The country’s third biggest private sector lender Axis Bank has committed Rs 30,000 crore lending till fiscal year 2025-26 beneath its sustainable financing framework, a senior official mentioned. These commitments are in line with the Sustainable Development Goals (SDGs), supporting India’s commitments beneath the Paris Agreement.
“As part of its commitments, the bank has set a target of incremental lending of Rs 30,000 crore over the next 5 years, under wholesale banking towards pertinent sectors included in its Sustainable Financing Framework (SFF),” Rajesh Dahiya, Executive Director (Corporate Centre), Axis Bank told PTI.
Environmental, Social and Governance (ESG) is a measure which investors use as a tool to assess how superior the practices of a firm are. For the last 3-4 years, the words sustainability and ESG have made men and women sensitive about the complete thought of a sustainable planet, Dahiya mentioned.
“These are the metrics which have been spoken about for about 3-4 years now. However, with COVID and all its problems, it highlighted the issue of sustainability in a very big and magnified manner.
“In the next five years, we want to lend Rs 30,000 crore more incrementally as wholesale banking towards pertinent sectors including Axis Bank’s SFF. We want to increase our portfolio of green lending,” Dahiya mentioned. He mentioned the bank’s current wholesale banking portfolio towards SFF, like green and social sectors, is tiny more than Rs 29,000 crore and it intends to lend to providers exactly where there are green practices.
After 5 years till 2025-26, the bank will assess these lendings to see positive social and environmental outcomes and improve it additional, he added. Going forward, the lender will also scale down its exposure to carbon-intensive sectors in its wholesale banking business enterprise portfolio.
The lender mentioned it is expanding its ESG danger coverage in credit appraisal beneath its ESG policy for lending. Axis Bank is constructing and deploying an ESG danger assessment toolkit, with ESG anxiety testing and ESG situation evaluation, for its big corporate, SME and agri-business enterprise verticals by 2022-23.
The lender will incentivise the borrowers for adopting superior practices by supplying .5 per cent interest waiver on new electric car loans, helpful instantly.
“We will make 5 per cent of our retail two-wheeler loan portfolio as electric by 2023-24 ,” he mentioned. Besides, the bank has set the target of incremental disbursement of Rs 10,000 crore by 2023-24 beneath Asha Home Loans for inexpensive housing, and rising share of ladies borrowers. Also, the bank will aim to attain 30 per cent female representation in its workforce by 2026-27, aligned to its #ComeAsYouAre Diversity Charter.
Among other individuals, it will plant 2 million (20 lakh) trees by 2026-27 across India towards contributing to producing a carbon sink. Dahiya mentioned Axis Bank is possibly the 1st amongst corporates to constitute an ESG Steering Committee comprising heads of crucial departments who shall act as ESG champions inside and outdoors the bank. “Since the day COVID hit, our board got us together and decided…we want to create a practice which is differentiated and which is measurable,” he added.
The bank has announced its commitments ahead of the upcoming 2021 United Nations Climate Change Conference (COP26) at Glasgow, UK from October 31 – November 12. The participants are anticipated to speak about enhancing their commitments made at COP21 at Paris in 2015. In line with its ESG method, Axis Bank has not too long ago raised India’s 1st sustainable USD AT1 bonds of USD 600 million in the overseas markets.