GREEN GIANTS

HOW INDIAN CONGLOMERATES ARE HEDGING CLIMATE RISK BY INTEGRATING TECHNOLOGY INTO STRATEGIC PLANNING AND INVESTMENT EVALUATION

- RICHA SHARMA & KRISHNA GOPALAN

IN 2019, Hindalco’s Birla Copper plant in Dahej, Gujarat, faced a massive challenge when heavy rainfall caused flooding, disrupting operations. The company carried out an assessment of the plant’s vulnerability to extreme weather and identified areas of improvement to protect it from future climate risks. But the impact of the initiative went beyond plant upgrades. It cultivated a forward-thinking mindset across the organisation and embedded climate adaptation and sustainability into its DNA.

This was one of the several weather events over the past few years that have stalled factories. The impact, in fact, goes beyond operations. The Reserve Bank of India said in a report in December 2024 that climate risks have started impacting the financial system and pose systemic risks by causing direct damage to assets, leading to loan losses, business disruptions and supply chain issues.

Realising that climate events may hit growth plans, India Inc. has started integrating sustainability into strategic planning, investment evaluation, risk management, and supply & demand projections. Take Project Aalingana by Tata Group for becoming net zero by 2045 under which all businesses—from auto to technology—will align operations to achieve the goal. Or Aditya Birla Group’s Sustainability 3.0, which involves digital integration of the foundation built in the two earlier versions, aligning it with a four-dimensional approach—sector of operation of the company, geography, value chain and time.

Among corporate biggies, Reliance Industries (RIL) has set one of the most ambitious targets; it wants to become net carbon zero by 2035. This means that in a decade from now, all its operations, including refineries and chemicals, will be carbon neutral. It is building a new energy ecosystem by investing ₹75,000 crore.