Production of goods and services, investment, laws and policies all have their respective impact on the environment. There are many eco-friendly financial instruments available in the world today. Some of these are eco-investment, green investment, green banking, green stocks, green bonds, green mutual funds, green savings accounts, green money market accounts and green certificates of deposit.
As a part of environment-friendly investment, the aim of the companies in recent years focuses not only on the profit maximisation approach but also on socially-responsible approach where businesses are not accountable to stockholders and stakeholders. The environmental issues focus on the investment pattern of the company. Generally it is the obligation of firms to use resources in ways to benefit society. A business approach that contributes to sustainable development by the environmental benefits for the stakeholders is the core activity of socially-responsive businesses and trade communities. It is now unequivocally recognised that businesses and corporate houses move beyond the strict considerations of profit maximisation also known as Corporate Social Responsibility (CSR). One important aspect of CSR is that it is not legally binding; rather it is a voluntary, social and environmental step that targets socially-responsive business and ethics. CSR reporting includes terms like “sustainable reporting”, “socially responsible accounting”, “social accounting”, “corporate social disclosures” and “social and ethical accounting”. Simply it reports the external reporting of social, ethical and environmental aspects of business organisations. It is also considered a set of actions designed to promote sustainable development in three aspects: economic, social and environment.
Bangladesh is one of the most environmentally-vulnerable countries in the world today. The present environmental condition of Bangladesh is not at all good. Severe air, water and noise pollution are threatening human health, ecosystems and economic growth of Bangladesh. Air pollution is caused by increasing population, burning of fossil fuels, industrialisation and associated motorisation. The water pollution is caused by industrialisation. The underground water of Bangladesh has been polluted due to arsenic. The inhabitants of major cities in Bangladesh are also exposed to a high level of noise pollution. Environmental degradation in Bangladesh is also caused by poverty, over-population and lack of awareness. It is manifested by deforestation, destruction of wetlands, soil erosion and natural calamities.
A number of companies listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) focus on social and environmental issues. They work on the environmental issues, such as Aftab Automobile Limited (DSE: AFTABAUTO). Its HINO buses run widely on all routes of the country. The company has also introduced environment-friendly (CNG-driven) AK1JMKA model HINO Bus for the first time in Bangladesh. To provide the highest level of luxury on the roads, Aftab Automobiles Limited has recently introduced ‘HINO RM2KSKA’ model which is the most luxurious transport in the country.On the other hand, Berger Paints Bangladesh Limited (DSE: BERGERPBL) is continuing with the environment-friendly range of ‘BreatheEasy’ products, the first ever odour-free and eco-friendly paint in Bangladesh. Two more products were launched in 2012. The new products are ‘BreatheEasy Wall Putty’ and ‘BreatheEasy Water Sealer’. The BreatheEasy series is environment-friendly, since it has the low level of volatile organic compound (VOC). Its ‘stain-free’ and ‘anti-bacterial’ features protect the wall from stains and fungi.
In the services and real estate sector, Eastern Housing Limited (DSE: EHL) states that its mission is to build and develop environment-friendly apartments, commercial buildings and land projects using the highest standards of safety, architecture, engineering and green technology. Manzurul Islam, Chairman of the Eastern Housing Limited, said: “In order to ensure environment-friendly sustainable real estate we have emphasised the use of environment-friendly building materials, effective waste management and efficient energy systems.” For the shareholders, the company focuses on environment-friendly sustainable real estate.
Dhaka Electric Supply Company Ltd (DSE: DESCO) encourages the use of renewable energy and ensures installation of eco-friendly solar panels in line with the government policy. DESCO installed solar panels at its 48 installations up to June 30, 2012. As a non-banking financial institution, IDLC Finance Limited (DSE: IDLC) is more concerned about environment. Selim RF Hussain, CEO and managing director of the company, told the stakeholders that IDLC’s external environmental efforts mainly revolved around continuing the tree plantation initiative, which began a few years ago, and the launch of an environmental awareness campaign across different schools. This initiative was aimed at educating children on matters such as environmental pollution and mitigation, responsible consumption of natural resources, adoption of the 3R principle—Reduce, Reuse and Recycle—to minimise wastage etc. IDLC covered 11 schools and received very positive feedback from these schools.
In the ceramics sector, Monno Ceramic Industries Limited (DSE: MONNOCERA) is a strong player on the environment front, using for example only natural non-toxic materials in its porcelain and only recycled pulp in its packaging while factory waste is disposed of in accordance with federal and European standards. Monno does not employ children or discriminate between genders and has an equal opportunity policy. Monno also cares for the community, providing welfare services, vocational training and basic education for those less well-off, together with homes for underprivileged children. Those educated under these programmes are helped find jobs depending on their individual abilities. Monno’s own ethical and social policy on environment is in accordance with that of their customers.
The Bangladesh Bank issued guidelines for environmental risk management and green banking in 2011. It is probably the only central bank, which has issued such indicative guidelines for green banking. The guidelines aim to ensure environment-friendly business practices by banks and financial institutions, incorporate environmental risks into the Core Risk Management (CRM) and promote sustainable financial and economic growth. Trust Bank has started its green journey after having the guidelines on Green Banking, Development Considering Environment, Conserving Environment and Biodiversity, and Environmental Risk Management.
There are other companies also, namely, Alltex Industries Limited (DSE: ALLTEX), Anlima Yarn Dyeing Limited (DSE: ANLIMAYARN), Bank Asia (DSE: BANKASIA), Envoy Textile Limited (DSE: ENVOYTEX), Prime Bank Limited (DSE: PRIMEBANK), Apex Spinning and Knitting Mills Limited (DSE: APEXSPINN), Lanka Bangla Finance Limited (DSE: LANKABAFIN), Dacca Dyeing and Manufacturing Co. Limited (DSE: DACCADYE), National Bank Ltd (DSE: NBL), Generation Next Fashions Limited (DSE: GENNEXT), Malek Spinning Mills Limited (DSE: MALEKSPIN), Metro Spinning (DSE: METROSPIN), Prime Textile (DSE: PRIMETEX), Beximco Company (DSE: BEXIMCO), Saiham Textile (DSE: SAIHAMTEX) and Square Textile (DSE: SQUARETEX). They are also working on their environmental policies.
We expect that more companies will voluntarily disclose important information in their narrative reports to help protect the interests of stakeholders.
The writer is a lecturer of the Department of Business Administration at the Daffodil International University
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