Readiness of Indian Export Sector and Strategy to deal with Climate Change Policy

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Globally there has been an acceptance ( albeit of varying degrees) that human …

Globally there has been an acceptance ( albeit of varying degrees) that human
induced climate change needs to be addressed. In the absence of a global
agreement which is not yet in sight, various countries, regions, and private
companies have taken commitments and are at different levels of implementing
them. Europe has been the leader from a policy point of view followed by some other
countries and states in the USA. There have been unilateral policy initiatives by
private players like Walmart, GE etc. where they are asking for disclosures on
Carbon and other environmental parameters from their suppliers.
The Indian scenario has been one of taking small steps to address climate change mitigation and there are no requirements to report or improve on carbon footprint on
organizations. The Indian export sector which is dependent largely on the western
markets has grown more than 25% annually and is thus the first to be affected by
any climate change related policy initiative by the governments or buyer companies
in the west.
This dissertation studies the current policy initiatives from publicly available data both
in the west and India. As part of the research a survey was conducted using a
questionnaire to assess levels of Awareness, Action taken, perception of Risk and
Opportunity and Market Behaviour. There is a detailed analysis of the data collected
in the survey which points to the fact that a lot needs to be done to remain
competitive in a carbon constrained world order. Based on the analysis there is a
strategy proposed for the Indian export sector to retain their competitive advantage
with regards to the upcoming policy initiatives around climate change.

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  • 1. The University of Edinburgh School of Geosciences and School of Business & EconomicsTitle: Readiness of Indian Export Sector and Strategy to deal with Climate Change Policy By: S 0897951 Dissertation Presented for the Degree of MSc in Carbon Management Supervisor: Prof Stuart Sayer The University of Edinburgh (2010) Word count:
  • 2. AcknowledgementMy Family, specially my sons Krish and Parth have been very patient with me duringmy study period and am really thankful to them.I’m much indebted to my dissertation supervisor, Professor Stuart Sayer for hisinsightful advise, support, freedom and encouragement which was much neededsince I was based in India when doing the research.I am very grateful for the support that I got from Anish, Mahesh and Vikrant fromNMIMS, India who helped me design, review and execute the survey questionnaire.They were instrumental in making this research report possible and it would not bepossible to complete this in the three month time frame.I would like to thank the various company representatives all of whom I can’t nameas there are too many, who took time out of their busy schedules to answer thequestionnaire.This dissertation has presented many challenges as hardly any published literaturewas available and I had some useful help from Frances Way and Nigel Topping fromcarbon disclosure project.I wish to thank all the people who commented on my pilot questionnaire and thosewho encouraged me to take up this challenge of primary research which at timeslooked impossible given the time constraint.
  • 3. AbstractGlobally there has been an acceptance ( albeit of varying degrees) that humaninduced climate change needs to be addressed. In the absence of a globalagreement which is not yet in sight, various countries, regions, and privatecompanies have taken commitments and are at different levels of implementingthem. Europe has been the leader from a policy point of view followed by some othercountries and states in the USA. There have been unilateral policy initiatives byprivate players like Walmart, GE etc. where they are asking for disclosures onCarbon and other environmental parameters from their suppliers.The Indian scenario has been one of taking small steps to address climate changemitigation and there are no requirements to report or improve on carbon footprint onorganizations. The Indian export sector which is dependent largely on the westernmarkets has grown more than 25% annually and is thus the first to be affected byany climate change related policy initiative by the governments or buyer companiesin the west.This dissertation studies the current policy initiatives from publicly available data bothin the west and India. As part of the research a survey was conducted using aquestionnaire to assess levels of Awareness, Action taken, perception of Risk andOpportunity and Market Behaviour. There is a detailed analysis of the data collectedin the survey which points to the fact that a lot needs to be done to remaincompetitive in a carbon constrained world order. Based on the analysis there is astrategy proposed for the Indian export sector to retain their competitive advantagewith regards to the upcoming policy initiatives around climate change.About the AuthorThe Author is a Chemical Engineer and has 15 years of experience in Supply Chain,Operations, Automation and Business Consulting. He is widely travelled havingworked in more than 12 countries. His areas of competence include Environmentalsolutions, IT systems, Clean Manufacturing solutions and Sustainability advisory. Heis a avid hiker and reader.
  • 4. TABLE OF CONTENTSAcknowledgementAbstractChapter 11. IntroductionChapter 22. Literature Review 2.1 Climate change policies in US and Europe 2.1.1 Climate change policies formulated in US 2.1.2 Climate change policies formulated in EU 2.3 Initiatives taken by the Private Players 2.3.1 Carbon Disclosure Project 2.3.2 Carbon management a part of the corporate strategy 2.4 Multilateral Initiatives 2.4.1 World Business Council for Sustainable Development 2.4.2 Global Reporting Initiative 2.4.3 United Nations Global Compact 2.4.4 Principles for Responsible Investment 2.4.5 Equator Principles 2.4.6 Some other measurement tools 2.4.6.1 Dow Jones Sustainability Index 2.4.6.2 FTSE4Good 2.5 Development of Indian Industry 2.5.1 Key Industries 2.5.2 Energy efficiency measures 2.5.3 Policies to Promote Energy efficiency measures: 2.5.4 Risks and opportunities
  • 5. 2.6 India’s Carbon Footprint 2.7 Climate Change Policy of Government of India 2.8 Indian Businesses and Climate Change 2.9 Indian Business Bodies on Climate Change 2.9.1 Confederation of Indian Industry (CII) 2.9.2 Federation of Indian Chambers of Commerce & Industry (FICCI) 2.9.3 National Association of Software and Services Companies (NASSCOM) 2.10 Policy Impact on Business Competitiveness 2.10.1 Business Competitiveness 2.10.2 Measuring Low Carbon Competitiveness 2.10.3 Policy Impact on Business CompetitivenessChapter 33. Methodology of the Study 3.1 Details of the Approach: 3.2 Methodology of Analysis: 3.3 Limitations of the Approach:Chapter 44. Analysis 4.1 Summary of Responses 4.2 Awareness of sector companies regarding climate change 4.3 Actions taken by sector companies regarding climate change and sustainability 4.4 Risk or Opportunity perceived by sector companies regarding climate change 4.5 Market Behaviour regarding climate change and sustainability 4.6 Correlations 4.6.1 Correlation on the basis of positive feedback 4.6.2 Correlation on the basis of negative feedback 4.7 Readiness of Sector Companies 4.8 ConclusionChapter 55. Strategy Development 5.1 StrategyChapter 66. ConclusionAnnexure A1: Old Survey Questionnaire
  • 6. Annexure A2: New Survey QuestionnaireAnnexure A3: Responses to the SurveyReferences List of FiguresFigure 1: Proposed emissions reduction under Waxman-Markey bill....................... 13Figure 2: EU greenhouse gas Emissions, 1990-2020, and the EU ETS component 15Figure 3: Development of Indian Industry................................................................. 22Figure 4: India GHG Emission by Sector and Climate change trapezium.............. 26 sFigure 5: CO2 Emissions per unit of GDP................................................................ 28Figure 6: India - CO2 Emissions by sectors ............................................................. 29Figure 7: Expenditure on Adaption Programme in India........................................... 30Figure 8: European and East Asian countries - low carbon competitiveness index . 36Figure 9: Share of Top 5 Commodity group in India’s Export 2009 - 10................... 41Figure 10: Q1- Effect of Climate change .................................................................. 46Figure 11: Q2 - Measures taken by Company.......................................................... 46Figure 12: Q4 - Negative Feedback to Q2................................................................ 47Figure 13: Q5 – Awareness of Policies .................................................................... 47Figure 14: Q7 - Major Challenges ............................................................................ 48Figure 15: Q8 - Impact on Competitiveness ............................................................. 49Figure 16: Q9 – Stakeholders’ reaction .................................................................... 50Figure 17: Q10 - Negative Feedback to Q9.............................................................. 50
  • 7. Figure 18: Q11 - Awareness about Border Tax Adjustment ..................................... 51Figure 19: Q12 - Positive Feedback to Q11 ............................................................. 51Figure 20: Q13 - Awareness of CDP and GRI.......................................................... 52Figure 21: Q14 - Sustainability ................................................................................. 52Figure 22: Q15 - Reporting of Carbon Footprint....................................................... 53Figure 23: Q16 - StakeholdersReaction ................................................................. 53Figure 24: Q17 - Negative Feedback to Q16............................................................ 54Figure 25: Q18 - Sustainability ................................................................................. 54Figure 26: Awareness .............................................................................................. 55Figure 27: Action ...................................................................................................... 56Figure 28: Risk / Opportunity.................................................................................... 58Figure 29: Market Behaviour .................................................................................... 59Figure 30: Strategy................................................................................................... 76 List of TablesTable 1: India Export 2009-10................................................................................ 24 sTable 2: Q3 - Positive Feedback to Q2 .................................................................... 46Table 3: Q6 - Positive Feedback to Q5 .................................................................... 48Table 4: Q8 - Positive Feedback to Q7 .................................................................... 49Table 5: Awareness.................................................................................................. 55Table 6: Action ......................................................................................................... 56Table 7: Risk or Opportunity..................................................................................... 57Table 8: Market Behaviour ....................................................................................... 58Table 9: Correlation on the basis of Positive Feedback ........................................... 59Table 10: Correlations on the basis of Negative feedback ....................................... 60
  • 8. Table 11: Readiness and Competitiveness .............................................................. 62Chapter 1 1. IntroductionClimate change is emerging as the foremost challenge to the human race (Clinton2007; Stern 2007). To over come this there have been various actions like the KyotoProtocol, the EU ETS regime, UK CRC, and other private initiatives like CDP,Walmart and Tesco restructuring their procurement policy to include carbon as a keycomponent. In the absence of a global deal there is increased talk of discouragingimport of carbon from countries like china and India. There is high likelihood of somemeasures in the west to control the embodied carbon in imported goods in the future,which is partly due to climate change concerns and partly due to local politicalpressure on jobs in the west. Similar fears have been raised in Indian businesspolicy circles at various forums that low income countries like India will face greaterdifficulties exporting in a climate constrained world where carbon emissions need tobe measured and certification obtained to enable participation in trade. There areinitiatives on the table like international reserve allowance, carbon labelling , borderadjustment tax being discussed in the west on making climate change relateddisclosures and non tariff penalties as a prerequisite for doing business withexporting companies. European Parliament, for example, has recently passeda resolution that calls for “the introduction of WTO compatible common standardsand labelling schemes regarding the GHG implications of different products,including at the production and transport stages”; “a procedure to assess and labelthese ecological footprints and to develop software in order to enable businesses tocalculate the quantity of GHG emitted from every production process”; and “thedevelopment of a scheme based on sound life-cycle data which includes finishedgoods, such as cars and electronic equipment” (European Parliament 2007). !" # $ %# & ( )* + , , + - ./ 0* 1# (" . #
  • 9. India has a very low carbon foot print since it is yet to reach the consumption levelsof the developed world but there is a urgent need for the Indian government to put inplace a carbon constraining system in place for the Indian businesses.The first sector which will directly get affected due to any change in the policy inEurope or USA and India is the Indian export sector, since the exposure to thosemarkets is very high. Since primary data is not available a Survey questionnaireseems to be the best idea to get information on the readiness of the companies onparameters like Awareness, Action taken, perception of Risks and Opportunities andby doing some statistical analysis find some co-relation between these parameters tobetter understand the scenario. Based on the data analysis a strategy approach tothe industry is needed which gives a starting point to begin taking some action toremain competitive in future.PurposeThe primary aim of this thesis is to study the policy initiatives in EU, USA and India,then by survey find if the Indian exporting companies are ready to remaincompetitive with regards to Climate Change policies on constraining carbon. After adetailed analysis of the survey results draw a strategy to close the gaps found in thesurvey. There has been no literature or a similar research done before on the topic ofthis dissertation which could be used by the export sector in India and the buyers inthe west to formulate the right response to climate change policy without affectingthe supply chains. This Dissertation is an attempt to fill this gap which has been speltto the author by quite a few business houses in India.ScopeResearch focuses on finding out if the Indian export sector is ready to deal with theClimate change policy initiatives being planned in the USA and EU which are the keymarkets for them. The Competitiveness of the exporting companies depends on theirappreciation of the issue of climate change and the upcoming policy environment intheir markets.The strategy formulation at the end is based on an extensive survey carried out bythe author by contacting exporting companies with a questionnaire. The Surveyresults are used to draw for conclusions and do analysis on the readiness and of theIndian export sector.
  • 10. OutlineThe study progresses in stages. The next chapter tries to capture from the availableliterature and other public sources the key climate change policy initiatives by EU,USA, private and multilateral bodies. It also looks at the Indian perspective andpolicy frameworks available or planned. Finally the chapter ends with analysing thepolicy impacts on the business competitiveness of the Indian export industry.The subsequent chapter (Chapter 3) presents the arguments supporting theapproach taken to the research in terms of the approach, methodology andlimitations. of the research approach. Chapter 4 itself presents the Questionnairewhich was used to survey and collect data from the various exporting companies inIndia, it represents the core of this research in terms of analysing the responses onparameters like awareness, Action, Risk and opportunity and market behaviour. Italso attempts to draw some co-relation between these parameters using statisticaltools. It ends with an assessment of the readiness of the sectors.Chapter 5 builds on the conclusions of the previous chapter and gives a strategywhich can be followed by the Indian export companies to better compete in themarket place in future with regards to climate change. The final Chapter 6 is a briefconclusion for the research dissertation which summarises the report.
  • 11. Chapter 2 2. Literature ReviewClimate change is a major concern the world over. The unrestricted carbon emissionby some of the most industrialized countries in the last century has contributed tothis cause the maximum. However, in the recent times the developing countriesnotably China and India, which are growing at a stupendous pace, have also beenemitting substantial greenhouse gases into the atmosphere. This has brought themunder the spotlight more so after the non-ratification of the Kyoto Protocol by the US.The developing countries are major polluters but still the per capita carbon emissionis very less as compared to their counterparts in the EU and US.The late advent of industrialization in India and China did not allow them to matchindustrial growth of the western world for most part of the last century. However,since the early 1990s the high rate of growth witnessed in China and India propelledboth these countries into a select group of notorious environment polluters. The highrate of growth of a necessity for these countries if they have to alleviate large scalepoverty and also come good various human development which are tracked theworld over.However, pressure has been mounting on China and India to commit to emissioncuts in the wake of their growing contribution to the gross global greenhouse gasemissions. The EU and US seem bent on pushing ahead with various borderadjustment measures supposedly for preventing carbon leakage. However, thesemeasures have already earned a lot of flak because they are being seen as theprotectionist measures being initiated in the guise of carbon footprint management.In light of all these developments, Industries in India have come a long way since thetime liberalization began and now competing at the global scale and therefore, thesemeasures being proposed and implemented in the developed world can haveserious consequences for these industries in India are concerned. The Indian
  • 12. industries lack adequate knowledge and the technical know how to come to termswith the stringent carbon emission norms. However, the Indian industries have takensome steps to check their carbon footprints and reduce other polluting effects of theirbusiness operations. The government of India is also pushing ahead with its agendaof have a broad based action plan on climate change. The national action plan doesnot commit any reductions in GHG emissions but pledges that “India’s per capitaemissions will never exceed the average per capita emissions of the developednations”.2.1 Climate change policies in US and Europe2.1.1 Climate change policies formulated in USBefore the adoption of the Kyoto Protocol in 1997, the US Senate unanimouslypassed the Byrd-Hagel Resolution, declaring that the United States should not agreeto binding commitments if the agreement was not accompanied by developingcountry commitments to reduce or limit emissions, or would cause serious harm tothe United States economy.2 As a consequence US never ratified the Kyoto Protocoland in fact in 2001, following the unsuccessful sixth Conference of the Parties (COP)to the UNFCCC, the US Administration rejected the Kyoto Protocol as an agreementthat was ‘fatally flawed in fundamental ways’.3US climate policy since then has been notable for its absence of mandatorygreenhouse gas emission reductions – in contrast with the EU – and its emphasis onresearch and development of clean technologies.4 However, some progress hasbeen made on the emissions reduction front by the US. The American Clean Energy 2 # ! , - , 3 ! 4 56 78 9: 3 * /;< ,5!7$ :% # 3 - 7 % * % 3 %3! 5/ " + ; * 0# = 3 *,0 ,/ (. * / 4" > 0 ? 8 @ !A. B " !7 $ / % : ! , %8 < % 4 6 / B, ,*,0 * 5 & :% , , ( #( - - / - , 7 0,5, // / :5/ " + ; * 0# = 3 *,0 ,/ (.* / 4 " > 0 ? 8 @ !A. B " $ !7 / % : 3 B 4 ,%=C 3 *,0 ,/ (. ,! 7 0 D? . ,3 # / 5 :% 7 : 55/ " + ; * 0# = 3 *,0 ,/ (. * / 4 " > 0 ? 8 @ !A. B " $ !7 / % :
  • 13. and Security Act, previously known as the Waxman-Markey climate and energy billwas passed by the US House of Representatives on 26 June 2009 which is a variantof cap-and-trade plan. Figure 1: Proposed emissions reduction under Waxman-Markey billSource: Climate StrategiesBorder Carbon AdjustmentsBorder Carbon Adjustment measures which have been a source of controversy arebeing actively discussed in US as well as EU. The border adjustment measures havebecome a source of concern among the developing countries as the as this is beingseen as a disguised protectionist measure which in a way seeks to hinder the growthplans of the developing countries by restricting their access to markets in developedcountries.International Reserve AllowanceThe “America’s Climate Security Act,” introduced by Senators Lieberman andWarner establishes an international reserve allowance program, which effectivelyrequires US importers of covered goods from covered countries (see the followingsections) to purchase international reserve allowances from the Administrator of theUS EPA5, or secure allowances or credits from recognized foreign programs6. A 3 / 5 : 5 : "*3" 5/ = ? 8 @ !A. B " $ !7 / % :
  • 14. separate reserve is created for the allowances that need to be purchased7,andinternational allowances cannot be used for compliance purposes by domesticindustries8. In order for goods to enter into the country, US importers are required toprovide a written declaration, which includes a ‘compliance statement’, stating thatthe good is covered by the international reserve allowance requirement or that thegood originates from an exempted country9. If the latter proves impossible, theimporter is required to state in which countries components of the good wereproduced, to provide an estimate of the required allowances, and to submit thisnumber of allowances or a financial deposit to cover their purchase10.2.1.2 Climate change policies formulated in EUIn March 2007, the European Council endorsed an EU objective of a 30% reductionin greenhouse gas emissions (GHG) by 2020 provided that other developedcountries would commit themselves to comparable emission reductions andeconomically more advanced developing countries contribute adequately accordingto their responsibilities and respective capabilities. The Council also made a firmindependent commitment of at least a 20% reduction of GHG emissions by 2020,irrespective of any international agreement.11The EU ETS, the world’s first major green house trading scheme, which wasdesigned to be implemented in phase right from the outset has been instrumental in 3 / 5 : 5 : 5 "*3" ": 5/ = ? 8 @ !A. B " $ !7 / % : 3 / 5 : 5 : "*3" 5/ = ? 8 @ !A. B " $ !7 / % : 3 / 5 : 5 : "*3" 5/ = ? 8 @ !A. B " $ !7 / % : 3 / 5 5 7 : "*3" /: 5/ = ? 8 @ !A. B " $ !7 / % : 3 / 5 5 : "*3" /: 5/ = ? 8 @ !A. B " $ !7 / % : = !" # $" % & # " " !% " ( ! "( # ( % & # " % ()**+,-.," / 0 0 1 0 ?%*@ . @ $ @ C 2< 33. !@ "$ *@ $ . 3%Brussels, 23.1.2008 2.
  • 15. the reduction of carbon emissions. Studies12 suggest that EU ETS in its first twoyears cut emissions by 50-100 MtCO2/yr or by around 2.5-5 percent.Figure 2: EU greenhouse gas Emissions, 1990-2020, and the EU ETScomponentSource: Carbon Trust, “Cutting carbon in Europe: The 2020 plans”, June 2008Climate Change and Energy PackageHowever, Border Tax Adjustments provisions have already been included in thepost-2012 climate change and energy package finalized by the EU in December200813. The EU package inter alia aims at achieving at least a 20 per cent reductionin GHG emissions from 1990 levels by 2020, raising the target to 30 per cent in theevent of an international agreement (under the UNFCCC) committing otherdeveloped countries to comparable emission reductions and economically more = *,0 ,/ . ,/ 0 # (2 0 # 0 0 ?%*,0 E # The package was proposed by the European Commission on 23 January 2008 [See EC (2008)]. A revised (watered-down)version of the package was finally adopted by the European Parliament on 17 December 2008. The package proposed a 20-20-20 targets for the EU to achieve by 2020: a 20-per cent reduction in GHG emissionsfrom 1990 levels; increasing theshare of renewables in the EU’s energy mix to 20 per cent from 8.5 per cent today; and a 20-per cent cut in energy usethrough improved energy efficiency.(cited in “#0 " 2 3 "4 53 6 #% 3 7?%6 / # F %4 - > 6 A 6 :
  • 16. advanced developing countries to contributing adequately according to theirresponsibilities and respective capabilities. 14With this aim in view, the 2008 package includes, among other things, an array ofproposals towards strengthening and expanding the EU Emissions Trading System(EU ETS) beyond 2012 and improving its functioning. These proposal include interalia the following: (i) a much larger share of allowances to be auctioned in the thirdphase of the ETS (2013-20) instead of being allocated for free, which is thepredominant practice under the first two phases (2005-07 and 2008-12,respectively); (ii) the scope of the ETS to be extended with the inclusion of a numberof new sectors like aluminium and ammonia, as well as two more GHGs (nitrousoxide and perfluorocarbons) under its purview (in addition to CO2)15.Border Tax Adjustments measure at WTOThe controversial tax adjustment measures are likely to face the hurdles in the formof international trade related agreements. The conformance of these provisions tothe ‘border tax adjustment’ is highly debatable. Also, it is interesting to see thatwhether these provisions can stand the test underthe ‘General Exceptions’ provisions of the Article XX of GATT. The authors are ofthe view that EU could face significant difficulties in establishing that the proposedCarbon Equalisation (CES) are WTO-compliant. But they also opine that nodefinitive conclusion can be reached on this contentious and complex issue of WTO-compatibility or otherwise of the CES unless and until such a measure getsimplemented and comes under the scanner of the WTO dispute settlement system.16 =2 # G # * H ,I 3 0 (* 8 2@ * 0 # , D?%6 / # F %4 - > 6 A 6 =2 # G # * H ,I 3 0 (* 8 2@ * 0 # , D?%6 / # F %4 - > 6 A 6 =2 # G # * H ,I 3 0 (* 8 2@ * 0 # , D?%6 / # F %4 - > 6 A 6
  • 17. Carbon LabellingCarbon labelling which is an important part of the proposed EU regulations on bio-fuels, is an instrument in the toolbox of measures available to mitigate climatechange . The credibility of the information is paramount for the carbon labellingscheme to be able to achieve its objectives of enlightening the consumers andbuyers in choosing emission efficient products.172.3 Initiatives taken by the Private PlayersBesides all these steps being taken at the Governmental levels, several privateplayers have also chipped in significant contribution to the cause of addressing thegrowing concerns about the climate change.2.3.1 Carbon Disclosure ProjectThe Carbon Disclosure Project Supply Chain is a collaboration of global corporationswho have extended their climate change and carbon management strategies beyondtheir direct corporate boundaries to engage with their Suppliers18. Hewlett Packard,L’Oreal, PepsiCo, Reckitt Benckiser, Wal-Mart, Cadbury Schweppes, Nestlé, Procter& Gamble, Tesco, Imperial Tobacco, Unilever and Dell have partnered with the CDPto produce supply chain emission data. Each company has selected suppliers towork with and is scheduled to respond to an information request by the CDP.192.3.2 Carbon management a part of the corporate strategyMoreover, firms are eager to cater to consumers’ demands and to reduce their owncarbon footprints. Global retail giants, such as, UK Tesco or US Wal-Mart aredeveloping carbon labelling schemes and major manufactures are following suite. =* + , , + - ./ 0 * 1# (" . # ?%4 , % , % 3 / (* 6 /, > / (3 ##, * ! # =* + , , + - ./ 0 * 1# (" . # ?%4 , % , %
  • 18. Tesco chief executive Terry Leahy announced plans to carbon-label all products onTesco’s shelves The stated objective is to allow consumers to integrate carbonemissions into their purchasing decisions by providing information in the same easilyaccessible way as for nutritional value or price. So far no more than a handful ofproducts have been carbon labelled, although an interim system has beendeveloped that puts a small airplane symbol on air-freighted products. This has beenimplemented under the assumption that airfreight is a major source of the carbonemissions in a product’s life cycle. The airplane symbols have also been used byTesco’s competitor Marks & Spencer and by the Swiss supermarket Popular outdoorgarments manufacturers Patagonia and Timberland, for instance, are also seeking tosatisfy their nature friendly consumers.20On July 16, 2009, Walmart announced plans to develop a worldwide sustainableproduct index, which is expected to lead to higher quality, lower costs and measurethe sustainability of products and help customers, live better in the 21st century. Oneof the biggest challenges we all face is measuring the sustainability of a product.Walmart believes a research-driven approach involving universities, retailers,suppliers and non-government organizations (NGOs) can accelerate and broadenthis effort.212.4 Multilateral Initiatives2.4.1 World Business Council for Sustainable DevelopmentThe World Business Council for Sustainable Development (WBCSD) is a CEO-led,global association of some 200 companies dealing exclusively with business andsustainable development. The WBCSD works with its members to develop andcommunicate businessviews and potential solutions to the international energy andclimate challenge. Recognizing that climate change presents both risks andopportunities for global business.22 =* + , , + - ./ 0 * 1# (" . # ?%4 , % , % 3 / (8 , 0 3 , / . 1( / C #( - - - / -
  • 19. 2.4.2 Global Reporting InitiativeThe Global Reporting Initiative (GRI) is a multi-stakeholder process and independentinstitution whose mission is to develop and disseminate globally applicableSustainability Reporting Guidelines.Guidelines are for voluntary use by organizations reporting on the economic,environmental, and social dimensions of their activities, products, and services.Started in 1997 by the Coalition for Environmentally Responsible Economies(CERES), the GRI became independent in 2002, and is an official collaboratingcentre of the United Nations Environment Programme (UNEP). The Global ReportingInitiative (GRI) produces one of the world most prevalent standards for ssustainability reporting - also known as ecological footprint reporting, EnvironmentalSocial Governance (ESG) reporting, Triple Bottom Line (TBL) reporting.232.4.3 United Nations Global CompactThe United Nations Global Compact, also known as Compact or UNGC, is a UnitedNations initiative to encourage businesses worldwide to adopt sustainable andsocially responsible policies, and to report on their implementation. According toUNGC, businesses should support a precautionary approach to environmentalchallenges, undertake initiatives to promote environmental responsibility andencourage the development and diffusion of environmentally friendly technologies.242.4.4 Principles for Responsible InvestmentIn early 2005 the United Nations Secretary-General invited a group of the world’slargest institutional investors to join a process to develop the Principles forResponsible Investment (PRI). Individuals representing 20 institutional investorsfrom 12 countries agreed to participate in the Investor Group. The Group acceptedownership of the Principles, and had the freedom to develop them as they saw fit. #( - ;# - ; B , , # J! J. #( - ;# - ; J$ JB , , 0# / J*
  • 20. The process was coordinated by the United Nations Environment ProgrammeFinance Initiative (UNEP FI) and the UN Global Compact. The PRI reflects the corevalues of the group of large investors whose investment horizon is generally long,and whose portfolios are often highly diversified. However, the Principles are open toall institutional investors, investment managers and professional service partners tosupport.252.4.5 Equator Principles26The Equator Principles (EPs) are a voluntary set of standards for determining,assessing and managing social and environmental risk in project financing. In October 2002, a small number of banks convened in London, together with the World Bank Group International Finance Corporation (IFC) and decided s jointly to try and develop a banking industry framework for addressing environmental and social risks in project financing. This led to the drafting of the first set of Equator Principles by these banks which were then launched in Washington, DC on June 4 2003 and updated in July 2006.2.4.6 Some other measurement toolsIn addition to numerous initiatives taken irrespective them being voluntary ormultilateral commitments, there have also evolved some other measurement toolswhich can be used for the assessment of the investments made by investors. Thesetools help the investors make Socially Responsible Investments. A few of the toolsare discussed below: #( - - - # #( - ;# - ; H J / #,
  • 21. 2.4.6.1 Dow Jones Sustainability Index27 Launched in 1999, the Dow Jones Sustainability Indexes are the first global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. The Dow Jones Sustainability Indexes are a cooperation of Dow Jones Indexes, STOXX Limited and SAM Group. Currently 70 DJSI licenses are held by asset managers in 16 countries to manage a variety of financial products including active and passive funds, certificates and segregated accounts.2.4.6.2 FTSE4Good28 The FTSE4Good Index Series has been designed to measure the performance of companies that meet globally recognised corporate responsibility standards, and to facilitate investment in those companies. FTSE brand make FTSE4Good the index of choice for the creation of Socially Responsible Investment products. FTSE4Good can be used in four ways:- Investment-- A basis for socially responsible financial instruments and fund products Research-- A research tool to identify socially responsible companies Reference-- A reference tool to provide companies with a transparent and evolving global corporate responsibility standard to aspire to and surpass Benchmarking-- A benchmark index to track the performance of socially responsible investment portfolios #( - - - , 7 1/ 0 #( - - - / 0 . / C23 B J. 1J3 1>#
  • 22. 2.5 Development of Indian Industry In the 1990s, following economic reform of post independence India began to experience rapid economic growth as markets opened for international competition and investment. In the 21st century, India is an emerging economic power with vast human, natural resources and a huge knowledge base.29 Figure 3: Development of Indian Industry2.5.1 Key IndustriesGems & JewelleryGems and jewellery form an integral part of Indian tradition. According to CreditAnalysis and Research Limited (CARE), the domestic jewellery market in India ispegged at US$ 16 billion. The organised sector of the gems and jewellery industry inIndia is estimated to grow at 40 per cent per annum. India polished diamond sexports were up by 11 per cent at US$ 13.8 billion from period of the previous fiscal,while polished diamond imports increased 15.5 per cent to US$ 8.5 billion. #( - ;# - ; / 0 J J.
  • 23. Textiles:Textiles, the largest industry in the country employing about 20 million people,account for one third of India total exports. Textile sector accounts for nearly 14% sof the total industrial output. However, the textile sector is largely unorganized anddispersed. Due to this, the industry is suffering from technological obsolescence andlack of up-to-date machinery for production of fabric, yarn and ready-madegarments. Initiatives such as Technology Up gradation Funds Scheme (TUFS),Scheme for Integrated Textile Parks (SITP), excise and import duty liberalization oftextiles and textile machinery lead growth of textile industry.30Engineering and Machine Tools:With production of wide range of items, India is a major exporter of heavy and lightengineering goods. The bulk of capital goods required for power projects, fertilizer,cement, steel and petrochemical plants and mining equipment, constructionmachinery are made in India.31Petroleum ProductsThe oil and gas industry has been instrumental in fuelling the rapid growth of theIndian economy. India has total reserves of 775 million metric tonnes (MMT) of crudeoil and 1074 billion cubic metres (BCM) of natural gas as on April 1, 2009, accordingto the basic statistics released by the Ministry of Petroleum and Natural Gas.Petroleum exports during 2008-09 were US$ 26.2 billion.Chemicals and related ProductsChemical Industry is one of the oldest industries in India, which contributessignificantly towards industrial and economic growth of the nation. Its size isestimated at around US$ 35 billion approx., which is equivalent to about 3% ofIndia GDP. The Indian Chemical sector accounts for 13-14% of total exports and 8- s9% of total imports of the country. With investments in R&D, the industry is #( - - - / // 0 / . 72 1 , 7. 777. 7" , / #( 0 # / 0 7 / 0 7; 7 0,
  • 24. registering significant growth in the knowledge sector comprising of specialtychemicals, fine chemicals and pharmaceuticals.32Table 1 below shows the exports data of the above mentioned sectors for the year2009 -10. Table 1: Indias Export 2009-10 Apr-Mar Commodity %Share 2009 GEMS & JEWELLERY 128,575.19 16.23 TEXTILES 88,491.61 10.72 ENGINEERING GOODS 183,997.80 18.34 PETROLEUM PRODUCTS 123,397.91 15.69 CHEMICALS & RELATED 109,883.82 13.64 PRODUCTS Others 206,408.72 25.38 Total 840,755.05 100 Data Source: DGCIS, Kolkata2.5.2 Energy efficiency measures Government has identified the need for energy efficiency in buildings and has been encouraging energy efficient consumption patterns among Indian households. The National Environmental Policy (NEP) drafted in 2004 is a milestone for the Indian Environment and Building Technologies (EBT) industry.33Impact of the economic indicators on the Indian EBT industry for the period 2006-09Economic Impact on the EBT IndustryIndicatorConsumption and • Construction investment is expected to increase by 5.7% --- / 0 / , / #( - - - - , 1 # #* 7. 7C / 7K. 0 ,
  • 25. Government annually during the period 2006 to 2009, reflecting an increaseExpenditure in lighting equipment, HVAC equipment, BAS, energy saving techniques • Government budgetary outlay for the Ministry of Environment and Forests (MoEF) is likely to increase by almost 3% from 2006 to 2007.Investment • India is expected to attract large investments in air pollution prevention and control equipment, lighting equipment, BAS and environmental services segments. • R&D activities are expected to be increased, with focus on emerging technologies for lighting equipment, HVAC equipment, and environmental equipment segments.Exports • The exports for the EBT industry are expected to record a CAGR of 15 % and imports are likely to register a CAGR of 10.3 % for the period 2005-2009. • The international agreements and stance of the government are expected to drive the trade in the EBT industry from 2006 to 2009.Imports • The environmental equipment and lighting equipment segments have greatly benefited from the increase in imports, as the Indian EBT industry is an import-driven industry.Source: Frost & Sullivan2.5.3 Policies to Promote Energy efficiency measures:• Electricity from renewables• Enhancing Efficiency of Power Plants• Introduction of Labelling Programme for Appliances• Energy Conservation Building Code• Energy Audits of Large Industrial Consumers• Accelerated Introduction of Clean Energy Technologies through the CDM
  • 26. The Indian companies have started putting in place systems to monitor and reporttheir GHG emissions. The percentage of companies giving an account of their GHGemissions in CDP 2009 stands at 63% (24). This number has almost doubled sinceCDP6 (2008), when only 33% (17) of the respondents disclosed their GHGemissions. Software & Services sector has outperformed its compatriots in carbonand energy intensive sectors such as Energy & Capital Goods sector, whosedisclosure was below average. 68% (26) of the respondents to CDP 2009 havereduction plans in place for slashing either their energy or GHG emissions. 51% (19)of the respondents shared the risks and opportunities posed by climate change(including the details of emissions and mitigation plans) with their stakeholdersthrough various corporate communication channels Figure 4: Indias GHG Emission by Sector and Climate change trapezium
  • 27. 2.5.4 Risks and opportunitiesRegulatory Risks: No direct risks, international market compliance, FutureRegulations, Investment uncertainty.Regulatory Opportunities: Demand for energy efficient technologies, Demand forrenewable energy, Improved Energy Efficiency, Product & technical innovation,Capture International market, Alternative products & solutions, Reduce dependenceon fossil fuel, evolve environmentally sound practices, lower GHG emissions.Other Risks: Resource Scarcity, Increased production & operational cost, Shift inconsumer demand, commercial & competitive risks, Change in consumptionpatterns, Reputation risks, financial risks, Lack of incentives for performers, Investorrisks, Insurance risks, External pressure and health impacts.Other Opportunities: Enhanced financial & environmental performance, increasedproductivity, carbon finance business, Sustainable Solution market, Nuclear energy,Research in alternate products, Carbon Neutral, Low Carbon Intensity Preference,competitive market.Physical Risks: Damage, disruption and displacement; precipitation, temperatureextremes, frequent floods, cyclones, drought, frequent storm and hurricane, sea levelrise, disease and migration. Production, Logistic network breakdown, safety &commercial losses, more energy demand, Risk to agribusiness, loss to portfoliocompanies, fluctuations in fuel and commodity pricesPhysical Opportunities: Smart & efficient solutions, improved products & services,Improved resource productivity and management, strengthening logistic network,increased market demand.34 * 6 /, # 7. % .4 *.% / 00 7 $ - 6 , %- - - / # > /
  • 28. 2.6 India’s Carbon FootprintIndia is one of the fastest growing economies in the world and the fourth largestGHG emitter in the world (behind the US, China and the EU). Around 4% of theglobal GHG emissions are contributed by India. However India’s per capita CO2emissions are currently only 1.1 tonnes, when compared to over 20 tonnes for theUS and in excess of 10 tonnes for most OECD countries.35 In 2007, India’s CO2emission intensity per unit of gross domestic product (GDP), valued at purchasingpower parity (PPP), was at the world average (see Figure 1). Figure 5: CO2 Emissions per unit of GDPSources: World Bank, 200936Note: GDP is valued at purchasing power parity in 2005 U.S. dollars.According to the IEA Statistics, 2009, in India, a large share of GHG emissions isproduced by the electricity and the heat sector which represented 56% of in2007, up from 42% in 1990 (see Figure 2). Manufacturing industries and constructionsector represents the other 22% of in 2007. The transport sector, which emitted B @ . =2< !@ "6 2@ *@ $ < "B $ (. % G *,0 * . ?%5 C : 8 , 4 ;%=. 6 . @ # $ "( + - 7* 6 , #0 ?%56 / 0 :
  • 29. only 9% of in 2007, is growing relatively slowly compared to the other sectors ofthe economy. A recently published collation of five modeling exercises (MOEF,2009) provides a range of estimates for India’s future emissions trajectory.Projections of per capita emissions in 2031 range from 2.77 to 5 t , while totalemissions range from 4 billion to 7 billion t .37 Figure 6: India - CO2 Emissions by sectorsSources:IEAStatistics,Emissions byFuelCombustions,2009 C% / 3 /; , 0 0 . ! # %=! / B B 0. ?%@ /
  • 30. 2.7 Climate Change Policy of Government of IndiaIndia is subject to high degree of climate variability resulting in droughts, floods andother extreme weather events which compels India to spend over 2% of its GDP onAdaptation and this figure is likely to go up significantly. Figure 7: Expenditure on Adaption Programme in India Source: Ministry of Environment & Forest, GOI , 200738In 2008, Prime Minister Manmohan Singh publicly committed to ensuring that “India’sper capita emissions will never exceed the average per capita emissions of thedeveloped nations and it would adopt purpose domestic actions to enhance itsclimate change management”39. India plans to reduce its emission intensity by 20-25% by 2020. India’s strategy for tackling climate change while pursuingdevelopment is set out in its National Action Plan on Climate Change (NAPCC)which was released on 30th June 2008. The NAPCC advocates a strategy thatpromotes, firstly, the adaptation to climate change and secondly, furtherenhancement of the ecological sustainability of India development path. The sNational Action Plan expresses India willingness to act as a responsible member of sthe international community and to make its contribution to mitigate global warming.The Eight National Missions of NAPCC represents multipronged, long term andintegrated strategies for achieving key goals in the context of climate change. Thefocus of NAPCC is on promoting understanding of causes and impact of climate #( / // " J**J 7 7 # C% %=. (" / /,0 / ?%B @ . @ / %39 Indian PM speech on release of Climate Change Action Plan, June 2008. s
  • 31. change, its adaptation and mitigation, energy efficiency and natural resourceconservation. It includes a target to reduce the emissions intensity of India’seconomy (per unit of GDP) by 20 per cent between 2007/08 and 2016/17, alsoarticulated in the Eleventh Five Year Plan (2007-2012).In the recent Union Budget on India, 2010, the government imposed a cess of Rs. 50per tonne on coal. The levy will be used to create National Clean Energy Fund forfinancing research and innovation in clean and green energy technologies.40 2.8 Indian Businesses and Climate ChangeCorporations in India will be subject to increasingly stringent environmentalregulations from the government. The National Action Plan on Climate Changepolicy mandates the setting up of energy benchmarks for various industry sectorsand allows for trading in energy efficiency certificates. Nine energy intensive sectorshave been identified and within these sectors, bands have been created whichclassifies individual business units on the basis energy intensity levels. The nineenergy intensive sectors are: 1. Thermal Power Plant 2. Fertilizers 3. Cement 4. Iron and Steel 5. Aluminum 6. Chlor Alkali 7. Railways 8. Pulp & Paper 9. TextilesEach industry is given a target to reduce their fuel consumption over a period of time.If they surpass their target then they are awarded energy efficiency certificates whichcan be traded on the open market of banked for the next round of efficiency targets.Those failing to achieve their target will be forced to buy those credits. This givesbusinesses a monetary incentive to become energy incentive. 4 . % 7 %$ - 6 , %C 7
  • 32. Due to NAPCC, renewable energy and clean technology in India is likely to have ahuge growth in the coming times. Indian companies can exploit these businessopportunities that are likely to arise out of climate change mitigation and adaptation.The global market for low-carbon technologies is estimated to amount to USD 3trillion per year by 2050, throwing up significant commercial opportunities. It isestimated that renewable energy, waste management and water treatment industrieswill be worth USD 700 billion globally by 2010; on par with the value of the globalaerospace industry.41Thus Indian businesses have an opportunity to gain competitive advantage byproper planning and adapting their business model to a low carbon business.2.9 Indian Business Bodies on Climate Change2.9.1 Confederation of Indian Industry (CII)Confederation of Indian Industry (CII) is a non-government, not-for-profit, industry ledand industry managed organization. CII works closely with government on policyissues, enhancing efficiency, expanding business opportunities for industry through arange of specialized services and global linkages.Climate Change: CII InitiativesThe CII’s Climate Change Council has been formed to strategize on implementationof the NAPCC and to engage industry, policy makers and R&D institutes to formulatestrategies to commit to accelerate deployment of clean energy technologies, buildcapacity to access and internalize cutting edge technologies.CII organizes various events and publishes various articles and reports to generateawareness, highlight policy recommendations and help engage industry, governmentand civil society. CII also renders various advisory services towards building a low-carbon economy. A B3 %= 0 8 79%
  • 33. 2.9.2 Federation of Indian Chambers of Commerce & Industry (FICCI)A non-government, not-for-profit organization, FICCI is the voice of India business sand industry. Established in 1927, FICCI is one of the oldest and largest apexbusiness organizations having a membership of over 83000 companies. FICCIprovides a platform for sector specific consensus building and networking.FICCI in Carbon SpaceFICCI partners with Royal Norwegian Embassy, New Delhi in developing CDMprojects in India. FICCI, being one of the most influential business federations inIndia with a well established countrywide network, is distinctively placed to promotethe CDM concept among its members as well as other associated businesses withits ABC approach: • Awareness among Indian organizations about CDM benefits • Build Capability for developing and implementing CDM Projects • Carbon Trading Mechanism Establishment2.9.3 National Association of Software and Services Companies (NASSCOM)NASSCOM was set up in 1988, at Mumbai to facilitate business and trade insoftware and services and to encourage advancement of research in softwaretechnology. NASSCOM’s diverse strengths include advocacy on public policy,research and market intelligence services, international trade development andaccess to an international network through 20 MoUs and linkages with 40 businessassociations across the globe.Green IT Initiative: Catalyzing Sustainable GrowthNASSCOM has recently announced its ‘Green IT’ initiative and NASSCOM’s GreenIT strategy is broadly aligned along the following three vectors:Make IT Green: Adoption by industry of Green technologies and practices includingGreen buildings, Green computing infrastructure, sharing infrastructure andaddressing issues like e-waste management.
  • 34. Make Green Happen through IT: Deploy IT solutions which help firms becomeGreen including like Cloud Computing, video-conferencing, intelligent transportsystems, web-conferencing, motion and heat detection sensors etc.Make Green warriors: Encourage the over 2 million employees of the IT-BPOindustry to adopt a Green life-style and thereby become change agents to catalyzetransformation and create a sustainable impact in the society around them.2.10 Policy Impact on Business Competitiveness2.10.1 Business CompetitivenessBusiness Competitiveness is all about being ahead of your competitors. When a firmsustains profits that exceed the average for its industry, the firm is said to possess acompetitive advantage over its rivals. The goal of much of business strategy is toachieve a sustainable competitive advantage.A competitive advantage exists when the firm is able to deliver the same benefits ascompetitors but at a lower cost (cost advantage), or deliver benefits that exceedthose of competing products (differentiation advantage). Thus, a competitiveadvantage enables the firm to create superior value for its customers and superiorprofits for itself.The firm resources and capabilities together form its distinctive competencies. sThese competencies enable innovation, efficiency, quality, and customerresponsiveness, all of which can be leveraged to create a cost advantage or adifferentiation advantage.2.10.1.1 National CompetitivenessA nation’s prosperity depends on its competitiveness, which is based on theproductivity with which it produces goods and services. Sound macroeconomicpolicies and stable political and legal institutions are necessary but not sufficientconditions to ensure a prosperous economy. Competitiveness is rooted in a nation’smicroeconomic fundamentals—the sophistication of company operations andstrategies and the quality of the microeconomic business environment in which
  • 35. companies compete. An understanding of the microeconomic foundations ofcompetitiveness is fundamental to national economic policy.422.10.1.2 International CompetitivenessThe concept of international competitiveness is often used in analyzing countriesmacroeconomic performance. It compares, for a country and its trading partners, anumber of salient economic features that can help explain international trade trends.This concept encompasses, first of all, qualitative factors or factors that do not lendthemselves readily to quantification. Thus, capacity for technological innovation,degree of product specialization, the quality of the products involved, or the value ofafter-sales service are all factors that may influence a country trade performance sfavourably. Likewise, high rates of productivity growth are often sought as a way ofstrengthening competitiveness.43In the carbon constrained world the adaptability of the business activities to achievelow carbon competitiveness has redefined the business competitiveness. Thegrowing concern and the inevitability of the low carbon world presents newopportunities for carbon efficient businesses. The paradigm shift in the way worldsees the global competitiveness has led countries to see climate change as a threatas well as a window of opportunity to stay competitive.2.10.2 Measuring Low Carbon Competitiveness44There are three elements to assessing overall low carbon competitiveness: wherecountries are positioned now, the rate at which this is changing, and the scale of thechallenge they face.The carbon competitiveness of any country can be done on the basis of the followingindices and metrics:- 7 The low carbon competitiveness index: This index explains the current competitiveness . / 0# 7 #( - - - / / 7 , 0# / 0 . / . ,* 0 # (* / # ," # / , ( 6*, B B ,- / / 0# 72 *,0 . E B% , # 3 # 0
  • 36. 7 The low carbon improvement index: This index measures the scope of improvement 7 The low carbon gap index: This index seeks to explain quantitatively the gap between the scope of improvement and the level of improvement required given the growth rate of any particular countryFigure 8: European and East Asian countries - low carbon competitivenessindexSource: Vivid Economics calculations in G20 low carbon competitiveness report2.10.3 Policy Impact on Business CompetitivenessThe global differential carbon-constraint regime is likely to affect the fundamentalaspects of International business:45 • Demand-Supply situation of carbon-intensive goods and services • Trade flow pattern of carbon-intensive products, and hence, the relative competitiveness of the sectors • Long-term investment decision on capacity expansion • Relocation of energy or carbon-intensive industries in non- or low carbon- constrained countries. $ / , (. # / 0 . E L
  • 37. To optimally manage the impact of climate regulations on the growth,competitiveness and hence the profitability of the individual business may require astructured approach to carbon management.Climate Competitiveness IndexThe 2010 Climate Competitiveness Index, the most comprehensive study to date ofnational progress to create green jobs and economic growth through low carbonproducts and services, shows that in spite of uncertainty surrounding internationalclimate negotiations, countries have forged ahead with low carbon growth strategiesin the first quarter of 2010.The annual Climate Competitiveness Index (CCI), produced by the independent non-profit institute AccountAbility, in partnership with the United Nations EnvironmentProgramme (UNEP), combines two sets of data.It investigates "Climate Accountability" to validate if a country climate strategy is sclear, ambitious and supported by stakeholders, as well as "Climate Performance,"considering each country capabilities and track record on delivering its strategy. sThirty two countries have made significant improvements, with Germany, China andthe Republic of Korea being the outstanding examples. India, Indonesia, Kenya,Mexico, the Philippines and Rwanda have also enhanced their climateaccountability.Sweden, Denmark, Germany, Japan and France show the most consistent progresson combining accountability and performance. Switzerland and Austria are strong onperformance, while the UK and USA are strong on accountability. The Republic ofKorea, Hong Kong and Malaysia are developing good strategies and the BASICnations (Brazil, South Africa, India and China) are progressing towards climatecompetitiveness.The CCI predicts that the global market for low carbon products and services will bein excess of US$2 trillion in 2020. However, to secure this market, countries needambitious climate competitiveness strategies, as well as the institutionalinfrastructure to build markets and convince investors.
  • 38. The report underscores the importance of the business sector. It concludes thatbusiness must play a proactive role in promoting climate competitiveness. Countriesthat perform well on the CCI have a critical mass of firms managing, reporting on andreducing their emissions - whilst aggressively growing portfolios of low carbonproducts and services.The CCI demonstrates that the best national performers have a coherent institutionalframework of low carbon support for business, including chambers of commerce,stock exchanges, investment agencies, government departments and NGOsdedicated to green growth.Source:http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=620&ArticleID=6536&l=en lastviewed on July 27, 2010
  • 39. Chapter 3 3. Methodology of the StudyDue to various polices and regulation related to climate change being imposed in theUS & EU which are the major importers of Indian goods, the Indian export sector issubject to increasingly stringent environmental regulations. To study how Indianexport sector is responding to the problems and the challenges around climatechange we did a survey among various exporting companies. This chapter explainshow the questionnaire for the survey was prepared and how the interviewsconducted.In the second part of this chapter we discuss how the analysis of the responses wasdone. Basically we categorized the questions into 4 categories namely Awareness,Action, Risk / Opportunity Perception and Market Behavior. Then it discusses thevarious tools like SPSS, etc. we used for analyzing the responses obtained from thecompanies.In the final part we discuss the various limitations of the study like time available fordoing survey, geographical spread of the companies, availability of the right people,etc. 3.1 Details of the Approach:The basic approach of the paper was to first study about the historical and currentstrategies of the Indian businesses on climate change, the policies of the Indiangovernment and other developed nations like the US and the EU in context toclimate change and the impact of these policies on business competitiveness ofIndian businesses.We know that India is under tremendous international pressure to undertake bindingemission targets so as to limit its GHG emissions. The developed countries areconsidering trade-based sanctions on Indian businesses if the country fails to commit
  • 40. to binding targets. A large part of India’s business (investments and exports) isdependent on Developed world where there are likely to be stricter policy related toclimate change. This will pose a huge risk for the Indian Exports sector because theexport sector will be subject to increasingly stringent environmental regulations notonly from the Indian government but also from the developed nations.It is in this context we undertook this study to gauge the “Readiness andCompetitiveness of Indian Export Sector due to Global Policies on Climate Change”.This research studies the policy environment (both private and public) in US, EU andIndia. See its effects on Indian export sector and outline strategies for Indian exportsector to stay competitive and grow in a carbon constrained global environment.India’s exports reached a level of US $ 185.3 billion during 2008 – 09 registering agrowth of 13.6 percent over the previous year. Our merchandise exports recorded anAverage Annual Growth Rate (AAGR) of 23.9 per cent during the five year periodfrom 2004-05 to 2008-09, as compared to the preceding five years when the exportsincreased by a lower AAGR of 14.3 per cent. According to latest WTO data (2009),India’s share in the world merchandise exports increased from 0.8 per cent in 2004to 1.1 per cent in 2008. India also improved its ranking in the leading exporters inworld merchandise trade from 30th in 2004 to 27th in 2008. However, during theyear 2009 – 10 India’s exports reduced to US $ 178.66 billion registering a decline of3.58% in US $ term over the corresponding period of the previous year. 46 The shareof top five Principal Commodity Groups in India’s total exports during 2009-10 (April-March) is given at Chart 1. B@ .% * 00 / E . %" , # 7
  • 41. Figure 9: Share of Top 5 Commodity group in India’s Export 2009 - 10 6 3 / ( * 00 / E . %B @ .% #( 0 0 / / /With the view of finding out how Indian export sector is responding to the problemsand the challenges around climate change we prepared a structured questionnaireso as to collect the first hand information from the various exporting companies. Thequestions in the questionnaire were framed in a particular order so as to get themaximum information from the companies. While framing the questionnaire it wasensured that questions were not ambiguous for the interviewee and whereverpossible enough explanation was provided about the various terminologies used inthe questionnaire. While preparing the questionnaire opinion from the variousindustry experts were taken. The pilot testing of the questionnaire was done on 10companies and based on the feedback from the executives from those companiesthe questionnaire was modified. The questionnaire is attached in the appendix A1.This final questionnaire was emailed to the representatives of various exportingcompanies from the Petroleum products group, Gems & Jewellery group, Textilegroup, Chemicals & related products group and Engineering goods group. Alsosome of the interviews with the executives were conducted on the telephone. Forcompanies which had a base in Mumbai, India direct face to face interviews were
  • 42. conducted by visiting these companies whenever an appointment was fixed withtheir representatives. To get the contact details about the various exportingcompanies, various business bodies like Gems & Jewellery Export PromotionCouncil (GJEPC), Apparel Export Promotion Council (AEPC), The Cotton TextileExport Promotion Council of India (TEXPROCIL), etc. were contacted. The details ofthe responses are attached in the appendix A2. By preparing an unambiguousquestionnaire and having a few open ended questions has helped us to havedetailed interview and the best output. 3.2 Methodology of Analysis:The questions in the questionnaire were categorized into 4 categories namely: 1. Awareness: Questions 1, 5, 11 & 13 from the questionnaire falls under the awareness category. For e.g. “Are you aware of any polices of the government with regards to Climate Change & GHG’s Reductions?” Through such questions we are trying to gauge how much the company is aware about the various domestic and the international policies related to climate change that would have an impact on them. 2. Actions: Questions 2, 4, 15, 16 & 17 were categorized in the action category. For e.g. “Has your company taken any measure to ascertain the GHG emission from its operations?” By asking such questions we want to check what all actions the company is taking with respect to climate change and GHG’s reductions. 3. Risk / Opportunity Perception: Questions 7, 8, 12, 14 & 18 falls in the Risk / Opportunity Perception category. For e.g. “What would be impact on your competitiveness in the market if you don’t take proactive action on Carbon Management & Sustainability?” Such questions checks how does the company perceive the issue of climate change and global warming either as a risk or as an opportunity for themselves. 4. Market Behavior: Questions 9 & 10 from the questionnaire were categorized in the market behavior category. For e.g. “Have your customers asked you to report your Carbon Footprint or Sustainability parameters?” In this category
  • 43. we are measuring what is the behavior of the market in which the company is operating in context to climate change and sustainable production of products.Now to analyze the primary data collected, various statistical tools are used namelySPSS and MS excel are used. SPSS (Statistical Package for Social Science) is acomprehensive tool for analyzing data. SPSS integrates complex data and filemanagement, statistical analysis and reporting functions. Using correlation analysiswe have tried to understand the relationship between the 4 categories / variables i.e.how much is response in category related to the responses in the other category.Basically correlation analysis helps us understand the relationship between twodependent variables on a scale of 0 to 1. If the correlation between 2 variables isbetween 0 to 0.3 then the correlation between them is said to be low. Similarlycorrelation between 0.3 to 0.7 is said to be moderately correlated and above 0.7 issaid to be highly correlated.For analysis, we have reframed responses in 2 categories i.e. positive feedback andnegative feedback. For e.g.” Q4: In case you are not doing it will you want to do it thenext:”a) 3 Months b) 6 Months c) 1 Year d) More than 1 YearIn this case options c & d are considered as negative feedback as it reflects delayedaction from corporate while options a & b indicates positive feedback as it reflectsquick action from them. So for Q4 we have clubbed the responses in a & b aspositive and responses c & d as negative feedback.Similarly for “Q8: What would be impact on your competitiveness in the market if youdon’t take proactive action on Carbon Management and Sustainability?”a) No Effect b) Marginal Effectc) Substantial Effect d) Don’t Know the EffectIn this case options a & d are considered as negative feedback as it reflects poorlyon company competitive strategy towards climate change initiative while Options b s& c are considered as positive feedback as it reflects company concerns regarding sabsence of proactive action towards climate change.
  • 44. 3.3 Limitations of the Approach:Every research study will have some or the other limitation. Our study had thefollowing limitations: • Time: Only one month of time was available for preparing the questionnaire and conducting the interviews. Due to this only few companies could be covered in the allotted time. Also the concerned person from the company was usually busy with some important work and hence could not provide the details. • Availability of the Right People: Climate change & Sustainability are generally a strategic issues and hence contacting the right people who had the knowledge about this issues was a very difficult task. • Cost: Since we belong to students community lack of funding was also an issue. • Geographical Spread of the Target Companies: Due to the geographical spread of the exporting companies, meeting with the representatives of only those companies who has a base in Mumbai, India was possible. Interviews with companies based outside Mumbai were either done through Telephone or through E-mail. • Lack of Support from the Companies: Over 400 companies were contacted but only 36 companies responded, this shows the unwillingness of the exporting companies to support such a research.
  • 45. Chapter 4 4. AnalysisIn this section, 36 responses from different companies in top 5 export sectors in Indiaare summarised and then analysed. They are further classified into 4 majorcategories like Awareness, Actions, Risk / Opportunity perception and MarketBehaviour. 66% companies are still not ready and competitive enough to facechallenges due to global policies on climate change. On the basis of positivefeedback, there is moderate correlation between Awareness, Action taken and Risk /Opportunity. So if company’s feedback is positive for any 1 of these 3 categories(e.g. Awareness) then it might result into corresponding positive action in other 2categories (i.e. Action and Risk/Opportunity) for climate change initiatives. On thebasis of negative feedback, Only Action taken is moderately correlated withAwareness, Risk / Opportunity and market Behaviour which implies that if companydo not take any action, it might be result of non-awareness, unable to find any risk /opportunity and due to uncooperative market behaviour regarding climate change. 4.1 Summary of Responses36 Responses of companies in top 5 export sectors in India for FY 2009-10 aresummarised on the basis of questions asked and then analysed as per 4 mentionedcategories like Awareness, Actions, Risk / Opportunity perception and MarketBehaviour.Summary of Responses:1. 80% of surveyed companies believe that climate change and global warming willhave effect on their organisation.
  • 46. Figure 10: Q1- Effect of Climate change 2. 50% of respondents have taken action regarding climate change. Some of these actions are use of energy efficient equipments, use of scrubber towers, residual water treatment and effluent treatment plant. Remaining 50% who has not taken action, majority of them still not believe necessity of such action in future. Figure 11: Q2 - Measures taken by Company Table 2: Q3 - Positive Feedback to Q2 Q3: If yes, briefly explain how you are doing it?We have installed green equipments in our new building so as to reduce the emission of GHG sand save on energy costs.We have tried to make our operations Eco-friendly by installing solar energy systems, rain waterharvesting initiatives.
  • 47. Carbon Footpint assessment is already underway and the internal employees are being madeaware of that.By destroying chemicals & gases - following environmental norms regarding chimney height.We neutralize the acid & other chemicalwaste with the help of ETP plant.Scrubber towers, ATPC plant, Employee awarness about the Global warming. - Using CFL Figure 12: Q4 - Negative Feedback to Q2 3. Only 8 respondents are aware of government policies regarding climate change. Some of the responses are regulations of MPCB (Maharashtra pollution control board), SEZ norms, national action plan for climate change etc. Figure 13: Q5 – Awareness of Policies
  • 48. Table 3: Q6 - Positive Feedback to Q5 Q6: If yes, please mention what are they?National Action Plan for climate change from GoI Voluntary Emission cuts by India SolarEnergy mission of GoIClean Development Mechanism -Maharashtra pollution control board Maharashtra PollutionBoard Maharashtra Pollution Control Board Green Industry Business Excellence Model - RioTinto(Miners) Certification - regulations (Seepz Authority) - Safety Council License from MPCB 4. 26 companies believe that there would be no or marginal risk or opportunity as far as climate change is concerned. Major challenges or opportunities identified by companies are technology improvement, government subsidies and SEZ regulations, and process / product improvement Figure 14: Q7 - Major Challenges
  • 49. Table 4: Q8 - Positive Feedback to Q7 If yes, what can be the possible challenges or opportunities?There are many opportunities in terms of Renewable energy generationsGovernment is providing a lot of subsidy for production of Solar, wind and other non-conventionalenergy sourcesLot many oppotunities Technology for corrosive & hazardous materialsChallenges in terms of increased cost of raw material due to less productivity caused by globalwarming.Government Policies forcing for modernization Upgradation of TechniquesAs per givernment regulationBlackish silver due to presence of moisture - Seepz Regulation 5. 66% of surveyed companies believe that absence of proactive action on carbon management will affect their competitiveness. Figure 15: Q8 - Impact on Competitiveness 6. A carbon footprint measures in a detailed manner on how much of GHG gasses are emitted directly or indirectly in manufacturing of your product. This is directly related to energy use and thus money. 32 out of 36 companies’ customers have not asked companies about carbon footprint or sustainability parameters. Although 50% of them believes that such situation will arise in next 2 years
  • 50. Figure 16: Q9 – Stakeholders’ reaction Figure 17: Q10 - Negative Feedback to Q97. Border Tax is a mechanism where the importing country will have somebenchmark for each product being imported. The exporter will have to declare (in averifiable way) the carbon footprint of the landed product. Based on the difference inthe Footprint and Benchmark a Border Adjustment tax will be imposed. Only 6respondents heard of Border Tax Adjustments for carbon, out of which 66% believethat this will not affect them in future
  • 51. Figure 18: Q11 - Awareness about Border Tax Adjustment Figure 19: Q12 - Positive Feedback to Q118. Carbon disclosure project (CDP) and Global reporting initiative (GRI) are the worldleading voluntary reporting initiatives and very well respected in the investing andlending and investing community. But only 5 respondents heard of CDP and GRIactivities.
  • 52. Figure 20: Q13 - Awareness of CDP and GRI9. 19% of survey companies say that lending institutes will charge higher interestrates to less sustainable companies. Figure 21: Q14 - Sustainability10. 50% of respondents want to measure carbon footprint under initiatives likecarbon disclosure project (CDP) and global reporting initiative (GRI)
  • 53. Figure 22: Q15 - Reporting of Carbon Footprint11. Due to majority of small scale raw material suppliers, 32 out of 36 surveyedcompanies do not ask their raw material suppliers regarding sustainability andenvironmental record. But in view of global policy changes regarding climate change,31% of them are intend to this in future Figure 23: Q16 - Stakeholders Reaction
  • 54. Figure 24: Q17 - Negative Feedback to Q1612. 59% respondents believe that if they implement sustainable manufacturing thenthat will help them to grow in market and improve their margins Figure 25: Q18 - Sustainability
  • 55. 4.2 Awareness of sector companies regarding climate change Awareness regarding climate change includes information regarding government and global policies regarding climate change. Although majority of respondents (29 out of 36) agrees to the fact that climate change and global warming will affect their organisation but less than 10 are aware of government policies, Border tax adjustment, carbon disclosure project (CDP) and global reporting initiative (GRI) Table 5: Awareness Questions 1 5 11 13 TOTAL % Negative 7 28 30 31 96 67%AWARENESS Positive 29 8 6 5 48 33% Total 36 36 36 36 Q1: Do you think the climate change and global warming will have any effect on your organization? Q5: Are you aware of any policies of the government with regards to Climate Change & GHG reductions? s Q11: Have you heard of Border Tax Adjustments for carbon being proposed in the US and EU? Q13: Have you heard of Carbon Disclosure Project (CDP) and Global reporting Initiative? Figure 26: Awareness
  • 56. 4.3 Actions taken by sector companies regarding climate change and sustainability Companies take action for reducing pollution either to follow government norms or as a measure to improve efficiency or to be better sustainable company in comparison with their competitors. 50% of respondents have taken action regarding climate change. Some of these actions are use of energy efficient equipments, use of scrubber towers, residual water treatment and effluent treatment plant. Remaining 50% who has not taken action, majority of them still not believe necessity of such action in future. 18 companies want to measure carbon footprint. While currently only 4 are asking suppliers regarding their environmental record, 18 more are planning to ask them in future Table 6: Action Questions 2 4 15 16 17 TOTAL % Negative 18 15 18 32 22 105 66%ACTION Positive 18 3 18 4 10 53 34% Total 36 18 36 36 32 Q2: Has your company taken any measures to ascertain the GHG emissions from its operations? Q4: In case you are not doing it will you want to do it the next Q15: Would you want to measure your carbon foot print and report it? Q16: Do you ask your suppliers about their Sustainability and environmental record before purchasing from them? Q17: If no, do you intend do this in future? Figure 27: Action
  • 57. 4.4 Risk or Opportunity perceived by sector companies regarding climate change Companies can use climate change mitigation tools as opportunity to take competitive advantage over their competitors. In exactly opposite case same can be perceived as risk when competitor takes proactive action regarding climate change. Although 26 companies believe that there would be no or marginal risk or opportunity as far as climate change is concerned but 24 companies believe that it will affect their competitiveness in absence of proactive action. Major challenges or opportunities identified by companies are technology improvement, government and SEZ regulations, and process / product improvement. 29 companies believe that lending institutes will not charge higher interest rate to less sustainable companies while 21 companies believe that sustainable manufacturing will lead to increase in margins and growth of companies. Table 7: Risk or Opportunity Questions 7 8 12 14 18 TOTAL %RISK OR Negative 26 12 4 29 15 86 57%OPPORTU Positive 10 24 2 7 21 64 43% NITY Total 36 36 6 36 36 Q7: Do you see any major challenges or opportunities in this regard? Q8: What would be impact on your competitiveness in the market if you don’t take proactive action on Carbon Management and Sustainability? Q12: If you know Border tax adjustments then do you think it will affect you? Q14: Do you think that investors, banks and funding agencies will charge higher interest rates to less sustainable companies? Q18: Do you think if you were to sustainably manufacture product, it will help you grow your market and margins?
  • 58. Figure 28: Risk / Opportunity 4.5 Market Behaviour regarding climate change and sustainabilityMarket behaviour corresponds to external factors like consumer side or supplier siderequirement that may force companies to take action regarding climate change.Majority of companies’ customers have not asked them regarding carbon footprint orsustainability parameters. Although 50% of them believes that such situation willarise in next 2 years Table 8: Market Behaviour Questions 9 10 TOTAL % MARKET Negative 32 16 48 71% BEHAVIOUR Positive 4 16 20 29% Total 36 32Q9: Have your customers asked you to report your Carbon Footprint or Sustainability parameters?Q10: If no, then do you think that this situation may arise in another 2 years?
  • 59. Figure 29: Market Behaviour 4.6 Correlations Using SPSS as a tool, we have tried to find out Correlation between 4 major categories i.e. Awareness, Action, Risk / Opportunity and Market Behaviour on the basis of nature of responses i.e. Positive feedback or Negative feedback. Correlation checks that how much 1 variable is dependent on other. 4.6.1 Correlation on the basis of positive feedback On the basis of positive feedback, there is moderate correlation between Awareness, Action taken and Risk / Opportunity. So for positive feedback, there is 35% correlation which implies that awareness about climate change will result into corresponding action taken. Also there is 39% correlation which implies that Awareness about climate change will result into corresponding spotting of risk or opportunity regarding climate change. There is 56% correlation which states that if a company has already taken any action to mitigate pollution then that will result into spotting of risk or opportunity regarding climate change. Table 9: Correlation on the basis of Positive Feedback SPSS Correlation on the basis of Positive Feedback Awareness_Yes Action_Yes Risk_Yes Market_YesSpearmans Awareness_Yes Correlation 1 0.35462358 0.38726783 0.23787808
  • 60. rho Coefficient Sig. (2-tailed) . 0.033823898 0.01962264 0.1624 N 36 36 36 36 Moderate Correlation Correlation Action_Yes Coefficient 0.35462358 1 0.56394103 0.14954815 Sig. (2-tailed) 0.033823898 . 0.00034106 0.38400959 0.3 to 0.7 N 36 36 36 36 Correlation Risk_Yes Coefficient 0.387267832 0.563941031 1 0.09204624 Sig. (2-tailed) 0.019622638 0.000341056 . 0.59339527 N 36 36 36 36 Correlation Market_Yes Coefficient 0.237878076 0.149548152 0.09204624 1 Sig. (2-tailed) 0.1624 0.384009587 0.59339527 . N 36 36 36 36 4.6.2 Correlation on the basis of negative feedback On the basis of negative feedback, Only Action taken is moderately correlated with Awareness, Risk / Opportunity and market Behaviour. So for negative feedback, there is 39% correlation which implies that no or superficial Awareness about climate change will result into not taking any action regarding climate change. There is 54% correlation which states that if a company has not taken any action to mitigate pollution then they will not able to find any risk or opportunity regarding climate change. Also there is 33% correlation which implies that due to non-readiness of market (Customer side) for climate change initiatives there will be no action taken by company for climate change. Table 10: Correlations on the basis of Negative feedback Correlations on the basis of Negative feedback Awareness_No Action_No Risk_No Market_No Correlation 1 0.21867069 0.2084322Spearmans rho Awareness_No Coefficient Sig. (2-tailed) . 0.016317777 0.20009069 0.22249884 N 36 36 36 36
  • 61. Correlation 1 Action_No Coefficient Sig. (2-tailed) 0.016317777 . 0.00066843 0.04560503 N 36 36 36 36 Correlation 0.218670688 1 0.17059924 Risk_No Coefficient Sig. (2-tailed) 0.20009069 0.000668428 . 0.31983934 N 36 36 36 36 Correlation 0.208432204 0.17059924 1 Market_No Coefficient Sig. (2-tailed) 0.222498841 0.045605027 0.31983934 . N 36 36 36 364.7 Readiness of Sector CompaniesAs per the following exhibit, only 33% of surveyed 36 companies are aware aboutpolicies regarding climate change. 34% of surveyed companies have taken actionregarding climate change and sustainability. 58% companies do not find anyopportunity or risk as far as climate change is concerned. 71% of respondentsbelieve that market is not ready for changes due to global policies on climatechange.
  • 62. Table 11: Readiness and Competitiveness4.8 ConclusionMajority of companies are not ready and competitive to face the challenges due toglobal policies on climate change. As pointed out by company representatives,organisation will definitely take actions regarding climate change only when mandateregarding climate change from government is strictly employed and stringentlymonitored on periodic basis. Like Walmart, when all customers will ask regardingsustainability report of manufacturers and with imposition like Border TaxAdjustments that will definitely push Indian companies in export categories to followglobal norms regarding climate change and sustainability.Currently Companies are giving priority to process improvement which is leading topollution reduction due to improve efficiency. Goal of ‘Being Green’ will be achievedonly when pollution reduction will be cause for improvement rather than effect. Asmore companies are inclined to measure carbon footprint so then can participate incarbon disclosure project (CDP) and global reporting initiative (GRI) activity, this is apositive sign towards climate change initiative.
  • 63. As actions taken towards climate change by companies is significantly dependant onawareness about climate change, finding future opportunities, development of actionplan and market behaviour, companies need to analyze steps taken towards climatechange, not only for them but also for their competitors to become ready andcompetitive enough to face the challenges due to global policies towards climatechange.
  • 64. Chapter 5 5. Strategy DevelopmentFrom market shifts to regulatory limitations, climate change poses many risks andopportunities that companies must begin planning, or risk losing ground to theircompetitors. As a result many companies would want to formulate a climate changerelated strategy so as to mitigate the risks associated with climate change andcapitalize on the opportunities arising out of it. This chapter explains how a companycan formulate a strategy to tackle climate change.The first step in the strategy formulation involves creating awareness about climatechange as it was found that awareness leads to action. Government, variousindustry associations and companies can play a major role in creating awarenessabout climate change policies. The next step would be measuring the company’scurrent carbon footprint, which would act as the baseline against which progress canbe measured. In absence of the baseline scenario, the impact of any initiatives takenby the company would not be measureable and therefore would lack credibility.Calculation of GHG emissions should be followed by identifying the various risks andopportunities associated with climate change. This should be followed by evaluatingthe various options available to reduce the emissions. Often there are many lowcost, easily identifiable options available through which companies can significantlyreduce their GHG emissions profile. Other than On-system reductions options thereare a number of Off-system reductions available to reduce emissions.The next step is to set goals to reduce emissions. Many organizations set short term,medium term and long term goals such that they all are aligned with the overallstrategy of the organization. Goal setting should be followed by calculating the costsassociated with achieving GHG emission reduction targets and identifying variousfinancial instruments available for funding them.
  • 65. Engaging employees is very vital to the success of any strategy including climatechange strategies. Securing the employees engagement and commitment from thetop management should the next step in developing climate change strategy. Thiswill be followed by implementation of the plan, monitoring and reporting of theemission reductions. There are many voluntary reporting mediums companies canuse, like external sustainability reports, triple bottom line reports, external websites,the Carbon Disclosure Project (CDP), Global Reporting Initiatives (GRI) and theClimate Registry.The next step would be to gain an advantage of implementing the various climatechange related initiatives. The aim would be to capitalize on the opportunities arisingout of those initiatives; such as repositioning and rebranding the products and goodsoffered by the company. The final step in climate change strategy would be to createa benchmark in the industry and develop strong external relations. 5.1 StrategyMost of the companies are aware about the climate change and believe that it willhave an effect on their organization but there is hardly any significant action beingtaken to mitigate the risks or take advantage of the opportunities arising out ofclimate change and global warming. For those few companies which expect tomitigate their impact on climate change, there is a lack of well defined, structuredclimate change related strategies in place. From market shifts to regulatorylimitations, climate change poses many risks and opportunities that companies mustbegin planning, or risk losing ground to their competitors. Without setting up acomplete firm wide strategy not only do companies miss out on value generation butalso open themselves up to future risks. In order to address all the value propositionsthat can be derived from a sustainability strategy, a top down approach needs to beincorporated.47 Various steps taken now to deal with climate change can improve acompany’s competitive position relative to its competitors. This section defines how acompany can formulate a strategy to tackle climate change.1) Create Awareness about Climate Change + %=* / # /,0 / (2 ## / ? $ /; + %* 3 ,"0 /
  • 66. From the analysis of the responses we know that there is a moderate correlationbetween awareness and action. Also it was found that only one-third of thecompanies are aware about the government and global policies related to climatechange. So as awareness about this policies increases, actions taken by companieswould also increase. Lack of adequate awareness would lead to no or minimal actionby the companies.Government, various industry associations and companies can play a major role increating awareness about climate change policies. Government of India’s NationalAction Plan on Climate Change was a major step in consolidating India’s position onclimate change mitigation and adaption efforts. Various business bodies like CII,FICCI & NASSCOM are coming up with various initiatives to help corporationscapitalize on the opportunities arising out of climate change mitigation. They alsoorganize various events and publish various articles and reports to generateawareness among businesses.Companies themselves can take proactive steps to create awareness about theclimate change issues among its suppliers, consumers and competitors. LikeWalmart which last year came up with supplier sustainability assessment so as toensure that all the products they sell are sustainable and have the minimal possibleimpact on the environment.48 Such initiatives will ensure sustainability across theentire value chain of Walmart. Due to this majority of suppliers of Walmart are takingsteps to become more sustainable and create environment friendly products.So unless awareness is created by policy makers, business bodies and companiesactions to mitigate climate change won’t take place.2) Conduct GHG Emission Profile AssessmentThe next step in creating the climate change strategy would be measuring thecompany’s current carbon footprint throughout the value chain, which would act asthe baseline against which progress can be measured. In absence of the baselinescenario, the impact of any initiatives taken by the company would not bemeasureable and therefore would lack credibility. 8 , 0 G =3 ##, 3 , " 0 ?%
  • 67. This is a fundamental step for identifying and prioritizing GHG emissions reductionoptions and the means to reduce these emissions. To identify sources, types, andamount of emissions, companies should be aware of the various tools and protocolsthat are available to gather such information.The World Resources Institute/World Business Council on Sustainable Development(WRI/WBCSD) Greenhouse Gas Protocol Corporate Accounting and ReportingStandard provides a step-by-step guide for quantifying GHG emissions and is usedas the starting point for most reporting efforts around the world. Companies can do aScope 1, Scope 2, or Scope 3 emission inventory. Scope 1 includes direct emissionsand generally include emissions from on-site production processes, from the directcombustion of fossil fuels in boilers and furnaces, and from on-site power generation;Scope 2 includes indirect emissions from the consumption of purchased electricity,heat, or steam; and Scope 3 includes other indirect emissions from upstream anddownstream sources across the value chain, as well as emissions associated withoutsourced or contract manufacturing, leases, or franchises not included in Scope 1or Scope 2. The WRI/WBCSD Protocol includes guidance for identifying relevantsource categories and calculation tools for emissions from particular sourcecategories. It provides the accounting framework for nearly every GHG standard andprogram in the world - from the International Standards Organization to The ClimateRegistry - as well as hundreds of GHG inventories prepared by individualcompanies.49GHG emissions can be reported in either absolute terms or in normalized terms. Togain a clear sense of a company’s exposure to possible climate-change policy,absolute measures are necessary. But to track performance relative to othereconomic or production goals, or to competitor benchmarks, emissions can benormalized with another measure such as dollars of revenue or units of production.The most common metrics include: total tons CO2e; tons CO2e per unit of product;energy consumption per unit of product; and total energy consumption. Somecompanies use both absolute as well as normalized measures to report GHGemissions.3) Identifying Risks & Opportunities M 2 B < B / ,. G--- % # / ,
  • 68. Once GHG emissions are calculated the next step in the climate change strategyformulation should be to identify how the operations and the sales of the businesswould be affected (both positive and negative) due to climate change policies.Identifying risks and opportunities must flow from an understanding of theorganizations current and future GHG emission footprint in the environment of thecurrent and future carbon restraint society and economy.In order to gauge risks and opportunities, companies should consider their emissionsrelative to industry peers, potential changes in customer preferences, and futureregulatory developments. In terms of assessing risks, companies generally considersthe impact of climate change regulations on the company’s various products andservices and thus impacting its bottom line. It can also include the pressure from thevarious stake holders to become more sustainable. The companies need to identifythose potential risks and try to eliminate them or at least reduce them as early aspossible.With proper risk management companies can address the various risks associatedwith climate change, but with time and experience companied can shift their climatechange related strategies to capitalize on the various opportunities arising out of theclimate change and thus enhancing its top line. This may involve improvingoperational efficiencies, shifting to new technologies, finding new uses for theexisting products or developing new or green products to meet the changing needsof the consumers. The companies need to identify what products and services willflourish given current and future carbon constraints and divert focus on developingthem before the competitor develops and gain early mover’s advantage.4) Evaluate OptionsAfter conducting the GHG emission profile assessment for the organization, the nextstep in the climate change strategy formulation should be to evaluate various optionsavailable to reduce these emissions.Often there are a number of low cost, easily identifiable options available throughwhich companies can significantly reduce their GHG emissions profile. These ‘low-hanging fruit’ options include a behavioral or technological change that improvesefficiency, reduces energy consumption and thus reduces the organizations GHG
  • 69. emissions. Identifying these low cost options can be the short term strategy of anorganization.Even if such big-impact options do not exist at present, companies can achieve adrastic reduction in their GHG emission profile by developing advanced technologysolutions in the future. Developing such advanced technologies which will help inreducing the GHG emissions can be a long term strategy for the organization. Alsoby sustaining their efforts over the long term, organizations can continuously reducetheir GHG emissions.All the GHG emission reduction options available at the facility level or even withinthe company are called the On-system reduction options. There are various Off-system reductions options available through which an organization can reduce itsGHG emission footprint. Off-system reduction options can include forestry projects,end-user efficiency programs, research and development projects, etc. Conductingcost-benefit analysis and evaluating their impact on the top line and the bottom lineof all the available options is necessary before implementing them.5) Goal SettingGoals set to reduce GHG emissions vary from organization to organization withrespect to objectives, timelines, baseline year and types of emissions covered. Goalssetting need not be limited only to GHG emission reductions but can also includestrategic initiatives and adaption strategies. Many organizations set short term,medium term and long term goals such that they all are aligned with the overallstrategy of the organization.Companies generally develop goals by analyzing the various risk and opportunitiesposed by the climate change policies. Short term goals may include improving theenergy efficiency which may be for a period of 1 to 3 years whereas long terms goalsof an organization can be becoming environment friendly and developing sustainableproducts and services over 10 to 15 years period.The goals should be such that they are feasible to achieve and would have asignificant impact on the company’s bottom line. Even if these goals are notfinancially viable the company should be able to justify them using the long term
  • 70. sustainability benefits from implementing them. Instead of setting one universal GHGemission reduction targets, organizations can also set diverse targets across variousbusiness units that all contribute towards the overall corporate goal. Companies canuse scenario planning for setting goals.Other then reducing GHG emission reduction goals companies are also settingvarious other goals. Such goals include sourcing renewable energy, reducing solidwaste, increasing use of hybrid vehicles, promoting use of bio-fuels, etc.6) Budgeting and Financing Climate Change InitiativesWhat are the costs associated with achieving GHG emission reduction targets andwhat all financial instruments are available for funding them? Some of the climatechange initiatives require almost zero or minimal cost to implement but some of theinitiatives require huge capital investment to fund activities like investment in R&D ofgreen products, purchase of new highly efficient sophisticated technology, etc. Thissection discusses the various financial instruments used for funding climate changerelated plans.Costs associated with achieving GHG emission reduction goals are measured inthree dimensions: absolute, normalized and financial-returns terms. Investment inclimate change strategies vary widely across companies to companies on anabsolute cost terms. Costs associated with climate change strategies can also becalculated on a normalized basis, such as cost per ton of CO2 reduced. Finally costassociated with climate change strategies can also considered on financial returnsbasis.Since India falls under non Annex I countries in the Kyoto Protocol, companies inIndia can implement various CDM projects and can recover their cost through tradingthe CERs generated.Companies can also use a combination of various other approaches to fund theirclimate-related strategies and evaluate prospective investments. Some of the mostcommon methods include using shadow prices for carbon; reserving a special poolof investment capital; and lowering internal hurdle rates.7) Employee Engagement
  • 71. Although most of the organizations while designing climate change initiatives placeprimary importance on external communications. Engaging employees is very vital tothe success of any strategy including climate change strategies. Climate changeinitiatives are usually of long term and complex nature, gaining confidence from theworkforce takes time and effort.Senior level support and engagement are a vital component of any successfulclimate change strategy. Top management by demonstrating a high level ofcommitment to addressing climate change can motivate the employees at the lowerlevel to also participate in the change.There is no shortcut to building and maintaining employee engagement with climatechange initiatives, but there are a range of activities that have proved to besuccessful for many organizations addressing this issue. The following activities canhelp organizations achieve maximum employee engagement: a) Consultation: In order to achieve maximum engagement, the whole business, including employees should be consulted and involved at the very beginning of the design of a climate change strategy. It vital that employees s feel part of the decision-making process when selecting the right blend of internal emission reduction activities and by getting feedback on what employees feel is appropriate and realistic, the chances of them buying into the process are increased. b) Communication: To ensure proper understanding of organizational goals, effective planning and deployment of an integrated communications strategy is very important, which delivers meaningful and relevant environmental messages. Various communication channels which can be used are face to face communication, electronic communications and printed communications. c) Education: Climate change is a complex issue and thus organizations should educate its employees about the same. Companies that educate and train their employees about the climate change initiatives often receive maximum engagement from employees. d) Participation: The initiatives of reducing emissions need to filter through the whole organization in order to achieve the stated objectives. If real behavioral change of the employees is to be achieved and sustained, then
  • 72. reinforcement, recognition and reward of those behaviors need to take place on an ongoing basis.50Every organization is different, and to engage employees effectively around aclimate change initiatives a company needs to tailor a strategy that ultimately worksfor them.8) Implementing, Monitoring & ReportingOnce the GHG emission reduction strategies are identified, goals are set, teamwhich will lead the plan is formed and employee engagement is assured the nextstep would be to implement the climate change initiative.Implementation of the climate change related initiative should be followed up bycontinues monitoring of the results. Constant monitoring and feedback are essentialto effective implementation. Monitoring of the emissions will help in evaluating thesuccess of the implemented strategies. Monitoring and feedback will help inmeasuring the impact of the strategies. Hence it is important for organizationsimplementing climate change strategies to develop monitoring equipments to trackGHG emissions.Climate change is a new reporting area for many companies, driven by stakeholderdemand for information as well as by regulation. There is a growing demand formore transparent reporting of climate change business strategies, initiatives andperformance. Creating an effective monitoring, reporting and verification system(MRV) for climate change initiatives is becoming increasingly important, particularlywith increasing regulatory requirements and stakeholder expectations. There aremany voluntary reporting mediums organizations can use, including externalsustainability reports, triple bottom line reports, external websites, the CarbonDisclosure Project (CDP), Global Reporting Initiatives (GRI) and the ClimateRegistry.51The information provided in the report needs to be relevant, complete and meet theexpectations of stakeholders and the regulatory requirements. Done well, it providesa company with the opportunity to present a clear picture of the measures it is taking 4 ; &,% , %=*,0 / 0 7 0 #, 0 ?% / / % M "/ 0 / (2 # /,0 / ?% EL ! # %
  • 73. to meet the challenges and opportunities of climate change. Organizations can alsointegrate financial and non-financial data in the report, which would help readers, geta better understanding of the financial implications of the company’s climate changerelated strategy.9) Re-branding & RepositioningThe next step in formulating climate change strategy would be how to gain anadvantage of implementing the various climate change related initiatives. The aimwould be to capitalize on the opportunities arising out of those initiatives; such asrepositioning and rebranding the products and goods offered by the company.Re-positioning involves changing the identity of a product, relative to the identity ofcompeting products, in the collective minds of the target market. Companiesimplementing various climate change related plans can gain an advantage in themarket by re-positioning themselves as a sustainable company.In recent years there has been an increase in demand by the consumers forsustainable and green products and services. As a result more and more companiesare marketing their products as green brands. Green brands are those brands thatconsumers associate with environmental conservation and sustainablebusiness practices. Such brands appeal to consumers who are becoming moreaware of the need to protect the environment. A green brand can act as a USP for aproduct and can also help in boosting corporate image.Brand value is created by communicating to the public the projects a company isinvolved in which improves economic, social and environmental impacts. A goodmarketing tool for assuring brand value is through public reporting in the abovementioned channels.10) Bench-marking and managing external relationsThe final step of the climate change strategy formulation involves setting up of anexample in the industry and engaging with important external agencies that woulddirectly impact the strategic success of the organization. Companies through itscredible initiatives related to climate change can set a bench-mark for its peer andmotivate them to become sustainable.
  • 74. There exist strong link between government policy and business strategy and also astrong need for companies to participate in policy development related to climatechange. This participation can be geared toward advancing individual-companyinterests, but it is also seen as way of providing valuable input toward the goal ofsound and effective policy.External outreach is critical to success. Outside groups can provide knowledge andkey avenues for advancing business objectives. The external outreach efforts areusually first aimed at employees and NGOs, and then at government, the broaderpublic, and finally the investment community.Companies can also work closely with business partners on climate change relatedactivities. Targeting the supply chain—from customers to suppliers—provides thebest opportunity for using outreach to connect climate concerns with a firm’sbusiness objectives.52 < 0 % %=B / (* # /,0 / ?% - * B , ,*,0 * %@ /
  • 75. Chapter 6 6. ConclusionThe outlook of global policies regarding climate change is shifting existing markets.India’s export business response towards climate change is important issue.53However responses of surveyed companies in this report show that many of themare not geared up to face the challenge of climate change. Out of thousandspursued, a few hundred convinced, of which thirty six responded. Few reasons forthis scenario are lack of awareness regarding aspects climate change whichincludes setting targets for reducing carbon impact, quantification and analysis ofmeasures taken, climate change policies and agreement, micro level understandingof business as well as awareness of sector’s macro environment and less pressurefrom stakeholders.Risk and opportunity analysis for climate change is judged companies on the basiscapturing financial opportunities through product and process improvement as wellas risk analysis with respect to changing government and SEZ regulation.Companies develop their strategies on the basis of economic level of issues andtheir impact by considering direct cost of implementation.Actions taken by companies towards climate change are significantly dependant onawareness about climate change, finding future opportunities, development of actionplan and market behaviour. For sustainable development, although half of surveyedcompanies have given positive response for measurement of carbon footprint butsame must be supported with time bound action plan along with verification andperiodic reporting of the same.Major force behind positive outlook for global policies regarding climate change ismarket transformation due to stakeholders like customers and suppliers’ pressure < 0 %" =*,0 * 3 (2 4 + /4 9 , B B! / ? ! 1 : 5 :( 7
  • 76. with key drives such as establishment of regulation, energy efficient products andgrowing interest among investing community54Companies will develop the strategy which is integrated with their present scenarioregarding climate change which can be widely divided as awareness, opportunities /risks, actions taken and market behaviour. So strategy formulation will start withcreating awareness and will end with benchmarking. Formation of new benchmarkwill again lead to creating awareness regarding achieving next milestone thusforming a strategy cycle which will be continuous improving process rather than onetime activity. Figure 30: Strategy < 0 %" =B / (* # /,0 / ? 0
  • 77. Annexure A1: Old Survey QuestionnaireThis questionnaire was prepared in an excel sheet and was e-mailed to the industryexperts for their views about it.Name of the RespondentTel No and Email of RespondentName of the CompanyContact Address,Tel Number and EmailSr. Question Y N Response Notes for Reference 1 Do you think the Climate Please provide some response even Change and Global if your answer is no. Try and provide Warming will have any effect at least 3 effects in both short and on you organization ( Short long term. The effects could be both and Long term) negative and Positive 2 Has your company taken List down the measures even if they any measures to ascertain are not relevant the GHG emissions from its operations? If yes briefly explain how you are doing it? In case you are not doing it will you want to do it in the next 3-6 months? 3 What policies of the Please list the top 3 Policies only. Eg. Government in Your region Reporting your Products Carbon Foot of operations (Including your print. target market are you aware off) 4 Are there any major challenges or opportunities that you see in regards to above 5 Have your Customers asked Some examples -- Wal-Mart, Levis, you to report your Carbon or TESCO, M&S etc.. Have Sustainability parameters ? implemented or in the process of If No, Do you think you will asking all suppliers to do carbon be required to do it in the ;labeling, vendor rankings based on next 2 years? sustainability, Sustainability Index etc. 6 Have you heard of Border Border Tax is a mechanism where the Tax adjustment for Carbon importing country will have some being proposed in the US benchmark for each product being and EU ? Do you think it will imported. The exporter will have to affect you and how? declare ( in a verifiable way) the carbon footprint of the landed product. Based on the difference in the Footprint and Benchmark a Border Adjustment tax will be imposed.
  • 78. 7 Have you heard of CDP CDP and WRI are the world leading (Carbon Disclosure Project) voluntary reporting initiatives and very or WRI (World Reporting well respected in the investing and initiative)? Do you think lending and investing community investors, Banks and funding agencies will provide higher interest rates to less sustainable companies? Would you want to report on Cap or WRI?8 Will you want to measure A carbon foot print measures in a your carbon foot print and detailed manner on how much of report it? Do you think you GHG gasses are emitted directly or could save energy costs if indirectly in manufacturing of your you were to do a carbon product. This is directly related to footprint? energy use and thus money.9 Do you ask your suppliers This is mainly for the key Raw about their Sustainability and Materials that you use. Environmental record before purchasing from them? If no do you intend to do it in future?10 Do you think if you were to Please detail your reasons. rebrand your Product as sustainably manufactured you could grow your margins and market.11 Do you think your Competitiveness could be from competitiveness in the various points of views -- Market, market could be affected if Profitability, Energy Costs, Insurance you don’t take proactive costs, cost of Money etc. action on Carbon Management and Sustainability (like your competitors are taking in China, Europe and USA)
  • 79. Annexure A2: New Survey QuestionnaireThis new questionnaire was prepared in the Google docs and the link of thequestionnaire was e-mailed to the companies for their response.Carbon Management ProjectThis is a Questionnaire for a Research Report on “Readiness and Competitiveness of IndianExport Sector due to Global Policies on Climate Change”Please try and provide as much and as accurate information as possible to help us do anaccurate analysis.We ensure you that the details of the respondent and the company will be kept confidential.* RequiredName of the respondentEmail of Respondent *Contact Number of the RespondentName of the Company *Do you think the climate change and global warming will have any effect on yourorganization? * o No Effect o Marginal Effect o Substantial Effect o Don’t Know the Effect o Other:Has your company taken any measures to ascertain the GHG emissions from itsoperations?* o Yes o NO
  • 80. If yes, briefly explain how you are doing it?In case you are not doing it, will you want to do it the next? o 3 Months o 6 Months o 1 Year o More than 1 YearAre you aware of any policies of the government with regards to Climate Change & GHGsreductions? * o Yes o NoIf yes, please mention what are they?Do you see any major challenges or opportunities in this regard? * o Yes o NoIf yes, what can be the possible challenges or opportunities?
  • 81. What would be impact on your competitiveness in the market if you don’t take proactiveaction on Carbon Management and Sustainability? * o No Impact o Marginal Impact o Substantial Impact o Don’t Know the ImpactHave your customers asked you to report your Carbon Footprint or Sustainabilityparameters? *A carbon footprint measures in a detailed manner on how much of GHG gasses are emitteddirectly or indirectly in manufacturing of your product. This is directly related to energy use andthus money. o Yes o NoIf no, then do you think that this situation may arise in another 2 years? o Yes o NoHave you heard of Border Tax Adjustments for carbon being proposed in the US and EU?*Border Tax is a mechanism where the importing country will have some benchmark for eachproduct being imported. The exporter will have to declare (in a verifiable way) the carbonfootprint of the landed product. Based on the difference in the Footprint and Benchmark a BorderAdjustment tax will be imposed. o Yes o NoIf yes, do think it will affect you? o Yes o NoHave you heard of Carbon Disclosure Project (CDP) and Global reporting Initiative?*CDP and GRI are the world leading voluntary reporting initiatives and very well respected in theinvesting and lending and investing community. o Yes o No
  • 82. Do you think that investors, banks and funding agencies will charge higher interest ratesto less sustainable companies? * o Yes o No o Don’t KnowWould you want to measure your carbon foot print and report it? *A carbon footprint measures in a detailed manner on how much of GHG gasses are emitteddirectly or indirectly in manufacturing of your product. This is directly related to energy use andthus money. o Yes o No o Can’t SayDo you ask your suppliers about their Sustainability and environmental record beforepurchasing from them? * o Yes o NoIf no, do you intend do this in future? o Yes o No o Can’t SayDo you think if you were to sustainably manufacture product, it will help you grow yourmarket and margins? * o Yes o No o Can’t Say
  • 83. Annexure A3: Responses to the Survey
  • 84. Q1: Do you think the climate change and global warming will have any effect on your organization?Q2: Has your company taken any measures to ascertain the GHG emissions from its operations?Q3: If yes, briefly explain how you are doing it?Q4: In case you are not doing it will you want to do it the nextQ5: Are you aware of any policies of the government with regards to Climate Change & GHG reductions? sQ6: If yes, please mention what are they?Q7 A): Do you see any major challenges or opportunities in this regard?Q7 B): If yes, what can be the possible challenges or opportunities?Q8: What would be impact on your competitiveness in the market if you don’t take proactive action on Carbon Management and Sustainability?Q9: Have your customers asked you to report your Carbon Footprint or Sustainability parameters?Q10: If no, then do you think that this situation may arise in another 2 years?Q11: Have you heard of Border Tax Adjustments for carbon being proposed in the US and EU?Q12: If yes, do think it will affect you?Q13: Have you heard of Carbon Disclosure Project (CDP) and Global reporting Initiative?Q14: Do you think that investors, banks and funding agencies will charge higher interest rates to less sustainable companies? *Q15: Would you want to measure your carbon foot print and report it?Q16: Do you ask your suppliers about their Sustainability and environmental record before purchasing from them?Q17: If no, then do you intend do this in future?Q18: Do you think if you were to sustainably manufacture product, it will help you grow your market and margins?
  • 85. References1. “Addressing Leakage and Competitiveness in US Climate Policy: Issues Concerning Border Adjustment Measures” WORKING PAPER- March 5, 2009.2. “Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading system of the Community”, COMMISSION OF THE EUROPEAN COMMUNITIES, Brussels, 23.1.2008.3. “ Climate Policy and Industrial competitiveness: Ten insights from Europe on the EU emissions trading system”, Climate & Energy Paper series 094. “The European Union’s Proposed Carbon Equalization System: Can it be WTO Compatible?”, Discussion Paper # 156, Biswajit Dhar and Kasturi Das.5. “Carbon Labelling and Low Income Country Exports: An Issues Paper”, Brenton Paul, et. al, 31 May 2008.6. Carbon Disclosure Project: Supply Chain Report 2010.7. “Carbon Labelling and Low Income Country Exports: An Issues Paper”, Brenton Paul, et. al, 31 May 2008.8. Wal-Mart Sustainability Product Index: Fact sheet.9. http://www.wbcsd.org10. http://en.wikipedia.org/wiki/Global_Reporting_Initiative11. http://en.wikipedia.org/wiki/United_Nations_Global_Compact12. http://www.unpri.org/about/13. http://en.wikipedia.org/wiki/Equator_Principles14. http://www.sustainability-index.com/15. http://www.ftse.com/Indices/FTSE4Good_Index_Series/index.jsp16. Economy of India, Available at: http://en.wikipedia.org/wiki/Economy_of_India [March, 2010]17. Confederation of Indian Industry, Available at: http://www.cii.in/Sector_Landing.aspx [March, 2010]18. India Key Industry, Available at: http://india.mapsofindia.com/indian-economy/india-key- industry.html [March, 2010]19. Indian Textile Industry – Industry analytics, Available at: http://www.docstoc.com/docs/25493164/Indian-Textile-Industry---Industry-Analytics/ [March, 2010]20. Indian Economy, Available at: http://www.bharatadesam.com/about/indian_economy.php [March, 2010]21. 7. Central electricity authority, GOI, Available at: http://www.cea.nic.in/ [March 2010]
  • 86. 22. Country industry forecast, Available at: http://www.businessworld.in/index.php/Country- Industry-Forecast-XI.html [March 2010]23. Carbon Disclosure report 2009-India 200, 2009, CII, British high commission - New Delhi, Available at: www.cdproject.net [March 2010]24. India: Addressing Energy security and climate change, Ministry of Environment & Forest, GOI, October 2007, Available at: http://envfor.nic.in/divisions/ccd/Addressing_CC_09-10-07.pdf [March 2010]25. Public Diplomacy Division, Ministry of External Affairs, GOI (Government of26. India). “THE ROAD TO COPENHAGEN: India’s Position on Climate Change Issues”. (27 Feb 2009)27. IEA (International Energy Agency). 2009. “CO2 Emissions from Fuel Combustion (Detailed Estimates)”. Vol. 2009 release 01.28. World Bank, “INDIA: Option for Low-Carbon Development”, South Asia Sustainable Development Department, (December 2009)29. http://siteresources.worldbank.org/INTINDIA/Resources/LCD-Synopsis-Dec2009.pdf30. Aaron Atteridge, et al. (2009), Stockholm Environment Institute Report, “Reducing Greenhouse Gas Emissions in India”, October 2009.31. GOI (Government of India), “National Action Plan on Climate Change”, June 2008.32. Indian PM speech on release of Climate Change Action Plan, New Delhi, June 2008. s33. http://www.pmindia.nic.in/lspeech.asp?id=69034. Union Budget of India 2010-2011, New Delhi, 26 February, 2010.35. http://indiabudget.nic.in/ub2010-11/bh/bh1.pdf36. KPMG India Study, “Climate Change: Is India Inc. Prepared?” 2008.37. Confederation of Indian Industry (CII); www.cii.in38. Federation of Indian Chambers of Commerce & Industry (FICCI)http://www.ficci.com/index.asp & http://www.ficci-cdm.biz/default.htm39. National Association of Software and Services Companies (NASSCOM)http://www.nasscom.in/40. Indicators of International Competitiveness: Conceptual Aspects and Evaluation: Mattine Durand and Claude Giorno41. G20 low carbon competitiveness- The Climate Institute & E3G, final report 14th September 200942. Navigating carbon regulations : Impact on Indian business by Ernst & Young