FSA and ADA Request Companies to Adopt Principles of Sustainable Insurance

The Financial Supervisory Authority welcomes the announcement by the African Development Agency “FSD Africa” ​​- a non-profit organization backed by the British government – that it is taking a set of initiatives to support Egypt’s efforts to improve environmental, social and implement sustainability management standards, support Egyptian and regional insurance companies and encourage investment in innovative solutions to counteract the effects of climate change.

The financial markets in Egypt are expected to benefit from the initiatives launched by the African Development Agency, aimed at encouraging economic activities that are compatible with the objectives of reducing carbon emissions, on climate change. adapt and conserve natural capital resources. The initiatives will also strengthen the Egyptian government’s efforts to build a more flexible and capable economy. To remain steadfast in the face of work to restore the Egyptian economy and face new challenges, including economic consequences arising from global events.

The African Development Agency holds advanced discussions with the Financial Supervisory Authority 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, and discusses the agreement to a memorandum of understanding so that the agency and the government work closely with insurance companies operating in Egypt to provide technical support; Including the recent workshop dedicated to “Leaders of Climate Finance in Africa,” whose activities were presented late last week at the Commission’s Regional Center for Sustainable Finance.

The workshop has helped strengthen the capacity of policymakers, regulators, academics and financial market participants to support climate change projects, and has provided guidelines to help them access climate finance funds from institutions and international bodies and capital. mobilize to fund climate change. projects in all North African countries.

Dr. Mohamed Omran, Chairman of the Financial Supervisory Authority, said that the government was aware of the importance of applying sustainability practices and sustainable financing as key instruments for economic growth, as sustainability is and continues to be an important focus of EFSA. strategy and represents one of its main priorities.

He added that the government is always happy to work to encourage partnerships with international bodies to encourage insurance companies to develop new solutions that contribute to addressing environmental and social issues, and the integration of environmental, social and governance principles that related to sustainability within insurance companies. plays an important role in ensuring that the insurance sector in Egypt provides insurance products, innovatively.

In turn, Mr. Gareth Bailey, British Ambassador to Egypt, explains that the financial sector plays a key role in meeting our commitments to combat climate change, as highlighted by the high-profile climate action leaders in the UK and Egypt in Bonn, Germany. I am therefore pleased to see that sustainable financing is fast becoming one of the mainstays of the green partnership between the two countries. I particularly welcome co-operation and co-ordination efforts to improve capacity building and deepen sustainable practices in the insurance sector and private insurance funds in Egypt and throughout the region. ”

Hisham Ramadan, Assistant Chairman of the Financial Supervisory Authority, said in his speech to the participants of the insurance sector leaders of the Leaders of Climate Finance in Africa workshop that the watchdog will continue to develop any efforts made by insurance companies to , to support. solutions that help address environmental and social issues related to sustainability, and that insurance companies, in line with the Government’s recent Resolutions no. 107 and 108 of 2021 are required to submit quarterly reports on their compliance with the ESG and TCFD measures and requirements or on the reason for non-compliance and the steps taken by the companies to comply with the disclosure standards. .

He stressed that the government will work with international institutions to develop business models to integrate climate change risks into the risk management structure of companies and entities engaged in non-bank financial activities, particularly in the insurance sector. Within the African continent to help African insurance markets include sustainability in their policies.

Ramadan noted that from now on, insurance companies must be ready in their fight to attract customers, as sustainability and their participation in adhering to policies to address the effects of climate change will be a key factor in customers’ decisions about choosing the insurance company in which they will place their trust, as customers have become more convinced that insurance companies have commitment in this area and would like to see them become more effectively involved in sustainability activities.

He pointed out that insurance companies can adopt sustainability in various ways, starting with the method of operation and management of the insurance company’s buildings, its vehicle fleet, through their investments, their underwriting decisions and how to design insurance products that are most compatible with the principles . of sustainability, in addition, the issue of sustainability must form part of a framework and risk management activities of the insurance company.

Commenting on these initiatives, ADA CEO Mark Napier said: “The agency is committed to working with regulators and government agencies to identify and mitigate climate change risks and seize every opportunity to do so. Our new partnerships will help qualify our partners in Egypt and its neighboring countries to address the risks of climate change effectively and accelerate the transition to a green economy with great growth opportunities. ”

The African Development Agency is also working on identifying mechanisms to support Egypt’s efforts to manage risks of climate change and human resource development by enhancing the constructive stakeholder engagement and holding a series of high-level meetings with leading business institutions and policymakers, with the emphasis on their commitment to special attention to the most vulnerable population groups climate change in Egypt.

The most important of these initiatives include the African Development Agency’s support for innovative solutions to combat the effects of climate change. As part of this, Bermuda, an agricultural technology start-up in Egypt, won the Climate Change Startup Challenge, which aims to find new solutions to improve the resilience of the most vulnerable communities in Africa against the risks posed by climate change.

The Baramouda Company project focused on maximizing the efficiency of agricultural waste management by treating soil pollution and agricultural waste. The company created soil improvers and organic fertilizers from different types of agricultural waste. The fertilizer consists of organic and natural components that have great benefit for the soil. of agricultural land in Egypt.

The African Development Agency has also recently announced similar support for FinTech start-ups in Africa to provide innovative solutions that enable the most vulnerable communities to withstand the effects of climate change.

The agency, in turn, participated in the roundtable meeting of entrepreneurs with pioneers of entrepreneurship and investment firms, financial technology accelerators and development agencies, hosted by the American University in Cairo Business Incubator to discuss the evolving ecosystem and find innovative solutions to combat. the effects of climate change.

The African Development Agency is aware of the importance of the contribution that insurance companies will make to support measures to mitigate climate change and achieve better results for the African continent; To achieve this, the agency urged insurance companies in Egypt to adhere to the Nairobi Declaration on Sustainable Insurance as a first step towards establishing a sustainable insurance industry and building adaptation capacity to climate change in the African continent. is known as the first signatory of the Nairobi Declaration as one of the founders of this advertisement.

It is noteworthy that FSD Africa – based in the Kenyan capital, Nairobi – was established in 2012 as a non-profit organization supported by British aid provided by the British government. The agency acts as a development institution to develop the financial sector and direct funding to serve the future of the African continent.

The African Development Agency’s team of financial sector experts work with governments, entrepreneurship leaders, regulators and policymakers to design ambitious programs that help financial markets work better for all stakeholders.

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