Accra: The Bank of Ghana (BoG) has called on banks to align their operations with 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, adding that rising temperatures and erratic rainfall patterns could push timelines and costs beyond projections, thereby posing risks to banks.
Mrs. Asante-Asiedu emphasized that these risks are increasingly part of the risk landscape, which can amplify loss given defaults for a bank, create reputational issues, or possibly lead to regulatory penalties. She stated that the goal is to ensure 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 further mentioned that BoG's sustained engagement was helping financial institutions adopt practices that integrate environmental, social, and governance (ESG) factors, particularly in high-impact sectors such as construction. This initiative has led to an increase in sector-wide compliance with the principles from 42.2% in 2021 to over 73.6% as of March 2025. Mrs. Asante-Asiedu urged the banking sector to be at the forefront of the ESG evolution, adding that the Bank of Ghana viewed sustainability not as a peripheral issue but as a central pillar of financial stability, long-term value creation, and responsible economic stewardship.
For his part, Mr. John Awuah, CEO of Ghana Association of Banks, acknowledged the construction sector's significant contributions to growth but highlighted the considerable environmental and social risks it presented. He stressed that these risks, if left unchecked, could undermine the very development gains the country seeks to consolidate. Mr. Awuah noted that the Ghana Sustainable Banking Principles are not merely a compliance tool but a strategic framework to reorient financial intermediation practices in ways that respect environmental boundaries, protect vulnerable communities, and future-proof banking institutions against climate and ESG-related risks.
Mr. Awuah called on development partners to help mitigate the perceived and actual risks associated with sustainable construction lending through a guarantee scheme tailored to ESG-aligned projects to incentivize banks to lend more assertively in this space. He also advocated for the provision of affordable and long-term financing to banks, which can then be on-lent to developers with credible sustainability plans to significantly reduce the price burden on borrowers and improve project viability.
Additionally, Mr. Awuah emphasized the need for support in the co-development of sector-specific ESG screening tools, environmental risk calculators, and construction-specific sustainability benchmarks to aid diligence and monitoring, as well as capacity building and technical assistance.
