maseda ratshikuni nedbank - environment

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NEDBANK GROUP

A Healthy Environment Supports Prosperous Communities

May 2012

The following information is strictly confidential, is to remain in-house at Nedbank Group, is for in-house purposes only, and may not be disseminated to outsiders. Attendees and staff members are reminded that they are legally bound by all constraints imposed upon them in regard to privacy of Bank information whether in terms of their contracts of

employment including the declaration of secrecy, and/or any and all codes and policies relating to conduct, including those restrictive as to share dealings, and in particular insider trading.

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Water and Conflict

The health of a country’s biodiversity is often an indicator of the health of its society. To maintain biological diversity one needs good governance and a holistic and long-term vision for the nation. In Botswana this is what we endeavour to do, and as a result of our pragmatic approach — and unlike many developing nations with an abundance of mineral wealth — we have not fallen prey to the so called “resource curse” where potential wealth generates unrest, inequality, poverty and suffering. These polices, naturally, have the protection of our natural and renewable assets — our biological diversity — at their heart. (Words of Ian Khama, President of the Republic of Botswana, Our Planet Magazine, the magazine of the United Nations

Environment Programme, May 2010)

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Everything else depends on healthy Ecosystems …

Year in and year out, the world economy may be losing $2.5 to $4.5 trillion-worth of natural capital

as a result of deforestation alone, quite apart from the cost of the losses of other key

ecosystems.(Achim Steiner, UN Under-Secretary-General and Executive Director, UNEP)

Development and environment communities must stop viewing their goals as separate, or even at odds with each other.

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Economic

Social

Ecological

The Building Blocks to a Resilient Economy

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Examples of Impacts Associated with Global Average Temperature Change

(Impacts will vary depending on extent of adaptation, rate of temperature

change, and socioeconomic conditions)

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Water and Cooperation

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Sustainability at Nedbank is a holistic, balanced and integrated journey comprising four focus areas:

Nedbank Sustainability Philosophy

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• Launched the WWF Nedbank Green Trust and the Nedbank Green Affinity programme in partnership with WWF-SA. Nearly R120 million has been donated and R30m in trust capital. (1990).

• First carbon-neutral bank in Africa (2010) • Launches the Nedbank Water Stewardship Programme working with WWF-SA in the WWF Water Balance

Programme (2011) • Launched the Nedbank BGreen ETF – Based on the Nedbank Green Index (2011) • Nedbank’s Head Office Phase II building was awarded the first ‘As Built’ Green Star rating in South Africa.

(2010) • African Banker Awards : Named Social Responsible Banker of the Year (2009) • Financial Times Sustainable Bank of the Year award for Emerging Markets: Middle East and Africa (placed

first in 2007 & 2008, finalist in 2009) • First and only SA bank to be included in the Dow Jones • World Sustainability Index (since 2005) • First SA bank to adopt the Equator Principles (2005) • Signatory to the UN Global Compact (since 2005) • Member of UNEP F1 (since 2004) • Inclusion in the JSE SRI (since 2004) • Signatory to the Carbon Disclosure Project (CDP) (2006) • Founding signatory to National Energy Efficiency Accord (2006) • SA Carbon Disclosure Leadership Index (winner 2009) • Signatory to the CDP Water Disclosure (2010) • Ranked 284th – third highest SA company – in the Global 1 000 • Sustainable Performance Leaders Index (2010) • First SA bank to sign the CEO Water Mandate (2011)

Nedbank Sustainability (Green) Credentials

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Manage our own impact

Lead through collaboration

Facilitate through

finance and products

Nedbank's Approach

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Nedbank’s Carbon Neutral Programme

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The Kyoto Protocol (1997) – What does it mean/date/annexure1/2?

EUA – What does it mean?/ baseline/how they traded

Joint Implementation – What does it mean

CER – What does it mean?

VER – What does it mean?

Carbon Project Lifecycle :

(PIN, PDD, Validation, Registry and Emission Reduction Verification & Issuance)

Carbon Project Cycle

Project Concept

Send PIN to DNA for approval

Develop physical project plan

Plan and engage with financiers

Select or develop project methodology

Define project benefits

Document project base-line

Evaluate project for additionality

Generate PDD & submit for approval to:

• DNA (meets national sustainability &

development criteria)

• Validation (Carbon Auditor)

• Scheme Registrar (project

acceptance/registration)

Complete physical project implementation

Project commissioning

Regulated

Activities

Large-scale

Hydro

Nuclear

Liquid Biofuels

Voluntary

schemes

include:

REDD

Distributed

small-scale (measuring &

monitoring

issues)

CDM Exclusions

(Annual)Report

Submitted for

Verification

Submittedfor Emission Reduction

Issuance

ER CertificatesIssued & allocated

in accordance

with ERPA’s

Measure & MonitorPerformance

(Emissions Benefit)

Carbon Project

Production

Cycle

Carbon Neutral Offset Process

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Scope 1, 0.36%

Scope 2: Electricity, 74.67%

Scope 3: Product Distribution, 0%

Scope 3: Office Paper, 1.62% Scope 3:

Commuting, 18.84%

Scope 3: Business

Travel, 4.52%

GHG emissions by scope for 2011

Nedbank's Carbon Footprint 2011

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Nedbank's Carbon Neutral Offset Programme

Kasigau Wildlife Corridor REDD project

• Background: The Kasigau Wildlife Corridor in SE Kenya (Between two National Parks, Tsavo East and Tsavo West.) It’s 500,000 acres of dryland forest and savannah grassland, that serves as an important wildlife corridor for movement of elephant, giraffe, zebra, and other large mammals. At the base of the Mountain are 5 traditional villages that are home to a small population of the Taita people.

• Problem: Deforestation due to an increasing population who have run out of land in their historic areas, and who are looking for new land on which to practice subsistence agriculture. Unfortunately the land has no permanent water sources and receives extremely low rainfall and is therefore unsuitable for even the most basic agriculture. Unfortunately the people don’t realize this until after they have cleared the native forest and attempted to grow crops. When the crops repeatedly fail, they move on and clear more Forest, hoping they will find the “magic” location on which their crops will grow. The result is rapid desertification as once the forest cover is removed the soil has no protection from the equatorial sun and degrades quickly.

• Solution: Creating sustainable economic alternatives for the local communities to allow them to feed their kids and put them through school without having to resort to destroying their environment. Register the project on avoided deforestation. This allows the project to claim credit for the avoided emissions that would have been created by the forest being cleared if we were not protecting it. • Building an Ecofactory, where 150 people were employed people from the community in the construction

phase and then trained and employ young women from the community sewing organic cotton clothing which is export to the US and Europe.

• Establish Organic Greenhouse: Grow citrus trees which is sold at a discount to local farmers so that they can plant a tree for shade that will also earn them income. The funds from the citrus sales fund the growth and distribution of free agroforestry species such as Neem and Morabaini to local farmers, to meet their medicinal, nutrition and fuelwood needs. With the financing from the Carbon project they have

established nurseries in the villages surrounding the Kasigau Wildlife Corridor, to improve food security and meet fuelwood needs for the broader community.

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Kasigau Wildlife Corridor REDD project

Old Kale School – no floor, no desks, one mud room New School block and launched a school bursary

program Organic clothing factory – jobs during building and trained

community in organic clothing making.

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eMbalenhle Air Quality (MAQ) in Mpumalanga

• Background: Project is being implemented by the Nova Institute, an independent non-profit organization, that aims to improve the functioning of low income household. The Nova vision is a healthy household culture in Southern Africa. The Nova mission is to develop and promote ways (models, products, technologies, practices) to improve the quality of life of households. Nova executes its mission together with household residents and networks.

• Problem: Approximately 1 million households consume just over 1 million tonnes of coal per annum in South Africa, most of which is burnt during winter. Domestic coal burning results in excessive concentrations of air pollutants that have a measurable negative impact on health, and result in increased morbidity and mortality. It is estimated that approximately 3% of the national coal consumption is burnt in households, and that this combustion accounts for approximately 20% of national particulate emissions .

• Solution: The project aims to improving access to energy for households in rural poor communities, which is a prerequisite for successful poverty alleviation and sustainable development. It supports dissemination of affordable small-scale renewable and efficient energy technologies, such as domestic biogas and efficient cooking stoves. These replace scarce firewood and expensive fuels, such as diesel and kerosene, and also enable access to energy in distant off-grid areas. • Financial benefits: savings in purchasing coal have been well documented and are on average R608 per

household p.a. • Savings in health costs are more difficult to quantify, but it is estimated to be at least 10 times more. All

residents, including those who do not use coal, experience cleaner air and much better health, but the users of this method benefit the most.

• The reduction in greenhouse gas emissions is about 1.3 ton of CO2eq per household p.a., or an additional 60 000 ton of CO2eq p.a. since 2007. These reductions are now included in the Fair Climate Programme

• The development of Basa Magogo is a joint effort between researchers and community members that proves that continuous close interaction between people from outside the community and people from inside can lead to the creative step which triggers a substantial positive result.

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eMbalenhle Air Quality (MAQ) in Mpumalanga

In this photo, the effect of using the Basa Magogo technique

is illustrated. Two braziers, of the type that people typically

use, are lighted according to the traditional technique (on the

right hand side) and the Basa Magogo technique in front.

Using the Basa Magogo technique is the only difference: the

coal, wood, paper, time of lighting the fire, the tins that are

used, all of these remain the same. As a technique, Basa

Magogo is quite simple: instead of starting the fire with paper

and wood at the bottom and then adding coal on top, the

opposite procedure is followed. That is, the paper and wood is

placed on top of the coal, and the fire burns from the top

downwards. It must, however, be done correctly

Nova has a dedicated team providing training

on all aspects of demonstrating the Basa

Magogo method. Here is an example of

fieldworkers attending a practical

demonstration on how to light a brazier

(called an imbawula) the BasaMagogo way.

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Amathole Berries, in East London, Eastern Cape

• Background: The PACE Centre is a South African not-for-profit organization in South Africa working with the Amathole Berries Pty Ltd is a commercial agricultural and rural development company. PACE through the work of its trading corporation, Credible Carbon is working with Amathole Berries to identify and develop a number of greenhouse gas saving projects on their site in the Eastern Cape.

• Problem: Amathole Berries is committed as a company to the increasing use of renewable energy sources, both as an environmental and commercial consideration. The key is to reduce greenhouse gas emissions.

• Solution: Credible Carbon, working with Amathole Berries, aims to identify and develop a number of greenhouse gas saving projects on their site. Methodologies involved include: • Converting bamboo to energy: 600,000 kWh of energy production per annum from a furnace that will use

bamboo as the feedstock. This will replace grid energy (coal fired) in the provision of energy to agricultural activities.

• Composting: Avoidance of methane production from biomass decay through controlled pyrolysis. A composting project that prevents sawdust going to anaerobic landfill and replaces the production of inorganic nitrate fertilisers with by using chicken manure as the nitrogen source. The chicken manure will be anaerobically digested before being composted so as to avoid N2O emissions. The use of this compost avoids the use of either nitric acid or ammonium bicarbonate that would otherwise be applied in the making of inorganic fertiliser.

• Sewerage Cogeneration: Methane capture from sewerage and cogeneration. The construction of a biodigester for human waste that will be used to generate electricity for farmworker houses.

• Waste Handling and disposal, Renewable energy generation. • Workers benefit commercially: All carbon revenue from this project is accruing to the Amathole Berries

Farm Employees Trust (a discretionary), which has a 15% stake in Amathole Berries Pty LTD and supports the families of farm employees.

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Solar Water Heater on office roof The biodigester at Amathole Berries uses sewerage from farm

households and farm animals. Methane gas is captured and

currently flared, but construction has begun to tap methane gas to

farm households for use in cooking (2011).

Amathole Berries, in East London, Eastern Cape

Composting of sawdust at Amathole berries

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Trees for Global Benefits, Uganda

• Background: The project is being implemented by the Environmental Conservation Trust of Uganda (ECOTRUST). This project is a cooperative community land-use carbon offset scheme with livelihood components emphasising sustainable land-use practices.

• Problem: The aim of the Trees for Global Benefits project is to produce long-term, verifiable voluntary emission reductions (VERs) by combining carbon sequestration with rural livelihood improvements through small-scale, farmer led, forestry/agroforestry projects. Tree growing on private and government contributes to reducing pressure on natural resources in the neighbouring national parks and forest reserves. The income from carbon credits is used by farmers to invest in small scale agroforestry enterprises on their land. The communities have cited lack of planting materials to support growing of indigenous species. In addition, the communities lack technical expertise, especially in the production of quality planting materials. This is compounded further by the fact that communities lack disposable income to purchase seedlings as well as to afford extension services from technical experts.

• Solution: Carbon sequestration/emission reduction benefits are generated by a suite of land-use activities involving afforestation and reforestation as well as agroforestry. The project is involves the planting of native and/or naturalised hard wood and fruit tree species on private land. • Improved income and livelihoods: The focus is on agroforestry systems and small scale plantations to

improve incomes, provide increased access to fuelwood and building materials, and reduce deforestation pressures on nearby forests.. Participants will also gain access to local and national markets for timber, pole wood and fuel wood, fruit and fodder. Nursery establishment and production of seedlings will also provide additional income to rural communities. The pilot phase of the project has involved recruiting 30 to 50 farmers annually with between 1ha and 5ha of land per farmer. With expansion of the project, the number of participants could extend to 400 farmers recruited annually each with an average 4ha.

• Conservation: The payment for carbon sequestration in this area will further contribute to the conservation of the forests and maintenance of their several ecological functions (e.g. carbon sequestration, biodiversity, watershed etc.).

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Nedbank’s Water Stewardship Programme

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Water and Cooperation

- Kofi Annan, February 2002

“But the water problems of our world need not be only a cause of tension; they can also be a catalyst for cooperation ….If we work together, a secure and sustainable water future can be ours.”

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How much water does it take to produce …

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Nedbank Water Stewardship Programme

• In August 2011, Nedbank committed to invest R9 million in SA’s critical water catchment areas through in an innovative Water Balance Programme, an initiative by WWF South Africa.

• Water is widely acknowledged as South Africa’s scarcest resource and the one that will be the most impacted by climate change. WWF has identified the availability of water and the health of water provisioning catchments as one of the most critical challenges facing South Africa..

• WWF estimates that around 98% of South Africa’s freshwater supplies are currently allocated and that demand will outstrip supply by 2025, jeopardising economic growth that is vital for SED.

• The Nedbank Stewardship Programme addresses : water scarcity, water quality and access to water. • Nedbank’s investment will fund the removal of alien invasive species, which is estimated to release more

than 550,000 kilolitres of water a year, back into two of SA’s high priority water catchment areas. • Nedbank is making an investment, in proportion to its operational water use, into WWF’s Water Balance

Programme. The programme encourages water users to take ownership of South Africa’s common water challenge by going beyond reducing their own water consumption to also making an investment back into water provisioning ecosystems.

• When one considers that approximately 3,300 million kilolitres of water is trapped by invasive alien species in South Africa – equating to around 7% of the country’s water run-off – it’s easy to understand how important this investment is in improving water security in our country.

• Nedbank, through the WWF Nedbank Green Trust, has been involved in several projects aimed at combating threats to South Africa’s fresh water supply. These projects include the Enkangala Grasslands Project, the Kouga River Valley Rehabilitation Project and flood simulation for the Pongola floodplain.

• The Nedbank Foundation, last year provided funding for the distribution of hundreds of 90-litre Hippo Water Rollers to mainly rural communities around the country. This enable communities to collect and transport water across various types of terrain. The Foundation also funded the sinking of boreholes for some communities. Thus far over R6 million has been contributed.

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• Several critical water catchments are recognised in South Africa as the country’s ‘water factories’ based on the high water yield of those catchments. WWF has identified five nodes in which these catchments lie and where the programme will focus its broader water stewardship efforts. These are the upper reaches of the Berg and Breede catchments, the Garden Route from George to Plettenberg Bay in the Western Cape; the Kouga in the Eastern Cape; the Umgeni in KwaZulu- Natal and the Enkangala Grasslands in Mpumalanga. Nedbank’s R9 million investment will contribute towards work in the latter two catchments.


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Thank You

maseda ratshikuni nedbank - environment

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