By Abashi Shamamba.
Bank Al-Maghrib has implemented the directive on the financial risk management system related to climate change and the environment. The directive has been in force since March 4, 2021 and is part of the consensus between international regulatory authorities, grouped within the Network of Central Banks and Supervisors for the Greening of the Financial Sector.
For the monetary authorities, this reform is a signal to the attention of banks and makes it possible to clarify their expectations in this area. It sets out the principles to be implemented by credit institutions to understand and manage the financial risks associated with climate change and the environment. The directive explains the financial risks linked to climate change and the environment: The physical risk, resulting from the occurrence of extreme or chronic climatic and environmental events; The risk of transition, resulting from the process of adaptation to a low-carbon and more environmentally sustainable economy.
The Moroccan central authority’s directive concerns branches of Moroccan banks outside the kingdom. They must therefore integrate the risks associated with climate change and the environment into their credit policy.
