The elephant in the room: Bringing sustainable investment to Africa

The coronavirus pandemic has renewed interest in sustainable investing strategies that allow investors to both protect the financial value of their assets and contribute to solutions to global problems such as climate change.  These investments have become increasingly mainstream, and now account for more than $39 trillion in the five major global markets, a 34 percent increase over two years, according to the latest trends reported by  the Global Sustainable Investment Alliance.

Such investments represent a sizable share of professionally managed assets in each region, ranging from 18 percent in Japan to 63 percent in Australia and New Zealand. How African investors reacting to these trends has been much less well documented. What we do know is that the market for ‘green investments’ across the region remain small.  For example, although the labelled bond market reached over $1 trillion U.S. in aggregate issuance in late 2020, less than 0.1% was raised by Sub-Saharan Africa. The African Pension Supervisors Network - in collaboration with the World Bank – recently set out to investigate existing practices and how to incentive changes.

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