In September 2023, African heads of state met in Nairobi for the Africa Climate Summit. The result of the meeting of the minds was the Nairobi Declaration which in essence “demands that major polluters commit more resources to help poorer nations.” The idea is for this declaration to form the basis of the continent’s position at the COP28 summit in November. Africa is amongst the world’s most vulnerable continents when it comes to climate change, however even though this is a globally acknowledged fact – Africa receives only about 12% of the $300 billion required to sufficiently manage and cope with the impacts of rampant climate change.

The declaration urges world leaders to “rally behind the proposal for a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation, that may also be augmented by a global financial transaction tax”. Former First Lady of South Africa and human rights activist, Graça Machel believes that the declaration is a “a huge step forward. Africa is a player, the world cannot go without having Africa at the centre. Africa is not here to be helped. Africa is here to offer opportunities to offer investment, to offer solutions.”

There are five key action points attached to the declaration. The first is Risk Management, which focuses on the advancing the management and assessment of both the Financial Stability Board’s Task Force on Climate-related Financial Disclosures objectives as well as Environmental, Sustainability and Governance risks and the opportunities attached to these across “all business lines”. The second point is ‘Insurance’ which aims to close the ‘insurance gap’ that promotes “inclusive and innovative insurance solutions (including through insurtech and nature-based solutions) for households, businesses and governments in order to build resilient cities and communities as well as sustainable food and agriculture systems, among others”.

Point three speaks to ‘investment’ and specifically supporting the transition to an emission-free economy. Policy, regulatory and industry engagement make up the fourth point of the declaration through the encouragement of engagement with global policy makers, politicians, regulators and industry associations via the Sustainable Insurance Forum (SIF), International Association of Insurance Supervisors (IAIS), and Vulnerable Twenty Group of Ministers of Finance (V20).

Last on the agenda is Sustainable insurance thinking and practices which “Promote the adoption and implementation of the four Principles for Sustainable Insurance across African insurance markets.”