India?s demographic posture indicating that more than 60% of the population is below the age of 35 is a source of great awakening about the future climatic change. Estimates and research about climate change are still developing, and awakening in the future generation is a great source of entrepreneurship and investment. HSBC advertising itself as the world?s local bank discovered in its survey that Asia, and particularly India, has the greatest concern and commitment about climate change and will be able to obtain green financial banking instruments such as solar panels or biogas developed by HSBC.
The survey has shown that 60% of Indians, which is the highest percentage shown in the survey done in four continents, have expressed concern about climatic change. Sustainable business opportunities will emerge with the beginning of activities on climate change. Packages of eco-friendly commodities, such as the use of energy-saving CFL bulbs, solar panel installation or a biogas cooker will provide future business. Indian green market has great potential and the size of the market will make use of all forms of alternative energy, including wind power generation.
Innovations at Grasim and Tata Steel
Individuals and corporate organisations will play dynamic role in the new phase of globalisation where knowledge and innovations will determine the economic system. Grasim Industries has become the first cement company in the world to reimburse the carbon credits it earned. A company executive reported that it has received Rs 17 crore by selling carbon credits in Europe and is expected to earn Rs 55 crore in the coming months by selling carbon credits. The company used alternate fuels like waste in cement manufacturing. It has set a goal to reduce 1% of its carbon dioxide emissions annually. International treaties such as the Kyoto Protocol set quotas on the amount of greenhouse gases countries can produce. Credits can be exchanged between businesses or can be sold in international markets at the prevailing market price. In its 100th annual report, Tata Steel company has taken several steps to improve the environmental performance. The company is trying to bring down the pollution load so that it can compete with international standards. Tata Steel is committed to address climate change by reducing CO2 emissions as the emission was brought down to a level of 2.2 tonnes per tonne of crude steel from 2.28 tonnes previous year. Clean Development Mechanism (CDM) projects are undertaken to avail carbon credit. The expected reduction of CO2 from these projects is more than 1.1 million tonnes per annum. Corporate sustainability is integrated in the business process to meet the future challenges of sustainable growth.
Siemens is also targeting to reduce the electric consumption in the Bombay suburban railways and will apply for carbon credit cards.
Investment opportunities
Globally, green technology is getting the highest attention of investor community. PE funds and VC funds are discovering new areas of investment to improve the environment. Since 2000, PE funds have infused $4.2 billion in clean technology start-ups and other alternative energy resources. Nearly $1.8 billion has already been invested since 2006. India Inc will be able to have its own sustainability index regarding environment and governance.
Sun Microsystems co-founder, Vinod Khosla, are among those who are investing in companies that aim to transform world by through investment in alternative energy and clean technologies. The California public employees retirement system, which is the largest pension fund in the world with assets over $250 billion, has launched ?Green Wave?. The funds will invest up to $500 million in environmental technologies. The interest of private equity in wind farms has been encouraged by the success of Suzlon, which is the largest wind turbine supplier in Asia.
India is getting the attention of the world as it has one of the largest emerging markets and can absorb investment in new technologies serving the environmental interest. With the backing of capital to clean technology, the world can expect the next generation to have a clean world to live in.
?Manish Sharma is director, Krishna Securities & Financial