Towards a Greener Footprint: Prioritising Carbon-Neutrality Makes Good Businesses Sense! Are Indian Firms Making the Transition?

Running a business is no mean feat, and each organisation — big or small — has its own set of challenges. In the past, companies only had one mantra: generating profits. Today, the end goal of making money remains the same, but they do have one additional challenge: being sustainable.
The climate crisis, resource crunch, growing trend of impact investing and increasing socio-environmental vulnerabilities mean a sharp change in priorities for the world. And in order to stay afloat in these trying times, businesses, as well as their consumers, are becoming more sustainability-conscious.

A case for carbon-neutrality

According to international scientific consensus, global net human-caused carbon dioxide (CO2) emissions must reduce by around 45% from 2010 levels by 2030 to have a fighting chance against global warming, with net-zero emissions expected around 2050. The term "net-zero" refers to a situation in which greenhouse gas emissions are matched by their removal from the atmosphere.
But because most greenhouse gases have a long shelf life, the Earth will continue to warm even decades after net global emissions turn zero. But if we delay carbon neutrality, it will take even higher number of years to stabilise the planet’s fever. The good news is that governments and companies worldwide are pledging to achieve net-zero emissions of greenhouse gases and carbon neutrality. The bad news? The path is far from straight-forward.
As a country, India needs an estimated investment of over US$1 trillion to achieve the climate targets for 2030. Just the renewable energy targets entail at least $223 billion in investments, as per the recent report by BloombergNEF. Therefore, the private sector's role is crucial to achieving these ambitious targets. But is India Inc. on the right path in terms of carbon neutrality?
Suppose you own a manufacturing company aspiring to reach net-zero emissions in the next two decades. In your journey, you will undoubtedly encounter several challenges, economic viability being the most prominent. But emerging evidence suggests that being carbon neutral might just be one of the most economically prudent decisions a company can make in the long run.

Achieving carbon neutrality

Carbon neutrality has much more to offer than meets the eye.
Net-zero and carbon neutrality essentially propose a climate-stability goal and an accounting method to track progress toward that goal. It's also a platform to which a growing number of people can commit over time. It offers shareholders the opportunity to reduce climate risk without sacrificing near-term gains and reputational benefits for companies that serve environmentally aware clients or industries.
It's just smart business to eliminate sources of carbon and greenhouse gas emissions at the company level. Even modestly-sized companies can "go green" without jeopardising their profits.
Firms can take several practical initiatives to ensure their role in a greener future. But the first step would be to define their goals. Experts advise that a company must prepare a gradual roadmap to transition into carbon-neutrality instead of running headfirst into adopting greener technologies.
Some tips that can help include installing clean energy on-site. Having solar panels and utilising electric vehicles for transport is a sure-fire way to take a step towards the greener side.
And on the off chance the company is unable to remove as much carbon from the environment as it contributes, carbon offsets can be purchased to make up the difference. Simply put, this means that firms donate funds to external efforts aimed at mitigating climate change.

Indian corporations’ journey towards carbon neutrality

Reliance Industries (RIL), Tata Consultancy Services (TCS), HDFC Bank, Wipro, Infosys, Mahindra & Mahindra, JSW Energy, ITC, Adani, Dalmia Cement, and Indian Railways are among the organisations that have proclaimed net-zero targets.
Apart from this, the Science-Based Target Initiative, a global alliance that allows businesses to make their own climate pledges, reports that 64 Indian corporations have vowed to cut greenhouse gas (GHG) emissions. Moreover, 28 of these companies have had their Net Zero targets validated.
Now, just pledging to go net-zero is not enough. Regulators and auditors follow up with firms to produce concrete plans of action and regular progress reports to back their claims. This financial year onwards, even the Securities and Exchange Board of India (SEBI) has mandated performance disclosures in terms of sustainability for the top 1,000 listed companies.
So, what are you waiting for?
This column is part of a year-long (2022-23) campaign on the theme “Only One Earth: Sustaining People, Planet and Prosperity” by Business Insider India’s Sustainability Insider.