Indian Companies Begin to Move towards Low Carbon Economy

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New Delhi : “We welcome this initiative (Carbon Disclosure Project) as it aims to inform and educate companies about the urgency to mainstream climate change related issues in their work,” said Mr Shyam Saran - the Prime Minister’s Special Envoy on Climate Change - speaking at the release of the second report of the India Carbon Disclosure Project (CDP) 2008. “The National Action Plan on Climate Change released by the Government aims to work on the entire gamut of such issues through its well defined eight National Missions,” he added.  

Most significant change from last years’ disclosure process is the marked improvement in the quality of information that the companies are now willing to share

Mr Saran pointed out that in order to ensure that energy does not become a constraint on India’s economy growth, it was necessary to make a strategic shift from carbon and fossil fuel-based growth to growth based on renewable and non-conventional sources of energy.  This is also what is required to deal with the challenge of climate change.

61 Indian companies in total, including 28 from the energy intensive sector, report through the Carbon Disclosure Project. Companies report on carbon emissions data, reduction targets, associated risks and opportunities and on how senior management have integrated the long-term effects of climate change into their financial assessment

Close to 125 senior leaders from business and industry met here today at a function to release. The event was organized by World Wide Fund for Nature-India (WWF-India) in partnership with the CII-ITC Centre of Excellence for Sustainable Development and the Carbon Disclosure Project (CDP). It is the outcome of a year’s efforts to measure and report carbon emissions by the top companies of India.

“The report demonstrates that there has been positive and proactive attitude among the Indian companies towards addressing the challenges of climate change”, said Mr. Ravi Singh - Secretary General and CEO, WWF-India - while releasing the report. “It shows an encouraging trend that companies are not only aware of the various threats and risks presented by climate change, but are also becoming increasingly sensitive towards its commercial and financial opportunities. It is heartening to see that there has been a marked improvement both in terms of quantity and quality of disclosures.” He further elaborated that companies from 17 sectors, including 9 from high impact sectors were a part of the disclosure process.

Describing the concept of carbon disclosure and its importance, Mr. Paul Simpson - Chief Operating Officer, CDP - said: “It is very promising to see an increase in the number of Indian companies responding to the Carbon Disclosure Project this year. This demonstrates an increase in awareness and understanding amongst Indian corporations with regards to the risks and opportunities climate change presents to their businesses which are increasing in significance year- on- year and we expect that more Indian companies will become engaged with tackling climate change over the next few years.”

The results of the second CDP India Report 2008 continue the positive findings from 2007. Mahindra & Mahindra, Tata Motors, Tata Power, Ambuja Cements, State Bank of India and HPCL are some of the companies that came on board this year. Key findings of the report show:

·        80% of the companies don’t consider existing regulatory mechanisms as a risk but rather as an opportunity for triggering long term investment in energy efficient technologies. However, these companies do acknowledge that in future, the regulations may affect their businesses.

·        40% of the companies acknowledge physical risks such as damage, disruption and displacement resulting due to climate change as some of the major challenges that could result in financial losses.

·        But, nearly 75% of the organizations have either taken up or have planned to manage or mitigate risks due to climate change by formulating relevant policies, changing operations, design and consumption patterns as well as strengthening supply chains and shifting to cleaner fuels.

Mr. Arun Bharat Ram, Past President - CII and Chairman - SRF Ltd, talked of the role that business needs to play in turning climate risks into opportunities, and various possibilities thereof. He also said this would go a long way in showing that corporate responsibility and sustainable development are inseparable.

Mr. Neeraj Swaroop - Regional CEO India & South Asia, Standard Chartered, India, talked about the role of financial sector for a shift towards a low carbon economy. He said ‘Standard Chartered has worked with the Carbon Disclosure Project (CDP) globally for a number of years, and I am delighted that we are sponsoring the launch of the CDP India Report 2008.  India is one of Standard Chartered’s largest markets, and we are already seeing the impacts of climate change.  The CDP plays a critical role in ensuring that the risks and opportunities associated with climate change are considered by companies and reported in a consistent and comparable way, and gives investors the opportunity to make informed choices.”

Earlier, welcoming all the participants Ms. Seema Arora - Principal Counsellor & Head of the CII-ITC Centre of Excellence for Sustainable Development - highlighted the relevance of the initiative against the backdrop of the deliberations at the recently held UN Conference on Climate Change at Poznan, and the current market meltdown.

The  second CDP report has clearly brought out that while all companies acknowledge that climate change has become an imperative, some of them have seized this an opportunity and are  already taking initiatives to start monitoring and reporting but this also paves the way for many more companies who need to grasp the opportunity.