Johannesburg - The pursuit of carbon neutrality for banks may be a marketer's ploy to attract publicity, but it may also be a genuine attempt of an already low carbon-emitting sector to be environmentally responsible.
At a press conference in New York on Wednesday, Absa group CEO Maria Ramos reiterated the bank needed to reduce its carbon emissions. This followed a recent statement by rival Nedbank, which said it aims to be completely carbon neutral.
What does carbon neutral mean? It is the way a company is able to balance its carbon dioxide (CO2) emissions with the amount it is able to sequester. By matching the two, a firm is neutral or net zero.
Also, one needs to consider the ultimate pay-off for being carbon neutral. Supposedly, environmental concerns are by nature emotive and can provide companies the leverage needed to attract clients, shareholders and positive sentiment.
By way of example, in June 2006 Nedbank launched a billboard with solar panels attached, powering a local primary school's kitchen. Its pay-off line was: "What if a bank really did give power to the people?"
The innovative idea was rewarded with a Cannes Lions 2007 grand prix award.
Initiatives like Nedbank's raises awareness to the possibilities of environmental issues to thousands of clients, said Kevin James, CEO of Global Carbon Exchange.
However, he also warned of the danger inherent in marketing - its motive. Said James: "The only benefit you get through communicating is if the initiative is meaningful; as long as companies are not taking the minimum amount of effort to get the maximum credit," - known in the industry as "greenwashing".
This often presents itself in carbon credits or certified emission reduction (CER) certificates - a "cheap way of achieving carbon neutrality", said James.
James said the purchasing of credits from third parties to offset your own emissions should support local products, and not be "purchased cheaply from countries like China and India".
Many of South Africa's big businesses have adopted the CER system, including Nedbank.
But marketing and CERs aside, a company's transparency is a more realistic indicator - as is the case with the Carbon Disclosure Leadership Index (CDLI) - to a company's forays in the "green space".
Of the low-carbon category, banks took up three spots in the top 10 CDLI leaders for 2008. Nedbank, ranked highest of the banks, was fourth with a score of 89 (out of 100). Next was FirstRand in ninth place with a score of 72 and the last placed bank and firm in the top ten went to Standard Bank (72).
Although most commercial pundits for the environment look for the big things, its also in the small things that changes are afoot.
Food & Trees for Africa (FTFA) said moves to "save" the environment include installing an auto switch-off program for air conditioners and lights in office buildings, increasing paper recycling, reducing energy consumption by changing to energy saving light bulbs - and even rationalising travel to meetings by teleconferencing.
A prominent social enterprise in South Africa, FTFA offers an online tool to measure carbon emissions from government bodies to private businesses.
Absa recently incorporated "green elements" in its Towers West building (Johannesburg CBD) by recycling its own water, using economical light fittings and relying on gas powered electricity generation (which is cleaner burning) rather than coal, to name a few.
"The banking industry has a massive responsibility and needs to be leading the way in the mitigation and adaption of environmental issues," said James.
Emissions by numbers
According to Absa's sustainability performance year-end December 2008, the bank's carbon footprint was 224 769 metric tonnes. It was the company's first report on its carbon trails.
By year-end 2009, Absa seeks to reduce its CO2 outpourings by 5 000tonnes.
Nedbank, too, is chasing down CO2 targets and its long time partnership with the World Wildlife Fund has stood it in good stead on the path to being a truly "green bank".
From 2007 levels (129 946 metric tonnes), Nedbank wants its CO2 emissions reduced 12% by 2015 or 7.67 tonnes per full-time employee. In 2008, the group discharged 131 310 metric tonnes of CO2 (lower than both Absa and Standard Bank).
Standard Bank's total CO2 emissions in 2008 was 168 824 metric tonnes (approximately 56 metric tonnes less than Absa).
Not to be left out, the First Rand Group (FNB, Outsurance, Momentum, Wesbank, Rand Merchant Bank, Advantage, RMB Asset Management, RMB Private Bank, Lekana and eBucks) in 2008 initiated its first carbon footprint measure, now in its second stage.
- Fin24.com