Recognising the highly fragmented nature of the African green finance market, the initiative aims to create a world-class, international pan African investment platform to mobilise the financing market and institutional capital at scale.
ICC Secretary General John W.H. Denton AO joined African ministers of Finance and leading institutional investors from Africa and around the world at a conference side event on Sunday to discuss how best to support green investments in Africa, the implementation of the African Continental Free Trade Area and stronger economic recovery and resilience.
Providing ICC perspective on how to scale up green investments, make Africa more attractive to institutional investors, and foster public and private markets for green investment projects, Mr Denton said that sustainable investment and investment in sustainability would position African economies for more resilient growth in the face of looming climate change challenges while also supporting significant job creation.
Mr Denton said that issues like environmental, social and corporate governance (ESG), impact investing, circular economy and green investments had for too long been regarded as discussions for developed economies stating:
“The reality is that investors and investments in emerging economies, including in Africa, must also be central to the development of policy settings that will drive the green transition,” he said. “This recovery must emphasise sustainability and resilience with policy settings, public-private partnerships and incentives that allow all countries to share in the benefits from a green transition.”
To effectively scale up investment, Mr Denton said that African economies and emerging markets would need to ensure strong institutions, good governance, policy stability, deeper local financial markets and increased technical skills to engage with investors but said that a coordinated, pan-African approach to enabling investment would send a strong signal to domestic and foreign investors alike, with African sovereign wealth funds catalysing further co-investment.
Mr Denton also called for alignment of approaches by global standard setters and by regional and national standard setters, including in Africa, saying:
“Coordination is key to avoiding fragmentation stemming from the recent flurry of activity and progress in ESG and to a non-aligned range of standards, inconsistent practices and the development of a two-speed financial ecosystem.”
Referring to the AGIIB initiative, Hubert Danso, Chair of the African Sovereign Wealth and Pension Fund Leader’s Forum, said:
“We are proud to play our role as the continents institutional investment community, to champion and create a specialist green infrastructure investment platform, that supports the continents green transition, creates jobs, increases the continents share of the industrial green global economy, whilst at the same time delivers globally competitive risk adjusted returns for its investors.”
The Forum has established a high-level working group of African and international institutional investment leaders, governments and technical advisors, to structure the new platform and present it during upcoming African Union, G7, G20 and COP 26 Summits.