Climate Finance Taxonomy
India is developing a Climate Finance Taxonomy, announced in Budget 2024-25, to legally define 'green' activities, crucial for verifying green bonds, guiding...
The article highlights India's substantial climate finance requirements, estimated at $2.5 trillion by 2030 for Nationally Determined Contributions and $10.1 trillion by 2070 for net-zero emissions. It discusses the current state of green finance in India, including the issuance of green and sustainability-linked debt, and identifies key challenges such as the lack of a comprehensive climate finance taxonomy, guarantee architecture, and regulatory incentives. The article emphasizes the crucial role of the Reserve Bank of India (RBI) in mandating green finance through measures like integrating climate risks into lending, making green activities eligible for Priority Sector Lending (PSL), and proposing differentiated capital requirements. It also stresses the importance of a finalized Climate Finance Taxonomy, scaling sovereign green bond issuances, establishing a State Climate Finance Facility, and leveraging blended finance to mobilize capital at scale.
Durable syllabus ideas for revision — not article memory.
India is developing a Climate Finance Taxonomy, announced in Budget 2024-25, to legally define 'green' activities, crucial for verifying green bonds, guiding...
RBI is actively promoting green finance by mandating climate risk integration for banks, including green activities in PSL, recognizing sovereign green bonds...
India needs trillions of dollars for climate action, primarily from domestic sources, utilizing instruments like green bonds and blended finance, supported b...
Previous year Prelims questions on overlapping themes and topics.
With reference to the Indian Renewable Energy Development Agency Limited (IREDA), which of the following statements is/are correct?
1. It is a Public Limited Government Company.
2. It is a Non – Banking Financial Company.
Select the correct answer using the code given below.
The Indian Renewable Energy Development Agency (IREDA) is a Non-Banking Financial Institution under the administrative control of Ministry of New and Renewable Energy for providing term loans for renewable energy and energy efficiency projects. Statement 1 is correct: IREDA is a Public Limited Government Company established under the Companies Act, 1956.
Statement 2 is correct: IREDA is also registered as a Non-Banking Financial Company (NBFC) with the Reserve Bank of India (RBI).
Consider the following statements:
1. "The Climate Group" is an international non-profit organization that drives climate action by building large networks and running them.
2. The International Energy Agency in partnership with the Climate Group launched a global initiative "EP100".
3. EP100 brings together leading companies committed to driving innovation in energy efficiency and increasing competitiveness while delivering on emission reduction goals.
4. Some Indian companies are members of EP100.
5. The International Energy Agency is the Secretariat to the "Under2 Coalition".
Which of the statements given above are correct?
Statement 1 is correct. The CLIMATE GROUP is an international non-profit organization founded in 2003, with offices in London, New York, New Delhi, Amsterdam, and Beijing. Its mission is to drive rapid climate action. This group builds and runs networks. Statement 2 is incorrect. EP100 is a global initiative led by The Climate Group and the Alliance to Save Energy (not by the International Energy Agency). Statement 3 is correct. The Climate Group's global EP100 initiative brings together a growing cohort of energy-smart companies committed to improving their energy productivity and reducing greenhouse gas emissions. By incorporating ambitious energy targets into their business strategies, leading companies are fostering innovation in energy efficiency, enhancing competitiveness, and achieving emissions reduction goals. Statement 4 is correct. EP100 has a global reach, with member companies operating in over 130 markets worldwide. India's Mahindra Group is among the frontrunners in the ongoing efforts to decrease energy consumption and carbon dioxide emissions by transitioning to renewable energy sources. Statement 5 is incorrect. The Climate Group serves as the Secretariat for the Under2 Coalition and collaborates with governments to expedite climate action through four main workstreams - Pathways, - Policy Action, - Transparency, and - Diplomacy.
Consider the following statements:
I. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
II. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.
Which of the statements given above is/are correct?
The Business Responsibility and Sustainability Report (BRSR) is a disclosure framework introduced by SEBI to promote transparency in a company’s non-financial performance, particularly in Environmental, Social, and Governance (ESG) areas. ❌ Statement I: Incorrect
* SEBI, not the RBI, mandates the submission of BRSR.
* It applies to the top 1,000 listed companies by market capitalization. ✅ Statement II: Correct
* BRSR disclosures are mostly non-financial and focus on areas like environment, social responsibility, and governance.
Which one of the following launched the 'Nature Solutions Finance Hub for Asia and the Pacific'?
Nature-based solutions involve using natural processes to tackle climate change and biodiversity loss, often needing dedicated financial support. ADB launched the Nature Solutions Finance Hub for Asia and the Pacific to fund nature-based solutions for climate and environmental challenges in the region.
With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of :
* Collateral Borrowing and Lending Obligations (CBLO) are instruments of the: C. Money market * CBLO is a money market instrument that facilitates borrowing and lending operations on a collateralized basis. It is used by banks, financial institutions, and other entities to manage their short-term liquidity requirements.
Which one of the following is the correct description of "100 Million Farmers"?
100 Million Farmers: The 100 Million Farmers initiative, launched by The World Economic Forum (WEF), seeks to drive a global movement focused on accelerating the adoption of regenerative agriculture and climate adaptation practices at the farm level. This initiative aims to transition towards sustainable food and water systems. It focuses on achieving net-zero carbon emissions, enhancing nature positivity, and improving farmers' resilience to climate change and market fluctuations. _Let's look at why the other options are incorrect:_ * Option B: This describes organizations promoting organic animal husbandry, not the '100 Million Farmers' initiative. * Option C: This refers to a blockchain-based platform for fertilizer trading, which is not the core focus of '100 Million Farmers.' * Option D: While farmer collectives are important, '100 Million Farmers has a broader scope encompassing sustainable practices and climate resilience.
Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?
Participatory Note (P-Note): This is a financial instrument issued by registered foreign portfolio investors (FPIs) to overseas investors. It allows overseas investors to participate in the Indian stock market indirectly without directly registering with the Securities and Exchange Board of India (SEBI). The FPI holds the underlying Indian securities, and the P-Note represents ownership for the overseas investor. The other options are not used for this purpose: Certificate of Deposit (CD): Issued by banks to raise short-term funds, not related to stock markets. Commercial Paper (CP): Short-term debt instrument issued by companies, not related to foreign investment in stocks. Promissory Note: A written promise to repay a debt, not used in this context of stock market participation.
In the context of finance, the term 'beta' refers to the
* The beta value of a stock measures how much its price moves compared to the overall market: * Beta > 1: Stock is more volatile than the market (moves more). * Beta < 1: Stock is less volatile than the market (moves less). * Beta = 1: Stock moves in line with the market.
Which of the following statements best describes the term ‘Scheme for Sustainable Structuring of Stressed Assets (S4A)’, recently seen in the news?
A scheme was launched by the Reserve Bank of India (RBI) on 13 June 2016, named Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) for addressing the large stressed assets of the corporate sector with banks. The S4A Scheme aims at the deep financial restructuring of big debted projects by allowing lenders (banks) to acquire equity of the stressed project. In this context, the scheme makes the financial restructuring of large projects at the same time helping the lender's ability to deal with such stressed assets. It is intended to restore the flow of credit to critical sectors including infrastructure. Hence, option B is the correct answer.
Consider the following statements:
Statement I:
At the 28th United Nations Climate Change Conference (COP28), India refrained from signing the “Declaration on Climate and Health”.
Statement II:
The COP28 Declaration on Climate and Health is a binding declaration; and if signed, it becomes mandatory to decarbonize health sector.
Statement III:
If India’s health sector is decarbonized, the resilience of its health-care system may be compromised.
Which one of the following is correct in respect of the above statements?
At COP28, India chose not to sign the “Declaration on Climate and Health,” and this decision can be understood by analyzing the nature of the declaration and India’s concerns. ✅ Statement I: Correct. India did not sign the COP28 Declaration on Climate and Health, unlike over 120 other countries. ❌ Statement II: Incorrect. The declaration is not legally binding; it is a voluntary political commitment. Signing it does not legally mandate countries to decarbonize their health sectors immediately. ✅Statement III: Correct. India’s concern is that rapid decarbonization of its health sector could compromise the resilience and accessibility of healthcare services, given current developmental challenges and resource constraints. Therefore, only Statement III correctly explains Statement I, while Statement II is factually wrong about the binding nature of the declaration.
Previous year Mains questions mapped to overlapping GS syllabus topics.
Why is maritime security vital to protect India’s sea trade? Discuss maritime and coastal security challenges and the way forward.
Write a review on India’s climate commitments under the Paris Agreement (2015) and mention how these have been further strengthened in COP26 (2021). In this direction, how has the first Nationally Determined Contribution intended by India been updated in 2022?
Mineral resources are fundamental to the country’s economy and these are exploited by mining. Why is mining considered an environmental hazard? Explain the remedial measures required to reduce the environmental hazard due to mining.
How does nanotechnology offer significant advancements in the field of agriculture? How can this technology help to uplift the socio-economic status of farmers?
Examine the scope of the food processing industries in India. Elaborate the measures taken by the government in the food processing industries for generating employment opportunities.
Examine the factors responsible for depleting groundwater in India. What are the steps taken by the government to mitigate such depletion of groundwater?