INDIAN ECONOMY

MODULE -A
UNIT-10: CLIMATE CHANGE,
SUSTAINABLE DEVELOPMENT
GOALS (SDGs) (Short Note)

Agenda:
What is Climate Change?
What are the Sustainable Development Goals (SDGs)?
What are the core elements of Sustainable Development?
All about India’s progress in SDGs?
All about India and SDG 13?
All about Bank and Climate Change?
All about CSR?

JAIIB WITH ASHOK

CLIMATE CHANGE, SUSTAINABLE DEVELOPMENT
GOALS (SDGs):
The Sustainable Development Goals (SDGs), also known
as the Global Goals, were adopted by the United Nations
in 2015 as a universal call to action to end poverty, protect
the planet, and ensure that by 2030 all people enjoy
peace and prosperity.
Long-term changes in temperature and weather patterns
are referred to as climate change.
If we aim to limit global warming to 1.5 C, scientists
recommend that by 2030, global emission should be cut
by 45%, compared to 2010 levels.
Sustainable Development Goal 13 is about climate action.
The official mission statement of this goal is to 'Take
urgent action to combat climate change and its impacts'.
SDG 13 has targets, which are to be achieved by 2030.

CORE ELEMENTS OF SUSTAINABLE DEVELOPMENT:

In Sep 2015, the UN General Assembly (UNGA)
announced a set of 17, Sustainable Development Goals
(SDGs) and 169 targets to spur action, over the next 15
years.
Goals were proposed in June 2012 at the United Nations
Conference on Sustainable Development (Rio+20).

JAIIB WITH ASHOK

These set of goals (SDGs) superseded the Millennium
Development Goals (MDGs).

The seventeen (17) Goals agreed under the SDGs are:

1. No Poverty.
2. Zero Hunger.
3. Good Health and Well-being.
4. Quality Education.
5. Gender Equality.
6. Clean Water and Sanitation.
7. Affordable and Clean Energy.
8. Decent Work and Economic Growth.
9. Industry, Innovation and Infrastructure.
10. Reduced Inequality.

JAIIB WITH ASHOK

11. Sustainable Cities and Communities.
12. Responsible Consumption and Production.
13. Climate Action.
14. Life below Water.
15. Life on Land.
16. Peace, Justice and Strong Institutions.
17. Partnerships to achieve the Goal.

GLOBAL ISSUES AND INITIATIVES:

The United Nations (UN) has evolved as the premier
forum for addressing the issues that transcend national
boundaries and cannot be resolved unilaterally by any
one country.
UN has added new challenges to its agenda, such as
AIDS, big data, and climate change.

INDIA'S PROGRESS IN SDGs:

Since 2019, India's total SDG score has increased from
60 to 66 in 2021 (out of 100), owing to nationwide
improvements in ‘clean water and sanitation' and
'affordable and clean energy,' respectively.
Kerala ranked first on SDG India Index, followed by
Himachal Pradesh, Tamil Nadu, Andhra Pradesh, and
Goa.

JAIIB WITH ASHOK

The task of coordinating the SDGs has been entrusted to
NITI Aayog.
Government's initiatives like 'Swachh Bharat', 'Make in
India', 'Skill India', and 'Digital India', are key to the SDGs.

India and SDG 13: Climate Action:

India pledged to achieve net-zero emissions by 2070 at
United Nations COP26 summit, in Glasgow in November
2021.
India has made five 'Panchamrit' commitments to combat
climate change. These are:
1. Achieving the target of net zero emissions by 2070.
2. Achieving 500-Gigawatt non-fossil energy capacity by
2030.
3. Fulfilling 50% of its energy requirements from
renewable energy sources by 2030.
4. India will reduce the total projected carbon emissions
by one billion tonnes from now onwards, till 2030.
5. India will reduce the carbon intensity of its economy, by
less than 45%, by 2030.
At the COP26 meeting, India also announced 'One Sun,
One World, One Grid' (OSOWOG), with the goal of
harnessing solar energy.

JAIIB WITH ASHOK

India has launched the ‘Plastic Hackathon 2021’campaign
to ensure that the country is free of single-use plastic by
2022.
The UN climate summit (COP27) was held in Egypt on
November 20, 2022.

Banks and Climate Change:

Climate change is likely to lower India's GDP by 2.8%, per
year by 2050, according to the World Bank.
Through green finance, the banking sector can help India
achieve its climate targets.
The Financial Services Taskforce (FSTF) of Sustainable
Markets Initiative suggests a gamut of strategies on how
the banking sector can support energy transitions:
1. Benchmarking the definition of sustainable financing for
further investments.
2. Undertaking scenario analysis.
3. Assessing the risks and opportunities in sustainable
financing mechanisms, etc.

Green Finance for sustainable development:

Green finance refers to the financial arrangements that
are specific to the use for projects that are
environmentally sustainable or projects that adopt the
aspects of climate change.

JAIIB WITH ASHOK

Environmentally sustainable projects include the
production of energy from renewable sources like solar,
wind, biogas, green building, recycling, efficient disposal
and conversion to energy, etc.

Progress in India:
In December 2007, the Reserve Bank issued a
notification on "Corporate Social Responsibility,
Sustainable Development and Non- Financial Reporting
Role of Banks" and mentions the importance of global
warming and climate change in the context of sustainable
development.
In 2008, The National Action Plan on Climate Change
(NAPCC) was formulated with a vision to outline the
broad policy framework for mitigating the impact of
climate change.
The Climate Change Finance Unit (CCFU) was formed in
2011 within the Ministry of Finance as a coordinating
agency for the various institutions responsible for green
finance in India.
Security and Exchange Board of India (SEBI) made it
mandatory for top 100 listed entities based on market
capitalization at BSE and NSE to publish annual business
responsibility reports since 2012.
In May 2017, SEBI issued guidelines for green bond
issuance specifying the disclosure requirements.

JAIIB WITH ASHOK

The Government of India (Gol) offers 30% (in some states
up to 70%) of the installation cost of the rooftop solar
panels as subsidy.
The GoI launched two phases of Faster Adoption and
Manufacturing of Hybrid and Electric Vehicles (FAME)
scheme in 2015 and 2019, to enhance the flow of credit,
reducing the up-front purchase price of all vehicles and
developing the infrastructures (such as charging stations)
to encourage green vehicle production and sales.
In order to counter the high up-front cost of such vehicles,
the State Bank of India has introduced a 'Green Car
Loans' scheme for electric vehicles with 20 basis points
lower interest rate and longer repayment window.
The RBI has included the small renewable energy sector
under its Priority Sector Lending (PSL) scheme in 2015,
where firms in renewable energy are eligible for loans up
to ₹ 30 crore while the households are eligible for loans
up to 10 Lakh.

Progress and Challenges of Green Finance in India:

Improvements in general awareness:
Google Trends can be a powerful tool for understanding
the pattern of google searches made in different locations,
it can help us understand the interest on a given topic of
green finance.

JAIIB WITH ASHOK

Green lending:
Green Lending refers to providing financial support for
projects that have a positive impact on the environment.
This includes funding for renewable energy, sustainable
infrastructure, and other initiatives that help reduce
pollution and conserve resources.
Green bonds:
Green bonds are the bonds issued by any sovereign
entity, inter-governmental groups or alliances and
corporates with the aim that the proceeds of the bonds
are utilised for projects classified as environmentally
sustainable.
India started issuing green bonds since 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

ACTIVITIES:
The aim of CSR is to voluntarily incorporate economic,
social, and environmental obligations into business
operations, in order to achieve long-term growth and
demonstrate a beneficial impact on the environment,
employees, consumers, shareholders, and communities.
Section 135 of the Companies Act 2013 provides legal
support for CSR in India.
Schedule VII provides the overall direction for CSR
efforts.

JAIIB WITH ASHOK

CSR attempts to eliminate hunger, poverty, and
malnutrition.
CSR intends to promote healthcare, preventive healthcare
and sanitation, by contributing to the Central
Government's 'Swachh Bharat Kosh' programme.
In India, companies are now free to spend more than the
mandated 2% of their net profits on CSR in any year and
the excess amount spent can be set off against the CSR
spending obligation in future years, subject to riders.
The penalty, at least Rs. 1 crore for the defaulting
company and at least Rs. 2 lakhs for each defaulting
officer were introduced in 2020, to replace imprisonment
provision of maximum three years for defaulting officers
that was brought in 2019.
In the latest development, non-compliance with CSR
provisions is now "civil wrong," not a crime and shifted
such violations to a penalty regime.

JAIIB WITH ASHOK