Egypt leaps forward in sustainable finance ranking by SBFN
The Sustainable Banking and Finance Network (SBFN), an initiative of the World Bank’s International Finance Corporation (IFC), upgraded Egypt’s rating from “Developing” to “Advancing” in its 2024 Global Progress report.
This move reflects the Central Bank of Egypt (CBE) commitment towards promoting sustainable finance within the country’s banking system.
The evaluation considers regulatory frameworks, strategies, disclosure requirements, and voluntary practices, as per the CBE’s report.
Egypt’s improved ranking follows its entry into the SBFN network in 2016. Since then, the CBE has undertaken several initiatives to promote sustainable finance in the Egyptian banking sector. These efforts include:
- Issuing guiding principles for sustainable financing in July 2021 to establish a framework for banks and prepare them for a more sustainable future.
- Building the capacity of banking sector employees in sustainable finance practices.
- Conducting a gap study to identify challenges and opportunities for sustainable finance within the Egyptian banking sector.
- Releasing regulatory instructions for sustainable financing in November 2022, aligned with international best practices and tailored to the Egyptian context.
The SBFN’s evaluation framework focuses on three key areas:
- ESG Integration: This assesses how banks and financial institutions manage environmental, social, and governance (ESG) risks within their lending, investment, and operational activities.
- Climate Risk Management: This evaluates frameworks, disclosure practices, data provision, and reporting mechanisms used by financial institutions to mitigate and adapt to climate change.
- Financing Sustainability: This examines how regulatory bodies, financial institutions, and banks are directing capital flows towards activities that support climate action, the green economy, and social goals.
Egypt’s commitment to sustainable finance is evident in its progress, aligning with the network’s goal of promoting sustainable practices in emerging markets.
The SBFN is a leading global entity focused on sustainable finance, with representation from 70 countries and 91 regulatory and governmental institutions from emerging markets.
