Empowering Africa’s Future: Building Resilience in a Changing Climate

In recent times, there has been a significant increase in natural disasters and erratic weather phenomena impacting various regions worldwide. Africa is also experiencing the fallout from a changing climate.

As we enter the latter part of the year, now is an opportune time to reflect on our evolving climate and the need to discuss our adaptation methods. It is essential to investigate innovative financial solutions that enhance resilience in our communities.

The World Meteorological Organization (WMO) State of the Climate in Africa 2024 report reveals that our continent has faced and will continue to face disproportionate effects from climate change, along with the substantial costs linked to necessary climate adaptation. According to the report, the financial strain of climate change can amount to 5% of Africa’s Gross Domestic Product (GDP), with numerous nations allocating up to 9% of their yearly budgets to address climate extremes.

Read: SA encouraged to incorporate climate risks into monetary policy

Consequently, it is crucial for both public and private sectors to refocus their efforts to emphasize adaptation and resilience, in addition to mitigation. We must continue investing in climate mitigation initiatives designed to reduce or mitigate the adverse effects of climate change, such as advancing cleaner energy sources and decarbonization strategies.

Equally vital is determining how to reduce vulnerability to the negative impacts of climate change. This approach, referred to as climate adaptation finance, includes investments in climate-resilient agriculture, such as drought-resistant crops and improved water management practices, as well as robust infrastructure like flood defenses, early warning systems, energy storage solutions, and the construction of resilient buildings. Funding these projects enhances the resilience of economies and communities against extreme weather events, like floods and droughts.

Read: Devastating monsoon season results in 1,860 fatalities in India and Pakistan

We share a collective and urgent responsibility to prioritize and develop innovative funding mechanisms for adaptation, while incorporating preparedness measures for resilience.

This objective remains a primary focus for my team. I recently attended two conferences in Cape Town in June: the 2025 SADC Sustainable Finance Forum and a Group of 20 (G20) discussion on adaptation and resilience. Both events highlighted that tackling climate-related challenges while emphasizing adaptation and resilience is not merely a moral obligation but a business imperative.

Various reports, including the 2023 Emerging Economies Climate Report, confirm the undeniable financial implications of climate change for Africa. The report indicates that 79% of respondents cited climate change impacts on their organizations this year, up from 68% in 2022, with flooding, drought, and heat recognized as the primary physical risks.

Business and finance must invest in our assets, infrastructure, and communities to better prepare ourselves for these risks. However, this call to action is fraught with challenges. The scalability of financing for adaptation and resilience encounters obstacles such as unclear revenue streams, inadequate and flawed data, a lack of expertise, and limited resources in low-income countries to support these initiatives, along with the challenge of accurately assessing and valuing the impacts of such projects.

Consequently, it is crucial for finance sector participants to devise solutions that offer tangible benefits while aligning with business needs. Innovative methods to address financing deficiencies have emerged, such as leveraging revenue streams from carbon credits or ecotourism to fund adaptation initiatives. Blended finance solutions are essential for bringing together diverse stakeholders with varying risk appetites and mandates to support critical projects that may not be commercially viable independently, while index-based (parametric) insurance can help mitigate physical risks.

In the memorable words of W. Edwards Deming, “In God we trust. All others must bring data.” Though adaptation is a relatively unfamiliar concept for many governments, real economy firms, and financial institutions, trustworthy data will be fundamental for any adaptation strategy. Improved data, modeling tools, and geolocation information will be indispensable for comprehensive solutions.

Read: Why the business sector must lead the charge on sustainable development goals

Corporate and financial institutions have the potential to incorporate adaptation considerations into their strategic planning and goal-setting, even though this remains an emerging priority. We will need audacity and visionary leadership to effect transformational changes in standard business practices.

In striving for a holistic approach, and paraphrasing a renowned French philosopher, Voltaire, “we should not let perfect be the enemy of the good.” As many may be aware, South Africa is presiding over the G20 this year, utilizing this global platform to promote initiatives aimed at making adaptation an accepted norm rather than an exception.

At Standard Bank, we advocate for a balanced approach in addressing existential challenges. This balance necessitates collaborative responses from the private sector, public sector, and civil society to secure a sustainable future.

This April, we announced an updated goal to mobilize over R450 billion in sustainable finance by 2028. By the end of 2024, we had already mobilized R177 billion since 2022. Our green and social mobilization targets include adaptation and resilience initiatives, encompassing essential infrastructure, critical services, and biodiversity conservation, along with sustainable agriculture.

We have financed several of the largest battery energy storage system (BESS) projects across Africa, amounting to approximately R12 billion. These BESS initiatives enhance the resilience of the national grid and improve energy access for communities.

Additionally, Standard Bank has set a goal to finance more than R7 billion in climate-smart agricultural practices by 2030, with over R2 billion already funded in 2024. Given that nearly 40% of land in Africa is committed to agriculture, this sector is vital in preserving our precious natural habitats, which require investment to foster adaptation and bolster resilience.

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Multilateral organizations and forums play a crucial role in fostering systemic and behavioral changes. The magnitude of the challenge is too overwhelming for any single entity to resolve independently. Events like COP30, G20, and the SADC Sustainable Finance Forum must serve as catalysts for innovation, action, and target-setting.

It is essential for African nations to ensure our voices resonate in these discussions, considering the scale of the challenges we encounter.

We have a unique opportunity to create a meaningful impact. It is crucial to rise to this challenge; otherwise, we risk compromising the future of generations yet to come.

Sasha Cook is the head of sustainable finance at Standard Bank Corporate & Investment Banking.

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