Table 2 Green banking policy interventions around the world
From: Transition towards green banking: role of financial regulators and financial institutions
| Â | Country | Name of Institution | Type of Intervention | Concept | Code of Conduct |
|---|---|---|---|---|---|
Developing countries | Bangladesh | Bangladesh Bank | 1. 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 |
Brazil | 1. 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 | |
China | People’s bank of China; China Banking Regulatory Commission | Green credit guidelines | Require banking institutions to report loan balances in 12 green sectors based on international sustainability standards and established a monitoring and evaluating system for green credit | Mandatory | |
Colombia | Asobancaria (Association of Banks) | Green protocol and environmental and social risk management guidelines | Require the formalization and implementation of an E&S policy, and require clear E&S performance standards, examples, and tools | Voluntary | |
India | Reserve Bank of India | Lending quotas | Require a minimum proportion of bank lending to climate and environment-related sectors | Mandatory | |
Indonesia | OJK | Sustainable finance regulations | Impose financial institutions to apply sustainable finance in their business activities | Mandatory | |
Lebanon | Banque du Liban | 1. 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 | |
Mongolia | Mongolian Bankers Association; Bank of Mongolia | Sustainable finance principles | Help banks integrate E&S considerations into lending decisions and product design | Voluntary | |
Nepal | Nepal Rastra Bank | Guideline on environmental & social risk management for financial institutions | Help financial institutions evaluate the environment and social risks that could arise from transactions | Mandatory | |
Nigeria | Central Bank of Nigeria | Nigerian sustainable banking principles | Require 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 | |
Pakistan | State Bank of Pakistan | Green Banking Guidelines | Provide guidelines to banks and development financial institutions for environmental risk management, green business facilitation and own impact reduction. | Voluntary | |
Vietnam | State Bank of Vietnam | 2015 Directive; 2016 Circular; 2018 Scheme | Require credit institutions to formalize their E&S risk management policies and report to the central bank and encourage lending to green projects | Mandatory | |
Developed countries | Belgium, Sweden, U.K. | Â | Disclosure of climate-related financial risks | Encourage information disclosure by firms and investors | Voluntary |
France | Government authorities and regulators such as AMF | Disclosure of climate-related financial risks | Enforce information disclosure by listed firms, banks and credit providers and investors under the France’s Energy Transition Law for Green Growth | Mandatory | |
Japan | Bank of Japan | Green central bank financing | Provide concessional loans to banks that lend to environment and energy business | Mandatory | |
The Netherlands | DNB | Consideration of ESG factors in asset eligibility criteria | Consider ESG aspects when purchasing assets and accepting collaterals | Voluntary | |
Norway | Norges Bank | Consideration of ESG factors in asset eligibility criteria | Consider ESG aspects when purchasing assets and accepting collaterals | Voluntary |