In a recent study by India’s top non-governmental trade association, The Associated Chambers of Commerce and Industry of India (ASSOCHAM), India’s green bond issuance is expected to reach new milestones in 2022, following an exceptionally strong 2021 which saw financing of USD 6.11 billion through these instruments, in the first 11 months of the year.
This uptake is in sync with the rising global investor interest in sustainable development.
“The year ‘2021 was the strongest year since green bonds from the country were first issued in 2015. India will need USD 10.103 trillion by 2070 to be carbon neutral, ” the ASSOCHAM study stated as per a media release.
The study added that the green bonds have emerged amongst the most prominent financial vehicles catering to climate action specifically for projects requiring long-term finances.
It said long-term investors including pension and insurance funds now prefer bonds which invest in green assets. Worldwide, labelled green bond issuance amounted to USD 167.6 billion, led by the United States followed by PRC), France ,Germany and the Netherlands
”We expect bond markets in India to witness further deepening by inclusion in global indices and allowance to diversify investment opportunities,” said Deepak Sood, Secretary General, ASSOCHAM. He said India has been amongst the world champions to follow the path of environment-friendly development.
As part of an integration effort of the country’s financial priorities into measurable metrics, the Bombay Stock Exchange has launched two such indices: S&P BSE Greenex and the S&P BSE Carbonex. The Greenex comprises top 25 stocks having minimum carbon footprint along with market capitalization and turnover from the BSE 100. It assesses the energy efficiency of firms.
The BSE Carbonex is a thematic index which measures companies’ ability to address climate change risk and opportunity. The index is based on the S&P BSE 100, with the constituent weights modified in accordance with the companies’ relative carbon performance as measured by the level of their greenhouse gas emissions and carbon policies.