Have you ever wondered how banks support environmental protection through finance?
In recent times, “Green Finance” has emerged as a crucial concept in the banking sector, especially for those appearing in the Certified Credit Professional (CCP) exam. Not only is this topic significant from an examination perspective, but it is also highly relevant in today’s environmentally-conscious financial landscape.
This blog post – based on a detailed and engaging Hindi-English video session – will take you through the complete landscape of Green Finance in India and globally. Whether you are a banking professional, a student preparing for CCP or JAIIB, or someone interested in sustainability, this article will give you a strong conceptual foundation and real-world applications of Green Finance.
We’ll start with the basic meaning, importance, global treaties, Indian regulatory steps, and various methods of Green Financing like Green Bonds, Sustainability Bonds, Blue Bonds, etc. We’ll also explain new-age concepts like Greenwashing and RBI’s Green Deposits Framework.
👉 So without further delay, watch the video and dive into this article. Don’t forget to share your views in the comment section below.
🎥 Watch the Complete Breakdown Here:
👉 “Before we dive in, watch this video for a complete breakdown:”
⏱️ Complete Topic-Wise Breakdown with Timestamps
🔍 00:00 – What is Green Finance? Explained with a Simple Example
Imagine a company named ABC that wants to reduce pollution caused by petrol and diesel vehicles. They propose building an Electric Vehicle (EV) charging station. Since this project contributes to reducing air pollution and promotes clean energy usage, the bank decides to finance this eco-friendly initiative with a loan of ₹50 lakhs.
This is the core idea of Green Finance – providing finance for projects that benefit the environment and society.
🌍 02:12 – Why is Green Finance Required?
India and other countries are experiencing unpredictable weather patterns, frequent floods, droughts, and rising temperatures – all because of climate change. This impacts food production, increases inflation, and leads to economic instability. Natural disasters often damage infrastructure, and people are unable to repay their loans due to financial stress, increasing the Non-Performing Assets (NPAs) of banks.
To address such problems, massive investments are required. However, public funds alone are not enough – hence, financial institutions are expected to actively contribute through Green Finance.
🌐 04:11 – Global Climate Initiatives: A Timeline
- Montreal Protocol (1987): First global treaty aimed at protecting the ozone layer by phasing out ozone-depleting substances like CFCs.
- UN Framework Convention on Climate Change (UNFCCC) – 1994: Focused on stabilising greenhouse gas emissions.
- Kyoto Protocol (1997): Legally binding emission reduction targets for developed nations.
- Paris Agreement (2015): A global landmark treaty aimed at keeping global warming well below 2°C.
- Kigali Amendment (2016): Amendment to Montreal Protocol targeting reduction of HFCs (Hydrofluorocarbons).
♻️ 07:26 – Circular Carbon Economy (CCE): 4Rs Framework
- Reduce: Reduce the use of carbon-based fuels.
- Reuse: Capture carbon and utilise it again without chemical alteration.
- Recycle: Convert captured carbon into new, value-added products.
- Remove: Extract carbon from the air and store it using techniques like afforestation and air capture technology.
📈 08:27 – Global Green Finance Regulations and Programs
- Equator Principles: Risk management framework for financial institutions.
- UNEP Principles for Responsible Investment
- Sustainable Stock Exchanges: ESG-compliant stock indices.
- Disclosures inspired by G20 TCFD: Companies are expected to disclose ESG risks and measures.
- Directed Lending: Banks to refinance renewable energy projects.
- Micro/Macro Prudential Norms: Environmental compliance is linked with capital adequacy and lending eligibility.
- Green Financial Institutions: Special green banks and ADB/USAID initiatives promoting green credit.
🇮🇳 12:22 – Green Finance in India: Key Regulatory Steps
- 2007: RBI’s notification on CSR and sustainable development.
- 2008: National Action Plan on Climate Change (NAPCC).
- 2011: Climate Change Finance Unit under Ministry of Finance.
- 2013: Companies Act Section 135 mandates 2% CSR spend.
- 2015: Renewable energy included under Priority Sector Lending (PSL).
- 2017: SEBI’s Green Bond Disclosure Guidelines.
- SBI Green Loans: Loans at concessional rates for EVs.
- PLI Scheme: Production-linked incentives for renewable components.
[FREE EPDF] DIGITAL FINANCE P2P LENDING VIA FINTECH PART 2 | CCP IIBF
💸 16:24 – Methods of Green Financing
- Green Lending: Direct loans for eco-projects.
- Green Bonds: Fixed-income instruments to fund green projects.
- Sustainability Bonds: Support projects with both environmental and social benefits.
- Sustainability-Linked Bonds: Issued by firms with committed sustainability targets.
- Social Bonds: Target affordable housing, healthcare, education, etc.
- Climate Bonds: Finance projects aimed at reducing carbon emissions.
- Blue Bonds: Focus on marine and aquatic ecosystem projects.
💚 21:35 – Green Economy, Green Deposits and Greenwashing
- Green Economy: Growth that does not harm nature and ensures sustainable resource usage.
- Green Deposits: RBI’s 2023 framework – deposits used strictly for eco-projects.
- Greenwashing: Misleading claims by companies to appear eco-friendly while engaging in harmful practices.
✅ Conclusion
To sum up, Green Finance is not just a topic for exams – it is the need of the hour. It plays a critical role in mitigating climate change and ensuring sustainable economic growth. Understanding these concepts will help bankers make better lending decisions and contribute towards India’s climate goals.
For students preparing for CCP, JAIIB, or other banking exams, mastering this topic will surely help you score better and stay ahead in your career. Do revise this topic with the video and PDF notes, and leave your feedback or doubts in the comment section below.
📥 Download PDF Notes of This Session
👉 Click Here to Download Full Notes on Green Finance – CCP
Includes: Complete definitions, regulatory frameworks, policy initiatives, bond types, and RBI-SEBI action points.
Also Like:
