KAMPALA – Training of financial industry workers has commenced to prepare them on how to mind the environmental, social, and governance aspects in their operations as they implement the UGX.120-billion aBi Green Finance Fund.
aBi Finance Ltd, with the support of the Danish government in December 2022 announced the package for the local financial industry for online lending to green agriculture-related projects.
Specifically, this training is aimed at ensuring that the commercial banks, microfinance institutions and other lenders use their financial services to contribute to the protection and promotion of the environment, the well-being of the communities around them.
Environmental, Social and Governance (ESG) is a framework used to assess an organization’s business practices and performance on various sustainability and ethical issues.
It is increasingly becoming an important determinant of investment priorities for international investment, as part of the fight against climate change, human rights violations and corruption.
Jane Aik, a trainer with the Uganda Institute of Banking and Financial Services, said Uganda has come a little late because in some other countries, the financial industry has gone a little further in integrating ESG in the operations.
“I think we are just late adopters. The effects of climate change have affected us for a very long time. The floods that have been affecting us in the recent past and temperatures rising beyond what we had experienced before and the land that we having isn’t giving us the food that we desire, so we are failing to meet our basics of life,” she said.
According to the Uganda Bankers Association, lending will soon be based on how much a project is catering for ESG.
UBA Executive Director, Wilbrod Humphreys Owor says the association and the Bank of Uganda, together with aBi are putting together a draft paper which should become a legal framework to compel lenders on implementation of ESG.
This, according to him, should be ready by the end of next month.
Speaking at the commencement of the training in Wakiso District, Aik said the trainings are aimed at preparing the workers on how to view the environment and how the credits they give out contribute to the negative or positive impacts on the environment.
The aBi-funded trainings are targeting financial institutions that signed up to implement the Green Financing, with a hope that others that are not part of it will also get on board through different initiatives.
The training sessions will initially target lower and middle-level managers including loans officers and branch managers.
On why they have started with this category of people, Moses Bwire, Investments Manager-Green Growth, and Business Development Services at aBi said these are officials who interact closely with farmers and it will be easier for the information to trickle down more effectively.
He added that the financial industry and the customers should take this importantly because, much as Uganda and the underdeveloped world are suffering from effects they have least contributed to, the developed world has decided to finance the mitigation of the impacts in this region.
On what they want the financial institutions to do, Bwire says that currently, they are empowering them with skills to identify the “green projects” that they have financed because they have always given out and supported them.
However, according to him, the banks did now know how to separate them, mainly because it was not considered important.
Now, with the new international reporting standards, the institutions will be able and required to separate such and report on them in their financial statements, for governance purposes.
Noah Owomugisha, Head, of Green Growth and Business Development Services, said they are targeting 2,000 workers in the initial training phase and the 40 training sessions will take them around the country.
