Sustainability is more than a corporate social responsibility

Abubakar Suleiman, CEO Sterling Bank and Oshiokamele Aruna, Managing Director, Tetra Pak during a fireside chat with Frank Aigbogun, Publisher BusinessDay, discussed how sustainability is more than a corporate social responsibility during the BusinessDay 2021 Diswaste conference. The conversation has been edited for brevity and clarity

Aigbogun

Last year, Sterling Bank announced the donation of 5,000 kits, to highway managers in Lagos and your adoption of LAWMA dates back to over a decade. When we go around, we see LAWMA people wearing a vest with Sterling Bank written clearly as a benefactor of the work that they do. Now, tell me, how did this relationship evolve and what is the future?

Suleiman

Thank you very much. Our relationship with LAWMA is truly a long standing one, and people ask how did it start? The truth is that after 12 years, you forget exactly how it started. But what we do remember very well was that we felt that while waste management was a significant challenge for us, there were very few corporates that were interested in being associated with managing waste. For some reason it was almost seen as if you are helping with waste management, maybe your brand itself is not that premium, and we felt that was wrong. Our conviction was that we needed to put our support where it was most needed.

Over those 12 years we have actually donated tens of thousands of kits to them, and it’s not just the overall, we’ve actually given them kits that assist them in cleaning, in packaging, and all sorts of ways of managing waste, so it is an extensive relationship.

One of the things we tried to do from the beginning was to bring in other stakeholders, because we know that the challenge is not one that one person can scale. For it to scale, you need to bring in both individuals and corporates. We have invited a lot of other stakeholders and tried to collaborate.

We are not just working with LAWMA, we are in over 20 states now, I think we are probably closer to 30 than 20, as I speak. Our objective is to make sure that in each of these states we work with the local authorities to encourage citizen participation.

It’s not just about giving them the kits, it is about encouraging citizen participation, and I thought going forward we will be able to aggregate a significant number of corporates that are committed to this cause. This is not just CSR. In some cases it is actually an obligation, especially for the people that are primarily responsible for originating the harmful waste in the society. If we can collaborate and bring them together we then begin to see impact.

Aigbogun

Thank you very much. Keep your mind on that word impact because I’m going to come back to that later just to get a sense of how you measure impact and what your perception of that impact is today. It has been going on for many years and at some point, we forget how it started but the good work you’re doing remains, I will come back to the point about impact later.

Mr Aruna, Tetra Pak is a global firm and you’ve straddled the food processing value chain since 1951. You are now involved in a unique way of integrating cycling into your operations and that is good, You’re doing business which I’m sure is profitable and innovatively too, which is like killing two birds with one stone? How has that fared so far?

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Aruna

Thank you, Mr Aigbogun for organising this seminar, you and the team, I think it’s a great time to have this discussion, especially today being Earth Day. For some people that do not know, Tetra Pak is a leading food processing and packaging company in the world, together with our suppliers and customers, we deliver food in a safe, innovative and environmentally friendly way to millions of people around the world. And we do that in about 190 billion packages.

When we talk about waste or in the larger sense of sustainability, that is not a CSR for us; that is our business strategy, that is key to how we do business. And like you rightly mentioned, we do it in a lot of innovative ways because our brand promise speaks for itself. It says protect what’s good, and for us it’s about the food, it’s about the people, and it’s about the planet that we live in today.

We’ve been doing a lot across the entire value chain, since 1951, like you said, and most recently, we did commit that in our entire operations, we are going to have net zero greenhouse gas emissions by 2025 and we will take a bolder step in the entire value chain, which includes our suppliers and customers.

Those are bold moves that you take when you believe in the environment and you believe in making it better even for the future. When you also look at what else we do, currently every raw material we use when it comes to paperboard we source them from renewable forest and that is very important. We make sure that we don’t just take from the earth, we actually return back as much as we do, or even much more in certain cases.

Finally, among the many things we do currently on the global scale, is renewable energy. If you look at all the factories that we produce from around the world, we’ve improved our renewable energy from about 50 percent to 70 percent, that’s a significant gap in ensuring that you continue to maintain sustainability as a key driver in your business. And of course ensuring that you have clean cities, for the environment and for the people to live in.
Aigbogun

Thank you very much Mr Aruna and congratulations to Tetra Pak. Mr Suleiman, recently you signed on a singer Olamide who became an ambassador for Sterling Bank and he’s probably better known through that initiative today. What was the message that you were trying to send?

Suleiman

It speaks to Olamide’s clout that he’s the one that is most remembered. Prior to Olamide we had had many efforts where we try to work with people who are easily recognisable, to inspire people. The objective primarily is to inspire.

We observed a lot of the places that are badly managed in terms of the environment or how waste has been treated, for instance, that places like Oshodi, Ojuelegba. When we got into the market, we also realised that people considered it beneath them to be responsible for the cleaning, i.e. cleaning the gutter, packing the waste. So we went there as executives of a bank, with a lot of our partners, rolled up our sleeves, CEOs, executive directors, senior people, and started digging into the waste and cleaning ourselves in the hope that we would inspire.

For a couple of years that strategy worked. But we then realised that we can’t limit our effort at convincing people to take waste management seriously, to just the market and the locations where we were, so we reached out and started using celebrity power. The first person we worked with was Funke Akindele. And that was also quite huge, but the year we took on Olamide, I think that was the biggest of all.

The thought process was a lot of young people out there are connected to these artists and therefore, if the artists are seen to be party to cleaning up and taking care of waste, this could change people’s hearts and minds about how they’re related with waste, and so it was incredibly successful.

We have seen what we call this Sterling environmental makeover, which is sort of, a programme that tries to show the before and after. You go to a place, you see how badly it is being kept, and how waste is being managed and come in, do the work and show to the world exactly what it looks after you’ve done the work.

We wanted to inspire people to continue to repeat this process and Olamide was a big hit. We also worked with him to release a song that became the theme song. And that was also a massive hit and sort of kept the idea of cleaning at the forefront for quite a long time.

Aigbogun

Great, thank you. Back to Mr Aruna. Tetra Pak is doing a lot of work within its factory gate, promoting sustainability and you have alluded to the vastly improved proportion of renewable energy that you now use in your operations moving to a high of 70 percent. You must be one of the one of the biggest in terms of the proportion of renewable energy in its operations and also your innovative ways to make packaging sustainable. How do you engage governments and civil society groups to advance this cause outside of your factory?

Aruna

When it comes to keeping the environment clean, it’s not one person’s responsibility, no one person can do it. It’s such a huge elephant and in order for you to eat an elephant, you have to eat one piece at a time.

One of the many ways we do that is partnering with our customers, with our suppliers and even like you mentioned, with the government. And one of the ways we do that is by being part of the Food and Beverage Recycle Alliance (FBRA), which is today we are the only carton producing company that is part of that in Nigeria.

Tetra Pak and the rest of the FBRA, discuss and look at what right advocacy steps we can implement in order to ensure we have cleaner cities for our environment. Because it is one thing to look at the laws and implement them but the responsibility, or one of the big responsibilities, lies with corporate entities like what Mr Suleiman and Sterling Bank are doing, That’s great. We need a lot more corporate citizens to engage in that way.

How do you improve education? How do you improve awareness as we improve collection and sorting? Those are many ways corporate citizens can begin to improve while we wait for the right government policies to be implemented, but there’s a lot we can do already from today.

Aigbogun

Thank you very much Mr Aruna. Let me go back to Abubakar. Staff of Sterling Bank, including directors, go out to clean the environment and we see your staff and your people sometimes on the street. Bankers joining in environmental clean up is very rare scene, but we do see it and I commend you.

I am aware of a 2020 report by Deloitte Global called the Global millennial survey, which pointed out that employees do examine the participation of their prospective employers or their employers in sustainability initiatives, and they take pride in it. Perhaps, it’s even the reason why they choose to work for that company.

So how do your staff feel about the work that you do? And how do your customers feel seeing you as a reliable partner in the renewable energy journey that has now become global?

Suleiman

Thank you very much. To be clear, I share the view that increasingly, people are interested in the company beyond just profits or beyond the career and getting paid and that is a fact we’ve observed across board.

When we started our journey though, that wasn’t how we were thinking, we were not thinking about this emerging generation that would start to hold us accountable, this emerged from a couple of individuals at senior level who felt it was the right thing to do.

There are many ideas that come and go in all corporates. If the employees don’t buy into the idea, it won’t last for 12 years. What happens is that there will be some flamboyance, some launch and people that make a lot of noise. The moment whoever is pushing the idea looks away, which will happen if you’re a busy person, the idea dies.

What has happened is that our employees have to own this concept of being connected to their environment. Beyond the cleaning, which is what you see, we for instance, started a process where we are generating a lot of batteries that we use in our ATM. We decided to start exchanging our batteries for tree planting. And so, for every battery that we consume, we ensure that in return a certain amount of trees are planted through a contract that was signed with partners. The idea started to permeate. Every year, we publish a sustainability report in the bank that shows the progress we have recorded in various parts of our work.

You talked about how renewable energy became something that we were aggressive about. It started as a business. But as I speak, more than half of our branches are running on either renewable energy, or a hybrid power system that uses sustainable power. We are also in the process of turning our entire head office building green so that it is almost entirely solar powered. This is something that has become part of the culture but it’s also part of the strategy of the institution and I think it’s something we’re quite proud of.

We have now seen new and younger people coming on board and this is a huge part of what they care about, so I think that the institution has absorbed and imbibed some of these focus on the environment as a culture, and people who care about the environment are increasingly coming here.

Aigbogun

Thank you very much. Mr Aruna, Tetra Pak signed an agreement with Onward Paper Mill, manufacturers and marketers of paper products. This agreement is meant to use the expertise to collect and recycle beverage cartons, juice cartons in Nigeria, tell us a bit about this partnership, and whether it is working.

Aruna

Thank you. That collaboration is one that we are really excited about. Before then, we started looking at how we can address the waste issue in Nigeria, like I said earlier, you have the awareness and the education, then you have the collection, sorting and the recycling.

In 2019, we did an awareness and education campaign to over 10,000 students in Lagos State. It was a huge success and we were about to continue that before COVID came. However, we still have plans to do that. So we try to catch them young, trying to teach the young people about the importance and relevance of recycling, of collection.

And then of course, you get to the point where we also have some partners that we work with today, where we facilitate collection. We’ve improved collection of used beverage cartons from 10 tons per month to 30 tons per month, thrice of what we used to do and a significant improvement.

Most people know Onward is a foremost company in the paper producing industry. We have partnered with them to use fibers from used beverage cartons in order to work as raw materials in the production of that green box.

This is a fantastic collaboration, because what it means is they have access to raw materials that have always been wasted which will help in their overall cost of production, which will be transferred to the consumers as well.

All the equipment has arrived in Lagos and we are beginning to set them up. By June, we should have that up and running. It’s something we’re really proud of and hopefully we should be able to share some of the good results in the very near future.

Aigbogun

Thank you very much Mr Aruna. Back to Sterling Back. What a great way to make money, if you make that money sustainably. I know that under your leadership, there is this programme that is dear to you called HEART, a strategy in which you invest in businesses or focus on businesses that are environmentally conscious. You target health, education, agriculture, renewable energy, as well as transportation.

Can you tell us some success stories involving these sectors? And then finally, how do you measure the success of your sustainability initiative?

Suleiman

One of the things we’ve accomplished [is that] we introduced remote work about three years ahead of COVID. We actually have spoken about this extensively. Just a couple of months before COVID, we were toying with the idea of a four-day work week and that started in four locations. By doing that, one of the things we’ve done is reduce our energy consumption. When we then got into COVID, we saw over 20 percent reduction in energy consumption.

That then pushed us to say, beyond COVID, what are the other reasons why we should continue with our remote work. We now have a situation where 20 percent of our workforce are working remotely, and are likely to remain in the foreseeable future. About 58 percent are now doing hybrid work in the office some days and they work out of the office on other days. Then we’ve got like 22 percent that are full time in the office.

Now, I say this, because a lot of the way that we generate is due to the fact that we run large offices, and it has become clear to us that, it is no longer required and that’s one way to go about measuring it. Recently, a financial institution has now joined us in providing kits for Lagos State. For us, we see that as one of the items we set for ourselves as measures, because we knew we knew that we couldn’t do this alone.

We have a sustainability report every year where we look at all of the waste that we generate, and we’ve been actively winding them down over a period of time. We have an effective waste recycling protocol within the building and on every floor. We’ve got waste being categorised and properly recycled, so the waste coming from Sterling Bank, no longer goes into landfill but straight into recycling processes.

We had an energy reduction plan. We spent about $2 million to change the cooling system in our building, because our building dates back to 1984 and the cooling system was highly ineffective and therefore consumed more fossil fuel, so we altered that.

Now we are in the final stage of a project that is going to wrap the entire 17 floors of Sterling Bank with voltaic cells so that we generate energy from the facade. Combined with energy generated from our parking lot it would actually be just under one megawatt and enough to run the building. These are the practical ways that sustainability is being measured.

If we step away from that and go to the HEART sector and exactly what are the success stories? We have deployed well over N115 billion worth of funding to companies and a huge part of his funding has gone into transport and agriculture, but we are increasingly seeing more going into renewable energy, education and health, and in some cases as grants for start-ups.

About seven years ago, we gave a $100,000 grant to a team of small kids that came back from Stanford, who were trying to help digitise the access to academic content. Their job was simply to go around Nigerian universities and digitise what we call handouts so that people can access all of those outputs from our professors.

And it could also be in terms of facilities like the significant facility that we gave to Primero to acquire vehicles. Recently, we have had a partnership where we funded Tremendoc, which is a telemedicine platform that in the year of COVID did about 60,000 medical consultations online. So you can imagine how critical this was at a time when people were afraid to go into hospitals when COVID was rampaging. You could just sit down in your house and access medical care.

We’re currently in conversation with a partner called Helium Health and the idea is to have Electronic Medical Record in federal, state and private hospitals across the country so that medical data becomes readily available. So we’re very selective in how we pick partners that can scale and we provide financing.

We are partnering with someone who is currently aggregating hospitals that are brownfield to upgrade them to world class hospitals and will probably become one of the largest hospital chains in West Africa in a couple of years, given the trajectory that we’ve seen. We’ve had public announcement of our collaboration with Nexford, a university that is registered out of Washington, DC and is now being partially regulated by the NUC.

We are now able to offer student loans for people to take a university degree. And the beauty of this is that it takes three years for them to get the bachelor’s and those three years they also get practical work experience working with Sterling.

We are looking to expand that to other corporates. For instance, somebody studying communications might want to work with BusinesDay in those three years as an intern, and get paid stipends while studying. The quality of education is then immediately superior to someone who never stepped into a newsroom through the four or five years of their education.

We started by giving a scholarship to 50 students to cover their education for three years, because we wanted to prove the quality of what we’re doing. A year and a half ago, we sent about 10 of our people to study with Nexford and it came out with incredible experience. The quality of the education was so superior that we knew that this was the path to scale.So right now, we’re probably the only financial institution that can give a student the financing they need for a three-year bachelor’s degree.

We brought solar power into many of the high density markets and now people are able to access power without generators. Finally, we are in a partnership to take rooftop solar power to millions of homes. We digitise the process through a platform called Imperium where an individual can go onto the platform, profile themselves, have technical people reach out to them, do the costing and pay as they use. You don’t even have to own the panels and the power set, you can just pay for the power as you use.

We need to change the culture, we need action and we did that with waste recycling and powering our own building for a start. We also need to financialise the process of waste management so that there is a profit from managing waste. That is why we have partnerships with a lot of people doing waste recycling. And we’re currently focusing our attention on the beaches in Lagos because we felt that, that is an area that has also been abandoned, where waste can be recycled.