RMB chips in on Africa’s transition to low carbon economy

RMB, a leading financial institution, has been at the forefront of driving sustainable finance initiatives across Africa. Over the past two years, RMB has facilitated over $155 billion in sustainable finance, playing a crucial role in delivering on commitments to reduce greenhouse gas emissions. Nigel Beck, Head Of Sustainable Finance & ESG at RMB, highlighted the exponential growth in global funding for ESG projects in 2021, with a 14-fold increase year on year, indicating a significant shift towards sustainable finance. Despite being four years behind the global trend, South Africa has experienced a 55% compound annual growth rate in sustainable finance, showing promising potential for further development. Beck emphasized that there is a substantial opportunity for growth within the continent, with the entire African region being approximately four years behind South Africa in sustainable finance progress. The key theme of the discussion centered around the strategic alignment of organizational goals with ESG objectives, leading to the development of innovative financial solutions that incentivize sustainability. RMB has been proactive in creating green financial products such as green loans, green bonds, and sustainability-linked loans, which tie pricing benefits to meeting specific ESG targets. These initiatives aim to encourage businesses to move towards sustainable practices and drive positive social impact, particularly in the African context. Beck emphasized the importance of balancing financial return with sustainable outcomes, ensuring that investments are future-proofed and aligned with long-term risk factors. The focus on social impact projects was another crucial aspect of the conversation, with RMB aiming to increase the proportion of social initiatives within its sustainable finance portfolio. Beck highlighted the introduction of gender-linked bonds and investments in social projects like fibre rollout and student accommodation, emphasizing the need to scale these opportunities for greater impact. The discussion also touched upon the challenges of financing high-impact social projects, which often face perceived risks and low returns, making them difficult for banks to fund. Beck outlined RMB’s approach to blended finance structures, combining public and private capital to support projects with positive social outcomes. The article further explores the growing recognition of the value proposition of sustainability in businesses, with clients showing a strong uptake of RMB’s sustainable finance products. The bank has witnessed significant growth in client engagement, with a substantial increase in sustainable finance transactions over the years. By quantifying the real-world impact of their projects, RMB has been able to demonstrate tangible outcomes, such as water efficiency benefitting 230,000 people for a year and the reduction of 4,000 kilotons of greenhouse gases, equivalent to 100,000 buses driving for a year. While challenges remain in measuring social impact, RMB continues to innovate and drive sustainable finance initiatives with a focus on creating lasting positive change in Africa's transition to a low-carbon economy.