Greenco: Enabling Indian Companies to Go Green Profitably

Transcription

1 Greenco: Enabling Indian Companies to Go Green Profitably NMK Bhatta, IIM Indore Bhavani Shankar, IIM Indore Muthusezhiyan N, CII GBC 20 June 2016 Indian Institute of Management Indore 1

2 Introduction Contents Challenges in adopting efforts Sector comparison: India Vs Developed Nations (U.S.) Lessons Learnt Suggestions for Spreading Green Efforts Concluding Remarks 20 June 2016 Indian Institute of Management Indore 2

3 Objective Study green efforts of companies rated under GreenCo & its effectiveness in leading the industries to become sustainable. Analyse sector-wise data in green efforts of Indian industry vis-à-vis other developed counties such as United States (U.S.). To offer recommendations for promoting green efforts among Indian Industries. 20 June 2016 Indian Institute of Management Indore 3

4 Challenges in Adopting Green Efforts Choices before companies Seeing green as limited, narrow and isolated initiative (or) adopting a more holistic approach; Merely meeting regulatory compliance (or) developing competitive advantage; Seeing green effort as cost center (or) envisioning a business opportunity. 20 June 2016 Indian Institute of Management Indore 4

5 Sector-wise Analysis of Key Sectors Green Journey 20 June 2016 Indian Institute of Management Indore 5

6 Aviation Sector About $12.1 billion investments are expected in 12 th five-year plan of which $9.3 billion is from private sector Indian Green Building Council (IGBC) Green Buildings, Leadership in Energy and Environment Design (LEED) and GreenCo certifications are being adopted Only 6 airports in India took green efforts (4.8%) Total 125 airports available, 2 are GreenCo rated Savings achieved from GreenCo are: INR million 20 June 2016 Indian Institute of Management Indore 6

7 Contd Airport Carbon Accreditation Prog recognizes the effort of airports to reduce their GHG emissions. Mumbai, Delhi and Bangalore airports have received level -III in Only 74 airports in USA took green efforts (1.4%) of total 5145 airports available for public use. 14 June 2016 Indian Institute of Management Indore 7

8 Cement Sector With 6.7 percent of world s cement output, India is world s second largest producer of cement. Up to $1 trillion investments are planned by govt. in 12 th fiveyear plan. Indian cement industry has been doing considerable work in energy efficiency areas It is one of the notable in Specific Electrical energy consumption in the world GreenCo helps cement companies to look beyond energy efficiency 20 June 2016 Indian Institute of Management Indore 8

9 Contd In India 6 firms have taken Greenco Rating. (70 companies with branches) Savings achieved due to GreenCo: INR to 43.6 million Portland Cement Association (PCA) in U.S. 115 plants were taking green efforts at various levels. Similar efforts are required in India to support Greenco in achieving its goals faster. 20 June 2016 Indian Institute of Management Indore 9

10 Consumer Durables By 2020 market is expected to reach $20.5 billion. e-waste in India is estimated to be 1.47 lakh tonnes per day U.S. Environment Protection Agency initiated National Electronics Action Plan-170 in U.S states impose regulations on design, manufacture, reuse, recovery & disposal of e-waste on the lines of extended producer responsibility. 4 Cos in India are Greenco rated, others meeting only govt. regulations. Over 11 key players exist in this market. Savings from green efforts per annum: INR million 20 June 2016 Indian Institute of Management Indore 10

11 Chemicals It accounts for 2.11 percent of India s GDP 12 th five-year plan proposes develop standards for chemical usage related to energy use, environmental impact, water, raw materials, and safety during the entire life cycle. U.S. produces 70,000 products from over 10,000 firms All American Chemistry Council member companies report their progress on environmental performance in SO X / NO X, water, and reducing emissions. Reductions observed in all the three parameters by In India only 2 companies have been Greenco rated. There are 5 major players and other smaller players. Savings from green efforts per annum: INR 4 20 million 20 June 2016 Indian Institute of Management Indore 11

12 Engineering Industry By 2020, Indian market spending would be $1.1 trillion Capital goods and engineering turnover was expected to reach $125.4 billion by Market size of electrical equipment was expected to reach $100 billion by In U.S. Green engineering was promoted by EPA to help industry move on sustainability path. EPA developed educational materials for integrated computer based tools, and training modules for industrial training In India, 8 industries are Greenco rated out of about 3543 organised players and 10,900 units in SMEs Saving from Green efforts per annum: INR million 20 June 2016 Indian Institute of Management Indore 12

13 Automobile Industry India s passenger vehicle production was expected to increase from 3.2 million in 2015 to 10 million in With production of 12 million passenger vehicles, U.S. is one of the largest automotive markets in the world. 10 automotive giants are investing in sustainability initiatives and are able to show profits In the US hybrid cars are capturing an increasing share of the domestic automobile market. In India 4 Cos are Greenco rated, out of 45 players in market. Savings for these companies from green efforts: INR million / Annum 20 June 2016 Indian Institute of Management Indore 13

14 Lessons Learnt from Greenco Efforts Equipment Wise Efficiency Monitoring Process Wise Benchmarking Energy Score Card for Employees Improvement in Raw Material Yield Green Supply Chain Policy Resource Efficiency Improvement at the Suppliers' End Life Cycle Assessment 20 June 2016 Indian Institute of Management Indore 14

15 Suggestions for Scaling Up Firms which are at higher level of maturity in their green journey need to handhold other firms through formation of associations. To scale up green efforts, CII-GBC needs to convince mature companies to share their green experiences without hampering their competitiveness. The rated companies should promote their achievements through green marketing campaigns. Government, industry & academia interactions needed. 20 June 2016 Indian Institute of Management Indore 15

16 Suggestions for Scaling Up (Contd ) Leaders who are members in other company boards need to push green agenda in those companies. Government policies / incentives are needed to encourage investment in green initiatives. Courses in academic institutions, should orient future managers with green bent of mind. Benefits of green buildings and their guidelines need to be promoted. Green buildings should become part of smart city conceptualisation. 20 June 2016 Indian Institute of Management Indore 16

17 Suggestions for Scaling Up (Contd ) Companies should integrate green efforts in their business strategy. Eco-labelling is most popular in EU, followed by China, Japan, Australia and New Zealand. Over 30 organisations are issuing eco-labels and over 13,000 products have been certified. Green business center should strive to get recognition for its logo, symbolising environment friendliness. If it becomes a standard, like star rating, then customer demand will force companies to go green. 20 June 2016 Indian Institute of Management Indore 17

18 Concluding Remarks Percentage of penetration of Green movement into Indian Industries is very limited. CII (GBC) is putting in a lot of efforts in bringing in more and more Industries into its fold, but for the size of Indian Industry, this alone can not improve the situation. Larger Greenco rated companies must come forward, motivate and handhold the other Industries in going forward in this direction. CII should work with Government in getting an approved Logo of recognition for various levels of Green rating so that the companies can leverage the same for green marketing 20 June 2016 Indian Institute of Management Indore 18

19 Concluding Remarks Contd We at the educational Institutions have also an important role to play. We need to implant the seeds of Green Commitment into the young minds because they are ones who will be running most of the corporates and take forward the movement We, at IIM Indore are starting to offer this subject Going Green in a profitable Way as an elective from the next term onwards. We are planning to recommend the same to the other IIMs also. CII may work with UGC and the State Governments to introduce this as a subject in all Engineering/Degree and MBA education Systems. 20 June 2016 Indian Institute of Management Indore 19

20 Thank You 20 June 2016 Indian Institute of Management Indore 20