Banks\\\' CSR funds to be channelised to R&D, says BB Governor

Bangladesh Bank (BB) governor Atiur Rahman Tuesday called upon the banks to support the universities and research institutions with quality research and development works as part of  their corporate social responsibility (CSR) activities.  

He also asked the banks to submit a report on carbon footprint in every third month and to find ways of installing solar panels at the rural branches of banks and setting up solar-run ATMs to serve the unbanked population of rural areas with automated banking services.

"You can support some of these universities and research institutions facing financial constraints in carrying out research so that they can come up with green products," Mr Atiur Rahman said at the Green Bankers Conference 2014 at Bangladesh Bank Training Academy in the city.

Citing example of Dhaka University Curzon Hall laboratory, he said many laboratories remain idle because they do not have fund to carry out research works. That's why CSR guidelines are undergoing a revision process so that the CSR fund of the banks can go to R&D, he added.          

BB Deputy Governor SK Sur Chowdhury, IFC Bangladesh Country Manager Kyle Kelhofer, and Dhaka University Institute of Energy Professor Saiful Huque,  BB Executive Directors M Mahfuzur Rahman and Ataur Rahman were present as the special guests at the programme.

"I think banking sector as a whole is robust enough to support these R&D activities of universities and research institutions," said Mr Rahman.

  He said the impacts of climate change are hitting harder and faster than expected, making the imperative to transition to a low-carbon economy all the more urgent. This is evident by the experience of the current summer. Highest temperature of Dhaka city in last five decades has been recorded in last month.

Mr Rahman urged the bankers not to finance projects out of greed by which wetlands will be filled up, green world will become gloomy and the trees are fallen.

"Now it is clear in the mind set of green bankers the financial sector has a pivotal role to play in de-carbonizing the economy and reducing global emissions of greenhouse gases at the required pace and scale," he said.

Moreover, it is agreed among all stakeholders that increased investments are required for the rapid development of low-carbon energy infrastructure and technologies.  

Referring to a recent study by the science journal 'Nature', he said if 20 largest banks reduce the carbon footprint of 10 per cent of their assets by 80 per cent, emissions globally would drop by 400 megatons.

The transition poses major challenges for the financial sector. According to the International Energy Agency, de-carbonizing the global economy will require a massive shift in investment from fossil fuel-based power sources to low-carbon energy infrastructure.

"For financial markets, this shift would involve financing new investments in clean energy, energy-efficient buildings, and new transport infrastructure while sharply reducing investments in fossil fuel-based energy generation and the oil, gas and coal industries," said Mr Rahman.

He said green banking does not mean only to support green or solar or bio-fuel energy projects, rather cutting the current level of energy consumption is also needed for green banking.

  "Bangladesh Bank is heading the banks and financial institutions to a new horizon of Green banking, where six green products were offered for refinancing initially, 44 green products are now open under BB refinancing scheme in 2014," he added.

He added: financial institutions should take initiatives to attract green bonds, green private equities for enhancing sustainable financing.

"So it's time for the banks and FIs to march forward. You have to generate the ideas, search the alternatives and explore the profitable environment friendly business, technology and products for financing," said the governor.