×

We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Upliftment models may help protect the planet, counteract climate change, and maximise employment and socioeconomic development. These are important in protecting individuals and their livelihoods as well as safeguarding biodiversity, water systems and the like, all in an economically viable way.

A critical aspect of making this work is empowering citizens to adapt and understand the potential short-term benefits of the transition to a greener future: what’s in it for citizens, and how soon can they reap the rewards?

Nedbank has started putting this approach into practice through projects across SA. One initiative, dubbed the KwaDrabo Trust, solves a problem: more than 60% of SA’s cattle stock is in rural areas, with farmers travelling long distances to markets where they can sell them at competitive rates. As a result the wealth in the cattle is often not realised and cattle are left on the land to overgraze and cause environmental damage such as soil erosion, or the ownership value is underrealised as farmers sell to “bakkie traders” at below-market rates.

The KwaDrabo Trust built a cattle-holding station near Butterworth in the Eastern Cape to deal with these trends. The station buys, processes and conditions cattle bought from the local small-scale farmers at market-related prices, using a R10m rural livestock borrowing facility provided by Nedbank and Brimstone through the Nedbank black business legacy programme. The animals are then sold to Beefmaster, a Nedbank client.

Up to 10,000 small-scale farmers will ultimately benefit from the initiative, with between R30m and R50m in funds flowing into the local community annually through the sale of these cattle. The participating farmers receive training in animal husbandry and business matters. The model is replicable and scalable, and the aim is to work with commercial abattoirs and rural communities across the country to encourage the adoption of similar models based on the success of this investment.

Another programme involves investment in about 25 small businesses that are responsible for the removal of alien trees (plants that are essentially destroying the local water supply) from specific communities and turning them into fuel. This type of project can be replicated in other regions easily and will create jobs, helping to protect SA’s water resources. Of course, there are many other critical components to realising a green and thriving economy, and tackling the skills shortage is one.

Some might argue that a transition to a green economy will worsen the unemployment issue rather than improve it. Indeed, if certain activities are phased out and employees cannot make the leap, numerous jobs could be in jeopardy. For example, the technical expertise that may be needed for critical renewable energy projects may not necessarily be home-grown. This, of course, serves as a notable barrier to building a climate-resilient future. Further, the need to scale up can also act as a hindrance — getting pilot projects off the ground from concept to implementation, particularly in a country that does not have bottomless pockets, can pose a serious challenge.

Yet despite these obstacles the economic benefits and income streams generated from such infrastructure (in addition to the apparent environmental and social benefits) would be huge. That is why it is imperative that companies start reskilling and upskilling their employees if the workforce of the future is to be created now.

The next vital factor is good governance. In countries rife with unbankable institutions, corruption, weak structures and inadequate policies, it is unlikely that international or even local investors and investment banks will want to invest in initiatives that will actually allow these kinds of transitions to happen.

In response to the Treasury’s 2021 technical paper, “Financing a Sustainable Economy”, SA’s green finance taxonomy was launched earlier this month. Based on its European counterpart, the taxonomy provides guidance on an official classification that defines a minimum set of assets, projects and sectors eligible to be defined as “green”, in line with international best practice and national priorities to address climate risk and contributions towards supporting a just transition. This will help investors make more informed (and greener) choices and prevent companies from greenwashing (communicating their activities or products as more environmentally sound than they are).

Last, and potentially the most crucial, is leveraging the unmistakable power of financial institutions to lead the way to a just transition. Nedbank is committed to moving out of fossil fuels in a deliberate and organised manner, which means changing lending policies to incorporate only sustainable activities.

The bank aims to stop the funding of new thermal-coal mines from 2025 and plans to exit all exposure to fossil-fuel-related activity by 2045. Additional opportunities lie in sectors such as agriculture through the financing of innovative irrigation technologies, shade netting (which protects crops from harsh weather) and other sustainable tools and practices.

Green bonds are another way to finance renewable energy endeavours. Nedbank was the first bank in SA to list a renewable energy bond on the green segment of the JSE. Financial institutions need to follow suit. Only then can the status quo be changed.

A future characterised by sustained resilience and growth, job creation, and a healthy environment is within reach. But innovative models and approaches, capacity building, good governance, and sustainable financing need to be underpinned by clear and bold leadership that will provide the strategic direction and decision-making needed to excel in the green space.

• Savin is senior manager for sustainability strategy & reporting at Nedbank Group.

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.