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Green Finance:
A Study on Its Awareness among The Bank Employees of Assam
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| Paper Id :
18338 Submission Date :
2023-12-14 Acceptance Date :
2023-12-22 Publication Date :
2023-12-25
This is an open-access research paper/article distributed under the terms of the Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. DOI:10.5281/zenodo.10461788 For verification of this paper, please visit on
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| Abstract |
The changing global scenario of the 21st century calls for sustainable development Owing to the
growing environmental concerns. Due to Global warming, it becomes imperative to
adopt renewable and clean energy sources. This is the reason, green finance
i.e. financing of investments that provide environmental benefits in the
broader context of environmentally sustainable development, is important not
only from the business point of view but also for environmental science. Sustainable
growth requires financing; therefore Green Finance has become need of the
hour.The main aim of Green Finance is to attract investment in green projects,
increase return on investment on such projects and discourage polluting
investments. In order to achieve non zero emission country by 2070, to expand
the energy capacity not coming from fossil fuels to 500 GW by 2030 and to cut
the carbon intensity of economy by 45% by 2030, green finance is very
important. In this study, researcher has focused on to understand the need,
benefits and various instruments of green finance and the level of awareness
that the employees of the banks have on green finance to make its customer
aware about the fact and the various steps taken by the banks to spread the awareness
among its customers to invest in green finance related projects. |
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| Keywords | Green Finance, Sustainable Development, Bank, Employees, Investment | ||||||
| Introduction | The need for
sustainable development is increasing in the 21st century due
to the problems like ozone layer depletion, global warming, increasing
pollution level and other environmental issues. Natural resources like
mineral ores, fossil fuels, agricultural productivity, and the
self-purification capacity of the natural environment all have their own
disadvantages. Irrational consumption of resources together with irresponsible
environmental pollution resulting from the entire product life cycle. This
issue now –a- days gives importance to the concept of ‘green finance’. Sustainable development: meaning- it is a development strategy which meets the needs of present generation without reducing the ability of the future generation to meet their own needs. Green finance: meaning- financing of investment in all financial sectors and asset classes that integrate Environmental, Social and Governance (ESG) considerations into the investment decisions and embed sustainability into risk management for encouraging the development of a more sustainable economy. |
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| Objective of study | The study has
been conducted with the following objectives: 1. To see the
needs and benefits of Green Finance. 2. To know the various instruments available for green finance. 3. To study the awareness among the bank employees and challenges faced by them in relation to green finance in Assam. |
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| Review of Literature | Various
authors, academicians, research scholars, government and non- government
agencies have conducted studies on different aspects of green finance. A few
relevant literatures relating to green finance have been discussed as follows: Jayasubramanian
and Shanthi ( 2014), in the study, highlighted the strengths and weaknesses of
green finance and also given few suggestions on it. Strengths such as promotion
of technology diffusion, eco-efficient infrastructure etc., weaknesses such as
lack of awareness, lack of competition etc. Sudhalakshmi
and Chinnadorai (2014) explains the concept of green finance and as per
the author, green finance is very important for India to ‘Go Green’ as it
connects with the environmental improvement through the financial perspective. Keerthi B.S.
(2013), has analysed about the challenges and opportunities of green
finance in India along with the concept of creating green jobs in India. Tasnimuddin Chowdhury et al (2013), in the study, discussed about the role of green finance in economic development and explained financing in renewable energy, green building projects etc. Thus, the review of literature and research activities shows that many studies have been done on green finance but no study has been taken to study the green finance awareness among the bank employees of Guwahati, Assam . Therefore, this study has been undertaken. |
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| Main Text |
Importance of
the study
The world is
facing unprecedented challenges caused by climate change, as a result, the
financial institution are increasingly adopting a sustainability agenda. Banks
are one of the primary source of funding for sustainable projects, and they
have a key role to play in promoting the adoption of green finance. However,
the bank employees face various challenges in promoting green finance in Assam,
a state in northeastern India. Here, the researcher will discuss the challenges
faced by bank employees in promoting green finance in Assam and suggest
possible solutions. |
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| Methodology | Both primary and secondary data have been collected. Primary
data have been collected by distributing well structured questionnaire among
banks of Assam and also through interviews with the bank managers. Secondary data
have been taken from websites, journals and other publications. |
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| Sampling |
Purposive random sampling technique has been adopted and 80
bank employees have been taken as samples for the study. |
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| Tools Used | Percentahe methiod, bar graph and pie diagram. | ||||||
| Analysis | By analysing
the various data and information collected from various sources, the following
findings have been gathered: Need and
benefits of green finance i. Green finance helps in the development of environmental
friendly infrastructure. ii. Business
can create value by increasing their participation in green financing and
thereby attract more environmentally concerned investors and customers. iii. Green
finance leads to the improvement of environment and helps to trade actively in
the carbon market. iv. Investment in green projects will lead to creation of employment in India. To provide financing of public policies which will encourage the implementation of environmental and environmental- damage mitigation or adaptation projects and initiatives.
Diagram showing
the various benefits of green finance. The various sectors where green finance can be availed of are:
Instruments of
green finance in India The following
are the instruments that has been found during the study:- Green fund A green fund is a mutual fund which
invest only in companies that focus on social consciousness or
directly promote environmental responsibility. A green fund can be seen in the
form of investment vehicle where
companies are engaged in environmentally supportive businesses such as solar
energy, wind mill, green buildings, green transport, water and waste
management, and sustainable living. Green bonds A green bond is
a type of debt security issued by an organization for the purpose of raising
funds or refinancing projects that contribute towards environmental
benefits . A green bond is also known as a climate bond. The way the green bond
works is similar to the loan process of the banks. Green credits Green credits
refers to the practice of banks taking into consideration not onl;y economic
benefit indicators but also environmental factors for the credit issuance
process and then making appropriate loan decision. Sustainaibility
linked bonds A
sustainability linked bond (SLB) is a debt instrument where financial and
structural factors are based on whether the issuers achieve sustainability or
ESG goals within a given period of time. If the company doesn’t meet those
goals, there’s a penalty with a higher interest to be paid by the investors. Awareness on
green finance among the bank employees. Lack of awareness and understanding of green finance among the bank employees has been found during the study
Diagram showing the level of awareness among the bank employees. There are many reasons for the lack of awareness like less publicity,training program, bank publications, word of mouth promotion and others for the bank employees. Among the various reason lack of training is the main issue
Diagram showing the awareness program provided to the bank employees The various sectors where green finance can be availed of are: |
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| Result and Discussion |
Challenges
faced by the bank employees: There are
various challenges faced by the bank employees in promoting green finance in
Assam such as- i. Lack
of understanding about green finance by the bank employees of Assam. They are
not aware about the various products and services of green finance, which makes
it difficult for the bank employees to promote green finance in Assam among its
customers. ii. In Assam, most of the banks have limited green
finance products and service offerings, which makes it difficult for the bank
employees to promote these products to their clients. This lack of product and
service is due to the limited demand for green finance product in the region. iii. Bank
employees face a lack of incentives in promoting green finance in Assam. There
are no financial incentives or recognition programs for bank employees who
promote green finance. This lack of incentives makes it difficult for bank
employees to prioritize green finance over other products and services, leading
to limited promotion of green finance. Bank employees
face limited training opportunities in green finance. Most banks in Assam
do not provideadequate training on green finance products and services.
This lack of training makes it difficult for the bank employees to
understand and promote green finance effectively |
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| Findings |
After collecting the information, the findings have been summarised as follows:
The banks of Assam has the green finance instruments but the investment in the instruments are low.
There is lack of knowledge regarding the benefits of making the investment in green finance instrument.
Lack of efforts towards the promotional activities of the concept of green finance among its bank employees and customers as well.
Promotional activities such as advertisement, bank publication and so on.
The bank has easy accessibility of green finance products for their customers but because of lack of knowledge the utilisation of such facility is less. There is very limited incentives provided by the banks to the bank employees to promote the concept of green finance among its customers. |
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| Conclusion |
Green finance
is the need of an hour under the vast concept of Sustainable
Development. Investors who are investing in the green finance instruments are
thinking beyond risk and returns, they are becoming more and more responsible
towards society. Increasing awareness about environment protection and
increased funding of green projects has opened a wide variety of opportunities
in the area of green finance.Environmentalists, government, investors, and
financial institutions should clearly define the concept of green finance.It
is very important for the financial institutions of Assam to take various
steps for their employees and investors such as training program, incentives
and so on. Various rules and regulations should be set up so that the investors
funds are properly utilised. Assam, a state in Northeast India should
concentrate on protection of natural resources, efficient energy management,
renewable energy generation and other ecological issues with the help of green
financing. Thus, it can be concluded that green finance is the best way to
achieve the various goals of the Sustainable Development. |
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| Suggestions for the future Study | A few suggestionsgiven by the researcher after the study are as follows:- 1. Awareness and Training Programs To address the lack of awareness and understanding of green finance, banks in Assam can provide awareness and training programs on green finance. These programs can help bank employees understand the concept of green finance and its benefits. They can also provide training on green finance products and services, including green loans, green bonds, and green funds. 2. Diversification of Product and Service Offerings Banks in Assam can diversify their product and service offerings by introducing more green finance products and services. This diversification can help bank employees promote green finance products and services to their clients more effectively. Banks can also collaborate with other financial institutions to introduce. 3. Promotional activities The financial institutions should take some promotional activities like advertisement in different ways, bank publications, display in banks digital boards regarding the benefits and ways to invest in the green finance instruments etcfor a better knowledge and awareness of the employees and the investors as well. 4. A proper rules and regulations The government and the financial institutions should make proper rules for the screeingof the green projects and also for the utilisation of the funds raised under green finance. The funds raised should be utilised for the green projects in a judicious way. 5. Availability of incentives The financial institutions should provide various kinds of incentives to the bank employees regarding spread of awareness among the customers. This incentives will act as a motivation for the employees to work effectively as well. |
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| References | Journals 1. Gupta,
A. (2014). Clean development mechanism of Kyoto Protocol: Contribution of India
in climate change mitigation and expectations of Indian project proponents.
International Journal of Climate Change Srategies and Management, Vol. 6,
Issue:2, pp. 116-130. 2. Jayasubramanian,
P., &Shanthi, M. (2014). Green Finance. Indian Journal of Applied Research. 3. Sudhalakshmi,
K., &Chinnadorai, K. (2014). Concept of Green Finance in India.
International Journal of Social Science and Interdisciplinary Research, 96-99. 4. B.S, K.
(2013). A Study on Emerging Green Finance in India: Its Challenges and
Opportunities. International Journal of Management and Social Sciences Research 5. Keerthi, B.S.
(2013). A Study on Emerging Green Finance in India: Its challenges and
Opportunities.International Journal of Management and Social Sciences Research
(IJMSSR), 2(2), 49-53 6. Chowdhary, T.
U., Datta, R., &Mohajan, H. K. (2013). Green Finance is Essential for
Economic Development and Sustainability. International Journal of Research in
Commerce, Economics & Management, 3(10), 104–108. https://mpra.ub.uni-muenchen.de/id/eprint/51169 Websites https://www.adb.org https://www.unep.org https://emeritus.org |
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