Climate related financial risk regulations are firming up all around the world. As climate change increases credit and liquidity risks from both its physical effects and the costly transitional policies created to halt its progress- African banks are expanding their current risk frameworks to explicitly include these risks and leverage green finance opportunities.
This reporting framework provides high level insights into the rapidly evolving landscape of countries and banks leading the charge in green finance commitments and action.
The ISSB builds on the work of market-led investor-focused reporting initiatives, including the Climate Disclosure Standards Board (CDSB), the Task Force for Climate-related Financial Disclosures (TCFD), the Value Reporting Foundation’s Integrated Reporting Framework and industry-based SASB Standards, as well as the World Economic Forum’s Stakeholder Capitalism Metrics.
As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The SASB Standards play an important role in the first two IFRS Sustainability Disclosure Standards, IFRS S1 General Requirements for Sustainability-related Disclosures and IFRS S2 Climate-related Disclosures.
Links: SASB Standards
Task Force on Climate-related Financial Disclosures (TCFD): The TCFD develops recommendations based on risk assessment, capital allocation, strategic planning, metrics and targets. Thus promoting stakeholders’ understanding of the concentration of carbon-related assets within the financial sector and the financial system’s exposure to climate-related risks.
Links: Website Publications
Climate Disclosures Standard Board (CDSB): The CDSB is an international group of business and environmental NGO’s that aims to align the global corporate reporting model, to equate natural capital with financial capital. They offer companies a precision reporting framework for environmental data that assists investors take informed decisions that result in an efficient allocation of capital.
GRI (Global Reporting Initiative) is the independent, international organization provides the world’s most widely used standards for sustainability reporting – the GRI Standards.
Links: Website ISSB Partnership
Intergovernmental Panel on Climate Change (IPCC): The IPCC is a United Nations (UN) body that gauges and monitors the scientific research into climate change. This panel provides policy makers with comprehensive Assessment Reports, containing thelatest climate assessments, future potential risks, their impacts and options for reducing the rate of climate change.
Links: Website
Network of Central Banks and Supervisors for Greening the Financial System (NFGS): The NFGS defines the best practices in green finance that augment the role of the financial system in managing risks and mobilizing capital towards environmentally sustainable development. This is aimed at strengthening the global response to the Paris Agreement.
Links: Website Publications Papers Scenarios
Bank of International Settlements (BIS): The BIS fosters discussions that facilitate collaboration among central banks and supports dialogue with authorities that promote financial stability. They conduct research into policy analysis, act as a counterparty for central banks and serve as an agent or trustee in connection with international financial operations.
Links: Website Green Bonds
The Equator Principles: The Equator Principles are a risk management and reporting framework created to guide financial firms deal with environmental and social risk. The framework performs the due diligence necessary for institutions to make responsible and informed decisions.
United Nations (UN): The UN which is the foremost intergovernmental organization that maintains international peace and security, has adopted the 2030 Agenda for Sustainable Development, which contains 17 Sustainable Development Goals (SDG’s). The UN drafts the Sustainable Development Agenda, undertakes financing efforts and monitors the progress of the SDG’s through the High-Level Political Forum (HLPF).
United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development.
PCAF is a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments.
Links: Website
🇪🇬
In May 2022, Egypt launched its 2050 National Climate Change Strategy, which does not include an overall emissions reduction goal. In its second NDC update, Egypt strengthened its renewable energy target, pledging to achieve 42% of renewable energy in its generation mix by 2030.
Click to read more about Climate and Environment
🇰🇪
Kenya's climate change policy focuses on achieving a low-carbon, climate-resilient development pathway by prioritizing actions like increasing renewable energy in electricity generation to 100% by 2030, promoting climate-smart agriculture, improving energy efficiency, and enhancing waste management systems, all while aiming to reduce greenhouse gas emissions significantly through its Nationally Determined Contribution (NDC) to the UN Framework Convention on Climate Change (UNFCCC).
Click to read more about Ministry of Environment
🇲🇦
Morocco's climate change policy focuses heavily on transitioning to a low-carbon economy by significantly increasing renewable energy production, aiming to generate 52% of its electricity from renewable sources by 2030, and has set a goal of achieving net-zero carbon emissions by 2050 through its "National Low Carbon Strategy 2050" strategy; this includes initiatives like lifting fossil fuel subsidies to encourage energy efficiency and investing in sustainable agriculture practices like the "Plan Maroc Vert" to address climate adaptation concerns.
Click to read more about Ministry of Energy, Mines and Environment (Morocco)
🇳🇬
Nigeria's climate change policy aims to reduce greenhouse gas emissions and build a climate-resilient society. The policy includes a number of strategies, such as increasing the use of renewable energy, improving energy efficiency, and raising public awareness.
Click to read more about Federal Ministry of Environment
🇿🇦
South Africa's climate change policy focuses on a "just transition" to a low-carbon economy, aiming to reduce greenhouse gas emissions significantly by 2030 through measures like a carbon tax, a Low Emission Development Strategy, and a Just Transition Framework, while prioritizing the needs of vulnerable communities during this transition, with a goal of reaching net-zero emissions by mid-century; this includes a recently passed Climate Change Act that outlines a comprehensive approach to climate action across sectors.
Click to read more about Climate Change and Air Quality
🇹🇿
Tanzania's climate change policy, outlined in its updated Nationally Determined Contribution (NDC), aims to reduce greenhouse gas emissions by 30-35% below business-as-usual levels by 2030, focusing primarily on the energy, transport, forestry, and waste sectors; this includes efforts to reverse deforestation, increase renewable energy usage, improve waste management, and promote sustainable transportation options, while also prioritizing adaptation measures like access to clean water and climate-smart rural electrification.
Click to read more about Department of Environment
🇨🇻
Cabo Verde's climate change policy focuses on significantly reducing greenhouse gas emissions by up to 18% below current levels by 2030, aiming to achieve a carbon-neutral economy by 2050, with a strong emphasis on adaptation measures through its National Climate Change Adaptation Plan (NAPCV) to mitigate the impacts of climate change on the island nation; this includes prioritizing climate justice, gender equality, and good governance in its climate actions.
Click to read more about The Water and Sanitation Revolving Fund
🇲🇺
Mauritius' climate change policy aims to reduce greenhouse gas emissions by 40% by 2030, achieve 60% of energy production from green sources by the same date, and completely phase out coal usage in electricity generation, all while promoting energy efficiency and a circular economy through initiatives like electric vehicles and tree-planting programs; this is outlined in their updated Nationally Determined Contribution (NDC) under the Paris Agreement.
Click to read more about Ministry of Environment and Waste Management/ Climate Change
🇿🇲
Zambia's climate change policy, officially called the "National Policy on Climate Change," aims to create a framework for coordinating climate change programs across sectors to achieve low-carbon and climate-resilient development, with a focus on sustainable development and addressing the needs of vulnerable groups, including rural women, children, and youth, while aligning with the country's Vision 2030 goals; key aspects include adaptation measures against droughts and floods, promoting renewable energy, and integrating climate change concerns into various economic sectors like agriculture, water, and infrastructure.
🇷🇼
Rwanda's climate change policy, centered around the "Green Growth and Climate Resilience Strategy (GGCRS)," aims to transition the country towards a low-carbon, climate-resilient economy by 2050, with a key focus on reducing greenhouse gas emissions by 38% by 2030 compared to business-as-usual levels through measures like sustainable land use, renewable energy, and forest management; this policy is aligned with the National Environment and Climate Change Policy which prioritizes a clean and healthy environment resilient to climate change.
🇨🇮
Côte d'Ivoire's climate change policy focuses on significantly reducing greenhouse gas emissions by 30.41% by 2030, with a conditional target of 98.95% reduction with international support, aiming for carbon neutrality by 2030; key areas include energy transition, forest preservation, and adaptation measures in agriculture, forestry, and coastal zones, all while seeking substantial climate financing to implement these goals.
🇧🇯
Benin's climate change policy, outlined in its "Law on Climate Change" enacted in 2018, focuses on reducing greenhouse gas emissions, promoting energy efficiency, and implementing adaptation measures to protect the environment, with a primary goal of building resilience to climate change impacts through initiatives like the National Adaptation Plan (NAP) and the National Climate Change Management Policy (PNGCC) aiming for low-carbon growth by 2030.
🇸🇳
Senegal's climate change policy, outlined in its Nationally Determined Contribution (NDC), aims to reduce carbon dioxide emissions by up to 29.5% by 2030, with a focus on increasing renewable energy in the electricity mix to 40.7% by 2035, while also prioritizing adaptation measures in sectors like agriculture, forestry, and coastal protection to build resilience against climate change impacts; the policy includes funding mobilization to support mitigation and adaptation efforts.
🇹🇳
Tunisia's climate change policy aims to reduce its carbon intensity by 45% by 2030 compared to 2010 levels, with an unconditional target of 27% reduction, focusing on transitioning to renewable energy sources to achieve carbon neutrality by 2050; this is outlined in their updated Nationally Determined Contribution (NDC) submitted to the UNFCCC.
🇿🇼
Zimbabwe's climate change policy aims to reduce greenhouse gas emissions by 40% by 2030 compared to business-as-usual levels, focusing on adaptation and mitigation strategies through initiatives like the Low Emission Development Strategy (LEDS) and the National Adaptation Plan, with a strong emphasis on incorporating climate change concerns into various sectors of the economy, including agriculture, energy, and forestry.
🇺🇬
Uganda's climate change policy, formally known as the "National Climate Change Policy," aims to guide the country towards a low-carbon development path by addressing climate change causes and impacts while promoting sustainable development and a green economy, with a strong focus on adaptation due to Uganda's vulnerability to climate change impacts despite its low greenhouse gas emissions; this policy is implemented through the "National Climate Change Act" which was enacted in 2021 and gives legal force to international agreements like the Paris Agreement and UNFCCC.
🇬🇭
Ghana's primary climate change policy is the "National Climate Change Policy" (NCCP), which aims to achieve a climate-resilient economy through adaptation and mitigation strategies, focusing on key areas like energy, infrastructure, natural resource management, agriculture, and disaster preparedness, while committing to reducing greenhouse gas emissions and promoting sustainable development; however, critics note that the policy lacks comprehensive legislation and robust enforcement mechanisms to fully address the climate crisis in the country.
🇦🇴
Angola's climate change policy, outlined in its National Strategy for Climate Change (ENAC) 2018-2030, aims to achieve a low-carbon development path while adapting to the impacts of climate change, with a focus on mitigating greenhouse gas emissions by reducing them up to 14% compared to business-as-usual by 2025, and further actions contingent on international support; key areas include sustainable forest management, transportation, agriculture, and renewable energy sources to address issues like droughts, floods, and coastal erosion impacting the country.
🇸🇿
Eswatini's climate change policy focuses on achieving a 5% reduction in economy-wide greenhouse gas emissions by 2030, prioritizing mitigation and adaptation actions across sectors like energy, transport, waste, water, and agriculture, with a strong emphasis on increasing renewable energy use, landscape restoration, and integrating gender and youth engagement into its climate action plan; this policy is outlined in their updated Nationally Determined Contribution (NDC) submitted to the UNFCCC.
🇸🇨
Seychelles' climate change policy prioritizes adaptation to climate change, aiming to reduce the country's vulnerability by focusing on resilience building across critical sectors like tourism, food security, coastal and marine resources, and infrastructure, with a goal to achieve net-zero emissions by 2050 and reduce greenhouse gas emissions by 26.4% by 2030 compared to a business-as-usual scenario; this is outlined in their updated Nationally Determined Contribution (NDC) submitted to the UNFCCC.
🇬🇦
Gabon is highly vulnerable to climate change due to its location, population distribution, and economic activities. The country is experiencing rising temperatures, more extreme weather events, and rising sea levels. These changes threaten the country's agriculture, water, and public health sectors.
🇱🇾
Libya has not developed a comprehensive climate change policy or submitted a National Determined Contribution (NDC) as required by the Paris Agreement, meaning it lacks a formal strategy to address climate change despite signing the agreement; however, the country does have a Renewable Energy Strategic Plan aiming to increase the share of renewable energy in its energy mix, and is currently working to strengthen water resource management and build resilience to climate change impacts through initiatives with international support.
🇹🇬
Togo's climate change policy focuses on significantly reducing greenhouse gas emissions, primarily through measures like promoting cleaner energy sources, improving transportation efficiency, and managing deforestation, with a strong emphasis on adaptation strategies particularly in coastal areas, all outlined in their updated Nationally Determined Contribution (NDC) which aims for a nearly 21% reduction in emissions by 2030 compared to a business-as-usual scenario; this policy is closely linked to the country's broader development goals, prioritizing sustainable practices across sectors like agriculture, water, and energy. Click to read more about
🇲🇿
Mozambique's climate change policy, primarily focused on adaptation due to its high vulnerability to climate impacts, centers around the "National Climate Change Adaptation and Mitigation Strategy" (NCCAMS), aiming to reduce climate change vulnerability and improve living conditions by implementing adaptation measures across sectors like agriculture, fisheries, energy, and coastal zones, while also promoting low-carbon development initiatives for mitigation; this strategy includes a strong emphasis on disaster risk reduction and early warning systems. Click to read more about
Find links to sustainability statements for each of the banks below.
Join over 1,000 subscribers! Every month we satiate our appetite for all things at the intersection of green finance, climate risk and Africa's sustainable development in curated sector insights.
Read the Substack