Banks lift economy with sustainable regulations
Commercial banks, Discount Houses and Development Finance Institutions (DFIs) are showing commitment to a directive by the Central Bank of Nigeria (CBN) on the implementation of the Nigerian Sustainable Banking Principles (NSBP). The NSBP rule is to make the banks look beyond profitability and project funding to boost economic growth but to protect the environment, writes COLLINS NWEZE.
It is now business unusual in commercial banks, discount houses and Development Finance Institutions (DFIs).
The guidelines aimed at integrating environmental and social policies into decision-making processes have been rolled out by the Central Bank of Nigeria (CBN) to guide their operations. They (guidelines) are contained in the Nigerian Sustainable Banking Principles (NSBP).
The apex bank said that trends in international business reporting take account of the impact of business on the environment and the socio-economic risks affecting business concerns.
According to the regulator, sustainability reporting allows organisational measure, understand and communicate their environmental, social and governance performances.
Although the reporting system has gained currency and acceptance globally, only a few local banks and organisations encourage sustainability practices in their reports.
Central Bank of Nigeria (CBN) Governor Godwin Emefiele said the apex bank will continue to renew its commitments towards the implementation of the NSBP and the achievements of the United Nation’s (UN) Sustainable Development Goals (SDGs) and the Paris Climate Change Agreement because a reduction in plastic use will bring about reductions in greenhouse gas emissions and carbon footprint.
As one of the lenders, Access Bank Plc has expressed its belief in the implementation of NSBP.
The bank’s Group Managing Director/Chief Executive Officer, Herbert Wigwe, said the lender defines sustainability as providing innovative solutions to support global efforts in addressing social, environmental and economic challenges.
Wigwe expressed his bank’s determination to create meaningful impact around the world and its subsidiaries by increasing awareness of best sustainable practices that can be implemented within its operational areas.
He listed profit, planet and people as the pillars in which corporate sustainability are entrenched, explained that the pillars have been embedded into how the bank carries out its operations.
The bank chief said: “This comes with a vision to be the most sustainable and respected bank in Africa, financing and facilitating brighter futures for all of our stakeholders through innovative services and best in class operations.”
He said the lender has in line with the sustainability practices, continued to develop simpler and smarter products and services with relevance to Nigerians, not losing focus of its vision to be the world’s most respected African bank.
Wigwe restated Access Bank’s determination to set standards for sustainable business practices capable of bringing out the best out of employees, deliver superior value to customers and provide innovative solutions for the markets and communities it serves.
The bank’s sustainability footprints are grouped into four units- economic development; environmental responsibility; sustaining societies; collaborations & partnerships.
At a recent launch of Nigeria’s Green Bond market development programme in Lagos, the Group Deputy Managing Director, Access Bank, Roosevelt Ogbonna said: “Our strategy, together with a solid corporate governance structure, has enabled Access Bank to retain its leadership position, contributing significantly to the economic growth of Nigeria and the broader African continent.
“We recognise that a better and prosperous future is linked to the well-being and health of our planet. Thus, the protection of the environment is relevant to us.
“This encourages us to continue to invest in innovative technologies and techniques that promote the efficient use of resources and address sustainability issues when managing risk.
“We continue to impact lives positively and responsibly in communities across Africa. Through this, we are able to continually contribute to the socio-economic development of these communities and help to achieve the new Sustainable Development Goals (SDGs).
“Over the years, our areas of focus in community investment have included gender equality, women empowerment, entrepreneurship, leadership, education, health, arts, and sports.”
The launch was one of the major events that took place during the Green Bonds Week, which drew local and international stakeholders in Lagos to discuss the impact of climate risk on investment portfolios, the role of regulators in developing the local market and growing green bond issuance.
Lagos State Governor Akinwunmi Ambode told his audience at the launch that the initiative would present profitable investment opportunities to stakeholders and investors, adding that the finance would help to reduce greenhouse emission and mitigate harsh effects of climate change in the Centre of Excellence.
Represented by his deputy Mrs. Oluranti Adebule, the governor assured that his administration would take maximum advantage of the opportunity embedded in the Green Bond Market to reverse the harsh trends of climate change.
He expressed optimism that the Green Bond will enhance the execution of projects to mitigate the effects of climate change in Lagos, while asserting that the success achieved during the N10.69 billion Green Bond issued by the Federal Government last year was a testimony to the fact that Climate Bond investment is a viable option for promoting sustainable growth in the environment.
Climate Bonds Director of Market Development Justine Leigh-Bell said: “The Nigeria Green Bonds Market Development Programme is a big step towards unlocking the full potential for domestic issuance while developing a pipeline of green investment opportunities and engaging with local and international investors. We are excited about the future in the region.”
The sustainable projects covered under the Green Bond proghamme are: renewable energy, energy efficiency, sustainable waste management, sustainable land use (forestry and agriculture), biodiversity, clean transportation and clean water. Their structure, risk and returns are otherwise identical to those of traditional bonds
Officials of Access Bank said they benchmark the bank’s performance against the nine NSBP and produce at least annually, a public Equator Principles report, on transactions that have reached Financial Close and on its Equator Principles implementation processes and experience.
Other banks’ contributions
Diamond Bank’s Managing Director/Chief Executive Officer Uzoma Dozie described the bank’s investment and focus on the Micro Small and Medium Enterprises (MSMEs) segment as strategic and predictive.
In his view, the future of sustainable banking in Nigeria is retail, therefore it is necessary to grow and consolidate its strength in the segment.
Managing Director Development Bank of Nigeria (DBN), Tony Okpanachi, said the bank’s operation in addition to its mandate, seeks to achieve the NSBP, where financial inclusion ranks high, as well as the UN SDGs and also in line with the Economic Recovery and Growth Plan (ERGP) of the Federal Government.
The First Bank of Nigeria Ltd, a member of FBN Holdings Plc, has also initiated its Corporate Responsibility and Sustainability (CR&S) Week in over 3,000 secondary schools across the country to improve financial literacy and inclusion among students.
The scheme, which involves career counseling session, is part of activities marking the second edition of the bank’s CR&S Week for the year.
Speaking at Yaba College of Technology Secondary School, Managing Director, Adesola Adeduntan said the week-long event was the bank’s brand promise to always put stakeholders’ needs first.
Adeduntan said the event was being commemorated across its business communities in Nigeria, United Kingdom (UK), Democratic Republic of Congo, Ghana, The Gambia, Guinea, Sierra-Leone and Senegal.
He said the initiative was to reinforce the bank’s role in driving sustainable development in its host communities. Adeduntan stated that the 2018 Corporate Responsibility and Sustainability week would amplify the bank’s ‘Employee Giving and Volunteering Scheme’ to create sustainable impact, touch lives and make our societies a better place to live.
Counseling the pupils, he said: “Professional life is rewarding but it always comes with continuous improvement and investment.”
Adeduntan called on the pupils to always align their interests and passion with their capabilities in career decision as well as personal brand.
He said: “Even though you think you are young but we believe this is the period you should begin to build your personal brand. You need to be creative, innovative and more especially collaborative as collaboration is very important if you want to grow in career. Whoever you are, the ability to collaborate and communicate is very important.”
Adeduntan assured the pupils that the bank would continue to invest its time and services to develop the youths as better leaders of tomorrow.
He said: “At First Bank it’s not just about profitability, it’s also about having an impact on the environment in which you operate and that is our trademark and that is what we have done for the past 124 years. And that is what we would continue to do going forward.”
First City Monument Bank (FCMB) also said its commitment to environmental protection and sustainability remains a core pillar of its CSR focus.
The bank said its business and operations are designed to ensure that it lends responsibly, promotes financial inclusion, encourages diversity, adheres to health and safety standards, and reduces (or totally avoids where possible) negative impact on the environment.
“A high-point of the bank’s environmental sustainability is its ability to identify and innovatively devise means of converting challenges posed by the environment to opportunities,” the bank said.
The FCMB further said it has been participating in the activities marking the World Environment Day (WED) over the years.
During the commemoration of the day in 2015, the bank collaborated with the Nigeria Conservation Foundation (NCF) in organising programmes to raise awareness on the need to protect the environment.
Sustainable banking milestones
Every year, one per cent of the Access Bank’s profit before tax is allocated to sustainability initiatives incorporating environmental, social and governance (ESG) rating as part of lending criteria. It has introduced a financial inclusion strategy and developed a USSD platform as fallout to bring the unbanked population into the financial system.
The bank’s efforts in this regard over the past few years, Wigwe added, has resulted in improvement in environmental footprints.
For instance, waste reduction initiatives form a key part of the bank’s cost-reduction strategy.
The Save Paper initiative launched across several business locations was aimed at cutting printing paper use by 50 per cent while N1.4 billion has been invested in capacity building for female employees of the bank who are now happier and better committed to delivering excellent services.
In terms of gender balance, the bank said its board composition is above the CBN regulation of 30 per cent. It carried out early branch closure policy to cut down electricity costs and introduced employee volunteering scheme to provide employees with a platform for giving back to the society.
The bank has also created an inclusive and empowering environment for its employees through various initiatives. One of such initiatives is the introduction of sustainability as a part of the ‘W initiative’ targeted at Women Empowerment, whereby it has educated 55,000 women, through the W Academy.
Sustainability, according to the lender, has been embedded in its culture as it has included it as part of assessment in the performance evaluation process of employees.
On economic development, Access Bank introduced ‘Beta Mama Beta Pikin’ to promote savings culture amongst the lower band of society whilst providing an opportunity for mothers and their children to gain access to health insurance.
The bank has supported 30 hospitals through the Hospital Facility Upgrade Support Scheme (HFUSS) and launched “N1 billion Access Nolly Fund”, a new and innovative financial service aimed at improving and providing solutions for the movie industry.
On environmental responsibility, its efforts have improved the environmental footprints.
It resulted in 63.4 per cent reduction of emissions from electricity, 16. 7 per cent reduction in emissions from petrol across Nigeria; led to 28.8 per cent reduction in emissions from diesel across Nigeria as validated by the NSBP.
The bank’s sustainability footprints have also led to 24.9 per cent reduction in diesel usage from early shutdown policy since June 2017, even as it has introduced over 413 solar-powered Automated Teller Machines (ATMs).
“Our Ogunlana Drive branch is fully powered by solar energy with no connection to the national grid we have four solar-powered branches, 311 branches powered by hybrid of alternative energy sources and national grid and we have LED lightings in all our facilities nationwide,” Ogbonna said.
On sustaining societies in Africa, the lender said that through strategic investments in communities, it has in the last few years impacted 853 communities, 20,071,453 beneficiaries and 358 Non-Governmental Organisations (NGOs).
Partnerships and disclosures
To underscore the importance of collaborative efforts in achieving the SDGs, Access Bank and the FMDQ securities market recently formalised partnership with the Financial Sector Deepening Africa and Climate Bonds Initiative United Kingdom. The aim is to revolutionise the Nigerian Debt Capital Markets (DCM) into properly- functioning and globally -competitive market.
The bank won multiple awards. They included: the Sustainability, Enterprise and Responsibility Awards (SERAs), and another awards for “Best Company in Climate Action”.
CBN/NDIC’s roles
The CBN and Nigeria Deposit Insurance Corporation (NDIC) want banks to shift focus from profitability alone and consider also other issues around sustainability, before lending.
NDIC’s Managing Director Umaru Ibrahim said that banks should ensure that activities of companies that pollute the environment are not financed. He said the United Nations Environment Programme (UNEP), through its UNEP Financial Initiative on the Environment and Sustainable Development at the Earth Summit in 1992, placed it as pertinent concern for financial systems across the world.
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