Informist, Friday, Sep 6, 2024

--NABARD Shaji: Working with rural centres on climate-friendly pdts

--CONTEXT: NABARD Chairman KV Shaji at FIBAC 2024 conference

--NABARD Shaji: Working to enhance corpus of climate change fund

--NABARD Shaji: Working with stakeholders to develop green taxonomy

--NABARD Shaji: Need granular climate risk assessment models

--StanChart Gurjar: There is need for CIBIL-like climate risk utility

MUMBAI – National Bank for Agriculture and Rural Development is working with several stakeholders to develop a green taxonomy, said K.V. Shaji, the chairman of the bank, at the FIBAC 2024 conference today.

"We are now working with several pilots across the country to develop proper climate framework, then, proper tools and proper taxonomy and proper strategy for our industry," Shaji said. Green taxonomy is a classification system that defines which economic activities and assets are considered environmentally sustainable or "green". It also establishes a common framework that helps make decisions based on sustainable criteria.

Further, Shaji emphasised the need to develop multiple climate risk assessment models suited to various geographies. "You see, it is a large country. Almost all agro-climatic situations in the world is present here. So, one-size-fits-all approach will not work," Shaji said.

In the Budget for 2024-25 (Apr-Mar), Union Finance Minister Nirmala Sitharaman said India will develop a taxonomy for climate finance to enhance the availability of capital for climate adaptation and mitigation.

Talking about the need for climate financing, Shaji said the apex development bank was working with rural financial institutions to develop lending products which would all have some aspect of climate consideration. "So that part, the climate change fund--though the corpus is around 100 crores (1 bln rupees), we will, depending on the demand, enlarge that corpus," chairman of the apex development bank said.

Taking note of global developments in the domain of climate financing, Shaji said NABARD was working with the Food and Agriculture Organisation to set up a carbon fund in India.

While speaking on the subject of climate finance, Shaji's co-panelist Sanjay Gurjar, co-head, Banking and Coverage, India and South Asia, Standard Chartered Bank, said there was a need to develop climate risk utility to provide relevant data for climate risk assessment. "There is a case for a climate risk utility similar to what CIBIL (TransUnion CIBIL) is for financial data," Gurjar said. "We certainly could do with a climate risk utility, which is some sort of a common platform for financial institutions."

Highlighting the need to establish a platform for climate risk assessment, he cited recent advancements in this area by the Hong Kong Monetary Authority as an example.

In May, the Hong Kong Monetary Authority launched the beta version of the Physical Risk Assessment Platform. The platform allows users to assess the potential impact of physical risks on residential and commercial buildings in Hong Kong under different climate scenarios, according to the central bank of Hong Kong. It also acts as a repository of more than 40 public data or data sources related to physical risk. End

Reported by Sourabh Kumar and Kabir Sharma

Edited by Akul Nishant Akhoury

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