Case study: How Absa takes action on its PRB targets: sustainable finance and own carbon reduction
Absa is a comprehensive, pan-African financial services institution operating across multiple sectors, including retail, wealth management, business, and corporate banking. Headquartered in Johannesburg, South Africa, the Group has established a strong presence in the African financial landscape through a wide range of offerings such as digital solutions, payment services, credit products, risk management, and insurance. Serving a large customer base, Absa supports 12.2 million clients, with 3.8 million utilizing digital banking services. Its extensive network includes 1,010 branches and 6,410 ATMs across various regions. Absa is a signatory of the Principles for Responsible Banking (PRB) and has, accordingly, set and published two targets which address two different areas of most significant impact that Absa identified in its impact analysis. Tweet This!
This case study is based on the 2023 Principles for Responsible Banking Report by Absa, prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Which Principles for Responsible Banking have been addressed?
The Principles for Responsible Banking (PRB) addressed in this case are:
- Principle 2: Impact and Target Setting
- Principle 4: Stakeholders
Abstract
Absa has set targets for sustainable finance and own carbon reduction. In order to show that it has implemented the actions it defined to meet the set targets, Absa took action on:
- SMART Target 1: Sustainable finance
- SMART Target 2: Own carbon reduction
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With this case study you will see:
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- Which are the PRB targets Absa has set and published;
- How Absa proceeded with stakeholder identification and consultation, and
- What actions were taken by Absa on its PRB targets
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Stakeholder identification and consultation
Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.
As part of its impact analysis and target-setting process, Absa interacts with a diverse range of stakeholders, including clients, investors, regulatory authorities, NGOs, and communities. Absa’s engagement approaches encompass consultations, partnerships, and collaborations, designed to collect insights and feedback that guide the bank’s sustainability initiatives. These interactions enable Absa to understand stakeholder views on key issues, determine priorities, and develop its sustainability commitments and action strategies.
What actions were taken by Absa on its PRB targets, sustainable finance and own carbon reduction?
In its 2023 Principles for Responsible Banking Report Absa reports that it took the following actions on its PRB targets, sustainable finance and own carbon reduction:
- SMART Target 1: Sustainable finance
- Since 2021, Absa’s sustainable finance initiatives have mobilized R80.2 billion, bringing Absa closer to its R100 billion target by 2025 and demonstrating its commitment to sustainable development. In 2023, Absa advanced this effort by an additional R31.0 billion, compared to R30.5 billion in 2022.
- SMART Target 2: Own carbon reduction
- Absa’s 2023 goal was to cut its carbon emissions by 5% across Scope 1, 2, and 3. However, Absa surpassed this target, achieving an 11% reduction in carbon emissions for the year, primarily driven by decreased reliance on grid electricity due to ongoing load shedding in South Africa. To date, Absa has realized an overall reduction of 33% in carbon emissions, exceeding the cumulative target of 19% set for 2023.
- Absa’s total operational carbon emissions (Scope 1 and 2) stand at 3.8 tCO2e per annum (2022: 4.4 tCO2e), and its emission intensity ratio—measured as greenhouse gas emissions per square meter—has decreased from 0.156 tCO2e/m²/year in 2022 to 0.141 tCO2e/m²/year in 2023. Additionally, diesel-powered electricity has a lower emission factor per unit of electricity (kWh) compared to Eskom electricity.
UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet
With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.
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References:
This case study is based on published information by Absa, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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