NGX launches dedicated platform for sustainable finance instruments

Sustainable finance

In celebration of the 2022 World Environment Day, Nigerian Exchange Limited (NGX) has launched a dedicated platform for sustainable finance instruments, in fulfilment of its commitment to foster the growth of long-term finance in Nigeria and Africa at large.

Announcing the launch in his address yesterday to mark the World Environment Day, NGX Chief Executive Officer, Temi Popoola, called for the unwavering support of our stakeholders to build a new normal that would help accelerate the achievement of sustainable development and climate change priorities across Africa, and a world where we can live sustainably in harmony with nature.

Popoola noted that securities exchanges are uniquely positioned at the heart of the financial industry, facilitating the effective and efficient allocation of resources for the purpose of economic growth and development.

The convening power of securities exchanges also positions these outstanding institutions as a driving force for change, he added.

Coupled with the global health crisis caused by the COVID-19 pandemic, He said: “…climate change and biodiversity loss are expected to have a longer and more significant impact on our health if not properly addressed.”

Tackling climate change

In his address, “Unlocking Capital for a Sustainable Earth,” Popoola feared a looming environmental and climate crisis, saying: “We live in a world in which the top global risks in terms of likelihood are associated with a looming environmental and climate crisis.

“Clearly, it has come to the fore that climate change, biodiversity loss and other key environmental concerns are striking harder and more rapidly than previously thought. Various high profile incidents experienced in recent times, such as the heat waves in heatwaves in Canada, wildfires in Australia, and floods in parts of Europe and Asia, have highlighted the pressure of the global climate challenge on economic activities.

“The impacts of climate change such as warming temperatures, changes in precipitation, increases in the frequency or intensity of some extreme weather events are expected to have a significant impact on global food value chains. This will subsequently affect the key determinants of health – clean air, safe drinking water, sufficient food and secure shelter.”

He continued: “According to the World Health Organisation (WHO), the impact of climate change is expected to cause approximately 250,000 additional deaths per year due to malnutrition, malaria, diarrhoea and heat stress. Hence, sub-Saharan African countries would need to develop their health infrastructure to address these predicted health challenges.

In Africa, if climate change is not addressed, the increased weather and climate variability will expose a wider than expected population to extreme heat, drought and floods, thereby resulting in an increase in the poverty burden.

“Again, the capital market is well equipped to support this change through the deployment of innovative financial instruments such as green bonds, healthcare bonds amongst other sustainability bonds.”

The capital market is well equipped to support this change through the deployment of innovative financial instruments such as green bonds, healthcare bonds amongst other sustainability bonds.

Building better

Amid increasing climate change impact, Popoola said it’s time to build better through sustainable finance. He charged stakeholders to take advantage of World Environment Day “to reflect on the collective challenges we face in preserving the only place we know as our home and start to make decisions that put social and environmental benefits at the core of our individual activities and business operations.

“We have ‘Only one Earth’ and we all have a part to play in preserving it. The COVID-19 pandemic has shown us that our activities as individuals and businesses have an immediate impact on our loved ones, and on people all around the world. As we continue building back our lives and return business activities to normalcy, it is critical to rethink our model of growth.”

For the NGX, he said the Exchange has witnessed tremendous growth in green bonds as well as other sustainable financial instruments which are designed to tackle the climate crisis.

“As a leading securities exchange in Africa, NGX helped develop Africa’s first fully certified green bond, the debut Federal Government Sovereign ₦10.69 billion green bonds,” he added.  

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