Africa presents a unique case for the type of transformational investing that is required for sustainability, to meet the United Nations’ Sustainable Development Goals (SDGs) and to achieve net-zero carbon emissions by 2050, according to panellists participating in a Sanlam Investments Forum on June 14.

Harvard Business School representative Euvin Naidoo, speaking in his personal capacity, said that the world appeared to be behind on its ambitions to reach and meet some of the SDGs and that tough changes would need to be made.

Changing people’s behaviour is what is fundamentally required on both a national and individual basis to ensure current and future investments go into the type of projects that will advance the SDGs and environment, social and governance upliftment, he added.

“This will be an ongoing journey . . . particularly when there are multiple stakeholders, across multiple geographies, all at different stages of development,” he said.

Naidoo noted that although issues differ widely on a region-by-region basis and especially between developed and developing regions, some challenges are shared, and that Covid-19 was a great example of an influence that levelled out the playing field, as the world faced a single main challenge at the same time.

DIFFERENT MINDSETS

Sanlam Investments CEO Nersan Naidoo commented that, in terms of addressing certain development and investment matters, there were differences in the priorities of countries.

In terms of climate change, the panel suggested that individuals from developing nations would rather prioritise investment into projects that address their more immediate needs, as opposed to investments into projects to reduce carbon emissions in the long term.

This is because, and in Africa particularly, many citizens rely on fossil fuels as a source of energy for heating and cooking, and taking this fuel away could result in hardship.

“You simply cannot shut [fossil fuel reliance] down and transition to clean energy immediately [in developing nations like Africa],” Nersan Naidoo said.

As such, he said awareness needed to be raised on both fronts of the investment scale, from the investors themselves on the needs and priorities of the people the investment will impact, as well as for the people the investment is aimed at helping.

Nonetheless, Climate Fund Manager CEO Andrew Johnstone said changes were already under way in the investment sector.

“. . . Twenty years ago, people looked at investment opportunities on the basis of their return to make their decision based on their risk tolerance, but since the evolution of the SDGs, and certainly post-Covid-19, is the emergence of purpose investing,” he stated.

Currently, Johnstone notes, large institutions, governments and even private individuals were looking at purpose investing. Whether they be into net zero investing or sustainable investing, there is a greater sustainability purpose attached to every rand that is spent.

Such investment was positively impacting on poorer communities in the same way it was positively impacting on more affluent communities.