Sustainable Finance Policy (2023 version)

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Laws and Policies

CCLW

CCLW national policies

Sustainable Finance Policy (2020 version)

Date issued

This Policy has incorporated targets for the banks and financial institutions which are linked to GHG emissions reductions and strengthened climate resilience. It will support the delivery of the objectives of Green Products/Projects/Initiatives by channeling private investment into the transition to a climate-neutral, climate-resilient, low-carbon, more resource-efficient, green, competitive and inclusive sustainable economy. The Policy covers a Sustainable Finance Taxonomy and a Green Taxonomy, with the latter being a subset of the former. The Green Taxonomy covers climate change mitigation, climate change mitigation and other environmentally sustainable implementations and impact on inclusive sustainable green growth, while the Sustainable Finance Taxonomy also includes Corporate Social Responsibility (CSR) Policy, and economic and governance.
This Policy was issued by the Sustainable Finance Department of Bangladesh Bank, which is the central bank of Bangladesh and fully owned by the Government of Bangladesh.

Sustainable Finance Policy

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Actions or measures to adapt terrestrial systems to climate change.

People whose sexual orientation, gender identity, or gender expression differs from the majority or societal norms

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

A drought is an extended period of unusually dry weather marked by a significant and sustained lack of precipitation, falling below a specific threshold over a large area for more than a month

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Activities involving the catching, processing, and selling of fish for food, recreation, and industry.

This sector provides medical services, manufactures medical equipment, and develops pharmaceuticals to maintain and improve health.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Actions to adapt human health, healthcare systems and well-being to climate change.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Activities that provide lodging, food, and entertainment services to guests, including hotels, restaurants, and resorts.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

Actions and measures to adapt and increase resilience of societies and the economy to climate change.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Activities that relate to the production of goods and services from forests.

Actions or measures to adapt freshwater systems to climate change.

A financial institution that manages a country's currency and can promote climate-related initiatives through green monetary policy and other means.

This sector involves managing waste treatment, sanitation, pollution control and environmental cleanup.

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

Finance that is primarily directed towards climate change mitigation, including greenhouse gas emissions reduction and enhancing the sinks of greenhouse gases.

Electrical energy generated from mechanical devices driven by flowing fresh water.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Production of electricity and heat from solar irradiation.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

This sector involves the distribution, treatment, and conservation of water resources.

Coastal zone and marine-related actions and measures to adapt and increase resilience to climate change

Dedicated pool of financial resources for climate-related projects.

Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

This sector provides communication services, software development, and IT solutions.

Jobs that contribute to preserving or restoring the environment. We include jobs which require a high amount of green skills or which spend much of their time on green activities, as well as jobs transforming polluting industries.

woman and genders outside of the gender binary

People whose health, both mental and physical, makes them more vulnerable to the effects of climate change

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

This sector involves activities to move goods and people, alongside the storage of products.

Finance that is primarily directed towards climate change adaptation, including increasing resilience and robustness to actual or expected climate change and its effects.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

This sector involves the wholesale and retail selling of goods.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Social and cultural groups that share collective ancestral ties to the lands and natural resources where they live, occupy or from which they have been displaced

People with different national or cultural traditions from the dominant population

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

The activities of industries that transforms raw materials into finished goods through industrial processes.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Actions to adapt and increase the resilience of rural and urban infrastructure and settlements to climate change.

Any substance with chemical properties that can cause physical harm to people or damage the environment, including ammonia, carbon monoxide, phosphine, chlorine, arsenic, cadmium, mercury, pesticides, dioxins, microplastics, benzene, asbestos, aflatoxins, fluoride, methanol, and toxins from marine sources.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Risks to the ecosystem health of the marine environment, including ocean warming, ocean acidification, and ocean deoxygenation, harming biodiversity, species health, ecosystem services, and coastal community livelihoods.

Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

People who have left their homes, whether through force, voluntarily, or a mixture of both

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Kinetic energy of airflow transformed into useful energy, mostly electrical energy.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Geohazards are adverse geological phenomenon's that are capable of causing widespread damage or loss to property, life and the environment, such as earthquakes, volcano eruptions and tsunamis. Climate change can increase the frequency and severity of some geohazards, such as landslides, and soil erosion.

Sustainable Finance Policy (2023 version)

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance