IDFC FIRST Bank: Outstanding Commitment to ESG Performance (India) 2023

Founded by the 2018 merger of Capital First and the banking arm of Infrastructure Development Finance Company, IDFC FIRST transitioned into one of India’s most prominent universal banks. It’s one of only two institutions to have achieved this distinction in the private sector. IDFC FIRST is building a world-class bank that’s rooted in Ethics, Technology and Social Good.

In 2022, the Bank set up a dedicated ESG function together with a Board-level Committee to steer sustainability initiatives across the Bank. Since then various efforts have been made to accelerate progress on fronts of climate change, green infrastructure, emissions baselining, influencing responsible purchase patterns, and lending to businesses such as EVs, which are critical in the transition towards a greener economy. For example, several large offices of the Bank are LEED/IGBC certified, including its Head Office, which is rated at LEED Platinum. The Bank also responsibly manages its e-waste, which it disposes in an environmentally friendly manner.

The Bank is a leading lender in the field of EV Two Wheelers, with maximum tie-ups, having financed over 1,10,000+ units in FY23. From a consumption finance standpoint, it financed over 96,000+ units of Invertor ACs in FY 2023; and are spreading awareness for using high energy-efficient products (such as 5-Star energy efficiency rated appliances) which can reduce electricity consumption and in turn, carbon emissions.

The Bank has emphasized Social Good as part of its Vision, and has been making consistent strides on this front. The Bank has pioneered financial inclusion products that expand credit access throughout rural communities and address the unbanked & underserved. During financial year 2022/23, IDFC FIRST rolled out new educational and agricultural credit lines and scaled up the retail and commercial portfolio, resulting in a 24 percent YOY increase in the overall loan book and a 66 percent jump in operating profit. IDFC FIRST’s rural banking business connects over 85,000 villages with financing for agriculture, micro-enterprises, infrastructure and energy efficiency. Female borrowers make up 60 percent of the bank’s rural lending portfolio. Dedicated business lines in the bank support the entrepreneurs, startups and MSMEs of India – a nation which recently emerged as the fifth-largest global economy and is projected to become number three by 2027.

IDFC FIRST Bank has also pioneered WASH (Water, Sanitation and Health) financing, where it lends towards purchase and renovation of sanitary infrastructure such toilets, tanks and sewerage. The Bank has lent over INR 10 billion of loans in this regard, benefitting over 1.4 million users on the sanitation front.

From a governance perspective, the Bank has always set high standards in adhering to good governance. The Bank’s Board is well-engaged and highly independent, with stalwarts from the industry functioning as its directors. The Bank also has stringent policies on code of conduct, risk management, cyber security and others, while maintaining an unwavering focus on overall stability, adequacy and performance.

The Bank has also raised the bar in its ESG ratings, and has adopted globally relevant standards of reporting such as Integrated Reporting, GRI, and SASB (Sustainability Accounting Standards Board) for its annual disclosures. Additionally, the Bank has also taken goals across Environmental and Social parameters.

IDFC FIRST contributes to the socio-economic development of the country through an innovative product offering and ongoing CSR activities. In 2022/23, the Bank supported over 24,000 individuals through its livelihood and entrepreneurship programmes and provided educational scholarships for 5,460 individuals. IDFC FIRST Bank, a repeat programme winner, is recognised in 2023 for its Outstanding Commitment to ESG Performance (India).