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Moroccan Financial Institutions Show Capacity to Improve Climate Risk Management Practices
Rabat, Morocco - The Moroccan financial sector has made significant progress in implementing sustainable finance practices, with a focus on climate risk management and green financing.
Governance and Regulation
According to a recent report by the Sustainable Banking and Finance Network (SBFN), Moroccan credit institutions have developed governance, risk management, and disclosure practices for climate and environmental risks. Regulatory Directive n° 5/W/2021 requires banks to integrate climate-related and environmental risks into their strategic planning and governance framework.
Climate Risk Management
The report highlights Morocco’s progress in Pillar 2: Climate Risk Management, where credit institutions have started reporting on their climate risk-management approaches using TCFD practices publicly on an annual basis. Additionally, they are expected to report directly to BAM on the qualitative and quantitative elements of their climate risk-management approaches.
Partnerships and Reporting
The AMMC has partnered with IFC to update Circular 03/19 on issuance of sustainable finance instruments and mandatory ESG reporting. The revised circular aims to promote transparency and accountability in the financial sector’s sustainability efforts.
Capacity Building
The SBFN report emphasizes the importance of capacity building among financial institutions. Banks are required to establish policies and procedures for:
- Defining, issuing, managing proceeds, tracking performance, and reporting on green, social or sustainability-focused products
- Developing training programs for employees on sustainable finance practices
Financing Sustainability
Morocco’s roadmap for aligning the financial sector with sustainable development goals is seen as a key driver of progress in Pillar 3: Financing Sustainability. The country has made significant progress in green financing and sustainable development.
Overview of Sustainable Finance Coverage
The SBFN report provides an overview of Morocco’s sustainable finance coverage in three framework areas:
- ESG Integration
- Climate Risk Management
- Financing Sustainability
The report highlights the country’s alignment with international goals and standards, national goals and strategies, overall approach and strategy, technical guidance, supervisory activities, and incentives.
Accessing the Report
The full report can be accessed at [URL TBD].