On August 26th, 2022, the government of India submitted a 3-page document to the United Nations Framework Convention on Climate Change (UNFCCC) that briefly outlined India’s updated climate pledge under the provisions of the 2015 Paris agreement. The pledge comes in advance of the 2022 United Nations Climate Change Conference (COP 27) that is scheduled to be held in Egypt this November. It is a meaningful evolution of the previous pledge made by the Indian government and has important implications for the future of the Indian corporate sustainability ecosystem.
Here are the main takeaways from the updated pledge:
1. Individual Action: Focus on the ‘Lifestyle for Environment’ (LIFE) approach that emphasises individual responsibility via the values of conservation and moderation.
2. Green Policy: Adopt climate-friendly, clean policy initiatives to curb
emissions growth.
3. Green Economy: Reduce the emissions intensity of the Indian GDP by 45 percent by 2030 (from 2005 baseline levels).
4. Green Energy: Reach at least a 50 percent cumulative installed electric power capacity from non-fossil-fuel-based energy sources by 2030
5. Reforestation and Afforestation: Generate a carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.
6. Climate Risk Mitigation: Invest in adaptation and mitigation strategies for sectors that are vulnerable to climate change (agriculture, water resources, coastal regions, disaster management, etc.)
7. Mobilisation of Resources: Invest domestic and international resources towards climate change solutions
8. Development of domestic technical capacity: Diffuse cutting-edge climate technology in India and engage in joint collaborative R&D for climate solutions.
With a more detailed action plan still to follow, there are still a number of unanswered questions about the stated pledge. However, the document has a number of important implications for the corporate sustainability environment in India over the coming decades. Some of these are listed below:
1. The focus on LIFE will likely result in the development and dissemination of new emissions reduction solutions that are targeted towards individual consumers. This will include solutions around climate education, personal footprint estimation, habit tracking, etc.
2. As consumers start to grow cognizant of their own footprints and attempt to take steps to reduce it, they will naturally look for sustainable consumer products that offer quantifiable carbon benefits. This is likely to lead to the increased demand, development and proliferation of consumer goods and services that are able to quantifiably establish their environmental bonafides.
3. In addition to consumer pressure, there will be an increased expectation on corporations to make climate-friendly business decisions due to new governmental regulations (e.g., Business Responsibility and Sustainability Reporting requirements) and expectations from other business partners in their supply chain.
4. The need to measure carbon intensities throughout the economy will result in the need for improved operational data streams and transparent accounting methods across every sector of the economy. While these practices will likely begin with large companies, the need to estimate scope 3 emissions will eventually result in these practices percolating down to smaller entities and becoming a universal practice.
5. The large investments in decarbonisation, green energy and carbon removal will lead to significant indigenous innovations in this space, resulting in a thriving ecosystem of affordable technological solutions for corporations to adopt.
6. The focus on natural carbon sinks (trees) will lead to technological innovations focused on the management and monitoring of these resources
7. The focus on vulnerable populations will result in more private and public sector solutions for these historically underserved communities
8. The investments towards climate mitigation and adaptation will lead to the creation of new verticals in the economy and unlock next-generation indigenous technological solutions that will help Indian corporations limit both their physical and transition risk.
A common theme across these anticipated effects is the need for a new generation of climate decision-making tools, including specialised solutions for:
1. Conscious consumers interested in measuring their personal footprints, contributing to similar-minded communities and making sustainable decisions that align with their personal climate goals
2. Consumer-facing companies that are interested in quantifying the relative environmental benefits of their products (via life-cycle assessments and other techniques)
3. Business-to-business companies that need to quantify the embodied carbon
in their products in order to satisfy their upstream supplier requests
4. Corporations looking for credible carbon accounting, reduction, reporting and benchmarking tools to meet their sustainability goals, unlock green capital, boost consumer confidence and future-proof their business models.
While the updated climate pledge is an early step along what promises to be a long journey, it sets the stage for some exciting developments in the corporate sustainability space. We are excited to follow the evolution of these pledges and contribute to the vibrant ecosystem of climate solutions it is likely to foster.
StepChange is a climate-tech startup that helps companies and brands accelerate their sustainability journey and transition to NetZero. Learn how we may be able to help your organisation through our website or simply follow us on LinkedIn to stay tuned!
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