability of our young people.
We also believe in possibility and in the actions of Africans who always find a way to get things done. This positions us as a bank that is truly African in understanding and responding with creativity, ingenuity and tenacity to the development imperatives of our continent.
Collaborating for change
As our new post-COVID-19 world order grows more inter-connected and even more complex, we will now, more so than ever before, play a key role in unlocking Africanacity – bringing our shared futures and Africa’s possibility to life.
The pandemic has reminded us that global challenges require brave action, and for this reason, we have joined forces with like-minded partners such as Daily Maverick to help South Africans make the risks of the global climate crisis a bigger focus of everyday life.
The response to the climate crisis is everyone’s responsibility and with our support, Daily Maverick will be stepping up its response with impactful, investigative journalism.
We are really proud to be a media sponsor of Daily Maverick’s Our Burning Planet project, to bring readers the hard-hitting journalism for which Daily Maverick is known.
Together, we hope to stimulate public debate, shift policy and contribute to creating sustainable and value-creating solutions to some of Africa’s greatest environmental challenges.
As we head towards the 26th UN Climate Change Conference (COP26) that will be held in Glasgow in November this year, we are heeding the call to protect our planet.