Addresses the management of environmental, social and governance risks and their link to the sustainability strategy of financial institutions.
Objective and functions
Promote the analysis and management of environmental, social and governance (ESG) risks and climate-related financial risks in the Dominican financial sector, using international standards as a reference.
- 01Analyze international standards and frameworks on ESG and climate risks.
- 02Follow regulatory initiatives on sustainability and their effect on the financial sector.
- 03Drive training on the measurement and management of these risks.
- 04Hold discussions with figures from the public and private sectors.
What ESG risks are
Environmental, social and governance risks
Financial and reputational risks that originate in environmental (climate, biodiversity, pollution), social (labor, communities, rights) and governance (ethics, transparency, decision-making structure) factors of the institution and its clients.
Climate-related financial risks
They fall into two types. Physical risks come from acute weather events, such as hurricanes and floods, or from gradual changes, such as rising sea levels. Transition risks come from the adjustment to a low-carbon economy: regulation, technology and shifts in demand. Both are transmitted to credit, market, liquidity and operational risks.
How it is measured and quantified
It is a maturing field. Exposure metrics, emissions and scenarios are combined.
Financed emissions
The share of clients’ and investments’ greenhouse gas emissions attributed to the institution’s loans and investments. They are part of Scope 3, category 15, of the GHG Protocol. The PCAF standard and IFRS S2 use them as a reference.
Exposure map by sector
Proportion of the portfolio in sectors with higher carbon intensity or more sensitive to physical events, with risk appetite limits.
Physical exposure by location
Cross-references the location of collateral and clients with the threat of hurricanes, floods and other events.
Climate scenario analysis
Estimates the financial impact of transition pathways and physical scenarios at different horizons.
Disclosure
The ISSB’s IFRS S2 standard, which incorporates the TCFD recommendations, requires disclosure of climate-related risks and opportunities, emissions and the scenarios used.
How it is managed
Coordination
Those who lead the committee. The coordination and co-coordination roles rotate once a year.
Coordination
Dalma Hernández
ABA
Co-coordination
To be appointed
This position is assigned by annual rotation.
Regulations and recommended readings
Standards and documents that the committee uses as the basis of its work.
- Basel Committee (BCBS), Principles for the effective management and supervision of climate-related financial risks, 2022 (opens in a new tab)
- ISSB, IFRS S2 Climate-related Disclosures, 2023 (opens in a new tab)
- G20/OECD, Principles of Corporate Governance, 2023 (opens in a new tab)
- Partnership for Carbon Accounting Financials (PCAF), global standard for emissions accounting (opens in a new tab)
- Club webinar: From Risk to Opportunity, ESG Strategy at Banco de Bogotá
Sign up for this committee
Members who wish to take part notify the Club’s Executive Committee, and this form is the channel. Regular members and representatives of sponsor members may take part. Not a member yet? Find out how to become one.
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