The global economic situation continues to recover slowly and unevenly from the shocks of the COVID-19 pandemic and subsequent geopolitical tensions. Many central banks are still maintaining their tight monetary policy stance to manage the inflation. The interconnectedness of global markets needs policy harmonization to mitigate impact of global shocks on economic activity.

Central banks as regulators are responsible for providing support and guidance to regulate banks and financial institutions (BFIs) for the development and execution of Environmental and Social Risk Management (ESRM) guidelines. This in turn helps improve risk management practices by integrating Environmental and Social Risks. The future of sustainable banking industries depends on the ability of banks to identify and manage environment/climate and social risk.