By Rotimi Ajayi

Last week, we started the debate on climate  change financing in Nigeria and the role Banks should play especially with the recent announcement by the banks of their readiness for voluntary sustainable banking principles. This will lead to Banks lending  to or co-implementing climate projects especially the renewable and green projects. Here under is the concluding contribution of a climate finance expert Prince Lekan Fadina.

Banks must have to adopt such concepts as baseline assessment, sustainability and environment issues, sustainability management systems, life circle assessment, stakeholders analysis, outreach and engagement, sustainability reporting.

As Climate Change emerges as one of the largest sustainability issues of our time, there is need to work with experts in determining implication of the global change on investment, the community where the project is or to be sited and the life cycle. Sustainability Principles can help to address Climate Change and improve the lives and livelihoods of rural dwellers that live in poverty.

There is also need to transform banking to take cognisance of the fact that traditional finance architecture that plays a large part in financing commercial ventures is virtually an extension of the short term nature of our life. This shows in many of our cultural “micro-wave” behavior – Now! Now!! Now!!!. This will be a constraint and may create concern to achieving the sustainability objectives.

In short, we must address governance, trust, confidence and delivery. The Central Bank has a lot to do with the policy and the leadership of the process while the Bankers Committee must be ready for cultural change and awareness creation.

The transition to sustainable investments, green economy is driven by countries interest in economy development, energy, security and climate. Globally more and more countries are embarking on a transition towards a greener economy. Nigeria must buy into it.

Countries have realized that this transition not only provides global climate benefit but also lays the foundation for a more sustainable and prosperous economy in the future. Green growth helps a country improve energy security (by reducing reliance on imported energy) build industry of the future, improve local health by reducing pollution and manage scarce resources effectively.

Sustainability banking principle poses many challenges but also provide opportunity for banks, business and society in clean and other friendly technologies.  There is need to address these challenges including skills, knowledge, technology, attitudinal differences and identification of catalyst for action.

Nigeria has put in place a well designed Climate Change and Clean Energy Policy. This will provide opportunities for investors in renewable energy, energy efficiency and decarbonisation. It will also create new jobs; stimulate technological innovation and sustainable long term economic growth.

We must all work together – the Banks, MDGS, private sector, legislators, non governmental organizations and other stakeholders. The Federal Ministry of Environment as the National designated Authority for Climate Change and Sustainable Development has leadership role to play in ensuring that Nigeria benefits from new global financial initiatives. Nigeria’s interest should be paramount in this new global financial architecture.

The road to low carbon economy is real and we need to use the transformation agenda as instrument of diversification of the Nigerian economy by supporting research and sustainable investments that lead to emission reduction, low carbon development and stimulation of investment. We must work towards ensuring effective regulations and policies that are critical to shift investment and finance green growth and job creation.

Nigeria has opportunity to key into what the recent Economic Intelligence Unit Poll showed that “forty six percent of investors say energy and natural resources offer the best investment return over the next three years”. It also revealed that Investors see Nigeria and some others as most attractive destinations. Nigeria and Kenya are likely to bring the best investment return within Africa over the next three years.

*Prince Lekan Fadina is an International Negotiator on Climate Change and Sustainable Development.