MFW4A on Climate Action
As the world continues to grapple with the Coronavirus crisis, on the heels of Earth Day 2021, we must remember that another crisis also requires our immediate attention and urgent action – the Climate crisis.
Africa is disproportionately vulnerable to the impact of climate change despite having least contributed to greenhouse carbon emissions. Several African regions have already been impacted, including drought in several countries in the Sahel as well in Central, Eastern and Southern regions, flood and irregular rainfalls in West, North and Southern Africa, and the constant reduction of lakes and rivers such as Chad and the Niger rivers. Climate change forces will further accelerate rural migration leading to significant increases in the informal sector and more degradation of living conditions in urban areas. In this context, many African countries will struggle to achieve the SDGs.
The urgency to address climate change warrants attention and the involvement of the public and private sector, including the financial sector. African financial institutions can play an important role in society’s adjustment to climate change and contribute to its mitigation, for example by mainstreaming climate change and environmental risks in their credit and investment processes, or by incentivizing clients for sustainable investments. There is also an increased recognition of the need for responsible adaptation strategies from the financial sector with the accelerating pace of climate change.
At MFW4A, our priority in the new strategic phase (2021-2023) will be on understanding these challenges and opportunities and deriving lessons for more effective and efficient interventions in mainstreaming climate actions. We have engaged with hundreds of participants over the past few months through webinars to discuss the broad range of issues, including topics related to Risks and Opportunities from Climate Change for the Finance Sector, Banking Systems and the Risks of Climate Change, and most recently Banks as Agents of Biodiversity covered in depth in the issue. In June, we are hosting a West African Regional Showcase on Sustainable Finance as part of the Ethical Finance 2021 Summit. The session will present a unique opportunity to showcase progress being made in sustainable finance in West Africa. In the fall, we will close out our EIB/MFW4A webinar series with a session on Climate Finance. Later this year, we plan to support strategic research in key areas climate risks and scale up capacity building of local banks and national development finance institutions.
The time has come for Africa’s financial actors to support proactively the drives towards climate-resilient and low-carbon economy by addressing the vulnerability of the continent to climate change as well as harnessing innovations to unlock new investment opportunities in green and climate linked sectors.