“Analysts and investors have commented on Nedbank’s incredible journey. I see Nedbank returning to the top position amongst the four major banks in South Africa over the next ten years. I leave at a good time.”
These are the words of Selby Baqwa who served as Group Executive, Governance and Compliance for nine years until his recent appointment as a Judge in the High Court, Pretoria.
“While the cluster I headed at Nedbank consisted of different business units, I would like to single out the sustainability portfolio for comment,” says Baqwa. “Sustainability is no longer about corporate involvement in niche environmental or social projects; it has become part of the Nedbank DNA, integrated into every part of the banking operation.
Nine years ago the concept of sustainability and sustainability reporting was in its infancy in the corporate and financial world, Baqwa explains. Sustainability is broadly defined as the way in which society’s needs and wants are designed to ensure the long-term health, growth and carrying capacity of society and the environment. Major banks such as Nedbank, which are pillars of the South African economy, play no small part in this context.
Nedbank led the way in environmental sustainability by establishing The Green Trust in 1990 in partnership with WWF. It funded environmental projects while the Nedbank Foundation, which was then part of Baqwa’s portfolio and Nedbank’s Corporate Social Responsibility (CSR) arm, funded social and community projects.
“The Foundation and The Green Trust were key to the growth of sustainability in the bank or what was called the Triple Bottom Line (People, Planet Profit),” Baqwa continues. “It was part a growing global trend with a collective ‘tuning in’ to climate change and Kyoto protocol issues.
“However, despite the importance of the social and environmental projects the bank was funding, they were still regarded as an ‘add on’ to core banking operations. The executives heading the various banking divisions provided the profits to fund the projects but they were generally less concerned about how those projects impacted on business, the community and the environment.
“Just a few years later, social, environmental and cultural sustainability is integrated into every part of Nedbank’s strategic outlook. If you went to the head of Nedbank Capital today, he would tell you about carbon emissions and carbon trading and how this fits into the holistic picture of managing a green, sustainable and profitable bank,” says Baqwa who, as head of Governance and Compliance, headed the sustainability team.
He calls it a “helluva mindset change” where bankers concerned with profit and the business case “who wouldn’t listen to you before if you weren’t talking about their specific banking products and services, now talk the sustainability talk. They have come to understand that finance is inseparable from social, environmental and cultural issues, and that this approach not only makes business sense but also business cents.”
Baqwa credits Nedbank’s former CEO, Tom Boardman, and the current CEO, Mike Brown, for this shift “because they inherently understand sustainability issues as the ‘new thinking’ globally, and they led from the top.”
In 2008 the Group Environmental forum (GEF) was constituted to drive environmental sustainability across the Nedbank Group. The end of 2010 saw this forum reconstituted as the Group Sustainability Committee (GSC) with increased executive management representation across the organisation. Mike Brown is a member of this committee. This has galvanised the group’s vision as a green and caring bank and facilitated the coordination of King III integrated sustainability recommendations across the business.
Nedbank’s annual financial report and its annual sustainability report were integrated into one report in 2010 to reflect the commitment of the group to integrate economic, environmental, social and cultural sustainability across its operations. An example of this is that the increasing impact of climate change and its related risks have been integrated into the Nedbank group’s philosophy and practice.
“This is a significant departure from the recent past where one board member would look at the sustainability issues and report back to the rest of the board. The bank’s integrated reporting process has enabled its senior managers to understand how sustainability issues affect every part of the business,” says Baqwa.
Nedbank is widely recognised for its sustainability efforts and is the only South African bank to be included in the Dow Jones World Sustainability Index.
The group’s ability to assume a sustainability leadership role was further reflected in the way in which it achieved carbon neutrality in 2010. By following a ‘reduce before offsetting’ approach, Nedbank’s carbon neutrality was achieved, as far as possible, by means of behavioural change within the bank, and the achieving of reduction targets (including paper, water, electricity, travel and waste).
Sustainability is increasingly reflected in every aspect of the bank, including collaborating with clients to help them become more sustainable and encouraging its vendors to adopt environmentally sustainable practices.
“Which brings me to 2011 and the question every bank needs to ask itself,” says Baqwa. “Why should you bank with Nedbank?”
His answer: “If you are concerned with climate change, a healthier environment and supporting the communities in the country in which you live, you can do this through Nedbank and know that you are playing your part. It’s a one-stop shop with financial, social and environmental priorities rolled into one.”
As he exits from the bank he called home for nine years he says that it is the “best feeling possible” to see where Nedbank is today: to see its transformation, strength, growth and strategic development.
“I am so happy to be able to say at the end of my term with Nedbank that it has been an incredibly fulfilling journey, served with an incredible community of leaders. It has been a winning journey on all counts.”