Finance that protects growth, people, and planet

Ali Reza Iftekhar
Managing Director, Eastern Bank

The Daily Star (TDS): How would you assess the current state of sustainable and green banking in Bangladesh?

Ali Reza Iftekhar (ARI): Over the past decade, sustainable and green banking in Bangladesh has made remarkable progress. When Bangladesh Bank first introduced its Sustainable Finance Policy and Environmental and Social Risk Management (ESRM) guidelines, banks mostly treated them as compliance requirements. Today, sustainability has become a strategic priority for the country's leading institutions.

The banking sector now recognizes that financing cannot be separated from realities such as climate change, resource scarcity, and the demand for inclusive finance. Bangladesh Bank has accelerated this shift with green refinancing schemes, channeling affordable funding into renewable energy, waste management, and other green projects. The recent adoption of IFRS S1 and S2 on sustainability and climate disclosures has further aligned us with global standards.

Eastern Bank PLC (EBL) is proud to be ranked among the top ten sustainable banks in Bangladesh Bank's 2024 Sustainability Rating. For us, this recognition validates our long-term ESG commitments—but it is not a destination. It is a responsibility to keep moving forward.

TDS: What sustainable or green financing/refinancing schemes does your bank offer, particularly for SMEs, women entrepreneurs, or environmentally responsible enterprises?

ARI: At EBL, inclusiveness is central to our sustainable finance strategy. In 2024, 35.24% of our total term loan portfolio was directed to green projects—almost double the previous year. Overall, 89% of our portfolio now qualifies as sustainable finance.

We actively utilize Bangladesh Bank's refinancing schemes and have already disbursed over BDT 200 crore to renewable energy, energy efficiency, and waste management ventures. Beyond financing, we offer training, advisory support, and flexible repayment terms for SMEs and women entrepreneurs whose businesses embrace sustainability. We also mobilize foreign funding from DFIs such as IFC, DEG, FMO, OFID, and ADB, primarily for green investments.

To encourage innovation, our EBL Startup Explorer program, launched with Startup Bangladesh, directly finances green and impact-driven startups. We also partner with NGOs to provide tailored refinancing solutions to grassroots entrepreneurs. Our vision is clear: make sustainable finance accessible not just to large corporates, but also to SMEs, women entrepreneurs, and innovators driving change from the ground up.

TDS: What initiatives has your bank undertaken to promote sustainable banking, and how are you reducing your own carbon footprint?

ARI: Sustainability at EBL goes beyond financing—it is embedded in our operations.

Our Head Office is a green building, equipped with solar glass panels generating 16 kW of electricity daily, along with rainwater harvesting and wastewater treatment facilities. We use hybrid vehicles, smart AC systems, and energy-efficient lighting to further reduce consumption.

We are steadily moving towards a paperless culture. By digitizing LC processing, we've reduced paper use by 40–45%, saving more than a million sheets each year. Our e-leave, e-appraisal, and e-learning systems cut paper use further. On the customer side, digital platforms like EBL Connect and SkyPay process billions of taka electronically, reducing the carbon footprint of cash handling while enhancing efficiency and convenience.

EBL is also among the first banks in Bangladesh to measure Scope 1, Scope 2, and Scope 3 emissions, including financed emissions, through the Joint Impact Model (JIM). Additionally, our partnership with DHL's GoGreen Plus program reduces 30% of emissions from trade document transport by using Sustainable Aviation Fuel.

TDS: What challenges has your bank encountered in adopting and promoting sustainable banking practices?

ARI: While progress is evident, challenges remain.

Data gaps: Measuring financed emissions across diverse industries remains difficult due to limited data quality and availability.

Awareness and capacity: Many borrowers—particularly SMEs—lack the technical know-how to adopt green technologies. Banks often need to invest in awareness and capacity-building before financing can be effective.

High upfront costs: Renewable energy or green building projects involve significant initial investment, discouraging entrepreneurs despite long-term savings. Here, concessional funding from Bangladesh Bank and DFIs plays a vital role

We believe stronger policy support—such as tax incentives for green technology and a carbon credit framework—would accelerate adoption across the financial sector.

TDS: What are your bank's future plans to advance sustainable banking, and what support do you seek from the government?

ARI: Looking ahead, EBL plans to introduce Green Deposit and Green Asset products, allowing customers to directly contribute to sustainable projects. We are also piloting a Climate Risk Diagnostic and Management Model with IFC and DEG, which integrates climate risk into credit decisions—making us one of the first banks in Bangladesh to embed climate risk into portfolio management.

To scale up these efforts, we seek government support in three areas:

1.   Incentives for green investment — including interest subsidies, tax benefits, and accelerated depreciation for renewable and energy-efficient technologies.

2.  Capacity-building programs — equipping SMEs and entrepreneurs with the skills to adopt sustainable practices.

3.  A robust carbon market framework — enabling banks and businesses to monetize emission reductions and attract greater climate finance.

Our ambition is clear: to help shape a financial sector that not only drives economic growth but also safeguards the planet for future generations