Axis Bank Commits to Positive Climate Action and Sustainable Development Goals
Axis Bank, India’s third largest private sector bank, announced a series of commitments aligned to achieving the Sustainable Development Goals (SDGs), supporting India’s commitments under the Paris Agreement. As part of its commitments, the Bank has set a target of incremental lending Rs. 30,000 crore over the next 5 years, under Wholesale Banking towards pertinent sectors included in its Sustainable Financing Framework.
Axis Bank has now become the first financial institution in India to have set up a standalone Environmental Social and Governance (ESG) Committee at the Board level, underscoring the Bank’s strong intent to adopting ESG as a strategic driver for the organization’s plans and performance. The Bank has also established an ESG Steering Committee at the Management level, comprising senior business leaders to champion ESG integration across the organization.
The Bank has announced its commitments ahead of the upcoming 2021 United Nations Climate Change Conference (COP26) at Glasgow, UK from 31 October – 12 November, where the Parties are expected to talk about enhancing their commitments made at COP21 at Paris in 2015.
The Bank’s commitments include:
Incremental financing of Rs. 30,000 Crores under Wholesale Banking to sectors with positive social and environmental outcomes, by FY 2026
Scaling down exposure to carbon-intensive sectors in its Wholesale banking business portfolio
Expanding ESG risk coverage in credit appraisal under its ESG Policy for Lending
Building and deploying an ESG risk assessment toolkit, with ESG stress testing and ESG scenario analysis, for its Large Corporate, SME and Agri-business verticals by FY 2023
Making 5% of its retail Two-Wheeler loan portfolio as electric by FY 2024, and offering 0.5% interest waiver on new EV loans, effective immediately
Incremental disbursement of Rs. 10,000 crores by FY 2024 under Asha Home Loans for affordable housing, and increasing share of women borrowers
Reaching 30% female representation in its workforce by FY 2027, aligned to the Bank’s #ComeAsYouAre Diversity Charter
Planting 2 million trees by FY 2027 across India towards contributing to creating a carbon sink
Achieving carbon neutrality in its business operations
Commenting on this announcement, Mr. Rajesh Dahiya, Executive Director, Axis Bank said, ‘’As a financial institution, we are aware of our responsibility towards helping India move on the path of equitable and sustainable economic growth. Over the past two years, we have been working relentlessly on bolstering our holistic strategy, governance, and performance benchmarks around ESG. These commitments are part of our longer term ESG strategy woven around our purpose of ‘Banking that leads to a more inclusive and equitable economy, thriving community and a healthier planet’. We would like to think of this as only the beginning and we shall continue to explore scaling and strengthening our commitments over time.’’
Recently, the Bank launched its Sustainable Financing Framework that articulates the Bank’s strategy for financing ESG-aligned sectors and defines the project categories that the Bank shall consider to be eligible as ‘Sustainable’. The Framework has received a Second Party Opinion from Sustainalytics, thus providing the highest level of confidence on its alignment to global sustainable finance best practices. The Bank has also set up an ESG Working Group towards managing the Bank’s obligations and commitments under the Framework.
In line with its ESG strategy, Axis Bank has successfully raised India’s first Sustainable USD AT1 notes of $ 600 million in the overseas markets on September 1, 2021. With this issuance, India is now only the second jurisdiction in Asia with an ESG AT1 issuance. The offering witnessed an overwhelming response from the investors, especially high- quality real money investors, with the order book being 3.8 times oversubscribed ahead of the Final Pricing Guidance announcement. Global investors, with their participation in this marquee transaction, have demonstrated confidence in the Bank’s ability to positively impact India’s socio-economic and environmental landscape.
Further, extending the reach and impact of its wider ESG aligned commitments, the Bank recently announced #ComeAsYouAre, – a charter of policies and practices that embrace diversity, equity and inclusion within the organization and for its customers. With these initiatives, Axis Bank became one of the first companies in the country to announce such a wide variety of inclusive steps for the LGBTQIA+ community.
Since the onset of the COVID-19 pandemic, the Bank has been working closely towards supporting its employees, customers, business partners, communities and government agencies towards fighting and emerging from the pandemic. It was amongst the first banks to put in place a Crisis and Emergency Response Team (CERT), which enabled the Bank to continue fulfilling its commitments to its stakeholders throughout the pandemic.
Over the years, Axis Bank has been recognized at various platforms for its ESG-aligned performance and impact. The Bank has been on the prestigious FTSE4Good Indices by FTSE Russell for five consecutive years since 2016 and is among the top 10 constituents of the S&P BSE 100 ESG Index and the MSCI India ESG Leaders Index, and is a constituent of the NIFTY100 ESG Sector Leaders Index.
About Axis Bank
Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporates, SME, Agriculture and Retail Businesses. With its 4,594 domestic branches (including extension counters) and 11,333 ATMs across the country as on 31st March 2021, the network of Axis Bank spreads across 2,559 centers, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. The Axis Group includes Axis Mutual Fund, Axis Securities Ltd., Axis Finance, Axis Trustee, Axis Capital, A.TReDS Ltd., Freecharge and Axis Bank Foundation.
For further information on Axis Bank, please refer to the website: www.axisbank.com.