UNICEF-IndusInd Bank’s Partnership To Boost Climate Resilience And PNB Strengthens Climate Action As A PCAF Signatory

Climate risk refers to the potential adverse impacts of climate change, including extreme weather events, long-term changes in temperature, precipitation patterns, rising sea levels, and their cascading effects on ecosystems, infrastructure, and communities. It is typically categorised into :

1 . Physical Risks :-

Acute: Sudden events like hurricanes, floods, heatwaves, or wildfires.

Chronic: Gradual changes such as rising temperatures, sea-level rise, or desertification.

2 . Transition Risks:- As society moves from a high-carbon (fossil fuel-dependent) economy to a low-carbon, sustainable economy, challenges and potential negative impacts arise.

The article is going to cover about climate drives taken by two(2) leading banks in India.

IndusInd Bank in partnership with UNICEF is taking various measures to address climate risk due to varied types of environmental changes and bringing climate resilience in disaster-stricken areas.

Punjab National Bank(PNB) adopts a global standard to assess Greenhouse Gas Emissions(GHG) associated with its financial portfolios and disclose them in its annual report. This practice has become possible by joining a global community called PCAF – Partnership For Carbon Accounting Financials.

UNICEF and IndusInd Bank Join Forces to Enhance Climate Resilience and Risk Management

IndusInd Bank, in partnership with UNICEF, is working to establish a climate risk-informed administrative system to support disaster-resilient communities. This project forms a key component of the Bank’s signature CSR initiative, the Integrated Rural Development Program, focused on high-priority districts.

Program Scope The program focuses on enhancing government policies in five (5) districts to address post-natural calamities like droughts, floods, storms, and heatwaves.

The five (5) districts and their respective states are as below

1. BAHRAICH in Uttar Pradesh
2. BARAN in Rajasthan
3. BEGUSARAI in Bihar
4. DHARASHIV in Maharashtra
5. VIRUDHUNAGAR in Tamil Nadu

KEY FEATURES

• Development of real-time monitoring systems.
• Implementation of early warning mechanisms.
• Advisory services to address climate-related challenges.

This collaborative effort aims to mitigate climate risks and enhance disaster preparedness in vulnerable regions.

UNICEF & IndusInd Bank: A Collaborative Vision for Climate Resilience

IndusInd Bank’s Perspective
Mr. Srinivas Bonam, Head of Inclusive Banking Group at IndusInd Bank, emphasizes the Bank’s commitment to address social challenges beyond its core operations. The partnership with UNICEF aims to safeguard vulnerable communities from climate-induced disasters through advanced technological tools and disaster management programs, ensuring greater stability in their lives.
UNICEF’s Mission
Mr. Arjun De Wagt, Deputy Representative for Programmes at UNICEF India, highlights the goal of strengthening disaster resilience in rural areas. UNICEF seeks to empower local governments, including panchayats, to implement sustainable climate solutions, ensuring a safer future for children and communities.

COHESIVE TEAM MEMBERS

• CSR Trust: India’s CSR Trust for SDGs manages and monitors the program comprehensively.
• IIT Gandhinagar: Develops software with pre-alert mechanisms and efficient monitoring systems.
• Gorakhpur Environment Action Group (GEAG): Focuses on capacity building and training for local officials.
• Mission Samriddhi: Promotes stakeholder collaboration and knowledge sharing.

Together, this coalition works to create a robust framework for climate resilience and disaster preparedness.

SOURCE:- https://www.indusind.com/in/en/about-us/mediabrand/FY/2024-2025/November/IndusInd-Bank-and-UNICEF-collaborate-to-strengthen-climate-risk-Management-and-Community-Resilience.html

PNB Strengthens Climate Action As A PCAF Signatory

Punjab National Bank (PNB) reinforces its environmental commitment by adopting globally recognized standards to measure and disclose greenhouse gas (GHG) emissions linked to its lending and investment activities. As a member of the Partnership for Carbon Accounting Financials (PCAF), PNB joins a global network of financial institutions dedicated to addressing climate change through advanced GHG accounting practices.

Key Advantages of PCAF Membership

• Global Network Access: Collaboration with international financial institutions focused on robust GHG accounting.
• Technical Support: Access to specialized training, India-specific emissions data, and global insights.
• Knowledge Exchange: Participation in working groups, workshops, and webinars to refine GHG standards and share expertise with peers.

Through this partnership, PNB aims to enhance transparency, strengthen climate strategies, and contribute to global efforts against climate change.

PNB Aligns With Global And National Climate Disclosure Standards
Punjab National Bank (PNB) has joined the Partnership for Carbon Accounting Financials (PCAF), a global standard for measuring and disclosing greenhouse gas (GHG) emissions. This move aligns with the Reserve Bank of India’s (RBI) draft guidelines and SEBI’s updated regulations, reinforcing PNB’s commitment to sustainability and climate risk management.

RBI’s Climate Risk Reporting Mandate

• Banks must disclose governance, strategy, and risk management related to climate risks by FY 2025-26.
• Metrics and targets for climate risks and opportunities must be reported from FY 2027-28.

SEBI’s Business Responsibility And Sustainability Report (BRSR)

• SEBI requires listed companies based on their market capitalisations, to include the BRSR in their Annual Reports starting FY 2023-24.
• The BRSR Core includes key performance indicators (KPIs) across nine (9) ESG [Environmental, Social Governance] attributes for the value chain.
• Disclosure formats for BRSR and BRSR Core are detailed in SEBI’s master circulars.

PNB’s adoption of PCAF standards and compliance with RBI and SEBI frameworks underscores its proactive approach to climate risk transparency and sustainable growth.

PNB’s First BRSR Core Report For FY 2023-24

In FY 2023-24, Punjab National Bank (PNB) disclosed its financial emissions in its Business Responsibility And Sustainability Report (BRSR), adhering to globally recognized PCAF standards.

PARAMETER	UNIT	FINANCIAL YEAR – 2023 – 2024	FINANCIAL YEAR – 2022 – 2023
Total Scope 1 Emission	Metric Tonnes of CO₂ Equivalent	8 , 4 9 4	7 , 8 6 6
Total Scope 2 Emission	Metric Tonnes of CO₂ Equivalent	1 , 9 7 , 0 8 9	2 , 0 8 , 8 6 0
Scope 1 & 2 Emission Intensity per Turnover	Total (Scope 1 + 2) Emissions / Revenue	1 . 7 1	2 . 2 3

Key Observations

• Reduction in Scope 2 Emissions: A notable decrease in emissions from indirect energy sources compared to the previous year.
• Increase in Scope 1 Emissions: Slight rise in emissions from direct energy sources.
• Improved Emission Intensity: A lower “Emission-To-Turnover” ratio indicates progress in environmental impact reduction.

Although there is no standard benchmark for this ratio, achieving a lower value aligns with India’s commitment to net-zero emissions by 2070.

PNB’s Initiatives to Minimize GHG Emissions

Punjab National Bank (PNB) has implemented several measures to reduce its greenhouse gas (GHG) emissions, focusing on energy efficiency, sustainability, and waste reduction. Let’s discuss few of them as below.

1. Tree Plantation Drive (PNB Palaash): Over 1.10 lakh trees were planted to enhance green cover.
2. Energy-Efficient Equipment: Installation of five-star-rated air conditioners and electrical devices in offices and branches.
3. Occupancy Sensor Lights: Deployed in administrative buildings to conserve energy.
4. Solar Heaters: Used at the Head Office for sustainable energy solutions.
5. Cycling Stands: Encourages eco-friendly commuting to reduce vehicle emissions.
6. LED Fixtures: Energy-efficient lighting implemented across bank premises.
7. Hand Dryers: Introduced in washrooms to minimize paper napkin usage.
8. Plastic Waste Recycling: Promotes sustainable waste management.

Why PCAF Focuses On GHG Emission Assessment And Disclosure

Background Of PCAF
The Partnership for Carbon Accounting Financials (PCAF) is a global partnership of financial institutions established in 2015 by Dutch financial institutions under the leadership of ASN Bank during the Paris Climate Summit. It provides a standardized framework for assessing and disclosing GHG emissions associated with financial portfolios, promoting transparency and accountability.

Purpose Of PCAF

• Address the financial sector’s critical role in driving the transition to a net-zero carbon economy.
• Facilitate the adoption of harmonized GHG accounting practices across institutions and is set to collaborate with banks and investors worldwide and commit to assess and disclose the GHG emissions associated with the portfolio.

PCAF’s Objectives And Goals

1. Develop A Global Standard: To establish a common GHG Accounting Standard for financial institutions worldwide.
2. Expand Membership: Aim to include over a thousand (1,000) financial institutions by 2025.
3. Achieve Net Zero: Support decarbonization efforts to meet the Paris Agreement’s 2050 Net Zero Emission goal.

PCAF’s Strategy
As a nonprofit organisation, PCAF collaborates with banks and investors globally, offering methodologies and resources to help assess and disclose GHG emissions tied to loans and investments.

EXAMPLE
Imagine bank funds by way of granting loans for two projects of big corporate houses :
1 . A coal-powered energy plant (high GHG emissions).
2 . A wind energy project (low GHG emissions).
Without measuring GHG emissions, the bank wouldn’t know the environmental impact of its funding decisions. By joining PCAF, the bank can calculate the emissions linked to each project, disclose them publicly, and prioritize financing for renewable energy projects, aligning its actions with net-zero goals.

SOURCE: https://www.pnbindia.in/downloadprocess.aspx?fid=5Akgph/U2f8ZyVQIuQTsjw==

FREQUENTLY ASKED QUESTIONS (FAQ)

Q1. What does the name “IndusInd” in IndusInd Bank signify?

Ans. The name “IndusInd” is inspired by the Indus Valley Civilization or the ancient Harappan Civilisation, known for its blend of innovation and business practices. Founded in 1994 by Srichand P Hinduja and the Indian diaspora, the bank reflects a legacy of innovation and foresight

Q2. What are IndusInd Bank’s main operations?

Ans. IndusInd Bank provides an extensive array of financial services, including:

• Microfinance, personal loans, and SME loans.
• Debit/credit cards and vehicle financing.
• Affluent, NRI banking, and ESG-linked financial products.
• Advanced digital banking facilities.

Q3. What is CSR?

Ans. Corporate Social Responsibility (CSR) signifies a company’s commitment to support social and environmental well-being. Under Section 135(1) of the Companies Act, 2013, a company must comply with CSR provisions if it meets any of these criteria:

• Net worth: ₹500 crores or more.
• Turnover: ₹1,000 crores or more.
• Net profit: ₹5 crores or more.

Q4. How much CSR spending is mandatory?

Ans. Qualified businesses are required to allocate 2% of their average net earnings from the past three fiscal years to CSR initiatives. Newly established companies contribute 2% of their average net earnings from the most recent financial years.

Q5. What does UNICEF stand for?

Ans. UNICEF stands for United Nations International Children’s Fund. It operates in 190 countries, focusing on the well-being of children from early childhood to adolescence.

Q6. What does SDG mean?

Ans. SDG refers to Sustainable Development Goals, a collection of 17 global targets introduced by the United Nations in 2015. These goals address poverty, hunger, education, clean water, gender equality, and health etc.

Q7. What is the UN?

Ans. The UN, or United Nations, is an international organisation founded on October 24, 1945, in San Francisco and headquartered in New York. Comprising 193 member nations, its central mission is to uphold international peace and security.

Q8. Which gases are included in Green House Gas (GHG)?

Ans. Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), Sulphur hexafluoride (SF6) Nitrogen trifluoride (NF3).

Q9. Which asset categories are included in the GHG methodology?

Ans. The GreenHouse Gas methodology applies to the following asset classes like:- listed and unlisted equity, corporate bonds, business loans, project finance, mortgages, commercial real estate, motor vehicle loans etc.

Q10. Define Scope 1 and Scope 2 Emission.

Ans. Scope 1 Emissions: These refer to direct greenhouse gas (GHG) emissions originating from assets or operations directly owned or managed by an organization. Additionally, unintentional releases, such as equipment leaks or methane emissions from coal mines, are also considered here.

Scope 2 Emissions:These are indirect GHG emissions generated from the production of purchased energy, such as electricity, heating, cooling, or steam, which are consumed by the entity.