India has a high potential for growth in sustainable investing with an opportunity to mobilise $1 trillion towards top ESG priorities, particularly for financing the climate transition, by 2030.

This capital could also play a critical part in bridging funding gaps such as pollution and waste management, as per Standard Chartered’s Sustainable Banking Report 2022: Mobilising retail investor capital.

Overall $8.2 trillion of investable retail wealth could be channelled into sustainable investments by 2030 to finance ESG objectives.

Across India, 46 per cent of investors want to help restore the environment, while nearly 40 per cent of investors want to put their money to hedge against ESG risks, and 33 per cent want to make a positive social impact.

However, a better-regulated ESG market, coupled with a growing pool of retail investors, could see India’s $1 trillion of potential retail capital directed toward addressing ESG issues.

Climate-themed solutions

The report highlights the need for climate-themed investment solutions to be made more widely available to translate this investor interest into actual impact.

Investors in India identified accessibility (51 per cent), comparability (49 per cent) and comprehensibility (44 per cent) as their top barriers to increasing their sustainable investments. Across 10 growth markets, the findings demonstrate how financial institutions can play a critical role in unlocking available capital by breaking down these barriers for retail investors.

The report stresses on the need to democratise access to sustainable investments by making more solutions available in more markets via digital platforms, provide clear and transparent information, address investor apprehensions and provide data-led advice on how to match their ESG priorities with the right solutions.

ESG-related issues

Marc Van de Walle, Global Head, Wealth Management, said, “The top ESG­-related issues across the 10 markets we surveyed – climate change, pollution, poverty, corruption, food scarcity and energy security – correspond to the areas that investors are most interested in addressing.”

Saurabh Jain, Head, Wealth Management, Standard Chartered Bank - India, said that to encourage greater private capital participation in the ESG market, India has already taken steps to improve transparency and regulate the ESG rating process.

India has one of the strongest investment potentials and the individual retail interest when added to government and corporate spending will play a huge role in supporting sustainable development and mitigating climate change, he said.