Responsible financing supports GREEN DEVELOPMENT
As we all live on the same planet, every country in the world is responsible for global warming. This is why Mongolia has a policy that promotes green development to deal with desertification and to support global activities against climate change.
Green development policies focus on not only climate change but also other challenges facing society and environment, such as water shortages, and soil, water and air pollutions.
Mongolia joined international agreements for promoting green development and dealing with global warming issues, implemented some projects and programs on such matters, and many projects from other countries were offered to Mongolia.
Parliament approved the National Green Development Policy, which aims to promote ecofriendly economy and sustainable financing.
The policy aims to raise Mongolia’s renewable energy resource production to 20 percent of total energy output by 2020 and to 30 percent by 2030; increase energy efficiency by 20 percent by 2030; support loans, subsidies and financing towards green development; and adopt innovation policy for a green economy.
Implementing green development policies against challenging climate change issues is the right path for every country in the world, but behind green development initiatives, many projects that are not beneficial to society and environment are carried out by businesses of politicians who have other interests in mind.
Few decades ago, Mongolians were totally ignorant of environmental issues and how it impacted the country, but today people have started to realize that desertification, air pollution, soil contamination, and drinking water pollution facing Ulaanbaatar residents are all connected to environmental degradation.
The problems come from mining operations, rural-to-urban migration, policy failure in urban planning, and other factors.
Every sector should pay great attention to protecting the environment and realize their responsibilities to ensure a sustainable growth.
As almost all major projects in the country are being implemented through loans from commercial banks, a crucial aspect to fighting climate change is the banking sector.
If banks execute a stricter policy which prohibits loans to companies that do not fulfill their environmental responsibilities greater progress in greed development can be achieved.
In 2013, all Mongolian commercial banks signed the Joint Declaration for Implementation of the Sustainable Financing Program (SFP), which promotes action against environmental challenges such as water, soil and air pollution, climate change, human rights violations, and sustainable development by reducing potential risks to the environment and society.
The SFP requires all banks to consider negative impacts on the environment or people when making decisions about investing, granting loans or other financial outlays to businesses, and to refuse financing to businesses in case of a serious negative impacts.
Under the objective to protect nature, banks that sign the SFP set special requirements to study the risks to the environment and society to their borrowers operating in sectors with high risks such as mining, construction and agriculture.
As stipulated in the requirements, banks started hiring experts to develop sustainable financing policy and regulation, and give their clients and partners recommendations on sustainable financing as well as training and awareness programs.
As a result, efficient collaboration between banks and their client companies are expected increase to fight negative impacts to the environment.
Even though there are many international and domestic projects and programs for green development, Mongolia needs to make evaluations to optimize their benefits to the people, society and environment. The earth cannot afford to be wasteful especially in its efforts to combat environmental degradation.