Nurturing sustainable finance growth in Africa

The case of the PSAC 

Sustainable finance is witnessing remarkable expansion in emerging markets, with African nations at the forefront of this transformation. The adoption of Environmental, Social, and Governance (ESG) policies and frameworks has accelerated capital mobilisation for sustainability. This growth is further evidenced by the increasing popularity of innovative sustainability-themed financial instruments, such as green bonds and other forms of sustainable capital market products. Public finance and investments are also increasingly aligned with sustainability objectives, recognising the urgent need to address the disproportionate vulnerability of the Global South, particularly African nations, to climate change and environmental degradation. 

This research project focuses on Portuguese-Speaking African Countries (PSAC) and seeks to provide a comprehensive understanding of the progress made in integrating sustainable finance within their economies. The primary objective is to evaluate the current state of sustainable finance in PSAC, identify existing gaps and limitations, and propose legal and policy recommendations to strengthen their frameworks in a **de jure condendo** (law-making) context. 

The study adopts a multidisciplinary approach, involving a detailed survey of the legal frameworks and policy measures currently in place within PSAC. This review aims to identify how these nations are addressing sustainable finance and how effectively their regulations and policies align with global ESG standards. Furthermore, the project includes a case study analysis, exploring the application of both public and private finance tools. By doing so, it aims to uncover best practices and highlight innovative approaches to mobilising financial resources for sustainability in these regions. 

Another critical component of the research involves the development of effectiveness indicators. These indicators will measure the impact of sustainable finance policies and tools in achieving their intended objectives, such as mitigating climate change risks, fostering environmental resilience, and promoting inclusive economic growth. Through this empirical analysis, the study seeks to offer actionable insights into how sustainable finance can be further enhanced in PSAC. 

The significance of this project lies in its potential to address several pressing challenges. African nations, including PSAC, face the dual burden of being among the most affected by climate change while also lacking the robust financial infrastructure needed to respond effectively. By identifying and addressing loopholes in the existing frameworks, the research aims to empower these countries with the tools and strategies necessary to harness the full potential of sustainable finance. 

The findings of this study will serve as a valuable resource for policymakers, financial institutions, and stakeholders in both the public and private sectors. By providing tailored legal and policy solutions, the project aims to bridge the gap between global sustainability goals and local implementation in PSAC. Ultimately, it seeks to contribute to a more resilient, inclusive, and sustainable financial ecosystem in Africa, while setting a benchmark for other emerging markets globally.

Research Team

Prof. Dr. Rute Saraiva

Prof. Dr. Paulo Alves Pardal

Partners