Background NoteThe last half decade has seen a global call to action to tackle climate change and pollution, which is driving a transition to ‘clean’ technologies, services and infrastructure, world over. States as well as businesses are increasingly committing to reducing their carbon footprint, and making their systems, processes and operations more resilient.
As the world continues to grapple with the humanitarian and economic impact of the pandemic, an aim to ‘build back better’ is taking shape, in response to the urgent need to tackle climate change. However, institutionalising a global financial system fit for this ambition will require fundamental changes to the way investment decisions are made – business and financial institutions will need to ensure that financial risks and opportunities arising out of climate change are embedded across core governance and risk management processes. As this transformation in the financial sector gathers pace, it must be matched by continued real economy action – to mobilise and accelerate flows of private finance into clean growth and environmental sectors.
The UK and India have been playing crucial roles on the world stage in supporting this global transition and are natural partners on this agenda. As a global standard bearer for green finance, and host to the UN Climate Change Conference (COP 26) in November next year, the UK is leading the way in mobilising green capital as well as carefully integrating Environmental, Social and Governance (ESG) considerations into the financial system. India too championed this cause with its leadership on scaling renewable energy deployment and initiating policy reforms in the corporate sector through mandatory ESG disclosures, which are now recommended to be applied for the top 1000 (by market capitalisation) listed companies. At the recently concluded 10th UK-India Economic and Financial Dialogue (EFD), both Finance Ministers have committed to build on this joint work and take this cooperation further.
It is against this backdrop that the seminar on the theme ‘Green Finance for Enhancing Climate Ambition’ has been designed. Discussions in the seminar will be focussed on how broader economic and social development concerns can be addressed in green investments, the role of financial mechanisms and instruments in catalysing much needed private capital for green finance and how India can transition to a resilient, ‘greener’ financial system incorporating relevant global standards on disclosures and risk management.