Strengthening Governance for a Sustainable Future: The Evolving Role of Financial Institutions

For financial institutions, sustainability is not a peripheral consideration, but rather it is central to resilience, competitiveness, and long-term value creation.

In my role as Group General Counsel at Republic Financial Holdings Limited, I have witnessed the rapid evolution of sustainability-related regulations and standards, and the profound ways in which they are reshaping the financial and operational landscape. Today, this pace is accelerating further, making strong governance and proactive monitoring now more important than ever.

Since 2019, more than 3,000 sustainability-related policy measures have been introduced globally. Among these, the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) is one of the most consequential, placing a carbon price on certain high-emission goods entering the EU. For many exporters across the Caribbean, several of whom are our clients, CBAM presents both a challenge and an opportunity. It signals a future in which climate-aligned business practices become essential for staying competitive in international markets.

Simultaneously, global standards such as the IFRS Sustainability Disclosure Standards (ISSB) are gaining widespread adoption. Central banks and regulators within our own region are beginning to consider these frameworks towards developing a new baseline for transparency and accountability across the financial sector.

Thus, the momentum is unmistakable within our own markets.
• Ghana has rolled out the Sustainable Banking Principles and the Climate-Related Financial Risk Directive.
• The Eastern Caribbean Central Bank adopted Prudential Standards on Climate-Related Risk in 2024.
• Regulators in the Cayman Islands and Trinidad and Tobago have signalled their intention to strengthen environmental and ESG disclosure requirements in line with global standards.

How RFHL is adapting to an evolving Sustainability-related regulatory environment
As our Group publishes its first Sustainability Report, we are strengthening our governance and risk management frameworks to meet emerging regulatory expectations while supporting our clients, communities, and subsidiaries through this transition. Our long-standing alignment with the UNEP FI Principles for Responsible Banking (PRB) and the Net Zero Banking Alliance (NZBA) has created a solid foundation for sustainable finance leadership.

Beyond regulatory developments, the reality on the ground is becoming increasingly stark. We have all seen the devastation caused by Hurricane Melissa in Jamaica in October 2025, and while the full economic cost is still being assessed, the scale of the damage serves as a sobering reminder of our region’s vulnerability. Past events tell a similar story. Hurricanes such as Maria inflicted catastrophic losses on Dominica, with damages amounting to as much as 225 percent of GDP, and climate-related disasters continue to erode economic stability across the Caribbean, contributing to an estimated 2.13 percent reduction in annual GDP growth. These figures underline a clear and pressing truth: environmental risk is also economic risk.

This is why staying ahead of these shifts for financial institutions is not only a matter of regulatory compliance… it is a business priority.

With the establishment of our Group Sustainability Unit, RFHL has taken a strategic, structured approach to systematically monitor global developments, anticipate regulatory requirements, and proactively guide subsidiaries across all jurisdictions. We are:
• embedding climate-related risks into our due diligence processes,
• strengthening our internal disclosures, and
• supporting the transition strategies of exporters and carbon-intensive industries.

Our commitment is clear:
We will continue to evolve our risk and compliance frameworks to uphold international best practices, protect the long-term resilience of the Group, and enable our stakeholders to navigate the sustainability transition with confidence.

Our inaugural Sustainability Report is more than a document, it is a marker of our direction and a reaffirmation of our responsibility.

As we move forward, we remain focused on partnering with our clients, communities, and regulators to build a more sustainable and resilient Caribbean.