Going green, as a series of feature articles in this newspaper have shown, is not just good for the environment, it is good for corporate bottom lines also. If energy costs form a tenth of all costs, for instance, then anything which reduces energy intensity can only be good. The question, of course, is whether the energy-saving devices cost so much that they negate the effect of the annual saving. While most purveyors of energy-saving equipment say payback periods are under four years, the companies featured seem to suggest this is indeed true — some, like ITC, claim to have delivered extra returns of up to a fourth to shareholders as a result of various environment-friendly measures. And these benefits are without taking into account the possibilities of tapping into the multi-trillion dollar opportunity for environmental products and services that are likely by 2020. Just the likely environmental credits that Indian industry can earn on the basis of the 1,400 Clean Development Mechanism (CDM) that has been approved so far, can earn a little over $6 bn by 2012.
While ITC has always been known for its pioneering work in the field, this got a fillip with US Secretary of State Hillary Clinton visiting ITC’s Green Centre in Gurgaon and calling it a “monument to the future”. A little over a decade ago, ITC’s paper business was bleeding and what turned it around was a greening project over 100,000 hectares involving tribals and small and marginal farmers — the company gave them saplings for commercial forestry which helped the environment (part of this programme is registered as a CDM project) and aided the bottom line from 15 to 30 per cent. The group as a whole is the only company of its size to be carbon positive for four years in a row, water positive for seven years in a row and solid-waste recycling positive since last year. Maruti Suzuki India Limited, the country’s largest auto-maker, similarly, has cut electricity consumption by a fifth between 2000-01 and 2008-09, water consumption by half and, since 2002-03, carbon emissions by 30 per cent. Apart from what it does to the company’s bottom line, it complements its marketing effort. In a market like Europe that is increasingly getting fanatic about the environment, the company’s A-Star is the first out of the country that meets the European end-of-life vehicle norms since 87 per cent of the car can be recycled at the time of scrapping; the rest, according to the company, can be put in incinerators and used in other forms. Though few power utilities have gone green, the potential is large since, as L&T’s sustainability report puts it, a watt saved is worth three watts generated, taking into account both the large transmission and distribution losses, apart from the losses due to the thermal inefficiency of equipment using this electricity. Few of the smaller units across the country are looking at going green, but the ones that have used energy-efficient furnaces or biomass gasifiers from Teri will testify, this has reduced costs and increased efficiency. So, whatever the view on whether Environment Minister Jairam Ramesh was right to talk of India needing to take on some non-binding commitments of her own at the Copenhagen global warming summit, the path for corporate India is quite clear.
