• investment & Mutual Fund

USD543 billion in retail investor capital could be mobilised to combat climate change in India by 2030

• nationalherald
• November 29, 2023

by Prashant Kapadia/NHN   

• Energy efficiency, resilient infrastructure and renewables are set to attract the highest investment

• 96% of investors in India are interested in climate investing, the highest among all markets surveyed

• Making a positive impact and personal values are the top investor motivations

29 November 2023, India: Standard Chartered’s latest Sustainable Banking Report 2023 reveals USD543 billion of retail investor capital could be mobilised towards climate investments in India by 2030. The research – based on investor interest from a survey of 1,800 respondents in 10 growth markets across Asia, Africa and the Middle East – identifies a global potential of USD3.4 trillion for climate investing, highlighting the power of individuals to combat climate change.

Within climate investing in India, USD324 billion could flow into mitigation themes – energy efficiency, renewables and energy storage are set to attract the most capital. USD219 billion could be mobilised towards adaptation including resilient infrastructure, biodiversity and food systems.

The survey shows 96% of investors in India are interested in climate investing, which is the highest among all markets surveyed, and 84% of them want to increase capital flows towards climate. They are mainly motivated by making a positive impact and personal values when making such investments.

However, multiple barriers, which vary by investor segments, are holding them back from translating their interest into investment.

Investor segment	Barriers to mitigation investment	Barriers to adaptation investment
Affluent	Accessibility (76%) Comparability (75%) Comprehensibility (73%)	Comparability (74%) Accessibility (72%) Perceived higher risks (72%)
High-Net-Worth (HNW)	Perceived higher risks (72%) Ambivalence/Fatigue (70%) Accessibility (66%)	Ambivalence/Fatigue (72%) Accessibility (70%) Comprehensibility (66%)
Next Generation  HNW	Accessibility (73%) Ambivalence/Fatigue (73%) Scepticism (70%)	Perceived low returns (79%) Comparability (76%) Ambivalence/Fatigue (73%)

The industry needs to help investors overcome these barriers to unlock the potential of retail capital. Financial institutions, regulators, companies and individuals must make a concerted effort to establish a wider range of climate assets to drive greater retail participation.

Asset managers and banks must also work to innovate new climate assets to match emerging investor interests, such as biodiversity and the blue economy. Financial institutions have a critical role to play in mobilising retail capital via three pillars – empowering investors with information, product customisation and outcome-based information. Digital and fintech solutions will play an enabling role and simplify processes for investors. The industry across the world also needs to align reporting standards and mandate minimum disclosure requirements to boost investor confidence. 

Marc Van de Walle, Global Head, Wealth Management, Deposits & Mortgages, Standard Chartered, said: “Financing our collective response to climate change is a critical challenge. Overall climate mitigation and adaptation face an annual funding gap of trillions of dollars. Institutional capital is often the focus when mobilising funds to bridge this gap – the scale and power of retail investor capital is a lesser-known opportunity. To overcome the current disconnect between investor interest and the scale of climate investments, the industry needs to improve access to solutions, harmonise reporting standards and measurement of impact.  We continue to work closely with our clients to match their investments to their areas of interest, so they can help finance solutions for a more sustainable future.”

Saurabh Jain, India Head, Wealth Management, Standard Chartered Bank, said: “Climate change is a key challenge for India, with frequent extreme weather events, a growing population and increasing urbanisation highlighting the need to bring rapid focus into building climate-resilient infrastructure and staying on course to achieve the country’s net zero targets. Our report shows that over half a trillion dollars could be available from retail investors to finance climate investments. Wealth managers can play a big role in channelling these investments into impactful financial solutions. At Standard Chartered Bank, India, we continue to work with our clients and asset managers to mobilise capital for climate action through innovative products.”

About the Sustainable Banking Report 2023 : The Sustainable Banking Report 2023, commissioned by Standard Chartered and prepared by PwC Singapore, surveyed 1,800 individuals from three investor segments (Affluent, High-Net-Worth (HNW) and Next Generation High-Net-Worth (NextGen HNW)) across 10 key markets in Asia, Africa and the Middle East – Mainland China, Hong Kong, Taiwan, South Korea, Singapore, Malaysia, India, the UAE, Nigeria and Kenya.