Green Banking – A Conceptual Approach For Future Sustainability
- Author Sarvjot Dhunna
- Co-Author Sonia Dara
- Country : India
- Subject : Commerce
According to a recent study by Javelin Strategy and Research, bank customers loved this idea. 43% of customers polled said they would rather do business with a bank that seems more "green." It's true that monthly paper statements have a big impact. If every household in the US were able to switch to paperless billing, this would save an estimated 16.5 million trees per year or about 46,000 acres (there are about 360 trees per acre). Trees protect watersheds, support wildlife habitats, and build soil fertility while sequestering carbon (deforestation is now the 2nd leading cause of global warming).But there’s a problem here.
While we can all agree that preventing deforestation by encouraging paperless billing is great for the environment, the implication that by doing so, a bank is obviated from its environmental responsibility and can now call itself “green” strains credibility. What does it matter if you save a few thousand trees in North America while funding dirty coal operations like Citibank or deforestation in the Congo like HSBC? True “green banking” is about WHERE the bank puts its money. Whether you open a savings account, CD, or IRA, the bank can then use your money as it pleases to build up its equity. So you had better make sure you know what the bank’s investment strategies are. Unfortunately, it is quite difficult to sort out. Even despite vows that HSBC and the World Bank would “...not provide facilities and other forms of financial assistance for logging operations that are in violation of local or national laws in respect of illegal logging," they had no problem lending money to a Singapore-based trading group called OLAM, which in turn did fund the illegal logging operations. The present paper study about some green banking practices. Banks can introduce green funds for customers who would like to invest in environment friendly projects. According to this paper Green banking will help to improve the asset quality of the banks. Green banking means promoting environmental friendly practices and reducing your carbon footprint from banking activities.
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