HDFC Bank to give loans for EVs, solar rooftops as part of strategy for carbon neutrality

An institution or economy turns carbon-neutral when its carbon dioxide (CO2) emissions become equivalent to its absorption of the gas from the atmosphere.

“As one of the largest banks in the country, I think the onus is on us to take the first step to be not just a socially responsible corporate but also an environmentally conscious corporate. Today, we want to pledge that we want to become, as a bank, carbon-neutral by financial year 2031-32,” said Ashima Bhat, group head - CSR, business finance and strategy, administration, and infrastructure, HDFC Bank.

Once electric vehicles are introduced into the market the bank plans to introduce cheaper financing options for them, but this is expected to happen over the next two-three years.

The lender will also focus on offering loans for green products like EVs at lower interest rates and incorporating environmental, social and governance (ESG) scores in its credit decisions. It is working on a framework for issuing green bonds and expects it to be in place by FY23.

Bhat said that what often separates two companies is the frameworks they have around ESG.

Bhat added that there are products under development for loans to electric vehicles and solar rooftops for residential purposes. There would definitely be an interest differential if you are going in for something which has an impact on climate change or the environment. These products will be rolled out in the next year or so, Bhat said.

In terms of operations, the bank plans to decrease absolute emissions and energy consumed in from the current level of 315,583 million tonne CO2 emissions, increase rooftop solar capacity in large offices and convert 50 percent of its total sourced electricity to renewable energy. It also intends to create single-use plastic free corporate offices, plant 25 lakh trees and reduce water consumption by 30 percent.

Bhat acknowledged that data centres and ATMs are sources of heavy electricity consumption. “The data centre is a big energy guzzler for us and we are counting it in our energy measurements and we are also looking to offset that,” Bhat said, adding that the bank is looking at energy-efficient measures at ATMs as well.