Earth Day in sustainable and responsible financing

MM Mahbub Hasan
| Published: April 21, 2024 8:48:13 PM

The entire world is now struggling to deal with climate change and environmental challenges. In particular, the current concentration of carbon dioxide in the atmosphere of 421 ppm is a major headache, having almost doubled from 280 ppm during the Industrial Revolution of ten thousand years ago to the mid-18th century. In 2009, in view of the 15th United Nations Climate Conference, a large-scale campaign involving millions of people was held in many countries in an effort to limit atmospheric carbon dioxide to 350 ppm. Despite widespread awareness, the concentration of carbon dioxide in the atmosphere is increasing day by day. Excessive use of fossil fuels is the main cause of this increase in atmospheric density and climate change. Moreover, various human activities such as drastic deforestation, destruction of the natural environment and use of biomass are also largely responsible for this change. Currently, the financial sector promotes environmental responsibility and the development of sustainable financial systems. As a result, it plays an important role in reviving the implications of Earth Day.
On April 22, 1970, this day was first celebrated with the participation of approximately 20 million people in several thousand places, including elementary schools, high schools, universities, and communities across the United States. This day of the largest environmental protest program has now secured a special place in human history as World Earth Day. With the theme ‘Planet vs. Plastic’, approximately 1 billion people in at least 193 countries around the world are celebrating the 54th Earth Day through various events. Over the past 74 years, the amount of plastic production in the world has increased rapidly. Even in 1950, the world produced only 2 million tons of plastic, which has risen to over 400 million in 2022. The world produces around 350 million tons of plastic waste every year, of which 1 to 2 million ends up in the trash. oceans, causing serious damage to the natural environment and biodiversity. If the amount of plastic production in the world is reduced, the harmful effects on the natural environment will also decrease. With this goal, the goal is to reduce the amount of plastic production in the world by at least 60 percent by 2040. That is why all students, parents, business people, governments, churches, various trade unions, individuals and NGOs are united to call for an unwavering commitment to build a plastic-free future for future generations, requesting to stop plastic to protect people. health and environmental health of the planet.
The role of sustainable and responsible finance in achieving Earth Day commitments is undeniable. In particular, the latest green banking ideas and plans, which were first introduced in the United States in 2008 during the Barack Obama administration, should be widely expanded and implemented accordingly. Although this green banking program was introduced in Bangladesh in 2009, Bangladesh Bank issued a circular on green banking in 2011 and adopted the Sustainable Finance Policy in Bangladesh in 2020. According to the report of Bangladesh Bank, during October-December 2023, around BDT 74.51 million dollars were invested in the green banking sector by banks and other financial institutions and 816.39 million BDT were invested under sustainable financial policies. Investments in both sectors are steadily increasing.
In the green banking industry and the adoption of sustainable financial policies, not only should the number of investments be increased, but also efforts should be made to make a financial system sustainable and responsible with regard to the financial market, such as green banks and companies for sustainable asset management. , green energy companies, social enterprises, sustainable technology companies, green real estate companies, green bond issuing companies and sustainable agriculture and food companies, including the proper functioning of the relevant authorities, need to be improved. Every company should also strive to play a responsible role in protecting the natural environment and biodiversity.
The situation is changing for the better as investors, companies and financial institutions see the need to integrate environmental considerations into their decision-making processes. World Earth Day serves as a poignant catalyst for our collective responsibility to protect and preserve this planet.
It is in this context that sustainable finance has emerged in recent years as a prominent force driving positive environmental outcomes. By developing a holistic approach, not only is the financial return taken into account, but the wider impact on society and the environment is also crucial. Earth Day serves as an annual reminder to recalibrate investment strategies and prioritize sustainability goals. Whether it means transitioning away from fossil fuels or promoting sustainable energy projects, Earth Day encourages financial institutions to channel capital into environmentally friendly efforts. Additionally, initiatives such as the Task Force on Climate-Related Financial Disclosures (TCFD) reporting increase transparency and standards that enhance investors’ ability to make decisions about climate-related risks and opportunities.
Earth Day inspires green innovation through participatory and collective action and encourages the adoption of sustainable practices across the financial system. It therefore serves as an opportunity for financial institutions to engage with their stakeholders and demonstrate their commitment to sustainable practices. Earth Day thus has deep significance in promoting sustainable and responsible finance, which exemplifies environmentally conscious investment practices. Positive environmental outcomes will be easily achieved if all financial sectors, stakeholders and investors are part of a long-term plan to improve the ecological health of this planet, along with financial and human health.
As we celebrate Earth Day around the world, let us reaffirm our commitment to building a greener, more tolerant, livable and sustainable future for our next generations.

MM Mahbub Hasan is a banker and development researcher.
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