The local financial industry made a significant move towards environmental sustainability this week as the Namibia Sustainable Finance Alliance (NSFA) was introduced.

The Alliance unites the Bank of Namibia along with major financial regulators, banks, and sector associations to address climate-related challenges and promote equitable development.

The NSFA serves as a voluntary, multi-stakeholder initiative designed to integrate sustainable finance into the national framework.

At the first gathering, Ebson Uanguta, Alliance Chairperson and Deputy Governor of the Bank of Namibia, highlighted the shared determination of the sector. Uanguta mentioned that the NSFA is a strong example of the institutions’ joint dedication to integrating sustainability and climate resilience into the financial system.

Namibia is encountering major climate challenges, which are currently affecting the financial industry due to higher loan defaults and more insurance payouts. The financial sector is anticipated to have a vital role in promoting resilience by supporting initiatives in climate-friendly farming, clean energy, and eco-conscious water management.

Eight organizations officially ratified the Terms of Reference to form the Alliance: the Bank of Namibia, the Namibia Financial Institutions Supervisory Authority (NAMFISA), the Namibia Savings and Investment Association, the Bankers Association of Namibia, Bank BIC, Bank Windhoek, Letshego Holdings Namibia, and the Namibia Reinsurance Corporation.

In its initial year, the NSFA will concentrate on two main areas: Climate and Nature Risk Assessment and Management (which involves creating tools and conducting pilot projects) and Data and Analytics (which aims to standardize climate reporting practices and investigate a common national climate data repository).

Deputy Governor Uanguta ended with a strong warning and a forward-looking perspective: “The consequences of doing nothing are significant, but the rewards of a successful shift are national wealth, security, and a respectful future for every Namibian.”