Sustainability is at the heart of Standard Bank Group’s success in South Africa, with the bank linking its own sustainability with that of Africa as a whole. But sustainability, according to the group’s chairman, is not always about playing it safe.
According to Fred Phaswana, the motto of the bank is to “always seek opportunity where others see risk”, saying the bank continually needs to innovate to address the challenges and uncertainties of the banking environment.
Standard Bank is one of South Africa’s oldest companies – now 150-years-old – and has assets totalling 1.497 billion rand ($179 million), making it Africa’s biggest bank. This comes with a heavy burden of responsibility in the world’s poorest continent, but the bank is no stranger to thinking in the long-term. The company has linked its own sustainability with that of Africa’s, and is putting its money where its mouth is. Last year it made efforts to extend financial services, reduce environmental impact and support carbon trading schemes in Africa. Since 2007, the bank has helped more than 300,000 South Africans on low incomes to buy homes.
This same commitment to African development takes place internally as well. In the last year the bank hosted a sustainability expo, ran awareness raising campaigns, offered discounts to staff to buy solar water heating systems and made its own offices greener. The group claims that it wants to play its part in undoing the legacy of apartheid, and operates a community trust to benefit black businesses. Eighteen years after the end of white minority rule, South Africa’s socio-economic problems are still entrenched, with an estimated one in three people without work according to the UN Development Programme. The economic bottom half of the population lives on eight per cent of national income.
“As a financial services group our most important contribution to sustainable development is to support and facilitate growth and development,” says Karin Ireton, Director of Group Sustainability Management. “By providing access to credit, savings and insurance products, we enable individuals to improve their quality of life and enhance their financial security. By providing finance to large and small businesses, we facilitate economic growth and job creation and by financing infrastructure and the development of key sectors, we help solve global challenges such as energy and food security, resource depletion and climate change.
“These social and environmental challenges present risks, both to our own sustainability and to the development and growth prospects of economies, particularly in emerging markets. However, the very nature of our business positions us to help our customers and stakeholders manage risk and invest for the future, which in turn contributes to the sustainable growth of local markets and national economies.”
The bank’s investment in Africa doesn’t just make sense from a humanitarian viewpoint, but a financial one as well. Emerging markets such as Africa are growing faster than the developed world and that there is great scope for expansion of banking services. Standard Bank has been busy redesigning its business architecture to take full advantage of these opportunities, supported by an enhanced technology infrastructure.
“The total wealth we created in 2011 was 50 billion rand ($6 billion), an increase of 12 per cent from 2010,” Phaswana says. “We regard the provision of financial services to marginalised communities as a valuable opportunity, to participate responsibly in the growth potential of a transforming South African economy. We also recognise that the private sector has an additional responsibility to assist governments in finding solutions to development challenges, particularly in emerging markets.”
