An evaluation of green banking practices in bangladesh
ENVIRONMENTAL ACCOUNTING CONCEPT AND REPORTING PRACTICE
1. PRESENTED BY:
Md. Abdul Kaium Masud
Assistant Professor
Department of Business
Administration,
Noakhali Science and
Technology University,
Mohammad Sharif Hossain
Uttara University
Saifuddin Khan
Lecturer,
University of Rajshahi,
Rajshahi
2. Environment is not only a word but
also a definition of life. We do not
think about our future generation.
We are so concerned of our business,
property, bank balance, wealth etc.
But who will consume these?
Interestingly, business doesn’t ask to
make the world complex. Every day
we are destroying our environment
and now Bangladesh is the fourth
country with worst urban air quality
in the world (The Daily Star, 2016).
3. Environmental reporting has been a
phenomenon of developed countries
and therefore, most environmental
accounting and reporting studies were
confined to the developed countries
(Belal, 2000) and a handful of studies
concentrated on the newly
industrialized countries such as Korea,
Hong Kong, Malaysia and Singapore and
African countries such as South Africa,
Nigeria and Uganda.
4. Choi 1998, Hossain and Chowdhury, 2014,
Bose Sudipta, 2006, Rahman and
Muttakin, 2005, Belal, A.R (1997,1999),
Gray, Adam has examined different
studies on environmental reporting.
5. The research focuses on the environmental
accounting concepts and reporting practices
of banking sector of Bangladesh. The study
also covers the following specific objectives:
To find out the present environmental
accounting practices of banking sector.
To find out whether the banking companies
have taken any protection on environment.
To observe the position of environmental
information in the annual report.
To observe the legal position of environmental
accounting in Bangladesh.
6. The study is purely based on the
information from secondary data
sources. The reason is that in our
country the use of environmental
accounting and reporting is rare and
in most of the cases, the concept
and understanding is not proactive.
The data collected for the purpose
of the study involves the
examination of annual reports for
the year 2010 and 2014 of selected
banks.
7. The data collected for the purpose
of the study involves the
examination of annual reports for
the year 2010 and 2014 of selected
banks. The study is completely a
descriptive research on
environmental accounting concept
and reporting practices of banking
sector in Bangladesh based on a
small sample size.
8. The banking companies
considered in the study include
twelve scheduled private
commercial banks listed in the
Dhaka stock exchange. In the
study judgment sample has been
used for choosing the sample
banks. Scheduled and listed
banking companies are only
considered for the study.
9. The sample for the study has been taken from
the scheduled private commercial banks of
the country. Bangladesh bank is the central
bank of the country and the chief regulatory
authority in the financial sector. The banking
system is composed of 4 state-owned
commercial banks, 4 specialized
development banks, 35 private commercial
Banks and 9 foreign commercial banks and a
total of 52 scheduled banks.
10. Accounting is a recording process that
collects records and communicates the
necessary information to the different
stakeholders to survive in the society.
EA is concerned with the information of
the organization related with
environment and environmental issues.
Environmental accounting describes
the generation, analysis and use of
monetarised environmental
information in order to improve
organizational environmental and
economic performance.
11. NEED OF ENVIRONMENTAL
ACCOUNTING IN CORPORATE LEVEL:
To understand the overall environmental
performance of the organization.
To identify environmental risks of the
organization.
To know the environmental policy of the
organization.
To measure environmental responsibilities of
the organization.
To assess annual environmental expenditure.
Calculating costs and savings of
Environmental projects.
To show eco-design projects.
12. Investment made into the environment
friendly equipment.
Stopping pollution like soil erosion, loss
of bio diversity, air pollution, water
pollution, problem of solid waste,
coastal & marine pollution.
Working on nonrenewable natural
resources.
Encouraging nonrenewable energy
sector.
Climate change issues.
13. ORGANIZATIONAL BENEFITS OF
PRODUCING ENVIRONMENTAL REPORT:
Organization has benefits of producing
environmental report from internal and external
point of view. It also helps to understand the
internal benefits, such as cost savings,
environmental grants and reward given by
government and other organizations, tax benefits
or revenues generated. On the other hand, the
external environmental costs and benefits are the
impact which the organization’s activity has on
wider society and environment at present and in
the future. It helps to understand the external
environmental impacts such as contamination of
ground water, traffic congestion, and poor urban
air quality (The Daily Star, 2016) and so on
14. Environmental Accounting Concept of
Banking Sector of Bangladesh:
Environmental accounting is a
concept of developing countries and
Bangladesh is far behind of the
concept and reporting. But presently
due to different stakeholders’
pressures, companies are trying to
provide some information in the
annual report. Bank is a financial
organization and non manufacturing
in nature.
15. Mercantile Bank Limited (MBL) 2010 to
2014 states its annual report; the whole
world is increasingly experiencing the
devastating effects of environmental
changes for green house affects due to
global warming. The bank is mindful of its
responsibilities to the future generations
by playing its part in promoting
environmental awareness and in the
conservation of the environment.
16. Export Import Bank Limited (EXIM)
2010 to 2014 described in the
annual report; EXIM bank is
extremely conscious about the
effect of carbon-emission, green
house-effect and global warming
phenomenon. EXIM bank has been
scrutinizing the environmental and
social impacts of various running and
proposed projects
17. Ministry for Forest and Environment,
Department of Forest, Department of
Environment, Planning Commission, Bank
Companies Act 1991, National Environment
Policy, 1992, Financial Institutions Act 1993,
Securities and Exchange Commission Act
1993, Financial Institutions Act,
1993,Companies Act 1994National
Environmental Management Action Plan,
1995, Environmental Conversion Act, 1995,
Environmental Conversion Rules, 1997
18. Environmental Protections Activities
Taken by the Banks:
Name
of Bank
Major Environmental Protective
Functions
Islami
Bank
Banglades
h Ltd.
ETP, Bio-gas plant, Solar Home System, Solar
Panel trades, Bio-ertilizer plant, Tunnel Kiln,
Installation of Zigzag kiln, Waste and hazardous
disposal plant, Waste paper recycling plant,
Waste attery recycling plant, Financing of LED
bulb production, Safe/Clean Water Supply
Projects, Improved cooking stove (Bandhu Chula
Al Arafa
Islamic
Bank Ltd.
Tree plantation, ETP, HHK & Zigzag technology,
Solar panel, Introduces "Green Office Guide" for
In-house Environmental Management.
Brack
Bank Ltd.
Paperless banking, Solar energy, Green financing,
Climate risk fund, Marketing and training &
capacity building, ETP, Solar Panels, Double hull
22. Environmental Accounting would be
the best weapon of the modern
business management to create
accountability in the society as well
as to save the environment from the
present conditions. It can be used
like a mirror of the business
organization to show what impact its
activities can create on society.
23. The study found that environmental
accounting concept and reporting
practices of Bangladeshi banking
companies are upward in trend.
Most of the banking companies are
trying to disclose some
environmental information in the
annual report
24. The performance of disclosing
environmental information and
place of information in the annual
report is poor in the year of 2010
and 2011. Moreover in the period of
2012 to 2014 all banking companies
EAR performance is in strong
position and all banks (100%)
disclosed environmental information
in the annual report
25. More than 90% banking companies disclosed
both financial and nonfinancial information
in the annual report. However on average
more than seventy five percent (75%)
banking companies disclosed environmental
information in the different section of annual
report. It indicates the importance of
management in the matter of EAR. Most of
the banks provide information of
environmental accounting in a separate
section that is highly appreciable.
26. We strongly want to say that
environmental reporting should be made
mandatory in Bangladesh. Banking
companies in Bangladesh should be asked
to submit the detailed environmental
information to the government relevant
institutions specially Bangladesh bank.
Company law, Banking companies law and
Securities and Exchange Commission law
should give the mandatory directions
regarding disclosing EAR