Nigerian Investors able to raise $94bn climate capital – Report

It has been revealed that retail investors are able to raise $94bn towards climate change financing in Nigeria by 2030.

This was revealed in Standard Chartered's latest Sustainable Banking Report 2023, which also disclosed that 95 per cent of investors in Nigeria were interested in climate investing, and 91 per cent of them wanted to increase capital flows towards climate.

The highest among all markets surveyed, with improving returns and making a positive impact being their top considerations.

The research, which was based on investor interest from a survey of 1,800 respondents in 10 growth markets across Asia, Africa and the Middle East, identified a global potential of $3.4tn for climate investing, highlighting the power of individuals to combat climate change.

According to the report, within climate investing in Nigeria, about $60bn could flow into mitigation themes with renewables, energy storage and energy efficiency looking set to attract the most capital.

About $34bn could be mobilised towards adaptation including resilient infrastructure, the blue economy and food systems.

The high interest in climate financing is, however, impacted by multiple barriers, which vary by investor segments, and are holding them back from translating their interest into investment.

 The report advised that financial institutions, regulators, companies and individuals must make a concerted effort to establish a wider range of climate assets to drive greater retail participation.

 “Asset managers and banks must also work to innovate new climate assets to match emerging investor interests, such as bio-diversity and the blue economy. Financial institutions have a critical role to play in mobilising retail capital via three pillars – empowering investors with information, product customisation and outcome-based information. Digital and fintech solutions will play an enabling role and simplify processes for investors. The industry across the world also needs to align reporting standards and mandate minimum disclosure requirements to boost investor confidence,” the report advised.

Head, Wealth Management and Deposits Nigeria and West Africa, Lanre Olajide, commenting on the reports said, “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 mobilising 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, harmonise 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.”