While many companies have made strides in reducing their Scope 1 and 2 emissions, the real challenge lies in addressing Scope 3 emissions, which account for 80 to 90% of a company’s total carbon footprint. Fortunately, regulators are beginning to shine a light on this issue, ensuring that companies cannot claim to be net zero by only addressing the more straightforward aspects of their operations. The message is clear: most emissions that need to be abated reside in the supply chain, and it’s time to shift the narrative from ‘Hard to Abate’ to Affordable to Abate’, emphasizes Shailesh Haribhakti, ESG Champion, Board Chairman, Audit Committee Chair and Independent Director at some of the country’s most preeminent organizations, as the Keynote address during our maiden conference on Sustainability.
Shailesh Haribhakti
As the world stands on the brink of transformative technological advancements, the imperative for adopting sustainability and ESG (Environmental, Social, and Governance) practices in the supply chain has never been more critical. One such breakthrough is the recent development at the Institute of Photonics, where researchers have enabled the transmission of entangled photons over optical fibers—a key step toward building a quantum Internet. This innovation is not just about faster communication; it represents a leap toward quantum-safe encryption, ensuring that sensitive data, including vital climate information, remains secure. This advancement underscores the disruptive nature of technology, which, alongside telecom and sustainability, will redefine how we collaborate and innovate in the future.
THE OVERLOOKED GIANT: SCOPE 3 EMISSIONS
While many companies have made strides in reducing their Scope 1 and 2 emissions, the real challenge lies in addressing Scope 3 emissions, which account for 80 to 90% of a company's total carbon footprint. Shockingly, an analysis of over 1000 Business Responsibility and Sustainability Reports (BRSRs) revealed that corporate attention to Scope 3 emissions is abysmally low. Fortunately, regulators are beginning to shine a light on this issue, ensuring that companies cannot claim to be net zero by only addressing the more straightforward aspects of their operations. The message is clear: the majority of emissions that need to be abated reside in the supply chain, and it’s time to shift the narrative from “Hard to Abate” to “Affordable to Abate.”
CHANGING THE NARRATIVE: AFFORDABLE TO ABATE
The transition to renewable energy is no longer optional; it is mandatory. In cities like Mumbai, 20% of distributed electricity can now come from renewable sources, blending seamlessly with fossil fuel-generated power. The supply chain must embrace this change, prioritizing renewable energy over fossil fuels to bend the curve toward sustainability. The same principle applies to electric vehicles (EVs). Although the market temporarily shifted towards hybrid vehicles, the momentum is returning to fully electric options, and within three years, EVs will dominate the market. The electrification of all energy is not just a possibility—it is an imminent reality.
COLLABORATION: THE KEY TO SUSTAINABLE SUPPLY CHAINS
To bring Scope 3 emissions into focus, companies must embrace three fundamental principles: collaboration, innovation, and technology. First, collaboration is crucial. Large corporations should work closely with their suppliers, particularly MSMEs (Micro, Small, and Medium Enterprises), to integrate them into carbon emissions measurement efforts. This involves paying a portion of the costs and ensuring that payments to MSMEs are made on time. By doing so, MSMEs will be more motivated to participate in the value chain, contributing to the overall sustainability effort.
Moreover, companies should diversify their supplier base, prioritizing those with the lowest carbon footprints. By doing so, Scope 3 will become a “must-do” rather than an afterthought. The role of collaboration cannot be overstated; it is the bedrock upon which sustainable supply chains are built.
THE TRANSFORMATIONAL ROLE OF TECHNOLOGY AT PLAY
Technology will play a pivotal role in transforming supply chains. Ray Kurzweil’s concept of the “Singularity” emphasizes how technology will revolutionize production and supply chains. As technologies such as IoT, Machine Learning, AI, and 3D printing converge, the era of hyper-personalization will dawn. We will witness the ability to decompose raw materials at the cellular level and reassemble them where needed, eliminating inefficiencies and distractions that compromise sustainability.
India, in particular, stands at the crossroads where the intersection of AI and sustainability offers a transformative opportunity. By integrating AI into sustainability initiatives, India could surpass its 2070 net-zero commitment and lead by example on the global stage. AI can optimize resource use, reduce waste, and enhance energy efficiency across various sectors, demonstrating that economic growth and sustainability can coexist harmoniously.
INDIA’S STANCE ON RENEWABLE ENERGY: A CASE IN POINT
India’s proactive approach to decarbonizing its steel and cement industries exemplifies its commitment to renewable energy. The integration of hydrogen, nuclear energy derived from thorium, and renewable sources like solar and wind into the national energy mix aligns with India’s deep-seated ethos of celebrating nature’s gifts while prioritizing a sustainable future. These efforts highlight India’s leadership in the global fight against climate change and its dedication to ensuring a greener future for generations to come.
Kurzweil’s concept of the “Singularity” emphasizes how technology will revolutionize production and supply chains. As technologies such as IoT, Machine Learning, AI, and 3D printing converge, the era of hyper-personalization will dawn. We will witness the ability to decompose raw materials at the cellular level and reassemble them where needed, eliminating inefficiencies and distractions that compromise sustainability.
India, in particular, stands at the crossroads where the intersection of AI and sustainability offers a transformative opportunity. By integrating AI into sustainability initiatives, India could surpass its 2070 net-zero commitment and lead by example on the global stage. AI can optimize resource use, reduce waste, and enhance energy efficiency across various sectors, demonstrating that economic growth and sustainability can coexist harmoniously.
INDIA’S STANCE ON RENEWABLE ENERGY: A CASE IN POINT
India’s proactive approach to decarbonizing its steel and cement industries exemplifies its commitment to renewable energy. The integration of hydrogen, nuclear energy derived from thorium, and renewable sources like solar and wind into the national energy mix aligns with India’s deep-seated ethos of celebrating nature’s gifts while prioritizing a sustainable future. These efforts highlight India’s leadership in the global fight against climate change and its dedication to ensuring a greener future for generations to come.
CONCLUSION
The era of sustainability is upon us, and the supply chain is at the heart of this transformation. By focusing on Scope 3 emissions, embracing renewable energy, fostering collaboration, and leveraging technology, we can create a supply chain that is not only sustainable but also innovative and resilient. The imperative is clear: sustainability and ESG practices are no longer optional— they are the foundation for a prosperous and responsible future. Let us seize this opportunity to lead the way in building a sustainable, equitable, and technologically advanced world.
Categories
