Presently, the whole world is going through a bad phase. It’s all because of playing with nature. Covid-19 has made People have realized that the time has come when we should behave friendly with nature. In recent years the idea that economic growth is intrinsically linked with a healthy environment has gained recognition among academics, businessmen, activists and common man alike. The alarming rate at which the non- renewable resources are depleting has made human beings realized that healthy environmental conditions are an indispensable part of the prosperity cycle of human beings. This has led them to shift their focus from being solely profit-oriented to being environmentally ethical too. As a part of healthy and ethical practices, individuals working in various sectors have now started addressing the need and means by which sustainable growth can take place. All of this is due to growing awareness about global climate change and global warming as a pressing concern.
As a part of India’s agenda under the Paris Agreement which was to reduce the emission intensity of their GDP by 33-35 per cent by 2030 from their 2005 level, India has started looking out for sustainable alternatives in every sector including the finance sector. This sector may not have a direct relationship with the environment but certainly has a direct relationship with firms and corporations who may be polluting the environment. Hence, the finance sector may be indirectly involved in promoting unethical means to procure profits at the cost of the environment.
India is largely an agrarian economy where the service sector contributes the most to the overall GDP. The primary sector depends on the environment for yield; the secondary and the tertiary on the other hand heavily depend on the primary sector and resources provided to them by the environment. The topography of India suggests that it is vulnerable to various climate changes, for instance, melting Himalayan glaciers may produce floods in north India on the one hand whereas erratic monsoons will create droughts in the peninsular region. Hence, economics and sustainable development goals of the country cannot be entirely divorced from one another.
This paper aims to suggest green finance as the ultimate option for sustainability and explore sustainability in terms of financial institutions concerning India. The above-mentioned objective will be explored further by examining the role of the Central Bank or an alternative body to the central bank and its role in enabling India’s transition towards a Green Economy with environmentally and ethically positive outcomes.