Sustainable finance is becoming a pivotal focus for Bangladesh’s banking industry, as the country grapples with climate change challenges. Since the implementation of the sustainability rating system by Bangladesh Bank in 2020, ten private banks and two financial institutions have earned sustainable ratings, evaluated on various criteria including green project financing and CSR activities. Industry leaders emphasize that sustainable finance not only benefits the environment but also fosters bank resilience and supports small and medium enterprises (SMEs). Despite significant progress, such as increased green finance contributions and operational transformations toward sustainability, challenges remain, including a lack of awareness and capacity among businesses. Experts call for stronger regulatory support and fiscal incentives to further drive the growth of sustainable finance, positioning Bangladesh on a steady path toward a more inclusive and environmentally responsible banking system.