The African Development Bank (AfDB), with the support of the Multilateral Cooperation Center for Development Finance (MCDF) and Making Finance Work for Africa (MFW4A) Initiative, hosted the inaugural Africa ESG Forum 2024 in Abidjan, Cote d’Ivoire on 21-22 October. The forum focused on building a sustainable finance ecosystem in Africa by promoting a collaborative approach to environmental, social, and governance (ESG) disclosures on the continent.
Forum participants acknowledged that ESG issues have become a key determinant of investment decisions globally, and an imperative for African corporates and small and medium-sized enterprises (SMEs) is to leverage ESG principles to develop sustainable finance ecosystems that integrate international best practices.
The Africa ESG Forum 2024 is a pioneering event in this space and envisaged by AfDB to be held annually. The forum aims to launch stakeholder outreach toward the establishment of an ESG Information Disclosure Hub Project, as well as convene key ESG players in Africa. They include government officials, regulators, investors, businesses, international development partners, and civil society.
“Companies that manage environmental and climate risks effectively are more attractive to investment,” noted Mr. Solomon Quaynor, Vice President, Private Sector, Infrastructure & Industrialization at the African Development Bank Group, in a keynote address. He stressed “the importance of strengthening ESG reporting standards, of the introduction of related capacity building programs for African companies, and of pursuing cooperation with international partners such as MCDF.”
Vice President Quaynor also highlighted the “importance of promoting new green finance instruments, such as green bonds and sustainability linked bonds, and of increasing the transparency and accessibility of data to assist SMEs to disclose ESG information.”
Participants considered the rapidly growing importance of ESG factors in investment decisions, with investors increasingly seeking to allocate capital toward companies and initiatives that prioritize sustainable practices. They also recognized that ESG disclosure remains fragmented in Africa, with various levels of adoption across countries and sectors, and this risks hampering full access to global capital markets for African stakeholders.
Participants went on to discuss the Africa ESG Information Disclosure Hub, which is designed to address this risk by promoting transparency and facilitating investor access to ESG data and support for the integration of ESG into the core strategies of African businesses.
Mr. Maman-Sani Issa, Director of the African Development Bank’s Department of Environmental & Social Safeguards and Compliance, observed that “while African economies are growing, they need to be armed with green development levers in order to access intranational capital markets.”
Mr. Frederic Wiltmann, Program Head at MCDF, congratulated AfDB for launching the Africa ESG Forum to help cement a sustainable finance ecosystem in Africa. He welcomed the forum’s rich technical presentations on the integration of standards from the International Sustainability Standards Board and the Global Standards for Sustainability Impacts.
Mr. Wiltmann underscored the need to develop an ESG taxonomy specific to Africa, and reaffirmed MCDF’s support for the successful establishment of the ESG Information Disclosure Hub Project.
In 2023, MCDF approved a USD2.415 million grant to support a new AfDB initiative to promote environmental and social (E&S) safeguards in African countries through regional and country-level E&S training, and technical support for E&S policy framework implementation.
The African ESG Forum 2024 convened 120 stakeholders, in addition to 500 online participants. Among them included representatives from the Central Bank of Nigeria, Moroccan Capital Market Authority, International Capital Markets Association, United Nations Environment Programme Finance Initiative, Africa Pension Supervisors Association, West African Development Bank (BOAD), and JP Morgan.
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david.hendrickson@themcdf.org
