Thrust on concerted efforts on Green Banking

Speakers at a workshop recently said that green banking can be an avenue to reduce pollution and save the environment aiding sustainable economic growth. They also said banking sector is a major source of financing for commercial projects, which is one of the indicators of economic growth in compliance with green ecology.

 These observations came at a workshop held at Modhumoti Bank Training Institute recently on "Green Banking and CSR" organised by the banks' Green Banking & CSR Department.

Khondkar Morshed Millat, Deputy General Manager of Green Banking & CSR Department of Bangladesh Bank was the resource person and Md. Mizanur Rahman, Managing Director & CEO of Modhumoti Bank inaugurated the day-long workshop.

Addressing the event, Mr. Mizanur Rahman highlighted that the environment is being polluted gradually due to different anti-environment activities in the country. He said banks can play vital roles in economic development and they are well equipped to undertake green banking activities. He echoed that banks should finance the sectors under green finance programme as per guidelines of Bangladesh Bank that would ensure sustainable and eco-friendly environment.

Senior officials of different branches of the bank and divisional heads & officials from head office participated in the workshop.

Mr Khondkar Morshed Millat provided a cognitive understanding of the concept of green banking & corporate social responsibility (CSR) and highlighted the role of banks and financial institutions in the evolution of Green Banking Policies & Practices under the guidelines of Bangladesh Bank. He underscored the importance of green banking & CSR and taking such initiatives by the country's banks and FIs.

Green Banking is a multi-stakeholders' endeavor where all have to work closely with government, NGOs, IFIs/IGOs, central bank, consumers and business communities to reach the goal. Green Initiatives by banks include internal environment management, environmental financing, product ecology, environmental disclosure and reporting, formulating and adopting principles and promoting other stakeholders.

The speakers observed that regulatory enforcement by the government, pressure from the civil society and consumers, voluntary supports and responses by the business entities are preconditions to create a congenial atmosphere. A framework of incentives for responsible banks and disincentives for pollutants are element for the development of green banking.

Bangladesh bank issued policy guidelines for developing green banking practices and environmental risk management and circulars for all commercial banks and financial institutes to handle green financing. The central bank is playing a proactive role in guiding green banking initiatives and the country's banks & FIs may work collectively and move forward by undertaking voluntary initiatives.

Financing environment-friendly projects will also help the financial institutions to avert legal, reputation, security and credit risks, Additional Managing Director of Modhumoti Bank Ltd.  Mr. Md. Shafiul Azam opined in the workshop.  At present a growing number of banks have been assessing environmental risk while selecting projects for financing under prudential guidelines of Bangladesh Bank, he also added.

In the concluding session of the workshop, Mr. Md. Touhidul Alam Khan, Deputy Managing Director of Modhumoti Bank Ltd. who is cost & management accountant and also Certified Sustainability Reporting Assurer (CSRA) of the country highlighted the activities undertaken by the Bank and briefed on future course of action. He informed that Modhumoti Bank Ltd. has taken a number of initiatives implementation of environmental policies, strategies and programs in the area of green banking activities including preparation of green banking policy and green banking office guide for the bank. Modhumoti Bank has conducted activities related to in-house environment-friendly projects, created climate risk fund, utilized online banking facility to serve the clients through alternative delivery channels and has also arranged workshop/training for the capacity building. Mr. Khan appreciated the key role of Bangladesh Bank for taking various innovative initiatives such as green financing, green products, green marketing, establishment of green branches etc. and also pointed out that Bangladesh Bank is the only central bank in the world who is taking such initiatives and other central banks in the world are following Bangladesh Bank's green banking model.

Shaheen Howlader, Executive President and Head of SME & Retail of Modhumoti Bank Ltd moderated the day-long workshop.