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2024-07-31

Guidelines on Climate-Related and Environmental Financial Risk Management for Financial Institutions

The National Bank of Rwanda mandates that all financial institutions integrate climate-related and environmental risks into their governance, strategy, and risk management frameworks through these newly issued guidelines. A phased implementation across four institutional tiers runs from March 2024 to December 2027, requiring entities to establish dedicated teams, submit self-assessments, and apply NGFS-aligned scenario analysis and stress testing to their internal capital and liquidity adequacy processes. Institutions must subsequently align their reporting and disclosure practices with these requirements to achieve full compliance by the designated deadlines.

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BNR RESTRICTED 26 Internal Capital Adequacy Assessment Process / Internal Liquidity Adequacy Assessment Process / *** Own Risk and Solvency Assessment Tier 1: Banks, General and life insurance & Public Pension; UMWALIMU Sacco / Tier 2: Deposit Taking Microfinance companies, Captive insurers, Micro insurers, Private pension schemes Tier 3: Non-Deposit Taking Financial Service Providers, UMUGANGA SACCOs, Mutual Insurers and Health Management Organizations Tier 4: Umurenge SACCOs and Non Umurenge SACCOs Phases March - 24 Oct-24 Jan-25 Apr-25 Jan-26 Apr-26 Sept-26 Jan-27 Apr-27 Dec-27 Governance, Strategy and risk management Establishment of a dedicated team/staff to follow up implementation of the guidelines (Immediate for All institutions) Capacity building_ (Immediate & continuous for All institutions) Submission of self-assessment results to National Bank of Rwanda (Tier 1) Submission of self-assessment results to National Bank of Rwanda (Tier 2 ) Submission of self￾assessment results to National Bank of Rwanda (Tier 3 ) Submission of self￾assessment results to National Bank of Rwanda (Tier4 ) Commencement of Data collection & Initial Self-Assessment of climate-related & environmental financial risks (All institutions) Integration of climate related and environmental financial risks in the institution's governance, strategy, and risk management (Tier 1) Integration of climate related and environmental financial risks in the institution's governance, strategy, and risk management (Tier 2) Integration of climate related and environmental financial risks in the institution's governance, strategy, and risk management (Tier 3) Integration of climate related and environmental financial risks in the institution's governance, strategy, and risk management (Tier 4) Scenario analysis and stress testing (Tier 1) Integration of risks in ICAAP, ILAAP & ORSA*** (Tier 1) Reporting & Disclosure Reporting & Disclosure as per the requirements of these guidelines (Tier 1) Reporting & Disclosure as per the requirements of these guidelines (Tier 2 ) Reporting & Disclosure as per the requirements of these guidelines (Tier 3 ) Full implementation of the guidelines (Where applicable)

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1 NGFS Climate Scenarios for central banks and supervisors - Phase IV | NGFS

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FLOOD INTENSIVE + RAINFALLS LANDSLIDES /MUDSLIDES HUMAN CASUALITIES + HEALTH x EROSION + SOIL DEGRADATION x INFRASTRUCTURE DAMAGES DISPLACEMENT x EXPANDED DRY SEASON DROUGHT WILDFIRES CROP FAILURES &LIVESTOCK LOSSES FOOD SECURITY

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