To tackle these challenges head-on, climate finance must be prioritised. This involves mobilising resources to fund projects that reduce greenhouse gas emissions, promote renewable energy, and enhance resilience to climate impacts. Such investments are crucial for job sustenance, creation, and economic diversification.
India’s ambitious goal of achieving Viksit Bharat, or a developed India, must be aligned with its climate action financing needs, which are estimated to require $10–12 trillion. This substantial investment is essential not only for mitigating and adapting to the impacts of climate change but also for ensuring sustainable economic growth and development. Integrating climate finance into the broader Viksit Bharat agenda is crucial, as it will enable India to build resilient infrastructure, foster innovation in green technologies, and create a robust framework for sustainable development.
Banks and financial institutions play a pivotal role in mobilising climate finance. They are instrumental in developing innovative financial products, such as green credit, green deposits, green bonds, and climate-focused credit and investment funds, which attract both domestic and international investors. As Indian sectors transition to cleaner energy sources, there will be significant implications for financial institutions’ portfolio exposures and future investment mixes. This shift will necessitate adjustments in how financial portfolios are structured, as investments in traditional high-carbon sectors may diminish while those in sustainable and green technologies increase.