Climate change is no longer a future threat it has already had a devastating impact on the financial sector. However, it also presents opportunities for investors. Green deposits is basically a fixed deposit investment plan for investors who wish to invest in environmental friendly projects. The funds are used to promote businesses which are shifting towards low carbon, climate resilient and sustainable economy. With the rising awareness of ESG(Environment, Social and governance) indicated the high market sentiment in finding ways to promote sustainable investing. Consumers in today’s time have become socially conscious which means they expect the companies which they are related to like banks or credit unions to accommodate their values and think of a larger picture beyond company profits. The trend quickly penetrated in the banking culture, where various plans were introduced in catering the consumers who wish to go a step ahead and get environmental as well as monetary benefits. On what basis are the environmental projects selected? 1) Companies which specifically work in sectors of: a) Renewable energy b) Energy efficiency technologies c) Green buildings d) Low carbon transport e) Waste management f) Water g) Carbon abatement and sequestration projects h) Forestry and land rehabilitation i) Adaptation infrastructure 2) Companies have setup a framework which analyzes the potential risks at all stages of credit process including origin, evaluation, approval, documentation and settlement, and monitoring. Apart from contributing to environmental friendly cause, this new offering in the market is open for retail investors as well as corporates. 1) Green deposits can fetch an individual investor an interest rate of3.95% - 6.55% whose period can range from 3-10years 2) Banks have various schemes for senior citizens for eg: HDFC bank’s green deposits allows senior citizens (60+) to receive an additional deposit of upto 0.25% per annum In conclusion, Investors are expected to conduct a thorough research before selecting any investment plan. In India, the green financing investment holds a lot more potential hence we can expect many other banks to come up with green deposits schemes. At the end of 2018, the market for green and sustainable finance was already worth $30.7 trillion. In the first half of 2020, more than $275 billion of new sustainable financing had been raised on capital markets. In the past year, despite the coronavirus pandemic, we’ve seen various forms of green and sustainable financing transactions and initiatives Thank you.
Amazingly written
ReplyDeleteNice 👍
ReplyDeleteCrispy.
ReplyDelete