State-run banks on a green drive, seek outside help

Indian banks, especially those in the public sector, are weaving green initiatives into their business decisions amid rising risks of climate change, and are looking for external help to create frameworks to help them make better decisions on the sustainability front.

- Shayan Ghosh

India’s largest bank State Bank of India (SBI) and second-largest public sector lender Bank of Baroda (BoB) are the government-owned lenders leading the way. SBI said in August that it wants to hire a consultant to measure carbon footprints in its loan portfolio, and benchmark the bank’s loan mix based on high- and low-emitting sectors, while taking into account the portfolios of other local and global peers.

SBI also raised a $1 billion syndicated social loan in February, arranged by MUFG Bank and Taipei Fubon Commercial Bank, which it said was the largest ESG (environment, social, governance) loan by a commercial bank in Asia Pacific and the second-largest social loan globally.

BoB is looking to appoint a consultancy for advisory on green financing, showed a public document from 30 November. The document showed that the bank is embarking on an ambitious journey to enhance its green financing portfolio, and align its business and operations with ESG principles.

Another public sector bank, Union Bank of India, said in July that it has empanelled EY, Deloitte, PwC, KPMG and Crisil as consultants to aid its ESG transition.