Bank Al-Maghrib Establishes Dedicated Green Finance Unit
Morocco’s Central Bank, Bank Al-Maghrib, has demonstrated its commitment to sustainable finance by establishing a Green Finance Unit (GFU), signaling its intent to address climate risks and promote green finance across the financial sector.
Bank Al-Maghrib, as Morocco’s central bank, plays a critical role in aligning the financial sector with the country’s sustainability goals. The challenge it faces is the integration of green finance principles into a traditionally risk-averse banking system while addressing climate risks that threaten financial stability.
The Green Finance Unit (GFU), launched within the banking supervision department, plays a pivotal role in advancing the country's National Roadmap for Aligning the Financial Sector on Sustainable Development, published in 2016. The roadmap focuses on five key areas: governance of environmental risks, development of sustainable financial products, financial inclusion, capacity building, and enhancing transparency. The GFU works closely with national and international stakeholders to promote green finance instruments like green and sustainability-linked loans and foster climate-related risks management in the banking sector.
The GFU also contributes to international work on inclusive green finance promoting central banks green finance policies targeting underserved communities while contributing to broader climate resilience efforts within the financial sector.
The GFU has been instrumental in establishing the regulatory framework to promote green finance instruments, such as green loans, positioning Morocco as a leader in the African continent. Despite progress, the funds raised through these instruments remain a small fraction compared to other emerging markets.
One of the key takeaways is the lack of internationally recognized standards to measure progress in green finance, which hinders investment and makes it difficult to assess the effectiveness of green initiatives. Developing concrete green standards with measurable outcomes is critical for scaling investment in sustainable finance.
Bank Al-Maghrib’s Green Finance Unit exemplifies Morocco’s leadership in integrating green finance into its financial system, paving the way for future innovation and investment in sustainability.
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