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The Central Bank of Kenya has mandated all commercial banks and insurers to conduct climate risk stress tests starting Q4 2024. The framework, developed with the Bank of England and NGFS, assesses exposure to physical risks (floods, droughts) and transition risks (carbon taxes, policy shifts). Institutions must model impacts on loan portfolios, asset values, and capital adequacy. The CBK will use results to guide supervisory decisions and green lending incentives. Kenya is the first East African country to implement such a system, aligning with global best practices and the IMF’s climate resilience guidelines.