Technology companies around the world are committing to carbon neutrality. India isn’t far behind either with the government pledging to achieve net-zero emissions by the year 2070.
The continuous conversations over the last few years have helped Indian companies realise the importance of going green, Anirban Mukherjee, Managing Director and Partner at Boston Consulting Group (BCG), said during TechSparks Bengaluru 2023, YourStory’s flagship startup-tech summit.
“When I was part of such panel discussions five years ago, climate did not feature beyond a corporate social responsibility (CSR) activity. However, different companies have started investing in greener initiatives since,” Mukherjee said, noting that carbon neutrality has definitely become an active boardroom conversation.
Angie Mahtaney, Business Mentor at Brigade REAP, concurred. At least one out of three early-stage startups being mentored by REAP is building in the climate or cleantech space, which indicates the growing interest in commitment towards the larger global goal, Mahtaney said.
“We are always assisting founders to understand how they can build sustainable businesses in the space, mainly how to reduce costs and expand revenue,” Mahtaney added. Scaling business models in the space is tricky and pivots play a key role in determining the effectiveness of carbon neutrality efforts, Mahtaney added.
However, India still has a long way to go.
“India is lagging behind the global trends by ten years. In the recent COP26 and COP27 conventions, India was called out for contributing 1% to the increase in global carbon emissions, making the country one of the top three contributors,” Mukherjee added.
The country will have to act collectively towards reducing emissions and this can come through in the form of mandates, policies, and investment decisions, according to BCG’s Mukherjee.
Access to finance
Financing in the space is crucial and tough because it is important to articulate the role, impact, and credit risk present in different types of capital available, according to Mukherjee.
Brigade REAP’s Mahtaney added that the presence of impact investors has also drawn increased attention to the cleantech space. “When we notice that a founder wants to build in the space, we direct them to an impact investor who may have a more suitable mindset,” Mahtaney added.
“The idea is to help companies achieve net-zero emissions targets along with profitability,” Mahtaney added.
Advice to founders
The top advice Brigade REAP’s Mahtaney gave entrepreneurs who want to be more proactive towards being environmentally aware is to be practical as it is a tough and long road ahead. “Remember that the work begins at home,” Mahtaney added.
BCG’s Mukherjee emphasised that founders must start looking at the environmental impact of their businesses early on. “Look at the Scope 3 emissions with a clear lens because cost cannot be the only criteria,” Mukherjee added.
Edited by Kanishk Singh
