Looking ahead

Capricorn Group is a regional financial-services group that is Namibian-owned and listed on the Namibian Stock Exchange (NSX), and its flagship brand – Bank Windhoek – has a dual-listed medium-term note programme on both the NSX and Johannesburg Stock Exchange. Its two banking subsidiaries operate in Namibia and Botswana, with other subsidiaries and associates offering associated and complementary financial products and services in the two countries. The company’s broad spectrum of customers includes individuals, SMEs and large corporates. Its value proposition is developed around customers rather than products or channels. Capricorn Group is evolving its banking proposition through data and digital technology to remain relevant to future customer needs.

ESG and sustainability have become two popular but significant terms that are floated around the corporate sphere. However, while many similarities exist between a business’ ESG and sustainability aspects, these terms are not to be used interchangeably, as their specific meanings differ.

Capricorn Group sees sustainability as the ability of an organisation to operate and conduct business without a negative impact on the environment, the communities in which they operate or society. Thus, sustainability is not about how a company spends its profits but how they generate them.

Financial-services companies are under growing pressure from stakeholders to address Africa’s sustainability challenges

Capricorn Group believes that financial services can drive economic development and a more inclusive and sustainable economy. The group improves lives through leadership in financial services and by being connectors of positive change.

The factors that relate to the three distinct ESG pillars comprise a wide array of core non-financial elements that represent risks and opportunities that will impact the ability of a business to create long-term value. These elements include climate change, carbon footprint and natural-resource scarcity. The social dimension includes labour practices, employee and community wellness, and data privacy. The governance pillar addresses board and executive management composition, ethics and transparency.

These unique factors underlying each ESG pillar provide a practical framework for companies to identify material matters, and to evaluate, monitor and report their impact and dependencies on the environment, society and corporate governance – and vice versa. The level and quality of ESG reporting and disclosure is ultimately used to measure the overall sustainability performance of an organisation.

It is vital to embed ESG risk management, reporting and disclosure practices, and other sustainability initiatives into business models and strategies to build resilient organisations that are set to thrive, and that will remain relevant and competitive in the new reality and future we are facing. For this reason, Capricorn Group created a committee, the group board social and ethics committee (BSEC), which provides oversight for the group sustainability strategy and ESG philosophy, good corporate citizenship and ethics. It monitors social, human rights, environmental and consumer activities. The BSEC is responsible for elevating the ethics and sustainability agenda throughout the group and, in 2022, raised awareness of key ESG matters and sourced expert opinion to guide the development of its group sustainability strategy.

The WEF investigated the factors shaping the future of consumption and buying decisions, and highlighted that consumers and employees, who form part of the critical stakeholders of any organisation, especially the next generation such as millennials and Gen Z, have increasingly different expectations for businesses they buy from, invest in and work for. Leaders are under pressure from various stakeholders and the market to prove that their organisations are acting responsibly and sustainably amid rising concerns over climate change and the impacts of business on people and society.

Last year’s UN Climate Change Conference, more commonly referred to as COP26, and the recent World Economic Forum has shown that there has been a visible step-change in the global financial industry’s support in the fight against climate change and their commitment toward reaching the Paris Agreement targets, ultimately reducing global greenhouse-gas emissions by at least 45% by 2030 to reach net zero ambition by 2050. Namibian financial-services companies are not isolated from the global shift towards combating climate change and continue to play a pivotal role in achieving the 17 UN Sustainable Development Goals. More specifically, driving socio-economic development by providing access to favourable capital and enabling financial inclusion across the country.

Sustainability is an organisation’s ability to operate without having a negative impact on the environment, the communities in which it operates or society

The African continent is susceptible to climate risks, social cohesion erosion and severe debt, highlighted as the most critical global risks for the next decade. Hence, financial-services companies face increasing pressure from their stakeholders in the communities where they operate to proactively contribute and effectively address and disclose their commitment to the continent’s interrelated sustainability challenges while demonstrating optimal financial performance.

The Capricorn Group board knows the importance of sustainability risks such as climate change. Namibia is already seeing the effects of climate change in a water-scarce country prone to severe droughts. In 2022, Capricorn Group engaged external experts to facilitate a process to identify, standardise and measure key sustainability indicators. The group has decentralised sustainability initiatives, with each entity responsible for its sustainability programme.

Bank Windhoek is leading several initiatives in Namibia’s sustainability-finance domain. These include the green bond and sustainability bond, and sustainability loans. Bank Windhoek is also a member of the Nasdaq Sustainable Bond Network. Bank Windhoek was invited to join the Namibian delegation at COP26 in November 2021. This provided an invaluable chance to build networks in the sustainability space and gain a deeper understanding of the risks and opportunities associated with climate change.

Bank Gaborone is supporting the development of the SME sector through supplier development programmes. Capricorn Asset Management also invests in key sustainable-development projects through its Caliber Capital Trust. In May 2022, Capricorn Group was represented as part of the Namibian delegation at the World Economic Forum in Davos, to position Namibia for international investment. The Capricorn Foundation, the group’s vehicle for CSR, also supports more than 16 projects across Namibia in education, job creation, economic advancement, health and vulnerability relief.