Central Bank of the Republic of Kosovo outlines supervisory roadmap for climate risk including planned inclusion in SREP

The Central Bank of the Republic of Kosovo (CBK) reported that its Deputy Governor for Financial Supervision, Milot Cakaj, spoke at an international conference in Skopje on climate risks and financial stability, setting out how the CBK is embedding climate-related risks in supervisory processes. In a panel on the supervisory approach to climate risk, Cakaj highlighted that physical and transition risks are affecting financial institutions’ business models and credit exposures, and pointed to the need to align supervisory approaches with European Central Bank and Basel Committee standards alongside stronger regional cooperation. He referenced steps taken over the past two years, including integrating climate risks into the CBK Strategic Plan 2024–2028, joining the Sustainable Banking and Finance Network, and publishing its first guide on credit exposures linked to the climate transition, particularly in the context of the European CBAM mechanism. He also pointed to the adoption of a Guideline on Syndicated Loans and a 2025–2027 Strategic Roadmap for managing climate and environmental risks developed with World Bank FinSAC support, positioning these as part of the regulatory basis for sustainable projects and long-term clean energy investment. Next steps flagged included finalising an advisory letter for the banking sector and incorporating climate risk into the SREP process.