Reeling under the pressure of bad loans, it's high time banks consider business losses caused by climate change.
Close to 40 per cent of gross credit exposure of Indian banks is in sectors where water risks are significant, said the WWF-India report Hidden Risks and Untapped Opportunities.
In fact, the highest at 20 per cent is in water intensive sectors (power and agriculture) that account for the highest gross credit exposure of Indian banks. India has already seen several instances of thermal power plants closing down or functioning below capacity due to water scarcity.
The water crisis is real. It is time for banks to consider climate and environmental factors as they assess projects' creditworthiness, and perhaps invest in water-related infrastructure, water treatment plants, and projects related to efficient irrigation systems.