By Shaymaa El-Demery, Deputy General Manager, Sustainability and Sustainable Finance, Central Bank of Egypt
While the Central Bank of Egypt (CBE) is considered in its early stages of implementing Inclusive Green Finance, the concept of sustainable finance is increasingly understood in our banking sector, and this awareness is being transferred to customers and investors.
CBE’s sustainability story started with the establishment of a Sustainability department in 2019. In July 2021, CBE issued guiding sustainability principles for the banking sector, focusing on six principles:
After conducting a gap analysis within the banking sector, the CBE issued binding regulations to the banking sector in November 2022. The regulations mandated banks to:
Today, 100% of banks are integrating sustainability policy and procedures into credit finance and investment finance. CBE is conducting an impact assessment of banks’ progress around sustainability and their sustainable goals.
We still have much to do in terms of implementing our Inclusive Green Finance roadmap; quality of data is a particular issue to be addressed.
For now, our main focus is on capacity building. We work both with banks’ sustainability departments and with business lines such as corporate, SME, Risk, retail financing and SMEs, building their understanding on the concept, so they can transfer that knowledge onto their customers.
Knowledge transfer is especially crucial in agriculture, a sector which is directly exposed to climate change, and a major component of the Egyptian economy, both in terms of livelihoods and of labour force.
A focus on financing climate mitigation projects, along with implementing modern irrigation methods, are both important aspects. This also entails financing projects that address vulnerable segments who are affected by climate change, including women and people in rural areas.