India needs to look at innovative strategies to raise domestic resources for climate finance 

With developed countries not providing adequate funds to developing countries for climate finance, India must look at generating internal resources, said experts at the BT India's Most Sustainable Companies Summit and Awards on Saturday.

At a session titled Climate Finance: The Missing Money, experts also underlined the need for green taxonomy to ensure more targeted fund flow as well as greater accountability of public funds.

Leena Nandan, former Secretary, Ministry of Environment, Forest and Climate Change, noted that funds from developed countries to the Global South has been very low and called for innovative measures for climate financing. India needs to balance the growth aspirations along with sustainable development, she noted, adding that it has adopted a strategy of offensive and defensive measures for this. Defensive measures include making carbon trading mandatory for several sectors while offensive measures include signing agreements with several companies for green funding. 

Samir Sharma, Head- CSR and Sustainability, L&T Finance pointed out that of the $100 billion promised every year by developed countries, only about $300 billion has come in a period of 13 years.

"If you see that money, much of that is commercial loans. That is one very, very big problem which we have," he said while advising three or four measures to raise funds domestically. 

Noting that there are trillions of dollars in domestic savings with the Life Insurance Corporation of India and pension funds, he suggested that some of this can be used for climate finance. 

"Whenever we see a climate related project, we tend to see the risks. People are afraid to fund the projects...the gestation period is huge," he pointed out.

He further said that India also needs to get more grants and less commercial loans for green finance. Carbon markets also need to be institutionalised with clear cut policy guidelines to help broaden it. 

Shriram Subramanian, MD, InGovern presented a different point of view and said that while the Indian listed corporate sector accounts for just 15-20% of the country's GDP but is saddled with disclosures and accountability. But the remaining 80% of the public sector, which provides public funding, does not face this.

"India has capital but we don't use it productively. There is no disclosure and accountability of public money," he further said.

 Subramanian also noted that perennial problems of air pollution in Delhi or traffic congestion in Mumbai have few takers to find solutions as there are no measurable returns. 

"Returns are not measurable or are unseen. There is a challenge to adaptation finance," he pointed out.

Nikunj Dube, Chief Ratings Officer, CareEdge- ESG Ratings also highlighted the challenge that India does not have standard definitions on green taxonomy. "This definition needs to be given for allocation of finance," he said.