India’s agriculture sector faces the dual challenge of ensuring food security and livelihoods while managing climate risks and limited resources. With most farmers engaged in small-scale subsistence farming, the transition to sustainable and climate-smart practices is both urgent and complex. This blog examines India’s evolving agricultural policy, the financing landscape, and opportunities to strengthen sustainable agriculture finance.
Green budgeting helps governments align public spending with environmental goals. By integrating climate, biodiversity, and pollution considerations into fiscal planning, it ensures budgets reflect sustainability priorities. India’s early adopters—like Bihar, Assam, and Odisha—are showing how state budgets can drive green transitions. As climate risks grow, green budgeting offers a systemic tool to make public finance part of the solution.
India’s proposed repairability index is a step toward sustainable consumption. A recyclability index can strengthen this by promoting eco-design, formalizing the recycling sector, and enforcing EPR. Together, they support a circular economy, reduce waste, create green jobs, and help India meet its climate and sustainable development goals.
Sustainability-related risks, especially environmental and climate concerns, are now central to financial stability and economic health. Companies and financial institutions face growing pressure to act, with stakeholders demanding greater environmental […]
The Landscape of Green Finance in India tracks flows to real economy sectors—clean energy, clean transportation, and energy efficiency—as well as to some adaptation sectors. The study considers both public and […]
Since its popularization in the 1960s, passive investing has become the primary strategy for private and institutional investors worldwide. Many have abandoned active stock picking due to the challenge of consistently outperforming the market and the high costs associated with active management. Passive investing offers reduced risks and fees, diversification benefits, and attractive long-term returns. However, it has drawbacks. Passive investors, who construct their portfolios to track benchmark indexes like the S&P 500 or NIFTY 500, often neglect risks and opportunities such as climate change. This oversight can lead financial markets toward a state of autopilot, ignoring significant environmental concerns.
India’s housing sector stands at a pivotal crossroads for climate action. Accounting for over 20% of the nation’s greenhouse gas emissions, primarily from electricity use, industry faces escalating demands exacerbated by urbanization and rising temperatures. Despite the apparent environmental imperative, scaling green housing remains challenging. High upfront costs deter widespread adoption, compounded by limited financial incentives and loan accessibility. Yet, the potential benefits—lower energy bills, enhanced asset value, and reduced carbon footprints—underscore green housing’s viability. With strategic policy interventions and financial sector alignment, India can harness this opportunity to catalyze a sustainable housing revolution, driving economic growth and environmental stewardship.
Greenwashing involves false or misleading claims to portray a company, product, or service as environmentally responsible. This practice deceives consumers and investors into believing the firm is committed to sustainability, while the reality may differ. As the importance of sustainability grows among the public and investors, greenwashing has become a significant concern, particularly in the finance sector. The rise of ESG investing has increased pressure on financial institutions to support sustainable practices. Yet, it has also enabled some to falsely present themselves as environmentally conscious to attract investors.
As appreciation of the urgency of climate change grows, several innovative financial instruments have been developed and deployed to raise capital for action, including green bonds, transition bonds, and sustainability-linked bonds (SLBs). However, confusion remains about the basic concepts of these instruments and the differences between them. This piece focuses on demystifying two such instruments: sustainability-linked bonds (SLBs) and transition bonds.
Climate change, now a major financial concern, impacts investment and lending decisions through physical and transition risks. Banks face significant physical risks affecting their assets and loan portfolios, while institutional investors and insurance companies must manage both risk types. Equity investors should prioritize transition risks due to potential policy changes. Ignoring climate risks is not viable; investors must integrate climate considerations to safeguard portfolios and drive positive change in business practices.