POST TIME: 11 October, 2019 00:00 00 AM
Bangladesh accelerates progress in sustainable finance reforms
Says second Global Progress Report of IFC-supported SBN
BSS, Dhaka

Bangladesh accelerates progress in sustainable finance reforms

Bangladesh is among thirty-eight emerging market having initiated key banking reforms to drive development and fight climate change, according to a report. The second Global Progress Report of the IFC-facilitated Sustainable Banking Network (SBN) also said these reforms require banks to assess, manage and report on environmental, social and governance (ESG) risks in their lending operations and put market incentives in place for banks to lend to green projects, said an IFC press release yesterday.

Of the 38 countries, 22 have adopted national sustainable finance policies and voluntary principles, seven of which were launched in 2019 alone. The report also captures the progress made by 14 countries to actively grow their green bond markets; and data shows increasing innovation by financial institutions to green their lending portfolios. “SBN members have demonstrated that transforming financial markets toward sustainability is possible,” said Georgina Baker, Vice President of IFC of the World Bank Group.

“Emerging markets are on the forefront of this shift – and SBN’s tools and guidance have laid the groundwork for more countries to follow suit.” added the IFC official. In addition to providing practical resources for countries undertaking sustainable finance reforms, the report also highlights the peer-to-peer knowledge sharing of SBN members – a hallmark approach of the network.

Bangladesh is among the group of countries advancing implementation of sustainable banking framework over the past few years. Since 2011, Bangladesh Bank has developed several policies to promote sustainable finance, including Policy Guidelines on Green Banking in 2013, and Guidelines on Environmental and Social Risk Management (ESRM) in 2017.

These guidelines encourage banks and financial institutions to incorporate environmental and social risk management into their credit activities, and to publish green banking and sustainability reports. The guidelines reflect the commitment of the Government of Bangladesh to sustainability, and the importance of the banking and financial sector in helping the country to achieve progress towards Sustainable Development Goals (SDGs) and nationally determined contributions (NDCs).

“It is aspiring for us to observe the remarkable progression of Bangladesh among its peers in the SBN global report. The report also provides us worthy snapshot of spaces to improve further through innovation in the coming years.” said Khondkar Morshed Millat, General Manager, Sustainable Finance Department of the Bangladesh Bank.

“Ultimately, SBN is about collaboration,” said Ye Yanfei, Deputy Director-General, China Banking and Insurance Regulatory Commission and co-Chair of SBN Measurement Working Group.