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Tuesday, March 03, 2020 / 01:28 PM / by FMDQ / Header Image Credit: Twitter; @FMDQGroup
...Stanbic IBTC Bank, Sterling Bank and
Wema Bank to Participate in Pilot Phase
The Financial
Centre for Sustainability (FC4S), Lagos - a member of the International Network
of Financial Centres for Sustainability- established as part of efforts to
accelerate the expansion of sustainable finance in Nigeria through the
collaborative partnership of FMDQ Group, Africa's first vertically integrated
financial market infrastructure group, comprising FMDQ Exchange, FMDQ Clear and
FMDQ Depository as well as other key stakeholders in the Nigerian
financial market, organised the Green Tagging Project (the Project) Kick-Off
Ceremony (the Event).
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.
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