According to The World Wildlife Fund, companies that adopt sustainable practices cut down energy costs by an average of 10%
In a world that is facing unprecedented environmental challenges, the need to transition towards a sustainable future has never been more pressing. Realising this, the union government, in its budget this year, set 'Green Growth' as one of its ‘Saptarshis’ or the seven priorities to achieve progress. It basically calls for reviving the environment as a key driver of economic growth if India has to live up to its promise of becoming a global green economy.
Over the last few years, India’s strategic emphasis on green growth has led to a slew of measures and policy interventions aimed at stimulating demand and strengthening the supply chain for green products. The government's recent extension of industrial licenses from three to 15 years further showcases its commitment to promoting the ease of conducting business, offering stability and predictability to industries seeking to align with green objectives.
Yet, as the nation endeavours to align itself with a stringent regulatory framework and compliance measures, challenges loom. While implementing green compliances is crucial, they often pose complex challenges. Financial resources, weaker implementation infrastructure, dynamic political environment, etc., are a few challenges that India is facing. Nonetheless, it is important to understand that following these measures, even though demanding, is crucial for attracting an environmentally-conscious cohort of consumers essential for sustainable growth.
While the government is looking to enhance India’s industrial kitty, for a green industrial policy to work, both market demand and supply must be stimulated.
The benefits of green growth are not just theoretical optics; they manifest in the bottom lines. According to The World Wildlife Fund, companies that adopt sustainable practices cut down energy costs by an average of 10%. Similarly, research conducted by the Environmental Protection Agency says water-saving initiatives lead to an average water bill reduction of 30%.
While larger enterprises seem to have the bandwidth to make the switch, keeping long-term profits in consideration, the scenario is distinct for small and medium-sized enterprises (SMEs), which constitute a formidable 40% of industrial production. These entities account for nearly 70% of total industrial pollution. The arduous nature of compliance, coupled with financial implications, raises several challenges. The post-pandemic era has magnified these concerns, making the cost of compliance a defining issue for even bigger companies. These have also translated to financial stress, reduced productivity, and weakened competitiveness.
Mitigating these challenges requires a multi-faceted approach. Streamlining the regulatory milieu and extending support to businesses in understanding and implementing regulations are key steps. However, the pièce de résistance lies in offering fiscal incentives to compliant entities. Measures such as land-related support and electricity duty exemptions can embolden small and medium industrial producers to transition to greener practices in sectors like cement, iron and steel. Adjusting subsidies based on the level of transition and ensuring that smaller firms moving towards sustainable methods receive greater support is equally important.
Unless policies are backed by adequate and essential regulatory and institutional bodies, action plans aimed at transitioning the Indian market and industries to greener versions are bound to fail. It is, therefore, important to create appropriate legal frameworks to actualise their potential.
The trajectory set by the 2023 Union Budget is predicated upon the synergy between policy interventions and an enabling environment. Organisations that truly comply with new norms and order serve as a link connecting intentions with actions. It is crucial to nurture such organisations to enhance both efficiency and accessibility. While India progresses towards a green economy, it is important to recognise that real change goes beyond economic numbers – it involves creating a lasting, sustainable legacy for future generations
(Rajesh C is the Chief Marketing Officer, Aparajitha Corporate Services.)