Evaluation of branch-level green banking in Bangladesh through life cycle assessment approach
Abstract Green banking is becoming an everyday practice around the globe, similar to developing nations like Bangladesh. This study aims to assess the banking system's environmental burden by leveraging Life Cycle Assessment (LCA), a methodology widely used for environmental footprint assessmen...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Springer
2025-07-01
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| Series: | Discover Applied Sciences |
| Online Access: | https://doi.org/10.1007/s42452-024-06288-0 |
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| Summary: | Abstract Green banking is becoming an everyday practice around the globe, similar to developing nations like Bangladesh. This study aims to assess the banking system's environmental burden by leveraging Life Cycle Assessment (LCA), a methodology widely used for environmental footprint assessment. The study pioneers the formation of a comprehensive Life Cycle Inventory (LCI) for the banking system in Bangladesh, distinguishably comparing the environmental footprints of urban versus rural and private versus public banks. This national Life Cycle Inventory not only compares the environmental performances of urban versus rural and private versus public banks but also serves as a crucial stepping stone for future research in sustainable banking practices. This study follows the ISO framework to conduct LCA of the banking system in Bangladesh at different branch levels. The total deposit of money per year in million BDT is considered as a functional unit and activities conducted inside a branch within the country are considered as System Boundary. In the assessment, OpenLCA is used for modeling while ReCiPe-2008 is used for assessing the lifecycle impact of the entire process. The study results reveal that Marine ecotoxicity is the primary contributor (1.1 kg 1,4 -DCB) to the overall banking system in Bangladesh, followed by freshwater ecotoxicity (0.81 kg 1,4-DCB) and Human carcinogenic toxicity (0.61 kg 1,4-DCB. However, the Global warming potential is identified as 27.22 kg CO2-eq for every million BDT deposited in an economic year. The hotspot analysis of the study indicates that in most impact categories, electricity production has the most significant environmental footprint. However, computer use and fossil fuel production play a noteworthy role in the categories of human non-carcinogenic toxicity and fossil resource depletion, because of their wide range of materials used in production. The study concludes that public and rural commercial banks pose more loopholes to improve greener banking practices as public banks and rural branches serve more customers with fewer facilities over a large area. It offers actionable options for policymakers and financial institutions, with substantial insights, guiding them to thrive in their operation in a direction where economic prosperity and environmental sustainability are in harmony. |
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| ISSN: | 3004-9261 |