Sustainable financing can lead to more social inclusive growth
In an interview with TBS, Md Ziaur Rahman, Deputy Managing Director, Chief Risk Officer and CAMLCO of Prime Bank PLC, discusses the bank’s commitment to sustainability and why it has adopted sustainable financing in its lending activities
Can you share your bank's overall vision and commitment to sustainability?
When it comes to sustainable financing, Prime Bank's vision is to amplify positive impacts while minimizing negative effects on people and the environment through its banking activities, products, and services. The bank is committed to sustainable finance by fostering projects that support environmental and social well-being, addressing climate change, and upholding best practices in corporate governance. We strive to make meaningful contributions to a more sustainable and resilient future for all.
What motivated Prime Bank to focus on sustainable financing?
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Prime Bank focuses on sustainable financing to drive economic, environmental, and social progress. Our goal is to enable businesses to adopt eco-friendly practices while supporting the transition to a low-carbon economy. This approach fosters inclusive growth and aligns with our vision of creating long-term societal benefits through responsible and impactful financial solutions.
What specific green financial products or services does your bank offer?
Our bank offers a range of green financial products and services for all segments, from SMEs to corporates. We provide funding for renewable energy, energy and resource efficiency, the circular economy, waste management, and environmentally friendly projects and initiatives.
How do you ensure these products align with global sustainability standards?
Prime Bank ensures its products align with global sustainability standards by designing them in line with the Sustainable Development Goals (SDGs) and Bangladesh's Intended Nationally Determined Contributions (INDC) commitments. By integrating these frameworks into our financing strategies, we not only meet regulatory requirements but also foster more resilient and sustainable business models for the long term.
What criteria does your bank use to evaluate the sustainability of projects or companies before offering financing?
Our bank evaluates the sustainability of projects by conducting a thorough screening based on Environmental, Social, and Governance (ESG) criteria. This ensures that the project aligns with our commitment to responsible and sustainable financing.
How do you balance risk and return with sustainability considerations when making lending or investment decisions?
We balance risk and return with sustainability by integrating ESG factors into our credit appraisal process. This involves thorough due diligence, assessing potential risks and opportunities related to environmental impact, social practices, and corporate governance, ensuring that our lending and investment decisions align with sustainable growth.
Does your bank partner with any organizations, governments, or NGOs to enhance your sustainable financing efforts?
Prime Bank is proud to have joined the United Nations' Net-Zero Banking Alliance under the UNEP Finance Initiative on May 28, 2023. This partnership underscores our strong commitment to mitigating ESG risks and advancing sustainable financing opportunities in alignment with global climate goals.
How does your bank measure the environmental and social impact of its sustainable financing activities?
Prime Bank measures the environmental and social impact of its sustainable financing by evaluating carbon footprints and greenhouse gas emissions. The project also fosters job creation, SME growth, and responsible resource management, contributing to Sustainable Development Goals (SDGs) 8 and 9. This demonstrates Prime Bank's commitment to sustainability and long-term social and environmental impact.
What challenges has your bank faced in adopting green financing, and how have you addressed them?
Our bank has encountered several challenges in adopting green financing, including regulatory gaps and insufficient incentives for SMEs to embrace eco-friendly practices. The lack of standardized strategies creates an uneven playing field. Additionally, the fear of losing market share to competitors not prioritizing sustainability hampers our ambition. Limited data and expertise contribute to greenwashing risks, further complicating the landscape. We address these challenges by advocating for clearer regulations and better incentives while striving to set an example in sustainable finance.
