What Is Climate Literacy, and How Has It Evolved?
Climate literacy traditionally referred to an individual’s ability to understand the basic science of climate change; its causes, impacts and potential responses. It meant understanding concepts such as greenhouse gases, global warming, changing weather patterns and the relationship between human activity and climate change.
However, as climate change became increasingly connected to economic activity, regulation and financial decision-making, its definition has evolved from general environmental awareness into an applied professional capability. For businesses, it means understanding how climate-related risks and opportunities can affect revenue, costs, assets, financing, investment portfolios, operations and long-term strategy.
This evolution can be understood in three broad stages.
- The first stage was awareness. Climate change was primarily treated as an environmental issue. Organisations focused on awareness campaigns, environmental initiatives, carbon reduction and corporate social responsibility. Responsibility largely sat with environmental or sustainability teams, while climate considerations remained peripheral to mainstream business functions.
- The second stage was measurement and management. As companies began measuring greenhouse-gas emissions and assessing exposure to physical and transition risks, climate issues started entering risk management and operational decision-making. Carbon accounting, emissions inventories, climate-risk assessments and scenario analysis became increasingly relevant to finance, risk, investment, insurance and supply-chain functions.
- The third stage is integration. Climate considerations are now increasingly being incorporated into governance, financial reporting, capital allocation and enterprise risk management. Under frameworks such as IFRS S1 and IFRS S2, organisations are expected to identify and disclose material sustainability- and climate-related risks and opportunities that could reasonably be expected to affect their prospects. This shifts climate literacy from an optional sustainability competency to a broader business capability.
The distinction matters. A sustainability professional may understand carbon accounting, but a credit analyst increasingly needs to understand how a borrower’s exposure to climate regulation could affect its repayment capacity. An investment professional may need to assess how transition risks could affect the valuation of an asset. A risk manager may need to understand physical climate hazards and their implications for collateral, operations or business continuity. Finance teams may need to understand the data, controls and assumptions supporting climate-related disclosures.
In this context, climate literacy is no longer simply knowing about climate change. It is knowing what climate change means for the business, and how to incorporate that understanding into decisions.
For Africa, a continent with economies highly exposed to climate shocks and the world’s youngest workforce, the critical question is: is this shift being matched by readiness on the ground?
How Is Regulation Driving Climate Capability?
Perhaps the clearest evidence that climate literacy is becoming a business skill is coming from financial regulators and standard-setters. The International Sustainability Standards Board's IFRS S1 and IFRS S2 have established a global baseline for sustainability- and climate-related financial disclosures. A growing number of jurisdictions are now adopting or otherwise using the standards.
The IFRS Foundation's latest jurisdictional tracking identifies Ghana, Kenya and Nigeria among African jurisdictions that have finalised approaches to ISSB Standards. Ghana and Kenya are among jurisdictions with first effective reporting periods beginning in 2027, while Nigeria's mandatory requirements commence later under its national roadmap. (IFRS Foundation)
What's notable across all four is that the mandates are no longer just asking "can you produce a report?" — increasingly they ask whether the company has the people, systems, and governance to produce credible sustainability information in the first place.
Nigeria
- Mandatory for large public interest entities (PIEs): 2027
- Mandatory for other PIEs: January 2028
- Mandatory for SMEs: January 2030
- Sept 2026: SEC directed public companies to submit implementation plans by 15 October 2026 — covering governance, gap analysis, data systems, internal controls, assurance, and capacity-building/training plans
- Regulator: FRC, working with SEC under the Adoption Readiness Working Group (ARWG)
Kenya
- Mandatory for public interest entities (NSE-listed firms, banks, insurers, pension funds, SACCOs): January 2027
- Readiness gap-analysis deadline: 30 June 2026
- Large non-PIEs: 2028; SMEs: 2029
- CBK has required banks to embed climate risk into ICAAP since 2021 — ahead of the IFRS mandate
- ~40% of foreign investors on the NSE now cite ESG compliance as a factor in investment decisions
Ghana
- Mandatory for listed companies and major PIEs: January 2027 (Phase II: 2028)
- Bank of Ghana's Sustainable Banking Principles + Climate-Related Financial Risk Directive already in force for banks
- 2026 KPMG survey of GSE-listed firms: only 19% report against TCFD, 10% against IFRS S2; just 27% have board-level sustainability oversight (up from 18% in 2023)
- Enforcement: ICAG (professional sanctions), SEC (fines, delisting)
South Africa
- No hard statutory deadline yet — JSE uses guidance aligned to IFRS S2, updated periodically
- Companies Amendment Bills added ESG governance requirements (remuneration transparency, ethics committees)
- More mature governance base, slower on binding mandates than Nigeria/Kenya/Ghana
The Talent Gap
Regulation explains why climate skills are suddenly urgent. Labour market data explains why they're hard to find. LinkedIn's 2025 Green Skills Report shows demand for climate-literate professionals growing roughly twice as fast as the supply of workers who actually have those skills — and Africa's talent is growing faster than expected, even if it's starting from a smaller base.
- Global green hiring grew ~8%/year (2021–2025); green skills supply grew only ~4.3%/year
- Just over half of green-skilled hires in 2025 went into non-green job titles — the skill is spreading past sustainability departments into ordinary finance, risk, and operations roles
- Nigeria and Ghana already have >20% of LinkedIn members with a green skill — ahead of Germany and Switzerland
- Kenya's green-talent growth rate: 5.9%/year — ahead of the UK (3.4%) and US (3.6%)
Where the gap actually is, is not entry-level roles, but mid-to-senior functions:
- Credit risk: modelling climate-adjusted expected credit losses (IFRS 9)
- Accounting: reconciling Scope 1–3 emissions with financial statements
- Legal: drafting ESG bond covenants, greenwashing liability protection
- Executive: owning materiality assessments and capital allocation decisions
A quiet risk worth naming: the market is producing certificates faster than it's producing capability. A professional can finish an ESG short course without being able to run a materiality assessment, or learn the terminology of climate risk without knowing how those numbers move a P&L. The next phase of African sustainability education needs to shift from knowledge acquisition to applied competence — climate literacy for a banker should look different from climate literacy for a procurement officer, even if the underlying goal is the same: using climate information to make a better decision inside your existing role.
The Money Behind It
None of this happens without financing, and that's where the biggest disconnect shows up. Billions are being mobilised for green infrastructure and clean energy, but almost none of it is earmarked for training the people who have to run, audit, and report on that infrastructure.
- Africa's climate finance gap: needs to roughly quadruple annually through 2030
- Sustainable finance gap estimated at $1.3 trillion by 2030 (LBS/Stanbic IBTC)
- Less than 1% of climate finance goes to skills/workforce training
- Only ~6.5% of African youth have completed formal vocational training
- Africa holds ~60% of global solar potential but only ~2% of global renewable energy jobs
- FSD Africa's 2026 modelling (covering Kenya, Nigeria, and South Africa) projects 3.8–7.9 million new green jobs by 2030, rising to 65.9–84.5 million by 2050 — with growth spread well beyond utility-scale renewables into clean cooking, solar home systems, waste recycling, and electric two- and three-wheelers. An earlier, more conservative estimate put direct green jobs at ~3.3 million by 2030, with roughly 40% requiring specialised or advanced skills
The scale of that number is the real headline: this isn't a problem that gets solved by training more engineers. A renewable energy project also needs accountants, lawyers, financiers, procurement specialists, and risk professionals who understand climate exposure.
Who's Building the Pipeline
The response to this skills gap isn't coming from one central body — it's a patchwork of central banks, professional associations, business schools, and informal online networks, each moving at a different speed and covering a different piece of the problem.
Nigeria
- Nigerian Sustainable Banking Principles (NSBP) Committee — Established in 2012 by the Central Bank of Nigeria (CBN) and the Bankers' Committee, compliance is mandatory for all deposit money banks, discount houses, and development finance institutions. Nine focus areas including environmental and social risk management, capacity building, and reporting. A Strategic Sustainability Working Group (SSWG), supported by IFC and FMO, sits under the Bankers' Sub-Committee on Economic Development and Sustainability and develops sector-specific guidance (agriculture, power, oil & gas). The CBN also appointed a dedicated Special Adviser on Sustainable Banking to drive implementation across the 34 signatory banks — making this arguably the most institutionalised climate-literacy infrastructure in Nigerian finance, predating even the IFRS S1/S2 push by over a decade.
- SPIN — formerly ASPN, rebranded 2022. Sets professional standards, credentials sustainability practitioners, publicly pushes back on regulators reducing sustainability to pure IFRS compliance.
- Lagos Business School Sustainability Centre — MBA and executive courses; partnered with Stanbic IBTC on climate finance research.
Kenya
- ICPAK (Institute of Certified Public Accountants of Kenya) — driving the IFRS S1/S2 roadmap and readiness assessments for listed and regulated entities.
- Kenya Institute of Supplies Management — embedding sustainability into core procurement credentials.
- Central Bank of Kenya — issued its own Guidance on Climate-Related Risk Management in 2021, pushing banks to build internal capacity ahead of the wider IFRS mandate.
Ghana
- ICAG (Institute of Chartered Accountants, Ghana) — running the national IFRS S1/S2 roadmap and enforcement.
- Ghana Stock Exchange — relaunched its ESG Disclosure Guidance Manual in 2026 with SECO and GRI support, aimed at helping listed firms build reporting capacity rather than just comply on paper.
South Africa
- SAICA (South African Institute of Chartered Accountants) — embedding sustainability into core accounting credentials.
- JSE — periodically updates its Sustainability Disclosure Guidance, acting as a de facto capacity-building tool given the absence of a hard statutory deadline.
Pan-African / Cross-Border
- LinkedIn groups/networks — regional ESG and sustainable finance communities function as de facto knowledge hubs: readiness templates, benchmarking, job postings. For many professionals, a regulatory webinar or LinkedIn community — not a university degree — is where they first encounter IFRS S2 or carbon accounting.
The Gaps That Remain
Even with all this activity, the same structural weak points show up in every country examined. None of them are about individual willingness — they're about infrastructure that hasn't caught up to the deadlines regulators have set.
- Individual — Assurance capacity (auditors who can sign off on emissions data) is thin and concentrated in a few cities.
- Organisational — Board-level ownership lags; most listed companies don't have sustainability as a defined board responsibility yet.
- Institutional — Universities and professional bodies are still adapting curricula to functional, role-specific climate competence rather than generic ESG awareness.
- Market — SME deadlines are pushed to 2028–2030 because SMEs — the bulk of African employment — are least ready, and least able to afford specialist consultants.
- Financing — Climate finance isn't reaching skills training; vocational (TVET) pipelines remain outdated and disconnected from what employers actually need.
If local expertise doesn't scale fast enough, African climate and infrastructure projects will keep leaning on imported consultants and technical specialists.
So, Is Africa's Workforce Ready?
The answer is neither a simple yes nor no. Africa is not starting from zero.
Climate literacy remains uneven across the population, but professionals are increasingly acquiring green and sustainability skills. Regulators are establishing disclosure frameworks. Employers are beginning to integrate climate competence into conventional roles. Professional bodies are building communities and competency pathways. Universities, development institutions and digital platforms are expanding access to training.
At the same time, significant gaps remain:
- The regulatory timetable is moving faster than many organisations' internal capabilities.
- Climate expertise remains concentrated within relatively small professional communities.
- Board and executive climate literacy remains uneven.
- Assurance and data capabilities are still developing.
- SMEs face greater constraints than large corporations.
- And formal education has not yet fully caught up with the skills being demanded by the emerging green economy.
This is why Africa's transition should be understood as rapid but uneven catch-up, rather than either complete unpreparedness or full readiness. The continent is building the capability while the regulatory and commercial demand is simultaneously accelerating.
The next few years will be particularly important. For Nigeria, Ghana and Kenya, the approach of mandatory ISSB-aligned reporting from 2027–2028 will test whether organisations can translate standards into functioning governance, data, controls and reporting systems. (IFRS Foundation)
- For employers, the implication is straightforward: sustainability cannot remain the responsibility of a small specialist team.
- For universities and professional bodies, sustainability needs to move further into mainstream business, finance, accounting, engineering, risk and management education.
- For professionals, climate knowledge is increasingly becoming a differentiator within existing careers.
- For policymakers, investment in climate finance without investment in human capital will leave part of the transition unfinished.
Climate literacy is therefore becoming something more fundamental than environmental awareness.
It is becoming professional literacy.
- The future accountant will need to understand sustainability data.
- The future banker will need to understand climate risk.
- The future investor will need to understand transition risk.
- The future engineer will need to understand resilience and resource efficiency.
- The future executive will need to understand how climate affects strategy, capital allocation and enterprise value.
- And the future sustainability professional will need much more than knowledge of environmental issues. They will need finance, data, governance, risk and commercial competence.
This is where platforms like The CircularNet can help bridge the gap between knowledge and capability. By connecting professionals and organisations to sustainability-focused learning, communities, events and practical resources, CircularNet creates a space to keep building the skills needed for Africa’s evolving green economy.
For organisations, it also provides opportunities to showcase their sustainability impact, connect with potential investors, access ESG training for their teams, and use tools such as the Events platform and video conferencing to collaborate and engage with the wider sustainability ecosystem.
The transition is already underway. The opportunity now is to ensure that Africa’s workforce has the knowledge, connections and practical capabilities to participate in it.