Status of Green Financing and Sustainable Financing: Bangladesh Context

Abstract

Almost all banks established green banking units in time, though there is a lack of seriousness in implementing green banking guidelines set by Bangladesh Bank. In the present situation, climate change, sustainability, environment, etc., have become major global concerns. There is no other planet in the universe for human beings and other animal habitats with ecological harmony. This study aims to examine the green financing (GF) and sustainable financing (SF) status and role of central bank in Bangladesh. This study gathered mainly secondary data from Bangladesh Bank (BB) website in 2023 and 2024 and used MS-excel software for tabulating, analyzing and comparing results. This study finds 22 banks achieved GF target where UCB PLC stood in the top position at 36.21%, next to Jamuna Bank PLC at 29.85%, IBB PLC at 22.42%, and Bank Asia stood at the end at 5.47%. On the other hand, 17 commercial banks fulfill the SF target of the total term loan disbursement set by Bangladesh Bank. It is observed that in Q4, 2023, 17 banks out of 61 had exposure to green finance, where 16 banks were PCBs. Only Bangladesh Krishi Bank occupied the top position, accounting for 56.48% of sustainable finance next to NRB Bank PLC 42.86%, BRAC Bank PLC 41.32%, etc., and Jamuna Bank PLC stood last position at 21.57%. The study also found the total target achieved by banks was 9.09% in GF and 27.24% in SF, which exceeded the target set by the Bangladesh bank and it is a milestone to achieve SDGs set by the united nations (UN) by 2030.