…Stanbic IBTC Bank, Sterling Bank and Wema Bank to Participate in Pilot Phase
The Green Tagging Project seeks to leverage the work carried out through the development of the Nigerian Sustainable Finance Roadmap to design a reporting framework through which all financial institutions can report, in a homogenous manner, their financing of projects.
The Project shall in like vein develop a monitoring mechanism which would serve as a transparency tool required to inform regulators of green and sustainably compliant market activities.
The UN Environment Programme (UNEP) Inquiry into the Design of a Sustainable Financial System has been working with six (6) countries (China, Kazakhstan, Nigeria, India, Mexico and Mongolia) that are keen to advance their ambitious yet crucial national sustainable finance agendas.
The overall outcome of the Inquiry’s project is to build international consensus to align financial systems with the Sustainable Development Goals and catalyse national regulatory actions.
Of the six countries in view, Nigeria is one of the few to have a pre-existing roadmap that highlights major barriers such as market failures, information asymmetries, lack of awareness, amongst others, as well as several high potential areas with an estimated $92.00 billion sustainable investment opportunity.
The Kick-off Ceremony for the Green Tagging Project which was sponsored by FMDQ and Financial Sector Deepening (FSD) Africa, focused on encouraging critical players within the Nigerian financial markets, primarily the banking institutions, to support climate-friendly developmental activities through the decarbonisation of their loan portfolios amongst others.
Climate Bonds Initiative, UK, technical partners to the Green Tagging Project shall over the next eight (8) months provide the requisite technical assistance to enable the participating banks identify, tag, track the performance of green assets and migrate them to the capital markets, if required.
The participating banks in the current pilot phase cuts across different categories including: the international (Stanbic IBTC Bank PLC) and national (Sterling Bank PLC and Wema Bank PLC) banking categories.
Speaking on this development, Mr.Marcos Mancini, Head, International Cooperation at the United Nations Environment Programme Inquiry highlighted that financial regulators through international platforms like the Network to Green the Financial System (NGFS), the Sustainable Insurance Forum (SIF) and others, have come to realise that climate change can affect the stability of one’s financial system.
He added, we, therefore, welcome this opportunity to continue working closely with FC4S Lagos, to further understand the composition of green and brown assets in banking credit portfolios and to design strategies to catalyse sustainable finance as well as commence charting the path to improve climate-related prudential banking ratios.”
According to Dr. Doyin Salami, the Vice Chairman of the Financial Centre for Sustainability, Lagos, the Green Tagging Project as an initiative of the United Nations Environment Programme Inquiry, is quite commendable, as it is expected to transform the way which banks who are the lubricators of the engine of growth in any economy, think and support projects that assist in maintaining a healthy, low-carbon, resilient and sustainable business environment and economy in the long run.
On its part, FC4S Lagos shall continue to partner with key international and domestic market stakeholders to promote similar initiatives in continuation of its avowed commitment to inspire a greener Nigeria.
Lending her voice to the introduction of this initiative, Ms. Justine Leigh-Bell, Deputy CEO/Director, Market Development, Climate Bonds Initiative, UK, added that,Nigeria continues to take strides in developing its green finance market, setting the path for other African nations to follow.
Building from the very successful Nigerian Green Bond Market Development Programme which was championed by FMDQ, FSD Africa and Climate Bonds Initiative , the launch of the Green Tagging Project for banks under the FC4S Lagos initiative will be an opportunity for Nigerian banks to take leadership in offering the local market a range of different green financial products that will allow them to manage their exposure to climate risks thereby contributing to a low-carbon, resilient Nigerian economy.