Climate risk and banking regulation
Banks carry climate risk mainly through what they lend to and invest in, which is why supervisors treat it as a financial risk and not a reputational one. The Central Bank of the UAE and the Central Bank of Jordan have issued binding climate risk regulation, the Central Bank of Bahrain has an ESG requirements module, and Qatar Central Bank has a sustainable finance framework. Supervisors expect climate risk in governance, strategy, risk management and capital planning, supported by scenario analysis and stress testing. Disclosure follows through IFRS S2 and its TCFD foundations, and financed emissions, measured with the PCAF standard, are the largest source of emissions for any bank. This collection starts with TCFD, IFRS S2 for banks and financed emissions, moves through stress testing and transition planning, covers the SBTi Financial Institutions Net-Zero Standard, then compares the GCC central banks and sets out the UAE, Bahrain and Jordan rules.
16 articles, in reading order
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TCFD for GCC Financial Institutions: Still the Foundation
What the TCFD recommendations are, how they underpin IFRS S2, and why their four-pillar framework remains the foundation of climate disclosure for GCC financial institutions.
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IFRS S2 for Banks: Climate Disclosure for the Financial Sector
What IFRS S2 requires of banks, why financed emissions and scenario analysis are the hard parts, and how GCC financial institutions should prepare.
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Financed Emissions and PCAF: A Bank's Biggest Footprint
What financed emissions are, how the PCAF standard measures them, and why Scope 3 Category 15 is the defining climate challenge for GCC banks.
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Financed Emissions for Jordanian Banks: PCAF, IFRS S2 and the Data Challenge
Why financed emissions are the hardest part of IFRS S2 for Jordanian banks: the Scope 3 Category 15 requirement, PCAF, data-quality scoring, and the data gap.
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ISO 14097: Assessing the Climate Impact of Finance
What ISO 14097 is, how it frames the assessment and reporting of investments and financing against climate goals, and why it matters for GCC banks and financed emissions.
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Climate Stress Testing and NGFS Scenarios for GCC Banks
What climate stress testing involves, how NGFS scenarios work, and why GCC banks must integrate climate scenario analysis into ICAAP and risk management.
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Climate Transition Planning for GCC Banks
What a credible climate transition plan involves, how the CBUAE principles and global frameworks shape it, and why GCC banks need one beyond a net-zero pledge.
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How a Bank Builds a Climate Transition Plan
Eight steps, nine to fifteen months from a reasonable base. The financed emissions baseline is the schedule, and most programmes underestimate it.
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Financed Emissions or Customer Alignment: The FINZ Choice
SBTi's FINZ lets an institution focus on financed emissions or customer net-zero alignment. The two routes need different data and different client conversations.
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What FINZ Asks of Banks on Fossil Fuel Finance
SBTi FINZ requires a fossil fuel transition policy: no coal expansion finance, no project finance for new oil and gas expansion, and no corporate finance to expanders by 2030.
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GCC Central Banks on Climate Risk and Sustainable Finance: Compared
How the GCC central banks compare on climate risk and sustainable finance, UAE, Qatar, Bahrain, Saudi Arabia, Oman and Kuwait, and what it means for regional banks.
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CBUAE Climate-related Financial Risk Management Regulation
What the CBUAE Climate-related Financial Risk Management Regulation requires, governance, strategy, risk management and capital, and how UAE banks should respond.
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Bahrain's CBB ESG Requirements Module Explained
What the Central Bank of Bahrain ESG Requirements Module introduced, who it applies to, and how it positions Bahrain in the GCC's sustainable-finance landscape.
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Jordan Just Made Climate-Risk Management Mandatory for Banks: What CBJ Regulation No. 2 of 2025 Requires
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.
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Article 11 Explained: The Six-Month Deadline Jordanian Banks Had to Meet
CBJ Regulation No. 2 of 2025 Article 11 gave Jordanian banks six months, to around 18 August 2025, to file a climate governance structure and amended risk strategy.
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SBTi FINZ Deadline for Banks: What Changed and What FINZ Asks
There is no December 2026 FINZ deadline. SBTi extended the window, then in October 2026 kept both its bank frameworks open with no end date. What FINZ asks of a bank.
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