India Inc decides a â€˜Corporate Strategyâ€™ for climate change at the CEO Forum hosted by TERIâ€™s Business Council for Sustainable Development4 February 2009
While climate change will become increasingly central to the policy preoccupations of the government, the corporate sector in order to participate in the eight missions under India's National Action Plan on Climate Change (NAPCC) will have to move beyond treating climate change as a corporate social responsibility issue and treat it as a key environmental condition shaping corporate strategy. This was clearly the corporate statement at the World CEO Forum, organised by TERI Business Council for Sustainable development (BCSD India), a partner of the WBCSD (World Business Council for Sustainable Development), Geneva and a member of its regional network.
Addressing top corporate CEO's from across the globe, Dr R K Pachauri, President, TERI-BCSD India & Director General, TERI said, "With an economy closely linked to its natural resource base and climate sensitive sectors, India is poised with the challenges of poverty radication, sustaining the rapid economic growth and dealing with the global threat of climate change. India has to chart its own course of sustainable economic development and businesses have a role in helping find way to prosperity in a carbon constrained world. This year's CEO Forum theme will evaluate challenges, identify solutions and analyse ways to fast track it. While looking at the Government of India's NAPCC, we thought that the corporate should come up with a strategy in line with the national action."
In his inaugural address Chief Guest Sh. Jairam Ramesh, Minister of State for Commerce and Industry and Minister of State for Power, Government of India stresses that technological expertise is what Indian Inc needs today "The drastic reduction in carbon emissions that is needed cannot be done with existing technologies. Hence, the most important imperative is to recognise that technological change is essential. India and France has recently signed a historical agreement. We are embarking on major initiatives with TERI and TATA Power to extract and use CO2 for propagation of micro- algae. India can be a world leader in providing innovative solutions to the world to manage climate change."
Recognising the urgency to generate awareness and build consensus on the climate change agenda in India, TERI-BCSD (Business Council for Sustainable Development) India had organised a corporate consultation, with the 84 member companies of the Business Council, on the NAPCC titled: "Growth and Prosperity in a Carbon Constrained World" to highlight business role towards the eight missions. The paper attempts to provide an overview of the eight missions as outlined in NAPCC and discuss the business opportunities flowing from them. It describes options; potentials, costs and co-benefits involved in these missions and highlight the need for business sector actions to integrate adaptation and mitigation options in their corporate planning. The popular version of the "White aper" was tabled today.
The Guest of Honour, HE Ms Anne Marie Idrac, Minister of State for Foreign Trade, Ministry of Foreign Trade, Government of France said, "It is important to have a good association between ministerial groups- think tanks and companies present in the World CEO Forum to decide its actions for combating climate change. It is crucial for governments to have a common action between public- private sectors for sustainable development. I strongly feel that the alliance between SMEs (Small and Medium Enterprises) and big companies is essential as the SME sector is the best technology provider at local levels."
At the forum it was deliberated that the prognosis is clear enough to justify immediate action. The Fourth Assessment Report of the IPCC (Intergovernmental Panel on Climate Change), chaired by Dr R Pachauri, Director-General TERI and Chairman IPCC, reflects a scientific consensus of some 1250 scientists, whose work was peer reviewed by another 2500. The message is clear. The earth is warming at an unprecedented rate and this is happening because of human missions of greenhouse gases (GHGs).
Mr. Nitin Desai, Chairman, TERI-BCSD India & Former Under Secretary General of the United Nations in his address said, "Private and public enterprises will have to move beyond this opportunistic use of the Kyoto Protocol's flexibility mechanism and beyond feel-good CSR projects. First, they must test their entire growth strategy against the emerging reality of carbon constraining policy regimes and the social compulsion to restrict GHG emissions. They may not face this constraint now. But they will in the lifetime of the plants and facilities and market presence they are establishing. Second, enterprises dependent on energy, water, biotic products or those located on a coast or near a river or water body will face environmental and economic onditions that are radically different from what they have faced in the past. They must re-examine all historical data they use for designing their physical facilities in the light of potential changes in temperature, hydrology, sea level rise, extreme climate events, and consequential changes in biotic resources, habitat, and health."
Present on the occasion were prominent figures from the corporate world like Dr J J Irani Co-Chairman, TERI-BCSD India & Director of the Tata Group of Companies, Ms Naina Lal Kidwai, Group General Manager and Country Head, HSBC India, Mr Arun Seth, Chairman, BT (India) Pvt Ltd, Ms Anne Lauvergeon, Chief Executive Officer, AREVA, Prof Jeffrey D Sachs, Director - Earth Institute & Special Adviser to the Secretary General of the United Nations and Mr Yvo de Boer, Executive Secretary, UNFCCC among others.
During the forum it was highlighted that India and China are the major players in the CDM space. India accounted for 25% of the 196.78 million CERs (certified emission reductions) issued and China, for 36.4%. The CDM projects span a wide range, from large projects for destroying HFC23 (an exceptionally potent GHG) to small-scale hydel schemes. With a few exceptions, they are add-ons to normal corporate growth strategies. They are useful in that they have generated a carbon consciousness in the corporate sector and helped to establish the market infrastructure of consultants, monitoring and verifying entities, rating organizations, venture funds, market operators, and so on. This is welcome as this market infrastructure will be very necessary in any future regime, where carbon use has a cost attached to it directly or indirectly.
Finally it was deliberated that all corporates need to address the issue of climate change in the contect of impacts and opportunities. Beyond this bottom line compulsion, the corporate sector must accept a social responsibility to strengthen the scientific effort to understand the physical and economic forces at work and to raise public awareness and promote social action to respond to the greatest existential threat that we face at present.
The CEO forum precedes the Delhi Sustainable Development Summit 2009, organised by The Energy and Resources Institute (TERI). Over 100 CEO's from organizations like HSBC India , AREVA, Google.org, Vaisala OYJ, Johnson Controls, Tata Chemicals, ACC Ltd, Philips, Deutsche Bank, Dassault Systems, BASF India Ltd, BT (India) Pvt Ltd, GE Infrastructure, Moser Baer India Ltd., participated in the forum.