Climate risk for some, biz opportunity for others

Climate change is fraught with business risks. The type of business risk varies from sector to sector. While a majority of oil and gas companies (56%) say that it is a reputational risk, most chemical companies (60%) say that it’s an operational risk, according to the trends emerging from the ongoing FE-EVI Green Business Survey. The initial round of survey is based on responses from the senior leadership of select companies from oil and gas, automotives, and chemicals.

While some of companies say it’s for the government to take measures to slow down the process of manmade climate change, others say the onus is on businesses.

Divided along sectors, respondent companies even suggest measures to combat climate change. While 60% chemical companies feel that the onus is on the government to invest in latest and clean technologies, 72% automotive companies say that it calls for strategic level changes in companies to fight climate change.

Despite the realisation about their roles, many companies don’t seem to have made a beginning themselves. Most of them don’t know where they stand in terms of their environmental performance and greenhouse gas foot printing. For example, 67% of the oil and gas companies have not even come up their greenhouse gas inventory.

It has not stopped respondent companies from thinking about how they should fight climate change, though. For example, 70% surveyed chemical companies feel that clean development mechanism and voluntary emission reduction could be important climate change combatant tools.

Others look at clean development mechanism and carbon trading differently. A majority (67%) of oil and gas companies feel that climate change is a mild business opportunity for them and can be harnessed through instruments like clean development mechanism and carbon trading.

Others look at the climate change opportunity from a marketing or brand building perspective. For example, 80% automotive companies feel that combating climate change is a great way to enhance their reputation among customers and investors.

A few companies are going beyond harnessing conventional business opportunities of carbon trading and brand building. For example, generating renewable power by comapnies themselves is picking up in automotive companies with 60% of the company having plans to do so. Others are focusing on innovation. A chemical company like Monsanto is developing seeds/chemicals that use 30% less natural resources and produce 20-30% more.

The final survey results based on responses from 300 top business houses in the country are expected by September end. Conducted by The Financial Express (FE) and Emergent Ventures India (EVI), a leading climate change mitigation advisory firm, the survey aims to map the greening of Indian businesses, highlight success stories and come up with a set of recommendations for the industry to adopt a low-carbon and high-growth path for a competitive edge in business.

It’s expected that the survey recommendations will serve as a reference work for industry bodies, rating agencies and financial institutions....