UGANDAN BANKS ARE KEY IN FIGHTING CLIMATE CHANGE

BY WOMAKUYU WEDUKU FREDERICK – BUGWERI DISTRICT NATURAL RESOURCES OFFICER

I have been following the New Vision, series on GREEN SCHOOLS, promoting climate crisis reduction.

The climate crisis is the most critical challenge facing society in the 21st century. The data is
irrefutable, and the world’s climate scientists agree that urgent action must be taken to address the
current and potential impacts of climate change, including chronic changes to temperature and
precipitation, rising sea levels, and more intense and frequent extreme weather events.

Some of these impacts are already being felt in communities across the globe, and longer-term
climatic changes have the potential to cause wide-ranging impacts affecting business and society,
including disrupted supply chains, damaged infrastructure, reduced crop yields and a decline in
biodiversity. These risks and impacts are exacerbated by inequality and unsustainable economic
development, which put additional pressure on land, water, forests, and other natural resources.

The New Vision GREEN SCHOOLS idea has trickled my mind into yet another idea. One of the sectors
that is critical in reducing the climate change but has played a meagre role are Banks.

Banks should support the transition to sustainable, low-carbon economy that balances
environmental, social, and economic needs, to meet the targets of the 2015, Paris Climate
Agreement that called on nations to keep the rise of global temperatures below 2 degrees Celsius.

Banks are the largest financiers of carbon-intensive sectors such as oil & gas, power, and industrials.

The ambition to bring business and the global economy into alignment with the Paris Agreement will
not be easy. It will require rapid and far-reaching transitions in energy systems, industrial processes,
land-use, buildings, transport, and other infrastructure.

We know that delaying this transition could significantly increase costs, lock in carbon-emitting
technology and infrastructure, increase the amount of stranded assets and reduce the range of
effective responses to the challenge in the medium and long term.

Banks should have environmental and social finance goals

To achieve climate change reduction significantly, banks should have environmental and social
finance goals to provide sustainable finance to align with the United Nations’ Sustainable
Development Goals (UN SDGs).

The environmental finance goal should aim at working towards low carbon emissions and reduction
of climate change risks that include, financing, clean technology, energy efficiency, green buildings,
renewable energy, sustainable Agriculture and Land Use, sustainable Transportation and water
quality and conservation.

Social Finance Goal includes financing in areas including affordable housing, affordable basic
infrastructure, diversity and equity, economic inclusion, education, food security, and healthcare.
Uganda Banks should also join membership of the U.N.-convened Net Zero Banking Alliance (NZBA),
which has helped to establish an industry framework for decarbonizing the banking sector.

Sustainable progress strategy

Banks should form a sustainable progress strategy that sets out three key pillars of activity that
contribute to the world’s sustainable development agenda:

Low-Carbon Transition

Banks should finance and facilitate low carbon solutions and support their clients in their
decarbonization and transition strategies.

Climate Risk

Banks should measure, manage, and reduce the climate risk and impact of their client portfolio.

Sustainable Operations

Banks should reduce the environmental footprint of their facilities and strengthen their sustainability
culture

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