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Webinar | Responsible finance and sustainability: The importance of lending and investing with care for environmental and social impacts

Jun 21, 2021 | Online

THE EIB WEST AND CENTRAL AFRICA SME BANKING AND MICROFINANCE ACADEMY 2020-2021

Webinar series

Topic 5: Responsible finance and sustainability: Why lend and invest with care for environmental and social impacts

21 June 2021, 01 pm (Abidjan) / 02 pm (Cotonou, Paris, Frankfurt, Douala, Kinshasa)

Introduction and background

Within the context of the European Investment Bank (EIB) TA Financial sector programme for West and Central Africa, Making Finance Work For Africa (MFW4A) and the IPC, Horus and IECD Consortium are hosting a series of webinars for banks and microfinance institutions operating in these regions.

This fifth webinar, will cover topics around sustainable and responsible finance and why they matter particularly in Africa. According to the World Business Council for Sustainable Development, the financial industry is "an important sector for increasing sustainability". There are several reasons for this.

First, financial institutions everywhere are an engine for financing economies, lending or investing in projects. For a long time, compliance with the law and profitability were the main drivers of financial institutions, which shareholders constantly expected. More recently however, sustainability and social impact have become important criteria due to a rising public awareness worldwide.

Second, financial institutions are impacting their environment and communities by the way they function, and treat their employees, their clients and their communities (including their suppliers). Increasingly, the private sector is urged to consider the role it plays in advancing the United Nations Sustainable Development Goals.

In this context, financial institutions should have policies and procedures promoting environmental friendly and fair/equitable financial services practices. Furthermore, they should set minimum standards to deal with customers and communities, and increase transparency to inform and empower consumers of financial services. This in turn will also positively impact their business and profitability as customers and investor are increasingly willing to award such behavior. 

Webinar

The webinar covered the need for FIs to contribute to sustainable development and social impact, in their lending or investing activities, by the way they function and treat their employees, their clients and their communities (including their suppliers). Increasingly, the financial sector worldwide is urged to consider the role it plays in advancing the United Nations Sustainable Development Goals.

Amelia Greenberg (f), Deputy Director of the Social Performance Task Force (SPTF), shared insight about the Universal Norms of Inclusive and Responsible Finance and how to use them effectively, keeping in mind clients protection, value creation, the care for employees and the preservation of natural resources.

Abdoulaye Sidibe (m), Head of Credit at Kafo Jiginew, a major financial institution in Mali, explained the steps taken by his institutions to implement Social and Environmental management frameworks, how the institution was able to integrate the framework, particularly into its lending activities and why it is important to make it an institution-wide effort, including staff training and client education.

Finally, Dr Ndidi Nnoli (f), Co-Chair of the Private Sector Advisory Group (PSAG) on SDGs and Chair at Circular Economy Innovation Partnership, added onto to this by speaking about her seven pillar methodology for sustainability, and why it is becoming urgent for the private sector, and banks in particular, to lend and invest with care for environmental and social impacts, with high risks of ending up with risky assets if this is not taken into account.  

Participants asked many questions that helped make the message as concrete as possible and received from panelists recommendations on the approach FIs should use to promote environmental friendly and fair/equitable financial services practices, as well as the expected minimum standards to deal with customers and communities and empower consumers of financial services.

Access the recording in French