BoG Calls for Coordinated Action to Protect Ghana’s Financial System from Climate Risks

The Bank of Ghana (BoG) has urged financial sector regulators to strengthen cooperation in managing climate-related risks, warning that environmental and sustainability challenges could threaten the stability of the country’s financial system.

The call is contained in the foreword to the Ghana Sustainable Finance Roadmap, jointly signed by BoG Governor Dr Johnson Pandit Asiama and the heads of the Securities and Exchange Commission (SEC), National Insurance Commission (NIC) and National Pensions Regulatory Authority (NPRA).

The roadmap provides a common framework for integrating sustainability considerations into financial regulation, improving climate-risk management and mobilising funding for sustainable economic activities. It was developed through collaboration among the four regulatory institutions, with support from Switzerland’s State Secretariat for Economic Affairs (SECO) and the International Finance Corporation (IFC).

Ghana’s financial sector holds GH¢647.25 billion in assets

According to the Bank of Ghana, total assets across Ghana’s financial sector stood at GH¢647.25 billion in 2025, equivalent to 45.1 per cent of gross domestic product (GDP).

The banking industry accounted for the largest share, representing 75.6 per cent of total financial sector assets. The pensions industry accounted for 16.8 per cent, followed by the securities industry at 4.2 per cent and the insurance industry at 3.4 per cent.

The central bank said the figures demonstrate the financial sector’s importance to economic development and underline the potential consequences of climate-related disruptions.

Climate change can affect financial institutions through several channels, including damage to property and infrastructure, disruptions to agricultural production, business losses and changes in the value of assets used as collateral.

These developments can increase credit, insurance and investment risks, potentially affecting institutions across the financial system.

Because the banking, pensions, securities and insurance industries are interconnected, the BoG said a coordinated regulatory response is essential to identify emerging risks and strengthen resilience.

Roadmap built around three pillars

The Sustainable Finance Roadmap is anchored on three main pillars: Environmental, Social and Governance (ESG) integration, climate-related risk management and financing sustainability.

The first pillar focuses on incorporating environmental, social and governance considerations into financial institutions’ policies, operations and decision-making.

The second centres on identifying, assessing and managing financial risks associated with climate change and other sustainability challenges.

The third seeks to direct funding towards sustainable economic activities, including investments that support environmental resilience and long-term development.

According to the roadmap, a consistent regulatory framework can help financial institutions make more informed and forward-looking decisions while providing clearer expectations for businesses and investors.

The framework is also intended to create a more predictable environment for sustainable investment and support an orderly transition towards a more sustainable financial system.

Green finance could create new opportunities

Beyond managing risks, the BoG believes sustainable finance could open opportunities for Ghana’s financial sector by attracting green capital and encouraging institutions to develop innovative financial products.

These opportunities include financing for climate-resilient infrastructure, sustainable agriculture, renewable energy, water management and other activities that contribute to environmental and economic resilience.

A clear regulatory framework could also help investors assess sustainability-related risks and opportunities more consistently, supporting transparency and confidence in the financial market.

The Bank of Ghana has previously highlighted the potential for sustainable finance to help Ghana attract international capital, deepen its financial markets and support long-term economic growth.

However, the success of these ambitions will depend on effective implementation, institutional capacity and the willingness of financial institutions to integrate sustainability considerations into their day-to-day operations.

Regulators and development partners to work together

The roadmap was prepared by a steering committee comprising representatives of the Bank of Ghana, SEC, NIC and NPRA.

The Ministry of Finance, the Institute of Chartered Accountants, Ghana, and the Chartered Institute of Bankers contributed to the process as observers and supporting stakeholders.

The BoG also acknowledged the technical assistance provided by the IFC, SECO and the Sustainable Banking and Finance Network.

The four regulators operate under different statutory mandates, but the roadmap seeks to align their efforts so that sustainability risks can be addressed more consistently across the financial sector.

The central bank stressed that successful implementation would require sustained collaboration, institutional commitment and shared responsibility among regulators and industry participants.

Supporting Ghana’s climate commitments

The initiative is also aligned with Ghana’s commitments under the Paris Agreement and other international sustainability frameworks.

The Paris Agreement aims to strengthen the global response to climate change, including by aligning financial flows with pathways towards lower greenhouse gas emissions and climate-resilient development.

For Ghana, integrating climate considerations into financial supervision could help institutions better assess their exposure to environmental risks while supporting investment in more resilient economic activities.

The roadmap sets out a common direction for regulators, but its practical impact will depend on how its principles are translated into supervision, risk-management practices, disclosures and financing decisions.

The BoG’s message is that protecting Ghana’s financial system from climate-related risks cannot be left to individual institutions acting alone. Coordinated oversight, clear regulatory expectations and sustained implementation will be central to building a more resilient and sustainable financial sector.

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