Financial Mail and Business Day

Absa’s Modise talks strategy

GARTH THEUNISSEN theunisseng@businesslive.co.za

Business Day chats with Absa’s Punki Modise, a 14-year veteran of the bank and former interim CEO of its retail and business banking unit. Modise is front and centre of the bank’s increasing focus on environmental, social and governance issues.

Business Day chats with Absa’s Punki Modise, a 14-year veteran of the bank and former interim CEO of its retail and business banking (RBB) unit.

Modise was named group chief strategy and sustainability officer in an operational shakeup announced at in June 2022. Her new role is part of Absa’s executive committee team and puts Modise front and centre of the increasing focus on environmental, social and governance (ESG) issues.

You’ve been in your new role for just more than six months. Tell us how it’s been so far and what your goals are for 2023.

It has been a steep learning curve, and there were also a few moments of discomfort, which I deem to be essential for learning, personal growth and organisational transformation.

A highlight has been the opportunity to sharpen our work on the group strategy and corporate purpose, which requires deep cross-functional collaboration — not an easy task in a large corporate across 15 countries.

I also had to build a new team and engaged numerous stakeholders internally and externally to understand how they perceive Absa in the context of sustainability. I’ve had the opportunity to look at the organisation through a new lens; to take stock of what we have done so far; and to set goals relating to how we cascade the group strategy, engage stakeholders and ensure organisational health in support of a strong and sustainable performance.

Absa was criticised by the Public Investment Corporation (PIC) over its alleged lack of transformation in the wake of Daniel Mminele’s departure. Is transformation part of Absa’s strategy and have you made enough progress?

While we have made significant progress in the past year, we see transformation, diversity and inclusion as an ongoing and dynamic process that is embedded in Absa’s talent management philosophy. It is linked to our continuous talent development and retention processes. Our recruitment and promotion practices are designed to create a business that is truly representative of the markets in which we operate, and one that is fit for purpose and society. The executive team has an unambiguous mandate from the board to continue to advance the transformation, diversity and inclusion agenda in its broadest sense. We also invest significantly in the development of employees.

Shareholder activist group Just Share strongly criticised Absa’s climate-risk policies in 2022, saying the bank failed to understand climate science. Has Absa fallen behind its peers in addressing climate concerns?

We view ESG as intrinsic to our strategy, culture and brand. We are spending meaningful time to ensure that all these efforts are aligned with one another. As we finalise the process of revisiting our corporate purpose, the precision and impact of our ESG efforts will grow. We believe in the science of climate change and we recognise Africa’s vulnerability to climate change. SA has set itself an ambitious net-zero target. As a systemically important bank, we intend to play our role in financing the country’s decarbonisation. We believe that a focus on mobilising resources to enable SA’s net-zero strategy is how we will contribute to an effective and just transition.

Why hasn’t Absa followed the lead of Nedbank and FirstRand in ruling out the financing of all new coal projects?

We have led in some areas of sustainability and we have work to do in others. For example, through a deliberate strategy, we have become the largest funder of renewable energy projects in SA. We were also the first local bank to announce sustainable finance targets. We believe that a sustainable and just energy transition is one that prioritises SA’s capacity to mobilise the necessary resources to deliver on its netzero strategy, alongside rapidly reducing the country’s carbon fuels for development and inclusive growth. We are fully committed to reducing financing for oil and gas.

We believe that this should not be the only focus of an energy transition and should consider the broader societal impacts of these decisions as our ESG agenda takes a holistic view of the two components environment and society. We are acutely aware that the transition has enormous implications for society.

Do you think it is fair for developed regions like the EU to pressure a developing country like SA to decarbonise its economy when industrialised countries are still using fossil fuels?

We are committed to playing a role in financing SA’s decarbonisation. As a relatively industrialised country with a high emissions footprint, SA faces a significant financial and logistical burden in decarbonisation. We need to be realistic about the complexities of the country’s decarbonisation challenge. There are countries that have resources and capacity built from historical emissions that are better positioned to decarbonise more aggressively. However, SA must face up to the economic and commercial risks and opportunities of the energy transition and Absa is committed to playing its role. Absa’s corporate and investment banking (CIB) division

has previously said it aims to finance or arrange R100bn in ESG-related projects by 2025. Is this still on track and could the financing quantum increase given the scale of the energy crisis in SA?

Yes, we remain on track to meet our stated target of financing or arranging R100bn in ESGrelated loans and debt by 2025. It is true that SA is facing an unprecedented energy supply crisis. As the country’s largest financier of renewable energy, we are committed to supporting SA’s goal to achieve a more sustainable energy future.

Tell us a bit about yourself when you are not at work. What are your hobbies and interests, how do you keep yourself motivated in your spare time?

I spend some of my spare time nurturing relationships and giving back to others; this is important for my emotional wellbeing and my ability to stay productive. I believe that the future belongs to those who give the next generation reason for hope. This entails making time to speak to women, especially young people, about my journey to share lessons that can help them on their own journeys of self-discovery. I also enjoy baking as I believe that being a great pastry chef takes more than the love of baking. You need to be creative, artistic and detail orientated. It’s amazing how some baking fails and successes can teach you a thing or two about humility.

What advice do you have for young South Africans considering a career in banking?

Banking is central to economic development and human progress, it enables almost everything and is connected in real time with everything that is going on in the world. A career in banking is a wonderful opportunity to be part of efforts to advance Africa’s socioeconomic development, and transform people’s lives and help them achieve their dreams. Entrepreneurs start and grow their businesses and large companies fund complex infrastructure projects in all these examples, banking and money are a common thread. Banking is also a stimulating environment because it brings together people with diverse backgrounds. This diversity is extremely important for innovation and the development of new products and services. I therefore think banking is a career that young people should consider; I’d advise them that to realise their dreams, it takes an awful lot of determination, discipline, dedication and at times humility.

FRONT PAGE

en-za

2023-01-27T08:00:00.0000000Z

2023-01-27T08:00:00.0000000Z

https://tisobg.pressreader.com/article/281801403094663

Arena Holdings PTY