Capital Markets in Africa can play a key role in driving such transformation, within the Continent and globally, by enabling the reallocation of capital towards green and climate-resilient investments.
In a context of climate change threats to the future of the planet, financing the world’s ambitious set of Sustainable Development Goals is a challenge to be overcome.The Paris agreement following the COP21 called for a drastic shift of the way usual business and economic activities are carried out with the aim to reduce global warming to less than 2°C pre-industrial level.
For such radical shift to effectively take place, tangible measures are required by the Parties, and through collective action, for an effective implementation of the Lima-Paris Agreement. To that end, mobilizing the required funding to finance the climate transition and ensuring fair access to available resources, in particular for countries in the south, are today the first priorities.
Climate finance is recognized as a key determinant of the needed global economic transformation towards sustainable and climate resilient structures. It is an increasing priority area on the agenda of policy makers, regulators and market practitioners to integrate the need to transform their financial environments in order to move the green economy forward and encourage climate-resilient investments.
In that context, a wide-system approach is required through the implementation of innovative financial policies and regulation, the promotion of adequate financial instruments, market practices and effective information dissemination mechanisms, and by systematically integrating climate change risks and related new developments in the entire financial system, but particularly in Capital Markets.