In a significant move towards enhancing climate resilience in the Eastern Caribbean Currency Union (ECCU), the Eastern Caribbean Central Bank (ECCB) has entered into a Memorandum of Understanding (MOU) with the Agence Française de Développement (AFD). The MOU, signed on November 10 at the ECCB Headquarters in St Kitts and Nevis, is aimed at integrating climate-based financial risk management within the region’s financial system.
ECCB’s Governor, Timothy N. J. Antoine, and AFD’s Senior Investment Officer, Lionel Lecrinier, formalized the agreement, marking a crucial step in the ECCB’s commitment to regional financial stability while addressing environmental concerns. The partnership, supported by funding from the AFD and the European Union, focuses on building the capacity of regulators and financial institutions in understanding, assessing, and monitoring climate-related financial risks.
This initiative is particularly relevant for the ECCU, where the financial system is susceptible to the impacts of climate change, including both physical and transition risks. However, it also identifies the potential opportunities in the evolving green economy, such as renewable energy and climate-smart agricultural practices.
Governor Antoine emphasized the urgency of global action on climate issues and the necessity of recognizing climate risk as a financial risk. Lecrinier also pointed out the dual nature of the situation, where risks are accompanied by emerging opportunities in green economic sectors.
The collaboration will extend beyond risk management to support the adoption of adequate regulations by regional governments to mitigate climate-related risks effectively. This initiative is especially timely, following the global climate discussions at COP 28, reinforcing the urgent need for climate action and financial strategies to support these efforts.
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