Africa’s Financial Industry Backs New Sustainable Finance Taxonomy to Boost Green Investment
Africa’s financial industry has taken a landmark step in advancing climate action and sustainable development by endorsing the continent’s first-ever Sustainable Finance Taxonomy. The framework, validated at a two-day workshop held in Nairobi on 16–17 July 2025, was unanimously supported by regulators, commercial banks, insurance companies, and development finance institutions from across Africa.
Led by the African Development Bank (AfDB) through its African Financial Alliance on Climate Change (AFAC) platform, the taxonomy establishes standardised definitions for activities that contribute to environmental sustainability and social progress. It aims to empower financial institutions to channel investments into climate-smart and socially responsible projects, filling a critical gap in Africa’s financial landscape.
The taxonomy is the product of an extensive year-long consultative process involving over 60 institutions from both the financial and real sectors. Technical expertise was provided by PricewaterhouseCoopers Luxembourg, with funding from the Global Center on Adaptation under the Africa Adaptation Acceleration Program.
Nana Sika Ahiabor, Manager of the Climate and Sustainability Office at the Bank of Ghana, praised the initiative as a timely and transparent tool. “Although voluntary, this taxonomy comes at a crucial moment as Africa seeks to scale up green finance. It offers a clear framework tailored to the African context, aligned with both global standards and national priorities,” she said.
Participants emphasised the taxonomy’s potential to harmonise financial markets across the continent, attract green capital, and enhance economic resilience. Ann Njuguna, Finance Manager at BRITAM Kenya, reflected on the process: “Working through real-world case studies demonstrated how a unified taxonomy can align African financial systems with global ESG standards while preserving our unique development priorities.”
Mahamadi Balima, Head of Sustainable Finance at the Financial Markets Authority of the West African Monetary Union (AMF-UMOA), highlighted the taxonomy’s strategic value for regional integration. “This tool will guide capital flows towards sustainable investments, foster inclusive growth, and attract impact investors both regionally and internationally,” he stated.
The private sector also welcomed the taxonomy. Rochelle Chetty of Standard Bank said, “Participating alongside other banks and development finance institutions was invaluable. Testing the taxonomy in practical scenarios is a vital step towards its effective implementation.”
Senior AfDB officials described the taxonomy as a cornerstone of Africa’s climate finance framework. Prof Anthony Nyong, Director of the Climate Change and Green Growth Department, called it “a critical milestone” for mobilising private sector resources towards sustainable development. Ahmed Attout, Director of Financial Sector Development, added that the collaborative development process reflects a strong commitment to managing sustainability risks while unlocking green investment opportunities.
As Africa faces increasing climate and sustainability challenges, the Sustainable Finance Taxonomy sets the foundation for a transparent, coherent financial ecosystem rooted in African development goals, yet seamlessly integrated with global sustainable finance standards.
