The big green reset: Major changes are afoot in the credit markets

As the transition to a low-carbon economy gathers pace

On January 25, we will cross a key milestone: The Reserve Bank of India (RBI) will conduct the first ever auction of sovereign green bonds (SGrBs). Two securities for a cumulative Rs 8,000 crore will be on sale — five- and 10-year SGrBs, each for Rs 4,000 crore. (The proceeds are to be deployed in government projects that aim to reduce the economy’s carbon footprint.)

In FY24, we may be on the cusp of a noticeable shift in the way credit is appraised and extended. A green taxonomy is in the works — to help lenders better assess climate risks in