BB tightens sustainable finance reporting to curb greenwashing

 
In a move to bolster transparency and ensure the integrity of environmental initiatives within the financial sector, Bangladesh Bank (BB) has issued new directives to refine the reporting framework for sustainable financing.

The central bank's Sustainable Finance Department (SFD) released a circular on Tuesday, aimed at preventing 'Greenwashing' and ensuring that data disclosure remains accurate and reliable.

The latest instructions seek to bring greater transparency to these reports. To achieve this, the central bank has revoked specific sections of the 2023 policy and reclassified several products to ensure they are categorized correctly under the sustainable finance umbrella.

A significant portion of the new directive involves shifting certain initiatives from 'Green Finance' to other categories to reflect their actual impact more accurately.

According to the circular, health services provided in climate-vulnerable and disaster-prone areas, previously labeled as Green Finance (Green SRF), must now be reported as other sustainable linked finance.

Digital loans or credits distributed via Mobile Financial Services (MFS) or other digital mediums by banks specifically those targeting climate-vulnerable areas (excluding consumer finance) will be considered Green Finance.

Maritime transport with low-rated ESDD and broadband/IT solutions using eco-friendly supply chains have been moved from Green Finance to other sustainable linked finance.

Certain products previously under green SRF are now categorized as 'Socially Responsible Finance' under the broader Sustainable Linked Finance framework.