India's Green Credit Programme: What It Is & How To Prepare
- India's proposed Green Credit Programme presents a significant opportunity for your business to contribute to environmental sustainability while reaping additional revenue.
- The purpose of Green Credits is to create a market-based mechanism for encouraging voluntary environmental actions in India. A Green Credit is a singular unit of a monetary incentive provided for a specified environment-positive activity.
- Auditable and certifiable Green Credits will require trustworthy traceability software for verifiable data on your environmental claims to ease the verification process.
In an era where environmental consciousness is no longer a mere trend but an urgent necessity, India has stepped up to the plate by introducing the pioneering Green Credit Programme. This innovative initiative aims to establish a market-based system for incentivizing voluntary eco-friendly practices. Continue reading to discover more about this proposed programme, why it’s important, the advantages it can offer your business, and how you can prepare.
India’s Green Credit Programme: What It Is & Why It’s Important
In alignment with India’s goal of achieving net zero by 2070, the Indian Government launched Mission LiFE (Lifestyle for Environment). This program aims to motivate at least one billion Indians and other global citizens to adopt eco-friendly behaviors. To realize the vision of Mission LiFE, The Ministry of Environment, Forest and Climate Change has proposed the Green Credit Programme. The draft rules were issued on June 26, 2023, and are open to public feedback for 60 days.
The purpose of Green Credits is to create a market-based mechanism for encouraging voluntary environmental actions in India. A Green Credit is a singular unit of a monetary incentive provided for a specified environment-positive activity. Various sectors can receive Green Credits, from grassroots individuals, Farmer Producer Organizations, cooperatives, and forestry and sustainable agriculture enterprises to larger-scale Urban and Rural Local Bodies, private sectors, industries, and organizations. The criteria for eligibility are yet to be determined, but credits will be offered for selected activities in the following sectors:
- Tree plantation
- Water conservation
- Natural and regenerative agriculture
- Waste management
- Air pollution reduction
- Mangrove conservation and restoration
- Eco-mark labeling
- Sustainable building and infrastructure
So, what does this mean for your business? If you are doing business in India, Green Credits allow you to earn additional revenue while safeguarding the planet. These credits can be bought and sold on a proposed domestic trading platform, similar to carbon credits. Additionally, engaging in certain activities that qualify as carbon credits can earn you Green Credits. The key to auditable and certifiable Green Credits will be implementing a data capture platform to provide evidence-based proof of their validity and existence to ease the verification process.
The Advantages and Challenges of Green Credits
For businesses operating in India, the Green Credit Programme presents both opportunities and challenges. By actively participating in this initiative and preparing for it early on, your company can contribute to environmental sustainability while potentially reaping significant benefits.
Here's a closer look at the potential impact of the Green Credit Programme on businesses:
- New Revenue Streams: Introducing Green Credits allows your business to earn additional revenue through environmental stewardship. By engaging in approved eco-friendly activities and obtaining Green Credits for your efforts, your company can monetize its positive ecological actions while doing good for the planet.
- Competitive Advantage: As more consumers and investors prioritize sustainability, companies with a strong environmental record and a portfolio of Green Credits may attract more customers, command premium prices for their products or services, and appeal to potential investors seeking sustainable ventures.
- Access to Carbon Credit Markets: Engaging in activities that qualify for carbon credits can also earn your business Green Credits. This opens the possibility of participating in the carbon credit markets, where your company can invest in projects that reduce carbon emissions for enhanced revenue streams while further contributing to India's climate goals.
- Data and Technology Implementation: To obtain auditable Green Credits, your business must implement a robust data capture platform for tracking and monitoring your environmental footprint. By selecting a reliable traceability platform (preferably blockchain-based), you can receive verifiable, real-time sustainability and procurement data for supply chain optimization.
- Market Volatility: The success of the Green Credits trading platform will depend on market demand and supply dynamics. Green Credits could fluctuate in value, and businesses engaged in this market might face uncertainties related to their environmental investments' monetary returns.
- Greenwashing: If not regulated properly, Green Credits could facilitate greenwashing. Companies may engage in misleading or unsubstantiated claims about their environmental footprint without proper technology to verify and validate credits.
- Cost/Resource Implications: Participating in the Green Credit Programme might require initial investments in eco-friendly technologies, practices, and infrastructure. While the potential benefits can be significant, some businesses may find it challenging to allocate resources for sustainability initiatives, especially if they face financial constraints.
- Feasibility: For the Green Credits programme to be feasible and successful, implementing a comprehensive and fair framework covering a wide range of sectors will be imperative. Additionally, the mechanisms for assigning value to the credits and enabling their transfer are unclear.
How To Prepare: Selecting the right traceability partner for validating Green Credits.
Auditable and certifiable Green Credits will require trustworthy traceability software for verifiable data on your environmental claims. Trupti Mishra, a professor at the Interdisciplinary Programme in Climate Studies at the Indian Institute of Technology (IIT) Bombay, states, “I believe any programme, regardless mandatory or voluntary, needs robust process, involving technical support, good measurement tools and more importantly proper monitoring at the source level.”
The below criteria will guide you in selecting the right traceability partner to support your Green Credits:
Source-Level, Unaggregated Data
Using aggregated data or occasional spot-checks does not provide the detail necessary to monitor your environmental efforts. Capturing raw, primary data on your ecological initiatives at the geo-located source (e.g., the polygon plot of land) will create an audit trail for proof of impact and progress. For instance, you could use data capture forms to monitor your regenerative farming practices, including soil-level information, and connect that data to your product's chain of custody. This will power your Green Credits with indisputable evidence.
Select a traceability solution that provides real-time data and reports on your environmental initiatives. When participating in a voluntary environmental program like the Green Credit Scheme, your business will likely need to undergo verification and certification processes. Spot audits, paperwork, or Excel sheets take time and increase the administrative burden. Real-time tracking provides continuous and auditable data, simplifying the verification process and increasing the credibility of the Green Credits earned. It also fosters accountability and prevents greenwashing and fraudulent claims.
Protect your data by choosing a secure, blockchain-based traceability platform. Blockchain will provide the utmost security by creating a decentralized network with tamper-proof records to minimize the risk of data manipulation or unauthorized access. Ensuring the safety of confidential information is crucial for encouraging supplier engagement in your environmental programs and verifying the credibility of your Green Credits.
Ensure the traceability partner you choose has the expertise in capturing and monitoring data on the ground. Your traceability system should be completely accessible to users throughout your value chains and operations and device agnostic in remote locations - meaning no hardware installation, apps, or smartphones are required! They should be able to speak the local language and understand the cultural barriers that may impact the success of your environmental programs. Additionally, they should provide in-field implementation and continued user and product support to proactively respond to challenges with effective solutions.
As the Green Credits Programme evolves and requirements shift, selecting a flexible and nimble audit/assurance tool is crucial. Ensure the traceability software you choose can adapt to changing datasets and evolving qualifications. Otherwise, your company may face the burden of repeatedly recalculating or restarting your projects. Look for a scalable platform that enables the effortless addition of new parameters, keeping your business agile and well-prepared for future adjustments in the Green Credits Programme.
BanQu: Green Credits Support Platform
India's Green Credit Programme presents a significant opportunity for your business to contribute to environmental sustainability while reaping additional revenue. Selecting a reliable, blockchain-based traceability partner is vital to support your Green Credits with auditable and certifiable data. BanQu's advanced supply chain traceability and compliance software is built from the ground up, equipping your brand with source-level, unaggregated data to verify the origin and validity of your environmental claims. With a user-friendly design and flexible scalability, BanQu can empower your business to adapt to evolving requirements and confidently participate in India's journey toward a greener and more sustainable future. Stay ahead of the curve and set up a discovery call today!