The first International Conference on Economics and Banking (ICEB-15), organized by the Ekuitas School of Business, Indonesia brings about the implementation of “green” initiatives that had been disseminated to public society by the government, the businesses, and related parties. The "green" element refers to the four elements of life which are the universe, human welfare, economy, and society.
It also occurs in the realm of banking with "Green Banking" terminology. Green banking definitions also vary. Including the term "ethical banking" which has the same meaning, “Green Banking” is an effort by the banks to make the industries grow green and in the process restore the natural environment. This concept will be mutually beneficial to the banks, industries, and the economy. It is not only ensuring the greening life of the industries but also facilitating to improve the bank’s asset quality in the future. Internationally, there is growing concern about the green financing. World institutions such as UNEP, UNESCO, and the International Finance Corporation (IFC) –one of Worldbank’s subsidiaries – had a few years to develop online training programs on various aspects in green financing.
Green banking is becoming a long-term business strategy, besides gaining profit but also building sustainability and social responsibility. It is arguably green banking in terms of marketing 3.0 , which is marketing based on values and the human spirit, in the realm of banking marketing. Encouraging enviromentally responsible investment and prudent lending will lead to higher quality loan portfolio and result in higher earnings.
Pratically, regarding environmental protection, it matters that in involving the banking sector, Indonesia is not lagging behind its neighboring countries. BNI and Bank BJB are signatory to UNEPFI (United Nations Environment Programme Finance Initiative) of initiative statement to promote sustainable development within the framework of market mechanisms toward common environment goals. But without strong and adequate government regulation, it can be counterproductive, due to diversification matters such as screening and limiting their costumer, futhermore the operating expenses will be higher due to hiring specialized employee with higher skills and expertise in green business. The Philippines is one country that is quite actively preparing its financial sector to help the country move towards the implementation of the concept of a green economy.
Herry Achmad Buchory
Martha Fani Cahyandito