The Reserve Bank of India (RBI) has released its latest report on Currency and Finance titled, ‘Towards a Greener Cleaner India’, highlighting the importance of addressing climate change-induced risks to macro-financial prospects. The report comes at a time when global banks like BNP Paribas are making significant commitments towards sustainable finance, and the Indian government estimates a massive expenditure of INR 85.6 trillion by 2030 for adapting to climate change. The RBI’s focus on a greener future reflects the growing recognition of environment challenges in the financial sector.
The RBI underscores the impact of climate change on the economy and financial system, emphasising the need for dedicated research and measures to mitigate climate-related risks. With mounting concerns over environment issues and their potential consequences, RBI aims to contribute to a sustainable and cleaner India through its policies and initiatives.
The recent announcement by BNP Paribas, declaring its decision to cease financing new oil and gas fields and reduce exposure by 80 percent by 2030, highlights the global shift towards green finance. The Ministry of Environment, Forest and Climate Change estimates a staggering expenditure of INR 85.6 trillion by 2030 to address climate change impacts.
The RBI’s report acknowledges the potential risks climate change poses to the financial system’s stability and macroeconomic prospects. It emphasises the importance of conducting comprehensive research to understand these risks better and formulate appropriate policies. By recognising the implications of climate change on financial stability, RBI aims to enhance resilience in the face of environmental challenges.
