aBi Finance Leads ESG Integration to Transform Uganda's Finance Sector

Uganda’s financial sector faces a new era where environmental, social, and governance (ESG) factors are becoming essential for risk management and investment appeal. At a recent high-level event in Kampala hosted at Four Points by Sheraton, aBi Finance unveiled initiatives to drive this change, with Bank of Uganda Governor Dr. Michael Atingi-Ego emphasizing the role of IFRS S1 and S2 standards.

These standards push institutions to incorporate climate and sustainability into their strategies beyond traditional financial metrics. Atingi-Ego noted that they represent a fundamental evolution in handling long-term risks like climate shocks and environmental impacts.

The first program, developed alongside the Uganda Bankers Association, builds capacity for adopting IFRS S1, S2, and Global Reporting Initiative frameworks. Ronald Ocheng from the association highlighted gaps in environmental and social performance data, stressing the need for credible reporting to attract global investors.

Targeting Tier IV microfinance institutions, the second initiative—crafted with the Association of Microfinance Institutions of Uganda—offers a tailored ESG framework. Executive Director Jackline Mbabazi explained it promotes responsible lending and environmental care suited to grassroots lenders serving farmers and small businesses.

Denmark’s Ambassador Signe Winding Albjerg underscored the power of partnerships and ‘patient capital’ for inclusive development. aBi Finance’s past efforts have supported over 2.2 million farmers, mostly women and youth, creating 300,000 jobs.

CEO Mona Muguma Ssebuliba affirmed aBi’s dedication to fostering innovation and sustainability. While challenges like capacity gaps persist, these steps position Uganda to align with global finance trends and avoid isolation.

Source: The Observer (Uganda)