We write this jointly in our capacity as alliance members of the GISD, from our homes in South Africa (SA), during a time of social distancing, while our planet fights one of the greatest wars in history. Sitting on the southern tip of Africa, we cannot help but reflect on how vulnerable our country is to the scourge that is COVID-19. More than 50% of SA’s population do not have access to piped (clean) water in their homes - never mind access to sanitation or energy – this is compounded by the lack of medical facilities and basics required to fight a contagion of this magnitude. The recent pandemic has highlighted the underlying and pre-existing inequality gaps in our society. And the pandemic has sparked a renewed consciousness and a willingness to respond by the public and private sector alike. Never has the 2030 Agenda for Sustainable Development been more relevant, more critical or more urgent to attain.
The Sustainable Development agenda sets out a vision for a prosperous future for the planet and its people as embodied by the United Nations (UN) Sustainable Development Goals (SDGs). It is an agenda that matters to all spheres of society and is underpinned by inclusive and sustainable economic development. This is vital for our country, which has one of the highest Gini coefficients in the world, severe poverty and escalating unemployment. This inequality has been brought into sharp focus by the coronavirus lockdown where the health and livelihood challenges for a person living in the affluent suburb of Sandton are very different to those staying in the neighbouring and densely populated township of Alexandra.
SA needs a sustainable reset. One that takes into consideration the natural resources required to support an economy that must remain competitive, but also meets the short and long-term needs of society. Development must be economically, socially and environmentally sustainable while at the same time ensuring that we leave the planet healthier for future generations to thrive.
While vulnerable as an emerging market with severe economic challenges, SA is also uniquely positioned to tackle the practicalities of implementing a sustainability-focused strategy, in a way that respects the dynamics and population demographics of the continent. We have deep and liquid capital markets that serve the domestic economy and the wider continent as well as a strong and sophisticated financial services sector. The Johannesburg Stock Exchange (JSE) is the largest exchange in Africa with excellent systems and plays an important role in facilitating the functioning of the SA economy. Indeed, the financial services industry and the exchanges that facilitate trade on these markets have a vital role to play in directing financial flows to where they are needed most, particularly in a crisis.
Investec plays an important role in funding a sustainable economy that is sensitive to the world’s limited natural resources, promotes carbon reduction and contributes positively to economic growth and social upliftment. As members of SA’s business society we, as the JSE and Investec, are acutely aware of our societal obligations but acknowledge that a shift in mind-set is required. Our investment strategies and expectation of returns need to include sustainability-linked metrics. Investors not only want to see greater sophistication and flexibility from their investments to meet their specific return goals, but they also want those investments to have an impact on creating a better world. It is important for them that our actions and products align with our commitment to support the UN SDGs.
Creating SDG-linked products and services would not be possible without the support and broad vision of exchanges such as the JSE. The JSE has long championed sustainability. It was the first emerging market and the first stock exchange globally, to introduce a sustainability index in 2004. This index measures companies on indicators related to environmental, social and governance practices. We have seen steadily increasing demand for financial products and initiatives that prioritise transparency, good governance and ultimately, action. To this end, the JSE has been driving a number of projects which directly underpin responsible investment.
During times of crisis, such as we currently find ourselves, instruments such as social bonds, aimed at improving social outcomes and based on partnerships are playing a leading role in making the finances available to meet the many challenges arising from the COVID-19 pandemic.
We are getting there, but slowly. Sustainability has increasingly gained in importance however, it needs to move from a values based metric to an outcomes-based imperative. To achieve this, policy makers need to set up an enabling framework. Considering the pressing issues covered by the SDGs, creating an enabling environment for related investment will directly help achieve the 2030 goals. This is one of the reasons we chose to join the UN mandated group of global CEOs - The Global Investors for Sustainable Development (GISD) Alliance - tasked with the objective of catalysing capital and skills to urgently meet the challenge presented by the burning platform that is the SDG investment gap. Traditional financing models may not be suitable to meet the estimated $2.5 trillion needed for investment in sustainability over the next 10 years.
It is both a huge responsibility as well as an honour for us to be part of this global group. As the Secretary General of the UN, António Guterres, likes to say: “to attack the biggest problems in the world, you need a level of collaboration across many stakeholders”. As part of the GISD alliance, we are working with leaders across the world to help unlock capital flows that will explicitly support sustainable development. The coronavirus pandemic has not only demonstrated that cooperation is possible on a previously unimagined scale but also highlighted the need for connection, even in a time of social distancing. The government in SA has limited fiscal space so the financial and corporate sector have rallied to assist in putting together an effective responsive economic package. The urgency of the crisis has shattered previous procedural impediments and opened the way for strong collaborative approaches, which give us hope for even greater partnerships post COVID-19.
We commend the UN Secretary General’s bold and courageous proposals in response to COVID-19 ranging from global ceasefire to fiscal stimulus and debt relief measures. The reality is that if the world had been implementing the SDGs with a higher level of commitment, then this pandemic's impact would not have been so severe. Investments in better health systems and reducing inequality would have helped tremendously in dealing effectively with the pandemic and its socioeconomic consequences. While we respond, we also need to ensure that recovery is lasting and resilient. That means major reorientation of investments and the global financial system to align with the SDGs. It has to be done at an accelerated pace to deliver during the Decade of Action.
As we navigate through these stormy waters, we acknowledge that this is the time for leaders to step up and take bold action. We are proud of the swift and decisive leadership shown by our SA president in responding to the COVID-19 heath crisis. For this reason, we have both chosen to join the president in donating 30% of our salaries for three months to COVID-19 relief efforts. Both our companies, Investec and the JSE, have a long history of caring for the people of SA, supporting our communities and driving economic growth. As the CEOs of our respective companies - but more importantly as leaders, parents and grandparents - we are both personally committed to accelerating action on sustainable development and creating a better world for our grandchildren and their grandchildren. We hope the example of this collaborative approach will help citizens around the world to realise the need to live in society and not off society, with the understanding that if we do not invest in the world that we want, the one we get will be worth infinitely less.
Dr Leila Fourie, Group CEO of the Johannesburg Stock Exchange, and Fani Titi, CEO of Investec, are members of the United Nations Global Investors for Sustainable Development CEO Alliance.