Major Indian and Brazilian cities are lagging in green finance because they lack strong public policy to develop sustainable financing, according to the author of a ranking of the "greenness" of the world's financial centers.
Based on surveys of bankers, insurers, investors and traders, among others, U.K-based think tank Z/Yen's index looks at factors such as infrastructure, carbon emissions, laws and public policy to obtain the ranking.
The fifth edition of the global green finance index demonstrates that New Delhi ranks the lowest in quality and depth of its green finance out of a total of 67 financial centers. Mumbai is second from the bottom.
The surveys do not receive much response from India or Brazil, Z/Yen Director Michael Mainelli said in an interview.
"India seems to have said we need to develop first and being green is a luxury," he said.
The country is taking the opposite strategy of China, which has chosen to develop its economy and green finance at the same time, he said.
While Indian Prime Minister Narendra Modi has announced plans to more than double his country's renewable generation target, he has also said it will not change its plan to use existing coal reserves to meet its development needs. India has the third-largest coal reserves in the world.
Mainelli cited Brazil as a country where poor policy support for green finance may explain why two major Brazilian cities fared badly in the rankings.
Brazilian President Jair Bolsonaro has come under criticism for failing to protect the world's largest rain forest, the Amazon, considered crucial in the fight against climate change, and for pushing back on environmental policies.
"In the case of Brazil, looking at what they have been doing on the rain forest lately, they have had a complete volte-face on the importance of the green politically there," Mainelli said.
Rio de Janeiro fell seven points on the depth of its green finance to 62nd place, while it dropped six points in terms of quality to 61st place. São Paulo fared better, falling two points to 48th place, while in quality it stood at 46th place, down three places in the ranking.
Western European cities continue to lead the index, with London retaining the top spot for quality, followed by Amsterdam, which topped the ranking for depth. Luxembourg took second place in that part of the ranking.
Mainelli said a combination of supportive public policies, awareness of climate change and investor demand were behind the region's leading position.
The EU is taking measures to increase the role of finance in making the European economy more sustainable, while central bank governors such as former Bank of England head Mark Carney have taken a strong stance on climate change.
"If your central banks consider it to be a regulatory imperative for financial stability, without question that is driving it," Mainelli said.