Technology today plays a critical role across industries, often helping businesses across all sectors identify and resolve bottlenecks in their operations. As organisations work towards becoming more sustainable, technology has the potential to be an enabler for environment, social and governance (ESG) mandates for organisations and assist them in their transformation journey. In the eighth episode of PwC’s ‘ESG: A bridge to action’, in association with Moneycontrol, industry leaders analysed the role of technology in organisational shifts towards sustainability.
Sudipto Ghosh, Data and Analytics Leader, PwC India, and Ashish Bhandari, MD and CEO, Thermax, shared some valuable insights into how technology can shape the ESG landscape. Sudipto Ghosh said that technology is expected to play a critical role in how organisations transform themselves towards adopting ESG strategies. There are three significant areas where technology could be a game changer for organisations looking to become more sustainable. First, manufacturing companies could use technology to monitor the conversion process of raw materials and ensure it adheres to the larger goal of reducing carbon emission. Second, technology could help organisations in their transition from using non-renewable to renewable sources of energy. Third, technology can help in capturing carbon emissions, if not necessarily reducing them. Blue hydrogen is an example of capturing carbon emissions in order to prevent them from being emitted.
But the role of technology in the context of ESG is not limited to the helping organisations in their transformation journey, Sudipto Ghosh said. Technology provides insights into recyclability of land, water and waste. Certain technologies, like blockchain, can be used to trace the origin of products to ensure that they are not compromising on the sustainability aspect. From monitoring employee health and safety to capturing critical data on carbon consumption and sharing them with internal and external stakeholders, technology has the potential to play a crucial role in organisations adhering to the governance aspect of ESG and PwC India’s ESG .
Discussing the impact of climate change in India and the potential role of technological transformation, Ashish Bhandari said that the country has witnessed some extreme-weather events and needs urgent sustainable interventions. India’s energy basket requires a radical transformation in the next five–ten years and cost-effective, sustainable solutions like solar or hydrogen based solutions will be required to be incorporated in the country’s energy mix, an area Thermax is functional in. However, transforming into sustainable organisations is a major challenge. Citing the example of solar energy, Ashish Bhandari said that in 2009–10, solar-based subsidies resulted in massive cost reduction in using solar energy across the US and Europe. Hydrogen is expected to undergo a similar phase and India must not let go of such an opportunity. A healthy mix of Government policy, research and development and industries willing to take certain risks could see hydrogen become the next big bet in sustainability.
Speaking about the key enablers for technology adoption at scale, Sudipto Ghosh highlighted the importance of organisations having a concrete strategy and high level of awareness from stakeholder as well as technology availability perspectives. It is important to develop a long-term road map and decide on tackling ESG issues and emissions, creating pilots, identifying proofs of concepts (POCs), etc. Organisations can also figure out the benefits of ESG transition, identify new customers and create a competitive advantage. Continuous monitoring a transformation journey is key as so that there is scope for alteration, if required, towards becoming ESG friendly.
Net zero is an important commitment for India and in order to meet the target of becoming net zero by 2070, coal – which accounts for 60% of India’s energy output – must be used in a cleaner manner, said Ashish Bhandari. Gasification and carbon capture are two areas India could look at in terms of sustainable and pollution-free coal usage. Converting agro waste into usable energy is another step for India to consider towards meeting net zero targets. Agro waste can be brought into the formal system so that farmers don’t burn and reduce its potential. Hydrogen usage is another important area where there’s significant scope for technology usage. Once there’s an established framework, India’s ESG transformation could see improved hydrogen usage and potential reduction in the cost curve in sync with global developments.
As the conversation around climate change, sustainability and net zero grows stronger in India, implementing the promises made in COP26 becomes critical and the need of the hour. Technology will not only assist organisations in their transition towards ESG but also provide them with innovation and exploration possibilities as well as redefine them in terms of their products, customers and the stakeholders they engage with.