BANKING ON THE ENVIRONMENT
WHILE THE CONCEPT OF GREEN BANKING IS STILL NASCENT IN THIS PART OF THE WORLD, SOME FINANCIAL INSTITUTIONS LIKE DOHA BANK ARE IN THE VANGUARD OF THIS MOVEMENT.
There is now heightened awareness within the banking community about the need to modify their activities and strategies to ensure the protection of natural resources and the environment. As a result, banks are increasingly adopting Green Banking as part of their corporate social responsibility (CSR) and sustainable development agenda. CEO of Doha Bank, Dr Seetharaman, says, “We believe banks, as responsible corporate citizens, have a role to play in protecting the environment and must contribute to sustainable development.”
Across the globe, there have been continuous efforts aimed at mitigating the risk of climate change caused by human activity. While it is true that banks are considered relatively environmentfriendly and do not impact the environment greatly through their own internal operations, the external impact on the environment through the activities of their customers is indeed substantial, says Dr Seetharaman. Banks can therefore play a vital role in aiding the reduction of external carbon emissions by financing green technology and pollution-reducing projects. Green finance as a part of Green Banking can make significant contribution to the transition to resource-efficient and low-carbon industries.
Greenhouse gas emissions need to be estimated for major economic sectors in areas of banking operation to determine the carbon footprint. Based on the carbon footprint in various economic sectors, targeted initiatives can be proposed to promote green economies. These initiatives can include lending for green projects, Clean Development Mechanism (CDM) schemes and paperless banking. The allocation matrix should be such that the greater the carbon footprint in the relevant economic sector, the higher the allocation of capital for Green Banking and sustainable projects.
The carbon footprint will be different across various geographies and economic sectors and hence country-wide and sectorwide allocations should be explored. This forms the basis for Green Banking and brings prudency into the capital framework, says Dr Seetharaman.
Being more specific, he says, “In our view, every bank should earmark a minimum of 10% of Tier 1 capital subject to a cap of 10% of risk-weighted capital towards Green Banking or CDM or any other sustainable development projects, taking into consideration the carbon emissions prevailing in the economy in which the bank operates.”
Doha Bank ‘s CSR philosophy is rooted in a commitment to promote and support high-impact programmes that make a positive impact on communities and on the environment. The bank promotes paperless banking, Internet banking, SMS banking and the like, as well as online channels such as Doha Sooq, e-remittances, e-statements and online bill payments. They also launched a green credit card as well as a green account.
In addition, Doha Bank has a dedicated Green Banking website www. dohagreenbank.com, which integrates the Bank s initiatives in promoting environmental sustainability by reaching out to the public and private sectors as well as to local communities. Doha Bank hosts the annual Al Dana Green Run as part of its efforts to enhance environmental awareness and promote a healthier lifestyle among members of the local community, in addition to campaigns like beach cleanup, Planet Savers Club, etc., spearheaded by the bank ‘s Green Banking Task Force Committee