The local climate threat and sustainable finance have captured the attention of regulators, national and supranational authorities around the world.
The August 2021 report of the Intergovernmental Panel on Local Weather Evolution (IPCC) highlighted the adjustments seen in Earth’s local time in every area across the local weather system.
The Climate Threats and Sustainable Finance Survey, conducted in January this year, covered 34 major deliberate industrial banks, including 12 public sector banks, 16 private sector banks and 6 major international banks in India, it said on Wednesday. the RBI.
“The responses indicate that if banks are beginning to take action on the climate threat and sustainable finance, concerted effort and further action is needed on this,” he said.
The results show that there is insufficient participation at the board level in local weather threats and sustainability funding points, and responsibility for oversight of local weather threats and sustainability-related initiatives has not been identified. been attributed to almost a third of the banks questioned.
Additionally, only a few banks have included key performance indicators (KPIs) on local climate threat, sustainability, environment, social and governance (ESG) in their top management’s performance analysis. .
Almost all banks did not have a separate or vertical corporate unit for sustainability and ESG-related initiatives.
The RBI said almost all of the banks surveyed recognized the urgency of the issue and most saw climate-related monetary hazards as a big threat to their business.
Additionally, many of the banks surveyed have decided to phase out their advertising to excessive carbon emitters/polluters over the next few years.
Few banks have both raised new capital to develop inexperienced credit rating and funding or set a goal of increasing lending and funding in sustainable finance. Most banks have launched a number of mortgage products to capture the benefits of alternatives arising from local climate change.
In addition, a number of banks have launched inexperienced deposits to lend to environmentally friendly companies.
The survey also noted that almost all banks do not align their climate-related monetary statements with an internationally accepted framework.
The RBI has asked banks to put in place a mechanism within the board or senior management to oversee and scale initiatives related to climate threat and sustainability.
“They could consider incorporating key performance indicators on local weather threats, sustainability and ESG as part of their top administration’s effectiveness assessment,” he said.
He also said banks could consider raising new capital to expand inexperienced credit and financing, or set a goal of increasing lending and financing in sustainable finance.
The RBI has urged banks to give you a way to reduce emissions from their own operations.
According to India’s commitment at the COP26 summit, banks can also consider committing to a timeline to move to zero web emissions.