India's economy must be sustainable and expand at the same time: Ashwani Bhatia from Sebi

 India's economy must be sustainable and expand at the same time: Ashwani Bhatia from Sebi

Addressing the "Role of Financial Markets in Sustainable Growth through ESG Investments" international finance conference, Bhatia stated that nations, including India, have recently taken significant steps to address climate change and transition to inclusive and sustainable economies.

Ashwani Bhatia, a longtime member of Sebi, said on Thursday that the shift to a sustainable economy must go hand in hand with India's rapid economic development. He also emphasized the importance of financial markets in advancing sustainable finance.

Addressing the "Role of Financial Markets in Sustainable Growth through ESG Investments" international finance conference, Bhatia stated that nations, including India, have recently taken significant steps to address climate change and transition to inclusive and sustainable economies.

The Allana Institute of Management Studies at Anjuman-I-Islam, in collaboration with the BSE, arranged the one-day conference.

This year marks the completion of 150 years since the founding of Anjuman-i-Islam. "The Indian economy is expanding quickly right now. Still, the shift to a sustainable economy must coincide with this development. In our capacity as regulators, we are establishing a comprehensive regulatory framework that addresses disclosures, funding, and transparency," Bhatia said.

All parties involved in this "complicated" transformation, including investors, businesses, authorities, and civil society, would need to work together and cooperate for it to be carried out successfully, he added. He pointed out that efforts have been made globally in recent years to address climate change and transition to sustainable and inclusive economies, and that some significant pledges have been made in this area by nations like India.

However, financial support must be provided for actions taken. According to estimates, India would need to spend a total of USD 10 trillion in order to satisfy its goals to have zero carbon emissions by the year 2070," the speaker said.

According to Bhatia, India is the first region to establish a social stock market and to have an ESG disclosure framework for value chains, Business Responsibility, and Sustainability Reporting (BRSR) to guarantee that all activity is done in a sustainable way.

The top 150 listed businesses would need to provide a reasonable assurance on BRSR in FY24, he said, adding that Sebi has also prescribed the light way for the adoption of the standards. "We will begin with 150 listed firms and reach 1,000 by 2026. People in the value chain and your suppliers must also provide limited assurance as a result of the disclosures starting with the next fiscal year, he added.

According to Bhatia, another area that Sebi's regulatory attention is being focused on is ESG grading. He emphasized that the capital market is essential to the nation's economic progress and that as the nation shifts to inclusive and sustainable growth, our market will be vital in advancing sustainable finance.

He said that Sebi has worked hard on green bonds, pointing out that the legal framework for the bonds was established in 2017 as a means of directing capital into environmentally friendly projects. Sadly, there are just 15 issuances totaling around Rs 4,600 crore. In contrast, the debt market raises an average of Rs 7 lakh crore annually.

However, we are well behind on the green front. Sebi has reviewed the rules governing green-tech securities against the background of growing interest in sustainable finance," he added. Bhatia said that the term of "green" has been expanded to include other sustainable financing models related to pollution prevention and management, as well as eco-friendly product development.

"We have introduced conceptions of Blue bonds, which look after water, yellow bondholders for solar energy and transition bonds, funds acquired for transitioning to a more environmentally friendly mode of operations, like the metro rail, among others," he said.