ESG: Social Impact Is The True Measure (

ESG: Social Impact Is The True Measure

We believe that it can give rise to the next major transformation of business thinking.

This quote from American author and academic Michael Porter has been a guiding principle for much of the work we as a bank have done as we have embraced the world of Environmental, Social and Governance (ESG) principles throughout our business.

If we look back, the term ESG emerged in 2005 where ESG principles found its roots as part of a study entitled Who Cares Wins conducted with private and public sector experts in conjunction with asset managers, bankers and analysts where bottomline profits at all costs were reviewed against longterm sustainability metrics and business goals.

The terms stability and predictability are particularly pertinent and underlines the importance of measuring the Business Value and impact of the Social aspect of the ESG equation.

Writing for the World Economic Forum (WEF) Sonja Haut, the Head of Impact Valuation at Novartis notes Impact valuation involves quantifying and valuing a companys positive and negative externalities related to society and the environment.

As ESG has taken hold, there has been a big focus on the Environmental side of the matrix, most notably in areas like green and renewable energy.

Investors want to invest in regions which are stable, predictable, and offering investment returns.

By understanding how to measure the business returns of social impact, leaders can translate social value into the language of business and demonstrate the value of social impact work to make sure that it is appropriately included in strategic and resource allocation decisions.

The 2020 Deloitte Review article Measuring the business value of corporate social impact Beyond social value to enterprise performance, suggests measuring the business value of corporate social impact against six drivers and matching it to existing business metrics to measure the business value of social impact in ways that are comparable and consistent with other corporate considerations.

This encompasses Financial Inclusion, Supply Chain and SME support,Gender Equality Financing, and Youth Empowerment.

To that end, we are encouraged by the adoption both internally and externally of true ESG principles that are focused on developing solutions which will benefit the African continent immeasurably in the next 10 to 15 years.

We have built some exciting initiatives and over the last 5 years have invested over R1.5bn via our Group Society Investment which has benefited over 860000 beneficiaries particularly youth who are looking to develop professional skills and start their own small businesses.

We worked on several landmark projects in the fields of green bonds, social impact bonds, healthcare and education.

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