Mapping the Future: Implementing Recommendations on Sustainability in Portuguese Banking Institutions

This report presents the work produced during a six-month internship at BiG bank in the Credit Risk department. The objective of the internship is a case study of the financial institution "BiG," climate risks, and the implementation of sustainable measures presently used. Currently, the banking sector is facing the need to respond to climate risks effectively and proactively. Globally and within the European Union, initiatives are being developed, such as the 2030 Agenda for Sustainable Development, the European Green Deal, and Taxonomy, with the aim of promoting sustainable development and the transition to a low-carbon economy. For the banking industry, two types of mandatory disclosure requirements have been introduced, Article 8 and Article 6. These mandatory disclosure requirements are part of regulations that promote transparency and awareness of sustainability and risk exposure, allowing stakeholders to make informed decisions regarding financial institutions. The climate stress tests conducted by the European Central Bank and the Bank of Portugal play a crucial role in identifying, assessing, and mitigating climate risks in the financial sector. The latest results show that the financial sector is still falling short of expectations and established guidelines. To prepare this work, a qualitative exploratory research was conducted. In addition to this approach, techniques for secondary data research were used, and a relevant literature analysis on the subject was carried out.