Absa has exceeded its R100bn sustainable finance target a year ahead of schedule.
The bank’s early achievement of this milestone comes at a time when financial institutions are under increasing pressure to address both the risks and opportunities presented by climate change, particularly in developing markets like SA.
At a media round-table discussion held on Friday, Absa executives discussed the bank’s progress and the ongoing challenges of aligning climate ambitions with the realities of the African context.
The bank’s initiatives span renewable energy financing, affordable housing and support for small businesses, but executives acknowledge the path to net zero by 2050 is
complex and requires balancing environmental goals with economic and social considerations.
In the energy sector, Absa finances a range of renewable energy projects, from small-scale solar installations for farmers and retailers to large independent power producers.
The bank supports small and medium-sized enterprises (SMEs) through concessional lending schemes and risk mitigation tools such as the Africa Guarantee Fund and gender bonds.
Executives, however, acknowledged that many SMEs face challenges, including high upfront costs and limited access to capital, which slow the adoption of sustainable technologies.
In the transport sector, Absa has financed electric buses for urban routes and supported the adoption of hybrid vehicles.
Shirley Webber, managing executive for sector coverage in corporate & investment banking, said hybrids are expected to be more common than fully electric vehicles in the near term due to fuel quality, infrastructure constraints and the large second-hand vehicle market.
She added that long-haul and cross-border transport would likely continue to rely on a combination of electric and more efficient combustion engines.
Affordable housing is another area of focus. Absa’s affordable- housing initiatives have helped thousands of families enter property ownership through favourable lending terms and educational programmes.
Nondumiso Ncapai, managing executive for home loans, said the bank has supported more than 4,000 families in securing property ownership over the past year. Partnerships with other organisations have helped hundreds of families obtain title deeds.
Absa has also introduced the Eco Home Loan in collaboration with the Green Building Council of SA, which promotes sustainable building practices in the housing sector.
Absa’s sustainability efforts have extended beyond financing. The bank has implemented community initiatives, such as donating 10,000 solar lights to schools that were affected by load-shedding, and installed solar with battery systems at community health centres.
Justin Schmidt, executive for manufacturing, energy & transport, said Absa has expanded its focus on water solutions, launching value propositions to help businesses and SMEs address water scarcity.
“Sustainability is good business practice,” Schmidt said. “Businesses will continue investing in renewable energy because it makes cost sense.”
Absa’s sustainability strategy aligns with SA’s nationally determined contributions under the Paris Agreement.
Mbombo Luhembe, group head of sustainability analytics, described sustainability as a long-term process shaped by global climate agreements and political changes.
The bank’s report showed a 33.2% reduction in its own operational carbon emissions since 2017, with targets to reach a 51% reduction by 2030. The bank has also set sector-specific decarbonisation pathways, including a 25% reduction in
coal-financed emissions and a 9% reduction in oil and gas emissions by 2030.
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