Japanese megabank signs ESG agreement with Standard Bank at TICAD-8

Since South Africa’s Standard Bank entered into a Business Corporation agreement with Mizuho Bank – the Japanese megabank – the partnership has seen many landmark deals and legacy transactions throughout Africa.

Standard bank has now confirmed that on 26 August, at the TICAD-8 (the eighth Tokyo International Conference on African Development – a conference led by the government of Japan since 1993) that was this year held in Tunisia, the Business Corporation agreement has been expanded to include environmental, social and governance (ESG) standards.

Socially and environmentally responsible investing

ESG criteria are a set of standards for a company’s behaviour used by socially conscious investors to screen potential investments.

This means that the agreement will now ensure that capital allocations made moving forward are in line with the agreed socio-economic principles that both promote the growth of and protect the continent.

By expanding the agreement to include ESG standards to guide future investments made in the continent, capital flow will both safeguard and promote important socio-economic principles.

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Sasha Cook, Standard Bank’s Head of Investment Banking in the Western Cape and Executive for Sustainable Finance, said: “The progression and maturation of this partnership aligns with Standard Bank’s goal to enable inclusive and sustainable economic growth in Africa.

“The Standard Bank Group’s sustainability strategy is based on two pillars: the bank firstly aims to achieve a positive social, economic and environmental impact linked to the United Nation’s sustainable development goals and, secondly, to upholding good ESG practices in the way it conducts business as a responsible corporate citizen.”

SA and Japan strengthen its trade relations

Over the past two decades, bilateral trade between South Africa and Japan has been both constructive and expanding. According to the Department of International Relations and Cooperation, over Yen 100-billion in Japanese investments has been sown into South Africa since 1994.

With investment-friendly initiatives such as the African Continental Free Trade Area (AfCFTA) and the Tokyo International Conference on African Development (TICAD), the two countries are strengthening their relations to drive Africa’s growth.

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Robert Cleasby, Head FI for Client Coverage and Financial Institutions at Standard Bank Group, said that their reason for attending the TICAD 8 conference was specifically to strengthen the capital market connection between South Africa’s presence in Sub-Saharan African markets and the capital market of Japan.

It was said that this connection has experienced low growth over the past decade.

To facilitate the increase in investments in Africa, Standard Bank established a Japan desk in 2019, to focus on Japanese corporates operating across the bank’s markets.