Jordan's CBJ Climate Risk Management Regulations No. 2 of 2025 made climate-risk management mandatory for banks from 18 February 2025. What the binding rules require.
Introduction
Many people in the market still assume climate is a voluntary, reputational matter for Jordanian banks. It is not. As of 18 February 2025, climate-risk management is a binding regulatory requirement. The Central Bank of Jordan issued the Climate Risk Management Regulations No. 2 of 2025, and with them, governance, strategy and risk-management integration for climate became hard obligations. This article explains what the regulation requires, article by article, and the deadline that has already passed.
The instrument and its force
The regulation (CBJ Ref. No. 23/1/3551) was issued and became effective on 18 February 2025. It was made under Article 65/b of the CBJ Law and Article 99/b of the Banking Law, so it carries the full force of banking regulation. It is grounded in the Basel Committee (BCBS) Principles for managing climate-related financial risks, which places Jordan alongside international supervisory practice.
The scope is broad. Article 3 applies the regulation to all banks operating in the Kingdom, on a proportionality basis calibrated to each bank’s size, complexity and risk profile. There is no opt-out.
What the regulation requires, article by article
The regulation turns the Central Bank’s Green Finance Strategy intentions into binding rules across governance, strategy and risk management.
| Article | Requirement |
|---|---|
| Art. 4 | Board oversight: board knowledge of climate risk, and board-adopted climate policies reviewed at least annually. D-SIB boards must set up a dedicated climate-risk unit in Risk Management; other banks are encouraged to. |
| Art. 5 | Senior management must implement the board’s strategy and maintain a climate-risk framework with clear roles and resources. |
| Art. 6 | Capacity building for the board, its committees (especially Risk Management) and staff. |
| Art. 7 | Material climate risks must be considered in business and risk strategy, with resilience assessed over short, medium and long term, and risk tolerance consistent with the bank’s climate commitments. |
| Art. 8 | Climate must be embedded in the three lines of defence, including climate assessment at credit origination. |
| Art. 9 | Identify, measure, monitor and manage climate risk across credit, market and liquidity risk, using stress-test results, and consider climate in the ICAAP. |
| Art. 10 | Internal reporting systems must monitor material climate risks and inform the board and senior management. |
| Art. 11 | Two deliverables to the CBJ within six months of issuance. |
| Art. 12 | The CBJ may issue more detailed rules later, including standardised climate-risk disclosure templates. |
The Article 11 deadline has already passed
The most concrete obligation was Article 11, which required two submissions to the CBJ within six months, meaning by around 18 August 2025. Banks had to submit the climate-risk structure or dedicated unit they adopted, and an amended risk-management strategy that integrates climate risk, reporting the changes made. For a deeper look at these submissions and the two supervisory tracks, see our note on Article 11 and the six-month deadline.
The debate about whether Jordanian banks should manage climate risk is over. The regulation settled it in February 2025. The question now is how well each bank does it.
How it maps to IFRS S2
The CBJ regulation covers governance, strategy and risk management at a principles level, which aligns closely with three of the four IFRS S2 pillars. The pillar it does not yet mandate is metrics and targets, particularly external greenhouse gas and financed-emissions disclosure. That gap is filled by the ASE disclosure framework for ASE20 banks. Together, the CBJ and the ASE form the two halves of Jordan’s climate regime, as our regulatory map explains.
How ESGweise helps
ESGweise works with banks as a climate-risk and readiness advisor. We help translate the CBJ requirements into a working framework: board and committee capacity building, climate integration into risk strategy and appetite, three-lines-of-defence controls, and the internal metrics and data foundation the regulation expects. We are an advisory partner, not an auditor. See our strategy, assurance readiness and reporting services and our work with banking and financial services.
Conclusion
Jordan made climate-risk management mandatory for its banks on 18 February 2025. CBJ Regulation No. 2 of 2025 requires board oversight, strategy integration, three-lines-of-defence controls, risk-management integration and ICAAP consideration, and it set a six-month deadline that has already passed. For any bank still treating climate as voluntary, the regulation is a clear signal that the baseline has moved. Understanding the binding text is the first step to meeting it credibly.
Frequently asked questions
Is climate-risk management mandatory for banks in Jordan?
Yes. The Central Bank of Jordan issued the Climate Risk Management Regulations No. 2 of 2025, which took effect on 18 February 2025. From that date, climate-risk management is a binding requirement for banks operating in Jordan, not a voluntary or aspirational one. Board oversight, strategy integration, internal controls and risk-management processes for climate are all hard requirements, applied on a proportionality basis according to each bank's size and complexity.
What does CBJ Regulation No. 2 of 2025 require?
It requires banks to give their boards oversight of climate risk, adopt and annually review climate-risk policies, build capacity across the board and staff, integrate material climate risks into business and risk strategy and risk appetite, embed climate into the three lines of defence, identify and manage climate risk across credit, market, liquidity and operational risk, and consider climate in the ICAAP. It also required two deliverables to the CBJ within six months of issuance.
What is the Article 11 deadline in the CBJ climate regulation?
Article 11 required banks to submit two things to the CBJ within six months of the regulation being issued, meaning by around 18 August 2025. Domestic systemically important banks had to establish a dedicated climate-risk unit in Risk Management and submit staff names and qualifications, while other banks had to submit the procedures and structure they would adopt. All banks had to amend their risk-management strategy to integrate climate risk and report the amendments made.
Is the regulation based on international standards?
Yes. The CBJ grounded Regulation No. 2 of 2025 in the Basel Committee on Banking Supervision (BCBS) Principles for the Effective Management and Supervision of Climate-Related Financial Risks. This aligns Jordan's requirements with international banking-supervision practice and maps closely to the governance, strategy and risk-management pillars of IFRS S2.