The Ministry of Finance, Planning and Economic Development has urged financial institutions to create financial products that align with environmental protection, social support, and transparency.
Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, emphasized the global shift in business practices, as consumers, producers, and financiers increasingly focus on sustainability.
Ggoobi was speaking at the 7th Annual Bankers Conference, organized by the Uganda Bankers Association and financial institutions in Kampala. He assured the industry of the economy’s strength and its ability to sustain the current 6 percent growth, but added that measures have been put in place to ensure double-digit growth figures.
He noted that growth driven by adherence to environmental, social, and governance (ESG) practices is crucial for the country’s transformation, challenging the financial industry to comply.
Earlier this month, the Bank of Uganda launched the ESG Framework, a document providing guidance to the financial industry on conducting sustainable business.
Developed jointly with the Association, the framework ensures that all institutions move at the same pace and direction toward achieving this global goal.
The framework also guides banks on creating structures to support ESG, securing and allocating human and financial resources, building the capacity to implement ESG activities, and the types of products or services on offer, among other aspects.
Ultimately, the long-term objective is to make ESG the standard practice in the financial industry, which the Bank of Uganda says will help the nation and global community protect the world from adverse climate change effects.
Representing the Deputy Governor at the conference, Executive Director Supervision, Twinemanzi Tumubweine, assured financial institutions that the central bank is finalizing guidelines to protect the industry against risks that may arise from the ESG framework.
Under ESG practices, including in the financial sector, businesses continuously improve measures that ensure their activities protect or do not harm the environment and communities, while observing transparency and avoiding corruption.
For the financial industry, lenders will be compelled to ensure that their credit facilities are given out only after verifying that the funded projects promote or do not harm the environment.
Julius Kakeeto, Chairman of the Uganda Bankers Association, said that as providers of credit for development, the banking industry is in a position to lead the journey toward sustainable growth and development.
The Annual Bankers Conference has, for the seventh time, been sponsored by digital financial solutions company, Mastercard.
Shehryar Ali, Mastercard Country Manager for East Africa, appealed to the business community to consider future generations when conducting business, in light of escalating climate change effects.
“I urge you all to close your eyes and envision a future through the eyes of your children, the young ones, and those to come. Only then will you see the relevance of ESG,” said Ali.
“Ponder, ‘how are we presenting a world, and will it be worth it?’” he added, stressing that inclusivity is essential on the global stage. Minorities must be heard on a global platform, and women’s voices and challenges must be addressed. Sustainability cannot work if these voices aren’t heard. If we’re to have sustainable, growing companies, we can’t shy away from these ESG practices.”
