Incorporating Climate Risk in the Bank’s Credit Risk Management Framework
African Development Bank (AfDB)
May 1, 2024
Climate Risk Management
Climate Transition Planning
ESG Strategy
Climate Risk Modeling
Green and Sustainable Finance Solutions
This 12-month assignment for the African Development Bank involves a comprehensive review and enhancement of the Bank’s credit risk management processes to effectively incorporate climate risk. The project is divided into two main components:
Component 1 – Review and Recommendations:
Benchmarking the Bank’s current credit risk management framework against major multilateral development banks and international standards (Basel Committee, TCFD, G20).
Reviewing existing climate risk tools and ESG considerations within the Bank’s portfolio.
Providing actionable recommendations to integrate physical and transition climate risks into credit risk assessments, capital adequacy, provisioning, and portfolio monitoring.
Proposing matrices and criteria for climate risk measurement across sovereign and non-sovereign operations.
Advising on best practices to embed climate risk in financing conditions and disclosures.
Component 2 – Implementation:
Developing quantitative approaches and tools to measure climate risks and their impact on key risk metrics such as capital adequacy and asset quality.
Conducting scenario analyses and climate stress tests to simulate potential climate risk impacts.
Establishing a review cycle for continuous improvement of the climate risk management framework.
The assignment involves close collaboration with a team of climate and finance experts and supports AfDB’s commitment to sustainable finance and responsible lending in Africa.
Greening MAIB – Enhancing Sustainability and Green Lending (Phase I) and Climate Risk Management Framework (Phase II)
GGF/maib
Supporting MAIB in developing and implementing a comprehensive sustainability strategy and climate risk management framework to enhance green lending and integrate climate risks into credit processes.
Supporting National Bank of Egypt in developing and implementing a comprehensive Climate Finance Strategy and integrated Climate Risk Framework, aligned with IFRS S2, TCFD, and Egypt’s national climate commitments.
EBRD CCG Facility: CCG and Paris Alignment Advisory for Bank Al Etihad (BAE) – Phase I & II
EBRD/RINA
Supporting Bank Al Etihad in aligning with EBRD’s Paris Agreement principles through climate risk diagnostics, action planning, and a comprehensive climate transition plan under the CCG Facility.
Development of European Stability Mechanism (ESM) ESG Framework
ESM/Deloitte
Supporting the European Stability Mechanism (ESM) in developing a comprehensive ESG framework, including climate risk management, carbon emissions reduction, and responsible asset management. This 4-month assignment involved tailored ESG policy design, climate risk assessments, and scenario analysis to enhance ESM’s risk management aligned with international standards.
