Banking and sustainability: What nexus?
Bankers are wont to bandy the argument that unlike operators in the oil and mining sectors, they are largely ‘office bound,’ and therefore hardly cause any harm or damage to the environment. But in the emerging ‘triple bottom line’ business world, the bankers’ position is rendered archaic, antediluvian or warped. Indeed, sustainability, for every corporate entity, is anchored on three prongs: the economic, environmental and social, making up the triple bottom line. These entail focus on corporate profitability/viability, deliberate minimisation of possible (negative) impact (footprint) on the environment as well as adoption of ethical approach in dealings with all stakeholders.
A ‘profitable’ company that is very much associated with environmental pollution and degradation is not sustainable, just like a business that thrives on child labour, human rights abuse, money laundering or ‘illicit trade’ financing. Obviously, operations in the oil and gas and other extractive industries are prone to generating or posing environmental hazards. And this is why everyone is familiar with the incessant cases of oil spillage, gas explosions/blowouts, gas flaring, and so on, mainly in the oil and gas producing parts of Nigeria. So, oil and gas companies are already ‘notorious’ for the environmental degradation and hazards their activities pose in Nigeria and almost everywhere else.
For banks, however, their environmental footprints are obtuse and hardly discernible. But a few questions here are apposite to provoke some probe into the nexus between sustainability and banking. In the pursuit of profitability, who do banks make loans available to? That is, what are the activities of major obligors/beneficiaries of bank loans? Are they producers of atomic bombs and other incendiaries? Do some banks serve as conduits for laundered money and other fraud?
What about the management/disposal of effluents and waste (liquid and solid)? Paper usage? Water usage? Energy consumption and carbon emission? How is the noise and air pollution caused by the giant power generating sets that dot the premises of banks (branches and head offices inclusive) being managed? How are the note counters in their ‘dungeons’ being protected from the deadly effects of the malodorous and putrescent banknotes they count? Do they put on nose/face masks, hand gloves or other protective wears while on duty? Are there medical or insurance policies arranged for them, in view of the obvious hazards they face daily?
Are there properly articulated health, safety and environment (HSE) policies and practices in place? Are there fire equipment, including serviceable fire extinguishers in place? What about fire/safety drills and officers? In case of emergency or accident, are there first aid kits and knowledgeable attendants around? Even in the office spaces, what are the sitting arrangements: do they make for good ventilation and easy movement?
Do the banks engage in discriminatory practices such as deliberately employing more males than females; accelerated promotions based on gender consideration, tribe or creed? Is there any health policy in place for employees in banks? How are pregnant women-employees treated? What are the provisions of the maternity or paternity leave policy (if any)? Is there any crèche in place to assist employee-nursing mothers?
What about the products and services of the banks: are they packaged to defraud the unsuspecting and gullible public or customers? Is there any deliberate policy to reach the (un)der-banked? Or is business for the ‘few that control the most’ only? With respect to human rights, is freedom of association allowed in or by the banks? Concomitantly, are staff unions allowed? How about staff turnover? Are staff regularly exposed to the right kind of training, on – and offshore?
These questions are not exhaustive; but serve to show that banks certainly have a lot to do to achieve sustainability. And in point of fact, the Central Bank of Nigeria (CBN) had, a few years ago, adopted its Nigeria’s Sustainable Banking Principles (NSBPs) which largely guide the banks to begin to imbibe the tenets of sustainability. But for close to seven years since the adoption of the NSBP, the effectuation of the policy by the deposit money banks (DMBs) is yet to attain some crescendo; it is still driven essentially by moral suasion. Most of the DMBs are yet to put proper sustainability policy in place; the others seem to be striving to write only ‘sustainability reports’ perfunctorily.
But sustainability, even before the adoption of the sustainable development goals (SDGs), has since become a global phenomenon, with principles and standards already developed and enforced by many international agencies. These include principles and standards set by the United Nations Global Compact (UNGC); the United Nations Environmental Programme Finance Initiative (UNEP-FI); the United Nations Declaration of Human Rights; the International Labour Organisation (ILO); the International Finance Corporation (IFC); the Organisation for Economic Cooperation and Development (OECD, among others.
There is also The Global Reporting Initiative (GRI); an international independent standards organisation that provides guidelines for businesses, governments and other organisations in writing their sustainability reports. According to Wikipedia, as of 2015, 7,500 organisations used GRI guidelines for their sustainability reports. Generally, GRI guidelines apply to multinational organisations, public agencies, small and medium enterprises, NGOs, industry groups and others.
Today, there already exist some ranking of companies on sustainability performance. Just like the “Top 1000 Global Banks” done by the Financial Times Group (London), there is the “Global 100 Most Sustainable Corporations in the World” published yearly by Toronto-Canada based Corporate Knights (CK). But whither Nigerian (nay, African) corporations in all this? A number of African banks (including many in Nigeria) have made the ‘Top 1000 Global Banks’ ranking for a number of years. But when it comes to sustainability which x-rays transparency and global best practices regarding human rights, anti-corruption, climate change, etc., Nigerian or African entities are yet to reckon with. Perhaps now that the attraction of foreign investors seems to rank tops on Nigeria’s economic recovery and development agenda, all hands should be on deck to get our companies on the global sustainability map. Serious foreign investors now use sustainability indices as guides for the location of their investments.
Okeke is an economic and sustainability expert.
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