Accra: The Bank of Ghana (BoG) has called on banks to align their operations with the sustainable banking principles as it steps up efforts to integrate climate risk and environmental sustainability into the country’s financial sector. The BoG has also issued a Climate-Related Financial Risk Directive, requiring all banks to integrate climate risk into governance and risk management structures.
According to Ghana News Agency, the directive seeks to enhance the resilience of Regulated Financial Institutions (RFIs) by integrating climate risk considerations into governance, risk management, and disclosure practices. Banks are required to update their governance structures, risk management systems, and internal policies to comply with the directive by 31st December 2025, with full implementation starting on 1st January 2026. A newly established Climate and Sustainability Office within the central bank will lead the implementation.
Speaking at a session on the construction sector, Second Deputy Governor of the BoG, Mrs. Matilda Asante-Asiedu, said the move was part of broader efforts to safeguard the banking sector from emerging Environmental, Social and Governance (ESG) financial risks through the implementation of the Ghana Sustainable Banking Principles. She noted that the construction industry, like other sectors, was deeply linked with climate, resource efficiency, and financial risk, warning that rising temperatures and erratic rainfall patterns could push timelines and costs beyond projections, thereby posing risks to banks.
Mrs. Asante-Asiedu emphasized the importance of proactive measures, stating, “Our goal is to ensure that banks do not simply react to these risks after they occur, but proactively incorporate sustainability considerations into project due diligence, client engagement, and portfolio monitoring.” She highlighted that sustained engagement by the BoG was helping financial institutions adopt practices that integrate ESG factors, particularly in high-impact sectors such as construction.
She also pointed out the success of these initiatives, indicating that sector-wide compliance with the principles increased from 42.2% in 2021 to over 73.6% as of March 2025. She urged the banking sector to lead the ESG evolution, viewing sustainability as a central pillar of financial stability, long-term value creation, and responsible economic stewardship.
Mr. John Awuah, CEO of the Ghana Association of Banks, echoed these sentiments, acknowledging the construction sector’s significant contributions to growth but also its environmental and social risks. He described the Ghana Sustainable Banking Principles as a strategic framework to reorient financial intermediation practices and emphasized the need for ESG to become the new language of risk, opportunity, and value creation.
Mr. Awuah called on development partners to help mitigate risks associated with sustainable construction lending through a guarantee scheme tailored to ESG-aligned projects. He also stressed the importance of providing affordable and long-term financing to banks for on-lending to developers with credible sustainability plans, reducing borrower price burdens and improving project viability. He advocated for support in developing sector-specific ESG screening tools, environmental risk calculators, and construction-specific sustainability benchmarks, along with capacity building and technical assistance.