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LATEST NEWS UPDATES | At India’s Climate, Finance and Policy Intersection, Big Infra Remains King -Amitanshu Verma

At India’s Climate, Finance and Policy Intersection, Big Infra Remains King -Amitanshu Verma

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published Published on Sep 2, 2022   modified Modified on Sep 2, 2022

-TheWire.in

* As of last year, financial institutions from India were the third-largest investors out of six countries financing 80% of the world’s coal investments.
* A 2021 report found that ICICI, the State Bank of India, Axis Bank, Trust Group and HDFC were among the fourth-biggest group of financiers of coal-based projects worldwide.
* Indian commercial banks’ large-scale investment in Big Infra has exposed the Indian people’s savings and personal investments to financial risk.
* It has also made almost every common person with a savings account party to projects that worsen the climate crisis, displace people and destroy livelihoods.
* A recent RBI survey and discussion paper highlight potential courses for reform, but also strengthen the viewing of climate-related issues in terms of investment risk.

The latest Reserve Bank of India (RBI) survey on ‘Climate Risk and Sustainable Finance’ points to the long road that commercial banks in India need to traverse in order to make their lending portfolio instrumental in the global response to the climate crisis.

The survey points out that hardly any banks incorporate performance indicators related to environment, social and governance (ESG) criteria in the evaluation of their top management. Most banks don’t have a separate vertical in their administrative structure to consider ESG-related initiatives and sustainable finance, nor were they able to present a clear strategy towards amplification of their sustainable finance portfolio or responding to climate risk.

The survey, conducted by the Sustainable Finance Group (SFG) of the Department of Regulation at the RBI, had the participation of 16 private commercial banks, 12 public sector banks and six foreign banks. Based on the survey, the SFG recommends capacity building and incorporation of climate-risk assessment as part of the banks’ governance framework, and advocates larger shares of the lending portfolio towards green financing.

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TheWire.in, 2 September, 2022, https://science.thewire.in/environment/banks-exposure-coal-green-finance/?fbclid=IwAR0LcQRqt3EfklYPqqsOxRfApWVsp3Oj2WBfVqo3RR62uB4wxDrf7C0FYYg


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