By: Kimberly Ramkhalawan
April 8, 2022
Policy gaps are to blame for the inefficiencies often experienced in attempting to develop the environmental, social and corporate governance (ESG) sector among Caribbean states. This according to the Anu Jogesh, Associate Director, Climate and Resilience Hub at WTW, speaking day two of the Caribbean Development Bank’s (CDB) Caribbean Catastrophe Risk Insurance Facility (CCRIF) Conference. The ESG sector comprises socially conscious investors participating in Environment, Social Governance based companies. However, she says the environment lags too often in attracting long-term investors and development of SMEs of this nature.
According to the United Nations, who developed this type of response to structuring risk management, this industry now represents some $30tr US dollars outside of funding through corporate social entities. Jogesh says making this part of any Caribbean country’s governance will greatly assist in pushing it as the main economic driver.
In opening the event, CDB president Dr Gene Leon said there was a need for regional heads to take into consideration the impact of their risks, whether climate or non-climate associated. He was speaking at the opening of the 2022 conference. He said taking inventory of a country’s risks can often impact its credit rating when it comes to accessing funding for projects and investors. Dr Leon said ‘by extension credit ratings; further, the improved risk profile has a permanent effect on creditworthiness, which enhances access to more affordable financing. This perspective provides a solution that implies a permanent impact on our ability to access more affordable finance while reducing the reliance on temporary-impact, lower rate concessional funding’.
With CCRIFF and the CDB as financial institutions in the region, they too were subject to credit ratings. Dr Leon reminded Caribbean nations, that implementing the proper policies and risk assessment legislation that also allowed for mitigating against it, enhanced their rating positionings as the region’s development bank, allowing them in turn to tap into further funding from across the world.
Dr Leon highlighted the impact of unmitigated risks has had on government resources and its ability to stay resilient during the pandemic and emergence from this period.
This year’s theme centered around Country Risk Management – A Key Imperative for the Caribbean and a Pathway to Resilient and Sustainable Recovery Post-COVID-19.
Liz Emmanuel, head of tech assistance at the CCRIF, says situational analysis shows that islands in the region focus primarily on three risks, financial, economic and environmental. However, she says the integrated approach among various ministries was found in nations that created this legislative approach.
She says analysis also shows a legislative approach that entailed involvement of not only state entities, but non-governmental organisations, community based groups and the private sector, providing an all hands on deck in times of a prepared response, while playing a pivotal part in the development of its framework.
CDB Chief Risk Officer, Malcolm Buamah spoke of establishing country headquarters for CCRIFF, as it saw the need for the physical presence in assisting nations develop their risk assessment and mitigation at all governance levels.
This was something Chief Executive Officer at CCRIFF, Isaac Anthony shared as the insurance risk agency was about to venture outside of environmental, climate shocks and hazards
Speaking on CCRIFF as the world’s first multi-country that provides quick financial liquidity when a crisis is triggered within fourteen days to its over 22 governments in the Caribbean and in Central America, Anthony says focus is now driven toward other areas outside of its mandate, as it becomes a developmental insurance company. He describes this in-country management as assisting in building resilient economies.