Africa’s Covid-19 recovery should be underpinned by sustainability


 Sola David-Borha, Chief Executive of Africa Regions at Standard Bank Group

As Africa moves past the worst of the Covid-19 pandemic, we need to ensure that governments and the private sector work towards a recovery plan that is underpinned by sustainability and responsible investments.

Authorities in many markets are implementing stimulus measures aimed at kickstarting the continent’s economies and limiting the damage caused by the pandemic. This represents a unique opportunity to strengthen the foundations of our economies and ensure they are more resilient against future shocks.

To do this, policymakers need to prioritise investments in areas such as healthcare, financial inclusion, renewable energy, sustainable infrastructure, and education.

The pandemic has highlighted the need to reimagine Africa’s education sector to ensure that most children do not fall behind in a global pandemic or crisis, and that the youth are equipped for an increasingly digital world. Covid-19 has also exposed the gaps in the continent’s healthcare systems, and reminded the world once again about the importance of environmental sustainability.

The financial services sector has an important role to play in ensuring that Africa’s recovery is a sustainable one.

Against this backdrop, the UN Principles for Responsible Banking could play an important role in guiding the way forward, measuring progress, and holding the sector to account.

It has been a year since 130 banks, including Standard Bank Group, launched the Principles – the first-ever global sustainability framework for the banking industry. As a founding signatory, we assisted in the development of the Principles.

Much progress has been made over the past 12 months. For Standard Bank, the framework has further pushed us to think beyond just the inputs of our activities, and to move more towards understanding the outcomes of those activities and the resultant impacts.

It has also affirmed that we are on the correct path with our SEE strategy – where we aim to maximise our social, economic and environmental impacts and mitigate any negative impacts.

Over the past year, we have participated in ground-breaking work through various peer working groups, such as the global Task Force on Climate-related Financial Disclosures pilot project, as well as the Principles for Responsible Banking implementation working groups.

Importantly, our participation has ensured that emerging-market banks have a say in the methodologies and standards being created.

We have identified seven SEE impact areas, informed by the UN’s Sustainable Development Goals, which we commit to tracking, assessing and reporting on. These are: Financial inclusion; job creation and enterprise development; infrastructure; Africa trade and investment; climate change and sustainable finance; education and skills development; and healthcare.

We believe that each of these areas are critical to Africa’s long-term success, and to a sustainable recovery from the current crisis.

We are in the process of finalising metrics for each of these impact areas, following consultations across our business. Importantly, these metrics will be included in employee performance metrics, such that incentives will be directly linked to the achievement of targets and tangible value generation in the SEE impact areas.

Through a phased and collaborative approach with business units and countries, and informed by relevant good practices, we will have two to three metrics that represent our aspirations in each impact area.

We already have some exciting examples of what can be achieved. We have partnered with UN Women on a Climate Smart Agriculture FPI (Flagship Programme Initiative) in four countries; Malawi, Nigeria, South Africa and Uganda. The project titled “Contributing to the Economic Empowerment of Women in Africa through Climate Smart Agriculture” aims to close the gender gap in the agricultural sector by strengthening women’s agricultural productivity and access to markets in selected value chains in these four countries. Over three years this project aims to reach at least 50,000 women beneficiaries.

And our Sustainable Finance Unit is gaining real momentum, having raised US$200 million via a green bond. The proceeds of the bond will be used to finance eligible green assets, such as renewable energy, energy efficiency, water efficiency and green buildings, in line with our Sustainable Bond Framework.

The Sustainable Finance Unit is actively working with our clients to develop bespoke solutions to help them achieve their social and environmental goals, and has already closed some landmark funding deals.

Africa’s potential remains firmly intact despite the Covid-19 setback. As we move into the recovery phase, we need to hold each other to account, and consider both the direct and indirect impacts of our business decisions, to ensure that we set Africa on the path to long-term prosperity. The Principles for Responsible Banking could prove to be a common framework that guides our collective decisions and keeps us firmly on track.