Decarbonisation is a big business opportunity for consulting firms in India
India launched its Alliance of CEO Climate Action Leaders chapter at the World Economic Forum’s 2022 to accelerate India’s decarbonisation efforts. At the COP26 Summit at Glasgow last year, India committed to achieving a net-zero emissions target by 2070. The country has pledged to reduce its projected carbon emissions by 1 billion tonnes and decrease its emission intensity by 45% by 2030. In 2020, ​​a coalition of six Indian industries signed up for an ‘Industry Charter for Near Zero Emissions by 2050’. The coalition includes Siemens Energy India, Thermax, Dalmia Cement (Bharat) Ltd, Shell Group of Companies India, Hindalco Industries and Tata Consulting Engineers Ltd. However, for business organisations, just making pledges is not enough. They need credible strategies across organisational functions and supply chains to realise the targets. According to PwC’s Net Zero Economy Index, a decarbonisation rate of 11.7% is required to keep global temperatures within 1.5 degrees Celsius. To achieve that, countries with the highest rate of decarbonisation in 2019 will need to double their efforts, and those with the lowest rate may need to improve ten times. Climate change is a very complex issue, and decarbonisation is just one way of addressing it. Achieving decarbonisation targets may be time-consuming. At times, it requires long term investment, changes in technology, changes in business models and so on. Occasionally, new technology can force a shift in strategy. As a result, it is difficult for businesses to understand where action must be focused and prioritised to address the issue of decarbonisation. To that end, corporates are approaching consultancy firms. Major global sustainability consulting industry players include McKinsey & Company, Accenture, Bain & Company, EY and Deloitte. According to The Insights Partners, the global environmental consulting services market size that stands at USD 34,365.5 million in 2020 is projected to reach USD 50,974.7 million by 2028 at a CAGR of 5.4%. Sensing the opportunity, consultancy firms worldwide are moving into this business. A few months back, KPMG announced the setting up of the India decarbonisation hub. The hub will help consolidate the most advanced skills, capabilities and knowledge from across all KPMG offices in India and from partners and associates. This will accelerate the transition toward sustainable solutions. Further, Mckinsey launched the McKinsey Platform for Climate Technologies (MPCT) to help clients plan, execute, and scale the implementation of critical climate technologies. The BCG Centre for Climate & Sustainability has partnered with businesses and governments to help them transform commitments into action and build a decarbonised, more sustainable world, driving technological and economic transformations to realise sustainable competitive advantage. The demand for environmental consulting services is set to increase, given countries are gradually coming together to tackle global warming and climate change. They have also started integrating climate change regulations and policies as part of their law-making process. The fastest-growing environmental consultancy market is in the Asia-Pacific. The region is home to around 60% of the world’s population, with China and India being the most populated countries. India ranks seventh on the Global Climate Risk Index. The country is looking toward disaster resilient and energy-efficient infrastructures. All these factors are driving the growth of the environmental consulting services market in the region. Along with top multinational consultancy service providers, numerous small players have cropped up in the Indian market to cash in on the growing opportunity. GRC India, Environ, Eco Foot Forward, Indian Environment Consultancy & Research Services (IECRS), Altilium and Consultivo, to name a few. Through these initiatives, the consultancy firms are helping businesses to create differentiated strategies to reduce the carbon intensity and greenhouse gas emission of their operations, supply chain and product mix; build new business models and capabilities to cash in on new opportunities in energy transition and energy efficiency; to modify their portfolio mix that minimises risk and maximises growth, and make investments in offsets that will ensure full contribution to the net-zero equation. Consultancy firms assess clients’ ESG impacts, create science-based targets, and engage effectively with key stakeholders. While formulating strategies, they focus on natural resource management, circular economy, and reporting frameworks and guidelines. Introducing the Environment, Social, and Governance (ESG) reporting requirements through the Business Responsibility and Sustainability Report (BRSR) in 2021 will bring standardisation to ESG risk assessment. In addition, the data will be made available in the report to compare environmental, social and governance goals across companies and sectors. This will further stimulate demand for environmental consultancy services. That said, how the environmental consultants support businesses in turning their vision into reality is something that needs to be seen.
The global environmental consulting services market is projected to grow at a CAGR of 5.4%.
The global environmental consulting services market is projected to grow at a CAGR of 5.4%.
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Zinnia loves writing and it is this love that has brought her to the field of tech journalism.