Lessons from a crisis and fresh opportunities

By Wendy Dobson, Head Group Corporate Citizenship, Standard Bank Group 

The crisis has provided the clearest demonstration yet of the fact that companies cannot achieve long-term success if the societies in which they operate are not prospering. 

Over and above the direct healthcare impact, the pandemic has had a devastating effect on economies the world over as governments implemented lockdowns to slow the spread of the virus. While necessary, these measures have disrupted people’s daily lives and put livelihoods at risk. 

Corporates in all sectors have had to revisit their purposes, and environmental, social and governance (ESG) considerations have come to the fore. To protect themselves against future shocks, and to ensure they succeed over the long run, all companies need to ensure that they tie their own performance to the wellbeing of society and the natural environment. 

In recent years, there has been a growing recognition globally that a company cannot generate sustainable returns for investors if it is not also generating value for other stakeholders. In Standard Bank’s case, this means that the bank’s future success depends on it bringing more of Africa’s people into the financial system, financing infrastructure projects that boost economic growth, and facilitating the development of the healthcare and education sectors, amongst other focus areas. 

In the context of COVID-19, our extraordinary steps to assist individual clients and  businesses weather the storm is in both our interests and theirs. 

Put simply, if we succeed at making a positive contribution to the societies in which we operate, and if we help mitigate the impact of the pandemic, we will grow the continent’s economy and will therefore be able to grow ourselves. Aside from the ethical case for being a responsible corporate citizen, there is clearly a strong commercial case for operating with all stakeholders in mind. 

Standard Bank Group has for several years been integrating social, economic and environmental (SEE) considerations into its core business and into the decisions it makes on a day-to-day basis. We are not simply paying lip service to the idea, we recognise that this is one of the most effective ways of managing risk and ensuring our continued longevity and relevance. 

As part of their performance agreements, our employees are required to include targets related to our SEE strategy, which is also a consideration in our remuneration committee discussions. Further, SEE is a mainstream agenda item for both our risk oversight and our social and ethics board committees, and our group executive committee. 

We also realise that we need to enhance how we measure our SEE impacts to improve transparency and accountability. This has been a challenge, given that the methodologies – particularly when it comes to social impact – are not yet well developed. But we are making good progress. 

For the time being, we are starting to measure our aggregate lending and other activities in our SEE impact areas.  

Over time, we will shift more towards the direct and indirect impacts of these lending activities. To get there, we are partnering with economists who have worked closely with development agencies and governments to gauge how we are influencing macro statistics within a country. This is a massive undertaking, but a necessary step in the right direction. We will also start to set our own impact targets, and these will guide capital allocation and day-to-day business decisions. 

To improve on our ability to measure impact, we are leveraging our position as a founding signatory to the UN Principles for Responsible Banking. Through this forum, we are working with other banks to develop impact measurement tools and methodologies that all signatory banks can use moving forwards.