Big majority of Indian firms say sustainable approach will boost profitability

Some 86% of Indian organisations see a moderate to strong relationship between sustainability and their organisation’s profitability – and are increasing their investments accordingly.

That’s one of the findings from a new ‘sustainability study’ commissioned by software giant SAP, which it launched at its flagship SAP Now customer conference.

Speaking at the event, Paul Marriott, President, SAP Asia Pacific Japan, said: “The Asian market represents more than 50% of the world’s emissions, and so as one of the fastest growing hotbeds of innovation and economic activity in the region, India is in a unique position to lead the charge against climate change. It is an encouraging sign that more and more Indian organizations recognize this and are ready to embrace it.”

The study found:

• 77% of Indian businesses have witnessed sustainability strategies contributing to revenue or profit growth to a moderate or strong degree. Similarly, 84% of Indian respondents saw a moderate or strong increase in the efficiency of business processes from sustainability activities.
• 58% of Indian businesses expect to a positive financial return on their sustainability investments within the next five years. In India, 39% of businesses intend to increase their investments in sustainability over the next three years.

However, Indian businesses also reported barriers to change, the main ones being:

• lack of an environmental impact strategy is the top barrier to taking environmental action with 40% of Indian businesses finding it a challenge.
• other notable challenges include uncertainty due to the Covid-19 pandemic, clear direction on embedding sustainability into business processes and IT systems, and a shortage of expertise.

The report said: “Businesses today believe that extracting value from sustainability data is critical for informed decision making. If our sustainability data is not accurate, then the decisions we make to improve the health of our planet and our businesses are cast into doubt. The key is to record and report accurate, granular, and auditable sustainability data and integrate it with financial data to make the right business decision.

“While 40% of Indian businesses are completely satisfied with the quality of the sustainability data they gather, others believe it’s a long way to go.”

It also found:

• Almost eight in 10 of (78%) Indian businesses report moderate or strong tracking of Scope 1 emissions, while that number is 77% for Scope 2 emissions, and 65% for Scope 3 emissions.
• Some 69% of Indian businesses use sustainability data to inform strategic and operational decision-making to a moderate to strong degree. Subsequently, three-quarters (75%) of respondents said they require sustainability data from their suppliers and 78% demand environmental impact data from partners like logistics and fulfilment to a moderate to strong degree.

“Sustainability is now a business necessity rather than merely a moral duty. It can no longer be seen as distinct from the overall financial performance of the company,” said Manish Prasad, President, and Managing Director of SAP Indian Subcontinent, told the 2,000 delegates at SAP Now.

“It is evident from the findings of our study that businesses that prioritize sustainability are more successful. The moment has come to consider carbon data similarly to financial data in all corporate processes by integrating financial and environmental decision-making.”

He added that “SAP’s efforts focus on helping create a sustainable future for the world, our customers, and society at large by bringing together social, environmental, and economic performance”.

 

India now third largest solar power generator

Meanwhile, India overtook Japan in 2023 to become the world’s third-largest solar power generator, according to a new report by global energy think tank Ember.

Solar produced a record 5.5% of global electricity in 2023 – India generated 5.8% of its electricity from solar last year, according to Ember’s ‘Global Electricity Review’.

Ember’s Asia Programme director Aditya Lolla said: “Increasing clean electricity is not just for reducing carbon emissions in the power sector. It is also needed to meet the rising electricity demand in an increasingly-electrified economy and to decouple economic growth from emissions, which is crucial for tackling climate change.”

Solar maintained its status as the world’s fastest-growing electricity source for the 19th consecutive year, adding more than twice as much new electricity worldwide as coal in 2023.

Ember said global solar generation in 2023 was more than six times larger than in 2015. Solar’s contribution to electricity generation in India increased from 0.5% in 2015 to 5.8% in 2023.