Financial institutions play a major role in determining whether a country is pursuing sustainable economic development. Banks, insurance companies, pension funds, asset managers and other financial actors shape environmental, social and governance (ESG) outcomes through their lending, investment and other financial decisions.

Given the urgent challenges posed by climate change, India is looking to improve the climate consistency of its financial system. Many financial actors are therefore exploring opportunities for peer learning both globally and domestically. For example, the Indian Ministry of Finance is a founding member of the International Platform on Sustainable Finance (European Commission, 2019); the Reserve Bank of India has recently joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS, 2019); and the Indian Banks’ Association, which represents nearly 250 banks, is a member of the Sustainable Banking and Finance Network (IFC, 2012).

A few Indian financial institutions have also begun exploring opportunities to reduce the carbon intensity of their portfolio and their exposure to climate-related risks. These efforts build on much more extensive experience with addressing other ESG priorities, such as gender equity and social inclusion. There are opportunities for other Indian banks to learn from these front runners, enabling success stories to be replicated and scaled up across the financial sector.

The aim of this briefing note is to highlight examples of good practice within India’s financial sector. The short case studies illustrate the range of options available to green finance and advance other ESG goals, and offer insight as to why the front-runners have developed these ESG policies and financial products. The analysis is intended to inform and inspire financiers looking to enhance their institutions’ resilience to the physical and transition risks of climate change, as well as deliver against other ESG priorities.