Greenhouse gas emissions constitute a significant portion of a business’s total carbon footprint. Recognising these emissions as a part of one’s own carbon footprint could lead to large-scale change. There is an emerging trend among businesses to set internal carbon prices or apply internal carbon taxes.
According to the report Reducing Risks, Addressing Climate Change through Internal Carbon Pricing, corporates see it as a way to prepare for current and future policies and regulations, to reduce other climate-related risks, to respond to investor concerns, and to encourage innovation. The report argues that even though adopting carbon pricing is on an upswing in India, Indian businesses report the need for support on implementing such programmes in the Indian context. For instance, there is a requirement for establishing boundary conditions with respect to the utilisation of the revenue generated by carbon pricing.
Industry innovations to reduce GHG emissions
By developing a dosing system, IOCL (Indian Oil Corporation Ltd) succeeded in transporting its aviation turbine fuel through pipelines, instead of tank trucks. This innovation helped save the company about 48 kl of fuel that was used while transporting in tank trucks. Under MarVal, Marico’s Value Enhancement programme, the company reduces its GHG (greenhouse gas) emissions through processes such as warehouse network optimisation, logistics cost optimisation through price discoveries and vehicle utilisation improvement.
To reduce their indirect carbon footprint, Page Industries is implementing multiple measures such as monitoring of fuel consumption in trucks, convincing transporters to retire vehicles that are older than 10 years, strategically improving transportation routes and tracking fleet status and utilisation in real-time.
Emissions emerging from the supply chain
Estimates state that for consumer goods makers and other manufacturers, between 40% and 60% of the business’ carbon footprint resides in its upstream supply chain. Although businesses may work with suppliers on their carbon footprint, they do not necessarily recognise emissions emerging from their supply chain as part of their own. The most common form of support observed were instating supplier code of conduct and conducting training for the suppliers.
At Mahindra & Mahindra, Supplier Sustainability Onsite assessment are conducted by CDMM (component development and materials management) & SCM (supply chain management). The assessments cover safety, environment, human rights, and compliance. In the year 2019-20, 98 such assessments were done. Going ahead, suppliers were encouraged to replace conventional lighting by energy efficient LED lighting and solar plant in order to reduce the overall carbon footprint. However, examples of extensive support programmes, such as Mahindra and Mahindra’s supplier sustainability assessments and energy audits are few.
Jubilant Life Sciences communicates its green sustainable supply chain policy with its partners and endeavours to categorically communicate its importance. In addition to this, it conducts yearly audits with its critical suppliers and external manufacturers. This audit entails detailed questions to understand the suppliers’ energy management practices. Jubilant also conducts supplier meets in which suppliers interact with each other and learn about how they can be more sustainable in their operations. Through the Jain Good Agricultural Practices programme, Jain Irrigation works with its suppliers, who are usually farmers, with rigorous training sessions to help optimise energy, water and fertiliser use in their farming practices, thereby improving their yield multifold.
Large-scale deforestation as part of CSR
Another intervention is undertaking large-scale deforestation measures, often as part of their CSR efforts. For instance, Tata Coffee follows a practice of sustainable plantation management, wherein they maintain over 180 hectares of land as a conservation area within their plantations to maintain ecological balance. Similarly, Piramal Enterprises conducts regular tree plantation drives at all their sites.
Innovations for cleaner production
Given the carbon-intensive nature of the oil and gas industry, using R&D to innovate for cleaner products and production processes is a predominant shared value approach among the businesses. Pernod Ricard India conducts regular life-cycle assessment of its product line. By working alongside the different stakeholders involved in the process, PRI constantly strives to optimise the production process and monitors closely relevant indicators such as “percentage reduction in packaging” or “percentage increase in recycled glass and plastic” to track progress.
IndianOil refineries are undertaking major technology upgrades to deliver BS-VI fuel, as per the world’s cleanest standards. The sulphur content in BS standard fuel is 10 parts per million (PPM) against 50 PPM in presently available BS-IV fuel, which significantly reduces particulate and SOx emission.
Chemical company BASF’s novel diesel oxidation catalyst is used on-road in all major markets and thus provides a significant benefit for air quality and fuel economy. The catalyst is designed to meet emission control regulations across the world, including India’s BSVI regulations. The technology not only reduces precious metal consumption by at least 25%, but also significantly broadens the temperature region to implement removal of soot.
Collaborations to reduce carbon emissions
A significant area of collaboration in the space of emission and energy management is adoption of international frameworks and disclosure projects. Disclosure projects help businesses identify avenues of improvement and set up objective pathways to achieve their targets. In recent years, there has been a marked increase in the awareness and adoption of global frameworks for emission control in India. While frameworks like Science-based Target Initiatives (SBTi) help companies in setting their targets, frameworks like the Carbon Disclosure Project (CDP) helps them in reporting and managing their interventions systematically.
A small number, businesses can also be seen relying on fewer mainstay forms of renewable energy compared to solar and wind in the form of biomass energy and energy derived from process waste. For example, BASF uses the “Biomass Balance Approach,” which ensures the use of only renewable feedstock in the chemical analysis without compromising resource efficiency and systems. Similarly, Reliance Industries redirects dried sludge from its emission treatment plant and uses it as a fuel for the captive power plants, reducing its use of coal while generating energy.