SBI’s ESG Financing Framework is a testament to the bank’s dedication to addressing sustainability challenges and fostering sustainable development in India.
MUMBAI (India CSR): The State Bank of India (SBI) has established an ESG (Environmental, Social, and Governance) Financing Framework, a significant step towards enhancing its sustainability strategy and contributing to the sustainable development of the Indian economy. This framework serves as a comprehensive guide for the issuance of green, social, or sustainable instruments, including bonds and loans, aimed at financing projects with environmental or social benefits.
The Bank has been publishing details of its ESG performance through the annual Sustainability Report as per Global Reporting Initiative (GRI) guidelines since FY17 and Business Responsibility and Sustainability Reporting since FY23 in compliance with the SEBI guidelines. Bank is committed to developing a culture of sustainability in every aspect of Banking through employee engagement, automation of processes, compliance with regulatory reporting framework and capacity building initiatives.
Dinesh Kumar Khara, Chairman, State Bank of India in his message to stakeholders says, “SBI is integrating ESG criteria in its product offerings and policy development, reducing carbon footprint by digitalisation of processes and other initiatives such as purchasing green energy and is also driving green transition in India by supporting sustainable activities while promoting economic growth.”
“Bank has an ESG Financing Framework, in alignment with the Sustainable Finance Guidelines and Principles of International Capital Market Association (ICMA), which serves as a roadmap for our bond and loan issuance programmes, ensuring that proceeds are directed towards supporting eligible activities and projects with environmental or social benefits. During the year, we successfully raised USD 250 million through green bonds, in accordance with our ESG Financing Framework. Bank has put in place a Policy on issuance of Green Deposits and Financing Framework in accordance with RBI guidelines.”, he said.
Framework and Principles
SBI’s ESG Financing Framework aligns with international standards, including the International Capital Market Association (ICMA) Green Bond Principles 2021, Social Bond Principles 2021, and Sustainability Bond Guidelines 2021. Additionally, it adheres to the Loan Market Association (LMA) Green Loan Principles 2021 and Social Loan Principles 2021. To ensure the integrity and effectiveness of the framework, SBI has obtained a second-party opinion from Sustainalytics, a leading independent ESG analytics firm.
Sustainability Committee
To oversee the framework’s implementation, SBI has established a Sustainability Committee (SC). This committee is responsible for determining the eligibility of projects under the ESG Financing Framework and for the regular monitoring of the ESG portfolio.
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Notable Initiatives and Achievements
Syndicated Loan Offering
In March 2023, SBI completed a significant syndicated loan offering of USD 1 billion, including a USD 500 million green shoe option, under its ESG framework. This loan was issued in a social format, with the bank’s Kisan Credit Card (KCC) portfolio of small and marginal farmers from the Delhi and Maharashtra circles mapped to meet the requirements of the syndicated social loan. The impact reporting and post-assurance exercises for this social project category are ongoing and will be disclosed on SBI’s website.
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Green Deposits and SBI Green Rupee Term Deposit (SGRTD)
Policy on Green Deposits
Following the Reserve Bank of India’s guidelines issued on April 11, 2023, for the acceptance of green deposits and financing green activities, SBI has proactively implemented a ‘Policy on The Issuance and Allocation of Green Deposits.’ This policy is in line with RBI’s guidelines and aims to mobilize funds to finance eligible green activities and projects, thus fostering a green finance ecosystem in India.
Renewable Energy Financing
As of March 31, 2024, SBI has raised INR 22.39 crore under its green deposit scheme. These funds are earmarked for financing eligible green projects and are temporarily parked in liquid instruments as specified in the financing framework.
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SBI Green Rupee Term Deposit
SBI has introduced a new deposit scheme called the “SBI Green Rupee Term Deposit” to support its green initiatives. This scheme is available to resident individuals, non-individuals, and NRI customers. Detailed information about the scheme is available on SBI’s website.
Green Bond Issuance
In FY24, SBI issued a green bond worth USD 250 million in accordance with its ESG Financing Framework. This bond underscores SBI’s commitment to promoting environmentally sustainable projects and supporting the transition to a low-carbon economy.
(India CSR)
