Banks in Mena should do more on climate risk data, new report says

Khaleej Times – Banks in the Middle East and North Africa (Mena) region should move quickly to go beyond reporting on environment and social governance (ESG) and get hard data on climate risk – both data on their own exposure and on that of their clients, recent research suggests.

The London Institute of Banking & Finance (LIBF) report says Mena banks would benefit from keeping pace with global best practices on climate risk reporting if they want to avoid losing ground to international counterparts.

According to the report, ‘Why we have to be clear about climate’, the scale and complexity of climate change requires Mena banks to get ready now to report on climate risk – ahead of local regulatory mandates or economic transitions.

LIBF is an internationally recognised organisation delivering financial education to banks and other institutions in Mena. It seeks to advance banking and finance by providing education and thinking, tailored to the needs of business, individuals and society. Founded in the City of London in 1879, The London Institute of Banking & Finance remains the only banking and finance professional body with degree awarding powers.

In October 2022, the Task Force on Climate-Related Financial Disclosure (TCFD) showed that only around 25 per cent of all firms in the Middle East report on their exposure to climate change. That was the lowest score globally, the next lowest being Latin America at 28 per cent of all firms. Europe was the leader with 60 per cent.

“Now it’s about hard numbers on climate exposure, about auditable climate reporting and about a defensible climate strategy,” said Kareem Refaay, LIBF’s Managing Director, Mena and GCC.

This goes much further than the ESG reports that institutions in the region already issue. These can provide useful information but are just a starting point for reporting on a firm’s exposure to climate risk, according to the LIBF report.

The LIBF analysis outlines four main reasons why Mena banks should move swiftly to enhance their climate risk reporting:

  1. Banks that are not aligned with the global regulatory requirements on climate risk reporting could increasingly find they don’t meet all the standards required by international partners.
  2. Mena banks that move quickly to implement processes to identify, manage and mitigate climate risk will likely enjoy a first-mover advantage.
  3. Analysing and reporting on the business risks of climate change is more demanding than reporting on ESG – it takes time to set up the right processes, train staff, and implement the data and IT systems needed to capture data related to climate change exposure.
  4. Banks in the Mena region can use their expertise in oil and gas to help inform the global transition to net zero.

“Achieving these goals will require a focus by risk management teams on the relevant figures, even if local regulators don’t demand it yet,” added Refaay.

“There are obvious reasons for banks everywhere to be hesitant about net zero reporting. Data is lacking and, worldwide, there is an increasing realisation that transition to net zero is both more complex and more difficult than hoped,” explained Refaay.

Image by: Shutterstock 

Shopping Cart

Media Kit

    Data Protection

    The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

        Data Protection

        The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

        Registration Form

          Data Protection

          The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

          Registration Form

            Data Protection

            The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

            Registration Form

              Data Protection

              The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

              Registration Form

                Data Protection

                The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                Registration Form

                  Data Protection

                  The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                  The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

                  COVID-19
                  Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

                  Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

                  The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

                  Request Nomination Pack

                  Error: Contact form not found.