Dialogue highlights role of African financial institutions in driving sustainable development
While African financial institutions play an important role in driving sustainable development amid global challenges such as climate change, pollution and biodiversity loss, tackling climate and biodiversity risks represents a multifaceted and multiyear transformation for African financial institutions, impacting every aspect of their business and operating models.
During the Advancing Climate and Nature Capabilities of African Financial Institutions dialogue, held on October 1, by the UN Environment Programme Finance Initiative (UNEP FI), in collaboration with the Banking Association South Africa (BASA), the Southern African Development Community Banking Association (SADC BA) and Standard Bank Group (SBG), SADC BA executive secretary Maxine Hlaba expressed that there was a unique opportunity to elevate African perspectives and priorities into the global sustainable finance agenda.
She also argued that financial systems should serve the needs of people, as well as the environment and a shared future.
“The challenges before us are immense,” she said, pointing out that Africa was on the front line of multiple intersecting crises, including climate change, biodiversity loss, poverty and inequality.
Despite challenges, she noted that the continent was seeing progress as financial institutions were beginning to embed climate and nature into their strategies, setting targets, building capacity and pivoting innovative approaches.
Hlaba also expressed that climate and nature were no longer “side issues” for the financial sector, but were rather central to stability, resilience and long-term growth.
Hence, she highlighted the importance of building capabilities and partnerships that determined whether financial systems could rise to these challenges.
“It is not just about responding to risks but also unlocking opportunities that can transform our economies and societies for the better,” she said.
“Let us ensure that African financial institutions are not only on par with global standards but help set them grounded in the African context, realities and aspirations of our people,” she continued.
Similarly, UNEP FI Africa and Middle East regional lead Nuran Atef noted that Africa's financial institutions were uniquely placed to turn challenges into opportunities.
“By responding to the continent's climate and nature realities, we not only address urgent needs, but also amplify Africa's voice globally,” she said.
Speaking on the first panel of the event, UN special envoy on financing the 2030 sustainable development agenda Dr Mahmoud Mohieldin highlighted the interconnected challenges facing developing economies and emerging markets of climate change, debt crises and financing gaps, emphasising the need for innovative financial mechanisms.
He also discussed the importance of increasing private sector participation in providing finance in this regard.
“Africa's transition cannot and will not be financed by public resources alone, because they are not sufficient for the ambitious goals and targets, and they are not going to be supported by isolated green niches here and there.
“It must be financed by building climate, nature and development into mainstream finance in mechanisms available to support the private sector and to support governments through public-private partnerships,” Mohieldin said, emphasising the need to break down silos and design and deliver integrated, bankable projects for the benefit of Africa.
Also speaking on the panel, Presidential Climate Commission executive director Dorah Modise agreed on the importance of collaboration, discussing the importance of policy certainty in deepening the engagement of financial institutions in driving South Africa’s transition to a low carbon, inclusive and climate resilient economy.
“The financial sector needs to be right at the centre of policy decisions, so that therefore, number one, participation in policy making, dialogues and policy development processes, is quite critical,” she said.
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