Global solutions must be tailored to local environments if regulators want to successfully tackle pressing financial inclusion issues, such as climate change, and ensure that no one is left behind, AFI Executive Director Dr. Alfred Hannig said on 30 October.

Dr. Hannig outlined five steps to “transform the financial sector”, during the close of the Global Conference on Green Finance in Rabat, Morocco.

Over 100 people from 35 member institutions took part in the event, as well as partner organizations and networks such as Agence Française de Développement (AFD), Swedish International Development Cooperation Agency (Sida), Network for Greening the Financial System, German Agency for International Development (GIZ), International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), Banco de Espana and De Nederlandsche Bank.

In support of long-lasting change was Bank-Al Maghrib Governor Abdellatif Jouahri, who opened the conference by underling that “understanding the issue of climate change from the angle of central banks and supervisors involves understanding the structural changes that will affect the financial system and the economy in general.”

“This will challenge us conducting our fundamental missions, either with regard to price stability, financial stability, or financial inclusion,” Governor Jouahri said.

Crucially, mindset shift, the first of the five steps, begins with incorporating new and emerging topics, such as gender and the environment, into mainstream thinking as well as extending collaboration to a wider scope of stakeholders and across tradition divides -– both within and across institutions.

“A shift in mindset calls not only for addressing issues of gender inclusive finance and inclusive green finance, but also we should recognize that it is oftentimes the women in the central banks who are driving green and inclusive green finance,” he said.

In addition to pioneering the field of inclusive green finance, following the endorsement of Sharm El Sheikh Accord on Financial Inclusion, Climate Change and Green Finance, AFI members have been key proponents of gender financial inclusivity after adopting the Denarau Action Plan which calls for narrowing of the gender gap and pushing for greater gender diversity in the workplace.

More inclusive cooperation, Dr. Hannig said, will trigger the next step, namely, better mapping and understanding of the risks posed to society and financial systems.

As a consequence, policymakers will be better placed to develop informed policy responses and solutions – the third step –, which for AFI’s Inclusive Green Finance workstream are outlined in the 4P framework.

Reinforcing this is capacity building, the fourth step, of, a key and in-demand AFI member service that enables members to share their expertise and solutions in order to build their knowledge and skills.

“It is essential to strengthen our capacities in this field and our cooperation and knowledge sharing at the national, regional, and international levels,” said Governor Jouahri.

The final step is implementation, which Dr. Hannig said that the network will support through cooperation and shared learning in order to help formulate policies at the national level.

“AFI is committed to drive this process,” he said. “We believe in collaboration and peer-learning as in this area, it will be our strength.”

Co-hosted by Bank Al-Maghrib, the conference provided a unique platform for AFI members, partners and international stakeholders to share insight on the possibilities and challenges of green finance in tackling climate emergency. Among the topics discussed were data measurements and credit risks, as well as Islamic green finance, the first time this topic was introduced at an AFI event.

The one-day conference followed two days of member training, the first-ever AFI capacity building event focused solely on inclusive green finance.

AFI’s IGF workstream is part of the International Climate Initiative (IKI), which is supported by the German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU).