Dhaka, Bangladesh (BBN) - Former governor of the Bangladesh Bank (BB) Dr. Atiur Rahman has indentified that greening of finance is a journey-- not a destination.
"Greening of finance is a journey-- not a destination. Much more to be done in institutionalization, experimentation and implementation,” the former governor said while speaking at a seminar on ‘Green Financing and Sustainable Development: Lessons from Bangladesh’ held at the World Bank (WB) headquarters in Washington DC on Monday.
Michael Toman, Lead Economist and Research Manager of Environment-Energy Team, presided over the seminar, according to a message, received in Dhaka from Washington on Tuesday.
Elaborating on the innovative role of Bangladesh’s central bank in incentivizing the financial system to go for green financing to align itself with the requirement of sustainable development Dr. Rahman highlighted moral suasion, refinancing, rewarding good performance of banks, adoption of environment and social risk management and developing collaboration at national and international levels.
This was the first of the series of seminars he is scheduled to give at the WB and the International Monetary Fund (IMF).
“Emerging countries like China, Bangladesh, Kenya and India have been providing determined leadership in pushing the green financing agenda through various innovative tools,” Professor Rahman explained.
He also said in the process they are transforming the financial system to serve the long-term interests of the world.
The former governor also show-cased the success stories of green financing in Bangladesh with regulatory support of the central bank which works deeply with the banks and tap their knowledge for the right kind of investment.
Besides, refinancing micro lending, the BB has also made banks do environmental due diligence for green investment in large projects, he added.
“Bangladesh, despite being a victim of climate change, remained morally on a higher ground by investing its own resources in climate adaptation and mitigation. Its success in bringing private capital in climate resilience investment is worth noting,” Professor Rahman observed.
Despite many challenges of green financing, the former governor asked for highest level of policy ownership through climate-friendly national development strategy.
In addition, he urged for a mixed and context specific approach for green financing. “And that's how a country can make a paradigm shift-- moving from margins to mainstreams of sustainable finance.”
Referring to UNEP' Inquiry on sustainable finance of which he was a member of advisory board Dr. Rahman said that it recommended to go for market-based product innovations, experimentations, implementations and impact studies.
To take the green financing campaign forward as desired by the UNEP inquiry BB provided needed leadership for policy coordination, capacity-building and implementation ecosystem involving policy makers, regulators, entrepreneurs and citizens.
He also talked about the need for public policy alignment, in order to complement the green financing process by helping direct spending, market development, and pricing mechanism.
Dr. Rahman met Dr. Subir Gokarn, executive Director (ED) of Bangladesh to the IMF.
Later he also met Subhash Garg, ED and Musharraf Hossain Bhuiyan, Alternate ED to the WB. They exchanged views on contemporary macro-economic issues of Bangladesh.
BBN/SSR/AD