It’s time for more responsible banking: The Central Bank of Egypt issued binding regulations designed to promote sustainable finance in the banking system in a circular (pdf) released Thursday.

According to the rules, banks will be required to:

  • Establish an independent unit for sustainability and sustainable finance by 1 April 2023;
  • Submit periodic reports, including a quarterly report on sustainable finance activities, and a yearly sustainability report no later than 31 March of each year, starting 2024;
  • Hire an environmental consultant certified by the Environment Ministry to assess environmental risks for major projects seeking funding starting July 2023;
  • Incorporate sustainable finance policies into lending and investment policies.

The new regulations come as part of efforts to achieve sustainable development goals. The CBE said it saw a “necessity in issuing a binding framework to bolster sustainable finance activities in banks” following a survey. The issuance of the regulations comes a little over a year after the CBE announced guiding principles for the strategy.

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