Risks for South African financial system

Technological risks. The central bank (CB), and financial institutions under supervision need to update risk-monitoring systems, upgrade IT systems, adopt new modeling techniques to measure climate-related risks. Without these, the monitoring build-ups of time-varying and cross-sectional risks would be inadequate.  
Economic risks and financial risks. Financial regulations to help shift lending and investment include higher capital requirement for high-carbon lending. And CBs are also urged to exclude such emitters from CB asset-purchase programmes.  While these are positive, they can result in unintended credit disintermediation. 
Business opportunities related to net zero transition and network effects.  

FSB-TCFD benefits of better disclosures are:

enhanced better assessment of climate-related risk – The SARB will be better armed to assess these risks for stress testing and fulfilling the financial stability mandates
better allocation of capital – the South African financial system would be on path to creating a resilient sector, that would withstand domestic and external shocks to disinvestment from high-carbon emitters
efficient strategic planning – Investing in new and cheaper technologies would render South Africa investor-friendly with profitable opportunities in ST and LT, with positive externalities from less insurance claims, stronger bank financed assets.

-Bonakele Hlongwane, South Africa