SDGs and ESG

Public Enterprises gearing-up to contribute to India’s Climate Agenda

India needs to identify effective options to engage the private sector and public-sector enterprises (PSEs), including working with international partners.

The Global Climate Risk Index 2021 ranks India among the top 10 countries most vulnerable to climate change. India is already experiencing severe impacts of climate change and these impacts are projected to increase in the future. In light of this threat, the Indian government is implementing several measures to reduce its GHG emissions and adapt to climate change. One of the major steps needed to achieve the same and develop the Indian economy on a low-carbon and resilient pathway is to raise awareness on climate change and localize actions including implementation of strategies for climate change mitigation at various levels by diverse public and private sector players.

A recent report by the International Energy Agency informs that manufacturing industries such as cement, iron and steel, chemicals, account for about one-fifth of global carbon dioxide emissions. Emissions from these industries and sectors are notoriously difficult to abate due to the fact that process related emissions itself forms a significant portion in addition to the GHG emissions associated with energy used for the fuel feedstock. Hence many of these sectors fall under the ‘hard to abate’ category.

Indian Public sector enterprises (PSEs) have been of strategic importance to the Indian economy and play an important role in nation building also through working towards making India Self-reliant.  They significantly contribute to the national GDP by 16% and Government of India expects PSEs to double their contribution to its GDP. Currently, PSEs play an important role in meeting countries’ strategic objectives. Prominent among the geo-strategic objectives is addressing climate change. The new mantra for the corporate sector is ‘What is good for Climate, is also good for the Business’. This is because taking action to tackle climate change will positively impact the triple bottom line of these businesses in terms of the economic, social and environmental aspects. There is a growing realisation that it is very important to consider both the impact of the climate risk transition and the perception of businesses by financial markets to assess the capabilities required for PSEs to respond effectively to the climate change agenda and contribute to the low-carbon transition.

India needs to identify effective options to engage the private sector and public-sector enterprises (PSEs), including working with international partners. It is crucial for deeper climate action that PSEs are brought on board and their capacities are developed considering their significant contribution to the GDP and associated GHG emissions. It is therefore important to enhance the capacities of Indian PSEs to effectively implement initiatives for reducing GHG emissions at the company level, thereby contributing to overarching industrial level policies and targets. The first step in this regard would be to assess their current capacities and gaps required in their contribution towards climate action.

In view of the above, GIZ (German Development Cooperation) India via its Global Carbon Markets project, funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) entered into a Memorandum of Understanding (MoU) with Standing Conference of Public Enterprises (SCOPE) to enhance capacities of Indian Public Enterprises on climate action so that they can embark on low carbon and climate resilient pathways. As a result of this MoU, SCOPE, the apex body in India for enhancing capacities of PSEs, and GIZ India conducted an assessment of capacities and training needs in PSEs with respect to sustainable efforts for climate change mitigation and also suggest steps to develop and adapt a systematic plan to attain effective climate change mitigation targets. The Training Needs Assessment (TNA) found that while the Indian PSEs are aware of climate change and its impacts, most of them are at various stages of developing or planning to develop concrete plans and/or targeted approaches to address climate change. Hence enhancing their capacities to enable them to embark on low-carbon development pathways will be of paramount importance. The findings highlighted that there is a need to develop a tailored training that can focus on relevant topics such as international response to climate change, types of carbon markets, Article 6 of the Paris Agreement, carbon pricing, climate finance, etc. It is also found that though 95% of the PSEs interviewed are aware of the GHG accounting process, however, not all are implementing them.

On 20th September 2021, SCOPE and GIZ India organized an event to launch Training Needs Assessment (TNA) Report titled “Low Carbon and Climate Resilient Pathways for PSEs: Training And Capacity Needs Assessment” . The event was attended by prominent stakeholders, including from the Department of Public Enterprises, Ministry of Finance, Government of India, The German Embassy to India, and senior management from the largest PSEs of India that work in hard-to-abate sectors. The launch event was followed by the first training workshop for PSE officials from the Northern regional offices and was attended by 60 PSE officials. Chairman and Managing Director of National Thermal Power Corporation (NTPC) said that such exercises are extremely necessary for catapulting PSEs for taking effective measures to address climate change and that PSEs should come together to voluntarily pledge concerted climate action.  The 2-day training workshop covered several aspects of climate change from the global and Indian context. Through presentations, discussions, activities, and case study analyses, the participants were introduced to global and Indian climate policy; carbon pricing mechanisms; carbon markets and associated opportunities; and climate financing. A similar such training was conducted in Bhubaneshwar to reach to PSEs from the easter region of India. Taking this exercise forward, two subsequent training workshops are being planned for the Southern, and Western regional offices for the year 2021.

Such assessments and associated capacity development measures can help PSEs identify their GHG mitigation potential and implement company level polices and actions thereby contributing to the achievement of India’s Nationally Determined Contribution and embark on low carbon development pathways.

Kundan Burnwal, Advisor Climate Change, GIZ India & Saurab Babu, Junior Advisor Climate Change, GIZ India

 

(Disclaimer – The views expressed are those of the authors and not the organisation they work for.)

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