Under the proposal, similar to the Green Taxonomy pioneered by the European Union (EU), the government will certify sustainable activities, which it hopes will attract more funds and give investors an extra layer of comfort, said the three government officials, who did not want to be named because they were not authorised to speak to the media.
The renewable energy ministry and the finance ministry are working on the draft policy. Neither ministry responded to queries from Reuters.
The officials said the draft framework is the first step in a long process of identifying sustainable projects and phasing out others.
The European Union and South Africa have created taxonomies that help make green activities visible and unlock large-scale capital, some supporters of the policy say, while critics say it is “greenwashing” – concealing environmentally unfriendly activity with buzzwords and public relations.
The EU also places green investment disclosure obligations on financial companies, pension funds, companies and financial market participants.
India does not plan to make such disclosures compulsory for companies yet, but will deem it a best practice, one of the officials said.
India projects $10 trillion to $15 trillion in investment is needed to achieve net-zero carbon emissions by 2070, in alignment with its Nationally Determined Contribution (NDC) commitments to the United Nations Framework Convention on Climate Change (UNFCCC).
According to another of the officials, India will need $3 trillion in investment to hit that number, for which it is taking steps that include incentives for manufacturing hydrogen fuel, electric cars and solar panels.
International bond markets are likely to contribute a small portion of the financing, but the rest will be funded through global fund managers investing locally, the second official said.
Last week, India sold its first sovereign green bonds worth a total of 80 billion rupees, at yields below comparable government bonds.
