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Environmental Damage Risk to Financial Sector – CONAMA

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The Coalition of NGOs against mining Atewa Forest (CONAMA) is urging government to act consistently with Vice President Bawumia’s advice that market actors should be guided by social and environmental sustainability in decision-making and recognize the risks to financial stability from environmental damage and climate change. 

The Vice President advised this during the launch of Ghana’s Sustainable Banking Principles (SBPs) where he emphasized that “financial institutions must include climate disruption issues into their risk management and reporting” and that sustainability must be “incorporated into the responsibilities and reporting of market actors to guide their decision making”. He went on to say “there is no doubt that environmental risk, and risk arising from climate change in particular, constitutes a significant systemic risk for the financial sector”. 

In a nutshell, the VP is advising careful assessment of the environmental and social sustainability and climate impacts of investments options to guide decision making in the finance sector, warning that environmental damage and climate change is a huge risk to their business activities.

While welcoming these statements, CONAMA is highlighting the inconsistencies of a government that on the one hand seems to be warning financial institutions and market actors against investment in environmentally and climate damaging activities due to the risk of financial instability, while on the other hand is seeking investment partners for projects that will have profoundly destructive impacts on Ghana’s forests and the climate. 

Most significant at the present time for this investment is the planned bauxite development in Ghana’s protected forests. Yet bauxite extraction,, gold mining and other activities that destroy the forest are not heeding Dr. Bawumia’s cautions: firstly, sustainability issues have not guided decision making because, if they had, bauxite development in the protected forests and anywhere close to watersheds would have been ruled out long ago; and second, the destruction of Ghana’s forests will contribute to the very environmental damage and climate change that he says is a risk to financial stability. Ghana is seeking investment for bauxite development, yet by Dr. Bawumia’s own advice, this is not advisable. 

Again, even though we commend the government greatly for actions to address galamsey, there are blatant galamsey activities currently on-going in several state protected forest reserves and along the streams and river bodies in the country that need a decisive and strong commitment to clamp down on these destructive commercially viable enterprises. These activities are being supported by loans from Ghana’s rural banks, contradicting the sound advice given by Dr. Bawumia to the finance sector. 

During the launch the VP also pointed to government’s announcement to implement climate change and green economy programs and projects that will “promote a clean environment, increase job creation and accelerate poverty reduction”. While this is good news, the on-going and planned damage to Ghana’s forests and environment will only undermine any good brought about by these ‘green’ projects, as the VP has himself acknowledged. It is a vicious circle and one that Ghana must break free from. 

We ask, what environmental analysis and sustainability considerations has GIADEC made in respect of valuing the trade-offs associated with the intended plans to mine bauxite in a watershed like Atewa Forest, which is also a critical natural climate solution for Ghana. The leadership of GIADEC obviously are oblivious to the need for environmental sustainability in decision-making and have failed to recognize the risks to financial stability from environmental damage and climate change that will result from tampering with the Atewa Forest. Like Ostriches, GIADEC hides its head in the sand, knowing very well that they cannot walk their talk of environmental sustainability. It is shameful for GIADEC, the EPA and the government to preach virtue and practice vice.

Where our government and GIADEC have failed, we expect the global Natural Climate Solution Ambassador for Climate Action, China, and its State Banks to take urgent steps to amend a financing deal that will see to the destruction of Atewa Forest, an important natural climate solution for Ghana.

Ghana’s Sustainable Banking Principles and Sector Guidance Notes should also send strong signals to the Ghana Exim Bank and all financial institutions, both at home and abroad, who will dare consider financing any mining activities that will put Ghana’s watersheds and natural climate solutions at risk.  We all have a watchdog role to play, where the government and GIADEC is seen just to be talking but without action. 

The Coalition of NGOs against mining Atewa Forest has long recognized the threat that environmental damage and climate change pose not only to the financial sector but to all sectors of Ghana’s sustainable development and achievement of the SDGs, and has been one of the reasons for advocating against such damaging developments and towards green development. 

As the Vice President has been so emphatic about how environmental damage and climate change will threaten financial stability, the Coalition of NGOs against mining in Atewa Forest urges for consistency between government’s words and actions by exempting Ghana’s forests and other protected areas from all damaging developments and to allow only green development projects – which Dr. Bawumia himself said will “promote a clean environment, increase job creation and accelerate poverty reduction” – throughout Ghana and most especially in and around Ghana’s forests and other areas of high biodiversity and natural resource value.

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