Sustainable Finance Could Extend Its Scope Beyond Climate Change

International Capital Market Association

The 50th International Capital Market Association(ICMA) Annual General Meeting & Conference was held from May 30 to June 1, 2018 at Meliá Castilla Hotel, Madrid, Spain. The Summit witnessed participants such as Investors and market infrastructure providers from the fixed income markets, together with market experts, regulators and policy makers to discuss the state of the global industry and future developments.

Dr. R. Seetharaman, CEO of Doha Bank participated in the panel discussion “Developments in green, social and sustainable finance” on 1st June 2018. He gave insight on the regulatory trends on Green Banking. He said “Central banks have a key role to play in enabling green financial instruments. This could be done through establishing green finance guidelines and frameworks to integrate environmental and social considerations into bank lending decisions. Following the Paris climate agreement in 2015, European financial supervisors have been increasingly scrutinising the banking sectors to understand their exposure to climate risks and their preparedness for a transition to a low-carbon energy system. Bank of England is engaged in an ongoing examination of both physical effects of climate change and the impact of changes associated with the transition to a lower-carbon economy. Central bank governors Europe are considering increasing regulatory oversight to address climate-related risks to the financial system, including carbon stress tests for banks. Bank of England would consider carbon stress tests of banks after its review of the sector’s exposure to climate-related risk is competed this year. China Banking regulatory commission had developed Green Credit Lines, Bangladesh Bank had brought Green Banking Framework, Indonesia Financial Services Authority had developed roadmap for sustainable finance. The Reserve Bank of India guided credit to priority sectors but also relied on industry- initiatives for green finance guidelines.”

Dr. R. Seetharaman highlighted on sustainable finance. He said “Sustainable finance refers to any form of financial service integrating environmental and social into the business or investment decisions for the lasting benefit of both clients and society at large and contribute to green economies. The 17 Sustainable development goals not just cover climate change but extends to areas such as health, education, infrastructure etc. Institutions should explore the concept of sustainable finance to other sustainable development goals based on their willingness and risk appetite to participate in financing such areas. Institutions adopt Environmental, Social and Governance (ESG) Criteria for sustainable finance, which considers social conscious lending or investments. Environmental criteria look at how a company performs as a steward of the natural environment. Social criteria examine how a company manages relationships with its employees, suppliers, customers and the communities where it operates. Governance deals with a company’s leadership, audits, internal controls and shareholder rights.”

Dr. R. Seetharman gave insight on initiatives of Doha bank in CSR. He said “Doha Bank Group as part of its Corporate social responsibility demonstrate fair, open, efficient and consistent business practices to mitigate climate change and promote sustainable development. It advocates and practices Green Banking, which is one of its core business philosophies that would support the sustainability into the future. It has tracked the developments pertaining to various Conference of the Parties (COP) meetings and involved with various COP meeting delegations including COP 18 in Doha. It has worked on “ECO-Schools Programme” with UNESCO which works with educational institutions to build awareness of key environmental issues and create action plans that are school-specific to help mitigate the overall impact on the environment. It has a dedicated Green Banking website of Doha Bank. Doha Bank has also provided facilities for district cooling and for project financing for water projects.”