As sustainable development transforms from a buzzword to a guiding principle across countries and companies, the requirements for capital have grown as well. Over a virtual panel discussion, the UK government’s Department for International Trade brought together experts and thought leaders from India and the UK to establish a constructive dialogue on the role of sustainable infrastructure development in economic growth.
Climate change and sustainability will be the biggest challenges facing the international community over the next decade, said Alderman Vincent Keaveny, Lord Mayor of the City of London. “Financial markets are critical to lowering the costs of key technologies and enabling business to transition at scale. Public finance is essential, but we know from estimates from the International Energy Authority and others that it will not be enough, which is why we must mobilize private capital,” he said at the discussion.
“The unique UK-India relationship can support India in its decarbonization. The UK is a one-stop shop to support the transition to a low-carbon economy, find tech solutions, restructure business divisions and raise capital. We must connect the UK innovation with India’s dynamicism and industry,” he further said.
“There are over $100 trillion across the world aligned to the Principles for Responsible Investment (PRI), over $40 trillion now aligned to the UN Sustainable Development Goals (SDGs) and over $1 trillion of green bonds, social bonds and sustainability bonds which have been issued in the market,” said Shrey Kohli, director, head of debt capital markets, London Stock Exchange.
According to Arun Saigal, managing director and head of global finance, Barclays Bank PLC, India, sustainable development has become an existential issue, with investors, providers of financial capital and corporates fully aware of the necessity for transition.
“I know the needle has moved. But it’s not going to be leap-frogging into a newer technology that we move into very, very rapidly. It will be a slow and gradual change and we need to take people along,” said Tarun Sharma, chief financial officer, India Exim Bank.
The dialogue emerging today is whether sustainability is the new digital. As industries and countries at large move towards net zero targets, there are also concerns around greenwashing, or conveying the impression that a product or service is eco-friendly without actually being so.
“If we have to achieve the targets as a country, it requires everybody in the ecosystem to be in sync including capital investment side, the regulatory side, which I think is going to propel us way faster than what digital did because here, we have a greater impetus,” said Niloufer Lam, partner at ZBA, a law firm.
“There is something in the vicinity of about $25-30 trillion lying in ESG funds. The number of opportunities that are available in India to invest is huge, and we will certainly see that money coming into India,” said Rajiv Anand, deputy managing director, Axis Bank.
Delivering the vote of thanks, Philip Sydenham, first secretary, trade (financial, professional services, creative, sport) at the British deputy high commission, Mumbai, said, “We are really committed to working together towards a sustainable, clean and resilient future and ensuring players of sustainable finance will be central to this. We are really looking forward to opening direct overseas listings as a major opportunity for new companies to raise capital directly from international investors, especially in the green space.”