Former governor of the Bangladesh Bank Atiur Rahman has said 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 institutionalisation, experimentation and implementation," the former governor said while addressing a seminar on "Green Financing and Sustainable Development: Lessons from Bangladesh" held at the World Bank (WB) headquarters in Washington DC Monday.
Elaborating on the innovative role of Bangladesh's central bank in incentivising the financial system to go for green financing to align itself with the requirement of sustainable development, Mr Rahman highlighted moral suasion, refinancing, rewarding good performance of banks, adoption of environment and social risk management and developing collaboration at the national and international levels.
Michael Toman, Lead Economist and Research Manager of Environment-Energy Team, presided over the seminar, according to a statement from Washington Tuesday.
This was the first of the series of seminars he is scheduled to speak at the WB and the International Monetary Fund (IMF).
Earlier on September 18, Mr Rahman left Dhaka for Washington DC at the invitation of Kaushik Basu, Chief Economist and Senior Vice President of the WB, to share his experience in innovative central banking with senior officials of the WB and the IMF.
The former governor also said emerging countries like China, Bangladesh, Kenya and India have been providing "determined leadership" in pushing the green financing agenda through various innovative tools.
"In the process they are transforming the financial system to serve the long-term interests of the world," he noted.
The former central bank chief also showcased the success stories of green financing in Bangladesh with regulatory support from the central bank, which works closely with the banks.
Besides, refinancing micro-lending, the BB has also made banks do environmental due diligence for green investment in large projects, according to the former governor.
"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," Rahman, who teaches development studies at Dhaka University, said.
The former governor asked for highest level of policy ownership through climate-friendly national development strategy.
In addition, Mr Rahman called 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 (United Nations Environment Programme) ' Inquiry on sustainable finance of which he was a member of advisory board, he said that it has recommended going for market-based product innovations, experimentations, implementations and impact studies.
To take the green financing campaign forward as desired by the UNEP inquiry, the BB provided needed leadership for policy coordination, capacity-building and implementation ecosystem involving policy makers, regulators, entrepreneurs and citizens, the former governor added.
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.
Mr Rahman met 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.