Three recent events may portend the climate future for companies around the globe. A court in Netherlands ordered the oil giant Shell to reduce its CO2 emissions and those of its suppliers by 45 per cent by 2030 as compared to the 2019 levels – in line with the Paris Climate Agreement.
In the USA, a small hedge fund, receiving support from key investors, was successful in seating two of its nominees on the board of Exxon Mobil Corp. The hedge fund, Engine No. 1 was pushing for a revised business strategy to address climate change.
In mid-May, Tesla declined to accept Bitcoin as payment for its cars citing the enormous carbon footprint of mining the cryptocurrency using electricity generated from fossil fuels. Among other factors, this led a plunge in the value of Bitcoin by over 30 per cent.
The Indian companies would be well advised to pay heed to such momentous changes as these foretell the future. Notably, Reliance Industries Limited has already committed to become a net-zero carbon company by 2035. Indian Oil Corporation is experimenting with a mix of hydrogen and natural gas to fuel public transport buses.
The Central Government has set up a National Hydrogen Mission focusing on R&D, demand generation, an enabling policy environment, and public-private partnerships. But such efforts will not be enough.