Axis Bank, the country’s third-largest private sector lender, has committed ??Lending 30,000 crore through fiscal year 2025-2026 under its sustainable financing framework, a senior official said.
These commitments are in line with the Sustainable Development Goals (SDGs), supporting India’s commitments under the Paris Agreement.
âAs part of its commitments, the bank has set an incremental loan target of ??30,000 crore over the next 5 years, from wholesale banking to relevant sectors included in its Sustainable Finance Framework (SFF), âRajesh Dahiya, Executive Director (Corporate Center), Axis Bank told PTI .
Environment, Social and Governance (ESG) is a measure that investors use as a tool to assess the quality of a company’s practices. Over the past 3-4 years, the words sustainability and ESG have made people aware of the very idea of ââa sustainable planet, Dahiya said.
âThese are the measures we’ve been talking about for about 3-4 years now. However, with COVID and all of its issues, it has highlighted the issue of sustainability in a very broad and magnified way.
âOver the next five years, we want to lend ??30,000 crore more as wholesale banking services to relevant industries including Axis Bank SFF. We want to increase our portfolio of green loans, âsaid Dahiya.
He said the bank’s existing wholesale banking portfolio to SFF, including the green and social sectors, is barely outdated. ??29,000 crore and he intends to lend to businesses where there are green practices.
After five years to 2025-2026, the bank will assess these loans to see positive social and environmental results and further increase them, he added.
Going forward, the lender will also reduce its exposure to carbon-intensive sectors in its wholesale banking portfolio.
The lender has said it is expanding its coverage of ESG risk in credit assessment as part of its ESG policy for lending.
Axis Bank is developing and deploying an ESG risk assessment toolbox, with ESG stress tests and ESG scenario analysis, for its large companies, SMEs and agro-industries by 2022-2023.
The lender will encourage borrowers to adopt good practices by offering a 0.5% interest waiver on new electric vehicle loans, with immediate effect.
âWe will return 5% of our electric retail two-wheeler loan portfolio by 2023-24,â he said.
In addition, the bank has set itself the objective of a gradual disbursement of ??10,000 crore by 2023-24 on Asha home loans for affordable housing and a growing share of female borrowers.
In addition, the bank will aim to achieve 30% female representation in its workforce by 2026-2027, in accordance with its #ComeAsYouAre diversity charter.
Among other things, he will plant 2 million trees (20 lakh) by 2026-2027 across India to help create a carbon sink.
Dahiya said that Axis Bank is likely the first of the companies to form an ESG steering committee made up of key department heads who will act as ESG champions inside and outside the bank.
âFrom the day COVID hit, our board of directors brought us together and decided (…) we want to create a differentiated and measurable practice,â he added.
The bank announced its commitments ahead of the upcoming 2021 United Nations Climate Change Conference (COP26) in Glasgow, UK, from October 31 to November 12.
Participants should discuss the enhancement of their commitments made at COP21 in Paris in 2015.
In line with its ESG strategy, Axis Bank recently raised India’s first USD AT1 sustainable bonds amounting to USD 600 million in overseas markets.
Never miss a story! Stay connected and informed with Mint. Download our app now !!