127-4 Guideline on Environmental & Social Risk Management (ESRM) For Banks and Financial Institutions

Summary

The Environmental & Social Risk Management (ESRM) guidelines set down standards for the identification, assessment, and management of E&S risks. Hydropower-related E&S criteria have been given special attention, given the Nepal’s reliance on this form of energy. The guidelines also provide a reporting template for all banks to report to Nepal Rastra Bank (NRB) on sustainability performance. The core objective of the ESRM Guideline is to require B/FIs to integrate Environmental & Social risk management into the overall credit risk management process in order to fully inform the credit authority of E&S risks prior to the financing decision regarding individual transactions.

Guideline on Environmental & Social Risk Management (ESRM) For Banks and Financial Institutions

Issuer

Nepal

Year

2018

Region

Asia

Issuer (type)

Nepal Rastra Bank (NRB) (Central Bank)

Policy Type

Disclosure

Geographical scope

National

Mandatory or voluntary

Mandatory

Main industries targeted

Manufacturing
Finance & Insurance
Real Estate, Rental & Leasing
Construction

Restrictiveness

Moderate

Sustainable Development Goals (SDGs)

SDG 1: No Poverty
SDG 3: Good Health and Well-being
SDG 6: Clean Water and Sanitation
SDG 7: Affordable and Clean Energy
SDG 8: Decent Work and Economic Growth
SDG 9: Industry, Innovation, and Infrastructure
SDG 10: Reduced Inequality
SDG 11: Sustainable Cities and Communities
SDG 12: Responsible Consumption and Production
SDG 13: Climate Action
SDG 14: Life Below Water
SDG 15: Life on Land