In green finance’s back seat: Africa sees itself as a mere net zero follower

Where does Africa fit in the global net zero debate? And how can it attract more green investment? 

Panellists at a major industry conference down in South Africa were not quite so sure.

In fact, a panel of insiders reluctantly admitted today that African movers and shakers do not manage to influence policy worldwide. and are far from visible in the green finance space.

They were sSpeaking during 1.5 Degrees: Africa Net Zero, the continent's biggest-ever net zero conference, taking place in Cape Town an attended by Net Zero Investor,

They agreed African businesses may be missing out on billions in investments as it makes Africa less attractive for investors simply because they don’t know which way the continent will be heading when it comes to green rules and regulation.

Asset owners would first look at Europe or the States, as that is where tomorrow’s sustainability rules and standards are originating. It provides certainty and the ability to plan ahead, something asset owners appreciate.

EU as the net zero leader

In Africa it is far from clear which way the continent is heading when it comes to ESG standards or green finance development, the panellists agreed.

If anything, it is clear that the EU is leading, when it comes to net zero standards, efforts and regulation.

It is Brussels who dominates the COP agenda, the global net zero events and standard-setting efforts around the world, the panellists agreed.

Delegates were told that Africans should take a more pro-active approach, be much more present and visible.

Taking part in the discussion, Kavita Pema, group head sustainability and ESG at AECI, a large chemicals company.

“We need to be more vocal, more engaged, lead more,” she said. “We are too passive, we are receptors, not instigators, we should highlight our issues, our problems, our challenges.”

Pema also stressed that the US and Europe can make bold statements, simply because circumstances in developed markets are so different.

“We don’t have the same resources different social issues,” she continued. “Africa feels the biggest impact, but the commitment and efforts are the lowest.”

Commitments

The panellists agreed that, internationally, there are a load of specific commitments, again, particularly from the EU.

“Nice things are said, but where is the action that follows on that,” questioned Peter Vanndell, the CEO of Nepad, who works with governments and private businesses across the entire continent.

He said that in Africa, still, it is still too much about economic growth.

“The focus in Africa is always on energy, on how to get cheap energy, grow the economy,” he said, adding that he does see that “shift is changing now.”

“The net zero debate is now starting in Africa,” he continued. “but historically we have been looking at our economies rather than climate change impact.”

No action

Pema recognises that observation but questions why and how investors can be persuaded to pump cash into Africa if “there is no tangible action.”

“Six to eight months after COP? What have we done? Feeling all rosy and a few months later we are back at where we were.”

“The words are there but we do not follow up with action. What are we going to do? What is going to take us there?”

Her remarks were followed by a long pause. It seems none of the panellists had the answers. At least not yet.