India’s MSMEs play an immense role in the terms of saving the environment from increasing carbon emissions by embedding environmental, social, and governance (ESG) measures into their business models. Industry experts shared views at an event discussing the role of grassroots entrepreneurs in sustainable development. 

Image source: Naem

Mr. Seema Arora, Deputy Director-General of the Confederation of Indian Industry (CII), said there are two ways for MSMEs to incorporate ESG into their operations. 


“Businesses can execute the plan first then adopt ESG into their way of doing business for every operation to become green environment-friendly inclusive, and second involve in making products with the ethos of ESG,” Mr. Arora said when addressing a panel on ESG adoption at the event Empowering Grassroot Startups for Sustainable Developer organized youth mentoring platform Bharatiya Yuva Shakti Trust (BYST). 

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Sustainability for MSMEs

Carbon dioxide emissions from fossil fuels and industrial processes increased by 11 percent and reached a record high of 2.6 billion metric tons, as per the market insights online platform, Statista. 

To decrease carbon emissions, India at the COP27 conference held in November last year assured its long-term low emissions growth strategy mentioning the low carbon transition pathways in key economic sectors. 

Prime minister Narendra Modi during the conference declared India’s target to achieve net zero emissions by 2070. “With an intent to focus on green and clean energy, India has embarked on new initiatives in renewable energy, e-mobility, ethanol blended fuels, and green hydrogen as alternative energy sources”, the Ministry of Environment, Forest and Climate change said in a statement in November on India’s emission targets. 

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Green finance is fundamentally credit support that is being offered for environment-friendly or sustainable business activities. Adopting ESG and steering toward green infrastructure, is easier to verbalize than being done without adequate financial support for small businesses despite there having been efforts undertaken by financial institutions to make way for green financing.

“There are multiple green investors and several funding options available such as NEEV, Samriddhi fund, etc.., and there one can be applied”, Sumesh, Investment Lead, Government of the United Kingdom.

To bolster green projects, the principal financing institution for MSMEs, SIDBI launched a Green Finance Scheme in March last year to aid water management efficiency, wastewater treatment, carbon capture and storage, environment protection, green building, and more and over of up to Rs 20 crore assistance.

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The government introduced a Zero Effect (ZED) scheme certification scheme in April last year to stimulate MSMEs to improve their manufacturing processes and systems for qualitative and sustainable production and the scheme has registered more than 22,000 enterprises as of December 15, 2022.

The port is also required for MSMEs to generate more employment, said Ashok Khosla, Chairman of Development Alternatives, a sustainability think tank. This move would generate more jobs in the range of Mini enterprises and thus need guidance in financing and technology. 


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