It is putting into place a plan to measure its carbon footprint, reduce greenhouse gas (GHG) emissions and figure out how much can the group possibly earn from carbon credits. Spearheading this initiative at the group is Tata Sons’ director JJ Irani. Under him, a 10-member committee comprising top executives from various Tata group companies has been set up. Says Irani, "The group has always been conscious of being cost efficient. The focus is now shifting towards the environment. We want to be efficient not just economically, but environmentally too. This is (Ratan) Tata’s mandate."
A month from now, the group will announce the appointment of a consulting firm, which will work at measuring the carbon footprint spawned by the group. Having done that, it will suggest measures to reduce the breadth of this footprint. A carbon footprint represents the range of GHG emissions, both direct and indirect, from a firm’s operations. In the US and Europe, recent surveys indicate that three out of every four companies are trying to measure the amount of GHG that their businesses generate. The immediate catalyst behind this exercise is that more than 95% of companies polled in these countries believe there is some business risk in the future if their carbon footprint is not controlled for instance, the fear of regulations like a carbon tax in the future. On the upside, there are immediate incentives, like earning certified emission reductions (CER) or carbon credits for every tonne of GHG reduced. Right now, one carbon credit is valued at Euro 13 (roughly Rs 756). In the case of Indian companies, the Tatas’ included, the latter argument is a powerful motivator.
In the Tata fold, group companies like Tata Steel, Tata Motors, Tata Chemicals, Tata Metaliks, Tata Sponge, among others, have either already, or are in the process of implementing clean development mechanism (CDM) projects. Tata Steel, the largest company within the group, hopes to earn a million certified emission reductions (CER), or carbon credits, per annum. At current prices, that will add close to Rs 76 crore to Tata Steel’s bottomline. Carbon credits are also the backbone on which Tata Steel has gotten into a unique arrangement with New Energy and Industrial Technology Development Organisation, a Japanese company. This firm supplied technology and equipment to two of Tata Steel’s projects in exchange for carbon credits that will be generated by the projects for a period of 10 years. One such project has the potential to earn 1.5 lakh carbon credits a year. In all, there are about 14-15 projects in Tata Steel’s pipeline. Another group company, Tata Power is in the process of applying for all its renewable (hydro, wind and solar plants) and other appropriate power sources for earning carbon credits. "We are also making an inventory of in-house gases and have plans to further reduce our green house gas emissions," said an executive of Tata Power. Meanwhile, Tata Motors has reduced carbon emissions of 1.63 lakh metric tonnes by generating energy from wind in Satara and Supe region in Maharashtra, thus earning carbon credits. The automobile major recently auctioned some of these credits on the Chicago Climate Futures Exchange. Said a Tata Motors spokesperson, "The company has invested in a 42 mw wind farm in Maharashtra in 1999-2000 to promote the use of wind energy. The benefit of this initiative, in terms of CERs up to 2011, is projected to be 32,433 CERs per annum valued at anywhere between Rs 1.5 crore and Rs 2 crore." Source: Times of India