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Table 2 Green banking policy interventions around the world

From: Transition towards green banking: role of financial regulators and financial institutions

 CountryName of InstitutionType of InterventionConceptCode of Conduct
Developing countriesBangladeshBangladesh Bank1. Green central bank financing
2. Lending quotas
3. Environmental risk management guidelines
1. Exclusive refinancing windows to encourage green finance initiatives
2. Requires all banks to have at least 5 % of their portfolio in green finance
3. Mandates banks to formulate their own environmental and social (E&S) risk management framework and introduced E&S risk assessment tool
Mandatory
Brazil1. Banco Central do Brasil
2. Ministry of the Environment, Brazilian Federation of Banks
1. Resolutions
2. Protocol verde
1. Require financial institutions to assess their activities’ exposure to E&S risks and formalize an E&S policy for all their activities and issue guidelines on how to implement the policy
2. The commitment of state-owned banks and commercial banks to voluntary green guidelines
1. Mandatory
2. Voluntary
ChinaPeople’s bank of China; China Banking Regulatory CommissionGreen credit guidelinesRequire banking institutions to report loan balances in 12 green sectors based on international sustainability standards and established a monitoring and evaluating system for green creditMandatory
ColombiaAsobancaria (Association of Banks)Green protocol and environmental and social risk management guidelinesRequire the formalization and implementation of an E&S policy, and require clear E&S performance standards, examples, and toolsVoluntary
IndiaReserve Bank of IndiaLending quotasRequire a minimum proportion of bank lending to climate and environment-related sectorsMandatory
IndonesiaOJKSustainable finance regulationsImpose financial institutions to apply sustainable finance in their business activitiesMandatory
LebanonBanque du Liban1. Green prudential regulation policy
2. Differential capital requirements for green projects
1. Incorporation climate, environmental and sustainability considerations into regulation
2. Incentivize banks to increase their loan portfolio in renewable energy and energy efficiency by exempting them from part of the required reserves to finance RE and EE projects at low cost
Mandatory
MongoliaMongolian Bankers Association; Bank of MongoliaSustainable finance principlesHelp banks integrate E&S considerations into lending decisions and product designVoluntary
NepalNepal Rastra BankGuideline on environmental & social risk management for financial institutionsHelp financial institutions evaluate the environment and social risks that could arise from transactionsMandatory
NigeriaCentral Bank of NigeriaNigerian sustainable banking principlesRequire the formalization of an ESG policy, providing financial institutions with 3 additional sector guidelines for the most sensitive sectors (oil & gas, power and agriculture).Mandatory
PakistanState Bank of PakistanGreen Banking GuidelinesProvide guidelines to banks and development financial institutions for environmental risk management, green business facilitation and own impact reduction.Voluntary
VietnamState Bank of Vietnam2015 Directive; 2016 Circular; 2018 SchemeRequire credit institutions to formalize their E&S risk management policies and report to the central bank and encourage lending to green projectsMandatory
Developed countriesBelgium, Sweden, U.K. Disclosure of climate-related financial risksEncourage information disclosure by firms and investorsVoluntary
FranceGovernment authorities and regulators such as AMFDisclosure of climate-related financial risksEnforce information disclosure by listed firms, banks and credit providers and investors under the France’s Energy Transition Law for Green GrowthMandatory
JapanBank of JapanGreen central bank financingProvide concessional loans to banks that lend to environment and energy businessMandatory
The NetherlandsDNBConsideration of ESG factors in asset eligibility criteriaConsider ESG aspects when purchasing assets and accepting collateralsVoluntary
NorwayNorges BankConsideration of ESG factors in asset eligibility criteriaConsider ESG aspects when purchasing assets and accepting collateralsVoluntary
  1. Source: CCCU (2014); Volz (2017); Campiglio et al. (2018); IFC (2018a, 2018b); TCFD (2018); Dikau and Volz (2018)