AfDB announces plans for sustainability hub for Africa to foster joint green movement

In a move towards sustainable development, the African Development Bank (AfDB) is planning to establish a comprehensive skilling and information-sharing hub dedicated to Environmental, Social, and Governance (ESG) practices across the continent.

At the inaugural continental ESG forum in Abidjan, Côte d'Ivoire, organised by the lender, the plan garnered strong support from stakeholders across the continent, who collectively rallied around the vision.

The two-day forum, held from October 21 to 22, brought together participants, including heads of state, investors and business leaders, who united in their support for the proposed African ESG hub, terming it a collective solution for sustainability challenges across the continent.

In preparation for its establishment, they acknowledged that with 80 per cent of African companies being SMEs, engaging the sector would be critical in advancing ESG reporting and sustainable finance across the continent.

In addition, they outlined plans for the proposed hub, including ensuring that it provides a credible platform for training and technical assistance, and for sharing best practices and case studies.

Conventionally, according to AfDB, the initiative aims to equip African nations, businesses and communities with the knowledge and tools necessary to implement effective ESG strategies, fostering responsible investment and sustainable growth.

"The hub is expected to play a pivotal role in addressing the challenges posed by climate change and social inequality, enhancing the continent's resilience in the face of these pressing issues," the lender notes.

It adds that the new hub will serve as a centralised platform for training, resources and best practices, enabling stakeholders from various sectors to collaborate and exchange ideas.

"By focusing on capacity building, the AfDB aims to empower local leaders and organisations to adopt ESG principles that not only align with global standards but also cater to the unique needs of African communities."

The initiative is particularly timely, as investors increasingly prioritise sustainability in their decision-making processes, highlighting the necessity for African entities to enhance their ESG capabilities.

Representatives of various participating institutions at the forum shared some of their ESG implementation experiences.

Moubarak Moukaila of the West African Development Bank highlighted the Bank's progress in sustainable project development.

"We created, at the beginning of this year, a unit that supports project development. We have developed, within six months, three projects with GEM and two projects with the Green Climate Fund," Moukaila said.

Mostafa Hawas of the Egyptian Stock Exchange offered practical insights into implementing ESG reporting requirements.

He outlined how they began with "a very, very simple survey" distributed to listed companies, and emphasised the importance of gradual implementation to build awareness, before introducing more detailed requirements.

Kuhle Sojola, ESG Engagement Specialist at Sanlam Investments, addressed the critical issue of greenwashing, the misleading use of advertising and marketing to falsely portray an organisation's products, goals, or policies as being environmentally friendly in corporate reporting.

"We use engagement as a tool to mitigate or reduce the risk of greenwashing. When a company's reported metrics differ significantly from those of their peer group, that is usually an indication that there could be a level of greenwashing there," Sojola said.