Climate Change the Next Frontier

Corporate's Fighting Climate Change

The Role of Big Industry in fighting climate change has traditionally been seen from the prism of being the polluter. They have been labeled as the big bad boys who have polluted the Air, Water, Misused Mining Resources, Used Fossil Fuel etc. In other words they been portrayed as the quintessential Villain. Circa 2022, situation is very different, the world is far more educated on Climate Change, Corporate Boards have globally adopted policies towards Sustainability, Net Zero. Many Corporates have indeed taken up positions which go far and beyond that has been mandated by governments in various sectors. From Profit Maximization to Sustainable Growth, Corporates around the world are doing many things to show their commitment in fighting climate change.

Innovation through Start-ups: Corporates today are working with incubators and accelerators in spotting & funding innovative startups. Many startups across India especially those coming from the University Atal Innovation Center (AIC) system, are bringing in new ?ideas and their prototypes are built across domains. In the climate change domain, this becomes a little difficult as the upfront investment in terms of physical prototypes are high. We have seen many corporates fund these types of innovations through grants through the AIC’s and Accelerators. Another trend that has come up is funding specific innovation challenges in specific domains by the Corporates. Corporates are helping startups by bringing them into their vendor eco-system and also by providing Management bandwidths. This is an excellent development and must be encouraged so that more and more startups working on Climate Change get guidance and start monetizing.

Sustainable Supply Chains : Corporates globally have started working on making their Entire Supply Chains sustainable. From Sourcing sustainable material, reducing plastic Consumption, to investing in Recycling, corporates are working across the board to reduce their global Carbon Footprint. We do hear of stories about ESG and how it is not a right metric to judge an organization. However, our belief is that while the financial incentive to judge ESG may be still a work in progress, there is enough merit in building an organization with high ESG scores as over a period of time the process efficiencies kicks in the financial benefits. Consumption of Energy across the supply chain if reduced and converted to Renewable sources will definitely help in reducing the energy cost. Recycling and reduction of Single Use Plastic will definitely help in reducing cost in the long run, especially when Petroleum prices are expected to go through the roof.

Internal Innovations: We believe that Internal Innovations around the world in sustainable practices will drive the next level of growth for the economy. With Global Capital driving the investments in Renewable Energy Generation, Corporates globally will invest a lot of time and energy in driving better products, more Energy efficient appliances, Lighting, Fuel Efficient Vehicles, Better Battery Technology. The next level of R&D and human innovations is already being led by corporates looking at how their own products could be more sustainable.

The corporate sector is well placed to help fight climate change in several ways. It has the capital, it has heft, the reach, and it can also channel a lot of investment into the Green Economy. The greatest impediments come from within this corporates themselves. Many of them are still too bogged down by their existing industrial practices, and struggle to adapt to the new requirements that a Climate Friendly vision would bring. Yet there's no denying that several of them are taking up an active approach on environmental issues. And if these progressive corporations can be multiplied; if they can act as exemplars for the rest of their class, then we might just see a revolution in corporate behavior on issues like Climate Change, and that would be good for us all.

This week we've explored the role of corporations working primarily in India and their role in bringing capital and heft to climate change. We'll continue to explore the topic in coming weeks, bringing you fresh perspectives on the topic.