BSP, UNEP-FI Push Climate Risk Modeling for Banks

The Bangko Sentral ng Pilipinas (BSP) and the United Nations Environment Programme–Finance Initiative (UNEP-FI) jointly hosted a webinar on May 2 aimed at advancing climate risk modeling practices for banks and financial institutions in the Philippines.

Over 100 banks and financial firms participated in the virtual event, which was part of the BSP’s Knowledge Exchange (KX) Series on Sustainability.

The session, titled “Webinar on Climate Risk Modeling for Adaptation and Resilience,” featured insights from UNEP-FI’s V20 Sustainable Insurance Facility, a global initiative supporting climate-smart insurance solutions tailored to micro, small, and medium-sized enterprises (MSMEs) in climate-vulnerable countries such as the Philippines.

BSP Assistant Governor and Chief Sustainability Officer Pia Bernadette Roman Tayag opened the webinar, emphasizing the critical dual role of financial institutions.

She said, “There are mutually reinforcing goals for banks to build their own resilience and finance the adaptation needs of the communities they serve.”

The webinar highlighted the importance of climate risk modeling in protecting banks’ MSME loan portfolios while enabling the development of adaptation lending products.

Speakers from the UNEP-FI Asia-Pacific and global teams outlined how such modeling tools help banks assess exposure to climate-related risks and align their financing practices with sustainable development goals.

The session also introduced UNEP-FI’s technical assistance program for Philippine banks, funded by the Asian Development Bank, which aims to equip institutions with frameworks and tools to develop climate-aligned financial products for MSMEs.

BSP officials including Director Ellen Joyce Suficiencia of the Sustainability Office and Deputy Director Rhodora Brazil-de Vera of the ESG Supervision and Surveillance Group participated in the dialogue, joined by technical experts Brandon Matthews, Agrotosh Mookerjee, and Manoj Pandey.

Deputy Director Joanne Marie Decena of the BSP Sustainability Office moderated the discussions.

This event marked the third installment of the BSP’s KX Series on Sustainability, an ongoing platform to build capacity in green finance and environmental, social, and governance (ESG) integration across the Philippine banking sector.

The initiative aligns with BSP’s 11-point Sustainable Central Banking Strategy launched in 2022, which includes promoting climate and environmental risk awareness in financial supervision.

According to the Department of Finance, the Philippines loses PHP174 billion annually due to climate-related disasters, making resilient financial systems a national imperative.