Mutual Trust Bank on turning ESG commitments into tangible impact
From renewable energy projects to green buildings, Mutual Trust Bank demonstrates how financial institutions can combine profitability with sustainability, shaping Bangladesh’s transition to a low-carbon economy
At Mutual Trust Bank, I see sustainable finance as more than a regulatory requirement—it's a critical driver of inclusive and resilient growth. Globally, sustainable finance has become central to decision-making, integrating environmental, social, and governance (ESG) considerations into investments and lending. For me, this means directing capital toward projects that not only generate profit but also create positive social and environmental outcomes.
In Bangladesh, sustainable finance is essential to tackling climate change and promoting green growth. By embedding ESG considerations in our operations, we support long-term investments in renewable energy, green industries, SMEs, and agriculture—sectors that empower communities, improve competitiveness, and protect the environment. With Bangladesh Bank's pioneering initiatives, such as refinancing schemes and regulatory guidance, sustainable finance here is gaining real momentum. For me and my team, this isn't just compliance—it's about creating shared value that benefits businesses, clients, and society, and positions Bangladesh for a more sustainable economic future.
Bangladesh Bank has been a true pioneer in promoting sustainable finance in South Asia. Its framework, including Green Banking Guidelines, the Sustainable Finance Policy, and refinancing schemes, provides a strong foundation. Initiatives like the Sustainability Rating, the 2022 Green Bond Financing Policy, Environment Friendly Refinance Scheme, Green Technology Fund, and allocating 10% of CSR budgets to climate risk funds show their commitment. Yet, I believe there's more to be done. The capital and bond markets need strengthening, the green bond market must mature, and coordination between Bangladesh Bank and the SEC will be crucial. Policy incentives like tax benefits, blended finance, and cross-sector collaboration could help scale sustainable finance nationwide. At MTB, we're fully committed to this vision, working alongside regulators and partners to create a robust, inclusive ecosystem aligned with SDGs and Bangladesh's Paris Agreement commitments.
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Demand for ESG-linked and green financial products in Bangladesh is steadily rising. I've seen sectors such as ready-made garments, renewable energy, and sustainable agriculture lead the way, driven by both regulatory incentives and corporate sustainability commitments. Programs like the Environment Friendly Refinance Scheme and the Green Technology Development Fund have made sustainable financing more accessible. While large corporates are rapidly adopting ESG-compliant finance, many SMEs and retail clients still need guidance. My goal is to bridge this gap through innovative products and personalized support, helping businesses integrate sustainable practices while promoting environmental and economic benefits.
Adopting sustainable finance in Bangladesh has its challenges. Despite pioneering policies, enforcement can be inconsistent, and many institutions still rely on traditional lending. SMEs and some corporates often lack awareness about sustainable finance benefits, while many bankers and investors are unfamiliar with ESG risk assessment. High upfront costs, limited government-backed guarantees, and underdeveloped risk models make green projects appear risky. Compared to developed countries, incentives are fewer, and renewable energy infrastructure and FinTech solutions remain limited. At MTB, we address these hurdles through capacity-building, strategic partnerships, and innovative green finance products. Multi-stakeholder collaboration is key to scaling sustainable finance and building a low-carbon, resilient economy.
At MTB, ESG integration is central to how we lend and invest. Environmental and Social Due Diligence (ESDD) is mandatory, and medium- to high-risk clients are assigned risk ratings and tailored Environmental and Social Action Plans before loans are approved. This is more than paperwork—our Relationship Managers, Credit Risk Management team, Sustainable Finance Department, and other units conduct site visits to ensure sustainability risks are addressed in practice. We've also established strong governance: a dedicated Sustainable Finance Department, help desks in 81 branches, a Sustainable Finance Committee, and oversight by our Board Risk Management Committee. Our green and sustainable finance products cover energy efficiency, renewable energy, green buildings, and SME sustainability, aligning profitability with long-term environmental and social value.
Some examples of our work show how impactful sustainable finance can be. We've financed green buildings, effluent treatment plants, solar energy projects, and energy-efficient machinery, supporting both corporates and SMEs. Equally important, we've trained our employees extensively on ESG and sustainability, which strengthens client engagement and adoption of green finance solutions. Through one-on-one discussions with customers, we've helped them embrace sustainable finance, creating long-term value for communities and the environment.
Looking ahead, I see sustainable finance in Bangladesh evolving dramatically over the next 5–10 years. It will shift from being compliance-driven to becoming a mainstream driver of growth and competitiveness. As Bangladesh approaches middle-income status, traditional financing alone won't meet the needs of infrastructure, affordable housing, healthcare, and climate-resilient development. Innovative and Sustainable Finance mechanisms will unlock new capital linked to social and environmental outcomes. Tools like credit guarantees, first-loss capital, and outcome-based financing will direct funding toward underfinanced sectors while ensuring accountability. Sustainability bonds—green, blue, or gender-focused—will attract both domestic and international investors. At MTB, we aim to lead this transformation by embedding ESG into decision-making, developing innovative financing solutions, and collaborating with regulators and global partners.
My advice to businesses and financial institutions starting their sustainability journey is simple: embed sustainability at the core of your strategy. For businesses, this means adopting resource efficiency, circular economy practices, and strong ESG frameworks from the outset. For financial institutions, building ESG expertise, strengthening ESDD, and training employees at all levels is essential—without skilled people, policies remain only on paper. Finally, collaboration is crucial. Banks, businesses, regulators, and development partners must work together to innovate, align with global standards, and accelerate Bangladesh's transition to a sustainable, inclusive, and resilient economy.
