Banks should focus on environment-friendly initiatives by providing innovative financial products to help offset the impacts of climate change and ensure sustainable development, senior economists and bankers said yesterday.
They were speaking at a seminar on "Green Banking Initiatives: Opportunities for Bangladesh" organised by Bangladesh Institute of Bank Management (BIBM) in Dhaka.
"We have to change our mindset about environmental issues for making a better future through greening our mind," said Bangladesh Bank Governor Atiur Rahman.
Green banking involves pursuing of financial and business policies that are not hazardous to environment and help conserve environment. The broad objectives of green banking are to use resources with responsibility avoiding waste and giving priority to environment and society.
"It is time to focus on protecting our planet through initiating green banking," said Mamun Rashid, managing director of Citibank NA.
"Because the main objective of green banking is to protect environment through pursuing environment-friendly financing policies."
"We need to focus on sustainable development approach because it has a close link with the development of other sectors, says Bandana Saha, director general for BIBM.
Banking sector can play a vital role to encourage other industries to go green through promoting eco-friendly financing schemes, Saha said.
"The banks should prioritise loaning the sectors that promote environmental practices," said Shah Md Ahsan Habib, director (training) of BIBM.
The banks can also launch green initiatives with their own business operations through pursuing cost cutting, recycling of materials and equipment and waste minimisation strategies, he said.
Habib said the financial institutions should initiate 'green office guide' to help protect the eco-system.
Use of online communication in stead of printed documents, installation of energy efficient equipment, use of filtered water in place of bottled water and encouraging usage of energy efficient cars are some of the examples of practising green business, he said.
"We are facing a negative impact of climate change though we contribute little to global warming, said Qazi Kholiquzzaman Ahmad, chairman of Palli Karma-Sahayak Foundation.
"So, we have to focus on adaptation and mitigation process to cope up the adverse impacts of global warming. And green banking initiative can facilitate this process."
However, there is an argument that green banking causes extra cost for a bank.
But, socially and environmentally responsible banks can also be financially successful and have growth rates similar to, or even better than that of the conventional ones, said Habib.
Green banks can also ensure effective utilisation of resources through initiating cost cutting and recycling processes, Saha said.