By Lamin Manjang

Sustainability experts have reiterated the need for adoption of best practices to drive inclusive growth and development in Nigeria and across the world as climate change remains a global challenge for development and threatens to drag millions of people into grinding poverty. Although we can argue that the impact of this is not very much visible to an average business owner in Nigeria just yet, the potential negative impact is way more serious than imaginable.

Businesses across the world, including in Nigeria, must commit to doing things the right way in order to continue to survive and thrive for the long run, and to play a positive role in addressing the climate change crisis. The Swiss Re Institute warns that one of the biggest impacts of climate change is that it could wipe up to 18% of GDP off the worldwide economy by 2050 if global temperatures rise by 3.2°C.

One may argue that these are mostly environmental and social issues, but they are more critical to global economic prosperity than they appear. A UN report further shows that Climate-related disasters do not only cause direct losses of assets that have a market value, e.g., property and infrastructure, but also losses of assets that do not have a market value, e.g., loss of life and damage to natural and cultural assets. They also produce indirect losses, including the lost output resulting from a reduced productive capital base and the output that is lost as capital  is redirected towards the rebuilding of assets that were destroyed, away from more productive uses, thereby affecting the country’s GDP in the long term.

As concerns around sustainability continue to rise, there is an urgent need for businesses and even non-profit organizations across all sectors to not only adjust their business models but align forces towards achieving a sustainable environment. The United Nations for instance launched its Sustainable Developmental Goals (SDGs) with the objective to confront the urgent environmental, political, and economic challenges facing our world. The UN recognised that ending poverty and other deprivations must go together with strategies that improve health and education, reduce inequality, and spur economic growth, while tackling climate change. Whilst good progress has been recorded, it has become necessary for more corporations to actively support and partner with the UN in achieving these goals. The Secretary-General of the United Nations, António Guterres, in a “State of the Planet” speech given in 2020 said that making peace with nature is the defining task of the 21st century.  It must be the foremost priority for everyone, everywhere.

Global financial institutions including our bank, Standard Chartered Bank, are investing in net-zero projects. In line with the 2015 Paris Agreement on climate change, we are committed to reaching zero carbon emissions from our operations and financing activities by 2030. Also, within the African continent, we are committed to providing clean energy to 1 billion people.as part of our Bold Stands This commitment has been cemented by a recent alliance with the African Natural Capital Alliance in partnership with the United Nations Economic Commission for Africa (UNECA) geared towards mobilizing the financial community’s response to nature-related risks and opportunities across the continent.

The World Bank, in a 2021 report, has predicted that climate change could impact Africa’s recovery thus pushing 86 million Africans to migrate by 2050. Sustainable finance and investments will play a major role in mitigating the socio-economic impact on the continent’s inhabitants by supporting a just and inclusive transition. As part of its commitment to driving sustainable finance and inclusion as a more sustainable way of doing business, Standard Chartered Bank has developed products that are linked to environmental, social, and governance criteria. With the launch of green mortgages, green auto loans, and sustainable deposits for retail customers, these are all part of efforts to mobilize USD300 billion in green and transition finance by the end of 2030.

At Standard Chartered Bank, we have remained resolute towards delivering sustainable and responsible banking. Our Sustainability Aspirations continue to provide a robust set of performance targets to support sustainable outcomes aligned to the UN SDGs. Very recently, the world’s first sovereign Blue Bond was launched by the Republic of Seychelles in partnership with Standard Chartered Bank and the World Bank. This bond is aimed at financing ocean-related conservation projects and so far, at least six Blue Bonds funding projects related to ocean conservation have been issued globally. More recently, Standard Chartered Bank participated in the 2022 Africa Climate Week (ACW) conference which was held in Gabon. ACW 2022, a crucial step towards COP27, brought together over 2,000 stakeholders over a period of five days to discuss climate change, sustainable finance, opportunities for public-private partnerships and the role of corporate organisations towards achieving net zero.

Paying attention to Environmental, Social, and Governance (ESG) matters is very important at a time like this. Interestingly, efforts in this direction do not compromise returns—it is rather the opposite. Investors are beginning to invest in sustainable projects that will make the world a better place while enjoying even better returns. A McKinsey report also shows that ESG links to cash flow in five important ways: facilitating top-line growth, reducing costs, minimizing regulatory and legal interventions, increasing employee productivity, and optimizing investment and capital expenditures. Each of these five levers should be part of every business’ checklist when approaching ESG opportunities.

-Lamin Manjang is the Chief Executive Officer at Standard Chartered Bank Nigeria Limited.