energy efficiency

It can’t even be argued that education is far more important for the development of any nation and its future generations; however this phenomenal progression can be complex to achieve in the absence of access to electricity.

On the flip side, established businesses can make a difference in this regard through their Corporate Social Responsibility (CSR) activities.

This week, we take a look at the latest report from India CSR IN CLEAN ENERGY What are India’s top companies up to?, which highlights the roles that established businesses are or should be playing to counter this predicament.

India’s Section 135 of the Companies Act, 2013 has created a historic opportunity for companies to enable widespread social change through systematic CSR activities.

According to the World Energy Outlook, as of 2016 about 300 million people in India were lacking access to energy, while an even higher number faced intermittent access. This was estimated to cost the country approximately 7% of its GDP5 annually.

The link between electricity and CSR

The lack of energy access has implications for education, livelihoods, health & sanitation, and safety factors that have a direct bearing on the inclusiveness of economic development and the quality of human capital.

The clean energy sector represents a $160 billion opportunity, according to the report. However, while the market potential of clean energy has been discussed and deliberated by many reports, the CSR angle has not seen much review.

The report does analyse the intersection of CSR and business for clean energy, but does not explore business models.

It recognises the contribution of private sector through core business models, products and services. Its aim is to provide a snapshot of existing corporate efforts in promoting access to energy through clean and renewable sources, through CSR.

Which sector companies are involved where?

This report has found that there is low CSR presence in clean energy, out of the 100 companies, only 39 had programmes in clean energy.

It further notes that this is low compared to the level of CSR activity in other cause areas; where more than 50% of the top 100 companies have CSR programmes in education, sanitation or skills and livelihoods.

Companies in power and oil and gas industries are most likely to support clean energy projects, capitalising on the strategic alignment and leveraging core competencies.

These were followed by the manufacturing and heavy engineering industry, focusing on communities in the vicinity of factories and regional offices.

The following reasons have been highlighted for relatively low participation:

  • Access to energy interventions are being perceived to be highly technical in nature. This discouraged CSR teams in companies that may not have the required capacities and capabilities.
  • While decisions on CSR projects within health, education, skills etc. were helmed by CSR teams, clean energy cut across CSR, sustainability and even business portfolios, leading to fragmented decision making and a greater lead time.
  • Companies found it difficult to source qualified and technically competent implementation partners in geographic areas of interest.
  • Energy access was not prioritised during needs assessments as its absence was not as noticeable as water or sanitation issues.
  • Companies believed that the government’s rural electrification policy could render off-grid projects redundant. However, the Draft Energy Policy, released by the government in August 2017, states that off-grid lighting solutions can play a complementary role given the intermittent nature of electricity supply.

Click here for the full report

The report has been compiled by Samhita Social Ventures, a CSR consulting organisation. It has been developed with support from Shakti Sustainable Energy Foundation and the International Finance Corporation.

 

Featured image: Stock