Fair Finance Guide India is a group of civil society organisations to create an ecosystem amongst financial sector actors to recognize the environmental, social and governance (ESG) risks in their investments.
The scorecard is an assessment of policy disclosures of a sample of eight Indian banks (public and private) — State Bank of India, Federal Bank, Punjab National Bank, Bank of India, Indian Overseas Bank, IDFC Bank, HDFC Bank and Yes Bank.
The assessment covers ten themes across ESG domain — Nature and Climate Change, Labour Rights, Human Rights, Gender Equality, Financial Inclusion and Arms, Transparency and Accountability, Corruption and Tax.
As per the Fair Finance Guide India scorecard, three out of eight Indian banks have scored high on parameters of financial inclusion and corruption.
However, seven out of eight banks scored zero on the themes of climate change and the environment. The banks also scored poorly on the themes of labour rights and human rights.
As per the report, banks can have a positive impact on the environment and reduce risks of climate change by screening for companies that are committed to protecting biodiversity, reducing their greenhouse gas emissions and supporting a low carbon economy.
This way the banking sector can contribute to making India a truly sustainable and inclusive economy.
Reference- Financial Express, Economic Times, Deccan Herald