We are in support of the Principles for Responsible Banking (PRB) by the United Nations Environment Programme Finance Initiative, which aim to increase the positive impact of the global financial sector through alignment with the SDGs and the requirements of the Paris Agreement.
The PRB call for transformation of the financial sector is equal with the level of urgent change that is needed to address pressing socioeconomic development needs within the context of the climate emergency. The PRB effectively mean that all banks will need to reconsider their business models and operations to ensure that they are contributing to the future of the planet and society in this way.
To date we have elected not to officially sign up to the PRB. Our purpose to use our financial expertise to do good for individuals, families, businesses, and society guides our activities in alignment with the PRB and we recognise that we will need to continuously increase our efforts to achieve the desired outcomes.
Nedgroup Investments partners with select specialist fund managers to deliver consistent long-term outperformance for its clients. While the approach to ESG integration is at the discretion of each sub-investment manager, we require appointed management firms to prove application of ESG principles into their investments and management decisions. Our 2024 responsible investment survey is one of the keyways in which we measure their inclusion of ESG considerations across the investment process. The latest results reveal that the majority of the 30 investment managers involved in the survey have incorporated ESG factors into their analysis, evaluation, and risk management, with over 60% also incorporating ESG into their portfolio construction and reporting and more than 70% having signed up to the UN PRI. The risks and opportunities associated with human rights, climate, and biodiversity were focus assessment areas of the survey.
Nedbank is a member of the United Nations Environment Programme Finance Initiative (UNEP FI), a partnership between UNEP and the global financial sector created in the wake of the 1992 Earth Summit, with a mission to promote sustainable finance.
More than 200 financial institutions, including banks, insurers and investors work with UNEP to understand today’s environmental, social and governance challenges, why they matter and how to address them. In a bid to define the global banking industry’s role and responsibilities in shaping a sustainable future, UNEP FI, together with member banks, has developed the principles for responsible banking, with banks across the globe now considering what is needed for their organisations to align with these principles.
Nedbank is also an active member of the Positive Impact Initiative and Working Group. The Positive Impact Initiative is a collaborative movement that started in 2015 by UNEP FI member banks and investors who believed in the need to transition to an impact-based business and financing paradigm to achieve a sustainable world as defined by the SDGs.
As a leading provider of project finance in SA, we carefully align with international best practice, including the Equator Principles, and International Finance Corporation (IFC) Performance Standards and Principles for Sustainable Banking when considering all prospective project finance transactions, project-related corporate loans, project finance advisory services and specific bridge loans. Nedbank has integrated the fourth version of the Equator Principles (EP4) in its social and environmental assessment for transactions where the EPs are applied. All affected transactions continue to be evaluated on both physical and transitional risk. EP and the IFC Performance Standards are applied within the lifecycle of CIB’s lending transactions even if they fall outside the scope of EP, i.e. regardless of the quantum. This process is operational in the CIB team. The steps in the CIB SEMS review process are as follows:
In the 2024 financial year, 13 Equator Principles deals (compared to 10 deals in 2022) to the value of US$867m had their first drawdown. Of the 13 deals, 2 were category A, and 11 were category B.