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About 90 Trillion Investment Needed To Combat Rising Temperature: Stuart Milne, CEO, HSBC India

The role of the capital market to mobilize private long term finance is also crucial, especially in the context of green bonds

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Accomplishing global climate action will require massive step up in the flow of financial resources. Clean energy alone would require trillions of dollars of funding. Regulatory and policy measures to enable banks to channel finance towards low carbon and adaptation projects is critical. The role of the capital market to mobilize private long term finance is also crucial, especially in the context of green bonds.

The session “Mobilizing Private and Public Finance for Climate Action” deliberated on the potential enablers for dovetailing the banking industry towards responsible and sustainable business practices, as well as the enablers for triggering insurance sector, capital markets, including both venture capitalists and big investors towards financing climate-friendly projects.

The session was during the ‘3rd Business and Climate Summit 2017’, a global annual forum that rotates different countries, organized by FICCI in collaboration with the Ministry of Environment, Forest and Climate Change (MoEFCC), Government of India; Ministry of New and Renewable Energy (MNRE), Government of India and the Government of Sweden.

In the session moderated by Dinesh Sharma, Special Secretary, (Economic Affairs), Government of India, & India’s Member on Green Climate Fund, Stuart Milne, CEO (India), HSBC said that “Over the next 15 years, to keep the rising temperatures below 2 degree Celsius, we need about 90 trillion in investment.”

He added that “Although the green bonds market remains small, the rate of growth is very high. India is one of the top 10 issuers”. The question, he said was, “How do we incentivize investors to invest and how to incentivize issuers to issue.”

Anita George, Managing Director, CDPQ Asia Pacific Pte Ltd, said that “Quebec is very green, in terms of energy as it depends mainly on hydro-powered energy” and that “We are one of the largest equity financiers of wind energy in North America”.

She added that “In India, we are the single largest shareholders in the solar platform” and that “India is a very attractive investment destination. We have close to 15 billion dollars invested in India. She also added that “CDPQ has been brave enough to step into renewable energy” and that “In North America we have done extremely well when it comes to green investments.”

Karnam Sekar, Deputy Managing Director, State Bank of India said that “In renewable energy funding, State Bank of India has been playing a pivotal role”. “In renewable energy funding, we have almost 5 billion rupees invested”, he said, adding that “Among Indian corporates, one main constraint is equity. Unless there is sufficient equity, not many lenders will lend.”

Brian Cahill, Managing Director, Moody’s Investors Service, Australia said that “The market is open to providing climate-friendly solutions, and incorporating sustainability in business decisions”.

He said that “There are already many indicators that capital markets are moving towards sustainability”, adding that “Green bonds markets although very small is growing rapidly”. He also added that “Mainstreaming green finance is not only possible, but it’s already occurring”.

Kaku Nakhate, President and India Country Head, Bank of America Merrill Lynch said that “We at Bank of America have been very focused on responsible growth strategy”. She added that “The transition to a low-carbon and sustainable economy is one of our most important focuses” and that “Every Bank of America employee has a duty to do, and we all have signed up to be really transformational in the way we do business, and personally also lower our emissions and move to a sustainable lifestyle.”

She also added “We have the number one Green Bond issuer across the world. We have mobilized our resources effectively towards conservation, transportation, energy efficiency and sustainability solutions. Our PM has committed that 1/3rd of our energy will come from renewable energy, as we are not an oil-producing nation. Technology change is going to be critical”.

She added that “by 2020, we have committed to be emission neutral and only use renewable energy”. To this Dinesh Sharma, the moderator remarked, “It is heartening to see that the Bank of America is doing more than America is doing”.

Jean-Bernard Levy, Chairman and CEO, EDF Group said that “EDF has played a significant role in the first business and climate summit in Paris”. Commending India’s PM, he said “Mr Modi’s early commitment to COP 21 was a catalyst for COP 21 to succeed”.

“To decarbonize our economy, our society, low carbon electricity is definitely a solution”, he said adding that “We have one of the lowest carbon emission footprint. We have strongly invested in growing the renewable energy base in India”. He said “Today we have a wider range of investors as we tap the green bond market regularly”, adding that “We have 5 billion euros of Green Bonds in our balance sheet”.

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