ReNew, Microsoft Ink 437.6 MW Green Energy Contract

ReNew and Microsoft have signed a 437.6 MW green energy sale contract.

Microsoft aims to achieve carbon-negative status by 2030 by producing over a million green energy attributes annually through this contract.

ReNew plans to allocate $15 million of contract revenue to a community fund. The endeavor aligns with Microsoft’s Environmental Justice priorities.

Puneet Chandok, President, India & South Asia, Microsoft, said, “Microsoft has ambitious renewable energy and decarbonization goals. This agreement with ReNew accelerates our progress towards these goals while benefiting local communities through rural electrification and improving women’s livelihoods.”

Sumant Sinha, Founder, Chairman, and Chief Executive Officer, ReNew, said, “As a sustainability-first organization, a just energy transition is integral to ReNew’s mission of creating a better world. This agreement will help us fulfil our commitment to the communities we operate with and address some socio-economic aspects related to climate change.”

A recent Oxford University study published in Carbon Management supports a new “Carbon Removal Budget” as a strategy to combat climate change.

The proposed solution would align with the Carbon Budget, which sets the global limit on the safe release of CO2 emissions.

This includes more cutting-edge solutions like biochar and technologies that directly capture and store carbon, as well as more conventional techniques like reforestation and planting trees to reduce carbon emissions.

There are, however, limitations on the availability of carbon removal. Certain techniques for eliminating carbon dioxide, for instance, necessitate large amounts of land and substantial energy consumption, the researchers noted.

They argued that carbon removal is crucial for achieving “net zero” emissions. But it’s not in unlimited supply or free to produce, requiring permanent removal and neutralization.

Some key questions:

According to the authors, carbon removal budgets can help to answer several urgent questions.

How much carbon removal is needed and when?
What methods for carbon removal should be prioritized?
What impediments exist to the different types of removal supply and how can we overcome them?
Critically, how should we allocate the finite, even if growing, carbon removal supply between different countries, companies, and financial institutions?

“Embedding carbon removal budgets into decision-making is necessary for an effective response to climate change. It will become an essential part of net zero transition plans, whether for countries, companies, or financial institutions,” noted Dr Ben Caldecott, the Lombard Odier Associate Professor, University of Oxford Smith School of Enterprise and the Environment and lead author.

Author’s notes:

Dr Caldecott said the Carbon Removal Budget is a mechanism to value and allocate finite carbon removal capacity for global temperature goals. This is similar to the Carbon Budget, ensuring fair and effective global distribution.

He said, “For example, it is not clear why a fossil fuel company should be using carbon removal when there are ways to reduce its emissions today? Especially when we need to preserve removals for future emissions that are extremely hard or impossible to eliminate.”

Dr Injy Johnstone, Research Fellow, Oxford Sustainable Finance Group and co-author said, “Carbon removal is a scarce resource, one which not all countries or companies have the same capacity to develop and deploy, meaning we need a Carbon Removal Budget to help equitably manage both supply and demand.”

He said that companies like Microsoft are investing in carbon removal, while many other countries are considering integrating it into existing compliance emissions trading or tax regimes to drive demand.

Two recent developments caught the DEI world by storm.

1. Microsoft laid off its DEI team

2. John Deere rejected DEI policies

These are just two examples of large multinational firms that decided to put profits before people.

Sadly, the number of enterprises side-lining DEI teams, casually rejecting policies, and scrapping DEI teams is on the rise. The issue came to the limelight because two major organizations, each a giant in its industry segment, decided to lean on DEI.

Globally, similar reports by many organizations going slow on DEI are coming out.

Corporate reality:

Although consolidated data on the issue is yet to be established, the trend is contrary to DEI reports by leading market analysis and advisory companies.

Market analyst reports indicate that most corporates have a DEI strategy in place and that these organizations are faring better in the ESG Index.

For example, recent S&P 1500 data shows that firms with diverse leadership consistently earn higher environmental ratings from MSCI, an ESG data provider in the United States.

The scenario is not so different at home in India. Several conversations with leading CXOs and decision-makers in large corporates across industry verticals reveal that these enterprises lag in DEI.

This is not because they do not have the necessary strategy or policy in place, but because revenues, business, and investors take center stage. And the two events are not harmonious.

Cover-ups?

“It is more about corporate culture. We have started implementing DEI, but that is more towards women empowerment,” a leading CXO told me.

Another corporate consultant asked to survey a client’s employee satisfaction index for DEI was gently warned against asking probing questions. He framed the questions in such a manner that the responses were indexed on a scale of 1 to 10. Needlessly to say, there was no qualitative analysis or follow-ups. The company proudly presented its DEI report in the ESG and integrated components of the annual report.

The World Economic Forum’s Global Gender Gap score in 2023 stands at 68.4%, with India ranking 127 out of 146 countries in terms of gender parity.

These frank admissions coincide with the recent findings of the WriteCanvas-ASSOCHAM survey. The survey reveals that the social component of which DEI is a formidable part is most often subsumed with CSR, governance, and environment. Three aspects stand out:

· Corporates equate gender equality with DEI. Nonetheless, women’s representation at the board level was marginalized

· Corporates have all the necessary DEI policies covered under the Company’s Act and global mandates in place. The reality is that not many have adequate physical and digital infrastructure for persons with disabilities.

· Community development, equal access and opportunity, and child labor are gaining ground as part of CSR activities.

Are things turning around in India?

The Companies Act and SEBI mandate women’s representation on Indian boards, leading to remarkable growth in women’s participation on boards.

CareEdge advisory analyzed the top 1000 companies’ board composition from a diversity perspective, observing upticks in the top 150 listed companies and trends in big manufacturing organizations prioritizing inclusion of different genders and persons with disabilities, observes Swati Agrawal, President CareAnalytics.

However, there is no focused regulation or policy regarding Diversity, Equity, and Inclusion (DEI) in India. The focus must be on addressing gender gaps and gender equality, while sustainability reporting focuses on gender gaps and gender equality. The industry must offer employment opportunities and address the banking requirements for employees and customers.

The change can be brought about just in the manner in which the shareholders are forcing corporates to consider environmental concerns to fight climate change. They must closely monitor how corporates implement DEI and ensure that the organizations are not just tick-boxing against all the parameters!

My take:

I believe that DEI adoption in its entirety will take a while. India is at the cusp of implementing DEI. Globally, enterprises are at least taking a small step towards diversity, equity, and inclusion.

Many organizations have promptly begun back-to-work policies for women. This is certainly a positive step. The shift is happening in the corporate sector, and that is a start.

Moreover, business leaders, stakeholders, and shareholders should understand that DEI is not just about improving diversity, but embracing the host of benefits that come along with it.

But there is also a nagging fear. Are Microsoft, John Deere and the ilk setting a precedent? Providing impetus to organizations to exploit loopholes and circumvent the regulations?

Prime Minister Narendra Modi has proposed the creation of a “green gross domestic product (Green GDP).”

In a free-wheeling conversation with philanthropist and Microsoft co-founder Bill Gates, the PM stressed the need to change the global terminology to address climate change, during the conversation. He said that climate action has gained momentum since the G20 Summit in India in September last year.

The prime minister asserted that the world needs to adopt a two-pronged strategy: first, nature- and climate-friendly innovation; and second, environmentally friendly lifestyles, in response to Gates’ question about how the green approach could be made more affordable for easier adoption.

Gates also reiterated the need for a “Green GDP” to be added to the GDP as a whole. He also praised Modi’s “Mission Innovation” initiative, which is working with the European Commission and 23 other nations to accelerate the clean energy revolution and move closer to the Paris Agreement’s objectives and net-zero pathways. The initiative includes India among its founding members.

“Our current challenge is how we perceive progress,” the PM said. “For instance, the amount of steel and energy used in a nation are frequently used to measure its level of development. If we stick to these guidelines, we will use more steel and electricity, which will raise our carbon emissions. This implies that we must adopt a new perspective. Climate-friendly lifestyle decisions and progress measurements are required. At the moment, all of our progress metrics are harmful to the climate.”

It must be noted that Gates, who visited India earlier this month, had spent an hour with the Prime Minister and his cabinet ministers, discussing how the Foundation can help India achieve its objectives in digital technology, women’s development, and climate change.

Microsoft is adding new features to its sustainability platform-Microsoft Cloud for Sustainability.

Key capabilities include helping companies meet emerging ESG reporting requirements and regulations, calculating Scope 3 emissions, and collecting and managing ESG data across categories and data sources.

Additional features:
The additional features include an expansion of Microsoft Cloud for Sustainability’s emissions calculation capabilities to include all 15 categories of Scope 3, or value chain, emissions.

How do these features support global mandates?
Microsoft is adding capabilities to track progress against Science Based Targets initiative (SBTi) designations. A new CSRD template to help organizations collect data needed for the European Sustainability Reporting Standards (ESRS) underlying the EU’s Corporate Sustainable Reporting Directive (CSRD) will begin applying in 2024. Microsoft will also introduce prebuilt reporting templates for other ESG regulations and standards as they are defined and implemented.

Spokesperson speak:
Satish Thomas, Corporate Vice President, Microsoft Industry Clouds, said, “Our initial release of the Microsoft Cloud for Sustainability data model focused on the pressing need to address carbon emissions. We have since expanded the data model to include water and waste. These data models centralize data to help streamline data ingestion, sharing, calculations, and reporting. This includes data from across the enterprise—enterprise resource planning (ERP), the Internet of Things (IoT) sensor, plant data, telemetry at the edge—and external sources including suppliers, utility companies, transportation, and more.”

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ReNew, Microsoft Ink 437.6 MW Green Energy Contract
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