NDBs Can Take Action on Climate Risk with Practical Guidebook

NDBs Can Take Action on Climate Risk with Practical Guidebook

Our Guidebook on climate risks provides practical steps for National Development Banks (NDBs) in Latin America to embed climate-related risk management into their practices.

Climate change poses a systemic risk to the financial sector and threatens to backtrack development progress. National Development Banks (NDBs) around the world have the responsibility to deliver on their complex development mandates while adapting to the external environment, managing risks, and adhering to regulations. But where to begin?

The Inter-American Development Bank (IDB) began by engaging Momentus (formerly IFCL). We were tapped to provide NDBs in Latin American and the Caribbean (LAC) with an actionable guide for how to address the urgency of climate risk management in their practices.

To answer the call, we delivered A Guidebook for National Development Banks on Climate Risk. It provides practical steps forNDBs in LAC to embed climate-related risk management into their DNA. The maturity levels of NDBs are varied, and generally fall behind their private sector banking counterparts, so we ensured that the guidebook accommodates a range of starting points in initiating climate risk assessment and management.

As part of this engagement, we reviewed the current climate-risk landscape and latest developments in its management and reporting for the financial sector. We also conducted stakeholder consultations witha diverse range of development banks to understand their level of awareness of climate-related risks, particularly in the financial sector, and gathered the key challenges, opportunities and lessons learned in their climate risk integration journey.

The guidebook includes a step-by-step plan for implementing climate risk assessments in NDB operations and a detailed roadmap

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