Green funding must be mainstreaming: Deputy Governor of the RBI

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    There is a need to mainstream green finance and find ways to incorporate the environmental impact into commercial lending decisions, according to RBI Lieutenant Governor M Rajeshwar Rao. Tackling climate risk in the financial sector should be a shared responsibility of stakeholders as it would undermine the resilience of the financial system in the long run, he said. Rao made these remarks when speaking about green and sustainable finance at the CAFRAL virtual conference recently.

    “Because the risks, opportunities and financial impacts of climate change vary from country to country, this presents unique considerations for emerging economies like India while balancing the needs of credit expansion, economic growth and social development,” said Rao.

    He noted that global understanding of the systemic impacts of climate change on the economy and the financial system, and the resulting impact on financial stability, is evolving, and responses from central banks and regulators around the world are evolving accordingly. “The private and public sectors need to build on our early advances by both recognizing what we know and urgently closing the gaps related to what we don’t know,” said Rao.

    He went on to say that the effects of climate risk extend beyond national borders and continents. “Let us be aware that those countries that do not make large contributors will be equally affected by these risks. We’re all in it together, ”he said. Climate-related financial risk refers to the risk assessment based on the analysis of the probabilities, consequences and responses to the effects of climate change.

    “Let us be aware that those countries that do not make large contributors will be equally affected by these risks. We’re all in it together, ”he said. Climate-related financial risk refers to the risk assessment based on the analysis of the probabilities, consequences and responses to the effects of climate change. Thus, climate-related financial risks can arise not only from climate change, but also from efforts to contain these changes, Rao said.

    A report published last year by the Ministry of Geosciences of the Government of India concluded that India has been experiencing an increase in the intensity and frequency of severe cyclones since the mid-20s as well.

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