Green banking can solve social problems in the textiles sector as well as address environmental concerns surrounding the coal-based power plant in the Sundarbans, Director (South Asia) of International Finance Corporation (IFC) Serge Devieux has said.
In an interview with the Dhaka Tribune, he revealed that the IFC had formulated green banking guidelines that address environmental and social risk, and these had been adopted by 77 global banks including Citibank, HSBC, Barclays and Standard Chartered.
“Social causes are extremely important when financing any company, as the banks should look at the company’s labour practices and help them shift to better and more responsible social practices,” Devieux said.
“We [IFC] can do it directly or we can do it through banks,” he added.
Admitting that one or two instances would not change the broader landscape, the IFC director however insisted that “somebody should start it.”
He said if banks acted socially responsible and looked at the social aspects of their lending, their clients would ultimately be helped and a better social framework would be developed.
“Bangladeshi industrialists are profit makers, but what we are trying to demonstrate is that if you have a sustainable profit, long-term profit, it will benefit them,” Devieux added. About the controversial coal-based power plant project near Sundarbans, he said the IFC guidelines addressed all the environmental aspects of such power plants.
“For each of these situations we have high environmental risk, because when you have forestry, natural resources, you have natural habitat, you may have indigenous population that will be displaced. All of that is part of our norms. That type of financing [IFC guidelines]using those norms can protect those projects,” he said.
Cautioning against the negative environmental impact of rapid industrialisation, Devieux said: “IFC has been developing policies towards the conservation of scarce resources, preservation of quality of environment and establishment of norms which allow us to develop a sustainable business.”
The green banking proposition is being very well received in general as it is a business proposition, he added.
“It is not only part of your corporate social responsibility, but also it is a good business because it is sustainable business. It is a risk mitigation measure at the same time,” he said. The 77 large banks have adopted the Equator Principles offered by the IFC as it mitigates environment and social risks, Devieux said.