While most Indian CEOs are concerned about climate change, only one-third of them have a strategy in place, says a new survey. This, despite the fact that they rate global warming as a bigger risk than terrorism, protectionist policies of governments, pandemics and gaps in infrastructure.
The number of CEOs who were somewhat or extremely concerned about the risks of climate change increased from 27% in 2008 to 52% in 2009, according to a survey of 62 Indian CEOs by consultancy firm PwC. The number increased despite the fact that the year saw the worst ever economic crisis in recent years.
A survey last year by this newspaper, FE-EVI Green Business Survey, also found that most companies in India were informed about climate risks on their businesses, but about half of them did not maintain their greenhouse gas inventory. The survey covered CEOs, CIOs and senior executives of 213 companies from the FE 500 companies.
Explaining why the risk awareness doesnt translate into the need to act, Bharti Gupta Ramola, PwCs sustainability & climate change leader for India, said, “I think it is because until recently climate change was not on the average Indian CEOs radar at all.” On the other hand, the average global CEOs awareness of climate change has been increasing gradually over the last 4-5 years and in the last couple of years it has started to get translated into specific actions.
Its a little wonder then that most (60%) of the Indian companies lacked a strategy to tackle climate change. In response to a question about the impact of the downturn on a climate change strategy on their part, 13% of the 37% companies who reported having one in place said they hiked their investment in support of such a strategy. While a majority (52%) reported no effect of the downturn on their climate change strategy, 17% delayed their investment and 4% reduced their investment, according to the survey titled Indian CEOs poised to respond to climate change.
Referring to the reasons, the PwC survey attributed it to a lack of sufficient appreciation of the potential costs and benefits of responding to climate change. While 10% CEOs feared that undertaking climate initiatives would affect their growth, 11% said adhering to new policies would be a major expense.
At the same time, the PwC survey said 26% CEOs understood that there would be a need to bring down emissions significantly. About one-fifth (19%) believed that climate change offers opportunities for new products or services. It is important that Indian business starts to develop action plans for addressing the challenges arising from climate change as well as taking advantage of the opportunities. For example, there is a very large opportunity to develop products and technologies that are cleaner, says Ramola.
The lack of strategies could be also due to uncertainty surrounding the climate change talks. Only 19% CEOs believed that the Indian government has clear and consistent long-term environmental policies.
The result is that 44% claimed they were getting ready for policies on cap-and-trade, carbon pricing, emissions reporting, or other emissions-related programmes, which would usher in a low-carbon economy. Leading businesses in India could be waiting for cues from global climate change agreements or from the Indian government regarding greenhouse gas reduction schemes, noted the report. The global climate change negotiations are scheduled to be held in Copenhagen in December.
Source: The Financial Express
Published on 16 November 2009