India's Green Finance: Paving the Way for a Sustainable Future - by Garima Bansal  - CollectLo

India's Green Finance: Paving the Way for a Sustainable Future

Garima Bansal  - CollectLo

Garima Bansal

Content Writer

2 min read . Oct 12 2023


Introduction Climate change is a global crisis, and the Paris Climate Agreement stands as a beacon of hope in the battle against it. India, a rapidly developing nation and host of the G20 summit, plays a crucial role in addressing climate change. With the motto "One Earth, One Family, One Future," India aims to attract trillions in investments to achieve net-zero emissions by 2070 and generate 50% of its power from non-fossil fuels by 2030.

Green Finance Defined Green finance involves directing finances and investments toward eco-friendly projects and activities that benefit the environment and reduce greenhouse gas emissions. It aligns financial flows with the goals of building a sustainable, low-carbon, and resilient future.

Methods of Green Finance Green finance comes in various forms, including:

·         Green Loans: Offering favorable terms to support sustainable projects.

·         Green Bonds: Issued to finance eco-friendly initiatives.

·         Blended Finance: Combining public and private resources for sustainable projects.

·         Green Investments: Focusing on companies prioritizing sustainability.

Milestones in Indian Green Finance India has made significant progress in promoting green finance:

·         Launch of the International Solar Alliance (ISA) in 2015.

·         Introduction of green bonds by YES Bank in 2015.

·         Transformation of IREDA into a Green Bank.

·         SEBI's regulation of green bonds in 2017.

·         Mandating ESG reporting for the top 1,000 listed companies in 2021.

·         Issuance of sovereign green bonds in 2022.

·         RBI's inclusion of renewable energy projects in Priority Sector Lending (PSL) norms in 2022.

·         Introduction of a framework for green deposits in 2023.

Challenges and the Path Forward India faces challenges such as lack of awareness, risk perception, and regulatory improvements. Inclusivity and capacity development are also crucial. However, with the growing global focus on sustainability, green finance is set to flourish. Future trends include green mortgages, ESG considerations, climate stress testing, carbon pricing, and increased green bond issuance.

Conclusion India's journey in green finance is vital not only for its sustainable development but also for the world's fight against climate change. As it continues to embrace green finance, India is paving the way for a more sustainable and resilient future.