Are Indian banks green and acting ethically about the environment? Not quite, according to research conducted by a British university. The University of Leicester’s Department of Geography is investigating the reasons why Indian banks have yet to commit to the Equator Principles a set of environmental and social guidelines to which 62 banks and financial institutions worldwide have become signatories.
As part of the research, doctoral student Sophie Hadfield-Hill conducted 40 interviews with CEOs and senior management of Indian banks and leading Companies.
“There is certainly a lack of awareness of the Equator Principles in India. Leading banks are vaguely conscious of the guidelines, however, the public sector is waiting to be led by the Reserve Bank of India and the private sector banks seem to only want to commit if there is regulation or financial incentive,” said Hadfield-Hill.
She also blamed the lack of interest on the issue among Indian consumers for the failure of banks to declare their commitment to environmentally and socially responsible business.
“Work needs to be done to make the guidelines more relevant to emerging economies. Firstly, however, Indian banks need to be made fully aware of the environmental and social guidelines to which banks worldwide are agreeing to,” she said.
It will be a huge financial burden for banks committing to environmental and social guidelines. However, Hadfield-Hill added: “If Indian banks are to penetrate western Markets and participate more in the global Economy, it is important that they recognise their responsibilities as global corporate citizens.
“Banks in India have significant influence over the safeguarding of fragile social groups and environments in Asia. At this time they must seriously consider their attitudes towards responsible lending both nationally and globally,” she said.
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