The concept of going green has gained great mileage recently and it surely is sustainable and balanced growth for any country. It represents the economic growth pattern with the new driving power of “green” and to obtain an eco friendly way in the manufacturing capability of India which is the need of the hour. Service sector is already contracting and GDP growth depends on manufacturing ability of Indian companies amidst the dull economic and business environment. So the challenge is to reduce pollution by utilizing green technology and expanding the energy and resources.
Green environmental management has been regarded as CSR activity recently that should try to do something for the society. Green financing is a CSR activity of finance firms such as banks, mutual fund companies, stock companies and so forth. This means financial companies should take efforts although it is not profitable.
Government should play an important role in promoting and bridging the gap by regulating the green industrial markets for green product dispersion and to try boost the green consumption. It should enable all products to emerge as a green lever in the form of financial programs by incentivising financial market based instruments, government subsidies, tax incentives, and necessary measurement reporting and verification infrastructure.
The major advantages of Green growth can be highlighted as:
- New markets
Few green initiatives:-
- Recently, SBI entered into an understanding with MITCON consultancy services ltd, ecosecurities India private ltd, etc. to provide a one stop solution to industries for CDM projects and emission trade. Apart from finance, it will provide financial services, securitisation of carbon credit receivables, delivery guarantees and escrow mechanism for carbon credit. Introduction of green channel banking for paperless work.
- ICICI bank has setup technology finance group(TFG) assisted the introduction of environment management codes in India.It supported clean coal concepts like coal washeries and coal bed methane for the first time in India.TFG also aided in development of first electric car in India, currently being exported to several countries.
- Canara bank is extending loans for solar lighting systems and has financed 50,000 such units and had lent a sum of RS 5 to 8 lakhs for each unit, taking outstanding to RS 50 crore.All such finances has made interest rate of only 2%.
- Indian overseas bank, are aggressively financing projects related to windmill, biomass energy and solar power.
- Oriental bank of commerce is financing those projects which fall under energy audit programme of the central government.
- The government of Maharashtra is committed and has many plans to encourage green homes and will be coming out with many new initiatives like the Bachat lamp yojna: P-CDM.It promotes replacement of inefficient bulbs.
Some examples of Indian firms who have achieved global reduction of carbon emission are Binani Cement, Mahindra& Mahindra, L&T, TATA Coffee, L’oreal and HUL. They have been awarded many green leadership awards.
The banking sector is one of the major source for financing steel, oil, paper, cement, power, textiles, etc. industries and they play an intermediary role between economic development and environmental protection.
Green finance is infrastructure for green growth. Because the green industry is very risky in the initial stages, the assistance and support in the aspect of finance is a pre requisitve to make the investment harmonised. If the government gives certain level of profits, the private sector will voluntarily join the market. The green finance association should be made and the various national green finance associations should compare notes and share lessons and experiences, exchange ideas, setup benchmarks, guidelines, training and good practices and publish news, handbooks and yearly reviews to promote green finance and thus economy.