What can banks and financial institutions do? - Financespiders

What can banks and financial institutions do? - Financespiders

Ascension of greenhouse gas (GHG) emissions, air, and water pollution, the eruption of the ozone layer, and such devastating environmental events have drastically affected the climate, eco-system, and livelihood.

The crisis started in the 18th century on the verge of the industrial revolution in Europe and the US when the people aspired heavily to consume beyond their basic needs.

With time, unprecedented events like the massive use of energy and environmental deterioration have resulted in global warming, drought, the rise of sea level, loss of biodiversity, extreme heatwaves, catastrophic changes in climate, and depletion of resources.

The impact of these events is quite evident and has become a global concern. If this continues, we are headed towards a mass extinction and every country, whether developed or developing, will be a victim of this drastic event.

Organizations like the United Nations, the United Nations Framework Convention on Climate Change, the United Nations Global Compact, the United Nations Environment Programme Finance Initiative (UNEP FI) are taking as many initiatives as possible to onboard stakeholders and entities to address the climate change and mitigate the ongoing catastrophe.

The Paris Agreement is an international legally binding treaty adopted by 196 Parties on the COP 21 in Paris where countries acknowledged climate change and signed the treaty with an ambition of limiting global warming to well below two degrees Celsius, preferably below 1.5 degrees Celsius compared to pre-industrial level through reducing the GHG.

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Bangladesh, as a member of the UN and a signatory of the Paris Agreement, has a responsibility of integrating imminent constructive strategies to mitigate carbon emissions and thus alleviate the drastic climate change.

Banks and FIs are responsible for infusing development in the economy and thus can play an active role in mitigating climate change. In this regard, being the regulatory body, the Bangladesh Bank has been playing a vigorous role in guiding the banks and FIs to decrease the global temperature and GHG emissions.

Introducing the Sustainable Finance Policy in 2020, compelling banks and FIs to set annual targets in green and sustainable finance, rolling out various refinancing/pre-financing schemes for green and sustainable finance, and increasing awareness among the stakeholders are some commendable measures undertaken by the BB.

We believe the central bank will also come up with pragmatic targets for the banks and FIs for reducing carbon emissions to attain sustainability in line with the global banking sector.

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If we do not take imminent actions, we will fail to conserve nature and this will drastically hit us where our own existence would become questionable. So, along with various other sectors, banks and FIs must also contribute to this effect vigilantly.

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