Assignment on Bangladeshi Companies and their climate and environment concern

Prepared forMd. Rezaul Kabir Lecturer, IBA.

Prepared byAyesha Sabrina Roll No. RQ 08 Section- A, Batch- 19th IBA, DU.

Part 1(a)- Information sheet for asiapacins

Background Data
Company Name: Asia Pacific General Insurance Company Limited Website address: www.apgicl.com Contact Address: Green White Bhaban(3rd Floor), 28 B.B. Avenue, Dhaka-1000,
Bangladesh.

Sector: Insurance
Market capitalization: 2282.665(mn) in BDT.

Climate Concern
1. Governance information (CC GOV): 2008- N/A. 2009- N/A. 2010- N/A. 2. Policy statement about climate change issues(CC POL): Not included in the annual reports for the years 2008, 2009, 2010. 3. Emissions reduction target (CC RED): 2008- N/A. 2009- N/A. 2010- N/A. 4. GHG Emissions data (GHG): No information regarding Green house gas emission included in the reports. 5. Energy (ENERGY) : Extracted data from the notes to the accounts under Sundry creditors for expenses and finance2008:Accrued Electricity expense: 30, 061 taka. [1] 2009: Accrued Electricity expense: 31, 500 taka. [2] 2010: Accrued Electricity expense: 36, 167 taka. [3] 6. Mitigation measures (CC MIT): No information in the reports for 2008, 2009 and 2010. 7. Product impacts on climate change (CC PROD): 2008- N/A. 2009- N/A. 2010- N/A. 8. Adaptation measures (CC ADAPT): No adaptation measures or plans in the company or community level have been mentioned in the annual reports for the years 2008, 2009 and 2010.

9. Assurance of climate change disclosures (CC ASSUR): No such assurance has been provided in the reports for 2008, 2009, 2010. 10. Reference to standards/protocols (CC STD): 2008- N/A. 2009- N/A. 2010- N/A. 11. Other climate change issues (CC) : 2008- N/A. 2009- N/A. 2010- N/A.

Environmental Disclosures
12. Governance information (ENV GOV): 2008- N/A. 2009- N/A. 2010- N/A. 13. Environmental policy (ENV POL) : 2008- N/A. 2009- N/A. 2010- N/A. 14. Targets and performance data (TPERFORM): 2008- N/A. 2009- N/A. 2010- N/A. 15. Environmental audit (ENV AUD) : 2008- N/A. 2009- N/A. 2010- N/A. 16. Spills and waste (WASTE) [Excluding GHG]: 2008- N/A. 2009- N/A. 2010- N/A. 17. Financial elements of environmental issues (ENV FIN): 2008- N/A. 2009- N/A. 2010- N/A. 18. Sustainability and sustainable development (SUSTB): 2008- N/A. 2009- N/A. 2010- N/A.

19. Installation of Effluent Treatment Plants (ETP): 2008- N/A. 2009- N/A. 2010- N/A. 20. Product impacts on environment (ENV PROD): 2008- N/A. 2009- N/A. 2010- N/A. 21. Reference to environmental accounting/reporting standards/guidelines/compliance (ENV STD): 2008- N/A. 2009- N/A. 2010- N/A. 22. Any mention of environmental awards (ENV AWARDS): 2008- N/A. 2009- N/A. 2010- N/A. 23. Any negative environmental disclosures (NEG DISC): 2008- N/A. 2009- N/A. 2010- N/A. 24. Other environmental issues (ENV): 2008- N/A. 2009- N/A. 2010- N/A.

Based on this information, an observation has been included in the following section.

Part 1(b)- Observation

Question- How Bangladeshi firms are responding to environment and climate change
related issues and how these issues have already been reflected on their annual reports and corporate websites?

Answer- Business is not free from the wraths of the environment. Earlier, organizations having
direct impact on the climate and the environment were considered responsible to contribute to sustain this gifts of nature. Insurance sector, having financing and investing activities showed little concern. But, the scenario has changed over the past few years. A report [4] showing the cost involved with several climate-related disasters will explain the reasonDisasters 2005 Hurricane Windstorm in Northern Europe Future estimation (by 2050) Cost $83 billion $10 billion $300 billion(annually)

These huge amounts of recovery investments cause a sharp decline in insurance investments. And therefore, the insurers now strongly believe that they have a significant role to play in minimizing climate risks and protecting the environment. They not only believe, but also are working effectively in support of the climate by introducing Green insurance, developed Auto insurance, Reduction in GHG emission etc. Some insurance companies have even accepted this responsibility to enlighten their clients on these issues. Unfortunately, the situation is a bit different in Bangladesh. Bangladesh having some of the most polluted regions within it and at the same time being one of the most calamity-prone zones of the world , has failed to respond to this immediate necessity of saving the environment and the climate. So has failed the majority of the Bangladeshi firms. Most of the companies are busy earning profits while completely ignoring their responsibility towards the environment. The example of Asia pacific general insurance company limited would strictly support this opinion. The company started its journey in 2006 and has been a profitable concern since then. The company has this mission to participate in the economic development of the country. But in their website or annual reports they have completely avoided the issues related to climate change and environment. Moreover, with the ongoing problem with power shortage the company is increasing its power consumption every year only to add to the problem. Unfortunately, this does not hamper the companys gain of more profits every year. It is because there is neither any legal requirement nor any moral obligation realized to comply with environmental or climate change policies. The above discussion illustrates the difference in response between international and local insurance companies towards rapid climate change and environmental hazards and the outcome is frustrating. Bangladeshi firms have indeed shown no response to this concerns and this can not go without criticism.

Part 2(a)- Information Sheet for pubalibank

Background Data
Company Name: Pubali Bank Limited Website address: www.pubalibangla.com Contact Address: Pubali Bank Bhaban, 26, Dilkusha Commercial Area, Dhaka-1000,
Bangladesh.

Sector: Bank.
Market capitalization: 34678.344(mn) in BDT.

Climate Concern
1. governance information (CC GOV): 2008- N/A. 2009- N/A. 2010- N/A. 2. Policy statement about climate change issues(CC POL): Not included in the annual reports for the years 2008, 2009, 2010. 3. Emissions reduction target (CC RED): 2008- N/A. 2009- N/A. 2010- N/A. 4. GHG Emissions data (GHG): No information regarding Green house gas emission included in the reports. 5. Energy (ENERGY) : 2008: Electricity expense: 30, 061 taka.[5] Fuel expense: 28,764,399 taka.[6] 2009: Electricity expense: 18,769,678 taka.[7] Fuel expense: 29,459,372 taka. [8] 2010: Electricity expense: 25,154,874 taka.[9] Fuel expense: 38,390,744 taka. [10] 6. Mitigation measures (CC MIT): No information in the reports for 2008, 2009 and 2010. 7. Product impacts on climate change (CC PROD): 2008- N/A. 2009- N/A. 2010- N/A. 8. Adaptation measures, e.g. corporate adaptation, community engagement (CC ADAPT): No adaptation measures or plans in the company or community

levels have been mentioned in the annual reports for the years 2008, 2009 and 2010. 9. Assurance of climate change disclosures (CC ASSUR): No such assurances have been provided in the annual reports for 2008, 2009, 2010. 10. Reference to standards/protocols (CC STD): 2008- N/A. 2009- N/A. 2010- N/A. 11. Other climate change issues (CC) : 2008- N/A. 2009- N/A. 2010- N/A.

Environmental Disclosures
12. Governance information (ENV GOV): 2008- N/A. 2009- N/A. 2010- N/A. 13. Environmental policy (ENV POL): Compliance with any environmental have not been illustrated in the 2008, 2009 and 2010 reports. 14. Targets and performance data (TPERFORM): 2008- N/A. 2009- N/A. 2010- N/A. 15. Environmental audit (ENV AUD): 2008- N/A. 2009- N/A. 2010- N/A. 16. spills and waste ( WASTE) [Excluding GHG]: 2008: Water and sewerage bill: 432,897 taka.[11] 2009: Water and sewerage bill: 944,959 taka.[12] 2010: Water and sewerage bill: 2,110,246 taka.[13]
17. financial elements of environmental issues (ENV FIN):

2008: Contribution to Chief Advisers Relief Fund mentioned.[14] 2009: Reference of Ayla that affected the economic growth of Bangladesh.[15]

Contribution of substantial amount to the relief fund of Prime Minister of Bangladesh also included.[16]

2010: Reference to inflation of oil price owing to natural calamities as freezing weather and considered as a dreadful bar in the upcoming years to a steady recovery of global economic condition.[17] Contribution of substantial amount to the relief fund of Prime Minister of Bangladesh also included. [18] 18. Sustainability and sustainable development (SUSTB): 2008- N/A. 2009- N/A. 2010- N/A. 19. Installation of Effluent Treatment Plants (ETP): No information provided in the annual reports of 2008, 2009, 2010. 20. Product impacts on environment (ENV PROD): 2008- N/A. 2009- N/A. 2010- N/A. 21. Reference to environmental accounting/reporting standards/guidelines/compliance (ENV STD): 2008- N/A. 2009- N/A. 2010- N/A. 22. Any mention of environmental awards (ENV AWARDS): No such awards or event mentioned in the annual reports for the years 2008,2009,2010. 23. Any negative environmental disclosures (NEG DISC): 2008, 2009,2010 reports exclude negative environmental disclosure. 24. other environmental issues (ENV): 2008: plantation: 40,874 taka. Wasa charges: 256,922 taka.[19] 2009: plantation: 13,299 taka. Wasa charges: 83,271 taka. [20] 2010: plantation: 33, 275 taka. Wasa charges: 209,626 taka.[21] Based on this information, an observation has been included in the following section

Part 2(b)- Observation

Question- How Bangladeshi firms are responding to environment and climate change
related issues and how these issues have already been reflected on their annual reports and corporate websites?

AnswerClimate change and environmental hazards have become major business challenges, posing threats and providing opportunities for business organizations of all categories. These can have direct (putting facility at risk through extreme weather condition) or indirect (imposed regulations ) effects on companies. Banks are affected mostly indirectly to the extent that normal economic activity is affected. For example, up to 5% of market capitalization can fall victim to sudden changes in climate or environment.[22] Besides, alternative energy resources generally require a huge investment. So, it will be logical to declare that banking sector has some significant roles to play in environmental uplift and climate issues. Banks climate strategies were evaluated in 2007 and it encompassed 114 banks.[23] While 56% of the respondents were European companies, only 9% were from Asia Pacific. Top positioned banks such as ANZ, HBOS, Westpac demonstrates strong climate governance, development and implementation of risk management tools in lending and financing, plans for launching of innovative products etc. If we scan the world banking sector, we will find that there has been a buzz to reduce direct and indirect emission of CO2 gas and to increase the use of eco-friendly products. Unfortunately, Bangladesh has a different scenario to illustrate. If we take the example of a leading bank like Pubali Bank Limited, the conviction will be crystal clear. The bank management takes pride in taking calculative business risk to ensure its profitability. But neither in its vision or mission, it has expressed the desire to be eco-friendly. Nor it has covered the environmental or climate concerns in its Risk management policy. Moreover, the reports show that electricity and fuel consumption is gradually increasing with the addition of new branches. In its 2010 report, 43% increase in profitability has been mentioned. But, the profit has not been contributed amply to climate concerns. The company has donated substantial amount of money to relief funds but there has been no prevention contributions. Besides, they have only mentioned some calamities but have not taken the steps to calculate the economic and financial impacts of these calamities. In conclusion, it can be said that, banking sector of Bangladesh has shown some response to climate issues but that is still unsatisfactory. The responses have been in the mitigation but not in planning, preparedness and risk management policies. With the upsurge in public awareness regarding these issues, it has become an obligation for business organizations to widen its focus and acknowledge their responsibilities in this regard.

References
1. Notes to the accounts, Annual report for the year ended 2008, Article 11, page 49. 2. Notes to the accounts, Annual report for the year ended 2009, Article 11, page 49. 3. Notes to the accounts, Annual report for the year ended 2010, Article 12, page 16. 4. Rick Hawkenberry, Insurance industry initiatives to address climate change market , page 2. 5. Notes to the financial statements, Annual report for the year ended 2008, Article 26, page 6. Notes to the financial statements, Annual report for the year ended 2008, Article 34, page 7. Notes to the financial statements, Annual report for the year ended 2009, Article 26, page 8. Notes to the financial statements, Annual report for the year ended 2009, Article 34, page 9. Notes to the financial statements, Annual report for the year ended 2010, Article 25, page 76. 10. Notes to the financial statements, Annual report for the year ended 2010, Article 33, page 77. 11. Notes to the financial statements, Annual report for the year ended 2008, Article 26 , page 12. Notes to the financial statements, Annual report for the year ended 2009, Article 26, page 13. Notes to the financial statements, Annual report for the year ended 2010, Article 25, page 76. 14. Corporate Social Responsibility, Directors Report, Annual report for the year ended 2008, page 15. Overview of Macro Economy of Bangladesh, Directors Report, Annual report for the year 2009, page 16. Corporate Social Responsibility, Directors Report, Annual report for the year ended 2009, page

17. Global Economy, Directors report, Annual report for the year ended 2010, page 14. 18. Corporate Social Responsibility, Directors Report, Annual report for the year ended 2010, page 17. 19. Notes to financial statements, Annual report for the year ended 2008, Article 34.1, page 20. Notes to financial statements, Annual report for the year ended 2009, Article 34.1, page 21. Notes to financial statements, Annual report for the year ended 2008, Article 33.1, page 78. 22. Bettina Furrer, Volker Hoffmann, Marion Swoboda, Banking and Climate Change : opportunities and risks, page 11. 23. Bettina Furrer, Volker Hoffmann, Marion Swoboda, Banking and Climate Change : opportunities and risks, page 22.

The End