Ggoobi Urges Bankers to Launch Climate-Focused Financial Products
Financial institutions have been urged by the Ministry of Finance, Planning, and Economic Development to develop financial solutions that align with environmental preservation, social support, and transparency.
Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury, explains that this is because consumers, producers, and financiers are placing a greater emphasis on sustainability, which is causing a global shift in business practices.
The Uganda Bankers Association and the financial institutions in Kampala hosted the 7th Annual Bankers Conference, where Ggoobi assured the industry about the health of the economy and its capacity to maintain the current growth rate of 6%, but he also mentioned that steps had been taken to guarantee double-digit growth rates.
Nonetheless, he asserts that the country will change as a result of business expansion that is predicated on adherence to environmental, social, and governance (ESG) principles, noting that the banking sector now faces the difficulty of doing so.
The Bank of Uganda unveiled the ESG Framework earlier this month, a manual that advises the financial sector on how to carry out sustainable business practices.
The framework was created in collaboration with the Association with the intention of ensuring that all the institutions advance toward this global goal at the same speed and in the same direction.
The framework also provides guidance to banks on how to establish ESG-supporting structures, secure and allocate financial and human resources, develop the ability to carry out ESG operations, and decide what kinds of products and services to provide, among other things.
The ultimate goal is to make ESG standard practice in the financial sector, which, according to the Bank of Uganda, will assist both the country and the international community in mitigating the negative effects of climate change.
The executive director of supervision, Twinemanzi Tumubweine, representing the deputy governor of the bank of uganda made a commitment to the financial institutions during the conference that the central bank is finalizing guidelines that would shield the sector from any risks associated with the ESG framework.
Practices falling under the umbrella of ESG Business, which includes the financial industry, involve introducing and constantly enhancing protocols to guarantee that their operations will preserve the environment and neighboring communities, maintain openness, and stay clear of corruption.
Lenders in the financial sector, for instance, will have to make sure that their credit facilities are disbursed only after verifying that the project they are funding either benefits the environment or does not.
According to Julius Kakeeto, the chairman of the Uganda Bankers Association, the banking sector is well-positioned to spearhead the transition to sustainable growth and development since it provides credit for development.
The Annual Bankers Conference has, for the seventh time, been sponsored by digital financial solutions company, Mastercard.
In light of the growing effects of climate change, Shehryar Ali, the Country Manager for Mastercard in East Africa, made a call to the business community to consider the next generation when conducting their operations.
