By Shailendra Singh Rao

The rising toll on the environment has created a demand for sustainable approaches worldwide. Over the past few years, growing economies have caused a sharp increase in worldwide carbon emissions. The primary causes of this are carbon emissions from transportation and industrial processes. The carbon dioxide (CO2) measurement in January 2022 was 418 parts per million, up about 11% over the 378 parts per million observed since 2007. The CAGR for this measurement from 2016 to 2021 was roughly 0.73%.

India has already started taking initiatives to combat climate change, including the gradual decarbonization of essential industries. In fact, the steel sector’s average CO2 emission intensity, which accounts for approximately a third of direct industrial carbon emissions, has decreased from 3.1 tonnes per tonne of crude steel in 2005 to roughly 2.6 tonnes by 2020.

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Businesses adopting a sustainable approach

In order to adopt a sustainable strategy, Indian businesses have included greener/cleaner products to help reduce carbon emissions, including solar heaters, electric vehicles, and organic food products. Lighting and HVAC companies are launching new energy efficiency solutions to contribute to power sustainability. Consumers are not only adopting explicit energy ratings for electric appliances as a new reality but also factoring them into their purchasing decisions.

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Consumer awareness of green products is predicted to increase further, and businesses are already seizing the opportunity to gain a competitive edge by delivering eco-friendly products. Energy-intensive companies are implementing smart processes to minimize waste and enhance energy efficiency. Greener technologies have also been implemented by businesses to reduce their carbon emissions.

Potential for businesses in India to develop a sustainable approach

India has attempted to address the pollution problem nationally and internationally. The nation has periodically monitored its role in the global scenario and has set some future ambitions. The potential for renewable energy in India is predicted to be 900 GW, with 750 GW coming from solar energy, 102 GW from wind energy, 25 GW from bioenergy, and 20 GW from small hydro energy.

According to a recent analysis by GWEC and MEC Intelligence (MEC+) analysis, India is anticipated to install 20.2 GW of wind power capacity between 2021 and 2025, an increase of 50% compared with the 39.2 GW of wind power capacity installed in the country in 2020–21.

Benefits of sustainable practices

The use of a sustainable approach by businesses is not only beneficial to the environment but also helps the company to some extent. Let’s look at some of the benefits.

– Cost reduction: Businesses using sustainable and renewable sources like solar energy cut costs due to low production, maintenance, and processing charges. Also, a new set of regulations was introduced in October 2021 by the Ministry of Power, India, to ease stakeholder financial strain and ensure prompt cost recovery in the power-producing process.

– Tax Benefit: Companies with an environmentally friendly approach have less of an obligation to the government in terms of tax payments. For creating and promoting sustainable goods and services, the government encourages businesses to take advantage of tax benefits. For example, the Industry Chamber FICCI asked the government to give 15% tax breaks to businesses that invest in green technologies. Also, for the acquisition and use of green energy, the Indian government proposed new regulations in August 2021. The most recent regulations are a part of government initiatives to encourage major energy consumers, especially industries, to use renewable energy sources in their everyday operations.

– Subsidies: The State and Central Governments provide support through purchase price rebates to businesses using a sustainable approach. In FY22, India’s investment in renewable energy hit a record US$ 14.5 billion, an increase of 125% over FY21.

Conclusion

Increasing awareness, legal obligations, new reporting frameworks, and commercial benefits realized by businesses have contributed to the adoption of sustainable practices in India during the last few years. Companies that have embraced a sustainability strategy are better positioned to maintain their success over a longer time. Sustainability also stimulates innovation in environmental management, CSR, employee development, and other areas. These businesses gain advantages from lower costs, greater governance, risk management, brand recognition, and better regulatory compliance.

The author is Founder and MD of Creduce.

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