Indian corporates' push for Green Economy
With the commitments at CoP26 and the consequent impetus given to the transition to a carbon-neutral economy at the budget session of 2022-2023, the country has embarked on a journey to tackle climate change and attain green recovery through climate policy initiatives implemented through a structured framework and planned investments. Exploring and utilising renewable energy sources, achieving energy efficiency, and reducing carbon emissions remain at the forefront of the agenda. For instance, the Pradhan Mantri Ujjwala Yojana scheme provides cleaner gas connections to households below the poverty line and the severe attention given to the electrical vehicle (EV) to promote low carbon transport. Along similar lines, industries and enterprises are extensively contributing to the green economy discourse and implementing strategies for a swift transition to a carbon-neutral economy. The developmental efforts made by the Small Industries Development Bank of India (SIDBI) to help facilitate the greening of MSMEs through incentivising innovating approaches in this regard have been central to the framework.
A similar vision is shared by the private sector and the big corporations in the country as well. These enterprises play a significant role in delivering developmental outcomes. They remain a major source of innovation to further the sustainable growth of the economy with little to no damage to the environment. Furthermore, they act as a channel to implement development policy projects and on-ground activities. Several Indian Industries have taken steps in this regard. About 67 Indian companies have committed to setting science-based targets. There are others who have initiated to achieve renewable energy and energy efficiency targets. In addition, these businesses have levied an internal price on carbon and other related products to make it less lucrative and meet their targets in this regard. To achieve the announced net-zero targets, many of these Indian businesses have shifted to renewable energy resources, focusing on reducing carbon emissions, cutting down greenhouse gasses, and recycling water through their own emissions using appropriate technological innovations. There also have been focused efforts in establishing value chains across the country that facilitate the circular economy and drive the demand for cleaner products in the market. Additionally, these enterprises are realising the significance of Environmental Social and Governance (ESG) frameworks in business operations and the further opportunities the framework opens for them. Awareness regarding the companies’ carbon footprint and ESG potential has a severely positive impact on the business performance.
More particularly, some concrete examples of Indian establishments’ voluntary actions to achieve carbon neutrality are as follows:
- Reliance has pledged INR 5 trillion over a span of 10 to 15 years to set up a 100 gigawatts renewable energy power plant in Gujarat. In addition, Reliance Industries Limited (RIL) has announced to transfer its gasification assets to a wholly-owned subsidiary. This will contribute to producing hydrogen and further establish a hydrogen ecosystem.
- Tata Consultancy Services has announced to achieve net-zero emissions by 2030. By the end of 2025, the company envisages reducing its greenhouse gas emissions by 70 per cent.
- Mahindra & Mahindra has committed to be established as a carbon-neutral company by 2040. The company aims to focus on "energy efficiency" “renewable power" to fulfil its goals. Furthermore, carbon sinks would be established to address the residual emissions.
- ITC has pledged to completely pivot to renewable energy sources by 2030. This would be achieved through large scale digitalisation and collaborations across various industries and sectors.
- Adani Group plans to expand its renewable power operations by almost five-fold by 2030 and further turn the entire business operations carbon-negative. The ports under the control of the group would be transformed into net-zero by 2025. Adani also aims to produce the world's cheapest green power by 2025.
- Wipro aims to achieve net-zero greenhouse gas emissions by the end of 2040. It has further established an initial target of reducing 55 per cent greenhouse gas emissions by 2030.
- Dalmia Cement has committed to being the first cement business to go carbon-neutral by 2040.
- Moreover, several investors have been engaged with their networks on issues regarding sustainability and climate targets. In this regard, significant opportunities have been created to fuel the facilitation of a sustainable green economy.
Estimates from a study conducted by World Resource Institute highlights with the current voluntary initiatives of Indian businesses can reduce India’s overall emissions by almost 2 per cent till 2030, above the national emissions trajectories. Their sectoral analysis highlights that over 90 per cent of the emissions reductions are driven by energy-intensive sectors such as metals, pulp and paper, and cement, therefore, voluntary actions from establishments in these sectors can quicken the shift to carbon neutrality.
Under this regard, an enhanced understanding of the impacts of such actions, accompanied with collaborated efforts on state, sub-national, and civil societies, would contribute extensively to establishing a better integrated and inclusive low emissions policy planning and further improve the climate action pathway for India. The private sector engagement in this regard is pivotal. The enterprises can further support green growth by targeting a varied range of environmental issues in their operations, consumer deliveries, and innovation.
This article is co-authored by Srijata Deb and Karishma Sharma.
- Hingne, A., A. Sheikh, V. Agarwal, and V. Adhia. 2021. “Potential Impact of Corporate Climate Action in India.” Working Paper. Washington, DC: World Resources Institute. Available online at http://www.wri.org/publication/ impact-corporate-climate-action-india.