Greening the World of Finance

[Prasad Madhav Modak]

My Professor friend was once again in the news. He became an Advisor to the Governor of the Central Bank  last month and was asked to take on the Green Agenda. The Governor had apparently attended some UN meeting on Greening and had found that lot was happening in the financing world on this topic and India had not much to say. That was shameful.

So the Professor was appointed. After his taking over, the finance world in India simply changed towards Green.

I went to withdraw money from the ATM next to my home and there was a long queue. Most in the queue were reading newspapers. Some were patiently solving crosswords. Some had started eating their lunch. Clearly the queue was moving slowly. I asked the gentleman next to me why was such as case. “Oh he said, don’t you know that the ATM now asks a lot of questions on green. How much water do you consume in a day, how much diesel is consumed per kilometer by a 10 year old  bus etc. are few opening questions. Questions are also asked on your general knowledge such as what is the name of the chairman of the Tripura Pollution Control Board, or what is the significance of 2 degrees, and few more questions at the end such as what did you do today on the Swatch Bharat Abhiyan etc. When you answer all these questions and get at least 70 marks out of 100, only then your ATM card becomes active. This takes time. Most people fail so they keep reattempting and since each time the questions asked are different, they keep failing again and again. I am planning to go to another ATM machine now where I believe there are professionals laundering outside who help to field these questions at a small fee. Apparently, some advisor to the Governor of the Central Bank has come up with this idea to promote green. Crazy!”

I was simply aghast. Although it generated Green Jobs, This was terrible. So I left the ATM machine and went straight to meet the Professor at the Central Bank. The Professor was giving a press interview at that time. “Yes, we propose to change the mind set of Indian citizens towards green living. This credit card (and he flashed a bright green credit card which had a shape of a leaf) will let you shop only green. If you attempt purchasing any “brown” product, then the card will not simply work”.  One journalist stopped him and asked who decides what is a green and a brown product?  The Professor smiled and said that this work was already done and a master database of key green consumer products was created at a national level. New entries were however most welcome”. Another Journalist quipped “why should one buy this Green Credit Card if this is so restrictive?” The Professor was already expecting this question.  “We will track the shopping done using this Green credit card and give you “greenie” points. With these points you can shop more green as a bonus…. And remember that there are no annual fees charged for the use of Green Credit Card – (don’t confuse this with Green Card my friends and he winked)

When we went to his cabin, I complained to the Professor about the ATM mess. I further added that the Green credit card idea could be controversial as it is really difficult to certify what is a green product”, But the Professor did not agree. Soon people will understand what is green through the ATMs and spend responsibly using the Green Credit card – he said.  The product makers will shift to the mission to “Make Green” because this will be the only way that they will survive. This will lead to reduced GHG emissions. The Central Bank will thus change India’s consumption and production patterns. This should have been the job of the Ministry of Environment and Forests (and Climate Change) but you know that this Ministry has been only focusing on management of residues or pollution …with no strategies towards sustainable consumption and production”. He sighed and I nodded. On this we had no disagreement.

He then paused and asked me “Have you been recently to any of the commercial banks asking for a loan?”

Next day, both of us went to a local commercial bank. I filled up a loan application form at the counter that used a paper that was recycled, unbleached and had seeds embedded. When I went to the desk of the loan officer, he served me water from a rainwater harvesting unit and in a clay jar. I was carrying the supporting papers in a plastic bag. He took the papers, tucked away my plastic bag “no plastic my friend – this is against the Central Bank’s directive”. He then walked across and inserted my plastic bag in a plastic to diesel machine. “Thanks for your contribution for the national plastic to diesel program” he said while sitting back on his chair and handed over a flower as a token of appreciation that came from an organic garden. My Professor fiend was standing behind me with great self-admiration and a proud face.

When I explained to him about my interest of securing loan for a vehicle, he asked me why am I purchasing a vehicle. Can you not take a public transport? We must follow sustainable lifestyles and reduce your carbon footprint, We are importing crude oil my friend that affects our BoP” He then showed me couple of videos on YouTube that said how we should avoid using private vehicles and take public transport. I am sorry he said, but if you still insist on taking a loan, then I will recommend you a bicycle. In the Netherlands, most use bicycles. I tried to tell him that public transport in the city is not good and, I get late, weary and tired. Besides we don’t have bicycle pathways like in the Netherlands, so safety can be an issue, but the officer wouldn’t pay heed to my protests.  We spent another 30 minutes discussing my loan. According to the officer, sanctioning of my car loan would severely affect India’s and world’s sustainability and bring in adverse and irreversible change.

We left the Bank, me disappointed and the Professor triumphant with joy. I said “I will go to another bank – perhaps a cooperative Bank where Central directives are often flouted”. The Professor said sure – try your luck. We have ensured that all Banks will follow our principles of sustainable finance in letter and spirit. The financing world in India now fully understands the importance of sustainability in the investment decisions.

But then how will the economic development in India happen? Especially the required financial flows in the infrastructure sector and the foreign direct investments that we want to attract? Your requirements are so stringent … I struggled to say. “Oh I am working on that, the Professor said while signing some important documents using a green pen. There are so many shades of green that I am sure we will find a way.  After all, what is green is what we decide. So we will stay green for the world but fix the shade we want to – somewhere dark and somewhere pale”. Aha - I exclaimed. I visualized my Professor friend like the scallywag boy of Asian Paints with a paint tin and brush in hand and a large palliate of Green.  Busy painting the walls. Very clever.

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