Developing Sustainable Value Chains Across Indian Industrial Ecosystem

Climate change poses an increasingly significant risk to business operations, necessitating urgent collaborative efforts to minimize these risks and enhance resilience. The Government’s urgency in addressing climate challenges can be ascertained by the fact that there has been a 33% reduction in emission intensity from 2005 to 2019 (as per India’s Third National Communication to UNFCCC in 2023). Industry continues to support the Government in these endeavours through CSR, compliance to various regulatory requirements, providing mandatory disclosures and through participation in Government-led collaborative initiatives.

However, for India to achieve its climate targets, it is important for Industry to take stock of their climate actions and environmental sustainability because of the magnitude of their industrial output; their growing scale and also their impact on the environment.

The CII-ITC Centre of Excellence for Sustainable Development (CESD), through its unique offerings and service propositions, raises awareness among the value chains and MSMEs about sustainable practices; ESG Core requirements; sustainability related disclosures; climate change actions and air quality management.

CESD is currently engaged with more than 400 MSMEs and value chain partners around the country in 10 clusters. Using digital tools, assessments and feedback reports, the Centre is on a mission to catalyse actions that are sustainable, inclusive and environment friendly.

CII Climate Action Charter

The CII Climate Action Charter (CCAC), along with a specialized toolkit tailored for MSMEs, assesses their vulnerability to climate-related risks and assists in estimating GHG emissions. It is an innovative offering that helps organisations in GHG inventorisation, emissions baselining and raises awareness among their value chain partners and MSMEs about climate change and the urgency for climate action.

Based on the TCFD approach, CCAC seeks to gauge the willingness, actions, and status of climate action among MSMEs. The tool captures the emission footprint (Scope 1 and Scope 2) of registered organisations with a commitment of three years and based on their performance, a comprehensive report with the risks and opportunities is shared with the signatories.

Currently, CCAC engages with over 300 MSMEs across industrial clusters in Tamil Nadu, Madhya Pradesh, and Rajasthan. For the fiscal year 2024-25, engagement with an additional 1000 MSMEs from industrial clusters located in Uttarakhand, Punjab, West Bengal, Maharashtra, and Tamil Nadu is in works.

Introducing Responsible and Sustainable Practices in Industrial Clusters

The Centre’s Eco Edge Program integrates sustainability in the value chains of organisations, for all sectors, by evaluating the sustainability performance of both sourcing companies and their chosen vendors on four areas: Human rights, Circularity, Health & Safety and Decarbonization. The program helps MSMEs manage their Scope 3 emissions, establish a network of sustainable vendors, and prepare for evolving global regulatory landscape. Some of the other services that can be availed include:

• Capacity Building Programs: Comprehensive/ customized sessions are conducted for vendors of members to enhance their awareness and skills pertaining to value chain sustainability. Additionally, specialized sessions are held for procurement and/or ESG teams to deepen their understanding and assist them in integrating sustainability considerations into procurement decisions.
• Baseline Assessment: Assists with baseline assessment on environmental & social parameters to analyse the current sustainability performance of their vendors, identify vendors with high-risk profiles, highlight top-performing vendors on specific Key Performance Indicators (KPIs) and use the entire analysis to set targets and action plans for them.
• Maturity Based Certification: Organisations and vendors who meet the pre-determined thresholds during baseline assessments are granted maturity level certificates.

Focussing on Air Polluting MSME Clusters: Nudging towards Clean Air Practices

To address the pressing issue of air pollution within MSME clusters, CESD has launched an intervention under the national Cleaner Air Better Life initiative. Through this programme, PSEs can empower MSMEs to effectively manage their emissions, comply with regulations, and embrace good management practices for clean air.

Through the Air Quality Management workshops tailored specifically for MSMEs, CII can help PSEs with the critical information dissemination understanding air pollution sources, pollution prevention techniques, and monitoring/reporting practices. Clean Air Action Toolkit for business is planned to support PSEs and MSMEs with assessing air quality risks, identifying cost-effective solutions, conducting feasibility analyses, and implementing chosen strategies in polluting clusters. This will facilitate seamless adoption of sustainable practices while ensuring regulatory compliance. For the first phase, CII has identified three clusters in Chattisgarh, Karnataka and Meghalaya.