The African Development Bank (AfDB) and the International Financial Reporting Standards (IFRS) Foundation have agreed to work together to advance disclosure practices concerning sustainable development in Africa. The two organisations signed a letter of intent on Tuesday, on the sidelines of the AfDB Group's 2024 Annual Meetings in Nairobi from 27 to 31 May.

Kevin Kariuki, Vice President of AfDB Group in charge of Power, Energy, Climate Change and Green Growth, and Ndidi Nnoli-Edozien, representing the directors of the International Sustainability Standards Board (ISSB), signed the document during the panel discussion, "Financial Institutions, Financial Regulations and Financial Architecture for Africa's Transformation".

The letter of intent is a pledge by the Bank and IFRS to prioritise their engagement with African financial institutions, financial market regulators and policymakers and to provide capacity-building and technical assistance to develop knowledge and capacity for effective sustainability disclosure in line with ISSB provisions to support investors' decision-making.

The partnership will be led by AfDB Group's African Financial Alliance on Climate Change (AFAC) and the IFRS Foundation's ISSB.

AFAC is a voluntary platform for stakeholders from the African financial sector (financial market regulators, policy makers and civil society representatives) to come together to fight climate change and stimulate sustainable finance.

Mobilising private funding

After the signing, AfDB President Akinwumi Adesina confirmed, "We are committed to supporting markets across Africa to advance sustainability disclosure practices. Partnership with the IFRS Foundation will help us to provide capacity building and assistance for greater transparency, accountability and efficiency, with the aim of mobilising capital flows across Africa.

"We and the ISSB have a shared interest in mobilising private climate finance. Central banks and financial markets need to introduce green priorities in their work. Valuation by capital markets must move increasingly towards green markets. Capacity building is essential, and we need to support our countries in order to access climate finance," he added.

"We thank the African Development Bank for its important partnership, and we prioritise assistance to companies and jurisdictions in developing the skills and capacities to adopt ISSB standards," said Erkki Liikanen, Chair of the IFRS Foundation Trustees.

The ISSB Chair, Emmanuel Faber, noted that "African companies have told us about the perceived benefits of using ISSB standards to communicate transition and physical risks in order to secure competitive advantages and attract investment. Our partnership with the African Development Bank puts us in a better position to reap the benefits of sustainability reporting for businesses and national economies in Africa."

Countries commit to accountability and transparency

The introduction of ISSB standards is strongly supported by jurisdictions around the world, including Nigeria and Kenya, which have declared their intention to apply the standards or to use them in other ways.

The partners will also work together on designing training materials suitable for the African context.

Rania A. Al-Mashat, Egypt's Minister for International Cooperation, called on international financial institutions to strengthen the capacity of the private sector to access climate finance, saying "We need to promote transparency, accountability and capacity building. The private sector made commitments at COP 26, COP27 and COP28. Egypt tried to bring all the countries together at COP27 to move forward together on various climate platforms."

The panel was organised by the African network of the Glasgow Financial Alliance for Net Zero (GFANZ), AFAC, the United Nations High Level Champions on Climate Change, the United Nations Environment Programme Finance Initiative, and the ISSB. Mahmoud Mohieldin, High-level Champion for Climate Change and UN Special Envoy for Finance for the 2030 Agenda for Sustainable Development, Hassatou N'Sele, AfDB Group CFO and Vice-President for Finance, and Ugas Sheikh Mohamed, Chairman of the Board of Directors of the Kenya Capital Markets Authority, took part in discussions alongside AfDB Vice-President Kevin Kariuki. Mary Schapiro, Vice-President of the GFANZ African network and Emmanuel Faber, ISSB President sent video messages.

Climate and development are inseparable

Nigeria's Minister of Finance, Economy Coordinator and Chair of the African Caucus, Wale Edun said he "supports the partnership between the African Development Bank and the ISSB to deepen the global sustainability disclosure base in order to meet the needs of African capital markets, which will improve transparency, accountability, efficiency and comparability." He emphasised that if African jurisdictions and companies adopted early, more investment could be attracted and stimulate private sector development in Africa. He urged the ISSB and the Bank to provide strong advisory and capacity-building support to unlock capital flows, working in parallel with a widespread adoption of ISSB standards in Africa, led by Nigeria, the first country to launch and adopt IFRS S1 and IFRS S2.

The letter of intent will be binding for an initial period of three years. The activities it lays out will be supported by resources provided by the AfDB and the IFRS Foundation.

Countries commit to accountability and transparency

The introduction of ISSB standards is strongly supported by jurisdictions around the world, including Nigeria and Kenya, which have declared their intention to apply the standards or to use them in other ways.

The partners will also work together on designing training materials suitable for the African context.

Rania A. Al-Mashat, Egypt's Minister for International Cooperation, called on international financial institutions to strengthen the capacity of the private sector to access climate finance, saying "We need to promote transparency, accountability and capacity building. The private sector made commitments at COP 26, COP27 and COP28. Egypt tried to bring all the countries together at COP27 to move forward together on various climate platforms."

The panel was organised by the African network of the Glasgow Financial Alliance for Net Zero (GFANZ), AFAC, the United Nations High Level Champions on Climate Change, the United Nations Environment Programme Finance Initiative, and the ISSB. Mahmoud Mohieldin, High-level Champion for Climate Change and UN Special Envoy for Finance for the 2030 Agenda for Sustainable Development, Hassatou N'Sele, AfDB Group CFO and Vice-President for Finance, and Ugas Sheikh Mohamed, Chairman of the Board of Directors of the Kenya Capital Markets Authority, took part in discussions alongside AfDB Vice-President Kevin Kariuki. Mary Schapiro, Vice-President of the GFANZ African network and Emmanuel Faber, ISSB President sent video messages.

Climate and development are inseparable

Nigeria's Minister of Finance, Economy Coordinator and Chair of the African Caucus, Wale Edun said he "supports the partnership between the African Development Bank and the ISSB to deepen the global sustainability disclosure base in order to meet the needs of African capital markets, which will improve transparency, accountability, efficiency and comparability." He emphasised that if African jurisdictions and companies adopted early, more investment could be attracted and stimulate private sector development in Africa. He urged the ISSB and the Bank to provide strong advisory and capacity-building support to unlock capital flows, working in parallel with a widespread adoption of ISSB standards in Africa, led by Nigeria, the first country to launch and adopt IFRS S1 and IFRS S2.

The letter of intent will be binding for an initial period of three years. The activities it lays out will be supported by resources provided by the AfDB and the IFRS Foundation.