Made in India: five companies demonstrate global leadership for the climate

Sensemaking / Made in India: five companies demonstrate global leadership for the climate

Neeta Lal describes how businesses in India are decoupling growth from carbon emissions, as five Indian companies make CDP’s Global A-list.

By Neeta Lal / 09 Jan 2015

The 2014 report from the Carbon Disclosure Project (CDP), which tracks the GHG emissions of major global corporations, has for the first time put five Indian companies on its Global A-list. Out of nearly 2,000 surveyed, 187 made the top grade, winning a position on the CDP’s Climate Performance Leadership Index (CPLI) for reducing absolute emissions and emissions intensity while driving growth and profitability. Wipro, Essar Oil, Tech Mahindra, Larsen and Toubro and Tata Consultancy Services were among them. 

“The report demonstrates a strong level of commitment by Indian companies towards greater energy efficiency as a means of addressing climate change. It also highlights the need for enabling a strong regulatory environment that attracts higher levels of investments”, said Damandeep Singh, Director, Carbon Disclosure Project, India, at the report's launch.

Martin Wright, Forum for the Future’s Director in India, says this is encouraging news. “With India heavily dependent on coal for its power needs, as well as oil (most of which is imported), cutting carbon makes sense both from a climate and an energy security viewpoint. It’s a classic case of companies profiting by doing the right thing.” And, he says, there will be growing pressure on them to do so as a result of Prime Minister Narenda Modi's Made In India mission – which aims to make manufacturing the economy's growth engine by inviting robust foreign participation: “Western-based companies often have relatively strong sustainability standards, and feed these down through their supply chain.”

Some incentives are already in place. The Indian Government launched the compulsory PAT (Performance, Achieve, Trade) scheme in 2012, to whittle down energy consumption in industries across India through a market-based mechanism to enhance the cost-effectiveness of improvements in energy efficiency through certification of the savings, that can then be traded. It was designed and implemented by the Bureau of Energy Efficiency (BEE), under the Ministry of Power to enable about 23 million tons oil-equivalent of fuel savings- in coal, gas, and petroleum products by 2015. New fiscal instruments to promote energy efficiency and market-based approaches to unlock energy efficiency opportunities, estimated to be worth about US $12 billion, are on its mandate.

In 2013, an industry survey by the Confederation of Indian Industries (CII) of 55 Indian companies, comprising of 10% of India’s total emissions and 45% of the country’s industrial emissions, revealed that 93% of these companies are implementing emissions reduction initiatives, as a result of the PAT initiative. These companies’ combined emission reduction efforts are saving 2.5 million metric tons of CO2-equivalent annually, according to CII.

Besides regulation, a number of factors are prompting Indian companies to wake up to the urgency of sustainable business models: rising awareness of immediate and long-term risks, customer expectations, pressure from environmental groups, and evidence from international competitors’ demonstrations of the potential cost savings.

For Shekhar Bathija, business analyst at Reliance Energy, it’s the commitment of Indian corporations to efficiency and decarbonisation that will determine the success of Modi’s plan for growth: "Indian firms are demonstrating the possibility of decoupling business growth from carbon emissions. Many firms have started measuring the GHG emissions of their suppliers, distributors, in short the entire life cycle of their products and activities. This is crucial if Modi's mission to turn the country into the factory of the world is to be a success," Bathija adds.

At Wipro – an information technology conglomerate headquartered in the southern city of Bangalore – climate change is now a vital part of the company’s risk assessment portfolio. According to Anurag Behar, the company’s Chief Sustainability Officer, climate change is as much a social issue as it is an ecological one, particularly in India. "Our commitment to carbon reduction is part of our larger engagement on sustainability issues – it is long-term by design and is integral to both our vision of corporate citizenship and to our business strategy", he says.

ITC, a Kolkata-based conglomorate straddling consumer goods, hotels, agri business (primarily tobacco) and information technology, has demonstrated a substantial reduction in total energy use with its carbon- and water-positive policies despite its exponentially growing pan-India presence. ITC Hotels is the first chain to be certified platinum rated by US Green Building Council, and its sustainability report was among one of the first in India to be comprehensively in accordance with the Global Reporting Initiative. The whole chain has been water positive for 12 consecutive years, carbon positive for nine years, and has also been responsible for over 163,000 hectares of afforestation, according to its 2014 report. It draws 38% of its total energy use from renewable sources.

According to Shashank Jain of Shakti Sustainable Energy Foundation, a New Delhi-based organisation that works in the area of energy efficiency, more and more Indian businesses are successfully balancing energy efficiency with profitability. "This will have a fantastic domino effect on India's energy landscape. More green policies will improve the image of the company in the global marketplace, generating more business for it by enabling greater exports while improving the country's foreign exchange earnings." Another payoff, adds the ecologist, will be rising public awareness of such products, expanding the consumer base. 

One driver for efficiency is the ambition to keep costs low for customers, as well as to conserve resources. This is the case for Tata Steel, which aims to scale down its absolute greenhouse gas emissions by 20% over the next decade. "We continually review and assess how we can operate our businesses by optimising the use of energy and space", a senior company official said. “Small, incremental, positive changes optimizing the use of resources, power and space, among individuals and enterprises, will all help us make India an energy-efficient nation."

"Gains in energy efficiency have played a vital role in neutralizing the growth in energy demand in Indian manufacturing industries despite phenomenal growth in industrial production," states Jain. "The measures implemented by aluminium, cement, chemical, pulp and paper and textile industries have shored up their market image and competitiveness."

As the impacts of climate change become increasingly manifest, India is becoming ever more vulnerable to severe droughts and floods lashing coastal populations and increasingly temperamental monsoons. The National Action Plan on Climate Change, launched in 2008, outlines existing and future policies and programmes for climate mitigation and adaptation to support low-carbon growth across swathes of India.

When it comes to delivering low-carbon energy solutions, Wright sees a golden opportunity for using decentralised methods – such as solar power, biomass gasification and other green technologies. “A lot of the really innovative energy solutions are happening here”, he says. “And they’re being delivered by a new wave of Indian entrepreneurs.” Forum for the Future is planning a major new project for 2015, exploring the potential to galvanise these entrepreneurs to transform India’s energy landscape.

Building evidence of successful climate policy in India, and showcasing it at the global level, will strengthen India’s negotiating position at global forums as well, says Anumita Roychoudhury, Director of the Centre for Science & Environment, a New Delhi-based environmental group.

 

Neeta Lal is a New Delhi-based journalist and editor.

Photo: Industry meets sustainability? The Tata Structura steel dome of Bangalore’s butterfly park – also home to Wipro, an IT company now on CDP’s Global A-list.
Credit: najeebkhan2009

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