BRIGITTE BURNETT: GNU opportunity to raise green financing, so let’s act now

Buoyed by positive sentiment around the government of national unity (GNU), it is now time to partner across the public and private sectors to make the investment case for SA and accelerate the quality and quantum of sustainable development financing. 

Achievement of the sustainable development goals (SDGs) is an essential mechanism for reducing the systemic risks associated with socioeconomic inequality, and would strengthen the financial and social stability so desired by all South Africans.

The UN Global Compact’s recent report, called the Voluntary National Review, found that only 17% of the SDGs are on track, and more than 33% have regressed since the last report was released before the pandemic.

Locally, the review found that while SA businesses are prioritising sustainability, the overall outlook is concerning, with persistent unemployment, declining municipal capacity and key education and health metrics continuing to be subpar, especially considering the investment and expenditure in these areas.

A key action item emanating from the report is for increased sustainable development finance to be rolled out to finance initiatives that would advance the achievement of the SDGs. In light of positive investor sentiment after the formation of the GNU, we have an opportunity to leverage this to draw investment from development finance institutions and private sector entities that could, through mechanisms such as green bonds, inject the money we urgently need to stimulate our economy, and in due course finance areas such as healthcare and education through the public sector. 

Organisations such as Nedbank that participated in the review have expressed their desire for more money to capacitate programmes to roll back dire poverty and inequality, and provide adequate sanitation, decent work and municipal capacity.

In the Voluntary National Review the priority of “growing sustainable investment” speaks to both the need to attract investment into SA companies and to the provision of financing for companies with sustainable value propositions that are seeking financing through loans or other financing mechanisms. 

The 2024 Financing for Sustainable Development Report highlights that we are at a critical juncture in global efforts to meet the SDGs and climate action. It urgently calls for large-scale investment to close the $4.2-trillion annual development financing gap, which has widened substantially from the $2.3-trillion gap that existed before the Covid-19 pandemic. The report stresses the need for comprehensive policy reforms and international co-operation to address outcomes such as healthcare, education and other developmental targets that are worsening amid geopolitical tensions, climate disasters and the global cost-of-living crisis.

In response Nedbank is committed to creating positive impact by using our financial expertise to do good. We have led the way in renewable energy and green building financing, including being first to market with our energy policy, as well as the nature position statement that was recently published. We have 16% of our gross banking loans and advances in sustainable development finance, with a view to increase this to 20% by the end of 2025. Additionally, initiatives such as the Nedbank Indalo Fund, and our partnerships with World Wide Fund for Nature (WWF) and the WWF Nedbank Green Trust, demonstrate the value of embedding social and developmental considerations in one’s approach. 

The path ahead requires collaboration and partnership between critical role players and embedding climate action and sustainable practices into business models and operations, be it as a JSE-listed firm, SMME or nonprofit organisation. The future of society and our shared quality of life depends on the future viability of the planet and reducing the vast inequalities that exist, protecting our shared natural capital assets and ecosystem services.

For this we will need to join hands to collaborate with urgency for our shared prosperity, to limit damage to the planet that can’t be reversed. Promoting green financing and the integration of fintech innovations and digital advancements offer the financial sector a pathway to bolstering sustainability while ensuring robust business returns. However, the window of opportunity is finite — the time for action is now. 

• Burnett is executive head of sustainability at Nedbank.