A Trend Analysis of Green Banking Practices in Bangladesh

This paper examines the extent of compliance by the listed banks with the green banking guideline of Bangladesh Bank, the supreme regulator of banking companies in Bangladesh. We have analyzed the contents of published annual reports of thirty listed banks for the period 2011-2015 with respect to twenty-one criteria mentioned in the green banking guideline. The guideline is expected to be implemented in three phases effective from 2011, 2012 and 2013 respectively. We have found that the compliance rate of the policy guideline is increasing over the years. Among three phases, the level of compliance by the banks is highest in phase I, followed by phase II and phase III. This is expected because banks have initiated the process of implementing phase I requirements earlier compared to other two phases. Regarding compliance with the individual element of the twenty-one factors, most of the banks are found to comply with areas such as green banking policy and online banking. The lowest compliance areas are green annual report & verification, green quarterly report, website disclosure, climate change fund, rigorous education and training to customers & employees and rigorous inhouse environment management. We recommend that banks should accelerate the speed of compliance with the requirements of the guideline to legitimize their existence and Bangladesh Bank should take necessary persuasive measures to ensure maximum level of compliance with the guideline. It is expected that green banking mechanism, when fully implemented by all the banks in Bangladesh, will contribute towards attaining an eco-friendly and sustainable business environment in Bangladesh