Board-level engagement in banks on climate risk inadequate: RBI survey

The survey pointed out a majority of the banks did not have a separate business unit or vertical for sustainability and ESG-related initiatives

Banks in India have begun taking steps in the area of climate risk and sustainable finance, yet the Board-level engagement on this count is inadequate. In about a third of the banks, responsibility for overseeing initiatives related to climate risk and sustainability was yet to be assigned, according to a Reserve Bank of India (RBI) survey.

Furthermore, only a few banks have included climate risk/sustainability/environmental, social and governance (ESG) related Key Performance Indicators (KPIs) in the performance evaluation of their top management, RBI survey said.

The central bank undertook survey on Climate Risk and Sustainable Finance in January 2022, covering