IDLC’s journey towards sustainable development and responsible finance

IDLC Finance has once again been ranked the top Non-Banking Financial Institution (NBFI) in Bangladesh by Bangladesh Bank's 2024 Sustainability Rating. This marks the fifth consecutive year the company has received the accolade since the award's inception in 2020. The recognition underscores IDLC's unwavering commitment to sustainable finance, transparency, and best-in-class Environmental, Social, and Governance (ESG) practices.

Since 2021, IDLC has pursued a five-year sustainability roadmap built around three core objectives: minimising the environmental footprint of its operations, fostering inclusive growth across communities, and creating a safe, healthy, and motivating workplace. Anchored by 10 strategic pillars and 30 specific commitments, the roadmap spans green financing, governance, responsible lending, employee well-being, and community engagement.

Progress against this roadmap is tangible. In 2024, 37.82% of IDLC's total disbursement was directed to sustainable finance, nearly double the Bangladesh Bank requirement of 20%. Meanwhile, 13.47% of term loans went to green finance, over twice the mandated 5%. These figures represent more than just numbers: through sustainability-linked projects, over 484,000 beneficiaries across Bangladesh were reached by the end of 2024. International recognition has followed, with Bloomberg's ESG rating placing IDLC among the country's top-ranked financial institutions, achieving an overall score of 3.51.

IDLC's green finance portfolio is strategically diversified. In 2024, 42.4% went to energy and resource efficiency, 17.9% to green buildings, 8.7% to renewable energy, 6.6% to liquid waste management, 2.7% to green agriculture, 7.1% to socially responsible financing, and 8.1% to ICT. Notably, repayment performance in sustainable finance outstrips conventional loans, with a Non-Performing Loan (NPL) ratio of just 1.99%, less than half of standard lending.

Sustainability principles permeate IDLC's internal operations. Energy-efficient lighting, automated sensor-based water and electricity systems, and virtual board meetings have reduced both carbon footprint and paper consumption. All new partnerships undergo Environmental & Social Due Diligence (ESDD), ensuring alignment with the company's sustainability standards.

Globally, IDLC has been a pioneer. It became the first Bangladeshi NBFI to join the United Nations Environment Programme Finance Initiative (UNEP-FI) in 2010. Since then, it has become a founding signatory of the Principles for Responsible Banking, the Collective Commitment to Climate Action, the Tobacco-Free Portfolio, and the Net-Zero Banking Alliance. These commitments place IDLC among a select group of institutions driving global sustainability.

Aligned with the Net-Zero Banking Alliance pledge, IDLC has set ambitious sector-specific carbon reduction targets, aiming for net-zero by 2050. Based on 2022 emissions, reductions by 2030 are targeted at 45% for food, 54% for textiles & RMG, 55% for agriculture, 47% for automobiles, and 49% for power. Full reduction across these sectors is expected by 2050, supporting both environmental preservation and sustainable economic growth.

Inclusivity lies at the heart of IDLC's approach. Its gender equality agenda promotes women's participation in the workforce and entrepreneurship, exemplified through the IDLC Purnota SME loan product for women entrepreneurs, supporting SDG 5. Human and labour rights compliance, workplace safety, and strong policies against harassment safeguard employees' well-being.

CSR initiatives extend IDLC's impact beyond finance. The 20-bedded chemotherapy unit at Chattogram Ma-O-Shishu Cancer Hospital has treated over 14,000 marginalised patients. Scholarships for underprivileged women, community water points, health camps, and emergency support during the 2024 floods in Feni, Noakhali, and Cumilla reflect the company's long-term commitment to social progress.

Innovation drives IDLC's sustainability journey. From financing industrial effluent treatment and green buildings to solar panel projects, digital savings products, and CMSME financing for clean technology adoption, IDLC develops solutions that meet urgent national and global needs. Plans for green affordable home loans and sustainable retail investment products further empower individuals to participate in environmentally responsible initiatives.

At IDLC, every loan, initiative, and decision is guided by the principle that responsible finance underpins sustainable growth. The company's vision is clear: to continue setting benchmarks in responsible financing, ensuring that today's actions create a greener, fairer, and more prosperous tomorrow.