São Paulo – The Central Bank of Iraq and the International Finance Corporation (IFC) signed an agreement on Sep. 23 to improve sustainable financing and develop guidelines for environmental and social risk management, as well as a roadmap for sustainable finance. The initiatives aim to improve the performance of local banks in environmental and social risk management, offer sustainable banking products, and make the sector more competitive.
The Sustainable Finance Roadmap will be implemented by 2029 and will follow the concepts of ESG—environmental, social, and governance—sustainability, social development, and governance to promote the financial stability of the banking system while reducing environmental risks.
ESG standards enhance sector quality
This ESG code establishes the standards and processes that banks will need to adopt in the coming years. “This project is testament to the Central Bank’s ongoing efforts to elevate the banking sector by adhering to international best practices and keeping pace with global developments in the banking industry,” said the governor of the Central Bank of Iraq, Ali Al-Alaq, at the project’s launch ceremony.
The IFC is a World Bank institution aimed at supporting private sector development in developing countries. The IFC’s regional director for Saudi Arabia, Lebanon, and Iraq, Fawaz Al-Balbisi, said that these sustainable finance standards are not “just infrastructure,” but represent a “systematic approach that the banking sector must achieve.”
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Translated by Guilherme Miranda
