Developing economies need a fair energy transition strategy- Chairman, Stanbic IBTC
As climate change threatens opportunities and economic stability, players in the financial services sector like other stakeholders have risen to the challenge of not only providing the financial powers to combat carbon emission but to sustain growth and development. BASIL OMIYI, chairman of Stanbic IBTC in this interview with MODESTUS ANAESORONYE gives insights into what the institution is doing. Excerpts:
There have been various calls for the adoption of green energy, especially among corporate organisations on the need for zero-emission. How important is green energy to sustainable development in Nigeria, and what are financial institutions doing to drive this?
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.
Green energy (Solar, Wind, Hydro etc.) thus presents an opportunity to pursue economic development while ensuring minimal adverse impacts on the environment.
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
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.
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 on board 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.
How has your organisation been able to reduce its own carbon footprint?
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 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.
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.
In your opinion, how has the Covid-19 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 businesses, 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.
Now, 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 drive awareness through communication initiatives by sharing practical tips that people can adopt to help address climate change.
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?
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 gets 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.
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.