According to the World Energy Outlook, as of 2016 about 300 million people in India were lacking access to energy, while an even higher number faced intermittent access. This was estimated to cost the country approximately 7% of its GDP5 annually.
India’s Section 135 of the Companies Act, 2013 has created a historic opportunity for companies to enable widespread social change through systematic Corporate Social Responsibility( CSR )activities.
The clean energy sector represents a $160 billion opportunity. There is low CSR presence in clean energy, out of the 100 companies, only 39 had programs in clean energy; this is low compared to the level of CSR activity in other cause areas; where more than 50% of the top 100 companies have CSR programs in education, sanitation or skills and livelihoods.
Companies in power and oil and gas industries are most likely to support clean energy projects, capitalising on the strategic alignment and leveraging core competencies. These were followed by the manufacturing and heavy engineering industry, focusing on communities in the vicinity of factories and regional offices.
The following reasons have been highlighted for relatively low participation:
- Access to energy interventions are being perceived to be highly technical in nature. This discouraged CSR teams in companies that may not have the required capacities and capabilities.
- While decisions on CSR projects within health, education, skills etc. were helmed by CSR teams, clean energy cut across CSR, sustainability and even business portfolios, leading to fragmented decision making and a greater lead time.
- Companies found it difficult to source qualified and technically competent implementation partners in geographic areas of interest.
- Energy access was not prioritised during needs assessments as its absence was not as noticeable as water or sanitation issues.
- Companies believed that the government’s rural electrification policy could render off-grid projects redundant. However, the Draft Energy Policy, released by the government in August 2017, states that off-grid lighting solutions can play a complementary role given the intermittent nature of electricity supply.
Sourced from Samhita Social Ventures, a CSR consulting organisation, Shakti Sustainable Energy Foundation and the International Finance Corporation.