We create value by having a positive impact on the communities in which we operate
For us, Shared Growth means having a positive impact by developing partnerships that improve the lives of communities while delivering shareholder value.
- Societal challenges, such as access to financial services, education, employment opportunities and economic growth
- Funding for strategic partnerships in community development
- Our environmental footprint and how we manage it
- Supporting education and skills development
- Investing in enterprise development
- Improving access to financial services
- Environmental stewardship
For our communities
- Increased access to, and funding for, education opportunities
- Improved access to markets and financial services for small and medium businesses
- Improved financial wellness
- Decreased negative impact on the environment
For the Group
- Enhanced client relationships and economic growth through more viable small and medium businesses
- Decreased risk exposure through greater financial literacy among consumers
- Minimised environmental impacts
- Strengthened social licence to operate
Our business is driven by a philosophy of Shared Growth which, in Citizenship, is focused on three areas: education and skills development, enterprise development and financial inclusion. Collaboration is key to our approach, and we drive strategic partnerships with like-minded stakeholders.
1. Supporting education and skills development
We aim to holistically improve the education ecosystem by focusing on learners, as well as administrators and institutions. We deliver on our commitment by:
- enabling increased access to education by providing financial support to individuals pursuing tertiary studies;
- strengthening the capacity of, and delivery by, educational institutions and government agencies by providing strategic funding, training and infrastructure support; and
- enabling increased access to employability or other economic opportunity by providing workplace exposure, job-shadowing and placements.
In our continued response to the student funding crisis in South Africa, we partnered with 21 universities to provide R154m in scholarships to 3 568 students (2016: R80m; 2 000 students). Towards the end of 2017, we began rolling out the programme into other countries, beginning with Mauritius, Seychelles and Tanzania, where we awarded 47 scholarships by year end. We have structures in place to expand this programme to the remaining countries in our footprint.
Our partnerships within the South African government’s Adopt-a-TVET (technical and vocational education training) initiative reached 36 (2016: 16) colleges. 1 236 (2016: 480) students completed their curricula’s workplace exposure and job-shadowing requirements within the Group. We also sponsored college graduation ceremonies. The Mail & Guardian awarded us their 2017 Drivers of Change Business Award, in recognition of our impact in supporting youth.
Our school governing body training takes place each year in different provinces across South Africa. In 2017, we focused on three provinces – North West, Free State and Northern Cape – training 2 636 governing body members from 669 schools in financial management and governance (2016: four provinces – Eastern Cape, Limpopo, Mpumalanga, KwaZulu-Natal –10 521 governing body members and 2 725 schools, respectively). The decline in reach is attributed to the lower number of schools in the respective geographies.
We donated R2.1m worth of furniture and equipment infrastructure to educational institutions and community based organisations in South Africa.
ReadyToWork, our free e-learning platform, provides four soft-skills modules – work, money, people and entrepreneurship – to improve employment or self-employment prospects for job seekers. 215 422 new users accessed the site, and 8 558 received work exposure, internships or placement opportunities through the platform’s employability partnerships.
2. Investing in enterprise development
To encourage socioeconomic growth, we support small and medium enterprises (SMEs) with procurement opportunities, supplier and entrepreneur training and business development support, and access to finance. To become successful, competitive and sustainable, entrepreneurs need access to business skills, information, networks and markets.
In South Africa:
- Our procurement spend with qualifying small and emerging micro enterprises was R3.03bn (2016: R3.1bn), including R689m in our insurance business for small claims fulfilment opportunities to 330 SMEs (2016: R58m; 50 SMEs).
- We co-invest with our corporate clients and civil society partners, including TechnoServe and Citrus Growers Association, in a number of capacity building programmes and advisory services. We incubated 310 SMEs (2016: 345) through various partnerships and platforms, including our Enterprise Development Centres, the SEED Academy (a SME training centre) the Absa Accelerator Programme and the Absa Enterprise Development Programme.
- 64 108 SMEs and aspiring entrepreneurs were upskilled through a range of business development support services (2016: 41 200).
- Our Virtual Incubator App, created in partnership with The Awethu Project, provides basic business concept training, business tools and access to a network of like-minded entrepreneurs. It was downloaded 23 781 times, and received MTN’s 2017 Best Education App Award. The app is part of our entrepreneurship offering with our South African TVET partners, and will be rolled out in our Rest of Africa markets in 2018.
We help to transform and grow the township economies of Gauteng, Limpopo and Mpumalanga by modernising spaza shops through a multi-million rand credit facility. Partnerships, such as with the University of Pretoria’s Mamelodi Business Clinic stimulate sustainable entrepreneurship through training and skills development for start-ups in the community.
Our structured approach to value chain financing blends our commercial funding with more affordable funds and/or guarantees from third parties to provide more affordable financing rates for emerging businesses that would not otherwise qualify for traditional finance. We have raised R2.1bn in financing to support SMEs and to assist our corporate clients to optimise their supply chains. We are disbursing these funds using a customised technology platform. Development funds lent to SMEs in our corporate value chain amounted to R107.4m and lending via third-party guarantees amounted to R108m.
In the Rest of Africa, we invest in aspiring and emerging entrepreneurs through a range of unique partnerships:
- In Botswana, we partnered with Project Concern International, to incubate 48 youth SMEs, coach them, and teach them business skills in farming, manufacturing, services and retail.
- Elev8 – a Mauritius-supported incubator – enables established and aspiring entrepreneurs with promising technology ideas to develop and refine their propositions and present to potential investors. We supported eight (2016: nine) businesses.
- In Tanzania, 21 SMEs benefited from a university entrepreneurship programme aimed at recognising and supporting university student entrepreneurs.
- Through our partnership with the British Council in Ghana, 176 SMEs are receiving training and business development support through specialised clinics.
3. Improving access to financial services
We contribute to a more inclusive economy and the financial wellness of our communities by developing affordable needs-based financial products and innovative convenient delivery channels, supported by consumer education and financial literacy training. We aim to use various communication channels to educate customers on managing the costs of everyday banking products.
A range of products serves the needs of the entry market, and we have sought ways to better meet customer needs and increase accessibility. For example, we reached 50 115 youths through the MegaU free transactional account in South Africa.
Atlas, our micro-lending product in Ghana, is used by over 300 000 customers. Funeral expenses are often a burden, and so we increased the funeral cover provided on the Absa’s Flexi offering. Through a strategic agency banking partnership with the Kenyan Post Office, we serve customers through 375 new points of presence.
In Botswana, the Mabogo Dinku initiative uses the Barclays Motshelo account as collateral in order to extend business financing for groups who would not otherwise qualify for credit facilities. In 2017, 223 groups had accessed loans from Mabogo Dinku and 6 609 Motshelo accounts.
Our consumer financial education interventions empower individuals to make informed choices and improve their lives through responsible personal financial management. Consumer education initiatives in South Africa reached 76 917 (2016: 45 930) consumers in face-to-face interventions and an additional 10 549 consumers in Botswana, Ghana, Seychelles, Uganda and Zambia.
4. Environmental stewardship
We are aware of our role as environmental stewards, and our environmental impacts are (i) indirectly via our lending, investing and procurement practices and (ii) in managing our direct environmental footprint.
In terms of our lending practices, we provide project financing to project sponsors undertaking environmentally and socially responsible developments. In 2017, we had no Equator Principles project finance transactions (over USD100m) that reached financial close. The delayed signing of the outstanding power purchase agreements under the Renewable Energy Independent Power Producers Programme has delayed the financial close of some of the projects we are supporting.
We provided environmental and social risk guidance on 98 (2016: 151) general transactions (outside the Equator Principles definitions or scope) with the majority in mining and metals, oil and gas power generation (including renewable energy).
Energy security is critical to Africa’s economic growth, and we play a role in funding renewable energy and fossil fuel projects. South Africa is the continent’s largest renewable energy market – to date, the Department of Energy has approved 65 long-term projects, with a total capacity of 4 016MW. We have been involved in financing 21 projects with a combined capital value of R62bn, totalling 1 698MW or 42% of approved projects (456MW solar photovoltaic, 892MW wind and 350MW concentrated solar technologies). A further 12 projects totalling 1 218MW are expected to reach financial close, and so will receive financing from us in 2018.
We have a focused strategy for our direct impact to reduce our natural resource consumption and pollution through alternative energies (such as gas and solar); our energy costs; and our dependence on conventional electricity supply.
Our property portfolio’s energy efficiency initiatives exceeded expectations, and we achieved the energy reduction target in 2016. Our total energy consumption reduced by a further 8.6% to 329 302 208kWhLA (2016: 360 473 411kWh).
Our corporate real estate reduced by 31 000m2, and we retained Green Star ratings in four buildings. By relying on our Johannesburg Campus energy centre, we decreased our demand from national energy suppliers by over 14 million kWh (equivalent to powering 1 150 households for a year) and reduced our carbon footprint by 9 725 tonnes by using cleaner gas power supply. We continue to balance the most cost-efficient and environmentally friendly energy sources. This resulted in increased grid electricity consumption, while we reduced gas and diesel consumption (cleaner yet less efficient), which in turn, resulted in an increased attributed carbon emission factor. Our total carbon footprint therefore increased by 0.9% in 2017 to 289 651 tonnes CO2LA (2016: 287 132 tonnes CO2). We have, however, implemented initiatives to reduce our footprint by 2 600 tonnes CO2 by 2018.
In 2016, we set out to reduce our energy consumption by a further 10.2% and our carbon emissions by 10% by 2018, against the 2015 baselines.
|The International Energy Agency released new carbon factors for all countries in 2017 and backdated them to 2015, which increased our reported carbon footprint by 4% and 8% in 2015 and 2016, respectively.|
In South Africa we:
- maintained 1.4 MW of solar photovoltaics, saving 2 000 tonnes of carbon emissions (equivalent to 51 800 trees grown for 10 years); and
- saved 13.9 million litres of water (2016: 12.4 million) through leak management and grey water systems, and we are investigating air-to-water systems, and we are investigating air-to-water generators for drought stricken areas.
Our CDP (formerly Carbon Disclosure Project) score stayed steady at a B (‘taking coordinated action on climate change issues’) rating which is in line with the industry average.