AgenciesBanks in the world’s third-biggest polluting nation are poorly prepared to combat rising global warming risks, according to a new study by local research and advisory group Climate Risk Horizons.
None of the 34 Indian banks surveyed in the report have a long-term net zero target year with an implementation plan covering so-called scope 1, 2 and 3 emissions, which cover direct green house gas emissions, indirect emissions through electricity or energy purchased, and those attributable to its supply chain or vendors.
Only two banks -- Yes Bank Ltd. and HDFC Bank -- have set targets for scope 1 and 2 emissions, while State Bank of India has only a long-term carbon neutral target year, without specifying the scope of emissions, according to the report. And only two -- Federal Bank and Suryoday Small Finance Bank -- have an exclusion policy that prohibits lending for the construction of new coal power plants or any extension plans.
None of the banks responded to their ranking, the report said.
India’s central bank has called on lenders to monitor the impact on their asset quality from companies exposed to fossil fuels as the economy transitions to cleaner energy as the country pledges to be net-carbon zero by 2070. Currently 62% of the nation’s electricity is generated from fossil fuel.
Read: Biggest India Bank Torn Between BlackRock and Funding Coal
Still, private lenders such as Yes Bank Ltd., IndusInd Bank Ltd., HDFC Bank Ltd. and Axis Bank Ltd. are better prepared with strategies to battle climate change, compared with their state-owned counterparts including the largest SBI.
A total of 26 of the 34 banks questioned don’t disclose the most basic environmental indicators, such as scope 1 and 2 greenhouse gas emissions, while only six banks had their operational greenhouse gas emissions independently verified by a third party.
--With assistance from Suvashree Ghosh, Anirban Nag and Abhay Singh.
None of the 34 Indian banks surveyed in the report have a long-term net zero target year with an implementation plan covering so-called scope 1, 2 and 3 emissions, which cover direct green house gas emissions, indirect emissions through electricity or energy purchased, and those attributable to its supply chain or vendors.
Only two banks -- Yes Bank Ltd. and HDFC Bank -- have set targets for scope 1 and 2 emissions, while State Bank of India has only a long-term carbon neutral target year, without specifying the scope of emissions, according to the report. And only two -- Federal Bank and Suryoday Small Finance Bank -- have an exclusion policy that prohibits lending for the construction of new coal power plants or any extension plans.
None of the banks responded to their ranking, the report said.
India’s central bank has called on lenders to monitor the impact on their asset quality from companies exposed to fossil fuels as the economy transitions to cleaner energy as the country pledges to be net-carbon zero by 2070. Currently 62% of the nation’s electricity is generated from fossil fuel.
Read: Biggest India Bank Torn Between BlackRock and Funding Coal
Still, private lenders such as Yes Bank Ltd., IndusInd Bank Ltd., HDFC Bank Ltd. and Axis Bank Ltd. are better prepared with strategies to battle climate change, compared with their state-owned counterparts including the largest SBI.
A total of 26 of the 34 banks questioned don’t disclose the most basic environmental indicators, such as scope 1 and 2 greenhouse gas emissions, while only six banks had their operational greenhouse gas emissions independently verified by a third party.
--With assistance from Suvashree Ghosh, Anirban Nag and Abhay Singh.
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