Webinar 1: Climate Change: What does it mean for the Financial Sector in Africa? Financial institutions can play an important role in society’s adaptation to climate change risks mitigation. This webinar will highlight risks and opportunities that climate change poses for the financial sector in Africa and discuss how financial institutions can best respond to these, in a sustainable manner. In particular, the webinar is expected to: Raise awareness on climate change within the financial industry in Africa and facilitate a broader dialogue aimed at integrating climate change considerations; Clarify the pivotal role the financial sector can play in mitigating climate change risks and adapting to its effects; and Present examples of transformative change in financial institutions’ practices Speakers Paul SMITH has worked for the climate team at the United Nations’ Environment Programme Finance Initiative (UNEP FI) for over four years. Paul leads UNEP FI’s climate adaptation and physical risk work supporting the Climate Risk Programme, the Climate Adaptation Working Group of the Principles for Responsible Banking and the Adaptation and Resilience Investor Collaborative (ARIC). He also leads on climate policy in partnership with the Investor Agenda and has co-authored The Climate Risk Landscape, Physically Fit? and Adapting to a New Climate, as well as contributing to Climate Risk: Managing the Financial Risk and Funding the Transition Anthony NYONG is the Director of Climate Change and Green Growth at the AfDB. Mr. Nyong has about 30 years of experience in environmental and natural resources management, renewable energy and green growth. He was a Coordinating Lead Author for the IPCC Fourth Assessment Report and a member of the IPCC Task Group on Data and Scenario Support for Impact and Climate Analysis. David ASHIAGBOR is the Chief Financial Sector Strategy Officer in the Financial Sector Development Department of the African Development Bank. He is currently leading the design and development of the Bank’s new Financial Sector Development Strategy, in addition to supporting the Director on policy and strategy issues. Marina FINKEN is the Partnership Coordinator for Making Finance Work For Africa (MFW4A). She is an experienced Finance Professional who, before joining MFW4A had a successful career within Big 4 firms, providing audit and advisory services to large Banking groups and other financial services entities.

1. Climate change: What
does it mean for the
Financial Sector in
Africa 25
9th of May 2023

2. Rules for the webinar
The duration of today's webinar is 60 minutes, including questions and
answers
For better listening comfort, all participant microphones will be disabled for
the duration of the webinar
Questions can be submitted via "Q&A“, or by raising hand.
Simultaneous translation will be available in EN/FR/EN
Slides and a recording of this presentation will be circulated to registered
participants within 72-hours following the webinar - They will also be available
on MFW4A.ORG.
Send a message to the organizers if you encounter technical problems
Do not forget to complete the questionnaire which will automatically appear on
your browser at the end of the session

3. Presenters today
3
McKinsey & Company
David Ashiagbor
Chief Financial Sector Strategy Officer at the African
Development Bank Group
Marina Finken
Head of the Making Finance Work for Africa initiative
Paul Smith
Leader of the climate adaptation and physical risk
work at the UNEP FI
Anthony Nyong
Director of Climate Change and Green Growth at the
African Development Bank

4. Session outline:
Times listed are GMT
Topic Duration
Facilitator
Climate change: What does it mean for the
Financial Sector in Africa
11:05 – 11:35
Paul Smith, UNEP FI
Q&A
Introduction 11:00 – 11:05
Anthony Nyong, AfDB
4
Closure 11:55 – 12:00
Marina Finken, MFW4A
Marina Finken, MFW4A
(Moderator)
Presentation of the African Financial
Alliance on Climate Change (AFAC)
11:45 – 11:55
David Ashiagbor , AfDB
11:35 – 11:45

5. Agenda
Introduction
Climate change: What does it mean for the Financial Sector in Africa

6. Agenda
Introduction
Climate change: What does it mean for the Financial Sector in Africa

7. Climate Change and the African
Financial Sector
UNEP Finance Initiative
May 2023

8. Agenda
1. Climate Impacts and Future Scenarios in Africa
2. Global Climate Finance Trends & Impacts to Africa
3. Climate Change & the African Financial Sector
4. UNEP FI’s Role

9. unepfi.org
Climate Impacts and
Future Scenarios in
Africa

10. The IPCC’s 6th Assessment Report
A timeline for action
Working
Group 1
Physical Science Basis underpinning past, present
and future climate change covering:
◼ Green house gases & aerosols
◼ Temperature changes in the air, land and sea
◼ Hydrological cycle
◼ Extreme weather
◼ Cryosphere
◼ Biogeochemistry and the carbon cycle
◼ Climate sensitivity
Working
Group 2
Impacts, Adaptation & Vulnerability
◼ World-wide and regional view of ecosystems and
biodiversity
◼ Human societies, cultures and settlements
◼ Vulnerabilities, capacities and limits of natural and
human systems to adapt to climate change
Working
Group 3
Mitigation of Climate Change
◼ Assessing methods for reducing greenhouse gas
emissions and removing greenhouse gases from
the atmosphere.

11. The IPCC’s 6th Assessment Report
Source: IPCC, 2022
The need for urgent action
Global
Warming
◼ It is unequivocal that human activities have warmed the
atmosphere, ocean and land.
◼ Global warming will exceed 2ºC this century without rapid
deep reductions in greenhouse gas emissions.
◼ It is very likely that there will be a global temperature increase
of 3.3 – 5.7 ºC by 2100 in a high emissions scenario.
Impacts and
Risks
◼ Human-induced climate change is already affecting weather
and climate extremes in every region across the globe
◼ There will be continued:
• Mean temperature increases in most land and ocean
regions (high confidence)
• Increases in hot extremes in most inhabited regions (high
confidence)
• Heavy precipitation increase in several regions (medium
confidence)
• Increased probability of drought and precipitation
deficits in some regions (medium confidence)
• Cryosphere: Permafrost thawing and loss of sea and land
ice cover (high confidence)
◼ There is a projected 0.6-1m sea level rise by 2100 under a
high emissions scenario.
Emission
Pathways
◼ 5 shared socio-economic pathways (SSPs) have been
defined, which refine and build on representative
concentration pathways (RCPs)
◼ There is an almost linear relationship between cumulative
emissions and global temperature increase (see diagram)
Global surface temperature increase to 2050 versus cumulative CO₂
emissions (GtCO₂)

12. Findings from the IPCC AR6
Source: IPCC, 2022
Greater insight into regional effects and climate extremes since AR5
Improved modelling and
understanding of physical
processes
• Improved modelling including of the global water cycle, land / ocean carbon sinks, ocean stratification and ice loss from glaciers and
ice sheets
• Incorporation of recent temperature and sea level changes
• Reduction in long-standing uncertainty ranges
• Human influence on the climate system is now an established fact
Reconciliation with
observational data
• For the first time in an IPCC report, future changes in global surface temperature are constrained by comparing simulations with
observed changes providing greater confidence in projections
Regional impact and
extreme events
• Improved understanding of how global changes translate to regional effects (see diagram)
• Increased understanding of the relationship between global warming and extreme events
Observed change in hot extremes and confidence in human contribution

13. Findings from the IPCC AR6
Biodiversity Loss and Ecosystem Disruption
▪ Above 1.5°C, half of assessed species are projected to
lose over 30% of their population’s suitable habitat.
▪ At 2°C, 7–18% of terrestrial species are at risk of
extinction, and over 90% of east African coral reefs are
projected to be destroyed by bleaching.
Food Production
▪ Global warming above 2°C will result in yield reductions
for staple crops across most of Africa compared to 2005
yields.
▪ Even under 1.7°C global warming, reduced fish harvests
could leave 1.2–70 million people in Africa vulnerable to
essential vitamin deficiencies.
Health
▪ Above 2°C of warming, distribution and seasonal
transmission of vector-borne diseases is expected to
increase, exposing tens of millions more people, mostly
in west, east and southern Africa.
▪ Above 1.5°C, risk of heat-related deaths rises sharply
(medium confidence), with at least 15 additional deaths
per 100,000 annually across large parts of Africa.
Source: IPCC, 2022
Impacts and Risks Across Warming Scenarios

14. ▪ Temperature Rise: Africa warmed at an average rate of 0.3 °C/decade between 1991 and 2021, faster than the warming from 1961-1990, at
+0.2°C/decade. The year 2021 was either the third or fourth warmest years on record for Africa.
▪ Sea level rise: Increasing along the African coastlines is at a higher rate than the global mean rate, especially along the Red Sea and southwest
Indian Ocean where the rate is close to 4 mm/year, resulting in coastal flooding and increased salinity of groundwater. By 2030, 108-116 million
people in Africa are expected to be exposed to sea level rise risk.
▪ Drought in East Africa: Worsened following consecutive failed rainy seasons combined with heightened conflict, related population displacement,
and COVID-19 restrictions, especially in Ethiopia, Somalia, and Kenya. Higher food prices led to more than 58 million people in conditions of acute
food insecurity.
▪ Extreme Weather: Severe floods affected South Sudan, Nigeria, Republic of Congo, DRC and Burundi. South Sudan recorded the third straight
year of extreme floods leading to elevated water levels of lakes and rivers, resulting from the intense rainfall in 2020 and 2021. North Africa
experienced extreme heat, leading to wildfires and sand and/or dust storms.
▪ Extreme Hazards: Drought-related hazards have claimed over 500,000 lives and economic losses of $70bn; over 1,000 flood-related disasters
caused over 20,000 deaths and could cost African nations $50bn annually by 2050.
Key Climate Impacts in Africa (1/2)
Vulnerabilities Alongside Worsening Climate Change
Source: World Meteorological Organization, 2022

15. ▪ Freshwater Access: The total surface area of Lake Chad, which is located close to the Sahara desert, bordering Chad, Cameroon, Nigeria, and
Niger, has shrunk from 25,000 km2 in the 1960s to 1,350 km2 in the 2000s and remained stable since. Long-term river flow in West Africa has
been steadily declining.
▪ Food Insecurity: Increased temperature contributed to a 34% reduction in agricultural productivity growth in Africa since 1961 – more than any
other region in the world, which is expected to continue. A warming scenario of 1.5° C is projected to be accompanied by a decline of 9% of the
maize yield in West Africa and 20%-60% of the wheat yield in southern and northern Africa.
▪ Population Displacement: In 2021, around 14.1mn people were internally displaced in Sub-Saharan Africa, including around 11.5mn due to conflict
and violence and 2.5mn due to chronic floods and droughts, sea level rise, and extreme weather events
▪ Gaps in Climate Services: The rate of implementation of Multi-Hazard Early Warning System (MHEWS) such as end-to-end drought and flood early
warning systems is lower than in other regions, with only 4 out of 10 people covered. Only four African countries are providing end-to-end drought
forecasting or warning services at a full/advanced capacity level.
▪ Water Stress and Management: Increasing consumption combined with more frequent droughts and heat events will increase water demand and
put additional pressure on already scarce water resources. Around 418mn people still lack even a basic level of drinking water, and 779mn people
lack basic sanitation services. 27 out of 51 African countries for which data are available have inadequate capacity to implement Integrated Water
Resource Management.
Key Climate Impacts in Africa (2/2)
Vulnerabilities Alongside Worsening Climate Change
Source: World Meteorological Organization, 2022

16. unepfi.org
Global Climate Finance &
Regulatory Trends

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”
Assessing Climate Financing Needs and Gaps
▪ Adaptation financing to developing countries is 5-10
times less than the necessary funding estimates of
$200bn/year by 2030, and up to $500bn/year by 2050,
estimated at $28.6bn in 2020 (UNEP 2022).
▪ Financing for energy infrastructure alone requires $1trn
by 2030, and multilateral banks will be essential for
renewable energy financing in emerging and developing
markets. (IMF 2022).
▪ Total annual necessary financing to achieve the SDGs by
2030 has increased from $15-20trn/year, rising 30-40%
YoY, which widens the total gap to $103-135trn (Force for
Good 2022).
Source: IMF, 2022
Mitigation and Adaptation Financing Gaps

18. The UN’s Climate Financing Framework: Meeting the $100bn Commitment
Source: UN, 2020
A Forward-Looking Ambitious Agenda

19. “
”
Funding the Gap: Public & International Finance
▪ Global public climate finance flows must reach at
least $1.25trn per year by 2030 and sustained
through 2050, quadrupling current totals with
average annual growth of $95bn/year from 2020-
2030 (WRI 2021).
▪ Public climate financing for developing countries
reached $83.3bn in 2020, growth of $4.4bn/year
since 2013 (OECD, 2022)
▪ Multilateral development bank (MDB) financing
rose 24% in 2021 YoY, surpassing the 2025 goals
set in 2019 by the UN Secretary General. $50bn
of MDB financing was allocated to low- and
middle-income countries (IADB, 2022).
▪ Examples of innovative financing instruments
include blended finance, impact bonds (social
impact bonds, development impact bonds,
environmental impact bonds), impact milestones,
outcomes bonds (such as the World Bank Wildlife
Conservation Bond), and cooperative finance
(patient capital) (ADB 2021).
Trends in Public & International Sustainable Finance
Source: WRI, 2021 Source: OECD, 2021

20. “
”
Funding the Gap: Private Finance
▪ Private sector SDG funding reached $2.5trn in 2021 (Force for Good
2022).
▪ An average of around 250 new sustainable funds have been
launched each quarter from Q4 2020 to first-half 2022, with total
assets reaching over $2trn in late 2022 (Morningstar 2022).
▪ Sustainable financing in emerging and developing market economies
will peak at a record $250bn in 2022 (IMF 2022).
▪ Sustainable global transaction banking (trade financing, credit cards,
current accounts, and liquidity management products) are expected
to grow to $35bn from $28bn by 2025 (McKinsey 2022).
▪ Examples of private financial products include green securitization
(Green ABS and RMBS), green leasing/renting (green property
leases, green car leasing, energy efficiency, green mortgages),
public-private partnerships (e.g., infrastructure financing), climate
insurance, transition and sustainability bonds, green/sustainability
linked loans (KPMG 2020).
Trends in Private Sustainable Finance
Source: WRI, 2021

21. ■ Created in November
2021 by the International
Financial Reporting
Standards Foundation
(IFRS)
■ Aims to develop a
comprehensive global
baseline of sustainability
disclosure standards
focused on the needs of
investors and the
financial markets.
■ Two exposure drafts
were published in March
2022: general
sustainability-related
disclosure standards and
other climate-related
disclosure standards
■ Expected release in June
2023
■ CSRD is an EU ESG
passed by the European
Union Council in
November 2022,
requiring firms to report
on their environmental
and social impact
activities.
■ International and non-EU
companies with more
than 150€ million annual
revenue within the EU
■ April 2022, EFRAG
released the draft EU
Sustainability Reporting
Standards
■ The requirements
correspond with the
pillars of the TCFD and
ISSB recommendations.
International Sustainability
Standards Board (ISSB)
Corporate Sustainability
Reporting Directive (CSRD)
■ In March 2022 the SEC
proposed amendments
to its 1933 and 1934
Securities Acts, requiring
inclusion of climate-
related financial
information
■ All public companies
under SEC supervision
■ Aligned with TCFD
recommendations
■ Proposed to be phased
in over three years, with
the first group reporting
for the first fiscal year
after the effective date of
the rule (e.g., fiscal year
2023)
U.S. Securities and
Exchange Commission (SEC)
■ In December 2021, the
FCA published two policy
statements regarding
TCFD-aligned climate-
related financial
disclosures.
■ Asset managers, asset
owners, life insurers and
pension providers
■ In January 2022, the UK
Parliament approved two
regulations requiring
TCFD-aligned climate-
related financial
disclosures proposed by
the Department for
Business, Energy and
Industrial Strategy
United Kingdom Financial
Conduct Authority (FCA)
Emerging Climate and Sustainability Disclosure Efforts (1/2)
International and regional standard setting through regulation and industry standards

22. Emerging Climate and Sustainability Disclosure Efforts (2/2)
■ The CDSB alongside We Mean
Business released a second
edition of its TCFD Good Practice
Guide in November 2021.
■ The guide studies 19 companies in
high-emitting sectors to help
companies conduct better
decision-useful analyses of
climate-related risks and
opportunities, and makes
recommendations for TCFD-
aligned disclosures within U.S.
financial markets
■ The UK Treasury initiated the TPT
in April 2022 to design and
disclose transition plans for firms.
■ The TPT has a two-year mandate
to convene academia, regulators,
and NGOs to develop its view on
best practices for transition
planning and associated metrics.
■ The taskforce draws upon TCFD
recommendations for templates
and guidance on setting metrics
and targets.
Carbon Disclosure Standards Board
(CDSB)
UK Transition Plan Taskforce
(TPT)
■ In June 2022, GFANZ proposed
recommendations and guidance
for financial institution net zero
plans.
■ They build upon the TCFD’s 2021
metrics and targets guidance and
reference the Principles for
Effective Disclosures to help them
address transition plan
disclosures.
Glasgow Financial Alliance for
Net Zero (GFANZ)
Industry-led Initiatives (not an exhaustive list)

23. Sustainable finance taxonomy work is also ongoing around the world
Graphic from end of 2021
Source: Future of Sustainable Data Alliance, 2021

24. unepfi.org
Climate Change & the
Financial Sector in
Africa

25. Climate Policy and Regulations in Africa (1/2)
Pushing Forward Sustainable Finance Agendas
▪ The Central Bank of Egypt (CBE)
published its Sustainable Finance
Guidelines in July 2021 with four
central principles: 1) Building the
necessary capabilities and knowledge,
2) Enhancing sustainable finance, 3)
Involvement of stakeholders, and 4)
Managing climate risks.
▪ Additionally, in July 2021 Egypt’s
Financial Regulatory Authority (FRA)
issued requirements of publicly listed
companies in non-bank financial
activities to submit ESG disclosure
reports. It also launched a think tank
and training center for sustainable
finance called “the Regional Center for
Sustainable Finance.”
▪ In 2016, Kenya’s parliament enacted
the Climate Change Act providing a
regulatory framework in response to
climate change and a mechanism for
establishing effective institutional
arrangements for climate action,
including climate finance.
▪ In 2016, the Kenyan National Treasury
introduced the National Policy on
Climate Finance.
▪ In October 2021, the Central Bank of
Kenya (CBK) released its Guidance on
Climate-Related Risk Management for
financial banks. Banks were expected
to submit a Board-approved, time-
bound implementation plan by June
2022, updating the CBK on their
implementation progress on a quarterly
basis.
Egypt Kenya
▪ In May 2022, The European Bank for
Reconstruction and Development
(EBRD), Bank Al-Maghrib (BAM), and
Groupement Professionel des
Banques du Maroc (GPBM) partnered
to support the development of climate
and environmental risk management
in Morocco.
▪ It promotes the private sector to
incorporate climate risks into their
strategy and promote Moroccan
banks to make further commitments
to sustainable finance.
▪ In March 2021, the BAM published a
directive for credit institutions to
identity and management of climate-
related risks.
Morocco

26. Climate Policy and Regulations in Africa (2/2)
Pushing Forward Sustainable Finance Agendas
■ In January 2022, the Financial Market
Council and the Tunis Stock
Exchange created an ESG Reporting
Guide, promoting practical
recommendations for ESG reporting
and KPIs. Although not prescriptive, it
provides concrete guidance on
standardized disclosures between
companies and stakeholders.
■ This guide is aligned with a 2018
Corporate Social Responsibility Law in
Tunisia (Law 35 on CSR).
■ The Central Bank of Tunisia has
integrated NGFS principles since
2019 through the adoption of the
National Low Carbon Strategy
(SNBC), the National Strategy for
Sustainable Development (SNDD),
and the National Strategy for the
Green Economy (SNEV).
▪ In 2012, the Central Bank of Nigeria
(CBN) approved the adoption of the
Nigeria Sustainable Banking Principles
(NSBP). These principles were to be
adopted by banks, discount houses,
and DFIs in Nigeria, and they’re
applications are binding.
▪ The NSBP is mandatory for all banks,
and banks are required to submit
reports every six months on their
progress on ESG-related goals. These
reports are to be disclosed annually
and published on banks’ websites and
the stock exchange market (if the bank
is on the premium board). In addition to
this, banks are required to publish an
annual sustainability report.
Tunisia Nigeria
■ The Central Bank of Mauritius (BoM)
established the Climate Change
Center (CCC), launched on October
14, 2021, after joining the Network for
Greening the Financial System
(NGFS).
■ The BoM published guidelines on
Climate-related and Environmental
Financial Risk Management in April
2022.
■ Financial institutions are expected to
submit internal frameworks and
roadmaps in addressing climate-
related and environmental financial
risks on a half-yearly basis. It will go
into effect in June 2023, with a
transitional period up to January 2024.
Mauritius

27. Climate Finance in Africa
Source: CPI, 2022
High-Level Overview of Costs vs. Needs
Source: CPI, 2022

28. Climate Finance in Africa
Source: IEA, 2022
Financing the Transition
■ In 2019 coal, natural gas, and oil accounted for 80% of
Africa’s total electricity generation, with renewables only
accounting for 3% of the world’s installed generation
despite large resource potential (IRENA, 2022).
■ Only 2% of global renewable energy investments from
2000 to 2020 went to Africa, and tend to be unequally
distributed across the continent (IRENA, 2022)
■ Achieving Africa’s energy and climate goals requires a
doubling of energy investments from $99bn in 2020 to
over $190bn in 2030 (IEA,2022).
■ Keys to financing the transition in Africa (IRENA, 2022):
■ Expanding renewable capacities and creating the
supporting economic structures
■ Ensuring bankability from de-risking by
international financial institutions, avoiding
constraining tariff contexts in Africa
■ Public sector prioritization of renewable energy
projects over fossil fuels
■ Investments must flow not just into power, but end
uses such as transport, cooking, heating, and
cooling

29. Climate Finance in Africa
Source: AfDB, 2023
Financing Climate Adaptation
■ The need for adaptation financing in Africa is estimated at
$52.7bn annually by 2030, and in 2020 this number was
just $11.4bn - 97% were public funds, only 3% came from
the private sector (GCA, 2022).
■ Financial instruments to scale adaptation (GCA, 2022):
■ Green Bonds
■ Debt-for-climate or debt-for-nature swaps
■ MDB and Climate Funds
■ Incorporation of adaptation into public budgets
■ Private sector investment is needed to meet adaptation
financing goals, which can leverage financial instruments
from development finance institutions (DFIs).
■ One example of a DFI investment in adaptation is
Netafim, who specializes in solar-powered drip-irrigation
systems in Niger – a country highly reliant on agriculture
but susceptible to severe flooding and drought (IFC,
2022).
■ The Africa Adaptation Acceleration Program (AAAP) is a
joint initiative created in 2021 of the African Development
Bank and the Global Center on Adaptation (GCA). It aims
to mobilize $25bn over five years, to accelerate and scale
climate adaptation action across the continent (GCA,
2021).

30. unepfi.org
The Role of UNEP FI

31. 508
FI’s
HQ’ed in 40
countries
operating in
139
countries
~50%
global banking
assets
■ UNEP FI is a UN-convened network of banks, insurers and investors accelerating
sustainable development, catalyzing action across the financial system in support
of more sustainable and inclusive economies.
■ The Principles for Responsible Banking is the flagship initiative driving
sustainable impact in the banking industry and brings together over 300 banks –
over half the global banking industry to align their core strategy, decision-making,
lending and investment with the UN Sustainable Development Goals. This
includes 23 African banks from 7 countries.
■ The Principles for Sustainable Insurance is a global framework for the insurance
industry to address environmental, social and governance risks and opportunities
and its members represent 33% of global premiums. This include 11 insurers
from 6 countries across Africa.
■ Across climate change, UNEP FI is working with the finance industry to drive
change globally and at the regional level across 3 pillars:
■ Knowledge and research
■ Climate risk
■ Decarbonisation
■ Adaptation & resilience
UNEP FI’s Role in Accelerating Climate Finance in Africa

32. Knowledge and research
Providing knowledge, data and case studies for the finance sector on climate change
■ Through the SDG Climate Facility project, UNEP FI has developed
knowledge products to support the finance sector’s transition to a low-
carbon, climate-resilient economy, across:
■ Climate and sustainable finance across the region
- The landscape of public and private finance in North Africa
- Deep-dives into six countries, including Egypt and Morocco.
■ Rethinking how private finance in Egypt and Morocco tackle climate
impacts and respond to the challenge of meeting the SDGs
- new approaches to risks identified by North African banks
■ Climate finance case studies from across North Africa:
- What is feasible for banks in the current climate?
- How are banks identifying climate-related opportunities
■ Highlighting the state of climate risk regulation in Africa across 12
jurisdictions.
- Challenges of integrating climate risk regulation by financial
regulators in Africa and offers potential areas of support for key
stakeholders.

33. Tackling climate risks
UNEP FIs climate risk programme
Online courses
■ Climate Change: Risks & Opportunities
for the Financial Sector
■ Available in English, French & Spanish
Climate risk
Programme
■ Institutional participation, including
banks, investors and insurers from all
continents
■ Set of in-depth modules
Bespoke regional,
national or
institutional courses
■ UNEP FI has organized courses at the
national and regional level, including:
■ Climate risk courses for Tunisia
and Egypt in 2021
■ Collaboration with the Kenyan
Bankers Association in 2022

34. Tackling carbon emissions
Supporting financial institutions in their journey to net zero
■ The Net Zero Banking Alliance brings together banks with over 40%
of global assets, committed to aligning their lending and investment
portfolios with net-zero emissions by 2050:
■ Transition operational and attributable GHG emissions from
lending and investment portfolios to align with pathways to net-
zero by 2050 or sooner.
■ 2030 targets and a 2050 target within 18 months of joining
■ 2030 targets to focus on priority sectors where the bank can
have most impact.
■ Annually publish absolute emissions and emissions intensity in
line with best practice and disclose against a board-level
reviewed transition strategy setting out proposed actions and
climate-related sectoral policies.
■ Robust approach to the role of offsets in transition plans.
■ Including three banks from across the region, despite the lack of
climate aligned targets in the region.

35. Tackling carbon emissions
Regional initiatives to climate mitigation in Africa
Exploring net zero
in the Middle East
& North Africa
■ Working closely with leading banks in
the Middle East and North Africa to
identify the barriers and develop a
pathway towards net zero.
■ Assessing the barriers and levers to
scale transition finance from the banking
sector.
Islamic finance
■ Partnership with CIBAFI and the Islamic
Development Bank
■ Assessing the potential for Islamic
banks to support the transition to a low-
carbon economy.
■ Publishing guidelines to support Islamic
banks’ ambitions on climate and
sustainability.
Supporting net zero
across the globe
■ To support banks across Africa, as well
as Latin America and Asia, UNEP FI is
setting up regional hubs to support
banks in their journey to
decarbonization.
The four pillars of the banking decarbonization framework
Source: UNEP FI , unpublished

36. Adapting to a changing climate
Developing a framework to help the finance sector respond to the growing impacts of climate change
■ The Principles for Responsible Banking launched a Working Group
on climate adaptation in March 2023, building on the framing paper
on adaptation published in November last year.
■ UNEP FI is also supporting the development of resilience building
solutions through the V20 Sustainable Insurance Facility

37. Thank you

38. Q&A
Submit your questions via the "Chat" or "Q&A“
You can also raise your hand for live question

39. Agenda
Presentation of the African Financial Alliance on Climate Change (AFAC)
Closure

40. WHY? AFAC 2030 Vision
To transform the continent's financial sector
by 2030 …
… to ensure it is resilient to climate risks …
… while sustainably meeting the needs
of its growing population
AFAC 2030 vision is that « financial capital and
financial products and services are mobilized to
support Paris Agreement goal to make financial flows
consistent with a pathway toward low greenhouse gas
emissions and climate-resilient development »
Vision Impact

41. WHY? AFAC expected outcomes
Leadership
and Awareness Access to data
Climate risk
regulation
Climate risk
management Green finance
The African financial
actors and policymakers
are aware of climate
change risks to their
economies
The African financial
institutions have access to
comprehensive and
comparable climate-
related data
An enabling policy
environment ensure
climate-related risks
management is
mainstreamed in financial
operations
The African financial
stakeholders are
adequately capacitated to
address climate risks and
vulnerabilities
in their decision-making
Capital is adequately
allocated towards
sustainable development
in Africa

42. An African-led platform
that convenes the voice
of Africa
A knowledge-sharing structure
that facilitate partnerships and
allow regional institutions
to share ideas, experiences,
best practices, and expertise
A central structure which
allows to achieve synergies
between initiatives active
in the region
WHY ? AFAC unique value proposition

43. WHO ? A dedicated governance is being defined
and is articulated around the 4 sector groups
PRELIMINARY FOR DISCUSSION
Members: Rotating membership of member organizations and
implementation partners
Key responsibilities: (i) Undertake strategic planning and major
decisions, (ii) Responsible for operational decision-making
Frequency: meet twice a year
Members: Hosted by the AfDB
Key responsibilities: Coordinate the day-to-day operations
Frequency: Ongoing support
Members: Consist of Members and Implementing partners; Co-chaired
by 2 members of AFAC
Key responsibilities: Development and implementation of the portions
of the work plan to be defined during inception phase
(Q4 2023)
Frequency: Bimonthly (or as agreed with
the co-chair)
Insurance Capital markets
Institutional
investors
Banking
Steering committee
Implementation partners
(e.g., UNEP-FI, GCA, FSDA, GFANZ)
Members
(Public authorities and Financial Institutions)
Secretariat

44. HOW? Operating model of working group
in practices
Membership: representatives from African financial institutions, as well as
policymakers / regulatory authorities. Chaired by a representative from a
leading African bank or financial institution. Implementation partners are
invited to attend/contribute
1
Contribution: expertise and perspectives of the members (e.g., sharing of
experiences and best practices, and to actively engage in discussions on climate
risk assessment, financing opportunities, knowledge sharing, needs
assessment, design of interventions (trainings etc.) and policy advocacy)
2
Frequency of meetings: bi-monthly to discuss progress and plan activities.
Communication expected regularly outside of formal
meetings to share information, coordinate activities, and seek
input from members.
3
Activities: range of activities to address climate risks and opportunities in
African financial institutions as defined during their initial kick-off
4

45. Status and next steps
Public Launch of
the AFAC 2023-2025
strategy
September
Africa Climate Week
Formal validation
of the strategy
Q3 2023
AFAC steering committee
From September
Implementation kick-off by
sector working groups

46. Agenda
Presentation of the African Financial Alliance on Climate Change (AFAC)
Closure

47. Our next webinars
16th May 1PM CET
How are African banks coping with Climate Change?
6th of June (TBC)
How is the African insurance industry responding to
climate change?

49. HOW ? AFAC has developed a comprehensive theory of
change to achieve its long-term vision
PRELIMINARY
Long-term
goal
Make the African Financial sector resilient to climate risks
Outcomes
The financial system actors have
access to comprehensive and
comparable data on climate
vulnerability
Outcome 2
The financial system actors are
adequately capacitated to be able
to address climate risks and
vulnerability in their decision-
making
Outcome 4
African financial systems are aware
of climate changes risks to their
economics
Outcome 1
Capita is mobilized towards
sustainable development
Outcome 5
An enabling policy environment
ensure climate-related risks
management is mainstreamed in
financial operations
Outcome 3
Countries central data
repositories in place
Countries‘ roadmaps to adopt
national green taxonomies for
investment purposes defined
Capacity to assess and
respond to climate and
nature-related risks built
Country roadmaps to mandatory
climate risk disclosure defined
Output Output 3 and 4
Public and private sector financial
actors trained on open-source
climate data
Output 8 and 9
Climate and nature-
related risk in financial decision
making trainings held
Output 1 and 2 Output 10
Convening for climate risk and
climate adaptation action policy in
place
Strategy to mobilize climate
financing in place within each AFAC
member
Output 5, 6 and 7
Financial institutions applying
recommendations of the TCFD and
TNFD with robust risk assessment
Impact Increased climate resilience of financial sector Enhancedinvestmentsto drive low-carbonandclimate-resiliencedevelopmentpathway
Detailed activities will be defined by working group (detailed next)