In conversation with H.E. Sum Sannisith (Deputy Governor, National Bank of Cambodia)

1. When and why did the National Bank of Cambodia join the NGFS?

The National Bank of Cambodia (NBC) became a member of the Network for Greening the Financial System (NGFS) in 2020 because we recognize that climate change is no longer solely an environmental issue—it has become an increasingly important macroeconomic and financial stability concern. As the central bank of a climate-vulnerable country, we see first-hand how floods, droughts, heatwaves and other climate-related events can affect economic activity, financial institutions, and ultimately our ability to fulfil our core mandates of maintaining price stability and safeguarding financial stability.

Cambodia is among the countries that are particularly exposed to physical climate risks. These events can disrupt agricultural production, weaken supply chains, increase food price volatility, reduce household incomes and impair borrowers' repayment capacity. Over time, these risks can accumulate into broader financial vulnerabilities affecting banks, businesses and households alike. For emerging and developing economies such as Cambodia, climate adaptation is therefore not a future agenda—it is a present necessity.

Joining the NGFS reflects our commitment to ensuring that Cambodia's financial sector is well prepared to manage these evolving risks while continuing to support sustainable economic growth. Membership enables us to collaborate with a global network of central banks and supervisors, exchange experiences, benefit from international best practices and contribute perspectives from an emerging economy that faces significant climate vulnerabilities.

The NGFS has become an invaluable platform for knowledge sharing, policy dialogue and technical cooperation. Through this collaboration, we have strengthened our understanding of climate-related financial risks and enhanced our institutional capacity to integrate these considerations into financial supervision, macroprudential surveillance and financial stability assessments.

Equally important, the NBC views climate action as a collective responsibility. While central banks are not environmental policymakers, we have an important enabling role in ensuring that the financial system remains resilient to climate risks and continues to channel financing toward investments that strengthen economic resilience. In this regard, our participation in the NGFS complements Cambodia's broader national commitment to sustainable development and climate resilience.

2. Can you share with us the key elements of the National Bank of Cambodia's climate strategy and how it fits into Cambodia's broader national agenda?

Climate adaptation and sustainable finance have become important strategic priorities for the National Bank of Cambodia because climate and nature-related risks increasingly influence macroeconomic conditions, financial stability and long-term economic development. Our approach is guided by a simple principle: integrating climate considerations into our existing mandates and policy frameworks, rather than treating climate as a separate agenda.

Cambodia has demonstrated a strong national commitment through its Nationally Determined Contributions (NDC 3.0), which target greenhouse gas emission reductions of up to 55 percent by 2035 while strengthening the country's resilience to climate change. Achieving these ambitions requires substantial investment, with financing needs estimated at approximately US$9.37 billion for adaptation and US$22.68 billion for mitigation. These investment needs highlight the important role of the financial sector in mobilizing capital towards sustainable and climate-resilient development.

Within this broader national framework, the NBC focuses on two complementary objectives.

The first is strengthening the resilience of the financial system by integrating climate-related and environmental risks into supervisory practices and financial stability monitoring. Climate risks can affect credit quality, collateral values, business continuity and overall banking sector resilience. Ensuring that these risks are appropriately identified, measured and managed is therefore an essential component of sound financial supervision.

The second priority is to foster a conducive ecosystem for sustainable finance. To this end, the NBC has developed the Sustainable Finance Roadmap to provide strategic direction for the financial sector and introduced the Cambodian Green Finance Taxonomy to establish a consistent framework for identifying environmentally sustainable economic activities. We have also incorporated ESG considerations into our reserve management practices, introduced regulatory incentives to encourage green lending and continued to invest significantly in capacity building across the financial sector.

Taken together, these initiatives seek to strengthen financial resilience while supporting greater investment in climate adaptation, sustainable infrastructure and Cambodia's long-term development objectives.

3. To what extent has the National Bank of Cambodia leveraged the work of the NGFS in its domestic journey? Could you share some examples?

The NGFS has been an important source of knowledge, technical guidance and international collaboration throughout Cambodia's sustainable finance journey.

Its work has informed several aspects of our policy development, particularly in the areas of climate risk governance, supervisory expectations, sustainable finance and climate-related financial risk assessment. As we continue developing Cambodia's Climate Risk Assessment Framework, international experiences shared through the NGFS have provided valuable reference points for strengthening our analytical methodologies and supervisory approaches.

Another important contribution has been knowledge sharing and capacity building. Through NGFS working groups, technical workshops, conferences and peer-learning activities, NBC staff have had opportunities to exchange experiences with central banks and supervisory authorities around the world. These engagements have significantly strengthened our institutional expertise and helped accelerate the development of sustainable finance policies.

The NGFS has also reinforced the importance of data quality and disclosure. Like many emerging economies, Cambodia continues to face challenges relating to the availability of granular climate-related information. International discussions within the NGFS have highlighted practical approaches to improving data governance, reporting standards and climate risk measurement, which continue to inform our own work.

Most importantly, the NGFS has demonstrated the value of international cooperation. Climate-related financial risks do not stop at national borders, and many of the analytical tools, methodologies and policy approaches benefit greatly from international collaboration. For an emerging economy such as Cambodia, being part of this global network enables us to contribute our own perspectives while learning from the experiences of others. Going forward, we look forward to continuing our active participation in the NGFS and contributing to the Network's work on sustainable finance, climate adaptation and financial stability.

4. One last word?

Climate change is a global challenge that no single institution can address alone. Through international cooperation, knowledge sharing and continued capacity building, central banks can play an important enabling role in strengthening financial resilience and supporting sustainable economic development. The National Bank of Cambodia remains committed to contributing to this collective effort through the NGFS while ensuring that Cambodia's financial system remains resilient, inclusive and well-positioned to support the country's long-term development objectives.