Sustainable Banking Principles to Guide ESG Integration and Risk Assessment in Construction Sector Financing – BoG
The Bank of Ghana (BoG) is intensifying efforts to integrate environmental sustainability into the country’s financial sector, urging banks and other regulated institutions to embed climate risk into their operations—particularly in the construction sector.
Speaking at the Ghana Sustainable Banking Principles (GSBP) forum focused on the construction industry, Second Deputy Governor of the Central Bank, Matilda Asante Asiedu, highlighted the growing importance of Environmental, Social and Governance (ESG) factors in assessing credit risk and project viability.
“Why is this sector so important in the context of sustainability?” she queried, pointing out that while banks traditionally assess credit using the seven Cs of credit risk, environmental factors are becoming equally critical. “What if rising temperatures and erratic rainfall patterns undermine the viability of materials, or site operations, pushing timelines and costs beyond projections? These are increasingly part of the risk landscape,” she remarked.
According to her, such emerging ESG-related risks could amplify a bank’s loss given default, damage its reputation, or even attract regulatory sanctions—underscoring the need for banks to move beyond reactive approaches to ESG compliance.
She emphasised the need for financial institutions to proactively incorporate sustainability considerations into project due diligence, client engagement and portfolio monitoring. “In so doing, we will not only safeguard financial soundness but also help to build a more resilient banking sector,” she added.
The BoG, she said, considers ESG issues not as peripheral matters but as a “central pillar of financial stability, long-term value creation and responsible economic stewardship.”
“ESG is not a PR exercise or about feel-good reporting. Rather, it is the framework for measuring organizations’ long-term sustainability and resilience. It is about how they manage their footprint, treat their community and people, and how they govern themselves,” she stressed.
The construction sector is seen as a critical area in the BoG’s sustainable banking agenda due to its close ties with climate risk, resource efficiency, and economic growth. The current round of sector deep-dives under the GSBP initiative is aimed at uncovering such intersections between traditional financial risk and ESG concerns.
Implementation of the Ghana Sustainable Banking Principles, introduced in 2019, is expected to strengthen banks’ resilience to ESG risks while positioning the financial sector to support sustainable development goals (SDGs) through responsible lending and investment practices.
