Sustainable Banking Redefined: BRAC Bank’s Holistic Approach to People, Planet, and Prosperity8 min read

1. The Foundation of Values-Based Banking

BRAC Bank’s journey into sustainability is anchored in its membership with the Global Alliance for Banking on Values (GABV), making it the sole Bangladeshi bank in this global network of values-based banks. This commitment means the bank’s operations and services focus on maximizing social, economic, and environmental benefits, going beyond traditional banking objectives.

• Inclusivity at the Core: BRAC Bank’s dedication to inclusivity is evident in its range of financial products designed to empower marginalized communities, particularly women. Through its flagship initiative ‘TARA,’ BRAC Bank offers specialized financial services for women entrepreneurs, providing not only credit but also training programs and mentorship. This holistic approach ensures that women in Bangladesh have access to resources and knowledge necessary for business growth and economic empowerment.
• Environmental Responsibility Embedded in Operations: BRAC Bank’s values-based approach extends to its environmental responsibility. The bank offers an array of green finance products targeted at industries such as renewable energy, sustainable agriculture, and eco-friendly business practices. In 2023 alone, BRAC Bank disbursed BDT 25,667 million in green finance, significantly exceeding industry norms and regulatory expectations. This proactive stance highlights the bank’s commitment to promoting sustainable economic development across Bangladesh.
• Fostering Economic Prosperity: A crucial component of BRAC Bank’s strategy is its emphasis on cottage, micro, small, and medium-sized enterprises (CMSMEs). Recognizing the pivotal role of CMSMEs in Bangladesh’s economy, BRAC Bank has structured its lending portfolio to support these businesses. The bank’s focus on CMSMEs is underscored by its achievement of disbursing over BDT 1 trillion in loans since its inception, reaching one million CMSME customers in 2023 alone. This focus not only stimulates economic growth but also supports Bangladesh’s broader development goals.

2. Governance, Strategy, and Risk Management in Sustainability

Sustainability at BRAC Bank is not an afterthought; it is a well-governed, strategic focus with dedicated oversight mechanisms.

• Sustainability Governance Framework: The bank’s governance structure ensures that sustainability initiatives are deeply integrated into its business model. The Sustainable Finance Committee, led by the Deputy Managing Director (DMD) and Chief Operating Officer (COO), monitors and steers these initiatives. This committee is responsible for aligning sustainability targets with broader business goals, ensuring transparency and adherence to global best practices.
• 2024 Sustainability Goals and Strategic Focus: BRAC Bank has set ambitious targets for 2024, aiming to expand its internal ESG (Environmental, Social, and Governance) expertise and digital offerings to minimize its environmental impact and enhance customer service. By focusing on responsible banking and expanding sustainable financial products, BRAC Bank is positioning itself as a leader in sustainable finance within the region.
• Comprehensive Risk Management: To navigate the complexities of sustainable finance, BRAC Bank employs global frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Partnership for Carbon Accounting Financials (PCAF). These frameworks guide the bank in identifying and managing climate-related risks, ensuring that the bank’s operations remain resilient and aligned with its sustainability commitments.

3. Environmental Stewardship: Green Finance and Emission Reduction

BRAC Bank’s environmental strategy is multi-faceted, focusing on green finance initiatives and carbon emission reduction efforts:

• Expanding Green Finance Portfolio: In collaboration with Bangladesh Bank, BRAC Bank offers green finance options through initiatives like the Technology Development Fund (TDF) and the Green Transformation Fund (GTF). These initiatives provide low-cost loans to businesses adopting sustainable practices, thus incentivizing green technology adoption and environmentally friendly business models.
• Measuring and Reducing Emissions: A pioneering effort in the Bangladeshi banking sector, BRAC Bank was the first to report greenhouse gas (GHG) emissions from its business loan portfolio (scope 3). This comprehensive disclosure is part of the bank’s broader commitment to transparency and environmental responsibility. Additionally, BRAC Bank tracks and reports emissions from its internal operations (scopes 1 and 2), showcasing a holistic approach to carbon accounting.
• Digital Transformation for Environmental Benefits: The bank’s emphasis on digital solutions, such as the Astha mobile app and the CorpNet platform, promotes a transition to paperless banking. By facilitating over 21.15 million digital transactions in 2023, BRAC Bank not only enhances customer convenience but also significantly reduces its carbon footprint associated with traditional banking methods.

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4. Social Impact: Financial Inclusion and Community Development

A central pillar of BRAC Bank’s sustainability efforts is its commitment to enhancing social welfare and financial inclusion:

• Focus on CMSME Lending for Economic Growth: With 45% of its lending portfolio dedicated to CMSME clients, BRAC Bank’s impact on grassroots economic development is profound. The bank’s network of 1,094 agent banking outlets ensures that even the most remote populations have access to formal financial services. This extensive reach plays a critical role in promoting financial inclusion across rural and semi-urban areas.
• Empowering Women through ‘TARA’: The ‘TARA’ initiative is a comprehensive program designed to support women entrepreneurs with tailored financial products and capacity-building opportunities. Through partnerships with educational institutions and international organizations, BRAC Bank offers training programs such as ‘Uddokta 101,’ which provide women with essential business skills, contributing to the growth of women-led enterprises and enhancing their socio-economic status.
• Commitment to Corporate Social Responsibility (CSR): BRAC Bank’s CSR efforts are targeted at addressing critical societal needs. In 2023, the bank allocated BDT 112 million towards healthcare, education, and disaster relief initiatives. Furthermore, the bank launched a dedicated fund focused on agricultural and climate adaptation projects, benefiting over 9,000 marginalized families in rural regions.

5. Innovative Finance Products for Sustainability

BRAC Bank’s approach to sustainable finance goes beyond traditional banking products, incorporating innovative solutions that address the evolving needs of its diverse customer base:

• Sustainability-Linked Finance: With a sustainable finance portfolio serving nearly 168,000 customers, BRAC Bank has disbursed BDT 237,000 million through innovative products such as the Tally Loan ‘Druti.’ This mortgage-free, unsecured loan is designed for small traders, providing them with quick access to capital and fostering financial inclusion among unbanked communities.
• Agriculture-Focused Finance Programs: Recognizing the vital role of agriculture in Bangladesh’s economy, BRAC Bank has introduced products like the Smart Farmer’s Card, launched in 2023. This card offers farmers an easy and efficient way to manage their finances digitally, supporting sustainable agricultural practices while enhancing financial literacy among rural populations.
• Digital Solutions for Enhanced Access and Efficiency: The launch of the ‘ASTHA’ super app and other digital services like Subidha, a digital lending platform, illustrate BRAC Bank’s commitment to using technology for sustainability. These platforms not only offer convenience and efficiency to customers but also contribute to environmental goals by minimizing the need for physical banking infrastructure and reducing carbon emissions.

6. Aligning with Global Standards for Transparency

Transparency is at the heart of BRAC Bank’s sustainability strategy, demonstrated by its adherence to global standards and frameworks:

• Global Reporting Initiative (GRI) Compliance: To ensure comprehensive and accurate ESG reporting, BRAC Bank follows the GRI standards. These standards provide a transparent view of the bank’s performance, allowing stakeholders to understand its impact on various sustainability dimensions. The bank also integrates TCFD and PCAF guidelines into its disclosures, particularly for climate-related risks, thus enhancing the transparency and credibility of its reports【5†source】.
• Commitment to the United Nations Global Compact (UNGC): As a signatory to the UNGC, BRAC Bank aligns its operations with the UN’s ten principles, focusing on human rights, labor standards, environmental protection, and anti-corruption efforts. This alignment demonstrates the bank’s comprehensive approach to sustainability, ensuring that it adheres to the highest standards of corporate responsibility.

7. Partnerships, Awards, and Industry Leadership

BRAC Bank’s leadership in sustainability is further cemented through strategic partnerships and recognitions that validate its efforts:

• Strategic Collaborations for Impact: The bank partners with international organizations, NGOs, and local institutions to amplify its sustainability impact. Through these collaborations, BRAC Bank conducts training programs for women entrepreneurs, especially in remote regions like the Chattogram Hill Tracts, fostering economic empowerment and financial literacy.
• Recognitions and Industry Accolades: BRAC Bank has been recognized as one of the top sustainable banks in Bangladesh for four consecutive years by the Bangladesh Bank. Moreover, the bank achieved a notable milestone by topping the Bloomberg Sustainability List in 2023, becoming the only Bangladeshi bank to receive this recognition. Such accolades affirm BRAC Bank’s position as a leader in the sustainability space and its commitment to setting industry benchmarks

Through continuous innovation, strategic partnerships, and a steadfast focus on people, planet, and prosperity, BRAC Bank demonstrates that financial institutions can be powerful agents of positive and transformative change. By redefining the role of banks in society, BRAC Bank sets the stage for a future where sustainable development and economic growth are intrinsically linked.

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