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Our Voices

Building resilience for the future through purposeful impact

7 August 2025

By Punki Modise, Chief Sustainability Officer, Absa Group

Sustainable finance is often judged by its immediate impact. But looking at it through a short-term lens misses the point. For banks like Absa, sustainable finance is not a side project. It is a way to manage risk, back innovation and stay competitive over the long term.

Africa’s development goals – outlined in frameworks such as the Sustainable Development Goals, the African Union’s Agenda 2063 and South Africa’s National Development Plan – require capital far beyond the reach of public funding. Financial institutions must step up, not only with capital, but with a clear strategy.

Absa mobilised R121bn between 2021 and 2025, focused largely on renewable energy. That is only a fraction of what is needed to tackle South Africa and Africa’s infrastructure and sustainability challenges. But the aim is not only short-term results. Investing in high-risk, low-margin projects builds the internal capabilities – skills, systems and products – that will shape Absa’s role in the future economy. These investments are part of the shift towards a more resilient, inclusive model of development.

From risk management to value creation

Recent global evidence supports this long view. Morgan Stanley’s 2025 “Sustainable Signals” survey shows 88% of executives now see sustainability as a long-term value driver, with over half placing value creation above risk management. More companies in North America and Europe treat sustainability as core business, not compliance, citing higher profitability, revenue growth and lower cost of capital. Crucially, 83% say they can measure returns on these investments as confidently as traditional ones.

This confirms what many already know: sustainable finance is central to creating value, building resilience and staying competitive. The risks are real. The same survey found 57% of companies faced climate-related events last year, causing rising costs, workforce disruption and lost revenue from supply chain failures. Looking ahead, 60% expect physical climate risks to affect their business within five years. The greater risk is doing nothing. Sustainable finance helps banks manage exposure, hedge volatility and seize emerging opportunities.

This approach builds capability. It enables banks to design and scale systems and products for tomorrow’s markets. It also sets them apart. While short-term impact may seem limited, managing and growing higher-risk investments will define future-ready banks. As Morgan Stanley shows, returns are increasingly measurable and competitive.

Sustainable finance is not corporate altruism. It is a practical way to build stronger institutions that deliver financial results while supporting long-term economic and social goals. By shifting from short-term outputs to long-term value, banks like Absa can shape Africa’s future and secure lasting value for shareholders and society.

We recognise the challenge of delivering returns within short financial cycles. Yet building lasting development and market opportunity requires patience and foresight. Supporting micro-enterprises, informal economies and essential infrastructure involves higher initial risks and thinner margins, but these investments are vital for inclusive growth and unlocking future market potential.

Being candid about these realities – and transparent about our impact – is critical. That’s why we invest in robust sustainability data platforms like Novisto, ensuring traceability and full integration of ESG insights into decision making. This transparency builds trust and strengthens our licence to operate and lead sustainably over the long term.

From financing to sustainable development impact

A clear example of how we are future-proofing Absa and expanding the impact of sustainable finance is the landmark Tanga UWASA Green Bond in Tanzania. Launched in 2024 in partnership with the National Bank of Commerce Limited, this first-of-its-kind green bond raised capital to upgrade water and sanitation infrastructure in Tanga City. The bond’s strong demand – twice oversubscribed – and its availability to retail investors, uniquely broadened financial inclusion by opening new pathways for ordinary citizens to participate in sustainable investment.

More than 6,000 households now enjoy improved access to clean water, while the rollout of prepaid water meters is expected to boost revenue collection by at least 10%. These are not incidental outcomes; they reflect deliberate design choices to create measurable community and economic value. Such investments build bank capabilities and demonstrate our commitment to embedding impact into the core of our operations, reinforcing our resilience in a changing world.

Infrastructure improvements are just one dimension of sustainable finance. The true value lies in the tangible improvements to people’s lives – the access we create and the economic inclusion we unlock. These outcomes are deeply personal and transformative, underpinning the strength and sustainability of the communities and markets we serve. By aligning our activities with these human-centred impact goals, we position Absa to anticipate and respond to evolving societal needs, creating long-term resilience.

Aligning investment with public policy for greater resilience

South Africa’s evolving green finance taxonomy presents an important opportunity to drive local investment while aligning with global best practices. But for this to be effective, implementation guidance must reflect the unique social and economic context we operate in.

At Absa, we are committed to embedding development priorities into every lending and investment decision. Through rigorous economic impact assessments and social return calculations, we ensure our capital deployment supports public policy outcomes and drives meaningful engagement with government, clients and investors alike. This alignment fortifies our position as a resilient financial institution deeply connected to Africa’s development trajectory.

Scaling impact with strategic purpose and partnerships

Scaling sustainable finance across Africa requires intentional focus on three pillars:

  • Enhancing data infrastructure to deliver consistent, credible impact measurement and reporting
  • Expanding blended finance instruments that mitigate risk and broaden project reach
  • Deepening collaborations with governments, development finance institutions, and civil society to ensure investments meet real, prioritised needs

At Absa, sustainable finance shapes every decision – from pioneering innovative financial products to driving customer-focused solutions and embedding data-driven accountability.

It is not just about protecting our licence to operate; it is central to strengthening our licence to lead. Mobilising capital for high-risk, low-margin projects builds the capabilities needed to support Africa’s development goals and the future economy.

Our success will be measured not only by financial returns but by the progress we enable for clients, communities and the continent. This approach ensures Absa remains resilient, relevant and a catalyst for inclusive growth for decades to come.

 

7 August 2025

By Punki Modise, Chief Sustainability Officer, Absa Group

Sustainable finance is often judged by its immediate impact. But looking at it through a short-term lens misses the point. For banks like Absa, sustainable finance is not a side project. It is a way to manage risk, back innovation and stay competitive over the long term.

Africa’s development goals – outlined in frameworks such as the Sustainable Development Goals, the African Union’s Agenda 2063 and South Africa’s National Development Plan – require capital far beyond the reach of public funding. Financial institutions must step up, not only with capital, but with a clear strategy.

Absa mobilised R121bn between 2021 and 2025, focused largely on renewable energy. That is only a fraction of what is needed to tackle South Africa and Africa’s infrastructure and sustainability challenges. But the aim is not only short-term results. Investing in high-risk, low-margin projects builds the internal capabilities – skills, systems and products – that will shape Absa’s role in the future economy. These investments are part of the shift towards a more resilient, inclusive model of development.

From risk management to value creation

Recent global evidence supports this long view. Morgan Stanley’s 2025 “Sustainable Signals” survey shows 88% of executives now see sustainability as a long-term value driver, with over half placing value creation above risk management. More companies in North America and Europe treat sustainability as core business, not compliance, citing higher profitability, revenue growth and lower cost of capital. Crucially, 83% say they can measure returns on these investments as confidently as traditional ones.

This confirms what many already know: sustainable finance is central to creating value, building resilience and staying competitive. The risks are real. The same survey found 57% of companies faced climate-related events last year, causing rising costs, workforce disruption and lost revenue from supply chain failures. Looking ahead, 60% expect physical climate risks to affect their business within five years. The greater risk is doing nothing. Sustainable finance helps banks manage exposure, hedge volatility and seize emerging opportunities.

This approach builds capability. It enables banks to design and scale systems and products for tomorrow’s markets. It also sets them apart. While short-term impact may seem limited, managing and growing higher-risk investments will define future-ready banks. As Morgan Stanley shows, returns are increasingly measurable and competitive.

Sustainable finance is not corporate altruism. It is a practical way to build stronger institutions that deliver financial results while supporting long-term economic and social goals. By shifting from short-term outputs to long-term value, banks like Absa can shape Africa’s future and secure lasting value for shareholders and society.

We recognise the challenge of delivering returns within short financial cycles. Yet building lasting development and market opportunity requires patience and foresight. Supporting micro-enterprises, informal economies and essential infrastructure involves higher initial risks and thinner margins, but these investments are vital for inclusive growth and unlocking future market potential.

Being candid about these realities – and transparent about our impact – is critical. That’s why we invest in robust sustainability data platforms like Novisto, ensuring traceability and full integration of ESG insights into decision making. This transparency builds trust and strengthens our licence to operate and lead sustainably over the long term.

From financing to sustainable development impact

A clear example of how we are future-proofing Absa and expanding the impact of sustainable finance is the landmark Tanga UWASA Green Bond in Tanzania. Launched in 2024 in partnership with the National Bank of Commerce Limited, this first-of-its-kind green bond raised capital to upgrade water and sanitation infrastructure in Tanga City. The bond’s strong demand – twice oversubscribed – and its availability to retail investors, uniquely broadened financial inclusion by opening new pathways for ordinary citizens to participate in sustainable investment.

More than 6,000 households now enjoy improved access to clean water, while the rollout of prepaid water meters is expected to boost revenue collection by at least 10%. These are not incidental outcomes; they reflect deliberate design choices to create measurable community and economic value. Such investments build bank capabilities and demonstrate our commitment to embedding impact into the core of our operations, reinforcing our resilience in a changing world.

Infrastructure improvements are just one dimension of sustainable finance. The true value lies in the tangible improvements to people’s lives – the access we create and the economic inclusion we unlock. These outcomes are deeply personal and transformative, underpinning the strength and sustainability of the communities and markets we serve. By aligning our activities with these human-centred impact goals, we position Absa to anticipate and respond to evolving societal needs, creating long-term resilience.

Aligning investment with public policy for greater resilience

South Africa’s evolving green finance taxonomy presents an important opportunity to drive local investment while aligning with global best practices. But for this to be effective, implementation guidance must reflect the unique social and economic context we operate in.

At Absa, we are committed to embedding development priorities into every lending and investment decision. Through rigorous economic impact assessments and social return calculations, we ensure our capital deployment supports public policy outcomes and drives meaningful engagement with government, clients and investors alike. This alignment fortifies our position as a resilient financial institution deeply connected to Africa’s development trajectory.

Scaling impact with strategic purpose and partnerships

Scaling sustainable finance across Africa requires intentional focus on three pillars:

  • Enhancing data infrastructure to deliver consistent, credible impact measurement and reporting
  • Expanding blended finance instruments that mitigate risk and broaden project reach
  • Deepening collaborations with governments, development finance institutions, and civil society to ensure investments meet real, prioritised needs

At Absa, sustainable finance shapes every decision – from pioneering innovative financial products to driving customer-focused solutions and embedding data-driven accountability.

It is not just about protecting our licence to operate; it is central to strengthening our licence to lead. Mobilising capital for high-risk, low-margin projects builds the capabilities needed to support Africa’s development goals and the future economy.

Our success will be measured not only by financial returns but by the progress we enable for clients, communities and the continent. This approach ensures Absa remains resilient, relevant and a catalyst for inclusive growth for decades to come.