This is a strategic time for Indian SMEs as they stand at a crucial juncture in India’s movement towards its net-zero goals. When it comes to aligning themselves in the global market, the ever-growing carbon-credit market presents an outstanding opportunity for businesses for revenue generation as well as establishing their position. However, the significance of this also makes it equally important for SMEs to navigate this landscape keeping many factors in mind. Here’s a quick look at all that you need to know before you decide.
The Expanding Carbon Market Landscape
The stage is set in the global carbon credits and India stands at the forefront, a strong player. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) has projected that the domestic market for carbon credits would reach $50 billion by 2030. It also predicts that demand for carbon credits would witness an increase by a factor of 15 or more by 2030, and by 100 by 2050. Coming to SMEs in the country, this presents them with a significant chance to align their growth with this increase. The roll out of the Carbon Credit Trading Scheme as well as other government initiatives can help them to streamline their participation.
Strategic Pathways for SMEs
1. Selling Carbon Credits
As businesses move swiftly towards their Net-Zero goals, SMEs are increasingly tilting towards the adoption of sustainable practices. The use of renewable energy, efficient waste and water management as well as energy-efficiency enhancements can help them generate a surplus of carbon credits. Now, these credits can be sold which would contribute to the financial capability of a business. However, this might be easier said than done. Businesses would have to navigate through the obstacles of monitoring, as well as accurate reporting, and verification (MRV). Robust systems would be needed to ensure credibility. This is where, Fitsol, a leading decarbonization partner, can help businesses not only track their emissions, but also come on a strategic path to reduce them.
2. Offsetting Emissions
While selling surplus carbon credits is one option, there are some emissions that prove to be unavoidable. For these, businesses would be required to procure or buy carbon credits. This offset mechanism can help keep businesses on the path to sustainability. Also, it can help enhance their brand reputation among environmentally conscious stakeholders.
3. Integrating Carbon Strategies
While the buying and selling of carbon credits is a transactional approach, it is also important to integrate sustainable practices and carbon considerations into your core business foundation. This could includes the adoption of science-based targets as well as the implementation of low-carbon technologies. By aligning your operations with the emerging global standards like the updated Science Based Targets initiative (SBTi) Net-Zero Standard, you can move towards sustainability. It will also help give your brand better visibility, especially in the sustainability space.
Photo by Casey Horner on Unsplash
Leveraging Technological Advancements
Emerging technologies are reshaping the carbon credit landscape:
Blockchain Platforms: These are platforms that can help to record, track as well as verify carbon credit transactions accurately. This is a tamper-proof and a transparent mechanism that can help contribute a significant reduction in transaction costs in carbon trading, making it more accessible for SMEs .
Artificial Intelligence (AI): There are a multitude of AI-driven tools today that are optimizing energy consumption as well as facilitating real-time emissions tracking. This can also result in more accurate reporting and efficient operations.
At Fitsol, we believe in partnering with SMEs and navigating them through the complexities of decarbonization. So be it evaluating current emissions and identifying reduction opportunities, crafting tailored decarbonization roadmaps aligned with business goals or assisting in carbon credit generation, verification, and trading processes, we have it all under one umbrella. The time has come for SMEs to transform environmental responsibility into a strategic advantage, positioning themselves for sustainable growth in a low-carbon economy.
Citation:
The Taskforce on Scaling Voluntary Carbon Markets (TSVCM): https://www.iif.com/tsvcm