Institute for Public Policy & Practice (IP3)

Bangladesh’s ESG Transition in 2025: Why It Lags India and Vietnam — and What It Can Learn from ASEAN Peers

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by Mohammad Syful Hoque

I assessed Bangladesh’s ESG transition relative to India and Vietnam over 2024–2025 using three comparable lenses—mandatory disclosure rules, real-economy clean-power penetration, and sustainable-finance depth—drawing metrics from a single harmonized dataset for electricity and regulator/market sources for finance and reporting. What I find is that, Bangladesh lacks an exchange-level ESG mandate, relying instead on voluntary, GRI-aligned guidance; by contrast, India mandates BRSR (with “BRSR Core” assurance and value-chain KPIs) and Vietnam embeds sustainability disclosures in annual reports via MOF Circular 96/2020. In 2024 Bangladesh’s low-carbon electricity share was ~2% (wind+solar ~1.3%) versus ~22% for India (~10% wind+solar) and ~44% for Vietnam (~13% wind+solar), underscoring a substantive transition gap with direct implications for corporate emissions and export competitiveness. Sustainable-finance activity also diverged: Bangladeshi banks/NBFIs reported no investments in green bonds/sukuk/impact funds in Q2–Q4 2024, while Vietnam issued ~VND 6,875.1 bn (~USD 0.27 bn) of verified green bonds and India’s aligned GSS+ market reached ~USD 55.9 bn by end-2024, including a sovereign green curve. Although Bangladesh Bank issued IFRS S1/S2-based disclosure guidelines in December 2023, coverage is limited to banks and FIs and is not yet economy-wide. Overall, Bangladesh lags because mandates are lighter, clean-power penetration is lower, and sustainable-finance plumbing is thin; targeted listing rules with limited assurance, value-chain data rails, a sovereign green bond to anchor pricing, and bankable renewable-energy auctions/PPAs constitute near-term, high-leverage fixes.

What This Means

  • Higher cost of capital: Investors price uncertainty; lack of assurance and thin green benchmarks widens spreads.

  • Export risk: Buyers increasingly require auditable ESG data and renewable-powered production.

  • Weak project bankability: Without a sovereign green curve, taxonomy, and bankable PPAs, clean-power and industrial decarbonization deals struggle.

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