Only in Africa: how African-ness is driving responsible investment

Being African is one of the facets of my identity of which I am most proud. Recently, I had the opportunity to show off my home country of South Africa to PRI CEO, Fiona Reynolds.

Fiona was in South Africa for just less than a week, during which we jumped between Durban, Johannesburg and Cape Town. The trip was jam-packed with group and individual engagements with PRI signatories and other key stakeholders in the local investment market. We spent each day, quite literally from dawn until well past dusk, engaged in insightful and enlightening conversation. We did so much talking that by the end of the trip, Fiona had lost her voice.

The conversations of the week have reaffirmed my understanding of some of the defining characteristics of African-ness, in the context of our general investment behaviour.

#1: We are chronically humble

The first stop for Fiona and I was the Institute for Retirement Funds Africa Annual Conference. The theme of this year’s conference was ‘You Have the Power’, a phrase which landed uncomfortably in my ear the first time I heard it. I believe this might be because as Africans, we have a controversial relationship with the concept of power. We tend to view power in a negative light, at worst as a weapon used against us and at best, as something to which we should aspire, but do not inherently possess.

It is likely that this is the result of a number of intensely complex and interrelated factors, including, but not limited to: our strong cultural relationship with nature; our history; our current developmental priorities.

Regardless of what might be behind it, the effect on the system of institutional investment is that not one of the stakeholder groups involved is operating as effectively as it could if it were to acknowledge, accept and then comfortably assert its respective power over the direction of investment.

As a result, it is often necessary to remind (or convince) asset owners, trustees, investment managers, consultants, regulators and policymakers that they do in fact have the ability to influence the direction of investment to ensure its alignment with the shared values of the broader African community.

#2: We value the wellbeing of the collective

Anyone who has ever been to Africa will be familiar with the concept of ‘ubuntu’. Whether you’ve heard the word or not (and regardless of how you may pronounce it), if you have set foot on this continent, you have felt the profound influence of this shared understanding: ‘I am because you are’.

I firmly believe that this acknowledgement of the interconnectedness of people – the appreciation of the value of the collective – is a distinctly (though arguably not uniquely) African perspective on the world. And it is to me a source of great pride to see this understanding manifested in the way that many African investors operate.

The discussions that Fiona and I had throughout her trip, and those I have been having with PRI signatories over the course of the last year and a half, always, without exception, contain some element of the role that investment does and should play in creating shared value for broader society.

There is an understanding held by investors in this market – especially, but not exclusively by those who are PRI signatories – that their success, the success of the one, is intrinsically connected to the success of others – of society more broadly.

As a result, there is a strong and growing desire from these investors, to engage more fully with what they consider to be the shared environmental, social and governance priorities of our community and to promote and engage in investment that not only generates maximum long-term returns, but also works to build and grow African economies in a sustainable and truly transformative way.

There is a strong desire among African investors to engage more fully with ESG issues and promote investment that not only generates maximum long-term returns, but also works to build sustainable African economies

#3: We fight for what’s right

As Africans, activism is in our blood. In South Africa, as is the case with many African countries, we are painfully aware of the fact that every freedom that we enjoy today has been hard won. We have these things because we are not afraid to roll up our sleeves to defend our values.

We also know all too well that relying on others to solve our problems or trying to achieve things in the absence of a united front is foolish. We know that its only if we take initiative and if we work together, that we can affect real change.

In this spirit, local investors have come together to initiate what will be an African Investor Forum (to be convened by the PRI, but driven by investors themselves). This will allow a platform for the identification of priorities across African signatories and the design and implementation of focused projects that aim to have these priorities clearly represented in the way that investors operating on the continent allocate investment, appoint service providers, engage with portfolio companies and interact with regulators and policymakers.

The forum is a critical tool and a first united step in the fight against the inertia stemming from our ignorance of our power and our lack of willingness to take ownership of it. 

There’s an African proverb that says “If you want to go fast, go alone. If you want to go far, go together”. In the case of Africa, and the transformation we need to implement in the face of the climate emergency, I reckon we need to do both – we have far to go, and we need to get there fast. Luckily, that is just the sort of situation in which African-ness thrives.

 

 

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