The Commercial International Bank (CIB) hosted a panel titled ‘Net-Zero Banking Alliance (NZBA): The Business Case for Banks in Developing Countries’ as part of its participation in the UN Conference of Parties on Climate Change (COP27) being held in Sharm El-Sheikh till 18 November.
The panel provided a platform for insights by key industry leaders on how the NZBA — a global alliance of banks committed to aligning their lending and investment portfolios with net-zero emissions by 2050 — can prop up African banks when it comes to financing vital decarbonisation projects that could unlock sustainable growth for African economies.
The event was moderated by Sarah Kemmitt — Secretariat Lead of the NZBA. Meanwhile, the panellists included Dalia Abdelkader, Chief Sustainability Officer at the CIB; Wendy Dobson, Head of Group Corporate Citizenship at Standard Bank Group; Alex Michie, Executive Director for Mobilising Capital to Emerging Markets and Developing Economies at the Glasgow Financial Alliance for Net-Zero (GFANZ); and Daniel Hanna, Global Head of Sustainable Finance at Barclays.
Amani Abu Zeid — Commissioner for Infrastructure, Energy, and Digitisation at the African Union and Board Member of the CIB — gave a keynote speech during the panel, where she noted that “access to finance remains one of the most crucial pillars in the net-zero transition and climate action on a global, regional, national, and local scale. The current low levels of financing for climate change mitigation and adaptation, which is disproportionately impacting developing economies, is a threat to the net-zero agenda.”
As a founding signatory of the NZBA and one of the few signatories in Africa and the Middle East, the CIB is keenly aware of its responsibility to further the conversation on sustainable financing and the role of African financial institutions in the energy transition.
In this vein, the bank led discussions on Africa as one of the lowest contributors to global GHG emissions while being one of the most disproportionately affected regions by climate change. As such, the continent is at an inflection point; while renewable resources in Africa are plentiful and could allow nations to power their own sustainable growth, the need for adaptation financing and capital to fuel the energy transition in the face of climate change continues to mount.
“Despite the low representation of African banks on the NZBA, it is important for the alliance to funnel climate finance inflows to Africa, where it is most needed. The frameworks and conditions on financing that will be developed must take into consideration the peculiarities and needs of every region. Africa needs a space within the framework of the net-zero agenda to address its development challenges at least in the short to medium terms,” said Abu Zeid.
In this regard, panellists discussed ways to bridge the gap between African banks and the NZBA by identifying specific needs, such as capacity building, technology transfer, and applicable best practices when it comes to decarbonising carbon-intensive sectors.
Africa-specific challenges as well as the ways both NZBA and GFANZ — a global coalition of leading financial institutions committed to accelerating the decarbonization of the economy — can provide tailored solutions to empower African banks in their decarbonisation efforts.
Abdelkader — who is also a representative of Africa on the NZBA Steering Committee — said: “The COP27 is focused this year on empowering Africa to manage climate change threats and capitalise on its opportunities.”
“Decarbonisation is a way to grow, and Africa has the resources, energy, and renewables to carve out new avenues for African banks to help secure economic growth and lay the foundations of a climate-resilient economy for many generations to come. Low-carbon projects in Africa are the gateway to unlock global private funds, and with CIB representing Africa in the NZBA, there is opportunity to drive this momentum.”
Meanwhile, Dobson shed light on the need for a more inclusive ecosystem for African financial institutions to achieve regional sustainable development and growth, adding that the “COP27 is a decisive moment to re-galvanise global commitments to support a just energy transition for Africa. Standard Bank believes this is central to our purpose of driving sustainable and inclusive growth in and across Africa.”
Highlighting the urgency for financial institutions to collaborate to overcome transitional challenges, Barclays’ Hanna said that “banks play a critical role in supporting the climate transition. Barclays was one of the first banks to commit to net-zero and develop BlueTrack™ — a methodology on how to measure our financed emissions. We believe this is a shared challenge and a shared opportunity. We work with the NZBA and other institutions to share our experience and learn from others so the finance industry can make progress at pace.”
The CIB is committed to leveraging its expertise and vast network of partners to advance Africa’s climate goals for mitigation and adaptation. Under the theme of ‘COP27 Sharm El-Sheikh: From Africa to the World,’ the bank has led six panels to address critical issues for critical industries when it comes to climate change and the financing required to bring that change to life.
The bank will host its final panel on 15 November on ACE and Civil Society Day in the Green Zone titled ‘Education for Sustainable Development.’