Act 1: Move your Money
To A Bank That Doesn’t Invest in Fossil Fuels
India is working to cut emissions, but its financial system still props up coal.
Citizens can still shift the balance by choosing greener banks.
India is among the top 10 greenhouse gas-emitting economies globally. However, at the same time, it is taking steps to mitigate its emissions. India has achieved two of its Nationally Determined Contributions (NDCs) targets of Paris Agreements ahead of time and has increased its goal to reduce the emissions intensity of its GDP from 35% to 45% by 2030, compared to a 2005 baseline. In 2022, the cost of generating solar photovoltaic electricity was $0.04 per kilowatt-hour (kWh) in both the People’s Republic of China (PRC) and India, compared to $0.06/kWh in the United States and $0.08/kWh in Germany (OWD 2022). A similar trend is observed for onshore wind energy. India has pledged to achieve net-zero emissions by 2070.
However, between 2016 and 2023, Indian banks provided nearly US$29 billion in coal financing through direct loans and underwriting. Public sector banks were responsible for about 75% of the loans, while private banks accounted for nearly 83% of the total underwriting.
Global and domestic financial trends indicate that coal is no longer a stable or profitable investment. Renewable energy has become cheaper, cleaner, and less risky, with round-the-clock supply available at 3.5–4.5 rupees per kWh—significantly below the cost of new coal power at 6–7 rupees per kWh. Studies suggest that stranded coal assets could amount to US$96.5 billion by 2047, posing risks to bank balance sheets and the broader financial system. Between 2016 and 2020, major Indian and foreign investors, including HDFC Mutual Funds and ICICI Prudential, are estimated to have lost around US$3 billion in foregone earnings due to the underperformance of coal sector stocks.
Although some banks—such as Federal Bank, Suryodaya Small Finance Bank, and RBL Bank—have adopted coal phase-out policies, others continue to fund coal. Citizens can play a role in shaping Indian banks’ energy transition by reallocating their investments toward greener options and engaging with banks to advocate for the adoption of coal exclusion policies.