Nedbank's commitment to the social and economic development of SA is shown internally in its culture and externally in its business strategy.
Nombulelo Moholi, group executive for strategy & corporate affairs, says Nedbank is playing a key role in sustainable community development programmes in the country through its 16-year-old Nedbank Foundation.
The bank has pumped more than R282m into a number of community development projects in the country, in line with the objectives of the Financial Sector Charter.
WHAT IT MEANS
 The bank invests in training initiatives
Sustainability is a priority for investment
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"Nedbank believes poverty is the biggest potential impediment to a successful future for SA. To help alleviate and ultimately eradicate poverty, as well as to develop skills, help create employment and accelerate economic performance, Nedbank has implemented a number of interventions at community level. Whatever we do needs to be sustainable," Moholi says.
Examples include the foundation's investment in Nedbank Youth Development Centres (NYDC) in Gauteng and KwaZulu Natal, offering out-of-school and out-of-work youth accredited training courses in agriculture, plumbing, bricklaying, electrical wiring and information technology.
"Nedbank, through its NYDCs, promotes self-employment and entrepreneurship as a viable way to generate income for the youth," Moholi says.
One of the government's targets is to double maths and science high school graduates to 50 000 by the end of this year. Nedbank supports the Maths Centre for Professional Teachers, the Penryn Trust, and the Nelson Mandela University Trust, thereby helping to improve teaching skills in this vital discipline and in turn develop a higher competency in maths for learners, she says.
Through the Eyethu Community Trust, created as part of Nedbank's black economic empowerment deal to support community projects in conjunction with the Nedbank Foundation, Nedbank sponsors the economics chair at Fort Hare University. This focuses on students from disadvantaged backgrounds and empowers them with skills that will enable them to trade in financial and stock markets.
The chair, a first for the university, presents a unique opportunity for students to gain a deeper understanding of economics. "Nedbank hopes to contribute to the development of future leaders, creative thinkers who can find solutions for the upliftment of all South Africans," says Moholi.
She says these development programmes form the basis of Nedbank's corporate social initiative (CSI) work, mainly through its foundation, and are complemented by various programmes run by staff volunteers.
"Thousands of Nedbank staff take part in a vast range of charitable projects all over the country, including the yearly team challenge and the innovative local heroes programme."
The programme, which allows staff to give back to their communities by nominating a charity close to their heart and applying for funding for that charity, has up to now donated more than R1,7m to nonprofit organisations.
In August last year, what started off as an internal staff initiative evolved into a national campaign with the external launch of the local heroes programme to clients. "Local heroes is a call to action for ordinary South Africans to make a difference in their communities by volunteering their time to a worthy cause," says Moholi.
Nedbank's bid to get clients to support worthy causes goes back many years.
Over the past two decades, Nedbank's clients have donated more than R100m to sports development, environmental support, arts & culture and underprivileged children through their support of the bank's internationally renowned affinities programme.
"There are many who want to help those less fortunate than themselves, or to contribute towards protecting the environment, but have neither the time nor the means to be personally involved. Nedbank's affinities make it possible for people to show they care simply by conducting their daily banking transactions," Moholi says.
The Nedbank affinities programme was first established with the launch of the Green Affinity in 1990. Since then, the range of causes supported through Nedbank's affinities has grown to include the arts, through contributions to the Arts & Culture Trust; sports development, through financial assistance of The Sports Trust; and needy children, through the Nedbank Children's Affinity, which has the Nelson Mandela Children's Fund as its beneficiary.
Nedbank is the only bank in SA to offer an affinity programme of this nature and magnitude linked to transactional banking products.
Sustainability
"For Nedbank, adhering to sustainable banking practices is not just a fad, but an integral part of the way we do things. It is part of our DNA," says Selby Baqwa, Nedbank's group executive for enterprise, governance & compliance.
Nedbank made history by becoming the first SA bank to adopt the Equator Principles, a global financial industry benchmark for determining, assessing and managing social and environmental risk in project financing. The Equator Principles are based on environmental and social policies and are safeguards drawn up by the World Bank's International Finance Corporation (IFC).
According to Baqwa, SA's fourth-biggest bank does environmental, social, political and reputational assessment prior to financing any project, joining a legion of global lenders that apply sustainability principles to the money they lend and the companies in which they invest. It is estimated that signatories to the Equator Principles represent 80%-90% of the global project finance market.
The bank also ensures that appropriate environmental and social assessment is carried out by borrowers and it verifies that they implement and monitor environmental and social risk management programmes.
Baqwa says the recent decision by the IFC and African Development Bank to subscribe to the R2bn Tier II capital qualifying bond issue by Nedbank bears testimony to the bank's commitment to the Equator Principles.
Nedbank has also been included in the Dow Jones World Sustainability Index for the fourth year running, making it one of the only 25 banks in the world and one of three with primary listings in Africa to be included in the coveted index. The JSE is the first stock exchange in the world to develop a socially responsibility investment index (SRI).
Nedbank is also the first SA bank to join the UN Environmental Programme Finance Initiatives (UNEPFI) sustainable development and environmental responsibility project.
The bank is involved in biodiversity and human rights work streams and co-chairs the UNEPFI African Task Force, which addresses sustainability issues in an African context, focusing on building awareness and creating risk management and corporate governance standards for the African finance sector.
Nedbank Capital, the investment banking arm of Nedbank has also launched green mining awards to reward corporates that encourage responsible mining and mineral beneficiation in Southern Africa's economic development.
The bank is the founder of the highly acclaimed Green Trust in conjunction with the World Wide Fund for Nature (WWF).
Risk management
Being a good corporate citizen goes beyond community upliftment and the observance of sound environmental and social practices.
"As a bank, Nedbank is conscious of the huge responsibility it carries. We maintain a transparent relationship with regulators and we're committed to responding appropriately to regulatory and supervisory developments," says chief risk officer Philip Wessels.
Wessels says the group's risk management unit has been at the forefront of Nedbank's transformation over the past few years, monitoring the risks faced by the group, which include credit, market and operational issues.
In addition to achieving its financial targets, Wessels says Nedbank has made significant investment in advanced risk and capital management capabilities and systems.
The bank successfully implemented the global capital accord Basel 2 in January this year, in line with regulations introduced by the SA Reserve Bank.
"The main purpose of Basel 2 is to enhance the level of sophistication of risk and capital measurement and management, thereby further evaluating the safety and soundness of the banking industry," Wessels says.
Nedbank has also implemented an enterprise-wide risk management (ERM) process to bring its risk management practices and standards to international level. "ERM involves integrating risk and capital management effectively across the group's risk universe, business units and operating divisions, geographical locations and legal entities," Wessels says.
