From ESG to Bankability: How to Finance the Transformation of African Exporters

For African exporters, the ESG (Environmental, Social, and Governance) question is no longer just about compliance. It can now determine market access, influence a banker’s analysis, and ultimately dictate a company’s ability to finance its own transformation. This was the central theme of the panel “From ESG to Bankability: How to Finance the Transformation of African Exporters?”, held during the 4th edition of the African ESG Summit on Thursday, October 8, in Tunis.

(From left to right: Meriam Ben Boubaker (Moderator), Gérard Sié Kambiré, Habib Karaouli, Riadh Naouar, and via video conference: Salma Frioui.)

Meriam Ben Boubaker, Vice President of the International CFO Alliance and moderator of the session, set the stage immediately. “You need to invest. To invest, you need money. The money exists, but it doesn’t go to companies that cannot prove what they are doing,” she stated. The panel was structured as a chain: Gérard Sié Kambiré provided the risk perspective, Salma Frioui the perspective on standards and proof, Habib Karaouli the banker’s perspective, and Riadh Naouar the development institution’s perspective. The underlying question was simple: which link in the chain must not break for money to reach businesses?

The First Lock: Climate Risk Management

According to Gérard Sié Kambiré, Managing Partner for ESG, Sustainable Finance & Climate Risk Expert, the first barrier lies in climate risk management. “In the past, risk measurement was based on historical data. But today, given climate change, companies are required to integrate climate risk management into their overall risk management,” he explained.

He distinguishes two categories of risk:

• Physical risks: Such as droughts in Tunisia or floods in West Africa.
• Transition risks: Linked to new European requirements, including the Carbon Border Adjustment Mechanism (CBAM) and the Deforestation Regulation.

His example of cocoa illustrates the problem quickly. An exporter who cannot demonstrate that their product meets European requirements risks losing their clients. “If I have no clients, how can I pay back the credit I took out from my bank?” he asked. ESG risk thus becomes a commercial risk, and then a financial risk. Assets themselves can lose value if they no longer generate the revenue necessary to service debt.

Banks Look Beyond Financial Statements

Banks are no longer solely focused on financial statements. They must also look at what could weaken a company’s market. In the case of Ivorian cocoa, this can extend to the geolocation of plantations. The goal is to trace the origin of the product and exclude farms located in areas that do not comply with deforestation rules. “Banks will look not only at what we have done—financial performance—but also at extra-financial performance,” emphasized Gérard Sié Kambiré.

From Data to Decision: The Role of Reporting

This leads to the question: what exactly needs to be put on the table? This is where Salma Frioui, an IFRS and sustainability reporting expert, shifts the debate to data. For her, the problem is not necessarily that companies lack ESG information. They already have their energy bills, social data, questionnaires from buyers, and elements from certifications.

“The problem today is how to transform this ESG data into financial information that is proportionate, reliable, and, above all, decision-oriented,” she explained. In other words, data sitting in an Excel file is of little value to a financier if it does not help understand the risk, the company’s trajectory, or the required investment. “ESG becomes bankable when it is translated into risk, investment, trajectory, and proof,” she summarized.

However, this does not mean asking exporting SMEs to replicate the reports of large corporations. Salma Frioui proposes a minimum reporting framework built around a few key blocks:

1. Company activity and exposure.
2. Energy and climate.
3. Social and operational data.
4. Two or three material risks.
5. Governance and transition plan.

An SME could, for instance, document its electricity, gas, or fuel consumption, its workforce, workplace accidents, critical suppliers, or risks that could directly impact its production. It could also set a target, such as a 30% reduction in energy consumption, and then specify the necessary investments, timeline, and expected gains.

“The bank will finance a trajectory, finance a project,” she insisted. Reporting would therefore not only serve to obtain credit but could also respond to requests from clients, buyers, or donors. This logic led Salma Frioui to advocate, at the end of the panel, for the creation of an “ESG Passport for SMEs.” The principle: a common, proportionate format built with banks, donors, and buyers to avoid each financier or client demanding a new dossier from the company.

The Nerve of War: Financing

Once risk is identified and data structured, the nerve of war remains: financing. Habib Karaouli, CEO of CAP Bank, believes that the weakest link in the chain is precisely this one. He cited over $2 trillion invested in sustainable finance globally, of which barely 1% is directed toward Africa. According to figures presented during the panel, this envelope remains highly concentrated in a few African countries.

For Karaouli, the problem is twofold: mobilize more capital and ensure it reaches the companies that need it. “Compliance has a cost, and the question is: who will bear this cost?” he highlighted, citing carbon footprints, diagnostics, and follow-up on recommendations.

However, a company that arrives with a structured ESG approach has an advantage. “Undoubtedly, these are positive factors that are taken into account,” affirmed Habib Karaouli. But bankers must now deal with a broader palette of risks: rapid regulatory changes in destination countries, climate change, geopolitical tensions, and market closures.

He also cited the potential effects of climate change on certain Tunisian activities, particularly agri-food and aquaculture. The rise in Mediterranean temperatures is, in his view, a parameter to be integrated into project evaluation. This new reality also changes the banking profession. “The assessment criteria have changed. It’s a matter of vigilance,” he summarized. A company that already masters its exposure and has a clear framework benefits from a “favorable advantage” in the analysis and will be “served before others.”

To move away from a logic where SMEs must absorb the cost of their upgrade alone, Habib Karaouli proposes a three-part financing line:

1. Strengthening equity.
2. Subsidized investment credits.
3. Financing for preliminary studies, particularly carbon footprints and ESG diagnostics.

This approach is inspired, according to him, by the Tunisian upgrade program launched in 1996.

Scaling Up: The Role of Value Chains

Financing cannot, however, be limited to a few already-structured companies. This is precisely where Riadh Naouar, Manager of Upstream & Advisory Services FIG NWC at IFC, broadens the debate. He recalled the role that regional banks can play in financing African trade and exports, citing the example of Coris Bank, which is present in several countries on the continent.

For him, exporting SMEs cannot be considered in isolation. A company that exports may depend on hundreds, or even thousands, of small businesses upstream. “There are SMEs linked to value chains. [...] All these SMEs in your value chain must comply,” he explained.

The problem then becomes one of data and knowledge. Banks need sufficiently robust information to project the climate trajectories of their portfolios. However, this data remains too fragmented in several African sectors. Without this raw material, it is difficult to measure risk correctly and thus to generalize green financing.

Hence the importance, according to Riadh Naouar, of the role played by buyers, multinationals, and donors. Large companies that impose new standards on suppliers must also contribute to their dissemination. “Donors and buyers play an important role in popularizing these standards,” he estimated, citing the cocoa sector as an example.

Financing the transition also requires the transfer of skills. “Access to knowledge is a key element,” he insisted. The challenge is no longer just to finance one SME or a thousand SMEs, but to support an entire value chain.

Conclusion: A Shared Responsibility

At the end of the panel, the four speakers each offered their solution:

• Riadh Naouar advocated for an ecosystem bringing together regulators, financiers, buyers, and value chains.
• Habib Karaouli reiterated his three-part financing line.
• Salma Frioui proposed her “ESG Passport for SMEs.”
• Gérard Sié Kambiré returned to the starting point: companies must learn to speak the language of banks.

“The more I understand your language, the better I am able to satisfy you,” he explained. He therefore called on SMEs to integrate a true risk culture while asking banks to play their role in this upgrade. Because the chain cannot work in one direction only: if the company must prove, measure, and invest, financing must also be capable of following this transformation.