eBusiness Weekly
Michael Tome
Business Weekly, in partnership with the Institute of Chartered Account Zimbabwe (ICAZ) and Financial Markets Indaba, on Wednesday successfully hosted the Financing Climate Change Adaptation Investment Conference in Harare that sought to stimulate the national climate financing agenda by Government and the private sector players in Zimbabwe.
So highly subscribed was the conference that it attracted the country’s private sector and Government officials, particularly the Environment, Climate, Tourism, and Hospitality Industry Ministry represented by Minister Mangaliso Ndlovu and his Deputy Minister Barbara Rwodzi.
Zimbabwe Energy Regulatory Authority (ZERA) was also part of the proceedings of the day.
The symposium covered a number of topics that dealt with climate adaptation, particularly in the critical areas of energy, agriculture, infrastructure as well as the new area of interest, Environmental Social Governance (ESG).
Minister Ndlovu indicated that climate finance and large-scale investments in green energy were required to significantly reduce emissions and enhance the climate change mitigation agenda.
Addressing delegates, Minister Ndlovu said climate action was a national priority and vital for climate adaptation and the Government intended to proffer solutions through the enhancement of renewable energy efficiency, climate-smart agriculture for food security and sustainable agriculture.
He, however, said significant funding was needed to adjust and reduce the impact of the adverse effects of climate change.
The high cost of capital equipment to have decent hydro and solar power generation plants has remained a major barrier in the establishment and provision of renewable energy in the country.
The conference came a few months after the United Nations Framework on Climate Change’s (UNFCC) 26th Conference of Parties (COP 26) held in Glasgow Scotland in November last year.
Zimbabwe finds itself in a catch 22 as it is endowed with and largely reliant on thermal power (coal) which is a major contributor to greenhouse gases emissions, hence requires a multi-stakeholder approach to attain pro-green mechanisms.
During Cop 26 held last year, Zimbabwe is one of the countries that made pleas by highlighting that coal use was still unavoidable in the country given the limited and dwindling water for hydroelectricity generation and the current state of dependency on thermal power.
Critically, Zimbabwe has set its Nationally Determined Contribution (NDC) to reduce economy-wide greenhouse gas emissions per capita to 40 percent up from 33 percent in 2015.
Minister Ndlovu acknowledged that Zimbabwe still had a long to go way towards attaining optimum levels of climate change mainstreaming due to funding whose source was mainly by donors, thus calling on local entities to invest in climate adaptation initiatives.
“Let me emphasise that it is not enough to solely rely on international climate finance, there is also a need to tap into national resources through innovative financial facilities and leverage the private sector to take the lead in addressing climate change.
“Therefore, let us take advantage of this conference to explore how we can mobilise domestic finance for climate change mitigation and adaptation,” said Minister Ndlovu.
He acknowledged that the country’s economy performs well when enough rains are realised hence the need to come up with measures that guarantee constantly good agriculture yields, further lauding the treasury for allocating funds towards climate adaptation.
“While our economy takes a knock during drought years, we need to appropriately recalibrate our sectorial policies to have a climate agenda. In 2021 our economy grew by more than 7 percent on the back of a good above normal rainfall season.
“It is therefore critical that we upscale investments in rainwater harvesting, supplementary irrigation adoption of drought-tolerant crop varieties, and adoption of viable business models to sustain agricultural production through value addition, market development and consolidation.
“We applaud the treasury for allocating an estimated $54 billion towards climate change-related projects across all ministries in the 2022 budget pronouncement,” he added.
Institute of Chartered Accountants Zimbabwe president, Tumai Mafunga, emphasised the need for the private and public sector to jealously guard their positions against child labour, modern slavery, and promotion of climate change adaptation as well as gender mainstreaming. He said the indaba sought to enlighten companies on the immediacy to adhere to Environmental, Social, and Governance (ESG) practices which had the potential to attract international capital.
“ESG now has a direct impact on the current reporting requirements, both public and private sector entities are now required to issue out sustainability reports which largely evolve around ESG.
“International investors are increasingly tapping into entities with ESG strategies before investing, the financial sector can actively participate by shifting capital from high to low carbon activities this is the trend that Institutional investors around the world are pursuing and Zimbabwe should not be left behind,” said Mafunga while addressing the delegates at the event.
ESG analysis has become an increasingly important part of the investment process. Investors are incorporating ESG data into the investment process to gain a fuller understanding of the companies in which they invest.
Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.
ESG metrics are not commonly part of mandatory financial reporting, though companies are increasingly making disclosures in their annual report or in a standalone sustainability report.
To help in financial resource mobilization, Minister Ndlovu indicated that his ministry has pushed for the accreditation of the Infrastructure Development Bank of Zimbabwe (IDBZ) and the Environmental Management Agency (EMA).
According to Minister Ndlovu, Government through his ministry was working on National Adaptation Plan (NAP) with help from the Green Climate Fund National Adaptation Planning Facility that thrives to reduce the country’s vulnerability to climate hazards and as well increase Zimbabwe’s resilience given the challenges that come with climate change.
The United Nations Framework Convention on Climate Change (UNFCC) Conference of Parties 2021 deliberated on issues that intended to attain global net-zero emissions consensus by midcentury which entailed keeping temperature goal not exceeding 1, 5 degrees Celsius, a temperature range which is considered pre-industrial levels.
It also intended to mobilise a climate financing fund of up to US$100 billion per year for access by developing country parties.
Numerous institutions, such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD) are working to form standards and define materiality to facilitate incorporation of these factors into the investment process.
The meeting was attended by a significant number of private sector players while thought-provoking conversations were initiated by renowned experts in the field of climate change adaptation who include Victor Utedzi, Owen Mavengere, Maxwell Chikumbutso, Tawanda Muzamwese, Rodney Ndamba, Dr Alfred Mthimkhulu, Welcome Mavingire, Rufaro Matsika and Lesley Ndlovu.
ARDA CEO Tinotenda Mhiko, UNDP Programmes specialist for Environment Climate and renewables Jeremiah Mushosho and Chairman for Green Buildings Council of Zimbabwe Mr Mike Juru also took turns to address the conference.
