Green financing

26.04.2024

Green financing

Why in the news?                                                                                                                                   

           Recently Climate Strategy 2030 has been unveiled by NABARD to mobilize green financing.

Important points:

• National Bank for Agriculture and Rural Development (NABARD) unveiled its Climate Strategy 2030 document on the occasion of Earth Day, which aims to address India's green financing needs.
• India needs about $170 billion annually to reach a cumulative total of more than $2.5 trillion by 2030, so current green finance flows are seriously inadequate.
• As of 2019-20, India's green financing stood at about $49 billion, a fraction of the need.
• NABARD's Climate Strategy 2030 is structured around four key pillars which include accelerating green credit across all sectors, playing a broader market-building role, internal green transformation and strategic resource mobilization.

About Green Finance:

• Green financing refers to any structured financial activity product or service that is designed to ensure better environmental outcomes.
• It includes a variety of loans, credit mechanisms and investments aimed at promoting the development of green projects or reducing the climate impact of regular projects.
• The goal of green financing is to align financial activities with environmental goals.
• It plays a key role in achieving many of the United Nations Sustainable Development Goals by supporting sustainable development priorities.

Examples of green financing:

• Financing of projects related to clean energy sources and energy-saving technologies.
• Financing initiatives that reduce pollution and promote clean practices.
• To support efforts to protect and conserve biodiversity.
• Investing in projects that promote resource efficiency and waste reduction.
• Financing projects that balance economic growth with environmental protection.

                         Source: The Hindu