Global climate change directs the finance and banking sector to take new measures. The Banks Association of Türkiye has prepared a guide to measure climate-related financial risks. The guide, which aims to regulate banks’ credit facilities according to climate risks, was prepared by the “Climate Risks Working Group” of the Banks Association of Türkiye. The guide evaluates climate risks in the energy, iron and steel, cement, aluminum, fertilizer, construction, agriculture, logistics and automotive sectors. The guide aims to determine a sector-based heat map regarding the devastating impact of climate change and to raise awareness with appropriate intervention strategies, taking into account the value chains of the sectors.
COMPLIANCE WILL BE CHECKED OUT
While it is stated that global climate change creates a separate “risk category” on its own, the concept of “adaptation” comes to the fore in banks’ assessment of sectors. This situation is expressed in the guide as follows: “To identify risks in sectors that do not have various adaptation capacities (carbon-intensive sectors), It is necessary to examine exposure factors and sensitivity levels and make evaluations to develop adaptation capacity. Because they may face increased compliance costs, penalties and reputational risks. This situation will most likely become stronger in the future for all sectors.“
CONSTRUCTION ABSORBS ENERGY
Risks related to the construction industry have an important place in the guide, which emphasizes that buildings consume large amounts of energy and natural resources throughout their entire life cycle, causing negative effects on climate change and the environment. The guide states that the building sector uses approximately 30 percent of global energy due to building-based energy uses such as heating, cooling, hot water preparation, cooking, lighting and electrical appliances.
ZERO CARBON BUILDING
While it is stated that buildings are the key driving force in the economy because they cause carbon emissions, the following statements are made about “zero carbon buildings”: “In this road map, Zero Carbon Buildings are the buildings that are highly energy efficient, provide the remaining energy needs from on-site renewable sources or renewable energy power plants, It is defined as buildings in which the operational and embodied carbon emissions of the cycle are minimized and emissions that cannot be eliminated are eliminated by carbon balancing. It is also important that Zero Carbon Buildings are resistant to climate change. Today, there are architectural designs, construction practices, building materials and technologies that will realize Zero Carbon Buildings. “These buildings also provide other benefits to their users, such as better indoor air quality, more comfortable living and working spaces, and lower energy bills.”
MOST IMPORTANT AGRICULTURE
The agricultural sector, which is highly exposed to the effects of global climate change, also finds a place in the guide. The guide describing conservation agriculture practices includes the following: “Increasing agricultural production • Land purchases to be made for the purpose of individual land purchases to establish new agricultural enterprises and to achieve economies of scale by combining the lands of existing enterprises • Determination of agricultural basin and enterprise-based product types through planned production • Obtaining planting permits according to regional climate and water usage • Preventing oversupply and supply shortage • Protecting the security of supply of strategic products.”
(email protected)
