The Financial Regulatory Authority (FRA) welcomed the announcement of the African Development Agency that it will undertake a set of initiatives to support Egypt’s efforts in implementing environmental, social, and governance standards (ESG).
This is to support Egyptian and regional insurance companies and encourage investment in innovative solutions to address climate change.
Financial markets in Egypt will benefit from the initiatives launched by the African Development Agency, which aim to encourage economic activities compatible with the objectives of reducing carbon emissions, adapting to climate change, and preserving natural capital resources. The initiatives will also enhance the efforts of the Egyptian government to build a more flexible and capable economy.
The African Development Agency is conducting advanced discussions with the FRA to work together to support the implementation of sustainability principles and environmental, social, and governance disclosure standards related to sustainability in the insurance sector in Egypt.
It also aims to discuss an agreement to implement a memorandum of understanding (MoU) so that the agency and the authority work closely with insurance companies operating in Egypt to provide technical support, including the recent workshop dedicated to ‘Leaders of Climate Finance in Africa’, which was hosted at the Regional Centre for Sustainable Finance at the authority late last week.
In a statement, Chairperson of the FRA Mohamed Omran said that the authority is aware of the importance of applying sustainability practices and sustainable financing as main tools for economic growth, as sustainability has been and still is an important axis of the authority’s strategy and represents one of its main priorities.
He added that the authority is happy to work on encouraging partnerships with international bodies to urge insurance companies to develop new solutions that contribute to addressing environmental and social issues.
For his part, Gareth Bayley — The UK’s Ambassador in Cairo — said: “The financial sector plays a key role in fulfilling our commitments to fight climate change as emphasised by high-profile climate action leaders in the UK and Egypt in Bonn, Germany. I am therefore pleased to see that sustainable financing has quickly become one of the main pillars of the green partnership between the two countries. I particularly welcome cooperation and coordination efforts to enhance capacity building and deepen sustainable practices in the insurance sector and private insurance funds in Egypt and across the region.”
Additionally, Hisham Ramadan — Assistant President of the FRA — noted that insurance companies must be ready for their battle to attract customers, as sustainability and these company’s participation in compliance with policies to address the effects of climate change will become a major factor in customers’ decisions about choosing the insurance company that they trust. Customers have become more convinced that insurance companies have a commitment in this area and would like to see them engage more effectively in sustainability activities.
He also pointed out that insurance companies can adopt sustainability in several ways, starting with the method of operating and managing the insurance company’s buildings and its fleet of vehicles.
Commenting on these initiatives, Mark Napier — CEO of the African Development Agency — said that “the agency is committed to working with regulators and government institutions to identify and mitigate the risks imposed by climate change and seize all available opportunities to achieve this.”
“Our new partnerships will contribute to the qualification of our partners in Egypt and neighbouring countries to effectively address the risks of climate change and accelerate the transition to a green economy with significant growth potential.”