A recent report from Standard Chartered’s Sustainable Banking Report 2023 has unveiled that retail investors in Nigeria could potentially raise $94 billion for climate change financing by 2030.
The report highlights that 95% of Nigerian investors express a keen interest in climate investing, with 91% seeking to amplify capital flows toward climate-related initiatives. This percentage is the highest among the 10 growth markets surveyed in Asia, Africa, and the Middle East. The primary considerations for investors in Nigeria are improving returns and making a positive impact.
The research, based on a survey of 1,800 respondents, identifies a global potential of $3.4 trillion for climate investing, emphasizing the significant role individuals can play in combating climate change.
In the context of climate investing in Nigeria, the report suggests that around $60 billion could be directed toward mitigation themes, with renewables, energy storage, and energy efficiency attracting the most capital. Additionally, approximately $34 billion could be mobilized for adaptation efforts, including resilient infrastructure, the blue economy, and food systems.
Despite the high interest in climate financing, the report notes various barriers that impact investors and hinder the translation of interest into tangible investments. The report emphasizes the need for collaborative efforts by financial institutions, regulators, companies, and individuals to establish a broader range of climate assets and drive increased retail participation.
The report recommends that asset managers and banks innovate new climate assets to align with emerging investor interests, such as biodiversity and the blue economy. It underscores the crucial role financial institutions play in mobilizing retail capital through empowering investors with information, product customization, and outcome-based information. Digital and fintech solutions are seen as enablers that simplify processes for investors. The report also calls for the alignment of reporting standards and the imposition of minimum disclosure requirements globally to boost investor confidence.
Lanre Olajide, Head of Wealth Management and Deposits Nigeria and West Africa, commented on the report, stating, “Financing our collective response to climate change is a critical challenge. Overall climate mitigation and adaptation face an annual funding gap of trillions of dollars. Institutional capital is often the focus when mobilising funds to bridge this gap – the scale and power of retail investor capital is a lesser-known opportunity. To overcome the current disconnect between investor interest and the scale of climate investments, the industry needs to improve access to solutions, harmonise reporting standards and measurement of impact.”
