Circular Economy: Nedbank's vision in Africa's Circular Economy Transition

Spokesperson: Nedbank

Q1) Can you provide a brief overview of the circular economy and its significance in today's financial landscape?

Circular economy is centred around ensuring sustainable consumption and production patterns by moving away from a linear approach to the economy towards a circular approach. Unsustainable consumption and production patterns are the root drivers of climate change, biodiversity loss, and pollution.

This creates a call and an opportunity for financiers support sustainable growth and development, ensuring sustainable business success.

Q2) How do you perceive the role of financial institutions in promoting and supporting the transition towards a circular economy?

 To maximise their contributions to sustainable development and achieve the outcomes required, financial institutions must commit to the deliberate allocation of capital in steadily increasing amounts that match the scale and time sensitivity of the societal and environmental challenges threatening to erode long-term economic and socio political stability.

It is important to understand that our planet and its people are facing unprecedented risks and vulnerabilities, and the only suitable response is a systemic one that balances the need for decisive change with an absolute commitment to achieving the United Nations Sustainable Development Goals to ensure greater prosperity, social justice and equity for all. Financial institutions actions and product offerings should be increasingly guided and informed by this imperative.

 Q3) In the context of circular economy efforts, how does Nedbank collaborate with other stakeholders, such as businesses, government agencies, and non-profit organizations?

We support a range of SA’s prominent recycling businesses. These businesses not only remove waste in the form of glass, paper, plastic, and other non-biodegradable materials from the environment, but also create work for many families that collect and sell waste to recyclers. Recycling also creates alternative income streams for factories where waste materials may be sold to recycling entities rather than being dumped in landfills.

As an example, Nedbank is proud to bank Mpact, the largest paper and plastic packaging and recycling business in southern Africa, whose integrated business model focuses on closing the loop on plastic and paper packaging through recycling and beneficiation. They have 47 operating sites and over 5 100 employees and generated a revenue of R11,5bn in 2021. Mpact values the principles of the circular economy and recycles most of the products it produces. The paper business is particularly well integrated, converting recovered paper into paper products used for packaging and corrugated containers. The recycling division recovers around 530 000 tonnes of recyclable material annually. The plastics business is continually increasing recycled content in non-food grade packaging products.

Q4) What informs Nedbank’s strategy when investing in circular economy initiatives?

We use the Nedbank Sustainable Development Framework to focus our sustainable-development efforts to identify business opportunities, risks and cost savings. The framework was conceived in 2017 to focus attention and resources on the most material goals and targets, which were selected using a rigorous proprietary methodology created by Earth Security Group. Given that the greatest contribution a bank can make to the sustainable-development agenda is through its commercial offering, we give primacy to the products and services lever. This framework underpins our business strategy and is tracked through the Creating Positive Impacts strategic focus area.

Q5) From your perspective, what are the key challenges and opportunities for financial institutions like Nedbank in actively participating in the circular economy?

Successfully balancing and integrating economic growth with environmentally sustainable actions remains one of the biggest challenges to the achievement of the Sustainable Development Goals. The only way to achieve this is by moving away from the traditional linear economy and embracing a circular approach in which resource wastage is eliminated and all members of society have access to the sustainable means to meet their needs. This circular economy can be achieved only by design and through deliberate, collaborative effort.

Q6) Looking ahead, what are Nedbank's future goals and aspirations in terms of contributing to a more sustainable and circular economy?

Nedbank’s purpose is to use its financial expertise to do good. This purpose guides our strategy, behaviours, and actions, in both the short and longer term, to ensure that we not only help to reduce the systemic risks to the environment in which we operate and to the people we serve, but also deliver material, long-term, positive societal value. Nedbank is aware that it, alongside its stakeholders, operates in a nested, interdependent system. This means that for our business to succeed, we need a thriving economy, a well-functioning society and a healthy environment. We use the Nedbank Sustainable Development Framework to focus our efforts and identify strategic focus areas with business opportunities and risks as well as cost savings.

A circular economy can be achieved only by design and through deliberate, collaborative effort, which Nedbank is fully committed to enabling and supporting.

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