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ESG investing in sub-Saharan Africa linked to sustainable development

The consideration of environmental, social, and governance (ESG) factors in investing in sub-Saharan Africa is closely tied to sustainable development according to Fitch Ratings.

The approach to ESG investing in sub-Saharan Africa is closely linked to longer-term sustainable development benchmarks, Fitch Ratings says in a new report. This shapes how borrowers in the region frame sustainable investment opportunities and which types of issuers source financing through the international capital markets.

The historically significant role of development finance institutions as sources of capital into sub-Saharan Africa has shaped the way investment into the region is positioned. Core infrastructure financing needs can be described as contributing to sustainable development objectives, which are closely aligned with many ESG investment frameworks.

Electrification programmes, for example, increasingly include renewable energy generation, or housing estates developments designed to have less environmental impact. New investors, including bondholders, non-traditional bilateral lending countries, and commercial banks, have also made efforts to incorporate sustainability into their investment strategies in Africa.

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Source: EsiAfrica

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