Climate related investment risks rise
Monday, June 26, 2023 | 230 Views |
The FSC is a statutory body made up of the Bank of Botswana (BoB), the Non-Bank Financial Institutions Regulatory Authority, the Financial Intelligence Authority and related entities.
Last week, the FSC produced its Financial Stability Report (FSR) for May, which is a research product designed to predict and mitigate vulnerabilities that could threaten the stability and resilience of the local financial system. While climate related risks have been a major worry for environmental movements and social institutions, the FSC has signalled worries that climate problems could harm macroeconomic stability and ultimately impact business prospects.
This, according to the FSC, has forced financial regulators to keep an eagle eye on the development of climate issues. “Climate-related risks and their mitigation strategies have taken centre-stage in world forums and are likely to define future regulatory and supervisory cooperative arrangements,” the Council said.
The FSC further revealed that the BoB, on behalf of Botswana, has entered into international agreements to control the growing worry of climate change. In a meeting convened in October 2022, governors of the Group of 20 (G20), which is the premier forum for international economic cooperation, signed an agreement to coordinate their efforts to tackle climate change and protect the environment, as well as to promote transitions towards greener, more prosperous and inclusive economies and societies.
“These developments prompt emerging markets and developing economies and developed countries alike to move towards sustainable and green economy,” read the FSR. Supporting government spending and initiatives through policy plans such as the Transitional National Development Plan (TNDP) will be crucial in forging joint action against climate change risks in the domestic economy, the FSC said.
The transition plan by the government has adopted a move to incorporate climate risks as a priority concern to be addressed by national development plans as well as infrastructural development policies, making it a necessity for all government projects to run through an environment assessment as a litmus test for environmental friendliness.
For the 2023-24 financial year, the government has budgeted P1.36 billion towards climate change initiatives and further climate finance funding is expected to be generated through green bonds, as well as access to the Green Climate Fund, the report read.
Botswana has firsthand experience on the impact of climate change, with adverse phenomena having affected sectors such as agriculture in the past. Climate phenomena such as El Niño have in the past rattled food security and increased the weight on government’s social security schemes which include poverty alleviation, destitute programmes and Ipelegeng. El Niño has a track record of emptying silos kept for the country’s strategic grain reserve and because the land locked country is a net importer of food, this also raises food prices on the shelves.
Figures released by the country’s electoral management body have shown that a total of 1, 037, 684 people have registered to vote.However, eligible voters could be discouraged by events leading to the voting day like poor execution of advance voting amid talks that the elections could be unfair.There have also been threats by certain opposition politicians that shall the elections not be free and fair, they will halt them.Despite these...