TIRANA, Aug 12 /ATA/ The Bank of Albania has broken down the risks facing the banking system as a result of climate change.
According to a recent publication by the bank’s scientific research, the Bank’s Climate Risks Exposure Assessment Report (2024) analyses the exposure of the Albanian banking sector to climate risks, including physical and transitional risks.
Through analysis of various indicators, the report identifies the challenges and opportunities for the banking sector in dealing with these risks. The Bank analyzes the financial risks associated with climate, looking at the channels through which this risk is transmitted.
“Banks are exposed to climate-related financial risks, through two main channels, physical risks and transition risks.
“Physical risks stem directly from climate change, while transitional risks arise from a response – from policymakers, innovators, or consumers – to prevent and/or combat climate change,” the document states.
Noting Albania’s environmental and economic profile, and the projections, those which show an increased risk, are mostly sectors related to the impact of climate change on the agricultural, energy sector, water resource management, transport and coastal areas.
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