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Banking Risk · Sustainable Finance · Audit
A practical review framework for banks, finance companies, risk teams, compliance officers and internal auditors. Use it to organise governance reviews, identify evidence gaps and challenge climate-related risk controls—not as a substitute for applicable law, the institution’s approved policies or professional judgment.
Jurisdiction focus: Bangladesh, with international reference material where relevant. Source review date: 28 October 2026.
Begin with Bangladesh Bank’s November 2025 Guideline on Climate Risk Management for Banks and Finance Companies. Map the applicable expectations to board oversight, risk management, business processes, monitoring and reporting.
Review the institution’s disclosure governance, data ownership, methodology, consistency and evidence trail against the applicable Bangladesh Bank disclosure guideline and subsequent instructions.
Assess how environmental and social due diligence is integrated into credit origination, approval, monitoring, escalation and portfolio reporting. Confirm the currently applicable version and amendments before testing.
Currency control: A circular’s publication date does not by itself establish that it remains the latest applicable instruction. Before relying on a requirement, check the issuing authority’s register for amendments, replacement instruments, effective dates and scope. This page is professional review support, not legal advice or a regulator-issued interpretation.
| Control area | Suggested test | Evidence to request | Potential red flag |
|---|---|---|---|
| Governance | Trace a material climate-risk issue from identification through committee review and decision. | Board/committee minutes, risk appetite, policy, action register. | No clear accountability, decision trail or escalation. |
| Risk assessment | Reperform a sample risk assessment and challenge key assumptions and data limitations. | Methodology, source data, assumptions, validation and approval records. | Unsupported assumptions or undocumented overrides. |
| Credit due diligence | Sample relevant credit files and trace screening results into approval and monitoring decisions. | Screening forms, due diligence, approvals, covenants and follow-up. | Missing due diligence or exceptions without approval. |
| Portfolio monitoring | Trace a reported exposure or risk indicator to source systems and investigate changes over time. | Portfolio reports, data extracts, reconciliations and escalation records. | Unexplained movements, stale data or absent escalation. |
| Disclosure | Reconcile selected published metrics to underlying records and approved reporting. | Disclosure workpapers, sign-offs, calculation logic and reconciliations. | Inconsistent figures, unclear methodology or unsupported claims. |
| Remediation | Retest a closed finding and verify evidence demonstrates sustainable correction. | Issue log, root-cause analysis, action evidence and retest results. | Closure based on assertion rather than independently checked evidence. |
Sampling note: Select samples based on risk, materiality, portfolio exposure and applicable requirements. These are suggested audit procedures, not a prescribed regulatory sample size.
For each test, record the requirement or policy reference, control objective, population and sample rationale, evidence identifier, test steps, result, exception severity, root cause, responsible owner, due date and retest outcome. Distinguish verified facts from observations, inferences, assumptions and unverified items.
Use a consistent assurance sequence: DISCOVER → INSPECT → VERIFY → TEST → CHALLENGE → ASSESS → RISK-RATE → REMEDIATE → RETEST → ASSURE.
Use the Basel Committee’s climate-related financial risk principles as an international reference point, while separately identifying which expectations are adopted or applicable in Bangladesh.
Where useful, compare disclosure practices with the IFRS Sustainability Disclosure Standards. Do not imply that international standards automatically create a local legal obligation.
This resource is an independent educational and audit-support framework published by RegTech Nexus AI. It is not issued, endorsed or approved by Bangladesh Bank, BIS, Basel Committee or IFRS Foundation. Confirm the latest official instruments, institutional applicability and any amendments before making compliance decisions. No climate-risk score, regulatory status or compliance conclusion is generated by this page.