[ad_1]
Representational Image
(IANS)
Climate Risk Horizons conducted a Tuesday analysis of India’s leading banks. It found that the sector’s financial system is not ready for the financial effects of climate change.
The report, “Unprepared: India’s big banks score poorly in climate challenge”, ranks 34 of the largest banks in India (based on market capitalisation). It also examines a range criteria and finds that most banks have not even started to incorporate climate change into their business strategies, except for a few cases.
This analysis follows the Intergovernmental Panel on Climate Change (IPCC’s) report on impacts and vulnerability. It warned that India faces serious economic risks from riverine flooding and sea-level rise, as well as reduced labour capacity due intolerable heat and drop in crop and fish yields.
Numerous studies have examined the effects of climate change on Indian economic growth, and GDP.
According to the World Bank, India’s GDP will suffer a 2.8% annual loss by 2050.
Deloitte Economics Institute estimates that an emissions pathway consistent with a 3°C temperature increase (which is what the planet is currently on course for) would lead to an annual loss of 3% of GDP from now till 2050 and a lost economic potential of $35 trillion by 2070.
Ashish Fernandes (CEO of Climate Risk Horizons) and one of the authors said that even in the best-case climate scenario, Indian economy will suffer severe consequences from the climate crisis.
“Our analysis shows that the banking sector is not ready to adapt to an economy whose foundations will face significant challenges. It is also not financing adaptation and mitigation efforts on a large scale.
“The good thing is that some banks are beginning to take steps in this direction.”
YES Bank and IndusInd Bank, HDFC Bank, HDFC Bank, and Axis Bank are the top-ranking overall banks and have begun to address the climate issue.
The distant sixth spot is held by the SBI, a public sector giant. The ranking shows that, despite their dominance and influence, public sector banks are trailing behind private-sector financial organizations.
“Globally, central bankers are becoming more aware of the climate problem. More than 106 global banks with assets of $68 trillion have committed to net-zero emission by 2050. The UN convened Net Zero Banking Alliance, which lists 40 countries’ banks as members. However, not one Indian bank is listed. Fernandes stated that the RBI has a critical role in ensuring that Indian banks recognize climate change as a systemic threat to their economy.
**
The headline and text of the above article were published by a wire agency.
