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“We need to phase out our business as usual way of power generation and manufacturing to promote green supply chains and increased deployment of renewables”.

March 30, 2020

Damandeep Singh, is the Founder & Director, Carbon Disclosure Project (CDP) India since 2012. Prior to this Daman spent over three decades writing and researching on environment and development issues in India. He worked as an independent researcher and journalist primarily on environment and climate change issues, executing projects for ERM UK, Worldwatch Institute, The Climate Group, Bureau of Energy Efficiency among others. He started his career as a journalist and has worked with major national dailies like The Times of India, The Pioneer, Business Standard and The Indian Express.

Given that as a country we are amongst the top three CO2 emitters in the world and with a rising aspirational middle class the emission challenge will only compound. While our industry needs to quickly transition towards renewable energy, individual lifestyles require to be tailored for sustainability. In this interesting conversation Daman covers all these concerns and much more.

Praveen Gupta: What is Carbon Disclosure Project (CDP)?

Damandeep Singh: CDP is the world’s largest disclosure platform for investors, companies, cities, states and regions to manage their environmental impacts 2019 over 8440 corporations, 950 cities, 120 states and regions disclosed through CDP. In India we work with a dozen cities and five states. In India, 49 of the top 200 companies share their data voluntarily including most of the Tata group, Mahindra Group, JSW; Vedanta all cement majors and many PSEs like NTPC, Indian Oil, GAIL among other. If you were to add another 10 self-selecting companies plus 120+ MSMEs the figure gets close to 200.

In India we work with a dozen cities and five states… 49 of the top 200 companies share their data voluntarily.

We ask them to disclose their impact on climate change, water & forests and their efforts to mitigate their impact. This is long drawn out process and requires detailed engagement as well follow. Many, understandably, are apprehensive about disclosing data that is material to their operations as even the government does not ask for it.

In a world where markets, investors and buyers are increasingly looking at ESG (environmental, social & governance) parameters, we try to convince companies on the value of sharing information which is vital to global investors and buyers.  These are the two key drivers for disclosures. Investors really want to understand what the long-term impacts of their investments would be. Also, big buyers globally including Walmart, L’Oreal, Microsoft etc. are insisting on this information and as companies to disclose through CDP.

Investors really want to understand what the long-term impacts of their investments would be.

PG: How do you verify the carbon emission data shared by disclosing entities?

DS: We believe in what the companies disclose voluntarily. However, our scoring methodology gives substantial weightage to third-party verification for which we have established a protocol. About one fifth of scoring weightage ensures data integrity which is verified by third party audit.

PG: Despite one of the lowest per capita carbon emissions our numbers add up to make us world’s third largest polluter. Any thoughts?

DS: Well, ‘lowest emitter’ is a bit of a misnomer. We inflate our denominator by hiding behind 70% of our rural compatriots who have little or no emissions.We can be clever now but at some stage this will be called out. Lifestyles in our Metro cities is no different than say China and, in some cases, closer to the European averages.

We inflate our denominator by hiding behind 70% of our rural compatriots who have little or no emissions.

In economic discussions we claim to be 5th in the world based on the cumulative figure of ~$2.8 trillion. Rather than go by different criteria we need to decide on a metric and use it consistently.

PG: With a growing middle class and rapid urbanisation – we are bound to witness steep consumerism. How do we balance growth with sustainability?

DS: There is a need to provide alternatives which will promote low carbon growth be in urban design, transportation for instance. Besides, I think the global response to the COVID pandemic will, hopefully, change, our individualistic approach. In current scenario, look at Europe or even Singapore. Car ownership is not discouraged, but it costs a fortune to drive into city centres as does parking. Our middle class takes many things for granted. There must be a combination of incentives and disincentives to keep a check on pollution and individual consumption.

There must be a combination of incentives and disincentives to keep a check on pollution and individual consumption.

PG: What is the rationale behind carbon pricing and how does it work?

DS: Carbon pricing is a risk mitigation tool which helps steer company on their low carbon path to facilitate cutting down the CO2 levels. While we do not have any carbon-tax we are moving towards a carbon constrained world which will necessitate tougher measures. There will be steady tightening of screws and evolution of best practices.

Carbon pricing is a risk mitigation tool which helps steer company on their low carbon path to facilitate cutting down the CO2 levels.

A few Indian corporates do impose a form of internal carbon tax upon themselves which creates a corpus to fund their low carbon expenditure. Having an internal carbon price promotes this understanding and creating of a pool of capital. Wipro stands out at $120 per ton of CO2 & ACC is nearly $50. This is generally used as a capex for all green initiatives.

In addition, it is vital that we get to work on educating and training accountants and CFOs and internal strategic mechanism.  

PG: Do you have any interaction with the fossil fuel industry? Do they demonstrate a sense of urgency to transition towards renewables?

DS: Yes, we do but turning them is a herculean task. We produce sectoral reports on what each of the high-emitting sectors is doing include the oil & gas sector. As mentioned, we are already working with NTPC, IOC, GAIL, Tata Steel, JSW and most of the cement players. Disclosure is the first step. It has a long way to go. While the fossil fuel industry enjoys subsidies and incentives – the sooner they transition towards a low-carbon trajectory cost as well as the risk will be lower.

The writing is on the wall. We are here to help them. There will be winners and losers. Earlier, this year you saw the valuation of Tesla zoom past many established players like VW, Ford & GM. Of course, we’re in uncertain territory with COVID. However, now, as the world reorders its priorities, it’ll be prudent to address the slow, but also lethal, global threat that climate change poses.

As the world reorders its priorities, it’ll be prudent to address the slow, but also lethal, global threat that climate change poses.

PG: What is the state of our forests which can be critical as carbon sinks?

DS: We need to preserve the integrity and biodiversity of old growth forests and the wildlife. Counting plantations and monoculture as forests is not the right thing to do.

PG: What will it take to deliver on our Paris Agreement commitments?

DS: We are one of the few countries on way to meet the climate pledge. However, we need to phase out our business as usual way of power generation and manufacturing to promote green supply chains and increased deployment of renewables. This might help us to attract companies looking for alternatives as they search for spreading their supply chains out of China. Investors, especially pension funds and sovereign funds are also looking at green strategies.

This might help us to attract companies looking for alternatives as they search for spreading their supply chains out of China. Investors, especially pension funds and sovereign funds are also looking at green strategies.

It calls for incentives for low carbon; disincentives for high carbon and for policymakers to keep pace. Apart from power generation, we need to fix say public transportation; steel/cement/aluminum manufacturing and step up investments in R&D. On the individual front we all need to question desires, wants and acquisitions.

PG: Best wishes in your endeavours towards addressing the CO2 emissions and building a sustainable future.

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