MSMEs: Driving green growth
The PHD Chamber of Commerce and Industry (PHDCCI) hosted the 'Global Summit on Sustainability MSMEs – Small Businesses, Big Impact' in New Delhi on September 13, 2024. The summit brought together industry leaders, policymakers, and sustainability advocates to discuss the pivotal role of Micro, Small, and Medium Enterprises (MSMEs) in fostering sustainable growth, driving innovation, and contributing to India's efforts to address global climate challenges.
MSMEs: A key driver of India's exports and jobs
Dr. Ashok Kumar, Deputy Director General of the Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India, highlighted that MSMEs account for 50% of India's exports and provide employment to 11-12 crore people. He stressed the urgent need for MSMEs to adopt energy-efficient and sustainable practices, given the pressing global climate challenges.
Dr. Kumar referred to environmental data revealing that six out of nine planetary climate boundaries have already been breached, putting immense pressure on the global ecosystem. He also cited the IPCC assessment, which indicates that only 500 gigatons of emission space remain in the atmosphere, while current annual emissions are 50 gigatons, further intensifying the urgency of the situation.
To support MSMEs' transition to green energy, Dr. Kumar discussed about a new government initiative. The Government of India has given in-principle approval for a ₹1,000 crore fund to provide interest subvention for MSMEs taking loans for green energy projects. This initiative complements the Bureau of Energy Efficiency's work, which has already demonstrated 50 energy conservation projects and developed sector-specific guidelines for MSMEs.
Need for a policy framework for MSMEs' green growth
R R Rashmi, Former Special Secretary, Ministry of Environment, Forest & Climate Change, advocated for a policy framework to help MSMEs adopt sustainable practices. She proposed introducing green ratings for products and green procurement policies to encourage MSMEs to align with national sustainability goals. Rashmi also suggested that MSMEs could greatly benefit from green credits as part of India's evolving carbon market.
Sustainability and innovation: Opportunities for startups
Dr. Ranjeet Mehta, CEO & Secretary General of PHDCCI, emphasised that sustainability is one of the biggest challenges today. He highlighted India's thriving startup ecosystem, which has grown from 400 startups in 2016 to 1,50,000 startups today, including 115 unicorns. This exponential growth during the COVID-19 period is a testament to Indian entrepreneurs' adaptability and innovation.
Dr. Mehta proposed the creation of sustainability parks to provide opportunities for startups to lead in the green transition. He also urged corporations to leverage the DPIIT's scheme for opening incubators and encouraged PHDCCI members to set up innovation centres for MSMEs.
Corporate leadership in sustainability
Several prominent corporate leaders shared their insights on integrating sustainability into business strategies. Mr. Jeevaraj Pillai, Director of Sustainability at UFlex Limited, discussed the importance of aligning corporate social responsibility (CSR) with core business operations to drive long-term success. He highlighted UFlex's commitment to supporting MSMEs in their transition to sustainable practices.
Mr. Rajesh Ayapilla, Senior Director of Sustainability & CSR at Coca-Cola India, outlined the company's focus on water conservation, sustainable packaging, and agriculture. He noted that Coca-Cola spends more than the mandated 2% of net profits on CSR and stressed that their sustainability efforts stem from responsibility, not obligation. Mr. Nitesh Raj, Vice President of the Somany Impressa Group, highlighted how CSR contributes to competitive advantage for companies, especially as they integrate themselves into the global value chain.
SIDBI's green initiatives for MSMEs
Dr. R K Singh, CGM, Green Climate Finance Vertical, SIDBI, explained the critical role of financial and non-financial support for MSMEs in adopting sustainable practices. He introduced the Sustainability Perception Index, developed to assess MSMEs' preparedness for sustainable growth. Dr. Singh shared that 2 in 5 MSMEs have adopted sustainability measures that balance profitability and environmental responsibility. He also spoke about SIDBI's 4E scheme and Green Financing Scheme, which aim to make financing more accessible for MSMEs investing in green projects.
Carbon markets and climate challenges
Mr. Saurabh Diddi, Director, Bureau of Energy Efficiency, linked recent climate-related disasters like the Wayanad floods to the broader issue of climate change. He discussed India's developing carbon market, including the Compliance Mechanism and the Offset Mechanism.
Global alignment on MSME sustainability
In a virtual address, Dia Mirza, United Nations Advocate for SDGs, commended MSMEs for their resilience and called for their alignment with the UN's Sustainable Development Goals (SDGs). She emphasised that MSMEs can unlock new markets and enhance competitiveness by adopting sustainable practices. Mirza also praised PHDCCI for leading the charge in empowering MSMEs to take on this challenge.
The Global Summit on Sustainability MSMEs brought together key industry leaders, policymakers, and corporate representatives to foster meaningful dialogue on innovative strategies, cutting-edge technologies, and compliance practices. The event reinforced the vital role MSMEs play in driving sustainable economic growth while addressing pressing global climate challenges.