Nigeria ahead of China, others on investors’ bid for climate investing

Some 95% of Nigerian retail investors are interested in investing in climate mitigation and adaptation, and nearly all of them want to increase capital flows toward climate initiatives — more than many other countries, a new report says.

Standard Chartered’s latest Sustainable Banking Report 2023 said that $94 billion of retail investor capital could be mobilised towards climate investments in Nigeria by 2030.

The Sustainable Banking Report 2023, commissioned by Standard Chartered and prepared by PwC Singapore, surveyed 1,800 individuals from three investor segments across 10 key markets in Asia, Africa and the Middle East – Mainland China, Hong Kong, Taiwan, South Korea, Singapore, Malaysia, India, the UAE, Nigeria and Kenya.

The research identified a global potential of USD3.4 trillion for climate investing, highlighting the power of individuals to combat climate change.

Within climate investing in Nigeria, $60 billion could flow into mitigation themes – energy storage, energy efficiency and renewable are set to attract the most capital. $34 billion could be mobilised towards adaptation including resilient infrastructure, food systems, biodiversity and the blue economy.

The survey shows 95% of investors in Nigeria are interested in climate investing, and 91% of them want to increase capital flows towards climate. They are mainly motivated by making a positive impact, improved returns and social norms when making such investments.

Only India had a higher percentage of investors keen on climate investing, with 96%.

There are barriers

However, multiple barriers, which vary by investor segments, are holding them back from translating their interest into investment.

The bank said industry needs to help investors overcome these barriers to unlock the potential of retail capital. 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 biodiversity and the blue economy,” it said.

“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.