'Risk of existential viability of Earth has to be kept above business viability'

NEW DELHI: Kotak Mahindra Bank Chairman Uday Kotak on Saturday pitched for businesses to finance climate transition with the government supporting them in terms of gap-funding.

Stating that the risk of existential viability of the Earth has to be kept above the business viability, Kotak said businesses need to go beyond capital which expects returns and opt for capital that is ready to take losses.

''We are dealing with two counter forces. First is the existential viability of planet Earth and second is the economic viability of business model of the Earth. The risk of existential viability of the Earth has to be put a step above the business viability,'' Kotak said at the B20 Summit India 2023, organised by CII.

The B20 India Task Force on Financing for Global Economic Recovery, chaired by Kotak, estimates that countries globally would need about USD 4.5 trillion over the next 7-10 years to finance their development goals.

It also suggests that globally businesses should contribute 0.2 per cent of their profit in setting up a 'global acceleration fund’ and the funds could be used in priority areas of climate change, energy, biodiversity and ocean pollution.

Speaking at a session on 'Financing the Climate Transition', Kotak said if countries prioritise existence of planet Earth over its business viability, then money has to come from businesses first, with support from governments.

''Government has to provide those loss bearing guarantee in addition to private capital. Therefore, the model which the world needs to move to is gap-funding provided by governments and supplemented by some of the current economic profits from businesses worldwide and hand it over to appropriate institutions to leverage the funding,'' Kotak added.