In the intricate realm of global environmental stewardship, India has emerged as a noteworthy leader within the G20, serving as a testament to its dedication to climate action. India has earned a place among the top 10 nations on the Climate Change Performance Index, underscoring its commitment and positioning it at the forefront of countries striving for sustainability. India's journey towards sustainability in 2023 began with a comprehensive set of strategies aimed at securing the necessary funding to address climate change. This initiative kicked off by prioritizing green growth in this year's budget. Additionally, India successfully issued its inaugural green sovereign bond, raising $1 billion at a more cost-effective capital rate compared to conventional debt. The Reserve Bank of India (RBI) also introduced new guidelines related to climate stress testing, climate disclosures, and green deposits at banks.

To tackle the challenges of mitigating climate change, developing countries require a minimum of $6 trillion. The Global Financial Stability Report by the International Monetary Fund (IMF) emphasizes that "The private sector must cover 90 percent of climate mitigation investments in emerging markets and developing economies (EMDEs), excluding China, as public investment growth is expected to be limited." Instead of relying solely on traditional funding methods, blended finance has consistently been a pivotal tool to secure additional financial resources strategically.

Currently, private sector investments account for approximately 40 percent of net investments, as indicated by data from the Climate Policy Initiative, corroborated by the International Energy Agency (IEA) and the International Monetary Fund (IMF).

As part of the G20 Presidency, the Independent Expert Group (IEG), led by Larry Summers and NK Singh, underscores the indispensable role that Multilateral Development Banks (MDBs) will play, particularly in the context of smaller economies, in attracting climate change financing. It is anticipated that countries like India and China, with well-established capital markets, will attain the targeted private financing figures with relative ease. However, the statement also points out that despite India's robust capital market, it faces challenges in reaching the required financial thresholds. A key issue is the inadequacy of both physical and regulatory infrastructure for climate finance, resulting in data imbalances, and investments in various sectors are typically guided by data-driven decision-making processes.

There exists a common misconception regarding private sector contributions to climate change mitigation. The private sector is often expected to function like a philanthropic organization, funding only environmentally friendly projects. However, private sector contributions can also be assessed through various initiatives undertaken in their individual capacities, such as the procurement of eco-friendly goods and services.