Regulatory Alerts2022-12-14
Sustainable Development and Sustainable Finance Circular for Local Banks
The Central Bank of Kuwait issued Circular No. 2/BS, IBS/500/2022 to mandate local banks to integrate Environment, Social, and Governance (ESG) standards into their corporate governance, risk management, and product development strategies. The directive requires banks to establish clear sustainability goals, launch climate-friendly financing instruments, manage climate-related financial risks through internal capital assessments, and ensure board-level approval of all sustainable finance policies. Furthermore, institutions must enhance operational sustainability and publish annual sustainability reports detailing their environmental, social, and economic impacts to guarantee transparency and long-term financial stability.
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