Speaking at the IPCC Fifth Assessment Report (AR5) launch outreach on August 6, 2014 in New Delhi, Rana Kapoor, President, ASSOCHAM and Managing Director & CEO, YES BANK said:

“This outreach program for the IPCC Fifth Assessment Report (AR5) comes at a critical time - when India is facing a delayed monsoon, falling crop levels and flash floods, amongst several other environmental concerns. The susceptible farm sector accounts for around 15 percent of India's economy and two-thirds of our population live in rural areas.

With the IPCC Fifth Assessment Report predicting drought-related water and food shortage for Asia in the coming decade, we urgently need to address the challenges of climate change in our roles as individuals, collectively as organizations and together as a country, to ensure holistic, sustainable development and growth.”

Following is the speech by Rana Kapoor, during the Inaugural session at IPCC Fifth Assessment Report (AR5) launches outreach, on 6th August 2014:

• Country specific outreach programs have become very relevant given the significant role of India in the global arena.

• The implications of the report on India demand for a stronger and more inclusive approach towards climate mitigation by involving all relevant stakeholders.

• A prediction in the report states that “by the year 2100, high temperatures and humidity are projected to compromise normal human activities, including growing food and working outdoors; and global warming may result in civil war and violence over resources such as water, by amplifying poverty and economic shocks”

• With the expanse of population in India and its growing requirements, there is an urgent need for growth strategies towards holistic inclusion with equitable allocation of resources that benefit every section of society. But this allocation of resources need to be focused on the intended short and long term benefits of society such as availability of finance, consumer goods, access to employment and standard of living.

• Water unfortunately is a dwindling resource and is currently a big issue in India, and this coupled with poverty is likely to be a ticking bomb. Therefore mechanisms to restore the water tables, become water positive and waste negative to fight these inevitable changes is critical.

• One step in the positive direction is the “National Rural Drinking Water Programme”- which has been allocated Rs 3650 crore in the Union Budget 2014,  to reach out to approximately 20,000 affected habitations.

• On the other hand, poverty alleviation in India would be tackled, only if aggressive measures are taken towards access to education, financial inclusion and rural skill development.

• While education and skill development are considered prerogatives of the government, the corporate sector needs to look at how they could leverage these areas to impact more and more lives. In addition interventions are much needed to create new growth opportunities for people at the lower, middle and bottom of the social pyramid.

• Providing financial access to the poor by linking them with banks has always been an important priority. At the same time it is important to create economic activity in rural areas to make inclusion a reality. Financial inclusion is not about opening bank accounts but actually providing access to formal financial services. Merely opening accounts and facilitating direct cash transfers (DCT) through these accounts is not sufficient. More important and critical is the focus on livelihood inclusion which would lead to real “Financial Inclusion” 

• The widely prevalent and ever rising rural-to-urban as well as rural-to-rural migration is an indication that rural families are finding native rural livelihoods unsustainable.  Appropriate infrastructure and the 100 smart cities proposal by the Government may be an immediate solution which drives sustainable rural livelihoods.

• The IPCC report also mentions that Asian coastlines, particularly cities, could face some of the worst effects of global warming, with hundreds of millions homes lost to flooding and rising sea levels, which would slow down economic growth eroding food security and triggering newer poverty traps, particularly in urban areas, putting trade-driven cities such as Kolkata and Mumbai at high risk.

• Lately India has seen many flash floods, which has affected livelihoods and small businesses. To fight these effects of climate change is a long-term affair, which requires sustained efforts by increasing forest cover and mitigative measures such as building tidal gates and dams or allowing soil infiltration.

• Cleaning of Rivers in India would undoubtedly help in increasing natural capital cover and balance the water eco system.

• To address these multi-dimensional climate change risks, the UNFCCC has identified four areas: adaptation, mitigation, reducing emissions from deforestation & forest degradation and finance for green economy. It is time for India as a developing country to sharply look at these four areas and balance profitable growth with inclusive/sustainable development.

• This IPCC report, serves as a reminder to the government and industry, to take an integrated approach to energy and climate policy.

• The new government has taken some pragmatic steps by announcing outlays in its recent union budget which include some new and expanded opportunities towards climate actions. To actualize these, we would now need to put together appropriate frameworks for execution, coordinate and bring multiple stakeholders on board and put in place transparent accounting mechanisms.

• Corporates have started to manage carbon and climate risks, and the media too, has an important role to play in reporting not on just climatic events but to clearly establish and present the linkage between these events and the economy’s downturn. At the same time, media could play a crucial role in highlighting responsible organizations working to address climate change in their capacity.

• The finance sector in its role as a “Sustainability Catalyst”, needs to look at five major elements:

  • Integrating ESG parameters into lending decisions/project financing.

  • Innovating products and business solutions that directly address environmental/ social concerns.

  • Proactively directing investment toward projects that have positive social and environmental outcomes.

  • Instituting Sustainability Management Frameworks for cleaner operations.

  • And, training and diversifying human resource skills base to include social and environmental practitioners.

• Therefore as conduits of capital, the sector is in a unique and powerful position to positively influence its stakeholder and operationalize sustainability within its value chain.

• The investors and financial institutions play a critical in determining how society responds to climate change, since investment decisions made today are likely to have a major influence on infrastructure, GHG emissions and society even beyond 2050.

• I believe it is important for the financial sector to play a stewardship role and check all boxes, i.e. meet short term profitability expectations through traditional lending and investing and also to nurture sustainable finance business verticals that will deliver triple bottom line results in the long term. This way the finance sector will be able to satisfy the needs for all types of investors and shareholder.

• Progressive financial institutions like YES BANK have adopted a systematic approach that combines fundamental quantitative analysis with carbon-risk research, that optimizes the risk return profile of their portfolio, believing that sustainability is not just an ethical imperative but a sound business decision that helps us mitigate risks and identify new business opportunities, that will impact social development and environmental management.

• This outreach event comes at a critical time, when monsoons have arrived late and the country may be in the danger of facing drought. We certainly need to turn our attention to the importance of addressing climate change in our roles as individuals, collectively as organizations and the country at large, thus moving towards overall and holistic development