(Posted 25th October 2024)
Environmental, Social and Governance Disclosure is Critical for Africa’s Sustainable Development — African Development Bank Group (AfDB) Vice-President (VP) Quaynor at Inaugural Africa Environmental, Social and Governance (ESG) Forum
The forum aims to catalyze collaboration and knowledge sharing on ESG issues, paving the way for the establishment of a centralised Africa ESG Information Disclosure Hub
“The importance of ESG disclosure for attracting finance for sustainable development in Africa cannot be overstated. It is no longer an optional add-on; it is a necessity if Africa is to thrive and not just survive in the 21st century,” stated Solomon Quaynor, African Development Bank Group Vice-President in opening the inaugural Africa ESG Forum today in Abidjan, Côte d’Ivoire.
The two-day event, jointly organised by the African Development Bank, the Multilateral Cooperation Center for Development Finance (MCDF) and Making Finance Work for Africa (MFW4A) takes place under the theme Building a Sustainable Finance Ecosystem for Africa: A Collaborative Approach for ESG Disclosure.
The forum aims to catalyze collaboration and knowledge sharing on ESG issues, paving the way for the establishment of a centralised Africa ESG Information Disclosure Hub and embedding ESG principles into the continent’s development strategies.
MFW4A is a platform for African governments, the private sector, and development partners to coordinate financial sector development across the continent. Its secretariat is hosted by the African Development Bank Group.
Quaynor, the Bank Group’s Vice president for Private Sector, Infrastructure & Industrialization emphasized the urgency of adopting robust ESG practices. “Achieving sustainable development requires substantial financial investments which will not come without trust, transparency, and accountability,” he said. He also highlighted that Africa faces low awareness of ESG’s importance, inadequate infrastructure for data collection, and inconsistent policy engagement. Fragmented ESG disclosure standards could lead to Africa being excluded from global capital markets that increasingly prioritise sustainability.
Quaynor further noted, “By facilitating better data availability and promoting best practices, we can enhance stakeholder engagement and foster greater trust between investors and businesses. This is essential for building a sustainable finance ecosystem that benefits everyone.”
Frederic Wiltmann, Head of Project Team at MCDF, elaborated on its work to support sustainable investment. “We now have several capacity-building programs focused on facilitating trade financing, connectivity infrastructure development, and environmental and social safeguards. One of the pillars involves establishing this Disclosure Hub initiative, and today’s forum serves as a launch for this capacity-building program, of which we hope the Disclosure Hub will be one of the major outputs.”
Opening-day sessions featured discussion of the development of an African ESG taxonomy and an overview of the global landscape of ESG disclosure. “Despite the challenges we face, there are many opportunities for Africa to lead in sustainability reform, and the establishment of the Sustainability Centre of Excellence is critical for driving the adoption of international standards,” added Lebogang Senne, Technical Director of the Pan African Federation of Accountants. PAFA’s board in August 2024 approved the establishment of a Centre of Excellence to accelerate the Africa-wide adoption and implementation of the IFRS Sustainability Disclosure Standards of the International Sustainability Standards Board (ISSB).
In a session titled, Perspectives from Sustainable Finance Initiatives, Wakesho Sonje of ICEA LION GROUP said The Nairobi Declaration for Sustainable Insurance is driving ESG integration in Africa’s insurance sector, with 219 members across 36 countries committed to sustainable principles and SDGs. She also highlighted that innovative products like parametric insurance are being developed to address climate-related risks and protect vulnerable communities. Additionally, initiatives like the African Development Bank’s Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) are partnering to achieve similar goals, she said.
Nearly one hundred delegates attended physically with a further 400 online sharing insights and posing questions to the speakers, reflecting strong commitment to addressing the critical role of Environmental, Social, and Governance (ESG) disclosure in fostering sustainable development across the continent.
Day 2 will feature engaging discussions on the challenges and opportunities in ESG reporting in Africa with insights from industry leaders. Additionally, sessions will focus on investor expectations for ESG reporting, including a panel discussion featuring representatives from various financial institutions.
