Nature and financial institutions in Africa: A first assessment of opportunities and risks

The report demonstrates that nature-related risks are material for African financial institutions, particularly in the agriculture and extractives sectors. Using the TNFD's LEAP approach, it finds that ambitious nature-positive transitions could lead to equity value changes between +2% and -5% and loan book changes between +0.3% and -0.6% by 2030. While aggregate portfolio impacts appear small due to limited sector exposure, specific risks in agriculture and extractives could double expected credit losses for some portfolios. The report highlights critical physical risks, such as water stress affecting 25% of African countries and habitat loss threatening ecotourism in Eastern and Southern Africa. It concludes that African financial institutions face significant capacity and data gaps in implementing nature-related disclosures and recommends an integrated approach that combines climate and nature risk management.

• Nature-related risks and opportunities are material for African financial institutions, with ambitious actions to halt nature degradation potentially shifting equity portfolio values by +2 to -5 percent and loan books by +0.3 to -0.6 percent by 2030.
• Nature-related risks in agriculture and deforestation-linked extractives are comparable in scale to climate-related risks in manufacturing, chemicals, and extractives; by 2050, profits in agriculture and deforestation-linked extractives could fall by 20 percent and 15 percent respectively under the most ambitious scenario.
• Water stress is a critical physical risk, with 25 percent of African countries already water stressed. In countries like Egypt, Morocco, and South Africa, unit production costs for staple crops could increase by 20 to 40 percent by 2050 relative to a baseline scenario.
• Ecotourism in Eastern and Southern Africa is highly vulnerable to habitat loss and deforestation, as there is a strong positive correlation between the number of visitors to national parks and the richness of flagship species.
• Deforestation associated with gold and copper production represents a significant market access risk; by 2050, unit production costs for these minerals could increase by 20 percent for gold and 33 percent for copper.
• African financial institutions face significant barriers to implementing the TNFD framework, including limited capacity (80% are still building climate risk capabilities), a lack of standardized counterparty data on asset locations, and difficulty recruiting staff with spatial data and scientific expertise.

APA

FSD Africa (2022). Nature and financial institutions in Africa: A first assessment of opportunities and risks. https://fsdafrica.org/wp-content/uploads/2022/06/Nature-and-financial-institutions-in-africa-a-first-assessment-of-opportunities-and-risks_compressed.pdf

Chicago

FSD Africa. Nature and financial institutions in Africa: A first assessment of opportunities and risks. 2022. https://fsdafrica.org/wp-content/uploads/2022/06/Nature-and-financial-institutions-in-africa-a-first-assessment-of-opportunities-and-risks_compressed.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=Nature and financial institutions in Africa: A first assessment of opportunities and risks |date=June 2022 |url=https://fsdafrica.org/wp-content/uploads/2022/06/Nature-and-financial-institutions-in-africa-a-first-assessment-of-opportunities-and-risks_compressed.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2022nature, author = {{FSD Africa}}, title = {{Nature and financial institutions in Africa: A first assessment of opportunities and risks}}, institution = {FSD Africa}, year = {2022}, month = jun, url = {https://fsdafrica.org/wp-content/uploads/2022/06/Nature-and-financial-institutions-in-africa-a-first-assessment-of-opportunities-and-risks_compressed.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }