The document discusses green banking practices at United Bank Limited (UBL) in Pakistan. It outlines UBL's policies for promoting environmental sustainability and reducing environmental risks in its operations and lending portfolio. Some key points include: - UBL must comply with the State Bank of Pakistan's guidelines on green banking and reducing banks' environmental impacts. - UBL's green banking activities include environmental risk management, financing renewable energy and resource efficiency projects, and reducing the bank's own carbon footprint. - UBL establishes a Green Banking Department and steering committee to oversee the implementation of green initiatives, including building internal green capacity, awareness campaigns for clients, and modifying internal processes to be more environmentally friendly. -

1. GREEN BANKING
Internal Control Division

2. Green Banking
Internal Control Division
Presenter: Rehan Ahmed

3. GREEN BANKING
Promotion of environmental friendly practices that aid banks and their clients in identifying
and managing environmental risks as well as reducing their carbon footprint and related
socially adverse actions.
As per Green Banking Policy UBL Compliance Circular # 507 Feb 01, 2019 and with reference
to the SBP Circular # 08 dated Oct 09, 2017 issued on Green Banking Guidelines vide IH&
SMEFD.
“SBP required financial institutions to envision Green Banking inculcation of environmental
consciousness as part of organizational culture and reorientation of banking
products/services and operations to reduce environmental impact of banks and the
economy.”

4. ENVIRONMENTAL FRIENDLY PRACTICES
Conserving Water (Refrain from Wastage)
Consuming Less Energy (Solar Energy, Hybrid Energy etc.)
Eating Locally Grown Vegetables (Cost Saving and Revenue Generating)
Combat Air Pollution (Business Proposals)
Buying Recycled Product (To Minimize Wastage)
Creating Less Waste (Promote Recycled Products)
Planting More Tree (Pre-Research Before Planting of Tree)

5. GREEN BANKING ACTIVITIES AT UBL
Green Banking
Activities
Environmental &
Social Responsibility
Business Strategy

6. KEY FOCUS OF ESR IN UBL
Conduct ESR diagnostic – identify gaps and propose improvement action plan based on best practices
and regulatory requirements
Guidelines on developing an ESR framework
Guidelines on cross-functional roles and responsibilities
Guidelines on Own Impact Reduction e.g. moving towards Paperless Environment, Green IT Structure,
Renewable Energy Based ATMs and branches / offices, Resource Efficiency Measures, Waste Reduction
and Migration towards Low Carbon & Climate Resilient operations within the Bank
Guidelines on delegation of responsibilities and management structure

7. BUSINESS STRATEGIES IN UBL
Product
Corporate Portfolio
Sales Channel & Marketing
Organization / HR
MIS / Data Management & Reporting
The key focus of the Green Banking Business strategy would to facilitate the following business areas:

8. GREEN BANKING FUNCTIONS IN UBL
The Business Functions of the Bank:
GB pipeline by identifying opportunities to
finance projects for renewable energy
financing with in the existing clients.
Solar Solution
Resource Efficiency Financing
Green Buildings
The Business Groups shall develop GB
Products a/c to their respective strategies:
Corporate & Investment Banking Group
Branch Banking Group
International Banking Group
Islamic Banking Group

9. GB shall be incorporated in the scope of compliance and routine internal controls.
Appropriate walls shall be established between internal audit functions & Units
Units / lines involved in the day-to-day green banking activities to ensure its independence.
GB Check List shall be developed and made part of our internal audit reports for each branch.
Green Banking Check List shall be developed for Head Office as well.
INTERNAL CONTROLS, AUDIT & COMPLIANCE

10. ENVIRONMENTAL RISKS
which impacts to some one’s business straight away.Direct Risk
• For e.g., If a Bank / DFI holds land as a security and land becomes flooded in case of default bank may not
recover its original value which may result in financial/security risk.
which challenge financial position of a Bank/DFI due to force-majeure on the client.Indirect Risk
• For e.g., the changes in environmental regulation in the importing country may require the exporter to make
unexpected investments which may lead to cash-flow shortfalls
with potentially negative publicity due to their own and their clients’ wrongdoingReputational Risk
• For e.g., In long term and large project finance activities where the management of the project company is in
breach with environmental stipulations. A damaged public image may lead to a loss of future business and will
take a long time to heal.

11. ENVIRONMENTAL RISK MANAGEMENT
GUIDELINES
 The Bank shall adopt Environmental Risk Management (EnvRM) procedures designed to
identify, assess, mitigate and monitor environmental risks arising from operations of a business.
The Bank shall design its General Guidelines and EnvRM system according to the SBP Green
Banking Guidelines while covering the following components.
Environmental Risk Avoidance List
Environmental Risk Management (EnvRM Procedures)
Environmental Due Diligence

12. ENVIRONMENTAL RISK AVOIDANCE LIST
The sources of environmental risks can be very different and even outside the influence of
clients. Usually environmental risk originates from or is inherent to:
 Behavior/Attitude towards Environmental Concerns
 Sector
 Site
 Legal and Regulatory Changes
 Climate Change
 Indirect Clients’ Risks
 Changes in Market Conditions

13. ENVRM PROCEDURES
 EnvRM is defined as risk management procedure designed to identify, assess, mitigate and
monitor environmental risks arising from operations of a business.
 It will enable banks/DFIs to minimize their exposures of foreseeable environmental risks
and, at the same time, provide adequate protection against unforeseeable risks
 EnvRM also entails the chance for a bank/DFI to build stronger relationships with the
clients by shaping their transactions in an environmentally beneficial manner.
 Properly undertaken, environmental risk management may help to reduce the amount of
non-performing assets
 Open up new financing opportunities and improve financial performance of a bank/DFI

14. ENVRM PROCEDURE STEPS
 The EnvRM follows the usual steps of any other credit assessment i.e.
1. Identification of Risk Parameters (EnvDD)
2. Triggers of Risks (EnvDD)
3. Estimate of Potential Risk Consequences (ERR)
4. Employment of Risk Mitigations (Risk Monitoring & Reporting)

15. ENVIRONMENTAL DUE DILIGENCE (ENVDD)
Environmental
Due Diligence
Risk Rating /
Categorization
Monitoring &
Control
Reporting &
Documentation
The EnvDD is a systematic procedure
carried out to assess environmental
implications and their effect on the credit
quality of a particular financing
transaction, at first approval and during
subsequent reviews of performance and
credit standing of the client.
The EnvDD encompasses assessment of
compliance with the environmental
regulations applicable on the prospective
borrower.

16. ESTABLISHMENT OF A GREEN BANKING
DEPARTMENT
 GBD is to be instituted, which will be headed by the Chief Green Banking Manager (CGBM).
 GBD will also employee Green Banking Officers (GBO) to be deputed in various department
for catering all green banking related matters as directed by CGBM.
 GBO in compliance will coordinate with main GBD to ensure latest regulations and
multilateral environmental agreements (MEAs) Pakistan has entered into are complied
with.
 GBD will be established with CGBM reporting to GE-CIBG, and a dotted reporting to the
President / CEO.
 Budget must be allocated so that initiatives may be implemented in letter and spirit.
 The GBD must be enabled to engage consultants established in the field of environment
conservation in the corporate context so as to effectively implement changes.

17. ROLE OF BOARD OF DIRECTORS &
MANAGEMENT
 BoD Shall be responsible for Green Banking at UBL
 BoD shall approve the Green Banking Policy
 BoD with the course of time shall review and approve strategies and budgets.
 Senior and Middle Management shall exercise supervisory actions and instructions to
facilitate gradual adaptation of resource efficient and green culture in the Bank’s
environment attitudes of the employees
 All individual heading business functions or units shall be systematically aligned and held
responsible for environmental impacts of the banking activities they would undertake.

18. IMPLEMENTATION OF GREEN BANKING
Strategy Formulation and Governance:
 A green banking steering committee (GBSC), comprising of senior executives of the bank
 That shall be responsible for implementation of the business model recommendations
within the agreed timeframe.
 The proposed committee should have senior level nominations from the following
Departments / Groups of the Bank:

19. IMPLEMENTATION OF GREEN BANKING
Serial No. Departments / Groups Role
1 Corporate and Investment Banking Chairperson
2 Chief Green Banking Manager Chairperson / Secretary
Member
3 Operations Group Member
4 Banking Product Group Member
5 Credit Risk Management Member
6 Information Technology Member
7 Credit Policy Member
8 Branch / Commercial Banking Member
9 Audit Group Member
10 Compliance Member
11 Human Resource Group Member
12 Finance Member

20. GREEN AWARENESS CAMPAIGNS FOR CLIENTS
The Bank shall devise internal plans for sensitizing their clients and public on environmental issues
through:
 Meetings
 Green Events
 Electronics & Print Media Advertisement
 Seminar and Conference
Internal Capacity Building:
The GBSC shall disseminate green banking policies to:
 Staff
 Clients
 And Other stakeholders

21. IN-HOUSE ENVIRONMENT MANAGEMENT
UBL needs to modify its internal processes, systems and infrastructure in order to minimize
negative impact on the environment. This includes, but is not limited to, the list below:
 Develop or implement systems to minimize the usage of paper in the organization.
 Reduce reliance on fossil fuels for back-up power i.e. promoting usage of solar power at
Bank premises.
 Use scrap/recycled paper in notepads; establishing two-sided printing as a uniform
practice.
 Encourage teleconferencing to reduce transport cost.
 Implement controls for auto-shutdown of equipment such as computers, scanners, lights,
fans etc.
 Introduce ATMs which are powered by renewable energy
 Establish flagship “Green branches/ offices” * The ‘green branches/offices’ are the
branches/offices which meet 50% or more of their energy needs from renewable energy
sources (like installation of photovoltaic solar panels), use energy efficient lights &
equipment and employ technologies for efficient use of water and other resources.

22. BENEFITS TO UBL
Benefits apart from the obvious gains to society from going green, the Bank will also
benefit from the initiative by the following means:
 Improving the image of the bank with respect to Corporate Social Responsibility
 Develop a climate related / eco-friendly corporate and consumer portfolio
 Productive yields would be generated from incremental financing and cross sell under the
Green Banking portfolio
 Reduce miscellaneous overhead costs pertaining to usage of paper/ office stationery,
energy, water as well as transport cost
 Enhance productivity and skills of employees by implementing latest technologies and
systems
 Reduce eco and bio health hazards by installing ecofriendly equipment
 Reduce NPLs by factoring environment risk in proposals

23. CONCLUSION
 Need to adopt Environmental Friendly Approach
 Need to manage Environment Risks
 Reduce Carbon Footprints
 Reduce Socially Adverse Actions
 By coping up above approaches UBL will get benefits and help in improving its market
image in a more positive way
 Assist in Cost cutting
 Help industry and environment grow in positive way
 Maximize the value of the bank

24. GLOBAL WARMING
 Global Warming and its precautionary measures:
https://youtu.be/oJAbATJCugs

25. QUESTIONS?