Namita Vikas, Group President & Global Head, Climate Strategy & Responsible Banking, YES BANK
The depletion of some natural capital in order to generate financial capital is an inevitable by-product of economic activity and development. However, as a rapidly developing country, India needs to understand and quantify ‘withdrawals’ from this natural capital stock. Without an understanding of the impacts of the usage, and the dependencies on healthy stocks, the country cannot guarantee future economic development, and continue to lift evermore Indians out of poverty. In fact, the World Bank estimates that a combination of climate change and natural resource mismanagement could push 100 million people back into poverty across the globe by 2030.
If organizations do not recognize that the overuse of natural capital will eventually affect the profitability, and in some cases viability of the organization, natural capital externalities will continue to be ignored by many businesses. Due to the knowledge gaps among Indian businesses, and the complex and multifaceted nature of the concept, multidisciplinary teams with specialists in ecology, law, business and public policy are required to connect the dots within organizations and to place natural capital at the core of organizational strategies.
YES BANK’s Natural Capital Awards are a step towards mainstreaming this understanding. In the four editions since its creation in 2013, the Awards have seen an exponential increase in participation and efforts by corporates, indicating that natural capital thinking is entering the mainstream in India.
As part of the government’s development of a holistic plan to tackle climate change, natural capital thinking must become one of its core planks. And as financiers of the economy, Indian Financial Institutions are pivotal in encouraging this transition. They may do this, for example, by integrating natural capital assessments into risk assessments, and apply them as a means to inform wider lending decisions. YES BANK applied the Natural Capital Protocol to study the natural capital impacts and dependencies of projects funded by the Bank’s green bonds, the details of which can be found on the Natural Capital Coalition’s website.
Read the full report here.