During the international climate summit (COP27), the African Financial Alliance on Climate Change (AFAC) revealed a new vision for 2030 that places a focus on raising money and developing resources to achieve the Paris Agreement objective.
AFAC, a pan-African alliance of Africa’s major banks, commercial, and development institutions, mobilizes private financing to assist low-carbon and climate-resilient development across the continent.
The new strategy’s major objective was to coordinate finance flows with reductions in greenhouse gas emissions and the establishment of climate-resilient communities by 2030. It suggested improvements in areas like leadership awareness, data access, regulation of climate risk, management of climate risk, and green finance.
Participants in the event included representatives from financial institutions, countries, the Global Centre on Adaptation, and the African Development Bank. The stakeholders were asked for their opinions on a new strategy by AFAC.
“The suggested modifications ought to be implemented right away and sent back for approval. Acting quickly is necessary. Dr. Ndidi Nnoli-Edozien, a member of the IFRS Sustainability Board, remarked, “We don’t have time. A non-profit, public interest group called IFRS is trying to create accounting and sustainability disclosure standards that are excellent, enforceable, and widely accepted.
The strategy also identified three major obstacles that must be overcome: the dearth of data that can be used to evaluate financial risk, the inadequacy of internal resources at national central banks to level the playing field between the public and private sectors, and the requirement to regularize and harmonize with international standards and practices.
The majority of climate finance has been focused on the public sector, according to Kevin Kariuki, vice president of power, energy, climate, and green growth at the African Development Bank. “There are enough requests to enlist the business sector to mobilize these funds. Once these modifications are put into effect, AFAC is a mechanism that can enlist private sector funding for climate change initiatives.
With the African Financial Alliance on Climate Change, the financial industry will be at the forefront of African efforts to combat climate change. To mobilize private capital flows toward a continent-wide low-carbon and climate-resilient development, it brings together Africa’s major financial institutions, including central banks, insurance firms, sovereign wealth and pension funds, stock exchanges, and commercial and development banks.
Through knowledge exchange, financial tools that reduce climate risk, disclosure of climate risk, and flows of climate money, AFAC will support climate action.