India towards Financial Sustainability
Recently, sustainability has become a major issue, and the financial sector must promote sustainable development. The Indian financial industry is adopting sustainable practises. This article will examine sustainability in the Indian financial industry and sustainable development efforts.
Sustainable finance refers to the process of integrating environmental, social, and governance (ESG) considerations into financial decision-making. In India, sustainable finance is still in its nascent stage, but it is gaining traction.
The RBI's 2018 circular on "Sustainable Banking Practises and Responsible Banking" required banks to consider ESG concerns in their decisions. The circular advised banks on ESG risk management and sustainability.
SEBI, like the RBI, has promoted sustainable finance. SEBI's 2020 ESG reporting circular covered listed businesses. The circular mandates listed firms to disclose ESG activities and risks in their annual reports.
Green bonds support sustainable initiatives. Green bonds are helping India raise funds for sustainable development. The Climate Bonds Initiative ranks India second in green bond issuance after China.
Indian Renewable Energy Development Agency (IREDA) issued a green bond of INR 4,500 crore in 2020 to support renewable energy projects. NHAI and HDFC have also created green bonds to fund sustainable projects.
Impact investing involves investing in businesses, organisations, or funds that may provide beneficial social or environmental consequences and financial rewards. Sustainable impact investment is growing in India.
The Indian Impact Investors Council (IIIC) reported on impact investing growth in India in 2020. In 2020, India's impact investment market was $10.9 billion, up from $1.9 billion in 2015.
In conclusion, India is promoting sustainable financial development. Green bonds and impact investment are helping finance sustainable projects, and the RBI and SEBI have set rules to encourage sustainable practises.
The financial industry will prioritise sustainability as India develops. Financial institutions may help India and the globe achieve sustainability by incorporating ESG factors into their decision-making.