ESG Reporting

Cultivating Resilience: The Crucial Role of Climate Risk Disclosure for Businesses

Climate risk disclosure is essential for businesses amid growing climate challenges. India improves ESG reporting with SEBI regulations.

Understanding the Business Impact of Climate Change: The Growing Significance of Climate Risk Assessment and Disclosure

Amidst the rising temperatures, erratic monsoons, and the ever-increasing spectre of climate-related disasters, businesses face an imminent threat that transcends geographical boundaries. Failing to grasp the profound implications of climate change, companies risk not only disruptions in their supply chains but also face potential shifts in policies, damage to brand reputation, and a myriad of other challenges that may prove insurmountable without proactive climate risk assessment and disclosure.

Climate risk refers to the potential adverse impacts and consequences that climate change and extreme weather events pose to various aspects of society, the economy, and the environment. These potential risks are mainly linked to the shifting climate patterns and the disruptions they may generate. According to the Task Force on Climate-related Financial Disclosures (TCFD), climate risks can be divided into two categories – risks related to the transition to a lower-carbon economy and risks related to the physical impacts of climate change. Transition risks include policy and legal risks, technology risks, market risks and reputation risks. Physical risks on the other hand include acute risks (event-driven, including increased severity of extreme weather events, such as cyclones, hurricanes, or floods) and chronic risks (longer-term shifts in climate patterns (e.g., sustained higher temperatures) that may cause sea level rise or chronic heat waves.) [1] In order for companies to be well informed of the risks posed to their business, climate risk assessment and climate-related disclosure are of urgent importance. Based on a business priorities, there are various frameworks that can be used to disclose climate-related information. The widely used ones are TCFD, Global Reporting Initiative (GRI), CDP, SASB Standards (Sustainability Accounting Standards Board), and the India-centric Business Responsibility and Sustainability Reporting (BRSR).

As nations approach their Net Zero goals, the significance of non financial disclosures has heightened in the contemporary business landscape. The increasing emphasis on these disclosures is driven by investors and stakeholders urging companies to provide more comprehensive information regarding their sustainability and environmental, social, and governance strategies. Several legislative measures mandating non-financial disclosures are currently in preparation or have already taken effect, including:
● Regulation (EU) 2020/852 of the European Parliament and the Council, implemented in July 2020, establishes a framework for promoting sustainable investment (EU Taxonomy Regulation).
● The Corporate Sustainability Reporting Directive (CSRD) and the Directive onCorporate Sustainability Due Diligence Directive (CSDDD).
● SEBI mandated BRSR for the top 1000 listed companies in India [3]

India’s Evolving ESG Reporting Landscape: Progress, Regulation & Rising Global Recognition

According to a report by EY, Indian companies are trailing behind in both coverage and quality of reporting compared to global averages. Nevertheless, the number of Indian companies responding to disclosure platforms such as CDP is increasing. Notably, 2020 was the first year Indian companies were featured on the CDP A-List. A report by EY recorded a significant year-on-year improvement in coverage, which was up to 65% in 2022 from 49% in 2021 [4]

The rise in reporting is undoubtedly connected to recent regulations issued by the Securities and Exchange Board of India (SEBI). These regulations mandate the top 1,000 companies in the country to generate a business responsibility and sustainability report starting from the financial year 2022-2023. For the preceding financial year (2021-2022), companies were encouraged to voluntarily create these reports.[5]

As of July 2023, SEBI mandated the top 150 listed companies to seek assurance for their BRSR Core reporting. BRSR Core comprises key indicators across the 9 ESG principles. Mandatory assurance will gradually be required by the top 1000 listed companies by 2026-27. Further, listed companies must include value chain disclosures in their Annual Report, following the BRSR Core. The value chain should cover the major partners both upstream and downstream of the listed entity, accounting for 75% of its purchases and sales by value. This positions India in a good place with respect to the assurance of ESG reporting [10]

S&P Global ESG Scores raw data, based on the 2022 S&P Global Corporate Sustainability Assessment (CSA) reports about one-quarter of Indian companies (24%) have a plan to adapt to the physical impacts of climate change, compared with the global average of 21%. Further, nearly 40% of India-headquartered companies conduct physical risk assessments.[6]

Navigating ESG and Climate Disclosure Challenges In India: Strategies, Barriers and Opportunities

Companies are grappling with challenges in establishing effective systems for tracking and reporting crucial metrics, with regulatory mandates often necessitating collaboration with various protocols or frameworks to ensure meaningful disclosures. Carbon emission disclosures, for example, require expertise in GHG protocols and carbon accounting mechanisms. However, many Indian businesses lack the required expertise and capacity for these demanding processes, which can lead to reporting fatigue. Nevertheless, innovative approaches and strategic partnerships can facilitate sustainability integration, ultimately enhancing long-term growth prospects. India faces a multitude of hurdles in embracing Environmental, Social, and Governance (ESG) principles due to factors spanning regulatory, economic, cultural, and infrastructural realms. These challenges encompass gaps in ESG awareness and education, difficulties in aligning ESG with business strategies, a short-term financial focus, concerns about data quality and availability, issues related to materiality assessments, regulatory fragmentation, financial
burdens linked to ESG adoption, cultural and social factors, supply chain complexities, and
the risk of “greenwashing.” However, despite these challenges, India is witnessing growing interest in ESG adoption, with businesses increasingly recognizing the potential benefits, including improved reputation and better access to capital. To overcome these hurdles, businesses must set clear ESG
goals, develop comprehensive ESG strategies, gain stakeholder support, provide ESG training, and collaborate with ESG experts. These efforts can position Indian businesses for long-term success and align them with global sustainability goals and frameworks. Moreover, ESG practices offer advantages such as alignment with sustainable development goals, access to green finance, enhanced innovation and efficiency, positive societal and environmental impact, and improved brand value.

Efforts to mitigate and adapt to climate change can produce opportunities in the form of resource efficiency and cost savings, low-carbon energy transition, new products and services, and supply chain resilience. According to CDP in 2021, 87% of the responding companies identified climate-related opportunities as having the potential to make a substantive financial or strategic impact on their business performance.[7]

India’s commitments to net-zero targets require more companies to come forward and set climate goals supported by adequate disclosures for transparency and accountability. Businesses are a very important part of climate action efforts and need to emerge as active collaborators in this conversation. Progress is visible, but the pace is very slow and thus the targets are at risk of being too ambitious and not being achieved in the given timeframe.

Reach out to Carbon Mandal by writing to us at to start your ESG reporting journey!

List of references:

  1. Task Force on Climate-related Financial Disclosure. (2017) Recommendations of the Task Force on Climate-related Financial Disclosures. .
    Accessed 11th October 2023
  2. PricewaterhouseCoopers. (2022) Task force on climate-related financial disclosures – 2022 Status report.
    Accessed 11th October 2023
  3. PricewaterhouseCoopers. ESG reporting and preparation of a Sustainability Report.
    Accessed 12th October 2023
  4. Ernst & Young. (2021) Global Climate Risk Disclosure Barometer.
    Accessed 12th October 2023
  5. Ernst & Young. (2022) Global Climate Risk Disclosure Barometer.
    . Accessed 18th October 2023
  6. Jennifer Laidlaw, S&P Global. (2023) With Physical Climate Risks Increasing in India, Adaptation Strategies Take Priority.
    ard/with-physical-climate-risks-increasing-in-india-adaptation-strategies-take-priority .

    Accessed 13th October 2023
  7. CDP. (2022) Disclosure: Imperative for a Sustainable India.
    CDP_AnnualDisclosureReport2021_V7.pdf?1663682392 .
    Accessed 17th October2023
  8. European Financial Reporting Advisory Group. How To Improve Climate-Related Reporting.
    1 . Accessed 18th October 2023
  9. KPMG. (2022) Challenges and opportunities in ESG reporting and assurance.
    n-esg-reporting-and-assurance.html .
    Accessed 19th October 2023
  10. Security Exchange Board of India. (July 2023) Circular No. – SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122. . Accessed 26th October 2023.
Decarbonization of the Indian Steel Industry

Decarbonization of the Indian steel industry: An Opportunity

Decarbonization has become an imperative aspect of mitigating the effects of climate change. Industrial activities are responsible for 1/3rd of the greenhouse gas (GHG) emissions and among this sector, the Steel industry contributes around 9% of the total GHG emissions (Zhang, Jiao, Zhang, & Guo, 2021). A report by the World Steel Association states that in the year 2020, 1.89 tonnes of CO2 emission was contributed from each tonne of steel manufactured (World Steel Association, 2022). The rising values of GHG emissions are leading to climate change and are greatly affecting countries in the global south. India is no exception, the changing patterns of monsoon, reduced glaciers in the Himalayas and many more impacts are observed as a result of climate change (Mallett & Pal, 2022).

Steel is an integral input material in industries like construction, automobile manufacturing etc. The steel industry due to its high dependence on carbon-based technologies is considered a hard-to-abate sector in terms of sustainability due to its high requirement of energy and resources (Mallett & Pal, 2022). The steel industry in India contributes to nearly 2% of its GDP making it a significant sector in economic development (Sun, 2023). India being the second largest producer of steel is committed to decarbonization with a short-term focus on reducing carbon emissions by FY 2030 through the use of renewable energy and promoting energy and resource efficiency. The medium and long-term focus areas for 2047 and 2070  are utilising green hydrogen for steel manufacturing, Carbon capture utilisation & storage (CCUS) and alternative innovations which could assist in achieving the transition to net zero respectively (PIB Delhi, 2023).

Decarbonization Technologies for the Steel Industry

Before we dwell on the de-carbonization technologies for the steel industries, let us understand the key processes prevalent in the industry. The dominant processes for the production of steel are Blast furnace-basic oxygen furnace (BF-BOF), Direct reduced iron (DRI) and Electric arc furnace (EAF). BF-FOF involves reducing iron ore to pig iron in a blast furnace using coal products. The steel is then made from the hot iron which is charged to a basic oxygen furnace. The DRI process reduces solid iron ore by reacting at a temperature below the melting point. Coal or natural gas are the sources of reducing gas. DRI sponge iron requires additional processing, generally EAF. EAF uses an electric arc to heat charged pig iron, steel scraps or sponge iron with electricity (Fan & Friedmann, 2021). 

Studies suggest that traditional energy-efficient measures can only reduce around 25-40% of average CO2 emission per tonne of crude steel produced. Hence, technologies like using hydrogen or biomass as reducing agents, and carbon capture utilization and storage (CCUS) are needed to further reduce the emissions (Muslemani, Liang, Kaesehage, Ascui, & Wilson, 2021). Production of green steel using direct hydrogen reduction involves reducing iron ore in a hydrogen-based shaft furnace and EAF is used to cast the reduced iron. Green hydrogen produced via electrolysis i.e., Hydrogen separated from oxygen in water using electric current and electricity required for electric arc casting should be from renewable resources to produce Green steel (Conejo, Birat, & Dutta, 2020).  Tata Steel recently initiated the use of hydrogen in their blast furnace and JSW Steel has plans to commission a green hydrogen-based steel plant by 2025. Another innovation is the usage of biomass integrated with blast furnace-basic oxygen furnace. The biomass could be used as a replacement for fossil fuels at the coke-making stage, sintering process or directly in blast furnaces. A study estimated that the use of biomass could reduce around 58% of CO2 emissions (Mandova et al., 2018).

India – A Potential Green Steel Leader

Decarbonization technologies have the potential to impact the emission trajectories significantly and could help in mitigating the higher costs of climate change. The steel manufacturing sector is on the threshold of change with new innovations like green hydrogen and India, one of the top steel producers, has the potential to be a green steel leader. Several industries have already begun initiatives to produce green steel and with the support of regulatory authorities, the green steel industry would develop successfully. Decarbonizing technology to produce green steel with less greenhouse gas production would build a cleaner production roadmap for the steel industry.

Learn how India, a major steel producer, is poised to become a global leader in green steel production and how you can contribute to this transformative journey by contacting Carbon Mandal. Take action now to support green steel initiatives and advocate for regulatory support that will accelerate the transition to cleaner and more sustainable steel production.


  1. Zhang, X., Jiao, K., Zhang, J., & Guo, Z. (2021). A review on low carbon emissions projects of the steel industry in the world. Journal of Cleaner Production, 306, 127259. doi:10.1016/j.jclepro.2021.127259
  2. Mallett, A., & Pal, P. (2022). Green transformation in the iron and steel industry in India: Rethinking patterns of innovation. Energy Strategy Reviews, 44, 100968. doi:10.1016/j.esr.2022.100968
  4. Sun, S. (2023). Topic: Steel industry in India. Retrieved from
  5. World Steel Association, A. (2022). Retrieved from
  6. Fan, Z., & Friedmann, S. J. (2021). Low-carbon production of iron and Steel: Technology Options, Economic Assessment, and policy. Joule, 5(4), 829–862. doi:10.1016/j.joule.2021.02.018
  7. Muslemani, H., Liang, X., Kaesehage, K., Ascui, F., & Wilson, J. (2021). Opportunities and challenges for decarbonizing steel production by creating markets for ‘green steel’ products. Journal of Cleaner Production, 315, 128127. doi:10.1016/j.jclepro.2021.128127
  8. Conejo, A. N., Birat, J.-P., & Dutta, A. (2020). A review of the current environmental challenges of the steel industry and its value chain. Journal of Environmental Management, 259, 109782. doi:10.1016/j.jenvman.2019.109782
  9. Mandova, H., Gale, W. F., Williams, A., Heyes, A. L., Hodgson, P., & Miah, K. H. (2018). Global assessment of biomass suitability for ironmaking – opportunities for co-location of sustainable biomass, iron and steel production and supportive policies. Sustainable Energy Technologies and Assessments, 27, 23–39. doi:10.1016/j.seta.2018.03.001
Exploring the role of Green Externalities Accounting in ensuring a sustainable Present and Future

Quantifying the Unseen: Assessing the Economic Impact of Hidden Green Externalities

Exploring the role of Green Externalities Accounting in ensuring a sustainable Present and Future


Accounting, as a critical language of finance, plays a pivotal role in shaping modern economies. This research article delves into the multifaceted accounting world, specifically focusing on Green Externalities Accounting in India. It explores the impact of green accounting toolkits and standards on economic development, state relations, and businesses. The article concludes with a call to action for a more sustainable future.

Introduction to Green Externalities

Anthropogenic climate change poses a significant threat, capable of engulfing us in one fell swoop, and its impacts extend far beyond a sudden wipeout. The cumulative acts of degradation have prompted various organisations to develop action plans and indices, such as the Climate Risk Index [1] aimed at addressing the threats of climate change. As determining forces, how can human-run organisations position themselves within the shell of nature’s resources and contribute to a more sustainable narrative?

While there is plenty we can do to keep our activities in check, accounting remains at the forefront in offering a structured process of recording, summarising, and analysing financial transactions among and across leading organisations, businesses, and states. It provides stakeholders with essential information to make informed decisions, influencing business strategies and socio-economic landscapes. Highlighting the pivotal role of finance in climate policy, Article 2 of the Paris Agreement emphasises the necessity of aligning financial flows with a trajectory aimed at reducing greenhouse gas emissions and enhancing resilience to climate change.

India’s adoption of International Financial Reporting Standards (IFRS) was initially announced by the Securities and Exchange Board of India (SEBI) in 2010. The convergence and adoption, however, were optimal and only applied to a few companies voluntarily. [2] Although limited, we can not discount the role that accounting standards such as the IFRS and the like play in determining GDP standards and broader economic analysis; much of which has come to stand synonymous with progress and development. Amidst the towering skyscrapers and bustling city streets, the relentless pursuit of economic growth often takes centre stage. However, as we marvel at the soaring GDP figures, it’s time to ask a pivotal question: Does GDP capture the true growth of the nation? A World Bank report from a few years ago revealed that India incurred a staggering cost of $550 billion, equivalent to approximately 8.5% of its GDP, as a consequence of air pollution alone. Furthermore, the expenses related to external factors like water pollution and land degradation were potentially even more substantial. India’s practice of exporting commodities effectively results in the depletion of its natural resources, which in turn escalates the risk of desertification and significant land degradation. If these alarming trends persist, it is plausible that India’s food production could experience a decline of 10-40% within a century. Therefore, when celebrating GDP growth, it is imperative that we also take into account the depletion of our nation’s natural capital in our economic assessments. [3]

Taking into account green externalities aims to quantify the environmental impacts of economic activities, such as pollution or resource depletion, makes them visible in economic assessments. It considers factors including but not limited to greenhouse gas emissions, water usage, and land degradation. In the pursuit of development through multidisciplinary approaches encompassing socio-economic concerns and environmental sustainability, it becomes imperative to ensure enduring progress for the future. This is particularly relevant for developing economies like India, where a shift from agriculture to manufacturing and services sectors is underway. The inadequacy of the traditional System of National Accounts (SNA), which measures Gross Domestic Product (GDP) and Gross National Product (GNP), lies in its inability to capture the true essence of a nation’s wealth, income, and performance. It fails to account for the environmental impact via externalities, be it positive or negative. Additionally, the conventional SNA disregards the value of natural resources that remain untransformed into marketable goods or services. The concept of ecosystem services, which denotes the environment’s free services to humanity, remains absent from current national accounting methods. These services, often termed as the ‘GDP of the poor,’ are especially critical for impoverished communities. The absence of ecosystem services in national accounting overlooks their significant contribution. The evolution of Green Externalities accounting has gained substantial urgency in recent years due to the significant losses nations have suffered from neglecting this crucial aspect of economic analysis. Severity has unearthed consequences including habitat destruction, resource depletion, and climate change. These issues have led to ecological crises, natural disasters, and adverse health effects, all of which have imposed substantial economic costs.

As per the United Nations Environment Programme Report, 1997 [4], greening the GDP is one of our major pathways towards a Green Economy. The integration of Green Accounts into traditional accounting systems will not only enable policymakers to analyse the interconnections between a nation’s economic activities and its environmental costs but also quantify these costs at various stages of production processes. This will empower relevant agencies to access precise data for amending industrial practices that surpass established environmental limits. Beyond accounting and assessment, parameters associated with Green Accounting provide a more accurate representation of economic growth by considering environmental costs and holding businesses accountable for their environmental footprint. Finally, it enables governments to tailor policies for regional variations in environmental impact, promoting balanced development.

Tools for Green Externalities Accounting

Creating an effective toolkit for Green Externalities Accounting involves defining clear metrics, establishing data collection protocols, and developing standardised reporting guidelines. It requires encompassing both qualitative and quantitative data to assess environmental impacts comprehensively. To facilitate the development of Environmental Accounts, key international organisations, including the United Nations, European Commission, International Monetary Fund, Organisation for Economic Cooperation and Development, and the World Bank, jointly issued the System of Environmental and Economic Accounts (SEEA-2003) handbook in 2003. Two primary approaches to Green Accounting have been proposed: one involves creating separate ‘satellite’ accounts dedicated to valuing natural resources, while the other advocates for a comprehensive modification of the traditional SNA to fully incorporate environmental accounts. In India, the Green Indian States Trust (GIST) took a significant step by creating environmentally adjusted accounts in 2003 under the Green Accounting for Indian States Project. Nevertheless, Green Accounting in India is in its infancy. The former Minister of Environment and Forests, Government of India, Mr. Jairam Ramesh, advocated for a transition towards incorporating environmental factors into national accounts by 2015. The TEEB India (The Economics of Ecosystem and Biodiversity) Project, initiated in 2011, conducted some standalone studies in this regard but hasn’t sufficiently contributed to the development of a Green GDP due to a fragmented approach.

Among the list of prominent reporting and decision-making tools that businesses and organisations are adopting, this article briefly discusses four of the following: Environmental Impact Assessment (EIA), Life Cycle Assessment (LCA), Carbon Pricing, and Sustainability and ESG Reports.

Environmental Impact Assessment (EIA) happens to be one of the many successful policy innovations of the 20th Century for environmental conservation. In India, it took off in the late 1970s and was first ordered during the early 1980s, on the Silent River Valley hydroelectric project. Since its induction in countries undergoing rapid industrialisation and economic growth-such as India- EIA has served as a vital toolkit in helping entities account for the environmental impact of their operations and decision-making and ensure that progress is aligned with environmental protection.

As for its contemporary, the Life Cycle Assessment (LCA). LCA helps pinpoint environmental “hotspots” and offers insights into reducing the substantial energy and material inputs, emissions, and waste, influencing decision-making at various project stages for improved environmental performance. [5] Energy audits generally encompass a thorough examination of an entity’s energy consumption patterns, encompassing the operation of energy-demanding equipment like HVAC systems, lighting, and industrial machinery. Organisations commonly utilise Life Cycle Assessment (LCA) to pinpoint instances of energy inefficiency and devise conservation-focused approaches. [6] However, LCAs demand a substantial amount of data since they require the inclusion of all inputs and outputs related to the environment across every step of supply chains and throughout the entire life cycle of a product or service. Therefore, the establishment of a comprehensive national LCA database is essential for advancing more comprehensive and scientifically grounded approaches to address sustainability challenges at the national level.

Carbon pricing is a policy mechanism aimed at reducing greenhouse gas emissions by assigning a cost to carbon emissions. It can be implemented through carbon taxes or cap-and-trade systems. Carbon taxes impose a direct fee on carbon emissions, while cap-and-trade systems set a cap on emissions and allow trading of emission permits. The idea is to incentivize companies and individuals to reduce their carbon emissions by making it financially advantageous to do so. This mechanism is crucial in mitigating climate change and transitioning to a low-carbon economy. However, currently, India does not levy an explicit carbon price. In 2021, fuel excise taxes, functioning as an indirect method of carbon pricing, accounted for 54.7% of greenhouse gas (GHG) emissions, maintaining the same level as in 2018. Conversely, fossil fuel subsidies, which remained at 2.5% of GHG emissions in 2021 as they were in 2018, worked in opposition to the advancements made in reducing emissions.”[7]

ESG sustainability reports are documents produced by companies and organisations to communicate their performance and commitment to environmental, social, and governance factors. ESG factors cover a wide range of issues, including environmental impact, and social ESG reporting is essential for transparency, accountability, and assessing a company’s sustainability and ethical practices. It is increasingly important in today’s business world as investors and consumers prioritise socially responsible and sustainable investments and products.

Obstacles and Requisites for Incorporating Green Externalities in India

India is currently positioned as the fifth most susceptible country to the repercussions of climate change, potentially endangering 2.5% to 4.5% of its GDP annually. To address this vulnerability, India has committed to reducing the carbon intensity of its GDP by 33-35% by 2030 compared to its 2005 levels. Nevertheless, achieving this ambitious target requires a substantial investment of $2.5 trillion between 2016 and 2030, as highlighted in a report by the Ministry of Environment, Forest and Climate Change (MoEFCC) in 2015.

Despite the urgency of the situation, there remains a significant shortfall in climate-related investments, stemming from both public and private sources. A forthcoming study conducted by the Climate Policy Initiative (CPI) indicates that India is currently mobilising less than a quarter of the necessary investment to meet this crucial target, as reported in 2020. [8] This includes regulatory changes, data infrastructure enhancement, and capacity building for businesses and government agencies. A robust framework for valuing environmental externalities is crucial for accurate accounting. Stakeholders in this transition include governments, businesses, environmental organisations, and accounting bodies. Governmental responsibility entails enacting policies to incentivise green practices. Businesses need to invest in sustainability initiatives and report their environmental impacts accurately. Environmental organisations can provide expertise and advocacy while accounting bodies must adapt standards to include green externalities. However, the process of such assessment in India faces several deficiencies which include but are not limited to its exclusive application to project-specific issues, and its focus on data presentation over analysis.

To enhance the process, accounting and assessment must aim to encompass private sector projects influenced by economic policy changes. Specific criteria for evaluating environmental impacts must be tailored to each project and its local environmental conditions. Furthermore, public participation, beginning early in project development is crucial, necessitating informal channels and financial support for affected communities. Associated departments must meticulously review projects, recording decisions publicly along with post-project monitoring. In India, the potential exists to implement these improvements with existing scientific resources. [9]


The research article has attempted to delve into the crucial importance of implementing Green Externalities Accounting, highlighting its pivotal role in reshaping modern economies towards sustainability. It underscores stakeholders’ need to prioritise transparency throughout their operations and be held responsible for the repercussions thereof. Often, minor externalities represent a significant grey area where communities are enduring global environmental impacts that are often overlooked or insufficiently quantified, even when occurring in plain sight. Until we take responsibility for our actions and incorporate them into our accounting practices, we cannot effectively assess or mitigate the consequences these actions have on communities, whether they are directly or indirectly connected to us. Beyond accounting, there will arise a need to assess climate-induced fiscal risks, and changes in the structure of the economy. Now is the moment for action. Connect with Carbon Mandal today to lead your organisation into this essential accounting revolution. Take a bold step with us now to shape a future that’s truly sustainable.

List of References

  1. 20-2-01E global climate risk index 2020 – Germanwatch. (n.d.).
  2. Adoption of IFRS in India: Benefits, challenges, and measures. (n.d.-b).
  3. Gandhi, F.V. (2018, May 23). Natural capital in the 21st century. The Hindu
  4. UNEP. Governing Council (19th sess.: 1997: Nairobi). (1997). United Nations Environment Programme:: report of the Governing Council on the work of its 19th session, 27 January- 7 February 1997, 3-4 April 1997. United Nations Digital Library System.
  5. Muralikrishna, I.V., & Manickam, V.(2017). Life cycle assessment. In Elsevier eBooks (pp. 57-75).
  6. Rahman, Md. M., & Islam, M.E. (2023). The Impact of Green Accounting on Environmental Performance: Mediating Effects of Energy Efficiency.
  7. Pricing greenhouse gas emissions: Turning climate targets into … – OECD. (n.d.-d).
  8. Department for Energy Security and Net Zero. (2019, July 2). Accelerating green finance: Green Finance Taskforce Report. GOV.UK.
  9. Evaluation of the environmental impact assessment procedure in India. (n.d.-c).
India and the Carbon Border Adjustment Mechanism: Paving the Way for Sustainability

India and the Carbon Border Adjustment Mechanism: Paving the Way for Sustainability

EU’s Carbon Border Adjustment Mechanism could spell worry for India’s export industries

EU’s Mission to Reduce Carbon Emission: ‘Fit for 55 in 2030 package’

According to IPCC’s sixth assessment report, with the current flow of production and consumption, global GHG emissions in 2030 make it likely that warming will exceed 1.5°C during the 21st century and make it harder to limit warming below 2°C. [1] As a result, carbon reduction pathways have increasingly become the need of the hour. Carbon pricing is one such pathway that curbs greenhouse gas emissions by placing a fee on emitting and/or offering an incentive for emitting less and is the EU’s primary mechanism for incentivizing industry to decarbonize.

Carbon Border Adjustment Mechanism or CBAM is part of the “Fit for 55 in 2030 package”, the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, in line with the European Climate Law. Through CBAM, the EU aims to curb emissions by levying a carbon tax/tariff on its imports. This in turn will affect all countries exporting goods to the EU as exported goods would be imposed a carbon tax.  [2]

Demystifying CBAM: Understanding the Carbon Border Adjustment Mechanism

The Carbon Border Adjustment Mechanism (CBAM) is a critical initiative aimed at equalizing carbon pricing for products within the European Union (EU) and imported goods and is scheduled to launch its transitional phase on October 1, 2023, with the initial reporting deadline set for January 31, 2024. During this phase, importers will be obliged only to report their emissions; actual border taxation will begin in 2026. [3]

This transitional phase serves as a learning period for stakeholders, including importers, producers, and authorities, to gather valuable data on embedded emissions. The collected information will be used to refine the methodology for the definitive CBAM system.

During this initial phase, importers are required to report greenhouse gas emissions (GHG) embedded in their imports, both direct and indirect, without making any financial payments or adjustments. Importers will have the option of reporting through three methods in the first year: (a) following the new EU methodology, (b) using equivalent third-country national systems, or (c) relying on reference values. However, starting from January 1, 2025, only the EU methodology will be accepted. [3]

Several countries, such as Canada and Japan, are considering similar initiatives, underlining the global importance of addressing carbon emissions through mechanisms like CBAM.

The new tax is intended to discourage carbon-intensive operations while encouraging industries to have their processes go “green” as much as possible. To avoid “carbon leakage,” the tax would mimic the EU’s carbon market pricing. This refers to when the EU’s emission-cutting efforts are offset by rising emissions outside the union due to manufacturing relocation to non-EU nations with less ambitious climate regulations or offset by increased imports of carbon-intensive products. This mechanism encourages trading partners to decarbonize their industries. [2]

Unpacking the Impact: How Carbon Border Adjustment Mechanism Affects Exports?

Carbon Border Adjustment Mechanism Affects Exports

The Carbon Border Adjustment Mechanism (CBAM) targets carbon-intensive imports like cement, steel, aluminium, and more, initially covering over 50% of emissions in EU Emissions Trading System sectors. Exporters to the EU, such as steel and aluminium companies, must measure their production’s carbon intensity. Similar to the EU’s Emissions Trading System (ETS), which places a limit on the right to emit certain pollutants but allows firms to trade emissions rights, CBAM will be based on certificates. Companies that import goods into the EU will be required to purchase certificates that represent the amount of emissions generated during the production of these goods. The commission will calculate the price of these certificates, which will mirror the ETS to comply with World Trade Organization (WTO) rules. [4]

This initiative signifies a significant global step in climate mitigation efforts, potentially expanding to other sectors and countries, impacting various industries and exporters, including those from India.

Upon the permanent system’s implementation on January 1, 2026, importers must annually declare the quantity of goods imported into the EU in the previous year and their associated GHG emissions. They will then surrender CBAM certificates, with the certificate price determined by the weekly average auction price of EU Emissions Trading System allowances. [3]

Of a total of USD 74836.52 million, the iron and steel sector account for about USD 4109.08 million (5.49%) and aluminium for about USD 2245.25 million (3%) in terms of India’s export to the EU in FY2022-23. [5] Other major sectors including cement, fertilizers, energy and chemicals and polymers are also set to be affected by the CBAM. The cost of India’s steel exports to the European Union (EU) could rise as much as 17% following the full implementation of the CBAM. [6]

Gearing up for the Implementation of CBAM

The EU plans to expand the levy’s scope, including plastics, chemicals by 2026, and all sectors under the EU Emissions Trading System by 2030, potentially covering finished products like cars. Indirect emissions may also be considered. As free allowances in the EU Emissions Trading System are phased out from 2026 to 2034, this transition poses challenges for certain sectors and exports, as they’ll have to pay full domestic carbon costs, potentially impacting their competitiveness. [2]

Businesses must prepare for the impending changes related to the Carbon Border Adjustment Mechanism (CBAM). The CBAM could increase costs for products from regions lacking strong carbon policies and distant suppliers. Companies should assess their emissions’ geographical composition and consider cost vs. carbon trade-offs. As CBAM expands its scope, more businesses will need to prepare, impacting customs data, sourcing, and supply chains. Staying informed is crucial for EU importers of CBAM goods.

The impact of the Carbon Border Adjustment Mechanism (CBAM) varies among countries based on their export structure and carbon production intensity. India, a significant EU trading partner, has implemented energy efficiency and renewable energy targets. However, India’s hard-to-abate sectors have high greenhouse gas emissions due to the lack of carbon pricing and usage of fossil fuels. Adoption of emerging decarbonization technologies may lag compared to more regulated markets. Considering the evolving landscape of imports and exports, marked by the emergence of market mechanisms such as CBAM, it’s noteworthy that certain Indian businesses have already embarked on their journey toward a low-carbon transition, positioning themselves for the future. These companies have assessed their carbon footprint and set GHG reduction targets. [7]

It becomes imperative for Indian firms to adopt green solutions for businesses and put systems in place for tracking emissions, assessing the effect on their supply chain, calculating the financial cost-benefit of different supply chain and technology options, and planning for competitiveness in the face of increasing carbon border taxes. The government on the other hand should focus on reshaping India’s policies related to climate mitigation. [5]

Connect with Carbon Mandal to gain valuable insights into GHG Accounting and decarbonization. Start your sustainability transition today!

List of references

  1. IPCC. AR6 Synthesis Report. Accessed 13th September 2023.
  2. World Economic Forum. (2022) CBAM: What you need to know about the new EU decarbonization incentive. Accessed 11th September 2023.
  3. Taxation and Customs Union. Carbon Border Adjustment Mechanism. Accessed 8th , 14th September 2023.
  4. Sinan Ülgen (2023). A Political Economy Perspective on the EU’s Carbon Border Tax. Accessed 11th September 2023.
  5. PricewaterhouseCoopers. Carbon Border Adjustment Mechanism (CBAM). Accessed 8th , 11th , 14th September 2023.
  6. CRISIL. SectorVector – Carbon coping. Accessed 11th September 2023.
  7. Policy Brief | the EU’s Carbon Border Adjustment Mechanism: How to make it work for developing countries. Accessed 8th September 2023.
  8. PricewaterhouseCoopers. EU Carbon Border Adjustment Mechanism (CBAM) – what do businesses in the Middle East Need to know? Accessed 8th September 2023.
  9. Shah, A. (2023). How Indian Firms Should Deal With The European Carbon Border Levy Accessed 8th September 2023.
  10. Ernst & Young. Carbon Border Tax Adjustment (CBAM): Everything but not tax! Accessed 8th September 2023.
  11. KPMG. EU Carbon Border Adjustment Mechanism (CBAM). Accessed 11th September 2023.
Representation of Indian Carbon Market

India’s Carbon Market: A Promising Future for Climate Action?

Taking a look at the carbon market in India and its expected future

Climate change is undeniably one of the biggest threats we face today, and combating it requires innovative solutions. Enter the carbon market – an intriguing concept that has gained momentum worldwide. The carbon market is a system where businesses and governments buy and sell credits for emitting greenhouse gases. The market sets a price for carbon, which creates an incentive to reduce emissions.

Carbon markets can either be compliant or voluntary. Compliance markets are formally governed by laws at the national, regional, and/or worldwide levels. Today’s compliance markets primarily follow a concept known as “cap-and-trade” [6]. Whereas, in voluntary carbon markets emitters like businesses, people, and others purchase carbon credits to compensate for the release of one tonne of CO2 or similar greenhouse gases. These carbon credits are produced through actions that remove CO2 from the atmosphere, like reforestation [6].

International carbon markets can be crucial in achieving cost-effective global greenhouse gas emission reductions. The number of emissions trading systems is rising globally. The United States, Canada, China, Japan, New Zealand, South Korea, and the EU ETS are just a few of the countries that have national or subnational systems running or in the works [4]. The market for carbon rose 13.5% in 2022, reaching a new high of 865 billion euros. This expansion was primarily brought on by an uptick in the demand for carbon permits, which resulted in skyrocketing costs [2]. Based on revenue, the European Union Emission Trading System is the largest carbon market; in 2022, it represented over 87% of the total market size.

In India, with its booming economy and increasing greenhouse gas emissions, how would the carbon market play a role in combating climate change? In this blog, we delve into the potential of India’s carbon market, exploring its promises and future in order to meet the sustainable goals of India.

India’s Carbon Market – Carbon Credit Trading Scheme

The carbon market in India is still in its early stages of development, but it holds great promise for climate action. The market allows businesses and individuals to offset their emissions by investing in projects that reduce greenhouse gas emissions. In return, they receive carbon credits that can be used to offset their own emissions or traded on the open market. India has issued 35.94 million carbon credits between 2010 and 2022 and has also traded these credits on overseas markets [5].

The Government of India has been taking steps to establish a carbon market in the country.

The most recent update was, in 2023, when the union government sanctioned the establishment of the first domestically regulated carbon market in India [1]. The goal of the Indian government’s development of the Indian Carbon Market (ICM), which would establish a national framework, is to decarbonize the Indian economy by pricing Greenhouse Gas (GHG) emissions through the trade of Carbon Credit Certificates [3]. The Carbon Credit Trading Scheme is being developed for this purpose by the Ministry of Power’s Bureau of Energy Efficiency in collaboration with the Ministry of Environment, Forestry, and Climate Change. The plan calls for the establishment of a “National Steering Committee,” a technical committee, an accredited carbon verification agency, and the Central Electricity Regulatory Commission (CERC), which will act as the market regulator for carbon emissions [1]. By 2025 it is anticipated that  Renewable Energy Certificates (REC) and Energy Savings Certificates (ESC) will be traded, and by 2026 these will be changed to Carbon Credit Certificates.

Through the creation of a domestic registry and integration with power markets, the recently announced carbon credit trading plan would usher in a new era to restore the trading of emissions, CMAI (Carbon Market Association Of India) President Manish Dabkara, Chairman and MD of EKI Energy Services, states that “Taking a cue from its Paris Agreement commitment and chasing its NetZero goal, Government of India in consultation with the Bureau has released the Carbon Credit Trading Scheme (CCTS) for the institutionalisation and functioning of the Indian Carbon Market (ICM). It involves a process for compliance in which emission objectives will be established for specific industries and organisations, surpassing which they will receive credit certificates” [7].

The energy transformation initiatives will be strengthened by the new avatar Carbon Credit Trading Scheme, which will broaden their scope to include India’s potential energy sectors. In order to meet the climate goals, GHG intensity benchmarks and targets will be created for these sectors and will be in line with India’s emissions trajectory [3]. Based on how well these sectoral trajectories are doing, carbon credits will be traded. Additionally, it is anticipated that a voluntary system will be developed concurrently to stimulate GHG reduction from non-obligated industries. Through the purchase of emission credits by both public and private enterprises, the ICM will activate new mitigation alternatives.

However, the notification did not list the activities that would qualify under the carbon trading plan. “The Ministry of Power will advise notifying the Ministry of Environment, Forestry and Climate Change (MoEFCC) of greenhouse gas emission intensity targets. The accountable parties are required to reach the targets for greenhouse gas emission intensity. The announcement stated that the obligated companies “shall also be required to get any other targets, such as usage of non-fossil energy or specific energy consumption, as may be declared by the Ministry of Power under the Act as amended from time to time [1].

The Future of the Carbon Market in India

Industry insiders predicted that the $2 billion voluntary carbon credit market in India may grow to $200 billion by 2030 [1]. India is one of the biggest exporters of carbon credits, yet it lacks its own carbon market. Although there are a few carbon offsetting sites that offer carbon credits, there isn’t yet a market that is regulated [1].

In the past decade, there have been many carbon market initiatives launched in India. It is difficult to predict the future of any given market, and this is especially true for nascent markets like carbon. There are a number of factors that could affect the future development of the carbon market in India, including political stability and economic growth.

Political stability is an essential factor to consider when predicting the future of any market. Political turmoils will make it difficult for businesses to operate and thus create uncertainty about the policy environment. Such situations could hamper the development of the carbon market in India.

Economic growth is another important factor to consider when predicting the future of a market. A growing economy usually leads to increased demand for commodities, including carbon credits. With India’s growing economy and a larger number of businesses coming up, the demand for carbon credits could potentially increase.

India’s transition to a low-carbon economy

The benefits of having a carbon market in India are many. For one, it would create incentives for businesses to invest in green technologies and practices that lower their emissions. It would give Indian businesses a way to offset their emissions if they are unable to reduce them enough on their own. There will be challenges that India could face when it comes to the regulation of this carbon market and tackling these issues would take solid and structured guidelines.

A carbon market would send a strong signal to the international community that India is serious about tackling climate change. This could attract more foreign investment and help India transition to a low-carbon economy.


  1. Standard, B. (2023). Centre approves formation of India’s first domestic regulated carbon market. Accessed July 10th 2023
  2. Ian Tiseo, & 10, J. (2023, July 10). Global Carbon Market Size 2022. Statista.,which%20culminated%20in%20surging%20prices. Accessed July 14th 2023
  3. Ministry of Power & Ministry of Environment, forests & climate change to develop Carbon Credit Trading Scheme for decarbonisation. Press Information Bureau. Accessed July 10th 2023
  4. International Carbon Market. Climate Action. Accessed July 14th 2023
  5. (2023, March 28). Carbon credit: Understanding the concept, its evolution and implications – ET energyworld. Accessed July 14th 2023
  6. Munjal, D. (2023, January 26). Explained: What are carbon markets and how do they operate? Accessed July 14th 2023
  7. Business Today. (2023, July 3). Govt finalises scheme for Indian Carbon Market, Steering Committee to be formed. Accessed July 16th 2023
Sustainability Reporting

ESG Reporting – Not an Option but a Necessity for a Sustainable Future

Exploring the Rise and Relevance of ESG Reporting in India

Investors perceived Covid-19 as the century’s first “sustainability” crisis, resulting in a surge in global ESG investing. According to an EY report, 90% of international investors consider a company’s ESG performance, and 86% prioritise corporate decarbonisation [3]. Due to the significant risks and opportunities associated with ESG issues, companies, investors, and regulators are becoming increasingly interested in ESG reporting. A partner of Omnivore, Mr.Roy explains, “An ESG system is essentially a toolkit to help predict what can potentially go wrong for the environmental and social externalities of a business. These predictions help tremendously with safeguarding business models against risks that are avoidable when approached in the right way” [1]. The Principles for Responsible Investments (PRI) were released by the United Nations in 2006 and established an ESG Reporting Guideline for incorporating ESG factors into business strategy and policy with 2,000 signatories, it is widely regarded as the official reference point for ESG frameworks [4]

Aside from identifying and managing environmental and social risks, ESG reporting can build trust and transparency with investors, and attract sustainable investors. Whitney Sweeney, the investment director of sustainability at Schroders states, “In 2021 alone, there were more than 225 new or revised policy initiatives established globally with an ESG focus – the highest number ever recorded and more than double any previous year and expect a continued high level of activity into 2023”[5]
With a multi-trillion dollar pool of ESG-driven capital available globally, Indian companies are fast adopting the ESG approach into their overall business models. They recognize their responsibilities go beyond monetary returns to create positive social and environmental impacts as well [3]. This article will look into the rise and associated relevance of ESG Reporting in Indian businesses.

Rise of ESG Reporting In India

One would be amazed to know that there exists a possibility, in which the Indian economy can mobilise $1 trillion by 2030 towards top ESG priorities, particularly for financing the climate transition [6]. As ESG reporting becomes increasingly relevant, Indian corporations are being pressed to disclose their ESG performance. Although, similar to the global trend, there was a surge in awareness and ESG compliance after the Covid-19 pandemic, guidelines were present prior in India to encourage ESG Investments. “Ministry of Corporate Affairs” (MCA) published the “Voluntary Guidelines” on “Corporate Social Responsibility” (CSR), which in 2011 became the “National Voluntary Guidelines” (NVG) on “Social, Environmental & Economic Responsibilities of Business”. There were nine principles in the NVG that represented the “Long-Term Sustainable Value” of Indian companies [8].

The Securities and Exchange Board of India (SEBI) developed a system in 2017 that would allow businesses to voluntarily adopt integrated reporting, which would provide stakeholders with all necessary financial and non-financial information and ensure open communication about the company’s strategy, governance, and performance [8]. In the year 2020, under its Business Responsibility and Sustainability Reporting (BRSR) initiative, the SEBI made ESG disclosures mandatory for the top listed 1000 companies, previously 100 companies under Business Responsibility Report (BRR). This was done so as to increase transparency and encourage companies to adopt sustainable practices [2]. It was through this initiative that BRSR reporting came to be in India. 
Corporate Social Responsibility (CSR) is mandated by the Indian government for companies with a net worth of 500 crore rupees, a turnover of 1000 crore rupees, or a net profit of 5000 crore rupees. At least 2% of these companies’ net profits should be spent on CSR endeavours. ESG profiles should also be disclosed in order to attract capital from global ESG investors and financiers [3]. The Bombay Stock Exchange (BSE) published the Guidance Document on ESG Disclosures in 2018, which acts as a guideline for voluntary ESG reporting. It listed 33 specific issues and metrics on which companies should focus when disclosing their ESG information to investors [8]. The above-mentioned ESG reporting guidelines and government initiatives were set to increase the rate of ESG compliance and thus ESG investments in the country.

Relevance of ESG Reporting for Indian Businesses

At the United Nations Climate Change Conference in Glasgow last year, Prime Minister Narendra Modi set India’s net-zero emission target for 2070, establishing a business case for net-zero emissions [9]. As evident in the term, ESG reporting makes a direct positive impact on environmental issues, employee safety and well-being and governance and policies. With the increased risk of climate change, the relevance of ESG reporting has increased manifold, in regards to Indian companies. Investing in ESG practices will boost India’s growth, reduce environmental risks and reduce its capital raising costs. 

Increased capital and improved risk management are the highlight benefits that companies can achieve by prioritising ESG. For instance, it is more likely that companies with strong environmental practices can access capital from socially responsible investors, as well as face fewer penalties for environmental violations [2]. If Indian companies ignore developing strong ESG frameworks, they can lose INR 7,13,800 crore due to climate-related risks within the coming next five years. In order to attract investors, businesses need to demonstrate climate resilience and aim to eliminate emissions [3]
ESG reporting also includes companies in the chemicals, refining, and cement industries. They would have to operate ethically, use available technology to be effective and reduce emissions, and effluent treatment, not discharge untreated waste into the soil, water, or air, and also care for their minority shareholders and the broader community [7].

Next Steps in ESG Reporting 

In terms of environmental and social risks, climate change will be significant for Indian companies as India is among one of the most vulnerable countries that will have to deal with the consequences of the same. Indian businesses, more or less, do not have a choice but to consider ESG factors in their business strategy and risk assessment and thereby start ESG reporting. For successful ESG reporting and investments, expert guidance and education are necessary. Investors should work with investment advisors to identify their ESG and financial preferences when recommending ESG products.

If you are interested in developing ESG reporting at your firm and contributing towards a sustainable future, look no further! Connect with us to gain invaluable insights on how to carry out ESG reporting that would best suit your business and be relevant in today’s evolving market and economy. Our experts can guide you on ESG reporting guidelines, BRSR reporting and innovative strategies enabling your business to thrive in the long run.

List of References  

  1. Shanthi, S. (2023, February 17). ESG investing gains momentum in India.,climate%20tech%20investments%20in%20India. Accessed April 17, 2023
  2. The rise of ESG investing in India: What it means for corporations. (2023, February 27). Accessed April 17, 2023
  3. Lin, B. (2023, January 31). India transforms its ESG landscape to be future-ready. Accessed April 19, 2023
  4. What is ESG Investing? Accessed April 19, 2023
  5. Hicks, C. (2023, January 10). ESG investing trends for 2023 | investing | U.S. news. Accessed April 19, 2023
  6. India can attract $1 trillion in ESG Investment: Stanchart. (2022, September 27). Accessed April 20, 2023
  7. Rise of responsible investing. (2022, April 25). Accessed April 20, 2023
  8. The importance of “ESG” and its Application in India – LEXFORTI. Accessed April 20, 2023
  9. Tikoo, R. (2022, May 07). How Indian businesses can grow sustainably with ESG approach. Accessed April 20, 2023
Cochin Airport

Cochin International Airport: Creating History with Solar Power 

Taking a look at the World’s first Solar powered Airport

The sun and its energy have always been ordained as an absolute necessity for the functioning of life on Earth. It is this same necessity that an airport in the state of Kerala, Cochin International Airport Limited (CIAL), has used as a trump card in its journey towards sustainable development.

A report by the International Energy Agency (IEA) states that Global Solar Photovoltaics (PV) capacity is expected to nearly triple between 2022 and 2027, surpassing coal as the world’s largest source of power capacity. According to the analysis, there are signs of diversity in global PV supply chains, with new legislation in the United States and India anticipated to increase investment in solar manufacturing by up to USD 25 billion between 2022 and 2027 [3].

Solar energy has been prioritised in India’s National Action Plan on Climate Change, with the National Solar Mission being one of the primary missions. The Mission’s goal is to position India as a global leader in solar energy by fast developing regulatory conditions for solar technology dissemination across the country [11]. India’s Intended Nationally Determined Contributions (INDCs) objective is to attain around 40% of cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030 and to reduce the emission intensity of its GDP by 33 to 35% from 2005 levels. As of November 30th 2022, solar power installed capacity was around 61.97 GW [11]. By 2026, the Indian industry will be able to produce 100 gigatonnes (GW) of solar modules per year, allowing the country to become a net exporter of solar power. This will considerably help India’s goal of adding 500 GW of non-fossil energy capacity by 2030, according to Bhupinder Bhalla, Secretary, Ministry of New and Renewable Energy [5].

Solar Energy in India’s Aviation Sector

India has set itself an ambitious goal of being the third-largest economy by 2030 and a $5 trillion economy by 2024–25. To reach the targets, there needs to be an increased focus on sustainable growth, which must address climate change issues and accomplish the Sustainable Development Goals (SDGs). The government plans to install 500 GW of renewable energy by 2030, including 280 GW of solar power, with the goal of reducing the nation’s overall carbon impact [12]. The idea of adopting solar power as an option, even for the aviation industry, has been sparked by the desire to lessen reliance on fossil fuels. In order to meet the needs of a large number of passengers, modern airports use a lot of energy in their daily operations, leading to large amounts of carbon emissions [12].

The conversion of Cochin International Airport Limited (CIAL) into a fully solar-powered airport began in the year 2013. CIAL started with a 100kWp Pilot Plant and gradually increased its solar capacity until it became the ‘World’s first Airport to be totally powered by Solar Energy’ in 2015, with an installed capacity of 13.1MWp [6]. In the year 2018, CIAL was awarded the United Nations’ Champions of the Earth environmental award. S.Suhas IAS, the Managing Director at CIAL states that “CIAL’s development policy encompasses Total Sustainability Management (TSM). We try to explore every possible way to address climate change. CIAL which achieved power neutrality in 2015 now becomes a power surplus organisation, feeding approximately 4 crore units of excess power annually to the State grid. And with the help of the Government, we are sure that we can venture into more such projects in the near future” [6].

The following section of this article will look into the solar energy initiatives taken up by CIAL and other initiatives that support their sustainability agendas.

Innovative Initiatives by CIAL

1.    Solar Energy

Solar power has been CIAL’s main focal point in its sustainable journey. At present, CIAL has 50 MWp of installed solar capacity. The airport produces surplus power which is supplied back to the grid. In accordance with a power banking module developed with the Kerala State Electricity Board (KSEB), CIAL contributes as much electricity as it generates throughout the day to the KSEB grid and “buys back” the power from KSEB as needed, particularly at night [1]. CIAL is the second largest energy producer in the state of Kerala, after the Kerala State Electricity Board (KSEB). In addition to maximising available land to install solar panels, CIAL has installed these panels on top of their car parking structure which is called solar carports.

Through its various solar PV systems at the airport, CIAL has produced more than 25 crore units of green energy to date. CIAL Infra purchased 35 acres of property in Payyannur, Northern Kerala, as part of its effort to expand its solar projects outside of CIAL premises, and built an 11.6 MWp solar plant there. This is the first terrain-based installation in India. The Payyannur solar farm was initially intended to be a “captive power plant” to help CIAL satisfy its growing energy needs. However, the Covid-19 outbreak derailed CIAL’s commercial ambitions and caused its energy consumption to slow down. As a result, this facility turned into an “Independent Power Plant ” (IPP) and the KSEB grid receives all of the energy produced by this plant [7]. This plant has so far generated approximately One Crore units of green power.

Relying upon solar energy for the entire functioning of the airport has enabled CIAL in lowering its carbon footprint by 1,60,000 metric tonnes [6]. This green energy initiative will reduce the amount of carbon dioxide emissions from coal-fired power stations over the next 25 years by more than 300,000 tons, which is the same as planting 3 million trees or not driving 750 million miles in automobiles [1].

2.    Photovoltaic Agriculture

With the aid of solar panels, CIAL has initiated Photovoltaic Agriculture. In this procedure, vegetables are grown in vacant spaces between solar panels. The water that is used to wash these solar panels runs off to the vegetables in between, thereby reusing water. The crops are anticipated to alter the microclimates beneath PV modules by lowering the temperature, which boosts power generation efficiency. Additionally, the crop coverage between PV arrays will prevent soil erosion and lessen the amount of dust that collects on the PV module. Another benefit of the cultivation is that it slows weed development around the PV panel mounts [8]. These agro-photovoltaic operations have so far generated about 90 metric tonnes of pesticide-free vegetables [6].


In the current scenario of climate change and the associated challenges that the world faces today in association with climate change, renewable energy is a step in the right direction. Airports, especially international ones, are important to a country’s economic fabric but at the same time contribute to a country’s carbon footprint. CIAL taking up solar energy and venturing into renewable energy has provided both a greater opportunity and a boost to switch to green energy. Other airports would be able to install renewable energy with ample planning along with clearly laying out their sustainability agendas.


  1. P.S, J. ICAO ENVIRONMENTAL REPORT – Sustainable Alternative Fuels. Accessed May 2, 2023
  2. How is the World’s first airport fully powered by Solar Energy faring over time. Accessed May 2, 2023
  3. International Energy Agency (IEA). Renewable Power’s growth is being turbocharged as countries seek to strengthen energy security – news. (2022). Accessed May 12, 2023
  4. Richardson, L. (2023, April 26). History of solar energy: Timeline & invention of solar panels: Energysage. Accessed May 15th, 2023 
  5. Koshy, J. (2023, February 20). India plans to Export Solar Power: Official. The Hindu. Accessed May 16th, 2023
  6. CIAL’s green energy generation touches 25 Cr. Units. Cochin International Airport.,by%201%2C60%2C000%20Metric%20tonnes. Accessed May 16th, 2023
  7. SOLAR POWER PROJECTS. CIAL infrastructure. Accessed May 16th, 2023
  8. Cochin Airport Scales up agri-voltaic farming with joint production of food and Energy. (2021, December 13). The New Indian Express. Accessed May 16th, 2023
  9. Small Hydro Electric Project (SHEP). CIAL Infrastructure. Accessed May 16th, 2023
  10. CIAL to commission its 1st Hydropower Project. (2021, October 24). Accessed May 16th, 2023
  11. Current status: Ministry of new and renewable energy, government of India. (n.d.).,and%20has%20achieved%20grid%20parity. Accessed May 12th, 2023
  12. Solar fueling green transformation of Indian Aviation. (2022, December 12). ET EnergyWorld. Accessed May 25th, 2023

Going Green: A Reality or a Facade?

Evaluating the relevance of greenwashing in a society where green has become a fad.

The Rise of Green Marketing

As the world continues to grapple with the urgent need for sustainable development, a disturbing trend has emerged – GREENWASHING. Companies and organisations are increasingly using deceptive marketing tactics to portray themselves as environmentally friendly, while their actual practices may be far from sustainable. 

At the COP27 climate summit in Egypt last year, UN Secretary-General António Guterres said, ‘We must have zero tolerance for net-zero greenwashing. [1]

Greenwashing implies “a discrepancy between words and deeds, which combines poor environmental performance and positive communication about the environmental performance.” [4] 

Consumers nowadays seek green products while investors want to invest in companies that care about the environment. [6] In the environmental era, firms are continuously looking for new ways to distinguish their products. Companies are eager to, on the green trend due to which greenwashing has become prevalent. [3] 

In the domain of environmental management, the term “greenwash” is used as a metaphor akin to the term “whitewash” to create an image among consumers that a firm implements sustainable business processes and practices. [8]

Typically, businesses use marketing and promotion to “greenwash” their products by making false claims that their product is recyclable, biodegradable, and eco-friendly.[1]

Before we explore greenwashing, it’s important to understand the difference between it and genuine green marketing. Let’s take a closer look.

Greenwashing and green marketing: two sides of the same coin

There’s a  thin line between green marketing and greenwashing.

Green marketing can be defined as “an ethical approach to sustainability of an organisation who adopts green practices as their major corporate social responsibility to meet the challenges put forward by consumers without having any ill-effect on the environment.”[8] Greenwashing is defined as the “act of misleading consumers regarding the environment-friendly practices of a company.” [5] Green marketing tends to increase the preference of consumers towards greener products whereas in the case of greenwashing a company deceives the consumer into believing their products are green by making exaggerated claims so that the consumer is convinced to buy the product. [10]

The seven sins of Greenwashing

An in-depth understanding of greenwashing requires us to know about the ‘seven sins of greenwashing’ [7]. The seven sins are as follows:

1. Sins of no proof – This happens when an environmental claim about a product is not supported by any relevant data or certification. 

For example, Facial tissues or toilet tissue products that claim various percentages of post-consumer recycled content without providing evidence

2. Sins of vagueness – This happens when a product makes claims that need to be better formed and can be easily misunderstood by the consumers.

For example, All natural claims. Arsenic, uranium, mercury, and formaldehyde are all naturally occurring, and poisonous. All natural isn’t necessarily green.

3.  Sins of hidden trade-offs – This happens when a claim about a product being green is made by looking at a limited set of characteristics while overlooking some significant environmental issues.

For example, Paper is not necessarily environmentally preferable because it comes from a sustainably harvested forest. Other environmental issues in the paper-making process, such as greenhouse gas emissions are equally important.

4.  Sins of irrelevance – This happens when truthful yet unhelpful and useless information is provided to the consumer in the name of a green claim.

For example, Companies make CFC-free claims despite the fact that CFCs (chlorofluorocarbons) are banned under the Montreal Protocol.

5. Sins of lesser of two evils – This is committed by making claims that are true in the product category but which may distract the consumers from other health or environmental risk. This happens when true claims about a certain product might divert consumers’  attention from the product’s other environmental effects.

For example, Organic cigarettes.

6. Sins of false labels – This is committed when a product through words or images tries to give an impression of a third-party endorsement when no such endorsement exists. 

7. Sins of fibbing – This is committed by making green claims that are untrue. 

For example, Products falsely claiming to be ENERGY STAR® certified or registered.

The dangers of unchecked greenwashing

The consumer is being led to feel that by adopting the practices advocated by particular companies, they are aiding the environment, even though this may not be the case. Consumers may lose faith in businesses that are doing well for society as a result of greenwashing. Consumer and investor confidence in green products and environmentally conscious businesses can be severely harmed by greenwashing, which makes these stakeholders reluctant to reward businesses for their environmental performance. Thus, the company can lose both consumers and investors while tarnishing its brand image as a result of greenwashing,[2]

Major Industries where greenwashing is rampant in India

Sensharma, Sinha and Sharma,2022 try to look at ESG reporting in India through a lens of greenwashing. They take the companies listed under NIFTY STOCK 50 index from the year 2019-20 using available ESG scores. They try to measure and compare the extent to which the companies are engaging in greenwashing activities. Data for the study is collected through secondary sources like Bloomberg and Thompson Reuters.[9]

The results of the study indicate that “54% of the 48 companies which are part of the sample are greenwashers”. The average greenwashing score turned out to be the most in the case of the energy sector and the least in the FMCG sector. [9]

Singhal and Agrawal, 2021 have tried to understand the concept of greenwashing from a consumer point of view in the state of Rajasthan, India. They have also tried to find out which sector in India greenwashes the most. A sample size of 100 individuals was chosen for the study and 88 people responded. The research was conducted through the medium of questionnaires which were mailed to the respondents. Some secondary data was also used in the analyses. The results of the study indicated that the beauty/cosmetic industry greenwashes the most, followed by Automobile Industry. [11]

So we can see that there is a difference in the consumer perception and the actual greenwashing score of the industries. While the consumer perceives that greenwashing is rampant in the beauty products/cosmetic industry, the greenwashing score comes out to be the most in the Energy Sector in India.

Way forward

In the current scenario, greenwashing is a significant issue that requires attention.

Consumers need to be aware of this practice and should read the labels carefully while buying green products. They should also do the necessary research before purchasing a product solely because it makes green claims.

Brands need to be aware that modern consumers value authenticity. While indulging in greenwashing may help them close deals quickly, there is a chance that consumers might lose faith in the company and stop buying their products altogether.

Businesses need to take their corporate social responsibility seriously and refrain from greenwashing activities as it can tarnish their image. They need to invite customers to join them in the effort to create a future that is both inclusive and truly green.

In the quest for a sustainable future, combating greenwashing emerges as a vital step towards real progress. With the awareness of this deceptive practice, consumers now hold the power to make informed choices. By diligently scrutinizing labels and conducting thorough research, one can differentiate between authentic green products and those that merely make false claims. Likewise, brands must recognize that the modern consumer values transparency and genuineness. 

Though greenwashing may yield short-term gains, the long-term consequences can be severe, eroding consumer trust and jeopardizing their market presence. Embracing corporate social responsibility becomes imperative for businesses, as they strive to build an unblemished reputation and foster a partnership with their customers. Together, by rejecting greenwashing and embracing a shared vision of inclusivity and true sustainability, we can pave the way towards a greener future for all.

If you need expert guidance on navigating the complexities of sustainability and avoiding greenwashing, reach out to our sustainability experts at Carbon Mandal and let’s work together towards a truly sustainable tomorrow.

List of references



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