Nedbank’s 2016 Sustainability Review highlights how it contributes to the sustainable development agenda of the South Africa, with a focus on products and services, partnerships and operations.
Says Brigitte Burnett, head of sustainability for Nedbank Group: “In our experience, our sustainability effectiveness is maximised through an approach that combines a commitment to sustainable products and services, managing our own impact, and partnering with like-minded organisations and initiatives.
“The information contained in our 2016 Sustainability Review demonstrates the value that is unlocked through this approach. While we certainly aren’t there yet, it is a journey and this report shows good progress in how we have delivered positive societal impacts for our country and our clients.”
At a products and services level, Burnett points to the more than R64bn worth of empowerment financing Nedbank has provided since 2009 as evidence of the bank’s dedication to transforming SA industries and businesses.
In some cases, these beneficiaries have started and grown their own businesses, while others have used it for transformational infrastructure projects – both helping to grow the economy and create jobs.
The bank also established a Green Savings Bond, which allows retail and institutional investors to not only grow their money, but also contribute to sustainable development projects like renewable energy.
Since its inception, more than R17bn has been invested into the product.
“As part of our Fair Share 2030 strategic enabler, Nedbank has also placed itself at the forefront of efforts to address the growing student accommodation crisis in South Africa,” says Burnett. “The R2.3bn we have invested in support of this vital housing sector has resulted in more than 5,000 more student beds being made available.”
Response to #FeesMustFall
The 2016 Sustainability Review offers evidence of Nedbank’s commitment to positive education outcomes and how the bank has responded to the Fees Must Fall campaign.
Burnett points specifically to Nedbank’s partnership with the Nedbank Mogale Empowerment Trust, which invested R100m in the MTN Zakhele Futhi scheme – the dividends received will be used to benefit black students across the country as well as black supplier development.
The review also discloses detail on investments aimed at socioeconomic upliftment and support. For example, the bank’s main CSI arm, the Nedbank Foundation, has invested R141m into a range of social projects across its key focus areas of education, health and social development.
The bank also provided more than R100m in drought support over the past financial year, including working capital for its agriculture clients and donations towards boreholes, animal feed and bottled water.
Reducing its carbon footprint
Closer to home, Nedbank remains committed to managing the sustainability impacts of its own operations and staff. Since 2010, Nedbank has been carbon neutral and, in 2016, it further reduced its overall direct carbon footprint by more than 6%.
Across the group, the bank remains focused on good water stewardship and continued its water usage minimisation trend by reducing water consumption across its operations by a further 1.1% in 2016.
The full 2016 Nedbank Sustainability Review is available for download at www.nedbank.co.za. It is a supplementary report to the Nedbank Group Integrated Report.
The R128 million regional office building at Karl Bremer Hospital in Bellville became the first recipient of the GBCSA Socio-Economic Category Pilot Award. The project was also awarded the GBCSA 5-Star Green Star Certified SA rating for design of a public or education building. If everything goes according to plan, the new office will be completed in January 2017.
The Socio-Economic Award goes to a green building project that has made a significant contribution to employment creation, economic opportunity, skills development and training, community benefit, empowerment, as well as health and safety. The Green Star rating measures the extent to which the design of a building performs well in terms of management, indoor environmental quality, energy, transport, water, materials, land use and ecology, emissions, and innovation. Four stars means “best practice”, and five stars means “South African excellence”.
The facility under construction on a 14 000 m2 site on the corner of Mike Pienaar Boulevard and Frans Conradie Drive will provide accommodation for over 320 public servants. It is expected to be a catalyst for the regeneration of surrounding areas once it is complete. Since construction started in January 2015, R70 million has been spent on procuring services from local contractors. The project is boosting the fortunes of building contractors, particularly small contractors and local suppliers.
The project’s economic opportunity targets have three main elements. The first requirement is a minimum contract participation goal of 5% of the total project value being spent on joint-venture contracts with developing contractors who also receive enterprise development support from the main contractor. The second target is to spend 25% of the contract value on the procurement of project-specific goods and services from black-owned and women-owned small and medium-sized enterprise (SMEs). The third is to spend 70% of the contract value in respect of materials, products and services on locally produced goods and services.
The office will use less water, generate less waste, and provide healthier working conditions for employees. Passive solar design minimises the need for heating and cooling. Activity spaces are open and aimed at encouraging communication between offices and promoting a sense of community. Bicycle-friendly facilities are provided for building staff and visitors to encourage commuters to use non-motorised transport. The innovative and creative design will help create a comfortable and productive work environment that integrates functional offices with amenities and access to social activities.
The GBCSA has independently verified that the Bellville regional office building is on par with the best South Africa has to offer. The Department continues to make a valuable contribution to job creation, economic empowerment, and skills development in the province in every project that it undertakes.
A South African judge postponed a case on whether mining companies are compelled to permanently ensure their assets are at least 26 percent black owned, heightening uncertainty in an industry that accounts for almost half of South Africa’s exports.
High Court Judge Pierre Rabie reserved judgment in Pretoria on whether Malan Scholes Inc., a Johannesburg law firm, will be allowed to consolidate its case with that of the Chamber of Mines, which has taken the Department of Mineral Resources to court. Malan Scholes wants the Mining Charter, which includes the empowerment clause, declared unconstitutional.
The chamber “does not want to see the charter destroyed,” said Chris Loxton, senior counsel for the mining group. “Scholes wants to put it to the sword,” which will create a conflict between the two groups, he said.
The case pits the need to decrease racial inequality 22 years after the end of apartheid against shareholder rights as the DMR’s clause would increase shareholder dilution. South Africa’s push for increased black ownership of the mining industry is part of an effort to address the legacy of whites only rule that deprived the black majority of economic opportunities.
The chamber planned on presenting its arguments about the issue of black shareholding on Tuesday, Roger Baxter, the chief executive officer of the chamber, said after court proceedings.
“The delay is obviously something that does affect us,” Baxter said. “This is a critically important issue and our focus is on resolving the issue around uncertainty.”
The chamber brought the case against the Department of Mineral Resources by mutual agreement after the two parties couldn’t agree in negotiations on whether the DMR’s 2010 addition to the charter that the empowerment requirement was permanent was legally enforceable. The two sides have been in dispute over that clause for six years.
The Centre for Applied Legal Studies, a legal group based at Johannesburg’s University of the Witwatersrand, was admitted to the case as an amicus, or friend of the court as it argues that Scholes’ position is not transformative.
“CALS intervenes in the public interest and in pursuit of its objectives to highlight the importance of transformation in the extractive industry which it deems a constitutional imperative,” said Nomonde Nyembe, an attorney for the organization.
Serudomo SA Rona, a community-based organization, was also admitted as an amicus. It is represented by the Legal Resources Centre and supports the DMR’s viewpoint.
South Africa is the world’s biggest producer of platinum and manganese and Africa’s biggest coal, chrome and gold producer. The world’s three biggest platinum companies are based in the country and Glencore Plc, South32 Ltd. and Anglo American Plc have assets in the country.
WE SEEM to have missed the opportunity to learn from the Marikana crisis as a wake-up call to address the structural problems in our society.
Dark clouds gathering over the mining industry reflect the depth of the looming crisis resulting from our failure to create a growing and inclusive economy. The response of the industry to the pressure on its uncompetitive “low skill, low wage” operating model, worsened considerably by Eskom’s inability to provide reliable power, could make or break the industry and take the rest of the economy with it.
Retrenchments might be seen as inevitable but the spillover effects could be disastrous. The despair of those caught up in poverty, unemployment and inequality is mounting and is likely to lead to robust resistance to any move to retrench the breadwinners of large extended families.
There would be no winners in the death dance that could break out under such circumstances between the private sector, the trade union movement and the government. What is needed are tough conversations about how we can work together to address the root causes of our socioeconomic problems. Such conversations should lead to a new social compact on transformation that lays the framework for drawing up industry-by-industry action plans with short-, medium-and long-term goals and targets.
The mining industry is ripe for such discussions to guide the drastic action its leaders know they have to take to stay alive. The looming wage negotiations should be used as a platform for union and mine leaders as well as the government to discuss the transformation of the industry into a more sustainable and competitive one.
The first principle should be putting the preservation of the livelihoods and wellbeing of workers at the centre. The latter requires creative modelling of the size and shape of skills needed for a “high skill, high wage” competitive industry. These would need to be fine-tuned at company level, taking into account the characteristics of each resource sector. Matching the profile of the existing workforce with that of the desired size and shape would yield a picture of the extent of the restructuring needed.
Those not fitting the new model should be given new opportunities that would leave them no worse-off economically. There are pilot models that hold promise for linking the urban-rural nexus that many mineworkers have to negotiate as migrants. Viable agribusinesses, protective-clothing manufacturing and other services can be developed into sustainable businesses in the home areas of those affected.
There is much we can learn from Brazil about the value agribusiness can add to the economy. We have the opportunity to turn our vast underutilised land resources into a platform to develop a strong farming industry. High-value food crops, such as soya, sunflowers and nuts, as well as high nutrition-value vegetables, such as mushrooms, spinach and berries, could transform the rural and periurban landscape.
Fibre crops such as sisal, flax and hemp that generate significant jobs along the value chain, from cultivation to processing, are highly suitable for the Eastern Cape, KwaZulu-Natal and other areas.
Our natural, mineral and human resources could be recombined in ways that produce higher economic value and shared prosperity for all.
The government has a major role to play in the industry to partner private sector incubators/accelerators that nurture and grow entrepreneurs. Pooling funds from the Industrial Development Corporation, the Development Bank of Southern Africa, the Land Bank and the Jobs Fund, as well as collaboration with the departments of rural development and agriculture, could unlock huge value.
Collective effort is needed to transform poor provinces such as the Eastern Cape, KwaZulu-Natal, Limpopo and Mpumalanga into vibrant food baskets. This would significantly contribute to meeting our land-reform and job-creation goals.
The second principle would be to give those affected by silicosis, tuberculosis and HIV, estimated in a study in 2012 to be 25% of the workforce, the first shot at the opportunity to get out of harm’s way without losing their livelihoods. Linked to this must be agreement on the settlement of outstanding occupational diseases’ claims to free the industry of the high-liability risk profile that hangs over its attractiveness to investors.
A 2009 study indicated about 288,000 workers with silicosis had laid claims of R10bn. The industry’s approach of literally fighting poor, unskilled miners to the death as a way of avoiding the flood of claims is not only ethically wrong, it hurts the industry’s image. Investor sentiment is not neutral to this issue.
The third principle is to commit to investing in skills development to migrate the industry to a high-skills operating model and increase productivity and competitiveness. The focus must be on-the-job training for new entrants to make the transformation needed industry-wide.
Collaboration within the industry, between the industry and vocational colleges, with the government providing incentives and removing bureaucratic barriers to pools of funds, is essential to success.
Using the National Skills Fund, the Jobs Fund and black economic empowerment scorecard points for skills development could work magic in moving us up the skill and productivity ladder. We should learn from the decades-old successful German artisan training scheme, including the development of skilled master tradespeople, who are essential for carrying out highly specialised tasks that unlock productivity.
The mining industry is the appropriate spearhead for transforming our socioeconomic landscape. It is a significant contributor to gross domestic product and generates 1-million jobs, 500,000 directly. It contributes R78bn to the wage bill and R17bn to the tax base. It produces 94% of the feedstock for electricity generation, while it consumes 15% of our energy pool. It also has a historic mission to contribute to socioeconomic transformation. It was the foundation on which our economy was built and it pretty much shaped the nature of urbanisation and industrialisation.
It now has to rise to the challenge and opportunity to once more lead the charge. The odds may seem against it but that is precisely what history’s magic moments are made of — turning moments of crises into opportunities for greatness. The industry is sitting on a treasure trove of reserves and talented leadership that has proven its mettle in tough times. It is time to leverage all these strengths to tackle the challenges.
The workers, the nation and the world are waiting with bated breath for that magic moment to lift the dark clouds hanging over us. We have been here before. Yet, in 1994, we came together to surprise ourselves and the world. We can do it again and complete the journey of transformation.
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