The TakeAway: The Africa Sustainable Investment Forum adds a new chapter to the history of using finance for social progress that started in South Africa.
Most people think the US-based divestment movement toppled apartheid in South Africa. The reality is more complex, as home-grown efforts in South Africa played a much bigger role than many people realize. I witnessed this influence on a trip to apartheid South Africa in October 1987 with peace entrepreneur Padraig O’Malley to interview almost two dozen labor leaders—such as Jay Naidoo, then president of the Congress of South African Trade Unions (COSATU). Supported by The Ford Foundation, the research goal was to identify how economic sanctions might help expand, rather than reduce, economic justice for victims of apartheid. One idea under quiet review: a “National Workers Trust” that linked corporate disinvestment to worker economic power. Eventually, a broad mix of actions – including selective purchasing by US states and cities, the withdrawal of Mobil and GM in 1988, and international oil sanctions that imposed a $2-3 billion tax on a $100 billion economy – combined to topple the apartheid regime.
Now, a project launched from South Africa builds upon the decades-long history of linking finance to social good, aimed at spreading sustainable investing throughout the African continent. Naidoo, who serves as board chair of the Development Bank of Southern Africa and the Global Alliance for Improved Nutrition (GAIN), joined other prominent South African financial leaders at the Johannesburg Stock Exchange in June to launch the Africa Sustainable Investment Forum (AfricaSIF). A Pan-African nonprofit network of individuals and institutions, AfricaSIF takes a “strategic new step” to expand sustainability and economic power in ways that “purposefully integrate environmental, social, and governance (ESG) factors,” according to co-founder and SinCo principal Graham Sinclair, who conceived the idea while working in Boston in the mid-2000s. It does so through “investment in the public, private, and philanthropy sectors across asset classes, countries, and stakeholders.” (You can follow AfricaSIF on Twitter at #AfricaSIF.)
AfricaSIF’s mission is to engage Africa’s other 53 countries and territories in sustainable investing practices. According to AfricaSIF, there now are more than 500 listed companies across 19 different stock exchanges throughout the continent (the world’s second largest). In the last 10 years, private equity firms headquartered in Africa have raised over $10 billion in aggregate capital. Meanwhile, South Africa has taken the lead in sustainable investing practices, such as mandating integrated reporting and XBRL tagging. The merits of sustainability considerations will increase as the Africa’s wealth of natural resources become a more attractive investment target.
The AfricaSIF Steering Committee “brings different levels of expertise, experience, and effort to the table representing African investment practitioners based in Africa and in the diaspora, with pan-African leadership perspectives from Kenya, Nigeria, Côte d’Ivoire, Ghana, South Africa, Zimbabwe, Sudan, Mauritius—with more country representation to follow.”
This Thursday, September 2nd, AfricaSIF will celebrate its second official launch in Cape Town, followed by similar events in Lagos, Nairobi, Cairo, Geneva, London, New York, and Boston. The global road show leads back to Cape Town this December 1st and 2nd, for the first annual “ESGAfrica” event designed in partnership with Responsible Investor.
“As the FIFA World Cup 2010 showed, Africa is taking its place in the world. We know investors seek new frontiers for investment returns,” Sinclair said. “AfricaSIF is a way of sharing knowledge and advocating for sustainable investment to be the primary way to invest on the continent.” He added, “AfricaSIF is being built by a next generation of investment practitioners with a passion for Africa, whether on the continent or living globally. From an idea floated in cold and snowy Boston in 2005, we have come a long way over years to make it happen in 2010.”
America, pay heed to South Africa: Sustainability is the way forward.
