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Retail investor capital aggregating $543 billion could be mobilised towards climate investments in India by 2030, per Standard Chartered’s (SC) latest Sustainable Banking Report 2023.
Within climate investing in India, $324 billion could flow into mitigation themes – energy efficiency, renewables and energy storage are set to attract the most capital, the report said.
Further, $219 billion could be mobilised towards adaptation including resilient infrastructure, biodiversity and food systems.
The research – based on investor interest from a survey of 1,800 respondents in 10 growth markets across Asia, Africa and the Middle East – identified a global potential of $3.4 trillion for climate investing, highlighting the power of individuals to combat climate change.
The survey shows 96 per cent of investors in India are interested in climate investing, which is the highest among all markets surveyed, and 84 per cent of them want to increase capital flows towards climate, per a SC statement.
They are mainly motivated by making a positive impact and personal values when making such investments, it added.
Multiple barriers
However, multiple barriers (such as accessibility, comparability, comprehensibility, ambivalence/fatigue, perceived higher risks, etc), which vary by investor segments, are holding them back from translating their interest into investment.
“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,” suggested the SC report.
SC emphasised that 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.
Marc Van de Walle, Global Head, Wealth Management, Deposits and Mortgages, Standard Chartered, observed that when it comes to climate investments, institutional capital is often the focus for mobilising funds to bridge the annual funding gap of trillions of dollars. 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,” he said.
Saurabh Jain, India Head, Wealth Management, Standard Chartered Bank, said wealth managers can play a big role in channelling climate investments into impactful financial solutions.
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