According to the most recent Sustainable Banking Report 2023, by 2030, retail investor money of $94 billion might be committed to climate initiatives in Nigeria.
The study, which highlights the ability of individuals to fight climate change, is based on investor interest from a survey of 1,800 respondents in ten growing markets across Asia, Africa, and the Middle East. It finds a $3.4 trillion global potential for climate investment.
According to the report, $60 billion might go towards mitigation themes like energy storage, renewable energy, and energy efficiency, which are expected to draw the greatest investments, while $34 billion could go towards adaptation topics like food systems, resilient infrastructure, and the blue economy.
In line with the statement, their primary goals when making these kinds of investments are to increase returns and have a beneficial influence. It did point out that a number of obstacles, which differ depending on the investor category, are preventing the investors from turning their curiosity into an investment.
The report also claims that: “For investors to fully realize the promise of retail capital, the industry must assist them in overcoming these obstacles. To encourage increased retail engagement, financial institutions, authorities, businesses, and individuals must work together to provide a larger range of climate assets.”
“The creation of novel climate assets that align with the interests of developing investors, such as the blue economy and biodiversity, is another task for asset managers and banks.
Financial institutions are essential in helping to mobilize retail money through three key strategies: providing investors with information, personalizing products, and providing outcome-based information.
Fintech and digital technologies will help investors by streamlining procedures and playing an enabling role. To increase investor confidence, the global industry must also harmonize reporting standards and impose minimal disclosure obligations.
Lanre Olajide, Head of Deposits and Wealth Management for Nigeria and West Africa, stated: “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 mobilizing 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, harmonize reporting standards, and measurement of impact. We continue to work closely with our clients to match their investments to their areas of interest, so they can help finance solutions for a more sustainable future.”
