Green financing need of the hour

Reckless deforestation activities across the continents and overdependence on non-renewable energy resources create added challenges for human beings on earth. Hence, we need right focus on sustainable development which has become an imperative. It has also become a global need as we live in an interconnected world. A united action is required to solve these major ecological problems before solutions become impossible.
Climate disasters in recent times that have impacted significantly on human life are Super Storm Sandy in the USA, Typhoon Haiyana in the Philippines, severe flood in Jakarta in Indonesia and Cyclone Nargis in Myanmar. Even the storm with heavy rainfall in Southern England, the UK starting on February 12, 2014 has been recognised as unparalleled in records stretching back to 1766. In case of Bangladesh, the most recent natural disasters are Sidr and Aila which happened on November 15, 2007 and May 27, 2009 respectively destroying the southern coastal areas of Bangladesh.
Financial institutions have a scope to directly provide finance in various fields of environment in Bangladesh. These areas may include non-conventional and alternative energy, any type of effluent treatment plant (ETP), bio-fertiliser, any sort of reprocessing and recycling plant, production, improved and environment friendly kiln (Hybrid Hoffman Kiln: HHK), nursery, forestry, improved cooking stove (Bandhu Chula), natural fibre (jute/ cotton products) and others areas.
On the other hand, indirect green financing as per the Bangladesh Bank include projects either in the way of project finance or working capital or in any other form, which possesses any sort of ETP (chemical, textile, liquid and garments) or environment-friendly other systems installed.
Financial institutions can finance these particular areas easily. Even banks can come forward to provide money in natural disaster-prone areas mitigate climate change. The Bangladesh Bank considers these outflows as CSR expenditures. Banks in Bangladesh can avoid deposit concentration which are mobilised from millions of common people. They can use the funds through a proper decentralised process for pertinent greenness. In this case, banks can join the deprived, impoverished and helpless people of society in the form of partners in production.  
Banks in Bangladesh have a commitment to pursue automation, nearly paperless, sustainable and green banking operations by making best use of the information technology and related professional skills. Banks' various ICT-based initiatives on green banking activities are online banking, e-banking, mobile financial services, ATM, SMS banking, call centres, phone banking, e-recruitment, etc. Thus, they are facilitating financial solution to billions of customers as well as helping keep ecological balance. Banks have given significant attention to energy efficiency. Some banks have inculcated this practice since their inception. Banks have started this enthusiastically following both financial inclusion and environmentally sustainable green financing approaches. In financing, banking sector in Bangladesh routinely takes up environmental impact assessment of investment proposals, considering environmental risks in financing decisions. For instance, some ethical banks do not finance even one taka (12 cent!) in tobacco production or tobacco-related businesses and industries. Hence, the banks' management always emphasises on the welfare aspect of the society and environment rather than making money.
Banks have extended financing activities to almost all priority sectors of green financing. They give top priority to these sectors due to moral obligations and consideration of social responsibility and welfare as well. They select financing sectors finding out the basic needs of common people. They prioritise sectors which are prone to high employment, import-substitute, export-oriented and which must ensure universal welfare.
Most of the banks have formulated comprehensive framework for financing in green or renewable energy particularly in solar energy, ETP, bio-gas, agro, SME etc. The banking industry needs to adopt comprehensive policy guidelines for green banking launched in 2011 for banks in Bangladesh. This policy guideline helps to adopt environmentally responsible financing while assessing borrowers' proposals. This guideline also helps greening of internal processes and practices within banks.
The banking sector needs to properly implement green banking policy to avail the central bank's preferential treatment which is reflected in CAMELS position in top ten banks promoted in the Bangladesh Bank's website and priority for opening new branch.
Financial institutions can explore new avenues for green financing ensuring better living environment. They can allocate resources for this segment to carve a niche in the market, set an example for stakeholders and create global business competitiveness.
The writer is a banker .
 smaacca@gmail.com