BCS Chair Naina Lal Kidwai on India’s climate opportunities
Naina Lal Kidwai, Business and Climate Summit Chair
Naina Lal Kidwai, Chair of the Business and Climate Summit 2017, spoke to the We Mean Business coalition about the opportunities for climate action in India and the need for financing. Kidwai is also former President of the Federation of Indian Chambers of Commerce & Industry, the Executive Director on the Asia Pacific Board of Hongkong and Shanghai Banking Corporation Limited and Country Head of HSBC India.
The opportunity for a country like India is huge if you look at the spaces that climate action suggests. India has very polluted, very congested cities so how does that help climate action? It helps because we have to look at whether it is the fuel we use in our cars, or the energy efficiency of our buildings or the whole space around transportation and mobility, in order to ensure we can reduce congestion and reduce pollution.
Around 70 percent of carbon in the urban environment is from transport and buildings. If we do this well we will have a positive impact on climate change.
To finance this transition clearly India needs a lot of money, the world will need a lot of money. How we direct this money is going to be important and there is a role that’s being played by a number of the global pension funds and investor communities around the world who are beginning to commit some of their finance to these areas.
We have a lot to do within the country as well. On the back of the UNEP (United Nations Environment Programme) enquiry into sustainable financing, we set up a chapter in India. This looked at how we could work on a financial structure for sustainable financing in the country, create the enabling structure for green bonds, make sure that the architecture here is such that we can rate a project to be green. It doesn’t have to be just a renewables project, it can be a project which looks at energy efficiency, but should be certified green and therefore be a recipient of this kind of money.
We also need to set up the venture capital systems which enable the innovations for the sector because you need equity as much as you need debt. Also, we need to develop the systems for municipalities to raise money. India sees hardly any issuance by way of municipal bonds and financing for municipalities who have to implement the projects for waste treatment etc.
We have a way to go as we look at these innovations and the key will be to move us from a model which is very bank finance dependant to one where the capital markets play a key role.