Climate Change; A Corporate Social Responsibility

Climate change in the form of global warming induced by the accumulation of

greenhouse gases in the atmosphere is already under way. For strategic purposes,

one can distinguish between the implications of a moderate increase (2 0 C) and a

catastrophic increase (50 C+). The moderate increase will affect hydrology, coastal

zones mountain ecosystems and biodiversity with significant impacts on agriculture,

health, settlements.

It is probably unavoidable because of the accumulation of greenhouse gases that

are already there; but we can cope with the consequences if we put our mind and

money on the job. On the other hand, a temperature increase that approaches 50 C

threatens catastrophic scale of disruption; but it may not happen for decades. So,

we still have time to prevent the worst if we start acting now. The case for action

applies as much for individual enterprises as it does for governments. The threat is

real, act now or face hugely higher costs in the future. This is why industry must

take this issue on board, and not just as a corporate social responsibility activity.

The bottom line is that there will be an implicit or explicit price for carbon. At the

present stage, this manifests itself in India as an opportunity. Enterprises that can

prove carbon savings over and above business-as-usual can use the clean

development mechanism to earn carbon credits and sell them for compliance

purposes to western enterprises. There is now no serious penalty for carbon

inefficiency; but that will certainly change soon enough.

The Government of India will resist any premature imposition of commitments and

insist that the principal polluters, the western nations, must bear the burden of
adjustment and demonstrate a more serious willingness to restrain their use of the

global atmosphere commons before leaning on low per-capita emitters like India.

However, India has committed itself to ensuring that its per capita emissions will at

all times remain below those of the industrial countries.

The Government has recognized the an its national Action Plan on Climate Change

integrates climate change concerns into development strategy. Indian enterprises

must also integrate climate concerns fully into their long term strategic planning

because carbon constraints and environmental changes will start to bite within the

lifetime of the investments being made now.

Second, they must anticipate. Climate change will alter the physical environment

and resource base for industry. All historical data used for planning must be re-

examined in the light of potential changes in temperature, hydrology, sea level rise,

extreme climate events and consequential changes in biotic resources, habitat and

health.

Third, they must innovate. The drastic reduction in carbon emissions that is needed

cannot be done with existing technologies. An intelligent enterprise will reflect this in

today’s decisions to avoid huge retro fitting costs at a later stage.

The potential areas for technology development and for innovative business models

can be identified quite readily. In a summary form, some of the energy related areas

that deserve serious attention in corporate planning in the immediate future include;

1. Energy efficiency: CFL/LED lighting, building design, appliance standards,

vehicle efficiency.
2. Cleaner fossil fuel use: Fuel switching, combustion efficiency.

3. Power from waste: Bio chemical conversion, waste water use, sewage

utilization and recycling. New business models for demand side management.