Bangladesh Achieves Milestone in Sustainable Finance with Pioneering Guidelines
Cooperation Agreement signed between Bangladesh Bank’s (Central Bank) Sustainable Finance Department and IFC’s ESG Bangladesh Project to provide technical assistance in developing policy guideline on sustainability and climate-finance related disclosure on June 7, 2023 at Central Bank of Bangladesh Head Office. On the photo from left to right: Mr. Modabber Hossain Bhuiya (Bangladesh Bank), Ms. Lopa Rahman (IFC), Mr. Ehsanul Azim (IFC), Mr. Chowdhury Liakat Ali (Bangladesh Bank), Ms. Rabeya Khandaker (Bangladesh Bank), Mr. Shakhawat Hossain (Bangladesh Bank)
In a significant leap towards sustainable finance, Bangladesh has taken a pioneering step by introducing guidelines for banks and finance companies on sustainability and climate-related financial disclosure. This achievement is part of the IFC Asia Pacific ESG Bangladesh Project, supported by the Swiss State Secretariat for Economic Affairs (SECO).
Initiated by the Bangladesh Central Bank, the guidelines received technical assistance from International Finance Corporation (IFC) and are formulated based on the International Sustainability Standards Board (ISSB) IFRS Sustainability Disclosure Standards, incorporating essential TCFD Recommendations. Released in December 2023, these guidelines position Bangladesh as one of the first few economies to undertake such a comprehensive approach.
The guidelines cover components such as Objectives, Standards Used, Scope, Method of Disclosure, Disclosure requirements, Implementation pathway, Regulatory Reporting, Assurance, and provisions on Awareness and Capacity Building.
What makes this development noteworthy is its alignment with the ongoing International Monetary Fund (IMF) Program in Bangladesh and leading to subsequent IMF financing package.
The Sustainability Disclosure Standards issued by the ISSB will not only empower stakeholders and investors to make informed decisions but also instill stronger confidence in financing from banks. This move underscores Bangladesh's commitment to embracing sustainable practices and aligns with global standards.
Furthermore, the collaboration between IFC and Bangladesh Bank is conducted in close partnership with the World Bank. This strategic alliance highlights collective efforts to foster sustainable financial practices on a global scale.
For those interested in exploring more resources on sustainability and climate disclosure, explore this sustainability reporting platform, ISSB Knowledge Hub, and anticipate the upcoming IFRS Sustainability Disclosure Standards training by the United Nations Sustainability Stock Exchanges Initiative, ISSB, and IFC in local markets.
This initiative not only sets a new standard in sustainable finance but also positions Bangladesh at the forefront of global efforts to integrate environmental, social, and governance considerations into financial decision-making.