While organizations have evidently made ambitious decarbonization commitments, meeting those goals is a another story. Zone President, and CEO & MD Schneider Electric India Anil Chaudhry, a power sector veteran speaks to ET Edge Insights as he shares his point of view on the transition to NetZero, sustainable finance and COP27
Queenie Nair: Do you think that COP27 will be able to achieve what COP26 did not – there has been a lot of anger and frustration that came out of the Glasgow summit? The transition for the world to reach NetZero needs that 100 billion to be pledged.
Anil Chaudhry: The COP27 summit presented an opportunity for developed and developing countries to come together on one platform and take decisive action on climate change, with time running fast. The developing world needs to secure $1 trillion external financing annually by the end of this decade to mitigate the climate crisis. It is important that the developed world finds workable solutions to address this key issue. India has emerged as a strong voice of the developing world, the country has so far financed its climate obligations internally with the help of public-private partnerships.
As India assumes the G20 presidency, the country would continue to drive the agenda on climate finance and energy security.
Queenie Nair: In your opinion what can government agencies or private sector do to encourage their industries and economies to raise capital for sustainable finance and develop the ecosystem?
Anil Chaudhry: Climate change is the biggest crisis the world is facing right now, and to address it, we need to create a united front. A crisis of this magnitude cannot be tackled in silos and therefore, there is a pressing need for collaboration across public and private sector. Globally many governments have acknowledged the challenges and are willing to accelerate t heir actions. We need to have policies encouraging organizations to prioritize decarbonization and sustainability.
Globally, we are seeing green funding for low-carbon energy sources, investments in solar power, and EV infrastructure. According to a recent Forrester Consulting report, ~ 63% of its respondents believe that lack of access to peer networks and cross-sector communities are some of the biggest obstacles to effective climate collaboration. Therefore, we need to foster an ecosystem of collaboration, technology transfer between industries, and take collaborative action to achieve quick results.
Queenie Nair: What do you see as the top challenges in India’s transition to net zero?
Anil Chaudhry: Having garnered global attention after announcing its climate targets at COP26, India later officially submitted its updated NDC targets in August 2022.
At its current pace, India is exhibiting one of the fastest transitions to renewable energy and aims to achieve 50% of its power requirement from renewables by 2030. However, growth is not linear and certain roadblocks like high cost of transitioning from fossil fuels to renewable energy sources slows the process.
According to a report titled “Getting India to Net Zero”, the country needs an investment of $10.1 trillion. Moreover, considering the needs of a fast-growing, developing economy, it would be a mammoth task to shore up the funds and allocate them across the economy. However, the future looks green, as India is moving in the right direction by rolling out policies such as The Draft National Electricity Plan which aims to drive a multi-fold increase in solar and wind power by 2031-32 and the Green Hydrogen Policy.
Yet another challenge is spreading sustainable practices down to grassroots level. Schneider Electric’s Green Yodha initiative was launched with the aim of brining like-minded individuals and organizations on a common platform to accelerate actions towards sustainability. And I am proud to share that within its first year, Green Yodha initiative has seen participation from top public and private sector organizations who have come forward and joined this good fight.
Queenie Nair: Looking at the EU’s ETS (Emissions Trading System) unmistakable success, what do you think is that block that Asia, in particular India needs to overcome for regional cooperation in the carbon-trading market?
Anil Chaudhry: The EU’s Emissions Trading System can act as a blueprint for setting up a carbon trading market in India along with the cooperation of the Indian subcontinent and East Asian countries. One of our major learnings from the ETS has been to expand the market’s footprint beyond energy-intensive industries to cover sectors like aviation and transportation. In order to establish a successful carbon trading market in Asia, the stakeholder countries need to devise an equitable carbon taxation system. The carbon pricing needs to be dynamic and flexible, in accordance with the country’s contribution to global carbon emissions, to protect developing economies like India from carrying the burden of heavy pricing.
Queenie Nair: Diverting from climate change in your role as a company executive, how do you balance your short- and long-term perspectives with an eye toward building diversity and resilience?
Anil Chaudhry: Due to globalization, businesses today operate in a VUCA (volatile, uncertain, complex and ambiguous) environment. So, businesses have to work towards being resilient. Resilience is the ability to recover from setbacks, adapt to change, and keep going in the face of adversity.
The global pandemic recently taught leaders to acknowledge their business vulnerabilities and identify agile solutions. Therefore, managing for resilience demands a completely new way of thinking about business, one that embraces complexity, ambiguity, interconnection, systems thinking, and a multi-timescale viewpoint.
Diversity rooted in the diverse ways of thinking aids this culture. Resilience depends on being able to generate alternative ways of reacting to situations. For Schneider Electric, diversity is an integral part of our history and culture. We believe that to thrive in a global marketplace, every organization must embrace Diversity as an integral tenet.
Queenie Nair: How does innovation help here?
Anil Chaudhry: Innovation is one of the strongest tools we have to become more resilient enabling an equitable and sustainable future for all. To further drive resiliency in this disruptive world, businesses must make innovation and sustainability a core part of their strategy. Currently, innovation across sectors and segments is led by integration of new technologies like artificial intelligence (AI), big data, and the Internet of Things. And like any other field, with digitization as the backbone, innovations can address the biggest issues facing us, fighting climate change, and creating a more sustainable world.
At Schneider Electric, innovation is at the heart of everything that we do. Through our IoT enabled EcoStruxure platform, we aim to ensure innovation at every level by tapping the true business value of IoT advancements. Following our company’s moto of ‘Life is On’, we are determined to bridge the gap between progress and sustainability by inventing and innovating technologically superior products to script the net-zero journey. We continuously work towards raising the bar for ourselves, our customers and partners, and the communities around us.
Queenie Nair: In your opinion what major shifts are required to achieve systems change to meet our global climate, nature and equity goals?
Anil Chaudhry: Nearly every major system will need to change to keep global temperature below 1.5 degrees Celsius. This includes how we consume and utilise resources.
We believe that if the future must be decarbonized and sustainable, we must move to an all-electric and all digital world. And Electricity 4.0 (the convergence of electric and digital) is the fastest route to net zero. Electricity makes energy green, and Digital makes energy smart. It’s important to shift to more renewables in the mix whilst simultaneously reducing energy waste.
Like the saying goes, with same efforts you get same results and to get new results you need to act differently. So, we have to make a conscious choice to move away from the traditional options and adopt the contemporary solutions available today. This needs collaboration of leaders across sectors who can ignite the systemic transformation required for the earth and our society to thrive.
Queenie Nair: In 2019 it was stated that ‘we are 43 years behind schedule on achieving the SDGs and recent data states that the world is unlikely to achieve its goals until 2082, worryingly the decline is most stark by pulling the world back on measures of rights and inclusiveness. Could you please share with us your perceptions on the present rising tide of change that seems to span across the globe?
Anil Chaudhry: Change is the only constant in life. We must embrace change, but we need to be cognizant of its socio-economic and environmental impact.
The SDG’s provide a comprehensive framework for countries to address the 17 most pressing global challenges including climate change, poverty, gender equality, health and education. While the statistics are alarming, the need of the hour is to reassess the strategy. All the challenges are interlinked to one and other with the overarching goal of attaining sustainable development. The improvements made in one area would reflect on the progress of others as well.
The need of the hour is to make high-impact interventions for driving population-scale impact. While the government has laid the roadmap for achieving the SDGs, India Inc has an important role to play to ensure activation at the grassroot level. Corporates must push forward India’s SDGs through their CSR initiatives.
We have taken commitments in line with the 1.5 deg C scenario, and we differentiate our Sustainability Strategy by playing on both sides of the equation. We are leading by example in our own ecosystem, and at the same time, with our complete range of EcoStruxure offerings powered by digitization, we are also part of the solution for making our customers, communities, and cities more sustainable and efficient. Additionally, through our CSR programs we focus on education, entrepreneurship, employment, and electrification.
Queenie Nair: Your thoughts on the ongoing COP27- if the 2050 net-zero targets will be achieved and what does it mean for the business community?
Anil Chaudhry: The switch to sustainability is no longer a choice, rather it is a deep-rooted lifestyle shift. The net-zero targets unveiled by various countries at COP26 have laid the roadmap for strategically planning the shift
We undertook research to understand that changing consumption patterns, driven by an appetite for the progress that new technologies herald, will help bring about a less carbon-intensive economy. In other words, keeping global warming to 1.5ºC may be more feasible than we think, because as the economy modernizes and provides increased benefits to people, it also decarbonizes.
Let’s be real, climate and energy crises are far too big for any of us to tackle alone. We need collaborative approach by all layers of business, government, and society. The success of our collective efforts is now a race against time. To win we need to prioritize three critical aspects- Decarbonize energy supply, Boost energy efficiency and circularity, and Accelerate Electrification.
COP 27 summit is a golden opportunity for global leaders to discuss the solutions for managing the issue of climate change. As an Impact company, Schneider Electric executives will participate in a series of panel discussions and meet decision makers during COP27.
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