September 22, 2021
Axis Bank, India’s third largest private sector bank, announced a series of commitments aligned to achieving the Sustainable Development Goals (SDGs), supporting India’s commitments under the Paris Agreement. As part of its commitments,
the Bank has set a target of incremental lending Rs. 30,000 crore over the next 5 years, under Wholesale Banking towards pertinent sectors included in its Sustainable Financing Framework.
Axis Bank has now become the first financial institution in India to have set up a standalone Environmental Social and Governance (ESG) Committee at the Board level, underscoring the Bank’s strong intent to adopting ESG as a strategic driver
for the organization’s plans and performance. The Bank has also established an ESG Steering Committee at the Management level, comprising senior business leaders to champion ESG integration across the organization.
The Bank has announced its commitments ahead of the upcoming 2021 United Nations Climate Change Conference (COP26) at Glasgow, UK from 31 October - 12 November, where the Parties are expected to talk about enhancing their commitments made at COP21
at Paris in 2015.
The Bank’s commitments include:
- Incremental financing of Rs. 30,000 Crores under Wholesale Banking to sectors with positive social and environmental outcomes, by FY 2026
- Scaling down exposure to carbon-intensive sectors in its Wholesale banking business portfolio
- Expanding ESG risk coverage in credit appraisal under its ESG Policy for Lending
- Building and deploying an ESG risk assessment toolkit, with ESG stress testing and ESG scenario analysis, for its Large Corporate, SME and Agri-business verticals by FY 2023
- Making 5% of its retail Two-Wheeler loan portfolio as electric by FY 2024, and offering 0.5% interest waiver on new EV loans, effective immediately
- Incremental disbursement of Rs. 10,000 crores by FY 2024 under Asha Home Loans for affordable housing, and increasing share of women borrowers
- Reaching 30% female representation in its workforce by FY 2027, aligned to the Bank’s #ComeAsYouAre Diversity Charter
- Planting 2 million trees by FY 2027 across India towards contributing to creating a carbon sink
- Achieving carbon neutrality in its business operations
Commenting on this announcement, Mr. Rajesh Dahiya, Executive Director, Axis Bank said, “As a financial institution, we are aware of our responsibility towards helping India move on the path of equitable and sustainable
economic growth. Over the past two years, we have been working relentlessly on bolstering our holistic strategy, governance, and performance benchmarks around ESG. These commitments are part of our longer term ESG strategy woven around our
purpose of ‘Banking that leads to a more inclusive and equitable economy, thriving community and a healthier planet’. We would like to think of this as only the beginning and we shall continue to explore scaling and strengthening
our commitments over time.’’
Recently, the Bank launched its Sustainable Financing Framework that articulates the Bank’s strategy for financing ESG-aligned sectors and defines the project categories that the Bank shall consider to be eligible as ‘Sustainable’.
The Framework has received a Second Party Opinion from Sustainalytics, thus providing the highest level of confidence on its alignment to global sustainable finance best practices. The Bank has also set up an ESG Working Group towards managing
the Bank’s obligations and commitments under the Framework.
In line with its ESG strategy, Axis Bank has successfully raised India’s first Sustainable USD AT1 notes of $ 600 million in the overseas markets on September 1, 2021. With this issuance, India is now only the second jurisdiction
in Asia with an ESG AT1 issuance. The offering witnessed an overwhelming response from the investors, especially high- quality real money investors, with the order book being 3.8 times oversubscribed ahead of the Final Pricing Guidance announcement.
Global investors, with their participation in this marquee transaction, have demonstrated confidence in the Bank's ability to positively impact India’s socio-economic and environmental landscape.
Further, extending the reach and impact of its wider ESG aligned commitments, the Bank recently announced #ComeAsYouAre, - a charter of policies and practices that embrace diversity, equity and inclusion within the organization and for its customers.
With these initiatives, Axis Bank became one of the first companies in the country to announce such a wide variety of inclusive steps for the LGBTQIA+ community.
Since the onset of the COVID-19 pandemic, the Bank has been working closely towards supporting its employees, customers, business partners, communities and government agencies towards fighting and emerging from the pandemic. It was amongst the
first banks to put in place a Crisis and Emergency Response Team (CERT), which enabled the Bank to continue fulfilling its commitments to its stakeholders throughout the pandemic.
Over the years, Axis Bank has been recognized at various platforms for its ESG-aligned performance and impact. The Bank has been on the prestigious FTSE4Good Indices by FTSE Russell for five consecutive years since 2016 and is among the top 10
constituents of the S&P BSE 100 ESG Index and the MSCI India ESG Leaders Index, and is a constituent of the NIFTY100 ESG Sector Leaders Index.