Developing Economies Need Fair Energy Transition Strategy – Stanbic IBTC Chairman

Developing Economies Need Fair Energy Transition Strategy – Stanbic IBTC Chairman

Stanbic IBTC Holdings PLC, a member of Standard Bank Group, recently hosted a webinar titled “2022 ‘Virtual Economic Outlook- Investing and planning in an election cycle”.

The event which aimed at reflecting on economic trends that shaped 2021 and projecting into 2022, was held on Monday, 14 February 2022.

Dr Demola Sogunle, Chief Executive, Stanbic IBTC Holdings, in an interview session was asked the following questions; 

1.      What is your view of the financial industry since 2021 began?

The financial industry has played a vital role in the global economic recovery since the novel COVID-19 adverse impact in 2020. The Nigerian financial sector, particularly the banking industry, has been exceptionally responsive to the challenges in the domestic environment.

Chairman, Stanbic IBTC said, the resilience of the Nigerian financial sector is undoubtedly reassuring, and the Central Bank of Nigeria has been supportive in various aspects. However, due to the fragile economy, high inflation rate, Naira devaluation, and an intensely competitive business environment, the financial sector grapples with harsh macroeconomic conditions.

2.      Environmental, Social and Governance (ESG) have become of increasing interest among companies in the last couple of years. How is Stanbic IBTC promoting and adopting this concept?

At Stanbic IBTC, we are well onboard the ESG paradigm. We recognise that our core business activities must support and contribute to inclusive and sustainable economic growth. We have thus adopted SEE (Social, Environmental and Economic) Impacts as one of our strategic value drivers. The SEE value driver requires us to think differently about the broader ESG impacts of our business activities, both direct and indirect impacts. 

In operationalising the SEE value driver, we seek to identify and explore opportunities to provide financial solutions, products, and services that help address social, economic, and environmental challenges. This also requires that we work with our clients, service providers, and other stakeholders to promote positive SEE outcomes while minimising negative SEE impacts.  

3.      There have been various calls for the adoption of green energy, especially among corporate organisations. Recently, Stanbic IBTC held its Sustainability Week, where the need for zero-emission was discussed. How important is green energy to sustainable development in Nigeria, and what can other corporates, for example, major financial institutions do to drive this principle?

For development in Nigeria to be sustainable, there must be an appropriate balance to ensure the environment and society are not negatively affected by economic activities, both today and in the future. We acknowledge that the economy and society are wholly owned subsidiaries of the environment; hence we must strive to ensure that the environment remains stable to support economic and social activities. 

READ: Stanbic IBTC Opens New Branch In Lagos Free Trade Zone

Green energy (Solar, Wind, Hydro etc.) thus presents an opportunity to pursue economic development while ensuring minimal adverse impacts on the environment. Green energy is devoid of carbon emissions (unlike fossil fuel energy sources) which harms the environment and is one of the major contributors to climate change. Corporates, including financial institutions, can gradually shift to cleaner energy sources for their operations. Also, financial institutions can help advance this shift by facilitating funding (in line with their risk appetites), which will be necessary to achieve growth in the green energy space.

However, the journey to a green energy world has only just begun. As you saw at COP26 (Conference of Parties 26), the world is attempting to obtain the commitment of Nation States to the Net-zero emission world. Progress is being made, but it is slow, and there are contentious positions. At this stage, most developing economies do not have the technology for green energy.

Neither can they afford the cost of green energy if they are to continue providing for their people and societies and improving their standard of living. The developed world, which is disproportionally responsible, on both gross and per capita basis, for the bulk of carbon emission into the atmosphere, is unwilling to drastically cut their energy consumption, as they wish to maintain the standard of living of their people. Therefore, there is a need for a just energy transition strategy that is fair to all and affordable to all.

4.      How has your organisation been able to reduce its carbon footprint, especially in the banking halls and areas where staff members interface with customers?

According to Stanbic IBTC Chairman, building Environmental Resilience is one of our four Sustainability pillars in Stanbic IBTC. This pillar demonstrates our focus on environmental footprint management. In line with this, we have implemented and continued to expand on programs to reduce our carbon footprints. The key areas include: 

Developing Economies Need Fair Energy Transition Strategy – Chairman, Stanbic IBTC

– Reduction of energy consumption in our office locations using energy-efficient fittings; retrofitting our office locations to maximise cooling and reduce energy wastage; the Switch-off and Unplug (SOUP) initiative after working hours.

– Adoption of cleaner energy sources across our office locations. We installed solar energy solutions across over one-fourth of our branch locations. In addition, we have adopted the use of natural gas (which is cleaner than diesel and petrol) for our energy consumption at our Idejo and Walter Carrington Crescent head office campuses. 

– We also have the Go-Green program across some branch locations to reduce energy and paper consumption and improve water efficiency. 

Besides reducing our carbon generation, we have recently also adopted Tree Planting programs to help us with carbon sequestration. So far, we have facilitated the planting of over 300 trees, and this number will grow significantly in the coming years.  

5.      What measures has Stanbic IBTC as a group taken to combat climate change?

We acknowledge the need for urgency in halting climate change, and Stanbic IBTC is contributing its quota to addressing this issue. In addition to the programs discussed earlier (aimed at reducing carbon footprints from our operations), we are also working with vendors and customers to provide solutions that can help address climate change issues. This is reflected in one of our seven focus SEE Impact Areas – Climate Change and Sustainable Finance – where the Group seeks to provide financial solutions to support climate change mitigation and adaptation measures. 

We also continue to advance awareness around climate change amongst the general public; leveraging our social media platforms and webinars, for instance, the recently concluded Net Zero Webinar. Similarly, our parent company, the Standard Bank Group hosted a Climate Summit in partnership with the University of London’s School of Oriental and African Studies. We continue to take awareness communication initiatives by sharing practical tips that people can adopt to help address climate change. 

6.      We know that marketing and advertising is very necessary to any business – yours inclusive. What plans are in place to adopt sustainable advertising models which help the environment and move away from traditional advertising?

As an organisation, we have begun practising sustainability marketing. One of the ways we have done this is drastically reducing our investment in traditional print media advertising and up-weighting investment in digital advertising. We have also instituted Sustainability Saturdays, where we educate the general populace across digital platforms on all issues about sustainability, highlighting what we, as a company, have invested in socially and our environmental impacts in the areas we operate. These are embedded in our marketing strategy. Another way we practice sustainable advertising is by ensuring that our marketing is consumer-oriented. Our engagements with our customers are innovatively value-adding to the customers. Lastly, our solutions, products, and services are useful to all strata of society.

7.      How well will you say Nigerian businesses and corporate organisations are doing in terms of protecting the environment?

I would say there is growing awareness amongst Nigerian businesses on the need to protect the environment. Some organisations are genuinely adopting measures to manage their environmental footprints in line with their commitments and or regulatory requirements. 

However, we are barely scratching the surface as a lot of work still needs to be done to develop appropriate regulations and enforce existing regulations to ensure compliance with environmental best practices and standards. Also, a lot still needs to be done in collaboration amongst stakeholders (regulators, NGOs, corporates, communities) to advance environmental protection in Nigeria. 

8.      In your opinion, how has the pandemic affected the adoption of sustainable environmental practices?

The COVID-19 pandemic presented a potent reminder of the need for businesses to adopt sustainable practices that can help minimise disruptions to business arising from such black-swan events. It was interesting to note how organisations quickly adopted sustainable environmental practices such as using digital conferencing systems and reducing business travel, which is a key contributor to global emissions.  Therefore, in my opinion, the pandemic accelerated the adoption of sustainable environmental practices.

9.      As a company that is big on CSI projects, how do you contribute in ensuring your host communities benefit from sustainable environmental practices?

As a socially responsible organisation, we develop initiatives to impact the communities in which we operate. Over the years, we have donated several water borehole projects to our host communities as part of our role in improving the standard of living of these communities. Access to clean water is part of the United Nations Sustainable Development Goals and we deliberately chose solar energy to power these water sources. Being an SDG-oriented organisation, another reason we have opted for the high quality solar powered borehole machines is to reduce the impact of fossil fuels on the environment.

We also have embarked on tree planting activities as part of our CSI initiatives; which we have been able to sustain due to our partnership with the Nigerian Conservation Foundation (NCF). As part of our 30th-anniversary activities in 2019, we planted 30 trees at Lekki Conservation Centre (LCC), an urban jungle in the heart of Lagos. We further planted 30 trees in each of the six geopolitical zones of the country.  We have also encouraged staff to participate in tree planting activities through their departmental CSI initiatives. This is one of the practical methods we have taken towards reducing carbon footprints and achieving net-zero emissions.

10. What can be done differently in the financial sector in Nigeria to ensure more people begin to pay attention to issues that affect the planet?

Stanbic IBTC Chairman added that I believe that the societal influence of the financial sector in driving positive changes has not been fully harnessed. On one hand, the public perception of the financial sector needs to be improved such that it claims its rightful place in society and get the public assured that it functions for the greater benefit of society. The industry is expected to lead by example by continuously improving sustainability drives in their business operations, for instance, Stanbic IBTC Group has committed to and is working towards achieving net-zero emissions by 2050.

On the other hand, the financial sector is responsible for adopting measures that will influence its various stakeholders such as providing them with sustainable investing opportunities and prioritising compliant stakeholders.

There is a need for collaboration amongst stakeholders (government agencies, regulators, environmental experts, financial institutions, NGOs, Communities) towards developing an ecosystem for environmental financing. This will encourage and facilitate increased adoption of environmentally beneficial practices, solutions, or programs.

11.  What is your expectation for the industry as a whole in the near future?

Without mincing words, ‘innovation-driven change’. Technology is rapidly advancing, competition is getting stiffer, and the regulatory environment is changing. The industry is generally looking out for improved ways to grow scale and remain relevant in society. The potentials for innovations to transform the financial ecosystem are almost limitless, and these courses are still being charted.