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.

FBRH Principles for Responsible Banking (PRB) Assurance:

First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience

• FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
• FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
• FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

 

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:

https://www.absa.africa/wp-content/uploads/2024/04/Absa-Group-Limited-Principles-for-Responsible-Banking-Report.pdf

Note to Absa: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us

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.

Stakeholder Management
Absa’s key stakeholder groups include the investment community (current and prospective shareholders, debt investors, investment analysts, and credit rating agencies), customers, employees and recognized trade unions, regulators and government entities, the planet,

as well as society, which encompasses suppliers, community organizations, and the media.

To achieve sustainable performance, Absa balances the needs of stakeholders across the short, medium, and long term. Stakeholder feedback is managed through Absa’s Group Stakeholder Engagement Policy and the Business and Professional Associations Standard.

Stakeholder Engagement Principles
The principles that underpin Absa’s stakeholder engagements include:
• Consistent messaging to all stakeholders
• Understanding the needs, interests, and expectations of stakeholders and incorporating them into the group’s decision-making processes
• Ongoing collaboration to establish meaningful relationships with stakeholders and align them with Absa’s goals
• Transparency through continuous, proactive, and honest communications
• A commitment to creating a sustainable business and being an active force for good in society
• Responsiveness to the evolving business environment and stakeholders’ legitimate needs, interests, and expectations.

How did Absa work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2022 Principles for Responsible Banking Report Absa reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

Absa’s 2022 ESG Report and 2022 Integrated Report provide information, including the respective management approaches, on key ESG topics that are vital for maintaining sound and responsible relationships with customers.

At Absa Group, there is a commitment to support sustainable economic activities and to encourage sustainable practices among clients. To facilitate this, Absa has developed a comprehensive set of policies, standards, and actions aimed at helping clients transition towards sustainability and achieve their sustainability goals.

One of Absa’s key policies is the Sustainable Finance Policy, which outlines the commitment to providing financing and advisory services to businesses that create a positive social and environmental impact. Additionally, Absa has established Environmental and Social Risk Management policies and standards that are publicly available, guiding lending practices to ensure that funding is directed exclusively towards projects that are socially responsible and environmentally sustainable.

Alongside these policies, Absa has implemented various initiatives to assist clients in their sustainability transition. For instance, Absa has launched a Sustainable Business Toolkit, which offers practical advice and resources to help businesses adopt sustainable practices. Financing solutions that incentivize sustainable investments, such as green bonds and sustainability-linked loans, are also available.

To evaluate progress toward its sustainability goals and monitor its impact, Absa has developed a set of indicators to measure client engagement and the impacts achieved. These indicators include the number of sustainable financing transactions completed, the percentage of the loan book focused on sustainable finance, and the number of businesses that have adopted sustainable practices with Absa’s support.

Absa is fully committed to supporting its clients and customers in their transition towards sustainable economic activities, and will continue to implement policies and initiatives that promote sustainable practices and enable positive social and environmental impacts.

Absa strives to continuously enhance its reputation and sentiment with its stakeholders. The Absa Way Code of Ethics is aligned with its purpose of empowering Africa’s tomorrow, together… one story at a time.

This includes disclosure on Ethics and integrity, including treating customers fairly, and mandated Financial Services Sector Disclosures. Moreover, Absa’s Product Risk Standard deals specifically with the suitability of products for the target market, transparency of product features and responsible selling and after-sales service.

These topics include, but are not limited to, culture, ethics and conduct (whistleblowing, financial crime and cybersecurity), responsible banking and lending, diversity and human rights. A good example of this is the Absa Way Code of Ethics:

• The Absa Way Code of Ethics details the expected behaviours when engaging with Absa’s customers, fellow employees, shareholders, government, regulators, business partners, suppliers, competitors and the broader community.
• The Absa Way Code of Ethics and Group Conflict of Interest Policy is reviewed and approved annually by the SSEC. In the reporting year, Absa focused on benchmarking the Absa Way and Conflict of Interest Policy with local and international practices, including the Harvard Business School Global Business Standards, Codex, the UN Global Compact principles, and local and international banks.
• The Absa Way handbook has been revised and thoroughly refined to create a simplified, more digestible, and easily communicated Code of Ethics.

 

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.

FBRH Principles for Responsible Banking (PRB) Assurance:

First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience

• • • FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
    • FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
    • FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

 

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:

https://www.absa.africa/wp-content/uploads/2023/05/Absa-Group-Limited-2022-Principles-for-Responsible-Banking-Report.pdf

Note to Absa: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.