DHAKA Bangladesh is among thirty-eight emerging
market economies 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 today.
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.
Established in 2012, SBN now represents 53 financial regulators and banking
associations from 38 emerging countries committed to sustainable finance.
SBN's member countries represent $43 trillion-or 85 percent-of emerging
market banking assets.
Source: Bangladesh Sangbad Sangstha (BSS)