In the pursuit of a sustainable future, India has placed a significant emphasis on Environmental, Social, and Governance (ESG) principles. While the focus on E (environment) is often at the forefront, it is crucial not to overlook the equally important aspects of S (social) and G (governance). These principles are part of a broader transition towards a more inclusive and stakeholder-driven economic system.
Furthermore, events over the past two years – the global pandemic outbreak, geopolitical conflicts, food, energy, and labor shortages, ecological and ecosystem imbalances – have all reinforced the importance of a model such as “stakeholder capitalism” that necessitates moving beyond short-term profit maximisation to a more balanced approach that considers the long-term impacts of business decisions.
Major ESG Trends in India:
To achieve ESG targets as a country, concerted action by industry is required around chosen action areas where immediate impact can be made. Some of the major ESG trends in India that are shaping its sustainable future:
Sustainable Energy Transition: India is witnessing a significant shift towards renewable energy sources to reduce greenhouse gas emissions and combat climate change. The country has set ambitious targets for renewable energy capacity, aiming to achieve 450 GW by 2030.
Green Buildings and Infrastructure: India is embracing the concept of green buildings and sustainable infrastructure. Green building rating systems such as Green Rating for Integrated Habitat Assessment, Leadership in Energy and Environmental Design (LEED) and Indian Green Building Council (IGBC) encourage sustainable construction practices to promote energy efficiency, water conservation, and passive cooling designs.
Water Management and Conservation: India faces significant challenges in water scarcity and pollution. Recognising the importance of responsible water management, there is a growing emphasis on water conservation and treatment. Industries are adopting sustainable practices to minimise water consumption and implement efficient wastewater treatment systems. These initiatives address both preserving of water resources and improving access to clean water.
Social Impact and Inclusive Growth: To encompass social impact and inclusive growth in the ESG agenda, companies and govt. are focusing on social initiatives such as education, healthcare, and skill development to uplift marginalised communities and promote social equity. Additionally, there is an increased emphasis on diversity and inclusion in the workplace, ensuring equal opportunities for all individuals.
Governance and Stakeholder Engagement: Good governance practices and stakeholder engagement are essential elements of ESG. Indian companies are enhancing transparency, accountability, and ethical practices through improved corporate governance frameworks. Furthermore, there is a growing recognition of the importance of engaging with stakeholders, including investors, employees, customers, and local communities, to address their concerns and ensure sustainable business practices.
Connecting ESG Trends to District Cooling Systems (DCS)
While the above trends represent various aspects of ESG, district cooling systems (DCS) have emerged as a transformative solution that aligns with multiple trends and promotes sustainable and inclusive development in India.
As a tropical country, India relies heavily on cooling solutions across various sectors, including real estate, agriculture, cold chains, data centers, pharmaceuticals, and transportation. Studies indicate that by 2050, space cooling alone could account for 30% of the electricity demand and 45 percent of peak electricity load in India. As such, traditional cooling methods, such as air conditioners, place a significant burden on energy resources and contribute to environmental degradation.
By centralising the generation of chilled water and distributing it through insulated pipes, DCS ensures reduction in power load requirements and energy efficiency levels that are 20 to 50% higher than conventional air conditioning systems. From an environmental perspective, in addition to emission reduction, district cooling fosters a circular economy by incorporating sustainable practices such as utilising sewage and saline water for cooling, integrating with thermal energy storage, and harnessing waste heat from waste-to-energy plants for free cooling. These practices contribute to better resource (water, grid power) management and conservation efforts, reducing the strain on freshwater resources/non-renewable sources.
While focusing on the environment is crucial, a comprehensive ESG approach cannot overlook the social and governance aspects. Sustainable cooling systems in India have the potential to generate nearly 3.7 million new jobs, according to a recent report by the World Bank. These employment opportunities will contribute to social equity by providing sustainable livelihoods and supporting the economic development of local communities.
In addition to job creation, district cooling systems also enhance social inclusivity by adopting a customer-centric approach through introduction of Cooling as a Service (CaaS) models. Such models allow consumers to access cooling services without the need for substantial upfront investments, making cooling solutions more affordable and enforceable through transparency and predictability in pricing structures. Cooling utilities prioritise transparency, stakeholder engagement, and environmental responsibility, integrating ESG factors into their business models.
(Sudheer Perla is country head, Tabreed India.)
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