Uganda orders banks to adopt ESG or risk capital loss
Uganda’s central bank has ordered lenders to embed environmental and social criteria into their operations, cautioning that ignoring climate threats could trim the nation’s economic output by 3.1 percent within 25 years. David Kalyango, who leads bank supervision and spoke for Governor Michael Atingi-Ego at a Kampala training program debut on Tuesday, said treating sustainability as a discretionary corporate activity has become outdated thinking. He pointed to the country’s dependence on farming, which employs most workers but remains exposed to weather disruptions that endanger growth.
A 2022 central bank review found no supervised institutions had tested their portfolios for environmental and social strains, revealing a weakness that could destabilize the sector. Regulators now want banks to track and disclose emissions tied to borrowers, since institutions financing carbon-heavy clients may struggle to attract foreign funding or face steeper costs. The monetary authority has rolled out frameworks covering green taxonomies, climate finance plans and bond standards to guide lenders toward projects that support ecological goals.
The curriculum emerged through collaboration between the Uganda Institute of Banking and Financial Services and aBi Finance Limited, aiming to give professionals practical methods for measuring sustainability performance across commercial banks and microfinance providers.
