Earth Overshoot Day is the day that marks excessive resource consumption beyond what Earth can sustainably renew in an entire year. This year on the day (August 1), humans will have already used up resources allotted for this entire year, and for the rest of the year, and would be running in debt of future renewal of Earth’s resources. This may be a hypothetical concept but it brings into perspective the extent of unsustainable consumption rampant in our everyday lives.
Addressing this issue, every forward thinking nation including India is prioritising sustainable growth and development through the 17 Sustainable Development Goals (SDGs) adopted by over 190 countries. Achieving these SDGs by 2030 would require investments up to USD 3.1 trillion in developing countries, as per a United Nations report. While government spending forms a large part of these investments, there is a large opportunity for private businesses to play a key role in achieving SDGs.
Manufacturing organizations can directly have an impact by streamlining their operations along with the SDG agenda, including sustainable sourcing of raw materials, innovating and using energy efficient technologies and integrating the principles of circular economy in their operations. However, for a service organization like a bank, it is more important to innovate on the services that they provide.
One of the first instances of banks actively engaging in sustainable development was the issuance of AAA rated green bonds by European Investment Bank (EIB) and World Bank in 2007. Green bonds assure institutional investors that the capital invested by them is used exclusively for green and sustainable projects such as renewable energy.
While green bonds provide the option of green investment to institutional investors, the vast majority of the clients served by the Indian banking industry – the retail customers – are yet to be involved in the green growth agenda of the country.
There are a host of conventional financial products that can be modified to serve as the engines of green growth, especially with the financing need presented by emerging low carbon sectors such as e-mobility, green buildings and circular economy. With the added advantages that green products offer, a shift in customer behaviour is expected, in which the customers actively seek out such products, and contribute proactively to the holistic sustainable development of the country.
As the famous American activist Saul Alinsky once said, “History is a relay of revolutions,” and inclusion of retail customers in the sustainability agenda could be the next revolution in banking.
Namita Vikas is Group President & Global Head, Climate Strategy & Responsible Banking at YES BANK. As the Chief Sustainability Officer of the Bank, she spearheads Sustainable Development and CSR, thus driving sustainability principles within its core operations and its value chain towards creating stakeholder value. Namita has an Advanced Management Degree in CSR and Leadership from the Swenska Institute, Sweden.
Views of the author are personal and do not necessarily represent the website’s views.
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