SBI Looking Into Risk Matrix, To Provide Special Credits For Green Initiatives: Chairman Dinesh Khara

SBI has been calculating the carbon footprint of it’s Rs 33 lakh crore portfolio at the account level to try to mitigate climate risks and deal in sustainable financing.

The Chairman called for a need to deepen the green bond market with a special focus on rupee-denominated bonds, standardization of green investment, and better corporate reporting.

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The State Bank of India is looking into developing the risk matrix for it’s borrowers, wherein it provides special credits to those starting on green initiatives, the bank’s Chairman, Dinesh Khara, said on Monday. 

Talking at a Ficci event in Mumbai, Khara said, “At the bank level we have started working out the risk matrix of our borrowers wherein we give some special credits to those embarking on green initiatives,” as reported by PTI. Notably, SBI has been calculating the carbon footprint of it’s Rs 33 lakh crore portfolio at the account level to try to mitigate climate risks and deal in sustainable financing, the company executive noted. 

Khara has been cautioning against green-washing recently. He urged for better project reports for green financing to be able to mitigate the information mismatch that is a major problem in the green funding segment. He also underlined the need for a policy framework to boost awareness of the green finance ecosystem. 

The lender’s chairman noted, “There is a need for the chartered accountants community to come out with some auditing standards which can help corporates in terms of having annual data relating to green initiatives and their outcomes.” Khara’s tenure with the bank was extended to August 2024. 

He called for a need to deepen the green bond market with a special focus on rupee-denominated bonds, standardization of green investment, better corporate reporting, and removing the asymmetry in information to control and curb the limitations of the green finance market. 

Khara further stated that for global spending on physical assets to reach net-zero, an investment of $275 trillion between 2021 and 2050 is required. He added that since 2014, domestic companies have together raised $43 billion in the segment’s funding space. This has made India the sixth-largest issuer of such bonds in the entire Asia-Pacific region. Notably, the first green bond was issued in 2014.