Banking beyond weather reports: Why lenders need a green business strategy

Indian lenders have yet to train their employees to assess credit risks arising from climate change

The latest Financial Stability Report (FSR) of the Reserve Bank of India (RBI) has highlighted two major challenges arising from climate-related events — recalibrating operations and business strategies to support the green transition, and strengthening resilience in the face of rising vulnerability. This observation comes even as Mint Road’s green taxonomy is in the works.

An issue which has not received enough attention is the lack of ESG (environmental, social, and corporate governance) shepherds, among lenders. There is no legacy expertise to fall back on. The sums involved are huge. The average annual investment for the transition to net-zero emission by