The committee has endorsed the necessity of enabling aggregation facilities, impact funds, and green equity in IFSC.
The International Financial Services Centres Authority (IFSCA), which established the committee of experts on "Sustainable Finance”, has recommended use of innovative instruments like catastrophe bonds, municipal bonds, green securitization, and blended finance among others.
Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.
The committee has endorsed the necessity of enabling aggregation facilities, impact funds, and green equity in IFSC, focusing on the need to improve capital flows in IFSC.
In addition to this, it recommended that IFSCA should play a vital role in capacity building as it lays the foundation for greening the financial system.
Some important recommendations include developing a voluntary carbon market, framework for transition bonds, enabling de-risking mechanisms, promoting regulatory sandbox for green fintech, and facilitating the creation of a global climate alliance among others.
The committee has also given its recommendations on various aspects of sustainable finance including products, policies and regulations, capacity building and outreach initiatives related to green and sustainable finance.
The panel had submitted its final report to the IFSCA Chairperson on October 3.
The committee, chaired by former Environment Secretary C.K. Mishra, comprised leaders and experts from the entire sustainable finance ecosystem including national and international institutions.
The committee's primary objectives were to harmonise the IFSC regulations with global best practices, investigate ways to improve capital flows through the IFSC, and support the creation of novel financial products in the field of green and sustainable finance.
(with inputs from IANS)
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