Banking on Sustainability

Interview with Karin Ireton

Business sectors worldwide are increasingly taking action on sustainability, and the financial sector is no exception. The World Financial Review talks to Karin Ireton, Head of Sustainability Management at Standard Bank Group, about what they are doing to promote sustainable development in South Africa and beyond.


What does “sustainability” mean to Standard Bank?
Responsible finance is core to our contribution to sustainability. As a financier we work with individuals who are trying to improve their quality of life; with businesses trying to grow and create employment; and with governments trying to build infrastructure and secure a better future for their citizens. Our three business units: Corporate and Investment Banking, Personal and Business Banking and our Wealth arm are all focused on developing products and services that meet the needs of Africa’s growing population and its economic development. Our social compact commits us to “provide responsible financial services and products, bearing in mind the needs of society, our customers, our staff, our shareholders, the environment and future generations”.


In 2013 Standard Bank was ranked Africa’s greenest bank and awarded Sustainable Bank of the Year in the Africa and the Middle East region – how do you aim to maintain and further this positive reputation?
Renewable energy financing and advisory services have been a growing aspect of our business, both in South Africa and across Africa. These opportunities are critical to changing the carbon intensity of the South African economy and increasing security of energy supply. Elsewhere on the African continent they are important in increasing the access to energy for development. Our focus is stretching beyond utility-focused energy opportunities to include opportunities for small businesses and others to increase their access to renewable energy or alternative energy technologies for their own use, so that they can grow more sustainably.


How have you incorporated sustainability at every level of Standard Bank Group’s operations?
Our process has been to develop policies, tools and methodologies that acknowledge the everyday business decisions and processes. So all large deals are screened for environmental and social risk as a matter of course. This means that credit committees can make more informed decisions and that deal-makers are sensitised early on to the issues that are inherent in certain sectors or products. We work with suppliers, with our customers and in partnership with national and local governments to find innovations that assist them. Earlier in 2014 we assisted the City of Johannesburg is raising its first Green Bond, which was 1.5 times over subscribed and is providing much-needed capital into environmental rehabilitation and services projects.


In this kind of organisation, how do you balance environmental and social sustainability with short-term commercial returns?
Environmental and social issues need to be understood in terms of both risk and opportunity. We recognised, for example, that in South Africa a shortage of electricity and growing corporate concerns about an impending carbon tax provided a market-linked opportunity for renewable and alternative energy technologies. So on the one side is risk, and on the other is opportunity. Our approach to the Equator Principles has been similar. By positively addressing these principles and having the right professional expertise in house we are able to take a lead arranger role and provide critical expertise into major deals.


UNCTAD has recently written about the importance of corporate sustainability reporting in facilitating private sector engagement with sustainable development; what role does corporate reporting play in your sustainability strategy?
We have been active in reporting on sustainability issues for the past 10 years, with significant improvements in both the quality of our content – the data – and associated analysis over that time. This has improved the quality of our decision-making and has supported our tenders to key clients for business. Increasingly customers are demanding a consistent and considered approach. Since the introduction of Integrated Reporting in South Africa, our sustainability reporting base has enabled us to quickly transform from traditional financial reporting to Integrated Reports that provide key stakeholders with accessible information.


Africa is seeing rapid growth; how is Standard Bank Group contributing to sustainable development in South Africa and in the wider continent?
All of our approaches are consistent across the Group and all of our deals are screened the same way. We believe that this has benefitted our banks across the Greater Africa and has positioned us well with regulators and other key stakeholders.


What role does innovation play in your operations, and how is the Group supporting innovation in sustainable technologies?
As a commercial bank our focus is on deals that are already in the commercial domain, however, when there is a business case for a new technology we will consider financing that. We are driving a technology focused social-media campaign at present to try and identify game-changing water technologies for use in Africa.


How does Standard Bank aim to ensure that its investments, and those of its customers, have a socially responsible impact?
All of our deals are screened in line with international good practice to prevent sanctions busting, money laundering or international fraud. In addition we screen for human rights risk, environmental and social risk and actively look for development opportunities in the commercial realm, as we recognise that our success is linked to the success of the communities which we serve.


How do your customers, both corporate and individual, benefit from this sustainability philosophy?
We increasingly find that new business is linked to sustainability principles and that our retail clients and employees are hugely supportive of our environmental initiatives and outreach.


What do you see as the major challenges the financial sector in Africa faces in coming years, and what are Standard Bank’s strategies for meeting these challenges?

We must make our fair contribution, doing what we do best – and that is securing the global economy through responsible products that are affordably priced.

The financial sector is faced with an urgent need to find the “clean” trillion to finance the adaptation of the global economy to address climate change risks. For all institutions this will be a challenge as it highlights the complexity of what lies ahead, of moving away from legacy sectors and relationships and increasing the access to new technologies at affordable prices. We have therefore supported the calls for a global price on carbon and greater disclosure of climate-related risks.


And finally, what role do you think the financial sector can play in driving the post-2015 Sustainable Development Goals?
I think every sector has to play a role and the finance sector will need to look carefully at what it is best placed to contribute. It is very clear that finding solutions is in everyone’s interest. We can’t sit back. We must make our fair contribution, doing what we do best and that is securing the global economy through responsible products that are affordably priced. Working in partnerships with others on critical issues is essential in issues as significant as this.

_DSC5428Karin Ireton is the Executive in charge of sustainability for the Standard Bank, Africa’s largest financial services group. Focus areas include responsible financing, climate change and energy, environmental and social risk and the communication of sustainability performance and issues to key stakeholders. She has held similar roles at mining giant Anglo American and previously served as a sustainable energy advisor at Eskom. Her early career was in news and business journalism. She holds an MA in International Political Economy (Leeds). She serves on the board of the National Business Initiative and the Endangered Wildlife Trust and chairs the Institute of Directors sustainability forum. She chaired the stakeholder Council for the Global Reporting Initiative from 2009 -2013.


The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.