 Introduction to Sustainable Finance and InsuranceAthenia Bongani Sibindi ()
A chapter in Sustainable Finance and Insurance in Africa, 2025, pp 1-8 from Springer Abstract: Abstract The introduction to the “Handbook of Sustainable Finance and Insurance in Africa” critically examines the essential roles that sustainable finance and insurance play in addressing the multifaceted challenges confronting the African continent in the twenty-first century. Sustainable finance is defined as the integration of environmental, social, and governance (ESG) criteria into investment decision-making processes, encompassing two primary categories: green finance, which refers to established environmentally sustainable practices, and transition finance, which facilitates private investments aimed at reducing greenhouse gas emissions and promoting a climate-neutral economy. The text references the European Union’s non-binding recommendations from June 13, 2023, which urge financial and non-financial entities to leverage these frameworks to support transition finance initiatives. The narrative subsequently shifts to sustainable insurance, characterized as a strategic approach that promotes accountability across the whole value chain. This includes proactive stakeholder engagement to identify, assess, manage, and monitor risks associated with ESG factors while capitalizing on associated opportunities. The overarching aim of sustainable insurance is to mitigate risks, improve business performance, and foster contributions to environmental, social, and economic sustainability. Despite its potential, the insurance sector in Africa remains markedly underdeveloped, as evidenced by low penetration rates. According to the World Bank Group's findings published in December 2024, Africa is among the most unequal regions globally, with over half of its countries reporting Gini index values exceeding 40. This inequality stems from structural factors such as ethnicity, gender, and education, exacerbated by market distortions that favour a limited number of stakeholders. Moreover, the introduction highlights ongoing land and mineral rights disputes as significant contributors to these disparities. It posits that superficial solutions are inadequate; a more nuanced and comprehensive approach is essential for effectively diagnosing and addressing systemic limitations. Additionally, the challenges posed by climate change threaten the livelihoods of vulnerable populations reliant on agriculture and fishing, further disrupting natural capital and diminishing income-generating capabilities. This introduction sets the stage for a deeper exploration of how sustainable finance and insurance can effectively confront these pressing challenges and serve as catalysts for transformative development across Africa. The handbook draws on contributions from diverse experts, providing critical insights aimed at enhancing financial inclusion and promoting sustainable economic growth within the region. Keywords: Sustainable finance; Land reform; Mining rights; Economic emancipation; Financial inclusion; Environmental stewardship and social responsibility; Climate change; Sustainable development goals; Adaptation to climate change (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:aaechp:978-3-031-86516-9_1 Ordering information: This item can be ordered from DOI: 10.1007/978-3-031-86516-9_1 Access Statistics for this chapter More chapters in Advances in African Economic, Social and Political Development from Springer |
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