The pan-African industry association, African Private Equity and Venture Capital Association (AVCA), has released a special report, which looks at the history and evolution of responsible investing in Africa.
The objective is to demonstrate the role of development finance institutions and private equity in creating a sustainable private sector.
The report titled An Untold Story: The Evolution of Responsible Investing in Africa, was released at the 15th Annual AVCA Conference which was held on 23rd and 24th April in Marrakech.
The report defines responsible investing and explores how fund managers in Africa typically invest for development outcomes that encompass financial returns and economic impact.
Given the continuing rise of responsible investing approaches, we must highlight the important role of the development finance community in the establishment of the PE industry in Africa.
Over the past two decades, they have helped to define an industry for which environmental, social and governance is a vital part of value creation. AVCA tells this story, which is supported by the association’s 2017 Sustainability Study Survey finding that nearly 70% of PE-backed companies had ESG factors integrated into their investment process.
An Untold Story: The Evolution of Responsible Investing in Africa focuses on how private equity (PE) strengthens the private sector through responsible investing and comes as part of AVCA’s ongoing exploration of the topic, which includes the annual Africa Sustainability Study.
The research delivers insights on a core theme influencing the investment ecosystem in Africa and follows the recent special macro report, which examines how African fund managers can capture opportunities in the face of rising currency and political risk. Read more: Private investment in mega-projects shows signs of recovery
The evolution and outlook of responsible investing formed an important part of discussions at AVCA’s conference in Marrakech. On the back of successful industry gatherings in Abidjan, Accra, Addis Ababa, Cairo, Cape Town, and Lagos, AVCA continues to showcase the most important private equity themes in the fastest growing economies in the world.
Given Morocco’s regional share of PE investments and recent re-entry into the African Union (AU), Marrakech served as the ideal location to celebrate the 15th anniversary of AVCA’s Conference.
Commenting on the report, Enitan Obasanjo-Adeleye, Director, Head of Research, AVCA, noted: “Responsible investing, sustainable investment and ESG implementation are approaches that have long been practised by the PE industry in Africa.
"This is no flash in the pan and by outlining the evolution to date, AVCA’s goal is to promote greater understanding and uptake of these practices by industry experts and newcomers alike.”
Runa Alam, Chair, AVCA Sustainability Committee added: “It is important to emphasise the industry's ongoing contribution to the sustainable investment story on the continent.
"The investment ecosystem must continue to take responsibility for Africa’s economic growth, while recognising that responsible investing itself is a key pillar in value creation.”
Download the report here.