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Climate Change - Role of Industry - Mr. Rambabu
This document discusses industry's role in climate change and outlines strategies for corporations to address it. It notes past international agreements on sustainability and climate change. While climate change is real and nations have agreed to limit global warming, current national commitments still fall short of emissions reductions needed. The document recommends corporations embed climate considerations in long-term planning, establish credible climate strategies, and lead by innovating and setting sustainability benchmarks. A case study highlights an Indian company's roadmap to achieve carbon neutrality through operational efficiencies, renewable energy sourcing, and community projects that offset remaining emissions.
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Climate Change - Role of Industry - Mr. Rambabu
- 1. Climate Change -Role of Industry
- 2. Sustainability • Limits toGrowth 1977 • Our Common Future 1987 • Rio Declaration 1992 • Rio +10 2002 • Rio +20 2012
- 3. What is thelimiting Factor ? • Finite Resources- Supportive Capacity of resources?? OR • Finite Assimilative Capacity ??
- 4. Climate Change isREAL…being monitored to calibrate action • Politically agreed to limit the rise to 2oC over pre-industrial levels . • National climate mitigation commitments still fall short by a giga ton. • In pre Durban (December 2011) meetings, the nations have agreed to monitor , analyse, review and calibrate action
- 5. Emission Reduction Commitments CanadaETS (2013) 17% of 2005 by 2020 • Dependent on US legislation • Domestic voluntary markets covering power and industry Brazil* 36-39% BAU by 2020 US (2012) 17% of 2005 by 2020 • Federal or state initiatives like RGGI/ WCI/ AB 32 Sectors covered • Power, • Industry, • upstream oil and gas- later • Transport- 2015 EU ETS (2005) 20% or 30% (conditional) of 1990 by 2020 • Power & Industries • Sustained volumes till 2012 India * 20-25% GDP emission intensity of 2005 by 2020 • Emissions intensity based commitment China * 40-45% GDP emission intensity of 2005 by 2020 •Emissions intensity based system NZ ETS (2010) 10-20% (conditional) of 1990 by 2020 • Transport, Energy, Industry • Agriculture (intensity based)- 2015 Low Medium High Level of ambition against Business as Usual (BAU) South Africa* 34% BAU by 2020 Australia ETS (2011) 5% or 15-25% of 2000 (conditional) by 2020 • Power, industry, transport Japan ETS (2011) 25% (conditional) of 1990 by 2020 • EU ETS like scheme by 2011. • Regional system for office buildings S. Korea (2010) 4% of 2005 by 2020 • Power, Industry Indonesia* 26% BAU by 2020 Russian Fed 15-25% of 1990 by 2020 * Voluntary in nature Source of Commitments: UNFCCC
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- 9. Financial Markets ExceedCarbon Budgets Several Times
- 10. Spectrum of Possibilities Increased effortsin GHG emission mitigation. Promotion of renewables, energy efficiency, green tech and green fuels. Domestic Regulations and Markets Bilateral and Multilateral fungibility International funding for GHG mitigation. International Agreement with binding commitments and GHG emission reduction is a commodity and is globally fungible. Certain Uncertain
- 11. Corporate Actions arestill…. • Decisions driven by “short term return" on capital investment • Initiatives driven "bottom up" with line managers or divisions. • Wait till scenario is clear…..Not too soon • “Good to do" …. good corporate social behaviour • Not integrated or loosely integrated to short and long term organizational planning.
- 12. Shortcomings of ClassicCorporate Actions • Opportunistic approach in response to developing regulations • For the time being BaU….too late to respond! • Assets, liabilities do not capture climate related valuation/ devaluation. • Lacks methodical approach to capture climate impact in return of investment projections. • Lack of system to methodically and continually apportion value erosion because of climate impact (climate impact is like a step curve). • Lacks systematic approach to unearth carbon asset identification.
- 13. Good Corporate Responseto Climate Change • Embedding climate consciousness in investment planning • Development of an integrated systematic approach to treat climate related assets. • Development of a corporate view on evolving climate regulation. • Establishing a feasible, long-term, credible climate strategy.
- 14. Good Practice • Understandthe impact of your value chain: Reduce, reuse and recycle • You can choose metrics to manage resources better and enhance toplines: Efficient systems and processes (power usage, transport, material usage, water, etc) • Lead by example: set the benchmarks for sustainability, get ahead of the curve. • Innovate, Innovate, Innovate: Use technology and existing policies to your best advantage. • Create commitment levels across the board for long term action plans and continuous monitoring and measurement. • Giving back to the society: CSR projects, forestry projects, CSR foundation, support a voluntary carbon project.
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- 16. Roadmap to carbon/waterneutrality Inclusion of carbon and water positive businesses in the portfolio Generate carbon and water reduction in the value chain Utilise available renewable energy in the operations Chose Community intervention to generate carbon and water offsets Offsetting emissions through external projects/purchases
- 17. Carbon offsets FY 12FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 Net Emissions tCO2 104926 87761 92149 96757 101594 106674 112008 117608 123489 Micro irrigation 9261 11113 13336 16003 19204 23044 Watershed 20000 25000 35000 40000 40000 40000 Land managem ent 4000 4000 4400 5500 6600 7920 Total offsets available 33261 40113 52736 61503 65804 70964 Balance emissions to offset -63496 -61481 -53938 -50505 -51804 -52525
- 18. Roadmap to carbon/waterneutrality Inclusion of carbon and water positive businesses in the portfolio Generate carbon and water reduction in the value chain Utilise available renewable energy in the operations Chose Community intervention to generate carbon and water offsets Offsetting emissions through external projects/purchases
- 19. Value chain improvements •M&M FES has 600 dealers and 600 suppliers in the value chain. • An energy audit of these would enable M&M FES and the value chain partner to understand the opportunities to implement operations improvement and energy efficiency measures to reduce carbon footprint. Again if these measures are bundled and developed into a carbon Project - these measures would be verified and accounted for, and carbon credits would be received. • Value chain improvements viz. EE lighting systems, optimizing contract demand, specific energy optimisation., logistics improvements etc… Assumption: If 10% of the suppliers and dealers at the upper end were targeted and minimum improvements were considered then 120 * 100= 12000 t Co2 will be generated annually for 10 years. However detailed study will need to be undertaken for the same
- 20. Roadmap to carbon/waterneutrality Inclusion of carbon and water positive businesses in the portfolio Generate carbon and water reduction in the value chain Utilise available renewable energy in the operations Chose Community intervention to generate carbon and water offsets Offsetting emissions through external projects/purchases
- 21. Green Power Sourcing PlantF12 F13 FY14 % switch to green power Replacement through green power (kwh) Green power (Mwh) Emission Reductions (tCO2e) Kandivali 3,91,33,140 2,94,07,080 3,14,65,576 74% 2,32,49,062 23,249 21,157 Nagpur 1,39,40,446 1,80,60,317 1,93,24,539 74% 1,42,94,086 14,294 13,008 Rudrapur 69,02,175 63,97,790 68,45,635 50% 34,22,818 3,423 3,115 Jaipur 10,43,778 10,14,259 10,85,257 30% 3,25,577 326 296 Swaraj 1 1,66,05,000 1,28,91,100 1,37,93,477 50% 68,96,739 6,897 6,276 Swaraj2 1,37,93,700 1,45,61,800 1,55,81,126 50% 77,90,563 7,791 7,089 Total 9,14,18,239 8,23,32,346 8,80,95,610 5,59,78,845 55,979 50,941
- 22. Roadmap to carbon/waterneutrality Inclusion of carbon and water positive businesses in the portfolio Generate carbon and water reduction in the value chain Utilise available renewable energy in the operations Chose Community intervention to generate carbon and water offsets Offsetting emissions through external projects/purchases
- 23. Other CSR -ESOPopportunities for generating GHG ERS The Clean Energy Clean water Campaign for rural villages (UNFCCC- PoA • Deploying energy efficient cook-stoves, zero energy water purifiers and CFLs to rural households to meet energy and water needs
- 24. Community Development GHGER opportunities Opp Cost /unit Offsets Cost of offsets Community benefits Ease of Implementation Scale INR tCO2 INR Complexity Time Units Offsets (CERs) Zero/low energy Water Purifiers 2200 10 220 health, avoided deforestation Easy 1 year 5000 10,000 EE Cook Stove 2200 10 220 health, avoided deforestation Easy 1 year 5,000 10,000 Investment of INR 2.5 crores(total) in the years 2014 and 15 , can generate 20,000CERs during the years 2017-21 . Annual operating costs will be 40.0 lacs per year.
- 25. FY 12 FY13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 TCO2(RE purchase accounted - FY15 onwards) 104926 87761 92149 69112 69112 65657 67212 66512 66827 Micro irrigation 9261 11113 13336 16003 19204 23044 Watershed 20000 25000 35000 40000 40000 40000 Land mgmt 4000 4000 4400 5500 6600 7920 Total offsets 33261 40113 52736 61503 65804 70964 RE purchase*( accounted in emissions cal. 27645 27645 31100 29545 30245 29930 30072 Value Chain Imp. 12000 12000 12000 12000 12000 CSR 20000 20000 20000 20000 20000 20000 Surplus Credits -15851 3001 19079 26291 31292 36137 Neutrality Achieved Achieved Achieved Achieved Achieved Suggested Roadmap ( with RE accounted for)
- 26. Summary The entity throughclimate neutral practice achieved the following: Demonstrated Social Responsibility Prepared for emerging carbon constraints Improved Energy and Cost efficiencies in operations and supply chain Improved relationship with the suppliers and community Future proofed its business portfolio
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