India’s geographical location makes it especially vulnerable to the effects of climate change, with major financial institutions souring debt worth more than $84 billion.
We’ve all heard the warnings. Yet it wasn’t until the almost biblical start of 2020 that the message really went home. The world watched in horror as wildfires ravaged Australia for weeks, blazing unchecked across the continent, then there were the swarms of locusts destroying acres of harvest in Africa and South Asia. And that wasn’t even the tip of the proverbial iceberg. 2020 also saw a host of other natural disasters from Atlantic hurricanes, flash floods, earthquakes, volcanic eruptions and wildfires sending communities from Australia to Turkey reeling, resulting in thousands losing their lives. And who can forget the mother of all disasters- the coronavirus pandemic that even today continues to sweep through the globe, bringing nations down to their knees.
According to the United Nations Office for Disaster Risk Reductions, there has been a rise in climate-related disasters during the past 20 years.
According to the Aon catastrophe report, titled Global Catastrophe Recap: First Half of 2020, released at least 207 natural disasters were recorded globally in the just the first half of 2020. The number of events exceeded average in all regions except the Americas. Between January and June 2019, at least 163 natural disasters were recorded. These disasters cost the world $75 billion. This is close to the average loss of $78 billion during 1980-2019.
The report further states that at least $71 billion, over 95 per cent of the loss, was due to the weather-related disasters. In fact, around 92 per cent of these disasters between January and June were weather-related.
Cyclone Amphan, the strongest on record in Bay of Bengal, is the world’s costliest, with $15 billion economic loss estimated so far, according to the report. The cyclone devastated the Gulf of Bengal — India and Bangladesh — in May 2020 and was the third-most severe storm witnessed by the region since 1999.
India’s geographical location makes it especially vulnerable to the effects of climate change. The country’s first-ever climate change assessment report, released by the Ministry of Earth Sciences in June last year, revealed that the average temperature is projected to rise by 4.4 degrees Celsius and the intensity of heat waves increase by three to four times by the end of the century.
This rise in temperature is largely on account of GHG-induced warming, partially offset by forcing due to anthropogenic aerosols and changes in LULC. By the end of the twenty-first century, average temperature over India is projected to rise by approximately 4.4°C relative to the recent past (1976–2005 average).
And climate change is expensive. And the cost of it has begun to sink in. According to leading non-profit environmental disclosure platform CDP, an increase in extreme weather events such as floods, droughts and cyclones risk souring debt worth more than $84 billion at India’s biggest financial institutions. In its annual report filed recently, CDP reported that India’s major financial institutions such as State Bank of India, HDFC Bank, IndusInd Bank Ltd. and Axis Bank Ltd. flagged exposure to environmentally sensitive businesses including cement, coal, oil and power.
According to CDP, the institutions also listed the effects of cyclones and floods on loan repayments in farming and related sectors. CDP, which gathered the data on behalf of 515 investors with $106 trillion in assets, said it received responses from 220 small and large Indian companies.
According to the report, India was second in the Asia Pacific and sixth globally among CDP’s ranking of countries whose companies committed to science-based targets for net-zero carbon emissions.
The report also stated that more than 50 Indian companies have committed to setting policies and regulatory changes by voluntarily committing to cutting their carbon footprint. Increased investor pressure and stronger disclosure norms are also compelling Indian companies to address climate concerns. Almost all the companies reported board-level oversight of climate-related issues, while some 84 per cent said climate-related risks and opportunities led them to alter plans for products and services.