India needs $20 billion investment every year for green transition

The report cites reforms in power sector for encouraging ESG-led investment in India’s climate transition.

FICCI and Trilegal jointly released a white paper ‘ESG – Into the Mainstream’ during the FICCI ESG Summit 2022. The report, released by Rajesh Verma, Secretary, Ministry of Corporate Affairs, and Government of India comes as at a timely juncture as ESG (Environmental, Social and Governance) considerations are increasingly influencing the way in which businesses measure success. The expectations of key business stakeholders such as investors, regulators, customers, and employees are also bringing these parameters in sharp focus.

The narrative around ESG has changed significantly over the last couple of years, from being seen as a compliance imperative to taking the centre stage at boardroom discussions and driving investment and business strategy decisions. India needs USD 20 billion worth of investments each year to achieve its climate targets and fund its green transition. It needs a large budget allocation, international finance from bilateral and multilateral sources and green private investments. Chapter 1 of the report, Unlocking Green Finance explores India’s readiness to access and deliver climate finance and other related aspects such as uniform carbon tax policy and green taxonomy for enhancing investor confidence. It delves deep into potential sources of finance and novel structures and the need to incentivize investors willing to provide ‘first loss capital’ to de-risk projects and catalyse further investments.

Focusing on Redefining corporate citizenship – the road to sustainability, the report details how corporates can contribute to the sustainability agenda, non-financial metrics and management of ESG risks. As regulators actively incorporate ESG and sustainability factors into the legal framework, the ways in which companies operate will change. The report also spotlights reforms in power sector for encouraging ESG-led investment in India’s climate transition