One of the world’s most densely populated countries and located in a low-lying delta, Bangladesh is highly vulnerable to climate change, experiencing floods, cyclones, increasing coastal erosion and rising temperatures. Climate calamities cause an average annual loss of nearly US$3bn, affecting more than 6.3 million people. By 2050, rising sea levels could submerge 17% of the country’s land, wiping out 30% of food production.
It’s a pressing situation that is forcing a shift in the country’s dynamic business landscape towards sustainable finance. And younger generations are at the forefront of this change.
‘I try to think about the bigger picture’
More than 70% of millennials and Gen Z worldwide show interest in sustainable investing – and Bangladesh is no different. ‘This value-driven thinking is increasingly apparent where climate change is not an abstract issue but a reality interposed by floods, sea-level rise and extreme weather,’ says Hamidul Islam FCCA, a partner at EY Bangladesh. As younger professionals accelerate change and advocate for environmental, social and governance (ESG) adoption, Islam believes that they are establishing emissions baselines, drafting transition plans, and posing tough questions about behaviour within organisations.
Respond to demand
Zahidul Alam, head of finance at BRAC International, suggests that strong regulatory action and rising demands of younger generations are driving a change in how businesses approach sustainability, observing a ‘genuine shift from sustainability being a quick CSR (corporate social responsibility) cleanup job to becoming an integrated financial strategy.’ Organisations are moving from seeing sustainability as just ‘a policy point to a crucial risk management strategy’.
A key driver is the Bangladesh Bank’s mandate, which enforces an ESG-based risk management framework. ‘Climate risk is credit risk,’ Alam says, adding that mandatory sustainable finance targets influence businesses to adopt green initiatives. Bangladesh’s export sector, too, depends on EU and US markets, which demand ESG compliance. For banks serving big corporations, it makes it a competitive necessity to offer green loans for exchange-traded products and solar-power projects.
Shift in focus
Gen Z and millennials, as both clients and employees, are ‘increasingly filtering their support based on a company’s commitment to climate action,’ Alam adds. They are both ‘critical talent in the workplace and ethical investors.’
As investors, young Bangladeshis are starting to look beyond traditional assets such as real estate and savings certificates. Instead, they are showing a growing interest in green bonds, ESG-linked products and impact-oriented investments, which have become easier now with the rapid expansion of digital financial services in Bangladesh.
‘Even small things like cost-saving measures or investment advice can have a ripple effect’
These preferences demand and influence banks and financial institutions to ‘offer credible sustainable finance products and avoid greenwashing,’ says Islam, who notes that young people ‘expect transparency, measurable impact and responsible corporate behaviour’, which helps influence institutional culture within.
Creating change
Having grown up seeing the impact of climate change, 25-year-old Ahnaf Tahmid, an associate at EY Bangladesh, believes that businesses need to take a broader, climate-informed approach and factor in ‘long-term strategies through diversifying portfolios and ESG-conscious decision-making’, he says.
Young professionals, Tahmid explains, are more aware of ESG integration in audit and financial reporting while pushing for ethical corporate behaviour, greener investment strategies and clear disclosures. His generation, he believes, is ‘trying to create change’ by incorporating a value-driven mindset ‘while continuously challenging outdated practices and proposing innovative solutions that are aligned with global sustainability goals.’
For Rishad Ahmed, also 25, a global finance assistant at Vogue Sourcing Bangladesh, this increasing awareness of green finance has changed the way he looks at financial decisions. ‘I try to think about the bigger picture, like how financial choices might affect people, communities or the environment. Even small things like cost-saving measures or investment advice can have a ripple effect. So when I make recommendations or give input, I try to balance profitability with responsibility.’ Finance professionals, Ahmed notes, have a bigger influence than they realise in shaping how businesses act.
‘We need to build reliable market infrastructure that rewards long-term sustainable behaviour’
Seeking solutions
While Bangladesh’s development sector works towards creating seasonal loans and climate-resilient finance products tailored to local needs, Alam notes that financial institutions and corporations are still behind. Dhaka-based companies are geographically insulated and tend to treat sustainability as a compliance checklist rather than a strategic opportunity. The way forward is to develop market-driven products like parametric insurance tied to flood levels.
Long-term approaches are essential, too, with ‘de-risking tools such as loan guarantees or low-rate refinancing for climate-resilient projects’, Alam says. ‘We need to build reliable market infrastructure that truly rewards long-term sustainable behaviour, not just short-term compliance.’
Young investors who continuously seek purpose-driven capital are often met with challenges like existing bureaucracy and a lack of reliable, accessible green investment products in the market. Fintech, Tahmid says, can bridge these gaps in ethical investing, with platforms offering transparent ESG ratings and educational content tailored towards young investors.
Regulators and accounting firms can further help young professionals take the lead in sustainability, Ahmed adds. This includes expanding practical learning on green finance and ESG reporting, as well as involving junior staff in sustainability projects.
As young professionals, clients and investors are increasingly tackling difficult questions about environmental and social impact, the next few years will be crucial for Bangladesh. ‘We’ll see a real shift from doing it because we have to, to doing it because it makes a long-term impact,’ says Ahmed.
