Sustainability for MSMEs: India has embarked on new initiatives in renewable energy, e-mobility, ethanol blended fuels, and green hydrogen as alternate energy sources
Sustainability for MSMEs: With sustainability gaining ground world over, India’s MSMEs can play a huge role when it comes to saving the environment from increasing carbon emissions by embedding environmental, social, and governance (ESG) measures into their business models, industry experts on Tuesday said at an event discussing the role of grassroot entrepreneurs for sustainable development.
There are two ways for MSMEs to incorporate ESG into their operations, according to Seema Arora, Deputy Director-General, Confederation of Indian Industry (CII). “Businesses can do this by first, adopting ESG into their way of doing business for every operation to become green, environment friendly and inclusive, and second making products with ethos of ESG,” Arora said addressing a panel on ESG adoption at the event Empowering Grassroot Startups for Sustainable Development organised by youth mentoring platform Bharatiya Yuva Shakti Trust (BYST).
Carbon dioxide emissions from fossil fuels and industrial processes in India increased 11 per cent in 2021 to reach a record high of 2.6 billion metric tons, as per the market insights online platform, Statista. To reduce carbon emissions, India at COP27 conference held in November last year had submitted its long-term low emissions growth strategy indicating low carbon transition pathways in key economic sectors.
Prime Minister Narendra Modi during the conference had announced India’s target to achieve net zero emissions by 2070. Focusing on green and clean energy, India has embarked on new initiatives in renewable energy, e-mobility, ethanol blended fuels, and green hydrogen as alternate energy sources, Ministry of Environment, Forest and Climate Change had said in a statement in November on India’s emission targets.
Adopting ESG and steering towards green infrastructure, however, is easier said than done without adequate financial support to small businesses even as there have been efforts undertaken by financial institutions to make way for green financing. Green finance is essentially credit support offered for environment-friendly or sustainable business activities.
“There are multiple green investors and several funding options available such as NEEV, Samriddhi fund etc., where one can apply for funding.” said Sumesh, Investment Lead, Government of the United Kingdom.
To support green projects, the principal financing institution for MSMEs, SIDBI had launched a Green Finance Scheme in March last year to aid water management efficiency, wastewater treatment, carbon capture and storage, environment protection, green building, and more with up to Rs 20 crore assistance.
The government had also introduced a Zero Defect, Zero Effect (ZED) scheme Certification scheme in April last year to encourage MSMEs to improve their manufacturing processes and systems for qualitative and sustainable production. The scheme has registered more than 22,000 enterprises as of December 15, 2022.
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Beyond sustainability, the support is also required for MSMEs to generate more employment, said Ashok Khosla, Chairman, Development Alternatives, a sustainability-focused think tank. “The largest number of jobs can be created in the range of mini (enterprises). They need help in financing and technology.”