India must act on climate change to benefit from big business opportunities

01 June 2007

On a global scale clean technology is expected to create a new kind of Silicon Valley effect with a global impact. By Stephen Manallack .

Growing environmental concerns and venture capital funding, combined with government regulation, make clean technology the business opportunity of the new century. It is vastly more than "feel-good" because there is money to be made and marketing opportunities for those who succeed.

But should a developing economy like India regard the push to clean technologies as a negative on growth? Or can it embrace clean technologies and sustainability in a way that inspires the rest of the world? One of the most offensive views in the West is that India and China will plough on with development, carelessly creating pollution, because it is "their turn" to grow and enjoy material wealth. The view is certainly mistaken for India where I have found an awareness of "sustainability" way above awareness in the West.

The opportunity for India is that investment in cleaner products and technologies can lead to a potent new source of innovation and competitive advantage. We are all operating in a dramatically changed market – for example, it used to be that "green products don''t work" and consumers won''t pay a premium for them. Not any more.

Bankers are certainly awake to this shift, including Indian bankers. According to Somak Ghosh, president, corporate finance and development banking, Yes Bank, it makes sense to invest in clean technologies because of the combined community and government focus on climate change. He was speaking at the third CleanTech Forum, held in Melbourne, Australia, that brought together investors and product developers. The first India CleanTech Forum, in association with the Confederation of Indian Industries, will be held in New Delhi on 3 August, 2007.

In the modern world of climate change where we realise we all depend on each other, issues of economic diversity, accountability and equity can no longer be delegated to the public affairs and marketing teams; they go to the heart of business. In this new era, companies must act with sensitivity to the environmental, social and cultural impacts of global expansion. In other words, it is about time business showed respect for the billions of current and future customers.

Climate change signals a new imperative where the business community has to create a new form of globalisation that takes the environment into account – not just tokenism on the edges, but at the core of business.