Fahrenheit in comparison to the previous century, leading to melting of Himalayan glaciers, bursting of lakes and rise of the sea level. Along with this, climatic changes have been causing natural disasters like cyclones, floods, landslides, and droughts.
Combined efforts of governments, corporate sector and individuals can
help in minimizing these various forms of environmental deterioration.
For this, governments have to come up with strong policies; corporate
houses should follow environmental protection guidelines more strictly;
and individuals have to be self-aware to protect the environment around
them.
As part of the role to be played by the corporate sector, banks and
financial institutions should embrace green banking — adopting process
and strategies that promote environment-friendly practices to help in
reducing carbon emission. Green banking helps in reducing internal
carbon footprint as well as external carbon emission.
Banks have been using lighting, air conditioning, electronic
equipments, IT, high paper wastage in massive proportion. The resultant
internal carbon footprint can be reduced through the use of renewable
energy, automation and other measures. On the other hand, banks can
reduce external carbon emission by financing projects and companies that
are working for pollution reduction and adopting green technologies.
Providing loans to firms that have concern for environment would ensure
proper utilization of natural resources.
Green banking avoids paper work and contributes to lower the cutting of
trees. It makes the corporate world aware about environmental and
social responsibility and thereby contributes to handing over a good
environment to the upcoming generation. Adopting green banking policies
are directly beneficial for the banks as well.
Providing loans to firms and companies that abide by environment
protection principles and regulations ensures that such clients do not
become victims of natural calamities. Reputation and goodwill is very
important for banks, and being a green bank provides them a distinct
identity and reputation in the society. This also minimizes bad goodwill
risk. Along with that, adopting such policies helps the banks avoid the
risk of being left with securities like contaminated land as
collateral.
However, green banking is not a piece of cake; there are various
challenges in making it a reality. It’s not only about reducing paper
use and getting digital; there are strategies that a bank should follow.
The most important step towards this objective is while providing
loans. Any entrepreneur would think of green environment only when banks
will restrict loans to businesses which might cause environmental
degradation. Banks can deny loans to businesses that aim high profits by
degrading the environment. The nature of business and its impact on the
environment should be carefully considered before approving business
loans. On the other hand, banks can offer low-interest loans to
businesses that are environment friendly. In this way, banks can play a
key role in promoting secondary source of energy like solar energy or
bio gas energy.
Next, banks can provide preference to green properties like homes
equipped with solar energy, rain water harvesting facility, and
properties with better environmental surroundings, for collaterals. And
they should give secondary preferences, if at all, to properties such as
polluting factory, or buildings emitting harmful waste in
the environment.
In terms of internal contribution, banks should embrace
environment-friendly architectural design. Such designs help in reducing
use of air conditioners and lights. Along with that, restricting use of
carbon emitting machines, fans, energy inefficient bulbs, should be
discouraged. Also, minimizing paper usage and promoting use of
electronic transactions through rapid use of ATM cards, debit cards or
other vending machines can help in being a green bank.
Another area, where banks can contribute to green environment is the
use of vehicles. Instead of providing sole vehicles to employees, banks
should provide pick-and-drop services. This will not only help in
reducing carbon emission but would also help in easing city traffic.
This will also help in reducing the space needed for parking at banks.
The space which would otherwise be used for parking could be used to
build gardens and fountains. This will not only help the banks go green
at the policy level but will also make it a green bank, literally too.
As part of their corporate social responsibility (CSR), banks can
invest in building and maintaining parks, gardens and forests in and
around cities. They can adopt tree plantation as a means to mark their
important achievements. This would help in inspiring other business
ventures to adopt similar strategies.
Banks have been providing many services to their customers such as free
ATMs, Internet Banking and Any Branch Banking Service (ABBS). They
could set up a basket ‘Disaster Emergency Fund’, for their client, in
case the latter are victimized. The customers should be given a choice
to opt for the fund by agreeing to provide certain amount of their
interest to the fund on an annual basis. This would make such customers
more secure from the impact of natural disasters on their finance.
Banking has been a charming job in Nepal, and is regarded a prestigious
job. To retain this image, it is necessary for banks to go green. Some
of the recommendations made in this article might sound impractical
considering the nature of their business and the stiff competition in
the market to get better clients, still these measures are for banks
which believe in ethical business.
Published in New Business Age Magazine of November Issue 2014.
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