CBL, World Bank Validate Mainstream Climate Change into Liberia’s Financial Sector | Business

In a decisive step toward strengthening Liberia’s financial system against climate-related shocks, the Central Bank of Liberia (CBL), with support from the World Bank, on Thursday, June 5, convened a one-day national workshop to validate a comprehensive report on mainstreaming climate change into the financial sector. 

The workshop, held at a local resort in Monrovia, brought together key stakeholders from government ministries, financial institutions, private sector actors, and development partners to chart a climate-resilient path forward for the country’s financial ecosystem.

Delivering opening remarks on behalf of Executive Governor Henry F. Saamoi, CBL Director of Development Finance, Jay Gbleh-bo Brown, emphasized the Bank’s commitment to integrating climate risk into Liberia’s financial architecture.

“Climate change is no longer a peripheral environmental issue — it is now a central macro-financial issue,” Brown declared. “Its implications for inflation, financial stability, asset quality, credit risk and insurance exposure require our urgent and coordinated action.”

Brown noted that Liberia, with its heavy reliance on climate-sensitive sectors such as agriculture, forestry, and fisheries, remains acutely vulnerable to the impacts of climate change — including flooding, sea-level rise, and erratic rainfall. He stressed that these are not future risks, but present realities that demand swift and strategic responses.

The report validated during the workshop was developed through a collaboration between the CBL, the World Bank, and consultant Louise Brown, following Liberia’s request for technical assistance from the Nationally Determined Contributions (NDC) Partnership based in Washington, D.C. The roadmap assesses existing vulnerabilities, outlines opportunities for green finance, and provides a structured implementation plan for climate-smart financial policies.

“We are grateful to the World Bank for honoring our request and supporting this initiative through the Climate Funds Trust Fund,” said Brown. “This report provides an actionable roadmap for building a resilient financial sector and positions us to attract climate finance and private sector investment for adaptation and mitigation.”

Brown also announced internal reforms already underway at the CBL, including the establishment of a dedicated climate team and efforts to embed climate considerations into monetary policy, financial supervision, and development finance.

World Bank Senior Private Sector Development Specialist Alari Mahdi, based in Accra and overseeing Liberia and Ghana, praised the CBL’s leadership in prioritizing climate action within the financial sector.

“Mainstreaming climate change into the financial decision-making you make day-to-day is both a strategic opportunity and a regulatory imperative,” Mahdi stated. “It allows institutions to manage risks better, seize green finance opportunities, and support a more inclusive and sustainable economy.”

Mahdi called on stakeholders to move “from strategy to implementation,” urging participants to actively engage in shaping and refining the roadmap. She reaffirmed the World Bank’s commitment to working with the CBL and financial institutions to build capacity, identify regulatory entry points, and promote climate-smart reforms.

Fred D. Koilor, Financial Sector Specialist with the World Bank/IFC, provided an overview of the project’s origins and objectives. He highlighted that the roadmap emerged from a thorough assessment of climate-related needs, gaps, and opportunities in the financial sector.

“This assessment identifies key actions necessary for mainstreaming climate issues, from data collection and green taxonomy development to creating innovative financial instruments,” Koilor explained. “However, these actions will only be effective if they are validated by the stakeholders present here today.”

Koilor stressed the importance of a collaborative, cross-sectoral approach to ensure Liberia’s financial sector is equipped to design products and policies that address the complex challenges posed by climate change.

“This is not just the Central Bank’s job,” he said. “It requires a whole-of-system approach that involves banks, insurers, regulators, and public and private stakeholders working together.”

Participants were urged to take the workshop seriously, recognizing the economic costs of inaction. Referencing the World Bank’s 2024 Liberia Country Climate and Development Report, Brown warned that Liberia’s economy could shrink by up to 15 percent and see 1.3 million people pushed into poverty by 2050 if climate risks are not addressed.

“This is not the future we can accept,” he said. “Let us take action today that will safeguard our financial system, our environment, and our economy for generations to come.”

Presenting the context and findings of the report, Madam Louise Brown, Consultant for the project, emphasized the pressing realities of climate change, stating:

“These [climate impacts] come from the expectations that climate change will cause, and is in fact already causing, increasing temperatures, globally changing rainfall patterns, and increasing incidence of extreme events like floods, droughts, and cyclones — and also leading to sea level rise. These have impacts on agricultural productivity, increased pests and disease outbreaks, impacts on infrastructure, saline intrusion into fresh water systems, and destruction of coastal infrastructure, biodiversity loss, reduced ecosystem function, and loss of livelihoods.”

She stressed that the poorest and most vulnerable communities, such as those in Liberia, are disproportionately affected.

Madam Brown presented a global economic model illustrating projected GDP losses due to climate change, highlighting that developing regions like Africa, South Asia, and South America are expected to face losses of up to 50% of GDP by 2100. In contrast, some wealthier northern countries may temporarily benefit due to warming temperatures and new shipping routes opened by melting ice caps.

“Subsequent studies show the impacts are likely to be even more severe,” she added, warning that the economic cost of inaction far outweighs the cost of proactive climate investment.

Referencing the United Nations Framework Convention on Climate Change (UNFCCC), Brown noted that significant milestones, particularly the 2015 Paris Agreement, have set ambitious targets to limit global warming to 1.5 to 2°C above pre-industrial levels.

The Paris Agreement, she explained, focuses on three goals: Climate mitigation (reducing emissions), Aligning financial flows with climate-resilient development (Article 2.1c) and advancing global adaptation efforts.

Brown pointed out that while adaptation is often underemphasized globally, it is “the most important for vulnerable countries like Liberia”. She highlighted that Liberia, as a low emitter of greenhouse gases, should prioritize adaptation but also explore mitigation opportunities where possible to attract climate finance.

Brown also presented a chart showing that while climate finance flows grew from US$316 billion in 2011 to US$1.3 trillion in 2020, the funding still falls far short of the estimated needs under the Paris Agreement. The yellow section of the chart, representing global climate finance needs, significantly dwarfs current flows.

“There is a strong economic case to take action now,” she said. “If we don’t, the projected damages under a ‘business-as-usual’ scenario will be far more devastating and costlier than the investments needed to mitigate or adapt.”

Brown clarified that climate finance encompasses both mitigation (e.g., renewable energy, forestry, waste management) and adaptation (e.g., flood-resilient agriculture and infrastructure). Moreover, climate finance can come in various forms — grants, loans, equity, and insurance — from both public and private sectors globally.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}