Gent Sejko: Climate, macroeconomy, and finance - navigating risks
and driving impacts
Welcome address by Mr Gent Sejko, Governor of the Bank of Albania, to the
HighLevel Forum 2023 on "Climate, Macroeconomy, and Finance: Navigating Risks and
Driving Impacts", Tirana, 8 November 2023.
* * *
Dear Mr Salinas,
Dear panellists and guests,
Good morning!
It is a great pleasure to welcome you to Bank of Albania's premises for this High-Level
Forum on: "Climate, Macroeconomy and Finance: Navigating risks and driving
impacts", a joint initiative with the World Bank.
At the beginning of my greeting, allow me to extend our profound appreciation to the
World Bank for its continuous support in establishing and enhancing our partnership
from some years now, and particularly in progressing towards green finance. I would
like also to thank all our distinguished guests, representatives of the most important
national and international institutions, who have joined us in this crucial effort. Your
presence today shows the importance of the topics we are going to address and the
grand challenges that lie ahead.
Today, we are going to discuss on a comprehensive challenge that goes beyond
political boundaries, industries and times: the challenge of climate change. Needless to
say, its impact affects every aspect of our lives, from the food we eat to the air we
breathe. The effects of climate change cast a shadow over our ambitions for
development, even though Albania's contribution to global greenhouse gas emissions is
very limited.
Climate change is no longer a distant threat. On the contrary, it is our present reality
that we experience every day, through unpredictable weather events, increased and
intensified probabilities of natural disasters, and even enhanced negative impacts on
agriculture, tourism and infrastructure. As a result, climate change exerts considerable
pressures on the stability of our financial systems as well. It is more than clear that our
financial sector cannot function in isolation from these challenges. As we strive to make
our activities sustainable and safeguard financial stability, we must not and cannot
neglect the presence of risks from climate change. The banking sector, as a
cornerstone of our economy, should increasingly enhance its resilience against
traditional financial turmoil, as well as against the unpredictable force of climate
phenomena.
Sustainable finances are not a choice, but an obligation. Our banking system - well
capitalised, profitable and liquid - has shown extraordinary resilient in recent years,
despite strong shocks on the real economy, from the earthquake of November 2019,
the lingering effects of COVID-19 and the armed conflict in Ukraine. Good management
of the banking system must also remain cautious regarding the risks and uncertainties
of the future, such as the challenges related to climate change.
To continue on the path of sustainable growth, our banks should continuously deal with
climate-related risks and make investments that are consistent with environmental
responsibility to preserve ecosystems, microclimates and other vital resources at the
country level. They should be better equipped to adapt quickly and effectively to a new
situation, benefiting from the opportunities created by the transition to a more
sustainable and environmentally responsible economy.
The Bank of Albania encourages the banking system to address this not as a challenge,
but as a strategic opportunity. We should be aware that supporting sustainable finance
is a cushion for your investments, in turn, an added value to increasing and preserving
our common welfare.
The commitment to a transforming change starts within our institutions, with a view to
collaboration, for fulfilling the promise of great common achievements. As a central
bank, we are devoted to setting the standard and giving the example for market players.
Today is an important moment, as we launch the "Strategy for the Management and
Supervision of Climate-Related Financial Risks to the Financial Sector, 2023-2025",
which is already published on the website of the Bank of Albania. This strategy - the
result of the fruitful partnership between the Bank of Albania and the World Bank
(FinSAC) - constitutes an important step in our unwavering commitment to address the
economic and financial consequences of climate change.
It is essential to underline that this strategy does not exist in a vacuum; it forms an
integral component of our overall mission and is carefully synchronized with our policies
and operations, including all aspects of climate challenge. This strategic document also
embodies concrete measures related to our preparation for challenges and the use of
opportunities created by the management of climate risks.
The Strategy we are launching today provides an action plan to identify, monitor and
manage climate-related risks, thereby ensuring the stability and resilience of our
financial system. The actions to be undertaken in the framework of this strategy will
affect the entire spectrum and various responsibilities of the Bank of Albania, from
monetary policy to financial stability and daily operations.
Further, the Bank of Albania remains steadfast in its commitment to facilitate the
dialogue and to collaborate, thus ensuring the sustainability of our financial system,
challenged by climate change and the transition towards a sustainable economy.
In addition to implementation of the climate strategy, we will continue on the path
towards modernization and digitalization of the market and payment systems, aimed at
promoting financial inclusion and the use of electronic payments in the Albanian
economy, in turn contributing to green finance. These initiatives will also simultaneously
serve as an impetus in our efforts towards collecting sufficient data and building
empirical models, as well as enhancing the awareness on climate-related risks within
our financial ecosystem.
The Bank of Albania is determined to fulfil its mission to guide advancement towards
green finance, increase public awareness and contribute to sustainable development.
Our effort includes integration of the latest innovations and best practices, accompanied
by harmonization of our regulatory framework with the EU legislation (acquis) on
sustainable finance.
Dear participants,
Central banks, international and national institutions are continuously improving their
analytical and empirical expertise in these key areas. Supporting green finance policies
is a fundamental principle of our commitment to a more sustainable and prosperous
future. This is not a journey that an institution or even a nation can make alone. It
requires cooperation and coordination on a global scale.
I thank each of you for joining us in this vital effort. Also, on behalf of the Bank of
Albania, I would like to express my gratitude to the Albanian Government for its
continuous support and commitment in addressing these critical issues. Our actions
today shape the world for generations to come and strengthen the resilience of our
economic and financial systems.
I hope that during the proceedings of this forum, the most productive and fruitful
discussions will take place, which stimulate the most creative thoughts and solutions to
the climate challenges that our system faces.
Thank you!