SBI chairman Dinesh Khara calls for raising green finance - Times of India
Summary
"There is a need to mobilize domestic and international flows from retail as well as institutional investors to meet the green finance needs and robust climate-focused frameworks backed by central regulations," said Dinesh Khara, Chairman of the State Bank of India.He was speaking at SBIs seminar on Climate Finance and Risk in New Delhi under the aegis of the finance ministrys Department of Financial Services.The event was attended by public and private sector banks, financial institutions, RBI, and senior bureaucrats.According to Khara, although India ranks 7th among the worlds most affected by climate change, a relatively small share (around 7%) of climate capital flows into India. The workshop was part of an industry-wide effort to find practical and impactful solutions to climate change. "The steps taken by India to address the climate change issue and urged banks to collaborate and create policies for mobilizing capital towards mitigation and adaptation finance," said Vivek Joshi, secretary Department of Financial Services. Joshi added that the financial sector is well positioned to incite behavioural change in corporates and contribute towards building a sustainable society.According to Rajat Gupta, Senior Partner at McKinsey & Company, there is an opportunity for India as the country has yet to invest in projects and can, therefore, focus on new projects rather than just transitioning.Key observations at the workshop, organized in collaboration with McKinsey & Company, included the gap in climate finance in India, avenues for mobilizing private capital in emerging markets towards climate-friendly initiatives, fostering green investments, and accelerating the transition to a low-carbon economy.Earlier this month, in an address to shareholders in the banks annual report, Khara said that the bank would incorporate environmental considerations into its lending framework to pursue sustainable banking practices.The bank aims to accommodate environment-induced financial risks within its overall risk management strategy for FY24, Khara said in his chairmans address to shareholders published in the banks annual report. "The Bank is steadfastly incorporating environmental, social, and governance-related criteria into lending decisions, thereby driving decarbonization at scale in India while simultaneously fostering economic growth," said Khara.Incorporating the green agenda into lending would require the bank to reduce the share of fossil fuel projects it finances and increase the share of lending to renewable energy projects.