The strategy, which is in line with the Third Financial Sector Strategic Plan and as part of the Qatar National Vision 2030, suggests creating incentives for financial institutions and capital market participants to issue sustainable products and promoting fintechs with positive environmental or social impact
The strategy, which is in line with the Third Financial Sector Strategic Plan and as part of the Qatar National Vision 2030, suggests creating incentives for financial institutions and capital market participants to issue sustainable products and promoting fintechs with positive environmental or social impact.
It is broadly based on three main pillars with the first pillar focusing on managing climate, environmental, and social risks in the financial sector; the second encouraging capital investments in sustainable finance and the third pillar aiming at incorporating ESG and sustainability practices into the QCB’s internal operations.
“We recognise the importance of integrating sustainability into our financial activities and we believe that sustainable development can only be achieved through effective partnerships between financial institutions and the society,” HE Sheikh Bandar bin Mohamed bin Saoud al-Thani, QCB governor said in the report.
The outcome of the first pillar is to establish climate, environmental and social risks awareness and management among banks and insurance companies and enhance transparency on the exposure of banks and insurers to climate, environmental and social related risks and opportunities.
For making Qatar a leading hub for sustainable finance and capital mobilisation, the strategy seeks to diversify innovative sustainable products including digital solutions (fintech); strengthen the contribution of the financial sector in mobilising capital towards sustainable finance and boost transparency on the contribution of the financial sector to national sustainability objectives.
Highlighting that a sustainable, globally-connected, central bank is resilient to climate, environmental and social risks; the QCB’s ESG strategy seeks to broaden incorporation of climate, environmental and social considerations across its functions, leveraging international collaboration.
Stressing that the outcome of each pillar will be achieved through a set of strategic initiatives, it said under the first pillar, the QCB called for prudential regulation on climate, environmental and social risks management applicable to banks and insurance companies and stress-test to assess climate risk for the banking industry.
The strategic initiative also suggested publishing a dashboard summarising the exposure of banks to climate and environmental and social risks and the contribution of banks to the national sustainability objectives.
The transparency of financial sector contribution to national sustainability objectives will be achieved through guidelines on the issuance of sustainable products (loans, bonds and sukuks) applicable to financial institutions and capital market participants.
Specific outcomes have also been defined for each cross-cutting theme, it said, adding there was a need to establish industry taskforces to bring forward selected topics (taxonomy and sustainable capital markets) and develop a data repository platform to collect and aggregate relevant data for climate, environmental and social risks assessments.
There was also a need to create QCB and industry-wide programmes to foster the development of sustainable finance and climate, environmental and social risks management capability, knowledge and talent for financial institutions and capital markets.
