Banks are taking efforts to support climate saving green initiatives such as solar-powered ATMs, paperless drives, green bonds, using efficient technologies, etc. to mitigate the risks around climate change.
Even as the largest economy, the United States, pulls out of the Paris pact on climate change, world over awareness is increasing about Corporate Social Responsibility (CSR) and sustainable development.
In 2016, R. Gandhi, then Deputy Governor of the Reserve Bank of India had said that given the pressing challenge of financing sustainable development, the year 2016 had set out to be the year of green finance. Banks and companies have raised money through green bonds to fund green initiatives and clean energy projects.
Though India’s green bond market is very small, it is estimated that Indian companies have issued USD 1.62 billion worth of green bonds in 2016, in comparison to USD 81 billion that was issued globally.
There is also a concerted effort by organisations including banks to support climate saving green initiatives such as solar-powered ATMs, paperless drives, green bonds, using efficient technologies, etc. to mitigate the risks around climate change.
A few days ago, State Bank of India (SBI) announced financing of 100 MW rooftop solar projects worth Rs 400 crore for private developers under a World Bank programme to aid government's target of 40 GW of rooftop solar installations by way of low cost financing.
"With the World Bank loan, SBI aims at developing the nascent rooftop solar market. As a tropical country, India has a huge potential to be the leader in the rooftop solar space…Financing is being provided to those with sound technical capacity, relevant experience, and creditworthiness, meeting the SBI standards," said Karnam Sekar, Deputy Managing Director, SBI in a statement.
Previously, SBI also offered green home loan scheme from SBI to support environmentally-friendly residential projects and offer various concessions on the same.
Other banks have taken to digital initiatives to go paperless, ensuring multichannel delivery through NetBanking, PhoneBanking and MobileBanking and other alternate channels for doing transactions and using solar-energy operated ATMs in smaller locations to reduce carbon footprint reducing customer travel requirements to branches.
Large public sector banks including Punjab National Bank and Canara Bank also fund green energy projects, set out tree plantation drives, emphasize on green building practices such as energy efficient lights, printing on both sides of paper, mater censors for lights, fans etc.
Country’s second largest private lender HDFC Bank on its website says it has initiated “Energy Management Module” in 100 select branches across 4 metro cities to pull data from sensors to monitor real time usage and based on analytics will help control electricity wastage. This system will also monitor diesel consumption of DG (diesel generator) sets.
HDFC Bank says it reports on voluntary reporting standards of Global Reporting Initiative and Carbon Disclosure Report and it is also signatory to the Carbon Disclosure Project (CDP) and has been reporting since 2011.
Mid-sized private bank said IndusInd Bank implemented power saving initiatives on 16,287 laptops and desktops that saved 458 MW of electricity and a reduction of 398 tons of carbon emissions.
It has a fleet of 100 solar ATMs continues to generate solar electricity enabling ATM services. Its solar powered facility at Karpakkam generated 62 MW of power and constitutes up to 8 percent of the total energy requirements. Waste Management Your Bank has collected 36,650 kg of e-waste for disposal through Government authorised recyclers and has channelized 6,023 kg of A4 paper for recycling, the bank said on its website.
The Reserve Bank of India, in its notification dated 20th November 2007, had advised banks to take note of the issues raised and consider using the same to put in place a suitable and appropriate plan of action towards helping the cause of sustainable development, with the approval of their Boards.
Delivering a speech on Sustainable Financial System in India in Mumbai in April 2016, Gandhi said that the challenge before developing economies like India was to “mainstream green finance so as to incorporate the environmental impact into commercial lending decisions while simultaneously balancing the needs of economic growth and social development. This will necessarily mean setting out on the journey of integrating financial system and sustainable development which has numerous goal-posts”.Gandhi concluded the speech by saying there must be goals to develop a commonly accepted set of green finance definitions and indicators that can be used to comparisons; identify, develop and market green financial products and services, measure the progress and enhance capabilities to assess risks to include it in the lending decisions thereby aligning the Indian financial system with sustainable agenda.