ABSA adopts Equator Principles

South Africa - 22 October 2009

Absa has confirmed its commitment to environmental sustainability by announcing that the bank has adopted the Equator Principles. This formally qualifies Absa as an Equator Principles Financial Institution (EPFI) and puts the bank in step with the world's top financial institutions, including principal shareholder, Barclays.

As a voluntary framework of environmental and social benchmarks, the Equator Principles define the circumstances under which financial institutions agree to approve loans for projects valued at more than US$10m.

The Principles suggest that banks do not operate in isolation when assessing project finance, but have an influence on the involvement of stakeholders within the project being financed.

“By adopting the Equator Principles we are clearly demonstrating our commitment to minimise the social and environmental impact of our project lending decisions. At the basis of the Principles is an understanding that development project finance needs to be approached holistically. The real value of subscribing to the Principles is in considering the project from all potential levels of impact, rather than just the financial risk a bank would normally consider," says Maria Ramos, Absa Group Chief Executive.

Absa has been operating within the Barclays ambit of the Equator Principles for the last 2 years, but having further enhanced its internal environmental risk management resource, it decided to formalise its commitment by independently adopting the Principles.

“As one of the founding institutions of the Equator Principles, the Barclays project finance operations globally function within the Principles. Absa’s decision to adopt independently is a testament to the bank’s commitment to environmental sustainability,” says Christopher Bray, Head of Environmental Risk Management at Barclays.

"As major role-players in project finance in South Africa and beyond our borders, we believe it is important to focus actively on environmentally sound and sustainable opportunities. This year, we have taken action to make our own business more sustainable by incorporating environmentally friendly practices into the design and operations of our existing and new office buildings. We are also taking steps to reduce our carbon footprint by consolidating our operations into fewer buildings. Absa is also a signatory to the Copenhagen Communiqué, which was launched in New York last month”, concludes Ramos.

In line with a global focus on climate change, Absa also collaborated with the wider Barclays Group on research examining the potential impacts of climate change on business in South Africa, Kenya and Ghana. The report finds that climate factors put economic and social value at risk in Africa today and although future climate projections have an element of uncertainty at the local level, business needs to assess current and future climate risks and identify management options.