Climate-related Risk Radar for Georgian Economic Sectors

The NBG in cooperation with German Sparkassenstiftung for International Cooperation (DSIK), has prepared a report on Climate-related Risk Radar for Georgian Economic Sectors and its possible application for the Financial Sector. The report develops a climate risk scorecard for Georgian economic sectors and assesses the financial sector’s exposure to the identified risky sectors.

The Risk Radar is a scoring methodology that chooses the top-down approach and uses available data to assess the potential climate risk of a sector. It covers both acute and chronic physical climate risks as well as transition risks. Other ESG risks are only considered from a more high-level perspective.

This scoring methodology has been applied to all main economic sectors in Georgia. After identifying the most vulnerable economic activities, commercial banks’ exposures to these high-risk sectors were assessed using a heat map.