If global warming is to be limited to 1.5 degrees centigrade, by 2050, carbon emissions have to come down drastically. To achieve the objective of a sustainable future, every organization must reach net zero, by either curtailing their emissions or by actively removing carbon from the atmosphere or doing a combination of both. Greenko has been a votary of sustainable development and climate action. It has recently committed to Climate Pledge and will be a ‘Net Zero’ company by 2040. Greenko also facilitates a smoother and effective transition of other businesses in India towards its ‘Race to Zero’. Greenko’s business philosophy has been to lead ‘Decarbonization, Digitalization, and Decentralization’ of India’s Energy Sector. Towards this end, Greenko has made a strategic shift from being a mere renewable energy producer to being able to address the challenges of delivering reliable renewable power, on demand, through a balanced combination of Intelligent Energy Platforms and Pumped Storage Systems (PSP). This will result in deeper decarbonization, leading to long- term energy security and economic stability for all stakeholders. Greenko is growing its portfolio of energy sources through PSP systems and investing in zerocarbon molecules, leading the momentum towards decarbonization of ‘hard-to-abate’ industrial sectors. We believe that this transition is a major route to build an Energy Independent India by 2047.
Global annual investment in clean energy infrastructure is expected to increase from around 290 billion USD over the past five years to about 880 billion USD in 2030. Annual investment in low-carbon technologies in end-use sectors rises from 530 billion USD in recent years to 1.7 trillion USD in 2030. The energy and industry transition to Net Zero is very capital intensive and requires large patient capital. For emerging and developing economies to attract international finance will require improvements in regulatory and policy frameworks that facilitate the international flow of long-term capital to support the development of both new and existing clean energy technologies.
Paris Climate Agreement and the Market Mechanisms under Articles 6.2 and 4 may support a carbon price that enables this transition to begin and scale up. Countries that speed up the processes to harness the opportunity in Paris Climate Agreement and channel the investments to right transition projects may garner early capital and build momentum
One constant at Greenko has been its adherence to a code of conduct and foundational values on which Greenko’s edifice has been built. This unwavering commitment to values in the evolution of Greenko’s business activities and its business model has been a source of continued stakeholder trust in Greenko.
Last year, a Dutch court order required Royal Dutch Shell to cut its emissions including from its use of products by 45% by 2030 from 2019 levels and Chevron shareholders, with the support of worlds’ largest investment fund manager, approved a resolution requiring the company to curb the emissions created using the company’s products. It is now clear that the judiciary, investors, and others are demanding ‘extended producer responsibility’ beyond applicable regulations. Such instances are not limited to climate change only and are increasingly covering other ESG factors such as Circular Economy, Diversity, Equity and Inclusion, Agility and Innovation, Digital and Cyber Security, etc, that have a linkage to the company’s ability to sustainably create value.
Our main shareholders, GIC, ADIA and ORIX, view Environmental, Social, and Governance (ESG) factors, as central to their core tenetsand believe that companies with innovative, creative mindset and good sustainability practices are more likely to perform well in the long term. Greenko has articulated its ESG framework and augmented its ESG risk management. Greenko has internalized ESG and ‘Integrated Thinking’, centered around multi-capital value-creation model. Internally, progress is measured through KPIs depicting the achievement of ESG objectives. Going forward, Greenko will link the ESG performance to the remuneration of its leadership.
During 2020-21, the Board and its committees have been active, despite the challenges posed by the pandemic, in guiding the management to face new challenges of growth and transformation. Mutual respect, trust, and candor have always been core to the Board function. The Board has been apprised of the SoPs that are being followed in operations during the pandemic. The Board continued its deliberations on the company’s transformational strategy to harness the opportunities arising out of ‘Energy Transition in India’ and regularly reviewed strategy and capex deployment. As the company is treading into innovative technologies, novel partnerships, and new markets, the risks are diligently identified, mitigated and appropriate provisions made for residual risk.
Greenko’s value creation story, delineated in this report, is about opportunity for India to harness new energy transition to Make India ‘Energy-Independent’ by 2047 and build ‘AatmaNirbhar Bharat’. The company is excited about the congruence of opportunity for India and itself and will be keen to listen to stakeholders’ concerns and suggestions.