NABARD unveils Climate Strategy 2030 to mobilize green financing

News Excerpt:

National Bank for Agriculture and Rural Development (NABARD) unveiled its Climate Strategy 2030 document on Earth Day, which aims to address India’s need for green financing.

About Climate Strategy 2030: 

  • The Climate Strategy 2030, a comprehensive blueprint, is designed to tackle India’s growing demand for green financing.
  • NABARD's Climate Strategy 2030 is structured around four key pillars
    • Accelerating green lending across sectors: This pillar focuses on increasing green lending across various sectors to meet the rising demand for sustainable financing.
    • Playing a broader market-making role: NABARD aims to shape the green finance market, facilitating increased participation and investment in sustainable projects.
    • Internal green transformation of NABARD: This aspect of the strategy involves internal reforms within NABARD to align its operations and practices with environmental sustainability goals.
    • Strategic resource mobilisation: NABARD intends to mobilise resources strategically to support and scale up green financing initiatives effectively.

Key challenges in green financing:

  • India requires approximately $170 billion annually, amounting to a cumulative total of over $2.5 trillion by 2030 for green financing, but the current inflows are critically insufficient.
  • As of 2019-20, India garnered about $49 billion in green financing, which is merely a fraction of what is needed.
  • Only $5 billion was allocated towards adaptation and resilience, reflecting the minimal private sector engagement in these areas due to bankability and commercial viability challenges.

Sustainable practices followed by real estate developers:

  • DLF:
    • DLF's sewage treatment plants recycle over 14 million litres of water daily, supporting horticulture, secondary water usage, and lake replenishment, reducing reliance on groundwater.
    • They implement practices like zero-discharge water systems, reducing strain on local water sources.
    • DLF is the only Indian real estate company featured in the Dow Jones Sustainability Index for the past three years, exemplifying its commitment to environmental, social, and governance excellence.
    • They prioritise preserving greenery by transplanting mature trees, ensuring the continuity of Gurugram's green landscape amid infrastructural development.
  • Signature Global (India) Ltd:
    • Most of their projects are either EDGE-certified or IGBC gold-rated, demonstrating their environmental commitment.
    • They save around 52% of water usage through various optimum water use practices, such as low-flow faucets and toilets, rainwater collecting systems, and wastewater treatment and reuse facilities.

Green finance:

  • Green finance is a broad term that can refer to financial investments flowing into sustainable development projects and initiatives, environmental products, and policies that encourage the development of a more sustainable economy
    • It includes climate finance but is not limited to it. It also refers to a wider range of other environmental objectives, such as industrial pollution control, water sanitation, or biodiversity protection. 
    • Mitigation and Adaptation finance are specifically related to climate change-related activities:
      • Mitigation financial flows refer to investments in projects and programs that reduce or avoid greenhouse gas emissions (GHGs).
      • In contrast, adaptation financial flows refer to investments that reduce the vulnerability of goods and persons to the effects of climate change.

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