Sustainable Change, Net Zero and ESG: How and Why Indian Companies are Taking these Phrases Out of Boardrooms and Incorporating them into Everyday Core Operations?
4PEL Staff
July 2024
In recent years, the conversation around Sustainability and Circular Economy has moved beyond mere corporate jargon, conferences and boardrooms to become a critical aspect of core operations across companies worldwide. Indian businesses are at the forefront of this shift, demanding implementation of best practices from the strategic discussions in boardrooms to the operations and processes on the ground. As a country, India is becoming more aware of the need to embrace energy transition and sustainable development with the country even eyeing net zero by 2070.
India’s cumulative corporate clean energy capacity is a little over 38 GW as of March 2024, as companies are becoming increasingly cognizant of their roles in leading the charge in Energy Transition. As of March 2020, India had already achieved 24% (87 GW) of installed RE capacity. Here’s a look at how companies are integrating Sustainability into their daily operations.
AMBITIOUS ESG TARGETS & ACTION PLANS ALONGSIDE
Leading Indian companies are setting ambitious sustainability goals, with Net Zero and RE100 commitments becoming central to their strategies. These goals go beyond environmental targets; they represent a shift towards sustainable business models aligned with global climate initiatives. Infosys, Dalmia Cement, Mahindra Holidays, and Tata Motors are key examples, pledging 100% renewable energy through RE100 and setting Net Zero targets to drastically reduce their carbon footprints.
ACCELERATING ADOPTION OF RENEWABLE ENERGY
Corporate electricity consumption makes up nearly half of India's total demand, positioning businesses as key players in the renewable energy transition. Companies are heavily investing in renewable sources like solar, wind and even battery storage to meet their RE100 commitments. Wipro, TCS and Tech Mahindra are adopting clean energy via the open access route while Infosys has installed large-scale solar power plants across its campuses, significantly reducing dependence on fossil fuels. These investments not only reduce greenhouse gas emissions but also ensure long-term energy cost stability.
IMPROVING ENERGY EFFICIENCY ACROSS OPERATIONS
Energy efficiency is a crucial lever for achieving Net Zero goals, as improved efficiency means lesser usage of electricity. Indian companies are focus on innovative technology as a tool to implementing extensive energy-saving measures in their operations. Many firms like Tata Motors, Mahindra Group and UltraTech have introduced energy-efficient practices in manufacturing, leading to substantial reductions in energy consumption and emissions. By focusing on efficiency, these companies not only meet regulations but also achieve cost savings and operational improvements.
ENSURING A SUSTAINABLE SUPPLY CHAIN
Addressing Scope 3 emissions, those indirectly generated within a company's value chain, is a complex but essential part of sustainability. Indian companies are increasingly incorporating sustainability into procurement processes, encouraging suppliers to adopt greener practices. This collaborative approach helps reduce the overall carbon footprint of their products and services.
PRORITISING BUSINESS INTEGRITY & ETHICS
Transparency is vital for successful sustainability initiatives. The Securities and Exchange Board of India (SEBI) mandates Business Responsibility and Sustainability Reporting (BRSR) for top listed companies, promoting accountability. By disclosing climate actions and progress, companies build trust with stakeholders and set a precedent for others. This framework ensures that sustainability efforts are backed by verifiable data and clear reporting.
LEVERAGING REGULATORY SUPPORT
India's regulatory landscape is evolving to support the country’s targets for clean energy, emissions control and net zero. Through stable, long-term policy, the government can directly aid green investment. Policies like the National Action Plan on Climate Change (NAPCC), GOAR and state-specific renewable energy policies provide a clear roadmap for companies to follow. Companies must navigate these regulations effectively and engage with policymakers to maximize the impact of their net zero actions.
FOCUSING ON THE COMPETITIVE ADVANTAGE OF NET ZERO
For businesses, net zero should not be viewed solely as compliance but as a strategic advantage. This shift involves integrating sustainability into the core of a company's value creation strategy. By positioning products as eco-friendly or shifting to "green" manufacturing processes, companies can attract premium pricing and higher customer demand. Access to green funding and positive investor perceptions further enhance the business case for net zero.
Through continued commitment, innovation, and collaboration, Indian companies are well-positioned to lead the way towards a sustainable and resilient future.
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