The National Bank of Georgia (NBG), in partnership with the German Sparkassenstiftung for International Cooperation (DSIK), has published the "ESG Risk Radar for Georgia – Assessment of Climate-related and other ESG Risks." This comprehensive report marks a significant advancement from the 2022 Climate-related Risk Radar, featuring an optimized and streamlined methodology that reduces subjectivity and enhances precision. By incorporating sub-scores for all major scoring items, the report offers a more detailed and transparent assessment of ESG risks, providing a robust evaluation tailored to the Georgian context.

The report introduces an ESG Scorecard specifically designed for Georgian economic sectors and evaluates the financial sector's exposure to these sectors at both the individual institution and national levels. The enhanced methodology employs a top-down approach, effectively addressing challenges related to data availability at the loan level. This approach allows for a detailed examination of a range of climate-related risks, including acute and chronic physical risks and transition risks. Additionally, it considers other ESG risks such as biodiversity loss and potential human rights violations. The report identifies the sectors most vulnerable to ESG risks, including climate risks, and uses a heat map to evaluate commercial banks' exposure to these high-risk sectors

The ESG Risk Radar employs a comprehensive five-step scoring methodology applied across all major sectors in Georgia, classified according to NACE sector codes. The process includes: Conducting initial desk research for sector-level ESG risk assessments based on diverse information sources; Integrating local expertise; Compiling an extensive ESG risk database and sector profiles; Developing a heat map assessment for both individual institutions and the national level; Fully disclosing findings and methodology for practical use by financial institutions.

The detailed methodology, findings, and practical applications are now available to the public on the NBG website.