Impact of Climate Change on Indian Business

As the sun rises over the Indian republic, a silent and pervasive threat looms larger than ever before: climate change. This global phenomenon, once considered a distant concern, is now manifesting with alarming urgency across continents, affecting every aspect of life and business. From melting polar ice caps to raging wildfires, the signs are unmistakable. Yet, while the narrative of climate change often centers on distant lands and abstract statistics, its impacts are profoundly and personally felt closer to home, especially in a country as diverse and vibrant as ours.

Climate change is not just a scientific issue but a humanitarian crisis of epic proportions. Around the world, we witness its effects in the form of unprecedented natural disasters: the intense heat waves scorching Europe, wildfires in Australia, devastating hurricanes battering the Americas, and catastrophic floods inundating Southeast Asia. These events are no longer anomalies but increasingly common occurrences, signaling a planet in distress. The economic cost is staggering—billions of dollars in damages, disrupted lives, and strained economies. Sadly, the impact of this crisis is not suffered uniformly by all; developing nations, particularly those in Asia and Africa, bear a disproportionate burden.

India, with its sprawling landscapes and varied climates, faces unique vulnerabilities. The country's economy, heavily reliant on agriculture, manufacturing, and services, is intricately tied to the rhythms of nature. When these rhythms falter due to climate change, the repercussions ripple through every sector of business. The once predictable monsoons now bring either drought or deluge, jeopardizing crops and livelihoods. Coastal cities, hubs of trade and industry, brace themselves against rising sea levels and cyclonic storms. Even the high-tech corridors and urban centers are not immune, as erratic weather patterns disrupt supply chains and infrastructure.

Consider the agricultural sector, the backbone of the Indian economy. With millions depending on farming for their livelihood, the changing climate threatens not just the yields but the very sustenance of entire communities. Meanwhile, in the bustling urban centers, businesses grapple with water shortages, power outages, and infrastructural damage. The textile industry, a significant contributor to India's exports, finds its supply chains disrupted by unpredictable weather and resource scarcity. Similarly, the financial sector faces increased risks as insurance claims for climate-related damages soar.

In this intricate web of economic activity, no sector remains untouched. The impact of climate change on Indian businesses is not just a story of numbers and data; it is a narrative of human resilience and struggle, of communities adapting and innovating in the face of adversity. Today, let us delve into the heart of these experiences, and attempt to understand how climate change is reshaping the business landscape in India. Through data, anecdotes, and human-centered stories, we uncover the immense challenges posed by climate change and the urgent need for collective action. From the financial losses suffered to the innovative measures being adopted, we journey through the highs and lows of this unfolding reality, ultimately seeking solutions and strategies to mitigate these impacts and build a sustainable future.

Join us as we navigate this critical issue, understanding the scale of the problem, the measures needed to tackle it, and how Rewardwise can play a pivotal role in supporting Indian businesses through this transformative journey.

The Growing Crisis

The story of climate change in India is one of escalating weather extremes that have begun to reshape the landscape of commerce and daily life. Across the country, the increasing frequency and intensity of extreme weather events serve as stark reminders of the urgent crisis at hand.

Cyclones and Floods

In recent years, India has been battered by a series of devastating cyclones. Cyclone Fani, which struck the eastern state of Odisha in May 2019, is a prime example. Packing winds of over 200 km/h, Fani left a trail of destruction in its wake. The cyclone caused an estimated ?525 crore (approximately $75 million) in infrastructure damage alone, affecting millions of people and crippling local economies. Businesses from small roadside vendors to large manufacturing units faced significant losses. For example, Bijoy Mohapatra all but lost his livelihood as an artist, along with several others, in Puri district, as his house could not withstand the ferocity of the wind and exposed his work to the rain.?

Chennai, one of India’s major urban centers, has faced severe flooding in recent years. The 2015 Chennai floods, triggered by the heaviest rainfall in over a century, resulted in damages exceeding $3 billion. The floodwaters inundated factories, disrupted supply chains, and halted production for days. The garment industry, in particular, suffered heavily, with factories reporting extensive losses due to machinery damage and inventory destruction?

Similarly, in Kerala, the 2018 floods were the worst in nearly a century, causing damages estimated at $2.7 billion. The floods severely impacted the tourism sector, which is a major revenue source for the state. Many small and medium enterprises in the tourism and hospitality industry faced bankruptcy due to prolonged closures and the cost of repairs.?

Assam has been experiencing flooding on a regular basis, with the monsoon season annually displacing thousands and causing extensive damage to agriculture and infrastructure. The state’s tea industry, a significant economic driver, is usually affected the most, with plantations submerged and production halted. The recurrent floods have led to severe economic strain on local businesses, exacerbating poverty and slowing economic growth, especially in the lower part of the state.

Heatwaves

Heatwaves, too, have become a harsh reality. In 2024, India experienced 536 heatwave days, one of its longest and hottest periods in 15 years, with an 11% rainfall deficit in the Northwestern part of the country. The intense heat not only claimed lives but also disrupted businesses. For instance, in Rajasthan, a state already grappling with water scarcity, the extreme temperatures exacerbated the situation. Water-intensive industries, such as the beverage and textile sectors, faced severe operational challenges. In Kerala, Coca-Cola’s local bottling plant in Kochi reported multiple shutdowns due to water shortages and subsequent protests, as far back as in 2016, highlighting the fragility of even large multinational operations under climate stress.

Delhi has also been experiencing volatile weather changes. Recently, the city saw a dramatic shift from a severe heatwave to sudden flooding. In May-June 2024, temperatures soared above 46°C, leading to water shortages and health crises. The heatwave was followed by intense rainfall, resulting in flash floods that paralyzed the city. Businesses, especially small enterprises, were hit hard by these abrupt changes, facing significant losses due to disrupted operations and infrastructure damage.

These stories are just a few examples of how extreme weather events, driven by climate change, are wreaking havoc on Indian businesses. From cyclones and floods to heatwaves, the growing crisis is undeniable. As we delve deeper into the economic impacts and the need for action, the experiences of the affected people underscore the real and present danger that climate change poses to livelihoods and the broader economy.

Agriculture Sector: Impact on Crop Yields and Incomes

Indian agriculture is perhaps the portion of our economy most vulnerable to, and most affected by, climate change, primarily through altered rainfall patterns and rising temperatures. Studies predict that climate change could reduce yields of major crops by 4.5% to 9% in the medium term (2010-2039), and by over 25% in the long term (2070-2099) if no adaptive measures are taken. Specifically, rice and wheat, staple crops in India, are highly vulnerable. Rice yields in India are projected to decline by 20% by 2050 and by 47% by 2080 if adaptation strategies are not implemented.

In 2022, a significant drop in wheat production due to extreme heat waves was observed, reducing the yield by approximately 15% compared to the previous year. This not only affected local food security but also impacted global wheat supplies, given India’s role as a major wheat exporter.

The economic ramifications for farmers are, naturally, very profound. Nearly half of India's population is engaged in agriculture, and any fluctuation in crop yields directly impacts their livelihoods. For example, the 2022 wheat yield decline led to a sharp decrease in farm incomes. According to the Indian Council of Agricultural Research (ICAR), climate change has already led to an annual reduction in farm incomes ranging from 15% to 18%.

Even the food industry, closely linked to agriculture, is suffering as a result of the forces of nature. This is in small part due to the nature of the inter-connectedness of the Indian economy. Reduced crop yields mean higher prices for raw materials, which increases the cost of production for food companies. This trickle-down effect leads to higher food prices for consumers, contributing to food inflation. Additionally, the decreased availability of staple crops can lead to food shortages and increased import dependency, further impacting our growth. No wonder our economists are often on edge, they do have a lot to worry about.

Mitigation and Adaptation Measures

So what is being done to bolster Indian agriculture and Indian farmers in the face of these challenges? To combat climate change, the Government of India and various organizations have taken it upon themselves to implement several adaptation strategies:

• Climate-Smart Agriculture (CSA): Techniques such as crop rotation, integrated soil management, and the development of heat and drought-resistant crop varieties are being promoted. These practices help improve crop resilience and reduce the adverse impacts of climate change.
• National Initiative on Climate Resilient Agriculture (NICRA): Launched by ICAR, this initiative focuses on research and field demonstrations of technologies to combat climate-related issues in agriculture. This includes the development of crops resistant to heat and water stress, improved agronomic practices, and capacity building for farmers.

These adaptation strategies and government initiatives are of the utmost importance, crucial to mitigating the more severe impacts of these intense natural phenomena and shielding our farmers and small agri-business owners against the worst parts. This should hopefully ensure the sustainability of not only the agriculture sector, but by extension, the greater food industry in the face of a changing climate.

Water Scarcity

Water scarcity poses another significant challenge to various industries in India, particularly the beverage and textile sectors, which rely heavily on water for their operations.

• Beverage Companies: The beverage industry, being highly water-intensive, is profoundly affected by water shortages. For example, during the severe droughts in 2014 and 2015 in Southeast Brazil, Danone reported a sales loss of approximately $6 million due to disrupted water supply, showcasing how similar water crisis can affect operations in India as well. In India, companies like PepsiCo and Coca-Cola have had to implement water-saving measures such as promoting drip irrigation among farmers to ensure a sustainable water supply for their production needs.
• Textile Industry: The textile industry, which consumes vast amounts of water for processes like dyeing and finishing, faces significant risks due to water scarcity. In 2022, water shortages led to production halts and increased operational costs in various regions. The industry is now increasingly focusing on water conservation measures, such as recycling water and adopting water-efficient technologies to mitigate these risks.

Water shortages not only disrupt operations but also lead to economic losses. According to a global survey by the Carbon Disclosure Project (CDP) water-related issues cost businesses around $14 billion back in 2016. In India, water scarcity has been particularly severe in cities like Bengaluru, Mumbai, and Delhi, where unplanned urbanization, neglect of water bodies, and groundwater depletion have exacerbated the crisis. Measures such as water rationing and restrictions on non-essential water use have been implemented to address the shortages, impacting businesses and daily life significantly.

• Infrastructure Damage

Besides agriculture and water shortages, there are also untold impact on human-made institutions by natural disasters. Climate change is a leading contributor to infrastructure damage, affecting roads, supply chains, and overall economic activity.

• Damaged Roads and Supply Chains: Extreme weather events, such as heavy rains and floods, often result in damaged roads and disrupted supply chains. For instance, the 2015 Chennai floods we talked about above caused over $3 billion in damages, severely affecting transportation infrastructure and halting production in various industries. Similarly, the 2018 Kerala floods destroyed thousands of kilometers of roads, impacting the local economy and necessitating extensive repairs.
• Economic Downtime and Repair Costs: The economic impact of this infrastructure damage is substantial. Repairing damaged infrastructure requires significant investment and time, leading to prolonged economic downtime. In Chennai, the aftermath of the floods saw businesses struggling to recover due to the extensive damage to roads and industrial facilities. In Kerala, the costs of repairing flood-damaged infrastructure added to the financial strain on the state.

The Lost Opportunities

If it was not obvious enough already, the economic impact of this crisis has been substantive, translating into millions and perhaps billions worth in damages, both through direct losses and through lost opportunity costs owing to our misuse of the environment. These damages have not been limited to any one industry alone, as we shall soon see below. What’s more, developing nations such as ours are hit harder by these lost opportunities, seeing as we are in a very crucial chapter in our growth story and cannot afford any more derailments. Hopefully, by recognizing these impacts and adapting accordingly, India can work towards safeguarding its economic future and unlocking more potential growth opportunities in a manner more sustainable than today.?

Before we devise a plan to correct these inefficiencies, however, it is necessary to identify the key avenues where we are missing out, that is, where these inefficiencies lie in the first place. We have here a non-exhaustive, brief list of certain aspects of the economy where climate change is proving to be a significant roadblock:-

• Export Revenue: Reduced agricultural productivity limits the ability to meet both domestic and international demand, resulting in lost export revenue. India, a significant exporter of agricultural products, loses potential income due to lower yields and poor crop quality. For instance, the 2022 heatwave reduced wheat production by approximately 15%, causing significant financial losses for farmers.
• Agribusiness Investments: Uncertainty in agricultural productivity, in monsoon-prone countries such as those in South Asia, deters investment in agribusinesses. Potential advancements in technology and infrastructure that could enhance not only productivity but also profitability are often sidelined due to the high risks posed by climate variability.
• Productivity Loss: Extreme heat and humidity lead to reduced labor productivity, particularly in outdoor and manual labor sectors. The situation has reached an extent where the RBI estimates that India could account for about 3.4 crore of the projected 8 crore global job losses by 2030, purely from heat stress.?
• Infrastructure Development: Resources that could be used for new infrastructure projects are instead allocated to repairing facilities damaged in floods, cyclones, and the like, or to rehabilitate people after climate-change induced disasters. This delays the development of modern infrastructure that is essential for stimulating economic growth and improved quality of life
• Reduced Tourism Revenue: Many areas which have traditionally been tourist hotspots are also reeling from the effects of climate change, resulting in lost revenue for the hospitality industry. Regions known for their natural beauty or cultural heritage, like Kerala, Shimla, Manali, Dharamsala, etc. face declines in tourist visits during and after extreme weather events. Landslides, road blockages, etc. are a common occurrence in hill stations, for instance.
• Port Operations: Rising sea levels and increased storm surges threaten port operations. Ports like Mumbai and Chennai, crucial for international trade, face increasing disruptions due to high tides and storm surges. The anticipated rise in sea levels could render many coastal ports inoperable, leading to significant delays and increased shipping costs.
• Raw Material Shortages: Environmental disruptions often lead to shortages of raw materials. For example, droughts and erratic rainfall patterns have affected the availability of essential agricultural inputs, impacting the production cycles of industries dependent on these materials. This ripple effect is seen in sectors like food processing and textiles, where production delays translate into higher operational costs.

As we can see, the impact is not limited to any one industry alone. Something that will be hit especially hard is the supply chain, which acts as the base for all other economic activity across the globe. A study by King's College London projects that climate-related supply chain disruptions could lead to global economic losses ranging from $3.75 trillion to $24.7 trillion by 2060, depending on the levels of carbon dioxide emissions. In India, these disruptions are already being felt. The Intergovernmental Panel on Climate Change (IPCC) has highlighted that the economic losses from supply chain disruptions could significantly hamper India’s GDP growth. The loss of productivity due to heat waves alone could put 4.5% of India’s GDP at risk by 2030.

Climate Change and Investment Trends

The picture seems pretty bleak from what we have seen so far. But let us move away from the direct effects on our economy for a moment and move in another, perhaps more unexpected direction: it seems the climate is also playing an active role in business decisions by major investors and stock traders. In fact, environmental factors are increasingly influencing investor behaviour and risk assessments in India, leading to shifts in investment patterns as stakeholders recognize the financial risks associated with climate-related events.

Investors are increasingly focusing on climate finance, which encompasses investments in climate mitigation, adaptation, and resilience projects. The Climate Policy Initiative reports that climate finance in South Asia, including India, has risen by up to 16% annually since 2017. At the same time, this growth lags behind the 23% and 29% increases seen in North America and Western Europe, respectively.

From a global perspective, Environmental, Social, and Governance (ESG) investments and green bonds are also gaining traction as people seek to align their portfolios with sustainable practices. In 2021, ESG funds held an estimated $2.7 trillion globally, with a significant portion directed towards climate action and sustainability projects, and approximately $520 billion worth of green bonds were issued globally about three years back.?

Smaller investors are also starting to get into the game. Many of them are reassessing their portfolios to account for climate risks. This includes divesting from high-risk sectors such as fossil fuels and increasing investments in renewable energy and sustainable infrastructure. The Global Fossil Fuel Divestment Commitments Database reports that over $40 trillion in assets are now held by institutions that have at least partly divested from fossil fuels.

The Indian government, for its part, is doing all it can on a macro scale. Some of the trends are looking positive. In 2023-24, for example, the government issued green bonds worth Rs. 200 billion. Moreover, in its latest submission to the UN climate body, it called for substantially more research and investment funding to be poured into climate finance in developing countries specifically. To be more exact, it called for the developed countries to provide ‘at least’ $1 trillion per year in climate finance to developing countries from 2025 so that they are better equipped to deal with the challenges brought forth by global warming. While there is definitely a geopolitical link to these submissions, if implemented, there could potentially be a huge easing of the burden not only in India, but in many other like-minded countries who are facing their own environmental problems.

Public and Private Action

So there is hope yet, it seems! It is not too late, at least not yet. Provided we all move single-mindedly in the same direction with similar goals and a similar vision, even climate change does not appear too insurmountable an obstacle. But is it possible to move single-mindedly in the same direction? The government may pump in all the packages and reforms it wants, but if the people and businesses of India don’t extend their support to these reforms privately of their own accord, they may be as good as useless. Fortunately, it seems the people are aware of this, and as such most major Indian businesses are doing all they can to mitigate this threat.

Let us first look at what are the public initiatives being undertaken by the government in this regard, and then we will move on to what the private players are doing. Everyone here has a part to play, no one is exempt from their responsibility. But the primary onus lies, of course, on the administration, as they set the overall mood for economic development. What plan or vision they have is crucial to know so that the other players can take measures accordingly.

Perhaps the most important such public initiative is the National Action Plan on Climate Change (NAPCC). Launched in 2008, the NAPCC outlines India's strategy to tackle climate change through eight national missions focusing on solar energy, energy efficiency, water, sustainable agriculture, and more. Key projects under this initiative include:

• National Solar Mission: Aims to promote the development and use of solar energy for power generation.
• National Mission for Enhanced Energy Efficiency: Focuses on improving energy efficiency across various sectors.
• National Water Mission: Seeks to conserve water, minimize wastage, and ensure more equitable distribution.
• Green India Mission: Aims to increase forest and tree cover to act as carbon sinks.

Next up, in line with its COP26 commitments, India also updated its NDCs (Nationally Determined Contributions) in 2022, enhancing its climate targets. These include:

• Achieving 50% of its electric power capacity from non-fossil fuel sources by 2030.
• Reducing the emissions intensity of its GDP by 45% from 2005 levels by 2030.
• Creating a carbon sink of 2.5 to 3 billion tons of CO2 equivalent through additional forest and tree cover by 2030

Smaller projects are also routinely launched, such as the National Hydrogen Mission, announced by Prime Minister Narendra Modi. This mission aims to make India a global hub for green hydrogen production and export. It focuses on reducing dependence on fossil fuels and promoting clean energy alternatives.

These initiatives have borne modest success for the most part. India is now one of the world's largest producers of solar energy, with solar capacity increasing from 2.6 GW in 2014 to over 40 GW in 2022. Sadly, we still remain heavily reliant on coal. Over 70% of our electricity is generated from coal, and plans for additional coal power capacity by some major companies are inconsistent with global climate targets. Which is where private players step in, ensuring that they see eye to eye with the government’s vision on tackling climate change, instead of eyeing short-term profits by exploiting the environment. Let us see how the largest Indian businesses are faring in this regard.

• Aditya Birla Group : The Aditya Birla Group has implemented extensive sustainability measures under its "<2°C Futures" initiative. This involves reducing greenhouse gas emissions, improving energy efficiency, and integrating sustainable practices across its operations. The company has reported a 51% reduction in specific GHG emissions and derives more than half of its energy consumption from renewable sources.
• Godrej Industries Group : Godrej’s "Good & Green" initiative focuses on environmental sustainability and social responsibility. The company has successfully reduced its specific GHG emissions by 51% and shifted more than 55% of its energy consumption to renewable sources. Additionally, their CSR efforts include community development and environmental conservation projects.
• ITC Limited : ITC has integrated sustainability deeply into its business model through initiatives like the e-Choupal program, which enhances supply chain efficiency and supports rural farmers. ITC has also made significant strides in water conservation, waste recycling, and renewable energy adoption, contributing to its reputation as a leader in sustainability.
• Tata Group : Tata Motors and Tata Power have been pioneers in adopting green technologies. Tata Motors focuses on electric vehicle development and has launched several electric car models. Tata Power is heavily invested in solar and wind energy projects, significantly reducing its carbon footprint.
• Mahindra Group : Mahindra has been at the forefront of promoting electric mobility and sustainability in its operations. The Mahindra Electric initiative aims to boost the adoption of electric vehicles (EVs) in India, while the company also focuses on renewable energy projects and water conservation efforts.

Corporate Social Responsibility (CSR) also plays a critical role in addressing climate change by fostering sustainable practices and community development. CSR encourages businesses to adopt sustainable practices in their operations, manifestations of which we can see above. This includes efficient resource management, waste reduction, and the use of green technologies. But it goes beyond that too, beyond merely company goals and objectives. CSR programs often focus also on improving the livelihoods of communities affected by climate change. By investing in education, healthcare, and skill development, these companies help build resilient communities that can better withstand climate-related challenges. Indian companies have increasingly integrated CSR initiatives that focus on environmental conservation, resource efficiency, and socio-economic development. What we saw just now was only a brief glimpse of their commitment to the shared vision and fight against climate change. If you would like us to explore this in more detail in another article, be sure to let us know.

Of course, these companies are, first and foremost, profit-seeking ventures, which means there needs to be something of value provided to them as well. To that end, there are multiple benefits accorded to private players for adhering to climate goals and sustainable practices. Companies adopting energy-efficient technologies and processes report significant cost savings. For instance, Tata Motors’ investments in energy-efficient manufacturing processes have resulted in substantial reductions in energy consumption and operational costs. Implementing waste reduction strategies also helps businesses minimize costs associated with waste disposal and raw material usage.?

What many industry leaders have not failed to notice is that the transition to a low-carbon economy opens up new markets for sustainable products and services. Companies that proactively embrace sustainability can tap into these emerging markets, generating new revenue streams and gaining a competitive edge. Tata Motors’ focus on electric vehicles has positioned the company as a leader in the growing EV market in India, just as Tesla has in the West.

Perhaps most importantly, however, sustainability is now becoming a key differentiator for brands. A Nielsen survey found that 79% of Indian consumers are willing to change their consumption habits to reduce their environmental impact. Companies that adopt sustainable practices can attract environmentally conscious customers and foster long-term loyalty. This explains the rise of several ‘green’ brands that bank on their environmentally friendly image to market themselves and sell their products. These factors play an essential role in enhancing brand reputation.

This opens up a whole new can of worms of greenwashing. Greenwashing is the practice of making misleading claims about the environmental benefits of a product—remains a significant issue. In India, only 29% of consumers trust companies to tell the truth about their environmental claims. It not only deceives consumers but also undermines genuine sustainability efforts. Companies may engage in such practices because they wish to reap the benefits of an enhanced brand image that comes with adopting sustainable practices, but are unwilling or unable to actually be an environmentally conscious brand. Some brands which have come under fire for greenwashing in the past are Mama Earth, which a lot of consumers say is misleading and actually damaging for your skin, and HUL, which faced criticism for promoting its Pureit water purifier as an eco-friendly product without any evidence to support its claims.

Evidently, this is a very complex situation. There is a lot of work being done, but we still need more public-private cooperation to drive home the fight against climate change, and we need to hold both the government and businesses accountable for when they lie to us. Now, let us take a look at what more concrete steps or strategies we can take to continue this fight in full swing. Stay tuned, the meat of today’s article is just ahead.

The Time For More

In the face of all we have discussed so far, the newly industrializing nations are facing a lot of dilemmas. For a long time, it was the general consensus that economic growth necessitates exploitation of the environment and its resources, consequently leading to degradation of the planet. Climate change and global warming were thus, unfortunate but ultimately inevitable consequences of industrialization and development. This consensus has more or less been turned over its head at this point. It is clear to everyone that it is possible and in fact, desirable, to trod on a path of development that is undertaken sustainably rather than irresponsibly. So how do we go about it, and what does this new path entail? What are the major ways in which a country like ours, with a growing middle class and consequently growing demand, can understand what it means to be an environmentally conscious society?

The answers to these questions are not simple. The adoption of renewable energy sources like solar power, for example, is a critical strategy for reducing carbon emissions and promoting sustainable business practices. In fact, India has made significant strides in solar energy adoption, with installed solar capacity reaching 84.27 GW as of May 2024. This growth represents a dramatic increase over the past decade, driven by government policies and incentives designed to promote solar power. Solar parks, rooftop solar installations, and off-grid solar systems have become increasingly common among businesses seeking to reduce their carbon footprints.?

But simply hyper-focusing on one aspect does not bring forth a wholesome solution. Wind energy also plays a vital role in India’s renewable energy landscape, with an installed capacity of 46.42 GW. The country aims to expand its offshore wind capabilities, targeting 30 GW by 2030. Businesses, particularly those with high energy demands, are investing in wind power to ensure a stable and sustainable energy supply. Biomass, small hydro, and waste-to-energy projects also contribute additional renewable capacity, helping diversify the energy mix. These sources combined with solar and wind energy had brought India’s total installed renewable energy capacity to approximately 193.57 GW as of May 2024. All of these are equally important parts of the Indian climate action story. There needs to be an equitable distribution of focus and investment evenly spread across all these sectors, not putting all our cards in one basket, as it were. The rapid adoption of renewable energy sources in India does highlight the country's, as well as the various businesses’, commitment to a sustainable energy future. However, we also need to be cutting back and optimizing existing sources of energy in addition to developing new ones.

Improving energy efficiency in business operations is crucial for reducing greenhouse gas emissions, cutting costs, and enhancing competitiveness. India's energy demand is growing rapidly, driven by economic development and population growth. Improving energy efficiency helps to manage this demand sustainably. By reducing the overall energy consumption, businesses can alleviate pressure on the energy supply system, enhance energy security, and reduce dependency on fossil fuels. This is particularly important for developing countries, which are often striving to balance their energy needs with environmental sustainability. Following we have several measures already in place to stabilize energy emissions, as well as suggestions on how to do so further:-

• Perform, Achieve, and Trade (PAT) Scheme: The PAT scheme, launched by the Bureau of Energy Efficiency (BEE), aims to enhance the cost-effectiveness of energy savings in the most energy-intensive industries of the country. This program sets mandatory energy efficiency targets and allows companies to trade excess energy savings as Energy Saving Certificates (ESCerts). The scheme has been implemented in sectors like cement, iron and steel, and thermal power plants, leading to significant energy savings and emissions reductions. A significant statistic is the saving of approximately 17 million tonnes of oil equivalent (MTOE), reducing CO2 emissions by about 87 million tonnes annually. In case you are wondering, that is equivalent to the total CO2 emissions of a country like Bangladesh.
• Standards and Labeling (S&L) Program: The S&L Program mandates energy performance labels on key energy-consuming appliances and equipment. By informing consumers about the energy efficiency of products, the program promotes the use of energy-efficient appliances, leading to substantial energy savings. As of March 2021, over 15,000 models have been awarded star labels, resulting in estimated electricity savings of 56 billion units, worth over ?30,000 crore during 2020-21.
• Energy Efficiency in Buildings: Implementing energy-efficient building designs and retrofitting existing buildings with energy-saving technologies can significantly reduce energy consumption. Measures include the use of LED lighting, energy-efficient HVAC systems, and smart building management systems. The adoption of these practices has been growing, particularly in commercial and office buildings
• Industrial Upgrades: Upgrading industrial processes and machinery to more energy-efficient technologies can lead to substantial energy and cost savings. For instance, using high-efficiency motors, advanced process controls, and waste heat recovery systems in manufacturing plants can reduce energy consumption significantly. The industrial sector has been a major contributor to energy efficiency improvements in India.

Reducing carbon footprint is another critical component of combating climate change and achieving sustainability goals. While industries, households, and businesses can be incentivized to reduce emissions using the above measures, reducing overall carbon footprint is another matter altogether. Here, the government and civic administration steps in, painting a picture of how sustainable development and the journey towards net-zero carbon footprint can be kickstarted, particularly through green buildings and sustainable transportation.

Green Buildings:

• Sustainable Construction Practices: The construction industry is a significant contributor to global carbon emissions, accounting for approximately 30-50% of total emissions. Implementing green construction practices can substantially reduce these emissions. This includes using sustainable building materials, energy-efficient designs, and integrating renewable energy sources like solar and wind into building infrastructure.
• Building-Integrated Photovoltaics (BIPV): BIPV systems integrate solar panels into the building structure, such as rooftops and facades. These systems help reduce operating costs and carbon emissions by generating renewable energy on-site. For instance, photovoltaic systems on rooftops could save an estimated $202 billion in costs while significantly improving environmental performance.

Sustainable Transportation:

• Electric Vehicles (EVs): Transitioning to electric vehicles is a crucial step in reducing emissions from the transportation sector, which accounts for a significant portion of global greenhouse gas emissions. India aims to have 30% of its vehicle fleet electric by 2030, which can substantially cut emissions from road transport.
• Public Transportation Enhancements: Improving public transportation systems and encouraging their use can reduce the number of private vehicles on the road, thus lowering overall emissions. Investments in metro systems, electric buses, and other sustainable transport options are vital.
• Non-Motorized Transport: Promoting walking and cycling by developing dedicated pathways and ensuring safety can further reduce transportation emissions. These modes of transport not only cut emissions but also promote healthier lifestyles, improving overall health goals of the country.

If all these measures are put in place and carried out in a comprehensive fashion, there is bound to be a structural shift in the economy itself. The decarbonization of India's power sector by transitioning from coal to renewables could reduce emissions by 60% by 2050, while reducing our dependence on unsustainable energy sources. This transition is even expected to lower the cost of power supply from INR 6.15 per kWh in 2020 to INR 5.25 per kWh by 2050. The integration of photovoltaic systems in buildings can save billions in energy costs while enhancing environmental performance, while transitioning to electric vehicles and improving public transportation will greatly reduce fuel costs and maintenance expenses, contributing to overall economic savings. Additionally, it will create countless new job opportunities in the renewable energy and EV manufacturing sectors.

Thus, the myth that sustainable action is incompatible with economic growth is a complete farce; we will keep moving, albeit in a different direction, a healthier direction.

Rewardwise Steps In

So again, how do we figure into this story? At what point does Rewardwise come in, and what role do we play? To see it from one perspective, we have always been here. Our mission statement being to help small businesses and local players build relationships with their customers, that in itself means ensuring their business model (and by extension, customer interactions) is in line with the broader sustainability vision of the nation, the government, the public, and other larger businesses. As both small and big companies increasingly recognize the importance of action on climate change, we offer a suite of programs and incentives to support these efforts. We will continually keep an eye on the changing business landscape and evolve our product efforts to help small businesses affected by climate change related events.?

• Rewardwise can predict demand depending on impending climate change related events to help plan manufacturing and supply chain.
• Rewardwise can assist in the supply chain optimization and low-cost advertisements.
• Rewardwise can consult with at-risk businesses to determine how to make them climate resilient.
• Rewardwise can create an ephemeral market to address emerging market needs right after the disaster.
• Rewardwise can provide financial products that are needed to serve the masses. For example, we can provide escrow accounts for NGOs working on the ground, connect them to donors, and transperantly convey the transactions out of the escrow account to the donors on a daily basis.

The Climate Story Continues

Addressing climate change is not just a matter of environmental responsibility but an urgent necessity for the survival and prosperity of Indian businesses. The evidence is clear: extreme weather events, resource shortages, and shifting market demands are already having profound impacts on the economic landscape. To safeguard their futures and seize emerging opportunities, businesses must take immediate and decisive action toward sustainability.

The consequences of inaction are stark. From devastating floods and heatwaves to prolonged droughts, the effects of climate change are already disrupting supply chains, reducing agricultural yields, and causing significant financial losses across various sectors. At the risk of overstating the facts, let us reassert the RBI’s estimation that up to 4.5% of India's GDP could be at risk by 2030 due to lost labour hours from extreme heat and humidity, translating to billions of dollars in potential economic losses.

Businesses especially have a critical role to play here, by mitigating climate change as best they can and promoting sustainability. By adopting sustainable practices, companies can not only reduce their environmental impact but also improve their financial performance and brand reputation. Some of the key steps we discussed today that businesses can take (and some of which they are already taking) include adopting solar, wind, and other renewable energy sources to reduce dependency on fossil fuels and lower operational costs, implementing energy-efficient processes to cut consumption, designing and retrofitting buildings to be energy-efficient and incorporating sustainable materials, and so on. The public-private contract between the government and the businesses need to be especially strong in this regard, as they need to hold each other accountable for climate action. The companies especially must engage in CSR activities, investing in community development and environmental conservation projects to build resilience and foster goodwill. The government for its part, may incentivize and facilitate a transition to electric vehicles and support the development of EV infrastructure. If things go well, perhaps this will even kickstart the establishment of an altogether different sort of economy, one that is more sustainable and healthier, and actually caters to the needs of both the people and the environment.

The time to act is now. By embracing sustainable practices and leveraging the support of initiatives like Rewardwise, Indian businesses can lead the way in combating climate change, securing their economic future, and contributing to a healthier planet. The transition to a sustainable economy is not just a challenge but an opportunity for growth, innovation, and long-term resilience. The only question is: are we up for it?