Financial institutions

Leading financial institutions partner with UNECA and FSD Africa to shape Africa’s natural capital

A group of leading financial institutions from across Africa met with the Ministry of Environment, Science, Technology and Innovation (MESTI) and the UK-funded Financial Sector Development Agency FSD Africa as founding members of the African Natural Capital Alliance (ANCA).

The alliance, in partnership with the United Nations Economic Commission for Africa (ECA), will act as an Africa-led collaborative forum to mobilize the financial community’s response to nature-related risks and opportunities across the continent. The ultimate goal of ANCA is to help develop and protect Africa’s natural capital by shifting financial flows from destructive activities for short-term gain to long-term stewardship of nature for growth. sustainable economy.

Among the founding members are Access bankthe Development Bank of Southern Africa (DBSA), Ecobank, Equity Bank, FirstRand, Investec, Sanlam, Standard Chartered and Zanaco. FSD Africa acts as coordinator of the alliance with the global management consulting firm Olivier Wyman acting as implementing and knowledge partner. The Cambridge Institute for Sustainability Leadership (CISL) also joins ANCA as a knowledge partner while initial support to the alliance is provided by UNECA and the UK Department for Environment, Food and Rural Affairs (DEFRA).

ANCA is also working with the Taskforce on Nature-related Financial Disclosures (TNFD) to provide an African voice in the development of its “beta” reporting framework for nature[1]associated risks and opportunities and participates in TNFD’s pilot testing program. Announcements of additional ANCA members from the public and private sectors are expected in the coming months.

The need to integrate nature into financial decision-making is particularly acute in Africa because more than 60% of the continent’s GDP is highly or moderately dependent on nature and yet, between 1970 and 2016, the natural capital stock of African countries actually decreased by an average of 65%.

1. The ANCA aims to ensure that the policies and practices of financial institutions, companies, regulators and policy makers integrate the risks and opportunities associated with Africa’s natural capital. It will do this through three pillars of activities: influencing global standards for managing nature-related risks, so that they reflect African contexts; facilitate peer learning to help financial institutions better reflect the connection between their portfolios and nature; and support policy, regulatory and investment approaches that maximize opportunities for sustainable growth from Africa’s natural capital.

1 https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_2020.pdf; https://africa.panda.org/our_news/blog/bending_the_curve_on_biodiversity_loss_in_africa___the_living_planet_index_2020/

One of the initial activities under the ANCA is the first developing country pilot program for the TNFD Beta Framework, undertaken by a limited group of founding ANCA members. The results of these pilots will directly inform the development of TNFD recommendations.

ANCA members will also join other personalities representing finance and politics on June 23, 2022 at a historic event to discuss why African leadership on nature will be essential to its economic development, economic opportunities that could be unlocked by transferring capital to nature-positive activities, and the risks of inaction and continued destruction of nature.

The event will also be the first opportunity to hear the results of a major study conducted by Vivid Economics and FSD Africa for ANCA which, for the first time ever, quantifies how nature[1]the associated opportunities and risks could impact the value of the portfolios of African financial institutions.

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Commenting on their decision to join ANCA:

Jean-Paul Adam, Director of the Technology, Climate Change and Natural Resource Management Division at UNECA said:

“The economic and social development of Africa is one of ECA’s core mandates – and nature is key to enabling this growth. We believe that to fulfill this mandate, we have an obligation to advocate for responsible management of Africa’s natural capital. We are committed to partnering and working with the African Natural Capital Alliance as we embark on the journey to become Africa’s voice on nature and ensure a prosperous and sustainable future for Africa.

Rachael Antwi, Head of ESG Group at Ecobank said:

“At Ecobank, we are committed to preserving Africa’s natural capital and enabling its resilience. We are convinced that responsible management of Africa’s natural capital can be a competitive advantage while creating fantastic opportunities and contributing to the growth and development of the continent.

“Ecobank’s vision for nature is an integral part of our broader vision for sustainability, and we embed sustainability at the heart of our strategy and operations. Our Sustainable Finance Framework is an essential compass for our fundraising activities, and we are leveraging our pan-African network to act as a force for good.

“The value of Ecobank’s association with the African Natural Capital Alliance (ANCA) is clear. We look forward to contributing to this knowledge platform on nature-related risks and opportunities, guiding institutional programs towards positive outcomes for nature, and representing the African voice in global nature discussions.

Dr James Mwangi, Group Managing Director and CEO of Equity Bank said:

“Equity Group’s strategy, outlined in our Africa Recovery and Resilience Plan, is to catalyze a natural resource-driven industrialization of Africa. We understand that nature is a valuable asset that drives our economies but also has a significant impact on our lives and livelihoods. For this reason, we must safeguard this asset but also find ways to use our natural capital in a sustainable way for the socio-economic prosperity of the people of Africa.

“We are therefore delighted to be one of the founding members of the Africa Natural Capital Alliance to bring our experience and voice to this critical global agenda of managing nature-related risks and opportunities.”

Mark Napier, CEO of FSD Africa, said:

“The dependence of African nations on their rich natural capital is both a source of vulnerability and a competitive advantage. The case for realigning investments to deliver a nature-friendly future for Africa is clear. To achieve this, we need financial institutions, businesses, regulators and policymakers to work together. ANCA has a key role to play in creating the capacity and conditions for the financial sector to reflect the true value of nature and embrace long-term management for sustainable growth.

Madeleine Ronquest, environmental and social risk manager, climate change at FirstRand said:

“There is a strong relationship between people, economy and nature. Natural capital, biodiversity and ecosystem services underpin daily life and the products and services of many clients of financial institutions have the potential to create significant systemic risk in the financial system. More than half of the world’s economy depends on the functioning of declining ecosystems, for example due to deforestation, land degradation, declining water quality and quantity, and declining and of species extinction.

“It puts livelihoods and businesses at risk. Just as the causes of nature, biodiversity loss and climate change are interdependent, so are the solutions. Nature-based solutions that protect and restore ecosystems provide workable solutions for climate change mitigation and adaptation, and offer solutions for sustainable and resilient businesses that effectively manage nature-related risks and opportunities .

“Thank you for inviting FirstRand Ltd to become a member of the African Natural Capital Alliance in addition to working closely with FSD Africa. The group is positioning itself in the market as a thought leader in environmental and social risk management and participates in several regional and global programs that develop biodiversity and nature risk assessment processes, frameworks and policies relevant to both the financial sector and the African continent, which presents unique challenges in biodiversity and nature.

Tanya Dos Santos, Global Head of Sustainability at Investec said: “For over a decade, Investec has believed in supporting conservation and enhancing the wildlife economy. As an extension of this commitment, the group has agreed to participate as a founding member of the African Natural Capital Alliance. Nature and biodiversity are the foundation of a healthy ecosystem necessary for the development of businesses and society. The economic benefits of natural capital have always been inequitably distributed and it is time for a conscious and collective effort to embed the value of nature and the communities that often protect this ecosystem at the heart of sustainability and climate.[1]related strategies.