Green Finance Practices by Nepalese Commercial Banks: Fostering Sustainable Development in Nepal

Abstract

Intending to integrate environmental, social, and governance (ESG) issues into financial choices, the global financial landscape has changed its growing pressure for sustainable development. Recently, green finance practices are gaining popularity as a key strategy in many countries in the world. However, Nepal, which is renowned for its natural beauty, suffers from several environmental issues. For instance, international initiatives, of the sustainable development goals (SDGs) of the United Nations (UN), emphasize the alignment of financial flows with sustainable development. The study has adopted a qualitative research method to investigate the practices and barriers preventing Nepalese commercial banks from implementing green finance practices. This study reveals the complex issues specific to Nepal through in-depth interviews with senior executives, risk managers, and sustainability officers. The findings of the study demonstrate several obstacles such as the implementation of regulatory framework, few green investment opportunities, perceived financial risks, a lack of knowledge and experience among banking professionals, and the requirement for strong institutional support and leadership commitment. To get rid of these barriers, it is recommended that Nepal’s commercial banks embrace green finance practices widely, fit into the nation's sustainable development objectives and support global environmental efforts.