Centre May Rope In Banks To Boost Forest Cover
All banking institutions in India may soon chip in to increase India’s forest cover in a coordinated manner.
If the environment ministry has its way, all banks will be asked to join the central and the state governments in their ongoing efforts of afforestation. The move will be part of one of the 10 ways, identified by the Centre, to reach India’s key climate goal.
As part of the country’s climate action plan to achieve its nationally determined contribution (NDC) target of creating additional carbon sink under the Paris Agreement, the ministry has come out with a proposal seeking all banks to allocate a minimum of 25% of their corporate social responsibility (CSR) funds for afforestation across the country. It takes note of clause 135 of the Companies Act, 2013 where the banks too are supposed to spend, in every financial year, at least 2% of their average net profit in three immediately preceding years on CSR initiatives. Such initiatives include “ensuring environmental sustainability” as one of the activities.
A draft guideline of the ministry in this regard says that a bank may carry out afforestation from its earmarked fund either by itself or by pooling resources with other banks. The draft, prepared by the ministry’s National Afforestation and Eco-Development Board (NAEB), was discussed in a special session on the first day of a two-day conference of the forest bureaucracy here on October 21.
Under the NDC target, India has promised to create an additional carbon sink of 2.5-3 billion tonnes of carbon dioxide equivalent by increasing forest and tree cover by 2030. The effort will also help the country reach its goal under the National Forest Policy, 1988 to increase India’s forest and tree cover from existing 24% to 33% of the total geographical area.
The draft on roles of banking institution gives details not only on how the banks would carry out afforestation but also on how these institutions will have to monitor the progress through plantation management committee. It says the afforestation projects of a particular bank would also be evaluated by an independent external agency.
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