Bank of Uganda Guidelines for the Management of Climate-related Financial Risks 2025

Bank of Uganda
Guidelines for the Management of Climate-related Financial Risks, 2025

Table of Contents

1. INTRODUCTION.................................................................................................3
   1.1 Citation and Commencement..............................................................................3
   1.2 Application .........................................................................................................3
   1.3 Background........................................................................................................3

2. DEFINITION OF COMMON TERMS.....................................................................4

3. CORPORATE GOVERNANCE..............................................................................5

4. INTERNAL CONTROL FRAMEWORK...................................................................7

5. CAPITAL AND LIQUIDITY ADEQUACY ................................................................7

6. RISK MANAGEMENT PROCESS .........................................................................8

7. MEASUREMENT, MONITORING AND REPORTING .............................................9

8. MANAGEMENT OF CREDIT RISK .......................................................................9

9. MANAGEMENT OF MARKET, LIQUIDITY, OPERATIONAL AND OTHER RISKS.. 10

10. SCENARIO ANALYSIS...................................................................................... 11

11. REGULATORY REPORTING AND DISCLOSURE ................................................ 12

12. CLIMATE-RELATED TRANSITION PLAN............................................................ 13

13. REFERENCES .................................................................................................. 15

14. INTRODUCTION
    1.1 Citation and Commencement
    These guidelines shall be cited as the Bank of Uganda Guidelines for the Management of Climate-related Financial Risks, 2025 and shall come into effect on 31 December 2025.
    1.2 Application
    These Guidelines shall apply to Bank of Uganda Supervised Financial Institutions (SFIs) under the Financial Institutions Act, Cap.57 (Laws of Uganda) and the Microfinance Deposit Taking Institutions Act, Cap.58 (Laws of Uganda).
    1.3 Background
    Bank of Uganda (BoU) recognizes that the emergence of Climate change poses new challenges for SFIs that could affect the safety and soundness of individual financial institutions and have broader implications for the banking system and financial stability. In view of the need to address the climate change problem, Uganda’s Nationally Determined Contribution (NDC) 2022 highlights the policies and measures to attain an economy-wide mitigation target in 2030 of 24.7% reduction in the greenhouse house gas emissions profile below the Business-as-Usual level relative to the 2015 baseline. At a global level, the Basel Core Banking Principles for Effective Banking Supervision were revised in 2024 to incorporate climate-related financial risks. In view of these developments, Bank of Uganda issues these guidelines to SFIs to provide a baseline level for the sound management of exposures to climate related financial risks and enhance the resilience of the banking sector against these risks. Furthermore, the guidelines complement the ongoing operationalization of the Environmental Social and Governance Framework for Uganda’s banking sector, 2024 and ensure SFIs have a sound basis for making Climate-related risk Disclosures as required by International Financial Reporting Standard (IFRS) – S2. SFIs should understand how climate-related risk drivers may manifest through financial risks as well as recognize that these risks could materialize over varying time horizons different from the traditional capital planning horizon and put in place appropriate measures to mitigate these risks. These guidelines cover; the definition of common terms, corporate governance; internal controls; capital adequacy and liquidity management; risk management process; measurement, monitoring and reporting; Management of strategic, credit, market, liquidity, operational and other risks; Scenario analysis; regulatory reporting and disclosures and transition planning.

15. DEFINITION OF COMMON TERMS

• Business model refers to an SFI’s system of transforming inputs through its
  activities into outputs and outcomes that aims to fulfil the institution’s strategic purposes and create value for the institution and hence generate cash flows over the short, medium, and long term.

• Climate-related financial risks refers to the adverse impact on a SFIs’ earnings
  and capital arising from climate change or from efforts to mitigate climate change, their related impacts and their economic and financial consequences.

• Climate change means long-term shifts in temperatures and weather patterns
  which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere, and which is, in addition to natural variability, observed over comparable periods.

• Climate related litigation risks arise from legal cases that involve parties seeking
  compensation or stay of implementation associated with activities by corporates and/or financial institutions that are presumed responsible for the loss and damage resulting from the effects of climate change.

• Physical risks are the economic costs and financial losses resulting from the
  increasing severity and frequency of extreme climate change-related weather events (such as droughts, landslides, floods, and storms), as well as longer-term progressive shifts in the climate (such as rising water body levels, changes in rainfall patterns and increasing temperatures).

• Transition risks are financial risks which can result from the process of adjustment
  towards a lower-carbon and more circular economy, prompted by:
  i. Technological developments that would make less environmentally friendly or
  high emitting technologies obsolete resulting in stranded assets;
  ii. Behavioral or social change, where consumers and investors demand more
  environmentally sustainable products and services; and
  iii. Changes in legislation, regulation and government polices intended to reduce
  carbon emissions and facilitate an orderly transition to a lower-carbon economy.

• Net zero refers to the balance between the amount of greenhouse gases produced
  and amount removed from the atmosphere.

• The transition plan entails actions and initiatives that will be undertaken by an
  SFI to deliver climate targets consistent with Uganda’s priorities as well as a long￾term response to manage the risks associated with its internal strategic planning and risk management processes to prepare for risks and potential changes in business models associated with the transition to a low emission and climate￾resilient economy.

• Stress testing is a general term encompassing various techniques for assessing
  resilience to extreme but plausible events. Stress tests are used to determine the stability of the supervised financial institution to shocks. They involve testing beyond normal operational capacity, often to a breaking point and comprises a range of activities from simple sensitivity analysis to more complex analyses and reverse stress testing.

3. CORPORATE GOVERNANCE
   3.1 SFIs shall develop and implement a sound process for understanding
   and assessing the potential impacts of climate-related risk drivers on their businesses and on the environments in which they operate. SFIs shall consider material climate-related financial risks that could materialize over various time horizons and incorporate these risks into their overall business strategies and risk management frameworks. i) SFIs shall take material physical and transition risk drivers into consideration when developing and implementing their business strategies, which includes understanding and evaluating how these risks could impact the resilience of an SFI’s business model over the short, medium and longer terms and considering how these drivers may affect an SFI’s ability to achieve its business objectives. The board and executive management shall be involved in relevant stages of the process, and the approach formulated by executive management shall be approved by the Board and clearly communicated to all the SFIs’ employees. ii) The board and executive management shall consider whether the incorporation of material climate-related financial risks into the SFI’s overall business strategy and risk management frameworks may warrant changes to its compensation policies, taking into account that these shall be in line with the business and risk strategy, objectives, values and long-term interests of the SFI. iii) SFIs’ risk management frameworks shall be consistent with their stated goals and objectives. As such, the board and executive management shall ensure that their internal strategies and risk appetite statements are consistent with any publicly communicated climate-related strategies and commitments.
   3.2 The board and executive management shall clearly assign climate￾related responsibilities to members and/or committees and exercise
   effective oversight of climate-related financial risks. Further, the board and executive management shall identify responsibilities for climate￾related financial risk management throughout the organizational structure. i) Overall responsibility for managing climate-related financial risks lies with the board which provides oversight. The board of directors shall have ultimate responsibility for approving the risk appetite for climate-related financial risks and ensure related exposures are maintained at prudent levels and consistent with risk appetite and any publicly communicated climate-related strategies and commitments. Thoughtful consideration shall be given and documented to delegating the responsibility for more detailed review of climate-related financial

risks to the existing Board Risk Management Committee or a new board committee with dedicated resources. ii) The Board of directors shall approve the framework for managing climate-related financial risks. Additionally, the Board of directors shall approve policies and ensure that executive management has in place procedures for proper management of climate-related financial risks that arise from the activities of the institution. iii) The Board of directors shall ensure that executive management possesses sound expertise and knowledge to manage climate-related financial risks and shall clearly assign climate-related responsibilities to members and/or committees and exercise effective oversight of climate-related financial risks. iv) Executive Management is charged with the execution of strategies to manage material climate-related financial risks as part of SFI’s business strategy and risk management framework. It is responsible for implementing the SFI’s strategies for managing climate-related financial risks while ensuring that policies and procedures are instituted to manage and control these risks. v) Executive Management shall develop and recommend climate-related financial risk management frameworks, policies, and standards for Board approval as part of the overall climate-related financial risks management. vi) Executive Management shall build capacity and ensure the board and staff are trained on climate-related topics either through internal workshops or external collaboration with expert organizations. vii) Executive Management shall ensure the climate-related financial risks are managed and controlled within the appetite and established framework guidance. This includes establishing internal controls and clear lines of accountability and authority to ensure effective climate-related financial risks management. viii) Executive Management shall develop lines of communication to ensure timely dissemination of climate-related financial risks management policies, procedure and other information to all individuals involved in the process. ix) SFIs shall ensure that the board and executive management have an adequate understanding of climate-related financial risks and that executive management is equipped with the appropriate skills and experience to manage these risks. SFIs shall build capacity and train the board and executive management on climate￾related topics either through internal workshops or external collaboration with expert organizations. x) SFIs shall clearly define and explicitly assign roles and responsibilities associated with identifying and managing climate-related financial risks throughout the SFI’s organizational structure and ensure relevant functions and business units have adequate resources and expertise to effectively fulfil responsibilities regarding climate-related financial risk management. Where dedicated climate units are set

up, their responsibilities and interaction with existing governance structures shall be clearly defined.
3.3 SFIs shall adopt appropriate policies, procedures and controls that are
implemented across the entire organization to ensure effective management of climate-related financial risks. Management of material climate-related financial risks shall be embedded in policies, processes and controls across all the relevant functions and business units for example, in client onboarding and transaction assessment.
4. INTERNAL CONTROL FRAMEWORK
4.1 SFIs shall incorporate climate-related financial risks into their internal
control frameworks across the three lines of defence (LOD) to ensure comprehensive and effective identification, measurement and mitigation of material climate-related financial risks. i) The internal control framework shall include a clear definition and assignment of climate-related responsibilities and reporting lines across the three lines of defence. ii) In the first line of defence, climate-related risk assessments shall be undertaken during the client onboarding, credit application and credit review processes, and in ongoing monitoring of clients as well as in new product, business or premises approval processes. Staff in the first line of defense shall have adequate awareness and understanding to identify potential climate-related financial risks. iii) The second line of defense, the risk function, shall be responsible for undertaking climate-related risk assessment and monitoring independently from the first line of defense. This includes challenging the initial assessment conducted by the first line of defense, while the compliance function shall ensure adherence to applicable rules and regulations. iv) The third line of defense, the internal audit function, shall provide an independent review and objective assurance of the quality and effectiveness of the overall internal control framework and systems, the first and second lines of defense and the risk governance framework in the light of changes in methodology, business and risk profile, as well as in the quality of underlying data.
5. CAPITAL AND LIQUIDITY ADEQUACY
5.1 SFIs shall identify and quantify climate-related financial risks and
incorporate those assessed as material over relevant time horizons as a Pillar 2 risk sub-types in their internal capital and liquidity adequacy assessment processes, including their stress testing programs. i) SFIs shall develop processes to evaluate the solvency impact of climate-related financial risks that may materialize within their capital planning horizons. SFIs shall include climate-related financial risks assessed as material over relevant time horizons that may negatively affect their capital position (i.e. through their impact

on traditional risk categories) in their internal capital adequacy assessment process that provides sufficient contextual information such as disclosure of methodologies, underlying assumptions, expert judgments, proxies and consequent uncertainties. SFIs shall explain how they obtained comfort that appropriate capital is held for any material climate related financial risks. ii) SFIs shall assess whether climate-related financial risks incorporating both physical and transition risks could cause net cash outflows or depletion of liquidity buffers, assuming both business-as-usual and stressed conditions (considering severe yet plausible scenarios). SFIs shall include climate-related financial risks assessed as material over relevant time horizons that may impair their liquidity position in their internal liquidity adequacy assessment process. iii) SFIs shall build risk analysis capabilities by identifying relevant climate-related risk drivers that may materially impair their financial condition, developing key risk indicators and metrics to quantify exposures to these risks, incorporate material risks in their risk appetite statement and assess the links between climate-related financial risks and traditional financial risk types such as credit, operational and liquidity risks.
6. RISK MANAGEMENT PROCESS
6.1 SFIs shall identify, measure, monitor and control all climate-related
financial risks as a distinct risk category that could materially impair their financial condition, including their capital resources and liquidity positions. SFIs shall ensure that their risk appetite and risk management frameworks consider all material climate-related financial risks to which they are exposed and establish a reliable approach to identifying, measuring, monitoring and managing those risks. i) The board and executive management shall ensure that climate-related financial risks, where material, are clearly defined and addressed in the SFI’s risk appetite framework that is reviewed on an annual basis. ii) SFIs shall regularly carry out a comprehensive assessment of climate-related financial risks and set clear definitions and thresholds for materiality, bearing in mind that an SFI’s risk management framework should enable it to recognize all material risks with an integrated firm-wide perspective on risk. These risks may include those posed by concentration, in particular those related to industry, economic sectors and geographic regions. As with other material risks, SFIs shall develop appropriate key risk indicators for effective management of material climate-related financial risks that align with their regular monitoring and escalation arrangements. iii) Where appropriate, SFIs shall consider risk mitigation measures such as establishing internal limits for the various types of material climate-related financial risks to which they are exposed, for example in their credit, market, liquidity and operational risk profiles. iv) Given the evolving nature of climate-related risks, additional channels for transmitting these risks to traditional financial risk categories may yet be undiscovered. As such, SFIs shall monitor future developments and seek to

understand and manage the impacts of climate-related risk drivers on other material risks.
7. MEASUREMENT, MONITORING AND REPORTING
7.1 Risk data aggregation capabilities and internal risk reporting practices
shall account for climate-related financial risks. SFIs shall seek to ensure that their internal reporting systems are capable of monitoring material climate-related financial risks and producing timely information to ensure effective board and executive management decision-making. i) An SFI’s risk data aggregation capabilities shall include climate-related financial risks to facilitate the identification and reporting of risk exposures, concentrations and emerging risks. SFIs shall have systems in place to collect and aggregate climate-related financial risk data across the institution as part of their overall data governance and IT infrastructure. SFIs shall also put in place processes to ensure that the aggregated data is accurate and reliable. SFIs may consider investing in data infrastructure and enhancing existing systems where appropriate to make it possible to identify, collect, cleanse and centralise the data necessary to assess material climate-related financial risks. ii) SFIs shall actively monitor clients and counterparties and collect additional data in order to develop a better understanding of their transition strategies and risk profiles. Where reliable or comparable climate-related data are not available, SFIs may consider using reasonable proxies and assumptions as alternatives in their internal reporting as an intermediate step. iii) The reporting shall be timely and updated regularly to ensure quarterly reporting to the Board of directors. SFIs may consider an appropriate interval for updating internal risk reports, taking into account the evolving nature of climate-related financial risks. iv) SFIs shall develop qualitative and/or quantitative metrics or indicators to assess, monitor, and report climate-related financial risks. Limitations that prevent full climate risk data assessment shall be made explicit to stakeholders where relevant.
8. MANAGEMENT OF CREDIT RISK
8.1 SFIs shall understand the impact of climate-related risk drivers on
their credit risk profiles and ensure that credit risk management systems and processes consider material climate-related financial risks. i) SFIs shall have clearly articulated credit policies and processes to address material climate-related credit risks. This includes prudent policies and processes to identify, measure, evaluate, monitor, report and control or mitigate the impacts of material climate-related risk drivers on their credit risk exposures (including counterparty credit risk) on a timely basis. SFIs shall incorporate material climate￾related financial risks into the entire credit life cycle, including client due diligence as part of the onboarding process and ongoing monitoring of clients’ risk profiles. ii) SFIs shall also identify, measure, monitor, report and manage the concentrations within and between risk types associated with climate-related financial risks. For

use metrics to assess and monitor concentration of exposure to geographies and sectors with higher climate-related risk. iii)SFIs shall consider a range of risk mitigation options to control or minimize material climate-related credit risks. These options may include adjusting credit underwriting criteria, deploying targeted client assessments, or imposing loan limitations or restrictions such as shorter-tenor lending, lower loan-to-value limits or discounted asset valuations. SFIs could also consider setting limits on or applying appropriate alternative risk mitigation techniques to their exposures to companies, economic sectors, geographical regions, or segments of products and services that do not align with their business strategy or risk appetite.
9. MANAGEMENT OF MARKET, LIQUIDITY, OPERATIONAL AND OTHER
RISKS
9.1 SFIs shall understand the impact of climate-related risk drivers on
their market risk positions and ensure that market risk management systems and processes consider material climate-related financial risks. i) SFIs shall identify and understand how climate-related risk drivers could affect the value of the financial instruments in their portfolios, evaluate the potential risk of losses on and increased volatility of their portfolio, and establish effective processes to control or mitigate the associated impacts. ii) Given the specific characteristics of market risk, analysis of a sudden shock scenario could serve as a useful tool for better understanding and assessing the relevance of climate-related financial risks to an SFI’s trading book. Such a scenario could, for example, feature variation in liquidity across assets exposed to climate-related risk and assume variation in the speed at which exposures could reasonably be closed out. iii)In evaluating mark-to-market exposure to climate-related risks, SFIs may consider how the pricing and availability of hedges could change given different climate and transition pathways, including in the event of a disorderly transition.
9.2 SFIs shall understand the impact of climate-related risk drivers on
their liquidity risk profiles and ensure that liquidity risk management systems and processes consider material climate-related financial risks. SFIs shall assess the impacts of climate-related financial risks on net cash outflows (e.g. increased drawdowns of credit lines, accelerated deposit withdrawals, margin calls) or the value of assets comprising their liquidity buffers. Where material and appropriate, SFIs shall incorporate these impacts into their calibration of liquidity buffers and into their liquidity risk management frameworks.
9.3 SFIs shall understand the impact of climate-related risk drivers on
their operational risk and ensure that risk management systems and processes consider material climate-related risks. SFIs shall also understand the impact of climate-related risk drivers on other risks (strategic, reputational, regulatory, and litigation or liability risk) and put in place adequate measures to account for these risks where material. This

includes climate-related risk drivers that might lead to increasing strategic, reputational, and regulatory compliance risk, as well as liability costs associated with climate-sensitive investments and businesses. i) SFIs shall assess the impact of climate-related risk drivers on their operations in general and their ability to continue providing critical operations. SFIs are expected to analyze how physical risk drivers can impact their business continuity and to take material climate-related risks into account when developing business continuity plans. ii) SFIs shall assess the impact of climate-related risk drivers on other risks, such as strategic, reputational, regulatory compliance and liability risk, and take such risks, where material, into account as part of their risk management and strategy-setting processes.
10. SCENARIO ANALYSIS
10.1 SFIs shall make use of scenario analysis to assess the resilience of
their business models and strategies to a range of plausible climate-related pathways and determine the impact of climate-related risk drivers on their overall risk profile. These analyses shall consider physical and transition risks as drivers of credit, market, operational and liquidity risks over a range of relevant time horizons. i) The objective(s) of climate scenario analysis shall reflect the SFI’s overall climate risk management objectives as set out by its board and executive management. These objectives could, for example include:
a) exploring the impacts of climate change and the transition to a low-carbon economy on the SFI’s strategy and the resilience of its business model; b) identifying relevant climate-related risk factors; c) measuring vulnerability to climate-related risks and estimating exposures and potential losses; d) diagnosing data and methodological limitations in climate risk management; and e) informing the adequacy of the SFI’s risk management framework, including risk mitigation options. ii) Scenario analysis shall reflect relevant climate-related financial risks for SFIs. This shall include the physical and/or transition risks that are relevant to an SFI’s business model, exposure profile and business strategy. Scenarios shall cover a range of plausible pathways, as appropriate. SFIs shall consider the potential benefits and limitations of selected scenarios and assumptions (e.g. balance sheet assumption). iii) SFIs shall build sufficient capacity and expertise to conduct climate scenario analysis that are proportionate to their size, business model and complexity. Larger and more complex SFIs shall be expected to have more advanced analytical capability. iv) Scenario analysis shall employ a range of time horizons, from short (3-5 years), medium term (6-10 years) and to long-term (more than 11 years), to address different risk management objectives. For instance, shorter time frames may be used to analyse the crystallization of risk within an SFI’s typical business planning

horizon at a lower level of uncertainty. Longer time frames, which carry higher levels of uncertainty, may be used to evaluate the resilience of existing strategies and business models to structural changes in the economy, financial system or distribution of risks. v) The field of climate scenario analysis is highly dynamic, and practices are expected to evolve rapidly, especially as climate science advances. Climate scenario models, frameworks and results should be subject to challenge and regular review by a range of internal and/or external experts and independent functions.
11. REGULATORY REPORTING AND DISCLOSURE
BoU recognizes that the accuracy, consistency and quality of climate related data is still evolving. Nonetheless, to facilitate the supervisory assessment of SFIs exposure to climate-related risks, SFIs are required to submit the following qualitative and quantitative information to BoU on a semi-annual basis commencing 30 June 2026. a) Description of material climate-related financial risks and the approach taken to address them with regards to governance, risk management and strategy. b) Quantitative and qualitative information on how the SFI is accounting for the impact of climate change, including metrics on the assets held by counterparties connected to carbon intensive activities and operations, and those in other highly vulnerable sectors and geographical locations. (Appendix A) c) Internal policies and commitments taken to reduce the carbon footprint of the SFI. d) Climate-related requirements that the SFI has imposed on firms they invest in or on borrowers (counterparties). e) Steps the SFI is taking in its investments and credit portfolios to account for the energy sector transition. f) Description of risk assessment methodologies including stress testing scenarios and assumptions. g) Information on corporate transition plans to support forward-looking assessment of risk and, alignment with Uganda’s national climate policy objectives. h) Physical risk data on vulnerability of assets as well as climate risk drivers and exposures. i) Forward-looking information such as SFIs transition plans, the results from climate stress testing or scenario analysis and forward-looking metrics. j) SFIs’ exposure to sectors or economic activities impacted by transition risk including exposures to carbon intensive sectors, and the proportion of such exposures to total exposures and assets. k) The process for identifying vulnerable concentrated exposures and for assessing the likelihood and impact associated with such risks.

l) Exposures subject to physical risks including chronic and acute events split by geographical region or location subject to physical risk, and the proportion of such exposures to total exposures and total assets. m) Details of methodology used to determine exposures which are subject to the impact of physical risks. n) SFIs shall also submit to BoU their climate-related transition plans at least on an annual basis commencing 31 December 2026 together with the ICAAP or when there have been material changes to corporate structure or business model impacting on previously submitted transition plans. o) SFIs should be able to explain to BoU how they identify their significant data gaps, what plans they have to close those gaps, and what processes they have in place to ensure that developments in data and tools will be identified and incorporated into their disclosures and management reporting.
12. CLIMATE-RELATED TRANSITION PLAN
SFIs are a unique and essential enabler in the national economy to accelerate a just transition and climate resilient economy while managing climate related financial risks that present a significant threat to their portfolios. Accordingly, SFIs shall develop a climate-related transition plan aligned to Uganda’s Energy Transition Plan, National Development Plan as well as the Nationally Determined Contributions (NDC) Strategic Pillars and targets with specific timelines premised on reducing their emissions (the majority of which are financed / facilitated emissions), manage their climate related financial risks and opportunities and use their levers to enable the economy-wide transition. Transition plans may reflect the non-linear nature of the emission reduction pathway for Uganda, which may involve an initial increase in GHG emissions in the medium term before experiencing a decrease, to account for factors such as energy security and affordability issues. The climate-related transition plans shall cover, amongst others:
a) Transition strategy: This shall include:
(i) the overall strategy for reaching net zero including overall objectives and priorities, interim and longer-term targets, and proposed strategies for financing the transition; and (ii) details of how the SFI aims to mitigate, manage, and respond to climate change. b) Implementation strategy: This shall include:
(i) climate or sustainability linked products and services proposed / offered to support and increase counterparties and SFI’s transition efforts (including a description of any underlying taxonomy, tools, methodologies or definition used to classify these products as climate or sustainability-linked). (ii) specific activities aimed at embedding net zero priorities into the SFI’s core activities and decision-making tools and processes. (iii) obtaining relevant and adequate data sources and developing the data infrastructure to collect and aggregate transition plan related data across the SFI. (iv) organization-wide policies on priority sectors and activities.

c) Metrics and targets: This shall include metrics and targets for measuring and monitoring the execution of the climate-related transition plans and progress over time towards reduction in emissions. The metrics may include actual and forecasted exposure to non-carbon intensive borrowers and renewables as a proportion of total exposures. d) Monitoring of strategic partnerships and stakeholders: This shall include details of activities undertaken with:
(i) key counterparties including Forex Bureaus and Money Remittances companies, Credit Reference Bureaus and Large Savings and Credit Cooperatives as well as portfolio companies to assess their own net zero strategies and plans; ii) financial industry including, as appropriate, peer institutions with the aim of addressing common challenges and ensuring a consistent approach; and (iii) as applicable, government, regulators and the public sector aimed at ensuring that the public sector appropriately support an orderly transition towards net zero. e) Governance and accountability mechanism: This shall include the approach taken by the SFI to embed transition plans into their governance arrangements and to ensure accountability in relation to:
(i) responsibilities of the board and executive management and, where applicable, remuneration and other incentives in place to support the delivery of the plan; and (ii) providing the necessary training to staff and other stakeholders and embedding the transition plan into the SFI’s culture and practices. f) Other Information: The transition plan shall also, where relevant, include:
(i) details of anticipated changes to the SFI’s strategies or business models in response to transition to net zero; (ii) assumptions, dependencies, and sensitivity analysis associated with the transition strategy; and (iii) actions to be taken by SFIs to reduce risks as they transition to a low carbon economy. The climate-related transition plans shall be commensurate to the SFIs exposure to climate-related risks and shall reflect SFI’s individual circumstances, including relevant industry-specific information. An SFI shall particularly be required to demonstrate the appropriateness of its transition plan to BoU at least on an annual basis. g) SFIs shall also, where available, collect information on future climate exposure trajectory and transition plans of their significant counterparties to inform their own transition strategy, risk appetite and management of climate-related risks.

13. REFERENCES
    International Sustainability Standards Board, IFRS S2 Climate Related Disclosures, June 2023 https://www.ifrs.org/issued-standards/ifrs-sustainability-standards￾navigator/ifrs-s2-climate-related-disclosures/ Network for Green the Financial System, Tailoring Transition Plans: Considerations for Emerging Markets and Developing Economies (EMDEs), April 2024 https://www.ngfs.net/sites/default/files/media/2024/04/17/ngfs_tailoring_tran sition_plans.pdf.pdf Transition Plan Taskforce, Banks Sector Guidance, April 2024 https://transitiontaskforce.net/wp-content/uploads/2023/11/TPT-Banks￾Sector-Guidance.pdf Basel Committee on Banking Supervision, Disclosure of climate related financial risks, November 2023 https://www.bis.org/bcbs/publ/d560.pdf Bonnel, A., & Swann S. (2015). Mainstreaming Climate Action within Financial Institutions: Emerging Practices. https://www.eib.org/attachments/fi_mainstreaming_epp_overview_en.pdf Network for Greening the Financial System Technical Documents. www.ngfs.net/en Principles for the effective management and supervision of climate-related financial risks; https://www.bis.org/bcbs/publ/d532.htm TCFD (2017) Final Report: Recommendations on Climate-Related Financial Disclosures. https://assets.bbhub.io/company/sites/60/2020/10/FINAL-2017-TCFD-Report￾11052018.pdf Uganda National Climate Change Act 2021 National Climate Change Act, 2021 - ULII Uganda National Climate Change Policy National Climate Change Policy April 2015 final.pdf (mwe.go.ug) Uganda Updated Nationally Determined Contribution (NDC) Updated NDC _Uganda_2022 Final.pdf (unfccc.int)