CBE Issues Binding Regulations to Foster Sustainability and Sustainable Finance
In light of Egypt's 2030 Vision, the country's plan to reach the UN's sustainable development goals (SDGs), and the belief that sustainable finance is a key part of ensuring financial and banking stability, the Central Bank of Egypt (CBE) issued binding sustainable finance regulations last week.
These rules are a big step toward Egypt's vision because they strengthen the role of the banking sector. They will also speed up the transition to a green economy and help Egypt deal with current and new environmental and social risks.
The regulations encompass several pillars, including the establishment of an independent department for sustainability and sustainable finance within each bank, as well as binding banks to integrate policies and procedures for sustainable finance within their credit and investment policies.
In addition, reports will be made regularly, and an environmental expert will be asked to look at the big business projects from an environmental point of view.
This new set of policies was made based on international best practices in a way that works for Egypt. The goal was to get banks to finance more sustainable projects, increase investment opportunities by attracting investors who are more interested in sustainable projects, and encourage investments in foreign currencies.
The CBE made these rules after doing a gap analysis in March 2022. The results of the analysis showed that the banking sector needed a binding framework to improve sustainability and sustainable finance.
This is also considered a continuation of the efforts exerted by the CBE to reinforce and integrate sustainable finance within banking activities after introducing the Guiding Principles for Sustainable Finance on July 18, 2021, which set the foundation for sustainability and sustainable finance concepts among Egyptian banks.
Source: Daily News Egypt