We welcome the assertive stance being taken by the Bangladesh Bank to incorporate environmental factors into banking practices. The central bank has been developing guidance on environmental impact assessments for financing proposals since 2008 when it highlighted environmental sustainability issues as part of its work on mainstreaming corporate social responsibility.
At the International Sustainable Banking Conference in Dhaka this week and earlier last month at the Global Green Growth Forum in Denmark, Governor Dr Atiur Rahman spoke of the importance of building capacity to develop green banking practices and ensure that sustainability factors and risks are duly incorporated into investment decisions.
It is vital for environmental sustainability and climate change resilience to encourage more private sector investment into energy efficiency to reduce emissions and to develop renewable energy infrastructure such as solar and bio-mass generation.
Building resilience is not just about channeling large scale multilateral initiatives such as the Clean Development Mechanism but also about policy reforms and incentives such as tax and tariff breaks to support access to safe drinking water and sectors such as organic farming.
The biggest challenge remains one of attitude and mindsets in the commercial banking sector. CSR is still mistakenly relegated by some banks as being largely about philanthropy, rather than being seen as vital to the future sustainability of the economy and therefore an integral factor to consider in all investment decisions.
Bangladesh Bank’s efforts to raise awareness and facilitate funds for environmentally aware finance should be more widely supported.
