The Bank of Ghana (BoG) has taken a bold step towards a greener and more sustainable financial sector by calling on banks across the country to fully adopt the Ghana Sustainable Banking Principles. This comes as part of wider efforts by the central bank to address climate-related risks and promote environmental sustainability in the banking system.
As part of this move, the BoG has issued a new Climate-Related Financial Risk Directive. This directive mandates all regulated banks and financial institutions to integrate climate risk into their governance and risk management frameworks. According to the central bank, banks must update their internal policies, risk systems, and governance structures to meet the new requirements by December 31, 2025, ahead of full enforcement on January 1, 2026.
A new Climate and Sustainability Office has also been established within the BoG to oversee and guide the implementation of these rules.
Speaking during a special session on the construction sector, the Second Deputy Governor of BoG, Mrs. Matilda Asante-Asiedu, said the central bank was focused on ensuring that Ghana’s banking system remains strong, even in the face of rising environmental and climate-related risks. She noted that the construction industry, like many others, is highly vulnerable to climate change and its effects.
Mrs. Asante-Asiedu said, “Rising temperatures, frequent flooding, and irregular rainfall patterns can delay construction timelines, increase costs, and eventually pose serious credit risks to banks financing such projects.”
She explained that such risks could also lead to reputational damage, regulatory penalties, and financial losses for banks if not properly managed. According to her, the goal of the new directive is to push banks to act ahead of time, rather than reacting only after environmental risks become serious problems.
“Our goal is to ensure that banks do not simply react to these risks after they occur, but proactively incorporate sustainability considerations into project due diligence, client engagement, and portfolio monitoring,” she stated.
Mrs. Asante-Asiedu added that the BoG’s continuous engagement with banks and financial institutions had already led to positive results. She revealed that overall compliance with the Ghana Sustainable Banking Principles had grown from 42.2% in 2021 to over 73.6% by March 2025, especially in key sectors like construction and manufacturing.
She stressed that the central bank does not view sustainability as an optional concern. Rather, it sees it as a core part of financial stability, long-term profitability, and responsible banking practices.
In support of this directive, Mr. John Awuah, CEO of the Ghana Association of Banks, also spoke on the importance of sustainability in banking. He acknowledged the importance of the construction sector to economic growth but pointed out that the sector also comes with serious environmental and social risks.
Mr. Awuah said, “The Ghana Sustainable Banking Principles are not just about checking boxes. They are about building a smarter, more forward-looking banking system that can support development without harming the environment or vulnerable communities.”
He stressed the need for a new way of thinking in financial risk management, where ESG (Environmental, Social, and Governance) considerations become the “new language of opportunity” and help banks prepare for the future.
Mr. Awuah called on development partners and the government to support the new initiative by creating a guarantee scheme for ESG-aligned construction projects. This, he said, would encourage more banks to provide financing to green construction efforts without fear of high risk.
He also urged for more long-term and affordable financing options for banks, so that they can support developers working on environmentally sustainable projects. In addition, he pushed for sector-specific ESG screening tools, environmental risk calculators, and strong sustainability benchmarks for the construction industry. These tools, he said, would help banks conduct proper due diligence and monitor performance.
As Ghana pushes forward in building a more resilient economy, the role of banks in managing environmental and climate risk will be more important than ever. The BoG’s new directive is seen as a key step toward a more responsible, climate-conscious banking sector that is ready to face the challenges of tomorrow.
