A new era of climate action is here, with India at the helm, steering steadfastly towards a sustainable future. The old world order has shifted, propelling India to the G20 presidency, and bringing a much-needed resurgence in the global fight against climate change.
What makes India uniquely positioned to take on this responsibility, especially when it is already the third-largest emitter of CO2? How have Indian companies responded so far to the demands for sustainable solutions, and what initiatives are they taking to become eco-warriors? Are we on track to cross the sustainability chasm and make good on our COP27 promises?
Climate Change Readiness Of Top Indian Companies
As per the Climate Leadership Report 2022, the readiness of Indian companies towards climate change is positively reinforced by their emission reporting numbers. Nearly 75% of the top 100 companies are regularly reporting their scope 1 and 2 emissions, and 48% are reporting scope 3 emissions.
As the understanding of scope 3 emissions continues to evolve, the numbers can be expected to grow further, especially with the mandatory ESG reporting starting in 2023. Beyond emission reporting, companies are constantly finding newer strategies for decarbonisation, as validated by the following sustainability initiatives across industries.
- Transitioning to 100% renewable energy consumption: For the power utility sector, which has historically been reliant on natural resources, is now making it possible for consumers to shift entirely to green power, starting from their immediate billing cycles.
Customers of Adani Electricity Mumbai Limited are now receiving a green power certificate every month, all at a nominal added cost.
- Developing sustainable corporate office campuses: With employees returning to the office again after the pandemic, it is now a business imperative for employers to lead with a ‘zero-carbon real estate’ agenda.
Bosch India has transformed its Bengaluru headquarters into a smart, sustainable campus that is expected to meet 85% of its energy consumption through in-house solar panels and green power. 60% of its annual water demand will also be met through rainwater harvesting projects.
- Designing low-carbon emission products: Cement contributes to 7% of global carbon emissions. As the second-highest producer of cement, a sustainable revolution in the Indian cement industry is critical, especially with the continued large-scale infrastructure development needed to support the growing population.
To this cause, many cement companies have instituted different emission reduction processes, but the most notable has been JSW which has designed low-carbon green cement products that directly reduce carbon emission intensity by 60%.
- Decarbonising internal operations: Placing an internal monetary value to emissions produced at every level of the value chain allows organisations to not just monitor effectively but also find newer ways of emission control and transition to a low-carbon economy.
85 Indian companies have either already set up an internal carbon pricing strategy or are planning to have it in place by 2023.
- Adopting clean mobility: Being at the cusp of a clean mobility revolution, India is going through a paradigm shift in the transportation industry that aims to achieve 30% EV penetration by 2030.
Expected to become a $12-14 Bn industry by 2025, the key to success for clean mobility adoption relies on developing at least 20 Lakh charging points across the nation, out of which 5 Lakh charging stations are already in the pipeline.
Further, to boost adoption for both consumers and manufacturers, the government is providing subsidies and tax benefits that may drive EV adoption further in the coming years.
In fact, in addition to industry-specific strategies, there is a wide array of solutions for companies to choose from — plastic neutrality, water conservation, waste management, and much more. However, to meet the COP27 promises, change needs to occur at a more fundamental level that leads to a snowball effect across the entire industrial spectrum.
Fundamental Changes Needed To Accelerate Climate Action
Industrialisation’s gains and losses will have far more compelling consequences for our collective goal of creating a more habitable planet within the next few decades. To realise the India 2050 vision, three-fourths of which is yet to be built, the urgency is greater than ever to raise the consciousness in our energy-intensive industries and use a more principled approach to foster change that helps us cross the long-drawn sustainability chasm.
- Transition from a linear to a circular economy: Estimates by the Ellen MacArthur Foundation suggest that adopting a circular economy in Indian industries can lead to both environmental and financial rewards. It could mean a massive 44% reduction in GHG emissions along with financial benefits worth INR 40 Lakh Cr by 2050.
Based on the 3R concept of reducing, recycling, and reusing the waste generated across the value chain, companies are able to eliminate the waste generated at the source of different production points.
At a time when supply chains around the world are being redesigned to adapt to future adversity, transitioning into a circular economy will be comparatively easier.
- Dump ‘net zero’ for a ‘zero-carbon’ approach: In theory, ‘net zero’ sounds like a failsafe idea for bringing positive climate change action. However, the only scientifically proven method of removing carbon from the atmosphere is by planting more trees.
With only so much land available for use, a ‘net zero’ approach will not only lead to mass hunger and displacement of people across the world but also exhaust available natural resources to recuperate from any future climate catastrophes.
In simpler terms, there is a big difference between ‘net zero emissions’ and ‘zero emissions’ and enabling mindsets that focus on the latter can help us make use of our emerging technologies to find innovative new methods to move towards a cleaner, greener future.
- Leverage technology for accurate emission reporting: With only 15% of the top 1,000 listed companies having published sustainability reports in the past year, scrutiny and regulation for accurate emission data are on the rise.
Taking immediate action to measure and report accurately will not only thwart reputational risks but also set these companies up for sustainability success. While the challenge lies in collecting scattered and unstructured data across the supply chain, and analysing effectively against its sustainability goals, using SaaS services across various production points can help with tracking, monitoring and reporting in a seamless manner.
Overall, Indian industries have arrived at a consensus that it is possible to fuse profitability with purpose and that adopting more sustainable business practices is far more incentivising in the long term.
In addition to the independent initiatives taken within firms to address climate change threats, government policies will continue to play a key role in helping India cross the sustainability chasm. This could range from vehicle scrappage, using steel as a 100% recyclable product, to creating 74 Mn green collar jobs by 2050.
Combined with a strong public-private partnership, India can not only cross this chasm but also inspire our fellow nations to accelerate their own capacities to address global climate change needs.