FBN Holdings: Driving sustainable finance for value creation
As a foremost financial institution in Nigeria, FBN Holdings has initiated and contributed significantly to the growth of Nigeria’s economy. BALA AUGIE examines how the Group has delivered value using sustainable finance as one cardinal area.
In the words of Ban Ki-moon, UN Secretary General, “Sustainable development is the pathway to the future we want for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship and strengthen governance.” If these words are anything to go by, and they are, then it means that every responsible organisation must have its eyes firmly fixed on the evolution of systems and processes that endure. It also follows that, at the financial marketplace, such an organization must be making contributions towards sustainable development as a whole, and to value creation in economic, environmental and social terms.
The implication of this is that while efforts are being channeled towards improving economic efficiency, prosperity, and competitiveness both in the short and long-term, there must at the same time be contributions to the protection and restoration of ecological systems and the enhancement of cultural diversity and social well-being.Though many banks and financial institutions operating in Nigeria could be having a tough time negotiating the economic quagmire that seem to be prevalent at the moment, there is no gainsaying the fact that now is the time to build these sustainability themes into their strategies. And this is quite practicable as FBN-Holdings is getting to prove with each passing year.
For the Group, the idea of sustainability is not just a corporate strategy. It could be said to have found a way to entrench these ideals into its daily operations and business activities, with holistic consideration giving to all stakeholders in its decision making. As such, provision of financial services by the Group has for some time now been anchored on relationships that offer lasting benefits to both clients and society at large, which implies that environmental, social and governance impacts are being carefully weighed and managed.
In its thinking, since customers remain the vital element of the Group’s business, it must constantly seek ways of providing products and services that meet customer needs without any adverse environmental and social impacts, so as to ensure overall sustainable growth and development. Indeed, progress made in this area shows that the Group has not merely paid lip service to these ideals; there have been tremendous results to show its commitment.
In a nutshell, for FBN-Holdings, corporate responsibility and sustainability (CRS) is not just about financing economic activity in a responsible way. It goes beyond that to encompass transparency and integrity in the conduct of business processes so as ensure an inclusive, positive impact on the communities where it operates and the society at large.
This approach, tagged ‘the Citizenship Approach’ by the Group, is captured in its corporate responsibility policy, which clearly outlines FBN-Holdings’ commitments and approach to corporate responsibility, as well its CRS governance framework. To drive this home, this policy and respective guidelines are strictly enforced across the operations and activities of the Group and its subsidiaries in various locations.
The strong point of this enforcement is the work of the Group’s sustainability team, made up of representatives from business units across the Group.After careful stakeholder engagement with customers, employees, investors, regulators, communities and industry partners and NGOs, and in partnership with Accenture, leading global professional services company, the team developed a sustainability strategy – an implementation road-map and performance management system – which it has been pursuing vigorously since 2014.
By setting up this framework, FBN-Holdings has been able to deliver value in a structured way along four cardinal areas, one of which is sustainable finance.
What has made this possible?
The Group’s sustainability efforts are enhanced by key enablers like CSR capacity development, stakeholder management, partnerships and communications and CSR performance management. In pursuit of this CSR capacity development, the Group has striven to invest effort and resources in the development of relevant policies, processes and tools, skills and capabilities to achieve the Group’s sustainability and business objectives. There have also been efforts at building trust through effective stakeholder engagement, providing actionable performance data, producing sustainability reports and effectively managing performance, all aimed at achieving the Group’s sustainability priorities. The sustainability and corporate responsibility performance management and reporting, a key component of the Group’s strategy in driving sustainable finance makes it possible to effectively measure, manage and report sustainability performance and also meet the Nigeria Sustainable Banking Principles (NSBPs) requirements to report a wide range of metrics.
Based partly on the Nigeria Sustainable Banking Principles, the Group has continued to provide sustainable banking training, which sees all employees being trained on sustainable banking approaches and principles, alongside specific training for senior leadership andadditional specific training to sector-specific employees, client relationship managers and the risk team.
Another very visible point of the Group’s effort at successfully embedding sustainability is the area of partnerships with credible international NGOs, sustainability consulting companies, educational institutions, governmental bodies and developmental finance institutions, including the International Finance Corporation, Lagos Business School of the Pan-Atlantic University, Accenture, Central Bank of Nigeria and Junior Achievement Nigeria, with focus on capacity building and sustainability thought leadership, development of sustainability strategy and opportunities inclusive of environmental, social and governance management system, the Nigeria Sustainable Banking Principles (NSBPs) and Financial literacy.
The Group believes that its stakeholders include all those who affect or are affected by its operations i.e. its employees, customers, shareholders, communities, regulators, the media etc., and that its own sustainability is greatly reinforced by them. This is what informs the spirited pursuit of beneficial, trusting and meaningful relationships with these different groups. The focus of the Group’s customer engagement remains inclusive financing. The approach here involves creating opportunities for people in the various communities where they operate, who do not have access to the basic financial tools to participate in the economy. And in furtherance of this, products, services, corporate responsibility and consumer education programs are constantly being tailored to meet the needs of the unbanked and under-banked, in a bid to enhance their livelihoods, as well as that of their families and communities.
The Group also relies on its competitive advantage in the industry, which stem from its over 120 years history, to ensure the provision of reliable and stable alternate banking channels.
Fully aware that SMEs remain the driving force for the development of any economy, the Group partners with about 5,000 SMEs on a yearly basis, providing support and infrastructure required for the SMEs to thrive. There has also been capacity building initiatives for SMES in line with the Group’s financial inclusion strategy. Furthermore, First Bank has continued to provide business management resources and tools for download and use by SMEs on its e-commerce portal, SMEConnect, which serves to deepen its existing customer relationships and offer a platform for SMEs and individual entrepreneurs to advertise and sell their goods and services.
Added to this, one of the Group’s newest strategic initiatives, the First Bank Sustainability Centre, established in conjunction with the Lagos Business School of the Pan Atlantic University, amongst other things, is building capacity in its stakeholders, including SMEs, a clear approach to customer education. FBN Holdings, Nigeria’s leading financial institution is believed to have the most diverse portfolio of SME owners and operators.
There are also efforts in the area of providing more investment opportunities and building capacity for women-led SMEs, which are largely deprived of the already limited funding. To this end, the Group continues to partner with institutions and NGOs like WIMBIZ (Women in Management, Business and Public Service) to drive the cause of women-led businesses.
For FBN-Holdings, sustainable finance also entails responsible lending, and to effectively see to this and lessen the associated environmental, social and governance risks, the environmental, social and governance management system (ESGMS) document, developed in partnership with Accenture, is now being implemented.
On a last note, in furtherance of its corporate objectives, and to ensure its sustainability as a responsible global brand, the Group is committed to a number of international standards and have only adopted principles that can be supported by the relevant frameworks, as well as those with a strategic fit with its business.
It is also fully committed to the seven core subjects of ISO 26000 guidance, which are: community involvement and development, human rights, labour practices, the environment, fair operating practices, consumer issues and organisational governance.
FBN-Holdings is also a member of The UN Global Compact, the highest body for corporate citizenship in the world today, established in 2000 to serve as a platform for dialogue, learning, and partnership for organizations willing to commit to adopting corporate responsibility as part of their business strategy and daily operations.
Recognitions
Over the years, the financial services group and its subsidiaries have continued to receive recognitions and awards, a testimony to its pace-setting leadership in the financial services sector. In more recent history, the group’s flagship brand, First Bank, became the first organisation in Nigeria to be granted notable international standardisation certifications: The prestigious Information Security Management Systems (ISMS) – ISO/IEC27001:2005 certification, which is the world’s highest accreditation for information protection and security and the BS25999 Business Continuity Management System Certification. Both certifications came from the International Organisation for Standardisation (ISO) in 2010 following rigorous certification processes by the British Standards Institution (BSI), a leading organisation in the field of auditing management systems and processes.
While the plethora of other awards and recognition do nothing but attest to the Group’s avowed brand purpose of always putting its shareholders, customers and partners at the heart of its business, the Bank was awarded the ‘Best Company Supporting SMEs’ in recognition of its role in promoting SMEs development in Nigeria.
BALA AUGIE