Banks ramp up ESG initiatives

FINANCIAL institutions in the country are continuing to incorporate environmental, social and governance (ESG) initiatives into their business operations in a push for a sustainable transformation of the economy.

ESG aspects are emerging as core values of companies, major financial institutions and shareholders around the world.
In Zimbabwe, the central bank directed banks to integrate their sustainability principles, including those covering environment and climate-related issues and social areas, into their corporate governance framework and risk management systems and practices.

According to recent financial results, banks have registered significant progress in comprehending the key pillars of the Sustainability Standards & Certification Initiative (SSCI) being driven by the European Organisation for Sustainable Development (EOSD).

CBZ, the biggest financial services group in the country, said sustainability has become an integral part of operations as a group as the institution believes this is largely borne out of need to responsibly generate a good return for shareholders and all stakeholders.

The group’s chairman, Marc Holtzman said CBZ is currently analysing and reorganising its governance structures and procedures in order to ensure that they are in line with worldwide best practices for ESG risk management.

“CBZ Holdings is dedicated to promoting economic growth and human development that is both sustainable and inclusive, as well as ensuring that our business operations have beneficial effects on society, the environment, and the bottom line,” Holtzman said.
“For us, embracing sustainability and ESG concepts as value drivers has shown us that we are socially responsible partners who consider not just our own interests but those of the society in which we operate. … we make intentional and deliberate trade-offs…we will keep working to improve our knowledge of our environmental and social implications,” he said.

ZB group chief executive Shepherd Fungura said in its drive to continuously progress ESG tenets, the group continues to record progress in its quest to attain certification under the SSCI as the group is targeting certification by the end of 2022.
FBC Holdings group chairman Herbert Nkala said ESG priorities have remained core to the growth of sustainable financial markets, signalling a total paradigm shift in terms of capital allocation.

“FBC Holding’s primary objective is to build a brand that is more aware of and responsible in the use of resources, impact on the environment and remains conscious and deliberate in its role to drive sustainable solutions in the communities it serves. The group’s sustainability strategy seeks to identify, manage and mitigate the impacts and risks of FBCH’s actions in the environment..,” he said.

Metbank said its board was capacitated to support, govern and communicate its ESG responsibilities, while the Infrastructure Development Bank of Zimbabwe (IDBZ) said, under the guidance of the RBZ, it was working towards certification by the EOSD under the SSCI.
“This will aid the bank’s drive towards development of inclusive, equitable, sustainable, low carbon, and resilient infrastructure,” IDBZ’s chairman Joseph Mutizwa said.
The People’s Own Savings Bank’s (POSB) EOSD certification initiative was approved at the end of 2021.

“Following the endorsement of the EOSD compliant purpose statement and high impact goals, the bank conducted a gap assessment of its policies and strategies against the sustainability standards …the bank’s initiatives and activities have been focused on addressing the identified gaps, training and improvement of operations to ensure progression in the certification process and sustainability of operations,” POSB chairperson, Israel Ndlovu, said in the firm’s financials.

RBZ governor, John Mangudya said the central bank continued to work closely with all financial institutions in the implementation of the SSCI being driven by the EOSD.
To ensure compliance, the Bankers Association of Zimbabwe established the BAZ Compliance Committee subcommittee responsible for providing a forum for the consideration of matters of policy and mutual interest concerning member banks.
ESG covers the major aspects of socially-responsible investments, and it is a framework for assessing the impact of the sustainability and ethical practices of an institution.
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