Most of the resources that are available to mankind and are necessary for its survival are limited in nature – be it water, land, our other natural resources like fossil fuels, minerals etc. The balance of nature is fragile and the negative impact of human activity on this balance is already being felt in the form of growing pollution, climate change, global warming, extreme weather incidents & dwindling biodiversity.
In this context it becomes imperative that all our activities, including economic activity, be mindful of the impact on the environment.
India has witnessed rapid development post-independence, especially post liberalization. This has created its own environmental challenges - depleting natural resources, environmental degradation and rising GHG emissions. The negative impacts of these become manifold in case of ecologically fragile states like Uttarakhand.
Going forward the pace of development will have to be even greater, if India is to lift millions of its poor out of poverty. The requirement for greater infrastructure and greater economic activity will put even more pressure on the environment. Hence there is an ever greater importance of focusing on environmentally sustainable development.
India – towards a Green Economy & role of MSMEs
A developing nation like India needs to move on a development path which is also ecologically sustainable, and the nation is conscious of this responsibility. India has voluntarily committed to reduce its emissions intensity by 20-25% by 2020 basis 2005. The National Action Plan for Climate Change lays down a roadmap for adopting both mitigation and adaption measures for achieving environmental sustainability and mitigating climate change.
The environmental footprint of industries is large accounting for 22% of the GHG emissions in the country. Hence industry has an important role to play in achieving the dream of a Green India. Significant efforts in the business sector are already underway in the areas of alternative power, green building, low-emission vehicles and energy-efficient manufacturing. However this is yet to percolate down to MSMEs in a significant manner.
The Micro Medium and Small Enterprises (MSMEs) are an important contributor to the Indian economy. They contribute 8% to the country’s GDP, account for 45% of manufacturing output and 40% of the country’s exports. They are the second largest employment generator in the country after agriculture. For Uttarakhand, a hill state, the economic landscape is dominated by MSMEs.
While the ecological footprint of individual MSMEs may not be very obvious due to the small size of their operations. However, given their large numbers collectively, MSMEs have a significant impact. Therefore the goal of India being a green economy cannot be realized without MSMEs participation.
MSMEs and low priority to Environmental Sustainability
While the agenda of Environmental Sustainability is gaining ground with large corporations in India, it continues to be largely a fringe priority for MSMEs. The reasons for this are many:
The perception amongst the MSMEs that their individual impact on environment is not much, prevents sustainability from becoming a key agenda for them
Awareness on environmental issues & understanding of their potential impact is often low
MSMEs have limited resources, including human and financial resources. These limited resources are prioritized for the current and the urgent business needs. In the process issues related to environmental impact of their own activities get neglected.
Limited resources often limit access to the necessary information and knowhow
Mainstreaming the agenda of Environmental Sustainability for MSMEs
The true spirit in embracing sustainability lies in going beyond the regulatory compliances and considering environment as an important stakeholder to be taken care of, like other stakeholders. There is enough evidence based on experience of businesses and organizations that have embraced environmental sustainability that making sustainability a part of strategic planning, processes and operations provides a competitive advantage. It leads to reduction in costs by helping achieve greater efficiencies and reducing wastages; greener products also tend to find better acceptance amongst customers.
However MSMEs often interpret Environmental Sustainability to mean compliances with environmental regulation. This creates a mindset wherein taking measures to protect the environment becomes a matter of ‘additionality’ , a matter of making additional compliances, often cumbersome and resource consuming, and considered as largely unnecessary.
This mindset needs to be changed by helping MSMEs make environmental sustainability a part of their DNA. Sustainability, like profitability, will have to become part of their systems and processes. This will in turn ensure that the initial costs/investments are more than offset by greater long term profitability, lower risks, and greater acceptance by customers
Role of Stakeholders
Government and Large Corporations can play a very important role in helping MSMEs, mainstream the agenda of mitigating the environmental footprint.
Government can encourage MSMEs to adopt environmental sustainability through
Creating awareness on the importance and benefits of environmental sustainability.
Creating mechanisms for capturing data on important environmental parameters. This is an essential input to strategic planning and also measuring progress
Offering appropriate financial incentives
Recognizing MSMEs who take leadership in achieving environmental sustainability. In the process others get motivated to adopt such practices as well as get to learn from the leaders
Setting appropriate standards for industry and at the same time also creating facilitator mechanisms/institutions which help MSMEs access the specialized knowhow and the financial resources. Also the monitoring of the implementation of these standards should be simple and hassle free
Creating common infrastructure /incentivizing creation of such infrastructure – for ex such CETPs, common pool of experts.
Including Environmental Sustainability in the curricula of various Technical Diploma and Degree courses which cater to industry. This will help in promoting a general culture which understands & values environmental sustainability
Large organizations can on the other hand be the role models and lead by example. They could take measures to encourage green supply chain and green vendors. They could play a role in creating awareness and sensitizing MSMEs, and also sharing their own expertise and experience.
Conclave on Sustainable Growth for MSMEs, Focus: Mitigating Environment Footprint
This Conclave aimed to address some of the above issues
Encouraging MSMEs to adopt environmentally sustainable practices.
To discuss current policy environment in the state for promoting sustainability amongst MSMEs & future plans.
Creating awareness among MSMEs through knowledge sharing.
You will get access to following Knowledge Resources by subscribing to the Digital
Library of this event.