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Standard Chartered Bank Ghana PLC Reinforces Green Economy through Sustainable Finance and ESG Investing

Economy & Investments Standard Chartered Bank Ghana PLC Reinforces Green Economy through Sustainable Finance and ESG Investing
NOV 18, 2021 LISTEN

Driven by a sense of responsibility for a safe and secure environment, Standard Chartered Bank (SCB) Bank Ghana PLC is committed to making deliberate investment decisions that will trigger increased efficiency for businesses in Ghana’s private sector.

It is not lost on the bank that the private sector in Ghana will play an important role in redefining business and helping to support the transition from exploiting nature to restoring nature. It is instructive to learn that socially conscious investing is becoming a more widely accepted practice as investors look for more than just profit.

Financing sustainable business has strong financial as well as broader societal benefits, which is why sustainable finance and investing continue to gain traction.

Through collaborations, Standard Chartered’s sustainable finance and investment teams aim to help integrate environmental considerations into mainstream finance and lending.

Global Head for Wealth Management at Standard Chartered Bank, Marc Van de Walle notes in the Bank’s Sustainable Investing Report for 2021, that investors of today want to use their wealth to help solve pressing challenges faced by the world.

“From improving access to healthcare and clean drinking water, to promoting economic inclusion for women and addressing climate change, investors are on the lookout for opportunities to make a difference,” he indicates in his foreword to that report, the report draws attention to the fact that “sustainable investing is at a tipping point.”

By definition, sustainable finance is the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.

The new sustainable finance strategy aims to support the financing of the transition to a sustainable economy by proposing action in four areas: transition finance, inclusiveness, resilience and contribution of the financial system and global ambition.

Overwhelmingly, in that survey, investors across the wealth spectrum were either intending to or already investing in sustainable investment solutions.

It was found that the allocation of sustainable investments in investor portfolios was on the rise: Indeed 13 per cent of investors already had more than 25 per cent of total investments channeled into sustainable solutions, compared to just 2 per cent in 2020.

Impressed by that encouraging trend, the next step for Standard Chartered is to seize this fundamental shift in attitudes to make sustainable investing a more mainstream investment option. Van de Walle did not mince words at all, in communicating the position of the bank on sustainable investing. He said, “We want to be the world’s most sustainable and responsible bank and are committed to helping our clients make a positive impact on society and the environment with their investments.”

With the United Nation’s Sustainable Development Goals, which aim to tackle pressing global challenges currently face an annual funding gap of USD2.5 trillion, there is a massive opportunity to channel private capital through sustainable investments to help bridge the gap.

On the strength of the new dawn, one that is tipping more towards sustainability than profits for businesses across the globe, Standard Chartered Bank Ghana PLC has announced it the introduction of many sustainable investment instruments unto the Ghanaian market (another first in the industry). The Bank believes the opportunities presented by the global transition from fossil fuels and other carbon-emitting energy sources to clean energy are yet to be tapped and the current momentum behind sustainable investing is only a glimpse of what is to come. Ghanaian investors are encouraged to seek exposure to ESG investments and place themselves ahead of the curve. The Bank plans to plant trees for every client who invests in ESG securities with the bank. Standard Chartered Bank Ghana PLC has over the years collaborated and has been at the forefront of the preservation of the Ramsar sites and supporting the national effort of urban afforestation.

Environmental, Social, and Governance (ESG) is an evaluation of a firm’s collective conscientiousness for social and environmental factors. ESG investing has increased in recent years, as non-financial factors like climate change to social justice continue to influence investor decisions. According to a Global survey by the UN Principles for Responsible Investment (PRI) and the CFA Institute, 50% of investors in Asia Pacific, Europe, the Middle East and Africa believe that environmental and social factors will impact share prices by 2022.

It is interesting to note that this move by the bank is in tandem with goals 6 (Clean water and sanitation), 7 (Affordable and clean energy), 11(Sustainable cities and communities), 12(Responsible consumption and production), 13 (Climate action), 14(Life below water) and 15 (Life on land) of the United Nation’s Sustainable Development Goals (SDGs).

It is hoped that private sector players and businesses across the country will resonate with the new age of sustainable financing investing and looking beyond profitability for long term growth. They must resonate with environmentally friendly business practices and decisions. They must look the way of more renewable forms of energy, reduce wastage and increase efficiency.

Reliable energy is key to preventing and fighting COVID-19, necessary for powering health care and critical communications, and boosting economic activity. Yet access is lacking in many countries including Ghana.

Standard Chartered is committed to supporting any national effort to close this gap by helping to transition to clean energy and deliver access to affordable, reliable, and sustainable energy for all. The bank is all for energy solutions that are economically viable, tailored to the needs of businesses and informed by the latest policy, financial, and technological innovations

Suffice to say that the World Bank Group has recently on the International Day for the Eradication of Poverty, warned that developing countries, including Ghana, need to achieve sustainable economic growth without further degrading the environment or aggravating inequality.

World Bank Country Director, Pierre Laporte, observes that three challenges that could greatly limit economic recovery of developing countries from the COVID-19 devastation are “climate change, debt, and inequality.”

Standard Chartered Bank Ghana PLC is confident that its strategy will contribute to building a green, resilient, and inclusive recovery.

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