How Millennials and Gen Z are driving sustainable finance in Bangladesh and beyond

In Bangladesh and around the world, a generational change is reshaping the financial landscape. Millennials and Gen Z, together making up the largest share of the global workforce are not only altering how investments are made but also redefining what those investments should stand for. 

Unlike previous generations, their approach to finance is not just about maximising returns. It is increasingly about aligning money with purpose: climate resilience, social responsibility, and long-term sustainability. This shift is accelerating the global movement toward sustainable and green finance, and Bangladesh is beginning to see its early signs.

A global push for sustainable finance

Globally, younger investors are at the centre of the surge in sustainable finance. Surveys by Morgan Stanley and PwC show that over 70% of Millennials and Gen Z are interested in sustainable investing, far higher than older generations. 

Their money is flowing into ESG-focused funds, green bonds, and renewable energy projects. For them, financial performance and social responsibility are not competing goals but two sides of the same coin.

This mindset has real consequences. Between 2019 and 2023, global sustainable investment assets under management grew to more than $35 trillion, making up over a third of total managed assets. Much of this growth has been driven by younger investors demanding that their capital contribute to addressing climate change, supporting inclusive growth, and ensuring corporate accountability. 

For financial institutions, catering to this demographic is no longer optional, it is essential for relevance.

In Bangladesh, the move toward sustainable finance is still developing, but demographic shifts suggest that it will accelerate quickly. With a median age of just over 27, Bangladesh has one of the youngest populations in Asia. This means that Millennials and Gen Z are not a fringe group, they are the core of the workforce and the emerging investor base.

Climate change adds another dimension. Bangladesh is one of the countries most vulnerable to rising sea levels, floods, and extreme weather. For young Bangladeshis, sustainability is not an abstract global agenda but a matter of personal and national survival. As a result, their interest in green finance is not merely aspirational—it is practical.

Financial institutions have started to recognise this. Bangladesh Bank introduced green banking guidelines in 2011 and later formalised sustainable finance policies in 2020. These policies encourage banks and non-bank financial institutions to allocate funds toward renewable energy, energy efficiency, waste management, and environmentally friendly industrial projects. 

While adoption is still uneven, the policy environment is aligned with the values of younger investors who increasingly want their savings and investments to support sustainable growth.

From savings culture to green investing

Traditionally, Bangladeshi households relied heavily on real estate, gold, and government savings certificates as safe assets. While these instruments remain popular, younger investors are beginning to explore alternatives. 

The rise of mobile financial services such as bKash and Nagad has accustomed them to digital transactions, making the leap to app-based investment platforms more natural. Brokerage firms and mutual funds that integrate sustainable finance products into digital platforms are likely to find strong traction among younger users.

Already, small but significant initiatives are pointing in this direction. Some banks in Bangladesh have launched green deposit schemes, while others have financed renewable energy projects through green credit lines. 

The Dhaka Stock Exchange has introduced ESG guidelines to encourage listed companies to disclose environmental and social performance. These steps, though modest, lay the groundwork for a generation of investors who want transparency and measurable impact alongside financial returns.

Global lessons and local opportunities

Globally, the rise of green bonds illustrates how investor demand translates into financial innovation. The green bond market, valued at over $2 trillion, has been driven largely by younger investors' appetite for climate-friendly assets. Bangladesh, too, is taking steps in this direction: in 2021, the government announced its first green bond framework, opening the door for both public and private issuers. 

For Millennials and Gen Z, who often express frustration at the lack of credible green products in local markets, such initiatives create an opportunity to align their portfolios with their values.

Another global lesson is the importance of avoiding greenwashing. In Europe and the US, many funds have faced backlash for marketing themselves as "sustainable" without clear evidence. Young investors, especially digital natives, are quick to call out inconsistencies, often on social media. 

For Bangladesh, this means financial institutions cannot simply rebrand existing products; they must provide transparent data, clear reporting, and visible outcomes if they want to attract and retain younger investors.

Why millennials and gen-z matter for green finance

The role of Millennials and Gen Z is not just about volume of capital but about direction. Their investment preferences create demand that shapes supply. When younger Bangladeshis choose green deposits over conventional ones, or when they opt for funds that prioritise renewable energy, they send signals to the market. 

Banks and asset managers, keen to attract this demographic, respond by creating more products in line with those values.

These generations are more willing to blend financial and non-financial goals. They see long-term resilience, whether for personal savings or national development as inseparable from sustainability. In a country like Bangladesh, where environmental risks directly affect economic growth, this mindset is particularly relevant.

The regulatory imperative

For this generational momentum to translate into real impact, regulation must play a proactive role. Bangladesh Bank and the BSEC have already taken steps by mandating green lending quotas, introducing sustainable finance reporting, and encouraging corporate ESG disclosures. 

The next step will be standardisation. Clear definitions of what qualifies as "green" or "sustainable" will help build trust, particularly among young investors wary of exaggerated claims. Digital investor education initiatives could also help bridge the knowledge gap, ensuring that retail investors understand both the opportunities and risks of sustainable finance.

Over the next decade, the influence of Millennials and Gen Z on Bangladesh's financial sector will only grow. As their incomes rise and their exposure to global markets increases, they will demand investment options that are both digitally accessible and socially meaningful. Globally, the future of finance is already tilting toward sustainability; in Bangladesh, this tilt is reinforced by the country's vulnerability to climate change and its youthful demographic profile.

The transformation is not immediate, nor without challenges. Awareness remains low, product diversity is limited, and institutional capacity needs strengthening. Yet the direction of travel is clear. Young investors are not waiting for sustainability to be handed down from regulators or institutions. They are asking for it now, in their language, on their devices, and in ways that connect personal finance to the broader goals of resilience and development.

Millennials and Gen Z are accelerating the shift toward sustainable and green finance, both globally and in Bangladesh. Their priorities, digital access, transparency, and alignment with values are reshaping how financial institutions design products and policies. 

For Bangladesh, where a young population faces acute climate risks, this shift has profound implications. It offers a path to mobilise domestic capital for sustainable development while deepening trust in the financial system.

The challenge for regulators, banks, and asset managers is to move beyond rhetoric and deliver credible, impactful products. If they succeed, they will not only capture a generation of investors but also contribute to building a more resilient and sustainable economy.

Tanveer Mohiuddin. Sketch: TBS