What are India’s Hopes for the G20 Summit 2023?

The G20 Summit 2023 slogan for India, ‘One Earth, One Family, One Future’, symbolises the country’s firm commitment to sustainability during its leadership.

Huge signs advertising the significance India’s government places on hosting the G20 this year can be seen throughout New Delhi.

The message is also in line with the nation’s strategic goal of drawing billions of dollars worth of investment into India’s infrastructure, as well as its advancement in technology and human development.

Assuring clean water, air and energy, creating true resilience to escalating climate shocks, and speeding up the delivery of net zero will need to be at the core of this investment surge for it to succeed.

Beyond these and other traditional green concerns, sustainable finance in India is emerging as a requirement that is intensely centred on people.

India had a rush of sustainable financing announcements in the first few weeks of 2023.

With funding designated for renewable energy, energy storage, hydrogen and agriculture that is more environmentally friendly, the budget for this year prioritised green growth.

The Reserve Bank of India made an announcement stating that it will be implementing new regulations on climate stress testing, climate transparency, and green deposits at banks.

A crucial step towards responsibility for environmental and social performance will be reached in 2023 when the 1,000 largest firms in India are required for the first time to release a Business Responsibility and Sustainability Report (BRSR).

These developments imply that some of the crucial parts of the sustainable finance puzzle are beginning to fit together.

Nonetheless, there are still concerns regarding how to practically include environmental, social, and governance (ESG) considerations in everyday financial decision-making.

The recent controversy surrounding the Adani Group’s governance has brought questions about honesty in corporate India to light and led some foreign investors to sell their interests.

Overall green, social, and sustainability bond issuance has been disappointing thus far, falling well short of what is required to support India’s energy and environmental transformations.

There have been few attempts to identify, assess, or manage low-carbon transition risks, according to a new examination of India’s major banks and financial institutions.

India has yet to define sustainable finance in terms of its requirements and objectives, thus it should make the release of its classification a top priority right away.

What is notable about the upcoming classification proposals made by India’s Task Force on Sustainable Finance is the inclusion of social and fair transition principles with well-known environmental finance objectives from the beginning.

This emphasises the essential human element that may end up being India’s defining contribution to international efforts in sustainable finance.

Creating ‘Greener’ Jobs for Indians

Several countries are beginning to understand that the best way to approach the climate problem is to focus on employment rather than emissions.

India is on track to surpass China as the most populous country in the world this year, and it has untapped potential for job creation in renewable energy, electric buses, trains, and cars, as well as in electric scooters, low-cost and efficient housing, natural farming, and net zero industrialisation.

It is hoped that the nation would emerge as the 21st century’s superpower in the field of green jobs, and there are some promising early indicators.

In the fiscal year 2022, India’s solar and wind energy sectors employed 164,000 people, a 47% increase over the previous year; by 2030, these two industries might collectively employ 1 million people.

A Skills Council for Green Jobs has also been created, and it has already trained 500,000 people in the green industry.

The quality of the green employment India might generate in terms of core competencies, inclusivity, and fair working conditions would be just as significant as the quantity.

India’s Priorities for the G20 Summit 2023

India’s top two priorities for the G20’s sustainable finance negotiations are closing the long-standing climate financing gap and raising investment to achieve the SDGs by 2030, including social targets like eliminating poverty, reducing inequality, and achieving gender equality.

There is currently no comprehensive blueprint outlining the amount of investment India would require to drive its sustainable energy and environmental changes.

Nevertheless, according to preliminary calculations from the Council on Energy, Environment and Water (CEEW), more than $10 trillion would be required for electricity, green hydrogen and electric cars alone to achieve India’s net-zero goal of 2070.

Together with other SDGs, improving climate resilience will require funding for India’s soils, forests, freshwater resources, and other SDGs.

There is a gap between India’s present financial system and its ability to create this amount of money, a gap that many nations in the Global South suffer to some extent.

When it comes to reporting requirements and investment protections, India has historically adopted sustainable finance norms developed overseas.

The G20 Summit 2023 is the time when India is becoming a sustainable finance maker on two fronts: aligning its domestic system with the nation’s climate and sustainable development goals and also encouraging the changes at the global level that are now so critically required.