If we continue business as usual and keep adding carbon to the atmosphere, we will cross over into temperatures that will make life on earth impossible. Rising temperatures and changing monsoon rainfall patterns from climate change could cost India 2.8 per cent of GDP and depress the living standards of nearly half the country’s population by 2050 .
There is little doubt that economic growth has helped pull billions of people out of poverty over the last seventy years or so. On the flip side, growth is also linked to increasing use of energy, materials and thereby global warming. It is increasingly becoming clear to policymakers that economic growth, social balance and ecological well-being cannot be seen under the same lens. The three need to be separated from one another. COP28 is the 28th annual United Nations (UN) climate meeting where governments will discuss how to limit and prepare for future climate change. It is hoped COP28 will help keep alive the goal of limiting long-term global temperature rises to 1.5C. This was agreed by nearly 200 countries in Paris in 2015.
The big questions we now need to be asking are, how can we use science to design economies that will mitigate the threats of climate change, biodiversity loss, and pandemics. How can we lay the foundation for a green, circular economy that is anchored in nature-based solutions and geared toward the public good? The discussion around the new emerging shifts in business and finance are therefore repeatedly highlighting the need for balance between profit and equality and between growth and environmental stability. There is no time to lose – the NetZero transition needs everything, everywhere, all at once.
While the discussions at COP28 build the momentum for policy change and concerted action at scale, there are six key strategies that companies can adopt to enable this transition.
- Aligning strategy and business models - Climate disclosures and stringent ESG compliances are what lie ahead for big companies the world over. However, merely following a compliance-driven approach is insufficient. Indian companies need to set targets that are ambitious and innovative so that they can lead the sustainability narrative. ESG needs to be built into everyday decision making around business goals, key investments, and business models that promote sustainable products and services.
- Collaborate at scale and build transparency - sustainability cannot be achieved without the participation of the larger ecosystem—suppliers, employees, customers, and the society at large. Align your governance to ensure that you avoid a silo-based approach, set evidence-based targets, measure them consistently and report them transparently.
- Designing for circularity - The opposite to a linear system is a circular one, where everything is interconnected to everything else in some way. One person’s waste is another’s resource, the same way that it is engineered in natural systems. Landfills in Indian cities are a testament to the fact that we are far away from a circular society. Indian companies can lead the change by creating circular systems and business models that reuse, share, repair, refurbish, remanufacture and recycle to create a closed-loop system. This will minimize resource inputs, reduces waste, pollution, and carbon emissions.
- Creating green supply chains – As companies net zero targets accelerate, the choices made by the big brands will impact global supply chains and unleash second and third order effects in products, materials, and components/ingredients. Indian companies need to anticipate these changes and adapt fast, else the fast-changing transition will leave them behind.
- Adopting nature-based solutions - To minimise damage and regenerate the environment, experts are advocating the use of ‘nature-based solutions’ that consist of forest protection, agroforestry, urban trees, mangrove restoration and green infrastructure creation. While several Indian organisations have started focusing on these types of activities to mitigate their environmental impact, these efforts need to rapidly scale.
- Brands with purpose - Brands and the values they represent have a lasting impression; hence, marketers are powerful influencers of consumption patterns. Broad claims about being green are not enough anymore. As Indian companies go global, brands will need to find new ways to compete and demonstrate their sustainable credentials. Can Indian brands demonstrate their sustainability credentials? Can we not just be known for low-cost manufacturing but for delivering the greenest, most sustainable brands?
If India is to lead the 21st century, we need leadership from Indian companies that is not just about saying the right thing but about doing what is right. Not just setting NetZero targets but building NetZero brands. The sprint to 2030 and limiting global warming will be about building trust in the Indian way of doing things – that is good for people and the planet.
Building trust is a journey. So is building a low carbon economy. So is building brands. So, let’s work together to build a green economy – everything, everywhere, all at once!
A version of this article was published on Nov 29, 2023 by The Economic Times Online.