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Business News/ News / India/  Sustainability consulting surges in India as more companies look to go green
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Sustainability consulting surges in India as more companies look to go green

Initially, matters of sustainability and ESG (environmental, social, and governance) were associated with corporate social responsibility in India, but that’s no longer the case, said Mollshree Garg, India managing partner at Environment Resources Management

Mollshree Garg, India managing partner at ERM, a global pure-play sustainability consultancy, Premium
Mollshree Garg, India managing partner at ERM, a global pure-play sustainability consultancy,

New Delhi: Indian companies’ shift towards environmentally sustainable operations is intensifying, going by the notable increase in firms that use sustainability consulting services, Mollshree Garg, India managing partner at ERM (Environment Resources Management), a global pure-play sustainability consultancy, told Mint. She said the country’s sustainability consultancy market was worth $255 million at the end of 2023, and has the potential to achieve double-digit annual growth in the coming years.

According to ERM, India’s sustainability consultancy market is expected to grow at a CAGR of 7.5% from 2021 to 2030, but Garg said it could grow even faster. “These estimates, according to my experience, are very conservative. I have seen a 30-35% rise in the companies’ budgets for sustainability-related matters in the past five years," she said

According to data assessed by ERM, key players in the energy, financial, healthcare, manufacturing and pharma sectors are leading buyers of sustainability-related consultancy services in India.

Initially, matters concerning sustainability and ESG (environmental, social, and governance) were associated with corporate social responsibility (CSR) but that’s no longer the case, Garg said, thanks to ever-increasing awareness about environmental and social challenges, regulations, and pressure from investors and consumers.

JSW Steel, a part of Sajjan Jindal’s JSW Group, recently announced substantial investments to set up green steel plants, while Hindalco is integrating its pumped hydro system to co-produce 375-400 MW of solar and wind power. The Adani Group announced fresh investments to build the world's largest green-energy park, spread across 725 sq km at Khavda, Kutch, which is expected to generate 30 GW of renewable energy.

Supply-chain management and procurement, materiality assessments, sustainable investing and finance, and climate risk and adaptation services are predicted to lead the demand for sustainability consultancy services by 2030, Garg said. Companies such as Mercedes-Benz, Tata Steel, Dabur, Amazon, and Tech Mahindra are taking the lead in adopting green transport for last-mile distribution, supply-chain operations, and even for employees.

Though companies are increasingly looking to manufacture greener products, India still lags the global trend, she added. Developed Western markets have a greater willingness to pay for environmentally friendly products owing to more awareness and sensitivity toward environmental issues.

“There is still the question of whether Indian markets are ready to pay a premium for cleaner and greener products. Despite the environmental benefits, the demand in India for such alternatives is weak due to the lack of compulsory standards or incentives from the authorities that could make consumers choose lower-carbon products," Garg added. “This eventually makes companies less willing to invest in greener production methods."

The market for green products in India is underdeveloped outside certain segments and therefore has greater scope for expansion with proper government intervention, she added.

Since it set up shop in India, ERM has been routinely advising central and state regulatory authorities on policy matters. It is a consultant to the Central Pollution Control Board (CPCB) for eight contaminated sites under the National Program on Remediation of Polluted Sites (NPRPS). ERM India also drafted the Environmental Clearance Notification and Environmental Impact Assessment guidelines, a defining element of India’s environmental regulatory framework.

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ABOUT THE AUTHOR
Naman Suri
Naman is a skilled business journalist who excels in breaking down complex financial details. He specializes in the corporate sector, providing thorough coverage of the pharmaceutical industry, the dynamic field of sports business, and the fascinating area of white-collar crime. Naman has a knack for making sense of numbers and presenting them in an understandable way.
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Published: 28 Mar 2024, 05:21 PM IST
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