Bank Al-Maghrib (central bank – BAM) and the World Bank (WB) have issued a report detailing their joint study on climate risks in the Moroccan banking sector on Tuesday, a first for the MENA region.
The evaluation completed in this research considers both physical climate hazards and those associated with the transition to a low-carbon economy.
This first-ever assessment analyzes bank portfolios’ exposure to drought and flood risks, as well as those connected to the adoption of a carbon assessment, based on the industry’s projected carbon footprint.
The study also examines banks’ sensitivity to potential climatic shocks.
Furthermore, the paper emphasizes the difficulties inherent in the shortage of suitably detailed data in and of itself, exacerbated by the complexities of understanding the interplay between meteorological, economic, and financial elements.
The study is part of Bank Al-Maghrib’s efforts to account for the effects of climate change on the banking industry and to assist sector operators in developing assessment and management methods for associated risks.