CIARAN RYAN: Many businesses have considered ‘going green’, but what does that mean? Installing solar panels, recycling water, switching to LED lights? Actually, it means a lot more than that, as we’re about to find out. Perhaps it also means using suppliers who have a like-minded approach to sustainable business interests. And, while we’re on the subject of sustainability, what does that mean in practical terms?
Joining us to discuss this is Mark Boshoff, head of transformation and sustainability at Nedbank. Hi Mark. Just tell us a bit about your role as head of transformation and sustainability at Nedbank and outline, if you will, some of the general trends in sustainable financing that we’re seeing at the moment.
MARK BOSHOFF: Hi Ciaran, thanks for having me. My role as head of sustainability and transformation in the bank is – I think I’m a very lucky chap – that I get to save the world, if you want to see it on those lines, through sustainability and the financial offerings that Nedbank offers.
And then I also have a look at how we can benefit black business people who want to start businesses and get their businesses up and running through empowerment financing. So all in all a very positive portfolio to have for businesses to go green; it depends on where you want to start.
A lot of companies would maybe begin with getting themselves a consultant who could look at how you do green office space, design the green office, and build it with various sources of material and things so that it’s done in a sustainable way. Other businesses are not that fortunate and have to possibly retrofit, and that’s probably where my portfolio comes in very strongly, as we assist those businesses to retrofit – through funding, of course – the solar panels or the renewable energy or the water conservation, or whatever it might be.
CIARAN RYAN: Following on from that, sustainability in business generally addresses two main categories: the effect that business has on the environment and the effect business has on society. Why is this important and what are Nedbank’s sustainability-finance offerings in this regard?
MARK BOSHOFF: Well, I think if one takes a step back and just has a look at it from the perspective of business in a society, how can any business be healthy and functioning and sustainable and viable in an unhealthy society? I think the two are very interlinked.
Your business has got to build your society, and your society has got to support your business. That is to me the main reason why one’s got to look at sustainability development goals as designed by the United Nations, because they look not only at saving the planet – if you want to call it that – but also how we build our societies and infrastructure around us in such a way that everybody benefits and it’s a prosperous and viable society for everyone.
What is Nedbank doing? In business banking what we have had a look at is how we can assist our clients to follow the same route we have followed in Nedbank, where we’re one of the first banks to become carbon-neutral, and where we have very firm policies on [going] green and sustainability. One of the things that we can do is to assist clients to finance that equipment that they’re looking at, and we’ve got various options that they could use.
CIARAN RYAN: Maybe you can just elaborate a little bit on that point. You said that Nedbank is the first bank to be carbon-neutral. What does that mean?
MARK BOSHOFF: We went through the very stringent tests and exercises that were operating at the time to [discover] our carbon footprint, whether we are contributing to global warming or not, as well as how to reduce that carbon footprint. We got to the point where, through various exercises and implementations and structures, we could safely claim that we were carbon-neutral at that point.
CIARAN RYAN: Interesting. Okay, sustainable business practices are no longer an option for business, but they’re becoming a necessity. And of course that has financial implications. Maybe just discuss some of the financial realities for businesses going down this road.
MARK BOSHOFF: When we started out on this road, Ciaran, it was very much a case of how we have a look at assisting businesses to reduce their carbon footprint, to become green, to become sustainable and to become ‘self-efficient’, if you want to call it that. But at the end of the day, as you rightly say, businesses are there to do business, to have a positive bottom line.
More and more it became very obvious that there were certain things that were impacting businesses. One of them at the stage when we developed the product was that the lights were going out with rolling blackouts and load shedding and all those wonderful things that we went through. That impacts businesses directly. They can’t do business, they can’t run their tools, they can’t run their points of business, and they won’t even be able to run their factories.
The other thing that was impacting them tremendously was the escalating cost of electricity. That had a direct impact on the bottom line. They weren’t always able to pass that on to the consumer, because the consumer was already struggling.
That’s when we started to realise that our product and our funding offering that we’ve got is not there just to prevent climate-warming and all those things that go with the sustainability side of it, but also to help businesses be more viable in a business sense.
CIARAN RYAN: I think a lot of businesses will be encouraged to hear that, when we talk about sustainability, it’s not just the box that you tick in the annual report, is it? It is actually keeping the lights on. That’s what sustainability does mean – keeping it in a way that is not harmful to the environment.
What is also interesting to note, which you’ve just touched upon, is the fact that this can now be done and it can be financed in a way which does make business sense. Can we just follow on from that, talking about some of the trends that are currently being talked about: greener offices such as using sustainable materials in the building process – you discussed that earlier on – reducing greenhouse-gas emissions and, of course, renewable energy sources to power facilities, considering the problems that we have with the Eskom grid at the moment. What are some of these big trends that businesses are having to confront?
MARK BOSHOFF: In my mind the big trends that they are having to confront is how to continue to operate, produce what they are designed to do, sustain staff to continue working in an environment that is conducive to health and safety, and possibly replace certain harmful business practices that they may have. All of this does cost money, and it does have an impact on the bottom line.
But one of the great things that we discovered when we started analysing the funding options that we provide and so on is that initially we thought it was going to be a way to help clients move forward.
Then we realised that it actually makes business sense to be sustainable, because all these offerings that you can buy, all these products and implementations that you can do, actually help you to save money, not just the environment.
That is becoming a big trend and we’re seeing more and more that businesses are starting to realise that they have various stakeholders who are starting to say, “Hang on a moment. You may not be as green as you say you are,” or “You are in a polluting environment, we no longer want to invest in you, we no longer want to buy from you, we no longer want to be part of this ongoing situation”. It’s just becoming more and more, as you say, non-negotiable.
One has to try and look at becoming a more sustainable business that doesn’t pollute, and that provides a benefit to the society around it other than just producing a certain piece of equipment or product.
CIARAN RYAN: Mark, any final thoughts? And perhaps just outline for us where you think South Africa will lie in terms of sustainability, let’s say, five years from now.
MARK BOSHOFF: That’s a tough question. Things change overnight, as we’ve seen in the recent past. We in South Africa are in a very, very fortunate position with our climate and where we are situated in the world. We are a great tourist destination. We have so many natural resources. I’m not talking about minerals and things, I’m talking about the natural beauty that we have around us. I think we probably can be compared to the Californians or guys of that nature, where you’re going to be looking at having people who want to spend time outdoors, who want to have tourists arrive safely and do their thing in a manner that is conducive to the environment.
So I think that we are going to see this groundswell – which has already started for different reasons, whether it was Eskom or cost increases or whatever it is – is now going to become a business imperative, and people are just going to follow it because it makes sense. So I foresee a great future for sustainability and for our country as a whole.
CIARAN RYAN: Thank you very much. That was Mark Boshoff, head of transformation and sustainability at Nedbank.
Brought to you by Nedbank Business Banking.
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