Responding to climate change is perhaps the biggest global challenge of the 21st Century, and the transition to a low-carbon economy will require investors to take account of the reality of a carbon-constrained world. Green Financing means a funding for environment friendly business.
From the perspective of a financial institution, green finance refers to environment friendly financial products or services. FFIL recognizes the value of environment and treatment as a capital, while trying to improve human well-being through reducing environment risk and maintaining ecological balance.
Inline with the "Policy Guideline for Green Banking" issued by the GB & CSR Department of Bangladesh Bank on August 11, 2013, FFIL has adopted its own "Green Banking Policy". The Policy has been approved by the Management and has been placed for Board Approval.
Major areas covered in the Policy include:
- E&S Risks in Credit Risk Management
- In-house Environment Management
- Green Finance, Products and Marketing
- Climate Risk Fund
- Training, Awareness and Green Events
- Disclosure and Reporting
Moreover, a Green Banking Unit has been formed with representation from different departments of FFIL that shall be responsible for on-time implementation of the areas covered by the Policy.
FFIL also complies with the "Environmental Risk Management (ERM) Guidelines for Banks and Financial Institutions in Bangladesh" issued by Bangladesh Bank on January 2011. ERM Guidelines have been incorporated in the Credit Policy of FFIL and has been approved by the Board. Environmental and social risks are now considered along with the general credit risks while assessing a prospective borrower.
Examples of Green Financed projects, however not limited to, are listed below:
- Tunnel Kiln
- Zigzag Brick Kiln
- Effluent Treatment Plant
- Waste Recycling plant
- Biogas Plant
- Solar Home System
In line with the circular of Bangladesh Bank issued on 01December 2016, a separate Sustainable Finance Unit as well as Sustainable Finance Committee has been formed in FFIL Head Office.