Sustainable financing by banks fell by 8.23 percent in the July-September quarter compared to the preceding quarter, showed Bangladesh Bank data.

At the end of the three-month quarter in September, banks had lent Tk 32,296 crore for sustainable projects, down from Tk 35,196 crore recorded in the April-June quarter.

Industry insiders said overall loans disbursement usually slows ahead of national elections, which was scheduled to be held on January 7 next year.

That is why banks are adopting a go-slow strategy in disbursing loans for sustainable projects too, they added.

The loan disbursements for sustainable projects amounted to Tk 39,987 crore in the October-December quarter last year.

Sustainable finance encompasses environmental, social, governance, and economic aspects, while green finance specifically addresses climate finance but excludes social and economic aspects.

A good portion of green finance is directed toward energy efficiency initiatives in textile factories and the establishment of green factories, as exporters aim to reduce carbon emissions to attract international buyers, as per the central bank officials.

They also said the banking sector was a significant source of financing for industrial projects such as steel, paper, cement, chemicals, fertilisers, power and textiles, which were major contributors of carbon emissions.