The Commercial International Bank (CIB) – Egypt announced, on Wednesday, its support for the recommendations outlined by the Task Force on Climate-related Financial Disclosures (TCFD).
The recommendations aim to help businesses disclose climate-related financial information. This important step comes in line with the bank’s efforts to support local and global practices and take precautionary measures to mitigate climate change risks in the short, medium, and long term.
This comes in addition to financing new projects aimed at reducing and adapting to greenhouse effects.
CIB is the first Egyptian bank to join this initiative, which goes hand-in-hand with Egypt’s goal to transform into a green economy. This aligns with Egypt’s Vision 2030, Paris Climate Agreement, and the UN sustainable development goals (SDGs).
The bank’s CEO Hussein Abaza said, “CIB is at the forefront of international financial institutions concerned with climate-related financial disclosures to avoid material risks resulting from global warming.”
He added, “It is our priority to protect the rights of shareholders and investors and safeguard our customers’ businesses while raising awareness about the risks and opportunities presented by climate change.”
In light of the bank expressing its support for the TCFD, CIB will disclose information on financial risks and opportunities related to climate change. These will be accessible to financial markets, investors, lenders, and stakeholders, ensuring transparency and strengthening confidence in CIB locally and internationally.
“The bank recognises the relationship between climate change and financial stability, resulting in our support for the TCFD recommendations to improve CIB’s risk management system and increase social and environmental opportunities,” said Dr Dalia Abdel Kader, Chief Sustainability Officer at CIB.
She added, “Financial disclosure requires gaining expertise to assess climate change scenarios and determine their impact on the Bank’s investments and credit portfolio.”
Abdel Kader said that it was for this reason that a team from CIB’s Risk Department joined a working group under the supervision of the United Nations Environment Programme Finance Initiative (UNEP FI) to learn the mechanisms and requirements for disclosure.
CIB’s comprehensive Environmental and Social Risk Management System (ESRM) works according to the latest international standards.
These include: the International Finance Corporation (IFC) Performance Standards; European Bank for Reconstruction and Development (EBRD) Performance Requirements; and the Equator Principles, to protect the bank’s credit portfolio and support customers.
The bank announced its support for the TCFD recommendations in light of increasing climate-related financial risks.
According to the World Economic Forum’s 2021 Global Risks Report, failure to mitigate climate change is one of the world’s biggest threats for the third year in a row. The report states that climate change inaction is considered a threat to humankind.
Since the banking sector plays a role in achieving sustainable development, it is necessary to determine the financial, operational, and market risks of climate change.
This is in addition to risks related to the local and global legislative environment resulting from potential changes in local, regional, and international laws in accordance to global agreements. It is also important to identify the medium- and long-term risks of climate change on the credit rating of countries around the world.
CIB is currently implementing a capacity-building programme to prepare climate-related disclosures in cooperation with UNEP FI.