Regulatory Alerts2021-10-15
Banking Circular No. 4 of 2021 - Guidance on Climate-Related Risk Management
The Central Bank of Kenya has issued guidance on climate-related risk management for commercial banks and mortgage finance companies. This guidance is in response to the urgent need for global efforts to address the impacts of climate change, as evidenced by recent extreme weather events. It highlights the role banks can play in advancing a low carbon economy and managing climate-related risks that pose both opportunities and threats to their operations. The guidance focuses on four main areas: governance, strategy, risk management, and disclosures. Implementation will be in stages, starting with sensitization efforts, followed by submission of implementation plans approved by institutions' boards to the Central Bank by June 30, 2022, and quarterly updates thereafter.