The concept of green banking has been integral in LankaBangla, and goes hand in hand with our stance on sustainable business model. With the constant headway of our Green Banking Unit (GBU) [presently known as Sustainable Finance Unit(SFU)], we have been a successful team in green banking. Using smart innovative financing techniques and market development tools, we aim to stimulate investments in clean technologies and hence contribute to societal welfare. To seek increased deployment of clean energy and more efficient use of funds, we introduced Green Finance, initiated in-house management, created Climate Risk Fund, Green Marketing, and supported employee training.
As per the Bangladesh Bank Circular No. 04 on "Policy Guidelines for Green Banking", LankaBangla Finance has established "Green Banking Policy"/Environmental and Social Risk Management Policy (ESRM) which is approved by the Board. A separate Green Banking Unit (GBU) [presently known as Sustainable Finance Unit (SFU)] was required to be formed for designing, evaluating and administering activities related to green banking issues of the company. As per the set BB circulation, this unit will report to the high powered committee (Sustainable Finance Committee) from time to time. GBU/SFU will be under the supervision of Risk Management Division (RMD). GBU/SFU is comprised of the representatives from each relevant divisions. Followings are the GBU/SFU members who will work together for providing input, data and preparing relevant reports as per green banking policy guidelines and Bangladesh Bank requirements.
| Sustainable Finance Committee | |||
|---|---|---|---|
| SL | Designation | Position in the committee | CSR focused Group |
| 01 | Managing Director and CEO | As Chairman of SFC | - |
| 02 | Head of Operations Division | As Head of Credit Administration | - |
| 03 | Chief Risk Officer | As Head of Risk Management and ICC | Member of CSR focused group |
| 04 | Company Secretary & Head of Regulatory Affairs | As Member of CSR focused group | Member of CSR focused group |
| 05 | Head of Corporate Financial Services | As Head of Corporate Financing | - |
| 06 | Head of SME Financial Services | As Head of SME Financing | - |
| 07 | Head of Human Resource Division | As Head of Human Resource Division | Member of CSR focused group |
| 08 | Chief Credit Officer | As Head of CRM | - |
| 09 | Finance & Accounts | As Finance Controller | Member of CSR focused group |
| 10 | Head of GIS | As Head of Logistics and Support Services | Member of CSR focused group |
| 11 | Unit Head- Project Structured & Sustainability Finance | As Member Secretary and Head of PSSF | - |
| Sustainable Finance Unit (SFU) | ||
|---|---|---|
| SL | Designation | Remarks |
| 1 | Chief Credit Officer & Head of Sustainable Finance Unit (SFU) | As Head of Sustainable Finance Unit (SFU) |
| 2 | Unit Head of Application & Database Services, Information & Communication Technology (ICT) | As Representative from ICT |
| 3 | Head of Small Business, SME Financial Services (SME) Division | As Representative from SME |
| 4 | Head of Retail Credit, Credit Risk Management Division (CRM) | As Representative from CRM |
| 5 | Representative from Retail Financial Services Division | As Representative from Home Loan |
| 6 | Representative from Finance & Accounts Division | As Representative from Finance & Accounts |
| 7 | Representative from Human Resources Division (HR) | As Representative from HR |
| 7 | Representative from Small Business, SME Financial Services (SME) Division | As Representative from SME |
| 9 | Unit Head- Project Structured & Sustainability Finance | As Member Secretary of SFC and Head of PSSF |
| 10 | Representative from General Infrastructure & Services (GIS) Division | As Representative from GIS |
| 11 | As Focal Point Official | As Focal Point Official of SFU |
| 12 | Representative from Women Entrepreneur Cell, SME Division | As Representative from Women Entrepreneur Cell |
Green Banking Initiatives
In response to increasing awareness of climate change, and environmental degradation, urgent measures for sustainable development have been addressed by some of the stakeholders all over the world. Banking system holds a unique position in an economy that can affect production, business and other economic activities through their financing activities which would in turn contribute to economic development as well as protect environment/climate from pollution and degradation. Through green banking/sustainable financing/Green Financing , LankaBangla concentrates on financing commercially viable technologies that consume less fossil fuel and have lower impacts on the environment. Moreover, implementing green banking concept within the organization through efficiency in energy use, water consumption and waste reduction may significantly contribute towards controlling operating costs.
And Governance
In line with the global development and response to the environmental degradation and as per instructions of Bangladesh Bank, LankaBangla Finance has already established its Green Banking Policy/Environmental and Social Risk Management Policy. A Green Banking Unit (GBU)/Sustainable Financing Unit (SFU) has been formed with the task of developing policies, planning and administering the green banking/Sustainable Financing/Green Financing initiatives of the company. All internal and external Green Banking/Sustainable Financing including Green Financing reporting is conducted through Sustainable Finance Unit. SFU periodically reports to Sustainable Finance Committee for overall progress of Green Banking/Sustainable Financing/Green Financing activities of LankaBangla and the Board is accordingly informed regarding aforementioned activities of LankaBangla.
The Company conforms to the instructions stipulated in the detailed guidelines on Environmental and Social Risk Management (ESRM) of Bangladesh Bank in consideration to the Green Banking policy/ESRM policy. Clear identification of the problems related to environmental risk is important for effective risk management as measures can be taken to address any environmental and social incidents. At LankaBangla, risks are prioritized based on the established processes in order to respond to unforeseen environmental happenings. A comprehensive risk exposure matrix (Environmental and Social Risk Due Diligence) is established for assessing environmental and social risks and then reported to Management Credit Committee of the company by Relationship Management through Credit Risk Management division.
Financing in eco-friendly and environmentally sustainable business activities and energy efficient industries will be extended through preference by all the credit delivery points. Environmental infrastructures such as renewable energy project(s), Liquid Waste Management, Alternative Energy, Fire Burnt Brick, Non Fire Block Brick, Recycling & Recyclable Product, Green Industry, Safety and Security of Factory, etc. are encouraged and those will be financed by the company with priority. Viability of environmental infrastructures for financing shall be assessed in line with the environmental issues i.e. how the purpose of the project(s)/business (es) & to what extent this/these is/are rewarding to the environment. Most viable project(s)/business(es)/ sector(s) shall be prioritized for financing to position the financial institution gradually as a "Carbon Neutral Financial Institution" first and then as a "Climate Positive Financial Institution". Notably LankaBangla has particular mandate for green financing reflecting its commitment towards sustainability.
Risk Fund
The financial institution addresses environmental issues and assesses environmental and Social risks (high/ moderate/low) of projects/ businesses of different sectors in different areas. At the same time, climate risk fund is created for "Green Banking"/Sustainable Financing may be used as a part of CSR activities at the time of emergency.
Green Marketing incorporates a broad range of activities, including products/services design, engineering, modification, new product innovation, changes to the production process and packaging, in order to encourage potential clients to design Green Project or environmentally safe products and also to modify advertising. Besides, company effectively uses green marketing channels more for widening target markets of usual products. Financial Institution takes steps that will help build awareness among common people to promote products/services which cause least harm to the environment. Corporate Affairs Division shall plan for developing & marketing Green Banking products to offer to the customers.
Green Marketing
Exclusive training programs or specialized/befitting classes in foundation or other credit related courses for incorporating Green Banking Policy Guidelines as a part of awareness building among the employees of the Company are arranged by the Human Resources DepartmentinconsultationwiththeGreenBankingPolicyGuidelines Implementation Unit (GBPIU). Training programs on environmental and social risk and employee awareness development should have to be implemented by the HR Department as a continuous process.
LankaBangla takes environmental stewardship ahead of each year realizing the present generation's responsibility to the future. By adopting Environmental Risk Management (ERM) Guidelines for Banks and Financial Institutions in Bangladesh, LankaBangla closely monitors the environmental impact of every step and effectively mitigates any risks that arise thereon. With more emphasis on environmental risk management programs at LankaBangla, a noticeable increase has occurred in the amount of screening and due diligence efforts to gather information on potential environmental risks. We take every effort to delight our clients being the growth partner in financing environment friendly products or initiatives. LankaBangla takes pride for being one of the financiers of a project having one ofthe largest biological Effluent Treatment Plant(ETP) of the world, the first auto brick manufacturing project to implement flexible fuel technology trapping harmful CO2 emissions and also to trade Certified Emissions Reductions (CERs) to the World Bank, country’s first lub-recycling plant and so forth. Green financing has been growing steadily in our portfolio.
We have established our office environment and only allow rational use of energy and promote the spirit of environment friendly action plans. Our policy allows only energy savings bulbs at all of our service points and Head Office. While furnishing our office premises we use ISO certified paints. On top of that, LankaBangla introduced automated e-alert system to ensure secured financial information flow to our clients in Bangladesh. The launch of e-mail based Customer Statement Delivery System, added an important service to support the clients’ needs, providing superior customer service to ensure delivery of accountstatements and transaction advicesto the designated e-mail addresses of clients on time. This new system also helps to protect the environment by eliminating paper-based activities at office, protecting and preserving our environment for the next generation. In future we dream to enhance our effort on preserving ecosystems, land air and water, in line with our broad corporate mission we defined.
At LankaBangla, we have long acknowledged that a healthy environment is the foundation for economic progress and the well-being of society. As a leading financial institution, we are committed to finding market solutions that benefit the environment. As per our long term commitment to our community, we continued to invest both in nurturing underprivileged people of our society, and to the environment we breathe in. We provide loans to customers carrying out due diligence and considering the environment and social impact. In all credit delivery points, we have focused on financing eco- friendly and environmentally sustainable business activities and energy efficient industries. Environmental infrastructure projects such as clean water supply, waste water treatment plants, solid and hazardous waste disposal plants, Effluent Treatment Plants, Bio-gas plants, Bio-fertilizer plants and energy efficient/low carbon emission projects like Auto Bricks using Hybrid Hoffman Kiln, Vertical Kiln, Zig-Zag Kiln etc. are always encouraged and dealt with top priority.
