DBSA Whitepaper Press Release.

DBSA Whitepaper Press Release.

African banks should add nature clauses to loan agreements to address biodiversity loss says report

Johannesburg, 24 April 2024 – A new report reveals how one Africa’s leading development banks is attempting to address the challenge of reducing its impact on nature and biodiversity. The report, titled “A case study on nature data” was commissioned by the African Natural Capital Alliance (ANCA) and co-published by the Development Bank of Southern Africa (DBSA) – a leading member of ANCA – and Oliver Wyman.

Key recommendations for the financial sector to come out of the report include that African banks should consider embedding clauses into loan agreements that actively guide projects away from areas where biodiversity is under threat.   Other recommendations include:

  • The use of biodiversity maps, geospatial data, and consultations with local communities to identify sensitive areas before loans are even considered.
  • African financial institutions should engage in genuine dialogue with affected communities using their traditional knowledge to enrich environmental assessments.

“Our collaboration with African Natural Capital Alliance and Oliver Wyman in producing this insightful report highlights our shared commitment to promoting sustainable development in Africa,” said Siloshini Naidoo, Head of ESG at the DBSA.”As a leading financier, we recognise the imperative to surround environmental considerations into our investments to ensure long-term prosperity for the continent.”

The DBSA was one of the leading financial institutions participating in the Africa pilot of the Taskforce on Nature-related Financial Disclosures (TNFD), the global framework for understanding and managing nature-related financial risks and opportunities, and the report addresses some of the challenges it faced in applying the TNFD’s methodology to its loan book.

Download Report