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IFC, HSBC AM Partner to Support Sustainability in Emerging Markets

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IFC, a member of the World Bank Group, and HSBC Asset Management (HSBC AM) are launching a specialized fund vehicle for the emerging markets (EMs).

The fund will support the existing HSBC Global Emerging Market Corporate Sustainable Bond Strategy and invest in publicly listed bonds issued by corporate and financial institutions in emerging markets.

The partners are planning to invest in key areas such as sustainable technologies and social impact.

HSBC’s Global Emerging Markets Corporate Sustainable Bond strategy aims to positively impact environmental, social, and governance by investing in UN SDG-compliant bonds and bridging financing gaps for EM corporate issuers.

IFC will support the strategy with a proposed $100 million anchor investment in the fund.

It will be classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR)—its highest level of classification in terms of sustainability, IFC said in a press release.

While emerging market countries comprise more than 80% of the world’s population, they capture a much smaller share of global financing. Significant investment is needed to advance and accelerate their transition to a sustainable future, the companies said in a press release.

“By aligning with SFDR Article 9, which places a strong emphasis on issuer-level sustainability and transparency beyond just an issuance’s use-of-proceeds, the HSBC corporate bond strategy will support the growth of sustainable businesses and accelerate their green transition,” said Mohamed Gouled, Vice President of Industries, IFC.

“IFC’s investment is expected to mobilize additional institutional investors and increase the pool of capital dedicated to sustainability-related transactions in emerging markets.”

Nicolas Moreau, CEO, HSBC Asset Management, said, “We are pleased to expand our partnership with IFC, which dates back to 2019 following the launch of HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO)2, as we reinforce our contribution to improved sustainability in emerging markets and help support our clients’ sustainable investment objectives. We hope this collaboration demonstrates the financial market opportunity in funding sustainability to help bridge the financing gap for EM corporate issuers whose activities are aligned with and positively contribute to the UN’s Sustainable Development Goals.”


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India Must Address $4 Trillion VFG to Meet SDGs

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Finance Minister Nirmala Sitharaman has emphasized the urgent need to address the $4 trillion financing gap to meet sustainable development goals (SDGs).

Contextually, in a separate incident, Saurabh Garg, Secretary, Ministry of Statistics and Program Implementation, reiterated that India aims to align its sustainable development goals with its 2047 development goal, with 95% of SDG indicators monitored by 2024.

Meanwhile, The FM advocated for the broader use of risk mitigation strategies, monitoring and assessment frameworks, and social impact instruments.

She highlighted the challenge of developing economies’ limited access to development financing. This hinders these nations from reaching their development objectives.

She also emphasized the importance of responding quickly and nimbly to funding requests submitted to multilateral development banks (MDBs). Sitharaman urged MDBs to collaborate with credit rating agencies to boost private capital for development financing. She supported creating special concessional windows for middle-income nations to tackle climate-related issues. She also underlined the need for fresh capital infusion, balance sheet optimization techniques, and financial innovations.

The finance minister sought input from other nations on strengthening the current debt relief and liquidity support systems for low- and middle-income countries. This includes the G20 common framework and the global sovereign debt roundtable.

“I would like to draw your attention to a pressing challenge that hinders developing economies from achieving their development goals — inadequate access to development finance. Recent reports reveal that implementation of many SDGs in developing economies is stagnating with some indicators even regressing. The SDG financing gap is estimated at $4 trillion annually for developing countries. The Global South is disproportionately affected by global uncertainties,” she said.

“… During India’s presidency, the G20 recommended wider adoption of social impact instruments and other blended finance instruments, monitoring and measurement frameworks, and risk mitigation measures,” she added.


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IICA, HP India, Launch ESG Professional Program

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HP and IICA have launched an ESG Professional Program. The HP Future Impact Leader – IICA Certified ESG Professional Programme, aims to equip organizations with the skills to lead sustainable initiatives.

The scholarship-based program is a significant step towards building a sustainable and responsible corporate ecosystem.

Dr. Ajay Bhushan Prasad Pandey, Director General & CEO, IICA and Chairperson, NFRA, and former Secretary of the Ministry of Finance, Government of India, delivered the keynote address.

He spoke about the growing importance of ESG in the global business landscape, highlighting its role in attracting investors and stakeholders.

He emphasized the importance of adopting ESG principles in business operations to identify cost-saving opportunities, reduce energy consumption, and minimize operational costs. He shared insights into the need for mandatory ESG reporting practices to avoid future reputational and compliance issues.

Dr. Pandey discussed the role of ESG regulations in India’s growth and development, motivating delegates to integrate ESG principles into their strategies.

He stressed the importance of mandatory ESG reporting practices to avoid reputational and compliance issues in the future.

He cited the 1972 UN Conference on the Human Environment and the 2015 UN Summit, emphasizing the importance of sustainable development.

According to him, adopting ESG core principles in business operations helps identify cost-saving opportunities, lower energy consumption, reduce resource waste, and minimize operational costs.

He highlighted the call by Prime Minister Narendra Modi to redefine the PPP (Pro-Planet-People) in the G20 Delhi Declaration.

He also referred to new research co-authored by Wharton’s Aline Gatignon, which offers insights into how various firms allocate Corporate Social Responsibility (CSR) funds across different dimensions.

Why is ESG important?

Rajeev Nair, Legal Head, HP India, underscored the importance of integrating legal frameworks with sustainable business practices. He spoke about HP’s commitment to sustainability and innovation, and how this program aligns with the company’s vision of creating a positive impact on society and the environment.

Geetanjali Master, Public Private Partnership Specialist, UNICEF India, spoke about the need for collaborative efforts required between public and private sectors to achieve sustainable development goals. Her address underscored the importance of partnerships in driving impactful ESG initiatives.

Dr Garima Dadhich, Associate Professor & Head of the School of Business Environment, IICA, shared the critical role of shaping sustainable business practices and the importance of developing ESG professionals and impact leaders.


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Indian Sustainable Agriculture Projects on Global Centre Stage

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Two sustainable agriculture projects, one led by a farmer’s collective and supported by an NGO, and the other, an individual scientist have won the Gulbenkian Prize for Humanity 2024.

In the first case, Andhra Pradesh Community Managed Natural Farming (APCNF) received the Gulbenkian Prize for Humanity for contributing to natural farming and sustainable agriculture, and community development.

The reward is in recognition of APCMNF’s contribution to global food security, climate resilience, and ecosystem protection.

APCNF:

APCNF supports smallholder farmers to switch from chemically intensive agriculture to natural farming, through practices such as using organic residues and minimizing tillage to improve soil health; reintroducing indigenous seeds; and diversifying crops, including trees.

The initiative was launched by Andhra Pradesh Government to find a sustainable solution to farmer distress caused by economic crises in agriculture and climate change. Implemented by non-profit organization Rythu Sadhikara Samstha (RySS) (‘Farmers Empowerment Cooperation’), it is recognized as the world’s largest agroecology program. It now reaches over a million smallholder farmers, predominantly women, across 500,000 hectares in the state.

According to a press release, the program has generated environmental and social benefits including greater soil carbon sequestration, reversed land degradation, reduced soil temperatures, increased biodiversity.

The four levers of success:

APCNF initiative’s success relies on four levers:

• Delivery through an established network of women collectives
• Farmer-to-farmer learning via ‘Champion Farmers’
• Progressive technology
• Government ownership

The program aims to reach all eight million farmer households in Andhra Pradesh over the next 10 years and inspire replication elsewhere. The model is already being incubated across 12 states in India, and in 2024 will be introduced in five other Global South countries, adapted to local contexts.

Dr Rattan Lal:

The second award recipient, Dr Rattan Lal is a globally renowned soil scientist.

He pioneered a soil-centric approach that harmonizes food production with ecological preservation and climate change mitigation.

His methodologies have highlighted on a on a global stage the interconnectedness of soil health and broader environmental and human wellbeing, and the importance of enhancing food security while conserving natural resources.

By promoting research and education in sustainable soil management, Dr Lal has advanced understanding of sustainable agriculture and climate resilience.

SDGs:

Food is central to the Sustainable Development Goals (SDGs), the United Nations’ development agenda for the 21st century.

The second of the 17 SDGs aims to “End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.” Reaching this goal by the target date of 2030 necessitates international collaboration for a sustainable transformation of the global food and agriculture system.

Jury notes:

Dr. Angela Merkel, President of the Jury, who announced the awards, said, “Access to high-quality food is of existential importance to everyone. Climate change and the resulting global warming have led to an increase in extreme weather events and are endangering food security around the world. This presents everyone engaged in the agriculture sphere with particular challenges. This year’s winners have demonstrated in an exemplary fashion how climate-resilient and sustainable food systems can be developed and put into practice.”

António Feijó, President of the Board of Trustees of the Calouste Gulbenkian Foundation said, “… Each winner has demonstrated exceptional commitment to transforming agricultural practices, proving that sustainable models can thrive in diverse and challenging environments. Their work also demonstrates the co-benefits of sustainable agriculture for communities as well as the planet. We believe their stories will inspire others to apply similar approaches in other regions and help us build a sustainable future for all.”


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Mindspace REIT Secures Rs 650-crore SLL bond from IFC

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Mindspace Business Parks REIT has secured a Rs 650 crore sustainability-linked bond from the International Finance Corporation (IFC), the private sector arm of the World Bank Group, the company announced said.

The coupon of the 7-year bond is linked to Mindspace’s commitment to achieve certain ESG targets towards building a greener eco-system.

“We are thrilled to announce another significant milestone in our sustainability journey as we become the first Indian REIT to issue sustainability-linked bonds. International Finance Corporation fully subscribed to this issuance. This follows our maiden green bond issue in March 2023. Post this issuance our cumulative green/sustainability-linked financing now stands at Rs 1,860 crore, strengthening our commitment to responsible growth,” Ramesh Nair, CEO, Mindspace Business Parks REIT, said.

It must be noted that the company has aligned its ESG strategy to 10 out of the 17 UN Sustainable Development Goals (SDGs).

Some of the ESG targets include reduction of greenhouse gas (GHG) emissions, increasing the share of green certified area for existing buildings (under operations and maintenance), and reduction in energy intensity.


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India’s Port Sector must Decarbonize Operations Value Chain

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The Maharashtra Maritime Board has called for public and private stakeholders in the port sector to collaborate in decarbonizing the entire chain of port operations.

The emphasis on decarbonization aligns with environmental goals and positions India’s port sector as a frontrunner in global efforts towards cleaner and greener energy solutions.

Praveen S Khara, Chief Port Officer, Maharashtra Maritime Board, highlighted the state’s 77 million metric tonnes cargo handling capacity, emphasizing collaboration among stakeholders to drive the decarbonization agenda forward.

He said that the “Harit Sagar” guidelines in 2023 promote greener port development, operation, and maintenance, focusing on minimizing environmental impact.

They advocate for clean energy adoption and green fuel storage. These guidelines guide major ports in formulating action plans for carbon emissions reduction and aligning with sustainable development goals. Collaboration and adherence to green guidelines are crucial for sustainability, Khara said.

The guidelines, introduced in 2023, advocate for the adoption of clean and green energy in port operations and the development of capabilities for the storage, handling, and bunkering of greener fuels.

They serve as a framework for major ports to formulate action plans for achieving quantified reductions in carbon emissions over defined timelines.


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India Auctioned Rs 20,000 Crore Green Bonds in FY24

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India auctioned Rs 20,000 crore of sovereign green bonds in FY24, marking a 25% increase from the previous year.

According to the latest CEEW Centre for Energy Finance (CEEW-CEF) Market Handbook, the bonds, with tenures of 5 years, 10 years, and 30 years, were oversubscribed, indicating strong investor demand.

The green bond auctions were aimed at raising capital for projects to mitigate climate change, promote renewable energy, and enhance environmental sustainability.

The demand for green bonds was driven by growing investor interest in environmentally responsible investments and India’s potential as a green finance market.

India’s success in auctioning green bonds aligns with its efforts to meet climate commitments under the Paris Agreement and achieve its renewable energy targets.

The auctions served as a catalyst for mobilizing private capital towards sustainable development goals, complementing government initiatives and public sector investments.

The bonds support India’s efforts to reduce carbon intensity and meet its commitments under the Nationally Determined Contributions.

The proceeds will be deployed in public sector projects, focusing on sectors like clean transportation, renewable energy, sustainable water management, and afforestation.

India’s green bond auctions have seen a significant increase in demand, reflecting growing investor interest in environmentally responsible investments.

The auctions are attracting institutional investors, financial institutions, and individual investors due to their dual objectives of financial returns and positive environmental impact.

It must be noted that the Reserve Bank of India has allowed foreign investors to invest in sovereign green bonds, promoting green financing initiatives and renewable energy projects to support India’s climate goals.

Meanwhile, India’s non-conventional energy sector saw a surge in foreign direct investment (FDI) in FY24, surpassing $2 billion for the second year in a row.


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COP28, Climate action, G20 Presidency

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Indian G20 Presidency to Align Climate Action Outcomes with COP28

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The Indian G20 Presidency’s final stage will coincide with COP28, offering a unique chance to align its climate action outcomes with the COP28 agenda, according to Observer Research Foundation (ORF).

India and the UAE are prioritizing global climate action, promoting equitable green transitions, sustainable development, and inclusive growth. Consequently, India’s G20 presidency and UAE hosting COP28 are crucial for representing and elevating the Global South’s voices in global climate policy discourse.

The event will bring together global policy experts to discuss and propose solutions to issues slated for COP28 deliberations. The goal is to foster collaboration between these two forums to enhance global response to challenges preventing the swift and equitable advancement of climate action.

Thematic Pillars:

Energy Prosperity for All:
Global economies must prioritize energy equity and justice as they transition towards green and clean energy sources. The Indian G20 Presidency emphasized the need for modern, sustainable energy access, emphasizing the urgent need to address the trilemma of energy access, affordability, and sustainability.

Climate – Health – Gender Nexus:
The COP28 and India’s G20 presidency are focusing on the interplay of climate, health, and gender. Addressing climate change’s impact on vulnerable populations, especially in health outcomes and gender disparities, is crucial for effective climate action and sustainable development goals.

Climate and Technology:
Technological innovation is pivotal in tackling climate change and achieving the Sustainable Development Goals, ORF noted. The G20 promotes international cooperation, investment, and policy frameworks to expedite the adoption of climate-friendly technologies. Challenges in scaling up and deploying these technologies include securing financing, ensuring accessibility, and facilitating technology transfer to developing countries. COP negotiations are vital in promoting global technology transfer, safeguarding intellectual property rights, and enhancing capacity in developing nations.

Climate Finance:
Global climate finance currently lacks sufficient investments to support emerging and developing economies in pursuing net-zero trajectories. Moreover, the distribution of climate finance exhibits biases that put emerging and developing economies at a disadvantage. Climate finance primarily originates in the country of origin, with a significant portion allocated to mitigation efforts, while adaptation funding is disproportionately limited. Resolving these inequities is crucial for achieving feasible pathways for achieving the Paris Climate Targets.


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IREDA Launches CSR Portal

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Indian Renewable Energy Development Agency (IREDA), has launched a portal to enhance corporate social responsibility (CSR) initiatives.

IREDA is a Mini Ratna (Category – I) Government of India enterprise under the administrative control of the Ministry of New and Renewable Energy.

The portal-accessible 24/7, will enable IREDA to ensure transparency in CSR requests and provide a CSR policy and proposal checklist for examination.

The portal will also contribute to the more efficient execution of IREDA’s social welfare initiatives as part of its CSR efforts, making them readily available to the public.

The portal was launched during the valedictory function of “Vigilance Awareness Week 2023”, held at the company’s registered office in Delhi. Dr. Praveen Kumari Singh, Additional Secretary, Central Vigilance Commission (CVC), launched the CSR portal in the presence of Chairman and Managing Director (CMD) of IREDA Pradip Kumar Das; Chief Vigilance Officer, Ajay Kumar Sahani, and other senior officials.

Mr Das spoke about the company’s commitment to advancing renewable energy and CSR while upholding the values of transparency and ethics. He emphasized that the newly introduced CSR portal symbolizes its dedication to promoting a paperless approach and to better serve communities and stakeholders.

Ms Singh applauded the unique initiative undertaken by IREDA in 2021, of launching the Whistle Blower Portal, which positioned the company as the first Central Public Sector Enterprise (CPSE) to provide such an online platform. She also highlighted that IREDA is a key partner in achieving Sustainable Development Goals, particularly in combating climate change.


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Net Zero, SDGs, Sustainable infrastructure

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World must invest $9.2T to meet net zero goals

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The Delhi-based Coalition for Disaster Resilient Infrastructure (CDRI) has stated that the world requires $9.2 trillion annually in disaster-resilient infrastructure. The upgraded infrastructure will help society achieve its net zero and sustainable development goals by 2050.

In its inaugural biennial report, CDRI emphasized the political and economic justification for investing in disaster-resilient infrastructure to mitigate climate-related disaster effects.

Key highlights:

The report reveals that disaster and climate risk-related asset loss and service disruptions globally result in an average annual loss of over $700 billion, primarily affecting low-income countries.

• 60% of the infrastructure needed by 2050 for sustainable development and net zero emissions is yet to be constructed
• An annual $9.2 trillion investment is required to tackle infrastructure deficits
• $2.76 trillion must be allocated to low- and middle-income countries
• China, India, Japan, and the US are predicted to account for 50% of global infrastructure investment, with 80% within the G20 alone in the coming years

The importance of a resilient infrastructure for net zero:

Infrastructure investment in low-income countries is slowing down. Investing in resilience is crucial for the long design lifecycles of many infrastructure assets to shape development trajectories for the coming decades.

Inadequate planning, design, standards, regulation, compliance, maintenance, operation, and governance are the main causes of the global infrastructure deficit.

Impact:

Neglecting resilience could result in stagnant social and economic development, stranded infrastructure assets, increasing liabilities, unreliable services, and growing existential risk.

Alternately, investing in infrastructure resilience can lead to quality essential services, reduced damage to assets, lower systemic risk, and sustainable social and economic development.


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