In 2003, Nedbank was in crisis. Its headline earnings were down 98%, its return on equity was 0.4% and its market capitalisation was the lowest of the ‘big four’ banks and on a downward trajectory. To keep the bank afloat Old Mutual had to inject R2 billion of secondary capital and R5.2 billion of primary had to be raised through a rights issue. “If one looks back at those very dark days, the responsibility of the current Nedbank leadership team above and beyond all else is to make sure we never go back there, because we know how damaging that period was to all of our stakeholders,”says Mike Brown, Nedbank’s current chief executive.
“The only highground left at that point was the green image of the brand,” states Brown. Tom Boardman stepped onto the ‘burning platform’ as chief executive with a vision that kept the bank’s environmental focus, but supplemented it with an understanding of all the stakeholders that contribute to its success. The five stakeholder groups encapsulated in the vision are staff, clients, shareholders, regulators and communities.
Read more: Sustainability Journey: Mike Brown (Sustainability Review Issue 13: Aug 2013)
Green building is on the rise in South Africa. One need look no further than the tangle of cranes on the Sandton skyline to spot the launch of the next generation of cleaner, more efficient infrastructure. But most businesses occupy older buildings. Can these properties also benefit from the principles of green building?
With so much waste and inefficiency in existing buildings, smart investments can reap substantial returns. A study released last year from Deutsche Bank and the Rockefeller Institute identified a $279 billion investment opportunity in US commercial building efficiency over the next decade, with potential returns of more than $1 trillion over the same time.
The most successful retrofits have a purpose, meeting stakeholder concerns, reducing costs, or improving productivity and brand image.
Read more: The benefits of greening existing buildings (Sustainability Review Issue 13: Aug 2013)
Water, energy and food are interlinked: impacts in one area affect the other two. This relationship is particularly evident in Lephalale, the impoverished, water-stressed area where Eskom is building its Medupi power station. Business can learn from how Eskom is collaborating with government and other businesses to manage water, a constraint to social and economic development in Lephalale.
Read more: Water – we’re all in it together (Sustainability Review Issue 12: May 2013)
In seeking to respond to increasing pressure for ‘responsible investment’, various financial services players are looking for a yardstick that can inform sound investment decisions as well as influence corporate behaviour. Here we unpack some of the issues.
There is a subtle difference between responsible investment and investing for societal impact. In the latter, emphasis is placed on investing in themes aimed at redressing social and environmental challenges, and the investor may not be focused only on financial returns. Such themes include education, healthcare, agriculture, public transport, infrastructure, water, low carbon energy, affordable housing, food and waste management.
If that is investing for societal impact, what is responsible investing? Is it the inclusion of social issues, such as fair trade and human rights, or does it require that we avoid certain industries such as alcohol, tobacco, gambling and weapons?
Read more: What is responsible investment? (Sustainability Review Issue 12: May 2013)