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Creating Business Value
ISBN - 978-93-81583-46-3

Sustainable Banking in India: The Road Less Travelled
Dr. Prita D. Mallya Associate Professor Dept. of Economics & Banking, VVM’s Shree Damodar College of Commerce & Economics, Goa pritamallya@yahoo.com; pritamallya@gmail.com

National Conference on Emerging Challenges forSustainable Business 2012 311

Sustainable Banking in India: The Road Less Travelled

Sustainable Banking in India: The Road Less Travelled Abstract Although the concept and practice of socially responsible and sustainable investing (SRSI) or more simply, sustainable finance, is yet to catch on in India, it represents a potentially hugely rewarding business opportunity. This paper begins with the wider concept of sustainable development and business, then highlights the importance of sustainable banking – why it makes economic sense for banks to seriously venture into this area; it lists various international initiatives to promote SRSI, identifies global best practices in the area of sustainable finance and presents the Indian banking sector’s sparse efforts in this direction. It also identifies some financial products that offer opportunities for sustainable banking in India. Since sustainable banking in India is in its infancy, the scope for empirical work in this area is extremely limited. This limitation can be overcome in the future as more bankers accept and follow this essential practice. Key words: green banking, responsible banking, sustainable banking, sustainable finance, sustainable development

1. Introduction

National Conference on Emerging Challenges forSustainable Business 2012 312

Sustainable Banking in India: The Road Less Travelled

There have been several paradigm shifts in the understanding of the concept of economic development (Meier 2005, Todaro & Smith 2011). In the early days of development economics following the end of the Second World War, development was seen as being concomitant with economic growth, and Gross Domestic


References: Biswas N. (2011): Sustainable Green Banking Approach: The Need of the Hour, Business Spectrum, 1(1), 32-38 Business Standard (2007): SBI launches Carbon Credit finance, August 6, www.businessstandard.com Chakrabarty K. C. (2011): Non-Financial Reporting: What, Why and How – Indian Perspective, address at National Conference on Non-Financial Reporting and Risk Management for Financial Institutions in India, June 6, Mumbai, accessed at http://www.rbi.org.in/ Dash R. N. (2008): Sustainable “Green” Banking: The Story of Triodos Bank, CAB Calling, October-December, 26-29 International Institute for Sustainable Development (2012): Sustainable Banking, accessed at www.iisd.org/business/banking, International Institute for Sustainable Development Kalia C. (2011): Sustainability - The Way Ahead for Banking and Financial Institutions, Finesse November 2010 - February 2011, Ernst & Young accessed at www.ey.com Kapoor R. (2007): Sustainable Banking in India, Financial Express, June 6 Meier G. M. (2005): Biography of a Subject: An Evolution of Development Economics. Oxford University Press, Oxford Mor N. (2008): Sustainable Financing for Indian Banks, presentation at IFC Seminar, January, Mumbai, accessed at www.ifmr.ac.in National Conference on Emerging Challenges forSustainable Business 2012 325 Sustainable Banking in India: The Road Less Travelled Nafziger E. W. (2005): From Seers to Sen: The Meaning of Economic Development, paper presented at the UN University/World Institute for Development Economics Research (WIDER) Jubilee Conference, 17-18 June Sahoo P. & Nayak B. P. (2007): Green Banking in India, Indian Economic Journal, 55(3), 82-98 Sen A. (1999): Development as Freedom, Knopf, New York The Climate Group (2010): Climate Change and Finance in India: Banking on the Low Carbon Indian Economy, The Climate Group, www.theclimategroup.org Todaro M. & Smith S. C. (2011): Economic Development, Pearson, New York UNEP (2011): UNEP FI Guide to Banking & Sustainability, United Nations Environment Programme, Geneva, www.unepfi.org/ World Commission on Environment and Development (also known as the Brundtland Commission) (1987): Our Common Future, Oxford University Press, Oxford Websites: http://www.equator-principles.com http://www.newenergyindia.org http://www.unpri.org National Conference on Emerging Challenges forSustainable Business 2012 326
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