Environmental sustainability in banking has become an increasingly common topic in IELTS Writing Task 2. Based on recent exam patterns and trends from leading IELTS preparation websites, questions about green banking and sustainable finance have appeared multiple times in the past two years, particularly in countries like India, China, and Southeast Asian nations where environmental concerns are paramount.
Similar to how can we use technology to solve global problems, this topic tests candidates’ ability to analyze the intersection of financial institutions and environmental responsibility.
Sample Question Analysis
Some people believe that banks should focus primarily on environmental sustainability when making lending decisions, while others argue that economic factors should remain the main consideration. Discuss both views and give your opinion.
This question requires candidates to:
- Examine two contrasting viewpoints about banking priorities
- Evaluate the balance between environmental and economic considerations
- Present and justify their own position
Green banking initiatives and sustainable lending practices in modern banking
Band 8 Sample Essay
Environmental considerations in banking decisions have become increasingly significant in today’s world, with some advocating for sustainability as the primary lending criterion while others maintain that traditional economic factors should retain precedence. This essay will examine both perspectives before presenting my own viewpoint.
Those who prioritize environmental sustainability in lending decisions argue that banks have a crucial role in combating climate change. By directing capital towards eco-friendly projects and restricting funding for environmentally harmful activities, financial institutions can significantly influence corporate behavior. For instance, when banks require environmental impact assessments before approving large industrial loans, companies are compelled to adopt greener practices, leading to reduced carbon emissions and more sustainable development.
Conversely, proponents of traditional economic-focused lending emphasize that banks’ primary responsibility is maintaining financial stability and promoting economic growth. They contend that over-emphasizing environmental criteria could restrict access to credit for many viable businesses, potentially hampering economic development and job creation. This perspective suggests that environmental considerations, while important, should not overshadow fundamental financial metrics like creditworthiness and business viability.
In my opinion, while both viewpoints have merit, the optimal approach lies in integrating environmental and economic considerations rather than treating them as mutually exclusive. Banks can develop sophisticated lending frameworks that evaluate both financial viability and environmental impact, similar to how should banks prioritize social responsibility in lending. This balanced approach ensures sustainable growth while maintaining financial stability.
Implementation of sustainable banking practices in modern financial institutions
Band 6.5 Sample Essay
In modern banking, there is a debate about whether environmental sustainability or economic factors should be more important for lending decisions. This essay will discuss both sides and give my opinion.
Firstly, some people think banks should focus on environmental protection when they lend money. They believe that banks can help stop climate change by only giving loans to companies that care about the environment. For example, if banks stop lending to factories that pollute a lot, these companies will have to become more environmentally friendly to get loans.
However, other people think economic factors are more important. They say banks need to think about making money and helping the economy grow. If banks only care about the environment, many good businesses might not get loans, which could cause economic problems and job losses.
I think both environmental and economic factors are important for banks. They should try to find ways to support both good business practices and environmental protection. Banks can make special programs that give better loan terms to environmentally friendly companies while still considering if the business can repay the loan.
Key Vocabulary
- Environmental sustainability (n) /ɪnˌvaɪrənˈmentl səˌsteɪnəˈbɪləti/ – the responsible interaction with the environment
- Lending criteria (n) /ˈlendɪŋ kraɪˈtɪriə/ – standards used to evaluate loan applications
- Viable (adj) /ˈvaɪəbl/ – capable of working successfully
- Carbon emissions (n) /ˈkɑrbən ɪˈmɪʃənz/ – release of greenhouse gases
- Creditworthiness (n) /ˈkredɪtˌwɜrðinəs/ – how suitable someone is to receive financial credit
- Mutually exclusive (adj) /ˈmjuːtʃuəli ɪkˈskluːsɪv/ – unable to occur together
For further practice, try writing your own essay addressing how banks can balance profit-making with environmental responsibility. Share your response in the comments section for feedback and discussion.
