As sustainability gains momentum globally, IDLC Finance has emerged as a frontrunner in Bangladesh’s financial sector.
For the fifth consecutive year, the company has secured the top position among non-banking financial institutions (NBFIs) in Bangladesh Bank’s 2024 Sustainability Rating, reflecting its unwavering commitment to Environmental, Social, and Governance (ESG) principles.
The recognition highlights IDLC’s effort to integrate sustainability into its core operations and lending practices, enhancing both business resilience and national development.
“We treat sustainability as a central element of our operations,” said Bangladesh’s largest NBFI’s Managing Director and CEO M Jamal Uddin.
Rather than treating it as a standalone program, IDLC embedded it into our lending practices and the long-term value we create for communities.
“Our strategy is based on the conviction that responsible financing is vital for both business resilience and national development,” he said in an interview with TIMES of Bangladesh.
Committed to sustainable finance
IDLC’s achievements in sustainable finance are significant, with 37.82 per cent of its total disbursements in 2024 allocated to sustainable finance, well above Bangladesh Bank’s regulatory target of 20 per cent.
In addition, 13.47 per cent of its term loan disbursements were directed at green finance, nearly triple the mandated 5 per cent.
These numbers demonstrate IDLC’s leadership in sustainable finance, proving its dedication to exceeding expectations rather than just meeting regulatory requirements, said Jamal Uddin.
“Sustainability is not just about numbers. It’s about making a tangible, measurable difference in communities. At IDLC, we aim to drive positive outcomes in both business and society,” said Jamal Uddin.
By the end of 2024, IDLC’s sustainable finance portfolio reached Tk3,987 crore, with its green finance portfolio standing at Tk1,247 crore.
Advancing green and sustainable solutions
IDLC’s approach to sustainability is focused on creating innovative solutions while meeting regulatory targets. The company has pioneered several financing mechanisms to address key environmental challenges in Bangladesh.
For example, ‘Energy Efficient Machinery Financing’ helps businesses transition to energy-efficient equipment that reduces power consumption, minimises waste, and enhances competitiveness in global markets.
Additionally, IDLC has made significant strides in financing renewable energy projects and effluent treatment plants (ETPs), enabling industries to reduce pollution and preserve water resources.
Through its ETP projects, IDLC has actively contributed to reducing river pollution, helping businesses comply with local regulations and global sustainability standards.
Financing for women, SMEs, and inclusivity
IDLC’s commitment to inclusivity is evident in its financing solutions targeting underrepresented groups, such as women entrepreneurs and marginalized communities.
One notable example is ‘IDLC Purnota’, a loan product specifically designed for women entrepreneurs, supporting Sustainable Development Goal (SDG) 5.
By empowering women to pursue business ventures, IDLC is contributing to the economic empowerment of women across Bangladesh.
The company’s Online DPS via bKash initiative also promotes financial inclusion to achieve SDG 1 and 10 by facilitating savings and investment for low- and middle-income households, directly benefiting marginalized populations.
Additionally, IDLC’s green financing for small and medium-sized enterprises (CMSMEs) supports eco-friendly practices, aligning with Bangladesh’s broader sustainability goals.
A unique governance framework
IDLC’s sustainability initiatives are underpinned by a comprehensive governance structure that ensures specialised oversight and integration of ESG practices throughout the organization.
The company operates through a Sustainable Finance Unit (SFU), a Sustainable Finance Committee (SFC), and a Green Banking Unit (GBU) to oversee its sustainability agenda and ensure that each lending relationship undergoes thorough environmental and social due diligence.
“We have a dedicated governance framework in place to ensure that sustainability is deeply integrated into every aspect of our business operations,” said M Jamal Uddin.
This governance structure is further reinforced by IDLC’s membership in UNEP-FI, PRB, CCCA, and the Net-Zero Banking Alliance (NZBA), emphasising the company’s alignment with global sustainability standards.
In line with the Paris Agreement, IDLC has committed to achieving net-zero emissions by 2050. The company has already begun measuring its greenhouse gas (GHG) emissions—both direct and indirect—and intends to continue monitoring these emissions to achieve its long-term sustainability goals.
IDLC’s CSR initiatives: sustainable social impact
IDLC’s commitment to sustainability extends beyond financial products to its Corporate Social Responsibility (CSR) initiatives, which focus on healthcare, education, disaster relief, and women’s empowerment.
One significant initiative is the 20-bedded chemotherapy unit at Chattogram Ma-O-Shishu Cancer Hospital, which provides life-saving treatment to over 10,000 marginalized cancer patients.
In the area of women’s empowerment, IDLC supports underprivileged women with scholarships to help them pursue higher education and gain financial independence.
The company has also installed community water points in flood-prone areas, ensuring that vulnerable communities have access to safe drinking water, particularly during natural disasters.
These initiatives address immediate needs while contributing to long-term social development.
Measuring impact and achieving goals
IDLC’s commitment to sustainability is evident in its measurable impact across various sectors.
In 2024, the company allocated its green finance disbursements across several key sectors, including 42.40 per cent of the total in energy and resource efficiency, 17.90 per cent in environment-friendly establishments, and 8.70 per cent in renewable energy.
Other notable allocations include information and communication technology and liquid waste management, both critical for Bangladesh.
By measuring and reporting its sustainable finance impact, IDLC ensures that its goals remain achievable, transparent, and aligned with both national priorities and global frameworks.
This comprehensive approach positions the company as a leader in the green finance sector and sets a model for other financial institutions in Bangladesh.
The roadmap ahead
IDLC’s sustainability strategy is structured around clear, actionable goals for the short, medium, and long term.
In the short term, IDLC plans to expand its sustainable finance offerings across high-impact sectors, while enhancing internal measurement and reporting capabilities.
“We aim to strengthen our internal capabilities for measurement and reporting, ensuring that our sustainability practices are both measurable and impactful,” said M Jamal Uddin.
In the medium term, IDLC intends to increase its financing for clean technology adoption, renewable energy growth, and sustainable agriculture, with a focus on supporting CMSMEs in transitioning to greener practices.
The company aims to drive transformation within key sectors, promoting the adoption of sustainable practices across the economy. In the long term, IDLC’s goal is to align with the Net-Zero Banking Alliance, reducing emissions across key sectors.
The company has committed to achieving net-zero emissions by 2050 and plans to implement restrictive financing policies for sectors that fail to adopt sustainable practices.
As IDLC Finance continues to innovate in the sustainable finance sector, its vision remains to integrate environmental responsibility into every product and service, creating long-term value for stakeholders while contributing to Bangladesh’s green economy.
“We are deeply committed to building a sustainable future, not only for our business but also for the communities we serve,” said M Jamal Uddin. “Sustainability is not an option for us—it is essential to our mission of fostering a greener, more resilient Bangladesh.”
