CHENNAI: Green bonds, green and sustainability-linked loans are steadily increasing in the country in recent years, with sustainable debt issuance stood at $13.7 billion (`1,118.46 billion) in 2021 calendar year (CY).
Sustainable debt, including loans and bonds worth $4.3 billion (`351 billion), have been raised in CY 2022 till October 7, as per the Institute for Energy Economics and Financial Analysis (IEEFA). So far, $28.3 billion worth of green loans and $19.38 billion worth green bonds have been issued in the Indian market till October 7, primarily by power utilities and independent power producers.
Sustainability-linked bonds are fast growing and are issued primarily by the industrial sector firms like JSW Steel, UPL, Ultratech Cement, among others. $2.45 billion sustainability-linked loans have been issued till October 7, as per Bloomberg Green Energy Finance. While the renewable energy sector and electric mobility is leading the lending under sustainable debt instruments, other sectors like banks, non-banking finance companies (NBFCs), chemicals, metals, pharma are also tapping into the green funds.
Indian corporations are expected to adopt more sustainable practices, mainly due to regulatory pressure and to tap into the low-cost green-labelled money. Some industry representatives believe corporations will be forced to take up sustainability practices in future to tap the sustainable finance market, as it is slated to grow bigger. Kamal Bali, managing director and President of Volvo India, said companies must adopt environment, sustainability and governance (ESG) practices in order get green-labelled finance and warned that carbon borders will become a norm for exports to developed economies.