Sustainable Banking for a Greener Future

Abstract

This paper discusses the origins and growth of sustainable banking, how it differs from conventional banking, how sustainable banking is operationalised, how they can be structured and concludes with the imperatives of sustainable banking. The 20th century has seen massive economic progress more than humankind has seen in the past. However, this has had side effects of biodiversity loss, climate change, and environmental pollution. Social issues like poverty and unequal economic development have been pervasive. The 21st century has seen the problems of sustainability and climate crisis take centre stage. Two factors have led to the climate crisis – producers’ unsustainable business practices and consumers’ consumption practices (Taneja and Ali 2021). Mitigating the impact of the climate crisis requires two tools – technology and finance. Given that banking is a significant source of funding for companies to transition to green businesses. At the same time, developing technology is also costly. While the primary funding source for technology development is the government, banks play no less a part. Sustainable banking has emerged from these needs.